PANGAEA LOGISTICS SOLUTIONS LTD.
10-Ks and 10-Qs
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
| Filed by the Registrant | ý | ||||
| Filed by a Party other than the Registrant | o | ||||
Check the appropriate box:
| o | Preliminary Proxy Statement | ||||
| o | Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | ||||
| ý | Definitive Proxy Statement | ||||
| o | Definitive Additional Materials | ||||
| o | Soliciting Material Under Rule 14a-12 | ||||
PANGAEA LOGISTICS SOLUTIONS LTD.
(Name of Registrant as Specified in Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
| ý | No fee required. | ||||
| o | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. | ||||
(1)
Title of each class of securities to which transaction applies:
(2)
Aggregate number of securities to which transaction applies:
(3)
Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
(4)
Proposed maximum aggregate value of transaction:
(5)
Total fee paid:
| o | Fee paid previously with preliminary materials: | ||||
| o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. | ||||
(1)
Amount previously paid:
(2)
Form, Schedule or Registration Statement No.:
(3)
Filing Party:
(4)
Date Filed:
PANGAEA LOGISTICS SOLUTIONS LTD.
109 Long Wharf
Newport, RI 02840
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 5, 2022
TO THE SHAREHOLDERS OF PANGAEA LOGISTICS SOLUTIONS LTD:
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders of Pangaea Logistics Solutions Ltd., a Bermuda company, will be held at 2:00 pm, Eastern Time, on August 5, 2022, in the Company's Executive Office at 109 Long Wharf, Newport, RI 02840. You are cordially invited to attend the annual meeting, which will be held for the following purposes:
(1)
to elect two directors to our Board of Directors as Class II directors serving until the annual meeting of shareholders to be held in 2025;
(2)
to elect one director to our Board of Director as Class III director serving until the annual meeting of shareholders to be held in 2023;
(3)
to approve the amendment of the PANGAEA LOGISTICS SOLUTIONS LTD. 2014 SHARE INCENTIVE PLAN (as amended and restated by the Board of Directors on May 6, 2022), the "2022 Amended Plan";
(4)
to approve the amendment of the Company's Bye-laws to adopt gender-inclusive language;
(5)
to transact such other business as may properly come before the meeting or any adjournment thereof.
Shareholders of record at the close of business on June 17, 2022 are entitled to notice of, and to vote at, the Annual Meeting or any adjournment or postponement thereof.
All shareholders are cordially invited to attend the Annual Meeting. If you do not expect to be present at the Annual Meeting, you are requested to fill in, date and sign the enclosed proxy and mail it promptly in the enclosed envelope to make sure that your shares are represented at the Annual Meeting. Shareholders of record also have the option of voting via the Internet. Instructions for using the service is included on the proxy card. In the event you decide to attend the Annual Meeting in person, you may, if you desire, revoke your proxy and vote your shares in person in accordance with the procedures described in the accompanying proxy statement. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted.
Thank you for your participation. We look forward to your continued support.
By Order of the Board of Directors
/s/ Mark L. Filanowski
Mark L. Filanowski
Chief Executive Officer
Newport, Rhode Island
June 22, 2022
This notice and proxy statement is dated June 22, 2022, and is first being mailed to our shareholders on or about June 24, 2022.
TABLE OF CONTENTS
| PROXY STATEMENT | |||||
| QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING | |||||
| PROPOSAL 1 — ELECTION OF CLASS I DIRECTORS | |||||
| PROPOSAL 2 — ELECTION OF CLASS III DIRECTORS | |||||
| Members of Our Board | |||||
| Director Skills and Experience | |||||
| Director Independence | |||||
| Meetings and Committees of our Board of Directors | |||||
| Audit Committee Information | |||||
| Compensation Committee Information | |||||
| Nominating Committee Information | |||||
| Board Leadership Structure and Role in Risk Oversight | |||||
| AUDIT COMMITTEE REPORT | |||||
| PROPOSAL 3 — TO APPROVE THE PANGAEA LOGISTICS SOLUTIONS LTD. AMENDED AND RESTATED 2014 EQUITY INCENTIVE PLAN | |||||
| PROPOSAL 4 — TO VOTE ON A PROPOSAL TO AMEND THE COMPANY's BYE-LAWS TO ADOPT GENDER-INCLUSIVE LANGUAGE | |||||
| SHARE OWNERSHIP | |||||
| Security Ownership of Certain Beneficial Owners and Management | |||||
| Section 16(a) Beneficial Ownership Reporting Compliance | |||||
| CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS | |||||
| Related Person Policy | |||||
| Related Party Transactions | |||||
| Principal Auditor Fees and Services | |||||
| Pre-Approval of Audit and Non-Audit Services | |||||
| SHAREHOLDER PROPOSALS AND OTHER SHAREHOLDER COMMUNICATIONS | |||||
| DELIVERY OF DOCUMENTS TO SHAREHOLDERS | |||||
| OTHER BUSINESS | |||||
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PROXY STATEMENT
General
This proxy statement, which is being mailed to each person entitled to receive the accompanying Notice of Annual Meeting on or about June 24, 2022, is furnished in connection with the solicitation of proxies to be voted at the annual meeting of shareholders by the Board of Directors (the "Board") of Pangaea Logistics Solutions Ltd. ("Pangaea" or the "Company"), The meeting is to be held on August 5, 2022, at 4:00 p.m. at the Company’s principal executive office, located at 109 Long Wharf, Newport, Rhode Island, and at any adjournments or postponements thereof.
Shareholders Who May Vote
All shareholders of record at the close of business on June 17, 2022 will be entitled to vote. As of June 17, 2022, Pangaea had outstanding 46,006,182 common shares, each of which is entitled to one vote with respect to each matter to be voted upon at the meeting. Proxies are solicited to give all shareholders who are entitled to vote on the matters that come before the meeting the opportunity to do so whether or not they attend the meeting in person.
Voting
If you are a holder of record of our common shares as of the record date, you may vote in person at the annual meeting or by submitting a proxy for the annual meeting. You may submit your proxy by completing, signing, dating and returning the enclosed proxy card in the accompanying pre-addressed postage paid envelope. If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or nominee, you should contact your broker, bank or nominee to ensure that votes related to the shares you beneficially own are properly counted. In this regard, you must provide the broker, bank or nominee with instructions on how to vote your shares or, if you wish to attend the meeting and vote in person, obtain a proxy from your broker, bank or nominee.
Changing or Revoking a Proxy
If you are a holder of record of our common shares as of the record date, you may change or revoke your proxy at any time before it is voted by submitting a new proxy with a later date, delivering a written notice of revocation to Pangaea's Secretary, or voting in person at the meeting. If your shares are held in the name of your broker or bank, you may change or revoke your voting instructions by contacting the bank or brokerage firm or other nominee holding the shares or by obtaining a legal proxy from such institution and voting in person at the annual meeting.
Required Vote
A quorum is required to conduct business at the meeting. A quorum requires the presence, in person or by proxy, of at least two shareholders representing the holders of at least thirty-three percent (33%) of the issued and outstanding shares entitled to vote at the meeting. Abstentions and broker “non-votes” are counted as present and entitled to vote for purposes of determining a quorum. A broker non-vote occurs when you fail to provide voting instructions to your broker for shares owned by you but held in the name of your broker and your broker does not have authority to vote without instructions from you. Under those circumstances, your broker may be authorized to vote for you without your instructions on routine matters but is prohibited from voting without your instructions on non-routine matters. Non-routine matters include the election of directors for which your broker cannot vote and absent your instructions on how to vote, will result in broker non-votes.
Any question proposed for consideration at the meeting shall be decided on by a simple majority of votes cast.
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Costs of Proxy Solicitation
Pangaea pays the cost of this solicitation of proxies. This solicitation is being made by mail but also may be made by telephone or in person. Our directors, officers and employees may also solicit proxies in person, by telephone or by other electronic means.
Pangaea will request that persons who hold shares for others, such as banks and brokers, solicit the owners of those shares and will reimburse them for their reasonable out-of-pocket expenses for those solicitations.
Attending the Meeting
If your shares are held in the name of your bank or broker and you plan to attend the meeting, please bring proof of ownership with you to the meeting. A bank or brokerage account statement showing that you owned voting shares of Pangaea on June 17, 2022 is acceptable proof to establish share ownership and obtain admittance to the meeting. If you are a shareholder of record, no proof of ownership is required. All shareholders or their proxies should be prepared to present government-issued photo identification upon request for proof of ownership and/or admission to the meeting.
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QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING
Q. Why am I receiving this proxy statement?
A. Pangaea Logistics Solutions Ltd. is furnishing you this proxy statement to solicit proxies on behalf of its Board to be voted at the 2022 annual meeting of shareholders of Pangaea Logistics Solutions Ltd. The meeting will be held at the Company's Executive Office, 109 Long Wharf, Newport, RI 02840 on August 5, 2022, at 2:00 pm Eastern Time. The proxies also may be voted at any adjournments or postponements of the meeting. When used in this proxy statement, “Pangaea,” “Company,” “we,” “our,” “ours” and “us” refer to Pangaea Logistics Solutions Ltd. and its consolidated subsidiaries, except where the context otherwise requires or as otherwise indicated.
This proxy statement contains important information about the matters to be acted upon at the annual meeting. Shareholders should read it carefully.
Q. What is a proxy?
A. A proxy is your legal designation of another person to vote the shares you own on your behalf. That other person is referred to as a “proxy.” Our Board has designated Mark Filanowski and Gianni Del Signore as proxies for the annual meeting. By completing and returning the enclosed proxy card, you are giving Mr. Del Signore and Mr. Filanowski the authority to vote your shares in the manner you indicate on your proxy card.
Q. What do I need to do now?
A. We urge you to read carefully and consider the information contained in this proxy statement. The vote of our shareholders is important. Shareholders are then encouraged to vote as soon as possible in accordance with the instructions provided in this proxy statement and on the enclosed proxy card.
Q.
Who is entitled to vote?
A.
We have fixed the close of business on June 17, 2022, as the “record date” for determining shareholders entitled to notice of and to attend and vote at the annual meeting. As of the close of business on June 17, 2022, there were 46,006,182 common shares outstanding and entitled to vote. Each common share is entitled to one vote per share at the annual meeting.
Q. How do I vote?
A.
If you are a stockholder of record, there are three ways to vote:
•
by Internet at www.cstproxyvote.com, 24 hours a day, seven days a week, until 11:59 p.m. Eastern Time on August 4, 2022 (have your Notice or proxy card in hand when you visit the website);
•
by completing and mailing your proxy card with the pre-addressed postage paid envelope. (if you received printed proxy materials); or
•
by written ballot at the Annual Meeting.
Even if you plan to attend the Annual Meeting in person, we recommend that you also vote by proxy so that your vote will be counted if you later decide not to attend.
If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or nominee, you should contact your broker, bank or nominee to ensure that votes related to the shares you beneficially own are properly counted. In this regard, you must provide the broker, bank or nominee with instructions on how to vote your shares or, if you wish to attend the meeting and vote in person, obtain a proxy from your broker, bank or nominee.
Q. What does it mean if I receive more than one proxy card?
A. It indicates that you may have multiple accounts with us, brokers, banks, trustees, or other holders of record. Sign and return all proxy cards to ensure that all of your shares are voted. We encourage you to register all your accounts in the same name and address.
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Q. If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me?
A. No. Your broker, bank or nominee cannot vote your shares unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank or nominee.
Q. What are my voting choices when voting for director nominees, and what vote is needed to elect directors?
A. In voting on the election of two director nominees to serve until the 2025 annual meeting of shareholders and one director nominee to serve until the 2023 annual meeting of shareholders. Shareholders may vote in one of the following ways:
•
in favor of an individual nominee; or
•
against an individual nominee; or
•
withhold votes as to an individual nominee.
Each director will be elected by a simple majority of the votes of the common shares present or represented by proxy at the meeting.
Our Board recommends a vote “ FOR ” all nominees.
Q. What if a shareholder does not specify a choice for a matter when returning a proxy?
A. Shareholders should specify their choice for each matter on the enclosed form of proxy. If no instructions are given, proxies that are signed and returned will be voted “ FOR ” the election of the director nominees.
Q. What constitutes a quorum?
A. The presence, in person or by proxy, of at least two shareholders representing the holders of at least thirty-three percent (33%) of the outstanding common shares constitutes a quorum. We need a quorum of shareholders to hold a validly convened annual meeting. If you have signed and returned your proxy card, your shares will be counted toward the quorum. If a quorum is not present, the chairman may adjourn the meeting, without notice other than by announcement at the meeting, until the required quorum is present. As of the record date, 46,006,182 common shares were outstanding. Thus, the presence of the holders of common shares representing at least 15,335,394 shares will be required to establish a quorum.
Q. How are abstentions and broker non-votes counted?
A. Abstentions are counted for purposes of determining whether a quorum is present at the annual meeting. A properly executed proxy card marked “withhold” with respect to the election of the director will not be voted with respect to the director indicated, although it will be counted for purposes of determining whether there is a quorum.
Broker non-votes will have no effect on the outcome of the vote on any of the proposals.
Q. Will any other business be transacted at the meeting? If so, how will my proxy be voted?
A. We do not know of any business to be transacted at the annual meeting other than those matters described in this proxy statement. The period of time specified in our Bye-laws for submitting proposals to be considered at the meeting has expired and no proposals were submitted.
Q. May I change my vote after I have mailed my signed proxy card?
A. Yes. Send a later-dated, signed proxy card to our corporate secretary at the address set forth below so that it is received prior to the vote at the annual meeting or attend the annual meeting in person and vote. Shareholders also may revoke their proxy by sending a notice of revocation to our corporate secretary, which must be received by our corporate secretary prior to the vote at the annual meeting.
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Q. Will I be able to view the proxy materials electronically?
A. Yes. To view this proxy statement and our 2021 Annual Report on Form 10-K ("Annual Report") electronically, visit
http://www.cstproxy.com/pangaeals/2022
.
Q. Where can I find the voting results of the annual meeting?
A. We intend to announce preliminary voting results at the annual meeting and will publish final results on a current report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) within four business days of the annual meeting.
Q. What is the deadline for submitting proposals to be considered for inclusion in the 2023 proxy statement and for submitting a nomination for director for consideration at the annual meeting of shareholders in 2023?
A. We expect to hold our 2023 annual meeting of shareholders on or about August 4, 2023. Shareholder proposals made in accordance with the relevant provisions of the Companies Act 1981 of Bermuda (i.e. the jurisdiction of incorporation of the Company) requested to be included in our 2023 proxy statement must be received no later than March 31, 2023. Proposals and nominations should be directed to Gianni DelSignore, Chief Financial Officer and Secretary, Pangaea Logistics Solutions Ltd., 109 Long Wharf, Newport, RI 02840.
Q. Who is paying the costs associated with soliciting proxies for the annual meeting?
A. We are soliciting proxies on behalf of our Board. This solicitation is being made by mail but also may be made by telephone or in person. Our directors, officers and employees may also solicit proxies in person, by telephone or by other electronic means. We will bear the cost of the solicitation.
We will ask banks, brokers and other institutions, nominees and fiduciaries to forward the proxy materials to their principals and to obtain their authority to execute proxies and voting instructions. We will reimburse them for their reasonable expenses.
Q. Who can help answer my questions?
A. If you have questions about the meeting or if you need additional copies of the proxy statement or the enclosed proxy card you should contact:
Gianni Del Signore
Phoenix Bulk Carriers (US) LLC
401.846.7790
gdelsignore@phoenixbulkus.com
PROPOSAL 1 - ELECTION OF CLASS II DIRECTORS
To elect the following three nominees to our Board of Directors as Class II directors serving until the annual meeting of shareholders to be held in 2025:
•
Carl Claus Boggild
•
David D. Sgro
Our Board unanimously recommends that shareholders vote “FOR" the election of two Class II director, Claus Boggild and David D. Sgro.
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PROPOSAL 2 - ELECTION OF CLASS III DIRECTOR
To elect the following nominee to our Board of Directors as Class III director serving until the annual meeting of shareholders to be held in 2023. On March 25, 2022, the Board of the Company appointed Karen H. Beachy to serve as a director on the Board, effective March 28, 2022. At the same time, the Board also appointed Ms. Beachy to serve on the Audit Committee.
•
Karen H. Beachy
Our Board of Directors consists of seven members divided into three classes. If approved at the 2022 meeting, our Board of Directors will consist of the following:
•
in Class II, to stand for reelection in 2022: Carl Claus Boggild and David D. Sgro;
•
in Class III, to stand for reelection in 2023: Richard du Moulin and Karen H. Beachy; and
•
in Class I, to stand for reelection in 2024: Eric S. Rosenfeld, Mark L. Filanowski and Anthony Laura.
Votes to withhold authority and broker non-votes are counted for purposes of determining the presence or absence of a quorum for the transaction of business, but will not affect the election outcome.
Nominee Information
Our Board believes that the nominees possess the qualities and experience that it believes our directors should possess, as described in detail below. The nominees for election to the Board, and our other continuing directors, together with their biographical information and the Board’s reasons for nominating them to serve as directors, are set forth below. No family relationship exists between any of the directors or the executive officers listed in the “Executive Officers and Executive Compensation” portion of this proxy statement.
Our Board unanimously recommends that shareholders vote “FOR" the election of Class III director, Karen H. Beachy.
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BOARD OF DIRECTORS
Members of Our Board
The following sets forth certain information concerning the persons who serve as the Company’s directors or are nominated for election:
| Name | Age | Position | ||||||||||||
| Carl Claus Boggild | 65 | Lead Independent Director | ||||||||||||
| Richard T. du Moulin | 75 | Director, Chair of the Board | ||||||||||||
| Mark L. Filanowski | 67 | Chief Operating Officer and Director | ||||||||||||
| Eric S. Rosenfeld | 65 | Director | ||||||||||||
| David D. Sgro | 46 | Director | ||||||||||||
| Anthony Laura | 70 | Director | ||||||||||||
| Karen H. Beachy | 51 | Director | ||||||||||||
Biographical information concerning the directors listed above is set forth below.
Class I Directors
Eric S. Rosenfeld.
Mr. Rosenfeld serves as a director of the Company. Eric Rosenfeld, 65, of New York, New York, U.S.A., has been the President and Chief Executive Officer of Crescendo Partners, L.P., a New York based investment firm, since its formation in November 1998. Prior to forming Crescendo Partners, he held the position of Managing Director at CIBC Oppenheimer and its predecessor company Oppenheimer & Co., Inc. for 14 years. Mr. Rosenfeld currently serves as lead independent director for Primo Water Corp, a water delivery and filtration company, and CPI Aero (Chairman Emeritus), a company engaged in the contract production of structural aircraft parts. He is also on the board at Aecon Group, Inc., a construction company, and Algoma Steel, Inc., a fully integrated producer of hot and cold rolled steel products. Mr. Rosenfeld has also served as Chairman and CEO for Arpeggio Acquisition Corporation, Rhapsody Acquisition Corporation, Trio Merger Corp, Quartet Merger Corp and Harmony Merger Corp., all blank check corporations that later merged with Hill International, Primoris Services Corporation, SAExploration Holdings, Pangaea Logistics Solutions Ltd and NextDecade Corporation respectively. Mr. Rosenfeld is also the Chief SPAC Officer of Legato Merger Corp II., a blank check corporation. Mr. Rosenfeld has also served as the Chief SPAC Officer of Legato Merger Corp, a blank check corporation that later merged with Algoma Steel, Inc. Mr. Rosenfeld is also currently the CEO of Allegro Merger Corp, a non-listed shell company. He was also a director of Canaccord Genuity Group, a full-service financial services company, NextDecade Corporation, a development stage company building natural gas liquefaction plants, Absolute Software Corp., a leader in firmware-embedded endpoint security and management for computers and ultraportable devices, AD OPT Technologies, an airline crew planning service, Sierra Systems Group Inc., an information technology, management consulting and systems integration firm, Emergis Inc., an electronic commerce company, Hill International, a construction management firm, Matrikon Inc. a company that provides industrial intelligence solutions, DALSA Corp., a digital imaging and semiconductor firm, HIP Interactive, a video game company, GEAC Computer, a software company, Computer Horizons Corp. (Chairman), an IT services company, Pivotal Corp, a cloud software firm, Call-Net Enterprises, a telecommunication firm Primoris Services Corporation, a specialty construction company, and SAExploration Holdings, a seismic exploration company.
Mr. Rosenfeld is a regular guest lecturer at Columbia Business School and has served on numerous panels at Queen’s University Business Law School Symposia, McGill Law School, the World Presidents’ Organization, and the Value Investing Congress. He is a senior faculty member at the Director’s College. He is a guest lecturer at Tulane Law School. He has also been a regular guest host on CNBC. Mr. Rosenfeld received an A.B. in economics from Brown University and an M.B.A. from the Harvard Business School. The board nominated Mr. Rosenfeld to be a director because he has extensive experience serving on the boards of multinational public companies and in capital markets and mergers and acquisitions transactions. Mr. Rosenfeld also has valuable experience in the operation of a worldwide business faced with a myriad of international business issues. Mr. Rosenfeld’s leadership and consensus-building skills, together with his experience as senior independent director of all boards on which he currently serves, make him an effective board member.
Mark L. Filanowski.
Mr. Mr. Filanowski was appointed to the position of Chief Executive Officer of the Company in December 2021. He served as Pangaea’s Chief Operating Officer from 2016 until his appointment as CEO, was a consultant to the Company from 2014 to 2016, and he has been a board member of the Company since 2014. Mr. Filanowski formed Intrepid Shipping LLC with another board member, Richard du Moulin, in 2002. From 1989 to 2002, he served as Chief Financial
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Officer and Senior Vice President at Marine Transport Corporation. Mr. Filanowski was Vice President and Controller at Armtek Corporation from 1984 to 1988. Mr. Filanowski started his career at Ernst & Young and worked as a Certified Public Accountant at EY from 1976 to 1984. He has served as the Chairman of the Board at Arvak and at Shoreline Mutual (Bermuda) Ltd., both marine insurance companies. He earned a BS from the University of Connecticut and an MBA from New York University. Mr. Filanowski’s experience in many aspects of the shipping industry, his participation as a director on other independent company boards, and his financial background, qualifications, and experience, make him a valuable part of the Company’s board.
Anthony Laura.
Mr. Laura is a founder of Pangaea and served as its Chief Financial Officer from the Company's inception until his retirement in April 2017. Prior to co-founding Bulk Partners Ltd., the predecessor to Pangaea, in 1996, Mr. Laura spent 10 years as CFO of Commodity Ocean Transport Corporation (COTCO). Mr. Laura also served as Chief Financial Officer at Navinvest Marine Services from 1986 to 2002. Mr. Laura is a graduate of Fordham University.
Class II Directors
Carl Claus Boggild.
Mr. Boggild is a founder of Pangaea and served as its President (Brazil) from the Company's inception until his retirement in 2016. Prior to co-founding Bulk Partners Ltd., the predecessor company to Pangaea, in 1996, Mr. Boggild was Director of Chartering and Operations at the Korf Group of Germany. He also was a partner at Trasafra Ltd., a Brazilian agent for the largest independent grain parcel operator from Argentina and Brazil to Europe. He worked for Hudson Trading and Chartering where he was responsible for Brazilian related transportation services. As President of COTCO, he was responsible for the operations of its affiliate Handy Bulk Carriers Corporation. Prior to becoming President of COTCO, Mr. Boggild was an Executive Vice President and was responsible for its Latin American operations. Mr. Boggild holds a diploma in International Maritime Law. Mr. Boggild’s qualifications to sit on our board include his operational experience and deep knowledge of the shipping industry.
David D. Sgro
. David D. Sgro serves as a director and audit committee chairman of the Company. Mr. Sgro served as Quartet’s chief financial officer, secretary and a member of its Board of Directors. He has been the Head of Research of Jamarant Capital Mgmt. since its inception in 2015. Mr. Sgro was a Senior Managing Director of Crescendo from December 2013 until December 2021 and held various positions with Crescendo beginning in May 2005. Mr. Sgro presently serves or has served on the board of directors of Algoma Steel, Legato Merger Corp., Legato Merger Corp. II, Allegro Merger Corp., NextDecade Corporation, Trio Merger Corp, Primoris Services, Bridgewater Systems, Inc., SAExploration Holdings, Harmony Merger Corp., Imvescor Restaurant Group, Hill Intl., BSM Technologies and COM DEV International Ltd. Mr. Sgro attended Columbia Business School and prior to that, Mr. Sgro worked as an analyst and then senior analyst at Management Planning, Inc., a firm engaged in the valuation of privately held companies. Simultaneously, Mr. Sgro worked as an associate with MPI Securities, Management Planning, Inc.’s boutique investment banking affiliate. From June 2004 to August 2004, Mr. Sgro worked as an analyst intern at Brandes Investment Partners. Mr. Sgro received a B.S. in Finance from The College of New Jersey and an M.B.A. from Columbia Business School. In 2001, he became a Chartered Financial Analyst (CFA®) Charterholder. Mr. Sgro is a adjunct professor at the College of New Jersey and a regular guest lecturer at Columbia Business School.
Class III Directors
Richard T. du Moulin
. Richard du Moulin serves a director and chair of the Board of the Company. He was the President of Intrepid Shipping LLC, a position he has held since he founded Intrepid in 2002. Intrepid Shipping sold its last owned vessel in January 2022. From 1974, he spent 15 years with OMI Corporation, where he served as Executive Vice President, Chief Operating Officer, and as a member of the company's Board of Directors. From 1998 to 2002, Mr. du Moulin served as Chairman and Chief Executive Officer of Marine Transport Corporation. From 1989 to 1998, Mr. du Moulin served as Chairman and CEO of Marine Transport Lines. Mr. du Moulin is a member of the Board Trustees of the Seamens Church Institute of New York and New Jersey. He currently serves as a Director of Teekay Tankers and an advisor to Hudson Structured Capital Management. Mr. du Moulin served as Chairman of Intertanko, the leading trade organization for the tanker industry, from 1996 to 1999. Mr. du Moulin served in the US Navy and is a recipient of the US Coast Guard's Distinguished Service Medal. He received a BA from Dartmouth College and an MBA from Harvard University. Mr. du Moulin’s qualifications to sit on our board include his operational experience and deep knowledge of the shipping industry.
Karen H. Beachy
Ms. Beachy serves as a director of Oceaneering International (NYSE: OII), a global provider of engineered services and products for the offshore energy, defense, aerospace, and entertainment industries. Ms. Beachy founded her strategic consulting firm, Think B3 Consulting, in January 2021 and joined The Alliance Risk Group in January 2022. The Alliance Risk Group is
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comprised of senior, experienced energy professionals that help energy leaders develop and enhance their integrated risk management and smart, clean resilient grid solutions. Prior to starting her consulting firm, Ms. Beachy served as the Senior Vice President of Growth and Strategy at Black Hills Corporation, an investor-owned electric and gas utility in the Midwest, where she was responsible for corporate planning, business development, process improvement, enterprise data and analytics, natural gas retail marketing, products and services, energy innovation and asset optimization. Ms. Beachy began her tenure at Black Hills in Rapid City, South Dakota in 2014 as the Director of Supply Chain and was promoted to Vice President of Supply Chain in 2016. She was responsible for sourcing, procurement, fleet, and materials management. Ms. Beachy worked at Vectren (now CenterPoint Energy) Corporation, an electric and gas utility in Indiana and Ohio, from 2010 to 2014 where Ms. Beachy led the gas operations division in Ohio and worked in supply chain. From 1995 to 2008, Ms. Beachy worked at Louisville Gas and Electric/Kentucky Utilities, an electric and gas utility in Kentucky and Western Virginia, where she held several positions in corporate development, products and services, electric operations, and supplier diversity. In 2007, Ms. Beachy completed an expatriate assignment in Germany with E.ON, a European electric utility, where she served as a project manager in the global liquified natural gas procurement group. Throughout her career, Ms. Beachy has served on several non-profit Boards with a focus on supporting and growing young people and entrepreneurs in the communities where she lived and worked. Ms. Beachy holds a bachelor’s degree in political science and a master’s degree in management from Purdue University.
Director Skills and Experience
The matrix below provides a summary of certain key skills and experience of our Directors. Our Directors, individually and as a group, possess numerous skills and experience that are highly relevant for an upstream shipping company like Pangaea. Our Directors are strategic thinkers with high expectations for the Company’s performance and are attuned to the demands of proper Board oversight and good governance practices.
| Directors | Eric S. Rosenfeld | Mark L. Filanowski | Anthony Laura | Carl Claus Boggild | David D. Sgro | Richard T. du Moulin | Karen H. Beachy | ||||||||||||||||
| Key Skills and Experience | |||||||||||||||||||||||
| Public Board of Directors Experience | l | l | l | l | l | ||||||||||||||||||
| Shipping Industry Experience/Supply Chain Management | l | l | l | l | l | ||||||||||||||||||
|
CEO/
Senior Executive
|
l | l | l | l | l | l | l | ||||||||||||||||
| Strategic Planning/Investment and M&A | l | l | l | l | l | l | l | ||||||||||||||||
| Human Capital Management | l | l | l | l | l | l | l | ||||||||||||||||
| Finance/Capital Allocation | l | l | l | l | l | l | l | ||||||||||||||||
| Financial Literacy/Accounting | l | l | l | l | l | l | l | ||||||||||||||||
| Regulatory/Policy Matters | l | l | l | l | |||||||||||||||||||
Director Independence
The Board of Directors affirmatively determined that the following Directors, including each Director serving on the Audit Committee, the Compensation Committee and the Nominating and Governance Committee, satisfy the independence requirements of Rule 5605(a)(2) of Nasdaq’s listing standards: Eric S. Rosenfeld, Anthony Laura, Carl Claus Boggild, David D. Sgro, Richard T. du Moulin and Karen H. Beachy. The Board of Directors also determined that all members of the Audit Committee, Compensation Committee and Nominating and Governance Committee are independent under applicable Nasdaq and SEC rules for committee members.
There is no family relationship between any of the Director nominees or executive officers of the Company.
Director Terms
The Directors serve until the next Annual Meeting of Shareholders or until their office shall otherwise be vacated pursuant to our Bye-laws.
