SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
Coastal Caribbean Oils & Minerals, Ltd.
................................................................................
(Name of Registrant as Specified In Its Charter)
................................................................................
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
Annual General Meeting of Shareholders
June 23, 1997
Dear Shareholder:
It's a pleasure for us to extend to you a cordial invitation to attend
the 1997 Annual General Meeting of Shareholders of Coastal Caribbean Oils &
Minerals, Ltd. at the offices of Conyers, Dill & Pearman, Clarendon House,
Church Street, Hamilton, Bermuda on Monday, June 23, 1997 at 11:00 A.M.
While we are aware that most of our shareholders are unable personally
to attend the Annual Meeting, proxies are solicited so that each shareholder has
an opportunity to vote on all matters that are scheduled to come before the
meeting. Whether or not you plan to attend, please take a few minutes now to
vote, sign, date and return your proxy in the enclosed postage-paid envelope.
Regardless of the number of shares you own, your vote is important.
Besides helping us conduct business at the annual meeting, there is
another reason for you to return your proxy vote card. Under the abandoned
property law of some states, a shareholder may be considered "missing" if that
stockholder has failed to communicate with us in writing. The return of your
proxy vote card qualifies as written communication with us.
The Notice of Annual General Meeting and Proxy Statement accompanying
this letter describe the business to be acted on at the meeting.
As in the past, members of management will review with you the
Company's results and will be available to respond to questions during the
meeting. For those of you who will not be able to attend, your Annual Report
contains current information on the status of the Florida litigation and related
matters.
We look forward to seeing you at the meeting.
Sincerely,
Benjamin W. Heath
May 13, 1997 President
<PAGE>
COASTAL CARIBBEAN OILS & MINERALS, LTD.
Clarendon House, Church Street
Hamilton, Bermuda
NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
June 23, 1997
NOTICE IS HEREBY GIVEN that the Annual General Meeting of Shareholders
of COASTAL CARIBBEAN OILS & MINERALS, LTD. (the "Company") will be held on
Monday, June 23, 1997, at 11:00 A.M., local time, at the offices of Conyers,
Dill & Pearman, Clarendon House, Church Street, Hamilton, Bermuda, for the
following purposes:
To receive the report of the independent auditors and the financial
statements for the year ended December 31, 1996 and to vote on the following:
1. To elect five members of the Board of Directors;
2. To ratify the appointment of independent auditors of the Company
for the year ending December 31, 1997 and to authorize the Board of
Directors to fix the remuneration of such auditors;
3. To consider and act upon a proposal to amend and restate the
Bye-laws of the Company;
4. To consider and act upon a proposal to increase the authorized
shares of common stock of the Company, par value $.12 per share,
from 100,000,000 shares currently authorized to 250,000,000 shares;
5. To consider and act upon a proposal to authorize 10,000,000 shares
of preferred stock of the Company;
6. To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
This notice and proxy statement and the enclosed form of proxy are
being sent to shareholders of record as of May 5, 1997 to enable such holders to
state their instructions with respect to the voting of their shares. Proxies
should be returned to the American Stock Transfer & Trust Company, 40 Wall
Street, 46th Floor, New York, N.Y. 10005 in the reply envelope enclosed.
By order of the Board of Directors,
James R. Joyce
Assistant Secretary
Dated: May 13, 1997
- - --------------------------------------------------------------------------------
RETURN OF PROXIES
SHAREHOLDERS WHO ARE UNABLE TO ATTEND THE ANNUAL GENERAL MEETING ARE
URGED TO VOTE BY PROMPTLY SIGNING, DATING, AND RETURNING THE ACCOMPANYING PROXY
IN THE REPLY ENVELOPE PROVIDED.
- - --------------------------------------------------------------------------------
<PAGE>
COASTAL CARIBBEAN OILS & MINERALS, LTD.
Clarendon House, Church Street
Hamilton, Bermuda
---------------
PROXY STATEMENT
---------------
GENERAL INFORMATION
This proxy statement is furnished to the shareholders of Coastal
Caribbean Oils & Minerals, Ltd., a Bermuda company (the "Company"), in
connection with the solicitation of proxies on behalf of the Board of Directors
for use at the 1997 Annual General Meeting of Shareholders to be held at the
offices of Conyers, Dill & Pearman, Clarendon House, Church Street, Hamilton,
Bermuda, on Monday, June 23, 1997 at 11:00 A.M., local time, and at any
adjournments or postponements thereof. The notice of meeting, proxy statement
and proxy are being mailed on or about May 5, 1997. A proxy may be revoked at
any time before it is voted by (1) so notifying the Company in writing; (2)
signing and dating a new and different proxy card; or (3) voting your shares in
person or by your duly appointed agent at the meeting.
The Company expects to solicit proxies primarily by mail. To the extent
necessary to assure sufficient representation of shares at the meeting, proxies
may be solicited by telephone and in person. The Company will request brokers,
banks and other nominees to forward copies of proxy material to beneficial
owners or other persons for whom they hold common stock and to obtain authority
for the execution and delivery of proxies. In addition, the Company has retained
Morrow & Co. Inc., to assist in the distribution and solicitation of proxy
materials for an estimated fee of $6,500 plus out-of-pocket expenses. The only
other expenses anticipated are the ordinary expenses incurred in connection with
the preparation, assembling, mailing and other distribution of the material. All
costs of the solicitation will be borne by the Company.
The record date for the determination of shareholders entitled to
notice of and to vote at the meeting has been fixed by the Board of Directors as
the close of business on May 5, 1997. On that date there were 40,056,358 shares
of common stock outstanding, which were held by approximately 13,400
shareholders of record. The holders of twenty-five percent of the total number
of shares entitled to be voted at the meeting, present in person or by proxy,
shall constitute a quorum for the transaction of business. Each outstanding
share is entitled to one vote at the meeting. Abstentions and broker votes will
be counted neither as votes in favor of nor as votes opposed to any proposition
brought before the meeting.
Bye-Law No. 21 of the Company provides as follows:
Any matters to be voted upon at any meeting of Shareholders
must be approved, not only by a majority of the shares voted
at such meeting, but also by a majority in number of the
Shareholders present in person or by proxy and entitled to
vote thereon. When shares are held by members or Shareholders
of another company, association or similar entity and such
persons act in concert, or when shares are held by or for a
group of Shareholders whose members act in concert by virtue
of any contract, agreement or understanding, such persons
shall be deemed to be one Shareholder for the purpose of this
Bye-law. In the case of the election of Directors, if no
candidate for one or more directorships receives both such
majorities, and any vacancies remain to be filled, each person
who receives the majority in number of the Shareholders
present in person or by proxy and voting thereon shall be
elected to fill such vacancies by virtue of having received
such majority.
The Company will determine whether shareholders have acted in concert,
depending on the circumstances and the evidence, if any, that shareholders were
in fact so acting and should therefore be treated as one shareholder. The
Company may require brokers, banks and other nominees holding shares for
beneficial owners to furnish information with respect to such beneficial owners
for the purpose of applying this provision. The proxy delivered with this proxy
statement includes a representation that the person signing the proxy is not
acting in concert as described above.
Pages 24 to 41 of the Company's 1996 Annual Report on Form 10-K are
incorporated herein by reference. The Company's Quarterly Report on Form 10-Q
for the quarterly period ended March 31, 1997 is also incorporated herein by
reference.
SHAREHOLDERS MAY OBTAIN WITHOUT CHARGE A COPY OF THE COMPANY'S MOST
RECENT ANNUAL REPORT ON FORM 10-K FILED WITH THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION UPON WRITTEN REQUEST TO COASTAL CARIBBEAN OILS & MINERALS,
LTD., C/O G&O'D INC, 149 DURHAM ROAD, OAK PARK - UNIT 31, MADISON, CONNECTICUT
06443.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Nominees
In accordance with the Company's Bye-laws, five directors are to be
elected at this Annual Meeting of Shareholders. If the proposed amendment to the
Company's Bye-laws providing for the classification of the Board of Directors is
adopted by shareholders, the five directors would be elected for staggered terms
of one, two or three years. One director would be elected for a one-year term
expiring at the 1998 Annual Meeting of Shareholders, two directors would be
elected for two-year terms expiring at the 1999 Annual Meeting of Shareholders,
and two directors would be elected for three-year terms expiring at the 2000
Annual Meeting of Shareholders, and in each case until their respective
successors shall have been elected and duly qualified. If the proposed amendment
to the Company's Bye-laws is not adopted by shareholders, all five directors
would be elected for terms of one year and until their respective successors
shall have been elected and qualified.
All nominees are currently directors of the Company. The persons named
in the accompanying proxy will vote all properly executed proxies for the
election of the persons named in the following table unless authority to vote
for one or more of the nominees is withheld.
<PAGE>
<TABLE>
<CAPTION>
MANAGEMENT RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE ELECTION OF THE NOMINEES.
Other Offices Held
Director With Company Age and Business Experience
Name Since for the past Five Years*
CLASS I NOMINEES FOR TERMS TO EXPIRE AT THE 1998 ANNUAL MEETING
<S> <C> <C>
Nicholas B. Dill 1997 Mr. Nicholas B. Dill was elected a director on April 7,
1997 to complete the unexpired term of C. Dean Reasoner who
resigned on March 20, 1997. Mr. Dill is a member of the
law firm of Conyers, Dill & Pearman, Hamilton, Bermuda, the
Company's Bermuda counsel. Age sixty-four.
CLASS II NOMINEES FOR TERMS TO EXPIRE AT THE 1999 ANNUAL MEETING
Benjamin W. Heath 1962 President Mr. Heath is Chairman and a director of Coastal Petroleum
Company ("Coastal Petroleum"), the Company's subsidiary, a
director of Magellan Petroleum Corporation ("MPC"),
Chairman and a director of Magellan Petroleum Australia
Limited ("MPAL"), a majority owned subsidiary of MPC, and a
director of Canada Southern Petroleum Ltd. ("Canada
Southern"). Age eighty-two.
Phillip W. Ware 1985 Vice President Mr. Ware, a geologist, has been President of Coastal
Petroleum since April 1985. He is also a director of
Coastal Petroleum. Age forty-seven.
CLASS III NOMINEES FOR TERMS TO EXPIRE AT THE 2000 ANNUAL MEETING
Charles T. Collis 1987 Secretary Mr. Collis is a member of the law firm of Conyers, Dill &
** Pearman, Hamilton, Bermuda, the Company's Bermuda counsel.
Age sixty-four.
John D. Monroe 1981 ** Mr. Monroe is a real estate broker and was formerly
President of Monroe-Buman Real Estate, Inc., a real estate
brokerage and development firm in Naples, Florida.
Mr. Monroe is also a director of Coastal Petroleum. Age
seventy.
- - -------------------------
* All of the named companies are engaged in oil, gas, or mineral
exploration and/or development except where noted. The business
experience described for each director above covers the past five
years.
** Member of Audit Committee.
</TABLE>
<PAGE>
The Company is not aware of any arrangements or understandings between
any of the individuals named above and any other person pursuant to which any of
the individuals named above was selected as a director and/or executive officer.
The Company is not aware of any family relationship among the officers and
directors of the Company or its subsidiary.
Board of Directors; Committees; Attendance
The directors of the Company are currently elected to one-year terms at
the Annual Meeting of Shareholders of the Company. If Proposal No. 3 to amend
and restate the Company's Bye-laws is approved, the directors will be elected to
one, two or three year terms as described under Proposal No. 3. All officers of
the Company are elected annually and serve at the pleasure of the Board of
Directors.
The principal functions of the Audit Committee are: (1) to recommend
the particular persons or firm to be employed by the Company as its independent
auditors; (2) to consult with the persons or firm so chosen to be the
independent auditors with regard to the plan of audit; (3) to review, in
consultation with the independent auditors, their report of audit, or proposed
report of audit, and the accompanying management letter, if any; and (4) to
consult with the independent auditors (periodically, as appropriate, out of the
presence of management) with regard to the adequacy of internal controls. During
1996, the Audit Committee, which was comprised of Messrs. Collis and Monroe, met
twice.
The Company does not presently have standing nominating or compensation
committees of the Board of Directors. The functions that would be performed by
such committees are performed by the Board of Directors.
There were six meetings of the Board of Directors of the Company held
during 1996. None of the directors attended less than seventy-five percent of
the aggregate number of meetings of the Board of Directors and the committees on
which they served.
<PAGE>
ADDITIONAL INFORMATION CONCERNING DIRECTORS AND OFFICERS
Executive Compensation
The following table sets forth certain summary information concerning
the compensation of Mr. Benjamin W. Heath, President and Chief Executive Officer
of the Company. No executive officers of the Company earned in excess of
$100,000 during fiscal year 1996.
<TABLE>
<CAPTION>
- - ------------------------------------------------------------------------------------------------------------------------------------
Summary Compensation Table
- - ------------------------------------------------------------------------------------------------------------------------------------
Annual Compensation Long Term
All Other
Name and Compensation Compensation
Principal Position Year Salary ($) Award ($) (1)
Options/SARs(#)
- - ---------------------------------------- -------------------- --------------------- ------------------ -----------------------------
<S> <C> <C> <C> <C>
Benjamin W. Heath, President 1996 40,000 - 12,000
and Chief Executive Officer 1995 40,000 60,000 12,000
1994 26,250 - 9,937
- - ---------------------------------------- -------------------- --------------------- ------------------ -----------------------------
(1) Reimbursement for office expense $6,000 in 1996, 1995 and 1994. Payment to SEP-IRA pension plan $6,000 in 1996, $6,000
in 1995, and $3,937 in 1994.
</TABLE>
Compensation of Directors
John D. Monroe received a director's fee of $15,000 for the year 1996.
Mr. Monroe is the only director who is paid directors' fees.
Compensation Committee Interlocks and Insider Participation
The entire board of directors constitutes the compensation committee.
Benjamin W. Heath and Phillip W. Ware are directors and the Presidents,
respectively, of Coastal Caribbean and Coastal Petroleum. Mr. C. Dean Reasoner,
a director until his esignation on March 20, 1997, is a partner in the law firm
of Reasoner, Davis & Fox which was paid $102,000 for legal services rendered in
1996.
Mr. Heath also serves as a director of MPC, MPAL and Canada Southern
Petroleum Ltd. ("CSP"). Mr. Heath is also Chairman of MPAL. During 1996, the
law firm of Reasoner, Davis & Fox also rendered services to MPC and CSP.
Mr. Reasoner also resigned as a director of MPC, MPAL and CSP during March 1997.
<PAGE>
Compensation Committee Report on Executive Compensation
The Compensation Committee, consisting of the entire board of directors
(other than C. Dean Reasoner, who resigned on March 20, 1997), submits the
following report for 1996.
The Board of Directors does not maintain specific compensation policies
applicable to the Company's executive officers, and the Board has established no
specific relationship between corporate performance and executive compensation.
Compensation has been determined based on the skills, experience and leadership
executive officers have brought to the performance of their duties, and on their
ability to protect, defend and pursue the Company's ability to realize value on
the Company's exploration leases.
Charles T. M. Collis
Benjamin W. Heath
John D. Monroe
Phillip W. Ware
Tax Deductibility of Compensation
Because it is not likely that compensation to any executive will exceed
$1 million, and because the Company is a Bermuda corporation not subject to the
tax laws of the United States, the Company does not expect that it will be
required to comply with the Omnibus Reconciliation Act of 1993 regarding
executive compensation.
Stock Options
The following table provides information about stock options exercised
during fiscal 1996.
<TABLE>
<CAPTION>
==================================================================================================================================
Aggregated Option/SAR Exercises in 1996 and December 31, 1996 Option/SAR Values
==================================================================================================================================
- - ------------------------- -------------------- ---------------- -------------------------------- ===============================
Value of Unexercised
Shares Number of Unexercised In-The-Money
Acquired Value Options/SARs Options/SARs
On Exercise (#) Realized ($) at December 31, 1996 at December 31, 1996 ($)
- - ------------------------- -------------------- ---------------- -------------------------------- ===============================
- - ------------------------- -------------------- ---------------- -------------- ---------------- -------------- ===============
Name Exercisable Unexercisable Exercisable Unexercisable
- - ------------------------- -------------------- ---------------- -------------- ---------------- -------------- ===============
- - ------------------------- -------------------- ---------------- -------------- ---------------- -------------- ===============
<S> <C> <C> <C> <C> <C> <C>
Benjamin W. Heath -0- -0- 72,000 - 171,000 -
- - ------------------------- -------------------- ---------------- -------------- ---------------- -------------- ===============
</TABLE>
<PAGE>
PERFORMANCE GRAPH
The graph below compares the cumulative total returns, including
reinvestment of dividends, if applicable, of Company Stock with the companies in
the NASDAQ Index and an Industry Group Index (Media General's Oil, Natural Gas
Production Industry Group).
The chart displayed below is presented in accordance with SEC
requirements. Shareholders are cautioned against drawing any conclusions from
the data contained therein, as past results are not necessarily indicative of
future performance.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
1991 1992 1993 1994 1995 1996
Coastal Caribbean 100.00 104.55 59.10 118.18 190.91 509.09
NASDAQ Stock Index 100.00 97.98 117.34 131.76 139.98 176.14
Industry Group 100.00 100.98 121.13 127.17 164.96 204.98
<PAGE>
Certain Business Relationships
Reasoner, Davis & Fox
During 1996, the Company retained the law firm of Reasoner, Davis &
Fox, of which Mr. C. Dean Reasoner, a director of the Company until his
resignation on March 20, 1997, is a partner. Fees for legal services rendered to
the Company by Reasoner, Davis & Fox amounted to $102,000 for the year 1996. In
addition, Reasoner, Davis & Fox is entitled to contingent fees payable in
connection with Coastal Petroleum's litigation against the State of Florida of
2.0 percent of any net recovery from execution on or satisfaction of judgment or
from settlement of this lawsuit.
G&O'D INC
During the year 1996, $169,632 was paid or accrued for accounting and
administrative services, office facilities and support staff provided to the
Company by G&O'D INC, a firm that is owned by Mr. James R. Joyce, Treasurer and
Assistant Secretary. The services rendered by G&O'D INC to the Company include
the following: preparation and filing of all reports required by Federal and
State governments, preparations of reports and registration statements required
under the Federal securities laws; preparation and filing of interim, special
and annual reports to shareholders; maintaining corporate ledgers and records;
furnishing office facilities and record retention. G&O'D is also responsible for
the investment of the Company's available funds and other banking relations and
securing adequate insurance to protect the Company. G&O'D is responsible for the
preparation and maintenance of all the minutes of any directors' and
shareholders' meetings, arranging all meetings of directors and shareholders,
coordinating the activities and services of all companies and firms rendering
services to the Company, responding to stockholder inquiries, and such other
services as may be requested by the Company. G&O'D maintains and provides
current information about the Company's activities so that the directors of the
Company may keep themselves informed as to the Company's activities. G&O'D's
fees are based on the time spent in performing these services to the Company.
Royalty Interests
The State of Florida oil, gas and mineral leases held by Coastal
Petroleum on approximately 3,700,000 acres of submerged lands along the Gulf
Coast and certain inland lakes and rivers are subject to certain overriding
royalties aggregating 1/16th as to oil, gas and sulphur, and 13/600ths as to
minerals other than oil, gas and sulphur. Of the overriding royalties as to oil,
gas and sulphur, a 1/90th overriding royalty, and of the overriding royalties on
minerals other than oil, gas and sulphur, a 1/60th overriding royalty, is held
by Johnson & Company, a Connecticut partnership which is used as a nominee by
the members of the family of the late William F. Buckley. A trust, in which Mr.
