B Y E - L A W S
OF
GLOBAL TELESYSTEMS HOLDINGS LTD.
I HEREBY CERTIFY that the within written Bye-Laws are a true copy of the Bye-
Laws of
GLOBAL TELESYSEMS HOLDINGS LTD.
as subscribed by the subscribers to the Memorandum of Association and approved
at the Statutory meeting of the above Company on the 25/th/ March, 1997.
Secretary
Prepared by
Messrs Appleby Spurling & Kempe
Cedar House
41 Cedar Avenue
Hamilton, Bermuda
I N D E X
BYE-LAW SUBJECT
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1 Interpretation
2 Registered Office
3-4 Share Rights
5-6 Modification of Rights
7-9 Shares
10-12 Certificates
13-15 Lien
16-21 Calls on Shares
22-28 Forfeiture of Shares
29 Register of Shareholders
30 Register of Directors and Officers
31-34 Transfer of Shares
35-38 Transmission of Shares
39-41 Increase of Capital
42-43 Alteration of Capital
44-45 Reduction of Capital
46 General Meetings and Written Resolutions
47-48 Notice of General Meetings
49-55 Proceedings at General Meetings
56-67 Voting
68-73 Proxies and Corporate Representatives
74-76 Appointment and Removal of Directors
77 Resignation and Disqualification of Directors
78-80 Alternate Directors
81 Directors' Fees and Additional
Remuneration and Expenses
82 Directors' Interests
83-87 Powers and Duties of the Board
88-90 Delegation of the Board's Powers
91-99 Proceedings of the Board
100 Officers
101 Minutes
102-103 Secretary and Resident Representative
104 The Seal
105-111 Dividends and Other Payments
112 Reserves
113-114 Capitalization of Profits
115 Record Dates
116-118 Accounting Records
119 Audit
120-122 Service of Notices and Other Documents
123 Winding Up
124-126 Indemnity
127 Amalgamation
128 Alteration of Bye-Laws
B Y E - L A W S
OF
GLOBAL TELESYSTEMS HOLDINGS LTD
INTERPRETATION
--------------
1. In these Bye-Laws unless the context otherwise requires -
"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 incorporated in Bermuda under the name of
Global Telesystems Holdings Ltd on the 25th day of March, 1997;
"paid up" means paid up or credited as paid up;
"Parent" means the company incorporated in the Cayman Islands under the
name of GT Parent Holdings LDC;
"Register" means the Register of Shareholders of the Company;
"Registered Office" means the registered office for the time being of the
Company;
"Resident Representative" means the person (or, if permitted in accordance
with the Companies Acts, the company) appointed to perform the duties of
resident representative set out in the Companies Acts and includes any assistant
or deputy Resident Representative appointed by the Board to perform any of the
duties of the Resident Representative;
"Resolution" means a resolution of the Shareholders or, where required, of
a separate class or separate classes of Shareholders, adopted either in general
meeting or by written resolution, in accordance with the provisions of these
Bye-Laws;
"Seal" means the common seal of the Company and includes any duplicate
thereof;
"Secretary" includes a temporary or assistant or deputy Secretary and any
person appointed by the Board to perform any of the duties of the Secretary;
"Shareholder" means a shareholder or member of the Company;
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"Stockholders Agreement" means the agreement dated 24th March, 1997, and
made between Parent and its shareholders relating, inter alia, to the
management and operation of the Parent;
"these Bye-Laws" means these Bye-Laws in their present form or as from time
to time amended;
for the purposes of these Bye-Laws a corporation shall be deemed to be
present in person if its representative duly authorised pursuant to the
Companies Acts is present;
words importing only the singular number include the plural number and vice
versa;
words importing only the masculine gender include the feminine and neuter
genders respectively;
words importing persons include companies or associations or bodies of
persons, whether corporate or un-incorporate;
reference to writing shall include typewriting, printing, lithography,
photography and other modes of representing or reproducing words in a legible
and non-transitory form;
any words or expressions defined in the Companies Acts in force at the date
when these Bye-Laws or any part thereof are adopted shall bear the same meaning
in these Bye-Laws or such part (as the case may be).
REGISTERED OFFICE
-----------------
2. The Registered Office shall be at such place in Bermuda as the Board
shall from time to time appoint.
SHARE RIGHTS
------------
3. Subject to any special rights conferred on the holders of any share or
class of shares, any share in the Company may be issued with or have attached
thereto such preferred, deferred, qualified or other special rights or such
restrictions, whether in regard to dividend, voting, return of capital or
otherwise, as the Company may by Resolution determine or, if there has not been
any such determination or so far as the same shall not make specific provision,
as the Board may determine.
4. Subject to the Companies Acts, any preference shares may, with the
sanction of a Resolution, be issued on terms:
(a) that they are to be redeemed on the happening of a specified event
or on a given date; and/or,
(b) that they are liable to be redeemed at the option of the Company;
and/or,
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(c) if authorised by the memorandum/Incorporating Act of the Company,
that they are liable to be redeemed at the option of the holder.
The terms and manner of redemption shall be provided for by way of such
Resolution, or if the shareholders so direct by Resolution, as the Board may
determine, provided that such rights, when so determined, shall be attached to
these Bye-Laws.
MODIFICATION OF RIGHTS
----------------------
5. 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
from time to time (whether or not the Company is being wound up) be altered or
abrogated with the consent in writing of the holders of not less than seventy
five percent of the issued shares of that class or with the sanction of a
resolution passed at a separate general meeting of the holders of such shares
voting in person or by proxy. To any such separate general meeting, all the
provisions of these Bye-Laws as to general meetings of the Company shall mutatis
mutandis apply, but so that the necessary quorum shall be two or more persons
holding or representing by proxy any of the shares of the relevant class, 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 and that any holder of shares of the
relevant class present in person or by proxy may demand a poll; provided,
however, that if the Company or a class of Shareholders shall have only one
Shareholder, one Shareholder present in person or by proxy shall constitute the
necessary quorum.
6. The special rights conferred upon the holders of any shares or class
of shares shall not, unless otherwise expressly provided in the rights attaching
to or the terms of issue of such shares, be deemed to be altered by the creation
or issue of further shares ranking pari passu therewith.
SHARES
------
7. (a) Subject to the provisions of these Bye-Laws and to sub-paragraph
(b) below, the unissued shares of the Company (whether forming part of the
original capital or any increased capital) shall be at the disposal of the
Board, which may offer, allot, grant options over or otherwise dispose of them
to such persons, at such times and for such consideration and upon such terms
and conditions as the Board may determine.
(b) Notwithstanding the foregoing, no shares in the capital of the
Company may be issued to the Parent except in accordance with the terms of
the Stockholders Agreement.
8. The Board may in connection with the issue of any shares exercise all
powers of paying commission and brokerage conferred or permitted by law.
4
9. 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
-------------
10. The preparation, issue and delivery of certificates shall be governed
by the Companies Acts. In the case of a share held jointly by several persons,
delivery of a certificate to one of several joint holders shall be sufficient
delivery to all.
11. If a share certificate is defaced, lost or destroyed it may be
replaced without fee 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.
12. 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
----
13. 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.
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14. 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 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.
15. 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 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
---------------
16. 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 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.
17. A call may be made payable by installments and shall be deemed to have
been made at the time when the resolution of the Board authorizing the call was
passed.
18. The joint holders of a share shall be jointly and severally liable to
pay all calls in respect thereof.
19. 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.