Meetings and Committees of the Board of Directors
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During the period January 1, 2021 through December 31, 2021, Pangaea's Board held eight meetings. We expect our directors to attend all Board and any meetings of committees of the Board of which they are members and to spend the time needed and meet as frequently as necessary to properly discharge their responsibilities. All of our current directors attended eight meetings of the Board and meetings of committees of the Board of which he/she was a member in fiscal year 2021. Karen H. Beachy was appointed to serve as director on the Company's board effective March 28, 2022. Although we do not have a formal policy regarding director attendance at shareholder meetings, we will attempt to schedule our meetings so that all of our directors can attend.
The Board of Directors has a standing Audit Committee, Compensation Committee and Nominating and Governance Committee, the respective members and functions of which are described below. Current charters describing the nature and scope of the responsibilities of each of the Audit Committee, Compensation Committee and Nominating and Governance Committee are posted on our website at www.pangaeals.com under the headings “Investors-board-committee-charters” and are available in print upon request to Pangaea Logistics Solutions Ltd., 109 Long Wharf, Newport, Rhode Island 02840.
Audit Committee Information
The Company’s Audit Committee is comprised of David Sgro, Anthony Laura and Karen H. Beachy, each of whom qualifies as independent under the applicable Nasdaq listing requirements and SEC rules.
The Board of Directors has determined that David Sgro is an audit committee “financial expert” as such term is defined in applicable SEC rules, and that he has the requisite financial management expertise within the meaning of Nasdaq rules and regulations. The Audit Committee is responsible for, among other duties, appointing and overseeing the work of, and relationship with, the independent auditors, including reviewing their formal written statement describing the Company’s internal quality-control procedures and any material issues raised by the internal quality-control review or peer review of the Company or any inquiry or investigation by governmental or professional authorities and their formal written statement regarding auditor independence; reading and discussing with management and the independent auditors the annual audited financial statements and quarterly financial statements, and preparing annually a report to be included in the Company’s proxy statement; providing oversight of the Company’s accounting and financial reporting principles, policies, controls, procedures and practices; and discussing with management polices with respect to risk assessment and risk management. In addition, the Board of Directors has tasked the Audit Committee with reviewing transactions with related parties.
Compensation Committee Information and Compensation Committee Interlocks and Insider Participation
The Company’s Compensation Committee is comprised of independent directors Richard du Moulin, Eric Rosenfeld and David Sgro, each of whom qualifies as independent under the applicable Nasdaq listing requirements and SEC rules. The Compensation Committee reviews and approves compensation paid to the Company’s officers and directors and administers the Company’s incentive compensation plans, including authority to make and modify awards under such plans.
None of the members of the Compensation Committee was, or has ever been, an officer or employee of the Company or any of its subsidiaries. The Company had no compensation committee interlocks for the fiscal year ended December 31, 2021.
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Nominating and Corporate Governance Committee
The Company’s Nominating and Governance Committee is comprised of Richard du Moulin, Eric Rosenfeld and Carl Claus Boggild, each of whom qualifies as independent under the applicable Nasdaq listing requirements and SEC rules.
The Nominating and Governance Committee, among other duties, assists the Board of Directors in identifying and evaluating qualified individuals to become members of the Board of Directors, and proposing nominees for election to the Board of Directors and to fill vacancies; considers nominees duly recommended by shareholders for election to the Board of Directors; and evaluates annually the independence of each member of the Board of Directors under applicable Nasdaq listing requirements and SEC rules.
Guidelines for Selecting Director Nominees
The guidelines for selecting nominees, which are specified in our Nominating Committee Charter, generally provide that persons to be nominated:
•
should have demonstrated notable or significant achievements in business, education or public service;
•
should possess the requisite intelligence, education and experience to make a significant contribution to the Board of Directors and bring a range of skills, diverse perspectives and backgrounds to its deliberations; and
•
should have the highest ethical standards, a strong sense of professionalism and intense dedication to serving the interests of our shareholders.
Our Nominating and Corporate Governance Committee considers many factors when determining the eligibility of candidates for nomination to the Board. In the event of a vacancy, the Committee’s goal is to nominate candidates from a broad range of experiences and backgrounds who can contribute to the Board’s overall effectiveness in meeting its mission. In considering candidates, the Board seeks talents, skills, diversity, and expertise to serve the long-term interests of the Company and our stockholders.
There have been no material changes to the procedures by which security holders may recommend nominees to our board of directors. The Nominating and Corporate Committee Charter is available on the Company's website at www.pangaeals.com/investors/board-committee-charters.
Board Leadership Structure and Role in Risk Oversight
Senior management is responsible for assessing and managing the Company’s various exposures to risk on a day-to-day basis, including the creation of appropriate risk management programs and policies. The Company has developed a consistent, systemic and integrated approach to risk management to help determine how best to identify, manage and mitigate significant risks throughout the Company.
The Board of Directors is responsible for overseeing management in the execution of its responsibilities, including assessing the Company’s approach to risk management. The Board of Directors exercises these responsibilities periodically as part of its meetings and also through three of its committees, each of which examines various components of enterprise risk as part of its responsibilities. The Audit Committee has primary responsibility for addressing risks relating to financial matters, particularly financial reporting, accounting practices and policies, disclosure controls and procedures and internal control over financial reporting. The Compensation Committee has primary responsibility for risks and exposures associated with the Company’s compensation policies, plans and practices, regarding both executive compensation and the compensation structure generally, including whether it provides appropriate incentives that do not encourage excessive risk taking. The Nominating and Governance Committee oversees risks associated with the independence of the Board of Directors and succession planning.
An overall review of risk is inherent in the Board of Directors’ evaluation of the Company’s long-term strategies and other matters presented to the Board of Directors. The Board of Directors’ role in risk oversight of the Company is consistent with the Company’s leadership structure; the Chief Executive Officer and other members of senior management are responsible for assessing and managing the Company’s risk exposure, and the Board of Directors and its committees provide oversight in connection with those efforts.
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REPORT OF THE AUDIT COMMITTEE
To the Shareholders of Pangaea Logistics Solutions Ltd.:
The Audit Committee oversees the Company’s financial reporting process on behalf of the Board of Directors. The Company’s management has the primary responsibility for the financial statements, for maintaining effective internal control over financial reporting, and for assessing the effectiveness of internal control over financial reporting. In fulfilling its oversight responsibilities, the Committee reviewed and discussed the audited consolidated financial statements and the related schedules included in the Annual Report on Form 10-K with Company management, including a discussion of the quality, not just the acceptability, of the accounting principles; the reasonableness of significant judgments; and, the clarity of disclosures in the financial statements.
The Committee is responsible for the appointment, compensation and oversight of the independent registered public accounting firm employed by the Company, Grant Thornton LLP. The Committee reviewed with Grant Thornton LLP, which is responsible for expressing an opinion on the conformity of those audited consolidated financial statements with U.S. generally accepted accounting principles, its judgments as to the quality, not just the acceptability, of the Company’s accounting principles and such other matters as are required to be discussed with the Committee by the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), including PCAOB Interim Auditing Standard AU Section 380, Communication with Audit Committees, the rules of the Securities and Exchange Commission, and other applicable regulations. In addition, the Committee has discussed with Grant Thornton LLP the firm’s independence from Company management and the Company, including the matters in the letter from the firm required by PCAOB Rule 3526, Communication with Audit Committees Concerning Independence, and considered the compatibility of non-audit services with Grant Thornton LLP’s independence.
The Committee also reviewed and discussed, together with management and Grant Thornton LLP, the Company’s audited consolidated financial statements for the year ended December 31, 2021 and the results of management’s assessment of the effectiveness of the Company’s internal control over financial reporting.
The Committee discussed with Grant Thornton LLP the overall scope and plans for their respective audits. The Committee meets with Grant Thornton LLP with and without management present, to discuss the results of their examinations; their evaluations of the Company’s internal control, including internal control over financial reporting; and the overall quality of the Company’s financial reporting.
In reliance on the reviews and discussions referred to above, the Committee recommended to the Board of Directors, and the Board approved, that the audited consolidated financial statements and related schedules and management’s assessment of the effectiveness of the Company’s internal control over financial reporting be incorporated by reference in the Annual Report on Form 10-K for the year ended December 31, 2021 filed by the Company with the Securities and Exchange Commission on March 16, 2022.
The Committee is governed by a charter, a copy of which is available on the Company's website: http://www.pangaeals.com. The Committee held four meetings during the period from January 1, 2021 through December 31, 2021. The Committee is comprised solely of independent directors as defined by the NASDAQ listing standards and Rule 10A-3 of the Securities Exchange Act of 1934, and includes one financial expert, as described in Section 407 of the Sarbanes-Oxley Act.
David Sgro, Audit Committee Chair
Anthony Laura, Audit Committee Member
Karen H. Beachy, Audit Committee Member
June 22, 2022
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Fees to Independent Registered Public Accounting Firm
The following table shows the fees billed to us or accrued by us for the audit and other services provided by Grant Thornton LLP for 2021 and 2020:
| 2021 | 2020 | |||||||||||||
|
Audit Fees
(1)
|
$ | 804,648 | $ | 551,100 | ||||||||||
(1)
Audit fees consist primarily of the audit and quarterly reviews of the consolidated financial statements, reviews of subsidiaries, consents, and assistance with and review of documents filed with the SEC.
Pre-Approval Policy for Services Performed by Independent Auditor
The Audit Committee has responsibility for the appointment, compensation and oversight of the work of the independent auditor. As part of this responsibility, the Audit Committee must pre-approve all permissible services to be performed by the independent auditor.
The Audit Committee has adopted an auditor pre-approval policy which sets forth the procedures and conditions pursuant to which pre-approval may be given for services performed by the independent auditor. Under the policy, the Committee must give prior approval for any amount or type of service within four categories: audit, audit-related, tax services or, to the extent permitted by law, other services that the independent auditor provides. Prior to the annual engagement, the Audit Committee may grant general pre-approval for independent auditor services within these four categories at maximum pre-approved fee levels. During the year, circumstances may arise when it may become necessary to engage the independent auditor for additional services not contemplated in the original pre-approval and, in those instances, such service will require separate
pre-approval by the Audit Committee if it is to be provided by the independent auditor. For any pre-approval, the Audit Committee will consider whether such services are consistent with the SEC’s rules on auditor independence, whether the auditor is best positioned to provide the most cost effective and efficient service and whether the service might enhance the Company’s ability to manage or control risk or improve audit quality. The Audit Committee has delegated to its Chairman authority to approve a request for pre-approval provided that the same is submitted to the Audit Committee for ratification at its next scheduled meeting.
All non-audit services were reviewed with the Audit Committee or the Chairman, which concluded that the provision of such services by Grant Thornton LLP were compatible with the maintenance of such firm's independence in the conduct of their respective auditing functions.
Attendance of Independent Registered Public Accounting Firm at the 2022 Annual Meeting of Shareholders
There will not be a representative of Grant Thornton LLP in attendance at the 2022 annual meeting of shareholders.
PROPOSAL 3 -
TO APPROVE THE AMENDMENT OF THE PANGAEA LOGISTICS SOLUTIONS LTD. 2014 SHARE INCENTIVE PLAN (AS AMENDED AND RESTATED BY THE BOARD OF DIRECTORS ON MAY 6, 2022), THE "2022 AMENDED PLAN"
The Company’s Board of Directors is seeking shareholder approval of the Pangaea Logistics Solutions Ltd. 2014 Share Incentive Plan (the "2022 Amended Plan"), which amends and restates our 2014 Equity Incentive Plan (the “2014 Plan”). The Board of Directors adopted the amendment and restatement of the 2014 Plan on May 6, 2022, subject to shareholder approval at the Annual Meeting. If approved by our shareholders, the amendment and restatement of the 2014 Plan will do the following:
• Increase the share reserved under the 2014 Plan by an additional 1,700,000 shares.
Rationale for Approval
The 2014 Plan was originally adopted by our Board of Directors in April 2014. On August 12, 2019, our shareholders approved an amendment and restatement of the 2014 Plan as adopted by our Board of Directors on May 14, 2019. The purpose of the Plan is to provide officers, directors, employees and consultants of the Company and its subsidiaries whose initiative and efforts
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are deemed important to the successful conduct of the Company’s business with incentives to enter into and remain in the service of the Company and its subsidiaries, to acquire a proprietary interest in the success of the Company, to maximize their performance and to enhance the long-term performance of the Company.
The Board of Directors believes that the effective use of stock-based, long-term incentive compensation has been integral to the Company’s success in the past and is vital to its ability to achieve strong performance in the future. The 2014 Plan is the only plan pursuant to which we can grant such equity awards, and the limited number of shares remaining available under the 2014 Plan restricts our ability to continue to grant future equity awards. As of June 22, 2022, approximately 50,737 shares remained available for future awards under the 2014 Plan. Our average annual shares issued for the past five years is approximately 498,796 shares. Our Board of Directors does not believe that the number of shares of our common stock remaining available for issuance under the 2014 Plan is sufficient to accomplish the aforementioned purposes of our long-term incentive compensation. The amendment and restatement of the 2014 Plan thus will add 1,700,000 shares to the 2014 Plan’s share reserve, by increasing the maximum number of shares available for issuance from 50,737 shares to 1,750,737 shares. A total of 4,449,263 have been granted to non-employee directors and employees since inception of the plan.
Summary of the 2014 Plan as Amended and Restated
The following is a summary of the material terms of the 2014 Plan as amended by the third amendment and restatement. This summary is qualified in its entirety by the full text of the 2014 Plan as amended. A copy of the Third Amended and Restated 2014 Equity Incentive Plan is attached to this proxy statement as Appendix A and is incorporated herein by reference. Shareholders are encouraged to review the Third Amended and Restated 2014 Equity Incentive Plan.
The 2022 Amended Plan will become effective only if it is approved by the Company’s shareholders. In the event that the 2022 Amended Plan is not approved by the Company’s shareholders,
| (i) | the Amended Plan (which has previously been approved by our shareholders) will continue in full force in accordance with its terms as in effect immediately prior to the adoption of the latest amendment by the Board, | ||||
| (ii) | the Company may continue to grant awards under the Amended Plan in accordance with its terms and conditions | ||||
Plan Administration
. The 2022 Amended Plan is administered by the Board or such other committee consisting of two or more individuals appointed by the Board to administer the 2022 Amended Plan (the “
Committee
”). The Committee has the authority, among other things, to select participants, determine types of awards and terms and conditions of awards for participants, prescribe rules and regulations for the administration of the 2022 Amended Plan and make all decisions and determinations as deemed necessary or advisable for the administration of the 2022 Amended Plan. The Committee may delegate certain of its authority as it deems appropriate, pursuant to the terms of the 2022 Amended Plan, to officers or employees of the Company or its affiliates. The Committee’s actions will be final, conclusive and binding.
Authorized Shares
. A total of 6,200,000 common shares are reserved and available for delivery under the 2022 Amended Plan. The number of common shares reserved and available for delivery under the 2022 Amended Plan is subject to adjustment, as described below. The maximum number of common shares reserved and available for delivery under the 2022 Amended Plan may be issued in respect of incentive stock options. Common shares issued under the 2022 Amended Plan may consist of authorized but unissued common shares or previously issued common shares. Common shares underlying awards that are settled in cash, canceled, forfeited, or otherwise terminated without delivery to a participant will again be available for issuance under the 2022 Amended Plan. Common shares withheld or surrendered in connection with the payment of an exercise price of an award or to satisfy tax withholding will again become available for issuance under the 2022 Amended Plan.
Individual Limits
. The maximum value of awards that may be granted to any non-employee directors of the Company in any one calendar year will not exceed $150,000 (calculating the value of any award based in shares on the grant date fair value of such awards for financial reporting purposes and excluding, for this purpose, the value of any dividend equivalent payment paid pursuant to any award granted in a previous year. Previously, the limitation was 10,000 shares.
During any time that the Company is subject to Section 162(m) of the Code, the maximum number of shares of common stock subject to options, share appreciation rights or performance awards, in each case, that may be granted to any individual in any one calendar year may not exceed 200,000 common shares. Similarly, the maximum value of a performance award that is valued in dollars and that is intended to qualify as performance-based compensation under Section 162(m) of the Code that may be granted to any individual in any one year may not exceed $1,000,000.
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Types of Awards
. The types of awards that may be available under the 2022 Amended Plan are described below. All of the awards described below will be subject to the terms and conditions determined by the Committee in its sole discretion, subject to certain limitations provided in the 2022 Amended Plan. Each award granted under the 2022 Amended Plan will be evidenced by an award agreement, which will govern that award’s terms and conditions.
Non-qualified Stock Options
. A non-qualified stock option is an option that is not intended to meet the qualifications of an incentive stock option, as described below. An award of a non-qualified stock option grants a participant the right to purchase a certain number of our common shares during a specified term in the future, or upon the achievement of performance or other conditions, at an exercise price set by the Committee on the grant date. The term of a non-qualified stock option will be set by the Committee but may not exceed 10 years from the grant date. The exercise price may be paid using cash, or by certified or bank cashier’s check, and if approved by the Committee (i) by delivery of common shares previously owned by the participant, (ii) by a broker-assisted, cashless exercise in accordance with procedures approved by the Committee, or (iii) by any other means approved by the Committee.
Incentive Stock Options
. An incentive stock option is an option that meets the requirements of Section 422 of the Code. Incentive stock options may be granted only to our employees or employees of certain of our subsidiaries and must have an exercise price of no less than 100% of the fair market value (or 110% with respect to a ten-percent shareholder) of a common share on the grant date and a term of no more than 10 years (or 5 years with respect to a ten-percent shareholder).
Share Appreciation Rights
. A share appreciation right entitles the participant to receive an amount equal to the difference between the fair market value of our common shares on the exercise date and the base price of the share appreciation right that is set by the Committee on the grant date, multiplied by the number of shares subject to the share appreciation right. The term of a share appreciation right will be set by the Committee but may not exceed 10 years from the grant date. Payment to a participant upon the exercise of a share appreciation right may be either in cash, common shares, or specified property as determined by the Committee.
Restricted Shares.
A restricted share award is an award of restricted common shares that does not vest until a specified period of time has elapsed, and/or upon the achievement of performance or other conditions determined by the Committee, and which will be forfeited if the conditions to vesting are not met. During the period that any restrictions apply, transfer of the restricted common shares is generally prohibited. Unless otherwise specified in their award agreement, participants generally have all of the rights of a shareholder as to the restricted common shares, including the right to vote such shares, provided, that any cash or share dividends with respect to the restricted common shares will be withheld by the Company and will be subject to forfeiture to the same degree as the restricted common shares to which such dividends relate.
Restricted Share Units
. A restricted share unit is an unfunded and unsecured obligation to issue a common share (or an equivalent cash amount) to the participant in the future. Restricted share units become payable on terms and conditions determined by the Committee and will vest and be settled at such times in cash, common shares, or other specified property, as determined by the Committee.
Other Share-Based or Cash-Based Awards
. Under the 2022 Amended Plan, the Committee may grant other types of equity-based or cash-based awards subject to such terms and conditions that the Committee may determine. Such awards may include the grant of dividend equivalents, which generally entitle the participant to receive amounts equal to the dividends that are paid on the shares underlying the award. The Committee may also grant common shares as a bonus, and may grant other awards in lieu of obligations of the Company or its affiliates to pay cash or deliver other property under the 2022 Amended Plan or under other plans or compensatory arrangements, subject to such terms and conditions as the Committee may determine.
Performance Awards
. A performance award is an award of common shares or units subject (in whole or in part) to the achievement of pre-determined performance objectives specified by the Committee. Earned performance awards may be settled in cash, common shares, or other awards (or in a combination thereof), at the discretion of the Committee. The Committee will be responsible for setting the applicable performance objectives, which will be limited to specific levels of or increases in one or more of the following business criteria: (i) earnings, including net earnings, total earnings, operating earnings, earnings growth, operating income, earnings before or after taxes, earnings before or after interest, depreciation, amortization, or extraordinary or special items or book value per share (which may exclude nonrecurring items); (ii) pre-tax income or after-tax income; (iii) earnings per share (basic or diluted); (iv) operating profit; (v) revenue, revenue growth, or rate of revenue growth; (vi) return on assets (gross or net), return on investment, return on capital, return on equity, financial return ratios, or internal rates of return; (vii) returns on sales or revenues; (viii) operating expenses; (ix) share price appreciation; (x) cash flow (including, but not limited to, operating cash flow and free cash flow), cash flow return on investment (discounted or otherwise), net cash provided by operations or cash flow in excess of cost of capital, working capital turnover; (xi) implementation or completion of critical projects or processes; (xii) economic value created; (xiii) balance sheet
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measurements (including, but not limited to, receivable turnover); (xiv) cumulative earnings per share growth; (xv) operating margin, profit margin, or gross margin; (xvi) share price or total shareholder return; (xvii) cost or expense targets, reductions and savings, productivity and efficiencies; (xviii) sales or sales growth; (xix) strategic business criteria, consisting of one or more objectives based on meeting specified market penetration, market share, geographic business expansion, customer satisfaction, employee satisfaction, human resources management, supervision of litigation, information technology, and goals relating to acquisitions, divestitures, joint ventures, and similar transactions, and budget comparisons; and (xx) personal professional objectives, including any of the foregoing performance goals, the implementation of policies and plans, the negotiation of transactions, the development of long term business goals, the formation of joint ventures, research or development collaborations, and the completion of other corporate transactions.
Performance objectives may be described in terms of Company-wide objectives or objectives that are related to the performance of an individual participant, a specific division, department or function of the Company or one of its subsidiaries or affiliates. Performance objectives may be expressed in absolute terms or on a relative basis. Relative performance may be measured by a comparison to a group of peer companies or to a financial market index. The Committee may adjust any performance objective and the related minimum acceptable level of achievement if, in the sole judgment of the Committee, events or transactions have occurred after the award’s grant date that are unrelated to the performance of the Company or the participant and result in a distortion of the performance objectives or the related minimum acceptable level of achievement. However, in no event will any adjustment be made if the performance award is intended to qualify for the performance-based compensation exception under Section 162(m) and such adjustment would cause the award to fail to so qualify.
Adjustments
. The aggregate number of common shares reserved and available for delivery under the 2022 Amended Plan, the individual limitations, the number of common shares covered by each outstanding award, and the price per common share underlying each outstanding award will be equitably and proportionally adjusted or substituted, as determined by the Committee, as to the number, price or kind of share or other consideration subject to such awards in connection with share dividends, extraordinary cash dividends, share splits, reverse share splits, recapitalizations, reorganizations, mergers, amalgamations, consolidations, combinations, exchanges, or other relevant changes in our capitalization affecting our common shares or our capital structure, or in the event of any change in applicable law or circumstances that results in or could result in, as determined by the Committee in its sole discretion, any substantial dilution or enlargement of the rights intended to be granted to, or available for, participants in the 2022 Amended Plan.
Corporate Events
. In the event of a merger, amalgamation, or consolidation involving the Company in which the Company is not the surviving corporation or in which the Company is the surviving corporation but the holders of its common shares receive securities of another corporation or other property or cash, a “change in control” (as defined in the 2022 Amended Plan), or a reorganization, dissolution, or liquidation of the Company, the Committee may, in its discretion, provide for the assumption or substitution of outstanding awards, accelerate the vesting of outstanding awards, cash-out outstanding awards, or replace outstanding awards with a cash incentive program that preserves the value of the awards so replaced.
Transferability
. Awards under the 2022 Amended Plan may not be sold, transferred, pledged, or assigned other than by the will or by the applicable laws of descent and distribution, unless (for awards other than incentive stock options) otherwise provided in an award agreement or determined by the Committee.
Amendment
. The Board or the Committee may amend the 2022 Amended Plan or outstanding awards at any time. The Company’s shareholders must approve any amendment if their approval is required pursuant to applicable law or the applicable rules of each national securities exchange on which the Company’s common shares are traded. No amendment to the 2022 Amended Plan or outstanding awards which materially impairs the right of a participant is permitted unless the participant consents in writing. Shareholder approval will be required for any amendment that reduces the exercise price or base price of any outstanding award or that would be treated as a repricing under generally accepted accounting principles. Shareholder approval will also be required for the repurchase for cash or cancellation of an award at a time when its exercise price or base price, as applicable, exceeds the fair market value of a common share on the date of such repurchase or cancellation.
Termination
. The 2022 Amended Plan will terminate on the day before the tenth anniversary of the 2022 Amended Plan’s effective date. In addition, the Board or the Committee may suspend or terminate the 2022 Amended Plan at any time. Following any such suspension or termination, the 2022 Amended Plan will remain in effect to govern any then outstanding awards until such awards are forfeited, terminated or otherwise canceled or earned, exercised, settled or otherwise paid out, in accordance with their terms.
Clawback
. All awards under the 2022 Amended Plan will be subject to any incentive compensation clawback or recoupment policy currently in effect, or as may be adopted by our board of directors or any committee thereof from time to time.
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Certain U.S. Federal Income Tax Consequences
The following is a brief discussion of the U.S. federal income tax consequences for stock options granted under the 2022 Amended Plan. The 2022 Amended Plan is not subject to the requirements of the Employee Retirement Income Security Act of 1974, as amended, and it is not, nor is it intended to be, qualified under Section 401(a) of the Code. This discussion is based on current law, is not intended to constitute tax advice, and does not address all aspects of U.S. federal income taxation that may be relevant to a particular participant in light of his or her personal circumstances and does not describe foreign, state, or local tax consequences, which may be substantially different. Holders of stock options under the 2022 Amended Plan are encouraged to consult with their own tax advisors.
Non-Qualified Stock Options.
With respect to non-qualified stock options, (i) no income is realized by a participant at the time the stock option is granted; (ii) generally, at exercise, ordinary income is realized by the participant in an amount equal to the difference between the exercise price paid for the shares and the fair market value of the shares on the date of exercise; and (iii) upon a subsequent sale of the stock received on exercise, appreciation (or depreciation) after the date of exercise is treated as either short-term or long-term capital gain (or loss) depending on how long the shares have been held, and no deduction will be allowed to such participant’s employer.
Incentive Stock Options.
No income is realized by a participant upon the grant or exercise of an incentive stock option, however, such participant will generally be required to include the excess of the fair market value of the shares at exercise over the exercise price in his or her alternative minimum taxable income. If shares are issued to a participant pursuant to the exercise of an incentive stock option, and if no disqualifying disposition of such shares is made by such participant within two years after the date of grant or within one year after the transfer of such shares to such participant, then upon sale of such shares, any amount realized in excess of the exercise price will be taxed to such participant as a long-term capital gain, and any loss sustained will be a long-term capital loss.
If shares acquired upon the exercise of an incentive stock option are disposed of prior to the expiration of either holding period described above, generally the participant will realize ordinary income in the year of disposition in an amount equal to the excess (if any) of the fair market value of such shares at exercise (or, if less, the amount realized on the disposition of such shares) over the exercise price paid for such shares. Any further gain (or loss) realized by the participant will be taxed as short-term or long-term capital gain (or loss), as the case may be, and will not result in any deduction by the employer.
Subject to certain exceptions for disability or death, if an incentive stock option is exercised more than three months following termination of employment, the exercise of the stock option will generally be taxed as the exercise of a non-qualified stock option.
New Plan Benefits
Because awards to be granted in the future under the 2022 Amended Plan are at the discretion of the Committee and/or the Board (including awards to non-employee directors of the Company), it is not possible to determine the benefits or the amounts received or that will be received under the 2022 Amended Plan by eligible participants.
Equity Compensation Plan Information
The following table provides information as of June 22, 2022 with respect to compensation plans under which shares of the Company are authorized for issuance.
|
Plan Category
|
(a) Number of securities to be issued upon exercise of outstanding options, warrants, and rights
|
(b) Weighted-average exercise price of outstanding options, warrants, and rights
|
(c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
|
||||||||
| Equity compensation plans approved by shareholders | — | — | 50,737 | ||||||||
| Equity compensation plans not approved by shareholders | — | — | — | ||||||||
| Total | — | — | 50,737 | ||||||||
During 2019, the Company adopted, and our shareholders approved, the Amended Plan. The Amended Plan is currently our only equity compensation plan. If approved by our shareholders at the 2022 Annual Meeting, the new 2022 Amended Plan will become effective upon such approval. If our shareholders do not approve the amendment, the Amended Plan as amended and
17
restated by the Board of Directors on May 14, 2019 and approved by shareholders on August 9, 2019 will remain in full force and effect in accordance with its terms and conditions.
Our board unanimously recommends that shareholders vote “FOR” approval of the 2022 AMENDED PLAN.
PROPOSAL 4
- TO APPROVE THE AMENDMENT OF THE COMPANY's BYE-LAWS TO ADOPT GENDER-INCLUSIVE LANGUAGE
At its meeting held on May 6, 2022, the Board determined that it is in the interests of the Company and its Shareholders to make certain amendments to our Bye-Laws. As such, the Board approved, and recommended that Shareholders approve, the adoption of the Amended and Restated Bye-Laws (the “Amended Bye-Laws). The Amended Bye-Laws are included as Appendix B to this Proxy Statement. If approved by Shareholders, the Amended Bye-Laws will become effective at the conclusion of the 2022 Annual Meeting. If the proposed amendments are not approved, our Bye-laws will remain as currently in effect and the obsolete provisions will remain in place. Shareholders are urged to carefully review Appendix B.
Our board unanimously recommends that shareholders vote “FOR” approval of the amended and restated bye-laws
.
SHARE OWNERSHIP
Security Ownership of Certain Beneficial Owners
The following table sets forth the beneficial ownership of our common shares as of the most recent practicable date prior to filing by (1) each person, or group of affiliated persons, known by us to be the beneficial owner of 5% or more of our outstanding common shares, (2) each of our directors, (3) each of our named executive officers and (4) all of our directors and executive officers as a group.
To our knowledge, each person named in the table has sole voting and investment power with respect to all of the securities shown as beneficially owned by such person, except as otherwise set forth in the notes to the table. The number of securities shown represents the number of securities the person “beneficially owns,” as determined by the rules of the SEC. The SEC has defined “beneficial” ownership of a security to mean the possession, directly or indirectly, of voting power and/or investment power. A security holder is also deemed to be, as of any date, the beneficial owner of all securities that such security holder has the right to acquire within 60 days after that date through (1) the exercise of any option, warrant or right, (2) the conversion of a security, (3) the power to revoke a trust, discretionary account or similar arrangement, or (4) the automatic termination of a trust, discretionary account or similar arrangement.
The percentages below reflect beneficial ownership on the Record Date, as determined in accordance with Rule 13d-3 under the Exchange Act and assumes there are 46,006,182 common shares outstanding.
