Exhibit 3.2
THE COMPANIES ACTS 1985 AND 1989
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A PUBLIC COMPANY LIMITED BY SHARES
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ARTICLES OF ASSOCIATION
OF
MERGECLAIM PUBLIC LIMITED COMPANY
(to be renamed Alliance Resources PLC)
(adopted by Special Resolution
passed on 5th December, 1990)
TABLE OF CONTENTS
Subject Article Page
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No. No.
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I. PRELIMINARY............................................................................... 1
Application.......................................................................... 1 1
Interpretation....................................................................... 2 1
II. CAPITAL................................................................................... 4
A. ISSUES AND RIGHTS................................................................... 4
Authorised share capital........................................................ 3 4
Alterations of share capital.................................................... 4 5
Purchase and redemption of the Company's shares................................. 5 5
Issue of shares with special rights............................................. 6 5
Variation of rights attaching to a class of shares.............................. 7 5
Special rights not varied by an issue of further shares of the class............ 8 6
Financial assistance for the acquisition of the Company's shares................ 9 6
Disqualification from voting - unpaid calls - non-compliance with statutory
requirements - statutory rights and court orders not affected................. 10 6
B. ALLOTMENT OF SHARES................................................................ 8
Allotment of shares............................................................. 11 8
Power to pay commission......................................................... 12 8
Trusts not to be recognised..................................................... 13 8
Issue of warrants............................................................... 14 9
C. CERTIFICATES....................................................................... 9
Form of share certificate and method of sealing................................. 15 9
Number of joint holders......................................................... 16 9
Period for the issue of share certificates...................................... 17 10
Balance certificates............................................................ 18 10
Issue of replacement certificates............................................... 19 10
Certificates for debentures and other securities................................ 20 11
Uncertificated shares and other securities...................................... 21 11
D. LIEN............................................................................... 11
Company's lien on partly-paid shares including dividends........................ 22 11
Enforcement of lien - application of sale proceeds - sale transfer
and good title of transferee to shares........................................ 23 11
E. CALLS ON SHARES.................................................................... 12
Board may make calls............................................................ 24 12
When a call is deemed to be made................................................ 25 12
Liabilities of joint holders.................................................... 26 12
Interest on unpaid calls........................................................ 27 12
Deemed calls.................................................................... 28 13
Board's power to differentiate.................................................. 29 13
Payment up in advance of calls.................................................. 30 13
(i)
Subject Article Page
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No. No.
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F. FORFEITURE OF SHARES............................................................... 13
Service of notice requiring payment of unpaid calls............................. 31 13
Contents of call notice......................................................... 32 13
Forfeiture...................................................................... 33 14
Service of notice of forfeiture................................................. 34 14
Forfeited shares to become the Company's property............................... 35 14
Former holders liability for unpaid calls....................................... 36 14
Statutory declaration as evidence............................................... 37 15
G. TRANSFER OF SHARES................................................................. 15
Transfers to be in Writing in usual common form................................. 38 15
No transfer fees payable........................................................ 39 15
No registration fees payable.................................................... 40 15
Execution of transfers.......................................................... 41 15
Board's power of refusal........................................................ 42 16
General conditions as to transfer............................................... 43 16
Temporary suspension of the registration of transfers........................... 44 16
Company to retain transfers and related documents............................... 45 16
Renunciation of allotment....................................................... 46 17
H. TRANSMISSION OF SHARES............................................................. 18
Surviving joint holders or personal representatives alone recognised............ 47 18
Person becoming entitled on death or bankruptcy................................. 48 18
Person electing to be registered required to notify............................. 49 18
Rights of persons entitled by transmission...................................... 50 18
I. UNTRACED SHAREHOLDERS.............................................................. 19
Power to sell shares............................................................ 51 19
J. STOCK.............................................................................. 20
Conversion of shares into stock................................................. 52 20
Rights and privileges of stockholders........................................... 53 20
Conditions as to transfer of stock.............................................. 54 20
Interpretation of "stock" and "stockholder"..................................... 55 21
K. ALTERATIONS OF CAPITAL............................................................. 21
Consolidation, sub-division, cancellation and reduction......................... 56 21
Treatment of resulting fractional entitlements.................................. 57 21
III. GENERAL MEETINGS......................................................................... 22
A. MEETINGS AND NOTICES................................................................ 22
Annual general meeting.......................................................... 58 22
Extraordinary general meetings.................................................. 59 22
Length of notice................................................................ 60 22
Short notice.................................................................... 61 23
Notice of right to appoint a proxy.............................................. 62 23
(ii)
Subject Article Page
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No. No.
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Notice members' resolutions upon requisition.................................... 63 23
Accidental omission or non-receipt.............................................. 64 23
B. PROCEEDINGS AT GENERAL MEETINGS..................................................... 23
Quorum - overflow meetings...................................................... 65 23
Lack of quorum adjournment or dissolution....................................... 66 24
Chairman........................................................................ 67 24
Adjournment..................................................................... 68 24
Amendments to resolutions....................................................... 69 25
Manner of decision.............................................................. 70 25
Proxy empowered to demand a poll................................................ 71 25
Objections to the qualification of a voter or to votes and errors in
counting votes etc............................................................ 72 25
Manner of and place for taking a poll........................................... 73 26
Chairman's casting vote......................................................... 74 26
When a poll has to be taken..................................................... 75 26
Notice of a poll................................................................ 76 26
Continuance of other business................................................... 77 26
Demand for a poll may be withdrawn.............................................. 78 27
C. VOTES OF MEMBERS.................................................................... 27
Voting rights................................................................... 79 27
Voting by joint holders......................................................... 80 27
Member of unsound mind may vote personal representative......................... 81 27
Proxy may vote on a poll........................................................ 82 28
Member need not cast his votes all in same way.................................. 83 28
Execution of a form of proxy.................................................... 84 28
Proxy need not be a member...................................................... 85 28
Deposit of proxy - duration of validity......................................... 86 28
Form of proxy instrument........................................................ 87 28
Board to send out instruments of proxy.......................................... 88 29
Validity of vote given by proxy................................................. 89 29
D. CORPORATIONS ACTING BY REPRESENTATIVES.............................................. 29
A corporate member may appoint a representative................................. 90 29
Directors entitled to attend and speak at meetings.............................. 91 29
IV. DIRECTORS................................................................................ 30
A. NUMBER AND REMUNERATION OF DIRECTORS................................................ 30
Number of Directors............................................................. 92 30
No share qualification.......................................................... 93 30
Remuneration of Directors....................................................... 94 30
Expenses........................................................................ 95 30
B. POWERS AND DUTIES OF DIRECTORS...................................................... 30
Board to manage the business of the Company..................................... 96 30
(iii)
Subject Article Page
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No. No.
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Local boards................................................................... 97 31
Appointment of attorneys and agents............................................ 98 31
Overseas branch registers...................................................... 99 31
Limit on borrowings............................................................ 100 31
Power of Board to delegate power to make calls................................. 101 34
Signing cheques and similar instruments........................................ 102 34
C. INTERESTS OF DIRECTORS............................................................. 34
Other office or place of profit - power to act in a professional capacity...... 103 34
Contracts with the Company - disclosure of interest............................ 104 34
Restriction upon voting - quorum............................................... 105 35
Offices and employment - ruling on materiality - notice by
Director of his interest................................................... 106 36
Disapplication of Articles 105 and 106 (a)..................................... 107 37
Company not to make loans, quasi-loans or enter into credit transactions....... 108 37
Director's places of profit in other companies................................. 109 38
Pension and superannuation funds - employees' share schemes -
charitable subscriptions..................................................... 110 38
Power to make provision for employees.......................................... 111 39
D. VACATION OF OFFICE OF DIRECTOR..................................................... 39
Vacation of office............................................................. 112 39
E. MANAGING AND EXECUTIVE DIRECTORS................................................... 40
Appointment of Managing and Executive Directors................................ 113 40
Remuneration for special or additional services................................ 114 40
Powers of Directors holding executive office................................... 115 40
F. ROTATION AND REMOVAL OF DIRECTORS.................................................. 41
One-third of the Directors to retire annually.................................. 116 41
Retiring Director to hold office until dissolution of meeting.................. 117 41
Directors who are to retire by rotation........................................ 118 41
When a retiring Director is deemed re-appointed................................ 119 41
Each re-appointment to be voted on separately.................................. 120 42
Notice required of an intention to propose a new Director...................... 121 42
Increase or reduction in permitted number of Directors......................... 122 42
Appointment of Director to fill a casual vacancy............................... 123 42
Removal of Director by ordinary resolution..................................... 124 42
G. ALTERNATE DIRECTORS................................................................ 43
Appointment and Revocation - approval of alternate by the
Director - remuneration.................................................... 125 43
H. PROCEEDINGS OF DIRECTORS........................................................... 44
Meetings of the Board - determination of questions............................. 126 44
Quorum and attendance by telephone............................................. 127 44
(iv)
Subject Article Page
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No. No.
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Restricted powers of Directors if less than prescribed minimum................. 128 45
Chairman of the Board.......................................................... 129 45
Validity of written resolution................................................. 130 45
Powers of quorum of Board...................................................... 131 46
Delegation of powers to Director............................................... 132 46
Appointment of committee of Board.............................................. 133 46
Proceedings of committee of Board.............................................. 134 46
Validity of acts of Board, etc................................................. 135 46
I. MINUTES............................................................................ 47
Minutes........................................................................ 136 47
J. SECRETARY.......................................................................... 47
Appointment and acts of Secretary.............................................. 137 47
K. THE SEAL........................................................................... 47
Custody and use of the Seal.................................................... 138 47
Official seal for use overseas................................................. 139 48
L. AUTHENTICATION OF DOCUMENTS........................................................ 48
Authentication of documents by Directors, Secretary; etc....................... 140 48
V. DIVIDENDS AND DISTRIBUTIONS............................................................. 49
Distribution of profits........................................................ 141 49
Dividends only payable on paid up and called up capital........................ 142 49
Interim dividends.............................................................. 143 49
Record dates................................................................... 144 50
Deduction of unpaid calls...................................................... 145 50
Unclaimed dividends............................................................ 146 50
Dividend warrants.............................................................. 147 50
Any joint holder may give receipt for a dividend............................... 148 51
Dividends to untraced shareholders............................................. 149 51
Dividend in specie............................................................. 150 51
Scrip dividends................................................................ 151 52
VI. RESERVES................................................................................ 53
Board power to carry profits to reserve - investment of reserves -
carry forward of profits................................................. 152 53
VII. CAPITALISATION OF PROFITS............................................................... 53
Capitalisation issue........................................................... 153 53
Board to effect capitalisations................................................ 154 55
VIII. ACCOUNTS AND AUDIT...................................................................... 55
Keeping of accounts and retention and location of accounting records........... 155 55
Accounts to be laid before general meetings.................................... 156 56
(v)
Subject Article Page
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No. No.
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Auditors' report.............................................................. 157 56
Deliver of reports and accounts to be delivered to members and
debenture holders - summary financial statements........................... 158 56
Non-delivery of reports and accounts.......................................... 159 56
Appointment of auditors....................................................... 160 57
Annual audit of accounts...................................................... 161 57
Validity of acts of auditors.................................................. 162 57
Right of auditors regarding general meetings.................................. 163 57
NOTICES ........................................................................ 57
Notices to be in Writing...................................................... 164 57
Service of notices............................................................ 165 57
New member to be bound by notices already served in respect
of the relevant share........................................................ 166 58
Notice to joint holders....................................................... 167 58
UK address for services....................................................... 168 58
Member present deemed to have received notice................................. 169 58
Advertisement of notice....................................................... 170 58
When service effected......................................................... 171 58
Service on deceased or bankrupt member........................................ 172 59
Convening of meetings by advertisement........................................ 173 59
I. WINDING-UP............................................................................... 59
Distribution of assets in specie.............................................. 174 59
II. INDEMNITY AND INSURANCE................................................................. 59
Indemnity and insurance for Directors and other officers...................... 175 59
(vi)
Company Number 2532955
THE COMPANIES ACTS 1985 AND 1989
__________________________________
A PUBLIC COMPANY LIMITED BY SHARES
__________________________________
ARTICLES OF ASSOCIATION
OF
MERGECLAIM PUBLIC LIMITED COMPANY
(to be renamed Alliance Resources PLC)
(adopted by Special Resolution
passed on 5th December, 1990)
I. PRELIMINARY
-----------
1. Application
-----------
No regulations or articles for management of a company contained or set out in
any Act of Parliament or statutory instrument concerning companies shall apply
to the Company and the following shall be the Articles of Association of the
Company.
2. Interpretation
--------------
(a) In these Articles, if not inconsistent with the subject or context, the
words standing in the first column of the following table shall bear the
meanings set opposite to them respectively in the second column thereof:
WORD MEANING
- ---- -------
Articles The Articles of Association as herein
contained or as from time to time
altered by special, or if permitted by
the Statutes ordinary, resolution
Base Rate The base lending rate of National
Westminster Bank PLC (or such other bank
as the Board may elect) as it stands
from time to time
1
Board The Board of Directors for the time
being of the Company or the Directors
present at a duly convened meeting of
Directors at which a quorum is present
or any of them acting as the Board of
Directors, or a committee thereof, in
accordance with these Articles
clear days In relation to a period of notice, that
period excluding the day when the notice
is given in accordance with these
Articles and the day for which it is
given or on which it is to take effect
Company Mergeclaim p.l.c. or such other name by
which the Company may for the time being
be registered in accordance with the
provisions of the Statutes
Connected In relation to a director, has the
meaning given to it in Section 346
Director A director for the time being of the
Company
dividend Dividend and/or bonus
Executive Director A Director who has been appointed to any
executive office under the Company in
accordance with the provisions of
Article 113
Extended Group The Company, its subsidiaries and its
subsidiary undertakings
Group The Company and its subsidiaries
holder In relation to shares, the member whose
name is entered in the Register as the
holder of the shares
Minimum Amount (Pounds)2.50 or such greater sum as the
Board may approve being not greater than
the maximum sum which The Stock Exchange
may from time to time permit for the
purpose
Office The registered office for the time being
of the Company
Ordinary Shares The Ordinary Shares of 10 pence each in
the capital of the Company referred to
in Article 3 number thereof for the time
being in issue
2
Overseas Branch Register Branch register of members as defined in
Section 362(2)
paid up or paid Paid up and/or credited as paid up in
respect of the nominal amount of a share
Recognised Clearing House A body declared by an order of the
Secretary of State for the time being in
force to be a recognised clearing house
for the purpose of the Financial
Services Act 1986
Recognised Investment A body declared by an order of the
Exchange Secretary of State for the time being in
force to be a recognised investment
exchange for the purposes of the
Financial Services Act 1986
Register The register of members of the Company
kept as required by Section 352(1)
Seal The common seal (if any) of the Company
Securities Seal The official seal (if any) of the
Company permitted to be used by Section
40
Statutes The Companies Act 1985, the Companies
Act 1989 and every Act and statutory
instrument for the time being in force
concerning companies and affecting the
Company
subsidiary A subsidiary as defined in Section 736
subsidiary undertaking A subsidiary undertaking as defined in
Section 258
The Stock Exchange The International Stock Exchange of the
United Kingdom and the Republic of
Ireland Limited
Transfer Office The address at which the Register is for
the time being situated
United Kingdom The United Kingdom of Great Britain and
Northern Ireland
in Writing Written or produced by any substitute
for writing, including printing,
typewriting, including printing,
typewriting, lithography and
photography, but not including telex or
facsimile.
3
(b) The following provisions shall apply to the construction or
interpretation of these Articles or any part thereof:
(i) any reference to any section or provision of any Act of Parliament shall
if not inconsistent with the subject or context include every statutory
modification, extension, substitution, amendment or re-enactment thereto
or thereof for the time being in force;
(ii) any reference to a numbered Article shall be a reference to the Article
of these Articles bearing the same number and includes reference to such
Article as amended from time to time;
(iii) any reference to a numbered Section shall, unless stated otherwise, be a
reference to the Section of the Companies Act 1985 bearing the same
number (subject to the provision of paragraph (b)(i) above);
(iv) words importing the singular number include the plural and vice versa;
(v) words importing the masculine gender include the feminine gender;
(vi) words importing persons shall include companies, corporations, firms and
other unincorporated bodies;
(vii) the expression "Secretary" shall mean and include the Secretary and any
joint, deputy or assistant Secretary for the time being of the Company;
(viii) any reference to "share", "member" and "holder" shall include "stock"
and "stockholder";
(ix) save as aforesaid, any words or expressions defined in the Statutes
shall, if not inconsistent with the subject or context, bear the same
meaning in these Articles;
(x) a special or extraordinary resolution shall be effective for any purpose
for which an ordinary resolution is expressed to be required under any
provision of these Articles; and
(xi) the headings contained in these Articles are included for purposes of
reference only and shall not in any way affect or govern the sense or
construction thereof or of any part thereof.
II. CAPITAL
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A. ISSUES AND RIGHTS
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3. Authorised share capital
------------------------
The share capital of the Company at the date of the adoption of these Articles
is (Pounds)2,500,000 divided into 25,000,000 Ordinary Shares of 10 pence each.
4
4. Alterations of share capital
----------------------------
The Company may increase or otherwise alter its share capital in any of the ways
permitted by Section 121.
5. Purchase and redemption of the Company's shares
-----------------------------------------------
(a) Subject to the provisions of the Statutes and to any necessary amendments
to these Articles, any share may be issued on the terms that it is, or at the
option of the Company or the holder thereof is to be liable, to be redeemed.
(b) The Company may purchase its own shares (including any redeemable shares)
subject to (i) the provisions of the Statutes and of these Articles and (ii) if
there is in issue any class of convertible shares for the time being forming
part of the capital of the Company ("convertible shares") to the holders of not
less than three-quarters thereof giving their consent in Writing or,
alternatively, the holders of the convertible shares passing an extraordinary
resolution at a separate meeting of the holders thereof.