Heath has a 54.4% beneficial interest, and C. Dean Reasoner (a director until
his resignation on March 20, 1997) have beneficial interests in such royalty
interest held by Johnson & Company. No payments have been made to Johnson &
Company (or to the beneficial owners of such royalty interests) in more than
thirty years.
<PAGE>
In 1990, Coastal Petroleum granted to officers 3.4% of any net recovery
from execution on or satisfaction of judgment or from settlement of the lawsuit
against the State of Florida as follows:
Relationship to
Percent of Coastal Petroleum
Name Net Recovery at Date of Grant
Benjamin W. Heath 1.25 Chairman of Board
Phillip W. Ware 1.25 President
Arthur B. O'Donnell 0.30 Vice President and Treasurer
James R. Joyce 0.30 Assistant Treasurer
James J. Gaughran 0.30 Secretary
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as to the number of shares
of the Company's Stock owned beneficially by each person who is known to be the
beneficial owner of more than 5% of the outstanding shares of common stock of
the Company.
Name and address of Amount and nature
beneficial owner of beneficial ownership Percent of class
Shares held Shares subject
directly to option
Leon S. Gross 4,190,031 - 10.46
3900 Ford Road
Philadelphia, PA 19131
Lykes Minerals Corp. - 7,800,000* 16.3**
111 East Madison Street
P.O. Box 1690
Tampa, FL 33601
- - ---------------
* At April 22, 1997, Lykes Minerals Corp. had purchased a total of 78
shares of Coastal Petroleum which are convertible into 7,800,000 shares
of the Company.
** Assumes all outstanding options are exercised to acquire shares of the
Company.
<PAGE>
The following table sets forth information as to the number of shares
of the Company's common stock owned beneficially at April 22, 1997 by each
director of the Company and by all directors and executive officers as a group:
Amount and Nature of
Name of Beneficial Ownership
Individual Shares held Percent of
or Group directly Options Class
Charles T. Collis 17,758 60,000 *
Nicholas B. Dill - - *
Benjamin W. Heath 20,000 72,000 *
John D. Monroe 400 60,000 *
Phillip W. Ware 3,791 120,000 *
Directors and executive officers
as a group (a total of 6 persons) 52,034 362,000 1.2%
- - ---------------
* Less than 1%.
PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed Ernst & Young LLP as the
Company's independent auditors for the year ending December 31, 1997.
Representatives of Ernst & Young, LLP are not expected to be present at the
meeting. The proxy permits voting for or against, or abstaining from voting for,
the ratification of the appointment of auditors. Unless otherwise indicated, the
shares will be voted in favor of ratifying the appointment of Ernst & Young
LLP and to authorize the Board of Directors to fix the remuneration of such
auditors.
MANAGEMENT RECOMMENDS A VOTE FOR PROPOSAL NO. 2.
PROPOSAL NO. 3
AMENDMENT AND RESTATEMENT OF THE BYE-LAWS OF THE COMPANY
The Board of Directors has approved the adoption of revised Company
Bye-laws (the "Proposed Bye-laws"). The existing Bye-laws have not been amended
for many years. The Proposed Bye-laws are intended to reflect current corporate
practice under the Bermuda Companies Act of 1981 (the "Companies Act") and
contain certain anti-takeover provisions ("Anti-takeover Provisions") that are
meant to further continuity and stability in the leadership and policies of the
Company and to discourage certain types of tactics which could involve actual or
threatened changes of control that management believes may not be in the best
interests of the shareholders. Accordingly, shareholders are asked to approve
Proposal 3 set forth in Exhibit A to this proxy statement at the Annual General
Meeting of Shareholders. The Company's current Bye-laws require that Proposal 3
be adopted by (1) a majority of shares voted at the Annual General Meeting and
(2) a majority in number of the shareholders present in person or by proxy and
entitled to vote.
<PAGE>
The following discussion of the Proposed Bye-laws is qualified in its
entirety by the full text of the Proposed Bye-laws set forth in Exhibit A and
shareholders are encouraged to read the Proposed Bye-laws carefully.
Anti-Takeover Provisions
There has been a growing trend toward the accumulation of substantial
stock positions in public companies by third parties as a prelude to proposing a
takeover, restructuring or sale of all or part of the company, or other similar
extraordinary corporate action. Such actions are often undertaken by a third
party without advance notice to or consultation with the company's board of
directors. In many cases, such third party seeks representation on the company's
board in order to increase the likelihood that its proposal will be implemented
by the company. If the company resists its efforts to obtain board
representation, the purchaser may commence a proxy contest to have its nominees
elected to the board in place of certain directors or the entire board. In some
cases, the purchaser may not be interested in taking over the company, but uses
the threat of a proxy fight and/or a bid to take over the company as a means of
pressuring the company to repurchase its equity position at a substantial
premium over market price, so-called "greenmail." In such event, the company
faces the risk that, if it does not do so, its business and management will be
disrupted, perhaps irreparably.
Advantages and Disadvantages. The Anti-takeover Provisions contained in
the Proposed Bye-laws have both advantages and disadvantages to shareholders.
The Anti-takeover Provisions cannot, and are not intended to, prevent a purchase
of all or a majority of the equity securities of the Company, nor are they
intended to deter bids for such securities. Rather, the Board of Directors
believes that the Anti-takeover Provisions will discourage disruptive tactics
and encourage persons who may seek to acquire control of the Company to initiate
such an acquisition through negotiations with the Board of Directors. The Board
of Directors believes that it will therefore be in a better position to protect
the interests of all the shareholders. Furthermore, the shareholders of the
Company will have a more meaningful opportunity to evaluate any such action.
Although the Anti-takeover Provisions are intended to encourage persons
seeking to acquire control of the Company to initiate such an acquisition
through arm's length negotiations with the Board of Directors, the overall
effect of the Anti-takeover Provisions may be to discourage a third party from
making a tender offer for a portion or all of the Company's common stock,
hostile or otherwise (including an offer at a substantial premium over the then
prevailing market value of the Company's equity securities), or otherwise
attempting to obtain a substantial position in the equity securities of the
Company in order to commence a proxy contest or engage in other takeover-related
action, even though some or a majority of the Company's shareholders might
believe such actions to be beneficial.
<PAGE>
To the extent any potential acquirers are deterred by the Anti-takeover
Provisions, they may have the effect of preserving the incumbent management in
office. The Anti-takeover Provisions may also serve to benefit incumbent
management by making it more difficult to remove management even when the only
reason for the proposed change of control or the shareholder action may be the
unsatisfactory performance of the present directors. In addition, since the
Anti-takeover Provisions are in part designed to discourage accumulations of
large blocks of the Company's stock by purchasers whose objective is to have
such stock repurchased by the Company at a premium, their adoption could tend to
reduce the temporary fluctuations in the market price of such stock that are
caused by such accumulations. Accordingly, shareholders could be deprived of
certain opportunities to sell their shares at a temporarily higher market price.
Takeovers or changes in the board of directors of a company that are
proposed and effected without prior consultation and negotiation with the
company are not necessarily detrimental to the Company and its shareholders.
However, the Board of Directors feels that the benefits of seeking to protect
the ability of the Company to negotiate effectively, through directors who have
previously been elected by the shareholders as a whole and are familiar with the
Company, outweigh any disadvantage of discouraging such unsolicited proposals.
Existing Anti-takeover Provisions
Except as described below, the Company's current Bye-laws do not
contain any provisions intended by the Company to have, or to the knowledge of
the Board of Directors have, any anti-takeover effect.
Dual Voting. Section 21 of the Company's current Bye-laws require that
any matter to be voted upon at any meeting of shareholders must be approved, not
only by a majority of the shares at such meeting, but also by a majority of the
shareholders present in person or by proxy and entitled to vote thereon ("Dual
Voting"). To illustrate the operation of Section 21 by example, if the Company
had three shareholders and 100 shares of its common stock outstanding, 70 shares
of which were held by a single shareholder, that majority shareholder could vote
his shares for a merger proposal and such proposal would be defeated, if the
other two minority shareholders vote their shares against it. The effect of Dual
Voting is that a person seeking control of the Company's common stock cannot
necessarily control the vote at shareholders' meetings by acquiring a majority
of the Company's common stock because each proposal voted upon, including the
election of directors, requires the vote of a majority of the shareholders
voting. A majority of the shareholders voting may not constitute a majority of
the shares outstanding or voting and thus a minority of the shares voting could
have a veto power over certain proposals brought for shareholder consideration.
This concept is continued in the Proposed Bye-laws and provides that whenever a
matter is voted upon, in order for the matter to be approved, it must receive
the requisite percentage vote of both shares and shareholders.
<PAGE>
Description of Proposed Anti-takeover Provisions
The proposed Anti-takeover Provisions would in general: (i) provide
for a classified Board of Directors, (ii) provide that shareholders may remove
members of the Board of Directors for cause only, (iii) provide for advance
notice of business to be brought before a shareholders' meeting, (iv) provide
for advance notice of shareholder nominees to the Board of Directors;
(v) provide for a supermajority shareholder vote to approve a business
combination; and (vi) provide the Board authority to issue stock and adopt a
shareholder rights plan. The effect of each proposed Anti-takeover Provision is
further described below.
Classiflcation of Directors to Serve for Staggered Terms. The Company's
current Bye-laws provide that all directors are to be elected to the Company's
Board of Directors annually for a term of one year. Section 81 of the Proposed
Bye-laws provides for a classified Board of Directors. A classified Board of
Directors divides the directors into several "classes" serving staggered terms.
The Company currently has five directors. All five directors are being nominated
for election at the Annual General Meeting. If this Proposal is adopted by the
shareholders, the director positions will be divided into three classes, one
director position constituting a single class and the four other director
positions divided into two classes of two directors. One director will be
nominated for election to a term of one year ending at the 1998 Annual General
Meeting and the terms of the other two classes of directors will expire at the
1999 Annual General Meeting of shareholders and the 2000 Annual General Meeting
of shareholders, respectively. After the interim arrangement described in the
previous sentence, each director will serve for three years, with one class
elected every year.
The classification of directors will have the effect of making it more
difficult to change the composition of the Board of Directors. Two shareholder
meetings, instead of one, will be required to effect a change in the majority
control of the Board, except in the event of vacancies resulting from removal in
which case the remaining directors will fill the vacancies so created (see
"Removal of Directors" below). The longer time required to elect a majority of a
classified Board will help to assure continuity and stability of the Company's
management and policies, since a majority of the directors at any given time
will have prior experiences as directors of the Company. The classification
provision will apply to every election of directors, however, whether or not a
change in the Board would be beneficial to the Company and its shareholders and
whether or not a majority of the Company's shareholders believe such a change
would be desirable.
Removal of Directors. Section 81 of the Proposed Bye-laws provides that
shareholders may remove a member of the Board of Directors only for cause.
"Cause" is defined as either (i) conviction of the Director on indictment of an
indictable offense involving the management of the Company or (ii) persistent
breach of the Companies Act. Section 82 provides that at any general meeting, no
more than one-third of the Directors may be removed. The Board of Directors
shall have the power to fill a vacancy on the Board and any director so
appointed shall hold office for the duration of the term of the directorship.
These provisions are intended to allow the Board of Directors to protect the
interests of the shareholders in the face of a hostile tender offer without
fear of abrupt removal by a potential acquirer.
<PAGE>
Notice of Business to be Brought Before a Shareholders' Meeting.
Section 61 of the Proposed Bye-laws provides that only business that has been
properly brought before a special general meeting or annual general meeting of
the shareholders may be conducted at that meeting. To be properly brought before
a special or annual general meeting, business must be (a) specified in the
notice of meeting (or any supplement thereto) given by or at the direction of
the Board of Directors, (b) otherwise properly brought before the meeting by or
at the direction of the Board of Directors, or (c) otherwise properly brought
before the meeting by a shareholder.
For business to be properly brought before a special or annual general
meeting by a shareholder, the shareholder must give timely notice to the
Secretary of the Company. To be timely, a shareholder's notice must be received
at the principal executive offices of the Company not less than ninety (90) days
before the anniversary date of the previous annual meeting of shareholders. To
be timely for a special meeting, a shareholder's notice must be received at the
principal executive offices of the Company not less than ninety (90) days before
the meeting date.
A shareholder's notice must set forth as to each matter the shareholder
proposes to bring before the special or annual general meeting (a) a brief
description of the business being brought before the meeting and the reasons for
conducting such business at the annual meeting, (b) the name and address, as
they appear on the Company's books, of the shareholders intending to propose
such business, (c) the class and number of shares of the Company which are
beneficially owned by the shareholder, (d) a representation that the shareholder
is a holder of record of common stock of the Company entitled to vote at the
meeting and intends to appear in person or by proxy at the meeting to present
such business, and (e) any material interest of the shareholder in such
business.
Section 61 provides an orderly procedure for the notification of the
Board of Directors of business which is to be presented at shareholders'
meetings. This will enable the Board of Directors to plan such meetings and
also, to the extent it deems it necessary or desirable, to inform the
shareholders, prior to the meeting, of any new business that will be presented
at the meeting. The Board will also be able to make a recommendation or
statement of its position so as to enable shareholders to better determine
whether they desire to attend the meeting or grant a proxy to the Board of
Directors as to the disposition of any such business. Section 61 may limit the
ability of shareholders to initiate discussion at a shareholder's meeting. It
will also preclude the conducting of business at a particular meeting, if the
proper notice procedures have not been followed.
Notice of Shareholder Nominees to the Board of Directors. Section 62 of
the Proposed Bye-laws provides that shareholder nominees may be elected to the
Board of Directors only if properly nominated before an annual general meeting
of the shareholders. To be properly nominated, a nominee must be (1) properly
nominated by the Board of Directors, or (2) properly nominated by a shareholder.
<PAGE>
For a person to be properly nominated by a shareholder, the shareholder
must give timely notice to the Secretary of the Company. To be timely, a
shareholder's notice must be received at the principal executive offices of the
Company not less than sixty (60) days nor more than ninety (90) days before the
date of the annual meeting of shareholders.
A shareholder's notice must set forth (a) the name and address of the
shareholder who intends to make the nomination and of the person or persons to
be nominated; (b) a representation that the shareholder is a holder of record of
stock of the Company entitled to vote at such meeting and intends to appear in
person or by proxy at the meeting to nominate the person or persons specified in
the notice; (c) a description of all arrangements or understandings between the
shareholder and each nominee; and (d) and such other information regarding each
nominee proposed by such shareholder as would be required to be included in a
proxy statement filed pursuant to the proxy rules of the Securities and Exchange
Commission, had the nominee been nominated, or intended to be nominated, by the
Board of Directors.
Notice of a shareholder nominee makes it easier for incumbent directors
to obtain advance notice of nominations and make more difficult the assumption
of control of the Company by a purchaser of a significant block of the shares of
the Company through the removal of incumbent Directors. Such restrictions
eliminate the ability to cause sudden changes in the membership of the Board
of Directors.
Supermajority Shareholder Vote to Approve a Business Combination.
Currently, the approval of the holders of a majority of the shares voted and a
majority of the shareholders present is required for most mergers and various
other forms of business combinations. Section 163 of the Proposed Bye-laws would
require that business combinations be approved by the holders of at least 75% of
the shares voted and the approval of 75% of the shareholders present in person
or by proxy. Adoption of Section 163 may give veto power to a minority of
shareholders with respect to business combinations that are opposed by the Board
but desired by a majority of shareholders, thereby assisting management in
maintaining their present positions.
A business combination is defined in the Proposed Bye-laws as any
scheme of arrangement, reconstruction, amalgamation, takeover, or similar
business combination involving the Company or any subsidiaries and any other
person.
Board Authority to issue Stock and Adopt a Shareholder Rights Plan.
Section 12 of the Proposed Bye-laws grants to the Board of Directors the
authority, except as required by applicable law or regulation, to offer, allot,
grant options over, rights to acquire or otherwise dispose of the unissued
shares of the Company at such times and for such consideration and upon such
terms and conditions as the Board may in its absolute discretion determine but
so that no shares shall be issued at a discount from par value. Such
authorization would enable the Board of Directors to authorize the issuance of
preferred stock with voting, dividend, liquidation and other rights superior to
the rights of other shareholders without shareholder approval. Issuance of the
preferred stock could, under certain circumstances, discourage or make more
difficult an attempt by a person or organization to gain control of the Company
by tender offer or proxy contest, or to consummate a merger or consolidation
with the Company after acquiring control, and to remove incumbent management,
even if such transactions were favorable to the Company's shareholders. Thus, it
could benefit present management by helping them to retain their positions.
<PAGE>
Section 132 of the Proposed Bye-laws authorizes the Board to adopt a
"shareholder rights plan." The defining characteristic of a shareholder rights
plan is a distribution to shareholders of a right which acquires significant
economic value (often the right to purchase shares of the Company at a discount)
upon the occurrence of specified events involving a non-board-approved
acquisitions of a significant ownership position in the Company. The Board of
Directors has the authority to implement the plan as well as to redeem the plan.
Shareholder rights plan are intended to protect the Company's shareholders in
the event of an unsolicited attempt to acquire the Company, including a gradual
accumulation of shares in the open market, by allowing the Board time to
evaluate an offer. Although a rights plan is intended to benefit all of the
Company's constituencies, it could also have the effect of discouraging tender
offers and other attempts to obtain control of the Company and thereby make it
more difficult to remove incumbent management.
MANAGEMENT RECOMMENDS A VOTE IN FAVOR OF THIS PROPOSAL
PROPOSAL NO. 4
INCREASE THE AUTHORIZE SHARES OF COMMON STOCK FROM
100,000,000 SHARES TO 250,000,000 SHARES OF COMMON STOCK
The Board of Directors has approved an increase in the number of
authorized shares of Company common stock from 100,000,000 to 250,000,000. The
shareholders have presently authorized 100,000,000 shares of common stock. Of
such 100,000,000 presently authorized shares of stock, 40,056,358 are issued and
outstanding. Shareholders are asked to approve the resolution set forth in
Exhibit B to this proxy statement at the Annual General Meeting of the
shareholders. The Company's Bye-laws require that the resolution be approved by
(1) a majority of shares voted at the Annual General Meeting and (2) a majority
in number of the shareholders present in person or by proxy and entitled to
vote.
The additional stock, if so authorized, could be issued at the
discretion of the Board of Directors without any further action by the
shareholders, except as required by applicable law or regulation, in connection
with acquisitions, efforts to raise additional capital for the Company, and
other corporate purposes. Shares of the stock will be issued only upon a
determination by the Board of Directors that a proposed issuance is in the best
interests of the Company. The Board of Directors has no present plan or
intention to issue any shares of stock authorized by this proposal.
This Proposal, in conjunction with Section 12 of the Proposed Bye-laws
discussed in Proposal 3, may have an anti-takeover effect. The flexibility
vested in the Company's Board of Directors to authorize the issuance of common
stock in one or more series could enhance the Board of Director's bargaining
capability on behalf of the Company's shareholders in a takeover situation and
could, under some circumstances, be used to render more difficult or discourage
a merger, tender offer or proxy contest, the assumption of control by a holder
of a large block of the Company's securities, or the removal of incumbent
management, even if such a transaction were favored by the holders of the
requisite number of the then outstanding shares. Accordingly, shareholders might
be deprived of an opportunity to consider a takeover proposal which a third
party might consider, if the Company did not have authorized but unissued shares
of stock.