20. 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.
6
21. 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
--------------------
22. If a Shareholder fails to pay any call or installment of a call on the
day appointed for payment thereof, the Board may at any time thereafter during
such time as any part of such call or installment remains unpaid serve a notice
on him requiring payment of so much of the call or installment as is unpaid,
together with any interest which may have accrued.
23. The notice shall name a further day (not being less than 14 days from
the date of the notice) on or before which, and the place where, the payment
required by the notice is to be made and shall state that, in the event of non-
payment on or before the day and at the place appointed, the shares in respect
of which such call is made or installment is payable will be liable to be
forfeited. The Board may accept the surrender of any share liable to be
forfeited hereunder and, in such case, references in these Bye-Laws to
forfeiture shall include surrender.
24. If the requirements of any such notice as aforesaid are not complied
with, any share in respect of which such notice has been given may at any time
thereafter, before payment of all calls or installments and interest due in
respect thereof has been made, be forfeited by a resolution of the Board to that
effect. Such forfeiture shall include all dividends declared in respect of the
forfeited shares and not actually paid before the forfeiture.
25. 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.
26. 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.
27. 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.
7
28. An affidavit in writing that the deponent is a Director 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
------------------------
29. The Secretary shall establish and maintain the Register of
Shareholders at the Registered Office in the manner prescribed by the Companies
Acts. Unless the Board otherwise determines, the Register of Shareholders 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 9.
REGISTER OF DIRECTORS AND OFFICERS
----------------------------------
30. 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
------------------
31. 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.
32. 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:-
8
(a) 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,
(b) the instrument of transfer is in respect of only one class of
share,
(c) 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
Secretary may exercise the powers and discretions of the Board under this Bye-
Law and Bye-Laws 31 and 33.
33. 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.
34. 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
----------------------
35. 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 in Bermuda 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.
36. 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
9
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.
37. 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 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 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.
38. Subject to any directions of the Board from time to time in force, the
Secretary may exercise the powers and discretions of the Board under Bye-Laws
35, 36 and 37.
INCREASE OF CAPITAL
-------------------
39. 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.
40. 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.
41. 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
---------------------
42. The Company may from time to time by Resolution:-
(a) divide its shares into several classes and attach thereto
respectively any preferential, deferred, qualified or special rights,
privileges or conditions;
(b) consolidate and divide all or any of its share capital into shares
of larger par value than its existing shares;
10
(c) 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;
(d) make provision for the issue and allotment of shares which do not
carry any voting rights;
(e) 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
(f) change the currency denomination of its share capital. Where any
difficulty arises in regard to any 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.
43. Subject to the Companies Acts and to any confirmation or consent
required by law or these Bye-Laws, the Company may by Resolution from time to
time convert any preference shares into redeemable preference shares.
REDUCTION OF CAPITAL
--------------------
44. 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 any capital
redemption reserve fund or any share premium or contributed surplus account in
any manner.
45. In relation to any such reduction, the Company may by Resolution
determine the terms upon which such reduction is to be effected including in the
case of a reduction of part only of a class of shares, those shares to be
affected.
GENERAL MEETINGS AND WRITTEN RESOLUTIONS
----------------------------------------
46. (a) 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
may, whenever it 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.
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(b) Except in the case of the removal of auditors and Directors,
anything which may be done by resolution of the Company in general meeting
or by resolution of a meeting of any class of the Shareholders of the
Company may, without a meeting and without any previous notice being
required, be done by resolution in writing, signed by all of the
Shareholders or their proxies, or in the case of a Shareholder that is a
corporation (whether or not a company within the meaning of the Companies
Acts) on behalf of such Shareholder, being all of the Shareholders of the
Company who at the date of the resolution in writing would be entitled to
attend a meeting and vote on the resolution. Such resolution in writing
may be signed by, or in the case of a Shareholder that is a corporation
(whether or not a company within the meaning of the Companies Acts), on
behalf of, all the Shareholders of the Company, or any class thereof, in as
many counterparts as may be necessary.
(c) For the purposes of this Bye-Law, the date of the resolution in
writing is the date when the resolution is signed by, or in the case of a
Shareholder that is a corporation (whether or not a company within the
meaning of the Companies Acts), on behalf of, the last Shareholder to sign
and any reference in any enactment to the date of passing of a resolution
is, in relation to a resolution in writing made in accordance with this
section, a reference to such date.
(d) A resolution in writing made in accordance with this Bye-Law is as
valid as if it had been passed by the Company in general meeting or, if
applicable, by a meeting of the relevant class of Shareholders of the
Company, as the case may be. A resolution in writing made in accordance
with this section shall constitute minutes for the purposes of the
Companies Acts and these Bye-Laws.
NOTICE OF GENERAL MEETINGS
--------------------------
47. An Annual General Meeting shall be called by not less than 5 days
notice in writing and a Special General Meeting shall be called by not less than
5 days notice in writing. 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, in the case of a Special
General Meeting, the general nature of the business to be considered. Notice of
every general meeting shall be given in any manner permitted by Bye-Laws 120 and
121 to all Shareholders other than such as, under the provisions of these Bye-
Laws or the terms of issue of the shares they hold, are not entitled to receive
such notice from the Company and to any Director or Resident Representative who
or which has delivered a written notice upon the Registered Office requiring
that such notice be sent to him or it.
Notwithstanding that a meeting of the Company is called by shorter notice
than that specified in this Bye-Law, it shall be deemed to have been duly called
if it is so agreed:-
(a) in the case of a meeting called as an Annual General Meeting, by
all the Shareholders entitled to attend and vote thereat;
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(b) in the case of any other meeting, by a majority in number of the
Shareholders having the right to attend and vote at the meeting, being a
majority together holding not less than 95 percent in nominal value of the
shares giving that right.
48. 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
-------------------------------
49. 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
provided by these Bye-Laws, at least two Shareholders present in person or by
proxy and entitled to vote shall be a quorum for all purposes; provided,
however, that if the Company shall have only one Shareholder, one Shareholder
present in person or by proxy shall constitute the necessary quorum.
50. 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 and at such adjourned meeting two Shareholders present in person
or by proxy (whatever the number of shares held by them) shall be a quorum
provided that if the Company shall have only one Shareholder, one Shareholder
present in person or by proxy shall constitute the necessary quorum. The
Company shall give not less than 5 days notice of any meeting adjourned
through want of a quorum and such notice shall state that the sole Shareholder
or, if more than one, two Shareholders present in person or by proxy (whatever
the number of shares held by them) shall be a quorum.
51. 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.
52. Each Director upon giving the notice referred to in Bye-Law 47 above,
and the Resident Representative shall be entitled to attend and speak at any
general meeting of the Company.
53. 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
13
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.
54. The chairman of the meeting may, with the consent of any meeting at
which a quorum is present (and shall if so directed by the meeting), adjourn the
meeting from time to time and from place to place but no business shall be
transacted at any adjourned meeting except business which might lawfully have
been transacted at the meeting from which the adjournment took place. When a
meeting is adjourned for three months or more, notice of the adjourned meeting
shall be given as in the case of an original meeting.
55. Save as expressly provided by these Bye-Laws, it shall not be
necessary to give any notice of an adjournment or of the business to be
transacted at an adjourned meeting.
VOTING
------
56. Save where a greater majority is required by the Companies Acts or
these Bye-Laws, any question proposed for consideration at any general meeting
shall be decided on by a simple majority of votes cast.