6. Issue of shares with special rights
-----------------------------------
Without prejudice to any rights for the time being conferred on the holders of
any shares or class of shares (which rights shall not be varied or abrogated,
except with such consent or sanction as is provided by Article 7) and subject to
Article 11, any share of the Company may be allotted with such preferred,
deferred or other rights, or such restrictions, whether in regard to dividend,
return of capital, voting, conversion or otherwise, as the Company may from time
to time by ordinary resolution determine (or, failing such determination, as the
Board may determine).
7. Variation of rights attaching to a class of shares
--------------------------------------------------
Subject to the provisions of the Statutes all or any of the rights, privileges
or conditions for the time being attached or belonging to any class of shares
for the time being forming part of the capital of the Company may from time to
time (either while the Company is a going concerning or during or in
contemplation of a winding-up) be modified, affected, varied, extended or
surrendered in any manner as may be provided by such rights, privileges or
conditions or otherwise with the consent in Writing of the holders of not less
than three-quarters of the issued shares of that class or with the sanction of
an extraordinary resolution passed at a separate meeting of the members of that
class. To any such separate general meeting all the provisions of these Articles
as to general meetings of the Company shall mutatis mutandis apply, but so that
(i) the necessary quorum shall be members of the class present in person or by
proxy holding not less than one-third of the issued shares of that class (or, if
at any adjourned class meeting of such holders a quorum as defined above is not
present, any one person present holding shares of the class in question or his
proxy shall be a quorum), (ii) any holder of shares of the class present in
person or by proxy may demand a poll and (iii) every such holder shall, on a
poll, have one vote for every share of the class held by him.
5
8. Special rights not varied by an issue of further shares of the class
--------------------------------------------------------------------
The rights conferred upon the holders of any shares or class of shares issued
with preferred or other rights shall not (unless otherwise expressly provided by
the rights attached to any such shares) be deemed to be varied by the creation
or issue of further shares ranking pari passu therewith or subsequent thereto
but in no respect in priority thereto.
9. Financial assistance for the acquisition of the Company's shares
----------------------------------------------------------------
Save to the extent prohibited by the Statutes or otherwise by law the Company
shall be entitled, subject to and in accordance with the provisions of the
Statutes, to give financial assistance directly or indirectly for the purpose of
the acquisition or proposed acquisition for the purpose of the acquisition or
proposed acquisition of any shares of the Company or any company of which it is
a subsidiary or for the purpose of reducing or discharging any liability
incurred by any person for the purpose of acquiring any shares of the Company or
any company of which it is a subsidiary.
10. Disqualification from voting - unpaid calls - non-compliance with
------------------------------------------------------------------
statutory requirements - statutory rights and court orders not affected
-----------------------------------------------------------------------
(a) No member shall, unless the Board otherwise determines, be entitled in
respect of any share held by that member to vote at any general meeting either
personally or by proxy or at any separate meeting of the holders of any class of
shares or to exercise any other right conferred by membership in relation to any
such meeting if any call or other sum presently payable by the member in respect
of that share remains unpaid.
(b) any member, or any other person appearing to be interested in any shares
of the Company, has been duly served with a notice under Section 212 (a "Section
212 Notice") and is in default for the prescribed period in supplying to the
Company the information thereby required, then at any time thereafter the Board
may in its absolute discretion by notice to such member (a "direction notice")
direct:
(i) that in respect of the shares in relation to which the default occurred
("default shares", which expression shall include any further shares
issued after the date of the Section 212 Notice in right of the first-
mentioned shares) such member shall not be entitled to vote at any
general meeting either personally or by proxy or at any separate meeting
of the holders of any class of shares or to exercise any other rights
conferred by membership in relation to any such meeting; and/or
(ii) if the default shares represent, at the date of the direction notice,
one-quarter of 1 percent or more of the issued shares of any class of
shares of the Company, that:
(aa) any dividend (or part thereof) or other moneys which would otherwise
be payable on such shares shall be retained by the Company until such
time as the direction ceases to have effect (without any liability on the
part of the Company to pay interest thereon) and that prior to such time
the acceptance of an offer made by the Company under Article 151 in
respect of any such dividend shall be of no effect; and/or
6
(bb) no transfer, other than an approved transfer, of any of the default
shares shall be registered.
(c) The Company shall send a copy of the direction notice to each other
person appearing to be interested in the relevant default shares of the address
of whom has been notified to the Company, but the failure or omission by the
Company to do so shall not invalidate such notice.
(d) Any direction notice shall have effect in relation to default shares in
accordance with its terms but shall cease to have effect:
(i) when the Company has received in Writing all information required by it
pursuant to a Section 212 Notice in respect of those default shares; or
(ii) if such shares are transferred by means of an approved transfer; or
(iii) if and to the extent that the Board so determines.
(e) For the purposes of this Article:
(i) a person shall be treated as appearing to be interested in any shares if
the member holding such shares has given to the Company a notification
under Section 212 which names such person as being so interested or if
the Company (after taking into account the said notification and any
other notification under the Act or any relevant information otherwise
available to that Company) knows or has reasonable cause to believe that
the person in question is, or may be, interested in the shares, and so
that references to persons interested in shares and to interests in
shares shall be construed in accordance with Section 212(5);
(ii) the prescribed period in respect of any shares is 28 days from the date
of service of the Section 212 Notice in respect thereof, except where the
shares to which such notice related represent one-quarter of 1 percent or
more of the issued shares of any class of shares of the Company in which
case such period shall be 14 days;
(iii) a transfer is an approved transfer if (but only if):
(aa) the transfer results from a sale made through a Recognised
Investment Exchange or any stock exchange outside the United Kingdom
on which the Company's shares (or rights in respect of those shares)
are normally traded; or
(bb) it is a transfer of shares to an offeror by way of acceptance of or
in pursuance of a takeover offer (within the meaning of Section 14
of the Companies Securities (Insider Dealing) Act 1985) for the
Company; or
(cc) the Board is satisfied that the transfer is made pursuant to a sale
to a party who, in the opinion of the Board, is not connected with
the holder thereof or with any other person appearing to be
interested in such shares prior to such transfer (being a party
which itself is not the holder of any shares of the Company in
respect of which a
7
direction notice is then in force or a person appearing to be
interested in any such shares) and the Board does not have
reasonable grounds to believe that the transferor or any other
person appearing to be interested in such first-mentioned shares
will following such transfer have any interest in such shares;
(iv) a reference to a person being in default in supplying to the Company the
information required by a Section 212 Notice includes a reference to his
having failed or refused to give all or any part of it and also includes
a reference to his having given information which he knows to be false in
a material respect or having recklessly given information which is false
in a material respect; and
(v) any notice by the Company pursuant to Section 212 or this Article may be
given by facsimile or telex in which case it will be deemed received
forthwith upon transmission thereof.
(e) None of the provisions contained in this Article shall in any way limit
or restrict the rights of the Company under Sections 212 and 216 or any
order made by the court under Section 216 nor shall any sanction imposed
by the Board pursuant to this Article cease to have effect, otherwise
than as provided in this Article, unless it is so ordered by the court.
B. ALLOTMENT OF SHARES
-------------------
11. Allotment of shares
-------------------
Subject to Sections 97, 98 and 100 and to the provisions of these Articles the
Board is hereby authorised to allot, grant options over or otherwise dispose of
the unissued shares in the capital of the Company in accordance with any
ordinary resolution passed from time to time authorising the Board for the
purposes of Section 80 to allot relevant securities.
12. Power to pay commission on subscription of shares
-------------------------------------------------
In addition to all other powers of paying commissions the Company (or the Board
on its behalf) may exercise the powers conferred by Section 97 of paying
commissions to persons subscribing or procuring subscriptions for shares of the
Company, or agreeing so to do whether absolutely or conditionally. The Company
(or the Board on its behalf) may also, on any issue of shares, pay such
brokerage as may be lawful.
13. Trusts in relation to shares not to be recognised
-------------------------------------------------
Except as required by law, no person shall be recognised by the Company as
holding any share upon any trust, and (except only as by these Articles or by
law otherwise provided) the Company shall not be bound by or recognise (even
when having notice thereof) any equitable, contingent, future or partial
interest in any share, or any interest in any fractional part of a share, or any
other right in response of any share, except an absolute right to the entirety
thereof in the registered holder.
8
14. Issue of warrants
-----------------
The Company may, with respect to any fully paid up shares, issue under the Seal
or Securities Seal (or, in the case of shares on an Overseas Branch Register, an
official seal for use in the relevant territory) a warrant stating that the
bearer of the warrant is entitled to the shares specified in it and may provide
(by coupons or otherwise) for the payment of the future dividends on the shares
included in the warrant. Notwithstanding the provisions of Article 138, no
warrant shall require to be signed or countersigned and the method or system of
sealing (if required) and signature (if any) of warrants shall be as for share
certificates under Article 15. If a warrant or coupon is defaced, worn out or
destroyed, it may be renewed on such terms (if any) as to evidence and indemnify
and payment of any exceptional expenses incurred by the Company in investigating
evidence as the Directors may determine but otherwise free of charge and (in the
case of defacement or wearing out) on delivery of the old warrant or coupon and
(in the case of destruction) only if the Directors are satisfied beyond
reasonable doubt that the original has been destroyed. If a warrant or coupon
is lost it will not be renewed unless the Directors are satisfied beyond
reasonable doubt that the original has been destroyed. Any warrant or coupon
surrendered to the Company may be destroyed at the option of the Company after
the expiration of 1 year from the date of surrender.
C. CERTIFICATES
------------
15. Form of share certificate and method of sealing
-----------------------------------------------
Every share certificate shall be issued under the Seal or the Securities Seal
(or, in the case of shares on an Overseas Branch Register, an official seal for
use in the relevant territory) unless otherwise permitted by the Statutes and
(so long as any of the Company's shares are listed thereon) the regulations of
The Stock Exchange. Each certificate shall specify the number and class of
shares to which it relates, the amount paid up thereon and the distinguishing
numbers (if any) of the shares to which it relates. No certificate shall be
issued representing shares of more than one class. Notwithstanding the
provisions of Article 138 of these Articles, no certificate shall be required to
be signed or countersigned. The method or system of affixing the Seal and the
Securities Seal (or, in the case of shares registered on an Overseas Branch
Register, the official seal is used in the relevant territory) to share
certificates may, if the Board so resolves, be controlled by, or the
certificates be approved for sealing by, the auditors, bankers or transfer
auditors of the Company, or by the appropriate department of the Company's
registrars. Any signature may be affixed to any certificate by any mechanical
means approved by the Board.
16. Maximum number of joint holders
-------------------------------
The Company shall not be bound to register more than 4 persons as the joint
holders of any share or shares and in the case of a share held jointly by
several persons the Company shall not be bound to issue more than one
certificate therefor and delivery of a certificate to one of joint holders shall
be sufficient delivery to all.
9
17. Period for the issue of share certificates
------------------------------------------
Subject to the provisions of Article 16 every person whose name is entered as a
member in the register (except a Recognised Clearing House or a nominee of a
Recognised Clearing House or of a Recognised Investment Exchange, including
Sepon Limited, in respect of whom the Company is not by law required to complete
and have ready for delivery a certificate) shall be entitled without payment to
one certificate for all the shares of any one class registered in his name. Any
certificate or certificates to which any person is entitled hereunder shall be
delivered:
(i) in the case of issue within one month after allotment (or such longer
period as the terms of issue shall provide); or
(ii) in the case of a transfer of fully paid shares within 14 days after
lodgment of the relevant instrument of transfer; or
(iii) in the case of a transfer of partly paid shares within 2 months after
lodgment of the relevant instrument of transfer.
If and so long as all the issued shares, or all the issued shares of a
particular class, in the capital of the Company are fully paid up and rank pari
passu for all purposes, then none of those shares shall bear a distinguishing
number. In all other cases each share which is not fully paid up shall bear a
distinguishing number.
18. Balance certificates
--------------------
Where a member has transferred some only of the shares comprised in a share
certificate, the old certificate shall be canceled and a new certificate for the
balance of such shares shall be issued to him in lieu without charge.
19. Issue of replacement certificates
---------------------------------
(a) Any 2 or more certificates representing shares of any one class held by
any member may at his request be canceled and a single new certificate for such
shares issued in lieu without charge.
(b) If any member shall surrender for cancellation a share certificate
representing shares held by him and request the Company to issue in lieu 2 or
more share certificates representing such shares in such proportions as he may
specify, the Board may, if it thinks fit, comply with such request upon payment
of the reasonable out-of-pocket expenses of the Company in providing the same.
(c) If a share certificate shall be damaged or defaced or worn out or alleged
to have been lost, stolen or destroyed, a new certificate representing the same
shares may be issued to the holder upon request subject to delivery up of the
old certificate or (if it shall be alleged to have been lost, stolen or
destroyed) compliance with such conditions as to evidence and indemnify (if any)
and the payment of any exceptional out-of-pocket expenses of the Company of
investigating such evidence in connection with the request as the Board may
think fit but without any further or other charge.
10
(d) In the case of shares held jointly by several persons any such request
may be made by any one of the joint holders.
20. Certificates for debentures and other securities
------------------------------------------------
The provisions of these Articles relating to certificates shall, with all
necessary modifications and adaptations, apply to certificates for debentures
and debenture stock and any other securities comprising the share or loan
capital of the Company as they apply to certificates for shares.
21. Uncertificated shares and other securities
------------------------------------------
Subject to the Statutes permitting the issue of shares, debentures or other
securities without certificates or the transfer without the same production of
certificates on the creation or production of written forms of transfer, the
Company may issue shares, debentures or other securities in uncertificated form
(or, as the case may be, permit the same to be transferred without the creation
on production of written forms of transfer) but subject always to any provisions
contained in the Statutes from time to time and, so long as any of the Company's
shares, debentures or other securities are listed on The Stock Exchange, subject
to any requirements placed on it by The Stock Exchange. The Board may from time
to time lay down regulations governing the issue and transfer of uncertificated
securities subject always as provided in this Article, which regulations shall
operate in substitution for the relevant provisions of these Articles governing
certificates and the transfer of securities insofar as the Statutes permit.
D. LIEN
----
22. Company's lien on partly-paid shares - lien extends to dividends
----------------------------------------------------------------
The Company shall have a first and paramount lien on every share (not being a
fully paid share) for all moneys (whether presently payable or not) payable at a
fixed time or called in respect of that share. Such lien shall apply whether
before or after notice to the Company of any equitable or other interest of any
person other than the registered holder or holders of such share, whether the
time for payment or discharge of the same shall have arrived or not and
notwithstanding that the same are joint debts or liabilities of such holder or
his estate and any other person whether a member of the Company or not; but the
Board may at any time declare any share to be wholly or in part exempt from the
provisions of this Article. The Company's lien, if any, on a share shall extend
to all dividends or other moneys payable thereon or in respect thereof. The
Company shall not have a lien or any other charge on its own fully paid shares
(whether taken expressly or otherwise); and in relation to any permitted lien or
other charge the provisions (so far as are applicable) of Section 148(4) and of
paragraph 13(3) of Part I of Schedule 9 to the Companies Act 1985 shall be
complied with in every respect.
23. Enforcement of lien by a sale of shares - application of proceeds of
--------------------------------------------------------------------
sale -Board's power to authorise a transferor to execute a sale transfer
------------------------------------------------------------------------
- good title of transferee to shares
------------------------------------
(a) The Company may sell, in such manner as the Board thinks fit, all or any
of the shares on which the Company has a lien, but not sale shall be made unless
some sum in respect of which the lien exists is presently payable, nor until the
expiration of 14 days after a notice in Writing stating and
11
demanding payment of the sum presently payable, and giving notice of intention
to sell in default, shall have been served on the registered holder for the time
being of the shares or the person entitled by reason of the death or bankruptcy
of such holder to the shares.
(b) The net proceeds of such sale, after payment of the costs thereof, shall
be applied in or towards payment or satisfaction of the debt or liability in
respect whereof the lien exists, so far as the same is presently payable, and
any residue shall (subject to a like lien for debts or liabilities not presently
payable as existed upon the shares prior to the sale) be paid to the person
entitled to the shares at the time of the sale. For giving effect to any such
sale the Board may authorise some person to transfer the shares sold to, or in
accordance with the directions of, the purchaser thereof. The purchaser shall be
registered as the holder of the shares so transferred and he shall not be bound
to see to the application of the purchase money nor shall his title to the
shares be affected by any irregularity or invalidity in the proceedings in
reference to the sale.
E. CALLS ON SHARES
---------------
24. Board may make calls
--------------------
Subject to the provisions of these Articles and to the terms of allotment
thereof, the Board may from time to time make calls upon the members in respect
of any moneys unpaid on their shares and each member shall (subject to receiving
at least 14 days' notice in Writing specifying the time or times and place so
specified the amount called on his shares. A call may, at any time before
receipt by the Company of a sum due thereunder, be revoked in whole or in part
and payment of a call may in whole or in part be postponed as the Board may
determine. A person upon whom a call is made shall remain liable for calls made
upon him notwithstanding the subsequent transfer of the shares in respect of
which the call was made.
25. When a call is deemed to be made
--------------------------------
A call shall be deemed to have been made at the time when the resolution of the
Board authorising the call was passed and may be required to be paid by
installments.
26. Liabilities of joint holders
----------------------------
The joint holders of a share shall be jointly and severally liable to pay all
calls in respect thereof.
27. Interest on unpaid calls
------------------------
If a sum called in respect of any share or any money payable on a share under
the terms of allotment is not paid before or on the day appointed for payment
thereof, the person from whom the sum is due shall pay interest on the sum from
the day appointed for payment thereof to the time of actual payment at the rate
per annum of 3 percent above the Base Rate or at such lesser rate as the Board
may agree to accept. Such person shall also pay all costs, charges and expenses
which the Company may have incurred or become liable for in order to procure
payment of, or in consequence of such non-payment of, such call or installment,
but the Board shall be at liberty to waive payment of such interest, costs,
charges and expenses wholly or in part.
