EXHIBIT 1
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For identification purposes, words referred to as being in bold or italics in
this document are identified by single inverted commas.
Company No. 3888792
MEMORANDUM
(As altered by Written Resolutions
passed on 19 May 2000 and 4 July 2000)
AND
ARTICLES OF ASSOCIATION
(As adopted by Written Resolution passed on 4 July 2000
and amended by Special Resolutions passed on 21 May 2001
and 20 May 2002)
OF
GLAXOSMITHKLINE PLC
TABLE OF CONTENTS
Contents
1 Table A and other standard regulations do not apply
2 The meaning of the Articles
3 Form of the Company's share capital
4 The power to increase capital
5 The power to change capital
6 Fractions of shares
7 The power to reduce capital
8 Buying back shares
9 The special rights of new shares
10 The directors' power to deal with shares
11 The directors' authority to allot "relevant securities"
12 The directors' authority to allot "equity securities"
13 Power to pay commission and brokerage
14 Renunciations of allotted but unissued shares
15 No trusts or similar interests recognised
16 Certificates
17 Replacement share certificates
18 The directors can make calls on shares
19 The liability for calls
20 Interest on unpaid calls
21 Sums which are payable when a share is allotted are treated as a call
22 Calls can be for different amounts
23 Paying calls early
24 Notice following non-payment of a call
25 Contents of the notice of non-payment
26 Forfeiture if the notice is not complied with
27 Forfeiture will include unpaid dividends
28 Dealing with forfeited shares
29 Cancelling forfeiture
30 The position of shareholders after forfeiture
31 The Company's lien on shares
32 Enforcing the lien by selling the shares
33 Using the proceeds of the sale
34 Evidence of forfeiture or sale and position of new holder
35 Changing the special rights of shares
36 More about the special rights of shares
37 General provisions about transfers of shares
38 More about transfers of shares in certificated form
39 Transfers which may not be registered
40 Closing the Register
41 Overseas branch registers etc
42 Death of a shareholder
43 Registering persons automatically entitled by law
44 A person who wants to be registered must give notice
45 Having another person registered
46 The rights of people automatically entitled to shares by law
47 Shareholders who cannot be traced
48 The Annual General Meeting
49 Extraordinary General Meetings and Separate General Meetings
50 Calling an Extraordinary General Meeting
51 Notice of meetings
52 The proceedings at a General Meeting will still be valid if a person who
is entitled to these things:
53 A General Meeting can be moved at short notice
54 The chairman of a meeting
55 Special Business at General Meetings
56 Security, other arrangements and orderly conduct at General Meetings
57 Overflow meeting rooms
58 Telephone Meetings
59 The quorum needed for meetings
60 The procedure if there is no quorum
61 Directors and other persons at General Meetings
62 Adjourning meetings
63 Confidential information
64 Amending resolutions
65 How votes are taken
66 How a poll is taken
67 Timing of a poll
68 The chairman's casting vote
69 Shareholders which are companies
70 Approved Depositaries
71 Written resolutions
72 The effect of a declaration by the chairman
73 The votes of shareholders
74 Shareholders who owe money to the Company
75 Failure to comply with a notice under Section 212 of the Companies Act
76 Votes of shareholders who are of unsound mind
77 The votes of joint holders
78 Completing proxy forms
79 Delivering proxy forms
80 Revocation of proxies
81 Proxies speaking at meetings
82 Proxies for amendments and adjournments
83 Expiry of proxies
84 Challenging votes
85 The number of directors
86 Qualification to be a director
87 Directors' fees and expenses
88 Special pay
89 Directors' expenses
90 Directors' pensions and other benefits
91 Appointing directors to various posts
92 Age limits
93 Retiring by rotation
94 Selecting the directors to retire by rotation
95 Re-electing a director who is retiring
96 Election of two or more directors4
97 People who can be directors
98 The power to fill vacancies and appoint extra directors
99 Removing and appointing directors by an Ordinary Resolution4
100 When directors are disqualified
101 Directors' meetings
102 Who can call directors' meetings
103 How directors' meetings are called
104 Quorum
105 The chairman of directors' meetings
106 Voting at directors' meetings
107 Directors can act even if there are vacancies
108 Telephone meetings
109 Resolutions in writing
110 The validity of directors' actions
111 Directors' interests in transactions with the Company
112 When directors can vote on things which they are interested in
113 More about directors' interests
114 Delegating powers to committees
115 Committee procedure
116 The directors' management powers
117 The power to appoint attorneys and agents
118 Shares held by the Company
119 Borrowing powers
120 Alternate Directors
121 The Secretary
122 Minutes
123 The Seal
124 Establishing that documents are genuine
125 Final dividends
126 Interim and fixed dividends
127 Currency of payment
128 Distributions in kind
129 No dividends are payable except out of profits
130 Apportioning dividends according to amounts paid up
131 Deducting amounts owing from dividends and other money
132 Payments to shareholders
133 Record date
134 Dividends which are not claimed
135 Capitalising reserves
136 Shareholders can be offered the right to receive new shares instead of
cash dividends
137 Dividend plans generally
138 Accounting and other records
139 Location and inspection of records
140 Sending copies of accounts and other documents
141 Appointment of Auditors
142 Serving and delivering notices and other documents
143 Notices to joint holders
144 Notices for shareholders with foreign addresses
145 Shareholders attending meetings
146 When notices are served
147 Serving notices and documents on shareholders who have died or
are bankrupt
148 Notices to predecessors
149 Notices to directors
150 Notices to the Company
151 Directors' power to petition
152 Distribution of assets in kind
153 Destroying documents
154 Indemnity
155 Insurance
156 Holding shares in uncertificated form
157 Predominance of CREST Regulations
Company No. 3888792
The Companies Acts 1948 to 1985
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COMPANY LIMITED BY SHARES
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SPECIAL RESOLUTIONS
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GlaxoSmithKline plc
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Passed: 21st May 2001
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At the FIRST ANNUAL GENERAL MEETING of the Company held on Monday, 21ST May
2001, the following resolutions were duly passed as a SPECIAL RESOLUTIONS:-
20 Authority to allot ordinary shares
THAT the Directors be and they are hereby generally and unconditionally
authorised in substitution for all subsisting authorities to exercise all powers
of the company to allot relevant securities (within the meaning of Section 80 of
the Act) up to an aggregate nominal amount of (pound)519 million, which
authority shall expire at the end of Annual General Meeting of the company in
2006 or, if earlier, on 20th May 2006 (unless previously revoked or varied by
the company in general meeting) provided that this authority shall be without
prejudice to any allotments of relevant securities made prior to the date of the
company's first Annual General Meeting pursuant to the authority conferred by
the shareholders of the company on 19th May 2000.