18
|
Name and Address of Beneficial Owner
(1)
|
Amount and
Nature of Beneficial Ownership |
Approximate
Percentage of
Beneficial
Ownership
(2)
|
||||||||||||
|
Directors and Executive Officers
:
|
||||||||||||||
|
Lagoa Investments
(2) (3)
c/o Phoenix Bulk Carriers (US) LLC
109 Long Wharf
Newport, RI 02840
|
8,290,437 | 18.02 | % | |||||||||||
|
Gianni DelSignore*
257 Wickham Rd. North Kingstown, RI 02852 |
282,555 | — | % | |||||||||||
|
Richard T. du Moulin*
52 Elm Avenue Larchmont, NY 10538 |
191,285 | — | % | |||||||||||
|
Mark L. Filanowski
(4)
*
71 Arrowhead Way
Darien, CT 06820-5507
|
324,382 | — | % | |||||||||||
|
Eric S. Rosenfeld
(5)
777 Third Ave, 37th Floor
New York, NY 10017
|
903,417 | 1.96 | % | |||||||||||
|
David D. Sgro*
(6)
777 Third Ave, 37th Floor
New York, NY 10017
|
339,494 | — | % | |||||||||||
|
Karen H. Beachy *
4579 Thorpe Ct Sparks, NV 89436 |
14,205 | — | % | |||||||||||
| All Directors and Officers as a Group | 10,345,775 | 22.49 | % | |||||||||||
| Five Percent Holders: | ||||||||||||||
| Lagoa Investments | 8,290,437 | 18.02 | % | |||||||||||
*Less than 1%.
(1)
The beneficial ownership of the common shares by the shareholders set forth in the table is determined in accordance with Rule 13d-3 under the Exchange Act, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rule, beneficial ownership includes any common shares as to which the shareholder has sole or shared voting power or investment power and also any common shares that the shareholder has the right to acquire within 60 days. The percentage of beneficial ownership is calculated based on 46,006,182 outstanding common shares. Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all common shares beneficially owned by them.
(2)
Unless otherwise indicated, the business address of each of the individuals is c/o Phoenix Bulk Carriers (US) LLC, 109 Long Wharf, Newport, Rhode Island 02840.
(3)
Shares owned by Lagoa Investments. Mr. Boggild is the Managing Director of Lagoa Investments and solely for purposes of reporting beneficial ownership of such shares pursuant to Section 13(d) of the Exchange Act, Mr. Boggild may be deemed to be the beneficial owner of the shares held by Lagoa Investments.
(4)
Shares owned by Mark Filanowski include 50,507 common shares held by his family members.
(5)
Shares owned by Eric Rosenfeld include 355,556 shares owned by Crescendo Partners III, L.P. Mr. Rosenfeld is the Managing Member of Crescendo Investments III, LLC which is the General Partner of Crescendo Partners III, L.P. Accordingly, solely for purposes of reporting beneficial ownership of such shares pursuant to Section 13(d) of the Exchange Act, Mr. Rosenfeld may be deemed to be the beneficial owner of the shares held by Crescendo Partners III, L.P.
(6)
Shares owned by David Sgro include 66,667 shares owned by Jamarant Capital L.P. of which Mr. Sgro is the Managing Member. Accordingly, solely for purposes of reporting beneficial ownership of such shares pursuant to Section 13(d) of the Exchange Act, Mr. Sgro may be deemed to be the beneficial owner of the shares held by Jamarant Capital L.P.
19
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires that our directors and executive officers file initial reports of ownership and reports of changes in ownership with the SEC. Directors and executive officers are required to furnish us with copies of all Section 16(a) forms they file. Based solely on a review of the copies of such forms furnished to us and written representations from our directors and executive officers, all Section 16(a) filing requirements were met for the fiscal year ended December 31, 2021, except for one Form 5 filed by Mr. Coll's Irrevocable Trust on February 15, 2022, which was delinquent with respect to three transfer transactions, and two Form 4s filed by Mr. Filanowski on December 13, 2021 and December 21, 2021 which were delinquent with respect to four transfer transactions.
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS
All ongoing and future transactions between us and any of our officers and directors or their respective affiliates will be on terms believed by us to be no less favorable to us than are available from unaffiliated third parties. Such transactions will require prior approval by our Audit Committee and a majority of our disinterested independent directors, in either case who had access, at our expense, to our attorneys or independent legal counsel. We will not enter into any such transaction unless our Audit Committee and a majority of our disinterested independent directors determine that the terms of such transaction are no less favorable to us than those that would be available to us with respect to such a transaction from unaffiliated third parties.
Related Person Policy
Our Code of Ethics requires us to avoid, wherever possible, all related party transactions that could result in actual or potential conflicts of interests, except under guidelines approved by the Board or the Audit Committee. Related-party transactions are defined as transactions in which (1) the aggregate amount involved will or may be expected to exceed $120,000 in any calendar year, (2) we or any of our subsidiaries is a participant, and (3) any (a) executive officer, director or nominee for election as a director, (b) greater than 5% beneficial owner of our common shares, or (c) immediate family member, of the persons referred to in clauses (a) and (b), has or will have a direct or indirect material interest (other than solely as a result of being a director or a less than 10% beneficial owner of another entity). A conflict of interest situation can arise when a person takes actions or has interests that may make it difficult to perform his or her work objectively and effectively. Conflicts of interest may also arise if a person, or a member of his or her family, receives improper personal benefits as a result of his or her position.
We also require each of our directors and executive officers to complete a directors’ and officers’ questionnaire that elicits information about related party transactions.
These procedures are intended to determine whether any such related party transaction impairs the independence of a director or presents a conflict of interest on the part of a director, employee or officer.
Related Party Transactions
Amounts and notes payable to related parties consist of the following:
| December 31, 2021 | Activity | March 31, 2022 | |||||||||||||||
| (unaudited) | |||||||||||||||||
| Included in accounts payable, accrued expenses and other current liabilities on the consolidated balance sheets: | |||||||||||||||||
|
Affiliated companies (trade payables)
(i)
|
$ | 2,847,910 | $ | (602,750) | $ | 2,245,160 | |||||||||||
|
Commissions payable (trade payables)
(ii)
|
$ | 38,896 | $ | 48,592 | $ | 87,488 | |||||||||||
| Included in current related party debt on the consolidated balance sheets: | |||||||||||||||||
| Interest payable – 2011 Founders Note | $ | 242,852 | — | $ | 242,852 | ||||||||||||
| Total current related party debt | $ | 242,852 | — | $ | 242,852 | ||||||||||||
i. Seamar Management S.A. ("Seamar")
ii. Phoenix Bulk Carriers (Brasil) Intermediacoes Maritimas Ltda. - a wholly-owned Company of a member of the
Board of Directors
20
Under the terms of a technical management agreement between the Company and Seamar Management S.A. (“Seamar”), an equity method investee, Seamar is responsible for the day-to-day operations for certain of the Company’s owned vessels. During the three months ended March 31, 2022 and 2021, the Company incurred technical management fees of approximately $781,800 and $594,000, respectively, under this arrangement.
The Company paid cash dividends of $5.0 million to a non-controlling interest holder of Nordic Bulk Holding Company Ltd. during the three months ended March 31, 2022.
21
SHAREHOLDER PROPOSALS AND OTHER SHAREHOLDER COMMUNICATIONS
Our 2023 annual meeting of shareholders is expected to be held on or about August 4, 2023 unless the date is changed by our Board. Our Bye-laws establish advance notice procedures with regard to certain matters, including director nominations, to be brought before an annual meeting. If you are a shareholder and you wish to present proposals or wish to present a matter of business in the proxy statement for the 2023 annual meeting, you need to provide the proposals to Pangaea by no later than March 31, 2023. You should direct any proposals to Gianni Del Signore, Chief Financial Officer, Pangaea Logistics Solutions Ltd., 109 Long Wharf, Newport, RI 02840.
Shareholders and interested parties may communicate with Pangaea’s Board, any committee chairperson or the non-management directors as a group by writing to the Board or committee chairperson in care of Pangaea Logistics Solutions Ltd., 109 Long Wharf, Newport, RI 02840. Each communication will be forwarded, depending on the subject matter, to the Board, the appropriate committee chairperson or all non-management directors.
DELIVERY OF DOCUMENTS TO SHAREHOLDERS
Our Annual Report for the fiscal year ended December 31, 2021, which was filed with the SEC on March 16, 2022, is being mailed to all shareholders of record with this proxy statement. The Annual Report does not constitute, and should not be considered, a part of this proxy solicitation material.
Pursuant to the rules of the SEC, we and the services that we employ to deliver communications to our shareholders, are permitted to deliver to two or more shareholders sharing the same address a single copy of each of our Annual Report and our proxy statement. Upon written or oral request, we will deliver a separate copy of the Annual Report and/or proxy statement to any shareholder at a shared address to which a single copy of each document was delivered and who wishes to receive separate copies of such documents. Shareholders receiving multiple copies of such documents may likewise request that we deliver single copies of such documents in the future. Shareholders may notify us of their requests by calling or writing us at:
Pangaea Logistics Solutions Ltd.
109 Long Wharf
Newport, RI 02840
(401) 846-7790
Attention: Investor Relations
A copy of our Annual Report, which includes our financial statements for the fiscal year ended December 31, 2021, is available without charge upon written request to the address set forth above.
22
OTHER BUSINESS
We are not aware of any matters to be acted upon at the 2022 annual meeting of shareholders other than those described above. The persons named in the proxies will vote in accordance with the recommendation of the Board of Directors on any other matters incidental to the conduct of, or otherwise properly brought before, the annual meeting. Discretionary authority for them to do so is contained in the proxy.
Whether you intend to be present at the annual meeting or not, we urge you to return your signed proxy promptly.
| PANGAEA LOGISTICS SOLUTIONS LTD. | ||||||||||||||
| Your Internet vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed and returned your proxy card. Votes submitted electronically over the Internet must be received by 11:59 p.m., Eastern Time, on August 4, 2022. | ||||||||||||||
| VOTE BY INTERNET | ||||||||||||||
| www.cstproxyvote.com | ||||||||||||||
| Use the Internet to vote your proxy. | ||||||||||||||
| Have your proxy card available when you access the above website. Follow the prompts to vote your shares. | ||||||||||||||
| VOTE BY MAIL | ||||||||||||||
| Mark, sign and date your proxy card and return it in the postage-paid envelope provided. | ||||||||||||||
|
PLEASE DO NOT RETURN THE PROXY CARD IF YOU ARE VOTING ELECTRONICALLY.
|
||||||||||||||
| TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS | ý | |||||||||||||
| THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. | ||||||||||||||
|
The Board of Directors recommends you vote FOR proposals 1 and 2.
|
||||||||||||||
|
1. Election of Class I Directors:
|
||||||||||||||
| Nominees: | For | Against | Abstain | |||||||||||
| 1a. Carl Claus Boggild | o | o | o | |||||||||||
| 1b. David D. Sgro | o | o | o | |||||||||||
| 2. Election of Class III Director | ||||||||||||||
| Nominee: | ||||||||||||||
| 2a. Karen H. Beachy | o | o | o | |||||||||||
| 3. To approve the Pangaea Logistics Solutions Ltd. Amended and Restated 2014 Equity Incentive Plan. | o | o | o | |||||||||||
| 4. To approve the Amendment of the Company's Bye-laws | o | o | o | |||||||||||
| Signature | Signature, if held jointly | Date | ||||||||||||
|
Note: Please sign exactly as name appears hereon. When shares are held by joint owners, both should sign. When signing as attorney, executor, administrator, trustee, guardian, or corporate officer, please give title as such.
|
||||||||||||||
23
Important Notice Regarding the Internet Availability of Proxy Materials for the Annual Meeting of Shareholders
to be held August 5, 2022.
To view the 2022 Proxy Statement and 2021 Annual Report please go to:
http://www.cstproxy.com/pangaeals/2022
PANGAEA LOGISTICS SOLUTIONS LTD.
PROXY
Annual General Meeting of Shareholders
August 5, 2022
This proxy is solicited on behalf of the Board of Directors
The undersign appoints Mark Filanowski and Gianni Del Signore, and each of them, as Proxies, each with the power to appoint his substitute, and authorizes each of them to represent and vote, as designated on the reverse hereof, all of the shares of common stock of Pangaea Logistics Solutions Ltd. held of record by the undersigned at the close of business on June 17, 2022 at the Annual Meeting of Stockholders of Pangaea Logistics Solutions Ltd. to be held on August 5, 2022 or at any adjournment thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS INDICATED. IF NO CONTRARY INDICATION IS MADE, THE PROXY WILL BE VOTED IN FAVOR OF ELECTING THE TWO NOMINEES TO THE BOARD OF DIRECTORS, AND IN ACCORDANCE WITH THE JUDGMENT OF THE PERSONS NAMED AS PROXY HEREIN ON ANY OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE ANNUAL MEETING. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
Continue and to be signed on reverse side
24
Appendix A
PANGAEA LOGISTICS SOLUTIONS LTD. 2014 SHARE INCENTIVE PLAN
(as amended by the Board of Directors on May 6, 2022)
1.
Purpose
.
The purpose of the Plan is to assist the Company in attracting, retaining, motivating, and rewarding certain key employees, officers, directors, and consultants of the Company and its Affiliates and promoting the creation of long-term value for shareholders of the Company by closely aligning the interests of such individuals with those of such shareholders. The Plan authorizes the award of Share- based incentives to Eligible Persons to encourage such persons to expend maximum effort in the creation of shareholder value.
2.
Definitions
.
For purposes of the Plan, the following terms shall be defined as set forth below:
“
Affiliate
” means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such Person.
“
Award
” means any Option, Restricted Share, Restricted Share Unit, Share Appreciation Right, Performance Award, or other Share-based or cash-based award granted under the Plan.
“
Award Agreement
” means an Option Agreement, a Restricted Share Agreement, an RSU Agreement, an SAR Agreement, a Performance Award Agreement, or an agreement governing the grant of any other Share-based or cash-based Award granted under the Plan.
“
Board
” means the Board of Directors of the Company.
“
Cause
” means, in the absence of an Award Agreement or Employment Agreement otherwise defining Cause, (1) the Participant’s plea of nolo contendere, conviction of or indictment for any crime (whether or not involving the Company or its Affiliates) (i) constituting a felony or (ii) that has, or could reasonably be expected to result in, an adverse impact on the performance of the Participant’s duties to the Service Recipient, or otherwise has, or could reasonably be expected to result in, an adverse impact on the business or reputation of the Company or its Affiliates, (2) conduct of the Participant, in connection with his or her employment or service, that has resulted, or could reasonably be expected to result, in material injury to the business or reputation of the Company or its Affiliates, (3) any material violation of the policies of the Company or its Affiliates, including but not limited to those relating to sexual harassment or the disclosure or misuse of confidential information, or those set forth in the manuals or statements of policy of the Company or its Affiliates, or (4) willful neglect in the performance of the Participant’s duties for the Service Recipient or willful or repeated failure or refusal to perform such duties. In the event that there is an Award Agreement or Employment Agreement defining Cause, “Cause” shall have the meaning provided in such agreement, and a Termination by the Service Recipient for Cause hereunder shall not be deemed to have occurred unless all applicable notice and cure periods in such Award Agreement or Employment Agreement are complied with.
“
Change in Control
” means the first of the following to occur after the Effective Date:
(1) a change in ownership or control of the Company effected through a transaction or series of transactions (other than an offering of Shares to the general public through a registration statement filed with the Securities and Exchange Commission or pursuant to a Non-Control Transaction) whereby any “person” (as defined in Section 3(a)(9) of the Exchange Act) or any two or more persons deemed to be one “person” (as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act), other than the Company or any of its Affiliates, an employee benefit plan sponsored or maintained by the Company or any of its Affiliates (or its related trust), or any underwriter temporarily holding securities pursuant to an offering of such securities, directly or indirectly acquire “beneficial ownership” (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company possessing more than fifty percent (50%) of the total combined voting power of the Company’s securities eligible to vote in the election of the Board (the “Company Voting Securities”);
(2) the date, within any consecutive twenty-four (24) month period commencing on or after the Effective Date, upon which individuals who constitute the Board as of the Effective Date (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual who becomes a director subsequent to the Effective Date whose election or nomination for election by the Company’s shareholders was approved by a vote of at least a
25
majority of the directors then constituting the Incumbent Board (either by a specific vote or by approval of the proxy statement of the Company in which such individual is named as a nominee for director, without objection to such nomination) shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest (including but not limited to a consent solicitation) with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board; or
(3) the consummation of a merger, consolidation, share exchange, or similar form of corporate transaction involving the Company or any of its Affiliates that requires the approval of the Company’s shareholders (whether for such transaction or the issuance of securities in the transaction or otherwise) (a “Reorganization”), unless immediately following such Reorganization
(i) more than fifty percent (50%) of the total voting power of (A) the corporation resulting from such Reorganization (the “Surviving Company”) or (B) if applicable, the ultimate parent corporation that has, directly or indirectly, beneficial ownership of one hundred percent (100%) of the voting securities of the Surviving Company (the “Parent Company”), is represented by Company Voting Securities that were outstanding immediately prior to such Reorganization (or, if applicable, is represented by shares into which such Company Voting Securities were converted pursuant to such Reorganization), and such voting power among the holders thereof is in substantially the same proportion as the voting power of such Company Voting Securities among holders thereof immediately prior to the Reorganization, (ii) no person, other than an employee benefit plan sponsored or maintained by the Surviving Company or the Parent Company (or its related trust), is or becomes the beneficial owner, directly or indirectly, of fifty percent (50%) or more of the total voting power of the outstanding voting securities eligible to elect directors of the Parent Company, or if there is no Parent Company, the Surviving Company, and (iii) at least a majority of the members of the board of directors of the Parent Company, or if there is no Parent Company, the Surviving Company, following the consummation of the Reorganization are members of the Incumbent Board at the time of the Board’s approval of the execution of the initial agreement providing for such Reorganization (any Reorganization which satisfies all of the criteria specified in (i), (ii), and (iii) above shall be a “Non-Control Transaction”);
(4) the sale or disposition, in one or a series of related transactions, of all or substantially all of the assets of the Company to any “person” (as defined in Section 3(a)(9) of the Exchange Act) or to any two or more persons deemed to be one “person” (as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) other than the Company’s Affiliates.
Notwithstanding the foregoing, (x) a Change in Control shall not be deemed to occur solely because any person acquires beneficial ownership of fifty percent (50%) or more of the Company Voting Securities as a result of an acquisition of Company Voting Securities by the Company that reduces the number of Company Voting Securities outstanding; provided that if after such acquisition by the Company such person becomes the beneficial owner of additional Company Voting Securities that increases the percentage of outstanding Company Voting Securities beneficially owned by such person, a Change in Control shall then occur, and (y) with respect to the payment of any amount that constitutes a deferral of compensation subject to Section 409A of the Code payable upon a Change in Control, a Change in Control shall not be deemed to have occurred unless the Change in Control constitutes a change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets of the Company under Section 409A(a)(2)(A)(v) of the Code.
“
Code
” means the Internal Revenue Code of 1986, as amended from time to time, including regulations thereunder and successor provisions and regulations thereto.
“
Committee
” means the Board or such other committee consisting of two or more individuals appointed by the Board to administer the Plan and each other individual or committee of individuals designated to exercise authority under the Plan.
“
Company
” means Pangaea Logistics Solutions Ltd., a limited liability company organized under the laws of Bermuda, and its successors by operation of law; provided that, prior to the Effective Date, “Company” means Quartet Holdco Ltd., a wholly-owned subsidiary of Quartet Merger Corp.
“
Company Voting Securities
” has the meaning set forth within the definition of “Change in Control.”
“
Corporate Event
” has the meaning set forth in Section 11(b) below. “
Data
” has the meaning set forth in Section 21(c) below.
“
Disability
” means, in the absence of an Award Agreement or Employment Agreement otherwise defining Disability, the permanent and total disability of such Participant within the meaning of Section 22(e)(3) of the Code. In the event that there is an Award Agreement or Employment Agreement defining Disability, “Disability” shall have the meaning provided in such Award Agreement or Employment Agreement.
26
“
Disqualifying Disposition
” means any disposition (including any sale) of Shares acquired upon the exercise of an Incentive Stock Option made within the period that ends either (i) two years
after the date on which the Participant was granted the Incentive Stock Option or (ii) one year after the date upon which the Participant acquired the Shares.
“
Effective Date
” means the effective date of the mergers contemplated by the Agreement and Plan of Reorganization, dated as of April 30, 2014, by and among Quartet Merger Corp., a Delaware corporation, Quartet Holdco Ltd., a wholly-owned subsidiary of Quartet Merger Corp., Quartet Merger Sub, Ltd., a wholly-owned subsidiary of Quartet Holdco Ltd., and Pangaea Logistics Solutions Ltd. (“Pangaea”) and the security holders of Pangaea.
“
Eligible Person
” means (1) each employee and officer of the Company or of any of its Affiliates, including each such employee and officer who may also be a director of the Company or any of its Affiliates, (2) each non-employee director of the Company or any of its Affiliates, (3) each other natural person who provides substantial services to the Company or any of its Affiliates as a consultant or advisor and who is designated as eligible by the Committee, and (4) each natural person who has been offered employment by the Company or any of its Affiliates; provided that such prospective employee may not receive any payment or exercise any right relating to an Award until such person has commenced employment or service with the Company or its Affiliates; provided further, however, that (i) with respect to any Award that is intended to qualify as a “stock right” that does not provide for a “deferral of compensation” within the meaning of Section 409A of the Code, the term Affiliate for this purpose shall include only those corporations or other entities in the unbroken chain of corporations or other entities beginning with the Company where each of the corporations in the unbroken chain other than the last corporation owns stock possessing at least fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in the chain, and (ii) with respect to any Award that is intended to qualify as an Incentive Stock Option, the term “Affiliate” as used for this purpose shall include only those entities that qualify as a “subsidiary corporation” with respect to the Company within the meaning of Code Section 424(f). An employee on an approved leave of absence may be considered as still in the employ of the Company or any of its Affiliates for purposes of eligibility for participation in the Plan.
“
Employment Agreement
” means an employment or other services agreement between a Participant and the Service Recipient that describes the terms and conditions of such Participant’s employment or service with the Service Recipient and is effective as of the date of determination.
“
Exchange Act
” means the U.S. Securities Exchange Act of 1934, as amended from time to time, including rules and regulations thereunder and successor provisions and rules and regulations thereto.
“
Expiration Date
” means the date upon which the term of an Option or Share Appreciation Right expires, as determined under Section 5(b) or 8(b) hereof, as applicable.
“
Fair Market Value
” means, as of any date when the Shares are listed on Nasdaq Capital Market or an other national securities exchange, the closing price reported on the principal national securities exchange on which such Shares are listed and traded on the date of determination, or if the closing price is not reported on such date of determination, the closing price on the most recent date on which such closing price is reported. If the Shares are not listed on a national securities exchange, the Fair Market Value shall mean the amount determined by the Board in good faith, and in a manner consistent with Section 409A of the Code, to be the fair market value per Share.
“
Incentive Stock Option
” means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code.
“
Incumbent Board
” shall have the meaning set forth within the definition of “Change in Control.” “
Non-Control Transaction
” has the meaning set forth within the definition of “Change in Control.”
“
Nonqualified Stock Option
” means an Option not intended to qualify as an Incentive Stock Option.
“
Option
” means a conditional right, granted to a Participant under Section 5 hereof, to purchase Shares at a specified price during a specified time period.
“
Option Agreement
” means a written agreement (including an electronic writing to the extent permitted by applicable law) between the Company and a Participant evidencing the terms and conditions of an individual Option grant.
“
Parent Company
” has the meaning set forth within the definition of “Change in Control.”
27
“
Participant
” means an Eligible Person who has been granted an Award under the Plan, or if applicable, such other Person who holds an Award.
“
Performance Award
” means an Award granted to a Participant under Section 9 hereof, which Award is subject to the achievement of Performance Objectives during a Performance Period. A Performance Award shall be designated as a “Performance Share” or a “Performance Unit” at the time of grant.
“
Performance Award Agreement
” means a written agreement (including an electronic writing to the extent permitted by applicable law) between the Company and a Participant evidencing the terms and conditions of an individual Performance Award grant.
“
Performance Objectives
” means the performance objectives established pursuant to this Plan for Participants who have received Performance Awards.
“
Performance Period
” means the period designated for the achievement of Performance Objectives.
“
Person
” means any individual, corporation, partnership, firm, joint venture, association, joint- stock company, trust, unincorporated organization, or other entity.
“
Plan
” means this Pangaea Logistics Solutions Ltd. 2014 Stock Incentive Plan, as amended from time to time.
“
Qualified Member
” means a member of the Committee who is a “Non-Employee Director” within the meaning of Rule 16b-3 under the Exchange Act and an “outside director” within the meaning of Treasury Regulation 1.162-27(e)(3) under Section 162(m) of the Code.
“
Qualified Performance-Based Award
” means an Option, Share Appreciation Right, or Performance Award that is intended to qualify as “qualified performance-based compensation” within the meaning of Section 162(m) of the Code.
“
Qualifying Committee
” has the meaning set forth in Section 3(b) hereof.
“
Reorganization
” has the meaning set forth within the definition of “Change in Control.”
“
Restricted Share
” means a Share granted to a Participant under Section 6 hereof that is subject to certain restrictions and to a risk of forfeiture.
“
Restricted Share Agreement
” means a written agreement (including an electronic writing to the extent permitted by applicable law) between the Company and a Participant evidencing the terms and conditions of an individual Restricted Share grant.
“
Restricted Share Unit
” means a notional unit representing the right to receive one Share (or the cash value of one Share, if so determined by the Committee) on a specified settlement date.
“
RSU Agreement
” means a written agreement (including an electronic writing to the extent permitted by applicable law) between the Company and a Participant evidencing the terms and conditions of an individual grant of Restricted Share Units.
“
SAR Agreement
” means a written agreement (including an electronic writing to the extent permitted by applicable law) between the Company and a Participant evidencing the terms and conditions of an individual grant of Share Appreciation Rights.
“
Securities Act
” means the U.S. Securities Act of 1933, as amended from time to time, including rules and regulations thereunder and successor provisions and rules and regulations thereto.
“
Service Recipient
” means, with respect to a Participant holding a given Award, either the Company or an Affiliate of the Company by which the original recipient of such Award is, or following a Termination was most recently, principally employed or to which such original recipient provides, or following a Termination was most recently providing, services, as applicable.
“
Shares
” means the Company’s common shares, par value $.0001, and such other securities as may be substituted for such shares pursuant to Section 11 hereof.
28
“
Share Appreciation Right
” means a conditional right to receive an amount equal to the value of the appreciation in the Shares over a specified period. Except in the event of extraordinary circumstances, as determined in the sole discretion of the Committee, or pursuant to Section 11(b) below, Share Appreciation Rights shall be settled in Shares.
“
Surviving Company
” has the meaning set forth within the definition of “Change in Control.”
“
Termination
” means the termination of a Participant’s employment or service, as applicable, with the Service Recipient; provided, however, that, if so determined by the Committee at the time of any change in status in relation to the Service Recipient (e.g., a Participant ceases to be an employee and begins providing services as a consultant, or vice versa), such change in status will not be deemed a Termination hereunder. Unless otherwise determined by the Committee, in the event that any Service Recipient ceases to be an Affiliate of the Company (by reason of sale, divestiture, spin-off, or other similar transaction), unless a Participant’s employment or service is transferred to another entity that would constitute a Service Recipient immediately following such transaction, such Participant shall be deemed to have suffered a Termination hereunder as of the date of the consummation of such transaction. Notwithstanding anything herein to the contrary, a Participant’s change in status in relation to the Service Recipient (for example, a change from employee to consultant) shall not be deemed a Termination hereunder with respect to any Awards
constituting nonqualified deferred compensation subject to Section 409A of the Code that are payable upon a Termination unless such change in status constitutes a “separation from service” within the meaning of Section 409A of the Code. Any payments in respect of an Award constituting nonqualified deferred compensation subject to Section 409A of the Code that are payable upon a Termination shall be delayed for such period as may be necessary to meet the requirements of Section 409A(a)(2)(B)(i) of the Code. On the first business day following the expiration of such period, the Participant shall be paid, in a single lump sum without interest, an amount equal to the aggregate amount of all payments delayed pursuant to the preceding sentence, and any remaining payments not so delayed shall continue to be paid pursuant to the payment schedule applicable to such Award.
3.
Administration
.
(a)
Authority of the Committee
. Except as otherwise provided below, the Plan shall be administered by the Committee. The Committee shall have full and final authority, in each case subject to and consistent with the provisions of the Plan, to (1) select Eligible Persons to become Participants, (2) grant Awards, (3) determine the type, number of Shares subject to, other terms and conditions of, and all other matters relating to, Awards, (4) prescribe Award Agreements (which need not be identical for each Participant) and rules and regulations for the administration of the Plan, (5) construe and interpret the Plan and Award Agreements and correct defects, supply omissions, and reconcile inconsistencies therein, (6) suspend the right to exercise Awards during any period that the Committee deems appropriate to comply with applicable securities laws, and thereafter extend the exercise period of an Award by an equivalent period of time, and (7) make all other decisions and determinations as the Committee may deem necessary or advisable for the administration of the Plan. Any action of the Committee shall be final, conclusive, and binding on all persons, including, without limitation, the Company, its Affiliates, Eligible Persons, Participants, and beneficiaries of Participants. For the avoidance of doubt, the Board shall have the authority to take all actions under the Plan that the Committee is permitted to take.
(b)
Manner of Exercise of Committee Authority
. At any time that a member of the Committee is not a Qualified Member, any action of the Committee relating to a Qualified Performance-Based Award or relating to an Award granted or to be granted to a Participant who is then subject to Section 16 of the Exchange Act in respect of the Company must be taken by a subcommittee, designated by the Committee or the Board, composed solely of two or more Qualified Members (a “Qualifying Committee”). Any action authorized by such a Qualifying Committee shall be deemed the action of the Committee for purposes of the Plan. The express grant of any specific power to the Committee and the taking of any action by the Committee shall not be construed as limiting any power or authority of the Committee.
