UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (earliest event reported): June 15, 2007
Bermuda
----------------------------------------------
(State or other jurisdiction of incorporation)
001-16017 98-0223493
------------------------ ------------------
(Commission file number) (I.R.S. Employer
Identification No.
|
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 5.02(e). Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
On June 15, 2007, at the Registrant's 2007 annual general meeting of shareholders (the "2007 Annual Meeting"), the shareholders of the Registrant approved amendments to the 2004 stock option plan (the "Option Plan"). In particular, the Option Plan was amended
o to increase from 500,000 to 1,000,000 the aggregate number of the Registrant's class A common shares which may be issued upon exercise of options to be granted under the Option Plan, and
o to delete all references in the Option Plan to the Registrant's class B common shares.
In general, holders of class A common shares and class B common shares vote together as a single class on all matters submitted to a vote of the Registrant's shareholders, with holders of class B common shares having one vote per share and holders of class A common shares having one-tenth of one vote per share.
When the Option Plan was first adopted, it provided for the award of options to purchase either class A common shares or class B common shares of the Registrant. However, no options on class B shares have ever been awarded under the Option Plan or the 2000 stock option plan. Furthermore, the outstanding class A shares are listed for trading on the New York Stock Exchange and are publicly owned, while all of the outstanding class B shares are owned by Orient-Express Holdings 1 Ltd., a wholly-owned subsidiary of the Registrant, and are not publicly traded. Because the Registrant's board has no intention of granting options to purchase class B shares, the board has amended the Option Plan to delete all references to them. Accordingly, options granted in the future under the Option Plan will only cover class A shares.
The following summary of the material terms of the Option Plan is qualified in its entirety by reference to the complete text of the Option Plan, which is Exhibit 10.1 to this report.
Administration and Eligibility
The Option Plan will be administered, and options will be granted, by the Registrant's board of directors or a committee thereof from time to time constituted pursuant to the bye-laws of the Registrant.
Options under the Option Plan may be granted in the discretion of the compensation committee or the board
o to any director, officer or employee of the Registrant or any of its subsidiaries who, in the opinion of the committee or the board, has contributed significantly to the growth and progress of the Registrant or any subsidiary, or
o to any person who, in the opinion of the committee of the board, holds promise of so contributing and who can be attracted to directorship, officership or employment through the grant of options under the Option Plan.
Terms of the Plan
Options may be granted for up to, but not exceeding in the aggregate, 1,000,000 class A common shares of the Registrant, subject to adjustment in certain events. The purchase price of the shares under each option will be not less than the fair market value of the shares at the time the option is granted, as determined by the compensation committee or the board, and is subject to adjustment in certain events.
In general, no option granted pursuant to the Option Plan may be exercised during the three years following the grant. Each option will expire upon the first to occur of
o ten years from the date of grant,
o one year after the optionee dies,
o three months after the optionee ceases to be a director, officer or employee for reasons not involving misconduct, impropriety or inefficiency, or
o the termination of the optionee's directorship, officership or employment for reasons involving misconduct, impropriety or inefficiency.
However, if the optionee dies less than one year prior to the date the option would otherwise expire, his or her representative may generally exercise the option within one year following the date of death regardless of the expiration of the ten-year term. Also, if an optionee's directorship, officership or employment terminates due to normal or early retirement, injury, disability, dismissal for redundancy or (with the committee's or board's concurrence) sale or other disposition by the Registrant of the relevant subsidiary or operating division of the Registrant, then the option held by the optionee will continue to be exercisable for three months following termination although the three-year period commencing on the date of grant has not expired. If an optionee dies while holding an option, the optionee's representative may exercise the option although the three-year period has not expired.
At the time of exercise, the optionee must pay to the Registrant the full option price of the shares as to which the option is exercised. With the permission of the compensation committee or the board, exercising optionees (other than directors or officers of the Registrant) may defer payment of all or part of the option price due upon exercise for up to five years from the date of exercise, provided that the deferral is in compliance with United States regulations and the underlying shares are held by the Registrant as collateral for the deferred portion of the purchase price. Optionees electing to defer payment are required to pay interest at the rate of not less than four percent per year on the amount deferred. They will have the right to withdraw part or all of the option shares held by the Registrant upon payment of a corresponding portion of the deferred option price and will be entitled, from the date of exercise, to the rights of a shareholder as to the shares covered by the exercised option, including the right to vote the shares and to receive dividends.
No option may be transferred by the optionee except by will or the laws of descent and distribution.
Termination and Amendment of the Plan
The Option Plan will terminate on the earliest to occur of
o the date of any corporate amalgamation, merger, consolidation or similar transaction involving the Registrant if the Option Plan is not continued pursuant to that transaction,
o the date of a resolution of the board of directors terminating the Option Plan, and
o February 9, 2014.
Any option outstanding at the time the Option Plan terminates will remain in effect until the option is exercised or expires.
The board of directors may modify the Option Plan without further shareholder action under Bermuda law, although no amendment may alter or impair the rights of any optionee, without his consent, under any option granted prior to the amendment.
Also at the 2007 Annual Meeting, the shareholders of the Registrant approved a new 2007 Performance Share Plan (the "Performance Plan"), under which 500,000 shares of the Registrant's class A common shares are reserved for issuance to eligible directors, officers and employees of the Registrant and its subsidiaries. No awards have been made under the Performance Plan to date.
The following summary of the material terms of the Performance Plan is qualified in its entirety by reference to the complete text of the Performance Plan, which is Exhibit 10.2 to this report.
Administration of the Plan
The Performance Plan will be administered, and awards will be granted, by the board of directors of the Registrant or, in the discretion of the board, its compensation committee. References below to the board's administrative authority may be generally construed to be references to the compensation committee unless otherwise specified in the Performance Plan.
The board of directors may establish terms and conditions, if any, including performance goals to be satisfied as a condition to the vesting of awards ("performance criteria"), applicable to the awards, which may differ with respect to each grantee. The authority of the board will include the authority
o to determine the extent to which any performance criteria have been satisfied,
o to determine whether, to what extent and under what circumstances an award may be settled, canceled, forfeited or accelerated,
o to make adjustments in the terms and conditions of any award in accordance with the Performance Plan,
o to construe or interpret the Performance Plan and awards, and
o to determine grantees' rights under the Performance Plan.
Eligible Grantees
Awards may be granted
o to any director, officer or employee of the Registrant or any subsidiary who, in the opinion of the board of directors, has contributed significantly to the growth and progress of the Registrant or any subsidiary, or
o to any person who, in the opinion of the board, holds promise of contributing to the growth and progress of the Registrant or any subsidiary, and who can be attracted to directorship, officership or employment through the grant of awards under the Performance Plan.
At the present time, the board intends to make initial awards subject to performance criteria only to executive officers of the Registrant.
Neither an award nor any rights under the award may be transferred by a grantee, other than by will or the laws of descent and distribution, and it is exercisable during a grantee's lifetime only by the grantee.
Grants of Awards and Performance Criteria
Awards may be granted at any time and from time to time on or before the expiration of ten years from May 7, 2007, the date on which the Performance Plan was adopted by the board of directors. If prior to the expiration of ten years from the date on which the Performance Plan is adopted, an award or any portion of an award expires or otherwise lapses without having vested, the shares underlying the award will become available for making awards to other eligible directors, officers and employees.
The performance criteria, if any, may be established by the board based on objective performance goals over the performance period to be determined by the board. These goals may be based on one or more business criteria that apply to the grantee, a business unit of the
Registrant, or the Registrant as a whole, including, but not limited to, share price, market share, sales, earning per share, earnings before tax, return on equity, total shareholder return, or costs.
Vesting of Awards
Generally, an award will not vest until three years after the date of the award. At the time of vesting,
o the grantee must be a director, officer or employee of the Registrant or a subsidiary,
o the board must have certified the satisfaction of any performance criteria upon which vesting is conditioned, and
o the class A common shares covered by the award must be listed on the New York Stock Exchange (or other U.S. national securities exchange) and their issuance must be registered with the U.S. Securities and Exchange Commission.
An award may vest sooner than three years after the award date if
o the grantee ceases to be a director, officer or employee due to retirement, injury or disability, dismissal for redundancy, death or (on concurrence of the board in its discretion) the sale of the grantee's subsidiary or operating division of the Registrant.
o a "change in control" of the Registrant occurs. A change in control generally means the acquisition of more than 40% of the voting shares in the Registrant by any person or group (other than by a subsidiary of the Registrant), the current directors of the Registrant ceasing to constitute at least a majority of the board, or a merger, sale of substantially all assets or similar transaction involving the Registrant without approval of the Registrant's directors at least a majority of whom is the current directors.
Payment of Awards
As soon as practicable after an award vests, but in any event not later than the 15th day of the third month of the calendar year following the calendar year in which the award vests, the Registrant will (i) cause a certificate or certificates for the number of shares in respect of which the award vests to be registered in the name of the grantee, in such denominations as the grantee may direct, and shall deliver the certificate or certificates to or upon the order of the grantee, and (ii) pay to the grantee an amount in cash equal to the value of the dividends (as determined by the board), if any, and without interest, that would have been paid on the acquired shares in respect of dividend record dates occurring during the period between the date of granted award and the date of vesting of such award unless otherwise determined by the board (the "Dividend Equivalent").
To the extent permitted under applicable law, the board, in its sole discretion, may pay the grantee a cash amount in lieu of the delivery of shares and the Dividend Equivalent in the preceding paragraph, and in full satisfaction thereof.
The grantee will be entitled, from the date shares are registered in the grantee's name, to all the rights of a shareholder as to the vested shares covered by an award, including the right to vote the shares and to receive and retain all dividends paid thereon.
Plan Amendments and Termination
The Performance Plan may be amended from time to time by the board. No amendment can alter or impair any of the rights or obligations of any person, without his or her consent, under any award granted before the amendment.
The Performance Plan will terminate upon the first to occur of the following:
o the Registrant amalgamates, merges, consolidates with or participates in another similar transaction, and no provision is made at the time of the transaction to continue the Performance Plan, except that no amendment will alter or impair any of the rights or obligations of any person, without his or her consent, under any award granted under the Performance Plan;
o the board terminates the Performance Plan; or
o May 7, 2017.
If the Performance Plan terminates, its provisions will continue in full force and effect as regards any awards made prior to the termination.
Item 5.03(a). Amendments to Articles of Incorporation or Bylaws;
Change in Fiscal Year.
At the Registrant's 2007 Annual Meeting, the Registrant's shareholders confirmed and approved amendments to the Registrant's bye-laws:
o to eliminate all references to Sea Containers Ltd., the Registrant's former parent company;
o to permit (i) the delivery of notices, proxy materials, financial statements and any other shareholder communications through an internet website or by email and (ii) shareholders to appoint a proxy or submit a voting instruction by electronic means, such as an internet website;
o to eliminate the requirement that there be at least two officers of the Registrant who are also directors; and
o to provide that deeds and other instruments of the Registrant which previously
had to be executed under the Registrant's seal may be executed by the signature of an authorized person without the seal.
The Registrant's amended bye-laws are filed herewith as Exhibit 3.2 and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits:
Exhibit Number Description of Exhibit
-------------- ----------------------
3.2 Bye-Laws, as adopted by the board of directors
on May 7, 2007 and confirmed by shareholders
on June 15, 2007.
10.1 Orient-Express Hotels Ltd. 2004 Stock Option
Plan, as amended effective June 15, 2007.
10.2 Orient-Express Hotels Ltd. 2007 Performance
Share Plan.
|
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
ORIENT-EXPRESS HOTELS LTD.
Date: June 21, 2007 By: /s/ Edwin S. Hetherington
-------------------------
Edwin S. Hetherington
Vice President, General Counsel and Secretary
|
EXHIBIT INDEX
Exhibit Number Description
-------------- -------------------------------------------------
3.2 Bye-Laws, as adopted by the board of directors on
May 7, 2007 and confirmed by shareholders on
June 15, 2007.
10.1 Orient-Express Hotels Ltd. 2004 Stock Option
Plan, as amended effective June 15, 2007.
10.2 Orient-Express Hotels Ltd. 2007 Performance Share
Plan.
|
EXHIBIT 3.2
BYE-LAWS*
of
ORIENT-EXPRESS HOTELS LTD.
INTERPRETATION
1. (1) In these Bye-Laws unless the context otherwise requires -
"A Shares" means the Class A Common Shares, par value $0.01 per share, of the Company;
"B Shares" means the Class B Common Shares, par value $0.01 per share, of the Company;
"Bermuda" means the Islands of Bermuda;
"Board" means the Board of Directors of the Company or the Directors present at a meeting of Directors at which there is a quorum;
"the Companies Acts" means every Bermuda statute from time to time in force concerning companies insofar as the same applies to the Company;
"Company" means the company named Orient-Express Hotels Ltd. incorporated in Bermuda on October 16, 1987 ;
"Director" means such person or persons as shall be appointed to the Board from time to time pursuant to Bye-Law 71.
"Officer" means a person appointed by the Board pursuant to Bye-Law 98 of these Bye-Laws and shall not include an auditor of the Company;
"paid up" means paid up or credited as paid up;
"Register" means the Register of Shareholders of the Company and includes any branch or sub-register;
"Registrar" means any person appointed to perform the duties of a registrar of shares and, if no such person shall be appointed, means the Secretary;
"Registered Office" means the registered office for the time being of the Company;
* As adopted by the board of directors on May 7, 2007 and confirmed by shareholders on June 15, 2007.
"Resident Representative" means the individual (or, if permitted in accordance with the Companies Acts, the company) appointed to perform the duties of resident representative set out in the Companies Acts and includes any assistant or deputy Resident Representative appointed by the Board to perform any of the duties of the Resident Representative;
"Resolution" means a resolution of the Shareholders or, where required, of a separate class or separate classes of Shareholders, adopted in general meeting in accordance with the provisions of these Bye-Laws; "
Seal" means the common seal of the Company and includes any duplicate or facsimile thereof;
"Secretary" includes a temporary or assistant or deputy Secretary and any person appointed by the Board to perform any of the duties of the Secretary;
"Shareholder" means a shareholder or member of the Company; and
"these Bye-Laws" means these Bye-Laws in their present form or as from time to time amended;
(2) For the purposes of these Bye-Laws, a company shall be deemed to be present in person if its representative duly authorised pursuant to the Companies Acts is present;
(3) Words importing only the singular number include the plural number and vice versa;
(4) Words importing only the masculine gender include the feminine and neuter genders respectively;
(5) Words importing persons include individuals, firms, companies, corporations, trusts or other entities, or associations or bodies of persons, whether corporate or un-incorporate;
(6) Reference to writing shall include typewriting, printing, lithography, photography and other modes of representing or reproducing words in a legible and non-transitory form;
(7) Any words or expressions defined in the Companies Acts shall bear the same meaning in these Bye-Laws unless otherwise defined herein;
(8) The word "may" shall be construed as permissive and the word "shall" shall be construed as imperative.
REGISTERED OFFICE
2. The Registered Office shall be at such place in Bermuda as the Board shall from time to time appoint.
SHARE RIGHTS
3. Any share in the Company may be issued with or have attached thereto such preferred, deferred, qualified or other special rights, privileges or conditions or such restrictions, whether in regard to dividend, voting, return of capital or otherwise, as the Board may from time to time determine. The respective rights and restrictions attached to the A Shares and the B Shares are as set forth in Schedules 1 and 2 (as the same may be amended from time to time) to these Bye-Laws, which Schedules shall be deemed to be incorporated in and form part of this Bye-Law 3.