21 Disapplication of pre-emption rights
THAT the Directors be and are hereby empowered pursuant to Section 95 of the Act
to allot equity securities (within the meaning of the Act) pursuant to the
authority conferred by Resolution 20 above as if Section 89(1) of the Act did
not apply to any such allotment, provided that this power shall be limited to
the allotment, other than allotments in connection with a rights issue (as
defined in Article 12.5 of the company's Articles of Association), of equity
securities up to an aggregate nominal amount of (pound)77 million and shall
expire at the end of the next Annual General Meeting of the company or, if
earlier, on 20th August 2002.
22 Purchase of own shares by the company
THAT the company be and is hereby generally and unconditionally authorised for
the purposes of Section 166 of the Act to make market purchases (within the
meaning of Section 163 of the Act) of its own Ordinary Shares of 25p each
provided that:
(a) the maximum number of Ordinary Shares hereby authorised to be purchased is
623 million;
(b) the minimum price which may be paid for each Ordinary Share is 25p;
(c) the maximum price which may be paid for each Ordinary Share is an amount
equal to 105 per cent of the average of the middle market quotations for
the company's Ordinary Shares as derived from the London Stock Exchange
Daily Official List for the five business days immediately preceding the
day on which the Ordinary Shares are contracted to be purchased; and
(d) the authority conferred by this resolution shall, unless renewed prior to
such time, expire at the end of the next Annual General Meeting of the
company to be held in 2002 or, if earlier, on 20th November 2002 (provided
that the company may enter into a contract for the purchase of Ordinary
Shares before the expiry of this authority which would or might be
completed wholly or partly after such expiry).
/s/ Simon Bicknell
----------------------------------
Simon Bicknell
Company Secretary
Company No. 3888792
The Companies Acts 1948 to 1985
---------------------------
COMPANY LIMITED BY SHARES
---------------------------
SPECIAL RESOLUTIONS
---------------------------
GlaxoSmithKline plc
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Passed: 20th May 2002
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At the SECOND ANNUAL GENERAL MEETING of the Company held on Monday, 20th May
2002, the following resolutions were duly passed as SPECIAL RESOLUTIONS:-
7. Disapplication of pre-emption rights
THAT for the purposes of Article 12 of the Company's Articles of Association the
Directors be and are hereby empowered pursuant to section 95 of the Act to allot
equity securities (within the meaning of the Act) pursuant to the authority
conferred by Resolution 20 passed at the Annual General Meeting held on 21st May
2001, as if section 89(1) of the Act did not apply to any such allotment,
provided that this power shall be limited
(a) to the allotment of equity securities in connection with a rights issue
(as defined in Article 12.5 of the Company's Articles of Association);
(b) to the allotment (otherwise than pursuant to sub paragraph (a) above) of
equity securities up to an aggregate normal amount of (pound)77million,
and shall expire at the end of the next Annual General Meeting of the Company
to be held in 2003 or, if earlier, on 19th November 2003.
8. Purchase of own shares by the Company
THAT the Company be and is hereby generally and unconditionally authorised for
the purposes of section 166 of the Act to make market purchases (within the
meaning of section 163 of the Act) of its own Ordinary Shares of 25p each
provided that:
(a) the maximum number of Ordinary Shares hereby authorised to be purchased is
617 million;
(b) the minimum price which may be paid for each Ordinary Share is 25p;
(c) the maximum price which may be paid for each Ordinary Share is an amount
equal to 105% of the average of the middle market quotations for the
Company's Ordinary Shares as derived from the London Stock Exchange Daily
Official List for the five business days immediately preceding the day on
which the Ordinary Share is contracted to be purchased; and
(d) the authority conferred by this resolution shall, unless renewed prior to
such time, expire at the end of the next Annual General Meeting of the
Company to be held in 2003 or, if earlier, on 19th November 2003 (provided
that the Company may enter into a contract for the purchase of Ordinary
Shares before the expiry of this authority which would or might be
completed wholly or partly after such expiry).
/s/ Simon Bicknell
-----------------------------------
Simon Bicknell
Company Secretary
THE COMPANIES ACT 1985
COMPANY LIMITED BY SHARES
Memorandum of Association
of
GlaxoSmithKline plc
(as altered by Written Resolutions passed on 19 May 2000 and 4 July 2000)
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1 The Company's name is "GlaxoSmithKline plc".(1)
2 The Company is to be a public company.
3 The registered office of the Company will be situate in England.
4 The Company's objects are:
4.1 To acquire and hold the whole or any part of the share capital of Glaxo
Wellcome plc. and of the share capital of SmithKline Beecham plc.
whether directly or through any subsidiary and generally to carry on
business as an investment holding company and for that purpose to
acquire debenture stock, bonds, notes, options, obligations and
securities issued or guaranteed by any company wherever incorporated or
carrying on business and debentures, debenture stock, bonds, notes,
obligations and securities issued or guaranteed by any government,
sovereign ruler, commissioners, public body or authority, supreme,
dependent, municipal, local or otherwise in any part of the world and
to exercise and enforce all rights and powers conferred by or
incidental to the ownership of any such shares, stock, obligations or
other securities including, without prejudice to the generality of the
foregoing all such powers of veto or control as may be conferred or
capable of exercise whether by virtue of the holding by the Company of
some special proportion of the issued or nominal amount thereof or
otherwise and to provide managerial, financial and other executive,
supervisory and consultant services for or in relation to any company
in which the Company is interested and all or any part of the
businesses or operations of any such company upon such terms as may be
thought fit.
4.2 To carry on business as a general commercial company and to carry on
any trade or business or activity of any nature whatsoever which may
seem to the directors to be capable of being conveniently or
advantageously carried on, or to be expedient with a view to directly
or indirectly enhancing the value of or to rendering profitable or more
profitable any of the Company's assets or utilising or developing its
skills, know-how or expertise.
____________________
(1) The Company was incorporated as Trushelfco (no.2577) on 6 December 1999.
On 14 January 2000 the Company's name was changed to Glaxo SmithKline Limited.