12
28. Sums payable on allotment or at any fixed time deemed to be on call
-------------------------------------------------------------------
Any sum or non-cash consideration which by the terms of allotment of a share or
pursuant to the Statutes is or becomes payable upon allotment or at any fixed
date thereafter whether on account of the nominal amount of the share or by way
of premium shall for all the purposes of these Articles be deemed to be a call
duly made and payable on the date on which, by the terms of allotment or
pursuant to the Statutes, the same becomes payable, and in the case of non-
payment all the relevant provisions of these Articles as to payment of interest
and expenses, forfeiture or otherwise shall apply as if such sum had become
payable by virtue of a call duly made and notified.
29. Board's power to differentiate regarding calls
----------------------------------------------
The Board may on the issue of shares differentiate between the holders of shares
as to the amount called to be paid and the times of payment.
30. Payment up of shares in advance of calls
----------------------------------------
The Board may, if it thinks fit, receive from any member willing to advance the
same all or any part of the money unpaid upon the shares held by him beyond the
sums actually called up thereon as a payment in advance of calls, and such
payment in advance of calls shall to that extent extinguish the liability on the
shares in respect of which it is advanced. The Company may (but shall not be
obliged to) pay interest upon the money so received, or so much thereof as from
time to time exceeds the amount of the calls then made and payable upon the
shares in respect of which it has been received, at such rate not exceeding the
Base Rate (unless the Company in general meeting shall otherwise direct) as the
member paying such sum and the Board agree upon.
F. FORFEITURE OF SHARES
--------------------
31. Service of notice requiring payment of unpaid calls
---------------------------------------------------
If a member fails to pay any call or installment of a call before or 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 on the person becoming entitled to the share by transmission on death or
bankruptcy or otherwise by operation of law) requiring payment of so much of the
call or installment as is unpaid, together with any interest which may have
accrued and any expenses incurred by the Company by reason of such non-payment.
32. Contents of notice requiring payment of unpaid calls
----------------------------------------------------
The notice shall name a further day (not earlier than 14 days from the date of
service thereof) 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 at
or before the time and at the place appointed the shares on which the call was
made or installment is payable will be liable to be forfeited.
13
33. Forfeiture of shares
--------------------
If the requirements of any such notice as aforesaid are not complied with, any
share in respect of which such notice has been given may at any time thereafter,
before payment of all calls or installments and interest due in respect thereof
has been received by the Company, be forfeited by a resolution of the Board to
that effect and such forfeiture shall include all dividends which shall have
been declared on the forfeited share and not actually paid before the forfeiture
and any dividends on such share which may have been declared and paid but which
have not been claimed by the payee at the date of the resolution of the Board by
which such share shall have been forfeited. The Board may accept the surrender
of any share liable to be forfeited hereunder and in such case references in
these Articles to forfeiture shall include surrender.
34. Service of notice of forfeiture
-------------------------------
When any share has been forfeited notice of the forfeiture shall be served upon
the person who was before the forfeiture the registered holder of that share (or
the person entitled thereto by transmission as aforesaid) and an entry of such
notice having been given, and of the forfeiture, with the date thereof, shall be
made forthwith in the Register opposite the entry in respect of the share; but
no forfeiture shall be in any manner invalidated by any omission or neglect to
give notice or make such entry as aforesaid.
35. Forfeited shares to become the Company's property
-------------------------------------------------
Upon being forfeited a share shall thereupon become the property of the Company
and during the period of 3 years immediately following the day prior to the date
of forfeiture of such share may be sold, re-allotted (subject to the provisions
of these Articles) 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 thing fit including the
remission of the whole or any part of the interest made payable by the next
succeeding Article. At any time before such a sale, re-allotment or disposition
the forfeiture may be annulled or canceled on such terms and conditions as the
Board thinks fit. The Board may, if necessary, authorise some person to
transfer such a forfeited share to any other person as aforesaid. If within the
period of 3 years immediately following the day prior to the date of forfeiture
of any share such share has not been sold, re-allotted or otherwise disposed of,
the Board shall before the expiration of the period of 3 years from the date of
forfeiture of the share cancel such share and shall diminish the amount of the
authorised and issued share capital by the nominal amount of the share so
canceled and shall comply with all relevant provisions of Sections 146 to 148.
36. Former holder of forfeited shares remain liable for unpaid calls
----------------------------------------------------------------
A person whose shares have been forfeited shall cease to be a member in respect
of the forfeited shares but shall notwithstanding the forfeiture remain liable
to pay to the Company all moneys which at the date of forfeiture were presently
payable by him to the Company in respect of the shares, with interest thereon at
the rate per annum of 3 per cent above the Base Rate, or at such lower rate as
the Board may determine, from the date of forfeiture until payment, and the
Board may enforce payment
14
without any allowance for the value of the shares at the time of forfeiture or
for any consideration received on their disposal.
37. Statutory declaration as evidence of forfeiture
-----------------------------------------------
A statutory declaration in Writing signed by the declarant stating that he is a
Director or Secretary of the Company and that a share has been duly forfeited on
a date stated in the declaration shall be conclusive evidence of the facts
therein stated as against all persons claiming to be entitled to the share
adversely to the forfeiture, and such declaration and the receipt of the Company
for the consideration (if any) given for the share on the sale, re-allotment or
disposal thereof, together with the certificate for the share delivered to a
purchaser or allottee thereof, shall (subject to the execution of a transfer if
the same be so required) constitute a good title to the share, and the person to
whom the share is sold, re-allotted or disposed of shall (subject to his having
agreed to become a member of the Company) be registered as the holder of the
share and shall be discharged from all calls and other expense (if any) in
connection therewith made or incurred prior to such sale or disposal and shall
not be bound to see to the application of the consideration (if any) nor shall
his title to the share be affected by any irregularity or invalidity in the
proceedings in relation to the forfeiture, sale, re-allotment or disposal of the
share.
G. TRANSFER OF SHARES
------------------
38. Transfers to be in Writing in usual common form
-----------------------------------------------
Subject to the provisions of Article 21 (transfers without a written
instrument), all transfers of shares shall be effected by transfer in Writing in
any usual or common form or in any other form which the Board may approve
PROVIDED that every transfer by a corporation shall be made by deed or deed poll
unless otherwise permitted by law in which case such transfers shall be executed
as required by the Statutes.
39. No transfer fees payable
------------------------
No fee shall be charged on the registration of a transfer.
40. No registration fees payable
----------------------------
No fee shall be charged on the registration of any probate, letters of
administration, certificate of death or marriage, power of attorney, stop notice
or other instrument relating to or affecting the title to any shares or
otherwise for making any entry in the Register affecting the title to any
shares.
41. Execution of transfers
----------------------
The instrument of transfer of a share shall be executed by or on behalf of the
transferor and the transferor shall be deemed to remain the holder of the share
until the name of the transferee is entered in the Register in respect thereof
PROVIDED that in the case of a partly paid share the instrument of transfer must
also be executed by or on behalf of the transferee.
15
42. Board's power to refuse to register transfers in certain cases
--------------------------------------------------------------
The Board may, in its absolute discretion and without assigning any reason
therefor, decline to register any transfer of shares (not being fully paid
shares) to a person of whom they shall not approve and they may also decline to
register any shares (not being fully paid shares) on which the Company has a
lien. If the Board declines to register a transfer of any shares, it shall,
within 2 months after the date on which the transfer was lodged with the
Company, send to the transferee notice of the refusal and (except in the case of
fraud or suspected fraud) return the instrument of transfer and any accompanying
certificate to the person presenting the same.
43. General conditions as to transfer
---------------------------------
Subject to the provisions of Article 21, the Board may also decline to register
any instrument of transfer, unless the instrument of transfer:
(i) is duly stamped (if required by law) and is deposited at the Transfer
Office or such other place as the Board may prescribe and is accompanied
by the certificate for the shares to which it relates and such other
evidence (if any) as the Board may reasonably require to show the right
of the transferor to make the transfer (and if the instrument of transfer
is executed by some other person on his behalf the authority of that
person so to do); and
(ii) is in respect of one class of share only; and
(iii) is in favour of not more than 4 transferees.
In the case of an instrument of transfer executed by a Recognised Clearing House
or a nominee of a Recognised Clearing House or of a Recognised Investment
Exchange (including Sepon Limited), the lodgment of a certificate for the shares
being transferred or other evidence as aforesaid will not be required unless and
to the extent that certificates have been issued in respect of the shares in
question.
44. Temporary suspension of the registration of transfers
-----------------------------------------------------
The registration of transfers of shares or of any class of shares or of any
other class of security in the share or loan capital of the Company may be
suspended at such times and for such periods as the Board may from time to time
determine PROVIDED always that such registration shall not be suspended for more
than 30 days in any calendar year.
45. Company to retain transfers and power of Company to destroy transfers and
-------------------------------------------------------------------------
related documents
-----------------
(a) Subject to paragraph (b) of this Article all instruments of transfer
which are registered shall be retained by the Company, but any instrument of
transfer which the board may decline to register shall (except in any case of
fraud or suspected fraud) be returned to the person presenting the same.
(b) Subject as hereinafter provided the Company shall be entitled to destroy:
16
(i) all instruments of transfer of shares which have been registered at any
time after the expiration of 6 years from the date of registration
thereof;
(ii) registered share certificates which have been canceled or ceased to have
effect at any time after the expiration of 1 year from the date of such
cancellation or cessation;
(iii) all notifications of change of name or address and dividend mandates
after the expiration of 2 years from the date of recording thereof; and
(iv) any other document on the basis of which any entry in the Register is
made at any time after the expiration of 6 years from the date of the
first entry in the Register was made in respect of it;
and 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 and that
every instrument of transfer so destroyed was a valid and effective instrument
duly and properly registered and that every share certificate so destroyed was a
valid and effective document duly and properly canceled and that every other
document so destroyed was a valid and effective document in accordance with the
recorded particulars thereof in the books or records of the Company PROVIDED
that:
(i) the provisions aforesaid shall apply only to the destruction of a
document in good faith and without notice in Writing to the Company of
any claim (regardless of the parties thereto) to which the document might
be relevant;
(ii) 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 case where the conditions of proviso (i)
above are not fulfilled; and
(iii) references herein to the destruction of any document include references
to the disposal thereof in any manner.
The provisions of this Article shall, with all necessary modification and
adaptations, apply to all instruments of transfer, notifications of change of
name or address and mandates relating to and certificates representing
debentures and any other securities comprising the share or loan capital of the
Company as they apply to instruments of transfer of and certificates for and
other documents relating to shares.
46. Renunciation of allotment permitted
-----------------------------------
Nothing in these Articles shall preclude the Board from recognising a
renunciation of the allotment of any share by the allottee in favour of some
other person before any person has been entered in the Register in respect of
such share.
17
H. TRANSMISSION OF SHARES
----------------------
47. Surviving joint holders or personal representatives alone recognised upon
-------------------------------------------------------------------------
death of a member
-----------------
In case of the death of a member, the survivors or survivor where the deceased
was a joint holder, or the legal personal representatives of the deceased where
he was a sole or only surviving holder, shall be the only persons recognised by
the Company as having any title to his interest in the shares held by him, but
nothing contained in these Articles shall release the estate of a deceased
member from any liability in respect of any share jointly or solely held by him.
48. Person becoming entitled on death or bankruptcy of a member may be
------------------------------------------------------------------
registered
----------
Subject to the provisions of these Articles, any person becoming entitled to a
share in consequence of the death or bankruptcy of a member may upon such
evidence as to his title being produced as may from time to time be properly
required by the Board, and subject as hereinafter provided, elect either to be
registered himself as holder of the share or to have some person nominated by
him registered as the transferee thereof, but the Board shall, in either case,
have the same right to decline or suspend registration as it would have had in
the case of a transfer of that share by that member before his death or
bankruptcy, as the case may be.
49. Person electing to be registered required to notify the Company
---------------------------------------------------------------
If the person becoming entitled to a share shall elect to be registered himself
under the provisions of the foregoing Article, he shall deliver or send to the
Company a notice in Writing signed by him stating that he so elects. If he
shall elect to have another person registered, he shall testify his election by
executing to such person a transfer of such share. All the limitations,
restrictions and provisions of these Articles relating to the right to transfer
and the registration of transfers of shares shall be applicable to any such
notice or transfer as aforesaid as if the death or bankruptcy of the member had
not occurred and the notice or transfer were a transfer signed by such member.
50. Rights of persons entitled to a share by transmission
-----------------------------------------------------
Save as otherwise provided by or in accordance with these Articles, a person
becoming entitled to a share in consequence of the death or bankruptcy of a
member or otherwise by operation of law shall (upon supplying to the Company
such evidence as the Board may reasonably require to show his title to the
share) be entitled to receive, and may give a good discharge for, the same
dividends and other moneys payable in respect thereof as if he was the
registered holder thereof; such person shall also be entitled to all other
advantages to which he would be entitled if he were the registered holder of the
share except that he shall not, before being registered as a member in respect
of the share, be entitled in respect of it to receive notice of or to attend or
vote at meetings of the Company or to exercise any rights conferred by
membership in relation to meetings of the Company; PROVIDED that the Board may
at any time give notice requiring any such person to elect either to be
registered himself or to transfer the share and, if the notice is not complied
with within 60 days, the Board may thereafter:
18
(i) withhold payment of all dividends and other moneys payable in respect of
the share (but any such action shall not constitute the Company a trustee
in respect of any such dividends or other moneys) and suspend any other
advantages to which such person would otherwise be entitled in respect of
the share until the requirements of the notice have been complied with;
and/or
(ii) at any time give notice requiring a person becoming entitled to a share
as aforesaid to elect either to be registered himself or to transfer the
share and, if the notice is not complied with within such period (being
not less than 42 days) as the Board may fix, the share may be sold at the
best price reasonably obtainable in such manner as the Board thinks fit
and, subject to the provisions of these Articles generally, the
provisions of Article 51(b) shall apply to such sale.
I. UNTRACED SHAREHOLDERS
---------------------
51. Company's power to sell shares
------------------------------
(a) The Company shall be entitled to sell in such manner as the Board thinks
fit at the best price reasonably obtainable the share of a member, or the share
to which a person is entitled by transmission, if and PROVIDED that:
(i) during the period of 12 years prior to the date of the publication of the
advertisements referred to in paragraph (ii) below (or, if published on
different dates, the earlier thereof) all warrants and cheques sent by
the Company through the post in prepaid letters addressed to the holder
of, or to the person entitled by transmission to, such shares at the
address appearing against the member's name in the Register (or which
have been sent to him at such other address, or to such other person at
such other address, as such member or the person so entitled by
transmission shall have instructed the Company to pay dividends otherwise
payable to the member at his registered address) have remained uncashed
PROVIDED that at least 3 dividends (whether interim or final) have been
paid or have become payable and no such dividend has been claimed; and
(ii) on the expiry of the said period of 12 years the Company shall have
inserted advertisements both in 2 national daily newspapers circulating
in the United Kingdom and in a newspaper circulating in the area of the
relevant said address referred to in paragraph (i) above giving notice of
its intention to sell the said shares; and
(iii) during the said period of 12 years and the period of 3 months following
the said advertisements and prior to the exercise of the power of sale,
the Company shall have received no communication from such member of
person entitled by transmission to such shares; and
(iv) notice in Writing shall have been given to the Quotations Department of
The Stock Exchange of its intention so to do.
19
(b) To give effect to any sale to be made pursuant to the provisions of this
Article or of Article 50, the Company may appoint any person to execute as
transferor an instrument of transfer of such shares or any of them and such
instrument of transfer shall be as effective as if it had been executed by the
holder of, or person entitled by transmission to, such shares and the title of
the transferee shall not be affected by any irregularity or invalidity in the
proceedings relating thereto. The Company shall account to the holder of, or
other person entitled to, such shares for the net proceeds of such sale and the
Company shall be deemed to be his debtor, and not a trustee for him, in respect
of the same. Any moneys not accounted for to the holder of, or other person
entitled to, such shares shall be carried to a separate account and shall be a
permanent debt of the Company. Moneys carried to such separate account may
either be employed in the business of the Company or invested in such
investments (other than shares of the Company or its holding company, if any) as
the Board may from time to time think fit and any profits made thereby and
interest or other income earned thereon shall belong to the Company which shall
have no obligation to account therefor to the holder of, or other person
entitled to, such shares.
J. STOCK
-----
52. Conversion of shares into stock
-------------------------------
The Company may by ordinary resolution convert the whole of any class of paid up
shares into stock, and reconvert any stock into paid up shares of any
denomination. After the passing of any resolution converting all the paid up
shares of any class into stock, any shares of that class which subsequently
become fully paid and rank pair passu in all respects with such shares shall by
virtue of this Article and such resolution be converted into stock transferable
in the same units as the shares already converted.
53. Rights and privileges of stockholders
-------------------------------------
The stockholders shall, according to the amount of the stock held by them, have
the same rights, privileges and advantages as regards dividends, participation
in asses on a winding-up, voting at meetings and in all other respects and be
subject to the same provisions of these Articles as if they held the shares from
which the stock arose, but no such right, privilege or advantage (except
participation in dividends and profits of the Company and in assets on a
winding-up) shall be conferred by an amount of stock which would not, if
existing in shares, have conferred such right, privilege or advantage.
54. Conditions as to transfer of stock - minimum amount transferable
----------------------------------------------------------------
Holders of stock may transfer the same or any part thereof in the same manner,
and subject to the same regulations, as would have applied to the shares from
which the stock arose, or as near thereto as circumstances admit; but the Board
may from time to time, if it thinks fit, fix the minimum amount of stock
transferable, PROVIDED that such amount shall not exceed the nominal amount of
the shares from which the stock arose.