4. (1) Subject to the Companies Acts, any preference shares may, with the sanction of a resolution of the Board, be issued on terms:
(a) that they are to be redeemed on the happening of a specified event or on a given date; and/or,
(b) that they are liable to be redeemed at the option of the Company.
The terms and manner of redemption shall be provided for in such resolution of the Board and shall be attached to but shall not form part of these Bye-Laws.
(2) The terms and manner of redemption of any other redeemable preference shares of the Company shall be either (A) as the Company may in general meeting determine or (B) in the event that the Company, in general meeting, may have so authorized, as the Board or any committee thereof may by resolution determine before the issuance of such shares, such resolution to be attached as a Schedule to these Bye-Laws.
(3) The Company may from time to time purchase its own shares on such terms and in such manner as may be authorized by the Board.
5. The Company may adopt a scheme or arrangement (hereinafter called a "shareholder rights plan") binding upon the Company or a successor to it or its assets or earning power and upon the Shareholders, present and future, and providing for the creation and
issuance of rights entitling the Shareholders of the Company, or certain of them, to acquire from the Company shares of any class or assets of the Company or a subsidiary of the Company or otherwise, and the terms and conditions of such shareholder rights plan and rights may be amended or modified either (i) as the Company may in general meeting determine or (ii) as the Directors or any committee thereof may determine, such shareholder rights plan to be attached as a Schedule to these Bye-Laws.
MODIFICATION OF RIGHTS
6. Subject to the Companies Acts, all or any of the special rights for the time being attached to any class of shares for the time being issued may, unless otherwise provided in the rights attaching to or 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 altered or abrogated with the sanction of a Resolution passed by a simple majority at a separate general meeting of the holders of the issued shares of that class. To any such separate general meeting, all the provisions of these Bye-Laws as to general meetings of the Company shall mutatis mutandis apply, but so that the necessary quorum shall be persons holding or representing by proxy a majority of the shares of the relevant class and that every holder of shares of the relevant class shall be entitled on a poll to one vote for every such share held by him.
7. The special rights conferred upon the holders of any shares or class of shares shall not, unless otherwise expressly provided in the rights attaching to or the terms of issue of such shares, be deemed to be altered by the creation or issue of further shares ranking pari passu therewith.
SHARES
8. Subject to the provisions of these Bye-Laws, the unissued shares of the Company (whether forming part of the original capital or any increased capital) shall be at the disposal of the Board, which may offer, allot, grant options over or distribute rights in respect of, or otherwise issue or dispose of them or options over or rights in respect of
them, to such persons, at such times and for such consideration (if any) and upon such terms and conditions as the Board may determine.
9. The Board may in connection with the issue of any shares exercise all powers of paying commission, discount and brokerage conferred or permitted by law.
10. Except as ordered by a court of competent jurisdiction or as required by law, no person shall be recognised by the Company as holding any share upon trust and the Company shall not be bound by or required in any way to recognise (even when having notice thereof) any equitable, contingent, future or partial interest in any share or any interest in any fractional part of a share or (except only as otherwise provided in these Bye-Laws, or by law) any other right in respect of any share except an absolute right to the entirety thereof in the registered holder.
CERTIFICATES
11. The preparation, issue and delivery of certificates shall be governed by the Companies Acts or other applicable law. In the case of a share held jointly by several persons, delivery of a certificate to one of several joint holders shall be sufficient delivery to all.
12. If a share certificate is defaced, lost or destroyed it may be replaced without fee payable to the Company but on such terms (if any) as to evidence and indemnity and to payment of the costs and out of pocket expenses of the Company in investigating such evidence and preparing such indemnity as the Board may think fit and, in case of defacement, on delivery of the old certificate to the Company.
13. All certificates for share or loan capital or other securities of the Company (other than letters of allotment, scrip certificates and other like documents) shall, except to the extent that the terms and conditions for the time being relating thereto otherwise provide, be issued under the Seal. The Board may by resolution determine, either generally or in any particular case, that any signatures on any such certificates need not be autographic but may be affixed to such certificates by some mechanical means or may be printed thereon or that such certificates need not be signed by any persons.
LIEN
14. The Company shall have a first and paramount lien on every share (not being a fully paid share) for all moneys, whether presently payable or not, called or payable, at a date fixed by or in accordance with the terms of issue of such share in respect of such share, and the Company shall also have a first and paramount lien on every share (other than a fully paid share) standing registered in the name of a Shareholder, whether singly or jointly with any other person, for all the debts and liabilities of such Shareholder or his estate to the Company, whether the same shall have been incurred before or after notice to the Company of any interest of any person other than such Shareholder, and whether the time for the payment or discharge of the same shall have actually arrived or not, and notwithstanding that the same are joint debts or liabilities of such Shareholder or his estate and any other person, whether a Shareholder or not. The Company's lien on a share shall extend to all dividends payable thereon. The Board may at any time, either generally or in any particular case, waive any lien that has arisen or declare any share to be wholly or in part exempt from the provisions of this Bye-Law.
15. The Company may sell, in such manner as the Board may think fit, any share on which the Company has a lien but no sale shall be made unless some sum in respect of which the lien exists is presently payable nor until the expiration of fourteen (14) days after a notice in writing, stating and demanding payment of the sum presently payable and giving notice of the intention to sell in default of such payment, has been served on the holder for the time being of the share.
16. The net proceeds of sale by the Company of any shares on which it has a lien shall be applied in or towards payment or discharge of the debt or liability in respect of which the lien exists so far as the same is presently payable, and any residue shall (subject to a like lien for debts or liabilities not presently payable as existed upon the share prior to the sale) be paid to the person who was the holder of the share immediately before such sale. For giving effect to any such sale, the Board may authorise some person to transfer the share sold to the purchaser thereof. The purchaser shall be registered as the holder of the share and he shall not be bound to see to the application of the purchase money, nor
shall his title to the share be affected by any irregularity or invalidity in the proceedings relating to the sale.
CALLS ON SHARES
17. The Board may from time to time make calls upon the Shareholders in respect of any moneys unpaid on their shares (whether on account of the par value of the shares or by way of premium) and not by the terms of issue thereof made payable at a date fixed by or in accordance with such terms of issue, and each Shareholder shall (subject to the Company serving upon him at least fourteen (14) days notice specifying the time or times and place of payment) pay to the Company at the time or times and place so specified the amount called on his shares. A call may be revoked or postponed as the Board may determine.
18. A call may be made payable by instalments and shall be deemed to have been made at the time when the resolution of the Board authorising the call was passed.
19. The joint holders of a share shall be jointly and severally liable to pay all calls in respect thereof.
20. If a sum called in respect of the share shall not be paid before or on the day appointed for payment thereof the person from whom the sum is due shall pay interest on the sum from the day appointed for the payment thereof to the time of actual payment at such rate as the Board may determine, but the Board shall be at liberty to waive payment of such interest wholly or in part.
21. Any sum which, by the terms of issue of a share, becomes payable on allotment or at any date fixed by or in accordance with such terms of issue, whether on account of the nominal amount of the share or by way of premium, shall for all the purposes of these Bye-Laws be deemed to be a call duly made, notified and payable on the date on which, by the terms of issue, the same becomes payable and, in case of non-payment, all the relevant provisions of these Bye-Laws as to payment of interest, forfeiture or otherwise
shall apply as if such sum had become payable by virtue of a call duly made and notified.
22. The Board may on the issue of shares differentiate between the allottees or holders as to the amount of calls to be paid and the times of payment.
FORFEITURE OF SHARES
23. If a Shareholder fails to pay any call or instalment of a call on the day appointed for payment thereof, the Board may at any time thereafter during such time as any part of such call or instalment remains unpaid serve a notice on him requiring payment of so much of the call or instalment as is unpaid, together with any interest which may have accrued.
24. The notice shall name a further day (not being less than fourteen (14) days from the date of the notice) on or before which, and the place where, the payment required by the notice is to be made and shall state that, in the event of non-payment on or before the day and at the place appointed, the shares in respect of which such call is made or instalment is payable will be liable to be forfeited. The Board may accept the surrender of any share liable to be forfeited hereunder and, in such case, references in these Bye-Laws to forfeiture shall include surrender.
25. If the requirements of any such notice as aforesaid are not complied with, any share in respect of which such notice has been given may at any time thereafter, before payment of all calls or instalments and interest due in respect thereof has been made, be forfeited by a resolution of the Board to that effect. Such forfeiture shall include all dividends declared in respect of the forfeited shares and not actually paid before the forfeiture.
26. When any share has been forfeited, notice of the forfeiture shall be served upon the person who was before forfeiture the holder of the share, but no forfeiture shall be in any manner invalidated by any omission or neglect to give such notice as aforesaid.
27. A forfeited share shall be deemed to be the property of the Company and may be sold, re-offered or otherwise disposed of either to the person who was, before forfeiture, the holder thereof or entitled thereto or to any other person upon such terms and in such manner as the Board shall think fit, and at any time before a sale, re-allotment or disposition the forfeiture may be cancelled on such terms as the Board may think fit.
28. A person whose shares have been forfeited shall thereupon cease to be a Shareholder in respect of the forfeited shares but shall, notwithstanding the forfeiture, remain liable to pay to the Company all moneys which at the date of forfeiture were presently payable by him to the Company in respect of the shares with interest thereon at such rate as the Board may determine from the date of forfeiture until payment, and the Company may enforce payment without being under any obligation to make any allowance for the value of the shares forfeited.
29. An affidavit in writing that the deponent is a Director of the Company or the Secretary and that a share has been duly forfeited on the date stated in the affidavit shall be conclusive evidence of the facts therein stated as against all persons claiming to be entitled to the share. The Company may receive the consideration (if any) given for the share on the sale, re-allotment or disposition thereof and the Board may authorise some person to transfer the share to the person to whom the same is sold, re-allotted or disposed of, and he shall thereupon be registered as the holder of the share and shall not be bound to see to the application of the purchase money (if any) nor shall his title to the share be affected by any irregularity or invalidity in the proceedings relating to the forfeiture, sale, re-allotment or disposal of the share.
REGISTER OF SHAREHOLDERS
30. The Secretary shall establish and maintain the Register in Bermuda in the manner prescribed by the Companies Acts. Unless the Board otherwise determines, the Register shall be open to inspection in the manner prescribed by the Companies Acts between 10.00 a.m. and 12.00 noon on every working day. Unless the Board so determines, no Shareholder or intending Shareholder shall be entitled to have entered in the Register any indication of any trust or any equitable, contingent, future or partial interest in any
share or any interest in any fractional part of a share and if any such entry exists or is permitted by the Board it shall not be deemed to abrogate any of the provisions of Bye-Law 10.
REGISTER OF DIRECTORS AND OFFICERS
31. The Secretary shall establish and maintain a register of the Directors and Officers of the Company as required by the Companies Acts. The register of Directors and Officers shall be open to inspection in the manner prescribed by the Companies Acts between 10:00 a.m. and 12:00 noon on every working day.
TRANSFER OF SHARES
32. Subject to the Companies Acts and to such of the restrictions contained in these Bye-Laws as may be applicable, any Shareholder may transfer all or any of his shares by an instrument of transfer in the usual common form or in any other form which the Board may approve.
33. The instrument of transfer of a share shall be signed by or on behalf of the transferor and where any share is not fully-paid, the transferee and the transferor shall be deemed to remain the holder of the share until the name of the transferee is entered in the Register in respect thereof. All instruments of transfer when registered may be retained by the Company. The Board may, in its absolute discretion and without assigning any reason therefor, decline to register any transfer of any share which is not a fully-paid share. The Board may also decline to register any transfer unless:-
(1) the instrument of transfer is duly stamped and lodged with the Company, accompanied by the certificate for the shares to which it relates, and such other evidence as the Board may reasonably require to show the right of the transferor to make the transfer, or
(2) the instrument of transfer is in respect of only one class of share, or
(3) where applicable, the permission of the Bermuda Monetary Authority with respect thereto has been obtained.
Subject to any directions of the Board from time to time in force, the Registrar may exercise the powers and discretions of the Board under this Bye-Law and Bye-Laws 32 and 34.
34. If the Board declines to register a transfer it shall, within three months after the date on which the instrument of transfer was lodged, send to the transferee notice of such refusal.
35. No fee shall be charged by the Company for registering any transfer, probate, letters of administration, certificate of death or marriage, power of attorney, distringas or stop notice, order of court or other instrument relating to or affecting the title to any share, or otherwise making an entry in the Register relating to any share.
TRANSMISSION OF SHARES
36. In the case of the death of a Shareholder, the survivor or survivors, where the deceased was a joint holder, and the estate representative, where he was sole holder, shall be the only person recognised by the Company as having any title to his shares; but nothing herein contained shall release the estate of a deceased holder (whether the sole or joint) from any liability in respect of any share held by him solely or jointly with other persons. For the purpose of this Bye-Law, estate representative means the person to whom probate or letters of administration has or have been granted or, failing any such person, such other person as the Board may in its absolute discretion determine to be the person recognised by the Company for the purpose of this Bye-Law.
37. Any person becoming entitled to a share in consequence of the death of a Shareholder or otherwise by operation of applicable law may, subject as hereafter provided and upon such evidence being produced as may from time to time be required by the Board as to his entitlement, either be registered himself as the holder of the share or elect to have some person nominated by him registered as the transferee thereof. If the person so becoming entitled elects to be registered himself, he shall deliver or send to the Company a notice in writing signed by him stating that he so elects. If he shall elect to have his nominee registered, he shall signify his election by signing an instrument of
transfer of such share in favour of his nominee. All the limitations, restrictions and provisions of these Bye-Laws relating to the right to transfer and the registration of transfer of shares shall be applicable to any such notice or instrument of transfer as aforesaid as if the death of the Shareholder or other event giving rise to the transmission had not occurred and the notice or instrument of transfer was an instrument of transfer signed by such Shareholder.
38. A person becoming entitled to a share in consequence of the death of a Shareholder or otherwise by operation of applicable law shall (upon such evidence being produced as may from time to time be required by the Board as to his entitlement) be entitled to receive and may give a discharge for any dividends or other moneys payable in respect of the share, but he shall not be entitled in respect of the share to receive notices of or to attend or vote at general meetings of the Company or, save as aforesaid, to exercise in respect of the share any of the rights or privileges of a Shareholder until he or his nominee shall have become registered as the holder thereof. The Board may at any time give notice requiring such person to elect either to be registered himself or to transfer the share and, if the notice is not complied with within sixty (60) days, the Board may thereafter withhold payment of all dividends and other moneys payable in respect of the shares until the requirements of the notice have been complied with.
39. Subject to any directions of the Board from time to time in force, the Registrar may exercise the powers and discretions of the Board under Bye-Laws 36, 37 and 38.
INCREASE OF CAPITAL
40. Subject to any confirmation or consent required by law, the Company may from time to time increase its capital by such sum to be divided into shares of such par value as the Company by Resolution shall prescribe.
41. The Company may, by the Resolution increasing the capital, direct that the new shares or any of them shall be offered in the first instance either at par or at a premium or (subject to the provisions of the Companies Acts) at a discount to all the holders for the
time being of shares of any class or classes in proportion to the number of such shares held by them respectively or make any other provision as to the issue of the new shares.