(c)
Delegation
. To the extent permitted by applicable law, the Committee may delegate to officers or employees of the Company or any of its Affiliates, or committees thereof, the authority, subject to such terms as the Committee shall determine, to perform such functions under the Plan, including, but not limited to, administrative functions, as the Committee may determine appropriate. The Committee may appoint agents to assist it in administering the Plan. Notwithstanding the foregoing or any other provision of the Plan to the contrary, any Award granted under the Plan to any Eligible Person who is not an employee of the Company or any of its Affiliates (including any non-employee director of the Company or any Affiliate) or to any Eligible Person who is subject to Section 16 of the Exchange Act must be expressly approved by the Committee or Qualifying Committee in accordance with subsection (b) above.
(d)
Section 409A
. All Awards made under the Plan that are intended to be “deferred compensation” subject to Section 409A of the Code shall be interpreted, administered and construed to comply with Section 409A, and all Awards made under the Plan that are intended to be exempt from Section 409A shall be interpreted, administered and construed to comply with
29
and preserve such exemption. The Committee shall have full authority to give effect to the intent of the foregoing sentence. To the extent necessary to give effect to this intent, in the case of any conflict or potential inconsistency between the Plan and a provision of any Award or Award Agreement with respect to an Award, the Plan shall govern. Notwithstanding the foregoing, neither the Company nor the Committee shall have any liability to any person in the event Section 409A applies to any Award in a manner that results in adverse tax consequences for the Participant or any of his or her beneficiaries or transferees.
4.
Shares Available Under the Plan
.
(a)
Number of Shares Available for Delivery
. Subject to adjustment as provided in Section 11 hereof, the total number of Shares reserved and available for delivery in connection with Awards under the Plan shall equal 4,500,000. Notwithstanding the foregoing, the number of Shares available for issuance hereunder shall not be reduced by Shares issued pursuant to Awards issued or assumed in connection with a merger or acquisition as contemplated by, as applicable, NASDAQ Listing Rule 5635(c) and IM-5635-1, NYSE Listed Company Manual Section 303A.08, AMEX Company Guide Section 711, or other applicable stock exchange rules, and their respective successor rules and listing exchange promulgations.
(b)
Share Counting Rules
. The Committee may adopt reasonable counting procedures to ensure appropriate counting, avoid double-counting (as, for example, in the case of tandem or substitute awards) and make adjustments if the number of Shares actually delivered differs from the number of Shares previously counted in connection with an Award. To the extent that an Award expires or is canceled, forfeited, settled in cash, or otherwise terminated without a delivery to the Participant of the full number of Shares to which the Award related, the undelivered Shares will again be available for grant. Shares withheld in payment of the exercise price or taxes relating to an Award and Shares equal to the number surrendered in payment of any exercise price or taxes relating to an Award shall be deemed to constitute shares not delivered to the Participant and shall be deemed to again be available for Awards under the Plan.
(c)
162(m) Limitation.
Notwithstanding anything to the contrary herein, during any time that the Company is subject to Section 162(m) of the Code, the maximum number of Shares with respect to which Options, Share Appreciation Rights, and Performance Awards, in each case to the extent intended to qualify as a Qualified Performance-Based Award, may be granted to any individual in any one calendar year shall not exceed 200,000. The maximum value of the aggregate payment that any individual may receive with respect to a Qualified Performance-Based Award that is valued in dollars in respect of any annual Performance Period is $1,000,000, and for any Performance Period in excess of one (1) year, such amount multiplied by a fraction, the numerator of which is the number of months in the Performance Period and the denominator of which is twelve (12). No Qualified Performance-Based Awards may be granted hereunder following the first (1
st
) meeting of the Company’s shareholders that occurs in the fifth (5
th
) year following the year in which the Company’s shareholders most recently approved the terms of the Plan for purposes of satisfying the “qualified performance-based compensation” exemption under
Section 162(m)(4)(C) of the Code.
(d)
Incentive Stock Options
. All Shares reserved for issuance hereunder may be issued or transferred upon exercise or settlement of Incentive Stock Options.
(e)
Limitation on Awards to Non-Employee Directors
. Notwithstanding anything to the contrary herein, the maximum value of Awards that may be granted to any non-employee director of the Company in any one calendar year shall not exceed $150,000 (calculating the value of any Award based in Shares based on the grant date fair value of such Awards for financial reporting purposes and excluding, for this purpose, the value of any dividend equivalent payments paid pursuant to any Award granted in a previous year) (subject to adjustment as provided in Section 11 hereof).
5. Options.
(a) General. Certain Options granted under the Plan are intended to qualify as Incentive Stock Options. Options may be granted to Eligible Persons in such form and having such terms and conditions as the Committee shall deem appropriate; provided, however, that Incentive Stock Options may be granted only to Eligible Persons who are employees of the Company or an Affiliate of the Company. The provisions of separate Options shall be set forth in separate Option Agreements, which agreements need not be identical.
(b) Term. The term of each Option shall be set by the Committee at the time of grant; provided, however, that no Option granted hereunder shall be exercisable after the expiration of ten (10) years from the date it was granted.
(c)
Exercise Price
. The exercise price per Share for each Option shall be set by the Committee at the time of grant; provided, however, that if an Option is intended to qualify as either (1) a “stock right” that does not provide for a “deferral of compensation” within the meaning of Section 409A of the Code,
30
(2) a Qualified Performance-Based Award, or (3) an Incentive Stock Option, then in each case the applicable exercise price shall not be less than the Fair Market Value on the date of grant, subject to subsection (g) below in the case of any Incentive Stock Option.
(d)
Payment for Shares
. Payment for Shares acquired pursuant to Options granted hereunder shall be made in full upon exercise of an Option in immediately available funds in United States dollars or by certified or bank cashier’s check, or if approved by the Committee (1) by delivery of Shares having a value equal to the exercise price, (2) by a broker-assisted cashless exercise in accordance with procedures approved by the Committee, whereby payment of the Option exercise price or tax withholding obligations may be satisfied, in whole or in part, with Shares subject to the Option by delivery of an irrevocable direction to a securities broker (on a form prescribed by the Committee) to sell Shares and to deliver all or part of the sale proceeds to the Company in payment of the aggregate exercise price and, if applicable, the amount necessary to satisfy the Company’s withholding obligations, or (3) by any other means approved by the Committee (including, by delivery of a notice of “net exercise” to the Company, pursuant to which the Participant shall receive the number of Shares underlying the Option so exercised reduced by the number of Shares equal to the aggregate exercise price of the Option divided by the Fair Market Value on the date of exercise). Anything herein to the contrary notwithstanding, if the Committee determines that any form of payment available hereunder would be in violation of Section 402 of the Sarbanes-Oxley Act of 2002, such form of payment shall not be available.
(e)
Vesting
. Options shall vest and become exercisable in such manner, on such date or dates, or upon the achievement of performance or other conditions, in each case as may be determined by the Committee and set forth in an Option Agreement; provided, however, that notwithstanding any such vesting dates, but in all cases subject to Section 11 below, the Committee may in its sole discretion accelerate the vesting of any Option at any time and for any reason. Unless otherwise specifically determined by the Committee, the vesting of an Option shall occur only while the Participant is employed
by or rendering services to the Service Recipient, and all vesting shall cease upon a Participant’s Termination for any reason. If an Option is exercisable in installments, such installments or portions thereof that become exercisable shall remain exercisable until the Option expires.
(f)
Termination of Employment or Service
. Except as provided by the Committee in an Option Agreement or otherwise:
(1) In the event of a Participant’s Termination for any reason other than (i) by the Service Recipient for Cause, or (ii) by reason of the Participant’s death or Disability, (A) all vesting with respect to such Participant’s outstanding Options shall cease, (B) each of such Participant’s outstanding unvested Options shall expire as of the date of such Termination, and (C) each of such Participant’s outstanding vested Options shall remain exercisable until the earlier of the applicable Expiration Date and the date that is ninety (90) days after the date of such Termination.
(2) In the event of a Participant’s Termination by reason of such Participant’s death or Disability, (i) all vesting with respect to such Participant’s outstanding Options shall cease, (ii) each of such Participant’s outstanding unvested Options shall expire as of the date of such Termination, and (iii) each of such Participant’s outstanding vested Options shall remain exercisable until the earlier of the applicable Expiration Date and the date that is twelve (12) months after the date of such Termination. In the event of a Participant’s death, such Participant’s Options shall remain exercisable by the person or persons to whom a Participant’s rights under the Options pass by will or by the applicable laws of descent and distribution until their expiration, but only to the extent that the Options were vested by such Participant at the time of such Termination.
(3) In the event of a Participant’s Termination by the Service Recipient for Cause, all of such Participant’s outstanding Options (whether or not vested) shall immediately expire as of the date of such Termination.
(g)
Special Provisions Applicable to Incentive Stock Options
.
(1) No Incentive Stock Option may be granted to any Eligible Person who, at the time the Option is granted, owns directly, or indirectly within the meaning of Section 424(d) of the Code, stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or of any parent or subsidiary thereof, unless such Incentive Stock Option (i) has an exercise price of at least one hundred ten percent (110%) of the Fair Market Value on the date of the grant of such Option and (ii) cannot be exercised more than five (5) years after the date it is granted.
(2) To the extent that the aggregate Fair Market Value (determined as of the date of grant) of Shares for which Incentive Stock Options are exercisable for the first time by any Participant during any calendar year (under all plans of the Company and its Affiliates) exceeds
$100,000, such excess Incentive Stock Options shall be treated as Nonqualified Stock Options.
31
(3) Each Participant who receives an Incentive Stock Option must agree to notify the Company in writing immediately after the Participant makes a Disqualifying Disposition of any Shares acquired pursuant to the exercise of an Incentive Stock Option.
6.
Restricted Shares
.
(a)
General
. Restricted Shares may be granted to Eligible Persons in such form and having such terms and conditions as the Committee shall deem appropriate. The provisions of separate Awards of Restricted Shares shall be set forth in separate Restricted Share Agreements, which agreements need not be identical. Subject to the restrictions set forth in Section 6(b), and except as otherwise set forth in the applicable Restricted Share Agreement, the Participant shall generally have the rights and privileges of a shareholder as to such Restricted Shares, including the right to vote such Restricted Shares. Unless otherwise set forth in a Participant’s Restricted Shares Agreement, cash dividends and stock dividends, if any, with respect to the Restricted Shares shall be withheld by the Company for the Participant’s account, and shall be subject to forfeiture to the same degree as the Restricted Shares to which such dividends relate. Except as otherwise determined by the Committee, no interest will accrue or be paid on the amount of any cash dividends withheld.
(b)
Vesting and Restrictions on Transfer
. Restricted Shares shall vest in such manner, on such date or dates, or upon the achievement of performance or other conditions, in each case as may be determined by the Committee and set forth in a Restricted Share Agreement; provided, however, that notwithstanding any such vesting dates, but in all cases subject to Section 11 below, the Committee may in its sole discretion accelerate the vesting of any Award of Restricted Shares at any time and for any reason. Unless otherwise specifically determined by the Committee, the vesting of an Award of Restricted Shares shall occur only while the Participant is employed by or rendering services to the Service Recipient, and all vesting shall cease upon a Participant’s Termination for any reason. In addition to any other restrictions set forth in a Participant’s Restricted Share Agreement, until such time as the Restricted Shares has vested pursuant to the terms of the Restricted Share Agreement, the Participant shall not be permitted to sell, transfer, pledge, or otherwise encumber the Restricted Shares.
(c)
Termination of Employment or Service
. Except as provided by the Committee in a Restricted Share Agreement, Employment Agreement or otherwise, in the event of a Participant’s Termination for any reason prior to the time that such Participant’s Restricted Shares have vested, all vesting with respect to such Participant’s Restricted Shares shall cease and all of Participant’s unvested Restricted Shares shall be immediately forfeited to the Company by the Participant for no consideration as of the date of such Termination.
7.
Restricted Share Units
.
(a)
General
. Restricted Share Units may be granted to Eligible Persons in such form and having such terms and conditions as the Committee shall deem appropriate. The provisions of separate Restricted Share Units shall be set forth in separate RSU Agreements, which agreements need not be identical.
(b)
Vesting
. Restricted Share Units shall vest in such manner, on such date or dates, or upon the achievement of performance or other conditions, in each case as may be determined by the Committee and set forth in an RSU Agreement; provided, however, that notwithstanding any such vesting dates, but in all cases subject to Section 11 below, the Committee may in its sole discretion accelerate the vesting of any Restricted Share Unit at any time and for any reason. Unless otherwise specifically determined by the Committee, the vesting of a Restricted Share Unit shall occur only while the Participant is employed by or rendering services to the Service Recipient, and all vesting shall cease upon a Participant’s Termination for any reason.
(c)
Settlement
. Restricted Share Units shall be settled in Shares, cash, or property, as determined by the Committee, in its sole discretion, on the date or dates determined by the Committee and set forth in an RSU Agreement. Unless otherwise set forth in a Participant’s RSU Agreement, a Participant shall not be entitled to dividends, if any, with respect to Restricted Share Units prior to the actual delivery of Shares.
(d)
Termination of Employment or Service
. Except as provided by the Committee in an RSU Agreement, Employment Agreement or otherwise, in the event of a Participant’s Termination for any reason prior to the time that such Participant’s Restricted Share Units have been settled, (1) all vesting with respect to such Participant’s Restricted Share Units shall cease, (2) each of such Participant’s outstanding unvested Restricted Share Units shall be immediately forfeited for no consideration as of the date of such Termination, and (3) any shares remaining undelivered with respect to vested Restricted Share Units then held by such Participant shall be delivered on the delivery date or dates specified in the RSU Agreement.
8.
Share Appreciation Rights
.
32
(a)
General
. Share Appreciation Rights may be granted to Eligible Persons in such form and having such terms and conditions as the Committee shall deem appropriate. The provisions of separate Share Appreciation Rights shall be set forth in separate SAR Agreements, which agreements need not be identical.
(b)
Term
. The term of each Share Appreciation Right shall be set by the Committee at the time of grant; provided, however, that no Share Appreciation Right granted hereunder shall be exercisable after the expiration of ten (10) years from the date it was granted.
(c)
Base Price
. The base price per Share for each Share Appreciation Right shall be set by the Committee at the time of grant; provided, however, that if a Share Appreciation Right is intended to qualify as either (1) a “stock right” that does not provide for a “deferral of compensation” within the meaning of Section 409A of the Code or (2) a Qualified Performance-Based Award, then in each case the applicable base price shall not be less than the Fair Market Value on the date of grant.
(d)
Vesting
. Share Appreciation Rights shall vest and become exercisable in such manner, on such date or dates, or upon the achievement of performance or other conditions, in each case as may be determined by the Committee and set forth in a SAR Agreement; provided, however, that notwithstanding any such vesting dates, but in all cases subject to Section 11 below, the Committee may in its sole discretion accelerate the vesting of any Share Appreciation Right at any time and for any reason. Unless otherwise specifically determined by the Committee is employed by or rendering services to the Service Recipient, and all vesting shall cease upon a Participant’s Termination for any reason. If a Share Appreciation Right is exercisable in installments, such installments or portions thereof that become exercisable shall remain exercisable until the Share Appreciation Right expires.
(e)
Payment upon Exercise
. Payment upon exercise of a Share Appreciation Right may be made in cash, Shares, or property as specified in the SAR Agreement or determined by the Committee, in each case having a value in respect of each Shares underlying the portion of the Share Appreciation Right so exercised, equal to the difference between the base price of such Share Appreciation Right and the Fair Market Value of one (1) Share on the exercise date. For purposes of clarity, each Share to be issued in settlement of a Share Appreciation Right is deemed to have a value equal to the Fair Market Value of one (1) Share on the exercise date. In no event shall fractional shares be issuable upon the
exercise of a Share Appreciation Right, and in the event that fractional shares would otherwise be issuable, the number of shares issuable will be rounded down to the next lower whole number of shares, and the Participant will be entitled to receive a cash payment equal to the value of such fractional share.
(f)
Termination of Employment or Service
. Except as provided by the Committee in a SAR Agreement, Employment Agreement or otherwise:
(4) In the event of a Participant’s Termination for any reason other than (i) by the Service Recipient for Cause, or (ii) by reason of the Participant’s death or Disability, (A) all vesting with respect to such Participant’s outstanding Share Appreciation Rights shall cease, (B) each of such Participant’s outstanding unvested Share Appreciation Rights shall expire as of the date of such Termination, and (C) each of such Participant’s outstanding vested Share Appreciation Rights shall remain exercisable until the earlier of the applicable Expiration Date and the date that is ninety (90) days after the date of such Termination.
(5) In the event of a Participant’s Termination by reason of such Participant’s death or Disability, (i) all vesting with respect to such Participant’s outstanding Share Appreciation Rights shall cease, (ii) each of such Participant’s outstanding unvested Share Appreciation Rights shall expire as of the date of such Termination, and (iii) each of such Participant’s outstanding vested Share Appreciation Rights shall remain exercisable until the earlier of the applicable Expiration Date and the date that is twelve (12) months after the date of such Termination. In the event of a Participant’s death, such Participant’s Share Appreciation Rights shall remain exercisable by the person or persons to whom a Participant’s rights under the Share Appreciation Rights pass by will or by the applicable laws of descent and distribution until their expiration, but only to the extent that the Share Appreciation Rights were vested by such Participant at the time of such Termination.
(6) In the event of a Participant’s Termination by the Service Recipient for Cause, all of such Participant’s outstanding Share Appreciation Rights (whether or not vested) shall immediately expire as of the date of such Termination.
9.
Performance Awards
.
(a)
General
. Performance Awards may be granted to Eligible Persons in such form and having such terms and conditions as the Committee shall deem appropriate. The provisions of separate Performance Awards, including the
33
determination of the Committee with respect to the form of payout of Performance Awards, shall be set forth in separate Performance Award Agreements, which agreements need not be identical.
(b)
Value of Performance Units and Performance Shares
. Each Performance Unit shall have an initial value that is established by the Committee at the time of grant. Each Performance Share shall have an initial value equal to the Fair Market Value of the Shares on the date of grant. In addition to any other non-performance terms included in the Performance Award Agreement, the Committee shall set the applicable Performance Objectives in its discretion, which objectives, depending on the extent to which they are met, will determine the value and number of Performance Units or Performance Shares, as the case may be, that will be paid out to the Participant. With respect to Qualified Performance-Based Awards, the Committee shall establish the applicable Performance Objectives in writing not later than ninety (90) days after the commencement of the Performance Period or, if earlier, the date as of which twenty-five percent (25%) of the Performance Period has elapsed.
(c)
Earning of Performance Units and Performance Shares
. Upon the expiration of the applicable Performance Period or other non-performance-based vesting period, if longer, the holder of Performance Units or Performance Shares, as the case may be, shall be entitled to receive payout on the value and number of the applicable Performance Units or Performance Shares earned by the Participant over the Performance Period, to be determined as a function of the extent to which the corresponding Performance Objectives have been achieved and any other non-performance-based terms met. No payment shall be made with respect to a Qualified Performance-Based Award prior to certification by the Committee that the Performance Objectives have been attained.
(d)
Form and Timing of Payment of Performance Units and Performance Shares
. Payment of earned Performance Units and Performance Shares shall be as determined by the Committee and as evidenced in the Performance Award Agreement. Subject to the terms of the Plan, the Committee, in its sole discretion, may pay earned Performance Units and Performance Shares in the form of cash, Shares, or other Awards (or in a combination thereof) equal to the value of the earned Performance Units or Performance Shares, as the case may be, at the close of the applicable Performance Period, or as soon as practicable after the end of the Performance Period. Any cash, Shares, or other Awards issued in connection with a Performance Award may be issued subject to any restrictions deemed appropriate by the Committee.
(e)
Termination of Employment or Service
. Except as provided by the Committee in a Performance Award Agreement, Employment Agreement or otherwise, if, prior to the time that the applicable Performance Period has expired, a Participant undergoes a Termination for any reason, all of such Participant’s Performance Awards shall be immediately forfeited by the Participant to the Company for no consideration.
(f)
Performance Objectives
.
(1) Each Performance Award shall specify the Performance Objectives that must be achieved before such Award shall become earned. The Company may also specify a minimum acceptable level of achievement below which no payment will be made and may set forth a formula for determining the amount of any payment to be made if performance is at or above such minimum acceptable level but falls short of the maximum achievement of the specified Performance Objectives.
(2) Performance Objectives may be described in terms of Company-wide objectives or objectives that are related to the performance of an individual Participant, the specific Service Recipient, or a division, department, or function within the Company or the Service Recipient. Performance Objectives may be measured on an absolute or relative basis. Relative performance may be measured by comparison to a group of peer companies or to a financial market index. With respect to Qualified Performance-Based Awards, Performance Objectives shall be limited to specified levels of or increases in one or more of the following:
(i) earnings, including net earnings, total earnings, operating earnings, earnings growth, operating income, earnings before or after taxes, earnings before or after interest, depreciation, amortization, or extraordinary or special items or book value per share (which may exclude nonrecurring items);
(ii) pre-tax income or after-tax income; (iii) earnings per share (basic or diluted); (iv) operating profit; (v) revenue, revenue growth, or rate of revenue growth; (vi) return on assets (gross or net), return on investment, return on capital, return on equity, financial return ratios, or internal rates of return; (vii) returns on sales or revenues; (viii) operating expenses; (ix) share price appreciation;
(x) cash flow (including, but not limited to, operating cash flow and free cash flow), cash flow return on investment (discounted or otherwise), net cash provided by operations or cash flow in excess of cost of capital, working capital turnover; (xi) implementation or completion of critical projects or processes; (xii) economic value created; (xiii) balance sheet measurements
34
(including, but not limited to, receivable turnover); (xiv) cumulative earnings per share growth; (xv) operating margin, profit margin, or gross margin; (xvi) share price or total shareholder return; (xvii) cost or expense targets, reductions and savings, productivity and efficiencies; (xviii) sales or sales growth;
(xix) strategic business criteria, consisting of one or more objectives based on meeting specified market penetration, market share, geographic business expansion, customer satisfaction, employee satisfaction, human resources management, supervision of litigation, information technology, and goals relating to acquisitions, divestitures, joint ventures, and similar transactions, and budget comparisons; and (xx) personal professional objectives, including any of the foregoing performance goals, the implementation of policies and plans, the negotiation of transactions, the development of long term business goals, the formation of joint ventures, research or development collaborations, and the completion of other corporate transactions. NTD: Performance objectives to be reviewed by client.
(3) Each of the Committee and the Board may, in its independent judgment, adjust Performance Objectives and the related minimum acceptable level of achievement if events or transactions have occurred after the applicable date of grant of a Performance Award that are unrelated to the performance of the Company or Participant and result in a distortion of the Performance Objectives or the related minimum acceptable level of achievement. In the event of any conflict between the Committee’s adjustment and the Board’s adjustment, the Board’s adjustments shall control. Potential transactions or events giving rise to adjustment include, but are not limited to, (i) restructurings, discontinued operations, extraordinary items or events, and other unusual or nonrecurring charges; (ii) an event either not directly related to the operations of the Company or not within the reasonable control of the Company’s management; and (iii) a change in tax law or accounting standards required by generally accepted accounting principles. Notwithstanding the foregoing, except as otherwise determined by the Committee, no adjustment shall be made if the effect would be to cause a Qualified Performance-Based Award to fail to qualify as “qualified performance-based compensation” within the meaning of Section 162(m) of the Code. In addition, with respect to Qualified Performance-Based Awards, the Committee may, in its discretion, reduce or eliminate the amount payable to any Participant pursuant thereto, in each case based upon such factors as the Committee may deem relevant, but shall not increase the amount payable to any Participant pursuant thereto for any Performance Period.
10.
Other Share-Based or Cash-Based Awards
.
The Committee is authorized, subject to limitations under applicable law, to grant to Participants such other equity-based or cash-based Awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based upon or related to Shares, as deemed by the Committee to be consistent with the purposes of the Plan. The Committee may also grant Shares as a bonus (whether or not subject to any vesting requirements or other restrictions on transfer) and may grant other awards in lieu of obligations of the Company or an Affiliate to pay cash or deliver other property under this Plan or under other plans or compensatory arrangements, subject to such terms as shall be determined by the Committee. The terms and conditions applicable to such Awards shall be determined by the Committee and evidenced by Award Agreements, which agreements need not be identical.
11.
Adjustment for Recapitalization, Merger, etc
.
(a)
Capitalization Adjustments
. The aggregate number of Shares that may be granted or purchased pursuant to Awards (as set forth in Section 4 hereof), the numerical share limits in Section 4, the number of Shares covered by each outstanding Award, and the price per Share underlying each such Award shall be equitably and proportionally adjusted or substituted, as determined by the Committee, as to the number, price, or kind of a Share or other consideration subject to such Awards (1) in the event of changes in the outstanding Shares or in the capital structure of the Company by reason of stock dividends, extraordinary cash dividends, stock splits, reverse stock splits, recapitalizations, reorganizations, mergers, amalgamations, consolidations, combinations, exchanges, or other relevant changes in capitalization occurring after the date of grant of any such Award (including any Corporate Event); (2) in connection with any extraordinary dividend declared and paid in respect of Shares, whether payable in the form of cash, stock, or any other form of consideration; or (3) in the event of any change in applicable laws or circumstances that results in or could result in, in either case, as determined by the Committee in its sole discretion, any substantial dilution or enlargement of the rights intended to be granted to, or available for, Participants in the Plan.
(b)
Corporate Events
. Notwithstanding the foregoing, except as provided by the Committee in an Award Agreement or otherwise, in connection with (i) a merger, amalgamation, or consolidation involving the Company in which the Company is not the surviving corporation, (ii) a merger, amalgamation, or consolidation involving the Company in which the Company is the surviving corporation but the holders of Shares receive securities of another corporation or other property or cash,
(iii) a Change in Control, or (iv) the reorganization, dissolution or liquidation of the Company (each, a “Corporate Event”), the Committee may, in its discretion, provide for any one or more of the following:
35
1. The assumption or substitution of any or all Awards in connection with such Corporate Event, in which case the Awards shall be subject to the adjustment set forth in subsection (a) above, and to the extent that such Awards are Performance Awards or other Awards that vest subject to the achievement of Performance Objectives or similar performance criteria, such Performance Objectives or similar performance criteria shall be adjusted appropriately to reflect the Corporate Event;
2. The acceleration of vesting of any or all Awards, subject to the consummation of such Corporate Event, with any Performance Awards or other Awards that vest subject to the achievement of Performance Objectives or similar performance criteria deemed earned (i) based on actual performance through the date of the Corporate Event, or (ii) at the target level (or if no target is specified, the maximum level), in the event actual performance cannot be measured through the date of the Corporate Event, in each case, with respect to all unexpired Performance Periods;
3. The cancellation of any or all Awards (whether vested or unvested) as of the consummation of such Corporate Event, together with the payment to the Participants holding vested Awards (including any Awards that would vest upon the Corporate Event but for such cancellation) so canceled of an amount in respect of cancellation based upon the per-share consideration being paid for the Shares in connection with such Corporate Event, less, in the case of Options, Share Appreciation Rights, and other Awards subject to exercise, the applicable exercise or base price; provided, however, that holders of Options, Share Appreciation Rights, and other Awards subject to exercise shall be entitled to consideration in respect of cancellation of such Awards only if the per-share consideration less the applicable exercise or base price is greater than zero dollars ($0), and to the extent that the per-share consideration is less than or equal to the applicable exercise or base price, such Awards shall be canceled for no consideration; and
4. The replacement of any or all Awards (other than Awards that are intended to qualify as “stock rights” that do not provide for a “deferral of compensation” within the meaning of Section 409A of the Code) with a cash incentive program that preserves the value of the Awards so replaced (determined as of the consummation of the Corporate Event), with subsequent payment of cash incentives subject to the same vesting conditions as applicable to the Awards so replaced and payment to be made within thirty (30) days of the applicable vesting date.
Payments to holders pursuant to paragraph (3) above shall be made in cash or, in the sole discretion of the Committee, in the form of such other consideration necessary for a Participant to receive property, cash, or securities (or a combination thereof) as such Participant would have been entitled to receive upon the occurrence of the transaction if the Participant had been, immediately prior to such transaction, the holder of the number of Shares covered by the Award at such time (less any applicable exercise or base price). In addition, in connection with any Corporate Event, prior to any payment or adjustment contemplated under this subsection (b), the Committee may require a Participant to (A) represent and warrant as to the unencumbered title to his or her Awards, (B) bear such Participant’s pro-rata share of any post-closing indemnity obligations, and be subject to the same post-closing purchase price adjustments, escrow terms, offset rights, holdback terms, and similar conditions as the other holders of Shares, and (C) deliver customary transfer documentation as reasonably determined by the Committee.
(c)
Fractional Shares
. Any adjustment provided under this Section 11 may, in the Committee’s discretion, provide for the elimination of any fractional share that might otherwise become subject to an Award.
12.
Use of Proceeds
.
The proceeds received from the sale of Shares pursuant to the Plan shall be used for general corporate purposes.
13.
Rights and Privileges as a Shareholder
.
Except as otherwise specifically provided in the Plan, no person shall be entitled to the rights and privileges of Share ownership in respect of Shares that are subject to Awards hereunder until such shares have been issued to that person.
14.
Transferability of Awards
.
Awards may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the applicable laws of descent and distribution, and to the extent subject to exercise, Awards may not be exercised during the lifetime of the grantee other than by the grantee. Notwithstanding the foregoing, except with respect to Incentive Stock Options, Awards and a Participant’s rights under the Plan shall be transferable for no value to the extent provided in an Award Agreement or otherwise determined at any time by the Committee.
15.
Employment or Service Rights
.
36
No individual shall have any claim or right to be granted an Award under the Plan or, having been selected for the grant of an Award, to be selected for the grant of any other Award. Neither the Plan nor any action taken hereunder shall be construed as giving any individual any right to be retained in the employ or service of the Company or an Affiliate of the Company.
16.
Compliance with Laws
.
The obligation of the Company to deliver Shares upon vesting, exercise, or settlement of any Award shall be subject to all applicable laws, rules, and regulations, and to such approvals by governmental agencies as may be required. Notwithstanding any terms or conditions of any Award to the contrary, the Company shall be under no obligation to offer to sell or to sell, and shall be prohibited from offering to sell or selling, any Shares pursuant to an Award unless such shares have been properly registered for sale with the Securities and Exchange Commission pursuant to the Securities Act or unless the Company has received an opinion of counsel, satisfactory to the Company, that such shares may be offered or sold without such registration pursuant to an available exemption therefrom and the terms and conditions of such exemption have been fully complied with. The Company shall be under no obligation to register for sale or resale under the Securities Act any of the Shares to be offered or sold under the Plan or any Shares to be issued upon exercise or settlement of Awards. If the Shares offered for sale or sold under the Plan are offered or sold pursuant to an exemption from registration under the Securities Act, the Company may restrict the transfer of such shares and may legend the Share certificates representing such shares in such manner as it deems advisable to ensure the availability of any such exemption.