MANAGEMENT RECOMMENDS A VOTE IN FAVOR OF THIS PROPOSAL
<PAGE>
PROPOSAL NO. 5
AUTHORIZATION OF 10,000,000 PREFERRED SHARES
The Board of Directors has approved the authorization of 10,000,000
preferred shares of Company stock. No shares of preferred stock are currently
authorized. Shareholders are asked to approve the resolution set forth in
Exhibit C to this proxy statement at the Annual General Meeting of the
shareholders. The Company's Bye-laws require that the resolution be approved by
(1) a majority of shares voted at the Annual General Meeting, and (2) a majority
in number of the shareholders present in person or by proxy and entitled to
vote.
The preferred stock, if so authorized, could be issued at the
discretion of the Board of Directors without any further action by the
shareholders, except as required by applicable law or regulation, in connection
with acquisitions, efforts to raise additional capital for the Company, and
other corporate purposes. The preferred stock will have such designations,
preferences, conversion rights, cumulative, relative, participating, optional or
other rights, including voting rights, qualifications, limitations or
restrictions thereof as are determined by the Board of Directors. Shares of the
preferred stock will be issued only upon a determination by the Board of
Directors that a proposed issuance is in the best interests of the Company. The
Board of Directors has no present plan or intention to issue any shares of stock
authorized by this proposal.
This Proposal, in conjunction with Section 12 of the Proposed Bye-laws
discussed in Proposal 3, may have an anti-takeover effect. The flexibility
vested in the Company's Board of Directors to authorize the issuance of
preferred stock in one or more series could enhance the Board of Directors'
bargaining capability on behalf of the Company's shareholders in a takeover
situation and could, under some circumstances, be used to render more difficult
or discourage a merger, tender offer or proxy contest, the assumption of control
by a holder of a large block of the Company's securities, or the removal of
incumbent management, even if such a transaction were favored by the holders of
the requisite number of the then outstanding shares. Accordingly, shareholders
might be deprived of an opportunity to consider a takeover proposal which a
third party might consider if the Company did not have authorized but unissued
shares of stock.
MANAGEMENT RECOMMENDS A VOTE IN FAVOR OF THIS PROPOSAL
OTHER MATTERS
The Board of Directors knows of no other matters that will be presented
for consideration at the meeting, other than those matters referred to in this
Proxy Statement.
<PAGE>
STOCKHOLDER PROPOSALS
Shareholder proposals relating to the Company's Annual General Meeting
of Shareholders for the fiscal year ending December 31, 1997 must be received by
the Company at its office, c/o Conyers, Dill & Pearman, Clarendon House,
Hamilton, Bermuda, by January 12, 1998. The fact that a shareholder proposal is
received in a timely manner does not insure its inclusion in the Company's proxy
materials. The Company reserves the right to omit any proposals from its Proxy
Statement and Form of Proxy where such omission is permitted by the rules of the
Securities and Exchange Commission.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE,
SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING IN PERSON ARE URGED TO
SIGN, DATE, AND RETURN THE ENCLOSED PROXY IN THE REPLY ENVELOPE PROVIDED.
By Order of the Board of Directors.
James R. Joyce
Assistant Secretary
Dated: May 13, 1997
<PAGE>
EXHIBIT A
RESTATEMENT OF THE BYE-LAWS
EXHIBIT B
RESOLVED: That the Company is authorized to increase the authorized common stock
of the Company, par value $.12 per share, from 100,000,000 shares currently
authorized to 250,000,000 shares, subject to the Bye-laws of the Company.
EXHIBIT C
RESOLVED: That the Company is authorized to issue 10,000,000 shares of
preferred stock of the Company, subject to the Bye-laws of the Company.
<PAGE>
EXHIBIT A
BYE-LAWS
OF
COASTAL CARIBBEAN OILS & MINERALS, LTD
(adopted at a general meeting held on the 23rd day of June, 1997)
SUBJECT BYE-LAW
Interpretation 1-2
Share Capital 3-6
Alteration Of Capital 7-11
Shares 12-15
Shares Certificates 16-21
Lien On, Calls On, and Forfeiture Of, Shares 22-42
Register Of Members 43-44
Record Dates 45
Transfer Of Shares 46-51
Transmission Of Shares 52-54
Untraceable Members 55
General Meetings 56-58
Notice Of General Meetings 59-60
Proceedings At General Meetings 61-65
Voting 66-73
Proxies and Corporation's Representatives 74-80
Board Of Directors 81-84
Executive Directors 85-86
Alternate Directors 87-90
Directors' Fees And Expenses 91-94
Directors' and Officers' Interests 95-98
General Powers Of The Directors 99-108
Proceedings Of The Directors 109-118
Managers 119-121
Officers 122-126
Register of Directors and Officers 127
Minutes 128
Seal 129-130
Destruction Of Documents 131
Dividends And Distributions 132-142
Capitalisation 143-144
Subscription Rights Reserve 145
Accounting Records 146-148
Audit 149-154
Notices 155-158
Winding Up 159-160
Indemnity 161
Alteration Of Bye-laws And Amendment To
Memorandum of Association 162
Business Combinations 163-164
<PAGE>
INTERPRETATION
1. In these Bye-laws, unless the context otherwise requires, the words standing
in the first column of the following table shall bear the meaning set opposite
them respectively in the second column.
Word Meaning
"Act" The Companies Act 1981 of Bermuda, as
amended from time to time.
"acting in concert" The term "person acting in concert"
includes:
(i) persons who, pursuant to an agreement,
arrangement or understanding (whether formal
or informal), actively cooperate either in the
acquisition or holding by any of them of
shares or th beneficial ownership of shares,
or rights over shares, carrying voting rights
in the Company, or in the exercise of voting
rights with respect to shares in the Company;
(ii) a company with any of its directors (or
their spouses, minor children, nominees,
related trusts or companies in which any
director holds or beneficially owns ten
percent (10%) or more of the shares, or rights
over shares, carrying voting rights);
(iii) a company with the trustees or managers
of any of its pension, provident or employee
benefit funds or any of its employee stock
option schemes;
(iv) a person who is a fund manager, with an
investment company, unit trust or other person
whose investments such person manages on a
discretionary basis, in respect of the
relevant investment accounts;
(v) a company with its parent company or any
of its subsidiaries; and
(vi) a company, in which ten percent (10%) or
more of the shares, or rights over shares,
carrying voting rights are held or
beneficially owned by a person, with any other
company in which ten percent (10%) or more of
the shares, or rights over shares, carrying
voting rights are held or beneficially owned
by the same person.
<PAGE>
"affiliate" means a person that directly or indirectly,
through one or more intermediaries, controls,
is controlled by, or is under common control
with another person. A person who is the
beneficial owner of ten percent (10%) or more
of a company's outstanding voting shares shall
be deemed to control such company.
"Auditor" the auditor of the Company for the time being
and may include any individual or partnership,
corporation, or other business entity.
"beneficial owner" a person (excluding an underwriter, acting
in the ordinary course of business as an
underwriter, who acquires shares pursuant to
any issue or offer of shares underwritten by
him):
(i) who individually or with or through any
affiliate or beneficially owns shares
(ii) who individually or with or through any
affiliate has;
(a) the right to acquire shares (whether
such right is exercisable immediately
or only after the passage of time)
pursuant to any agreement, arrangement
or understanding (whether formal or
informal), or upon the exercise of
conversion rights, exchange rights,
warrants or options or otherwise;
provided, however, that a person shall
not be deemed the beneficial owner of
any share tendered pursuant to a
tender or exchange offer until such
offer is accepted; or
(b) the right to vote shares pursuant to
any agreement, arrangement or under-
standing (whether formal or informal);
provided, however, that a person shall
not be deemed the beneficial owner of
any share under this subparagraph (b)
if the right to vote such share arises
solely from a revocable proxy or
consent given in response to a proxy
or consent solicitation made to
Members or any class of Members
generally; or solely under a nominee
agreement or trust where the nominee
or trustee has no economic interest
in the share (other than the right
to be paid normal nominee or trustee
fees or remuneration); or
<PAGE>
(ii) who has any agreement, arrangement or
understanding (whether formal or informal)
for the purpose of acquiring, holding, voting
(except where the right to vote is within the
exclusion of subparagraph (ii)(b) above)
or disposing of any shares with any other
person who beneficially owns, or whose
affiliates directly or indirectly beneficially
own, shares or any interest therein.
"Bye-laws" these Bye-laws in their present form or as
supplemented or amended or substituted from
time to time.
"Board" or the Board of Directors of the Company or the
"Directors" Directors present at a meeting of Directors at
which a quorum is present.
"Business Combination" any scheme of arrangement, reconstruction,
amalgamation, takeover, or similar business
combination involving the Company or any
subsidiaries and any other person.
"capital" the share capital from time to time of
the Company.
"Cause" (i) conviction of the Director on indictment
of an indictable offence involving the
management of the Company; or
(ii) persistent breach of the Act
"clear days" in relation to the period of a notice that
period excluding the day when the notice is
given or deemed to be given and the day for
which it is given or on which it is to take
effect.
"clearing house" a clearing house recognised by
the laws of the jurisdiction in which
the shares of the Company are listed or
quoted on a stock exchange in such
jurisdiction.
"Company" Coastal Caribbean Oils & Minerals, Ltd.
"Competent a competent regulatory authority in the
Regulatory jurisdiction or place where the shares of the
Authority" Company are listed or quoted on a stock
exchange in such territory.
"Designated Stock a stock exchange which is an appointed stock
Exchange" exchange for the purposes of the Act in
respect of which the shares of the Company are
listed or quoted.
"dollars" and "$" dollars, the legal currency of the United
States of America.
"head office" such office of the Company as the Directors
may from time to time determine to be the
principal office of the Company.
<PAGE>
"Member" a duly registered holder from time to time of
the shares in the capital of the Company.
"month" a calendar month.
"Notice" written notice unless otherwise specifically
stated and as further defined in these
Bye-laws.
"Office" the registered office of the Company for the
time being.
"ordinary resolution" a resolution passed by both (i) simple
majority of votes cast by such Members as,
being entitled so to do, vote in person or, in
the case of any Member being a corporation, by
its duly authorised representative or, where
proxies are allowed, by proxy and (ii) a
simple majority in number of the Members
present in person or in the case of any Member
being a corporation by its duly authorised
representative or where proxies are allowed,
by proxy, at a general meeting of which not
less than fourteen (14) clear days' Notice
(save where a longer period is required by
these Bye-laws) has been duly given PROVIDED
THAT when shares are held by members
of another company, firm, partnership,
association or other body corporate or
unincorporate and such persons act in concert,
or when shares are held by or for a group of
Members who act in concert, such persons shall
be deemed to be one Member.
"paid up" paid up or credited as paid up.
"person" (i) any person acting in concert with him or
any nominee for him or person acting on his
behalf;
(ii) any company in which such person holds
or is the beneficial owner of ten percent
(10%) or more of the shares, or rights over
shares, carrying voting right in such
company; and
(iii) any person or entity over which the
person acquiring the shares, or rights over
shares, carrying voting rights has, directly
or indirectly, the power to direct or cause
the direction of management or policies of
such other person.
"Register" the principal register and where applicable,
any branch register of Members of the Company
to be kept pursuant to the provisions of the
Act.
<PAGE>
"Registration Office" in respect of any class of share capital
such place as the Board may from time to time
determine to keep a branch register of Members
in respect of that class of share capital and
where (except in cases where the Board
otherwise directs) the transfers or other
documents of title for such class of share
capital are to be lodged for registration and
are to be registered.
"Seal" common seal or any one or more duplicate seals
of the Company (including a securities seal)
for use in Bermuda or in any place outside
Bermuda.
"Secretary" any person firm or corporation appointed by
the Board to perform any of the duties of
secretary of the Company and includes any
assistant, deputy, temporary or acting
secretary.
"special resolution" a resolution passed by both (i) a majority
of not less than 75% of votes cast by such
Members as, being entitled so to do, vote in
person or, in the case of such Members as are
corporations, by their duly authorised
representative or, where proxies are allowed,
by proxy and (ii) by a majority of 75% in
number of the Members present in person or in
the case of any Member being a corporation by
its duly authorised representative or where
proxies are allowed, by proxy, at a general
meeting of which not less than twenty-one (21)
clear days' notice (save where a longer period
is required by these Bye-laws), specifying
(without prejudice to the power contained
in these Bye-laws to amend the same) the
intention to propose the resolution as a
special resolution, has been duly given
provided that a resolution may be proposed
and passed as a special resolution at any
general meeting, other than an annual general
meeting, of which less than twenty-one (21)
clear days' Notice has been given, if it is
so agreed by a majority in number of the
Members having the right to attend and vote at
any such meeting, being a majority together
holding not less than ninety-five (95) percent
in nominal value of the shares giving that
right PROVIDED FURTHER THAT when shares are
held by members of another company, firm,
partnership, association or other body
corporate or unincorporate and such persons
act in concert, or when shares are held by or
for a group of Members who act in concert,
such persons shall be deemed to be one Member.
"threshold" 15% or more or the total voting rights which
may be cast at
"year" a calendar year.
2. (1) In these Bye-laws, unless such construction is inconsistent with the
subject or context:
(a) words importing the singular include the plural and vice versa;
(b) words importing a gender include every gender;
<PAGE>
(c) words importing persons include companies, associations and
bodies of persons whether corporate or unincorporate;
(d) the words:
(i) "may" shall be construed as permissive;
(ii) "shall" or "will" shall be construed as imperative;
(e) expressions referring to writing shall, unless the contrary
intention appears, be construed as including printing,
lithography, photography and other modes (including electronic or
by computer) of representing words or figures in a visible form;
(f) references to any act, ordinance, statute or statutory provision
shall be interpreted as relating to any statutory modification or
re-enactment thereof for the time being in force;
(g) save as aforesaid words and expressions defined in the Act shall
bear the same meanings in these Bye-laws if not inconsistent with
the subject in the context;
(h) a special resolution shall be effective for any purpose for which
an ordinary resolution is expressed to be required under any
provision of these Bye-laws or the Act.
(2) Any right or power of the Company under the Act or the Company's
memorandum of association or Bye-laws which is not expressly subject to approval
by the Members in general meeting shall be exercisable the Board.
SHARE CAPITAL
3. (1) The capital of the Company shall be divided into shares of the pa
value of US$0.12 each.
(2) The Members shall, subject to the provisions of the Company's
memorandum of association and these Bye-laws, be entitled:
(a) to one vote per share and one individual vote as a Member;
(b) to such dividends as the Directors may from time to time declare
on shares;
(c) in the event of a winding-up or dissolution of the Company,
whether voluntary or involuntary or on a reorganisation or
otherwise or upon a distribution of capital, to all the surplus
assets of the Company;
(d) generally to all the rights from time to time attaching to the
shares.
<PAGE>
4. (1) Subject to any special rights conferred on the holders of any shares or
class of shares, any share in the Company (whether forming part of the present
capital or not) may be issued with or have attached thereto such rights or
restrictions whether in regard to dividend, voting, return of capital or
otherwise as the Board may determine.
(2) No Member shall be entitled to any information of the Company's trading
or any matter which is or may be in the nature of confidential information or a
trade secret or secret process which may relate to the conduct of the business
of the Company and which in the opinion of the Directors would be inappropriate
to communicate to the public.
5. Subject to the Act and the Company's memorandum of association and these
Bye-laws, any preference shares may be issued or converted into shares that, at
a determinable date or at the option of the Company or the holder, are liable to
be redeemed on such terms and in such manner as the Company before the issue or
conversion may by ordinary resolution determine.
6. Subject to the Act, the Company's memorandum of association and Bye-laws,
and, where applicable, the rules of any Designated Stock Exchange and/or any
competent regulatory authority, the Company may purchase or otherwise acquire
its own shares upon such terms and subject to such conditions as the Board
thinks fit.
ALTERATION OF CAPITAL
7. (1) The Company may from time to time by ordinary resolution in accordance
with the Act:
(a) increase its capital by such sum, to be divided into shares of
such amounts, as the resolution shall prescribe;
(b) consolidate and divide all or any of its capital into shares of
larger amount than its existing shares;
(c) divide its shares into several classes and without prejudice to
any special rights previously conferred on the holders of
existing shares attach thereto respectively any preferential,
deferred, qualified or special rights, privileges, conditions or
such restrictions which in the absence of any such determination
by the Company in general meeting, as the Directors may determine
provided always that where the Company issues shares which do not
carry voting rights, the words "non-voting" shall appear in the
designation of such shares and where the equity capital includes
shares with different voting rights, the designation of each
class of shares, other than those with the most favourable voting
rights, shall include the words "restricted voting" or "limited
voting";
(d) sub-divide its shares, or any of them, into shares of smaller
amount than is fixed by the memorandum of association, and may by
such resolution determine that, as between the holders of the
shares resulting from such sub-division, one or more of the
shares may have any such preferred rights or be subject to any
such restrictions as compared with the other or others as the
Company has power to attach to unissued or new shares;
<PAGE>
(e) change the currency denomination of its share capital; and
(f) cancel any shares which, at the date of the passing of the
resolution, have not been taken, or agreed to be taken, by any
person, and diminish the amount of its capital by the amount of
the shares so canceled.
(2) The Board may settle as it considers expedient any difficulty which
arises in relation to any consolidation and division under this Bye-law and in
particular but without prejudice to the generality of the foregoing may issue
certificates in respect of fractions of shares or arrange for the sale of the
shares representing fractions and the distribution of the net proceeds of sale
(after deduction of the expenses of such sale) in due proportion amongst the
Members 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
their purchaser or resolve that such net proceeds be paid to the Company for the
Company's benefit. Such purchaser will not be bound to see to the application of
the purchase money nor will his title to the shares be affected by any
irregularity or invalidity in the proceedings relating to the sale.
8. The Company may from time to time by ordinary resolution in accordance with
the Act reduce its authorised or issued share capital or any share premium
account or other undistributable reserve in any manner permitted by law.
9. Except so far as otherwise provided by the conditions of issue, or by these
Bye-laws, any capital raised by the creation of new shares shall be treated as
if it formed part of the original capital of the Company, and such shares shall
be subject to the provisions contained in these Bye-laws with reference to the
payment of calls and installments, transfer and transmission, forfeiture, lien,
cancellation, surrender, voting and otherwise.
10. Subject to the Act and without prejudice to Bye-law 4, all or any of the
special rights for the time being attached to the shares or any class of shares
may, unless otherwise provided by the terms of issue of the shares of that
class, from time to time (whether or not the Company is being wound up) be
varied, modified or abrogated with the sanction of a special resolution passed
at a separate general meeting of the holders of the shares of that class. To
every such separate general meeting all the provisions of these Bye-laws
relating to general meetings of the Company shall, mutatis mutandis apply.
11. 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 varied, modified or
abrogated by the creation or issue of further shares ranking pari passu
therewith.
SHARES
12. (1)Subject to the Act and these Bye-laws and without prejudice to any
special rights or restrictions for the time being attached to any shares or any
class of shares, the unissued shares of the Company (whether forming part of the
original or any increased capital) shall be at the disposal of the Board, which
may offer, allot, grant options over, rights to acquire 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 in its absolute discretion determine but
so that no shares shall be issued at a discount. Neither the Company nor the
Board shall be obliged, when making or granting any allotment of, offer of,
option over, rights to acquire or disposal of shares, to make, or make
available, any such offer, option rights or shares to Members or others with
registered addresses in any particular territory or territories being a
territory or territories where, in the absence of a registration statement or
other formalities, this would or might, in the opinion of the Board, be unlawful
or impracticable. Members affected as a result of the foregoing sentence shall
not be, or be deemed to be, a separate class of members for any purpose
whatsoever.