42. The new shares shall be subject to all the provisions of these Bye-Laws with reference to lien, the payment of calls, forfeiture, transfer, transmission and otherwise.
ALTERATION OF CAPITAL
43. Subject to any confirmation or consent required by law, the Company may from time to time by Resolution:-
(1) reclassify or divide its shares into several classes and attach thereto respectively any preferential, deferred, qualified or special rights, privileges or conditions;
(2) consolidate and divide all or any of its share capital into shares of larger par value than its existing shares;
(3) sub-divide its shares or any of them into shares of smaller par value than is fixed by its memorandum, so, however, that in the sub-division the proportion between the amount paid and the amount, if any, unpaid on each reduced share shall be the same as it was in the case of the share from which the reduced share is derived;
(4) make provision for the issue and allotment of shares which do not carry any voting rights;
(5) cancel shares which, at the date of the passing of the Resolution in that behalf, have not been taken or agreed to be taken by any person, and diminish the amount of its share capital by the amount of the shares so cancelled; and
(6) change the currency denomination of its share capital.
Where any difficulty arises in regard to any reclassification, division, consolidation, or sub-division under this Bye-Law, the Board may settle the same as it thinks expedient and, in particular, may arrange for the sale of the shares representing fractions and the distribution of the net proceeds of sale in due proportion amongst the Shareholders who would have been entitled to the fractions, and for this purpose the Board may authorise some person to transfer the shares representing fractions to the purchaser thereof, who shall not be bound to see to the application of the purchase money nor shall his title to
the shares be affected by any irregularity or invalidity in the proceedings relating to the sale.
44. Subject to the Companies Acts and to any confirmation or consent required by law or these Bye-Laws, the Company may by Resolution from time to time convert, or authorize the conversion of, any preference shares into redeemable preference shares.
REDUCTION OF CAPITAL
45. Subject to the Companies Acts, its memorandum and any confirmation or consent required by law or these Bye-Laws, the Company may from time to time by Resolution authorise the reduction of its issued share capital or of any capital redemption reserve fund or any share premium or contributed surplus account in any manner.
46. In relation to any such reduction, the Company may by Resolution or the Directors may determine the terms upon which such reduction is to be effected including, in the case of a reduction of part only of a class of shares, those shares to be affected.
GENERAL MEETINGS
47. The Board shall convene and the Company shall hold general meetings as annual general meetings in accordance with the requirements of the Companies Acts at such times and places as the Board shall appoint. The Board or the Chairman of the Board (if any) may, whenever it or he thinks fit, and shall, when required by the Companies Acts, convene general meetings other than Annual General Meetings which shall be called special general meetings.
NOTICE OF GENERAL MEETINGS
48. An Annual General Meeting or a Special General Meeting shall be called by notice not less than ten (10) nor more than fifty (50) days before the date of the meeting. The notice shall be exclusive of the day on which it is served or deemed to be served and of the day for which it is given, and shall specify the place, day and time of the meeting and
the general nature of the business to be considered. Notice of every general meeting shall be given in any manner permitted by Bye-Laws 118 and 119 to all Shareholders other than those which, under the provisions of these Bye-Laws or the terms of issue of the shares they hold, are not entitled to receive such notice from the Company, and to any Director or Resident Representative.
49. The accidental omission to give notice of a meeting or (in cases where instruments of proxy are sent out with the notice) the accidental omission to send such instrument of proxy to, or the non-receipt of notice of a meeting or such instrument of proxy by, any person entitled to receive such notice shall not invalidate the proceedings at that meeting.
PROCEEDINGS AT GENERAL MEETINGS
50. No business shall be transacted at any general meeting unless a quorum is present when the meeting proceeds to business, but the absence of a quorum shall not preclude the appointment, choice or election of a chairman which shall not be treated as part of the business of the meeting. Save as otherwise expressly provided by these Bye-Laws, the quorum at any general meeting shall be constituted by Shareholders, either present in person or represented by proxy, holding in the aggregate shares carrying a majority of the voting rights entitled to be exercised at such meeting.
51. If within five minutes (or such longer time as the chairman of the meeting may determine to wait) after the time appointed for the meeting, a quorum is not present, the meeting, if convened on the requisition of Shareholders, shall be dissolved. In any other case, it shall stand adjourned to such other day and such other time and place as the chairman of the meeting may determine.
52. A meeting of the Shareholders or any class thereof may be held by means of such telephone, electronic or other communication facilities as permit all persons participating in the meeting to communicate with each other simultaneously and instantaneously and participation in such a meeting shall constitute presence in person at such meeting.
53. Each Director and the Resident Representative, if any, shall be entitled to attend and speak at any general meeting of the Company.
54. The Chairman (if any) of the Board or, in his absence, the President shall preside as chairman at every general meeting. If there is no such Chairman or President, or if at any meeting neither the Chairman nor the President is present within five minutes after the time appointed for holding the meeting, or if neither of them is willing to act as chairman, the Directors present shall choose one of their number to act or if one Director only is present he shall preside as chairman if willing to act. If no Director is present, or if each of the Directors present declines to take the chair, the persons present and entitled to vote on a poll shall elect one of their number to be chairman.
55. The chairman of the meeting may, with the consent of any meeting at which a quorum is present (and shall if so directed by the meeting), adjourn the meeting from time to time and from place to place but no business shall be transacted at any adjourned meeting except business which might lawfully have been transacted at the meeting from which the adjournment took place.
56. Save as expressly provided by these Bye-Laws, it shall not be necessary to give any notice of an adjournment or of the business to be transacted at an adjourned meeting if the time and place to which the meeting is adjourned are announced at the meeting at which the adjournment is taken, unless the Directors fix a new record date for the adjourned meeting in which case a notice of the adjourned meeting shall be given to each person who is a Shareholder on the new record date entitled to notice under Bye-Law 113.
VOTING
57. Save where a greater majority is required by the Companies Acts or these Bye-Laws or by the special rights for the time being attached to any class of shares for the time being in issue, any question proposed for consideration at any general meeting shall be decided
on by a simple majority of votes cast, including votes received in the form of electronic records or transmissions.
58. Subject to these Bye-Laws and to any special rights or restrictions for the time being attached to any class of shares for the time being in issue, each Shareholder at any general meeting of the Company shall be entitled to one vote for each share held by him, and such vote may be given in person or by proxy.
59. In the case of an equality of votes at a general meeting, the chairman of the meeting shall not be entitled to a second or casting vote, and the Resolution shall fail.
60. In the case of joint holders of a share, any one of the holders may exercise the voting rights attaching to the share, either personally or by proxy, as if he were solely entitled thereto, and if more than one of the joint holders is present at any general meeting, personally or by proxy, that one of the holders whose name stands first on the Register in respect of such share shall alone be entitled to exercise the voting rights in respect thereof. Several executors or administrators of a deceased Shareholder in whose name any shares stand shall for the purposes of this Bye-Law be deemed joint holders thereof.
61. A Shareholder who is a patient for any purpose of any statute or applicable law relating to mental health or in respect of whom an order has been made by any Court having jurisdiction for the protection or management of the affairs of persons incapable of managing their own affairs may vote 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 by proxy, and may otherwise act and be treated as such Shareholder for the purpose of general meetings.
62. No Shareholder shall, unless the Board otherwise determines, be entitled to vote at any general meeting unless all calls or other sums presently payable by him in respect of shares in the Company have been paid.
63. If:
(1) any objection shall be raised to the qualification of any voter; or
(2) any votes have been counted which ought not to have been counted or which might have been rejected; or
(3) any votes are not counted which ought to have been counted,
the objection or error shall not vitiate the decision of the meeting or adjourned meeting on any Resolution unless the same is raised or pointed out at the meeting or, as the case may be, the adjourned meeting at which the vote objected to is given or tendered or at which the error occurs. Any objection or error shall be referred to the chairman of the meeting and shall only vitiate the decision of the meeting on any Resolution if the chairman decides that the same may have affected the decision of the meeting. The decision of the chairman on such matters shall be final and conclusive.
64. Except as the Companies Acts shall otherwise require in the particular case, Shareholders may only act in general meeting of the Company and no resolution or consent in writing signed by one or more Shareholders for the time being entitled to vote at a general meeting upon such resolution or consent shall be valid or effectual for any purpose.
PROXIES AND CORPORATE REPRESENTATIVES
65. The instrument appointing a proxy shall be in writing or in the form of an electronic record or transmission from the Shareholder or his attorney authorised by him or, if the Shareholder is a corporation, from an officer, attorney or other person authorised to appoint such a proxy on behalf of the corporation.
66. Any Shareholder may appoint a standing proxy or (if a company or corporation) representative by depositing at the Registered Office, or by sending an electronic record or transmission from the Shareholder, a proxy or (if a company or corporation) an authorisation and such proxy or authorisation shall be valid for all general meetings and adjournments thereof or until notice of revocation is received at the Registered Office or by the Company through an electronic record or transmission from the Shareholder. Where a standing proxy or authorisation exists, its operation shall be deemed to have been suspended at any general meeting or adjournment thereof at which the Shareholder is present or in respect to which the Shareholder has specially appointed a proxy or
representative. The Board may from time to time require such evidence as it shall deem necessary as to the due execution or continuing validity of any such standing proxy or authorisation and the operation of any such standing proxy or authorisation shall be deemed to be suspended until such time as the Board determines that it has received the requested evidence or other evidence satisfactory to it.
67. Subject to Bye-Law 66, the instrument appointing a proxy together with such other evidence as to its due execution or continuing validity as the Board may from time to time require, shall be delivered at the Registered Office (or at such place as may be specified in the notice convening the meeting or in any notice of any adjournment or, in either case, in any document sent therewith) or to the Company through an electronic record or transmission prior to the holding of 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.
68. Instruments of proxy shall be in any common form or in such other form (including an electronic record or transmission) as the Board may approve and the Board may, if it thinks fit, send out with the notice of any meeting forms of instruments of proxy for use at that meeting. The instrument of proxy shall be deemed to confer authority to 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.
69. A vote given in accordance with the terms of an instrument of proxy shall be valid notwithstanding the previous death or unsoundness of mind of the principal, or revocation of the instrument of proxy or of the authority under which it was executed, provided that no notice in writing or through an electronic record or transmission of such death, insanity or revocation shall have been received by the Company at the Registered Office (or such other place as may be specified for the delivery of instruments of proxy in the notice convening the meeting or other documents sent therewith) one hour at least before the commencement of the meeting or adjourned meeting at which the instrument of proxy is used.
70. Subject to the Companies Acts, the Board may at its discretion waive any of the provisions of these Bye-Laws related to proxies or authorisations and, in particular, may accept such verbal or other assurances as it thinks fit as to the right of any person to attend and vote on behalf of any Shareholder at general meetings.
APPOINTMENT AND REMOVAL OF DIRECTORS
71. The number of Directors shall be such number not less than three as the Company by Resolution may from time to time determine. Any vacancies on the Board of Directors may be filled by the Directors remaining in office. At any special general meeting called for the purpose of electing any person to be a Director or increasing or reducing the number of Directors of the Company or electing any person to act as an additional Director, Shareholders holding not less than ninety percent (90%) of the shares of the Company at the time in issue and outstanding and entitled to vote, either present in person or represented by proxy, shall constitute a quorum at such meeting.
72. Subject to the Companies Acts and these Bye-Laws, the Directors shall serve until re-elected or their successors are appointed at the next annual general meeting. To the extent permitted by law, a Director shall not be required to be a Shareholder of the Company or to have registered in his name any shares in the Company.
73. The Company shall at the annual general meeting and, subject to Bye-Law 71, may by Resolution determine the minimum and the maximum number of Directors. Without prejudice to the power of the Company by Resolution in pursuance of any of the provisions of these Bye-Laws to appoint any person to be a Director, the Board, so long as a quorum of Directors remains in office, shall have power at any time and from time to time to appoint any individual to be a Director so as to fill any vacancy occurring on the Board.
74. Directors may be removed for cause by vote of the Shareholders or by resolution of the Directors. Directors may be removed without cause by vote of the Shareholders. Notwithstanding the preceding sentences, a Director may not be removed at a special general meeting unless notice of any such meeting shall have been served upon the
Director concerned not less than fourteen (14) days before the meeting and he shall be entitled to be heard at that meeting and provided further that the Resolution removing any Director is duly adopted by Shareholders holding not less than ninety percent (90%) of the shares of the Company at the time in issue and outstanding and entitled to vote generally in the election of Directors. Subject to the third sentence of Bye-Law 71, any vacancy created by the removal of a Director at a special general meeting may be filled at the meeting by the election of another Director in his place or, in the absence of any such election, by the Board.
RESIGNATION AND DISQUALIFICATION OF DIRECTORS
75. The office of a Director shall be vacated upon the happening of any of the following events:
(1) if he resigns his office by notice in writing delivered to the Registered Office or tendered at a meeting of the Board;
(2) if he becomes of unsound mind or a patient for any purpose of any statute or applicable law relating to mental health and the Board resolves that his office is vacated;
(3) if he becomes bankrupt under the laws of any country or compounds with his creditors;
(4) if he is prohibited by law from being a Director;
(5) if he ceases to be a Director by virtue of the Companies Acts or is removed from office pursuant to these Bye-Laws.
ALTERNATE DIRECTORS
76. The Company may in general meeting elect a person or persons qualified to be Directors to act as Directors in the alternative to any of the Directors of the Company or may authorize the Board to appoint such Alternate Directors. Any Alternate Director may be removed by the Company in general meeting and, if appointed by the Board, may be removed by the Board 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. An Alternate Director may also be a Director in his own right and may act as alternate to more than one Director.
77. An Alternate Director shall be entitled to receive notices of all meetings of Directors, to attend, be counted in the quorum and vote at any such meeting at which any Director to whom he is alternate is not personally present, and generally to perform all the functions of any Director to whom he is alternate in his absence.
78. Every person acting as an Alternate Director shall (except as regards powers to appoint an alternate and remuneration) be subject in all respects to the provisions of these Bye-Laws relating to Directors and shall alone be responsible to the Company for his acts and defaults and shall not be deemed to be the agent of or for any Director for whom he is alternate. An Alternate Director may be paid expenses and shall be entitled to be indemnified by the Company to the same extent mutatis mutandis as if he were a Director. Every person acting as an Alternate Director shall have one vote for each Director for whom he acts as alternate (in addition to his own vote if he is also a Director). The signature of an Alternate Director to any resolution in writing of the Board or a committee of the Board shall, unless the terms of his appointment provides to the contrary, be as effective as the signature of the Director or Directors to whom he is alternate.
DIRECTORS' FEES, REMUNERATION AND EXPENSES
79. The amount, if any, of Directors' fees shall from time to time be determined by the Board. Each Director may be paid his reasonable travel, hotel and incidental expenses in attending and returning from meetings of the Board or committees constituted pursuant to these Bye-Laws or general meetings and shall be paid all expenses properly and reasonably incurred by him in the conduct of the Company's business or in the discharge of his duties as a Director. Any Director who, by request, goes or resides abroad for any purposes of the Company or who performs services which in the opinion of the Board go beyond the ordinary duties of a Director may be paid such extra remuneration (whether by way of salary, commission, participation in profits or otherwise) as the Board may determine, and such extra remuneration shall be in addition to any remuneration provided for by or pursuant to any other Bye-Law.