On 22 May 2000, the Company was re-registered as a public company with the name
Glaxo SmithKline plc.
On 21 June 2000, the Company's name was changed to GlaxoSmithKline plc.
4.3 To subscribe, underwrite, purchase, or otherwise acquire, and to hold,
dispose of, and deal with, any shares or other securities or
investments of any nature whatsoever, and any options or rights in
respect thereof or interests therein, and to buy and sell foreign
exchange.
4.4 To draw, make, accept, endorse, discount, negotiate, execute and issue,
and to buy, sell and deal with bills of exchange, promissory notes, and
other negotiable or transferable instruments or securities.
4.5 To amalgamate or enter into partnership or any joint venture or
profit/loss-sharing arrangement or other association with any company,
firm, person or body.
4.6 To purchase or otherwise acquire and undertake all or any part of the
business, property and liabilities of any company, firm, person or body
carrying on any business which the Company is authorised to carry on or
possessed of any property suitable for the purposes of the Company.
4.7 To promote, or join in the promotion of, any company, whether or not
having objects similar to those of the Company.
4.8 To borrow and raise money and to secure or discharge any debt or
obligation of or binding on the Company in such manner as may be
thought fit and in particular by mortgage and charges upon all or any
part of the undertaking, property and assets (present and future) and
the uncalled capital of the Company, or by the creation and issue of
debentures, debenture stock or other securities of any description.
4.9 To advance, lend or deposit money or give credit to or with any
company, firm or person on such terms as may be thought fit and with or
without security.
4.10 To guarantee or give indemnities or provide security, whether by
personal covenant or by mortgage or charge upon all or any part of the
undertaking, property and assets (present and future) and the uncalled
capital of the Company, or by all or any such methods, for the
performance of any contracts or obligations, and the payment of capital
or principal (together with any premium) and dividends or interest on
any shares, debentures or other securities, of any person, firm or
company including (without limiting the generality of the foregoing)
any company which is for the time being a holding company of the
Company or another subsidiary of any such holding company or is
associated with the Company in business.
4.11 To issue any securities which the Company has power to issue for any
other purpose by way of security or indemnity or in satisfaction of any
liability undertaken or agreed to be undertaken by the Company.
4.12 To procure the registration, recognition or incorporation of the
Company in or under the laws of any territory outside England.
4.13 To subscribe or guarantee money for any national, charitable,
benevolent, public, general or useful object or for any purpose which
may be considered likely directly or indirectly to further the
interests of the Company or of its members.
4.14 (i) To establish and maintain or contribute to any pension or
superannuation funds for the benefit of, and to give or procure the
giving of donations, gratuities, pensions, allowances or emoluments to,
any individuals who are or were at any time in the employment or
service of the Company or of any associated company, or who are or were
at any time directors or officers of the Company or of any associated
company, and the wives, widows, families and dependants of any such
individuals; to establish and subsidise or subscribe to any
institutions, associations, clubs or funds which may be considered
likely to benefit any such persons or to further the interests of the
Company or of any associated company; and to make payments for or
towards the insurance of any such persons.
(ii) To establish and maintain, and to lend or contribute to, any
scheme for encouraging or facilitating the holding of shares or
debentures or other securities in the Company or any associated company
by or for the benefit of its employees or former employees, or those of
any associated company, or by or for the benefit of such other persons
as may for the time being be permitted by law, or any scheme for
sharing profits with its employees or those of its associated
companies, and (so far as for the time being permitted by law) to lend
money to employees of the Company or of any associated company with a
view to enabling them to acquire shares in the Company or any
associated company.
(iii) (a) To purchase and maintain insurance for or for the benefit of
any persons who are or were at any time directors, officers or
employees or auditors of the Company, or of any associated company, or
who are or were at any time trustees of any pension fund in which any
employees of the Company or of any associated company are interested,
including (without prejudice to the generality of the foregoing)
insurance against any liability incurred by such persons in respect of
any act or omission in the actual or purported execution and/or
discharge of their duties and/or in the exercise or purported exercise
of their powers and/or otherwise in relation to the Company or
associated company or pension fund and (b) to such extent as may be
permitted by law otherwise to indemnify or to exempt any such person
against or from any such liability.
(iv) In this paragraph 4.14:
(a) an "associated company" is any company (i) which is the
Company's holding company or (ii) in which the Company or its
holding company or any of the predecessors of the Company or of
such holding company has any interest whether direct or
indirect or (iii) which is in any way allied to or associated
with the Company or its holding company or any of the
predecessors of the Company or of such holding company, or (iv)
which is a subsidiary undertaking of any other associated
company; and
(b) "holding company" and "subsidiary undertaking" have the
same meanings as in the Companies Act 1985 as amended by the
Companies Act 1989.
4.15 To distribute among members of the Company 'in specie' or otherwise, by
way of dividend or bonus or by way of reduction of capital, all or any
of the property or assets of the Company, or any proceeds of sale or
other disposal of any property or assets of the Company, with and
subject to any incident authorised and consent required by law.
4.16 To do all or any of the things and matters aforesaid in any part of the
world, and either as principals, agents, contractors, trustees or
otherwise, and by or through trustees, agents, subsidiary companies or
otherwise, and either alone or in conjunction with others.
4.17 To do all such other things as may be considered to be incidental
or conducive to any of the above objects.
And it is hereby declared that (a) the objects set forth in each
sub-clause of this clause shall not be restrictively construed but the
widest interpretation shall be given thereto, and (b) the word
"company" in this clause, except where used in reference to the
Company, shall be deemed to include any partnership or other body of
persons, whether corporate or unincorporated and whether domiciled in
the United Kingdom or elsewhere, and (c) except where the context
expressly so requires, none of the several paragraphs of this clause,
or the objects therein specified, or the powers thereby conferred shall
be limited by, or be deemed merely subsidiary or auxiliary to, any
other paragraph of this clause, or the objects specified in such
paragraph, or the powers thereby conferred but may be carried out in as
full and ample manner and shall be construed in as wide a sense as if
each of the said paragraphs defined in the objects of a separate,
distinct and independent company.