(2) The Board may issue warrants conferring the right upon the holders
thereof to subscribe for any class of shares or securities in the capital of the
Company on such terms as it may from time to time determine.
13. (1) The Company may in connection with the issue of any shares exercise all
powers of paying commission and brokerage conferred or permitted by the Act.
Subject to the Act, the commission may be satisfied by the payment of cash or by
the allotment of fully or partly paid shares or partly in one and partly in the
other.
(2) Neither the Company nor any of its subsidiaries shall directly or
indirectly give financial assistance to a person who is acquiring or proposing
to acquire shares in the Company for the purpose of that acquisition whether
before or at the same time as the acquisition takes place or afterwards PROVIDED
that nothing in this Bye-law shall prohibit transactions permitted by the Acts.
14. Except as required by law, no person shall be recognised by the Company as
holding any share upon any trust and the Company shall not be bound by or
required in any way to recognise (even when having notice thereof) any
equitable, contingent, future or partial interest in any share or any fractional
part of a share or (except only as otherwise provided by these Bye-laws or by
law) any other rights in respect of any share except an absolute right to the
entirety thereof in the registered holder.
15. Subject to the Act and these Bye-laws, the Board may at any time after the
allotment of shares but before any person has been entered in the Register as
the holder, recognise a renunciation thereof by the allottee in favour of some
other person and may accord to any allottee of a share a right to effect such
renunciation upon and subject to such terms and conditions as the Board
considers fit to impose.
SHARE CERTIFICATES
16. Every share certificate shall be issued under the Seal or a facsimile
thereof and shall specify the number and class and distinguishing numbers (if
any) of the shares to which it relates, and the amount paid up thereon and may
otherwise be in such form as the Directors may from time to time determine. No
certificate shall be issued representing shares of more than one class. The
Board may by resolution determine, either generally or in any particular case or
cases, that any signatures on any such certificates (or certificates in respect
of other securities) need not be autographic but may be affixed to such
certificates by some mechanical means or may be printed thereon or that such
certificates need not be signed by any person.
<PAGE>
17. (1)In the case of a share held jointly by several persons, the Company shall
not be bound to issue more than one certificate therefor and delivery of a
certificate to one of several joint holders shall be sufficient delivery to all
such holders.
(2)Where a share stands in the names of two or more persons, the person
first named in the Register shall as regards service of notices and, subject to
the provisions of these Bye-laws, all or any other matters connected with the
Company, except the transfer of the shares, be deemed the sole holder thereof.
18. Every person whose name is entered, upon an allotment of shares, as a Member
in the Register shall be entitled, without payment, to receive one certificate
for all such shares of any one class or several certificates each for one or
more of such shares of such class upon payment for every certificate after the
first of such reasonable out-of-pocket expenses as the Board from time to time
determines.
19. (1)Subject to paragraph (2) hereof, share certificates shall be issued in
the case of an issue of shares within twenty-one (21) days (or such longer
period as the terms of the issue provide) after allotment or in the case of a
transfer of fully or partly paid shares within twenty-one (21) days after
lodgment of a transfer with the Company, not being a transfer which the Company
is for the time being entitled to refuse to register and does not register.
(2)Notwithstanding anything in these Bye-laws, a person may by notice in
writing to the Company elect that no certificate be issued in respect of shares
registered or to be registered in his name and on receipt of such election the
Company shall not be required to issue a certificate for such shares or may
cancel an existing certificate without issuing another certificate in lieu
thereof.
20. Upon every transfer of shares the certificate held by the transferor shall
be given up to be canceled, and shall forthwith be canceled accordingly, and a
new certificate shall be issued to the transferee in respect of the shares
transferred to him. If any of the shares included in the certificate so given up
shall be retained by the transferor a new certificate for the balance shall be
issued to him.
21. If a share certificate shall be damaged or defaced or alleged to have been
lost, stolen or destroyed a new certificate representing the same shares may be
issued to the relevant member upon request and on payment of such fee as the
Designated Stock Exchange may determine to be the maximum payable or such lesser
sum as the Board may determine and, subject to compliance with such terms (if
any) as to evidence and indemnity and to payment of the costs and reasonable
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 damage or
defacement, on delivery of the old certificate to the Company provided always
that where share warrants have been issued, no new share warrant shall be issued
to replace one that has been lost unless the Directors are satisfied beyond
reasonable doubt that the original has been destroyed.
<PAGE>
LIEN ON, CALLS ON AND FORFEITURE OF, SHARES
22. The Company shall have a first and paramount lien on every share (not being
a fully paid share) for all moneys (whether presently payable or not) called or
payable at a fixed time in respect of that share. The Company shall also have a
first and paramount lien on every share (not being a fully paid share)
registered in the name of a Member (whether or not jointly with other Members)
for all amounts of money presently payable by such Member or his estate to the
Company whether the same shall have been incurred before or after notice to the
Company of any equitable or other interest of any person other than such Member,
and whether the period for the payment or discharge of the same shall have
actually arrived or not, and notwithstanding that the same are joint debts or
liabilities of such Member or his estate and any other person, whether a Member
of the Company or not. The Company's lien on a share shall extend to all
dividends or other moneys payable thereon or in respect thereof. The Board may
at any time, generally or in any particular case, waive any lien that has arisen
or declare any share exempt in whole or in part, from the provisions of this
Bye-law.
23. Subject to these Bye-laws, the Company may sell in such manner as the Board
determines 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, or the
liability or engagement in respect of which such lien exists is liable to be
presently fulfilled or discharged nor until the expiration of fourteen clear
days after a notice in writing, stating and demanding payment of the sum
presently payable, or specifying the liability or engagement and demanding
fulfillment or discharge thereof and giving notice of the intention to sell in
default, has been served on the registered holder for the time being of the
share or the person entitled thereto by reason of his death or bankruptcy.
24. The net proceeds of the sale shall be received by the Company and 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 entitled to the
share at the time of the sale. To give effect to any such sale the Board may
authorise some person to transfer the shares sold to the purchaser thereof. The
purchaser shall be registered as the holder of the shares so transferred and he
shall not be bound to see to the application of the purchase money, nor shall
his title to the shares be affected by any irregularity or invalidity in the
proceedings relating to the sale.
25. Subject to these Bye-laws and to the terms of allotment, the Board may from
time to time make calls upon the Members in respect of any moneys unpaid on
their shares (whether on account of the nominal value of the shares or by way of
premium), and each Member shall (subject to being given at least fourteen (14)
clear days' Notice specifying the time and place of payment) pay to the Company
as required by such notice the amount called on his shares. A call may be
extended, postponed or revoked in whole or in part as the Board determines but
no member shall be entitled to any such extension, postponement or revocation
except as a matter of grace and favour.
<PAGE>
26. A call shall be deemed to have been made at the time when the resolution of
the Board authorising the call was passed and may be made payable either in one
lump sum or by installments. The Directors may make arrangements on the issue of
shares for a difference between the Members in the amount of calls to be paid
and in the times of payment.
27. A person upon whom a call is made shall remain liable for calls made upon
him notwithstanding the subsequent transfer of the shares in respect of which
the call was made. The joint holders of a share shall be jointly and severally
liable to pay all calls and installments due in respect thereof or other moneys
due in respect thereof.
28. If a sum called in respect of a share is not paid before or on the day
appointed for payment thereof, the person from whom the sum is due shall pay
interest on the amount unpaid from the day appointed for payment thereof to the
time of actual payment at such rate as the Board may determine, but the Board
may in its absolute discretion waive payment of such interest wholly or in part.
29. No Member shall be entitled to receive any dividend or bonus or to be
present and vote (save as proxy for another Member) at any General Meeting
either personally or by proxy, or be reckoned in a quorum, or exercise any other
privilege as a Member until all calls or installments due by him to the Company,
whether alone or jointly with any other person, together with interest and
expenses (if any) shall have been paid.
30. On the trial or hearing of any action or other proceedings for the recovery
of any money due for any call, it shall be sufficient to prove that the name of
the Member sued is entered in the Register as the holder, or one of the holders,
of the shares in respect of which such debt accrued, that the resolution making
the call is duly recorded in the minute book, and that notice of such call was
duly given to the Member sued, in pursuance of these Bye-laws; and it shall not
be necessary to prove the appointment of the Directors who made such call, nor
any other matters whatsoever, but the proof of the matters aforesaid shall be
conclusive evidence of the debt.
31. Any amount payable in respect of a share upon allotment or at any fixed
date, whether in respect of nominal value or premium or as an instalment of a
call, shall be deemed to be a call duly made and payable on the date fixed for
payment and if it is not paid the provisions of these Bye-laws shall apply as if
that amount had become due and payable by virtue of a call duly made and
notified.
32. On the issue of shares the Board may differentiate between the allottees
or holders as to the amount of calls to be paid and the times of payment.
33. The Board may, if it thinks fit, receive from any Member willing to advance
the same, and either in money or money's worth, all or any part of the moneys
uncalled and unpaid or installments payable upon any shares held by him and upon
all or any of the moneys so advanced (until the same would, but for such
advance, become presently payable) pay interest at such rate (if any) as the
Board may decide. The Board may at any time repay the amount so advanced upon
giving to such Member not less than one month's notice in writing of its
intention in that behalf, unless before the expiration of such notice the amount
so advanced shall have been called up on the shares in respect of which it was
advanced. Such payment in advance shall not entitle the holder of such share or
shares to participate in respect thereof in a dividend subsequently declared.
<PAGE>
34. (1) If a call remains unpaid after it has become due and payable
the Board may give to the person from whom it is due not less than fourteen (14)
clear days' notice:
(a) requiring payment of the amount unpaid together with any
interest which may have accrued and which may still accrue up
to the date of actual payment; and
(b) stating that if the notice is not complied with the shares on
which the call was made will be liable to be forfeited.
(2) If the requirements of any such notice 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 and interest due in respect thereof has
been made, be forfeited by a resolution of the Board to that effect, and such
forfeiture shall include all dividends and bonuses declared in respect of the
forfeited share but not actually paid before the forfeiture.
35. 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. No forfeiture
shall be invalidated by any omission or neglect to give such notice.
36. 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 will
include surrender.
37. Until canceled in accordance with the requirements of the Act, a forfeited
share shall be the property of the Company and may be sold, re-allotted or
otherwise disposed of to such person, upon such terms and in such manner as the
Board determines, and at any time before a sale, re-allotment or disposition the
forfeiture may be annulled by the Board on such terms as the Board determines.
38. A person whose shares have been forfeited shall cease to be a Member in
respect of the forfeited shares but nevertheless shall remain liable to pay the
Company all moneys which at the date of forfeiture were presently payable by him
to the Company in respect of the shares, with (if the Directors shall in their
discretion so require) interest thereon from the date of forfeiture until
payment at such rate as the Board determines. The Board may enforce payment
thereof if it thinks fit, and without any deduction or allowance for the value
of the forfeited shares, at the date of forfeiture, but his liability shall
cease if and when the Company shall have received payment in full of all such
moneys in respect of the shares. For the purposes of this Bye-law any sum which,
by the terms of issue of a share, is payable thereon at a fixed time which is
subsequent to the date of forfeiture, whether on account of the nominal value of
the share or by way of premium, shall notwithstanding that time has not yet
arrived be deemed to be payable at the date of forfeiture, and the same shall
become due and payable immediately upon the forfeiture, but interest thereon
shall only be payable in respect of any period between the said fixed time and
the date of actual payment.
39. A declaration by a Director or the Secretary that a share has been forfeited
on a specified date shall be conclusive evidence of the facts therein stated as
against all persons claiming to be entitled to the share, and such declaration
shall (subject to the execution of an instrument of transfer by the Company if
necessary) constitute a good title to the share, and the person to whom the
share is disposed of shall be registered as the holder of the share and shall
not be bound to see to the application of the consideration (if any), nor shall
his title to the share be affected by any irregularity in or invalidity of the
proceedings in reference to the forfeiture, sale or disposal of the share. When
any share shall have been forfeited, notice of the declaration shall be given to
the member in whose name it stood immediately prior to the forfeiture, and an
entry of the forfeiture, with the date thereof, shall forthwith be made in the
register, but no forfeiture shall be in any manner invalidated by any omission
or neglect to give such notice or make any such entry.
40. Notwithstanding any such forfeiture as aforesaid the Board may at any time,
before any shares so forfeited shall have been sold, re-allotted or otherwise
disposed of, permit the shares forfeited to be bought back upon the terms of
payment of all calls and interest due upon and expenses incurred in respect of
the share, and upon such further terms (if any) as it thinks fit.
41. The forfeiture of a share shall not prejudice the right of the Company to
any call already made or instalment payable thereon.
42. The provisions of these Bye-laws as to forfeiture shall apply in the case of
non-payment of any sum which, by the terms of issue of a share, becomes payable
at a fixed time, whether on account of the nominal value of the share or by way
of premium, as if the same had been payable by virtue of a call duly made and
notified.
REGISTER OF MEMBERS
43. (1) The Company shall keep in one or more books a Register of
its Members and shall enter therein the following particulars, that is to say:
(a) the name and address of each Member, the number and class of
shares held by him and the amount paid or agreed to be
considered as paid on such shares;
(b) the date on which each person was entered in the Register;
and
(c) the date on which any person ceased to be a Member.
(2) Subject to the Act, the Company may keep an overseas or
local or other branch register of Members resident in any place, and the Board
may make and vary such regulations as it determines in respect of the keeping of
any such register and maintaining a Registration Office in connection therewith.
44. The Register and branch register of Members, as the case may be, shall be
open to inspection between 10 a.m. and 12 noon on every business day by Members
without charge or by any other person, upon a maximum payment of five Bermuda
dollars, at the Office or such other place in Bermuda at which the Register is
kept in accordance with the Act or, if appropriate, upon a maximum payment of
ten dollars at the Registration Office. The Register including any overseas or
local or other branch register of Members may, after notice has been given by
advertisement in an appointed newspaper and where applicable, any other
newspapers in accordance with the requirements of any Designated Stock Exchange
to that effect, be closed at such times or for such periods not exceeding in the
whole thirty (30) days in each year as the Board may determine and either
generally or in respect of any class of shares.
<PAGE>
RECORD DATES
45. Notwithstanding any other provision of these Bye-laws the Company or
the Directors may fix any date as the record date for:
(a) determining the Members entitled to receive any dividend,
distribution, allotment or issue and such record date may be
on, or at any time not more than 30 days before or after,
any date on which such dividend, distribution, allotment or
issue is declared, paid or made;
(b) determining the Members entitled to receive notice of and to
vote at any general meeting of the Company.
TRANSFER OF SHARES
46. Subject to these Bye-laws, any Member may transfer all or any of his shares
by an instrument of transfer in the usual or common form or in any other form
approved by the Board and may be under hand only.
47. The instrument of transfer shall be executed by or on behalf of the
transferor and the transferee provided that the Board may dispense with the
execution of the instrument of transfer by the transferee in any case which it
thinks fit in its discretion to do so. The Board may also resolve, either
generally or in any particular case, upon request by either the transferor or
transferee, to accept mechanically executed transfers. The transferor shall be
deemed to remain the holder of the share until the name of the transferee is
entered in the Register in respect thereof. Nothing in these Bye-laws shall
preclude the Board from recognising a renunciation of the allotment or
provisional allotment of any share by the allottee in favour of some other
person.
48. (1) The Board may, in its absolute discretion, and without giving any
reason therefor, refuse to register a transfer of any share issued under any
share scheme for employees upon which a restriction on transfer imposed thereby
still subsists, and it may also refuse to register a transfer of any share to
more than four (4) joint holders. Nothing in these Bye-laws shall impair the
settlement of transactions entered into through the facilities of a Designated
Stock Exchange except as provided by such exchange.
(2) No transfer shall be mad to an infant or to a person of unsound
mind or under other legal disability.
(3) The Board in so far as permitted by any applicable law may, in its
absolute discretion, at any time and from time to time transfer any share upon
the Register to any branch register or any share on any branch register to the
Register or any other branch register. In the event of any such transfer, the
shareholder requesting such transfer shall bear the cost of effecting the
transfer unless the Board otherwise determines.
<PAGE>
(4) Unless the Board otherwise agrees (which agreement may be on such
terms and subject to such conditions as the Board in its absolute discretion may
from time to time determine, and which agreement it shall, without giving any
reason therefor, be entitled in its absolute discretion to give or withhold), no
shares upon the Register shall be transferred to any branch register nor shall
shares on any branch register be transferred to the Register or any other branch
register and all transfers and other documents of title shall be lodged for
registration, and registered, in the case of any shares on a branch register, at
the relevant Registration Office, and, in the case of any shares on the
Register, at the Office or such other place in Bermuda at which the Register is
kept in accordance with the Act.
49. Without limiting the generality of the last preceding Bye-law, the
Board may decline to recognise any instrument of transfer unless:-
(a) the instrument of transfer is in respect of only one class
of share;
(b) the instrument of transfer is lodged at the Office or such
other place in Bermuda at which the Register is kept in
accordance with the Act or the Registration Office (as the
case may be) accompanied by the relevant share
certificate(s) and such other evidence as the Board may
reasonably require to show the right of the transferor to
make the transfer (and, if the instrument of transfer is
executed by some other person on his behalf, the authority
of that person so to do); and
(c) if applicable, the instrument of transfer is duly and
properly stamped.
50. If the Board refuses to register a transfer of any share in accordance with
Bye-law 48, it shall, within two (2) months after the date on which the transfer
was lodged with the Company, send to each of the transferor and transferee
notice of the refusal.
51. The registration of transfers of shares or of any class of shares may, after
notice has been given by advertisement in an appointed newspaper and, where
applicable, any other newspapers in accordance with the requirements of any
Designated Stock Exchange to that effect be suspended at such times and for such
periods (not exceeding thirty (30) days in any year) as the Board may determine.
TRANSMISSION OF SHARES
52. If a Member dies, the survivor or survivors where the deceased was a joint
holder, and his legal personal representatives where he was a sole or only
surviving holder, will be the only persons recognised by the Company as having
any title to his interest in the shares; but nothing in this Bye-law will
release the estate of a deceased Member (whether sole or joint) from any
liability in respect of any share which had been solely or jointly held by him.
53. Subject to the Act, any person becoming entitled to a share in consequence
of the death or bankruptcy or winding-up of a Member may, upon such evidence as
to his title being produced as may be required by the Board, elect either to
become the holder of the share or to have some person nominated by him
registered as the transferee thereof. If he elects to become the holder he shall
notify the Company in writing either at the Registration Office or Office, as
the case may be, to that effect. If he elects to have another person registered
he shall execute a transfer of the share in favour of that person. The
provisions of these Bye-laws relating to the transfer and registration of
transfers of shares shall apply to such notice or transfer as aforesaid as if
the death or bankruptcy of the Member had not occurred and the notice or
transfer were a transfer signed by such Member.
54. A person becoming entitled to a share by reason of the death or bankruptcy
or winding-up of a Member shall be entitled to the same dividends and other
advantages to which he would be entitled if he were the registered holder of the
share. However, the Board may, if it thinks fit, withhold the payment of any
dividend payable or other advantages in respect of such share until such person
shall become the registered holder of the share or shall have effectually
transferred such share, but, subject to the requirements of Bye-law 70(2) being
met, such a person may vote at meetings.