57. At any general meeting, a resolution put to the vote of the meeting
shall be decided on a show of hands unless (before or on the declaration of the
result of the show of hands or on the withdrawal of any other demand for a poll)
a poll is demanded by:-
(a) the chairman of the meeting; or
(b) at least three Shareholders present in person or represented by
proxy; or
(c) any Shareholder or Shareholders present in person or represented
by proxy and holding between them not less than one tenth of the total
voting rights of all the Shareholders having the right to vote at such
meeting; or
(d) a Shareholder or Shareholders present in person or represented by
proxy holding shares conferring the right to vote at such meeting, being
shares on which an aggregate sum has been paid up equal to not less than
one tenth of the total sum paid up on all such shares conferring such
right.
Unless a poll is so demanded and the demand is not withdrawn, a declaration
by the chairman that a resolution has, on a show of hands, been carried or
carried unanimously or by a particular majority or not carried by a particular
majority or lost shall be final and conclusive, and an entry to that effect in
the minute book of the Company shall be conclusive evidence of the fact without
proof of the number of votes recorded for or against such resolution.
14
58. If a poll is duly demanded, the result of the poll shall be deemed to
be the resolution of the meeting at which the poll is demanded.
59. A poll demanded on the election of a chairman, or on a question of
adjournment, shall be taken forthwith. A poll demanded on any other question
shall be taken in such manner and either forthwith or at such time (being not
later than three months after the date of the demand) and place as the chairman
shall direct. It shall not be necessary (unless the chairman otherwise directs)
for notice to be given of a poll.
60. The demand for a poll shall not prevent the continuance of a meeting
for the transaction of any business other than the question on which the poll
has been demanded and it may be withdrawn at any time before the close of the
meeting or the taking of the poll, whichever is the earlier.
61. On a poll, votes may be cast either personally or by proxy.
62. A person entitled to more than one vote on a poll need not use all his
votes or cast all the votes he uses in the same way.
63. In the case of an equality of votes at a general meeting, whether on a
show of hands or on a poll, the chairman of such meeting shall not be entitled
to a second or casting vote.
64. In the case of joint holders of a share, the vote of the senior who
tenders a vote, whether in person or by proxy, shall be accepted to the
exclusion of the votes of the other joint holders, and for this purpose
seniority shall be determined by the order in which the names stand in the
Register in respect of the joint holding.
65. A Shareholder who is a patient for any purpose of any statute or
applicable law relating to mental health or in respect of whom an order has been
made by any Court having jurisdiction for the protection or management of the
affairs of persons incapable of managing their own affairs may vote, whether on
a show of hands or on a poll, by his receiver, committee, curator bonis or other
person in the nature of a receiver, committee or curator bonis appointed by such
Court and such receiver, committee, curator bonis or other person may vote on a
poll by proxy, and may otherwise act and be treated as such Shareholder for the
purpose of general meetings.
66. 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.
67. If (i) any objection shall be raised to the qualification of any voter
or (ii) any votes have been counted which ought not to have been counted or
which might have been rejected or (iii) 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
15
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.
PROXIES AND CORPORATE REPRESENTATIVES
-------------------------------------
68. The instrument appointing a proxy shall be in writing under the hand
of the appointor or of his attorney authorised by him in writing or, if the
appointor is a corporation, either under its seal or under the hand of an
officer, attorney or other person authorised to sign the same.
69. Any Shareholder may appoint a standing proxy or (if a corporation)
representative by depositing at the Registered Office a proxy or (if a
corporation) an authorisation and such proxy or authorisation shall be valid for
all general meetings and adjournments thereof or, resolutions in writing, as the
case may be, until notice of revocation is received at the Registered Office.
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 and continuing
validity of any such standing proxy or authorisation and the operation of any
such standing proxy or authorisation shall be deemed to be suspended until such
time as the Board determines that it has received the requested evidence or
other evidence satisfactory to it.
70. Subject to Bye-Law 69, the instrument appointing a proxy together with
such other evidence as to its due execution as the Board may from time to time
require, shall be delivered at the Registered Office (or at such place as may be
specified in the notice convening the meeting or in any notice of any
adjournment or, in either case or the case of a written resolution, in any
document sent therewith) prior to the holding of the relevant meeting or
adjourned meeting at which the person named in the instrument proposes to vote
or, in the case of a poll taken subsequently to the date of a meeting or
adjourned meeting, before the time appointed for the taking of the poll, or, in
the case of a written resolution, prior to the effective date of the written
resolution and in default the instrument of proxy shall not be treated as valid.
71. Instruments of proxy shall be in any common form or in such other form
as the Board may approve and the Board may, if it thinks fit, send out with the
notice of any meeting or any written resolution forms of instruments of proxy
for use at that meeting or in connection with that written resolution. The
instrument of proxy shall be deemed to confer authority to demand or join in
demanding a poll and to vote on any amendment of a written resolution or
amendment of a resolution put to the meeting for which it is given as the proxy
thinks fit. The instrument of proxy shall unless the contrary is stated therein
be valid as well for any adjournment of the meeting as for the meeting to which
it relates.
16
72. A vote given in accordance with the terms of an instrument of proxy
shall be valid notwithstanding the previous death or insanity of the principal,
or revocation of the instrument of proxy or of the authority under which it was
executed, provided that no intimation in writing of such death, insanity or
revocation shall have been received by the Company at the 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, or the taking
of the poll, or the day before the effective date of any written resolution at
which the instrument of proxy is used.
73. 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 or to sign written resolutions.
APPOINTMENT AND REMOVAL OF DIRECTORS
------------------------------------
74. The number of Directors shall be such number not less than two as the
Company by Resolution may from time to time determine and, subject to the
Companies Acts and these Bye-Laws, shall serve until re-elected or their
successors are appointed at the next Annual General Meeting.
75. The Company shall at the Annual General Meeting and may by Resolution
determine the minimum and the maximum number of Directors and may by Resolution
determine that one or more vacancies in the Board shall be deemed casual
vacancies for the purposes of these Bye-Laws. Without prejudice to the power of
the Company by Resolution in pursuance of any of the provisions of these Bye-
Laws to appoint any person to be a Director, the Board, so long as a quorum of
Directors remains in office, shall have power at any time and from time to time
to appoint any individual to be a Director so as to fill a casual vacancy.
76. The Company may in a Special General Meeting called for that purpose
remove a Director provided notice of any such meeting shall be served upon the
Director concerned not less than 14 days before the meeting and he shall be
entitled to be heard at that meeting. Any vacancy created by the removal of a
Director at a Special General Meeting may be filled at 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
---------------------------------------------
77. The office of a Director shall be vacated upon the happening of any of
the following events:
(a) if he resigns his office by notice in writing delivered to the
Registered Office or tendered at a meeting of the Board;
17
(b) 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;
(c) if he becomes bankrupt or compounds with his creditors;
(d) if he is prohibited by law from being a Director;
(e) 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
-------------------
78. The Company may by Resolution elect any person or persons to act as
Directors in the alternative to any of the Directors or may authorise the Board
to appoint such Alternate Directors and a Director may appoint and remove his
own Alternate Director. Any appointment or removal of an Alternate Director by
a Director shall be effected by depositing a notice of appointment or removal
with the Secretary at the Registered Office, signed by such Director, and such
appointment or removal shall become effective on the date of receipt by the
Secretary. Any Alternate Director may be removed by Resolution of the Company
and, if appointed by the Board, may be removed by the Board. Subject as
aforesaid, 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.