20
55. Interpretation of "stock" and "stockholder"
-------------------------------------------
The provisions of these Articles which are applicable to paid up shares shall
apply to stock, and the words "share" and "member" or "holder" therein shall
include "stock" and "stockholder."
K. ALTERATIONS OF CAPITAL
----------------------
56. Consolidation, subdivision, cancellation and reduction
------------------------------------------------------
The Company may be ordinary resolution:
(i) consolidate and divide all or any of its share capital into shares of
larger nominal value than its share capital into shares of larger nominal
value than its existing shares; and/or
(ii) sub-divide all or any of its share capital, into shares of smaller
nominal value than is fixed by the memorandum of association, and so that
the resolution whereby any share is sub-divided may determine that, as
between the holders of the shares resulting from such sub-division, one
or more of the shares may have any such preferred or other special rights
over, or may have such deferred rights, or be subject to any such
restrictions as compared with the others, as the Company has power to
attach to shares upon the allotment thereof; and/or
(iii) cancel any shares which, at the date of the passing of the resolution,
have not been subscribed or agreed to be subscribed, by any person, and
diminish the amount of its share capital by the amount of the shares so
canceled;
and may by special resolution:-
(iv) reduce its share capital or any capital redemption reserve or any share
premium account or any other undistributable reserve in any manner
authorised by the Statutes.
57. Treatment of any fractional entitlements arising on consolidation
-----------------------------------------------------------------
(a) Whenever on any consolidation of shares members shall be entitled to any
fractions of shares, the Board may sell to any person (including, subject to the
provisions of the Statutes and of these Articles, the Company) the shares
representing such fractions for the best price reasonably obtainable and, except
as provided below, shall distribute the net proceeds of sale thereof amongst the
members entitled to such fractions in due proportions. Whenever on any
consolidation of shares the value of a fractional entitlement to a share shall
be less than the Minimum Amount in respect of one or more members and an
ordinary resolution of the Company shall have been passed consenting thereto the
proceeds of the sale (after the deduction of the proper expenses of such sale)
of each and every such fractional entitlement amounting to less than the Minimum
Amount shall belong to and be vested in the Company. For the purpose of giving
effect to any such sale, the Board may authorise some person to transfer the
shares sold to the purchaser thereof and the purchaser shall be registered as
the holder of the shares comprised in any such transfer and he shall not be
bound to see to the application of the purchase moneys nor shall his title to
the shares be affected by any irregularity or invalidity in the proceedings
related to the sale.
21
(b) Upon any consolidation of fully paid shares into shares of larger nominal
value the Board may settle any difficulty which may arise with regard thereto as
it thinks fit and in particular (but without prejudice to the generality of the
foregoing) may as between the holders of shares so consolidated determine which
shares are consolidated into each consolidated share and in the case of any
shares registered in the name of one holer (or joint holders) being consolidated
with shares registered in the name of another holder (or other joint holders)
may make such arrangements for the allocation, acceptance or sale of the
consolidated share or any fractions thereof and for the distribution to the
member entitled thereto of any moneys received in respect thereof as may be
thought fit and for the purpose of giving effect thereto may appoint some person
to transfer the consolidated share or any fractions thereof and to receive the
purchase price thereof and any transfer executed in pursuance thereof shall be
effective and after such transfer has been registered no person shall be
entitled to question its validity.
III. GENERAL MEETINGS
A. MEETINGS AND NOTICES
--------------------
58. Annual general meeting
----------------------
The Company shall in each year hold a general meeting as its annual general
meeting in addition to any other meetings in that year and shall specify the
meeting as such in the notice calling it. Not more than 15 months shall elapse
between the date of one annual general meeting of the Company and that of the
next. The annual general meeting shall be held at such time and place as the
Board shall determine.
59. Extraordinary general meetings
------------------------------
All general meetings, other than annual general meetings, shall be called
extraordinary general meetings. The Board may call an extraordinary general
meetings. The Board may call an extraordinary general meeting whenever it
thinks fit and at such time and place as it shall determine, and extraordinary
general meetings shall be convened by the Board on such requisition, or in
default may be convened by such requisitionists, as provided by the Statutes.
60. Length of notice
----------------
In the case of annual general meeting or of a meeting for the passing of a
special resolution 21 clear days' notice at the least and in any other case 14
clear days' notice at the least specifying the place, the day and the hour of
meeting, and the general nature of the business to be transacted, shall be given
in Writing in the manner hereinafter mentioned to all members (other than those
who under the provisions of these Articles or the conditions attaching to the
shares held by them are not entitled to receive the notice) and to the Directors
(at the addresses supplied by them pursuant to Article 126) and auditors for the
time being of the Company. In the case of a meeting convened for the purpose of
considering the passing of a special or extraordinary resolution, the notice
shall specify the intention to propose the resolution as a special or
extraordinary resolution as the case may be.
22
61. Short notice
------------
A general meeting of the Company shall, notwithstanding that it is called by
shorter notice than that specified in Article 60, be deemed to have been duly
called if it is so agreed:-
(i) in the case of a meeting called as the annual general meeting, by all the
members entitled to attend and vote threat; and
(ii) In the case of any other meeting, by a majority in number of the members
having a right to attend and vote at the meeting, being a majority
together holding not less than 95 per cent in nominal value of the shares
giving that right.
62. Notice to state right of member to appoint a proxy
--------------------------------------------------
In every notice calling a meeting of the Company there shall appear with
reasonable prominence a statement that a member entitled to attend and vote is
entitled to appoint one or more proxies to attend and on a poll vote instead of
him and that a proxy need not also be a member.
63. Notice to be given of members' resolutions upon requisition
-----------------------------------------------------------
It shall be the duty of the Company, subject to the provisions of the Statutes,
on the requisition in Writing of such number of members as is specified in the
Statutes and (unless the Company otherwise resolves) at the expense of the
requisitionists:-
(i) to give to members entitled to receive notice of the next annual general
meeting notice of any resolution which may properly be proposed and is
intended to be proposed at that meeting; and
(ii) to circulate to members entitled to have notice of any general meeting
sent to them any statement of not more than 1,000 words with respect to
the matter referred to in any proposed resolution or the business to be
dealt with at that meeting.
64. Accidental omission or non-receipt of notice
--------------------------------------------
The accidental omission to give notice to, or the non-receipt of notice by, any
person entitled to receive notice shall not invalidate the proceedings at any
general meeting.
B. PROCEEDINGS AT GENERAL MEETINGS
-------------------------------
65. Quorum - overflow meetings
--------------------------
(a) No business shall be transacted at any general meeting unless a quorum of
members is present when the meeting proceeds to business. Save as in these
Articles otherwise provided, 2 persons present, each of whom is a member or a
proxy for a member or a representative, appointed in accordance with the
Statutes or Article 90, of a corporation which is a member, shall be a quorum
for all purpose.
23
(b) A general meeting may, if the Board or the chairman of the meeting so
decides, be held simultaneously in more than one room, building or other
location specifically approved for such purpose by the Board PROVIDED that all
those present (in whichever location) can at all times hear and participate
fully in the proceedings.
66. Adjournment or dissolution for lack of quorum
---------------------------------------------
If within 15 minutes from the time appointed for any general meeting or separate
meeting of holders of any class of shares for the time being forming part of the
capital of the Company a quorum is not present or if during a meeting a quorum
ceases to be present, the meeting, if convened on the requisition of or by
members, shall be dissolved. In any other case it shall stand adjourned to the
same day in the next week, at the same time and place, or to such other day and
at such time and place as the Board may determine, and, if at such adjourned
meeting a quorum (as defined in Article 65(a)) is not present within 15 minutes
from the time appointed for holding the meeting, the meeting shall be dissolved.
67. Chairman
--------
The chairman (if any) of the Board shall preside as chairman at every general
meeting of the Company. If there is no such chairman or if at any meeting he
shall not be present within 10 minutes after the time appointed for holding the
same or shall be unwilling to act as chairman, the deputy chairman (if any), if
present and willing to act, shall preside as chairman; but if at any meeting
neither the chairman nor the deputy chairman is present within 10 minutes after
the time appointed for holding the meting, or if neither of them is wiling to
act as chairman, the Directors present shall choose one of their number to act,
or if one Director only is present he shall preside as chairman, if willing to
act. If no Director is present or if each of the Directors present declines to
take the chair, the members present and entitled to vote shall choose one of
themselves to be chairman of the meeting. The appointment of a chairman of a
meeting shall not be treated as part of the business of that meeting.
68. Adjournment
-----------
Notwithstanding his inherent power to adjourn the meeting for such reason as he
may think fit, the chairman of the meeting may:
(i) if he considers there to be insufficient space for those present or
entitled to be present to be accommodated or there is some other reason
why they cannot hear or participate in the proceedings; or
(ii) in any other case, with the consent of any meeting at which a quorum is
present,
and shall if so directed by the meeting, adjourn the meeting from time to time
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. Whenever under the
provisions of these Articles a meeting is adjourned for 14 days or more, 7 clear
days' notice at the least specifying the place, the date and the hour of the
adjourned meeting and the
24
general nature of the business to be transacted, shall be given as in the case
of the original meeting. Save as aforesaid, it shall not be necessary to give
any notice of an adjournment or of the business to be transacted at any
adjourned meting. Where a meeting is adjourned sine die, the time and place for
the adjourned meeting shall be fixed by the Board.
69. Amendments to resolutions
-------------------------
If an amendment shall be proposed to any resolution under consideration but
shall in good faith be ruled out of order by the chairman of the meeting, the
proceedings on the substantive resolution shall not be invalidated by any error
in the ruling. In the case of a resolution duly proposed as a special or
extraordinary resolution, no amendment thereto (other than a mere clerical
amendment to correct a manifest error) may in any event be considered or voted
upon.
70. Manner in which resolution decided - demand for a poll- chairman's
------------------------------------------------------------------
declaration on a result of a show of hands
------------------------------------------
At any general meeting a resolution put to the voter of the meeting shall be
decided on a show of hands unless before or upon the declaration of the result
of the show of hands a poll is demanded by:
(i) the chairman of the meeting; or
(ii) at least 5 members entitled to vote at the meeting; or
(iii) a member or members representing not less than one-tenth of the total
voting rights of all the members having the right to vote at the meeting;
or
(iv) a member or members holding shares conferring a right to vote at the
meeting being shares on which an aggregate sum has been paid up equal to
not less than one-tenth of the total sum paid up on all the shares
conferring that right.
Unless a poll is so demanded, a declaration by the chairman of the meeting that
a resolution has been carried, or carried unanimously or by a particular
majority, or lost or not carried by a particular majority, and an entry to that
effect in the book containing the minutes of the proceedings of the Company,
shall be conclusive evidence of the fact without proof of the number of
proportion of the votes recorded in favour of or against such resolution.
71. Proxy empowered to demand a poll
--------------------------------
The instrument appointing a proxy to vote at a meeting shall be deemed also to
confer authority to demand or join in demanding a poll (and for the purposes of
the last preceding Article a demand for a poll by a person as proxy for, or duly
authorised corporate representative of, a member shall be the same as a demand
by that member) and to vote on a poll or the election of a chairman of the
meeting.
72. Objections to the qualification of a voter or to votes and errors in
--------------------------------------------------------------------
counting votes etc.
-------------------
25
If any objection is raised as to the qualification of any voter or to the
counting of, or failure to count, any votes or if any votes shall be counted
which ought not to have been counted or might have been rejected or if any votes
were not counted which ought to have been counted, the objection or error shall
not vitiate the result of the voting unless it be raised or pointed out at that
same meeting, or at any adjournment thereof, and it shall in the opinion of the
chairman of the meeting be of sufficient magnitude to vitiate the result of the
voting. The decision of the chairman of the meeting on such matters shall be
final and conclusive.
73. Manner of and place for taking a poll
-------------------------------------
Except as permitted in Article 75, if a poll is duly demanded it shall be taken
in such manner (including the use of ballot or voting papers) and at such place
and at such time as the chairman of the meeting may direct and the result of a
poll shall be deemed to be the resolution of the meeting at which the poll was
demanded. The chairman of the meeting may (and, if so directed by the meeting,
shall), in the event of a poll, appoint scrutineers (who need not be members)
and may adjourn the meeting to some place and time fixed by him for the purpose
of declaring the result of the poll. The result of the poll shall be deemed to
be the relevant resolution of the meeting at which the poll was demanded.
74. Chairman's casting vote
-----------------------
In the case of an equality of votes, whether on a show of hands or on a poll,
the chairman of the meeting at which the show of hands takes place or at which
the poll is demanded shall be entitled to a second or casting vote in addition
to the vote or votes to which he may be entitled as a member or on behalf of any
other member.
75. When a poll has to be taken
---------------------------
A poll on the election of a chairman of the meeting or on a question of
adjournment if validly demanded shall be taken forthwith. A poll validly
demanded on any other question shall be taken either forthwith or at such later
time and place as the chairman of the meeting directs not being more than 30
days from the date of the meeting or adjourned meeting at which the poll was
demanded.
76. Notice of a poll
----------------
No notice need be given of a poll not taken forthwith if the time and place at
which it is to be taken are announced at the meeting in respect of which it is
demanded. In any other case, at least 7 clear days' notice shall be given
specifying the time and place at which the poll is to be taken.
77. Continuance of other business
-----------------------------
The demand for a poll shall not prevent the continuance of the meeting for the
transaction of any business other than the question on which the poll has been
demanded.
26
78. Demand for a poll may be withdrawn
----------------------------------
A demand for a poll may, before the poll is taken, be withdrawn but only with
the consent of the chairman and a demand so withdrawn shall not be taken to have
invalidated the result of a show of hands declared before the demand was made.
If a demand for a poll is to withdrawn:
(i) before the result of a show of hands is declared, the meeting shall
continue as if the demand had not been made; or
(ii) after a result of a show of hands is declared, the demand shall not be
taken to have invalidated the result of that show of hands, but if a
demand is withdrawn the chairman of the meeting or other member or
members so entitled may himself or themselves demand a poll.
C. VOTES OF MEMBERS
----------------
79. Voting rights
-------------
Subject to any special rights or restrictions as to voting attached to any
shares by or in accordance with these Articles or their terms of issue, on a
show of hands every member who (being an individual) is present in person or
(being a corporation) is present by a duly authorised representative at any
meeting of the Company and entitled to vote shall have one vote and on a poll
every member present either personally or by proxy and entitled to vote shall
have one vote for every Ordinary Share held by him.
80. Voting by joint holders
-----------------------
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 shares.
81. Member of unsound mind may vote by committee or other appointed
---------------------------------------------------------------
representative
--------------
A member who is a patient for any purpose of any statute 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 committee, receiver, curator bonis or other person in the
nature of a committee, receiver or curator bonis appointed by such court, and
such committee, receiver, curator bonis or other person may on a poll vote by
proxy PROVIDED that such evidence as the Board may require of the authority of
the person claiming to vote shall have been deposited at the Transfer Office or
at such other place within the United kingdom as is specified in the notice
convening the meeting not less than 48 hours before the time for holding the
meeting or adjourned meeting at which such person claims to vote and in default
the right to vote shall not be exercisable.
27
82. Proxy may vote on a poll
------------------------
On a poll, votes may be given either personally or by corporate representative
or by proxy.
83. Member need not cast his votes all in same way
----------------------------------------------
On a poll, a member entitled to more than one vote need not, if he votes, use
all his votes or case all the votes he uses in the same way.
84. Execution of a form of proxy
----------------------------
The instrument appointing a proxy shall be in Writing under the hand of the
appointor or his agent duly authorised under the hand of the appointor, or, if
the appointor is a corporation, either under its common seal or under the hand
of an officer or agent so authorised. The Board may, but shall not be bound to,
require evidence of the authority of any such officer or agent. If more than
one proxy is so appointed, the instrument appointing each such proxy shall
specify the shares held by the member in respect of which each such proxy is to
vote and no member may appoint more than one proxy to vote in respect of any one
share held by that member.
85. Proxy need not be a member
--------------------------
Any person (whether a member of the Company or not) may be appointed to act as a
proxy. A member may appoint more than one proxy to attend on the same occasion.
86. Deposit of instrument of proxy - duration of validity of instrument of
----------------------------------------------------------------------
proxy
-----
The instrument appointing a proxy and the power of attorney or other authority
(if any) under which it is executed, or a copy of such power or authority
certified notarially or in some other way approved by the Board, shall be
deposited at the Transfer Office or at such other place within the United
Kingdom as is specified in the notice convening the meeting or in the instrument
of proxy issued by the Company in relation to that meeting not less than 48
hours before the time appointed for holding the meeting or adjourned meeting at
which the person named in the instrument proposed to vote or, in the case of a
poll taken more than 48 hours after it was demanded, be deposited as aforesaid
after the poll has been demanded but not less than 24 hours before the time
appointed for taking the poll or, where the poll is not taken forthwith but is
taken not more than 48 hours after it was demanded, be delivered at the meeting
to the chairman or to the Secretary or to any Director and in default the
instrument of proxy shall not be treated as valid. No instrument appointing a
proxy shall be valid after the expiration of 12 months from the date named in it
as the date of its execution, except at an adjourned meeting or on a poll
demanded at a meeting or an adjourned meeting in cases where the meeting was
originally held within 12 months from the date named in it as the date of its
execution.
87. Form of proxy instrument
------------------------
An instrument of proxy may be in any usual oar common form or in such other form
as the Board shall approve. Instruments of proxy need not be witnessed.
28
88. Board to send out instruments of proxy to all members
-----------------------------------------------------
The Board shall (while any shares of the Company are listed on The Stock
Exchange) and otherwise may at the expense of the Company send, by post or
otherwise, to the members entitled to be sent notice of a meeting and to vote
thereat instruments of proxy (with or without stamped envelopes or other pre-
paid or similar postal facilities for their return) for use at any general
meeting or at any meeting of any class of members of the Company, either in
blank or nominating in the alternative any one or more of the Directors or any
other persons. If for the purpose of any meeting invitations to appoint a proxy
are issued at the expense of the Company, such invitations shall be issued to
all (and not to some only) of the members entitled to be sent a notice of the
meeting and to vote thereat by proxy. The accidental omission to send such an
instrument, or to give such an invitation to, or the non-receipt thereof by, any
member entitled to attend and vote at a meeting shall not invalidate the
proceedings of that meeting.