UNTRACEABLE MEMBERS
55. (1) Without prejudice to the rights of the Company under paragraph (2)
of this Bye-law, the Company may cease sending cheque for dividend entitlements
or dividend warrants by post if such cheque or warrants have been left uncashed
on two consecutive occasions. However, the Company may exercise the power to
cease sending cheque for dividend entitlements or dividend warrants after the
first occasion on which such a cheque or warrant is returned undelivered.
(2) The Company shall have the power to sell, in such manner as the
Board thinks fit, any shares of a Member who is untraceable, but no such sale
shall be made unless:
(a) all cheque or warrants in respect of dividends of the shares
in question, being not less than three in total number, for
any sum payable in cash to the holder of such shares in
respect of them sent during the relevant period in the
manner authorised by the Bye-laws of the Company have
remained uncashed;
(b) so far as it is aware at the end of the relevant period, the
Company has not at any time during the relevant period
received any indication of the existence of the Member who
is the holder of such shares or of a person entitled to such
shares by death, bankruptcy or operation of law; and
(c) the Company, if so required by the rules governing the
listing of shares on the Designated Stock Exchange, has
given notice to, and caused advertisement in newspapers in
accordance with the requirements of, the Designated Stock
Exchange to be made of its intention to sell such shares in
the manner required by the Designated Stock Exchange, and a
period of three (3) months or such shorter period as may be
allowed by the Designated Stock Exchange has elapsed since
the date of such advertisement.
For the purpose of the foregoing, the "relevant period" means the
period commencing twelve years before the date of publication of the
advertisement referred to in paragraph (c) of this Bye-law and ending at the
expiry of the period referred to in that paragraph.
<PAGE>
(3) To give effect to any such sale the Board may authorise some person
to transfer the said shares and an instrument of transfer signed or otherwise
executed by or on behalf of such person shall be as effective as if it had been
executed by the registered holder or the person entitled by transmission to such
shares, and the purchaser shall not be bound to see to the application of the
purchase money nor shall his title to the shares be affected by any irregularity
or invalidity in the proceedings relating to the sale. The net proceeds of the
sale will belong to the Company and upon receipt by the Company of such net
proceeds it shall become indebted to the former Member for an amount equal to
such net proceeds. No trust shall be created in respect of such debt and no
interest shall be payable in respect of it and the Company shall not be required
to account for any money earned from the net proceeds which may be employed in
the business of the Company or as it thinks fit. Any sale under this Bye-law
shall be valid and effective notwithstanding that the Member holding the shares
sold is dead, bankrupt or otherwise under any legal disability or incapacity.
GENERAL MEETINGS
56. An annual general meeting of the Company shall be held in each year other
than the year of incorporation at such time and place as may be determined by
the Board.
57. Each general meeting, other than an annual general meeting, shall be called
a special general meeting. General meetings may be held in any part of the world
as may be determined by the Board.
58. The Board may whenever it thinks fit call special general meetings, and
Members holding at the date of deposit of the requisition not less than
one-tenth of the paid up capital of the Company carrying the right of voting at
general meetings of the Company shall at all times have the right, by written
requisition to the Board or the Secretary of the Company stating the business to
be transacted, to require a special general meeting to be called by the Board
for the transaction of any business specified in such requisition and such
meeting shall be held within such period as the Board may consider appropriate.
NOTICE OF GENERAL MEETINGS
59. (1) An annual general meeting and any special general meeting shall be
called by not less than fourteen (14) clear days' Notice but a general meeting
may be called by shorter notice if it is so agreed:
(a) in the case of a meeting called as an annual general meeting, by
all the Members entitled to attend and vote thereat; and
(b) in the case of any other meeting, by a majority in number of the
Members having the right to attend and vote at the meeting, being a
majority together holding not less than ninety-five percent (95%)
in nominal value of the issued shares giving that right.
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(2) The period of notice shall be exclusive of the day on which it is
served or deemed to be served and exclusive of the day on which the meeting is
to be held, and the notice shall specify the time and place of the meeting and,
in case of special business, the general nature of the business. The notice
convening an annual general meeting shall specify the meeting as such. Notice of
every general meeting shall be given to all Members other than to such Members
as, under the provisions of these Bye-laws or the terms of issue of the shares
they hold, are not entitled to receive such notices from the Company, to all
persons entitled to a share in consequence of the death or bankruptcy or
winding-up of a Member and to each of the Directors and the Auditors.
60. The accidental omission to give Notice of a meeting or (in cases where
instruments of proxy are sent out with the Notice) to send such instrument of
proxy to, or the non-receipt of such Notice or such instrument of proxy by, any
person entitled to receive such Notice shall not invalidate any resolution
passed or the proceedings at that meeting.
PROCEEDINGS AT GENERAL MEETINGS
61. (1) No business other than the appointment of a chairman of a meeting shall
be transacted at any general meeting unless a quorum is present at the
commencement of the business unless otherwise expressly provided by these
Bye-laws. Members holding at least 25% of all shares in issue entitled to attend
and vote in person or by proxy or (in the case of a member being a corporation)
save where a higher quorum is stated in the Act by duly authorised
representative shall form a quorum for all purposes.
(2) The annual general meeting of the Company shall consider the
election of Directors, the receipt and consideration of the profit and loss
account, the balance sheet, the notes thereto and the reports of the Directors
and Auditors thereon, the appointment of the Auditors and such other business as
the Board considers may properly be brought before the meeting and shall be held
on such date as the Board shall each year fix. The day, place and hour of each
annual general meeting shall be specified in the notice of the annual general
meeting. The meeting may be postponed or adjourned from time to time and place
to place at the discretion of the Chairman until its business is completed.
To be properly brought before any general meeting by
Members, business must be (a) specified in the notice of the meeting (or any
supplement thereto) given by or at the direction of the Board, (b) otherwise
properly brought before the meeting by or at the direction of the Board, or (c)
specified in a notice or requisition given by Members in accordance with the Act
and delivered to or mailed and received at the registered office of the Company
not less than ninety (90) days before the anniversary date of the previous
annual general meeting of the Company in the case of business or resolutions
to be considered at an annual general meeting or ninety (90) days before a
special general meeting of the Company in the case of business or resolutions to
be considered at a special general meeting is held specifying:
(a) a description of the business to be brought before the
general meeting and the reasons for conducting such
business at the general meeting;
(b) the name and address of the Member intending to propose
such business;
<PAGE>
(c) the class and number of shares of the Company which are
beneficially owned by the Member;
(d) a representation that the Member is the registered holder
of sufficient shares required by the Act entitled to vote
at such meeting and intends to appear in person or by proxy
at the meeting to present such business; and
(e) any material interest of the Member in such business.
62. (1)If within thirty (30) minutes (or such longer time not exceeding
one hour as the chairman of the meeting may determine to wait) after the time
appointed for the meeting a quorum is not present, the meeting, if convened on
the requisition of Members, shall be dissolved. In any other case it shall stand
adjourned to the same day in the next week at the same time and place or to such
time and place as the Board may determine. If at such adjourned meeting a quorum
is not present within half an hour from the time appointed for holding the
meeting, the meeting shall be dissolved.
(2)Only persons who are nominated in accordance with the procedures
set forth in these Bye-laws shall be eligible for election as Directors.
Nominations of persons for election to the Board of Directors of the Company
shall only be made at an annual general meeting of the Company. Such nominations
shall be made (a) by or at the direction of the Board of Directors or (b) by any
Member of the Company entitled to vote for the election of Directors at the
meeting who complies with the notice procedures set forth in this Section.
Nominations by Members shall be made pursuant to timely notice in writing to the
Secretary of the Company. To be timely, a Member's notice shall be delivered to
or mailed and received at the principal executive offices of the Company not
less than sixty (60) days nor more than ninety (90) days prior to the meeting;
provided, however, that in the event that less than seventy (70) days' notice or
prior public disclosure of the date of the meeting is given or made to Members,
notice by the Member to be timely must be so received not later than the close
of business on the 10th day following the day on which such notice of the date
of the meeting was mailed or such public disclosure was made. For purposes of
this Section, public disclosure shall be deemed to have been made to Members
when disclosure of the date of the meeting is first made in a press release
reported by the Dow Jones news Services, Associated Press, Reuters Information
Services, Inc. or comparable national news service or in a document publicly
filed by the Company with Securities and Exchange Commission pursuant to
Sections 13, 14 or 15(d) of the Securities Exchange Act of 1934, as amended.
Each such notice shall set forth:
(a) the name and address of the Member who intends to make the
nomination and of the person or persons to be nominated;
(b) a representation that the Member is a holder of record of stock of
the Company entitled to vote at such meeting and intends to appear in person or
by proxy at the meeting to nominate the person or persons specified in the
notice;
(c) a description of all arrangements or understandings between the
Member and each nominee and any other person or persons (naming such person or
persons) pursuant to which nomination or nominations are to be made by the
Member; and
<PAGE>
(d) such other information regarding each nominee proposed by such
Member as would be required to be included in a proxy statement filed pursuant
to the proxy rules of the Securities and Exchange Commission, had the nominee
been nominated, or intended to be nominated, by the Board of Directors.
To be effective, each notice of intent to make a nomination given
hereunder shall be accompanied by the written consent of each nominee to being
named in a proxy statement and to serve as a Director of the Company if elected.
No person shall be eligible for election as a Director of the Company
unless nominated in accordance with the procedures set forth in these Bye-laws.
The presiding officer of the meeting shall, if the facts warrant, determine and
declare to the meeting that nomination was not made in accordance with the
procedures prescribed by these Bye-laws, and if he should so determine, he shall
so declare to the meeting and the defective nomination shall be disregarded.
63. The President of the Company or the Chairman shall preside as chairman at
every general meeting. If at any meeting the President or the Chairman, as the
case may be, is not present within fifteen (15) minutes after the time appointed
for holding the meeting, or if neither of them is willing to act as chairman,
the Directors present shall choose one of their number to act, or if one
Director only is present he shall preside as chairman if willing to act. If no
Director is present, or if each of the Directors present declines to take the
chair, or if the Chairman chosen shall retire from the chair, the Members
present in person or by proxy and entitled to vote shall elect one of their
number to be chairman.
64. The Chairman 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 as the meeting shall determine, but no business
shall be transacted at any adjourned meeting other than business which might
lawfully have been transacted at the meeting had the adjournment not taken
place. When a meeting is adjourned for fourteen (14) days or more, at least
seven (7) clear days' notice of the adjourned meeting shall be given specifying
the time and place of the adjourned meeting but it shall not be necessary to
specify in such notice the nature of the business to be transacted at the
adjourned meeting and the general nature of the business to be transacted. Save
as aforesaid, it shall be unnecessary to give notice of an adjournment. No
business shall be transacted at any such adjourned meeting other than the
business which might have been transacted at the meeting from which the
adjournment took place.
65. If an amendment is proposed to any resolution under consideration but is in
good faith 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.
In the case of a resolution duly proposed as a special resolution, no amendment
thereto (other than a mere clerical amendment to correct a patent error) may in
any event be considered or voted upon.
<PAGE>
VOTING
66. Subject to any special rights or restrictions as to voting for the time
being attached to any shares by or in accordance with these Bye-laws, at any
general meeting every Member present in person or by proxy or (being a
corporation) is present by a duly authorised representative shall have (i) one
vote in his capacity as an individual Member exercisable in such manner as the
chairman may determine provided that any persons who are acting in concert shall
be deemed to be a single Member and entitled to only one vote as an individual
Member and (ii) one vote for every fully paid share of which he is the holder
but so tha no amount paid up or credited as paid up on a share in advance of
calls or installments is treated for the foregoing purposes as paid up on the
share.
67. A declaration by the chairman that a resolution has been carried, or carried
unanimously, or by a particular majority, or not carried by a particular
majority, or lost, and an entry to that effect made in the minute book of the
Company, shall be conclusive evidence of the fact without proof of the number or
proportion of the votes recorded for or against the resolution.
68. In the case of an equality of votes the chairman of such meeting shall be
entitled to a second or casting vote in addition to any other vote he may have.
69. Where there are joint holders of any share any one of such joint holder may
vote, either in person or by proxy, in respect of such share as if he were
solely entitled thereto, but if more than one of such joint holders be present
at any meeting 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. Several
executors or administrators of a deceased Member in whose name any share stands
shall for the purposes of this Bye-law be deemed joint holders thereof.
70. (1) A Member who is a patient for any purpose 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 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 and
may otherwise act and be treated as if he were the registered holder of such
shares for the purposes of general meetings, provided that such evidence as the
Board may require of the authority of the person claiming to vote shall have
been deposited at the Office, head office or Registration Office, as
appropriate, not less than forty-eight (48) hours before the time appointed for
holding the meeting, or adjourned meeting as the case may be.
(2) Any person entitled under Bye-law 53 to be registered as the holder
of any shares may vote at any general meeting in respect thereof in the same
manner as if he were the registered holder of such shares, provided that
forty-eight (48) hours at least before the time of the holding of the meeting or
adjourned meeting, as the case may be, at which he proposes to vote, he shall
satisfy the Board of his entitlement to such shares, or the Board shall have
previously admitted his right to vote at such meeting in respect thereof.
71. No Member shall, unless the Board otherwise determines, be entitled to
attend and vote and to be reckoned in a quorum at any General Meeting unless he
is duly registered and all calls or other sums presently payable by him in
respect of shares in the Company have been paid.
<PAGE>
72. If:
(a) any objection shall be raised to the qualification of any voter; or
(b) any votes have been counted which ought not to have been counted or
which might have been rejected; or
(c) any votes are not counted which ought to have been counted;
the objection or error shall not vitiate the decision of the meeting or
adjourned meeting on any resolution unless the same is raised or pointed out at
the meeting or, as the case may be, the adjourned meeting at which the vote
objected to is given or tendered or at which the error occurs. Any objection or
error shall be referred to the Chairman of the meeting and shall only vitiate
the decision of the meeting on any resolution if the Chairman decides that the
same may have affected the decision of the meeting. The decision of the Chairman
on such matters shall be final and conclusive.
73. (1) Subject to the Act, a resolution in writing signed (in such manner as to
indicate, expressly or impliedly, unconditional approval) by or on behalf of all
persons for the time being entitled to receive notice of and to attend and vote
at general meetings of the Company shall, for the purposes of these Bye-laws, be
treated as a resolution duly passed at a general meeting of the Company and,
where relevant, as a special resolution so passed. Any such resolution shall be
deemed to have been passed at a meeting held on the date on which it was signed
by the last Member to sign, and where the resolution states a date as being the
date of his signature thereof by any Member the statement shall be prima facie
evidence that it was signed by him on that date. Such a resolution may consist
of several documents in the like form, each signed by one or more relevant
Members.
(2) Notwithstanding any provisions contained in these Bye-laws, a
resolution in writing shall not be passed for the purpose of removing a Director
before the expiration of his term of office or for the purpose of removing the
Auditor.
PROXIES AND CORPORATION'S REPRESENTATIVES
74. Any Member entitled to attend and vote at a meeting of the Company shall be
entitled to appoint another person as his proxy to attend and vote instead of
him. A Member may appoint a proxy in respect of part only of his holding of
shares in the Company. A proxy need not be a Member of the Company.
75. The instrument appointing a proxy shall be in writing under the hand of the
appointor or of his attorney duly authorised in writing or, if the appointor is
a corporation, either under its seal or under the hand of an officer, attorney
or other person authorised to sign the same. In the case of an instrument of
proxy purporting to be signed on behalf of a corporation by an officer thereof
it shall be assumed, unless the contrary appears, that such officer was duly
authorised to sign such instrument of proxy on behalf of the corporation without
further evidence of the fact.
<PAGE>
76. The instrument appointing a proxy and (if required by the Board) the power
of attorney or other authority (if any) under which it is signed, or a certified
copy of such power or authority, shall be delivered to such place or one of such
places (if any) as may be specified for that purpose in or by way of note to or
in any document accompanying the notice convening the meeting (or, if no place
is so specified at the Registration Office or the Office, as may be appropriate)
not less than forty-eight (48) hours before the time appointed for holding the
meeting or adjourned meeting at which the person named in the instrument
proposes to vote and in default the instrument of proxy shall not be treated as
valid. No instrument appointing a proxy shall be valid after the expiration of
twelve (12) months from the date named in it as the date of its execution,
except at an adjourned meeting in cases where the meeting was originally held
within twelve (12) months from such date. Delivery of an instrument appointing a
proxy shall not preclude a Member from attending and voting in person at the
meeting convened and in such event, the instrument appointing a proxy shall be
deemed to be revoked.
77. Instruments of proxy shall be in any common form or in such other form as
the Board may approve (provided that this shall not preclude the use of the
two-way form) and the Board may, if it thinks fit, send out with the notice of
any meeting forms of instrument of proxy for use at the meeting. The instrument
of proxy shall be deemed to confer authority 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.
78. A vote given in accordance with the terms of an instrument of proxy shall be
valid notwithstanding the previous death or insanity 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 Office or the
Registration Office (or such other place as may be specified for the delivery of
instruments of proxy in the notice convening the meeting or other document sent
therewith) two (2) hours at least before the commencement of the meeting or
adjourned meeting at which the instrument of proxy is used.
79. Anything which under these Bye-laws a Member may do by proxy he may likewise
do by his duly appointed attorney and the provisions of these Bye-laws relating
to proxies and instruments appointing proxies shall apply mutatis mutandis in
relation to any such attorney and the instrument under which such attorney is
appointed.
80. (1) Any corporation which is a Member of the Company may by any authorised
officer authorise such person as it thinks fit to act as its representative at
any meeting of the Company or any class of Members of the Company. The person so
authorised shall be entitled to exercise the same powers on behalf of such
corporation as the corporation could exercise if it were an individual Member of
the Company and such corporation shall for the purposes of these Bye-laws be
deemed to be present in person at any such meeting if a person so authorised is
present thereat. Any reference in these Bye-laws to a duly authorised
representative of a Member being a corporation shall mean a representative
authorised under the provisions of this Bye-law.
(2) If a clearing house is a Member it shall have only one vote as an
individual member and it may authorise such person as it thinks fit to act as
its representative at any meeting of the Company or at any meeting of any class
of Members. A person so authorised under the provisions of this Bye-law shall be
entitled to exercise the same powers on behalf of the clearing house (or its
nominee) which he represents as that clearing house (or its nominee) could
exercise if it were an individual Member.
BOARD OF DIRECTORS
81. (1) Unless otherwise determined by the Company in general meeting, the
minimum number of Directors shall be two, and the maximum number of Directors
shall be determined by the Board. The Directors shall be elected or appointed in
the first place at the statutory meeting of Members and thereafter at an annual
general meeting of the Company in accordance with these Bye-laws and shall hold
office until the next appointment of Directors or until their successors are
elected or appointed. The Directors shall be divided into three classes, as
nearly equal in number as possible, with the term of office of the first class
to expire at the 1998 annual general meeting of Members, the term of office of
the second class to expire at the 1999 annual general meeting of Members and the
term of office of the third class to expire at the 2000 annual general meeting
of Members, or in each case thereafter when their respective successors are
elected and have qualified or upon their earlier death, resignation or removal.