5 The liability of the members is limited.
6 The Company's share capital is (pound)100 divided into 100 Shares of
(pound)1 each and the company shall have the power to divide the
original or any increased capital into several classes, and to attach
thereto any preferential, deferred, qualified or other special rights,
privileges, restrictions or conditions.(2), (3), (4)
We, the several persons whose names and addresses are subscribed, are desirous
of being formed into a company, in pursuance of the Memorandum of Association,
and we respectively agree to take the number of shares in the capital of the
Company set opposite our respective names.
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NAMES, ADDRESSES AND DESCRIPTIONS Number of Shares taken
OF SUBSCRIBERS by each Subscriber
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For and on behalf of
TRUCIDATOR NOMINEES LIMITED,
35 Basinghall Street,
London EC2V 5DB
One
J.S. HAW Director
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For and on behalf of
TREXCO LIMITED,
35 Basinghall Street,
London EC2V 5DB
One
D.C.J. ROWE Authorised Signatory
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Dated the 26th day of November 1999
WITNESS to the above signatures:-
R.H. Smith
35 Basinghall Street,
London EC2V 5DB
___________________
(2) By a Written Resolution passed on 19 May 2000 each ordinary share of
1 pound each in the capital of the Company was sub-divided into four
ordinary shares of 25 pence each.
(3) By a Written Resolution passed on 19 May 2000 the authorised share capital
of the Company was increased to (pound) 2,500,000,000 divided into
9,999,800,000 ordinary shares of 25 pence each and 50,000 redeemable
preference shares of (pound) 1 each.
(4) On 31 August 2001 50,000 redeemable preference shares of (pound) 1 each were
redeemed in accordance with Article 3.2 of the Company's Articles of
Association. The nominal amount of such shares was converted into 200,000
ordinary shares of 25 pence each, resulting in the Company's authorised
share capital of 2,500,000,000 pounds being comprised of 10,000,000,000
ordinary shares of 25 pence each.
Company No. 3888792
The Companies Act 1985
Company Limited by Shares
ARTICLES OF ASSOCIATION
of
GLAXOSMITHKLINE plc
(adopted by a Written Resolution passed on 4 July 2000)
PRELIMINARY ARTICLES
1 Table A and other standard regulations do not apply
The regulations in Table A of the Companies (Tables A to F) Regulations
1985, and any similar regulations in any other legislation relating to
companies, do not apply to the Company.
2 The meaning of the Articles
2.1 The following table gives the meaning of certain words and phrases as
they are used in these Articles. However, the meaning given in the
table does not apply if that is inconsistent with the context in which
a word or phrase appears. After the Articles there is a glossary which
explains various words and expressions. The glossary also explains some
of the words in the Memorandum. But the Glossary is not part of the
Memorandum or Articles, and it does not affect their meaning. In the
table below and the rest of Article 2 the words which are explained in
the Glossary are printed in italics.
Words Definitions
amount (of a share) This refers to the 'nominal value' of the
share.
Approved Depositary This means someone appointed:
(a) to hold the Company's shares or any rights
or interests in any of the Company's
shares; and
(b) to issue securities, documents of title or
other documents which evidence that the
holder of them owns or is entitled to
receive the shares, rights or interests
held by the Approved Depositary.
A nominee acting for someone appointed to do
these things will also be treated as an Approved
Depositary. But the arrangements for the
Approved Depositary to do the things described
above must be approved by the directors. The
trustees of any scheme or arrangements for or
principally for the benefit of employees of the
Group will also be treated as an Approved
Depositary unless the directors decide
otherwise. References in the Articles to an
Approved Depositary or to shares held by it
refer only to an Approved Depositary and to its
shares held in its capacity as an Approved
Depositary.
Articles The Company's Articles of Association, including
any changes made to them.
Companies Act The Companies Act 1985.
company Includes any corporate body.
the Company GlaxoSmithKline plc
CREST Regulations The Uncertificated Securities Regulations 1995
(SI 1995 No 95/3272).
director A director of the Company.
dividend arrears This includes any dividends on shares with
'cumulative' rights which could not be paid, but
which have been carried forward.
electronic mail Includes any electronic transmission in any form
through any medium.
existing shares Shares which are in 'issue' at the relevant
(of any kind) time.
General Meeting A meeting of holders of the Company's shares
held in accordance with these Articles.
Group The Company and its subsidiaries.
holder A person whose name is entered in the Register
as a holder of any of the Company's shares.
legislation The Companies Act, the CREST Regulations and all
other laws and regulations applying to the
Company.
London Stock Exchange London Stock Exchange plc.
Official List The Official List of the UK Listing Authority
Operator A person who is approved by the Treasury under
the Crest Regulations as an operator of a
relevant system.
Ordinary Shareholder A holder of the Company's Ordinary Shares.
paid-up share or other Includes a share or other security which is
security treated ("credited") as 'paid up'.
pay Includes any kind of reward or payment for
services.
proxy This includes a person appointed as a proxy or
entitled to the same rights as a person so
appointed in accordance with Article 70.
recognised clearing A clearing house granted recognition under the
house Financial Services Act 1986.
recognised investment An investment exchange granted recognition
exchange under the Financial Services Act 1986.
Register The Company's register of 'members'.
Registered Office The Company's registered office.
relevant system A relevant system as defined in the CREST
Regulations in which the Operator of the
relevant system has permitted the Company's
shares or securities (or the relevant shares or
securities) to be transferred.
rights of any share The rights attached to the share when it is
issued, or afterwards.
Seal The Company's Common Seal, or any official seal
kept by the Company under section 40 of the
Companies Act (called a Securities Seal).
Secretary Any person appointed by the directors to do work
as the Company Secretary including but not
limited to any joint, assistant or deputy
secretary.
shareholders' meeting Includes both a General Meeting of the Company
and a meeting of any class of holders of the
Company's shares.
subsidiary A "subsidiary undertaking", as defined in
section 258 of the Companies Act.
terms of a share The terms on which a share was issued.
United Kingdom Great Britain and Northern Ireland.
United States The United States of America.
in writing In writing, or any substitute for writing, or a
combination of the two.
2.2 References to a 'debenture' include 'debenture stock' and references to
a 'debenture holder' include a 'debenture stockholder'.
2.3 Where the Articles refer to a person who is 'automatically entitled to
a share by law', this includes a person who is entitled to the share as
a result of the death, or bankruptcy, of a shareholder.
2.4 Words which refer to a single number also refer to plural numbers, and
the other way around.
2.5 Words which refer to males also refer to females, to companies and so
on.