17.
Withholding Obligations
.
As a condition to the vesting, exercise, or settlement of any Award (or upon the making of an election under Section 83(b) of the Code), the Committee may require that a Participant satisfy, through deduction or withholding from any payment of any kind otherwise due to the Participant, or through such other arrangements as are satisfactory to the Committee, the minimum amount of all federal, state, and local income and other taxes of any kind required or permitted to be withheld in connection with such vesting, exercise, or settlement (or election). The Committee, in its discretion, may permit Shares to be used to satisfy tax withholding requirements, and such shares shall be valued at their Fair Market Value as of the vesting, exercise, or settlement date of the Award, as applicable; provided, however, that the aggregate Fair Market Value of the number of Shares that may be used to satisfy tax withholding requirements may not exceed the minimum statutorily required withholding amount with respect to such Award.
18.
Amendment of the Plan or Awards
.
(a)
Amendment of Plan
. The Board or the Committee may amend the Plan at any time and from time to time.
(b)
Amendment of Awards
. The Board or the Committee may amend the terms of any one or more Awards at any time and from time to time.
(c)
Shareholder Approval; No Material Impairment
. Notwithstanding anything herein to the contrary, no amendment to the Plan or any Award shall be effective without shareholder approval to the extent that such approval is required pursuant to applicable law or the applicable rules of each national securities exchange on which the Shares are listed. No amendment to the Plan or any Award shall materially impair a Participant’s rights under any Award unless the Participant consents in writing (it being understood that no action taken by the Board or the Committee that is expressly permitted under the Plan, including, without limitation, any actions described in Section 11 hereof, shall constitute an amendment to the Plan or an Award for such purpose). Notwithstanding the foregoing, subject to the limitations of applicable law, if any, and without an affected Participant’s consent, the Board or the Committee may amend the terms of the Plan or any one or more Awards from time to time as necessary to
bring such Awards into compliance with applicable law, including, without limitation, Section 409A of the Code.
(d)
No Repricing of Awards Without Shareholder Approval
. Notwithstanding subsection (a) or (b) above, or any other provision of the Plan, the repricing of Awards shall not be permitted without shareholder approval. For this purpose, a “repricing” means any of the following (or any other action that has the same effect as any of the following): (1) changing the terms of an Award to lower its exercise or base price (other than on account of capital adjustments resulting from share splits, etc., as described in Section 11(a)), (2) any other action that is treated as a repricing under generally accepted accounting principles, and (3) repurchasing for cash or canceling an Award in exchange for another Award at a time when its exercise or base price is greater than the Fair Market Value of the underlying Shares, unless the cancellation and exchange occurs in connection with an event set forth in Section 11(b).
19.
Termination or Suspension of the Plan
.
37
The Board or the Committee may suspend or terminate the Plan at any time. Unless sooner terminated, the Plan shall terminate on the day before the tenth (10th) anniversary of the Effective Date. No Awards may be granted under the Plan while the Plan is suspended or after it is terminated; provided, however, that following any suspension or termination of the Plan, the Plan shall remain in effect for the purpose of governing all Awards then outstanding hereunder until such time as all Awards under the Plan have been terminated, forfeited, or otherwise canceled, or earned, exercised, settled, or otherwise paid out, in accordance with their terms.
20.
Effective Date of the Plan
.
The Plan is effective as of the Effective Date, subject to shareholder approval.
21.
Miscellaneous
.
(a)
Certificates
. Shares acquired pursuant to Awards granted under the Plan may be evidenced in such a manner as the Committee shall determine. If certificates representing Shares are registered in the name of the Participant, the Committee may require that (1) such certificates bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Shares, (2) the Company retain physical possession of the certificates, and (3) the Participant deliver a stock power to the Company, endorsed in blank, relating to the Shares. Notwithstanding the foregoing, the Committee may determine, in its sole discretion, that the Shares shall be held in book-entry form rather than delivered to the Participant pending the release of any applicable restrictions.
(b)
Clawback/Recoupment Policy
. Notwithstanding anything contained herein to the contrary, all Awards granted under the Plan shall be and remain subject to any incentive compensation clawback or recoupment policy currently in effect or as may be adopted by the Board (or a committee or subcommittee of the Board) and, in each case, as may be amended from time to time. No such policy adoption or amendment shall in any event require the prior consent of any Participant.
(c)
Data Privacy
. As a condition of receipt of any Award, each Participant explicitly and unambiguously consents to the collection, use, and transfer, in electronic or other form, of personal data as described in this section by and among, as applicable, the Company and its Affiliates for the exclusive purpose of implementing, administering, and managing the Plan and Awards and the Participant’s participation in the Plan. In furtherance of such implementation, administration, and management, the Company and its Affiliates may hold certain personal information about a Participant, including, but not limited to, the Participant’s name, home address, telephone number, date of birth, social security or insurance number or other identification number, salary, nationality, job title(s), information regarding any securities of the Company or any of its Affiliates, and details of all Awards (the “Data”). In addition to transferring the Data amongst themselves as necessary for the purpose of implementation, administration, and management of the Plan and Awards and the Participant’s participation in the Plan, the Company and its Affiliates may each transfer the Data to any third parties assisting the Company in the implementation, administration, and management of the Plan and Awards and the Participant’s participation in the Plan.
Recipients of the Data may be located in the Participant’s country or elsewhere, and the Participant’s country and any given recipient’s country may have different data privacy laws and protections. By accepting an Award, each Participant authorizes such recipients to receive, possess, use, retain, and transfer the Data, in electronic or other form, for the purposes of assisting the Company in the implementation, administration, and management of the Plan and Awards and the Participant’s participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom the Company or the Participant may elect to deposit any Shares. The Data related to a Participant will be held only as long as is necessary to implement, administer, and manage the Plan and Awards and the Participant’s participation in the Plan. A Participant may, at any time, view the Data held by the Company with respect to such Participant, request additional information about the storage and processing of the Data with respect to such Participant, recommend any necessary corrections to the Data with respect to the Participant, or refuse or withdraw the consents herein in writing, in any case without cost, by contacting his or her local human resources representative. The Company may cancel the Participant’s eligibility to participate in the Plan, and in the Committee’s discretion, the Participant may forfeit any outstanding Awards if the Participant refuses or withdraws the consents described herein. For more information on the consequences of refusal to consent or withdrawal of consent, Participants may contact their local human resources representative.
(d)
Participants Outside of the United States
. The Committee may modify the terms of any Award under the Plan made to or held by a Participant who is then a resident, or is primarily employed or providing services, outside of the United States in any manner deemed by the Committee to be necessary or appropriate in order that such Award shall conform to laws, regulations, and customs of the country in which the Participant is then a resident or primarily employed or providing services, or so that the value and other benefits of the Award to the Participant, as affected by non-United States tax laws and other restrictions applicable as a result of the Participant’s residence, employment, or providing services abroad, shall be comparable to the value of such Award to a Participant who is a resident, or is primarily employed or providing services, in the United States. An Award may be modified under this Section 21(d) in a manner that is inconsistent with the express terms of the Plan, so long as such modifications will not
38
contravene any applicable law or regulation or result in actual liability under Section 16(b) of the Exchange Act for the Participant whose Award is modified. Additionally, the Committee may adopt such procedures and sub-plans as are necessary or appropriate to permit participation in the Plan by Eligible Persons who are non-United States nationals or are primarily employed or providing services outside the United States.
(e)
No Liability of Committee Members
. Neither any member of the Committee nor any of the Committee’s permitted delegates shall be liable personally by reason of any contract or other instrument executed by such member or on his or her behalf in his or her capacity as a member of the Committee or for any mistake of judgment made in good faith, and the Company shall indemnify and hold harmless each member of the Committee and each other employee, officer, or director of the Company to whom any duty or power relating to the administration or interpretation of the Plan may be allocated or delegated, against all costs and expenses (including counsel fees) and liabilities (including sums paid in settlement of a claim) arising out of any act or omission to act in connection with the Plan, unless arising out of such person’s own fraud or willful misconduct; provided, however, that approval of the Board shall be required for the payment of any amount in settlement of a claim against any such person. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company’s certificate or articles of incorporation or bye laws, each as may be amended from time to time, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.
(f)
Payments Following Accidents or Illness
. If the Committee shall find that any person to whom any amount is payable under the Plan is unable to care for his or her affairs because of illness or accident, or is a minor, or has died, then any payment due to such person or his or her estate (unless a prior claim therefor has been made by a duly appointed legal representative) may, if the Committee so directs the Company, be paid to his or her spouse, child, relative, an institution maintaining or having custody of such person, or any other person deemed by the Committee to be a proper recipient on behalf of such person otherwise entitled to payment. Any such payment shall be a complete discharge of the liability of the Committee and the Company therefor.
(g)
Governing Law
. The Plan shall be governed by and construed in accordance with the internal laws of Bermuda without reference to the principles of conflicts of laws thereof.
(h)
Funding
. No provision of the Plan shall require the Company, for the purpose of satisfying any obligations under the Plan, to purchase assets or place any assets in a trust or other entity to which contributions are made or otherwise to segregate any assets, nor shall the Company be required to maintain separate bank accounts, books, records, or other evidence of the existence of a segregated or separately maintained or administered fund for such purposes. Participants shall have no rights under the Plan other than as unsecured general creditors of the Company, except that insofar as they may have become entitled to payment of additional compensation by performance of services, they shall have the same rights as other employees and service providers under general law.
(i)
Reliance on Reports
. Each member of the Committee and each member of the Board shall be fully justified in relying, acting, or failing to act, and shall not be liable for having so relied, acted, or failed to act in good faith, upon any report made by the independent public accountant of the Company and its Affiliates and upon any other information furnished in connection with the Plan by any Person or Persons other than such member.
(j)
Titles and Headings
. The titles and headings of the sections in the Plan are for convenience of reference only, and in the event of any conflict, the text of the Plan, rather than such titles or headings, shall control.
39
40
APPLEBY
BYE-LAWS
of
PANGAEA LOGISTICS SOLUTIONS LTD.
The undersigned
HEREBY CERTIFIES
that
the
attached Bye
-
Laws are a true copy of the Bye-Laws of Pangaea
Logistics
Solutions
Ltd.
(the
Company)
adopted by the
Shareholder
(
s) of
the
Company effective as of its merger with Quartet
Merger
Corp
.
on 2 October
2014
Director/ Secretary
A
ppleb
y
Se
rv
ices
(
B
ermud
a
)
Lt
d. Canon's Court, 22
V
i
c
t
o
ri
a Street
H
amil
t
on
H
M
12
B
ermuda
41
CONTENTS
Clause
Page
Contents
1
| BUSINESS COMBINATIONS | |||||
2
BYE-LAWS
OF
PANGAEA
LOGISTICS SOLUTIONS
LTD.
INTERPRETATION
1.
INTERPRETATION
1.1
In
these
Bye-Laws, unless
the context otherwise
requires:
Appointed
Stock
Exchange:
has
the meaning given such term in
the
Companies Acts.
Bermuda:
the
Islands
of Bermuda;
Board:
the Board of Directors of
the
Company or
the Directors
present at a meeting of Directors at which
there is
a quorum;
clear days:
in
relation to
the
period of a
notice, that
period excluding the day on which
the notice is
given or served, or
deemed
to be given or served, and the day for which
it
is given or on which it
is
to take effect;
Companies
Acts:
every Bermuda statute from time to time
in
force concerning companies insofar as
the
same applies to the Company;
Company:
the
company
incorporated in
Bermuda under
the
name
of Quartet Holdco, Ltd. on 29 April 2014 and subsequently merged as the surviving entity with Quartet Merger Corp. on 29 September 2014 as Pangaea Logistics Solutions Ltd.;
Director:
such person or
persons
as shall be appointed
to
the Board from time to time pursuant to these Bye
-
Laws;
Indemnified
Person:
any Director, Officer, Resident Representative, member of a committee
duly
constituted under these Bye-Laws and any
liquidator,
manager or trustee for the time being acting
in
relation
to the
affairs of the Company, and
his or her
heirs, executors
and administrators;
Officer:
a person appointed by the Board
pursuant
to these Bye-Laws and shall
not include
an auditor of the Company;
paid
up:
paid
up
or
credited
as paid up;
Register:
the Register
of Shareholders of the Company
and,
except in
Bye-Law 10,
includes
any branch register;
Registered
Office:
the
registered office for
the time being of
the Company;
2
Resident Representative:
(if
any)
the
individual or
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:
a resolution of the Shareholders passed
in
general meeting or, where required,
of
a separate class or separate classes
of
shareholders passed in a separate general meeting or in either case adopted
by
resolution in
writing,
in accordance
with
the provisions
of
these Bye Laws;
Seal:
the
common seal of the Company and
includes
any authorised duplicate
thereof;
Secretary:
includes a joint, temporary,
assistant or deputy Secretary and the
individual
or the
company appointed by the Board
to
perform any
of
the duties
of the Secretary;
share:
share in
the capital of the Company and
includes
a
fraction of
a share;
Shareholder:
a
shareholder or
member
of
the
Company,
provided that
for
the purposes
of
Bye-Law 45 it shall also include any holder of notes, debentures or bonds
issued
by
the
Company;
Specified Place:
the place,
if any, specified
in
the
notice
of
any
meeting
of
the
shareholders,
or adjourned meeting of the shareholders, at
which
the
chairman of
the meeting shal
l
preside;
Subsidiary:
and
Holding Company
have
the same
meanings
as
in
section
86 of
the
Companies
Act 1981,
except that
references
i
n
that
section
to
a company shall include
any body
corporate or
other legal
entity, whether incorporated
or
established
in Bermuda or
elsewhere;
These Bye-Laws:
these
Bye-Laws in
their present
form.
1.2
For
the purposes of
these Bye-Laws,
a
corporation
which
is
a shareholder shall
be deemed
to
be present in person
at a general meeting
if,
in accordance with the Companies Acts,
its
authorised
representative
is
present.
1.3
Words
importing
only
the
singular
number
include the plural number
and
v
i
ce versa.
3
1.4
Words importing persons
include
companies or associations or bodies of persons, whether corporate or unincorporated.
1.5
A reference to writing shall
include
typewriting, printing,
l
ithograp
h
y, photography and electronic record.
1.6
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).
1.7
A
reference
to anything being done by electronic means includes its being done by means of any electronic or other communications equipment or facilities and
reference
to any communication being delivered or received, or being
delivered
or
received
at a particular place,
includes
the transmission of an electronic record to a recipient identified in such manner or by such means as the Board may from time to time approve or prescribe, either generally or for a particular purpose.
1.8
A
reference
to a signature or to anything being signed or executed include such forms of electronic signature or other means of verifying
the
authenticity of an electronic
record
as the Board may from time to time approve or prescribe, either generally or for a particular purpose.
1.9
A reference to any statute or statutory provision (whether
in
Bermuda or elsewhere)
includes
a
reference
to any modification or re-enactment of it for the time being in force and to every rule, regulation or order
made under
it (or under any such modification or re-enactment) and for the time being in force and any reference to any rule, regulation or order made under any such statute or statutory provision
includes
a
reference
to any modification or replacement of such rule,
regulation
or order for the time being in force.
1.10
In
these Bye-Laws:
1.10.1
powers of delegation shall not be restrictively construed but the widest interpretation shall be given thereto;
1.10.2
the word
Board
in the context of the exercise of any
power
contained in these Bye
Laws
includes any committee consisting of one or more Directors, any Director holding
executive
office and any local or divisional Board, manager or agent of
the
Company to which or,
as
the ease may be, to whom the power
in
question has been delegated;
1.10.3
no power of delegation shall be limited by the existence or, except where expressly provided by the terms of delegation, the exercise
of
any other power of delegation; and
4
1.10.4
except where expressly provided by the terms of delegation, the delegation of a power
shall
not
exclude
the concurrent exercise of that power by any other body or
person who
is
for
the
time
being
authorised to exercise
it
under these Bye-Laws or under
another delegation
of the powers.
REGISTERED OFFICE
2.
REGISTERED OFFICE
The Registered
Office shall
be
at such place in Bermuda as the
Board
shall from time to time appoint.
SHARES AND
SHARE
RIGHTS
3.
SHARE
CAPITAL
3.1
The
authorised share capital of
the
Company at
the
date of adoption of
these
Bye-Laws
is
10,100.00
divided into 100,000,000
Common
Shares
of
par
value US$0.0001
each
and
1,000,000 Undesignated
Shares of par value US$0.0001 each.
3.2
Common Shares
The Common Shares shall, subject to
the
other provisions of
these
Bye-Laws, entitle the holders
thereof
to the following rights:
3.2.1
as regards
dividend:
after making all necessary
provisions,
where relevant, for payment of any preferred
dividend
in
respect
of any preference shares
in the
Company then outstanding, the Company shall apply any profits or
reserves
which the
Board resolves to
distribute
in
paying such profits or reserves to the holder of the Common
Shares
in respect
of their
holding of such shares pari passu and pro rata to the
number
of Common Shares held
by each of
them;
3.2.2
as regards capital:
on a return of assets on
liquidation,
reduction of capital or otherwise, the
holders of
the Common Shares shall
be
entitled to
be
paid the
surplus
assets of the Company remaining after payment of
its
l
iabilities (subject to the rights of holders of any preferred shares in the Company then in issue having
preferred
rights on the return of
capital)
in
respect of
their
holdings of Common Shares pari passu and pro
rata to
the number
of
Common Shares
held
by
each
of them;
3.2.3
as regards voting
in
general meetings:
the
holders of the Common Shares shall
be entitled to
receive notice of, and
to
attend and
vote
at, general meetings
of
the Company;
every
holder of Common
5
Shares present
in
person or by proxy shall on a
poll
have
one vote for each Common Share
held
by him or her.
3.3
Undesignated
Shares
The rights attaching to the Undesignated Shares, subject to these Bye-Laws
generally
and to
Bye-Law
3.4
in particular,
shall
be
as follows:
3.3.1
each
Undesignated
Share shall
have
attached to
it
such
preferred,
qualified or other special rights, privileges and conditions and be subject to such restrictions, whether
in regard
to dividend,
return
of capital, redemption, conversion into Common Shares or voting or otherwise,
as the
Board may
determine
on or before its allotment;
3.3.2
the
Board may
allot the Undesignated Shares in more than
one
series and,
if it
does so, may name and
designate
each series in such manner as it deems appropriate to
reflect the particular rights and restrictions attached to
that series, which may differ
in
all or any
respects
from any other series of Undesignated Shares;
3.3.3
the
particular rights and
restrictions
attached to any Undesignated Shares shall be recorded
in
a resolution of the
Board. The
Board may at
any
time before the allotment
of
any
Undesignated
Share by further resolution
in
any way amend such rights and restrictions or
vary
or
revoke
its designation. A copy of any such
resolution
or
amending
resolution
for the
time being
in
force shall be annexed as an appendix
to
(but shall not form part of) these
Bye-Laws;
and
3.3.4
the
Board shall not attach
to
any Undesignated Share any rights or restrictions which would
alter or abrogate
any of the special
rights
attached
to
any other class of series of shares for the time being
in
issue
without such sanction
as
is required for any alteration or abrogation of such rights, unless expressly authorised
to
do so by
the
rights attaching
to or
by the terms of issue of such shares.
3.4
Without limiting the foregoing and subject to the Companies Acts,
the
Company may
issue
preference shares (including any preference
shares
created pursuant to Bye-Law 3.3) which:
3.4.1
are
liable
to be redeemed on the happening of a
specified
event
or
events or on a given
date
or
dates and/or;
3.4.2
are liable to be redeemed at the option of
the Company
and/or,
if
authorised
by
the Memorandum of Association of
the
Company, at
the
option of
the holder.
6
3.5
The
terms and
manner of the
redemption of
any
redeemable
shares
created
pursuant
to
Bye Law 3.3 shall be as
the
Board may by resolution determine before the allotment of such shares and the terms and manner of redemption of any other redeemable preference shares
shall be
either:
3.5.1
as the Shareholders may by Resolution determine;
or
3.5.2
insofar
as the Shareholders do not
by
any Resolution determine, as the Board
may by
resolution determine,
in either
case,
before
the
allotment of
such
shares. A
copy
of any
such Resolution or resolution
of
the Board
for
the
time being
in force
shall
be attached as an appendix to
(but
shall not form part of) these Bye
-
La
ws.
3.6
The terms of any
redeemable
preference
shares
(including any
redeemable
preference
shares created
pursuant to Bye-Law 3.3) may
provide for
the
whole or any part of
the amount due on
redemption
to be paid or satisfied otherwise than in cash, to the
extent
perm
i
tted by
the
Companies Acts.
3.7
Subject to the foregoing and 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.
3.8
The Board may, at its discretion and
without the
sanction of
a
Resolution, authorise the purchase by the Company
of
its own shares,
of
any class, at
any price
(whether at par
or
above or
below
par), and any shares to be so purchased
may be
selected
in
any manner whatsoever,
upon
such terms as the Board may
in
its discretion
determine, provided always that
such
purchase is
effected
in accordance
with
the provisions of the
Companies
Acts.
The whole
or any part of the amount payable on any such purchase may be paid
or satisfied otherwise
than in
cash,
to the
extent
permitted
by the Companies
Acts.
3.9
The
Board may, at its
discretion and without the
sanction
of
a Resolution, authorise the acquisition by
the Company of
its
own shares, of any class, at any price (whether at par or
above
or
below
par),
and any shares to
be so
purchased may be
selected
in any manner whatsoever, to be held as treasury
shares, upon
such
terms as
the Board may
in
its
discretion
determine,
provided always
that
such acquisition is effected
in accordance
with
the
provisions
of the
Companies
Acts.
The whole or
any part
of
the amount
payable
on any
such
acquisition may be paid or
satisfied otherwise
than in
cash, to
the
extent
permitted by the
Companies
Acts.
The Company
shall
be entered
in the
Register as a Shareholder
in
respect
of the
shares
held by
the Company as
treasury
shares and shall be
a
Shareholder
of
the Company
but subject always to
the
provisions of the Companies Acts and for the avoidance of
doubt the Company
shall
not exercise
any
rights
and shall
7
not enjoy or participate in any of
t
h
e
rights attaching to
those shares
save
as expressly
prov
i
ded
for in the Companies Act.
8
4.
MODIFICATION OF RIGHTS
4.1
Subject to the Companies Acts, all or any of the special rights for the time be
i
ng
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 (75%) of the issued shares of that class or w
i
th
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 (2) or more persons holding or representing by proxy the majority 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 or her 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.
4.2
For
the
purposes of this Bye-Law, unless otherwise expressly provided
by
the rights attached to any shares or
class
of shares, those
rights
attaching to any class of shares for the time
being
shall not
be
deemed to be altered by:
4.2.1
the
creation
or issue of further shares ranking pari passu with them;
4.2.2
the creation or issue for full value
(as
determined by
the Board)
of further shares ranking as
regards participation in
the profits or assets of the Company or otherwise in priority to them; or
4.2.3
the
purchase
or redemption by the Company of any of
its
own shares.
5.
SHARES
5.1
Subject to the provisions of these Bye-Laws, the unissued shares of the Company
(whether
forming part of the original capital or any
increased
capital) shall be at the disposal of
the
Board, which may offer, allot, grant options over or otherwise dispose of them to such persons, at
such
times and for
such
consideration and
upon
such terms and conditions
as
the
Board
may
determine.
5.2
Subject to the provisions of these Bye-Laws, any
shares
of the
Company held
by the
Company
as treasury shares shall be at the disposal of the Board, which may hold all or any of the shares, dispose of
or
transfer all
or
any of the shares for
cash or
other
consideration, or cancel
all or any of the shares.
5.3
The Board may in connection with the
i
ssue
of
any shares
exercise
all powers
of
paying commission and brokerage conferred
or permitted
by
law.
Subject to the provisions of the Companies Acts, any such
9
commission or
brokerage
may be satisfied by the payment of cash or by the allotment
of
fully
or partly
paid
shares or partly in one
way and partly in
the
other.
5.4
Shares
may
be issued in fractional denominations and
in
such event the Company shall deal with such fractions
to the
same extent as its whole shares, so that a share in a fractional denomination shall have, in proportion to the fraction of a whole share that it represents, all
the rights of
a
whole
share,
including
(but without
limiting
the generality of the foregoing) the
right
to vote, to receive dividends
and
distributions and to participate in a
winding-up.
5.5
Except as ordered by a court of competent jurisdiction or as required by law, no person sha
ll
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
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.
6.
CERTIFICATES
6.1
No share certificates shall be issued by the Company unless,
in
respect of a class of
shares,
the Board
has either for
all
or
for some
holders
of such shares
(who
may be determined in such
manner
as
the
Board thinks fit) determined that
the holder
of such shares may be entitled to share
certificates. In
the case of a share held jointly by several persons, del
i
very
of a certificate
to
one of several joint holders shall be sufficient delivery to all.
6.2
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.
6.3
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
in
such form as
the
Board may
determine
and
issued
under the Seal or signed by a Director, the Secretary or any person authorised by the Board for that purpose. 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, or may determine that a representation of the Seal may be printed on any
such certificates.
If any person
holding
an
office
in
the Company who has signed, or whose facsimile signature
has been
used on, any certificate ceases for any
10
reason to hold his or her office, such certificate may nevertheless be
issued
as
though that person had not ceased to hold such office.
6.4
Nothing in these Bye-Laws shall prevent title to any securities of the Company
from being
evidenced and/or transferred without a written instrument
in
accordance with regulations made from time to
time in this
regard
under
the Companies Acts, and the Board shall have
power
to implement any arrangements which it may think
fit
for such evidencing and/or transfer which accord with those regulations.
7.
LIEN
7.1
The
Company shall have a
first
and
paramount
lien on every share
(not
being a fully paid share) for all monies, whether presently
payable
or not, called or payable, at
a
date
fixed
by
or
in accordance with
the
terms of issue of such share in respect of such share, 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 or her
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 or her
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, e
i
ther generally or
i
n
any particular case, waive any
l
ien
that
has arisen or declare
any
share to be wholly or
in
part exempt from
the
provisions of
this Bye-Law.
7.2
The
Company
may
sell, in such manner as the
Board
may think fit, any share on which the Company has
a
lien but no sale shall be made unless some sum in
respect
of which the
lien
exists is presently payable nor until the expiration of fourteen (14) days after a
notice
in
writing, stating and
demanding payment
of the sum presently payable and giving
notice
of the
intention to
sell in
default
of such payment, has been
served
on
the
holder for
the
time being of
the
share.
7.3
The net proceeds of sale by the Company of any shares on which it
has
a lien shall
be
app
l
ied
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
shal
l
(subject
to
a
like lien
for debts or
liabilities
not presently payable
as
existed upon the share
prior
to the sale)
be
paid to the person who was the
holder
of the share immediately before
such
sale.
For
giving effect
to
any such
sale,
the Board may authorise some person to transfer the share sold to
the
purchaser thereof. The purchaser shall be registered as the holder of the share and he or she s
ha
ll not be bound to see
to
the application of the purchase money
,
nor shall
his or her
title
to the
share be affected by any irregularity or invalidity in the proceedings
r
elating to the sale.
7.4
11
7.4.1
Whenever any law for the time being of any country, state or place imposes or purports to impose any
immediate
or future or possible liability upon the Company to make any payment or empowers any government or taxing authority or government official to require the Company to make any payment in respect of any shares registered in any of the Company's registers as held either jointly or solely by any Shareholder or in respect of any dividends, bonuses or other monies due or payable or accruing due or which may become due or payable to such Shareholder by the Company on or
in
respect of any shares registered as aforesaid or for or on account or in respect of any Shareholder and whether in consequence of:
(a)
the death of such Shareholder;
(b)
the non-payment of any income tax or other tax
by
such Shareholder;
(c)
the non-payment of any estate, probate, succession, death, stamp, or other duty by the executor or administrator of such Shareholder or by or out of his or her estate; or
(d)
any other act or thing;
7.4.2
in every such case (except to the extent that the rights
conferred
upon
holders of any class of shares render the Company liable to make additional payments
in
respect of sums withheld on account of the foregoing):
(a)
the Company shall be fully indemnified by such Shareholder or his or her executor or administrator from all liability;
(b)
the Company shall have a
lien
upon all dividends and other
monies
payable in respect of the shares registered in any of
t
he
Company's registers as held either jointly or solely by such Shareholder for all monies paid or payable by the Company in respect of such shares or
i
n
respect
of any dividends or other monies as aforesaid thereon or for or on account or
i
n
respect
of such Shareholder
under
or in consequence of any such law together with interest at the rate of fifteen percent
(15%)
per annum thereon from the date of payment to date of repayment and may deduct or set off against such dividends or other monies payable as aforesaid any monies paid or payable by the Company as aforesaid together with interest as aforesaid;
(c)
the Company may recover as a debt due from such Shareholder or his or her executor or administrator wherever constituted
any
monies paid
by
the Company under or in
consequence
of any such law and
interest
thereon at the rate and for the period aforesaid
12
in excess of any dividends or other monies as aforesaid then due or payab
l
e by the Company; and
(d)
the Company
may, if any such
money is
paid or payable by it under any
such law
as
aforesaid,
refuse
to register
a
transfer
of
any shares by
any
such
Shareholder or his or her
executor or
administrator until
such
money and
i
nterest as aforesaid
is
set
off
or
deducted as aforesaid,
or
in case
the
same exceeds the
amount
of any such dividends
or other monies as
aforesaid then due or payable by
the
Company, until
such excess
is
paid
to the Company.
7.5
Subject to
the
rights conferred upon
the holders
of
any class
of shares,
nothing
herein
contained shall prejudice
or
affect any right
or remedy which
any law may
confer
or
purport
to confer on
the
Company
and as
between the
Company
and every
such Shareholder
as aforesaid, his or her
estate
representative,
executor, administrator
and estate
wheresoever constituted
or situate,
any
right
or
remedy
which such
law
shall confer
or purport to
confer
on the Company
shall
be
enforceable
by
the Company.
8.