At each annual general meeting of Members following such initial classification
and election, Directors elected to succeed those Directors whose terms expire
shall be elected for a term of office to expire at the third succeeding annual
general meeting of Members after their election, or in each case thereafter when
their respective successors are elected and have qualified or upon their earlier
death, resignation or removal. In the case of the election of Directors, if no
candidate for one or more directorship receives the vote required to pass an
ordinary resolution, and any vacancies remain to be filled, each person who
receives the majority in number of the Members present in person or by proxy and
voting thereon shall be elected to fill such vacancies;
(2) The Directors shall have the power from time to time and at any
time to appoint any person as a Director. Any Director so appointed by the Board
shall hold office for duration of the term of his directorship.
(3) Neither a Director nor an alternate Director shall be required to
hold any shares of the Company by way of qualification and a Director or
alternate Director (as the case may be) who is not a Member shall be entitled to
receive notice of and to attend and speak at any general meeting of the Company
and of all classes of shares of the Company.
(4) (i) Subject to paragraph 4(ii) below, a Director may only be
removed for Cause before the expiration of his period of office and then only by
a special resolution passed at an annual general meeting notwithstanding
anything in these Bye-laws or in any agreement between the Company and such
Director (but without prejudice to any claim for damages under any such
agreement); provided that the notice of any such meeting convened for the
purpose of removing a Director shall contain a statement of the intention so to
do and be served on such Director at least ninety (90) days before the meeting
and at such meeting such Director shall be entitled to be heard on the motion
for his removal.
(ii) The Board of Directors shall also have the power to
remove a Director for any cause they reasonably believe to be a proper cause
(whether or not similar to Cause) and to suspend Directors pending a final
determination that cause exists for removal.
<PAGE>
82. At any general meeting no more than one-third of the Directors for the time
being shall be removed.
83. No person shall, unless recommended by the Directors for election or who are
nominated in accordance with the procedures set forth in these Bye-laws, be
eligible for election as a Director.
84. The office of a Director shall be vacated if the Director:
(a) resigns his office by notice in writing delivered to
the Company at the Office or tendered at a meeting of
the Board whereupon the Board resolves to accept such
resignation;
(b) becomes of unsound mind or dies;
(c) without special leave of absence from the Board, is
absent from meetings of the Board for six consecutive
months, and his alternate Director, if any, shall not
during such period have attended in his stead and the
Board resolves that his office be vacated; or
(d) becomes bankrupt or has a receiving order made against
him or suspends payment or compounds with his
creditors;
(e) is prohibited by law from being a Director; or
(f) ceases to be a Director by virtue of any provision of
the Act or is removed from office pursuant to these
Bye-laws.
EXECUTIVE DIRECTORS
85. The Board may from time to time appoint any one or more of its body to be a
Managing Director, Chief Executive Officer or to hold any other employment or
executive office with the Company for such period (subject to their continuance
as Directors) and upon such terms as the Board may determine and the Board may
revoke or terminate any of such appointments. Any such revocation or termination
as aforesaid shall be without prejudice to any claim for damages that such
Director may have against the Company or the Company may have against such
Director. A Director appointed to an office under this Bye-law shall be subject
to the same provisions as to removal as the other Directors of the Company, and
he shall (subject to the provisions of any contract between him and the Company)
ipso facto and immediately cease to hold such office if he shall cease to hold
the office of Director for any cause.
86. Notwithstanding any other provision in these Bye-laws, an executive Director
appointed to an office under these Bye-laws shall receive such remuneration
(whether by way of salary, commission, participation in profits or otherwise
or by all or any of those modes) and such other benefits (including pension and/
or gratuity and/or other benefits on retirement) and allowances as the Board may
from time to time determine, and either in addition to or in lieu of his
remuneration as a Director.
<PAGE>
ALTERNATE DIRECTORS
87. Any Director may at any time by Notice delivered to the Office or head
office or at a meeting of the Directors appoint any person to be his alternate
Director. Any person so appointed shall have all the rights and powers of the
Director or Directors for whom such person is appointed in the alternative
provided that such person shall not be counted more than once in determining
whether or not a quorum is present. An alternate Director may be removed at any
time by the body which appointed him and, subject thereto, the office of
alternate Director shall continue until the next annual election of Directors
or, if earlier, the date on which the relevant Director ceases to be a Director.
Any appointment or removal of an alternate Director shall be effected by Notice
signed by the appointor and delivered to the Office or head office or tendered
at a meeting of the Board. An alternate Director may also be a Director in his
own right and may act as alternate to more than one Director. An alternate
Director shall, if his appointor so requests, be entitled to receive notices of
meetings of the Board or of committees of the Board to the same extent as, but
in lieu of, the Director appointing him and shall be entitled to such extent to
attend and vote as a Director at any such meeting at which the Director
appointing him is not personally present and generally at such meeting to
exercise and discharge all the functions, powers and duties of his appointor as
a Director and for the purposes of the proceedings at such meeting the
provisions of these Bye-laws shall apply as if he were a Director save that as
an alternate for more than one Director his voting rights shall be cumulative.
88. An alternate Director shall only be a Director for the purposes of the Act
and shall only be subject to the provisions of the Act insofar as they relate to
the duties and obligations of a Director when performing the functions of the
Director for whom he is appointed in the alternative 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 the Director appointing him. An alternate Director shall
be entitled to contract and be interested in and benefit from contracts or
arrangements or transactions and to be repaid expenses and to be indemnified by
the Company to the same extent mutatis mutandis as if he were a Director but he
shall not be entitled to receive from the Company any fee in his capacity as an
alternate Director except only such part, if any, of the remuneration otherwise
payable to his appointor as such appointor may by notice in writing to the
Company from time to time direct.
89. 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). If his appointor is for the time being unavailable or unable
to act, the signature of an alternate Director to any resolution in writing of
the Board or a committee of the Board of which his appointor is a member shall,
unless the notice of his appointment provides to the contrary, be as effective
as the signature of his appointor.
90. An alternate Director shall ipso facto cease to be an alternate Director if
his appointor ceases for any reason to be a Director, however, such alternate
Director or any other person may be re-appointed by the Directors to serve as an
alternate Director PROVIDED always that, if at any meeting any Director retires
but is re-elected at the same meeting, any appointment of such alternate
Director pursuant to these Bye-laws which was in force immediately before his
retirement shall remain in force as though he had not retired.
<PAGE>
DIRECTORS' FEES AND EXPENSES
91. The ordinary remuneration of the Directors shall from time to time be
determined by the Board and shall (unless otherwise directed by the resolution
by which it is voted) be divided amongst the Board in such proportions and in
such manner as the Board may agree or, failing agreement, equally, except that
any Director who shall hold office for part only of the period in respect of
which such remuneration is payable shall be entitled only to rank in such
division for a proportion of remuneration related to the period during which he
has held office. Such remuneration shall be deemed to accrue from day to day.
92. Each Director shall be entitled to be repaid or prepaid all traveling, hotel
and incidental expenses reasonably incurred or expected to be incurred by him in
attending meetings of the Board or committees of the Board or general meetings
or separate meetings of any class of shares or of debentures of the Company or
otherwise in connection with the discharge of his duties as a Director.
93. Any Director who, by request, goes or resides abroad for any purpose 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 or in
substitution for any ordinary remuneration provided for by or pursuant to any
other Bye-law.
94. The Board shall obtain the approval of the Company in general meeting before
making any payment to any Director or past Director of the Company by way of
compensation for loss of office, or as consideration for or in connection with
his retirement from office (not being payment to which the Director is
contractually entitled).
DIRECTORS' AND OFFICERS' INTERESTS
95. A Director may:
(a) 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, subject to the relevant
provisions of the Act, upon such terms as the Board may
determine. Any remuneration (whether by way of salary,
commission, participation in profits or otherwise) paid to
any Director in respect of any such other office or place of
profit shall be in addition to any remuneration provided for
by or pursuant to any other Bye-law;
(b) act by himself or his firm in a professional capacity for
the Company (otherwise than as Auditor) and he or his firm
may be remunerated for professional services as if he were
not a Director;
(c) continue to be or become a director, managing director,
joint managing Director, deputy managing director, executive
director, manager or other officer or member of any other
company promoted by the Company or in which the Company may
be interested as a vendor, shareholder or otherwise and
(unless otherwise agreed) no such Director shall be
accountable for any remuneration, profits or other benefits
received by him as a director, managing director, joint
managing director, deputy managing director, executive
director, manager or other officer or member of or from his
interests in any such other company. Subject as otherwise
provided by these Bye-laws the Directors may exercise or
cause to be exercised the voting powers conferred by the
shares in any other company held or owned by the Company, or
exercisable by them as Directors of such other company in
such manner in all respects as they think fit (including the
exercise thereof in favour of any resolution appointing
themselves or any of them directors, managing directors,
joint managing directors, deputy managing directors,
executive directors, managers or other officers of such
company) or voting or providing for the payment of
remuneration to the director, managing director, joint
managing director, deputy managing director, executive
director, manager or other officers of such other company
and any Director may vote in favour of the exercise of such
voting rights in manner aforesaid notwithstanding that he
may be, or about to be, appointed a director, managing
director, joint managing director, deputy managing director,
executive director, manager or other officer of such a
company, and that as such he is or may become interested in
the exercise of such voting rights in manner aforesaid.
96. Subject to the Act and to these Bye-laws, no Director or officer or proposed
or intending Director or officer shall be disqualified by his office from
contracting with the Company, either with regard to his tenure of any office or
place of profit or as vendor, purchaser or in any other manner whatever, nor
shall any such contract or any other contract or arrangement in which any
Director or officer is in any way interested be liable to be avoided, nor shall
any Director or officer so contracting or being so interested be liable to
account to the Company or the Members for any remuneration, profit or other
benefits realised by any such contract or arrangement by reason of such Director
or officer holding that office or of the fiduciary relationship thereby
established provided that such Director or officer shall disclose the nature of
his interest in any contract or arrangement in which he is interested in
accordance with Bye-law 98 herein.
97. A Director or officer who to his knowledge is in any way, whether directly
or indirectly, interested in a contract or arrangement or proposed contract or
arrangement with the Company shall declare the nature of his interest at the
meeting of the Board at which the question of entering into the contract or
arrangement is first considered, if he knows his interest then exists, or in any
other case at the first meeting of the Board after he knows that he is or has
become so interested.
98. For the purposes of the last preceding Bye-law, a general notice to the
Board by a Director to the effect that:
(a) he is a member or officer of a specified company or firm and
is to be regarded as interested in any contract or
arrangement which may after the date of the notice be made
with that company or firm; or
(b) he is to be regarded as interested in any contract or
arrangement which may after the date of the notice be made
with a specified person who is connected with him;
<PAGE>
shall be deemed to be a sufficient declaration of interest under this Bye-law in
relation to any such contract or arrangement, provided that no such notice shall
be effective unless either it is given at a meeting of the Board or the Director
or officer takes reasonable steps to secure that it is brought up and read at
the next Board meeting after it is given.
GENERAL POWERS OF THE DIRECTORS
99. (1) The business of the Company shall be managed and conducted by the Board,
which may pay all expenses incurred in forming and registering the Company and
may exercise all powers of the Company (whether relating to the management of
the business of the Company or otherwise) which are not by the Act or by these
Bye-laws required to be exercised by the Company in general meeting, subject
nevertheless to the provisions of the Act and of these Bye-laws. The general
powers given by this Bye-law shall not be limited or restricted by any special
authority or power given to the Board by any other Bye-law.
(2) Any person contracting or dealing with the Company in the ordinary
course of business shall be entitled to rely on any written or oral contract or
agreement or deed, document or instrument entered into or executed as the case
may be by any two of the Directors acting jointly on behalf of the Company and
the same shall be deemed to be validly entered into or executed by the Company
as the case may be and shall, subject to any rule of law, be binding on the
Company.
(3) Without prejudice to the general powers conferred by these Bye-laws
it is hereby expressly declared that the Board shall have the following powers,
namely:
(a) to give to any person the right or option of requiring at a
future date that an allotment shall be made to him of any
share at par or at such premium as may be agreed.
(b) to give to any Directors, officers or servants of the
Company an interest in any particular business or
transaction or participation in the profits thereof or in
the general profits of the Company either in addition to or
in substitution for a salary or other remuneration.
100. The Board may establish any regional or local boards or agencies for
managing any of the affairs of the Company in any place, and may appoint any
persons to be members of such local boards, or any managers or agents, and may
fix their remuneration (either by way of salary or by commission or by
conferring the right to participation in the profits of the Company or by a
combination of two or more of these modes) and pay the working expenses of any
staff employed by them upon the business of the Company. The Board may delegate
to any regional or local board, manager or agent any of the powers, authorities
and discretions vested in or exercisable by the Board (other than its powers to
make calls and forfeit shares), with power to sub-delegate, and may authorise
the members of any of them to fill any vacancies therein and to act
notwithstanding vacancies. Any such appointment or delegation may be made upon
such terms and subject to such conditions as the Board may think fit, and the
Board may remove any person appointed as aforesaid, and may revoke or vary such
delegation, but no person dealing in good faith and without notice of any such
revocation or variation shall be affected thereby.
<PAGE>
101. The Board may by power of attorney appoint under the Seal any company, firm
or person or any fluctuating body of persons, whether nominated directly or
indirectly by the Board, to be the attorney or attorneys of the Company for such
purposes and with such powers, authorities and discretions (not exceeding those
vested in or exercisable by the Board under these Bye-laws) and for such period
and subject to such conditions as it may think fit, and any such power of
attorney may contain such provisions for the protection and convenience of
persons dealing with any such attorney 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. Such attorney or attorneys may, if so
authorised under the Seal of the Company, execute any deed or instrument under
their personal seal with the same effect as the affixation of the Company's
Seal.
102. The Board may entrust to and confer upon a Managing Director, Joint
Managing Director, Deputy Managing Director, an Executive Director or any
Director any of the powers exercisable by it upon such terms and conditions and
with such restrictions as it thinks fit, and either collaterally with, or to the
exclusion of, its own powers, and may from time to time revoke or vary all or
any of such powers but no person dealing in good faith and without notice of
such revocation or variation shall be affected thereby.
103. All cheque, promissory notes, drafts, bills of exchange and other
instruments, whether negotiable or transferable or not, and all receipts for
moneys 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. The Company's banking accounts shall be
kept with such banker or bankers as the Board shall from time to time determine.
104. (1) The Board may establish or concur or join with other companies (being
subsidiary companies of the Company or companies with which it is associated in
business) in establishing and making contributions out of the Company's moneys
to any schemes or funds for providing pensions, sickness or compassionate
allowances, life assurance or other benefits for employees (which expression as
used in this and the following paragraph shall include any Director or
ex-Director who may hold or have held any executive office or any office of
profit under the Company or any of its subsidiary companies) and ex-employees of
the Company and their dependents or any class or classes of such person.
(2) The Board may pay, enter into agreements to pay or make grants
of revocable or irrevocable, and either subject or not subject to any terms or
conditions, pensions or other benefits to employees and ex-employees and their
dependents, or to any of such persons, including pensions or benefits additional
to those, if any, to which such employees or ex-employees or their dependents
are or may become entitled under any such scheme or fund as mentioned in the
last preceding paragraph. Any such pension or benefit may, as the Board
considers desirable, be granted to an employee either before and in anticipation
of or upon or at any time after his actual retirement.
105. The Board may exercise all the powers of the Company to raise or 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, subject to
the Act, to issue debentures, bonds and other securities, whether outright or as
collateral security for any debt, liability or obligation of the Company or of
any third party.
<PAGE>
106. Debentures, bonds and other securities may be made assignable free from
any equities between the Company and the person to whom the same may be issued.
107. Any debentures, bonds or other securities may be issued at a discount
(other than shares), premium or otherwise and with any special privileges as to
redemption, surrender, drawings, allotment of shares, attending and voting at
general meetings of the Company, appointment of Directors and otherwise.
108. Where any uncalled capital of the Company is charged, all persons taking
any subsequent charge thereon shall take the same subject to such prior charge,
and shall not be entitled, by notice to the members or otherwise, to obtain
priority over such prior charge.
PROCEEDINGS OF THE DIRECTORS
109. The Board may meet for the despatch of business, adjourn and otherwise
regulate its meetings as it considers appropriate. Questions arising at any
meeting shall be determined by a majority of votes.
110. A meeting of the Board may be convened by the Secretary on request of the
Chairman or any two Directors. The Secretary shall convene a meeting of the
Board of which notice may be given in writing or by telephone or in such other
manner as the Board may from time to time determine whenever he shall be
required so to do by the President or Chairman, as the case may be, or any
Director. Any Director may waive notice of any meeting either prospectively or
retrospectively.
111. (1) The quorum necessary for the transaction of the business of the Board
shall be a majority of the Directors then in office. An alternate Director shall
be counted in a quorum in the case of the absence of a Director for whom he is
the alternate provided that he shall not be counted more than once for the
purpose of determining whether or not a quorum is present.
(2) Directors may participate in any meeting of the Board by means
of a conference telephone or other communications equipment through which all
persons participating in the meeting can communicate with each other
simultaneously and instantaneously and, for the purpose of counting a quorum,
such participation shall constitute presence at a Meeting as if those
participating were present in person.
(3) Any Director who ceases to be a Director at a Board meeting may
continue to be present and to act as a Director and be counted in the quorum
until the termination of such Board meeting if no other Director objects and if
otherwise a quorum of Directors would not be present.
112. The remaining Directors or a sole remaining Director may act
notwithstanding any vacancy in the Board but, if and so long as the number of
Directors is reduced below the minimum number fixed by or in accordance with
these Bye-laws, the remaining Directors or Director, notwithstanding that the
number of Directors is below the number fixed by or in accordance with these
Bye-laws as the quorum or that there is only one remaining Director, may act for
the purpose of filling vacancies in the Board or of summoning general meetings
of the Company but not for any other purpose.
<PAGE>
113. The Board may elect a chairman and one or more deputy chairman of its
meetings and determine the period for which they are respectively to hold such
office. If no chairman or deputy chairman is elected, or if at any meeting
neither the chairman nor any deputy chairman is present within five (5) minutes
after the time appointed for holding the same, the Directors present may choose
one of their number to be chairman of the meeting.
114. 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.
115. (1) The Board may delegate any of its powers, authorities and discretions
to committees, consisting of such Director, officer, Directors or officers as it
thinks fit, and they may, from time to time, revoke such delegation or revoke
the appointment of and discharge any such committees either wholly or in part,
and either as to persons or purposes. Any committee so formed shall, in the
exercise of the powers, authorities and discretions so delegated, conform to any
regulations which may be imposed on it by the Board.
(2) All acts done by any such committee in conformity with such
regulations, and in fulfillment of the purposes for which it was appointed, but
not otherwise, shall have like force and effect as if done by the Board, and the
Board shall have power, with the consent of the Company in general meeting, to
remunerate the members of any such committee, and charge such remuneration to
the current expenses of the Company.
116. 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 under
the last preceding Bye-law.
117. A resolution in writing signed by all the Directors except such as are
temporarily unable to act through ill-health or disability, and all the
alternate Directors, if appropriate, whose appointors are temporarily unable to
act as aforesaid shall (provided that such number is sufficient to constitute a
quorum and further provided that a copy of such resolution has been given or the
contents thereof communicated to all the Directors for the time being entitled
to receive notices of Board meetings in the same manner as notices of meetings
are required to be given by these Bye-laws) be as valid and effectual as if a
resolution had been passed at a meeting of the Board duly convened and held.