79. 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.
80. 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.
18
DIRECTORS' FEES AND ADDITIONAL REMUNERATION AND EXPENSES
--------------------------------------------------------
81. The amount, if any, of Directors' fees shall from time to time be
determined by the Company by Resolution and in the absence of a determination to
the contrary such fees shall be deemed to accrue from day to day. Each Director
may be paid his reasonable travel, hotel and incidental expenses in attending
and returning from meetings of the Board or committees constituted pursuant to
these Bye-Laws or general meetings and shall be paid all expenses properly and
reasonably incurred by him in the conduct of the Company's business or in the
discharge of his duties as a Director. Any Director who, by request, goes or
resides abroad for any purposes of the Company or who performs services which in
the opinion of the Board go beyond the ordinary duties of a Director may be paid
such extra remuneration (whether by way of salary, commission, participation in
profits or otherwise) as the Board may determine, and such extra remuneration
shall be in addition to any remuneration provided for by or pursuant to any
other Bye-Law.
DIRECTORS' INTERESTS
--------------------
82. (a) A Director may hold any other office or place of profit with the
Company (except that of auditor) in conjunction with his office of Director for
such period and upon such terms as the Board may determine, and may be paid such
extra remuneration therefor (whether by way of salary, commission, participation
in profits or otherwise) as the Board may determine, and such extra remuneration
shall be in addition to any remuneration provided for by or pursuant to any
other Bye-Law.
(b) A Director 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.
(c) Subject to the provisions of the Companies Acts, a Director 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 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.
(d) So long as, where it is necessary, he declares the nature of his
interest at the first opportunity at a meeting of the Board or by writing
to the Directors as required by the Companies Acts, a Director shall not by
reason of his office be accountable to the Company for any benefit which he
derives from any office or employment to which these Bye-Laws allow him to
be appointed or from any transaction or arrangement in which these Bye-Laws
allow him to be interested, and
19
no such transaction or arrangement shall be liable to be avoided on the
ground of any interest or benefit.
(e) Subject to the Companies Acts and any further disclosure required
thereby, a general notice to the Directors by a Director or officer
declaring that he is a director or officer or has an interest in a person
and is to be regarded as interested in any transaction or arrangement made
with that person, shall be a sufficient declaration of interest in relation
to any transaction or arrangement so made.
POWERS AND DUTIES OF THE BOARD
------------------------------
83. Subject to the provisions of the Companies Acts and these Bye-Laws and
to any directions given by the Company by Resolution, the Board shall manage the
business of the Company and may pay all expenses incurred in promoting and
incorporating the Company and may exercise all the powers of the Company. No
alteration of these Bye-Laws and no such direction shall invalidate any prior
act of the Board which would have been valid if that alteration had not been
made or that direction had not been given. The powers given by this Bye-Law
shall not be limited by any special power given to the Board by these Bye-Laws
and a meeting of the Board at which a quorum is present shall be competent to
exercise all the powers, authorities and discretions for the time being vested
in or exercisable by the Board.
84. 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.
85. 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.
86. 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.
87. The Board may from time to time appoint one or more of its body to be
a managing director, joint managing director or an assistant managing director
or to hold any other 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
20
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
--------------------------------
88. 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.
89. The Board may entrust to and confer upon any Director, officer or,
without prejudice to the provisions of Bye-Law 90, other individual 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.
90. 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, conform to any
regulations which may be imposed upon it by the Board.
PROCEEDINGS OF THE BOARD
------------------------
91. 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.
92. Notice of a meeting of the Board shall be deemed to be duly given to a
Director if it is given to him personally or by word of mouth or sent to him by
post, cable, telex, telecopier or other mode of representing or reproducing
words in a legible and non-transitory form at his last known address or any
other address given by him to the Company
21
for this purpose. A Director may waive notice of any meeting either
prospectively or retrospectively.
93. (a) 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.
(b) 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.
(c) 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.
94. So long as a quorum of Directors remains in office, the continuing
Directors may act notwithstanding any vacancy in the Board but, if no such
quorum remains, the continuing Directors or a sole continuing Director may act
only for the purpose of calling a general meeting.
95. The Chairman (if any) of the Board or, in his absence, the President
shall preside as chairman at every meeting of the Board. If there is no such
Chairman or President, or if at any meeting the Chairman 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.
96. 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.
97. 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.
22
98. 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.
99. 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
--------
100. The officers of the Company shall include a President and a Vice-
President or a Chairman and a Deputy Chairman who shall be Directors and shall
be elected by the Board as soon as possible after the statutory meeting and each
Annual General Meeting. In addition, the Board may appoint any person whether
or not he is a Director to hold such office as the Board may from time to time
determine. Any person elected or appointed pursuant to this Bye-Law shall hold
office for such period and upon such terms as the Board may determine and the
Board may revoke or terminate any such election or appointment. Any such
revocation or termination shall be without prejudice to any claim for damages
that such officer may have against the Company or the Company may have against
such officer for any breach of any contract of service between him and the
Company which may be involved in such revocation or termination. Save as
provided in the Companies 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
-------
101. The Directors shall cause minutes to be made and books kept for the
purpose of recording -
(a) all appointments of officers made by the Directors;
(b) the names of the Directors and other persons (if any) present at
each meeting of Directors and of any committee;
(c) of all proceedings at meetings of the Company, of the holders of
any class of shares in the Company, and of committees;
(d) of all proceedings of its managers (if any).
23
SECRETARY AND RESIDENT REPRESENTATIVE
-------------------------------------
102. 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.
103. 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
--------
104. (a) The Seal shall consist of a circular metal device with the name
of the Company around the outer margin thereof and the country and year of
incorporation across the centre thereof. Should the Seal not have been received
at the Registered Office in such form at the date of adoption of this Bye-Law
then, pending such receipt, any document requiring to be sealed with the Seal
shall be sealed by affixing a red wafer seal to the document with the name of
the Company, and the country and year of incorporation type written across the
centre thereof.
(b) The Board shall provide for the custody of every Seal. A Seal
shall only be used by authority of the Board or of a committee constituted
by the Board. Subject to these Bye-laws, any instrument to which a Seal is
affixed shall be signed by either two Directors, or by the Secretary and
one Director, or by the Secretary or by any one person whether or not a
Director or Officer, who has been authorised either generally or
specifically to attest to the use of a Seal.
DIVIDENDS AND OTHER PAYMENTS
----------------------------
105. The Board may from time to time declare cash dividends or
distributions out of contributed surplus 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
may also pay any fixed cash dividend which is payable on any shares of the
Company half yearly or on such other dates, whenever the position of the
Company, in the opinion of the Board, justifies such payment.
106. Except insofar as the rights attaching to, or the terms of issue of, any
share otherwise provide:-
(a) all dividends or distributions out of contributed surplus may be
declared and paid according to the amounts paid up on the shares in respect
of which the dividend or distribution is paid, and an amount paid up on a
share in advance of calls may be treated for the purpose of this Bye-Law as
paid-up on the share;
24
(b) dividends or distributions out of contributed surplus may be
apportioned and paid pro rata according to the amounts paid-up on the
shares during any portion or portions of the period in respect of which the
dividend or distribution is paid.
107. 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.
108. No dividend, distribution or other moneys payable by the Company on or
in respect of any share shall bear interest against the Company.