CALLS ON SHARES
8.1
The Board may from time
to
time make
calls upon the
Shareholders
(for the
avoidance
of doubt excluding the
Company
in
respect of
any
nil
or
partly paid
shares
held
by the Company
as
treasury shares) in
respect
of
any
monies
unpaid
on
their
shares (whether on account of
the
par value of
the
shares
or by
way
of premium) and not by the
terms
of
issue thereof made payable
at
a
date
fixed
by or
in
accordance
with such terms
of
issue, and each Shareholder shall (subject
to the Company
serving upon him or her at
least
fourteen (14)
days’
notice
specifying the time
or times
and place of
payment) pay to the
Company
at the time or times and place so specified
the amount
called
on his or her
shares. A call may be
revoked
or postponed
as
the
Board may
determine.
8.2
A call may
be
made
payable
by
instalments and shall
be deemed
to
have
been made at the time when the
resolution
of the Board
authorising
the call was passed.
8.3
The joint holders
of
a share shall be jointly and
severally
liable
to
pay
all calls
in respect thereof.
8.4
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.
8.5
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
13
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.
8.6
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.
9.
FORFEITURE OF SHARES
9.1
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 or her
requiring
payment of so much of the call or installment as is unpaid, together with any interest which may
have
accrued.
9.2
The notice shall
name a further
day (not being less than fourteen (14) days from the date of the notice) on or before which, and the place where, the payment
required
by the notice
is
to be made and shall
state
that, in the event of non-payment on or before the day and at
the
place
appointed,
the shares
in
respect of which such call is
made
or
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.
9.3
If
the
requirements
of any such notice as aforesaid are not complied with, any
share
in
respect of which such notice
has
been given may
at
any time thereafter,
before
payment of all calls or
instalments
and
interest
due in respect thereof has been made, be forfeited by a
resolution
of
the Board to that effect. Such forfeiture shall include all dividends declared in respect of the forfeited shares and not actually paid before the forfeiture.
9.4
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 not
i
ce as aforesaid.
9.5
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.
14
9.6
A person whose shares have been forfeited shall thereupon
cease
to
be
a
Shareholder
in respect
of
the
forfeited shares
but
shall, notwithstanding the forfeiture, remain liable to pay to the Company all monies which at the date of forfeiture were presently payable
by him or her 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 al
l
owance for the value
of
the shares forfe
i
ted.
9.7
An
affidavit
in writing that the deponent is a
Director
of
the
Company or the Secretary and that a share
has
been
duly
forfeited on the date stated
in
the
affidavit shall
be
conclusive evidence of the
facts
therein stated as against all
persons
claiming to be entitled to the share.
The
Company may
receive
the consideration (if any) given for the share on the sale, re-allotment or disposition thereof and the Board may authorise some person
to
transfer
the share to the
person
to whom the same
is
sold,
re-allotted
or disposed of, and he or she 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 or her
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
10.
REGISTER OF SHAREHOLDERS
10.1
The
Register shall
be kept at the
Registered Office
or
at such other place in Bermuda
as
the
Board
may from time to
time
direct,
in the
manner prescribed by the Companies Acts. Subject to the provisions of the Companies Acts, the Company may keep one or more overseas or branch registers in
any
place,
and the Board
may make, amend and revoke any such
regulations
as it may think
fit
respecting the keeping of such registers. The Board
may
authorise any share on the Register to be
included
in a branch register or any share registered on
a
branch register to be
registered
on another branch register, provided that at
all
times the Register is maintained
in
accordance with the Companies Acts.
10.2
The
Register or any branch register may be closed
at
such times and for such
period
as the
Board
may from
time
to time decide, subject to the Companies Acts. Except during such
time
as
it is
closed, the
Register
and each branch
reg
i
ster shall be open to inspection
in
the
manner
prescribed by
the
Companies Acts between
10:00
a
.
m. and 12:00
noon (or
between such other times
as the
Board from time
to
time
determines) on every working day. Unless the Board so determines, no Shareholder or intending Shareholder
shall
be
entitled to have entered
in
the Register or any branch register any indication of
any
trust or
any equitable,
contingent,
future
or
partial
interest
in any share or 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
5.5.
15
REGISTER OF DIRECTORS AND OFFICERS
11.
REGISTER OF DIRECTORS AND OFFICERS
The Secretary shall establish and maintain a register of the Directors and Officers of the Company as required
by
the Companies Acts. The
register
of Directors and Officers shall be open to
inspection in
the
manner
prescribed by the Companies Acts between 9:00 a.m. and 5:00
p.m. in
Bermuda on every working day.
TRANSFER OF SHARES
12.
TRANSFER OF SHARES
12.1
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 or her shares by
an instrument of transfer in
the usual
common form,
in
any other form which the
Board
may approve, or, provided such shares are
listed
on an Appointed Stock Exchange,
by
any means permitted by the
rules
of such exchange.
12.2
Subject to Bye-Law 12.1, any instrument of transfer of a share shall be signed by
or on
behalf of
the
transferor and where any share
i
s not fully-paid,
the
transferee. 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 discret
i
on 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 such shares are listed on an Appointed Stock Exchange or:
12.2.1
the
instrument
of
transfer is duly
stamped
(if
required by
law)
and
lodged
with the Company,
at
such place as the Board shall
appoint
for the purpose, accompanied by
the
certificate
for
the
shares
(if
any has
been
issued) 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,
12.2.2
the instrument of transfer
is
in respect of only one class of share,
12.2.3
the instrument of transfer is
in
favour
of
less
than five (5) persons
jointly;
and
12.2.4
it is satisfied
that
all applicable
consents,
authorisations, permissions or approvals of any governmental
body
or agency in Bermuda or any other applicable
jurisdiction
required to
be
obtained under relevant
l
aw prior to such transfer have been obtained.
12.3
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.
16
12.4
If the Board declines to register a transfer it shall, within three
(3)
months after
the
date
on
which the instrument of transfer was lodged, send to the transferee notice of such
refusal.
12.5
A fee to be determined by the Board
shall
be charged by the Company for registering any transfer, probate, letters of administration, certificate of death
or
marriage, power of attorney, 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, (except
that the Company
may
require
payment
of a sum sufficient to
cover
any tax or other governmental charge that may be imposed
on
it
in connection with such transfer or entry).
TRANSMISSION OF SHARES
13.
TRANSMISSION OF SHARES
13.1
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 or her 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 or her 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.
13.2
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 or her entitlement,
either
be registered himself or herself as the holder of the share or elect to have some
person
nominated by him or her registered as
the
transferee thereof. If
the
person so becoming entitled elects to be registered
himself or herself,
he or she shall deliver or send to the Company a notice
in
writing signed by him or her stating that he so
elects.
If he or she shall elect to have his or her nominee registered, he or she shall signify his or her
election
by signing an instrument
of
transfer of such share in favour of
his or her
nominee. All the
limitations,
restrictions and provisions of these Bye-Laws relating to the
right
to
transfer
and the registration
of
transfer of shares shall be applicable
to
any
such
notice or
instrument
of
transfer
as aforesaid
as
if
the death of the Shareholder
or other event giving rise to the transmission had not
occurred
and
the
notice or instrument of transfer was an
instrument
of
transfer
signed by such Shareholder.
13.3
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 or her entitlement) be entitled to receive and may give a discharge for any dividends or
other
monies
payable
in respect
of
the share, but he shall not be entitled
in
respect of the share to
receive
17
notices
of or to attend or
vote at general
meetings
of
the Company or, save as aforesaid,
to
exercise
i
n 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 herself or to transfer the share and, if the notice
is
not
complied with within
sixty
(60) days,
the Board may thereafter withhold payment of all
dividends
and
other
monies payable
in
respect
of
the
shares
until the requirements
of
the notice
have
been complied with.
13.4
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.
SHARE CAPITAL
14.
INCREASE OF CAPITAL
14.1
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.
14.2
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.
14.3
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.
15.
ALTERATION OF CAPITAL
15.1
The Company may from time to
time
by
Resolution:
15.1.1
divide its
shares
into several classes and attach
thereto
respectively any preferential, deferred, qualified or
special
rights,
privileges or conditions;
15.1.2
consolidate and
divide
all
or
any of
its
share
capital
into
shares of
larger par
value
than its
existing
shares;
15.1.3
sub-divide
its
shares or
any of
them into
shares
of
smaller
par value
than is fixed by its
memorandum,
so, however, that in the
sub-division
the proportion between
the amount
paid
and the amount,
if
any,
unpaid
on each
reduced
share shall be the
same
as
it
was
in
the
case of the share from which
the reduced
share
is derived;
15.1.4
make provision for the issue
and
allotment of
shares which do
not carry any
voting
rights;
18
15.1.5
cancel shares which, at the
date
of the passing of the Resolution in
that
behalf, have not been taken or agreed to be taken
by
any person, and dimin
i
sh
the amount of its share capital by the amount of the
shares
so cancelled; and
15.1.6
change the
currency
denomination
of
its
share capital.
15.2
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
shal
l
not
be
bound to see to
the
application of the purchase money nor shall
his or her
title
to
the shares be affected by any irregularity or
invalidity
in the proceedings relating to the sale.
15.3
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.
16.
REDUCTION OF CAPITAL
16.1
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
share premium
account
in
any manner.
16.2
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 RESOLUTIONS
IN WRITING
17.
GENERAL
MEETINGS
AND RESOLUTIONS IN
WRITING
17.1
The
Board
shall convene and
the
Company
shall hold general meetings
as Annual General
Meetings in accordance with the requirements
of the Companies Acts at such
times and places as the Board
shall
appoint. The Board
may, whenever
it thinks
fit, and shall, when
requisitioned by
shareholders
pursuant to the
provisions of
the
Companies
Acts,
convene
general meetings
other
than
Annual General
Meetings,
which shall be called
Special
General
Meetings, at such time
and place as the Board
may
appoint.
17.2
Except in
the case
of
the
removal of auditors or Directors, anything
which may be done
by resolution
of the
Shareholders
in general
meeting
or by resolution
of
any class of Shareholders
in a separate general meeting
may
be done by resolution
in writing,
signed by
the
Shareholders
(or
the holders
of
such
class
of shares)
19
who
at
the
date
of
the
notice
of the resolution
in writing
represent the majority
of votes that
would be required
if
the
resolution
had been
voted
on at a meeting of the Shareholders. Such resolution in
writing
may be
signed by
the
Shareholder or its proxy, or
in the case of a Shareholder
that
is a corporation
(whether or
not a
company
within
the meaning
of
the Companies
Acts)
by its
representative on behalf
of such
Shareholder, in as many counterparts as
may
be necessary.
17.3
Notice of any
resolution in writing
to be made under this Bye-Law
shall be
given to all
the
Shareholders who
would
be
entitled
to
attend
a meeting and vote on
the
resolution. The requirement to give notice of any resolution in
writing
to be
made
under
this
Bye-Law
to
such Shareholders shall be satisfied by giving to those Shareholders a
copy
of that reso
l
ution in writing in the same manner as that
required
for a
notice
of a general meeting
of
the
Company
at
which
the resolution could have been
considered,
except that
the
length of the
period
of notice shall not apply.
The
date
of
the notice
shall be set out in the copy of
the
resolution in
writing.
17.4
The accidental omission to give notice, in accordance
with this
Bye-Law, of a
resolution in
writing to,
or
the non-receipt of such
notice
by,
any person
entitled to receive
such
notice
shall
not invalidate
the
passing
of
the resolution in
writing.
17.5
For the purposes of this Bye-Law, the
date of
the
resolution
in
writing is
the date
when
the
resolution
in writing is
signed
by, or on behalf
of,
the Shareholder who establishes the majority of
votes required
for the
passing of
the resolution
in writing
and any
reference
in any enactment to the date of
passing of
a resolution is,
i
n relation to a resolution
in writing made in
accordance with this
Bye-Law, a
reference to
such
date.
17.6
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 meet
i
ng
of
the relevant class of Shareholders of the Company,
as the case may be.
A
resolution in writing
made in
accordance
with
this
Bye-Law
shall constitute
minutes
for
the purposes of
the Companies
Acts and these Bye-Laws.
18.
NOTICE OF GENERAL MEETINGS
18.1
An Annual General Meeting shall
be
called by not
less
than 10 (ten) and
no
more
than
60 (sixty) clear days’
notice in
writing and a Special General Meeting shall be called by not
less
than
10
(ten) and no more than
60 (sixty)
clear days’ notice in writing. The notice shall specify the place, day and
time
of
the
meeting, (including any satellite meeting place arranged for
the purposes
of Bye-Law 19) and, the nature of
the
business to be considered. Notice of every general meeting shall be given
in
any manner permitted by these Bye-Laws
to
all Shareholders other than such as,
under
the provisions of these Bye-Laws or the terms of
i
ssue of the shares they
hold,
are not entitled to receive such notice from the Company and to each Director,
20
and to any Resident Representative who or which has de
l
ivered a written notice upon
the
Registered Office requiring that such notice be sent to them or it.
18.2
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.
18.3
A Shareholder present, either
in
person or by proxy, at any meeting of the Company or
of
the holders of any class of shares in the Company shall be deemed to have received notice of the meeting and, where requisite, of
the
purposes for which it was called.
18.4
The Board may cancel or postpone a
meeting
of
the
Shareholders after it has been convened and notice of such cancellation or postponement shall be served in accordance with these Bye
Laws
upon all Shareholders entitled to
notice
of the meeting so cancelled or postponed setting
out,
where the meeting is postponed to a specific date,
notice
of
the
new meeting in accordance with this Bye-Law.
19.
GENERAL MEETINGS AT MORE THAN ONE PLACE
19.1
The provisions of
this
Bye
-
Law
shall apply if any general meeting is
convened
at or adjourned
to
more than
one
place.
19.2
The notice of any meeting or adjourned meeting may specify the Specified Place and the Board shall make arrangements for simultaneous attendance and participation in a satellite
meeting
at
other
places (whether adjoining the Specified Place or in a different and separate place
or
places altogether or otherwise) by Shareholders. The Shareholders present at any such satellite meeting place in person or by proxy and
entitled
to vote shall
be counted
in the quorum for, and shall be
entitled
to vote at, the general meeting
in
question if
the
chair
of
the
general meeting is
satisfied
that adequate
facilities
are available throughout the general meeting to
ensure
that Shareholders
attending
at
all
the meet
i
ng places are
able to:
19.2.1
communicate
simultaneously and
instantaneously
with
the persons
present
at the other meeting place or places,
whether
by use
of
microphones, lo
ud-
speakers, audio-visual or other
communications
equipment or
facilities;
and
19.2.2
have access to all documents which are required by the Companies Acts and these Bye-Laws to be made
available
at the meeting.
19.3
The
chair of
the
general meeting shall be present at, and the meeting shall be
deemed to take
place at, the Specified Place.
If
it appears to
the
chair of the general
meeting
that
the
facilities at the Specified Place or
21
any satellite meeting
place
are or become
inadequate
for
the purposes
referred to above, then the chair may, without the consent of the meeting, interrupt or adjourn the general
meeting.
All business conducted at
that
general meeting up to the time of such adjournment shall be valid.
19.4
The Board may from time to time make such arrangements for
the
purpose
of controlling the
level of attendance at any such satellite meeting (whether involving the
issue
of tickets or the
imposition
of some means of selection or otherwise) as they shall
in
their absolute discretion consider appropriate, and may from
time
to
time vary
any such arrangements or make new arrangements in place of them, provided
that
a Shareholder who
is
not entitled
to
attend
,
in
person or
by proxy,
at any
particular
place shall be entitled so
to
attend at one of the other places and the entitlement of any
Shareholder
so to attend the meeting or adjourned meeting at such
place
shall
be
subject
to
any such arrangements as
may
be for the time being
in
force and by
the notice
of meeting or adjourned meeting stated to apply
to the
meeting.
19.5
If
a meeting is adjourned to
more
than one place, notice of the adjourned meeting shall be
given
in
the
manner
required
by
Bye-Law 18.
20.
PROCEEDINGS AT
GENERAL
MEETINGS
20.1
In accordance
with the Companies Acts, a general meeting may be held with only one
individual
present provided that the requirement for a quorum is satisfied. 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 chair, which shall not be treated as part of the business of
the
meeting. Save as
otherwise
provided by
these Bye-Laws,
at
least
two
(2)
Shareholders present in
person
or by proxy and entitled to vote representing
the
holders of more than 33% of the
issued
shares entitled to
vote
at such meeting
shall
be a quorum for all purposes; prov
i
ded, 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.
20.2
If
within
five
(5) minutes (or such longer time as the chair of the meeting may determine
to
wait) after
the time
appointed for
the
meeting, a quorum
is
not present, the meeting,
i
f
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 chair of
the
meeting may
determine
and
at
such adjourned meeting two (2)
Shareholders
present
in
person or
by proxy and
entitled to vote
and
representing the holders of
more
than 33% of the
issued
shares entitled to vote at such meeting shall be a
quorum,
provided 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
.
The
Company
shall give not
less
than
10
clear
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
(2) Shareholders present
in
person or by
proxy
and entitled
to
vote
and
representing the
22
holders
of more than 33% of
the issued
shares entitled to vote at
such
meeting shall
be
a quorum. If at
the
adjourned
meeting
a
quorum is
not present within
fifteen
(15) minutes after
the time
appointed for holding the
meeting,
the
meeting
shall
be
dissolved.
20.3
A meeting of the Shareholders or
any
class thereof may be held by means of such telephone, electronic
or
other communication
facilities
(including, without
limiting
the generality of
the
foregoing, by telephone, or by video conferencing) 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. If it appears to
the
chair of a general
meeting
that
the
Specified Place is
inadequate
to accommodate all
persons
entitled and wishing to attend,
the
meeting
is
duly constituted and its proceedings are valid
if
the chair is satisfied
that
adequate facilities are available, whether at the Specified
Place
or elsewhere, to ensure
that
each such person
who
is
unable
to
be accommodated at the Specified Place
is
able to communicate simultaneously and
instantaneously
with the persons
present
at the Specified Place, whether by the use of microphones, loud-speakers, audio-visual or other communications equipment or
facilities.
20.4
Subject to the Companies Acts, a
resolution
may only be put to a vote at a general meeting of
the
Company or of any class of Shareholders if:
20.4.1
it
is proposed by
or at
the
direction
of the Board; or
20.4.2
it
is
proposed at the direction of the
Court;
or
20.4.3
it is
proposed on the requisition
in
writing
of such
number of Shareholders
as
is
prescribed by,
and
is
made
in accordance
with, the
relevant provisions of
the
Companies Acts; or
20.4.4
the
chair of the meeting in his or her absolute discretion decides that the resolution may properly be
regarded
as within the
scope
of
the
meeting.
23
20.5
No
amendment may be made to a
resolution,
at or before the time
when
it
is
put to a vote,
unless
the chair of the meeting
in
his or her absolute discretion
decides
that the amendment or the amended resolution may properly be put to a vote at that meeting.
20.6
If
the
chair of the meeting rules a resolution or an amendment to a resolution admissible or out of order (as
the
case may be), the
proceedings
of
the meeting or on
the
resolution in question shall
not
be invalidated by
any
error in his or her ruling. Any rul
i
ng
by
the chair of the
meeting
in
relation
to a
resolution
or an amendment to a resolution shall be final and conclusive.
20.7
The Resident Representative,
if
any, upon giving the notice
referred
to
in
Bye-Law 18
.
1
above, shall be entitled to attend any general meeting of the Company and each
Director
shall be entitled to attend and speak at any general meeting of
the
Company.
20.8
The Board
may
choose one of
their
number to
preside
as chair at every general meeting
.
If
there
is no such
chair,
or
if at any meeting the chair
is
not present within five (5)
minutes after the
time appointed for
holding
the meeting, or is not willing to act as chair,
the Directors
present shall choose one of their number
to
act or
if
only one
Director is
present
he
shall preside as chair
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 chair.
20.9
The
chair
of
the meeting
may,
with
the
consent by resolution of any meeting at
which
a
quorum
is
present
(and shall if so directed by the meeting), adjourn the meeting from
time to
time (or sine die) 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.
In
addition
to
any other
power
of adjournment conferred by
law,
the
chair
of the meeting may at any time without consent of the meeting adjourn
the
meeting (whether
or not
it
has commenced or a quorum is present) to another time and/or
place
(or
sine
die) if,
in his or her opinion, it would
facilitate
the conduct of the business of
the
meeting
to
do so or
if
he
is
so directed
(prior
to or at the meeting) by the Board. When a meeting
is
adjourned sine
die, the
time and place for the adjourned meeting shall be fixed
by
the Board. When a meeting is adjourned for three
(3)
months or more or for an
indefinite period,
at least
10
clear days notice shall be given of the adjourned meeting. 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.
21.
VOTING
21.1
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 simp
le
majority of votes cast.
24
21.2
Subject
to Bye-Law 38.2 and to
any
rights or restrict
i
ons attached to
any class
of shares, at
any
meeting of the Company, each Shareholder present in person shall be entitled to one vote on any
question to
be decided on a show of
hands
and each Shareholder present in
person
or by proxy shall
be
entitled on
a
poll
to
one vote for each share held
by
him or her.
21.3
At any general meeting, a resolution put
to
the vote of the meeting shall be decided on a show of
hands
or
by a count
of votes
received in the
form of electronic records,
un
l
ess (before or on the declaration of the result of the show of hands or count of votes received as electronic
records
or on the withdrawal of any other demand for a poll) a poll
is
demanded by:
21.3.1
the
chair of the meeting; or
21.3.2
at least three
(3)
Shareholders present in person or
represented
by
proxy;
or
21.3.3
any Shareholder or Shareholders present
in
person or
represented
by
proxy
and
holding
between them not less than one tenth
(1/10)
of the total voting rights of all
the Shareholders
having the right to vote at such
meeting;
or
21.3.4
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 (1/10) of the total sum paid up on all such shares conferring such
right.
The
demand for a poll may,
before
the poll is
taken,
be withdrawn but only with the consent of the chair and a demand so
withdrawn
shall not be taken
to
have invalidated the result of a show of
hands
or count of votes received as electronic records
declared
before the demand was made.
If
the demand for a poll is withdrawn, the chair or any other Shareholder entitled may demand a poll.
21.4
Unless a
poll is
so demanded and
the demand is not withdrawn, a declaration
by
the chair that a
resolution
has, on a show of
hands
or
count
of votes received as electronic records, 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
or
proportion of votes recorded for or against such resolution.
21.5
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.
21.6
A poll
demanded
on the election of a chair, 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
25
(being not
later
than three
(3)
months after the date of
the demand)
and
place
as
the
chair shall direct and he may appoint scrutineers
(who
need
not be
Shareholders) and fix a time and place for declaring the result of
the
poll. It shall
not
be necessary (unless
the
chair otherwise
directs)
for notice
to be given of a poll.
26
21.7
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.
21.8
On a poll, votes
may
be cast either personally or by proxy.
21.9
A person entitled to more than one vote on a poll
need
not use all his or her votes or cast all the votes
he or she uses
in the same way.
21.10
In
the case of an equality
of
votes at a general meeting, whether on a show of hands or count of votes received as electronic records
or
on
a
poll, the chair of such meeting
sha
l
l not be entitled
to a second or
casting vote
and the
resolution
shall
fail.
21.11
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.
21.12
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 or her
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.
21.13
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 or her
in
respect of shares in
the
Company
have been pa
i
d.
21.14
If:
21.14.1
any objection shall
be
raised to the qualification of any voter; or,
21.14.2
any votes have been counted
which
ought not
to
have been
counted
or which might have
been
rejected;
or,
27
21.14.3
any votes are
not
counted which ought to have been counted,
the
objection or error shall not vitiate the decision of the meeting or adjourned meeting on any
resolution unless the
same
is
raised or pointed out at the meeting or, as the case may be,
the adjourned meeting
at which
the
vote objected
to is
given or tendered or at which
the
error occurs. Any objection
or error shall be referred to
the chair of the meeting
and shall
only vitiate the decision of
the
meeting on any
resolution
if the chair decides
that the
same may
have
affected the decision of
the
meeting.
The
decision of
the
cha
i
r
on such matters shall
be final
and conclusive.
22.
PROXIES
AND
CORPORATE
REPRESENTATIVES
22.1
A Shareholder may appoint one or
more persons
as his or her proxy, with or without the power of
substitution,
to
represent him or her
and vote on
his or her behalf in
respect of all or some only of
his or her
shares at any
general meeting
(including an adjourned
meeting).
A
proxy need
not be a
Shareholder.
The
instrument appointing a proxy
shall be in writing executed by the appointor or
his or her
attorney authorised by
him or her
in writing or,
if
the appointor
is
a corporation, either under its seal or
executed
by
an
officer,
attorney or
other
person
authorised to sign the same.
22.2
A Shareholder which
is
a corporation may, by written authorisation, appoint any person (or
two
(2)
or
more persons
in the
alternative)
as
its representative
to
represent it and vote
on its
behalf
at any general meeting (including an adjourned meet
i
ng) and such a corporate
representative may
exercise the same powers on beha
l
f of
the
corporation which he
represents
as that corporation could exercise if it were an individual Shareholder and the Shareholder
shall
for
the
purposes of these Bye-Laws
be
deemed to
be
present in person at any such
meeting
if
a person so authorised
is
present at it.
22.3
Any Shareholder may
appoint
a proxy or (if a corporat
i
on) representative for a specific general meeting, and adjournments thereof, or may appoint a standing proxy or (if a corporation) representative,
by
serving on
the
Company at the
Registered
Office, or at such
place
or places
as
the
Board may
otherwise specify for the purpose, a proxy or
(if
a corporation) an authorisation. Any standing
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
or at such place or places as the Board may
otherwise
specify for the purpose. 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 standing proxy or authorisation and the operation of
any
such standing proxy or
28
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.
22.4
Subject
to
Bye-Law 22.3, the
instrument appointing
a proxy or corporate representative 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 or places 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 resolution in
writing, in any
document
sent therewith) not
less
than 48
hours
or such other period as the Board
may
determine, 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 resolution
in
writing, prior
to the
effective date of the resolution in writing and in default the instrument of proxy or authorisation shall not be treated as valid.
22.5
Instruments
of
proxy
or
authorisation
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
resolution
in writing forms of instruments of proxy or authorisation for use
at
that meeting or
in
connection with that resolution
in
writing.
The
instrument of proxy shall be deemed
to
confer authority to demand or join in demanding a poll,
to
speak at the meeting and to vote on any amendment of a resolution
in
writing or amendment of a
resolution
put
to
the
meeting
for which it
is
given as the
proxy
thinks fit. The instrument of proxy or authorisation 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. If the terms of the appointment of a proxy
include
a
power
of substitution, any proxy appointed by substitution under such power shall be deemed to
be
the proxy
of
the Shareholder who conferred such power. All the provisions of
these
Bye
Laws
relating to
the
execution
and
delivery
of an
instrument
or other form of communication appointing or evidencing the appointment of a proxy shall apply, mutates
mutandis,
to
the instrument
or other form of
communication
effecting or evidencing such an appointment by substitution.
22.6
A vote given in accordance with
the
terms of an instrument
of
proxy or authorisation
shall be
valid notwithstanding the
previous
death or unsoundness of mind
of
the
principal,
or
revocation
of the instrument of proxy or of the corporate authority,
provided
that no
intimation
in writing of such
death,
unsoundness of mind
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
or authorisation in the notice convening the meeting or other documents sent therew
i
th) at
least
one hour
before
the commencement of the meeting or adjourned
meeting,
or
the
taking of the poll, or the day before the
effective
date of any
resolution
in writing at which
the instrument
of
proxy
or authorisation is used.
29
22.7
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, speak and
vote
on behalf of
any
Shareholder
at
general meetings or to
sign
resolutions in
writing.
BOARD OF DIRECTORS
23.
APPOINTMENT AND REMOVAL OF DIRECTORS
23.1
At
the
point of adoption of these Bye-Laws on 5 August 2022, the Board consists of the following persons:
23.2
Eric
Rosenfeld, Anthony Laura and Mark Filanowski is each designated as a class I Director, Carl Claus Boggild and David Sgro is each designated as a class II Director and Richard du Moulin and Karen H. Beachy
is
each designated as a class III Director for the purposes of these Bye-Laws. There is no distinction in the voting or other powers and authorities of Directors of different classes; the classifications are solely for the purposes of the retirement by rotation provisions set out
in Bye
-
Laws
23.4, 23.5 and 23.6. All Directors will be designated as either class I,
class
II or class
III Directors.
The Board shall from time to time by resolution
determine
the respective numbers of class I Directors,
class
II Directors and class
III
Directors.
23.3
Upon resignation
or
termination
of office of
any
Director, if a new Director shall be appointed to the
Board
he will be designated to fill
the
vacancy arising and shall, for the purposes of
these
Bye-Laws, constitute a member of
the
class of
Directors
represented
by
the person that
he
replaces.
23.4
Each
class I
Director shall
(unless
his or her
office is vacated in accordance with these Bye-Laws) serve initially
until the
conclusion of the Annual General Meeting of the Company held
in
the calendar year 2015 and subsequently shall (unless his or her office is vacated
in
accordance with these Bye-Laws) serve for
three-year
terms, each concluding at the
third
Annual General Meeting after
the
class
I Directors
together were
last
appointed or re-appointed.
23.5
Each class II Director shall (unless his or her office is vacated in accordance with these Bye-Laws) serve initially
until the
conclusion of the Annual General Meeting of the Company held in the calendar year
2016
and subsequently shall (unless his or her office is vacated in accordance with these
Bye-Laws)
serve for
three-year
terms, each concluding at the third Annual General Meeting after the class II Directors together were last appointed or
re-appointed.
23.6
Each
class III Director
shall (unless
his or her
office is vacated
in
accordance with
these
Bye-Laws) serve initially until the conclusion
of
the Annual General Meeting of the Company
held
in the calendar year 2017 and subsequently shall (unless
his or her
office is vacated in accordance with these Bye-Laws) serve for
30
three
-
year terms, each concluding at the third Annual General Meeting after
the
class III Directors together were
last
appointed or re-appointed.
23.7
Any Director
retiring
at an Annual General Meeting will be eligible for re-appointment and will
reta
i
n office until the close of the meeting at which he retires or (if earlier)
until
a Resolution is passed at
that
meeting not to fill the vacancy or the
resolution
to re-appoint
him or her is
put
t
o
a vote at the meeting and is
lost.