Such resolution may be contained in one document or in several documents in like
form each signed by one or more of the Directors or alternate Directors and for
this purpose a facsimile signature of a Director or an alternate Director shall
be treated as valid.
118. All acts bona fide done by the Board or by any committee or by any person
acting as a Director or members of a committee, shall, notwithstanding that it
is afterwards discovered that there was some defect in the appointment of any
member or the Board or such committee or person acting as aforesaid or that they
or any of them were disqualified or had vacated office, be as valid as if every
such person had been duly appointed and was qualified and had continued to be a
Director or member of such committee.
<PAGE>
MANAGERS
119. The Board may from time to time appoint a General Manager, a Manager or
Managers of the Company and may fix his or their remuneration either by way of
salary or commission or by conferring the right to participation in the profits
of the Company or by a combination of two or more of these modes and pay the
working expenses of any of the staff of the General Manager, Manager or Managers
who may be employed by him or them upon the business of the Company.
120. The appointment of such General Manager, Manager or Managers may be for
such period as the Board may decide, and the Board may confer upon him or them
all or any of the powers of the Board as they may think fit.
121. The Board may enter into such agreement or agreements with any such General
Manager, Manager or Managers upon such terms and conditions in all respects as
the Board may in their absolute discretion think fit, including a power for such
General Manager, Manager or Managers to appoint an Assistant Manager or Managers
or other employees whatsoever under them for the purpose of carrying on the
business of the Company.
OFFICERS
122. (1) The officers of the Company shall consist of the president, vice
president, chairman, deputy chairman, the Directors and Secretary and such
additional officers (who may or may not be Directors) as the Board may from time
to time determine, all of whom shall be deemed to be officers for the purposes
of the Act and these Bye-laws.
(2) The Directors shall, as soon as may be after each appointment or
election of Directors, elect amongst the Directors a president and a vice
president or a chairman and a deputy chairman; and if more than one (1) Director
is proposed for either of these offices, the election to such office shall take
place in such manner as the Directors may determine.
(3) The officers shall receive such remuneration as the Directors may
from time to time determine.
(4) The Company may in accordance with the Act appoint a resident
representative ordinarily resident in Bermuda and the resident representative
shall maintain an office in Bermuda and comply with the provisions of the Act.
The Company shall provide the resident representative with such documents and
information as the resident representative may require in order to be able to
comply with the provisions of the Act. The resident representative shall be
entitled to have notice of, attend and be heard at any Directors' meeting or
general meeting of the Company.
123. (1) The Secretary and additional officers, if any, shall be appointed by
the Board and shall hold office on such terms and for such period as the Board
may determine. If thought fit, two (2) or more persons may be appointed as joint
Secretaries. The Board may also appoint from time to time on such terms as it
thinks fit one or more assistant or deputy Secretaries.
<PAGE>
(2) The Secretary or an assistant or deputy Secretary shall attend all
meetings of the Members and shall keep correct minutes of such meetings and
enter the same in the proper books provided for the purpose. He shall perform
such other duties as are prescribed by the Act or these Bye-laws or as may be
prescribed by the Board.
124. The President or the Chairman, as the case may be, shall act as chairman at
all meetings of the Members and of the Directors at which he is present. In his
absence a chairman shall be appointed or elected by those present at the
meeting.
125. The officers of the Company shall have such powers and perform such duties
in the management, business and affairs of the Company as may be delegated to
them by the Directors from time to time.
126. A provision of the Act or of 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
place of the Secretary.
REGISTER OF DIRECTORS AND OFFICERS
127. (1) The Board shall cause to be kept in one or more books at its Office
a Register of Directors and Officers and shall enter therein the particulars
required by the Act.
(2) The Register of Directors and Officers shall be open to inspection
by members of the public without charge at the Office between 10:00 a.m. and
12:00 noon on every business day.
MINUTES
128. The Board shall cause Minutes to be duly entered in books provided for
the purpose:
(a) of all elections and appointments of officers;
(b) of the names of the Directors present at each meeting of the
Directors and of any committee of the Directors;
(c) of all resolutions and proceedings of each general meeting of the
Members, meetings of the Board and meetings of committees of the
Board.
SEAL
129. (1) The Company shall have one or more Seals, as the Board may determine.
For the purpose of sealing documents creating or evidencing securities issued by
the Company, the Company may have a securities seal which is a facsimile of the
Seal of the Company with the addition of the words "Securities Seal" on its face
or in such other form as the Board may approve. The Board shall provide for the
custody of each Seal and no Seal shall be used without the authority of the
Board or of a committee of the Board authorised by the Board in that behalf.
Subject as otherwise provided in these Bye-laws, any instrument to which a Seal
is affixed shall be signed autographically by one Director and the Secretary or
by two Directors or by such other person (including a Director) or persons as
the Board may appoint, either generally or in any particular case, save that as
regards any certificates for shares or debentures or other securities of the
Company the Board may by resolution determine that such signatures or either of
them shall be dispensed with or affixed by some method or system of mechanical
signature. Every instrument executed in manner provided by this Bye-law shall be
deemed to be sealed and executed with the authority of the Board previously
given.
(2) Where the Company has a Seal for use abroad, the Board may by writing
under the Seal appoint any agent or committee abroad to be the duly authorised
agent of the Company for the purpose of affixing and using such Seal and the
Board may impose restrictions on the use thereof as may be thought fit. Wherever
in these Bye-laws reference is made to the Seal, the reference shall, when and
so far as may be applicable, be deemed to include any such other Seal as
aforesaid.
130. Any Director or the Secretary or any person appointed by the Board for the
purpose may authenticate (by affixing the seal or otherwise) any documents
affecting the constitution of the Company and any resolution passed by the
Company or the Board or any committee, and any books, records, documents and
accounts relating to the business of the Company, and to certify copies thereof
or extracts therefrom as true copies or extracts, and if any books, records,
documents or accounts are elsewhere than at the Office or the head office the
local manager or other officer of the Company having the custody thereof shall
be deemed to be a person so appointed by the Board. A document purporting to be
a copy of a resolution, or an extract from the minutes of a meeting, of the
Company or of the Board or any committee which is so certified shall be
conclusive evidence in favour of all persons dealing with the Company upon the
faith thereof that such resolution has been duly passed or, as the case may be,
that such minutes or extract is a true and accurate record of proceedings at a
duly constituted meeting.
DESTRUCTION OF DOCUMENTS
131. The Company shall be entitled to destroy the following documents at the
following times:
(a) any share certificate which has been canceled at any time
after the expiry of one (1) year from the date of such
cancellation;
(b) any dividend mandate or any variation or cancellation thereof
or any notification of change of name or address at any time
after the expiry of two (2) years from the date such mandate
variation cancellation or notification was recorded by the
Company;
(c) any instrument of transfer of shares which has been registered
at any time after the expiry of seven (7) years from the date
of registration;
(d) any allotment letters after the expiry of seven (7) years from
the date of issue thereof; and
(e) copies of powers of attorney, grants of probate and letters of
administration at any time after the expiry of seven (7) years
after the account to which the relevant power of attorney,
grant of probate or letters of administration related has been
closed;
<PAGE>
and it shall conclusively be presumed in favour of the Company that every entry
in the Register purporting to be made on the basis of any such documents so
destroyed was duly and properly made and every share certificate so destroyed
was a valid certificate duly and properly canceled and that every instrument of
transfer so destroyed was a valid and effective instrument duly and properly
registered and that every other document destroyed hereunder was a valid and
effective document in accordance with the recorded particulars thereof in the
books or records of the Company. Provided always that: (1) the foregoing
provisions of this Bye-law shall apply only to the destruction of a document in
good faith and without express notice to the Company that the preservation of
such document was relevant to a claim; (2) nothing contained in this Bye-law
shall be construed as imposing upon the Company any liability in respect of the
destruction of any such document earlier than as aforesaid or in any case where
the conditions of proviso (1) above are not fulfilled; and (3) references in
this Bye-law to the destruction of any document include references to its
disposal in any manner.
DIVIDENDS AND DISTRIBUTIONS
132. (1) Subject to the Act and these Bye-laws, the Board may from time to
time declare dividends in any currency to be paid to the Members or make a
distribution to the Members out of any contributed surplus (as ascertained in
accordance with the Act).
(2) The Board may adopt a scheme or arrangement shareholder rights plan
granting rights entitling the Members (or certain specified Members) to acquire
shares (of any class) or assets of the Company or a subsidiary of the Company
and such scheme or arrangement or plan may be amended or varied in accordance
with the terms thereof.
133. No dividend shall be paid or distribution made out of contributed surplus
if to do so would render the Company unable to pay its liabilities as they
become due or the realisable value of its assets would thereby become less than
the aggregate of its liabilities and its issued share capital and share premium
accounts.
134. Except in so far as the rights attaching to, or the terms of issue of,
any share otherwise provide:
(a) all dividends shall be declared and paid according to the
amounts paid up on the shares in respect of which the dividend
is paid, but no amount paid up on a share in advance of calls
shall be treated for the purposes of this Bye-law as paid up
on the share; and
(b) all dividends shall 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 is
paid.
135. The Board may from time to time pay to the Members such interim dividends
as appear to the Board to be justified by the profits of the Company and in
particular (but without prejudice to the generality of the foregoing) if at any
time the share capital of the Company is divided into different classes, the
Board may pay such interim dividends in respect of those shares in the capital
of the Company which confer on the holders thereof deferred or non-preferential
rights as well as in respect of those shares which confer on the holders thereof
preferential rights with regard to dividend and provided that the Board acts
bona fide the Board shall not incur any responsibility to the holders of shares
conferring any preference for any damage that they may suffer by reason of the
payment of an interim dividend on any shares having deferred or non-preferential
rights and may also pay any fixed dividend which is payable on any shares of the
Company half-yearly or on any other dates, whenever such profits, in the opinion
of the Board, justifies such payment.
136. The Board may deduct from any dividend or other moneys payable to a Member
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.
137. No dividend or other moneys payable by the Company on or in respect of
any share shall bear interest against the Company.
138. Any dividend, interest or other sum payable in cash to the holder of shares
may be paid by cheque or warrant sent through the post addressed to the holder
at his registered address 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
address as appearing in the Register or addressed to such person and at such
address as the holder or joint holders may in writing direct. Every such cheque
or warrant shall, unless the holder or joint holders otherwise direct, be made
payable to the order of the holder or, in the case of joint holders, to the
order of the holder whose name stands first on the Register in respect of such
shares, and shall be sent at his or their risk and payment of the cheque or
warrant by the bank on which it is drawn shall constitute a good discharge to
the Company notwithstanding that it may subsequently appear that the same has
been stolen or that any endorsement thereon has been forged. Any one of two or
more joint holders may give effectual receipts for any dividends or other moneys
payable or property distributable in respect of the shares held by such joint
holders.
139. All dividends or bonuses unclaimed for one (1) year after having been
declared may be invested or otherwise made use of by the Board for the benefit
of the Company until claimed. Any dividend or bonuses unclaimed after a period
of six (6) years from the date of declaration shall be forfeited and shall
revert to the Company. The payment by the Board of any unclaimed dividend or
other sums payable on or in respect of a share into a separate account shall not
constitute the Company a trustee in respect thereof.
140. The Board may resolve that dividends be satisfied wholly or in part by the
distribution of specific assets of any kind and in particular of paid up shares,
debentures or warrants to subscribe securities of the Company or any other
company, or in any one or more of such ways, and where any difficulty arises in
regard to the distribution the Board may settle the same as it thinks expedient,
and in particular may issue certificates in respect of fractions of shares,
disregard fractional entitlements or round the same up or down, and may fix the
value for distribution of such specific assets, or any part thereof, and may
determine that cash payments shall be made to any members upon the footing of
the value so fixed in order to adjust the rights of all parties, and may vest
any such specific assets in trustees as may seem expedient to the Board and may
appoint any person to sign any requisite instruments of transfer and other
documents on behalf of the persons entitled to the dividend, and such
appointment shall be effective and binding on the Members. The Board may resolve
that no such assets shall be made available to Members with registered addresses
in any particular territory or territories where, in the absence of a
registration statement or other special formalities, such distribution of assets
would or might, in the opinion of the Board, be unlawful or impracticable and in
such event the only entitlement of the Members aforesaid shall be to receive
cash payments as aforesaid. Members affected as a result of the foregoing
sentence shall not be or be deemed to be a separate class of Members for any
purpose whatsoever.
141. (1) Whenever the Board has resolved that a dividend be paid or
declared on any class of the share capital of the Company, the Board may further
resolve either:
(a) that such dividend be satisfied wholly or in part in the
form of an allotment of shares credited as fully paid up,
provided that the Members entitled thereto will be entitled
to elect to receive such dividend (or part thereof if the
Board so determines) in cash in lieu of such allotment. In
such case, the following provisions shall apply:
(i) the basis of any such allotment shall be determined
by the Board;
(ii) the Board, after determining the basis of
allotment, shall give not less than two (2) weeks'
notice in writing to the holders of the relevant
shares of the right of election accorded to them
and shall send with such notice forms of election
and specify the procedure to be followed and the
place at which and the latest date and time by
which duly completed forms of election must be
lodged in order to be effective;
(iii) the right of election may be exercised in respect
of the whole or part of that portion of the
dividend in respect of which the right of election
has been accorded; and
(iv) the dividend (or that part of the dividend to be
satisfied by the allotment of shares as aforesaid)
shall not be payable in cash on shares in respect
whereof the cash election has not been duly
exercised ("the non-elected shares") and in
satisfaction thereof shares of the relevant class
shall be allotted credited as fully paid up to the
holders of the non-elected shares on the basis of
allotment determined as aforesaid and for such
purpose the Board shall capitalise and apply out of
any part of the undivided profits of the Company
(including profits carried and standing to the
credit of any reserves or other special account
other than the Subscription Rights Reserve) as the
Board may determine, such sum as may be required to
pay up in full the appropriate number of shares of
the relevant class for allotment and distribution
to and amongst the holders of the non-elected
shares on such basis; or
<PAGE>
(b) that the Members entitled to such dividend shall be entitled
to elect to receive an allotment of shares credited as fully
paid up in lieu of the whole or such part of the dividend as
the Board may think fit. In such case, the following
provisions shall apply:
(i) the basis of any such allotment shall be determined
by the Board;
(ii) the Board, after determining the basis of
allotment, shall give not less than two (2) weeks'
notice in writing to the holders of the relevant
shares of the right of election accorded to them
and shall send with such notice forms of election
and specify the procedure to be followed and the
place at which and the latest date and time by
which duly completed forms of election must be
lodged in order to be effective;
(iii) the right of election may be exercised in respect
of the whole or part of that portion of the
dividend in respect of which the right of election
has been accorded; and
(iv) the dividend (or that part of the dividend in
respect of which a right of election has been
accorded) shall not be payable in cash on shares in
respect whereof the share election has been duly
exercised ("the elected shares") and in lieu
thereof shares of the relevant class shall be
allotted credited as fully paid up to the holders
of the elected shares on the basis of allotment
determined as aforesaid and for such purpose the
Board shall capitalise and apply out of any part of
the undivided profits of the Company (including
profits carried and standing to the credit of any
reserves or other special account other than the
Subscription Rights Reserve) as the Board may
determine, such sum as may be required to pay up
in full the appropriate number of shares of the
relevant class for allotment and distribution to
and amongst the holders of the elected shares on
such basis.
(2) (a) The shares allotted pursuant to the provisions of
paragraph (1) of this Bye-law shall rank pari
passu in all respects with shares of the same
class (if any) then in issue save only as regards
participation in the relevant dividend or in any
other distributions, bonuses or rights paid, made,
declared or announced prior to or contemporaneously
with the payment or declaration of the relevant
dividend unless, contemporaneously with the
announcement by the Board of their proposal to
apply the provisions of sub-paragraph (a) or (b)
of paragraph (2) of this Bye-law in relation to the
relevant dividend or contemporaneously with their
announcement of the distribution, bonus or rights
in question, the Board shall specify that the
shares to be allotted pursuant to the provisions
of paragraph (1) of this Bye-law shall rank for
participation in such distribution, bonus or
rights.
<PAGE>
(b) The Board may do all acts and things considered
necessary or expedient to give effect to any
capitalisation pursuant to the provisions of
paragraph (1) of this Bye-law, with full power to
the Board to make such provisions as it thinks fit
in the case of shares becoming distributable in
fractions (including provisions whereby, in whole
or in part, fractional entitlements are aggregated
and sold and the net proceeds distributed to
those entitled, or are disregarded or rounded
up or down or whereby the benefit of fractional
entitlements accrues to the Company rather than
to the members concerned). The Board may authorise
any person to enter into on behalf of all Members
interested, an agreement with the Company providing
for such capitalisation and matters incidental
thereto and any agreement made pursuant to such
authority shall be effective and binding on all
concerned.
(3) The Board may resolve in respect of any one particular dividend of
the Company that notwithstanding the provisions of paragraph (1) of this Bye-law
a dividend may be satisfied wholly in the form of an allotment of shares
credited as fully paid up without offering any right to Members to elect to
receive such dividend in cash in lieu of such allotment.
(4) The Board may on any occasion determine that rights of election and
the allotment of shares under paragraph (1) of this Bye-law shall not be made
available or made to any Members with registered addresses in any territory
where, in the absence of a registration statement or other special formalities,
the circulation of an offer of such rights of election or the allotment of
shares would or might, in the opinion of the Board, be unlawful or
impracticable, and in such event the provisions aforesaid shall be read and
construed subject to such determination. Members affected as a result of the
foregoing sentence shall not be or be deemed to be a separate class of Members
for any purpose whatsoever.
(5) Any resolution declaring a dividend on shares of any class may
specify that the same shall be payable or distributable to the persons
registered as the holders of such shares at the close of business on a
particular date, notwithstanding that it may be a date prior to that on which
the resolution is passed, and thereupon the dividend shall be payable or
distributable to them in accordance with their respective holdings so
registered, but without prejudice to the rights inter se in respect of such
dividend of transferors and transferees of any such shares. The provisions of
this Bye-law shall mutatis mutandis apply to bonuses, capitalisation issues,
distributions of realised capital profits or offers or grants made by the
Company to the Members.
142. Before declaring any dividend, the Board may set aside out of the profits
of the Company such sums as it determines as reserves which shall, at the
discretion of the Board, be applicable for any purpose to which the profits of
the Company may be properly applied 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 and so
that it shall not be necessary to keep any investments constituting the reserve
or reserves separate or distinct from any other investments of the Company. The
Board may also without placing the same to reserve carry forward any profits
which it may think prudent not to distribute.
<PAGE>
CAPITALISATION
143. The Board may resolve to capitalise any part of the amount for the time
being standing to the credit of any reserve account or to the credit of the
profit and loss account or otherwise available for distribution by applying such
sum in paying up (i) unissued shares, debentures or other obligations to be
allotted or distributed fully paid pro rata to the Members or any class of
Members or (ii) in full partly paid shares of those Members who would have been
entitled to such sums if they were distributed by way of dividend or
distribution. In addition, the Board may resolve to capitalise any part of the
amount for the time being standing to the credit of the Company's share premium
account by applying such sum in paying up unissued shares to be issued to the
Members, or class of Members, as fully paid bonus shares.
144. The Board may settle, as it considers appropriate, any difficulty arising
in regard to any distribution under the last preceding Bye-law and in particular
may issue certificates in respect of fractions of shares or 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 shall
be made to any Members 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 Members.