89. Validity of vote given by proxy
-------------------------------
A vote given or a poll demanded by a person duly appointed as a proxy or by a
duly authorised representative of a corporation in accordance (in either case)
with the terms of his appointment shall be valid notwithstanding the death or
insanity of the principal or the revocation of the instrument of proxy, or of
the authority under which the instrument of proxy was executed or the
representative was duly appointed, PROVIDED that no intimation in Writing of
such death, insanity or revocation shall have been received by the Company at
the Transfer Office at least 24 hours prior to the commencement of the meeting
or adjourned meeting at which the instrument of proxy is used (or, in the case
of a poll, before the time appointed for the taking of the poll).
D. CORPORATIONS ACTING BY REPRESENTATIVES
--------------------------------------
90. A corporate member may appoint a representative
-----------------------------------------------
Any corporation which is a member of the Company may, by resolution of its
directors or other governing body, authorise such person as it thinks fit to act
as its representative at any meeting of the Company, or at any meeting of any
class of members of the Company, and the person so authorised shall be entitled
to exercise the same powers on behalf of the corporation which he represents as
that corporation could exercise if it were an individual member of the Company
personally present at such meeting.
91. Directors entitled to attend and speak at general meetings
----------------------------------------------------------
Each Director (or, failing him, his alternate, if any) shall be entitled to
attend and speak at any general meeting of the Company and at any separate
meeting of any class of members.
29
IV. DIRECTORS
---------
A. NUMBER AND REMUNERATION OF DIRECTORS
------------------------------------
92. Number of Directors
-------------------
Unless and until otherwise determined by the Company by ordinary resolution and
subject to the Statutes, the Directors shall not be less than 2 nor more than 20
in number.
93. No share qualification for Directors
------------------------------------
Neither a Director nor an alternate Director shall be required to hold any
qualification shares.
94. Remuneration of Directors
-------------------------
The Directors shall be entitled to remuneration by way of fees for their
services as Directors in such sums as the Board may determine but not exceeding
in aggregate (Pounds)100,000 per annum or such other higher amount as may be
sanctioned by ordinary resolution of the Company, such remuneration to be
divided amongst the Directors as they may be resolution determine or, in default
of agreement, equally. Such remuneration shall be deemed to accrue on a day-to-
day basis. Any remuneration payable to any Director pursuant to this Article
may if the Director concerned so requires and if the Board so agrees, consist in
whole or in part of payments by way of pension contributions or premiums
therefor, whether pursuant to a pension scheme or otherwise. Subject as
aforesaid, a Director holding office for part of a year shall be entitled to a
proportionate part of a full year's remuneration.
95. Expenses
--------
In addition to such remuneration as aforesaid, any Director may be paid such
reasonable travelling, hotel and other expenses as he may properly incur in
connection with the discharge of his duties, including but not limited to in
attending or returning from meetings of the Board or committees of the Board or
general meetings or meetings of the holders of any class of shares.
B. POWERS AND DUTIES OF DIRECTORS
------------------------------
96. Board to manage the business of the Company
-------------------------------------------
The business of the Company shall be managed by the Board, which may exercise
all such powers of the Company as are not by the Statutes or by these Articles
required to be exercised in general meeting, subject nevertheless to the
provisions of the Statutes and of these Articles and to such directions, whether
or not inconsistent with these Articles, as may be prescribed by the Company by
special resolution but no such direction and no alteration of these Articles
shall invalidate any prior act of the Board which would have been valid if that
direction or alteration had not been made. The general powers given by this
Article shall not be limited or restricted by any special authority or power
given to the Board by any other Article and a meeting of the Directors at which
a quorum is present may exercise all the powers exercisable by the Board.
30
97. Local boards
------------
The Board may establish local boards for managing any of the affairs of the
Company, whether in the United Kingdom or elsewhere, and may appoint any persons
to be members of such local boards and may fix their remuneration and may
delegate to any local board any of the powers, authorities and discretions
vested in the Board (except the power to make calls, forfeit shares or borrow
money) with power to sub-delegate and may authorise the members of any local
board to fill any vacancies therein and to act notwithstanding vacancies. Any
such appointment or delegation may be made upon such terms and subject to such
conditions as the Board may think fit, and the Board may remove any persons so
appointed, and may annul or vary any such delegation, but no person dealing in
good faith and without notice of any such annulment or variation shall be
affected thereby. Notwithstanding the generality of the above, the Board shall
ensure that the number of such persons comprising such local board and that no
resolution of such local board shall be effective unless a majority of members
of the local board present at the meeting and capable of forming part of the
quorum (if any) fixed for such meeting are Directors or alternate Directors of
the Company.
98. Appointment of attorneys and agents
-----------------------------------
The Board may from time to time and at any time appoint, whether in the United
Kingdom or elsewhere, any corporation, firm or person, or any fluctuating body
of persons, whether nominated directly or indirectly by the Board, to be the
attorney or agent of the Board or the Company for such purposes and with such
powers, authorities and discretions (not exceeding those vested in or
exercisable by the Board under these Articles) and for such period and subject
to such conditions as it may think fit and any such appointment may contain such
provisions for the protection and convenience of persons dealing with any such
agent as the Board may think fit and may also authorise any such agent to
delegate all or any of the powers, authorities or discretions vested in him.
The Company may exercise powers conferred by the Statutes with regard to having
an official seal for use abroad and such powers shall be vested in the Board.
99. Overseas branch registers
-------------------------
The Company may exercise the powers conferred upon the Company by the Statutes
with regard to the keeping of an Overseas Branch Register in any territory where
the Company transacts business and the Board may (subject to the provisions of
the Statutes) make and vary such regulations as it thinks fit respecting the
keeping of such register.
100. Limit on borrowings
-------------------
(a) The Board shall restrict the borrowings of the Company and exercise all
powers of control exercisable by the Company in relation to its subsidiaries and
subsidiary undertakings so as to secure (as regards subsidiaries and subsidiary
undertakings, so far as by such exercise it can secure) that, save with the
previous sanction by an ordinary resolution of the Company, no moneys shall be
borrowed if the aggregate principal amount (including any premium payable on
final repayment) outstanding of all moneys borrowed by the Extended Group
(excluding amounts borrowed by any member of the Extended Group from any other
member of the Extended Group) then exceeds or
31
would as a result of the borrowing exceed an amount equal to two and one half
times the aggregate of:-
(aa) the amount paid up on the share capital of the Company; and
(bb) the total of the capital and revenue reserves of the Extended Group,
including any share premium account, capital redemption reserve, property
revaluation reserve and credit balance on the profit and loss account and
all amounts attributable to the interests of minority shareholders in
subsidiaries and minority and other interests in subsidiary undertakings,
but excluding sums set aside for taxation and deducting any debit balance
on the profit and loss account.
all as shown in the latest group accounts of the Company, but adjusted as may be
necessary in accordance with paragraph (c) of this Article in respect of any
variation in the paid up share capital or reserves of the Extended Group since
the date of that balance sheet.
(b) For the purposes of this Article, but without prejudice to the generality
of the terms "borrowing" and "borrowed"; -
(i) there shall be deducted from the aggregate amount of moneys borrowed for
the purposes of paragraph (a) an amount equal to the aggregate for the
time being outstanding of all cash deposits with banks (not being the
Company or any subsidiary of the Company), certificates of deposit,
securities of governments, and securities of public companies traded on a
Recognised Investments Exchange or an overseas stock exchange and similar
instruments owned by the Company and/or any subsidiary or subsidiary
undertaking of the Company net of a proportion of the total amount for
the time being outstanding of cash deposits and certificates of deposit
and securities of governments, or securities of public companies traded
on a Recognised Investment Exchange or an overseas stock exchange and
similar instruments owned by any partly owned subsidiary or any
subsidiary undertaking which would otherwise fail to be included, such
proportion being that which the issue equity share capital of such partly
owned subsidiary or such subsidiary undertaking which is not for the time
being beneficially owned directly or indirectly by the Company bears to
the whole of its issued equity share capital;
(ii) moneys borrowed for the purpose of repaying the whole or any part of any
moneys previously borrowed and then outstanding (including any premium
payable on final repayment) and to be applied for that purpose within 6
months of the borrowing shall not, pending such application, be taken
into account as moneys borrowed;
(iii) the principal amount (including any premium payable on final repayment)
of any debentures issued in whole or in part for a consideration other
than cash shall be taken into account as moneys borrowed by the member of
the Extended Group issuing them; and
(iv) the principal amount of acceptance credits shall be treated as moneys
borrowed.
32
(c) For the purposes of this Article, adjustments shall be made to reflect
any variation in the amount of such paid up capital and capital and revenue
reserves (including in respect of any distribution actually made or paid) as
specified in paragraph (a) which has occurred since the date of such group
accounts and for this purpose share capital allotted shall be treated as having
been issued and any share capital already called up or payable at any future
date within the following 12 months shall be treated as already paid up). Any
Interim Report of the Company which includes a profit and loss account (whether
or not in summarised form) shall be prima facie evidence of any profit and/or
loss referred to therein and of any consequential variation in the revenue
reserves of the Company. If the Company proposes to issue any shares for cash
and the issue of such shares has been underwritten, then such shares shall be
deemed to have been issued and the subscription moneys (including any premium)
payable in respect thereof within the following 12 months (to the extent to
underwritten) shall be deemed to have been paid up.
(d) When the aggregate amount of borrowings required to be taken into account
for the purposes of this Article on any particular day is being ascertained, any
of such moneys denominated or repayable (or repayable at the option of any
person other than the Company) in a currency other than sterling shall be
converted for the purpose of calculating the sterling equivalent at the lower
of:-
(i) the rate of exchange prevailing in London on that day; and
(ii) the rate of exchange prevailing in London 6 months before such day.
For this purpose the rate of exchange shall be taken as the middle market rate
as at the close of business on the relevant day.
(e) No debt incurred or security given in respect of moneys borrowed or to be
taken into account as moneys borrowed in excess of the above limit shall be
invalid or ineffectual except in the case of express notice to the lender or the
recipient of the security at the time when the debt was incurred or security
given that the limit hereby imposed has been exceeded, but no lender or other
person dealing with the Company shall be concerned to see or enquire whether the
borrowing limit has been observed.
(f) For the purposes of this Article, the reference to figures appearing in
the "group accounts" shall be those figures as appearing in the Company's group
accounts prepared in accordance with the Companies Act 1985 as amended and
substituted by the Companies Act 1989.
(g) A certificate or report by the auditors for the time being of the Company
as to the amount of the limit on borrowings or the amount of any borrowings or
to the effect that the limit imposed by this Article has not been on will not be
exceeded at any particular time or times shall be conclusive evidence of such
amount or fact for the purposes of this Article.
(h) Notwithstanding any other provision of this Article, the Board may at any
time act in reliance on a bona fide estimate of the amount of the adjusted
capital and reserves and if in consequence the limit herein before contained is
inadvertently exceeded, an amount borrowed equal to the excess may be
disregarded until the expiration of 90 days after the date on which by reason of
a determination
33
of the Auditors, the publication of group accounts or an Interim Report or
otherwise the Board became aware that such a situation has or may have arisen.
101. Power of Board to delegate the power to make calls
--------------------------------------------------
If any uncalled capital of the Company is included in or charged by any mortgage
or other security, the Board may delegate to the person in whose favour such
mortgage or security is executed, or to any person in trust for him, the power
to make calls on the members in respect of such uncalled capital, and to sue in
the name of the Company or otherwise for the recovery of moneys becoming due in
respect of calls so made and go give valid receipts for such moneys, and the
power so delegated such subsist during the continuance of the mortgage or
security, notwithstanding any change of Directors, and shall be assignable if
expressed so to be.
102. Signing of cheques and similar instruments
------------------------------------------
All cheques, promissory notes, drafts, bills of exchange and other negotiable or
transferable instruments, and all receipts for moneys paid to the Company, shall
be signed, drawn, accepted, endorsed or otherwise executed, as the case may be,
in such manner as the Board shall from time to time by resolution determined.
C. INTERESTS OF DIRECTORS
----------------------
103. Other office or place of profit under the Company - power of a Director
-----------------------------------------------------------------------
to act in a professional capacity
---------------------------------
A Director may hold any other office or place of profit under the Company in
conjunction with his office of Director on such terms as to tenure of office,
remuneration or otherwise as the Board may determine, and he or any firm in
which he is interested may act in a professional capacity for the Company and he
or such firm shall be entitled to remuneration (by way of salary, commission,
fee, participation in profits, pension, superannuation or otherwise) for such
services as if he were not a Director and such remuneration shall be charged as
part of the Company's ordinary working expenses PROVIDED that nothing herein
contained shall authorise a Director or any such firm to act as auditor to the
Company or any company controlled by the Company. In this Article, "firm"
includes "company".
104. Director may contract with the Company - disclosure of interest
---------------------------------------------------------------
Subject as provided in the Statutes, no Director or intending Director shall be
disqualified by his office from contracting with the Company, or any other
company in which the Company may be interested, either with regard to his tenure
of any such other office or place of profit as is referred to in Article 103 or
as vendor, purchaser or otherwise. Further, subject, if and as required by
Section 320, to the approval of the Company in general meeting, and save as
provided in Sections 330 and 341, no such contract nor any other contract,
transaction or arrangement (whether or not constituting a contract) entered into
by or on behalf of the Company, or any other company in which the Company may be
interested, in which any Director is in any way directly or indirectly
interested (whether through persons connected with him or otherwise) shall be
liable to be avoided, nor shall any Director
34
so contracting or being so interested be liable to account to the Company for
any profit realised by any such contract, transaction or arrangement by reason
of such Director holding that office or of the fiduciary relationship thereby
established, PROVIDED that the nature of his interest (if not declared in
accordance with the provisions of Article 106(c)) has been or is declared by
him:-
(i) at the meeting of the Board at which the question of entering into that
contract, transaction or arrangement is first taken into consideration;
or
(ii) if the Director was not at the date of that meeting interested in the
proposed contract, transaction or arrangement, at the next meeting of the
Board after he became so interested; or
(iii) if that contract, transaction or arrangement or proposed contract,
transaction or arrangement is entered into or to be entered into not by
the Company but by a company in which the Company is interested as to 1
per cent or more of the equity share capital of that company, at the next
meeting of the Board after the Director became aware of his interest or
the Company's interest in such contract, transaction or arrangement.
105. Restriction on voting - quorum - matters upon which a Director may vote
-----------------------------------------------------------------------
(a) Save as herein provided, a Director shall not at any meeting of the Board
vote in respect of any contract, transaction or arrangement (whether or not
constituting a contract) or any proposal whatsoever in which he has any material
interest (whether direct or indirect or through persons connected with him)
otherwise than by virtue of his interest in shares or debentures or other
securities of or otherwise in or through the Company, and if he shall do so his
vote shall not be counted, nor if he has a duty which conflicts or may conflict
with the interests of the Company, nor shall he be counted in the quorum present
upon a motion in respect of any such contract, transactions, arrangement or
proposal. Subject to his complying with the provisions of these Articles and of
the Statutes with respect to disclosure of his interest, these prohibitions
shall not apply to:-
(i) any contract, transaction, arrangement or proposal by a Director to
underwrite shares or debentures or other securities of the Company or any
of its subsidiaries or subsidiary undertakings; or
(ii) any contract, transaction, arrangement or proposal for giving any
Director any security or indemnity in respect of money lent by him to or
obligations undertaken by him for the benefit of the Company, or any of
its subsidiaries or for giving any security or indemnity to any other
person, firm or company for any obligation of the Company, its holding
company or any company controlled by the Company, in which that Director
himself has assumed personal liability in whole or in part whether under
a guarantee or indemnity, or by providing or agreeing to provide security
or otherwise; or
(iii) any contract, transaction, arrangement or proposal concerning any other
company in which that Director is interested directly or indirectly,
whether through a connected person or otherwise and whether as an officer
or shareholder or otherwise PROVIDED that he is not the holder of or
beneficially interested in 1 per cent or more of the issued equity share
capital
35
of such company or of any third company through which his interest is
derived or of the voting rights available to members of the relevant
company (any such interest being deemed for this purpose to be a material
interest in all the circumstances) and PROVIDED that there shall be
disregarded any shares held by a Director as bare or custodian trustee
and in which he 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 scheme in
which the Director is interested only as a unit holder; or
(iv) any proposal concerning the adoption, modification or operation of a
superannuation fund or retirement benefit scheme under which he may
benefit and which has been approved by or is subject to and conditional
upon approval by the Board of Inland Revenue for taxation purposes; or
(v) any proposal concerning the adoption of insurance cover for the Directors
in accordance with the provisions of Article 175; or
(vi) any arrangement fore the benefit of employees of the Company or of any of
its subsidiaries (including, but not limited to, an employees' share
scheme) under which the Director benefits in a similar manner to such
employees and does not afford to any Director as such any privilege or
advantage not generally afforded to the employees to whom such
arrangement relates.
(b) For the purposes of this Article:-
(i) an interest of any person who is connected with a Director shall be taken
to be the interest of that director; and
(ii) in relation to an alternate Director, an interest of his appointor shall
be treated as an interest of the alternate in addition to any interest
which the alternate has otherwise.