2.6 References to a 'person' or 'people' include companies, 'unincorporated
associations' and so on.
2.7 References to 'the directors' refer to the directors acting as the
board of directors, unless this meaning is inconsistent with the
context in which this expression appears.
2.8 References to 'an officer' shall include a director, manager and the
Secretary, but shall not include an auditor.
2.9 Any headings in these Articles are only included for convenience.
They do not affect the meaning of the Articles.
2.10 When any legislation, or a specific provision of legislation, is
referred to, this includes any amendment to such legislation or
provision, as well as any later legislation in which the legislation or
provision is included.
2.11 When any legislation or the Articles are referred to, the version which
is current at any particular time will apply.
2.12 Any word or expression which is defined in the Companies Act or the
CREST Regulations means the same in the Articles, unless the Articles
define it differently, or the way in which the word is used is
inconsistent with the definition given in the Companies Act or the
CREST Regulations.
2.13 Where the Articles give a power or authority to anybody, this power or
authority can be used on any number of occasions, unless the way in
which the word is used does not allow this meaning.
2.14 Where the Articles say that anything can be done by passing an
'Ordinary Resolution', this can also be done by passing a 'Special
Resolution' or an 'Extraordinary Resolution' and where they say
anything can be done by passing an 'Extraordinary Resolution', this can
also be done by passing a 'Special Resolution'.
2.15 All such of the provisions of these Articles as are applicable to
paid-up shares shall apply to stock and the words "share" and
"shareholder" shall be construed accordingly.
2.16 Where the Articles refer to any document being 'made effective' this
means being signed, sealed or executed in some other legally valid way.
2.17 Where the Articles refer to 'months' or 'years', these are calendar
months or years.
2.18 Where the Articles refer to 'clear days', the number of days does not
include the two days between which the interval is measured. For
example if notice is required to be given a number of clear days before
a meeting, neither the date notice is delivered nor the date of the
meeting are taken into account.
2.19 Where the Articles refer to a share being (or to shares held) in
certificated form, this means that title to the share is recorded on
the 'Register' and is evidenced by a share certificate.
2.20 Where the Articles refer to a share being (or to shares held) in
uncertificated form, this means that title to the share is recorded on
the 'Register' but is not evidenced by a share certificate, and that it
may be transferred by means of the relevant system.
SHARE CAPITAL
3 Form of the Company's share capital
The Company's share capital at the date when these Articles are adopted
is (pound)2,500,000,000 made up of 9,999,800,000 Ordinary Shares of 25
pence each and 50,000 redeemable preference shares of (pound)1 each.
The rights attaching to the redeemable preference shares shall be as
follows:-
3.1 As regards income and capital:
(a) on a return of capital on winding-up or otherwise the assets of
the Company available for distribution among the members shall
be applied first in repaying in full the holders of the
redeemable preference shares the amounts paid up on such
shares; and
(b) except as provided in Article 3.1(a) above the redeemable
preference shares shall carry no right to participate in the
profits of the Company available for distribution by way of
dividend or otherwise or the assets of the Company.
3.2 As regards redemption:
(a) subject to the provisions of the Companies Act and Article
3.2(b) below, the Company shall redeem the redeemable
preference shares at par either:
(i) on sixty business days' notice given at any time after
the date on which the merger of Glaxo Wellcome plc and
SmithKline Beecham plc to be effected by way of a scheme
of arrangement becomes effective, such notice to be
given by either the directors of the Company or the
holders of the redeemable preference shares; or
(ii) on 31 December 2000;
(b) if the Company shall at any time be unable in compliance with
the provisions of the Companies Act to redeem the redeemable
preference shares on the date specified in accordance with
Article 3.2(a) above, then the Company shall redeem such shares
as soon as it is able to comply with such provisions of the
Companies Act;
(c) on the redemption of any redeemable preference shares the
nominal amount of such redeemable preference shares comprised
in the authorised share capital of the Company shall thereafter
be converted into ordinary shares of 25 pence each in the
Company without any further resolution or consent; and
(d) subject to paragraphs 3.2(a) and 3.2(b) above any notice of
redemption served shall specify the date fixed for redemption
and upon such date the holders of the redeemable preference
shares shall be bound to present the certificate in respect
thereof in order that the certificate may be cancelled. Upon
delivery the Company shall pay to such holders the amount due
to them in respect of such redemption.
3.3 As regards voting, the holders of the redeemable preference shares
shall not be entitled to receive notice of or to attend and vote at any
general meeting of the Company unless a resolution is to be proposed:
(a) to wind up the Company; or
(b) which varies, modifies, alters or abrogates any of the rights
attaching to the redeemable preference shares.
4 The power to increase capital
4.1 The Company's shareholders can increase the Company's share capital by
passing an Ordinary Resolution. The resolution will fix the amount of
the increase and the nominal amount of the new shares and the currency
or currencies of the shares.
4.2 Any legislation and the provisions of the Articles about payment of
calls, transfer, automatic entitlement by law, forfeiture, lien and all
other things apply to new shares under Article 4.1 in the same way as
if they were part of the Company's existing share capital.
5 The power to change capital
The Company's shareholders can pass Ordinary Resolutions to do any of
the following:
(a) to consolidate, or consolidate and then divide, all or any of
its share capital into shares of a larger nominal amount than
the existing shares;
(b) to cancel any shares which have not been taken, or agreed to be
taken, by any person at the date of the resolution, and reduce
the amount of the Company's share capital by the amount of the
cancelled shares;
(c) to divide some or all of its shares into shares which are of a
smaller nominal amount than is fixed in the Memorandum of
Association. This is subject to any restrictions under the
legislation. The resolution may provide that, as between the
holders of the divided shares, different rights and
restrictions of a kind which the Company can apply to new
shares may apply to different divided shares.
6 Fractions of shares
6.1 If any shares are consolidated or divided, the directors have power to
deal with any fractions of shares which result or any other difficulty
that arises. For example the directors can sell any shares representing
fractions to any person (including the Company, if the legislation
allows this) and can authorise someone to transfer the shares sold to
the new holder. If the directors decide to sell, they can distribute
the proceeds of sale among members in proportion to their fractional
entitlements or retain some or all of the net proceeds for the benefit
of the Company. The buyer does not need to take any steps to see how
any money he is paying is used. Nor will his ownership be affected if
the sale was irregular or invalid in any way.