SUBSCRIPTION RIGHTS RESERVE
145. The following provisions shall have effect to the extent that they are
not prohibited by and are in compliance with the Act:
(1) If, so long as any of the rights attached to any warrants issued by
the Company to subscribe for shares of the Company shall remain exercisable, the
Company does any act or engages in any transaction which, as a result of any
adjustments to the subscription price in accordance with the provisions of the
conditions of the warrants, would reduce the subscription price to below the par
value of a share, then the following provisions shall apply:
(a) as from the date of such act or transaction the Company
shall establish and thereafter (subject as provided in this
Bye-law) maintain in accordance with the provisions of this
Bye-law a reserve (the "Subscription Rights Reserve") the
amount of which shall at no time be less than the sum which
for the time being would be required to be capitalised and
applied in paying up in full the nominal amount of the
additional shares required to be issued and allotted
credited as fully paid pursuant to sub- paragraph (c) below
on the exercise in full of all the subscription rights
outstanding and shall apply the Subscription Rights Reserve
in paying up such additional shares in full as and when the
same are allotted;
(b) the Subscription Rights Reserve shall not be used for any
purpose other than that specified above unless all other
reserves of the Company (other than share premium account)
have been extinguished and will then only be used to make
good losses of the Company if and so far as is required by
law;
<PAGE>
(c) upon the exercise of all or any of the subscription rights
represented by any warrant, the relevant subscription rights
shall be exercisable in respect of a nominal amount of
shares equal to the amount in cash which the holder of such
warrant is required to pay on exercise of the subscription
rights represented thereby (or, as the case may be the
relevant portion thereof in the event of a partial exercise
of the subscription rights) and, in addition, there shall be
allotted in respect of such subscription rights to the
exercising warrant holder, credited as fully paid, such
additional nominal amount of shares as is equal to the
difference between:
(i) the said amount in cash which the holder of such
warrant is required to pay on exercise of the
subscription rights represented thereby (or, as
the case may be, the relevant portion thereof in
the event of a partial exercise of the
subscription rights); and
(ii) the nominal amount of shares in respect of which
such subscription rights would have been
exercisable having regard to the provisions of the
conditions of the warrants, had it been possible
for such subscription rights to represent the
right to subscribe for shares at less than par
and immediately upon such exercise so much of the sum
standing to the credit of the Subscription Rights Reserve as
is required to pay up in full such additional nominal amount
of shares shall be capitalised and applied in paying up in
full such additional nominal amount of shares which shall
forthwith be allotted credited as fully paid to the
exercising warrant holders; and
(d) if, upon the exercise of the subscription rights represented
by any warrant, the amount standing to the credit of the
Subscription Rights Reserve is not sufficient to pay up in
full such additional nominal amount of shares equal to such
difference as aforesaid to which the exercising warrant
holder is entitled, the Board shall apply any profits or
reserves then or thereafter becoming available (including,
to the extent permitted by law, share premium account) for
such purpose until such additional nominal amount of shares
is paid up and allotted as aforesaid and until then no
dividend or other distribution shall be paid or made on the
fully paid shares of the Company then in issue. Pending such
payment and allotment, the exercising warrant holder shall
be issued by the Company with a certificate evidencing his
right to the allotment of such additional nominal amount of
shares. The rights represented by any such certificate shall
be in registered form and shall be transferable in whole or
in part in units of one share in the like manner as the
shares for the time being are transferable, and the Company
shall make such arrangements in relation to the maintenance
of a register therefor and other matters in relation thereto
as the Board may think fit and adequate particulars thereof
shall be made known to each relevant exercising warrant
holder upon the issue of such certificate.
<PAGE>
(2) Shares allotted pursuant to the provisions of this Bye-law shall
rank pari passu in all respects with the other shares allotted on the relevant
exercise of the subscription rights represented by the warrant concerned.
Notwithstanding anything contained in paragraph (1) of this Bye-law, no fraction
of any share shall be allotted on exercise of the subscription rights.
(3) The provision of this Bye-law as to the establishment and
maintenance of the Subscription Rights Reserve shall not be altered or added to
in any way which would vary or abrogate, or which would have the effect of
varying or abrogating the provisions for the benefit of any warrant holder or
class of warrant holders under this Bye-law without the sanction of a special
resolution of such warrant holders or class of warrant holders.
(4) A certificate or report by the auditors for the time being of the
Company as to whether or not the Subscription Rights Reserve is required to be
established and maintained and if so the amount thereof so required to be
established and maintained, as to the purposes for which the Subscription Rights
Reserve has been used, as to the extent to which it has been used to make good
losses of the Company, as to the additional nominal amount of shares required to
be allotted to exercising warrant holders credited as fully paid, and as to any
other matter concerning the Subscription Rights Reserve shall (in the absence of
manifest error) be conclusive and binding upon the Company and all warrant
holders and Members.
ACCOUNTING RECORDS
146. The Board shall cause true accounts to be kept of the sums of money
received and expended by the Company, and the matters in respect of which such
receipt and expenditure take place, and of the property, assets, credits and
liabilities of the Company and of all other matters required by the Act or
necessary to give a true and fair view of the Company's affairs and to explain
its transactions.
147. The accounting records shall be kept at the Office or, subject to the Act,
at such other place or places as the Board decides and shall always be open to
inspection by the Directors of the Company. No Member (other than a Director of
the Company) shall have any right of inspecting any accounting record or book or
document of the Company except as conferred by law or authorised by the Board or
the Company in general meeting.
148. Subject to the Act, a printed copy of the balance sheet and profit and loss
account, including every document required by law to be annexed thereto, made up
to the end of the applicable financial year and containing a summary of the
assets and liabilities of the Company under convenient heads and a statement of
income and expenditure, together with a copy of the Auditors' report, shall be
sent to each person entitled thereto at least twenty-one (21) days before the
date of the general meeting and laid before the Company in general meeting in
accordance with the requirements of the Act provided that this Bye-law shall not
require a copy of those documents to be sent to any person whose address the
Company is not aware or to more than one of the joint holders of any shares or
debentures.
<PAGE>
AUDIT
149. (1) Subject to the Act, at the annual general meeting or at a subsequent
special general meeting in each year, the Members shall appoint an auditor to
audit the accounts of the Company and such auditor shall hold office until the
Members appoint another auditor. Such auditor may be a Member but no Director or
officer or employee of the Company shall, during his continuance in office, be
eligible to act as an auditor of the Company.
(2) Subject to the Act, a person, other than a retiring Auditor, shall
not be capable of being appointed Auditor at an annual general meeting unless
notice in writing of an intention to nominate that person to the office of
Auditor has been given not less than fourteen (14) days before the annual
general meeting and furthermore, the Company shall send a copy of any such
notice to the retiring Auditor.
(3) The Members may, at any general meeting convened and held in
accordance with these Bye-laws, by special resolution remove the Auditor at any
time before the expiration of his term of office and shall by ordinary
resolution at that meeting appoint another Auditor in his stead for the
remainder of his term.
150. Subject to the Act, the accounts of the Company shall be audited a
least once in every year.
151. The remuneration of the Auditor shall be fixed by the Company in
general meeting or in such manner as the Members may determine.
152. If the office of auditor becomes vacant by the resignation or death of the
Auditor, or by his becoming incapable of acting by reason of illness or other
disability at a time when his services are required, the Directors shall as soon
as practicable convene a special general meeting to fill the vacancy.
153. The Auditor shall at all reasonable times have access to all books kept by
the Company and to all accounts and vouchers relating thereto; and he may call
on the Directors or officers of the Company for any information in their
possession relating to the books or affairs of the Company.
154. The statement of income and expenditure and the balance sheet provided for
by these Bye-laws shall be examined by the Auditor and compared by him with the
books, accounts and vouchers relating thereto; and he shall make a written
report thereon stating whether such statement and balance sheet are drawn up so
as to present fairly the financial position of the Company and the results of
its operations for the period under review and, in case information shall have
been called for from Directors or officers of the Company, whether the same has
been furnished and has been satisfactory. The financial statements of the
Company shall be audited by the Auditor in accordance with generally accepted
auditing standards. The Auditor shall make a written report thereon in
accordance with generally accepted auditing standards and the report of the
Auditor shall be submitted to the Members in general meeting. The generally
accepted auditing standards referred to herein may be those of a country or
jurisdiction other than Bermuda. If so, the financial statements and the report
of the Auditor should disclose this fact and name such country or jurisdiction.
NOTICES
155. Any Notice from the Company to a Member shall be given in writing or by
cable, telex or facsimile transmission message and any such Notice and (where
appropriate) any other document may be served or delivered by the Company on or
to any Member either personally or by sending it through the post in a prepaid
envelope addressed to such Member at his registered address as appearing in the
Register or at any other address supplied by him to the Company for the purpose
or, as the case may be, by transmitting it to any such address or transmitting
it to any telex or facsimile transmission number supplied by him to the Company
for the giving of Notice to him or which the person transmitting the notice
reasonably and bona fide believes at the relevant time will result in the Notice
being duly received by the Member or may also be served by advertisement in
appointed newspapers (as defined in the Act) or in accordance with the
requirements of any Designated Stock Exchange. In the case of joint holders of a
share all notices shall be given to that one of the joint holders whose name
stands first in the Register and notice so given shall be deemed a sufficient
service on or delivery to all the joint holders.
156. Any Notice or other document:
(a) if served or delivered by post, shall be sent airmail where
appropriate and shall be deemed to have been served or
delivered on the day following that on which the envelope
containing the same, properly prepaid and addressed, is put
into the post; in proving such service or delivery it shall
be sufficient to prove that the envelope or wrapper
containing the notice or document was properly addressed and
put into the post and a certificate in writing signed by the
Secretary or other officer of the Company or other person
appointed by the Board that the envelope or wrapper
containing the notice or other document was so addressed and
put into the post shall be conclusive evidence thereof; and
(b) if served or delivered in any other manner contemplated by
these Bye-laws, shall be deemed to have been served or
delivered at the time of personal service or delivery or, as
the case may be, at the time of the relevant despatch or
transmission; and in proving such service or delivery a
certificate in writing signed by the Secretary or other
officer of the Company or other person appointed by the
Board as to the fact and time of such service, delivery,
despatch or transmission shall be conclusive evidence
thereof.
157. (1) Any Notice or other document delivered or sent by post to or left at
the registered address of any Member in pursuance of these Bye-laws shall,
notwithstanding that such Member 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 Member 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 a
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.
<PAGE>
(2) A notice may be given by the Company to the person entitled to a
share in consequence of the death, mental disorder or bankruptcy of a Member by
sending it through the post in a prepaid letter, envelope or wrapper addressed
to him by name, or by the title of representative of the deceased, or trustee of
the bankrupt, or by any like description, at the address, if any, supplied for
the purpose by the person claiming to be so entitled, or (until such an address
has been so supplied) by giving the notice in any manner in which the same might
have been given if the death, mental disorder or bankruptcy had not occurred.
(3) Any person who by operation of law, transfer or other means
whatsoever shall become entitled to any share shall be bound by every notice in
respect of such share which prior to his name and address being entered on the
Register shall have been duly given to the person from whom he derives his title
to such share.
158. For the purposes of these Bye-laws, a cable or telex or facsimile
transmission message purporting to come from a holder of shares or, as the case
may be, a Director or alternate Director, or, in the case of a corporation which
is a holder of shares from a director or the secretary thereof or a duly
appointed attorney or duly authorised representative thereof for it and on its
behalf, shall in the absence of express evidence to the contrary available to
the person relying thereon at the relevant time be deemed to be a document or
instrument in writing signed by such holder or Director or alternate Director in
the terms in which it is received.
WINDING UP
159. (1) The Board shall have power in the name and on behalf of the
Company to present a petition to the court for the Company to be wound up.
(2) A resolution that the Company be wound up by the court or be
wound up voluntarily shall be a special resolution.
160. If the Company shall be wound up (whether the liquidation is voluntary or
by the court) the liquidator may, with the authority of a special resolution and
any other sanction required by the Act, divide among the Members in specie or
kind the whole or any part of the assets of the Company and whether or not the
assets shall consist of properties of one kind or shall consist of properties to
be divided as aforesaid of different kinds, and may for such purpose set such
value as he deems fair upon any one or more class or classes of property and may
determine how such division shall be carried out as between the Members or
different classes of Members. The liquidator may, with the like authority, vest
any part of the assets in trustees upon such trusts for the benefit of the
Members as the liquidator with the like authority shall think fit, and the
liquidation of the Company may be closed and the Company dissolved, but so that
no contributory shall be compelled to accept any shares or other property in
respect of which there is a liability.
INDEMNITY
161. (1) The Directors, Secretary and other officers and each person who is or
was or had agreed to become a Director or officer of the Company, and each such
person who is or was serving or who had agreed to serve at the request of the
Board of Directors or an officer of the Company as an employee or agent of the
Company or as a Director, officer, employee or agent of another company,
corporation, partnership, joint venture, trust or other enterprise and every
Auditor for the time being of the Company and the liquidator or trustees (if
any) for the time being acting in relation to any of the affairs of the Company
and everyone of them, and every one of their heirs, executors, administrators
and estates, shall be indemnified and secured harmless out of the assets and
profits of the Company from and against all actions, costs, charges, losses,
damages and expenses which they or any of them, their or any of their heirs,
executors, administrators or estates, shall or may incur or sustain by or by
reason of any act done, concurred in or omitted in or about the execution of
their duty, or supposed duty, in their respective offices or trusts; and none of
them shall be answerable for the acts, receipts, neglects or defaults of the
other or others of them or for joining in any receipts for the sake of
conformity, or for any bankers or other persons with whom any moneys or effects
belonging to the Company shall or may be lodged or deposited for safe custody,
or for insufficiency or deficiency of any security upon which any moneys of or
belonging to the Company shall be placed out on or invested, or for any other
loss, misfortune or damage which may happen in the execution of their respective
offices or trusts, or in relation thereto; PROVIDED THAT this indemnity shall
not extend to any matter in respect of any fraud or dishonesty which may attach
to any of said persons. Subject to the provisions of the Act and without
limiting the generality or the effect of the foregoing, the Company may enter
into one or more agreements with any person which provide for indemnification
greater or different than that provided in this Bye-law. Any repeal or
modification of this Bye-law shall not adversely affect any right or protection
existing hereunder immediately prior to such repeal or modification.
(2) Each Member and the Company agree to waive any claim or right of
action he or it might 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, or supposed duties, with or for the Company; PROVIDED THAT such waiver
shall not extend to any matter in respect of any fraud or dishonesty which may
attach to such Director. Any repeal or modification of this Bye-law shall not
adversely affect any right or protection of a Director of the Company existing
immediately prior to such repeal or modification.
ALTERATION OF BYE-LAWS & AMENDMENT TO MEMORANDUM OF ASSOCIATION
162. No Bye-law shall be rescinded, altered or amended and no new Bye-law shall
be made until the same has been approved by a resolution of the Directors and
confirmed by an ordinary resolution of the Members. A special resolution shall
be required to alter the provisions of the memorandum of association or to
change the name of the Company.
BUSINESS COMBINATIONS
163. (A) Any Business Combination shall require the approval of the Board and a
special resolution of the Members notwithstanding the fact that no vote may be
required, or that some lesser percentage may be specified, by law or the
Memorandum of Association of the Company, by any other provision of these
Bye-laws or otherwise.
<PAGE>
A proxy statement complying with the requirements of the United States
Securities Exchange Act of 1934, as amended, shall have been mailed to all
holders of shares carrying voting rights for the purpose of soliciting approval
by the Members of such Business Combination. Such proxy statement shall contain
at the front thereof, in a prominent place, any recommendations as to the
advisability (or inadvisability) of the Business Combination which the Board may
have furnished in writing and, if deemed advisable by the Board, an opinion of a
reputable investment banking firm as to the adequacy (or inadequacy) of the
terms of such Business Combination from the point of view of the holders of
shares carrying voting rights other than any interested person (such investment
banking firm to be selected by the Board to be furnished with all information it
reasonably requests, and to be paid a reasonable fee for its services upon
receipt by the Company of such opinion).
(B) The Company, whether acting through the Directors or by its Members
generally, shall have no power to propose or enter into any compromise or
arrangement pursuant to the Act (i) in connection with any Business Combination
or (ii) providing for any revocation, alteration or amendment of this Bye-law or
any other amendment of its Memorandum of Association or these Bye-laws which
could have the effect of modifying or circumventing this Bye-law. If the
Directors shall submit an amalgamation agreement for approval to any meeting of
the holders of shares of the Company or to the holders of shares of any class of
the Company pursuant to the Act in connection with any Business Combination,
then the requisite quorum for such meeting shall be ninety percent (90%) of all
shares of the Company and/or of the class in question at the time in issue and
entitled to vote.
164. (1) Except as permitted by paragraph (2) of this Bye-law, if at any time a
person acquires or becomes the beneficial owner of any shares, or rights over
shares, carrying voting rights in the Company which, alone or when aggregated
with any shares or rights over shares which such person then already holds or of
which such person is then already the beneficial owner, would carry notes which
may be called at any general meetings in excess of the threshold, then such
person shall not be entitled, in respect of that portion of any shares, or
rights over shares, carrying voting rights in the Company held or beneficially
owned by him in excess of the threshold, (i) to vote such shares at any general
meeting of the Company either personally or by proxy or by his attorney or, if a
company or a corporation, by its duly authorised representative or to exercise
any other right conferred by shareholding in the Company in relation to general
meetings of the Company as to which the record date or scheduled meeting date
falls within a period of five (5) years from the date such person first acquired
or became the beneficial owner of shares, or rights over shares, carrying voting
rights in excess of the threshold, or (ii) to give any written consent with
respect thereto for a period of five (5) years from the date such person first
acquired or became the beneficial owner of shares, or rights over shares,
carrying voting rights in excess of the threshold. For purposes of the foregoing
sentence, no shares, or rights over shares, carrying voting rights in the
Company held or beneficially owned by the Company or any of its subsidiaries
shall be aggregated with such shares or rights over shares held or beneficially
owned by any other person.
(2) The restrictions contained in paragraph (1) of this Bye-law shall
not apply to the Company or any of its subsidiaries or:
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(a) any person who, on May 1, 1997 holds or is the beneficial
owner of shares, or rights over shares, carrying voting rights in excess of the
threshold and continues at all times thereafter to hold or be the beneficial
owner of shares, or rights over shares, carrying voting rights in excess of the
threshold; or
(b) to any person who holds or is the beneficial owner of shares,
or rights over shares carrying voting rights in the Company if the acquisition
by such person of such shares or rights over shares in excess of the threshold
is approved prior to the threshold being exceeded (i) by a special resolution of
the Members, or (ii) by resolution of the Board followed by a resolution passed
by (i) in excess of fifty percent (50%) of the shares carrying voting rights in
the Company not held or beneficially owned by any person holding shares or
rights over shares with respect to which such vote is being taken, and (ii) in
excess of fifty percent (50%) in number of the Members present in person or in
the case of any Member being a corporation by its duly authorised representative
or where proxies are allowed, by proxy.
(3) The Company, whether acting through the Directors or by its Members
generally, shall have no power to propose or enter into any compromise or
arrangement pursuant to the Act providing for any revocation, alteration or
amendment of this Bye-law or any other amendment of its Memorandum of
Association or these Bye-laws which could have the effect of modifying or
circumventing this Bye-law.
(4) Nothing contained in this Bye-law shall be construed to relieve any
interested person from any fiduciary obligation imposed by law.