DIRECTORS' AND OFFICERS' INTERESTS
80. (1) A Director or other officer may hold any other office or place of profit with the Company (except that of auditor) in conjunction with his office for such period and upon such terms as the Board may determine, and may be paid such extra remuneration therefor (whether by way of salary, commission, participation in profits or otherwise) as the Board may determine, and such extra remuneration shall be in addition to any remuneration provided for by or pursuant to any other Bye-Law.
(2) A Director or other officer may act by himself or his firm in a professional capacity for the Company (otherwise than as auditor) and he or his firm shall be entitled to remuneration for professional services as if he were not a Director or other officer.
(3) Subject to the provisions of the Companies Acts, a Director or other officer may notwithstanding his office be a party to, or otherwise interested in, any transaction or arrangement with the Company or in which the Company is otherwise interested; and may be a director or other officer of, or employed by, or a party to any transaction or arrangement with, or otherwise interested in, any body corporate promoted by the Company or in which the Company is
interested. The Board may also cause the voting power conferred by the shares in any other company held or owned by the Company to be exercised in such manner in all respects as it thinks fit, including the exercise thereof in favour of any resolution appointing the Directors or any of them to be directors or officers of such other company, or voting or providing for the payment of remuneration to the directors or officers of such other company.
(4) So long as, where it is necessary, he declares the nature of his interest at the first opportunity at a meeting of the Board or by writing to the Directors as required by the Companies Acts, a Director or other officer shall not by reason of his office be accountable to the Company for any benefit which he derives from any office or employment to which these Bye-Laws allow him to be appointed or from any transaction or arrangement in which these Bye-Laws allow him to be interested, and no such transaction or arrangement shall be liable to be avoided on the ground of any interest or benefit.
(5) Subject to the Companies Acts and any further disclosure required thereby, a general notice to the Directors by a Director or other officer declaring that he is a director or officer or has an interest in a person and is to be regarded as interested in any transaction or arrangement made with that person, shall be a sufficient declaration of interest in relation to any transaction or arrangement so made.
POWERS AND DUTIES OF THE BOARD
81. Subject to the provisions of the Companies Acts and these Bye-Laws, the Board shall manage the business of the Company and may pay all expenses incurred in promoting and incorporating the Company and may exercise all the powers of the Company. No alteration of these Bye-Laws shall invalidate any prior act of the Board which would have been valid if that alteration had not been made. The powers given by this Bye-Law shall not be limited by any special power given to the Board by these Bye-Laws and a meeting of the Board at which a quorum is present shall be competent to exercise all the powers, authorities and discretions for the time being vested in or exercisable by the Board.
82. The Board may exercise all the powers of the Company to borrow money and to mortgage or charge all or any part of the undertaking, property and assets (present and future) and uncalled capital of the Company and to issue debentures and other securities, whether outright or as collateral security for any debt, liability or obligation of the Company or of any other persons.
83. All cheques, promissory notes, drafts, bills of exchange and other instruments, whether negotiable or transferable or not, and all receipts for money paid to the Company shall be signed, drawn, accepted, endorsed or otherwise executed, as the case may be, in such manner as the Board shall from time to time by resolution determine.
84. The Board on behalf of the Company may provide benefits, whether by the payment of gratuities or pensions or otherwise, for any person including any Director or former Director who has held any executive office or employment with the Company or with any body corporate which is or has been a subsidiary or affiliate of the Company or a predecessor in the business of the Company or of any such subsidiary or affiliate, and to any member of his family or any person who is or was dependent on him, and may contribute to any fund and pay premiums for the purchase or provision of any such gratuity, pension or other benefit, or for the insurance of any such person.
85. The Board may from time to time appoint one or more of its body to hold any employment or executive office with the Company for such period and upon such terms as the Board may determine and may revoke or terminate any 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 for any breach of any contract of service between him and the Company which may be involved in such revocation or termination. Any person so appointed shall receive such remuneration (if any) (whether by way of salary, commission, participation in profits or otherwise) as the Board may determine, and either in addition to or in lieu of his remuneration as a Director.
DELEGATION OF THE BOARD'S POWERS
86. The Board may by power of attorney appoint any company, firm or person or any fluctuating body of persons, whether nominated directly or indirectly by the Board, to be the attorney or attorneys of the Company for such purposes and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Board under these Bye-Laws) and for such period and subject to such conditions as it may think fit, and any such power of attorney may contain such provisions for the protection and convenience of persons dealing with any such attorney and of such attorney as the Board may think fit, and may also authorise any such attorney to sub-delegate all or any of the powers, authorities and discretions vested in him.
87. The Board may entrust to and confer upon any Director or officer any of the powers exercisable by it upon such terms and conditions with such restrictions as it thinks fit, and either collaterally with, or to the exclusion of, its own powers, and may from time to time revoke or vary all or any of such powers but no person dealing in good faith and without notice of such revocation or variation shall be affected thereby.
88. The Board may delegate any of its powers, authorities and discretions to committees, consisting of such person or persons (whether a member or members of its body or not) as it thinks fit. Any committee so formed shall, in the exercise of the powers, authorities and discretions so delegated, and in conducting its proceedings, conform to any regulations which may be imposed upon it by the Board. If no regulations are imposed by the Board the proceedings of a committee with two or more members shall be, as far as is practicable, governed by the Bye-Laws regulating the proceedings of the Board.
PROCEEDINGS OF THE BOARD
89. The Board may meet for the despatch of business, adjourn and otherwise regulate its meetings as it thinks fit. Questions arising at any meeting shall be determined by a majority of votes. In the case of an equality of votes the motion shall be deemed to have
been lost. A Director may, and the Secretary on the requisition of a Director shall, at any time summon a meeting of the Board.
90. Notice of a meeting of the Board shall be deemed to be duly given to a Director if it is given to him personally or by telephone or by word of mouth or sent to him by post, cable, telex, telecopier or other mode of representing or reproducing words in a legible and non-transitory form at his last known address or any other address given by him to the Company for this purpose. A Director may prospectively or retrospectively waive notice of any meeting.
91. (1) The quorum necessary for the transaction of the business of the Board may be fixed by the Board and, unless so fixed at any other number, shall be two individuals. Any Director who ceases to be a Director at a meeting of the Board may continue to be present and to act as a Director and be counted in the quorum until the termination of the meeting if no other Director objects and if otherwise a quorum of Directors would not be present.
(2) A Director who to his knowledge is in any way, whether directly or indirectly, interested in a contract or proposed contract, transaction or arrangement with the Company and has complied with the provisions of the Companies Acts and these Bye-Laws with regard to disclosure of his interest shall be entitled to vote in respect of any contract, transaction or arrangement in which he is so interested and if he shall do so his vote shall be counted, and he shall be taken into account in ascertaining whether a quorum is present.
(3) The Resident Representative shall, upon delivering written notice of an address for the purposes of receipt of notice, to the Registered Office, be entitled to receive notice of, attend and be heard at, and to receive minutes of all meetings of the Board.
92. So long as a quorum of Directors remains in office, the remaining Directors may act notwithstanding any vacancy in the Board but, if no such quorum remains, the remaining Directors or a sole remaining Director may act only for the purpose of calling a general meeting.
93. The Board may elect a Chairman of the Board from amongst its members. If no Chairman of the Board is elected or he is absent, the President shall be chairman. If at any meeting the Chairman of the Board or the President is not present within five minutes after the time appointed for holding the meeting, or is not willing to act as chairman, the Directors present may choose one of their number to be chairman of the meeting.
94. 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.
95. A resolution in writing signed by all the Directors for the time being entitled to receive notice of a meeting of the Board or by all the members of a committee for the time being shall be as valid and effectual as a resolution passed at a meeting of the Board or, as the case may be, of such committee duly called and constituted. Such resolution may be contained in one document or in several documents in the like form each signed by one or more of the Directors or members of the committee concerned.
96. A meeting of the Board or a committee appointed by the Board may be held by means of such telephone, electronic or other communication facilities as permit all persons participating in the meeting to communicate with each other simultaneously and instantaneously, and participation in such a meeting shall constitute presence in person at such meeting.
97. All acts done by the Board or by any committee or by any person acting as a Director or member of a committee or any person duly authorised by the Board or any committee, shall, notwithstanding that it is afterwards discovered that there was some defect in the appointment of any member of the Board or such committee or person acting as aforesaid or that they or any of them were disqualified or had vacated their office, be as valid as if every such person had been duly appointed and was qualified and had continued to be a Director, member of such committee or person so authorised.
OFFICERS
98. The officers of the Company shall include a President and a Vice-President and such other officers (including additional Vice Presidents) as the Board may determine from time to time, or as may be provided elsewhere in these Bye-Laws. No officer of the Company is required to be a Director. The officers shall be elected by the Board as soon as possible after each annual general meeting. Any person elected or appointed pursuant to this Bye-Law shall hold office for such period and upon such terms as the Board may determine and the Board may revoke or terminate any such election or appointment. Any such revocation or termination shall be without prejudice to any claim for damages that such officer may have against the Company or the Company may have against such officer for any breach of any contract of service between him and the Company which may be involved in such revocation or termination. Save as provided in the Companies Acts or these Bye-Laws, the powers and duties of the officers of the Company shall be such (if any) as are determined from time to time by the Board.
MINUTES
99. The Board shall cause minutes to be made and books kept for the purpose of recording:-
(1) all appointments of officers made by the Board;
(2) the names of the Directors and other persons (if any) present at each meeting of the Board and of any committee;
(3) of all proceedings at meetings of the Company, of the holders of any class of shares in the Company, of the Board and of committees appointed by the Board;
(4) of all proceedings of its managers (if any).
Shareholders shall only be entitled to see the Register of Directors and Officers, the Register, the financial information provided for in Bye-Law 116 and the minutes of meetings of the Shareholders of the Company.
SECRETARY AND RESIDENT REPRESENTATIVE
100. The Secretary and, if required, the Resident Representative shall be appointed by the Board at such remuneration (if any) and upon such terms as it may think fit and any
Secretary and Resident Representative so appointed may be removed by the Board. The duties of the Secretary and the duties of the Resident Representative shall be those prescribed by the Companies Acts together with such other duties as shall from time to time be prescribed by the Board.
101. A provision of the Companies Acts or these Bye-Laws requiring or authorising a thing to be done by or to a Director and the Secretary shall not be satisfied by its being done by or to the same person acting both as Director and as, or in the place of, the Secretary.
THE SEAL
102. (1) The Board may authorise the production of a Seal of the Company for use in Bermuda and one or more duplicate Seals of the Company for use in any place outside Bermuda, which shall consist of a circular device with the name of the Company around the outer margin thereof and the country and year of registration in Bermuda across the centre thereof.
(2) Any document required to be under seal or executed as a deed on behalf of the Company may be (i) executed under the Seal in accordance with these Bye-Laws or (ii) signed or executed by any person authorized by the Board for that purpose, without the use of the Seal.
(3) The Board shall provide for the custody of every Seal. A Seal shall only be used by authority of the Board or of a committee constituted by the Board. Subject to these Bye-Laws, any instrument to which a Seal is affixed shall be attested by the signature of a Director, the Secretary or any officer of the Company or by the signature of any person authorized by the Board for that purpose.
DIVIDENDS AND OTHER PAYMENTS
103. The Board may from time to time declare dividends or distributions, in kind or otherwise, out of profits or contributed surplus or any other reserve distributable by the Company, to be paid to the Shareholders according to their rights and interests including such interim dividends as appear to the Board to be justified by the position of the
Company. The Board, in its discretion, may determine that any dividend shall be paid in cash or shall be satisfied, subject to Bye-Law 111, in paying up in full shares in the Company to be issued to the Shareholders credited as fully paid or partly paid or partly in one way and partly the other. The Board may also pay any fixed cash dividend which is payable on any shares of the Company.
104. Except insofar as the rights attaching to, or the terms of issue of, any share otherwise provide:-
(1) all dividends or distributions may be declared and paid according to the amounts paid up on the shares in respect of which the dividend or distribution is paid, and an amount paid up on a share in advance of calls may be treated for the purpose of this Bye-Law as paid-up on the share;
(2) dividends or distributions may be apportioned and paid pro rata according to the amounts paid-up on the shares during any portion or portions of the period in respect of which the dividend or distribution is paid.
105. The Board may deduct from any dividend, distribution or other moneys payable to a Shareholder by the Company on or in respect of any shares all sums of money (if any) presently payable by him to the Company on account of calls or otherwise in respect of shares of the Company.
106. Except insofar as the rights attaching to, or the terms of issue of, any share otherwise provide, no dividend, distribution or other moneys payable by the Company on or in respect of any share shall bear interest against the Company.
107. Any dividend, distribution or 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 address in the Register or, in the case of joint holders, addressed to the holder whose name stands first in the Register in respect of the shares at his registered address as appearing in the Register or addressed to such person at such address as the holder or joint holders may in writing direct. Every such cheque or warrant shall, unless the holder or joint holders otherwise direct, be made payable to the order of the holder or, in the case of joint holders, to the order of the holder whose name stands first in the
Register in respect of such shares, and shall be sent at his or their risk and payment of the cheque or warrant by the bank on which it is drawn shall constitute a good discharge to the Company. Any one of two or more joint holders may give effectual receipts for any dividends, distributions or other moneys payable or property distributable in respect of the shares held by such joint holders.
108. Any dividend or distribution unclaimed for a period of six years from the date of declaration of such dividend or distribution shall be forfeited and shall revert to the Company and the payment by the Board of any unclaimed dividend, distribution, interest or other sum payable on or in respect of the share into a separate account shall not constitute the Company a trustee in respect thereof.
109. The Board may also, in addition to its other powers, direct payment or satisfaction of any dividend or distribution wholly or in part by the distribution of specific assets, and in particular of paid-up shares or debentures of any other company. Where any difficulty arises in regard to such distribution or dividend the Board may settle it as it thinks expedient, and in particular, may authorise any person to sell and transfer any fractions or may ignore fractions altogether, and may fix the value for distribution or dividend purposes of any such specific assets and may determine that cash payments shall be made to any Shareholders upon the footing of the values so fixed in order to secure equality of distribution and may vest any such specific assets in trustees as may seem expedient to the Board.
RESERVES
110. The Board may, before recommending or declaring any dividend or distribution, set aside such sums as it thinks proper as reserves which shall, at the discretion of the Board, be applicable for any purpose of the Company and pending such application may, also at such discretion, either be employed in the business of the Company or be invested in such investments as the Board may from time to time think fit. The Board may also without placing the same to reserve carry forward any sums which it may think it prudent not to distribute.
CAPITALIZATION OF PROFITS
111. The Board may from time to time resolve to capitalise all or any part of any amount for the time being standing to the credit of any reserve or fund which is available for distribution or any amount standing to the credit of any share premium account and accordingly that such amount be set free for distribution amongst the Shareholders or any class of Shareholders who would be entitled thereto if distributed by way of dividend and in the same proportions, on the footing that the same be not paid in cash but be applied either in or towards paying up amounts for the time being unpaid on any shares in the Company held by such Shareholders respectively or in payment up in full of unissued shares, debentures or other obligations of the Company, to be allotted and distributed credited as fully paid amongst such Shareholders, or partly in one way and partly in the other, provided that for the purpose of this Bye-Law, a share premium account may be applied only in paying up of unissued shares to be issued to such Shareholders credited as fully paid and provided further that any sum standing to the credit of a share premium account may only be applied in crediting as fully paid shares of the same class as that from which the relevant share premium was derived.