109. Any dividend, distribution, 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.
110. Any dividend or distribution out of contributed surplus unclaimed for
a period of six years from the date of declaration of such dividend or
distribution shall be forfeited and shall revert to the Company and the payment
by the Board of any unclaimed dividend, distribution, interest or other sum
payable on or in respect of the share into a separate account shall not
constitute the Company a trustee in respect thereof.
111. The Board may direct payment or satisfaction of any dividend or
distribution out of contributed surplus wholly or in part by the distribution of
specific assets, and in particular of paid-up shares or debentures of any other
company, and where any difficulty arises in regard to such distribution or
dividend the Board may settle it as it thinks expedient, and in particular, may
authorise any person to sell and transfer any fractions or may ignore fractions
altogether, and may fix the value for distribution or dividend purposes of any
such specific assets and may determine that cash payments shall be made to any
Shareholders upon the footing of the values so fixed in order to secure equality
of distribution and may vest any such specific assets in trustees as may seem
expedient to the Board provided that such dividend or distribution may not be
satisfied by the distribution of any partly paid shares or debentures of any
company without the sanction of a Resolution.
25
RESERVES
--------
112. The Board may, before recommending or declaring any dividend or
distribution out of contributed surplus, set aside such sums as it thinks proper
as reserves 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
-------------------------
113. The Company may, upon the recommendation of the Board, at any time and
from time to time pass a Resolution to the effect that it is desirable to
capitalize all or any part of any amount for the time being standing to the
credit of any reserve or fund which is available for distribution or to the
credit of any share premium account or any capital redemption reserve fund and
accordingly that such amount 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, and the Board shall give effect to such Resolution,
provided that for the purpose of this Bye-Law, a share premium account and a
capital redemption reserve fund may be applied only in paying up of unissued
shares to be issued to such Shareholders credited as fully paid and provided
further that any sum standing to the credit of 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.
114. 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
------------
115. Notwithstanding any other provisions of these Bye-Laws, the Company
may by Resolution or the Board may fix any date as the record date for any
dividend, distribution, allotment or issue and for the purpose of identifying
the persons entitled to receive notices of general meetings. Any such record
date may be on or at any time before or after any date on
26
which such dividend, distribution, allotment or issue is declared, paid or made
or such notice is despatched.
ACCOUNTING RECORDS
------------------
116. 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.
117. 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 or by Resolution.
118. A copy of every balance sheet and statement of income and expenditure,
including every document required by law to be annexed thereto, which is to be
laid before the Company in general meeting, together with a copy of the
auditors' report, shall be sent to each person entitled thereto in accordance
with the requirements of the Companies Acts.
AUDIT
-----
119. Save and to the extent that an audit is waived in the manner permitted
by the Companies Acts, auditors shall be appointed and their duties regulated in
accordance with the Companies Acts, any other applicable law and such
requirements not inconsistent with the Companies Acts as the Board may from time
to time determine.
SERVICE OF NOTICES AND OTHER DOCUMENTS
--------------------------------------
120. Any notice or other document (including a share certificate) may be
served on or delivered to any Shareholder by the Company either personally or by
sending it through the post (by airmail where applicable) in a pre-paid letter
addressed to such Shareholder at his address as appearing in the Register or by
delivering it to or leaving it at such registered address. 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 seven 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.
121. Any notice of a general meeting of the Company shall be deemed to be
duly given to a Shareholder, or other person entitled to it, if it is sent to
him by cable, telex, telecopier or other mode of representing or reproducing
words in a legible and non-transitory
27
form at his address as appearing in the Register or any other address given by
him to the Company for this purpose. Any such notice shall be deemed to have
been served twenty-four hours after its despatch.
122. 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
----------
123. 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
contributories 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
---------
124. Subject to the proviso below, every Director, officer of the Company
and member of a committee constituted under Bye-Law 90 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 ALWAYS that
the indemnity contained in this Bye-Law shall not extend to any matter which
would render it void pursuant to the Companies Acts.
125. Every Director, officer, member of a committee duly constituted under
Bye-Law 90 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,
28
in which judgment 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.
126. To the extent that any Director, officer, member of a committee duly
constituted under Bye-Law 90 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.
AMALGAMATION
------------
127. Any resolution proposed for consideration at any general meeting to
approve the amalgamation of the Company with any other company, wherever
incorporated, shall require the approval of a simple majority of votes cast at
such meeting and the quorum for such meeting shall be that required in Bye-law
49.
ALTERATION OF BYE-LAWS
----------------------
128. These Bye-Laws may be amended from time to time in the manner provided
for in the Companies Acts.
(Revised June 13, 1997)
Form of Schedule I to the Bye-Laws
of Global Telesystems Holdings Ltd.
SCHEDULE I
Senior Increasing Rate Redeemable
Exchangeable Preference Shares
----------------------------------
The terms of the Company's authorized Senior Increasing Rate
Redeemable Exchangeable Preference Shares shall be as set forth below in this
Schedule I.
(a) Designation. There is hereby created out of the authorized and
-----------
unissued Preferred Shares of the Company a class of Preferred Shares designated
as the "Senior Increasing Rate Redeemable Exchangeable Preference Shares." The
number of shares constituting such class shall be 500,000 and are referred to as
the "Preference Shares." 100,000 Preference Shares shall be initially issued
with the remaining 400,000 shares reserved for issuance in accordance with
paragraph (d) hereof. The liquidation preference of the Preference Shares shall
be $1,000.00 per share.
(b) Currency. The Preference Shares shall be denominated in United
--------
States currency and all payments and distributions thereon or with respect
thereto shall be made in United States currency. All references to "$" or
"dollars" refer to United States currency.
(c) Rank. The Preference Shares shall, with respect to dividends and
----
distributions upon liquidation, winding-up and dissolution of the Company, rank
(i) senior to all classes of Common Stock of the Company and to each other class
of Capital Stock of the Company or series of Preference Shares of the Company
hereafter created the terms of which do not expressly provide that it ranks
senior to or on a parity with the Preference Shares as to dividends and
distributions upon liquidation, winding up and dissolution of the Company
(collectively referred to as "Junior Securities"); (ii) pari passu with each
---- -----
class of Capital Stock of the Company or series of Preferred Stock of the
Company hereafter created, the terms of which expressly provide that such class
or series will rank on a parity with the Preference Shares as to dividends and
distributions upon liquidation, winding-up and dissolution (collectively
referred to as "Parity Securities"); provided that any such Parity Securities
--------
not issued in accordance with the requirements of paragraph (g)(ii)(A) hereof
shall be deemed to be Junior Securities and not Parity Securities; and (iii)
junior to each class of Capital Stock of the Company or series of Preferred
Shares of the Company hereafter created the terms of which expressly provide
that such class or series will rank senior to the Preference Shares as to
dividends and distributions upon
2
liquidation, winding-up and dissolution of the Company (collectively referred to
as "Senior Securities"); provided that any such Senior Securities that were not
--------
approved by the Holders in accordance with paragraph (g)(ii)(B) hereof shall be
deemed to be Junior Securities and not Senior Securities.
(d) Dividends.