106. Offices and employment - ruling on materiality - power of members to
--------------------------------------------------------------------
amend provisions of this Article - notice by a Director of his interest
-----------------------------------------------------------------------
(a) Where proposals are under consideration concerning the appointment
(including fixing or varying the terms of appointment) of 2 or more Directors to
officers or employments with the Company or any company in which the Company is
interested, such proposals may be divided and considered in relation to each
Director separately and in such case each of the Directors concerned (if not
debarred from voting by reason of being the holder of or beneficially interested
in 1 per cent or more of any class of the equity share capital of any company in
which the Company is interested or of any third company through which his
interest is derived or of the voting rights available to members of the relevant
company) shall be entitled to vote (and be counted in the quorum in respect of
each resolution except that concerning his own appointment.
(b) If any question shall arise at any meeting as to the materiality of a
Director's interest or as to the entitlement of any Director to vote and such
question is not resolved by his voluntarily agreeing
36
to abstain from voting, such question shall be referred to the chairman of the
meeting (or, if the Director concerned is the chairman, to the other Directors
at the meeting) and his ruling in relation to any Director other than himself
(or, as the case may be, the ruling of the majority of the other Directors in
relation to the chairman) 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.
(c) A general notice in Writing given to the Board by any Director to the
effect that:-
(i) he is a member of a specified company or firm and is to be regarded as
interested in any contract, transaction or arrangement which may, after
the date of the notice, be made with that company or firm; or
(ii) he is to be regarded as interested in any contract, transaction or
arrangement which may after the date of the notice be made with a
specified person who is connected with him; or
(iii) he is to be regarded as having an interest of the nature and extent
specitied in the notice in any contract, transaction or arrangement in
which a specified person or class of persons is interested,
shall (if such Director shall give the same at a meeting of the Board or shall
take reasonable steps to secure that the same is brought up and read at the next
meeting of the Board after it is given) be deemed to be a sufficient declaration
of interest in relation to any such contract, transaction or arrangement.
(d) Any interest of which a Director has no knowledge and of which it is
unreasonable to expect him to have knowledge shall not be treated as an interest
of his for the purposes of these Articles.
107. Disapplication of Articles 105 and 106 (a)
------------------------------------------
The provisions of Articles 105 and 106(a) may at any time be suspended or
relaxed to any extent permitted by law, and either generally or in respect of
any particular contract, arrangement or transaction and any transaction not duly
authorised by reason of contravention of either of those Articles may be
ratified, to the extent permitted by law, by the Company by ordinary resolution
in general meeting.
108. Company not to make loans, quasi-loans or enter into credit
-----------------------------------------------------------
transactions with Directors or shadow directors or connected persons
--------------------------------------------------------------------
Save as permitted by the Statutes, the Board shall not:-
(i) make a loan or a quasi-loan to or enter into a credit transaction as a
creditor for a Director (including a shadow director) of the Company or
any person connected with such a Director; or
(ii) enter into any guarantee or provide security in connection with a loan or
quasi-loan or credit transaction made by any person to or for such a
Director or person so connected; or
37
(iii) take part in any arrangement whereby another person enters into such a
transaction in return for a benefit from the Company or any subsidiary; or
(iv) arrange for the assignment to it of any rights, obligations or liabilities
of any such loan or quasi-loan to such a Director or persons so connected.
For the purposes of this Article the expressions "quasi-loan", "credit
transaction" and "shadow director" shall have the meanings ascribed to them in
Sections 331(3), 331(7) and 741(2) respectively.
109. Director's places of profit in other companies
----------------------------------------------
Any Director may continue to be or become a director (executive or non-
executive), managing director, manager or other officer, or employee or member
of, or holder of any place of profit under, any other company which the Company
may control or in which it may be interested, and no such Director shall be
accountable for any remuneration or other benefits received by him as such. The
Board may exercise the voting power conferred by the shares of any other company
held or owned by the Company in such manner in all respects as it thinks fit
(including the exercise thereof in favour of any resolution appointing members
of the Board or any of them to be directors, managing directors, executive
directors, managers or other officers or employees of, or holders of any places
of profit under, such company, or voting or providing for the payment of
remuneration to the directors, managing directors, executive directors, managers
or other officers or employees of such company), and subject to Articles 104,
105 and 106 any Director of the Company may vote in favour of the exercise of
such voting rights in manner aforesaid, notwithstanding that he may be, or be
about to be, appointed or become a director, managing director, executive
director, manager or other officer or employee or member of, or the holder of
any place of profit under, such other company, and as such is or may become
interested in the exercise of such voting rights in manner aforesaid.
110. Pension and superannuation funds - employees' share schemes -
-------------------------------------------------------------
charitable subscriptions
------------------------
The Board may establish and maintain or procure the establishment and
maintenance of any non-contributory or contributory pension or superannuation
funds or share option or share incentive schemes or profit sharing schemes or
trusts for the benefit of, and give or procure the giving of donations,
gratuities, pensions, allowances, disability benefits or emoluments to (or to
any person in respect of), any persons who are or were at any time in the
employment or service of the Company, or of any company which is or was a
subsidiary or a subsidiary undertaking of the Company or is or was allied to or
associated with or controlled by the company or any such subsidiary or
subsidiary undertaking or who are or were at any time Directors or officers of
the Company or of any such other company as aforesaid, and hold or have at any
time held any salaried employment or office in the Company or such other
company, and the wives, husbands, widows, widowers, families and dependents of
any such persons, and also establish and subsidise or subscribe to any
institution, association, club or fund calculated to be for the benefit of or to
advance the interests and well-being of the Company or of any such other company
as aforesaid, or of any such person as aforesaid, and make payments for or
towards the insurance of any such persons as aforesaid, and subscribe or
guarantee money for any charitable or benevolent objects or for any exhibition,
or for any public, general or useful objective and do any of the matters
aforesaid either alone or in conjunction with any
38
such other company as aforesaid. Subject always, if the Statutes shall so
require, to particulars with respect to the proposed payment being disclosed to
the members of the Company and to it being approved by the Company, any Director
who holds or has held any such employment or office shall be entitled to
participate in and retain for his own benefit any such donation, gratuity,
pension, allowance or emolument. A Director or former Director shall not be
accountable to the Company or the members for any benefit of any kind conferred
under or pursuant to this Article and the receipt of any such benefit shall not
disqualify any person from being or becoming a Director of the Company. For the
purposes of this Article, a company shall not be deemed to be a company which is
or was allied to or associated with or controlled by the Company or any of its
subsidiaries or subsidiary undertakings unless the Group beneficially owns or
owned at the relevant date for the purposes of this Article 40 per cent or more
of the equity share capital of the said company.
111. Power to make provision for employees
-------------------------------------
The Board is hereby authorised to sanction (by resolution of the Board) the
exercise of any power conferred upon the Company by Section 719.
D. VACATION OF OFFICE OF DIRECTOR
------------------------------
112. Vacation of office
------------------
The office of a Director shall be vacated in any of the following events,
namely:-
(i) if he ceases to be a Director by virtue of any provision of the Statues or
he becomes prohibited otherwise by law from being a Director; or
(ii) if he becomes bankrupt, has a receiving order made against him or makes
any arrangement or composition with his creditors generally; or
(iii) if he is, or may be, suffering from mental disorder and either:-
(a) he is admitted to hospital in pursuance of an application for
admission for treatment under the Mental Health Act 1983 or, in
Scotland, an application for admission under the Mental Health
(Scotland) Act 1960 or, in any other jurisdiction, in pursuance of an
application or otherwise under similar legislation, or
(b) an order is made by a court having jurisdiction (whether in the United
Kingdom or elsewhere) in matters concerning mental disorder for his
detention or for the appointment of any person to exercise powers with
respect to his property or affairs; or
(iv) if he resigns his office by notice in Writing to the Company sent to or
deposited at the Office; or
39
(v) if, in the case of a Director who holds any executive office with the
Company or any subsidiary, his appointment as such is terminated or
expires and the Directors resolve that his office be vacated; or
(vi) if he is absent for more than 6 consecutive months without permission of
the Directors from meetings of the Directors held during that period and
his alternate Director (if any) shall not during such period have attended
in his stead and the Directors resolve that his office be vacated; or
(vii) if he is requested in Writing by all the other Directors to resign.
E. MANAGING AND EXECUTIVE DIRECTORS
--------------------------------
113. Appointment of Managing and Executive Directors
-----------------------------------------------
The Board may from time to time appoint any one or more of the Directors of the
Company to any executive office, including the offices of executive chairman,
executive vice-chairman, executive deputy chairman, Chief Executive, Managing
Director or to any other executive office or employment under the Company and
subject to the Statutes such appointment may be for such period and on such
terms (as to remuneration and otherwise) as it thinks fit and, subject to the
provisions of any contract between him and the Company, the Board may revoke
such executive appointment or vary the terms thereof. Any resignation from
office given by a Director to the Company pursuant to Article 112(iv) shall have
effect without prejudice to any claim by either against the other for damages
for breach of any contract of service between the relevant Director and the
Company.
114. Remuneration for special or additional services
-----------------------------------------------
A Director appointed to the office of Chief Executive or Managing Director or
other executive office or any Director who discharges any special duty or
function or otherwise performs services any of which in the opinion of the Board
are beyond the attention necessary for the performance of or are outside the
scope of his ordinary duties as a Director or who goes or resides abroad on the
business of the Company shall receive such additional remuneration (whether by
way of salary, commission or participation in profits or otherwise) as the Board
may determine. Any remuneration payable to any Executive Director pursuant to
this Article may if the Director concerned so requires and if the Board so
agrees consist in whole or in part of payments by way of pension contributions
or premiums therefor, whether pursuant to a pension scheme or otherwise.
115. Powers of Directors holding executive office
--------------------------------------------
The Board may entrust to and confer upon any Director appointed to the office of
Chief Executive or Managing Director or other executive office any of the powers
exercisable by them as a Board, other than the power to make calls or forfeit
shares, upon such terms and conditions and with any such restrictions as they
think fit, and either collaterally with or to the exclusion of their own powers,
and may from time to time revoke, withdraw or vary all or any of such powers.
40
F. ROTATION AND REMOVAL OF DIRECTORS
---------------------------------
116. One-third of the Directors to retire annually
---------------------------------------------
Subject to the provisions of the Statutes and these Articles, one-third of the
Directors for the time being, or, if their number is not 3 or a multiple of 3,
the number nearest to but not exceeding one-third, shall retire from office at
the annual general meeting in every year PROVIDED that if in any year the number
of Directors who are subject to retirement by rotation shall be 2, one or such
Directors shall retire and, if in any year there shall be only one Director who
is subject to retirement by rotation, that Director shall retire. The Directors
to retire by rotation shall include (so far as it is necessary to obtain the
number required) any Director who wishes to retire and not offer himself for re-
election.
117. Retiring Director to hold office until dissolution of meeting
-------------------------------------------------------------
A director retiring at a meeting shall retain office until the dissolution of
that meeting except where a resolution is passed to elect some other person in
the place of the retiring Director or a resolution for his re-election is put to
the meeting and lost (in which case his retirement will take place upon the
determination of the resolution). A retiring Director who is re-elected or
deemed to have been re-elected will continue in office without break.
118. Directors who are to retire by rotation
---------------------------------------
Subject to the provisions of the Statutes and of these Articles, the Directors
to retire in every year shall be those who have been longest in office since
their last appointment, but as between persons who became or were last re-
appointed Directors on the same day, those to retire shall (unless they
otherwise agree among themselves) be determined by lot. A retiring Director
shall be eligible for re-appointment.
119. When a retiring Director is deemed re-appointed
-----------------------------------------------
The Company at the meeting at which a Director retires under any provision of
these Articles may by ordinary resolution fill up the vacated office by
appointing the retiring Director or (subject to the provisions of the Statutes)
some other person thereto, and in default the retiring Director, if willing to
act, shall be deemed to have been re-appointed, except in any of the following
cases:-
(i) where at such meeting it si expressly resolved not to fill up such office
or a resolution for the re-election of such Director is put to the meeting
and lost; or
(ii) where such Director has given notice in Writing to the Company that he is
unwilling to be re-elected; or
(iii) where the default is due to the moving of a resolution in contravention of
the next following Article; or
(iv) where such Director has attained any retiring age applicable to him as
Director.
41
120. Each re-appointment to be voted on separately
---------------------------------------------
At a general meeting a motion for the appointment of 2 or more persons as
Directors of the Company by a single resolution shall not be made unless a
resolution that it shall be so made has been first agreed to by the meeting
without any vote being given against it and, for the purposes of this Article, a
motion for approving a person's appointment or for nominating a person for
appointment shall be treated as a motion for his appointment.
121. Notice required of an intention to propose a new Director
---------------------------------------------------------
No person other than a Director retiring at the meeting shall, unless
recommended by the Board for appointment, be eligible for appointment to the
office of Director at any general meeting unless, not less than 6 nor more than
48 clear days before the day appointed for the meeting, there shall have been
given to the Company at the Office notice in Writing by some member not being
the person proposed duly qualified to be present and vote at the meeting for
which such notice is given of his intention to propose such person for
appointment, stating the particulars which would, if he were appointed, be
required to be included in the Company's register of Directors and also notice
in Writing signed by the person to be proposed of his willingness to be
appointed, such notice of willingness to be appointed not having been withdrawn.
The Board shall take all reasonable steps to cause the Company to give notice of
each and every candidate for appointment to the office of Director to members at
least 4 days prior to the meeting at which the appointment is to take place.
122. Increase or reduction in permitted number of Directors - casual
---------------------------------------------------------------
vacancies - additional Directors
--------------------------------
Without prejudice to the next following Article, the Company may from time to
time by ordinary resolution increase or reduce the number of Directors, and may
also determine in what rotation such increased or reduced number is to go out of
office, and may appoint any person to be a Director either to fill a casual
vacancy or as an additional Director.
123. Appointment of Director to fill a casual vacancy or as an additional
--------------------------------------------------------------------
director - retirement at next following annual general meeting
--------------------------------------------------------------
The Board shall have power at any time, and from time to time, to appoint any
person to be a Director, either to fill a casual vacancy or as an additional
Director, but so that the total number of Directors shall not at any time exceed
any maximum number fixed in accordance with these Articles. Subject to the
provisions of these Articles, any director so appointed shall hold office only
until the next following annual general meeting and shall then be eligible for
election. Any Director who retires under this Article shall not be taken into
account in determining the Directors who are to retire by rotation at such
meeting.
124. Removal of Director by ordinary resolution
------------------------------------------
The Company may, by ordinary resolution of which special notice has been given
in accordance with Section 379, remove any Director before the expiration of his
period of office, and my, by ordinary resolution, appoint another person in his
stead. The person so appointed shall be subject to
42
retirement at the same time as if he had become a Director on the day on which
the Director in whose place he is appointed was last appointed a Director.
Nothing in this Article shall be taken as depriving any Director removed
hereunder of compensation or damages payable to him in respect of the
termination of his appointment as a Director or of any executive appointment
ipso facto terminating with his appointment as a Director.
G. ALTERNATE DIRECTORS
-------------------
125. A Director may appoint an alternate - powers of alternate - approval
--------------------------------------------------------------------
of alternate by two-thirds majority - revocation of appointment of
------------------------------------------------------------------
alternate - remuneration of alternate
-------------------------------------
(a) Any Director may at any time appoint any other Director or appoint any
other person willing to act (whether a member of the Company or not) to be his
alternate; and every such alternate shall (subject to his giving to the Company
an address either within the United Kingdom or of an office of the Company
outside the United Kingdom at which notices may be served, including by
facsimile or telex, upon him) be entitled (during any period of absence which
his appointor has notified in Writing to the Secretary) to notice of meetings of
the Directors and to attend and vote as a Director at any such meeting at which
the Director appointing him is not personally present and generally at such
meeting to have and to perform all the functions of his appointor as a Director
in his absence (other than the power to appoint an alternate of the Director
appointing him) PROVIDED that no such appointment of any person not being a
Director shall be operative unless or until the approval of the Directors by a
majority consisting of at least two-thirds of all the Directors shall have been
given.
(b) The Directors may at any time, by a majority consisting of at least two-
thirds of all the Director's, revoke the appointment of an alternate Director.
A Director may at any time revoke the appointment of an alternate appointed by
him, and appoint another person in his place (subject always to the proviso to
paragraph (a) of this Article), and if a Director shall die or otherwise cease
to hold the office of Director the appointment of his alternate shall thereupon
cease and determine PROVIDED that, if any Director retires whether by rotation
or otherwise but is re-appointed by the meeting at which such retirement took
effect or is deemed to have been re-appointed by the meeting at which such
retirement took effect, any appointment made by him pursuant to this Article
which was in force immediately prior to his retirement shall continue to operate
after his re-appointment as if he had not so retired.
(c) Any appointment or revocation by a Director under this Article shall be
effected by notice in Writing to the Company under the hand of the Director
making the same or in any other manner approved by each of the other Directors
of the company for the time being in office, and any such notice if sent to or
left at the Office shall be sufficient evidence of such appointment or
revocation.
(d) Every such alternate shall be an officer of the Company and shall alone be
responsible to the Company for his own acts and defaults, and he shall not be
deemed to be the agent of the Director appointing him.
43
(e) The remuneration of any such alternate shall be payable out of the
remuneration payable to t he Director appointing him, and shall consist of such
portion (if any) of the last mentioned remuneration as shall be agreed between
such alternate and the Director appointing him. The alternate shall however be
entitled to be paid his expenses and to indemnified by the Company to the same
extent as the Director appointing him.
H. PROCEEDINGS OF DIRECTORS
------------------------
126. Meetings of the Board - determination of questions - chairman's
---------------------------------------------------------------
casting vote - convening of meetings
------------------------------------
The Board may meet for the despatch of its business, adjourn and otherwise
regulate meetings as it thinks fit. Questions arising at any meeting shall be
determined by a majority of votes. In case of an equality of votes the chairman
of the meeting shall have a second or casting vote. A Director who is also an
alternate Director shall be entitled, in the absence of his appointer, to a
separate vote on behalf of the Director he is representing in addition to his
own vote. Any Director may, and the Secretary on the requisition of any
Director shall, at any time summon a meeting of the Board. Due notice of any
meeting of the Board shall be given to each Director (or, during any period of
absence which he has notified in Writing to the Secretary stating or indicating
that during such absence notices should be sent to his alternate, to any
alternate Director appointed by him in accordance with Article 125) either
personally or by sending the same by facsimile, telex or through the post
addressed to him (or, as the case maybe, his alternate) at the address in
the United Kingdom given by him or his alternate to the Company or (if he or, as
the case may be, his alternate is resident outside the United Kingdom) to the
address of the overseas office of the Company specified by him or his alternate
to the Company.