112. Where any difficulty arises in regard to any distribution under the last preceding Bye-Law, the Board may settle the same as it thinks expedient and, in particular, may authorise any person to sell and transfer any fractions or may resolve that the distribution should be as nearly as may be practicable in the correct proportion but not exactly so or may ignore fractions altogether, and may determine that cash payments should be made to any Shareholders in order to adjust the rights of all parties, as may seem expedient to the Board. The Board may appoint any person to sign on behalf of the persons entitled to participate in the distribution any contract necessary or desirable for giving effect thereto and such appointment shall be effective and binding upon the Shareholders.
RECORD DATES
113. Notwithstanding any other provisions of these Bye-Laws, the Board may fix any date as the record date for any dividend, distribution, allotment or issue and for the purpose of identifying the persons entitled to receive notices of or to vote at general meetings. Any
such record date may be on or at any time before or after any date on which such dividend, distribution, allotment or issue is declared, paid or made or such notice is despatched.
ACCOUNTING RECORDS
114. The Board shall cause to be kept accounting records sufficient to give a true and fair view of the state of the Company's affairs and to show and explain its transactions, in accordance with the Companies Acts.
115. The records of account shall be kept at the Registered Office or at such other place or places as the Board thinks fit, and shall at all times be open to inspection by the Directors; provided that if the records of account are kept at some place outside Bermuda, there shall be kept at an office of the Company in Bermuda such records as will enable the Directors to ascertain with reasonable accuracy the financial position of the Company at the end of each three month period. No Shareholder (other than an officer of the Company) shall have any right to inspect any accounting record or book or document of the Company except as conferred by law or authorised by the Board.
116. A copy of every balance sheet and statement of income and expenditure, including every document required by law to be annexed thereto, which is to be laid before the Company in general meeting, together with a copy of the auditor's report, shall be sent by any method permitted under Bye-Law 118 to each person entitled thereto in accordance with the requirements of the Companies Acts.
AUDIT
117. Save and to the extent that an audit is waived in the manner permitted by the Companies Acts, the auditor shall be appointed and his duties regulated in accordance with the Companies Acts, any other applicable law and such requirements not inconsistent with the Companies Acts as the Board may from time to time determine. The remuneration of the auditor shall be fixed by the Shareholders entitled to vote on the appointment of the auditor or by the Directors if authorized to do so by such Shareholders.
SERVICE OF NOTICES AND OTHER DOCUMENTS
118. Any notice or other document (including a share certificate) may be served
on or delivered to any Shareholder by the Company either (i) personally or
(ii) by sending it through the post (by airmail where applicable) in a
pre-paid letter addressed to such Shareholder at his address as appearing
in the Register or (iii) by delivering it to or leaving it at such
registered address or (iv) by email transmitting such notice or other
document or by publishing such notice or other document on an internet
website. In the case of joint holders of a share, service or delivery of
any notice or other document on or to one of the joint holders shall for
all purposes be deemed as sufficient service on or delivery to all the
joint holders. Any notice or other document if sent by post shall be deemed
to have been served or delivered three days after it was put in the post,
and in proving such service or delivery, it shall be sufficient to prove
that the notice or document was properly addressed, stamped and put in the
post. Any notice or other document transmitted by email shall be deemed to
have been served or delivered twenty-four (24) hours after its dispatch. If
published on a website, any notice or other document shall be deemed to
have been served or delivered to the Shareholder upon the later of (i)
twenty-four (24) hours after the time of dispatch of an email notification
or (ii) three days after a written notice is put in the post, in either
case containing the following information: (a) the publication of the
notice or other document on the website, (b) the address of the website,
(c) the place on the website where the notice or other document may be
found, and (d) how the notice or other document may be accessed on the
website.
Each current and future Shareholder shall be deemed to have acknowledged and agreed that any notice or other document may be served or delivered to such Shareholder by the Company by way of publishing it on a website for access by the Shareholder instead of being provided by other means.
119. Any notice of a general meeting of the Company shall be deemed to be duly given to a Shareholder, or other person entitled to it, if it is sent to him by cable, telex, telecopier or other mode of representing or reproducing words in a legible form at his address as
appearing in the Register or any other address given by him to the Company for this purpose, or by email transmitting such notice or by publishing such notice on an internet website. Any such notice, other than delivery through a website, shall be deemed to have been served or delivered to the Shareholder twenty-four (24) hours after its dispatch. If published on a website, any such notice shall be deemed to have been served or delivered to the Shareholder upon the later of (i) twenty-four (24) hours after the time of dispatch of an email notification or (ii) three days after a written notice is put in the post, in either case containing the following information: (a) the publication of the notice on the website, (b) the address of the website, (c) the place on the website where the notice may be found, and (d) how the notice may be accessed on the website.
Each current and future Shareholder shall be deemed to have acknowledged and agreed that any notice of a general meeting of the Company may be served or delivered to such Shareholder by the Company by way of publishing it on a website for access by the Shareholder instead of being provided by other means.
120. Any notice or other document delivered, sent or given to a Shareholder in any manner permitted by these Bye-Laws shall, notwithstanding that such Shareholder is then dead or bankrupt or that any other event has occurred, and whether or not the Company has notice of the death or bankruptcy or other event, be deemed to have been duly served or delivered in respect of any share registered in the name of such Shareholder as sole or joint holder unless his name shall, at the time of the service or delivery of the notice or document, have been removed from the Register as the holder of the share, and such service or delivery shall for all purposes be deemed as sufficient service or delivery of such notice or document on all persons interested (whether jointly with or as claiming through or under him) in the share.
WINDING UP
121. If the Company shall be wound up, the liquidator may, with the sanction of a Resolution of the Company and any other sanction required by the Companies Acts, divide amongst the Shareholders in specie or kind the whole or any part of the assets of the Company
(whether they shall consist of property of the same kind or not) and may for such purposes set such values as he deems fair upon any property to be divided as aforesaid and may determine how such division shall be carried out as between the Shareholders or different classes of Shareholders. The liquidator may, with the like sanction, vest the whole or any part of such assets in trustees upon such trust for the benefit of the contributors as the liquidator, with the like sanction, shall think fit, but so that no Shareholder shall be compelled to accept any shares or other assets upon which there is any liability.
INDEMNITY
122. Subject to the proviso below, every Director, officer of the Company and member of a committee constituted under Bye-Law 88 and any Resident Representative shall be indemnified out of the funds of the Company against all liabilities, loss, damage or expense (including but not limited to liabilities under contract, tort and statute or any applicable foreign law or regulation and all reasonable legal and other costs and expenses properly payable) incurred or suffered by him as such Director, officer, committee member or Resident Representative and the indemnity contained in this Bye-Law shall extend to any person acting as a Director, officer, committee member or Resident Representative in the reasonable belief that he has been so appointed or elected notwithstanding any defect in such appointment or election; provided the indemnity contained in this Bye-Law shall not extend to any matter which would render it void pursuant to the Companies Acts. Nothing in this Bye-law or Bye-Laws 123, 124 and 125 below shall operate in favour of any person acting in the capacity of auditor to the Company.
123. Every Director, officer, member of a committee duly constituted under Bye-Law 88 or Resident Representative of the Company shall be indemnified out of the funds of the Company against all liabilities incurred by him as such Director, officer, committee member or Resident Representative in defending any proceedings, whether civil or criminal, in which judgement is given in his favour, or in which he is acquitted, or in connection with any application under the Companies Acts in which relief from liability is granted to him by the court.
124. To the extent that any Director, officer, member of a committee duly constituted under Bye-Law 88 or Resident Representative is entitled to claim an indemnity pursuant to these Bye-Laws in respect of amounts paid or discharged by him, the relative indemnity shall take effect as an obligation of the Company to reimburse the person making such payment or effecting such discharge.
125. Expenses incurred in defending any civil or criminal action, suit or proceeding may be paid by the Company in advance of the final disposition of such action, suit or proceeding as authorised by the Directors in the specific case upon receipt of an undertaking by or on behalf of the indemnified party to repay such amount if it shall ultimately be determined that the indemnified party is not entitled to be indemnified pursuant to Bye-Laws 122 and 123 or otherwise
EMPLOYEE SHARES
126. The Company may give financial assistance to bona fide employees of the Company or its subsidiaries in order that they may purchase or subscribe for fully paid up shares in the Company to be held by such employees by way of beneficial ownership, and may require or allow the sale of such shares to the Company when an employee ceases to be employed by the Company or any of its subsidiaries.
ALTERATION OF BYE-LAWS
127. The Directors may from time to time revoke, alter, amend or add to these Bye-Laws; provided that no such revocation, alteration, amendment or addition shall be operative unless and until it is confirmed at a subsequent general meeting of the Company except that Bye-Laws 71 and 74 and this Bye-Law 127 shall not be revoked, altered or amended and no new Bye-Law shall become operative which alters the effect of any of them until the same has been approved by Shareholders holding not less than ninety percent (90%) of the shares of the Company at the time issued and outstanding and entitled to vote generally, and Bye-Laws 128 and 129 shall not be revoked, altered or
amended and no new Bye-Laws shall become operative which alters the effect of either of them except as provided in such Bye-Laws.
TRANSACTIONS INVOLVING CERTAIN INTERESTED PERSONS
128. (A) Except as provided in paragraph (B) of this Bye-Law 128, the favourable vote, at a general meeting of the Company, of the holders of not less than ninety percent (90%) of the shares carrying voting rights in the Company shall be required prior to and as a condition to the consummation of any Business Combination (as hereinafter defined) involving an interested person (as hereinafter defined). Such ninety percent (90%) favourable vote shall be in addition to any vote of the Shareholders which would be required without reference to this Bye-Law 128 and shall be required 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.
(B) The provisions of paragraph (A) of this Bye-Law 128 shall not apply to a particular Business Combination, and such Business Combinations shall require only such vote or approval (if any) of the Shareholders as would be required without reference to this Bye-Law 128, if all of the following conditions are satisfied:
(1) the ratio of (i) the aggregate amount of the cash and the fair market value of other consideration to be received per A Share or B Share in such Business Combination by holders of A Shares or B Shares other than the interested person involved in such Business Combination, to (ii) the market price per A Share or B Share, respectively, immediately prior to the announcement of the proposed Business Combination, is at least as great as the ratio of (iii) the highest per A Share or B Share price (including brokerage commissions, transfer taxes and soliciting dealers' fees) which such interested person has theretofore paid in acquiring any A Shares or B Shares prior to such Business
Combination, to (iv) the market price per A Share or B Share, respectively, immediately prior to the initial acquisition by such interested person of any A Shares or B Shares;
(2) The aggregate amount of the cash and the fair market value of
other consideration to be received per A Share or B Share in such
Business Combination by holders of A Shares or B Shares other
than the interested person involved in such Business Combination
(i) is not less than the highest per A Share or B Share price
(including brokerage commissions, transfer taxes and soliciting
dealers' fees) paid by such interested person in acquiring any A
Shares or B Shares, and (ii) is not less than the consolidated
earnings per A Share or B Share of the Company for its four full
consecutive fiscal quarters immediately preceding the record date
for solicitation of votes on such Business Combination multiplied
by the then price/earnings multiple (if any) of such interested
person as customarily computed and reported in the financial
community;
(3) The consideration (if any) to be received in such Business Combination by holders of A Shares or B Shares other than the interested person involved shall, except to the extent that a Shareholder agrees otherwise as to all or part of the A Shares or B Shares which such Shareholder owns, be in the same form and of the same kind as the consideration paid by the interested person in acquiring A Shares or B Shares already owned by it;
(4) After such interested person became an interested person and prior to the consummation of such Business Combination: (i) such interested person shall have taken steps to ensure that the Board includes at all times representation by Continuing Directors (as hereinafter defined) proportionate to the ratio that the number of shares carrying voting rights in the Company from time to time owned by Shareholders who are not interested persons bears to all shares carrying voting rights in
the Company outstanding at the time in question (with a
Continuing Director to occupy any resulting fractional position
among the Directors); (ii) such interested person shall not have
acquired from the Company or any subsidiary of the Company,
directly or indirectly, any A Shares or B Shares (except (x) upon
conversion of convertible securities acquired by it prior to
becoming an interested person, or (y) as a result of a pro rata
share dividend, stock split or division or subdivision of shares,
or (z) in a transaction consummated on or after July 15, 2000 and
which satisfied all applicable requirements of this Bye-Law 128);
(iii) such interested person shall not have acquired any
additional shares, or rights over shares, carrying voting rights
or securities convertible into or exchangeable for shares, or
rights over shares, carrying voting rights except as a part of
the transaction which resulted in such interested person becoming
an interested person; and (iv) such interested person shall not
have (x) received the benefit, directly or indirectly (except
proportionately as a Shareholder), of any loans, advances,
guarantees, pledges or other financial assistance or tax credits
provided by the Company or any subsidiary of the Company, or (y)
made any major change in the Company's business or equity capital
structure or entered into any contract, arrangement or
understanding with the Company except any such change, contract,
arrangement or understanding as may have been approved by the
favourable vote of not less than a majority of the Continuing
Directors; and
(5) 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 Shareholders 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 Continuing Directors, or any of them, may have furnished in writing and, if deemed advisable by a majority of the Continuing Directors, 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 a majority of the Continuing Directors, 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).
(C) For purposes of this Bye-Law 128 and Bye-Law 129:
(1) The term "Business Combination" means (i) any scheme of
arrangement, reconstruction, amalgamation or similar business
combination involving the Company or any of its subsidiaries and
an interested person or any other company or corporation, if the
arrangement, reconstruction, amalgamation or similar business
combination is initiated, proposed or caused by the interested
person or if such other company or corporation is, or after such
transaction would be, an affiliate of such interested person;
(ii) any transaction or series of transactions involving the
sale, purchase, lease, exchange, mortgage, pledge, transfer or
other disposition, acquisition or encumbrance of assets between
the Company or any of its subsidiaries and any interested person
having a aggregate market value in excess of five percent (5%) of
the consolidated book value of the Company and its subsidiaries
prior to the relevant transaction or series of transactions;
(iii) the issue or transfer to an interested person of any
securities of the Company or any of its subsidiaries other than
an issue or distribution to all Shareholders of the Company
entitled to participate therein (such entitlement not being
dependent upon or affected by any scheme or proposal initiated or
proposed by an interested person) pro rata to their respective
entitlements; (iv) the adoption of any plan or proposal for the
liquidation or dissolution of the Company or any of its
subsidiaries unless such plan or proposal is initiated, proposed
or adopted independently of, and not by agreement or arrangement
with, any
interested person; (v) the reclassification of any securities or other restructuring of the capital of the Company or any of its subsidiaries, in such a way as to confer a benefit on an interested person which is not conferred on the Shareholders generally or any other transaction which has the effect, directly or indirectly, of increasing the proportionate share of the outstanding shares of any class or series, or securities convertible into the shares of any class or series, of the Company or any subsidiary of the Company beneficially owned by the interested person except as a result of immaterial changes due to fractional share adjustments; or (vi) any transaction involving the receipt by the interested person of the benefit, directly or indirectly (except proportionately as a Shareholder of the Company), of any loans, advances, guarantees, pledges, or other financial benefits provided by or through the Company or any of its subsidiaries.