6.2 So far as the legislation allows, in effecting divisions and/or
consolidations the directors can treat a shareholder's shares held in
certificated form and uncertificated form as separate holdings. The
directors can also cause any shares which result and which represent
fractions to be entered in the Register as shares in certificated form
where this is desirable in order to sell them.
7 The power to reduce capital
7.1 The Company's shareholders can pass a Special Resolution to:
(a) reduce its share capital in any way; or
(b) reduce any capital redemption reserve, share premium account or
other undistributable reserve in any way.
7.2 This is subject to any restrictions under the Companies Act.
8 Buying back shares
8.1 The Company can buy back, or agree to buy back in the future, any
shares of any class (including redeemable shares), if the legislation
allows this. However, if the Company has existing shares with special
rights, then the Company can only buy back shares if it is allowed by
the special rights of those shares to do so or if the holders of that
class of shares pass an Extraordinary Resolution agreeing that the
Company may do so.
8.2 The Company can pay any price permitted by the legislation for shares
which it buys back (including buying back at above or below the nominal
value of the shares).
8.3 It can use any method for selecting which shares are to be bought back.
SHARES
9 The special rights of new shares
9.1 If the Company issues new shares, the new shares can have any rights or
restrictions attached to them. The rights can take priority over the
rights of existing shares, or existing shares can take priority over
them, or the new shares and the existing shares can rank equally. These
rights and restrictions can apply to sharing in the Company's profits
or assets. Other rights and restrictions can also apply, for example
special voting rights or restrictions on the right to vote.
9.2 The rights and restrictions referred to in Article 9.1 can be decided
by an Ordinary Resolution. The directors can also take these decisions
if they do not conflict with any resolution passed by the shareholders.
9.3 If the legislation allows this, the rights of any new shares can
include rights for the holder and/or the Company to have them redeemed.
These rights can either be set out in the Articles or be decided by a
Special Resolution passed by the shareholders.
9.4 The ability to attach particular rights and restrictions to new shares
may be restricted by special rights previously given to holders of any
existing shares.
10 The directors' power to deal with shares
The directors can decide how to deal with any shares which have not
been issued. The directors can allot them at any time and on any terms
except that Article 9.3 applies to redeemable shares. The directors can
also grant options to give people a right to acquire shares in the
future, or the directors can dispose of the shares in any other way.
The directors are free to decide who they deal with, when they deal
with the shares, and the terms on which they deal. But they must obey:
(a) the other provisions of the Articles; and
(b) the provisions of the legislation relating to authority,
pre-emption rights and other matters;
(c) any resolution passed by the shareholders of the Company under
those provisions of the legislation.
11 The directors' authority to allot "relevant securities"
11.1 This Article regulates the authority of the directors to allot
'relevant securities'. The meaning of relevant securities is given in
section 80 of the Companies Act.
11.2 The directors are authorised, generally and without conditions, under
section 80 of the Companies Act, to allot shares, and rights to shares,
which are relevant securities. They are authorised to allot them for
each period decided on by the shareholders as referred to in Article
11.3. But this authority is restricted by the limit on the maximum
amount of relevant securities set out in the resolution which decides
on, renews or extends the period for which the authority is to last or
in any other resolution passed by the shareholders (including a
resolution passed before these Articles were adopted).
11.3 The shareholders can decide on any period for which the authority under
Article 11.2 is to last by passing an Ordinary Resolution.
11.4 During the period specified in any resolution under Article 11.3, the
directors can make offers, and enter into agreements, which would, or
might, need shares to be allotted after those periods.
11.5 In working out any maximum amount of securities referred to in this
Article, the nominal value of rights to subscribe for shares, or to
convert any securities into shares, will be taken as the nominal value
of the shares which would be allotted if the subscription or conversion
takes place.
12 The directors' authority to allot "equity securities"
12.1 This Article regulates the power of the directors to allot 'equity
securities' for cash. The meaning of equity securities is given in
section 94 of the Companies Act.
12.2 Where the directors have general authority under section 80 of the
Companies Act under Article 11.2, they have the power to allot equity
securities, entirely paid for in cash under that authority, free of the
restriction in section 89(1) of the Companies Act. This power will be
for each period decided on by the shareholders as referred to in
Article 12.3.
12.3 The shareholders can decide on any period for which the power under
Article 12.2 is to last by passing a Special Resolution.
12.4 There is no limit on the maximum amount of equity securities which can
be allotted under the power in Article 12.2 where the allotment is in
connection with a rights issue (which is defined in Article 12.5). In
all other cases, the maximum amount of equity securities which can be
allotted under that power is the amount stated in the Special
Resolution which decides on the period for which the power is to last
as referred to in Article 12.3.
12.5 In Article 12.4 'rights issue' means an offer of equity securities
which is open to the following people for a period decided on by the
directors:
(a) people who are registered holders of Ordinary Shares on a
particular date, in proportion to their holdings of Ordinary
Shares; and
(b) people who are registered on a particular date as holders of
other classes of equity securities which give them the right to
receive the offer or which permit them to receive the offer and
the directors decide that it is appropriate for them to do so.
12.6 However, the directors may do the following things, and the issue will
still be treated as a rights issue for the purpose of this Article if
they do so:
(a) sell any fractions of equity securities to which people would
be entitled and keep the net proceeds for the Company's
benefit;
(b) make the rights issue subject to any limits or restrictions
which the directors think are necessary or appropriate to deal
with legal or practical problems under the laws of any
territory, or under the requirements of any recognised
regulatory body, or stock exchange, in any territory (other
than the United Kingdom); or
(c) treat a shareholder's holdings in certificated form and in
uncertificated form separately.
12.7 During the period specified in any Special Resolution under Article
12.3, the directors can make offers, and enter into agreements, which
would, or might, need shares to be allotted after those periods.
12.8 In working out any maximum amounts of securities referred to in this
Article, the nominal value of rights to subscribe for shares, or to
convert any securities into shares, will be taken as the nominal value
of the shares which would be allotted if the subscription or
conversion takes place.
13 Power to pay commission and brokerage
The Company can use all the powers given by the legislation to pay
commission or brokerage (a special form of commission) to any person
who:
(a) applies, or agrees to apply, for any new shares; or
(b) gets anybody else to apply, or agree to apply for, any new
shares.