---------
(i) Beginning on the Issue Date, the Holders of the outstanding
Preference Shares shall be entitled to receive, when, as and if declared by
the Board of Directors, out of funds legally available therefor,
distributions in the form of dividends on each Preference Share, at a rate
per annum equal to 14% of the liquidation preference per Preference Share,
--- -----
payable on each Dividend Payment Date. If the Preference Shares are not
redeemed prior to April 1, 2001 the dividend rate shall increase by 0.50%
per annum on April 1, 2001 and by an additional 0.50% per annum on each
--- ----- --- -----
subsequent April 1; provided that in no event shall the dividend rate borne
--------
by the Preference Shares exceed 20% per annum. All dividends shall be
--- -----
cumulative, whether or not earned or declared, on a daily basis from the
date of issuance of the Preference Shares and shall be payable in arrears,
on each Dividend Payment Date, commencing June 1, 1997. Dividends may be
paid, at the Company's option, on any applicable Dividend Payment Date
occurring on or prior to April 1, 2002 either in cash (and, if paid in
cash, payable only for such consecutive Dividend Periods immediately
preceding the applicable Dividend Payment Date for which dividends, whether
cash or in-kind, have not been declared and paid) or by the issuance of
additional Preference Shares (including fractional shares) having an
aggregate liquidation preference equal to the amount of such dividends.
Thereafter, dividends will be payable in cash only; provided that if the
--------
dividend rate exceeds 15% per annum, the Company may, at its option, cause
--- -----
any dividends in excess of 15% per annum to be paid in additional
--- -----
Preference Shares (including fractional Shares). In the event that
dividends are declared and paid through the issuance of additional
Preference Shares on or prior to April 1, 2002 or as provided in the
previous sentence, such dividends shall be deemed paid in full and shall
not accumulate. Each dividend shall be payable to the Holders of record as
they appear on the stock books of the Company on the Dividend Record Date
immediately preceding the related Dividend Payment Date. Dividends shall
cease to accumulate in respect of the Preference Shares on the Exchange
Date or on the date of their earlier redemption unless the Company shall
have failed to issue the appropriate aggregate principal amount of Exchange
Notes in respect of the Preference Shares on such Exchange Date or shall
have failed to pay the relevant redemption price on the date fixed for
redemption.
3
(ii) All dividends paid with respect to the Preference Shares
pursuant to paragraph (d)(i) shall be paid pro rata to the Holders entitled
--- ----
thereto.
(iii) Nothing herein contained shall in any way or under any
circumstances be construed or deemed to require the Board of Directors to
declare, or the Company to pay or set apart for payment, any dividends on
Preference Shares at any time.
(iv) Dividends accruing after April 1, 2002 on the Preference Shares
for any past Dividend Period and dividends in connection with any optional
redemption pursuant to paragraph (f)(i) may be declared and paid at any
time, without reference to any regular Dividend Payment Date, to Holders of
record on such date, not more than forty-five (45) days prior to the
payment thereof, as may be fixed by the Board of Directors of the Company.
(v) Dividends payable on the Preference Shares for any period less
than a year shall be computed on the basis of a 360-day year of twelve 30-
day months and the actual number of days elapsed in the period for which
payable.
(e) Liquidation Preference.
----------------------
(i) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Company, the Holders of
Preference Shares then outstanding shall be entitled to be paid out of the
assets of the Company available for distribution to its stockholders an
amount in cash equal to the liquidation preference for each share
outstanding, plus, without duplication, an amount in cash equal to
accumulated and unpaid dividends thereon to the date fixed for liquidation,
dissolution or winding up (including an amount equal to a prorated dividend
for the period from the last Dividend Payment Date to the date fixed for
liquidation, dissolution or winding up) before any distribution shall be
made or any assets distributed to the holders of any of the Junior
Securities including, without limitation, Common Stock of the Company.
Except as provided in the preceding sentence, Holders of Preference Shares
shall not be entitled to any distribution in the event of any liquidation,
dissolution or winding up of the affairs of the Company. If the assets of
the Company are not sufficient to pay in full the liquidation payments
payable to the Holders of outstanding Preference Shares, then the holders
of all such shares shall share equally and ratably in such distribution of
assets first in proportion to the full liquidation preference to which each
is entitled until such preferences are paid in full, and then in proportion
to their respective amounts of accumulated but unpaid dividends.
4
(ii) For the purposes of this paragraph (e), neither the sale,
conveyance, exchange or transfer (for cash, shares of stock, securities or
other consideration) of all or substantially all of the property or assets
of the Company nor the consolidation or merger of the Company with or into
one or more entities shall be deemed to be a liquidation, dissolution or
winding up of the affairs of the Company.
(f) Redemption.
----------
(i) Optional Redemption. (A) The Company may, at the option of the
-------------------
Board of Directors, redeem at any time on or after April 1, 1997, in whole
or in part, in the manner provided for in paragraph (f)(iii) hereof, any or
all of the Preference Shares, at the redemption prices (expressed as a
percentage of the liquidation preference) set forth below plus, without
duplication, an amount in cash equal to all accumulated and unpaid
dividends per share (including an amount in cash equal to a prorated
dividend for the period from the Dividend Payment Date immediately prior to
the Redemption Date to the Redemption Date) (the "Optional Redemption
Price"). The redemption prices shall be as follows if redeemed during the
12-month period beginning April 1 of each of the years set forth below:
1997............................ 114%
1998............................ 114%
1999............................ 114%
2000............................ 114%
2001............................ 114%
2002............................ 111%
2003............................ 108%
2004............................ 105%
2005............................ 102%
2006............................ 100%
; provided that no redemption pursuant to this paragraph (f)(i)(A) shall be
--------
authorized or made unless prior thereto full accumulated and unpaid
dividends are declared and paid in full, or declared and a sum in cash set
apart sufficient for such payment, on the Preference Shares for all
Dividend Periods terminating on or prior to the Redemption Date.
(B) In the event of a redemption pursuant to paragrap h (f)(i)(A)
hereof of only a portion of the then outstanding Preference Shares, the
Company shall effect such redemption on a pro rata basis according to the
--- ----
number of shares held by each Holder of the Preference Shares, except that
the Company may redeem such shares held by Holders of fewer than 10 shares
(or shares held by Holders who would hold less than 10 shares as a result
of such redemption), as may be determined by the Company.
5
(ii) Mandatory Redemption. (A) The Company will, on each June 1 and
--------------------
December 1 commencing on the first such date to occur more than 90 days
after the Commercial Operation Date, apply an amount equal to 100% of
Excess Cash Flow to mandatorily redeem the Preference Shares on a pro rata
basis, at the redemption prices (expressed as a percentage of the
liquidation preference) set forth below, plus, without duplication, an
amount in cash equal to all accumulated and unpaid dividends per share
(including an amount in cash equal to a prorated dividend for the period
from the Dividend Payment Date immediately prior to the Redemption Date to
the Redemption Date); provided that any Excess Cash Flow shall be applied
--------
(i) first, to mandatorily redeem the Senior Notes pursuant to the
provisions thereof, (ii) second, if none of the Senior Notes are
outstanding, to pay accumulated but unpaid dividends in cash on the
Preference Shares and (iii) third, to redeem the Preference Shares in
accordance with the terms of this Section (f)(ii)(A). The redemption
prices shall be as follows if redeemed during the 12-month period beginning
April 1 of the years set forth below:
1997................. 114%
1998................. 114%
1999................. 112%
2000................. 112%
2001................. 107%
2002 and thereafter.. 100%
Notwithstanding the foregoing, at such time as at least $50 million in aggregate
liquidation preference of Preference Shares has been redeemed or repurchased,
Excess Cash Flow may be used for a Permitted System Upgrade in lieu of redeeming
any Preference Shares.