127. Quorum and attendance by telephone
----------------------------------
(a) The quorum necessary for the transaction of the business of the Board may
be fixed by the Board and, unless so fixed at any other number, shall be 3. For
the purposes of this Article an alternate Director shall be counted in a quorum
but so that no less than 2 separate individuals present in person or by
telephone shall constitute the quorum. To count in a quorum, any Director who is
present by telephone must be fully able to hear and participate in the
proceedings.
(b) For the purpose of determining whether a quorum exists for the transaction
of the business of the Board: -
(i) in the case of a resolution of directors (or their alternates), who would
(if attending a meeting) comprise a quorum, in telephonic communication
with one another, any such resolution shall be as valid and effective as if
passed at a meeting of the Board duly convened and held;
(ii) in the case of a meeting of the Board, in addition to the Directors and
alternate Directors (if any) and physically present at the meeting, any
Director or alternate Director in
44
telephonic communication with such meeting shall be counted in the quorum
and shall be entitled to vote.
128. Restricted powers of Directors to act if number falls below prescribed
----------------------------------------------------------------------
minimum
-------
The continuing Directors or a sole continuing Director may act notwithstanding
any vacancies in their body, but if and so long as the number of Directors is
reduced below the minimum number of Directors fixed by or in accordance with
these Articles, or fixed as the quorum necessary for the transaction of the
business of the Board, the continuing Directors or Director may act for the
purpose of filling up vacancies in their body or of summoning general meetings
of the Company, but not for any other purpose. If there be no Directors or
Director able or willing to act, then any 2 members may summon a general meeting
for the purpose of appointing Directors.
129. Chairman of the Board
---------------------
The Directors (if they think fit) may from time to time elect and remove a
chairman or vice-chairman of their meetings and one or more deputy chairmen of
their meetings and determine the period for which they are respectively to hold
office. The chairman or in his absence the vice-chairman or one of the deputy
chairmen shall preside at all meetings of the Board, but if there be no
chairman, vice-chairman or any deputy chairmen or if at any meeting none of the
chairman, the vice-chairman or any of the deputy chairmen be present and willing
to act within 5 minutes after the time appointed for holding the same, the
Directors present may choose one of their number to be chairman of the meeting.
As between he deputy chairmen present and in default of an agreement between
them, the chair shall be taken by the deputy chairman who has since his last
appointment been longer in that office.
130. Validity of written resolution of Directors
-------------------------------------------
A written resolution signed by all the Directors entitled to receive notice of a
meeting of the Board or of a committee of the Board shall be as effective as a
resolution passed at a meeting of the Board or of a committee of the Board duly
convened and held, and may consist of several documents in the like form each
signed by one or more of the Directors concerned. The signature of an
alternative Director for the time being appointed as alternate for any Director
who has not signed shall be deemed for the purposes of this Article to be the
signature of the Director by whom the alternate is so appointed PROVIDED that at
the time of such signature by any alternate it is, in the reasonable opinion of
the Secretary, impracticable to obtain the signature of the Director who had
appointed him. A resolution executed by an alternate need not also be executed
by his appointor and, if it is executed by a Director who has appointed an
alternate, it need not also be executed by the alternate in that capacity. For
the purposes of this Article, any signature may be affixed to a facsimile copy
of the resolution and any signed resolution shall be valid if the Company
receives the original or a copy by facsimile.
45
131. Powers of a quorum of the Board
-------------------------------
A meeting of the Board for the time being at which a quorum is present shall be
competent to exercise all powers and discretions for the time being exercisable
by the Board.
132. Delegation of powers to a Director
----------------------------------
The Board may entrust to and confer upon any Director any of the powers
exercisable by it upon such terms and conditions and with such restrictions as
it thinks fit, and either collaterally with, or to the exclusion of, its own
powers, and may from time to time revoke or vary all or any of such powers but
no person dealing in good faith and without notice of such revocation or
variation shall be affected thereby.
133. Appointment of committee of the Board
-------------------------------------
The Board may delegate any of its powers to committees consisting of such
members or member (including alternate Directors) of its body as it thinks fit.
Any committee so formed shall, in the exercise of the powers so delegated,
conform to any regulations that may be imposed on them by the Board. Any such
regulations may, inter alia, provide for or authorise the co-option to the
committee of persons other than Directors and for such co-opted persons to have
voting rights as members of the committee PROVIDED that such co-opted persons
shall be a minority of the committee in number and resolutions of such committee
shall not be effective unless a majority of the members of the committee present
at the meeting and voting in favor are Directors or alternate Directors.
134. Proceedings of a committee of the Board of Directors
----------------------------------------------------
The meetings and proceedings of any committee appointed pursuant to Article 133
and including 2 or more members of the Board shall be governed by the provisions
of these Articles regulating the meetings and proceedings of the Board so far as
the same are applicable and are not superseded by any regulations made by the
Board under Article 133.
135. Validity of acts of the Board or of a committee of the Board or of a
--------------------------------------------------------------------
Director
--------
All acts done bona fide by any meeting of the Board, or of a local board or of a
committee of the Board, or by any person acting as a Director or pursuant to any
resolution duly and validly passed by the Directors or by a committee of the
Board shall, notwithstanding that it be afterwards discovered that there was
some defect in the appointment of any person acting as aforesaid, or that they
or any of them were disqualified from holding office, or had vacated office, or
were disqualified from holding office, or had vacated office, or were not
entitled to vote, be as valid as if every such person had been duly appointed
and was qualified and had continued to be a Director or committee member (as the
case may be) and had been entitled to vote.
46
I. MINUTES
-------
136. Minutes
-------
The Board shall cause minutes to be made of:
(i) all appointments of officers made by the Board; and
(ii) the names of the Directors (and any alternate Directors) present at each
meeting of the Board and of any local board or committee of the Board; and
(iii) all resolutions and proceedings at all meetings of the Company, of the
holders of any class of shares of the Company, of the Board and of local
boards and committees of the Board.
Any such minutes, if purporting to be signed by the chairman of the meeting at
which the proceedings took place or by the chairman of the next succeeding
meeting, shall be evidence of the proceedings.
J. SECRETARY
---------
137. Appointment of and acts of the Secretary
----------------------------------------
(a) The Secretary and any joint Secretary shall be appointed by the Board for
such term, at such remuneration and upon such conditions as it may think fit;
and any such Secretary so appointed may be removed by the Board, but without
prejudice to any claim which such Secretary may have against the Company.
(b) No person shall be appointed to the office of Secretary or joint Secretary
unless he is duly qualified or eligible under one or more of the categories
specified in Section 286.
(c) The Board may, at any time and from time to time, appoint one or more
persons qualified or eligible under one or more of the categories specified in
Section 286 to be deputy and/or assistant Secretary and anything required or
authorised to be done by or to the Secretary may be done by or to any deputy
and/or assistant Secretary so appointed; any deputy and/or assistant Secretary
may be removed by the Board.
K. THE SEAL
--------
138. Custody and use of the Seal
---------------------------
(a) The Board shall provide for the safe custody of any Seal, Securities Seal
and other official seal and, subject to Articles 14 and 15, no such seal shall
be affixed to any instrument except by the authority of a resolution of the
Board or of a committee of the Board authorised by the Board in that behalf. The
Board may determine whether or not any instrument to which the Seal or
Securities Seal or any other official seal is affixed shall be signed; but, if
it is to be signed, at least
47
one Director and such other person as the Board may appoint for the purpose
shall sign every instrument to which such seal shall be affixed and in favor of
any purchaser or person bona fide dealing with the Company such signatures, or a
certified copy of the Board resolution resolving that such instrument to which
such seal has been affixed need not be so signed, shall be conclusive evidence
of the fact that such seal has been properly affixed. Subject as aforesaid, the
Board may from time to time make such regulations as it sees fit (subject to the
provisions of Article 14 in relation to warrants, Article 15 in relation to
share certificates and Article 20 in relation to certificates of debenture stock
or loan capital or any other securities comprising the share or loan capital of
the Company) determining the persons and the number of such persons in whose
presence the Seal, Securities Seal or other Official Seal shall be used, and
until otherwise so determined such seal shall be affixed in the presence of one
Director and the Secretary or of 2 Directors.
(b) To the extent permitted by law, a document which is signed by a Director
and the Secretary, or by two Directors, and expressed (in whatever form of
words) to be executed by the Company shall have the same effect as if it were
under seal and a document so executed which: -
(i) is intended by the person or persons making it to be a deed, and
(ii) makes that fact clear on the face of such document (in whatever form of
words)
shall have effect, upon delivery, as a deed; and it shall be presumed, unless a
contrary intention is proved to be deliver upon its being so executed.
139. Official seal for use overseas
------------------------------
The Company may have one or more official seals for use overseas under the
provisions of the Statutes where and as the Board shall determine. The Company
may in Writing under the Seal appoint any agent or committee to be the duly
authorised agent of the company for the purpose of affixing and using abroad any
such official seal and may impose such restrictions on the use thereof as shall
be thought fit. Wherever in these Articles reference is made to the Seal, the
reference shall, when and so far as may be applicable, be deemed to include any
such official seal.
L. AUTHENTICATION OF DOCUMENTS
---------------------------
140. Authentication of documents by Directors, Secretary or any other
----------------------------------------------------------------
person appointed by the Board
-----------------------------
Any Director or the Secretary or any person appointed by the Board for the
purpose shall have power to authenticate any documents affecting the
constitution of the Company and any resolutions passed by the Company or the
Board or any committee of the Board, and any books, records, documents and
accounts relating to the business of the Company, and to certify copies thereof
or extracts therefrom as true copies or extracts; and where any books, records,
documents or accounts are elsewhere than at the Office the local manager or
other officer of the Company having the custody thereof shall be deemed to be a
person appointed by the Board as aforesaid.
48
A document purporting to be a copy of a resolution, or an extract from the
minutes of a meeting, of the Company or of the Board or any committee of the
Board which is certified as aforesaid shall be conclusive evidence in favour of
all persons dealing with the Company upon the faith thereof that such resolution
has been duly passed or, as the case may be, that such minute or extract is a
true and accurate record of proceedings at a duly constituted meeting.
V. DIVIDENDS AND DISTRIBUTIONS
---------------------------
141. Distribution of profits
-----------------------
The Company may be ordinary resolution declare dividends and such dividends
shall be paid to the members in accordance with their respective rights and
priorities in existence from time to time, and subject thereto in paying a
dividend on the Ordinary Shares PROVIDED that:
(i) no such dividend shall exceed the amount recommended by the Board; and
(ii) generally no dividend or other distribution (as so defined) shall be
declared or made otherwise than in accordance with the provisions of the
Statutes as they from time to time apply to the Company.
142. Dividends only payable on paid up and called up capital
-------------------------------------------------------
Subject to the rights of person, if any, entitled to shares with special rights
as to dividends, all dividends shall be declared and paid according to the
amounts paid up on the shares in respect of which the dividend is paid, but no
amount paid up on a share in advance of calls shall be treated for the purposes
of this Article as paid up on the share. All dividends shall be apportioned and
paid pro rata according to the amounts paid up on the shares during any portion
or portions of the period in respect of which the dividend is paid, except that,
if any share is issued on terms that it shall rank for dividend as if paid up
(in whole or in part) as from a particular date, such share shall rank for
dividend accordingly.
143. Interim dividends
-----------------
Subject to the provisions contained in Articles 141 and 142 and to the
provisions of the Statutes, the Board may:
(i) from time to time pay to the members such interim dividends as appear to
the Board to be justified by the profits of the Company available for
distribution;
(ii) pay half-yearly or at other suitable intervals to be settled by the Board
any dividend expressed to be payable at a fixed rate if it is of the
opinion that the profits of the Company justify the payment;
(iii) if at any time the share capital of the Company is divided into
different classes, declare and pay interim dividends in respect of those
shares in the capital of the Company which
49
confer on the holders thereof deferred or non-preferred rights as well as
in respect of those shares which confer on the holders thereof preferential
rights with regard to dividends; but no interim dividend shall be paid on
shares carrying deferred or non-preferred rights if, at the time of
payment, any preferential dividend is in arrear; and PROVIDED that the
Board acts bona fide the Directors shall not incur any responsibility to
the holders of shares conferring a preference for any damage that they may
suffer by reason of the payment of an interim dividend on any shares in the
capital of the Company having deferred or non-preferred rights.
144. Record dates for dividend payments and capitalisation distributions
-------------------------------------------------------------------
Notwithstanding any other provision of these Articles but without prejudice to
the rights attached to any shares in the capital of the Company, any resolution
resolving to pay a dividend on shares of any class, whether a resolution of the
Company in general meeting or a resolution of the Board, may specify that the
same shall be payable to the persons registered as the holders of such shares at
the close of business on a particular date, notwithstanding that it may be a
date prior to that on which the resolution is passed, and thereupon the dividend
shall be payable to them in accordance with their respective holdings so
registered, but without prejudice to the rights inter se in respect of such
dividend of transferors and transferees of any such shares. The provisions of
this Article shall mutatis mutandis apply to capitalisation issues to be
effected pursuant to Article 153.
145. Deduction from dividends of unpaid calls
----------------------------------------
The Board may deduct from any dividend or other moneys payable to any member on
or in respect of a share all sums of money (if any) presently payable by him to
the Company on account of calls or otherwise in relation to the shares of the
Company.
146. Company may retain unclaimed dividends
--------------------------------------
The payment by the Board of any unclaimed dividend or other moneys payable on or
in respect of a share into a separate account shall not constitute the Company a
trustee in respect thereof. All unclaimed dividends or other moneys payable on
or in respect of a share may be invested or otherwise made use of by the Board
for the benefit of the Company until claimed; but so that any such dividend
unclaimed after a period of 12 years from the date of declaration shall be
forfeited and shall revert to the Company. No dividend shall bear interest as
against the Company unless otherwise provided by the rights attached to the
share.
147. Dividend warrants
-----------------
Any dividend or other moneys payable on or in respect of a share may be paid by
cheque or warrant sent through the post to the registered addresses of the
member or person entitled thereto, and in the case of joint holders to the
registered address of the joint holder who is first named on the Register, or to
such person and such address as the holer or joint holders may direct by notice
in Writing to the Company signed by such holder or holders. Every such cheque
or warrant shall be made payable to the order of the person to whom it is sent
or of such other person as the holder
50
or joint holders may direct by notice in Writing to the Company signed by such
holder or holders, and payment of the cheque or warrant, if purporting to be
duly endorsed, or where unendorsed appearing to have been duly paid by the
banker on whom it is drawn, shall be a good discharge to the Company. Every such
cheque or warrant shall be sent at the risk of the person entitled to the money
represented thereby. Any such dividend or other money may also be paid by any
other usual or common banking method (including, without limitation, direct
debit, bank transfer and electronic funds transfer).
148. Any joint holder may give receipt for a dividend
------------------------------------------------
If several persons are registered as joint holders of a share or are entitled
thereto in consequence of the death, bankruptcy or mental disorder of the holder
or by operation of law or any other event, any one of them may give effectual
receipts for any dividend or other moneys payable on or in respect of the share.
149. Company not obliged to send dividend warrants to untraced shareholders
----------------------------------------------------------------------
(a) Without prejudice to the Company's rights under Articles 145 and/or 146, if
on 2 consecutive occasions cheques or warrants in payment of dividends or otehr
moneys payable on or in respect of any shares have been sent through the post in
accordance with the provisions of these Articles but have been returned
undelivered or left uncashed during the periods fro which the same are valid,
the Company need not thereafter despatch further cheques or warrants in payment
of dividends or otehr moneys payable on or in respect of the share in question
until the holder or other person entitled thereto shall have communicated with
the Company and supplied to the Company, by notice in Writing signed by such
holder or other person, an address for the purpose.
(b) The Board may exercise the powers of the Company conferred by paragraph (a)
of this Article in respect of any dividend or other such payment falling due to
be paid 1 month after notice of the Company's intention to exercise such powers
has been served on the relevant member by recorded delivery post.
(c) All moneys represented by warrants or cheques not despatched by the Company
under the provisions of paragraph (a) of this Article shall be deemed to be
unclaimed dividends or moneys and the provisions of Article 146 shall apply
thereto.
150. Payment of dividend in specie
-----------------------------
A general meeting declaring a dividend may, upon the recommendation of the
Board, direct payment of such dividend wholly or in part by the distribution of
specific assets, and in particular of paid up shares, debentures or debenture
stock of any other company or in any one or more of such ways, and the Board
shall give effect to such resolution; and where any difficulty arises in regard
to the distribution it may settle the same as it thinks expedient and in
particular may issue fractional certificates, and may fix the value for
distribution of such specific assets or any part thereof, and may determine that
cash payments shall be made to any members upon the footing
51
of the values so fixed, in order to adjust the rights of members, and may vest
any specific assets in trustees upon trust for the persons entitled to the
dividend as may seem expedient to the Board, and generally may make such
arrangements for the allotment, acceptance and sale of such specific assets or
fractional certificates, or any part thereof, and distribution of the cash
proceeds of any sale or of the cash equivalent to any member or members and
otherwise as they think fit.
151. Scrip dividends
---------------
The Board may, with the sanction of an ordinary resolution of the Company, offer
to the holders of Ordinary Shares the right to elect to receive an allotment of
additional Ordinary Shares, credited as fully paid, in whole or in part, instead
of cash in respect of any dividend which is specified in the applicable ordinary
resolution or such part of such dividend as the Board may determine. The
following provisions shall have effect:
(i) Any such ordinary resolution may specify a particular dividend or may
specify all or any dividends falling to be declared or paid during a
specified period, being a period expiring not later than five years after
the date of the meeting at which the resolution is passed.