(2) The term "person" includes: (i) any person acting in concert (as
hereinafter defined) with him or any nominee for him or person
acting on his behalf; (ii) any company in which such person holds
or beneficially owns ten percent (10%) or more of the shares, or
rights over shares, carrying voting rights 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.
(3) The term "beneficial owner" when used with respect to any share means a person:
(i) that individually or with or through any affiliate beneficially owns such share, directly or indirectly; or
(ii) that individually or with or through any affiliate has:
(a) the right to acquire such share (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding (whether or not in writing), 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 such share pursuant to any agreement, arrangement or understanding (whether or not in writing); 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:
(x) solely from a revocable proxy or consent given in response to a proxy or consent solicitation made to Shareholders or any class of Shareholders generally; or
(y) solely under a nominee or trustee agreement 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
(iii) that has any agreement, arrangement or understanding (whether or not in writing) for the purpose of acquiring, holding, voting (except where the right to vote is within the exclusion of clause (x) or (y) of subparagraph (3)(ii)(b) above) or disposing of such share with any other person that beneficially owns, or whose affiliates
directly or indirectly beneficially own, such share or any interest therein; but does not, for so long as such shares are held for purposes of an underwriting, include an underwriter, acting in the ordinary course of his business as an underwriter, who acquires shares pursuant to any issue or offer of shares underwritten by him.
(4) A person shall be deemed not to acquire or hold any share if he acquires or holds such share solely as nominee or bare trustee thereof and has no beneficial or economic interest therein other than the right to be paid normal nominee or trustee fees or remuneration.
(5) The "market price" per share of a class on any date shall be deemed to be the average of the daily closing prices of shares of that class for ten consecutive trading days commencing no more than 15 trading days before such date. The closing price for each day shall be the last reported sales price regular way on the New York Stock Exchange, or, if not reported on such Exchange, on the Composite Tape or, in case no such reported sales take place on such day, the average of the reported closing bid and asked quotations on the New York Stock Exchange, or, if such shares are not listed on such Exchange or no such quotations are available, the last sales price in the over-the-counter market reported by the National Association of Securities Dealers Automated Quotations System, or if not reported by such System, the average of the high bid and low asked quotations in the over-the-counter market as reported by National Quotation Bureau, Incorporated, or any similar organization, or if no such quotations are available, the fair market price as determined by a majority of the Continuing Directors (whose determination shall be conclusive).
(6) For purposes of subparagraphs (1) and (2) of paragraph (B) of this Bye-Law 128, in the event of a Business Combination upon consummation
of which the Company would be the surviving corporation or company or would continue to exist (unless it is provided, contemplated or intended that as part of such Business Combination or within one year after consummation thereof a plan of liquidation or dissolution of the Company will be adopted or effected), the term "other consideration to be received" shall include (without limitation) A Shares or B Shares retained by Shareholders of the Company other than the interested persons who are parties to such Business Combination.
(7) "Continuing Director" means a Director of the Company who either
(i) was first elected as a Director prior to July 15, 2000 or
(ii) was designated (before his or her initial election as a
Director) as a Continuing Director by a majority of the then
Continuing Directors.
(8) The term "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.
(9) A company shall be deemed to be a "subsidiary" of another if: (i) the other is a shareholder of it, either directly or indirectly through one or more other subsidiaries, and controls the composition of its board of directors; or (ii) the other beneficially owns, either directly or indirectly through one or more other subsidiaries, more than half in nominal value of its issued share capital; or (iii) it is a subsidiary of any company which is in turn, either directly or indirectly through one or more other subsidiaries, a subsidiary of the other company. For the purpose of this definition "company" includes any body corporate, wherever incorporated.
(10) The term "interested person" means a person to whom paragraph (1) of Bye-Law 129 applies but excludes the Company and each of its
subsidiaries. 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 in determining whether such person is an interested person.
(11) An interested person shall be deemed to have acquired a share of the Company at the time when such interested person became the beneficial owner thereof. With respect to shares owned by affiliates or other persons whose ownership is attributed to an interested person under the foregoing definitions, if the price paid by such interested person for such shares is not determinable, the price so paid shall be deemed to be the higher of (a) the price paid upon acquisition thereof by the affiliate or other person or (b) the market price of the shares in question at the time when the interested person became the beneficial owner thereof.
(12) 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 the 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 any 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.
(13) The term "rights over shares" includes any rights acquired by a person by virtue of an agreement to acquire shares or an option to acquire shares or an irrevocable commitment to accept an offer to acquire shares and includes warrants or options to subscribe for shares in the Company if immediately exercisable, as if such warrants or options had at the relevant time been exercised.
(14) The term "securities" includes shares, debentures, and options or warrants to subscribe for or purchase any shares or debentures, and any rights in respect thereof or any other right which if exercised would enable a person, not otherwise able so to do, to exercise voting rights.
(15) The term "voting rights" means the voting rights attributable to the share capital of the Company which are then currently exercisable or, in the case of options and warrants to subscribe for shares, would be exercisable if those options and warrants were themselves exercised, at a general meeting of the Company.
(D) A majority of the Continuing Directors shall have the power to determine for the purposes of this Bye-Law 128 and Bye-Law 129, on the basis of information known to them, (i) the number of shares, or rights over shares, carrying voting rights of which any person is the beneficial owner, (ii) whether a person is an affiliate of another or acting in concert with another, (iii) whether a person has an agreement, arrangement or understanding with another as to the matters referred to in subparagraph (3) of paragraph (C), and (iv) any matters referred to in subparagraph (11) of paragraph (C). Any such determination by the Continuing Directors shall be final and binding on all persons.
(E) The Company, whether acting through the Directors or by its Shareholders generally, shall have no power to propose or enter into any compromise or arrangement pursuant to the Companies Acts (i) in connection with any Business Combination or (ii) providing for any revocation, alteration or amendment of this Bye-Law 128 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 128. 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 Companies Acts 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 and, for the purpose of such submission and approval, the A Shares and the B Shares shall be deemed to be of the same class but in any event shall carry their respective voting rights.
(F) Any revocation, alteration or amendment of this Bye-Law 128, or any other revocation, alteration or amendment of the Company's Memorandum of Association or these Bye-Laws which would have the effect of modifying or permitting circumvention of this Bye-Law 128, shall require the favourable vote, at a general meeting of the Company, of the holders of at least ninety percent (90%) of the then outstanding shares carrying voting rights at a general meeting of the Company; provided, however, that this paragraph (F) shall not apply to, and such ninety percent (90%) vote shall not be required for, any such
revocation, alteration or amendment recommended to Shareholders by the favourable vote of not less than a majority of the Continuing Directors.
(G) Nothing contained in this Bye-Law 128 shall be construed to relieve any interested person from any fiduciary obligation imposed by law.
129. (1) Except as permitted by paragraph (2) of this Bye-Law 129, 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 fifteen percent (15%) or more of the total voting rights which may be cast at any general meeting of the Company (such fifteen percent (15%) of the total voting rights which may be cast at any general meeting being herein referred to as 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 129 shall not apply to the Company or any of its subsidiaries or:
(a) any person who, on July 15, 2000, 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 Resolution adopted in general meeting by at least ninety percent (90%) 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, or (ii) by resolution adopted by a majority of the Continuing Directors followed by a Resolution adopted by 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.
(3) The Company, whether acting through the Directors or by its Shareholders generally, shall have no power to propose or enter into any compromise or arrangement pursuant to the Companies Acts providing for any revocation, alteration or amendment of this Bye-Law 129 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 129.
(4) Any revocation, alteration or amendment of this Bye-Law 129, or any other revocation, alteration or amendment of the Company's Memorandum of Association or these Bye-Laws which would have the effect of modifying or
permitting circumvention of this Bye-Law 129, shall require the favourable vote of the holders of at least ninety percent (90%) of the then outstanding shares carrying voting rights, at a general meeting of the Company; provided, however, that this paragraph (4) shall not apply to, and such ninety percent (90%) vote shall not be required for, any such revocation, alteration or amendment recommended to Shareholders by the favourable vote of not less than a majority of the Continuing Directors.
(5) Nothing contained in this Bye-Law 129 shall be construed to relieve any interested person from any fiduciary obligation imposed by law.
* * * * *
Schedule 1 to the Bye-Laws
The rights and restrictions attaching to the A Shares are as follows:
1. Designation.
The designation of the A Shares shall be "Class A Common Shares". All A Shares shall rank pari passu in all respects.
2. Dividend Rights.
The A Shares and the B Shares shall rank pari passu with respect to the rights to receive dividends and other distributions payable in cash or in kind when, as and if declared by the Board, provided however that, in relation to a distribution of A Shares or B Shares or rights, options or warrants to subscribe for A Shares or B Shares:
(a) A Shares, and rights, options and warrants to subscribe for A Shares, shall be distributed only to the holders of A Shares;
(b) B Shares, and rights, options and warrants to subscribe for B Shares, shall be distributed only to the holders of B Shares; and
(c) the ratio of the number of A Shares outstanding to the number of B Shares outstanding, each on a fully diluted basis, shall be the same immediately after such distribution as immediately prior thereto except as may be provided under any shareholder rights plan adopted under Bye-Law 5.
3. Voting Rights.
Subject to the provisions of the Bye-Laws of the Company, at any general meeting of the Company each holder of A Shares shall be entitled to one-tenth of one vote for each A Share held by him. Holders of A Shares shall vote together as a class with holders of B Shares.
4. Rights Agreement.
The A Shares and the B Shares collectively shall be deemed "Voting Shares" of the Company for the purposes of any shareholder rights plan adopted under Bye-Law 5 of the Company.
5. Other Rights.
Except as otherwise provided herein or in the Companies Acts or the Bye-Laws of the Company, the A Shares and the B Shares shall rank pari passu and be treated equally in all respects.
6. Conversion into A Shares.
No holder of shares in the Company shall be entitled to convert such shares or any of them into A Shares except pursuant to rights attached thereto expressly conferring such entitlement.
7. Consolidation and Sub-division.
No Resolution shall be proposed at any general meeting of the Company for the consolidation or sub-division of any shares of the Company which contemplates that the ratio of the number of A Shares outstanding to the number of B Shares outstanding shall change as a consequence of the passing of the Resolution.
8. Amalgamation Agreement.
In any case where the Board shall be required to submit an amalgamation agreement for approval to a general meeting of the Company, the A Shares and the B Shares shall be deemed to be of the same class but in any event shall carry their respective voting rights.
* * * * *
Schedule 2 to the Bye-Laws
The rights and restrictions attaching to the B Shares are as follows:
1. Designation.
The designation of the B Shares shall be "Class B Common Shares". Each certificate representing, immediately prior to their classification as B Shares, common shares of the Company shall be deemed to represent a like number of B Shares. All B Shares shall rank pari passu in all respects.
2. Dividend Rights.
The A Shares and the B Shares shall rank pari passu with respect to the rights to receive dividends and other distributions payable in cash or in kind when, as and if declared by the Board, provided however that, in relation to a distribution of A Shares or B Shares or rights, options or warrants to subscribe for A Shares or B Shares:
(a) A Shares, and rights, options and warrants to subscribe for A Shares, shall be distributed only to the holders of A Shares;
(b) B Shares, and rights, options and warrants to subscribe for B Shares, shall be distributed only to the holders of B Shares; and
(c) The ratio of the number of B Shares outstanding to the number of A Shares outstanding, each on a fully diluted basis, shall be the same immediately after such distribution as immediately prior thereto except as may be provided under any shareholder rights plan adopted under Bye-Law 5.
3. Voting Rights.
Subject to the provisions of the Bye-Laws of the Company, at any general meeting of the Company each holder of B Shares shall be entitled to one vote for each B Share held by him. Holders of B Shares shall vote together as a class with holders of A Shares.
4. Conversion.
(a) Each holder of B Shares shall be entitled at any time and from time to time by notice in writing delivered to the Company (a "Conversion Notice") to convert such number of B Shares held by him as may be specified in the Conversion Notice into the like number of A Shares. The Conversion Notice shall be in such form as the Board may from time to time prescribe and shall be delivered to the Company at the specified office (the "Conversion Office") of such agent as the Company may from time to time designate for the purpose (the "Conversion Agent") during the usual business hours of the Conversion Agent.
(b) A Conversion Notice to be effective must be accompanied by delivery up of the certificate or certificates comprising the B Shares to be converted and by such other evidence (if any) as the Company or the Conversion Agent may require to prove the title of the person exercising the right to convert.
(c) A Conversion Notice shall not be withdrawn without the written consent of the Company or the Conversion Agent and shall take effect immediately prior to the close of business on the date of delivery of the Conversion Notice as aforesaid, together with the required certificates in proper order for conversion and any amount payable pursuant to the provisions of the sentence next following (the "Conversion Date"). If the Conversion Notice shall specify that any certificate for A Shares to be delivered pursuant thereto shall be issued in a name other than that of the holder of record of the B Shares to be converted, the person or persons requesting the issuance thereof shall pay to the Company the amount of any tax which may be payable in respect of any transfer necessary for such issuance or shall establish to the satisfaction of the Company that such tax has been paid or is not payable.
(d) On the Conversion Date, the B Shares comprised in the Conversion Notice shall automatically be converted into A Shares unless, pursuant to paragraph (g) hereof, conversion shall be effected on the Conversion Date by means of the purchase of B Shares and the issue to the holder of a like number of A Shares. In any case, the A Shares arising from such conversion shall thereupon rank pari passu in all respects with all other A Shares for the time being in the capital of the Company, with the right to participate in full in all dividends declared on the A Shares payable to holders of record of A Shares on or after the Conversion Date whether or not such dividends are declared wholly or in part in respect of a period prior to the Conversion Date.
(e) As soon as practicable after the Conversion Date, the Company shall deliver or cause to be delivered at the Conversion Office to or upon the written order of the holder a certificate or certificates representing the number of A Shares to which he was entitled upon conversion of the B Shares held by him. Except as otherwise provided in paragraph (c) hereof, the issuance of such certificate or certificates shall be made without charge for any stamp or other similar tax in respect of such issuance.
(f) Upon conversion by a holder of only part of the B Shares held by him, the Company shall at its own expense deliver or cause to be delivered to him at the Conversion Office a new certificate or certificates representing the number of B Shares remaining unconverted by him.
(g) Conversion of the B Shares may be effected in such manner as the Board may, subject to the provisions of the Companies Acts and the Bye-Laws of the Company, from time to time determine and, without prejudice to the generality of the foregoing, the Board is hereby authorized pursuant to Section 42A of the Companies Acts to effect such conversion by means of the purchase of B Shares in such manner and at such price as it may determine. In the case of a conversion by such means:
(i) the Board may effect the purchase of the relative B Shares out of the amount paid up on such B Shares, out of amounts which would otherwise be available for dividend, out of the proceeds of a fresh issue of shares, or in any other manner for the time being permitted by law; and
(ii) the A Shares to be issued upon such conversion shall be issued, credited as fully paid-up and non-assessable.
(h) On or promptly after the conversion of B Shares into A Shares, the Company shall list the A Shares so arising upon each national securities exchange upon which the outstanding A Shares are listed at the time of such conversion, or if the outstanding A Shares are not then listed upon a national securities exchange but are included in the National Association of Securities Dealers Automated Quotations System will cause such shares to be so included.
5. Rights Agreement.
The A Shares and the B Shares collectively shall be deemed "Voting Shares" of the Company for the purposes of any shareholder rights plan adopted under Bye-Law 5 of the Company.