14 Renunciations of allotted but unissued shares
The directors can allot shares on terms which include the right to
transfer the allotment to another person before any person has been
entered on the Register. This is known as the right to renounce the
allotment. The directors can impose terms and conditions regarding
rights to renounce.
15 No trusts or similar interests recognised
15.1 The Company will only be affected by, or recognise, a current and
absolute right to whole shares. The fact that any share, or any part of
a share, may not be owned outright by the registered owner, for example
if a share is held on any kind of trust, is not of any concern to the
Company.
15.2 The only exception to what is said in Article 15.1 is for any right:
(a) which is expressly given by these Articles; or
(b) which the Company has a legal duty to recognise.
SHARE CERTIFICATES
16 Certificates
16.1 When a shareholder is first registered as the holder of any class of
shares in certificated form, he is entitled, without payment, to one
certificate for all the shares in certificated form of that class which
he holds and if he holds shares in certificated form of more than one
class he is entitled to a separate share certificate for each class of
shares.
16.2 If a shareholder gets more shares of any class he is entitled, to the
extent that these extra shares are to be held in certificated form and
provided that he pays such reasonable charge as the directors may
decide, to another certificate for the extra shares.
16.3 If a shareholder transfers part of his shares covered by a certificate,
he is entitled, without payment, to a new certificate for the balance
to the extent that the balance is to be held in certificated form.
16.4 The Company does not have to issue more than one certificate for any
share held in certificated form, even if that share is held jointly.
16.5 When, in the case of a share held in certificated form jointly by
several persons, the Company delivers a certificate to one joint
shareholder, this is treated as delivery to all of the joint
shareholders.
16.6 The Company can deliver a certificate to a broker or agent who is
acting for a person who is buying the shares in certificated form, or
who is having the shares in certificated form transferred to him.
16.7 The directors can decide how share certificates are made effective.
For example, they can be:
(a) signed by, or printed with a copy of the signature(s) of, one or
more directors;
(b) sealed with the Seal; or
(c) printed with a copy of the Seal.
16.8 A share certificate must state the number, class and any
distinguishing numbers of the shares to which it relates and the
amount paid up on those shares. It cannot be for shares of more than
one class.
16.9 Unless the legislation requires otherwise, the time limit for the
Company to provide a share certificate under this Article in respect of
shares in certificated form is:
(a) one month after the allotment of a new share (or any longer
period provided by its terms of issue);
(b) five business days after a transfer of fully paid shares is
presented for registration; or
(c) two months after a transfer of partly paid shares is presented
for registration.
16.10 The Company does not have to issue a certificate to a recognised
clearing house or to its nominee, or to the nominee of a recognised
investment exchange.
17 Replacement share certificates
17.1 If a shareholder has two or more share certificates for shares of the
same class, he can ask the Company for these to be cancelled and
replaced by a single new certificate. The Company must comply with such
a request, but may request that the shareholder pays such reasonable
charge as the directors may decide.
17.2 A shareholder can ask the Company to cancel and replace a single share
certificate with two or more certificates, for the same total number of
shares. The Company may comply with such a request and may request that
the shareholder pays such reasonable charge as the directors may
decide.
17.3 A shareholder can ask the Company for a new certificate if the original
is:
(a) worn out or defaced; or
(b) said to be lost, stolen, or destroyed.
17.4 If a certificate has been worn out or defaced, the Company can require
the certificate to be delivered to it before issuing a replacement. If
a certificate is said to be lost, stolen or destroyed, the Company can
require satisfactory evidence, and an indemnity, before issuing a
replacement.
17.5 The Company can require the shareholder to pay any exceptional
out-of-pocket expenses which the Company reasonably incurs in
investigating the evidence or preparing a form of indemnity when
issuing any replacement share certificates under Article 17.4.
Otherwise, the replacement will be issued free of charge.
17.6 In the case of joint shareholders, only the shareholder whose name is
listed before the names of the other joint shareholders on the Register
for the shares concerned can request replacement certificates under
this Article.
CALLS ON SHARES
18 The directors can make calls on shares
18.1 The directors can call on shareholders to pay any money which has not
yet been paid to the Company for their shares. This includes both the
nominal value of the shares and any premium which may apply. They can
also make calls on people who are automatically entitled to shares by
law. A shareholder who is called on to pay money on his shares is
required to pay even if he later transfers those shares to someone
else. If the terms of issue of the shares allow this, the directors
can:
(a) make calls as often, and whenever, they think fit;
(b) decide when and where the money is to be paid;
(c) decide that the money may be paid by instalments;
(d) wholly or partially revoke or postpone any call; and
(e) fix a rate of interest applicable to late payments.
18.2 A call is treated as having been made as soon as the directors pass a
resolution authorising it.
19 The liability for calls
A member who has received at least 14 clear days' notice stating the
amount called and when and where payment must be made must pay the call
as required by the notice. Joint shareholders are liable jointly and
severally (which, in general terms, means together and separately) to
pay any money called for.
20 Interest on unpaid calls
If the person due to pay any money called for in this way does not pay
it by the day that it is due, he is liable to pay interest on the
money. This interest will run from the day the money is due until it
has actually been paid. The yearly interest rate is that fixed by the
terms of issue of the share, failing which it is that stated in the
notice of call, or the "appropriate rate" as defined in the Companies
Act. But the directors can decide not to require any or all of this
interest to be paid.
21 Sums which are payable when a share is allotted are treated as a call
If the terms of a share require any money to be paid at the time the
share is allotted, or at any fixed date, then this money will be
treated in the same way as a valid call for money on shares which is
due on the same date. If this money is not paid, everything in the
Articles relating to non-payment of calls applies. This includes
Articles which allow the Company to forfeit or sell shares and to claim
interest.
22 Calls can be for different amounts
On or before an issue of shares, the directors can decide that
shareholders may be called on to pay different amounts, or that they
may be called on at different times.
23 Paying calls early
The directors can accept payment in advance of some or all of the money
from a shareholder before he is called on to pay the money. The
directors can agree to pay interest on money paid in advance until it
would otherwise be due to the Company. The rate of interest can be
agreed upon by the directors and the shareholder except that it must
not be higher than the "appropriate rate" as defined in the Companies
Act (except as stated in a resolution of the shareholders passed at a
General Meeting).