23.8
If
the Company,
at the
meeting at which a Director
(of
any class) retires
by
rotation or otherwise, does not
fill
the vacancy, the retiring Director shall, if willing to act, be deemed to have been re-appointed unless
at the
meeting
it
is
resolved
not to fill the
vacancy
or unless a
resolution
for the re-appointment of
the Director
is put to the meeting and
lost.
23.9
No
person other than a Director retiring by
rotation
shall be appointed a Director at any general
meeting
unless:
23.9.1
he or she is
recommended by
the Board; or
23.9.2
in the
case of an Annual General Meeting, not
less than
one hundred
twenty
(120) nor more than one hundred fifty (150) days
before the
date of the Company's proxy statement
released to Shareholders
in connection with the prior year's Annual General Meeting, a
notice
executed
by
a Shareholder (not being
the
person
to be
proposed) has been
received
by the Secretary of
the
Company of the
intention to
propose such
person
for
appointment, setting forth
as
to each
person whom the
Shareholder proposes to
nominate for election or
re-election
as a
Director:
(a)
the
name,
age,
business
address and residence address of such person;
(b)
the principal occupation or employment of such person;
(c)
the
class,
series and
number
of shares of the Company which are beneficially owned
by
such person;
(d)
particulars which would,
if he
were so appointed, be required
to
be
included in
the
Company's
register of
Directors
and Officers; and
(e)
all other
information relating
to such
person
that is required
to be
disclosed
in
solicitations for proxies for the election of Directors pursuant to
the
Rules and Regulations of the Securities and Exchange Commission under Section
14
of the Securities
Exchange
Act of
1934
of the United States of America
(as
amended),
together
with
notice executed by such person of his or her willingness
to
serve as a Director
if
so
31
elected; provided, however,
that no
Shareholder shall be entitled to
propose
any person to be appointed, elected
or re-elected
Director at any special
general
meeting.
23.10
Except as otherwise
authorised
by the Companies Acts,
the
appointment of any person proposed as a Director shall be effected by a
separate
Resolution
.
Subject
to
Bye
-
Law
23.3,
the Resolution appointing any Director must designate the Director as a class I, class II or class
III
Director.
23.11
All
Directors, upon
election
or
appointment, except upon
re-election or
re-appointment
at an Annual General Meeting, must prov
i
de written acceptance of their appointment,
in
such form as
the Board may
think
fit, by notice in
writing to the Registered Office within
thirty
(30)
days
of
their appointment.
23.12
The
number
of Directors
shall
be not less than
three (3)
and not more than
10
or such number in excess thereof as the Board by
resolution may
from
time
to
time
determ
i
ne. Any
one
or more
vacancies in
the Board not filled
at
any
general
meeting
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
i
n office, shall have power at any time and from time
to
time,
subject
to Bye-Laws
23.1, 23.2 and 23.3,
to appoint
any
individual
to
be
a
Director
so
as to fill a casual
vacancy.
A Director so appointed shall
hold
office
only
until the next following
Annual
General Meeting
and shall
not
be
taken
i
nto account in determining the Directors
who
are to
retire by
rotation
at
the
meeting.
If not reappointed at
such
Annual
General
Meeting, he shall
vacate
office at the
conclusion
thereof.
24.
RESIGNATION AND DISQUALIFICATION OF DIRECTORS
24.1
The
office of
a Director
shall
be vacated
upon
the happening of any
of
the following
events:
24.1.1
if
he or she resigns his or her
office
by notice in writing delivered to the
Registered
Office or tendered at a meeting of the Board;
24.1.2
if he or she 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 or her office
is
vacated;
24.1.3
if he or she becomes bankrupt under the
laws of any country
or
compounds
with his or her
creditors;
24.1.4
if
he or she is
prohibited
by law from
being
a Director;
24.1.5
if
he or she ceases
to be a Director by
virtue of the Companies Acts
or these Bye
-
Laws or
is removed from
office
pursuant
to
these Bye-Laws;
32
24.1.6
if he or she
shall
for more than
six (6) consecutive
months have been absent without permission
of the Board
from meetings of
the
Board held
during
that
period
and
his or her
Alternate Director
(if any) shall not
during
such period have attended
in
his or her
stead and
the Board resolves that his or her
office
be
vacated;
24.1.7
if
he or she
is
requested
to resign in
writing
by not
less
than three quarters
of the
ot
h
er
Directors. In
calculating
the number
of
Directors
who are required to
make such
a
request to
the
Director, there shall
be excluded any Alternate
Director
appointed by him or her acting
in his or her
capacity as such
33
24.2
The
provisions of section 93 of the Companies Act 1981 of Bermuda shall
not
apply to
the
Company.
25.
ALTERNATE DIRECTORS
25.1
Any
Director
(other
than
an
Alternate
Director) may appoint any other
Director,
or any other
person
approved
by
resolution of
the
Board and willing to act, to be
an
Alternate
Director and may
remove
from
office
an
Alternate Director so appointed by h
i
m or her. Any appointment or
removal
of an Alternate Director by
a
Director shall be effected by
delivery
of a written
notice
of appointment or removal
to
the Secretary at the Registered Office, signed by such Director, and such notice shall be effective
immediately
upon receipt or on any
later
date specified
in
that
notice. Any
Alternate
Director
may also be removed by resolution of the Board. An Alternate Director may also be a Director
in his or her
own right and may
act
as alternate
to more
than one
Director.
25.2
An Alternate Director shall cease to
be
an Alternate
Director:
25.2.1
if his or her appointor ceases to be a Director; but,
if a
Director retires by
rotation
or otherwise
but is
reappointed or deemed to
have been
reappointed at the meeting at
which he or she retires,
any appointment of an Alternate Director
made
by
him or her
which was
in
force immediately prior to his or her
retirement
shall continue after
his or her
reappointment;
25.2.2
on the happening of any
event
which,
if he or she
were a
Di
r
ector
,
would cause him or her to vacate his or hers office as Director;
25.2.3
if
he or she is removed from office pursuant
to
Bye-Law 25.1; or
25.2.4
if
he or she
resigns his or hers office
by notice
to
the
Company.
25.3
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 or she
is alternate
is
not
personally
present, and generally to perform
all the
functions of
any Director to
whom
he or she
is alternate in
his or her
absence.
25.4
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 or her acts and defaults and shall not be
deemed
to be the agent of or for any Director for whom he or she
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 or she
acts as alternate (in addition to his or her own vote if he or she is also a Director). The signature of an
34
Alternate Director
to
any resolution in writing of
the
Board or a committee of the Board shall, unless the terms of
his or her
appointment
provides
to the contrary, be as effective as the signature of the Director or Directors to whom he or she
is
alternate.
26.
DIRECTORS' INTERESTS
26.1
A Director may
hold
any other office or place of profit with the Company
(except
that
of
auditor) in
conjunction with
his or her
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.
26.2
A Director may
act
by
himself / herself
or his or her firm
in
a professional capacity for the Company
(otherwise
than
as
auditor) and
he
or his or her firm shall be entitled to remuneration for professional services as
if
he or she were
not
a Director.
26.3
Subject
to the provisions of the Companies Acts, a Director may
notwithstanding
his or her
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.
26.4
So long as, where
it is
necessary, he or she declares the nature of his or her
interest
at
the
first
opportun
i
ty at a
meeting
of the Board or by writing to the Directors as required by
the
Compan
i
es Acts, a Director shall not by reason of
his or her
office
be
accountable
to
the Company for any
benefit
which
he
derives from
any
office or employment to which these Bye-Laws allow
him or her to
be appointed or from any
transaction
or arrangement in which these Bye-Laws allow him or her to be interested, and
no
such transaction or arrangement
shall
be liable to be avoided on
the
ground of any interest or benefit.
26.5
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 or she
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.
35
26.6
For the purposes of these Bye-Laws,
without
limiting the generality of
the foregoing,
a Director is deemed to have an interest in
a
transaction or
arrangement with
the
Company
if he or she is the holder of or beneficially interested
in
10 per cent or more of any class of the equity share capital of any body corporate
(or
any
other body corporate
through which his or her
interest
is
derived) or of the voting
rights
available to members of the relevant body corporate with which the Company is proposing to enter into a transaction or arrangement, provided that
there
shall be disregarded any shares held by such Director as bare or
custodian trustee
and in which he or she has no beneficial interest, any shares comprised in a
trust
in
which
the
Director's interest is in
reversion or remainder if and so long as some other person
is
entitled to receive
the
income
thereof, and any
shares comprised
in an authorised unit trust in which
the Director
is only
interested
as a
unit holder.
For the purposes
of
this Bye-Law, an interest of a person
who is connected
with a Director shall be treated as an interest of the Director.
27.
POWERS AND DUTIES OF THE BOARD
27.1
Subject to the provisions of the Companies Acts, 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.
27.2
The Board may exercise all the powers of the Company
except
those powers
that
are required by
the
Companies Acts or these Bye-Laws to be exercised
by
the Shareholders.
27.3
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.
28.
FEES, GRATUITIES AND PENSIONS
28.1
The ordinary remuneration of the Directors office for their services
(excluding
amounts payable under any other provision of these Bye-Laws) shall be determined by Board and each such
Director
shall be paid a fee (which shall be deemed to accrue from day
to
day) at such rate as may from time to time be determined by the
Board.
Each Director may be paid
his or her 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 or her in the
36
conduct of the Company's business or
in
the discharge of
his or her 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 add
i
tion to any remuneration provided for by or pursuant to any other Bye-Law.
28.2
In addition to its powers under
Bye
-
Law
28.1
the
Board may (by establishment of or maintenance of schemes or
otherwise)
provide additional benefits, whether by the payment of
gratuities
or pensions or by insurance or otherwise, for any past or present Director or employee of the Company or any of its subsidiaries or any body corporate associated with, or any business acquired by, any of them, and for any member of his or her
family
(including a spouse and a former spouse) or any person who is or was dependent on him or her, and may (as well before
as
alter he or she ceases to
hold
such office or employment) contribute to any fund and pay premiums for the purchase or provision of any such benefit.
28.3
No
Director or former Director shall be accountable to the Company or the Shareholders for any benefit provided pursuant to this Bye-Law and the receipt of any such benefit shall not disqualify any person from being or
becoming
a Director of the Company.
29.
DELEGATION OF THE BOARD'S POWERS
29.1
The
Board may by power of attorney appoint any company, firm or person or any
flu
c
tuating 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, andanysuch 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,
andmayalso authorise any such attorney to sub-delegate all or any of the powers, authorities and discretions vested
in
him or her. Such attorney may, if so authorised by the power of attorney, execute any deed, instrument or other document on behalf of the Company.
29.2
The Board may entrust to
and
confer upon any Director,
Officer or,
without
prejudice
to the provisions of Bye-Law 29.3, other person any of the powers, authorities
and
discretions 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, authorities
and
discretions,
and
may from time to time revoke or vary all or any
of such
powers,
authorities
and discretions but no person dealing in good faith and
without
notice
of
such
revocation or
variation
shall
be affected
thereby.
37
29.3
When
required under the requirements from time to time
of
any stock
exchange
on
which
the shares of the
Company
are listed,
the
Board shall appoint an Audit
Committee
and a Compensation Committee in accordance with
the
requirements
of such stock
exchange.
The
Board also may delegate any of its powers,
author
i
ties and discretions to any other committees,
consisting
of such person or persons
(whether
a member or members
of
its body or not) as it thinks fit. Any committee
so formed shall, in
the
exercise
of the powers, authorities and discretions
so
delegated, and in
conducting its
proceedings
conform
to any regulations
which
may be
imposed
upon it by the Board. If no regulations are imposed by the Board the proceedings of a committee with two
(2) or more members
shall
be,
as far as is practicable, governed
by
the Bye-Laws regulating the proceedings
of
the Board.
30.
PROCEEDINGS OF THE BOARD
30.1
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.
30.2
Notice of a meeting of the Board may be given to
a
Director by
word
of mouth
or
in any manner permitted by these Bye-Laws.
A
Director
may
retrospectively
waive
the requirement
for
notice
of
any meeting by consenting in
writing
to the business
conducted
at
the
meeting.
30.3
The quorum necessary
for
the transaction
of
the business
of
the Board shall be such
number
as constitutes a majority of the Directors then in
office. 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,
subject
to Bye-Law 30.13, 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.
30.4
A
Director
who
to
his or her
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 or her 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 or her
vote
shall
be counted,
and
he shall be taken into
account
in
ascertaining
whether
a
quorum is
present.
30.5
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.
38
30.6
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.
30.7
The
Board may choose one of
their
number to preside as chair at every meeting of the Board. If there is no such chair, or if at any meeting the chair
is
not present within five (5)
minutes
after the
time
appointed for holding the meeting, or is not willing to act as chair, the
Directors
present may choose one of their number to be
chair
of the
meeting.
30.8
The meetings
and
proceedings of
any committee
consisting
of two
(2)
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.
30.9
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 an Alternate Director, as provided for
in these
Bye-Laws 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.
30.10
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
(including,
without
limiting
the generality of the foregoing, by telephone or
by
video conferencing) 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.
Such
a
meeting shall be deemed
to
take place where
the
largest group of
those
Directors participating
in
the meeting is physically assembled, or, if there
is
no such group, where the
chair
of the meeting then is.
30.11
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.
39
30.12
The Company may by resolution
suspend
or
re
l
ax to any extent, either generally or in respect of any particular matter, any
provision
of these Bye-Laws prohibiting a Director from voting at a meeting of the
Board
or of a committee of the Board, or
ratify
any transaction not duly authorised by reason of a contravention of any such provisions.
30.13
Where proposals
are under
consideration concerning the appointment (including fixing or varying the terms of appointment) of two (2) or
more
Directors to offices or employments with
the Company
or any body corporate
in
which the Company is interested, the proposals
may
be
divided and
considered in relation to
each
Director separately and in such cases each of the Directors concerned (if not debarred from voting
under
the provisions of
Bye-Law
30.4) shall be entitled
to
vote
and be
counted in the quorum
in
respect of each resolution except that concerning his or her own appointment.
30.14
If
a question arises
at
a meeting of the Board or a committee of the Board as to the entitlement of a Director
to
vote or be counted
in
a quorum, the question may, before the conclusion of
the
meeting, be
referred
to the chair of the meeting and his or her ruling in
relation
to any Director other than himself or herself shall
be
final and conclusive except in a case where the nature or extent of the
interests
of the Director concerned have not been fairly
disclosed. If
any such question arises in respect of the chair of the
meeting,
it shall be decided by
resolution
of the Board (on
which
the chair shall not vote) and such reso
l
ution will be final and conclusive except in a case where
the interests
of
the
chair have
not
been fairly
disclosed.
OFFICERS
31.
OFFICERS
31.1
The Officers of the Company , who may or may not be
Directors,
may be appointed by the Board at any time, subject to Bye-Law 30.13. Any person 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 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 or her 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.
31.2
Any appointment of a Director to an executive office shall terminate
if
he ceases
to be
a Director but without prejudice to any
rights
or claims which he may have against the Company by reason of such cessation. A Director appointed to an executive office shall not ipso facto cease to be a Director
if
his or her appo
i
ntment to such executive office terminates.
40
31.3
The emoluments of any Director holding
executive
office for
his or her
services
as
such
shall
be determined by the Board, and may be
of
any
description, and (without limiting
the
generality
of the foregoing) may include admission to or continuance of membership of any scheme (including any share acquisition scheme)
or
fund
instituted
or established or financed or contributed to by the Company for the provision of
pensions, life
assurance
or
other
benefits
for employees
or
their dependents, or the payment
of
a pension or other benefits to him / her or
his or her
dependents
on
or after retirement
or
death, apart from membership or any
such scheme or
fund.
31.4
Save as otherwise provided, the provisions
of
these Bye-Laws as to resignation and disqualification of Directors shall mutatis
mutandis
apply to the resignation and disqualification of Officers.
MINUTES
32.
MINUTES
32.1
The Board shall cause minutes to be made and
books
kept for the purpose of recording:
32.1.1
all appointments of Officers made by the Board;
32.1.2
the names of the Directors and other
persons (if
any) present at
each
meeting of the Board and of any
committee;
and
32.1.3
all proceedings at meetings
of
the Company,
of
the holders of any
class
of shares in the Company,
of
the Board and
of committees appointed
by
the
Board or the Shareholders.
32.2
Shareholders
shall
only be
entitled
to see the Register of Directors and Officers, the Register, the financial information provided for
in
Bye-Law
39
.
3
and the minutes
of
meetings
of the
Shareholders of the Company.
SECRETARY AND RESIDENT
REPRESENTATIVE
33.
SECRETARY AND RESIDENT REPRESENTATIVE
33.1
The
Secretary (including one
or more deputy or assistant
secretaries)
and, if required,
the Resident
Representative, shall be
appointed
by the
Board
at
such
remuneration
(if
any) and upon
such terms as
it may
think
fit
and any Secretary 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.
33.2
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.
41
THE SEAL
34.
THE SEAL
34.1
The Board may authorise the production of a common seal of the Company and one or
more
duplicate common seals of
the
Company,
which
shall consist of a circular device with the
name
of the Company around the outer margin thereof and the country and year of registration
in
Bermuda across
the centre
thereof.
34.2
Any document required to be under seal or
executed
as a deed on behalf of the Company
may
be
34.2.1
executed under the Seal in accordance with these Bye-Laws;
or
34.2.2
signed or executed by any person authorised by the Board for that purpose, without the use of the Seal.
34.3
The Board shall provide for the custody of
every
Seal. A Seal shall only be
used
by authority of the Board or of a committee constituted by the Board. Subject to these Bye-Laws, any instrument to which a Seal is affixed shall be attested by the signature of:
34.3.1
a
Director; or
34.3.2
the Secretary; or
34.3.3
any
one
person authorised by the Board for
that
purpose.
DIVIDENDS AND OTHER PAYMENTS
35.
DIVIDENDS AND OTHER PAYMENTS
35.1
The Board may from time
to
time declare
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,
in
its discretion, may determine that any dividend
shall
be pa
i
d
in cash
or shall be satisfied, subject to Bye-Law
37,
in paying up in full shares
in
the
Company to
be
issued
to the Shareholders
credited as
fully paid or partly
paid or
partly
in one
way
and
partly the
other.
The Board may also pay any fixed
cash
dividend
which is payable
on any
shares
of the Company half yearly or
on such
other dates, whenever the position
of the Company,
i
n
the opinion
of the Board, justifies
such
payment.
35.2
Except
insofar as
the rights attaching
to,
or the terms of
issue of,
any share
otherwise
provide:
35.2.1
all
dividends
or
distributions
out of
contributed
surplus
may
be declared and
pa
i
d according to the
amounts
paid
up
on
the
shares
in
respect of which the
dividend
or distribution
is
paid,
and
an
42
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;
35.2.2
dividends or distributions out of contributed surplus may be apportioned and paid
pro
rata according to the amounts paid-up on the shares during
any portion
or
portions of the
period in respect of which the
dividend
or distribution
is
paid.
35.3
The Board may
deduct from any dividend, distribution or other monies payab
l
e to a Shareholder by
the
Company on
or
in respect of
any
shares all sums of money (if any)
presently
payable by him or her
to
the Company on account of calls or otherwise
in
respect
of
shares of the Company.
35.4
No
dividend,
distribution or other monies
payable
by
the Company on or
in
respect of
any
share
shall bear interest
against
the
Company.
35.5
Any
dividend,
distribution or interest, or part thereof
payable in
cash, or any
other
sum payable in
cash to
the holder of shares
may be
paid by cheque or warrant sent through
the
post or by courier addressed to the
holder
at
his or her
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 or her
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, her
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 (2) or more
joint
holders may give effectual
receipts
for any dividends, distributions or other monies payable or property
distributable in respect of
the shares held by
such
joint holders.
35.6
Any
dividend
or distribution out of contributed surplus unclaimed for a period of six
(6)
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.
35.7
The Board may also, in addition to its other powers, direct payment or satisfaction of any dividend or distribution out of contributed surplus
wholly or
in
part by
the distribution of specific assets, and in particular of paid-up shares
or
debentures of any
other
company, and where any difficulty arises in regard to such distribution or dividend, the Board may settle
it
as it thinks expedient, and in particular, may authorise any
person
to sell and transfer any fractions or may ignore fractions altogether, and may fix
the
value for distribution or dividend purposes
of
any such
specific
assets and may determine that cash payments shall be made to any Shareholders upon the footing of the values so fixed in order
to
secure
equality
of distribution
43
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
distribut
i
on of any partly paid shares or debentures of any company without the sanction of a Resolut
i
on.
36.
RESERVES
The Board may, before 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 suc
h
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.
CAPITALISATION OF PROFITS
37.
CAPITALISATION OF PROFITS
37.1
The
Board may from time to time resolve to capitalise all or any part
of
any amount for the time being standing to the credit of any reserve
or
fund which is available for distribution or to the credit of any
share
premium account and accordingly that such amount be set free for distribution
amongst
the Shareholders
or
any class of
Shareholders who would
be ent
it
led thereto if distributed by way of dividend and in the
same proport
i
ons,
on the footing that the same be not paid in cash but
be
applied
either
in
or towards
paying up amounts for the
time
being
unpaid
on any shares in the
Company
held by such Shareholders respectively
or
in payment up
in
full of unissued
shares,
debentures
or
other
obligations of
the Company, to be allotted and distributed
credited as
fully
paid
amongst such Shareholders,
or
partly in one way and partly in
the
other, provided that for the purpose
of
this
Bye-Law,
a
share premium
account may be applied only in paying up
of
unissued shares
to be
issued to such Shareholders credited as fully paid.
37.2
Where any difficulty arises in regard to any distribution
under
this 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
38.
RECORD DATES
44
38.1
Notwithstanding any other provisions of these Bye-Laws, the Company may
fix
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 any general meeting. Any such record date
may
be on or at any time not more than 30 days before any date on which such
dividend,
distribution, allotment
or issue
is declared, paid
or
made
or
not more than 30 days before the date of any such meetings.
38.2
In
relation
to
any general meeting of
the Company
or
of
any
class of
Shareholder or to any adjourned meeting or
any
poll taken at a meeting or adjourned meeting of
which
notice is given, the Board may specify in
the
notice
of
meeting or
adjourned
meeting or in any document sent to Shareholders by or on behalf
of
the Board in relation to
the meeting,
a time and date
(a
record date)
which
is
not more than
30
days before the date
fixed for
the
meeting
(the
meeting date)
and,
notwithstanding any
provision
in these Bye-Laws to the contrary, in
such case:
38.2.1
each
person
entered in the
Register at the
record
date as a Shareholder, or a Shareholder of the relevant class,
(a
record date holder)
shall be
entitled
to
attend and to vote
at
the relevant meeting
and
to exercise
all
of the rights or
privileges of a
Shareholder,
or a Shareholder
of
the relevant class,
in
relation to that meeting in
respect of the shares, or
the
shares of
the relevant class,
registered
in his or her name at the record date;
38.2.2
as regards
any
shares, or
shares
of the relevant class,
which
are registered
in
the name
of
a record
date
holder
at
the record date but are
not
so registered
at
the meeting
date
(relevant
shares),
each holder
of any
relevant
shares
at the meeting date
shall
be deemed to have
irrevocably appointed that
record
date
holder as
his or her proxy
for the purpose
of
attending
and voting
in respect
of those
relevant
shares
at
the relevant meeting
(with
power to appoint,
or to
authorise
the
appointment
of, some
other person as proxy), in such
manner as
the record
date
holder
in his or her absolute discretion may
determine; and
38.2.3
accordingly, except through his or her proxy pursuant to Bye-Law 38.2.2 above,
a
holder of relevant shares at the meeting date shall not be entitled to attend or to vote at the
relevant
meeting, or to exercise any of
the
rights or privileges of a Shareholder, or a Shareholder of the
relevant
class, in respect of the relevant shares at that meeting.
38.3
The entry of the name of a person in the Register as a
record
date
holder
shall
be
sufficient evidence of his or her appointment as proxy
in
respect of
any
relevant
shares for the
purposes
of this
paragraph,
but all the
provisions of
these
Bye-Laws
relating
to the
execution and deposit of an
instrument appointing
a proxy or
45
any ancillary matter
(including
the
Board's powers and discretions
relevant
to such matter) shall apply
to
any
instrument
appointing any person
other than
the
record date holder
as proxy
in respect
of any
relevant
shares.
ACCOUNTING RECORDS
39.
ACCOUNTING RECORDS
39.1
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 w
i
t
h the
Companies Acts.
39.2
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
(3) 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.
39.3
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
40.
AUDIT
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.
46
SERVICE OF NOTICES AND OTHER DOCUMENTS
41.
SERVICE
OF
NOTICES AND OTHER DOCUMENTS
41.1
Any notice
or
other document (including but not
limited
to a share certificate, any notice of a general meeting of
the
Company, any instrument of
proxy
and any document to be sent in accordance with Bye-Law 39.3) may be sent to, served on or delivered
to
any Shareholder
by
the Company
41.1.1
personally;
41.1.2
by
sending
it through
the post
(by airmail
where applicable) in a pre-paid
letter
addressed to such Shareholder at
his or her address
as
appearing in
the Register;
41.1.3
by sending it by courier to or leaving
it at the
Shareholder's address appearing
in
the
Register;
41.1.4
where applicable, by sending it by
email
or facsimile or other mode of representing or reproducing words
in
a legible and non-transitory form or
by sending
an electronic record of it
by
electronic means,
in
each case to an address or number supplied by such Shareholder for the
purposes
of communication
in
such manner; or
41.1.5
by publication of an electronic
record
of
it
on a website
and
notification of such publication (which shall
include
the address of the website,
the
place on
the
website where the document may be found, and how the document may be accessed on the website) by any of the
methods
set out
in
paragraphs 41.1.1, 41.1.2, 41.1.3 or 41.1.4 of this
Bye-Law, in
accordance
with
the
Companies Acts.
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.
41.2
Any notice or other document shall be deemed to have
been
served on or
delivered to
any Shareholder by the Company
41.2.1
if sent by personal delivery,
at
the
time
of delivery;
41.2.2
if
sent by post, forty-eight (48) hours after
it
was put
in
the post;
41.2.3
if sent
by
courier or facsimile, twenty
-
four (24) hours after sending;
41.2.4
if
sent by email or other mode
of
representing or reproducing
words
in
a
legible
and non-transitory form or as an electronic record by electronic means, twelve
(12)
hours
after
sending;
or
47
41.2.5
if published as an electronic
record
on a website, at the time
that
the notification
of
such
publication
shall be
deemed
to have been delivered to such Shareholder, and
in proving
such service or delivery,
it
shall be sufficient to
prove that the notice
or
document
was properly addressed and stamped and put in the post, published on a website in accordance
with
the Companies Acts
and
the
provisions
of these Bye-Laws, or sent
by courier,
facsimile, email or as an electronic
record
by
electronic
means, as the case may be,
in
accordance with these Bye-Laws.
Each
Shareholder and each person becoming a
Shareholder
subsequent to the adoption of
these
Bye-laws, by
virtue
of
its
holding or
its acquisition
and
continued hold
i
ng
of a share, as
applicable,
shall
be deemed to
have acknowledged and
agreed
that any
not
i
ce or other document (excluding a share certificate) may be provided
by
the Company
by
way
of accessing
them on
a
website instead of being provided by other
means
.
41.3
If
any
time, by
reason of the suspension or curtailment of postal services within Bermuda or
any
other
territory,
the Company is unable effectively to convene a general meeting
by notices
sent through
the post,
a
general
meeting may be convened
by
a
notice
advertised
in
at
least
one national
newspaper
published
in
the territory
concerned
and such notice shall be deemed
to
have been
duly
served
on
each
person
entitled to receive
it
in
that territory
on the day, or on the first day, on which
the advertisement
appears. In any such case the Company shall send
confirmatory copies of
the
notice by
post
if
at
least
five
(5)
clear
days before the meeting
the posting
of notices to addresses throughout that territory again becomes practicable.
41.4
Save
as otherwise
provided,
the provisions of these Bye-Laws as to service of notices and other
documents on
Shareholders shall
mutatis
mutandis apply to service
or
delivery of
not
i
ces
and
other documents
to the
Company or any Director, Alternate Director or Resident
Representative
pursuant to these Bye-Laws.
48
DESTRUCTION OF DOCUMENTS
42.
DESTRUCTION OF DOCUMENTS
The Company shall be entitled to destroy all
instruments
of transfer of shares which
have
been
registered
and
all
other documents on
the
basis of which any entry is made
in
the register at any time after the expiration of
six
(6) years from
the
date of
registration
thereof and
al
l
dividends mandates or variations or cancellations thereof and notifications of change of address at any
time
after the expiration
of
two
(2) years from the date of recording
thereof
and a
ll
share
certificates
which have been cancelled at any time after the expiration of one
(1)
year from the date of cancellation thereof and
all
paid div
i
dend warrants and
cheques at
any time after the expiration of one (1) year from the date of actual payment thereof and all instruments of
proxy
which have been used for
the
purpose of a poll at any time after the expiration of one (1) year from
the date
of such use
and
all
instruments
of proxy which have not been used for
the
purpose of a poll
at
any time after one
(1)
month from
the
end of the meeting
to
which the
instrument
of proxy
relates
and at which no poll was demanded. It shall conclusively
be
presumed in favour of the Company that every
entry
in
the
register
purporting to have
been made
on the basis of an
instrument
of transfer or other document so destroyed was duly and properly
made,
that every
instrument
of transfer so destroyed was a valid
and
effective instrument duly and properly registered, that every share certificate so destroyed was a valid and effective certificate duly and properly cancelled and that every other document herein before mentioned so destroyed was a valid and effective document
in
accordance
with
the
recorded
particulars thereof in the books or records of the Company,
provided
always
that:
42.1
the
provisions aforesaid shall apply only to the destruction of a document
in
good fa
i
th and without notice of any claim (regardless of the parties thereto) to wh
ich
the document might be relevant;
42.2
nothing herein
contained
shall be construed as
imposing
upon the Company any
liability in respect
of the destruction of any such document earlier than as aforesaid or
in
any other circumstances which would not attach to the
Company
in
the
absence of
this
Bye-Law; and
42.3
references
herein
to the destruction of any document
include
references to the disposal thereof in any manner.
UNTRACED SHAREHOLDERS
43.