(B) On April 1, 2007, the Company shall redeem, to the extent of
funds legally available therefor, in the manner provided for in paragraph
(e)(iii) hereof, all of the Prefe rence Shares then outstanding at a
redemption price equal to 100% of the liquidation preference per share,
plus, without duplication, an amount in cash equal to all accumulated and
unpaid dividends per share (including an amount equal to a prorated
dividend for the period from the Dividend Payment Date immediately prior to
the Redemption Date to the Redemp tion Date) (the "Mandatory Redemption
Price").
(iii) Procedures for Redemption. (A) At least thirty (30) days and
-------------------------
not more than sixty (60) days prior to the date fixed for any redemption of
the Preference Shares, written notice (the "Redemption Notice") shall be
given by first class mail, postage prepaid, to each Holder of record on the
record date fixed for such redemption of the Preference Shares at such
Holder's address as it appears on the stock books of the Company, provided
--------
that no failure to
6
give such notice nor any deficiency therein shall affect the validity of
the procedure for the redemption of any Preference Shares to be redeemed
except as to the Holder or Holders to whom the Company has failed to give
said notice or to whom such notice was defective. The Redemption Notice
shall state:
(1) whether the redemption is pursuant to paragraph (f)(i) or
(f)(ii) hereof;
(2) the Optional Redemption Price or the Mandatory Redemption
Price, as the case may be;
(3) whether all or less than all the outstanding shares of the
Preference Shares are to be redeemed and the total number of
Preference Shares being redeemed;
(4) the date fixed for redemption;
(5) that the Holder is to surrender to the Company, in the
manner, at the place or places and at the price designated, his
certificate or certificates representing the Preference Shares to be
redeemed; and
(6) that dividends on the Preference Shares to be redeemed shall
cease to accumulate on such Redemption Date unless the Company
defaults in the payment of the Optional Redemption Price or the
Mandatory Redemption Price, as the case may be.
(B) Each Holder of Preference Shares shall surrender the certificate
or certificates representing such Preference Shares to the Company, duly
endorsed (or otherwise in proper form for transfer, as determined by the
Company), in the manner and at the place designated in the Redemption
Notice, and on the Redemption Date the full Optional Redemption Price or
Mandatory Redemption Price, as the case may be, for such shares shall be
payable in cash to the Person whose name appears on such certificate or
certificates as the owner thereof, and each surrendered certificate shall
be canceled and retired. In the event that less than all of the shares
represented by any such certificate are redeemed, a new certificate shall
be issued representing the unredeemed shares.
(C) On and after the Redemption Date, unless the Company defaults in
the payment in full of the applicable redemption price, dividends on the
Preference Shares called for redemption shall cease to accumulate on the
Redemption Date, and all rights of the Holders of redeemed shares shall
terminate with respect thereto on the Redemption Date, other than the right
to receive the Optional Redemption Price or the Mandatory Redemption Price,
as the case may be, without interest; provided, however, that if a notice
-------- -------
of redemption
7
shall have been given as provided in paragraph (iii)(A) above and the funds
necessary for redemption (including an amount in respect of all dividends
that will accrue to the Redemption Date) shall have been irrevocably
deposited in trust for the equal and ratable benefit for the Holders of the
shares to be redeemed, then, at the close of business on the day on which
such funds are segregated and set aside, the Holders of the shares to be
redeemed shall cease to be stockholders of the Company and shall be
entitled only to receive the Optional Redemption Price or the Mandatory
Redemption Price, as the case may be, without interest.
(g) Voting Rights.
-------------
(i) The Holders of Preference Shares, except as otherwise required
under Bermuda law or as set forth in paragraphs (ii), (iii) and (iv) below,
shall not be entitled or permitted to vote on any matter required or
permitted to be voted upon by the stockholders of the Company.
(ii) (A) So long as any shares of the Preference Shares are
outstanding, the Company shall not authorize any additional Preference
Shares or any class of Parity Securities without the affirmative vote or
consent of Holders of at least a majority of the then outstanding
Preference Shares, voting or consenting, as the case may be, as one class,
given in person or by proxy, either in writing or by resolution adopted at
an annual or special meeting; provided, however, that no such vote or
-------- -------
consent shall be necessary in connection with the issuance of additional
Preference Shares pursuant to the provisions of paragraph (d) hereof.
(B) So long as any Preference Shares are outstanding, the Company
shall not authorize any class of Senior Securities without the affirmative
vote or consent of Holders of at least a majority of the outstanding
Preference Shares, voting or consenting, as the case may be, as one class,
given in person or by proxy, either in writing or by resolution adopted at
an annual or special meeting.
(C) So long as any Preference Shares are outstanding, the Company
shall not amend this Certificate of Designation so as to affect materially
and adversely the specified rights, preferences, privileges or voting
rights of holders of Preference Shares without the affirmative vote or
consent of Holders of at least a majority of the issued and outstanding
Preference Shares, voting or consenting, as the case may be, as one class,
given in person or by proxy, either in writing or by resolution adopted at
an annual or special meeting.
(D) While any of the Preference Shares are outstanding, the Company
shall not amend or modify the
8
Exchange Notes to be issued upon an exchange of Preference Shares in
accordance with paragraph (h) hereof in the form as executed on the Issue
Date without the affirmative vote or consent of Holders of at least a
majority of the Preference Shares then outstanding, voting or consenting,
as the case may be, as one class, and given in person or by proxy, either
in writing or by resolution adopted at an annual or special meeting.
(E) Except as set forth in paragraphs (g)(ii)(A), (g)(ii)(B) and
(g)(ii)(C) above, (x) the creation, authorization or issuance of any shares
of any Junior Securities, Parity Securities or Senior Securities or (y) the
increase or decrease in the amount of authorized Capital Stock of any
class, including Preference Shares, shall not require the consent of
Holders of Preference Shares and shall not be deemed to affect adversely
the rights, preferences, privileges or voting rights of Holders of
Preference Shares.
(iii) Without the affirmative vote or consent of Holders of a
majority of the issued and outstanding Preference Shares, voting or
consenting, as the case may be, as one class, given in person or by proxy,
either in writing or by resolution adopted at an annual or special meeting,
the Company shall not, in a single transaction or series of related
transactions, consolidate or merge with or into, or sell, assign, transfer,
lease, convey or otherwise dispose of all or substantially all of its
assets to, another Person or adopt a plan of liquidation unless: (A)
either (1) the Company is the surviving or continuing Person or (2) the
Person (if other than the Company) formed by such consolidation or into
which the Company is merged or the Person that acquires by conveyance,
transfer or lease the properties and assets of the Company substantially as
an entirety or in the case of a plan of liquidation, the Person to which
assets of the Company have been transferred, shall be a corporation,
partnership or trust organized and existing under the laws of the United
States or any State thereof or the District of Columbia or under the laws
of Bermuda; (B) the Preference Shares shall be converted into or exchanged
for and shall become shares of such successor, transferee or resulting
Person, having in respect of such successor, transferee or resulting Person
the same powers, preferences and relative, participating, optional or other
special rights and the qualifications, limitations or restrictions thereon,
that the Preference Shares had immediately prior to such transaction; (C)
immediately after giving effect to such transactions, no Voting Rights
Triggering Event shall have occurred or be continuing; and (D) the Company
has delivered to the Holders of the Preference Shares prior to the
consummation of the proposed transaction an Officers' Certificate and an
Opinion of Counsel, each stating that such consolidation, merger or
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transfer complies with the terms hereof and that all conditions precedent
herein relating to such transaction have been satisfied.