6. Other Rights.
Except as otherwise provided herein or in the Companies Acts or the Bye-Laws of the Company, the A Shares and the B Shares shall rank pari passu and be treated equally in all respects.
7. Consolidation and Sub-division.
No Resolution shall be proposed at any general meeting of the Company for the consolidation or sub-division of any shares of the Company which contemplates that the ratio of the number of A Shares outstanding to the number of B Shares outstanding shall change as a consequence of the passing of the Resolution.
8. Amalgamation Agreement.
In any case where the Board shall be required to submit an amalgamation agreement for approval to a general meeting of the Company, the A Shares and the B Shares shall be deemed to be of the same class but shall in any event carry their respective voting rights.
EXHIBIT 10.1
ORIENT-EXPRESS HOTELS LTD.
1. The Plan
Orient-Express Hotels Ltd. (the "Company") may grant, in the manner and upon the terms and conditions set forth herein, options to purchase not in excess of an aggregate of 1,000,000 Class A common shares of the Company (adjusted, if necessary, in accordance with Section 12) to eligible directors, officers and employees of the Company and its subsidiaries (as determined in accordance with Section 3). Shares may be either authorized but unissued shares or acquired shares.
2. Administration of the Plan
The Plan shall be administered, and the options hereunder shall be granted, by the Board of Directors of the Company or a committee thereof from time to time constituted pursuant to the Bye-Laws of the Company. Any decision of the Board or the committee shall be final and conclusive in all matters relating to the Plan. The Board or the committee may make or vary regulations for the administration and operation of the Plan not inconsistent with the provisions hereof. The Board or the committee may act only by a majority of its members in office, except that the members may authorize any one or more of their number or the Secretary of the Company to execute and deliver documents on their behalf. No member of the Board or the committee shall be liable for anything done or omitted to be done by him or by any other member in connection with the Plan, except for his own willful misconduct or as expressly provided by statute.
The Board or the committee shall have authority to (a) adopt a subsidiary plan (the "U.K. Plan") under the Plan which provides for the grant of options on shares reserved under the Plan to eligible United Kingdom resident directors, officers and employees and complies with the requirements imposed by the United Kingdom Board of Inland Revenue, and (b) prescribe the form of options granted under the Plan; provided, however, in each case that the terms and conditions of the U.K. Plan and the form of the option are not more favorable to optionees than the terms and conditions of the Plan. Any option granted under the U.K. Plan shall be deemed to be outstanding also under the Plan.
The Board or the committee is authorized, in its discretion exercised at the time of grant, to designate options as "United States incentive stock options" within the meaning of Section 422 of the United States Internal Revenue Code.
3. To Whom Options May Be Granted
Options may be granted to those directors, officers and employees of the Company or any subsidiary who, in the opinion of the Board or the committee, have contributed significantly to the growth and progress of the Company or any subsidiary or to persons who, in the opinion of the Board or the committee, hold promise of contributing to the growth and progress of the Company or any subsidiary and who can be attracted to
directorship, officership or employment through the grant of options under the Plan. The Board or the committee is hereby given the authority to determine which of the eligible directors, officers and employees are to be granted options and the number of shares to be allocated to each.
No United States incentive stock option shall be granted to a person who is not an employee or (except as provided in Sections 4 and 7) to an employee who owns (or would be regarded as owning) shares possessing more than ten percent of the total combined voting power of all classes of shares of the Company or its subsidiaries at the time the option is granted. In addition, in the case of United States incentive stock options, the aggregate fair market value (determined at the time the option is granted) of the shares with respect to which incentive stock options are exercisable for the first time by an employee during any calendar year (under all United States incentive stock option plans of the Company and its subsidiaries) shall not exceed U.S.$100,000.
The term "subsidiary" means any corporation in an unbroken chain of corporations beginning with the Company, each of which owns at the time such option is granted (except in the case of the last such corporation in the chain) shares possessing 50 percent or more of the total combined voting power of all classes of shares in one of the other corporations in such chain.
4. Option Price
The option price per share shall be not less than the fair market value of the shares subject to the option at the time it is granted, as determined in good faith by the Board or the committee. If a United States incentive stock option is granted to an employee who at the time the option is granted owns (or would be regarded as owning) shares possessing more than ten percent of the total combined voting power of all classes of shares of the Company or its subsidiaries, the option price shall be at least 110 percent of the fair market value of the shares subject to the option at the time it is granted. The option price shall be subject to adjustment in accordance with Section 12.
5. Circumstances Under Which Options May Be Granted
Options may be granted at any time and from time to time on or after the date on which the Plan is adopted by the Board of Directors of the Company and before the expiration of ten years therefrom. If prior to the expiration of ten years from the date on which the Plan is adopted, an option shall expire or otherwise terminate without having been exercised in full, the unexercised shares shall thereupon become available for the granting of options to other eligible directors, officers and employees. No option shall be granted unless, at the time such option is granted, the Company shall have available at least the number of shares covered by such option and by all other options then outstanding under the Plan.
6. Options Not Assignable
Every option granted under the Plan shall provide that it is not transferable by the person to whom it is granted, otherwise than by will or the laws of descent and distribution, and that it is exercisable, during his lifetime, only by him.
7. Manner of Exercise of Options
Any person to whom an option has been granted may exercise the same, subject to the provisions of Section 10, at any time and from time to time before the expiration of not more than ten years (or, in the case of any United States incentive stock option granted to an employee subject to the second sentence of Section 4, not more than five years) from the date the option was granted. Any such exercise shall be effected by giving written notice to the Company, in a form satisfactory to the Board or the committee, specifying the number of shares with respect to which the option is being exercised. Any person to whom an option has been granted under the U.K. Plan may exercise the same under the Plan, subject to all the provisions hereof and provided that in the written notice of exercise the person states that he is exercising under the Plan and not under the U.K. Plan.
8. Manner of Payment on Exercise of Options
At the time of giving such notice, such person shall pay or cause to be paid to the Company the full option price of the shares as to which the option is exercised. As soon as practicable thereafter, the Company shall cause a certificate or certificates for such shares to be registered in the name of such person, in such denominations as such person may direct, and shall deliver said certificate or certificates to or upon the order of such person.
Notwithstanding the foregoing, on concurrence by the Board or the committee (which concurrence may be granted or withheld in its sole discretion) the person exercising an option may elect to defer, for a term not to exceed five years from the date of exercise, payment of all or a portion of the option price of the shares as to which the option is exercised, provided, however that:
(a) in the case of an optionee who is a "United States person" within the meaning of Regulation X of the Board of Governors of the Federal Reserve System of the United States of America, the portion of the option price so deferred for future payment shall not exceed the "good faith loan value" of the shares, within the meaning of the applicable provisions of Regulation G of such Board and as may be in effect on the date of exercise if such deferral is then subject to such regulation;
(b) the shares for which the option is exercised shall be issued to and registered in the name of the person exercising the option but shall be endorsed by the person in blank (either on the certificate or on a separate stock power) and held by the Company as collateral for the deferred portion of the option price;
(c) the person exercising the option shall execute a promissory note or other instrument of like effect in favor of the Company in a principal amount equal to the deferred portion of the option price, which instrument shall provide for the payment of interest at the rate, determined by the Board or the committee, of at least four percent per annum, payable quarterly;
(d) the person exercising the option shall have the right at any time and from time to time to withdraw part or all of the option shares from the collateral so held by the Company upon payment of a corresponding portion of the deferred option price,
together with any accrued interest thereon, and that upon such payment the person exercising the option shall be discharged under the promissory note or other instrument, pro tanto, and shall then be free to dispose of the shares in any manner he may deem appropriate, subject to the relevant conditions and restrictions of the Plan; and
(e) the deferred payment arrangement shall be subject to such further terms and conditions as may be prescribed by the Board or the committee upon the exercise of options.
The person exercising an option shall be entitled, from the date of exercise, to all the rights of a shareholder as to the shares covered by the exercise, including the right to vote the shares and to receive and retain all dividends paid thereon.
9. Exercise After Death of Person to Whom Granted
In the event the person to whom an option is granted shall die owning but without having fully exercised the option, his estate or any person who acquired the right to exercise the option by bequest or inheritance or by reason of the death of the optionee may, subject to the provisions of Section 10 (except subsection 10(b) and (d)), exercise the option at any time and from time to time before the expiration of the period of one year after the date of death, notwithstanding that the exercise may occur less than three years or more than ten years after the date of grant thereof, but only if the person so exercising the option shall have furnished the Company with evidence satisfactory to the Company of the person's right to exercise the option and of payment or provision for the payment of any estate, transfer, inheritance or death taxes payable with respect to the option or the shares to which it relates. Any such exercise shall be effected in the manner described in Sections 7 and 8. Any such exercise, however, shall not be permitted in the case of a United States incentive stock option after the expiration of ten years from the date the option was granted.
10. Circumstances Under Which Options May Not Be Exercised
Every option under the Plan shall provide that it may not be exercised (except as may be otherwise provided in Sections 9 and 11):
(a) until the shares reserved for issuance upon the exercise thereof have been listed upon any national securities exchange in the United States of America on which the Company's Class A common shares are then listed;
(b) until the expiration of a period of three years from the date the option was granted, and in any event not after (i) the expiration of a period of three months from the date a person ceases to be a director, officer or employee of the Company or a subsidiary thereof under circumstances not involving misconduct, impropriety or inefficiency on his part or (ii) the termination of the directorship, officership or employment of a person by the Company or a subsidiary thereof or the shareholders for reasons involving misconduct, impropriety or inefficiency on his part; provided, however, that a person ceasing to be a director, officer or employee of the Company or a subsidiary thereof on account of (i) retirement at or after the normal retirement date, (ii) early retirement not earlier than five years before the normal retirement
date, (iii) injury or disability, (iv) dismissal for redundancy or (v) on concurrence of the Board or the committee (which concurrence may be granted or withheld in its sole discretion), the sale or other disposition of the subsidiary for which the person acts as director or officer or which employs the employee or the operating division of the Company or a subsidiary for which the employee performs his employment, shall be entitled to exercise an option at any time prior to the expiration of a period of three months from the date he ceases to be a director, officer or employee of the Company or a subsidiary thereof notwithstanding that such exercise is made prior to the expiration of a period of three years from the date such option was granted (and for purposes of this Section 10 hereof, the directorship, officership or employment of any person with the Company or a subsidiary thereof shall not be deemed to have ceased or terminated so long as such person shall continuously since the date of grant of the option be a director, officer or employee either of the Company or a subsidiary thereof or of Sea Containers Ltd. or a subsidiary thereof);
(c) unless the Board or the committee shall be satisfied that the issuance of shares upon exercise will be in compliance with all relevant rules and regulations of the United States Securities and Exchange Commission; or
(d) after the expiration of ten years from the date the option is granted.
11. Change in Control
For purposes of this Section 11, "Change in Control" means any of the following events:
(a) any "person" (as that term is defined for the purposes of Section 13(d) or 14(d) of the U.S. Securities Exchange Act of 1934), other than James B. Sherwood or a group including James B. Sherwood or any subsidiary of the Company, shall directly or indirectly acquire more than 40% of the voting shares of the Company then outstanding and then entitled to vote generally in the election of directors of the Company; or
(b) individuals who, on the date of adoption of the Plan, constitute the Company's Board of Directors (or the successors of such individuals nominated by such Board of Directors or a committee thereof on which such individuals or their successors constitute a majority) shall cease to constitute a majority of the Company's Board of Directors; or
(c) the Company amalgamates, merges or consolidates with or into any other corporation, other than a corporation which directly, or indirectly through one or more intermediaries, is controlled by James B. Sherwood or a group including James B. Sherwood, without the approval of its Board of Directors constituted as provided in clause (b) above; or
(d) the Company sells, leases, exchanges or otherwise disposes of all or substantially all of its assets and business without the approval of its Board of Directors constituted as provided in clause (b) above.
In the event of a Change in Control, and notwithstanding anything to the contrary in Section 3, any outstanding option granted under the Plan which an optionee shall not then
have been entitled to exercise shall become exercisable immediately prior to or concurrently with the occurrence of the Change in Control and the optionee shall have the right to exercise all such options.
Notwithstanding anything in the Plan to the contrary, in the event of exercise of an option following a Change in Control, the optionee may elect, in the written notice provided for in Sections 7 and 8, (i) to pay or cause to be paid to the Company the full option price of the shares as to which the option is exercised, or (ii) to surrender to the Company all or any part of an option and receive from the Company upon such surrender an amount in cash equal to the excess, if any, of the determined value of the shares subject to the option or portion thereof so surrendered over the aggregate exercise price of such shares as set forth in the applicable option grant letter. The term "determined value" as used herein means the higher of (A) the highest sale price per Class A common share of the Company on the New York Stock Exchange (or, if any of such shares are not listed on that exchange at that time, then the highest sale price of the shares on the principal stock exchange on which such shares are listed, or if such shares are not listed, then the over-the-counter market) during the 12 months immediately preceding the date of the Change in Control, or (B) the highest price per share actually paid in connection with any Change in Control (including, without limitation, prices paid in any subsequent amalgamation, merger or combination with any entity that acquires control of the Company), in either case multiplied by the number of shares subject to the option or portion thereof so surrendered. In the event of a surrender of all or a portion of an option pursuant to this Section, the number of shares as to which the option was surrendered shall not again become available for use under the Plan.
The obligations of the Company under the Plan shall be binding upon any successor company, corporation or other organization resulting from any amalgamation, merger, consolidation or other reorganization of the Company, or upon any successor company, corporation or organization succeeding to all or substantially all of the assets and business of the Company, in any such case which would constitute a Change in Control. The Company agrees that it will make appropriate provisions for the preservation of all optionees' rights under the Plan in any agreement or plan that it may enter into or adopt to effect any such amalgamation, merger, consolidation, reorganization or transfer of assets constituting a Change in Control.
12. Adjustment of Number or Kind of Shares
If the Company shall effect one or more share splits, share dividends, combinations of shares, exchanges of shares or similar capital adjustments, the Board or the committee shall appropriately adjust the aggregate number and kind of shares with respect to which options have been granted or may be granted under the Plan. Every option granted under the Plan shall provide that, in the event of any such capital adjustments, the number and kind of the shares with respect to which it may be exercised, and the option price, shall be appropriately adjusted.
13. Amendment
The Plan may be amended from time to time by the Board of Directors of the Company. No amendment shall alter or impair any of the rights or obligations of any person, without his consent, under any option theretofore granted under the Plan.
14. Termination
The Plan shall terminate upon the first of the following dates or events to occur:
(a) if the Company is a participant in any corporate amalgamation, merger, consolidation or other transaction and no provision is made at the time of the transaction to continue the Plan, except as provided in Section 11;
(b) resolution of the Board of Directors of the Company terminating the Plan; or
(c) on February 9, 2014.
In the event of termination of the Plan in any of the ways provided hereinabove, the provisions of the Plan shall continue in full force and effect as regards any options granted prior to such termination.
15. Effect of Options Upon Employment
Nothing in the Plan shall be construed as giving any person acting as a director or officer of or employed by the Company or any subsidiary thereof the right to be retained in such directorship, officership or employment. The Company and any subsidiary thereof and the shareholders shall have the right to dismiss any director, officer or employee at any time with or without cause and without liability for the effect which such dismissal might have upon him as a participant under the Plan, and under no circumstances shall a person ceasing to be a director, officer or employee by reason of dismissal or otherwise be entitled to or claim against the Company or any subsidiary thereof any compensation for or in respect of any consequent reduction or loss of his rights or benefits (actual or prospective) under any option held by him in connection with the Plan.