UNTRACED
SHAREHOLDERS
43.1
The
Company shall
be entitled to
sell,
at the best price reasonably obtainab
l
e, the shares of a Shareholder
or
the shares to
which
a person
is
entitled by virtue of transmission on death, bankruptcy, or otherwise by operation of law if and provided that:
49
43.1.1
during a
period
of
six (6)
years, no
dividend in
respect
of those shares
has been
claimed
and at
least
three
(3)
cash dividends have become
payable on the
share in question;
43.1.2
on or after
expiry
of that period
of
six
(6) years, the
Company
has
inserted an advertisement in a newspaper circulating in the area of the last registered address at which service of notices upon the Shareholder or person
entitled
by transmission may be
effected
in
accordance with
these Bye-Laws and
in
a nationa
l
newspaper published in the
relevant
country, giving notice
of
its intention to
sell
such shares:
43.1.3
during that period of six
(6) years
and the period of three
(3)
months
following
the publication of
such
advertisement, the Company has
not
received any communication from such Shareholder or person
entitled
by
transmission;
and
43.1.4
if so required
by
the rules of any securities
exchange
upon which the shares
in
question are listed for the time being, notice has
been
given
to
that
exchange
of the Company's intention to make such sale.
43.2
If during any six
(6) year
period referred to
in
paragraph 43.1 above, further
shares
have been issued
in right
of those held at the beginning of such period or of any previously
issued
during such period and all the other requirements
of
this Bye-Law
(other
than the requirement that they be in issue for six
(6) years) have
been
satisfied
in regard to the further shares,
the
Company may also sell the
further shares.
43.3
To give effect to
any
such
sale,
the
Board
may
authorise some person to
execute an instrument of transfer of the shares sold
to,
or in accordance with the directions of, the purchaser and an instrument of
transfer executed
by that person shall be as effective
as if
it had been
executed by
the holder of,
or person entitled
by transmission to,
the
shares.
The
transferee shall not be bound
to
see
to
the application
of
the purchase money, nor
shall
his or her
title
to the shares be affected by any irregularity in, or
invalidity
of,
the
proceedings in
reference
to the sale.
43.4
The net proceeds of
sale shall
belong
to
the
Company
which
shall
be
obliged
to account to the former Shareholder or other person previously
entitled
as aforesaid
for
an amount
equal
to such
proceeds and shall enter
the name
of
such
former
Shareholder
or other person in
the books of the
Company
as
a creditor for
such
amount. No
trust shall be created
in
respect of
the debt, no interest
shall
be payable in
respect of
the
same
and
the
Company
shall not be
required to account for any money
earned
on
the
net
proceeds,
which may be employed
in
the business of
the
Company or invested in
such
investments as
the
Board
from time
to time thinks
fit.
50
WINDING UP
44.
WINDING
UP
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 or she deems fair
upon
any property to be divided
as
aforesaid and may determine how such division shall be
carried out
as between the 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 AND INSURANCE
45.
INDEMNITY AND INSURANCE
45.1
Subject to the proviso below, every
Indemnified
Person shall be indemnified and held harmless out of the assets
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 or her by or by reason
of
any act done,
conceived
in
or
omitted in the
conduct
of the Company's business or in the discharge
of
his or her duties and the
indemnity contained
in this ByeLaw shall extend to any Indemnified Person acting in any
office or trust
in
the
reasonable belief that he or she has been appointed or elected to
such office
or trust 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.
45.2
No Indemnified
Person shall be
liable
to the Company for
the
acts, defaults or omissions
of any other Indemnified Person.
45.3
Every Indemnified Person shall
be indemnified out
of the assets of the Company
against all
liabilities incurred by him or her by
or
by reason
of
any
act
done, conceived in or
omitted
in
the
conduct
of
the
Company's
business
or
in
the discharge of his or her
duties, in
defending any
proceedings, whether civil or criminal, in which judgement
is given
in his or her favour,
or
in which he or she is acquitted,
or
in
connection with any application
under
the Companies Acts
in which relief from
liabi
l
ity is granted to him or her
by
the
court.
51
45.4
To
the extent
that any
Indemnified Person
is
entitled to
claim
an
indemnity
pursuant
to these Bye-Laws
in
respect of
amounts
paid
or discharged
by him or her, the relevant
indemnity shall
take effect as an
obligation
of the Company to
reimburse
the
person
making
such
payment
or effecting such
discharge.
45.5
Each Shareholder and the Company agree to
waive
any claim or r
i
ght of action
he, she
or
it
may at any time have, whether individually or by or in the right of the Company, against any Indemnified Person
on
account of any action
taken
by such
Indemnified Person
or the
failure
of such
Indemnified
Person to
take
any action in the performance of his or her duties with or for the Company
PROVIDED HOWEVER
that such waiver shall not apply to any claims or
rights
of
action
arising out of
the fraud
of
such Indemnified
Person or to
recover
any gain, personal profit or advantage to which such Indemnified Person is
not legally
entitled.
45.6
Expenses
incurred
in
defending any civil or criminal action or proceeding for which
indemnification
is
required
pursuant
to
these Bye-Laws shall be paid by the Company in advance of the final disposition of such action or proceeding upon receipt of an undertaking by or on behalf of the
Indemnified
Person to repay such
amount if
any allegation of fraud
or
dishonesty
is proved
against
the
Indemnified Person PROVIDED
THAT
no monies shall
be
paid
hereunder
unless payment of the same shall be authorised in the specific case upon
a
determination that indemnification of the Director or Officer would be proper
in the
circumstances because
he or she
has
met the
standard of conduct which would entitle
him or her
to
the
indemnification thereby
provided
and such determination shall be made:
45.6.1
by the Board,
by
a majority vote at a meeting duly constituted by a
quorum
of Directors
not party to the
proceedings or matter with
regard to
which the
indemnification is,
or would be,
claimed;
or
45.6.2
in the case such a
meeting
cannot be constituted
by lack of
a disinterested
quorum, by
independent
legal
counsel
in
a
written opinion;
or
45.6.3
by a majority vote of
the
Shareholders.
45.7
Without prejudice to the provisions of
this
Bye-Law,
the
Board shall have the power to purchase and maintain insurance for or for the benefit of any Indemnified Person or any persons who are or were at any time Directors, Officers, employees of the Company, or of any other company which
is
its holding company or in which the Company
or
such holding company
has any interest
whether
direct
or
indirect
or which
is
in
any way allied to
or
associated with the Company, or of any subsidiary undertaking of the Company or any such other company
,
or who are or were at any time
trustees
of any pension fund in which employees of the Company or
any
such other company
or subsidiary
undertaking are interested
,
including (without
prejudice to the generality of the foregoing) insurance against any
liability incurred
by such persons
in
respect
of any act or omission
in
the
actual
or
purported execution or
discharge
of their duties or
52
in
the
exercise
or purported exercise of their
powers
or otherwise
in
relation
to
their duties, powers or offices
in
relation to the Company or
any
such other company, subsidiary
undertaking
or pension fund.
AMALGAMATION
46.
AMALGAMATION OR
MERGER
Any
resolution
proposed
for
consideration at any general meeting
to
approve the amalgamation or merger of the Company with any other
company,
wherever incorporated, shall require the approval of:
46.1
the
Board,
by resolution adopted by a majority of Directors
then in office,
and
46.2
the Shareholders, by resolution passed by a majority of votes
cast
at such meeting and the quorum for such meeting shall be that
required in
Bye-Law 20.1.
CONTINUATION
47.
CONTINUATION
Subject to the Companies Acts, the Company may with the approval of:
47.1
the Board, by
resolution
adopted by a majority of Directors then in office, and
47.2
the Shareholders by
resolution
passed by a majority
of
votes
cast
at the general meeting,
47.3
approve the discontinuation of the Company
in
Bermuda and the continuation of the Company
in
a jurisdiction outside Bermuda.
ALTERATION OF BYE-LAWS
48.
ALTERATION OF BYE-LAWS
48.1
Subject
to Bye-Laws 48.2
and
48.3, these Bye-Laws may
be
revoked
or amended
only by
the
Board,
which may from time to time revoke
or
amend them in any way
by
a
resolution
of the
Board
passed by a majority of the Directors then
in
office and eligible to vote on that resolution, but no such revocation or amendment shall be
operative
unless and until it is approved at
a
subsequent general meeting
of
the Company
by
the
Shareholders
by Resolution passed by a majority of votes cast.
48.2
Where the Board
has, by
a resolution passed by a majority of the
Directors
then in
office
and
eligible
to vote
on
that resolution,
approved a
revocation
or amendment of
Bye-Laws
23, 24, 46,
47, 48
and
49 inclusive,
the
revocation
or amendment will
not
be effective
unless approved
by
a
Resolution of Shareholders
holding
not
less
than
80
per
cent
of
the
issued shares
of the
Company carrying
the
right to vote at general meetings
at
the relevant
time.
48.3
No amendment
of
the Bye-Laws may be made
without
complying
with the
requirements
of
Bye-Law 49.9, if applicable.
53
BUSINESS
COMBINATIONS
49.
BUSINESS COMBINATIONS
49.1
The following
definitions
shall apply with respect
to
the provisions of
this
Bye-Law:
49.1.1
the
Act:
the Securities Exchange Act of 1934 of
the
United States of America, as amended, and the rules and
regulations
thereunder (or any subsequent provisions replacing
the
Act, rules or regulations).
49.1.2
Affiliate:
or a person
affiliated
with a specified
person
means a
person
that directly or indirectly through one
or
more
intermediaries,
controls or is controlled
by, or is under
common control with, the person specified.
49.1.3
Associate:
used to
indicate
a relationship with any person, means
(a)
any corporation
or
organization (other than the Company or a majority owned subsidiary of
the
Company) of which such person
is
an officer or partner or
is, directly
or
indirectly, the
beneficial owner of 10 percent or more of
any
class of equity securities,
(b)
any trust or other estate in which such person has a substantial
beneficial interest
or as to which such person serves a trustee
or
in a similar fiduciary capacity, and
(c)
any
relative
or spouse of such person, or any
relative
of
such spouse, who has the same home as such person or who
is
a director or officer of the Company or any of
its parents
or subsidiaries.
49.1.4
A person shall be a
beneficial owner
of any
Voting
Shares:
(a)
which such person or any of its Affiliates or Associates beneficially owns, directly or indirectly;
(b)
which such
person or
any of its Affiliates or Associates
has,
directly or indirectly,
(i)
the right to acquire (whether such rights
is
exercisable immediately
or
subject only to the passage of time), pursuant to any agreement, arrangement or
understanding or
upon the exercise of
conversion
rights, exchange rights, warrants or options, or otherwise,
or
(ii)
the right to vote pursuant of any agreement, arrangement or understanding;
or
54
(c)
beneficially
owned,
directly or indirectly, by any other person with which such
person
or any of its Affiliates or Associates has any agreement, arrangement or understanding of the purpose of acquiring, holding, voting or disposing of any shares of Capital Stock.
For the purposes of determining whether a person is an Interested Shareholder pursuant to this Bye-Law, the number of Capital Shares deemed
to be
outstanding shall
include
shares deemed beneficially owned by such person through application of this paragraph,
but
shall not
include
any other Capital Shares that may be issuable pursuant to
an
agreement
arrangement
or
understanding,
or
upon
exercise of conversion rights, warrants or options,
or
otherwise.
49.1.5
Business Combination:
(a)
any merger, consolidation or amalgamation of the Company or any Subsidiary (as hereinafter defined) with
(i)
any
Interested
Shareholder or
(ii)
any other
company
(whether or
not itself
an Interested Shareholder) which is or after such merger,
consolidation
or amalgamation would be an Affiliate or Associate of an
Interested
Shareholder; or
(b)
any sale,
lease,
exchange, mortgage, pledge, transfer or other d
i
sposition
or
security arrangement, investment, loan, advance, guarantee, agreement to purchase, agreement to pay, extension of credit,
joint
venture participation or other arrangement
(in
one transaction or a series of transactions) w
i
th or for the benefit of any
Interested
Shareholder or any Affiliate or Associate of
any Interested
Shareholder involving any assets, securities or commitments of the Company, any Subsidiary or
any
Interested Shareholder or any Affiliate or Associate of any
Interested
Shareholder
(except
for any arrangement, whether as
employee,
consultant or otherwise, other
than
as a Director, pursuant to
which
any Interested Shareholder or any Affiliate or Associate thereof shall, directly or indirectly, have
any
control over or responsibi
l
ity for the management of any aspect
of
the business or affairs of the Company, with
respect
to which arrangements the value tests set forth below shall
not
apply),
together with
all other
such
arrangements
(including
all
contemplated
future events),
that constitutes
10% percent or more
of
the
book value
of
the
total assets
(in
the
case of
transactions involving assets
or commitments
other than capital
shares)
or 10% percent
or
more
of
the Shareholders'
equity (in
the case of transactions in
Capital
Shares) of the entity in question
(the
Substantial Part),
as
reflected
in the
most recent fiscal year and consolidated balance
sheet of such
entity
55
existing at the time the Shareholders of the Company
would
be required to approve or authorize the
Business
Combinations involving the
assets, securities and/or commitments constituting any
Substantial
Part;
or
(c)
the adoption of any plan or proposal for
the
liquidation or dissolution of the Company or for the
discontinuation
into another jurisdiction or for any amendment to the Company's Bye-Laws; or
(d)
any reclassification of shares or
other
securities
(including
any reverse stock split), or recapitalization
of
the
Company,
or any merger, consolidation
or
amalgamation
of
the
Company with
any
of
its Subsidiaries or any
other
transaction
(whether
or not
with or
into or
otherwise
involving an
Interested
Shareholder) that has the effect, directly or
indirectly, of
increasing the proportionate share of any class or series of
Capital
Shares,
or
any securities convertible
into Capital
Shares or into
equity
securities of
any
Subsidiary, that is beneficially owned by an Interested Shareholder or
any Affiliate or Associate
of any Interested Shareholder; or
(e)
any
agreement,
contract
or
other
arrangement providing
for
any one
or
more
of
the
actions
specified
in the
foregoing
clauses 49.1.S(a) to
49.1.S(b)
inclusive.
49.1.6
Capital Shares:
all the authorised
shares in
the
capital
of the Company.
49.1.7
Common Shares:
all the authorised
common shares
in the
capital
of the
Company.
49.1.8
Continuing Director:
any
member of
the Board
while
such person is a member of the Board
who
is not an Affiliate
or Associate
or representative
of
the Interested Shareholder and
was
a member of the
Board prior
to
the time that
the Interested Shareholder became an Interested Shareholder, and
any
successor of
a Continuing
Director while
such successor
is a
member of the Board of
Directors,
who
is
not an
Affiliate or Associate or representative
of the Interested
Shareholder and
is
recommended or elected to
succeed the Continuing
Director by a
majority of Continuing
Directors
.
49.1.9
Control:
(including
the terms
controlling, controlled by
and
under common control with)
means the possession, direct or indirect, of the
power
to direct
or cause
the direction
of
the management
and policies of
a person, whether
through
the ownership of
voting securities, by contract, or otherwise.
49.1.10
Fair Market Value:
(a)
in the case of cash, the amount of such cash;
56
(b)
in the case of shares, the highest closing sale price during the 30 day period
immediately preceding
the
date
in question of a share on the Composite Tape for
New
York Stock Exchange Listed Stocks, or,
if
such shares are not quoted on the Composite Tape, on the New York Stock Exchange, or, if such shares are not
listed
on such Exchange, on the principal United States securities exchange registered under the Act on which such stock
is
listed or, if such shares are not listed on any such exchange, the highest closing bid quotation with respect to such shares
during
the 30 day period preceding
the
date
in
question on
the National
Association of Securities Dealers, Inc. Automated Quotations System, in the
pink
sheets of
the
National Quotation Bureau
or
any similar system then in
use,
or
if no
such quotations are available, the fair
market
value on the date in question of a share as
determined
by a majority of the Continuing Directors
in
good faith; and
(c)
in
the case of property other than cash or shares,
the fair market
value
of
such
property on
the
date in question as
determined
in good fa
i
th
by
a
majority of the Continuing Directors.
49.1.11
Interested Shareholder:
any
person
(other
than
the Company or any Subsidiary and
other than
any profit sharing, employee share
ownership or
other employee
benefit
plan
of
the Company or any Subsidiary or any trustee of a fiduciary with
respect
to any such
plan
when acting
in
such
capacity)
who
(a)
is
or has
announced
or
publicly
disclosed a
plan or
intention
to become
the
beneficial owner
of
Voting Shares
representing
ten percent
(10%)
or more
of
the vote entitled to be case by the holders of all
then
outstanding shares of Voting Shares, or
(b)
is an Affiliate or Associate of the Company and at any time within the
two (2)
year period immediately prior to the date
in
question was the beneficial owner of
Voting
Shares representing
ten
percent
(
10%)
or more of the
votes entitled to be case by the holders of all then outstanding
shares
of Voting
Shares.
49.1.12
Person:
any individual, firm, company or other entity
and
shall
include
any group
comprised
of any person and any
other
person with whom such person
or
any Affiliate or Associate of such person
has
any agreement, arrangement or understanding directly or
indirectly,
for the purpose
of
acquiring, holding, voting or disposing of Capital Shares.
49.1.13
Proposed Action:
a Business Combination or any proposal
to amend,
repeal or adopt any provision of these Bye-Laws inconsistent with
this
Bye-Law.
57
49.1.14
Subsidiary:
any
company, wherever organised, of which a majority of any
class
of equity security
is
beneficially owned by the Company; provided,
however,
that for the purposes of
the
definition of Interested Shareholder set forth in this Bye-Law, the
term
Subsidiary
shall mean only a company of which a
majority
of
each class
of equity security is beneficially owned by the Company.
49.1.15
Voting Shares:
shall mean all Capital Shares which by
their
terms may be voted on all matters submitted to Shareholders of the Company generally.
49.2
In
addition
to
any affirmative vote
required
by
law
or these Bye-Laws, and except as otherwise expressly provided in Bye-Law 49.3, a Business Combination with, or proposed by or on behalf of, any Interested Shareholder or any Affiliate or Associate of any Interested Shareholder or
any
person who
thereafter
would be an Affiliate or Associate of such
Interested
Shareho
l
der shall require the affirmative vote of not less than sixty-six and two-thirds percent
(66
2/3%) of
the
votes entitled to be cast by the holders of al
l
the then outstanding Voting Shares, voting
together as
a single class, excluding Voting
Shares
beneficially owned by any Interested Shareholder or any Affiliate or
Associate
of such Interested Shareholders. Such affirmative vote shall be required notwithstanding
the fact
that no vote may be requ
i
red
,
or that a
lesser
percentage or separate class vote may be
specified,
by
law
or
in
any agreement with any
national
securities exchange or otherwise.
49.3
The provisions of Bye-Law
49.2
shall not be applicable to any particular Business Combination, and such
Business
Combination shall
require
only such affirmative vote, if any,
as is
required by law or any other
provision
of
the
Bye-Laws of the Company,
if
all of the conditions specified
in
either of the following paragraphs 49.3.1 or 49.3.2 are met:
49.3.1
The Business
Combination
shall have
been
approved
by
a majority of
the
Continuing Directors.
49.3.2
All of
the
following
conditions
shall have been met:
(a)
the aggregate amount of the cash and the
Fair
Market Value
as
of the date
of
the consummation of the Business Combination of
consideration
other than cash to be
received
per
share
by holders of Common Shares in
such Business Combination
shall be at least equal to the highest amount determined under clauses (i) and
(ii)
below:
(i)
(if applicable) the highest per share price
(including
any brokerage commissions, transfer taxes and soliciting dealers' fees) paid by or
on
behalf of the Interested
Shareholders
for beneficial ownership of Common Shares acquired by it (x) within the two
(2)
year period
immediately
prior to the first public announcement of the proposed Business Combination
(the
Announcement Date)
or
(y)
in the
58
transaction in
which
it became an
Interested
Shareholder, whichever is higher, in either case as adjusted for any subsequent stock
split,
stock
dividend,
subdivision or reclassification with respect to the Common Shares;
and
(ii)
the
Fair Market
Value
per share of Common Shares on the Announcement Date or
on
the date on which the
Interested
Shareholder became
an Interested
Shareholder (the
Determination Date),
whichever
is
higher, as adjusted for any subsequent stock split, stock
dividend,
subdivision or
reclassification
with respect to the Common Shares.
(b)
The aggregate amount of the
cash
and the Fair Market Value as of
the
date of the consummation of the Business Combination, of considerat
i
on other than cash to be received per share by holders of shares of any class or series
of
outstanding Capital Shares, other than Common Shares, shall
be
at least
equal to
the
highest
amount determined under clauses
(i), (ii)
and
(iii)
below:
(i)
(if applicable) the
highest
per share price
(including
any
brokerage
commissions, transfer taxes and soliciting dealers' fees) paid by or on behalf of the Interested Shareholder for any such class or
series of Capital
Shares in connection with the acquisition by the Interested Shareholder of beneficial ownership of shares of such class
or
series of
Capital
Shares
(x)
within the two
(2) year
period immediately prior to the Announcement Date
or (y)
in the transaction in
which
it
became an Interested Shareholder,
whichever
is higher,
in
either case
as adjusted for any subsequent share split, share dividend,
subdivision
or reclassification with respect to
such
class or
series of Capital
Shares;
(ii)
The Fair Market Value per
share
of such class or
series
of Capital Shares on
the
Announcement Date or on the
Determination
Date, whichever is higher, as adjusted
for any subsequent share split,
subdivision or reclassification with respect to such class
or
series of Capital Shares; and
59
(iii)
(if applicable) the highest preferential amount per share to which the holders of shares of such class or series of Capital Shares would be entitled
in
the event of any
voluntary
or involuntary
liquidation,
dissolution or winding up of the affairs of the Company regardless of whether the Business Combination to be consummated constitutes such an event.
(c)
The consideration to be received by holders of a particular class
or
series of outstanding Capital Shares shall be in
cash
or
in
the same form as previously has been paid by or on behalf of the Interested Shareholder in connection with
its
direct or indirect acquisition of beneficial ownership of shares of such class or series of Capital Shares. If the consideration so paid for shares of any class or series of Capital Shares varied as to form, the form
of
consideration for such class or series of Capital Shares shall be either cash
or
the form used to acquire beneficial ownership
of
the
largest
number of shares of such class or series of Capital Shares
previously
acquired by
the
Interested Shareholder.
(d)
After the Determination Date and prior
to
the consummation of such Business Combination;
(i)
except as approved by a majority of the Continuing Directors, there shall
have
been no failure to declare and pay at
the
regular
date
therefor any full quarterly dividends
(whether
or not cumulative) payable in accordance with
the
terms of any outstanding Capital Shares;
(ii)
there shall have been no reduction
in
the
annual
rate of dividends paid on the Common Shares except as necessary to
reflect
any stock spl
i
t, stock dividend or subdivision
of
the Common Shares, or except as approved by a majority of the Common
Shares,
or
except
as approved by a
majority
of the Continuing Directors;
(iii)
there
shall
have
been an increase in the
annual
rate of dividends paid on the Common Shares as necessary to
reflect
any
reclassification
(including any reverse
stock
split), recapitalization, reorganization or any similar
transaction
that
has
the
effect of
reducing
the number of outstanding
Common
Sha
r
es, unless the
failure so to
increase
such annual rate is approved
by
a majority
of
the Continuing Directors; and
(iv)
such
Interested
Shareholders shall not have become the beneficial owner of any additional Capital Shares except as part of the transaction that results in such
60
Interested Shareholder becoming an Interested
Shareholder
and
except
in
a transaction that; after giving effect
thereto,
would not result in any
increase
in the
Interested
Shareholder's percentage beneficial ownership of any class or series of Capital Shares.
(e)
A proxy or
information
statement describing the proposed Business Combination and complying
with
the requirements of the Act shall be mailed to all Shareholders of the Company at
least
thirty (30) days prior to the consummation of such Business Combination (whether or not such proxy or information statement is required to be mailed pursuant to such Act or subsequent provisions).
The
proxy
or information
statement shall
contain
on
the
first page thereof, in a prominent place, any
statement
as to the advisability
(or
inadvisability) of the Business Combination that
the
Continuing Directors, or any of them, may choose to make and, if deemed advisable by a majority of the Continuing Directors, an opinion of an investment banking firm selected by a majority of the Continuing Directors as to the fairness (or unfairness)
of
the terms of the Business Combination from a financial po
i
nt of view to the holders of
the
outstanding
shares
of Capital Shares other than the
Interested
Shareholder and its Affiliates
or Associates,
such
investment
banking
firm
to
be
paid a reasonable fee for its services by
the
Company.
(f)
Such Interested Shareholder shall not have any major change
in
the Company's business or equity capital structure without the approval of a majority of the Continuing Directors.
(g)
The provisions of
this
paragraph 49.3
.
2
shall be
required
to be met
with
respect to every
class
or series
of
outstanding Capita
l
Shares,
whether
or not the
Interested
Shareholder
has previously acquired beneficial ownership
of
any shares of a particular class or series of Capital Shares.
49.4
In the
event
of
any Business
Combination in which
the
Company survives
,
the phrase
consideration other
than
cash to be received
as
used in paragraphs 49.3.2(a) and Bye
Law
49.3.
2
(b)
shall
include the Common Shares and/or the
shares of
any
other
class
or
series of Capital Shares retained
by
the holders of such shares.
49.5
A majority of
the
Continuing
Directors
shall
have power
and duty
to determine fo
r
the purpose of this
Bye
-
Law
,
on the basis of information known
to
them
after
reasonable inquiry, all questions arising under this Bye-Law including,
without
limitation,
49.5.1
whether a person is an
Inter
est
e
d Shareholder,
49.5.2
the number of shares of Capital Shares or other securities beneficially owned by any person,
61
49.5.3
whether a person
is
an Affiliate or Associate of another,
49.5.4
whether a Proposed Action
is
with, or proposed by, or on behalf of
an Interested
Shareholder or an Affiliate or Associate of an
Interested
Shareholder,
49.5.5
whether the assets
that
are
the
subject of
any
Business Combination, or the consideration to be received for the issuance or transfer of securities by
the
Company or any Subsidiary
in
any Business Combination constitutes 10% percent or more of
the book
value of the total assets (in the case of transactions involving assets or commitments other than capital shares) or 10% percent or more of the Shareholders' equity (in the case of transactions
i
n
Capital Shares) of
the
entity in question
49.5.6
whether
the assets
or securities that are
the
subject of any
Business
Combination constitute a
Substantial
Part. Any such
determination
made
in
good faith shall
be binding
and
conclusive
on all parties.
The
good faith determination of a
majority
of the Continuing Directors on such matters shall be conclusive and binding for all purposes of this Bye-Law.
49.6
Nothing
contained in
this
Bye-Law
shall be
construed to relieve any
Interested
Shareholder from
any fiduciary
obligation imposed by
law.
49.7
The
fact
that any Business Combination complies with the provisions of
th
i
s Bye-Law shall
not
be construed
to impose
any fiduciary duty, obligation or responsibility on
the
Board or any
member
thereof, to approve such Business Combination or recommend
i
t
s adoption or approval
to
the Shareholders of the Company,
nor
shall such compliance limit, prohibit or otherwise
restrict
in any manner the Board or any member thereof, with respect to evaluations of or actions and
responses
taken with respect to such Business Combination.
49.8
A
Proposed Action is presumed to have
been
proposed by, or on behalf of, an
In
t
erested Shareholder or a person
who
thereafter
would become such
if
49.8.1
after the Interested Shareholder became such, the Proposed Action is proposed following the election of any Director who with respect to such Interested Shareholder, would not qualify to serve as a Continuing Director or
49.8.2
such Interested Shareholder, Affiliate, Associate or person votes for or consents to
th
e
adoption of any such Proposed Action, unless as to such Interested Shareholder, Affiliate, Associate or
62
person a majority of the Continuing Directors makes a good
faith
determination that such Proposed Action
is
not proposed by or on behalf of
such Interested Shareholder, Affiliate, Associate or
person,
based
on
information known to them after
reasonable
inquiry.
49.9
Notwithstanding
any other provisions of
these
Bye-Laws
(and
notwithstanding the
fact that
a
lesser
percentage or separate class vote may be specified
by law
or
these
Bye-Laws), any
proposal
to amend, repeal or
adopt
any provision of these
Bye-Laws inconsistent
with this Bye Law which
is
proposed
by
or on behalf of an Interested Shareholder or an Affiliate or Associate of
an
Interested Shareholder
shall
require
the
affirmative
vote
of the
holders
of
not
less than sixty-six and
two-thirds
percent
(66
2/3%) of the votes entitled to
be
cast by the
holders
of all the
then
outstanding Voting Shares, voting together as
a
single class, excluding Voting
Shares
beneficially owned by such Interested Shareholder; provided,
however,
that this
Bye-Law 49.9 shall
not
apply to,
and
such sixty-six and two-thirds percent
(66
2/3%) vote
shall
not be required for, any amendment, repeal or adoption unanimously
recommended
by
the
Board
if
all of
the Directors
on
the
Board
are
persons who would be eligible to serve as Continuing Directors within
the meaning of
Bye-Law 49.1.7.
63
TABLE OF CONTENTS
PROXY STATEMENTQUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETINGPROPOSAL 1 ELECTION OF CLASS I DIRECTORSPROPOSAL 2 ELECTION OF CLASS III DIRECTORSMembers of Our BoardDirector Skills and ExperienceDirector IndependenceMeetings and Committees of our Board of DirectorsAudit Committee InformationCompensation Committee InformationNominating Committee InformationBoard Leadership Structure and Role in Risk OversightAUDIT COMMITTEE REPORTPROPOSAL 3 TO APPROVE THE PANGAEA LOGISTICS SOLUTIONS LTD. AMENDED AND RESTATED 2014 EQUITY INCENTIVE PLANPROPOSAL 4 TO VOTE ON A PROPOSAL TO AMEND THE COMPANY's BYE-LAWS TO ADOPT GENDER-INCLUSIVE LANGUAGESHARE OWNERSHIPSecurity Ownership of Certain Beneficial Owners and ManagementSection 16(a) Beneficial Ownership Reporting ComplianceCERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONSRelated Person PolicyRelated Party TransactionsPrincipal Auditor Fees and ServicesPre-Approval of Audit and Non-Audit ServicesSHAREHOLDER PROPOSALS AND OTHER SHAREHOLDER COMMUNICATIONSDELIVERY OF DOCUMENTS TO SHAREHOLDERSOTHER BUSINESS