For purposes of the foregoing, the transfer (by lease, assignment,
sale or otherwise, in a single transaction or series of related
transactions) of all or substantially all of the properties or assets of
one or more Subsidiaries of the Company, the Capital Stock of which
constitutes all or substantially all of the properties and assets of the
Company shall be deemed to be the transfer of all or substantially all of
the properties and assets of the Company.
(iv) (A) If (1) the Company fails to pay dividends on the Preference
Shares in an amount equivalent to at least four quarterly dividends (a
"Dividend Default"); (2) the Company fails to redeem all of the then
outstanding Preference Shares on April 1, 2007 or otherwise fails to
discharge any redemption obligation with respect to the Preference Shares;
(3) the Company fails to make a Change of Control Offer (whether pursuant
to the terms of paragraph (i)(v) or otherwise) following a Change of
Control if such Change of Control Offer is required by paragraph (i) hereof
or fails to purchase Preference Shares from Holders who elect to have such
shares purchased pursuant to the Change of Control Offer; then in the case
of any of clauses (1)-(3) the number of directors constituting the Board of
Directors shall be adjusted by the number, if any, necessary to permit the
Holders of Preference Shares, voting separately and as one class, to elect
the lesser of two directors or that number of directors constituting 25% of
the members of the Board of Directors. Each such event described in
clauses (1), (2) and (3) is a "Voting Rights Triggering Event." Holders of
a majority of the issued and outstanding Preference Shares, voting
separately and as one class, shall have the exclusive right to elect the
lesser of two directors or that number of directors constituting 25% of the
members of the Board of Directors at a meeting therefor called upon
occurrence of such Voting Rights Triggering Event, and at every subsequent
meeting at which the terms of office of the directors so elected by the
Holders of Preference Shares expire (other than as described in (g)(iv)(B)
below). The voting rights provided herein shall be the exclusive remedy at
law or in equity of the holders of Preference Shares for any Voting Rights
Triggering Event.
(B) The right of the Holders of Preference Shares voting together as a
separate class to elect members of the Board of Directors as set forth in
subparagraph (g)(iv)(A) above shall continue until such time as (x) in the
event such right arises due to a Dividend Default, all accumulated
dividends that are in arrears on the Preference Shares are
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paid in full in cash; and (y) in all other cases, the failure, breach or
default giving rise to such Voting Rights Triggering Event is remedied,
cured or waived by the holders of at least a majority of the Preference
Shares then outstanding and entitled to vote thereon, at which time (1) the
special right of the Holders of Preference Shares so to vote as a class for
the election of directors and (2) the term of office of the directors
elected by the Holders of Preference Shares shall each terminate and the
directors elected by the holders of Common Stock or Capital Stock (other
than the Preference Shares), if applicable, shall constitute the entire
Board of Directors. At any time after voting power to elect directors
shall have become vested and be continuing in the Holders of Preference
Shares pursuant to paragraph (g)(iv) hereof, or if vacancies shall exist in
the offices of directors elected by the Holders of Preference Shares, a
proper officer of the Company may, and upon the written request of the
Holders of record of at least twenty-five percent (25%) of the Preference
Shares then outstanding addressed to the secretary of the Company shall,
call a special meeting of the Holders of Preference Shares, for the purpose
of electing the directors which such Holders are entitled to elect. If
such meeting shall not be called by a proper officer of the Company within
twenty (20) days after personal service of said written request upon the
secretary of the Company, or within twenty (20) days after mailing the same
within the United States by certified mail, addressed to the secretary of
the Company at its principal executive offices, then the Holders of record
of at least twenty-five percent (25%) of the outstanding Preference Shares
may designate in writing one of their number to call such meeting at the
reasonable expense of the Company, and such meeting may be called by the
Person so designated upon the notice required for the annual meetings of
stockholders of the Company and shall be held at the place for holding the
annual meetings of stockholders. Any Holder of Preference Shares so
designated shall have, and the Company shall provide, access to the lists
of stockholders to be called pursuant to the provisions hereof.
(C) At any meeting held for the purpose of electing directors at which
the Holders of Preference Shares shall have the right, voting together as a
separate class, to elect directors as aforesaid, the presence in person or
by proxy of the Holders of at least a majority of the outstanding
Preference Shares shall be required to constitute a quorum of such
Preference Shares.
(D) Any vacancy occurring in the office of a director elected by the
Holders of Preference Shares may be filled by the remaining directors
elected by the Holders of Preference Shares unless and until such vacancy
shall be filled by the Holders of Preference Shares.
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(v) In any case in which the Holders of Preference Shares shall be
entitled to vote pursuant to this paragraph (g) or pursuant to Bermuda law,
each Holder of Preference Shares entitled to vote with respect to such
matter shall be entitled to one vote for each Preference Share held.
(h) Exchange.
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(i) Requirements. The outstanding Preference Shares are exchangeable,
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in whole but not in part, at the option of the Company, at any time for
Global's Exchange Notes due 2007 (the "Exchange Notes") to be substantially
in the form of Exhibit A hereto; provided, however, that any such exchange
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may only be made if on or prior to the date of such exchange (i) the
Company has paid (or is deemed to have paid) all accumulated dividends on
the Preference Shares (including the dividends payable on the date of
exchange) and there shall be no contractual impediment to such exchange;
(ii) no default or event of default under any other material instrument
governing Indebtedness of Global outstanding at the time would be caused
thereby; and (iii) the Company shall have delivered a written opinion to
the effect that all conditions to be satisfied prior to such exchange have
been satisfied. The exchange rate shall be $1.00 principal amount of
Exchange Notes for each $1.00 of liquidation preference of Preference
Shares, including, to the extent necessary, Exchange Notes in principal
amounts less than $1,000, provided that the Company shall have the right,
--------
at its option, to pay cash in an amount equal to the principal amount of
that portion of any Exchange Note that is not an integral multiple of
$1,000 instead of delivering an Exchange Note in a denomination of less
than $1,000. Each holder of Preference Shares by so holding agrees to
accept Exchange Notes and, in lieu of fractional shares, cash, in
satisfaction of the amounts due to him on redemption or repurchase of the
Preference Shares that is deemed to occur upon the exchange and waives any
right to receive cash other than as aforesaid in respect of such redemption
or repurchase.
(ii) Procedure for Exchange. (A) At least thirty (30) days and not
----------------------
more than sixty (60) days prior to the date fixed for exchange, written
notice (the "Exchange Notice") shall be given by first-class mail, postage
prepaid, to each Holder of record on the record date fixed for such
exchange of Preference Shares at such Holder's address as the same appears
on the stock books of the Company; provided that no failure to give such
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notice nor any deficiency therein shall affect the validity of the
procedure for the exchange of any Preference Shares to be exchanged except
as to the Holder or Holders to whom the Company has failed to give said
notice or to whom such notice was defective. The Exchange Notice shall
state:
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(1) the date fixed for exchange;
(2) that the Holder is to surrender to the Company, in the manner
and at the place or places designated, his certificate or certificates
representing the Preference Shares to be exchanged;
(3) that dividends on the Preference Shares to be exchanged shall
cease to accrue on such Exchange Date whether or not certificates for
Preference Shares are surrendered for exchange on such Exchange Date
unless the Company shall default in the delivery of Exchange Notes;
and
(4) that interest on the Exchange Notes shall accrue from the
Exchange Date whether or not certificates for Prefere