16. Construction
In all respects the Plan shall be governed by, and be construed in accordance with, the laws of the Islands of Bermuda.
EXHIBIT 10.2
ORIENT-EXPRESS HOTELS LTD.
2007 PERFORMANCE SHARE PLAN
1. 2007 Performance Share Plan (the "Plan")
Orient-Express Hotels Ltd. (the "Company") may grant, in the manner and upon the terms and conditions set forth in this Plan, rights to purchase ("Awards") not in excess of an aggregate of 500,000 Class A common shares of the Company (adjusted, if necessary, in accordance with Section 10) to eligible directors, officers and employees of the Company and its subsidiaries (as determined in accordance with Section 3). Shares subject to Awards may be either authorized but unissued shares or acquired shares.
2. Administration of the Plan
(a) The Plan shall be administered, and Awards hereunder shall be granted, by the Board of Directors of the Company (the "Board") or, at the discretion of the Board, the Compensation Committee (the "Committee") thereof. In the event the Committee is the administrator in respect of any Awards, references in the Plan to the Board, other than in paragraph (c) below and Sections 5(a), 9, 11 and 12, shall be deemed to be references to the Committee with respect to such Awards. Any decision of the Board shall be final and conclusive in all matters relating to the Plan. The Board may act only by a majority of its members in office, except that the members may authorize any one or more of their number or the Secretary of the Company to execute and deliver documents on their behalf. No member of the Board shall be liable for anything done or omitted to be done by him or by any other member in connection with the Plan, except for his own willful misconduct or as expressly provided by statute.
(b) The Board may make or vary regulations for the administration and operation of the Plan not inconsistent with the provisions hereof and may establish terms, conditions, including Company performance goals to be attained as a condition to the vesting of Awards ("Performance Criteria"), if any, and restrictions applicable to such Awards, which may differ with respect to each grantee. The authority of the Board shall include, but shall not be limited to, the authority to determine the extent to which any Performance Criteria have been satisfied, to determine whether, to what extent and under what circumstances an Award may be settled, canceled, forfeited or accelerated, to make adjustments in the terms and conditions of any Award in accordance with the Plan, to construe or interpret the Plan and Awards and determine grantees' rights thereunder.
(c) For purposes of making Awards, the Committee shall be comprised solely of directors who are "independent directors" pursuant to New York Stock Exchange requirements.
3. To Whom Awards May Be Granted
(a) Awards may be granted to those directors, officers and employees of the Company or any subsidiary thereof who, in the opinion of the Board, have contributed
significantly to the growth and progress of the Company or any subsidiary or to persons who, in the opinion of the Board, hold promise of contributing to the growth and progress of the Company or any subsidiary and who can be attracted to directorship, officership or employment through the grant of Awards under the Plan. The Board is hereby given the authority to determine which of the eligible directors, officers and employees are to be granted Awards and the number of shares underlying each such Award.
(b) The term "subsidiary" means any corporation in an unbroken chain of corporations beginning with the Company, each of which owns at the time any Award is granted (except in the case of the last such corporation in the chain) shares possessing 50 percent or more of the total combined voting power of all classes of shares in one of the other corporations in such chain.
(c) The terms and conditions of an Award shall be set forth in a written Award notice provided to the grantee, which shall indicate the date of the grant of the Award, the number of shares to which the Award relates, the Purchase Price of such shares, and any Performance Criteria upon which the vesting of such Award may be conditioned.
4. Purchase Price of Shares
The price that must be paid by a grantee to obtain shares pursuant to the Award shall be $.01 per share (the "Purchase Price"), representing the par value of each share.
5. Circumstances Under Which Awards May Be Granted
(a) Awards may be granted at any time and from time to time on or after the date on which the Plan is adopted by the Board and before the expiration of ten years therefrom. If prior to the expiration of ten years from the date on which the Plan is adopted, an Award or any portion of an Award expires or otherwise lapses without shares having been distributed, the shares underlying such Award shall thereupon become available for making Awards to other eligible directors, officers and employees.
(b) Awards shall be granted at such times as determined by the Board.
(c) The maximum number of shares subject to all Awards under the Plan shall be the number of shares in Section 1. The maximum number of shares that may be subject to any Award to any individual shall be within the discretion of the Board, subject to the number of shares remaining under the Plan that have not been the subject of Awards at the time of the grant of such Award.
6. Awards Not Assignable
Every Award under the Plan shall provide that neither the Award nor any rights under the Award shall be transferable by the grantee, other than by will or the laws of descent and distribution, and that it is exercisable, during his lifetime, only by the grantee.
7. Manner of Payment of Awards
(a) As soon as practicable after an Award vests in accordance with Section 8, and in any event not later than the 15th day of the third month of the calendar year following the calendar year in which the Award vests, the Company shall (i) cause a certificate or certificates for the number of shares in respect of which the Award vests to be registered
in the name of the grantee, in such denominations as the grantee may direct, and shall deliver such certificate or certificates to or upon the order of the grantee, and (ii) pay the grantee an amount in cash equal to the value of the dividends, if any, and without interest, that would have been paid on the acquired shares in respect of dividend record dates occurring during the period between the date of the Award and the date of vesting of such Award, unless otherwise determined by the Board (the "Dividend Equivalent"); provided, however, that no payments shall be made under this Section 7(a) unless the grantee shall have paid the Company, in the manner determined by the Board, the full Purchase Price for all shares to be acquired by the grantee.
(b) To the extent permitted under applicable law, the Board, in its sole discretion, may pay the grantee a cash amount in lieu of the delivery of shares and payment of cash in paragraph (a), and in full satisfaction thereof, equal to the total of (i) the Dividend Equivalent (as defined in paragraph (a) above), and (ii) the fair market value of the aggregate number of shares in respect of which the Award vests, less the Purchase Price of same, such payment to be made not later than the payment date in paragraph (a) above. For these purposes, the "fair market value" of each share shall be determined based on the closing price of a share on the New York Stock Exchange (or any other national securities exchange in the United States of America on which the Company's Class A common shares are then listed) on the date the Award vests.
(c) The grantee shall be entitled, from the date shares are registered in his or her name, to all the rights of a shareholder as to such shares, including the right to vote the shares and to receive and retain all dividends paid thereon.
(d) Notwithstanding paragraph (a) above, unless otherwise provided in a
grantee's Award, in the event that any shares or cash to be paid to the grantee
in connection with a change in the ownership or effective control of the Company
or the ownership of a substantial portion of the assets of the Company, as
described in Section 280G of the U.S. Internal Revenue Code of 1986, as amended
(the "Code"), pursuant to the Plan, any Award, or otherwise (including, without
limitation, the acceleration of any payment, award, distribution or benefit)
(the "Payment") constitutes an "excess parachute payment" within the meaning of
Section 280G of the Code, the grantee shall be paid an additional amount (the
"Gross-Up Payment") such that the net amount retained by the grantee after
deduction of (i) any excise tax imposed under Section 4999 of the Code and (ii)
any federal, state and local income and employment tax and excise tax imposed
upon the Gross-Up Payment shall be equal to the Payment. For purposes of
determining the amount of the Gross-Up Payment, the grantee shall be deemed to
pay (I) federal income tax and employment taxes at the highest marginal rate of
federal income and employment taxation in the calendar year in which the
Gross-Up Payment is to be made and (II) state and local income taxes at the
highest marginal rate of taxation in the state and locality of the grantee's
residence in the calendar year in which the Gross-Up Payment is to be made, net
of the maximum reduction in federal income taxes that may be obtained from the
deduction of such state and local taxes.
(e) Notwithstanding any provision of the Plan to the contrary, no payment shall be made in respect of any transaction involving an Award unless and until the grantee pays, in the manner determined by the Board, all applicable tax withholdings due in connection with such transaction and which the grantee's employer is required to withhold.
(f) In the event that any payment is made under this Section 7 following the grantee's death, the Plan shall pay the grantee's estate or any person who acquired the Award by bequest or inheritance or by reason of the death of the grantee, subject to the provisions of Section 8, at the time, in the manner and subject to the conditions set forth in this Section 7 as if such person were the grantee; provided, however, that such person shall have furnished the Board with evidence satisfactory to the Board of such person's right to the Award.
8. Circumstances Under Which Awards Shall and Shall Not Vest
(a) Vesting. Every Award under the Plan shall provide that:
(i) it shall not vest until the shares reserved for issuance under such Award have been listed upon any national securities exchange in the United States of America on which the Company's Class A common shares are then listed;
(ii) it shall not vest until the expiration of a period of three years from the date the Award was granted, except as provided in (iii) and (iv) below;
(iii) it shall not vest if the grantee is not a director, officer or employee of the Company or a subsidiary thereof on the date the Award would otherwise vest; provided, however, that a grantee ceasing to be a director, officer or employee of the Company or a subsidiary thereof on account of
(I) retirement at or after the normal retirement date in any applicable pension plan of the Company in which the grantee participates,
(II) injury or disability as determined under any disability insurance policy or plan of the Company in which the grantee participates,
(III) dismissal for redundancy,
(IV) death, or
(V) on concurrence of the Board (which concurrence may be granted or withheld in its sole discretion), the sale or other disposition of the subsidiary for which the person acts as director or officer or which employs the employee or the operating division of the Company or a subsidiary for which the employee performs his employment,
shall, subject to (vi) below, vest in his or her Award as of the date of the event in (I) - (V), as determined by the Board;
(iv) in the event of a Change in Control (as defined in Section 9), subject to (vi) below, the Award shall vest on the date of the relevant event, as determined by the Board;
(v) it shall not vest unless the Board shall be satisfied that the issuance of shares in connection with that Award will be in compliance with all relevant rules and regulations of the United States Securities and Exchange Commission; and
(vi) it shall not vest unless and until the Board certifies that any Performance Criteria upon which the vesting of that Award is conditioned have been satisfied.
(b) Performance Criteria. The Board may establish Performance Criteria which must be satisfied as a condition for any Award to vest. Such Performance Criteria shall be set forth in the notice of Award and shall be based on objective performance goals over the performance period determined by the Board. Such goals may be based on one or more business criteria that apply to the grantee, a business unit of the Company, or the Company as a whole, including, but not limited to, share price, market share, sales, earning per share, earnings before tax, return on equity, total shareholder return, or costs. The Board may also provide for pro-rata satisfaction of Performance Criteria in the event of (i) a grantee's termination of employment before the expiration of a performance period on account of the events in paragraph (a)(iii)(I)-(V) above, or (ii) a Change in Control (as defined in Section 9), in either case before the expiration of the relevant performance period.
The Performance Criteria shall be determined in accordance with generally accepted accounting principles, if applicable, and shall be subject to certification by the Board, provided, that the Board shall have the authority to make equitable adjustments to the Performance Criteria (i) in recognition of unusual or non-recurring events affecting the Company or its subsidiaries or the financial statements of the Company or any subsidiary, (ii) in response to changes in applicable laws or regulations, (iii) to account for items of gain, loss or expense determined to be extraordinary or unusual in nature or infrequent in occurrence, or related to the disposal of a segment of a business, or (iv) related to a change in accounting principles.
The failure to satisfy the Performance Criteria within the performance period over which such Performance Criteria is measured shall cause the Awards subject to such Performance Criteria to lapse and become void to the extent that the Performance Criteria have not been met as of the last day of such performance period.
9. Change in Control
For purposes of the Plan, "Change in Control" means any of the following events:
(a) any "person" (as that term is defined for the purposes of Section 13(d) or 14(d) of the U.S. Securities Exchange Act of 1934), other than any subsidiary of the Company, shall directly or indirectly acquire more than 40% of the voting shares of the Company then outstanding and then entitled to vote generally in the election of directors of the Company; or
(b) individuals who, on the date of adoption of the Plan, constitute the Company's Board (or the successors of such individuals nominated by such Board or a committee thereof on which such individuals or their successors constitute a majority) shall cease to constitute a majority of the Company's Board; or
(c) the Company amalgamates, merges or consolidates with or into any other corporation, other than a corporation which directly, or indirectly through one or more intermediaries, is controlled by any subsidiary of the Company, without the approval of the Company's Board constituted as provided in clause (b) above; or
(d) the Company sells, leases, exchanges or otherwise disposes of all or substantially all of its assets and business without the approval of the Company's Board constituted as provided in clause (b) above.
The obligations of the Company under the Plan shall be binding upon any successor company, corporation or other organization resulting from any amalgamation, merger, consolidation or other reorganization of the Company, or upon any successor company, corporation or organization succeeding to all or substantially all of the assets and business of the Company, in any such case which would constitute a Change in Control. The Company agrees that it will make appropriate provisions for the preservation of all grantees' rights under the Plan in any agreement or plan that it may enter into or adopt to effect any such amalgamation, merger, consolidation, reorganization or transfer of assets constituting a Change in Control.
10. Adjustment of Number or Kind of Shares
If the Company shall effect one or more share splits, share dividends, combinations of shares, exchanges of shares, repurchases, recapitalizations or similar capital adjustments, the Board shall appropriately adjust the aggregate number of shares with respect to which Awards have been made or may be made under the Plan in order to prevent dilution or enlargement of the rights of grantees under Awards. Every Award under the Plan shall provide that, in the event of any such capital adjustments, the number and kind of shares to which it applies shall be appropriately adjusted.
11. Amendment
The Plan may be amended from time to time by the Board. No amendment shall alter or impair any of the rights or obligations of any person, without his consent, under any Award theretofore granted under the Plan.
12. Termination
The Plan shall terminate upon the first of the following dates or events to occur:
(a) if the Company is a participant in any corporate amalgamation, merger, consolidation or other transaction and no provision is made at the time of the transaction to continue the Plan, except as provided in Section 9;
(b) resolution of the Board terminating the Plan; or
(c) on May 7, 2017.
In the event of termination of the Plan in any of the ways provided hereinabove, the provisions of the Plan shall continue in full force and effect as regards any Awards prior to such termination.
13. Effect of Awards Upon Employment
Nothing in the Plan shall be construed as giving any person acting as a director or officer of or employed by the Company or any subsidiary thereof the right to be retained in such directorship, officership or employment. The Company and any subsidiary thereof and the shareholders shall have the right to dismiss any director, officer or employee at any time with or without cause and without liability for the effect which such dismissal might have upon him as a participant under the Plan, and under no circumstances shall a person ceasing to be a director, officer or employee by reason of dismissal or otherwise be entitled to or claim against the Company or any subsidiary thereof any compensation for or in respect of any consequent reduction or loss of his
rights or benefits (actual or prospective) under any Award held by him or her in connection with the Plan.
Any determination by the Board that the grantee is eligible for vesting under Section 7(a)(iii)(II) is conditioned upon the grantee's consent to the use of his or her personal information, including medical records, for the purpose of making the necessary determination as to the grantee's injured or disabled condition.
14. No Funding
Nothing contained in the Plan or any Award shall require the Company or any subsidiary thereof to set aside any funds or shares for delivery hereunder. No grantee of any Award or any other person obtaining the Award upon the grantee's death shall have any rights under the Plan that are greater than those of a general creditor of the Company.
15. Construction
In all respects the Plan shall be governed by, and be construed in accordance with, the laws of the Islands of Bermuda.