(ii) The basis of allotment shall be determined by the Board so that, as nearly
as may be considered convenient, the value (calculated by reference to the
average quotation) of the additional Ordinary Shares (including any
fractional entitlement) to be allotted instead of any cash amount of
dividend shall be equal to such amount. for such purpose the "average
quotation" of an Ordinary Share shall be the average of the middle market
quotations (less the relevant dividend unless the Ordinary Shares are
already quoted ex such dividend) on The Stock Exchange (derived from the
Daily Official List of the Stock Exchange or any similar publication) on
at least 5 consecutive dealing days selected by the Board, but commencing
no earlier than the day upon which the proposed relevant dividend is
announced by the Board.
(iii) The Board shall give notice in Writing to the holders of the Ordinary
Shares of the rights of election offered to them and shall send with or
following such notice forms of election and specify the procedure to be
followed and the place at which and the latest date and time by which duly
completed forms of election must be lodged in order to be effective.
(iv) The dividend (or that part of the dividend in respect of which a right of
election has been offered) shall not be payable on Ordinary Shares in
respect of which the said election has been duly exercised (the "elected
ordinary Shares") and instead thereof additional Ordinary Shares shall be
allotted to the holders of the elected ordinary Shares on the basis of
allotment determined as aforesaid. For such purpose the Board shall
capitalise, out of such of the sums standing to the credit of reserves
(including any share premium account and capital redemption reserve) or
profit and loss account as the Board may determine, a sum equal to the
aggregate nominal amount of the additional Ordinary Shares to be allowed
on such basis and apply the same in paying up in full the appropriate
number of unissued Ordinary Shares for allotment and distribution to and
amongst the holders of elected Ordinary Shares on such basis.
52
(v) The additional Ordinary Shares so allotted shall rank pari passu in all
respects with the fully paid Ordinary Shares then in issue save only as
regards participation in the relevant dividend (or share election in
lieu).
(vi) The Board may do all acts and things which it considered necessary or
expedient to give effect to any such offer and capitalisation, with power
to make such provisions as it thinks fit for dealing with shares becoming
distributable in fractions (including provisions whereby, in whole or in
part, fractional entitlements are disregarded or rounded up or the benefit
of fractional entitlements accrues to the Company rather than to the
members concerned). The Board may authorise any person on behalf of all
the members concerned to enter into an agreement with the Company
providing for such capitalisation and matters incidental thereto and an
agreement made under such authority shall be effective and binding on all
persons concerned.
(vii) Notwithstanding anything to the contrary in this Article, the Board may
make such exclusions from any offer of rights of election to holders of
Ordinary Shares as it may think fit in the light of any legal or practical
problems under the laws of, or the requirements of any regulatory ore
stock exchange authority in, any territory.
VI. RESERVES
--------
152. Board may carry profits to reserve - investment of reserves - carry
-------------------------------------------------------------------
forward of profits
------------------
The Board may, before recommending any dividend, whether preferential or
otherwise, carry to reserve out of the profits of the Company (including any
premiums received upon the issue of debentures or other securities of the
Company) such sums as they think proper as a reserve or reserves which shall, at
the discretion of the Board, be applicable for any purpose to which the profits
of the Company may be properly applied, and pending such application may, at the
like discretion, either be employed in the business of the Company or be
invested in such investments other than shares of the Company or of its holding
company (if any) as the Board may from time to time think fit. The Board may
also without placing the same to reserve carry forward any profits which it may
think prudent not to divide.
VII. CAPITALISATION OF PROFITS
-------------------------
153. Capitalisation issue
--------------------
(a) The Company in general meeting may upon the recommendation of the Board at
any time and from time to time, subject as hereinafter provided, by ordinary
resolution resolve:
(i) to capitalise any undivided profits of the Company (whether or not the same
could have been distributed as dividend under the provisions of Article 141
and including profits carried forward or standing to any reserve) or any
sum carried to reserve as a result of the sale or revaluation of the assets
of the Company (other than goodwill) or any part thereof
53
or any sum standing to the credit of the Company's share premium account
or any capital redemption reserve fund;
(ii) that the Board be authorised and directed to appropriate the profits or
sum resolved to be capitalised to the members in proportion to the nominal
amount of Ordinary Shares (whether or not fully paid up) held by them
respectively which would entitled them to participate in a distribution of
that sum if the shares were fully paid up and the sum were then
distributable and were distributed by way of dividend and to apply such
profits or sum on their behalf, either in or towards paying up the
amounts, if any, for the time being unpaid on any shares, debentures or
other securities held by such members respectively, or in paying up in
full unissued shares, debentures or other securities of the Company of a
nominal amount equal to such profits or sum, and to allot and distribute
such shares, debentures or other securities credited as fully paid up, to
and amongst such members, or as they may direct, in the proportion
aforesaid, or partly in one way and partly in the other;
(iii) that any shares allotted under this Article to any member in respect of a
holding by him of any partly paid Ordinary Shares shall, so long as such
ordinary Shares remain partly paid, rank for dividends only to the extent
that such partly paid Ordinary Shares rank for dividend;
(iv) to make such provision by ignoring fractions or by payment in cash or
otherwise as they determine in the case of the shares or debentures
becoming distributable in fractions;
(v) to authorise any person, on behalf of all the members concerned, to enter
into an agreement with the Company providing for the allotment to them
respectively, credited as fully paid up, or any further shares to which
they are entitled upon such capitalisation, any agreement made under such
authority being binding on all such members; and
(vi) generally to do all acts and things required to give effect to such
resolution as aforesaid;
PROVIDED that:
(aa) the share premium account and the capital redemption reserve fund
and any such profits which could not have been distributed as
dividend under the provisions of Article 141 may, for the
purposes of this Article, only be applied in the paying up of
unissued shares to be issued to members credited as fully or
partly paid; and
(bb) no unrealised profits shall be applied in paying up any
debentures of the Company or any amount unpaid on any share in
the capital of the Company.
(b) This Article is subject to any special conditions which may be attached to
any shares hereafter issued, or upon which any shares may for the time being be
held.
54
154. Board to effect capitalisations
-------------------------------
Whenever a resolution is passed in pursuance of Article 156 the Board shall
either:
(i) allot unissued shares, debentures or other securities of the Company, as
the case may be, to the amount authorised by the resolution credited as
fully paid up amongst the holders of the shares entitled to participate
therein as nearly as may be in proportion to the number of such last-
mentioned shares held by them respectively with full power to the Board to
make such provisions by way of the issue of fractional certificates or
otherwise as they think fit for the case of fractions, and prior to such
allotment the Board may, if thought fit, authorise any person, on behalf of
all the members to be entitled to the said shares, debentures or other
securities of the Company, to enter into an agreement with the Company
providing for the allotment to them in the proportion aforesaid credited as
fully paid up of the shares, debentures or other securities authorised by
the resolution to be distributed amongst them, and any agreement made under
such authority shall be effective and binding on all the holders of the
said shares, debentures or other securities of the Company for the time
being; and the Board shall have power generally to do all acts and things
required to give effect to such resolutions as aforesaid. Whenever on any
issue of shares, debentures or other securities of the Company in pursuant
of Article 153 the value of a fractional entitlement thereof shall be less
than the Minimum Amount in respect of any member, the proceeds of sale
(after the deduction of the proper expenses of such sale) of each and every
such fractional entitlement amounting to less than the Minimum Amount shall
belong to and be vested in the Company. For the purpose of giving effect to
any such sale, the Board may authorise some person to transfer the
securities sold to the purchase thereof and the purchaser shall be
registered as the holder of the securities comprised in any such transfer
and he shall not be bound to see the application of the purchase money nor
shall his title to the said securities be affected by any irregularity or
invalidity in the proceedings relating to the sale; and/or
(ii) (if the resolution so specifies) apply such profits or sum on behalf of the
members entitled thereto in paying up the amounts, if any, unpaid on any
shares, debentures or other securities held by such members.
VIII. ACCOUNTS AND AUDIT
------------------
155. Keeping of accounts and retention and location of accounting records
--------------------------------------------------------------------
(a) The Board shall cause to be kept proper accounts and accounting records
in accordance with the requirements of the Statutes.
(b) The accounting records shall be kept at the office or (subject to the
provisions of the Statutes) at such other place as the Board thinks fit, and
shall always be open to inspection by the Directors and any other officers of
the Company. No member (other than an officer of the Company) shall h ave any
right of inspecting any account or book or document of the Company
55
except as conferred by law (including the Statutes) or authorised by order of
the court or by the Board or by the Company in general meeting.
156. Accounts to be laid before general meetings
-------------------------------------------
The Directors shall from time to time, in accordance with the provisions of the
Statutes, cause to be prepared and to be laid before the Company in general
meeting such profit and loss accounts, balance sheets, group accounts (if any)
and reports as are specified in the Statutes.
157. Auditors' report
----------------
The Auditors' report shall be read before the Company in general meeting and
shall be open to inspection as required by the Statutes.
158. Reports and accounts to be delivered to members, debenture holders and
----------------------------------------------------------------------
auditors -summary financial statements
--------------------------------------
(a) Subject to the provisions of paragraph (b) below and of Article 165, a
printed copy of the Directors' and auditors' reports accompanied by printed
copies of the balance sheet, profit and loss account and other documents
required by the Statues to be annexed to the balance sheet (together the
"Statutory Accounts") shall, not less than 21 clear days prior to the annual or
other general meeting at which it is proposed to lay such documents before
members, be delivered or sent by post to the registered address of every member
and holder of debentures of the Company and to the auditors and to every other
person, if any, who is entitled by these Articles or the Statutes to receive
copies of such documents and/or notices of meetings from the Company. Upon a
listing of all or any of the shares or securities comprising the share or loan
capital of the Company being for the time being granted on The Stock Exchange
(or on any other stock exchange in the United Kingdom or elsewhere), the
required number of copies of each of these documents shall at the same time be
forwarded to the appropriate officer of such stock exchange.
(b) The Company may, insofar as is permitted by the Statutes and without
prejudice to the right of any member who wishes to receive the Statutory
Accounts to require the Statutory Accounts to be sent to him, send to members
summary financial statements which comply with the provisions of the Statutes
("Summary Financial Statements") in lieu of the Statutory Accounts, such Summary
Financial Statements to be sent not less than 21 clear days prior to the annual
or other general meeting at which the Statutory Accounts of which the Summary
Financial Statements are a summary are to be laid as provided in paragraph (a)
of this Article. Upon a listing being granted as stated in paragraph (a) above,
there shall be forwarded to The Stock Exchange (as provided above) such number
of copies of any Summary Financial Statements as may for the time being be
required under its regulations or practice.
159. Cases in which reports and accounts need not be delivered
---------------------------------------------------------
The last preceding Article shall not require a copy of the Statutory Accounts or
Summary Financial Statements to be sent to more than one of any joint holders or
to any person of whose
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address the Company is not aware, but any member or
holder of debentures or person entitled by the Statutes or these Articles to
receive a copy of the Statutory Accounts or Summary Financial Statements to whom
a copy has not been sent shall be entitled to receive a copy free of charge on
application at the Office.
160. Appointment of auditors
-----------------------
Auditors shall be appointed, and their duties, powers, rights and remuneration
regulated, in accordance with the provisions of the Statutes from time to time
in force.
161. Accounts to be audited annually
-------------------------------
At least once in every financial year of the Company the accounts of the Company
shall be examined and the balance sheet, profit and loss account and the Group
accounts, if any, reported upon by an auditor or auditors.
162. Validity of acts of auditors
----------------------------
Subject to the provisions of the Statutes, all acts done by any person acting as
an auditor shall, as regards all persons dealing in good faith with the Company,
be valid, notwithstanding that there was some defect in his appointment or that
he was at the time of his appointment not qualified for appointment.
163. Right of auditors to receive notice of and attend and speak at general
----------------------------------------------------------------------
meetings
--------
The auditor shall be entitled to attend any general meeting and to receive all
notices of and other communications relating to any general meeting which any
member is entitled to receive, and to be heard at any general meeting on any
part of the business of the meeting which concerns him as auditor.
NOTICES
-------
164. Notices to be in Writing
------------------------
Save as otherwise provided in these Articles, any notice to be given to or by
any person pursuant to these Articles shall be in Writing, except that a notice
calling a meeting of the Board need not be in Writing.
165. Service of notices
------------------
Save as otherwise provided in these Articles, any notice in Writing or document
(including a shares certificate) may be served by the Company on any member
either personally or by sending it through the post in a prepaid cover addressed
to such member, or by delivery in a cover addressed to such member, at his
address as appearing in the Register or such other address as he may from time
to time notify in Writing to the Company as his address for service.
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166. Persons becoming entitled to shares to be bound by notices
----------------------------------------------------------
Every person who by operation of law, transfer or other means whatsoever shall
become entitled to any share shall be bound by any notice given by the Company
other than a notice issued by authority of Article 10 in respect of such share
which, before his name and address are entered in the register, shall have been
duly given to the person from whom he derives his title to such share.
167. Notice to joint holders
-----------------------
In the case of joint holders of a share, all notices shall be given to that one
of the joint holders whose name stands first in the Register in respect of the
joint holding, and notice so given shall be sufficient notice to all the joint
holders.
168. Members registered outside the United Kingdom entitled to give an
-----------------------------------------------------------------
address for service in the United Kingdom
-----------------------------------------
Any member described in the Register by an address not within the United Kingdom
who shall from time to time give to the Company an address within the United
Kingdom at which notices may be served upon him shall be entitled to have
notices served upon him at such address, but, save as aforesaid, no member other
than a member described in the Register by an address within the United Kingdom
shall be entitled to receive any notice from the Company.
169. Member present at general meeting deemed to have received notice
----------------------------------------------------------------
Any member present, either personally or by proxy, at any meeting of the Company
shall for all purposes be deemed to have received due notice of such meeting
and, where requisite, of the purposes for which such meeting was convened.
170. Advertisement of notice
-----------------------
Any notice (in Writing or otherwise) required to be given by the Company to the
members of any of them and not provided for by or pursuant to these Articles
shall be sufficiently given if given by advertisement which shall be inserted
once in 2 leading national daily newspapers published in the United Kingdom.
171. When service effected
---------------------
Any notice in Writing or other document, if served by post, shall be deemed to
have been given on the day following that on which the envelope containing the
notice was posted and in proving such service it shall be sufficient to prove
that the envelope containing the notice or document was properly addressed and
duly posted. A notice to be given by advertisement shall be deemed to have been
served on the day on which the advertisement appears.
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172. Service of notice on or delivery of document to be deceased or
--------------------------------------------------------------
bankrupt member
---------------
A notice may be given by the Company to the person entitled to a share in
consequence of the death or bankruptcy of a member or otherwise by operation of
law by sending or delivering it in any manner authorised by these Articles for
the giving of notice to a member addressed to that person by name, or by the
title of representative of the deceased or trustee of the bankrupt or by any
like description at the address, if any, within the United Kingdom supplied for
that purpose by the person claiming to be so entitled. Until such an address
has been supplied, a notice may be given in any manner in which it might have
been given if the death or bankruptcy or operative event had not occurred and
such notice shall be deemed a sufficient service of such notice on all persons
interested (whether jointly with or as claiming through or under him) in the
share.
173. Convening of meetings by advertisement
--------------------------------------
If at any time by reason of the suspension or curtailment of postal services
within the United Kingdom the Company is unable to send notices through the post
to addresses in the United Kingdom and is thereby prevented from effectively
convening a general meeting by post, a general meeting may be convened so far as
concerns members whose addresses in the Register or given pursuant to Article
168 are within the United Kingdom, by a notice advertised in at least 2 leading
national daily newspapers published in the United Kingdom and such notice shall
be deemed to have been duly served on all members entitled thereto at noon on
the day when the advertisement appears. In any such case the Company shall send
confirmatory copies of the notice by post if at least 4 days prior to the day of
the meeting the posting of notices to addresses throughout the United Kingdom
again becomes practicable.
I. WINDING-UP
----------
174. Distribution of assets in specie
--------------------------------
In the winding-up (whether the liquidation is voluntary, under supervision or by
the court) of the Company the liquidator may, with the authority of an
extraordinary resolution and any other sanction required by the Statues, divide
among the members in specie the whole or any part of the assets of the Company,
whether or not the assets shall consist of property of one kind, and may for
such purposes set such value as he deems fair upon any one or more class or
classes of property, and may determine how such division shall be carried out as
between the members or different classes of members. The liquidator may, with
the like authority, vest any part of the assets in trustees upon such trusts for
the benefit of members as the liquidator, with the like authority, shall think
fit, and the liquidation of the Company may be compelled to accept any shares in
respect of which there is a liability.
II. INDEMNITY AND INSURANCE
-----------------------
175. Indemnity and insurance for Directors and other officers
--------------------------------------------------------
(a) Subject to the provisions of the Statutes, but without prejudice to any
indemnity to which he may otherwise be entitled, every Director or other officer
or auditor of the Company shall be
59
indemnified out of the assets of the Company against any liability, loss or
expenditure incurred by him in defending any proceedings, whether civil or
criminal, which relate to anything done or omitted to be done or alleged to have
been done or omitted to be done by him given in his favour or in which he is
acquitted or which are otherwise disposed of without any finding or admission of
guilt or breach of duty on his part or incurred in connection with any liability
in respect of any such act or omission or from liability to pay any amount in
respect of shares acquired by a nominee of the Company.
(b) To the extent permitted by the Statues, the Directors may arrange insurance
cover at the cost of the Company in respect of any liability, loss or
expenditure incurred by any Director, officer or auditor of the Company in
relation to anything done or alleged to have been done or omitted to be done as
Director, officer or auditor.
60