FORFEITING SHARES AND LIENS OVER SHARES
24 Notice following non-payment of a call
Articles 24 to 34 apply if a shareholder fails to pay the whole of the
amount payable under the terms of allotment of a share, or amount of a
call, or an instalment of a call, by the day that it is due. They also
apply in the same way to a person who is automatically entitled to a
share by law. The directors can serve a notice on him any time after
the date it is due, if the whole amount immediately due has not been
paid.
25 Contents of the notice of non-payment
This notice must:
(a) demand payment of the amount immediately payable, and may also
require payment of any interest and any of the Company's
expenses caused by the failure to pay;
(b) give a date by when the total referred to immediately above
must be paid, but this must be at least 14 clear days after the
notice is served on the shareholder;
(c) say where the payment must be made; and
(d) say that if the full amount demanded is not paid by the time
stated, and where stated, the Company can forfeit the shares on
which the amount payable was due.
26 Forfeiture if the notice is not complied with
If the notice is not complied with, the shares that it relates to can
be forfeited at any time while any amount (including interest and
expenses) is still outstanding. This is done by the directors passing a
resolution stating that the shares have been forfeited. The directors
can accept the surrender of any share that would otherwise be
forfeited. If a share is surrendered it will be treated as if it had
been forfeited.
27 Forfeiture will include unpaid dividends
All dividends or other amounts which are due on the forfeited shares,
but have not yet been paid, will also be forfeited.
28 Dealing with forfeited shares
28.1 The Company must notify a person whose shares have been forfeited. This
includes a person who was entitled to the share by law. An entry of the
notice and the date of forfeiture must be made in the Register. If the
Company does not comply with the requirements of this Article 28.1, the
forfeiture is still valid.
28.2 A share forfeited or surrendered under Article 26 belongs to the
Company. The directors can sell or dispose of any forfeited share on
any terms, and in any way that they decide. This can be with, or
without, a credit for any amount previously paid up for the share. It
can be sold or disposed of to any person, including the previous
shareholder, or the person who was previously automatically entitled by
law to the share. The directors can, if necessary, authorise any person
to transfer a forfeited share to the new holder.
29 Cancelling forfeiture
After a share has been forfeited, the directors can cancel the
forfeiture. But they can only do this before the share has been sold or
disposed of. This can be on any terms that they decide.
30 The position of shareholders after forfeiture
A shareholder loses all rights in connection with forfeited shares and,
if the shares are in certificated form, must surrender any certificate
for those shares to the Company for cancellation. A person is still
liable to pay calls which had been made, but not paid, before the
forfeiture of his shares. He must also pay interest on the unpaid
amount, until it is paid. The interest rate will be the rate payable
before the shares were forfeited (or, if no interest was payable, at
the "appropriate rate" as defined in the Companies Act). He continues
to be liable for all claims and demands which the Company could have
made relating to the forfeited share. He is not entitled to any credit
for the value of the share when it was forfeited or for money received
by the Company under Article 28 unless the directors decide to allow
credit for all or any of that value. None of the rights relating to the
forfeited share continue to exist after forfeiture unless the Articles
or the legislation require it.
31 The Company's lien on shares
The Company has a lien on all partly paid shares. This lien has
priority over claims of others to the shares. This lien is for any
money owed to the Company for the shares. This includes money called or
payable at a fixed time on the share, even if it is not yet payable.
The directors can decide to give up any lien which has arisen. They can
also decide to suspend or cancel any lien which would otherwise apply
to particular shares. The lien extends also to dividends and other
amounts payable in respect of the share.
32 Enforcing the lien by selling the shares
If the directors want to enforce the lien referred to in Article 31,
they can sell some or all of the shares in any way they decide. The
directors can authorise someone to transfer the shares sold to the new
holder. But they cannot sell the shares until all of these conditions
are met:
(a) the money owed by the shareholder must be immediately payable;
(b) the directors must have given a written notice to the
shareholder. This notice must say how much is due. It must also
demand that this money is paid, and say that the shareholder's
shares can be sold if the money is not paid;
(c) the notice just referred to must have been served on the
shareholder, or on any person who is automatically entitled to
the shares by law; and
(d) the money has not been paid by at least 14 clear days after the
notice has been served.
33 Using the proceeds of the sale
If the directors sell any shares under Article 32, the net proceeds
will first be used to pay the Company's expenses associated with the
sale and then to pay off the amount which is then payable to the
Company. The directors will pay any money left over to the former
shareholder, or to anybody who would otherwise have been automatically
entitled to the shares by law. But the Company's lien will also apply
to any money left over, to cover any money still due to the Company
which is not yet payable: the Company has the same rights over this
money as it had over the shares immediately before they were sold. The
Company need not pay over anything left under this Article, in the case
of shares in certificated form, until the certificate representing the
shares sold has been delivered to the Company for cancellation.
34 Evidence of forfeiture or sale and position of new holder
34.1 A director, or the Secretary, can make a statutory declaration which
declares:
(a) that he is a director or the Secretary of the Company;
(b) that a share has been properly surrendered, forfeited or sold to
satisfy a lien under the Articles; and
(c) when the share was surrendered, forfeited or sold.
34.2 This will be evidence of these facts which cannot be disputed. If this
declaration is delivered to the new holder of a share, with any
completed transfer form which is required, this gives the new holder
good title to the share.
34.3 The new holder of a share which has been forfeited, surrendered or sold
under Article 32 does not need to take any steps to see how any money
he may be paying for the share is used, including whether that money is
transferred to the person whose shares are being transferred. The new
shareholder's ownership of the share will not be affected if the steps
taken to surrender or forfeit the share, or the sale or disposal of the
share, were invalid or irregular, or if anything that should have been
done was not done.
CHANGING SHARE RIGHTS
35 Changing the special rights of shares
35.1 If the Company's share capital is split into different classes of
shares, the special rights which are attached to any of these classes
can be varied or abrogated if this is approved by an Extraordinary
Resolution. This must be passed at a separate meeting of the holders of
the relevant class of shares. This is called a 'class meeting'.
Alternatively, the holders of at least three-quarters of the existing
shares of the class (by nominal value) can give their consent in
writing. But this does not apply if the variation or abrogation is not
permitted by the legislation or the terms of issue of the shares.
35.2 The special rights of a class of shares can be varied or abrogated
while the Company is a going concern, or while the Company is being
wound up, or winding up is being considered.
35.3 All the Articles relating to General Meetings apply, with any necessary
changes, to a class meeting, except as set out in Article 35.4.
35.4 At least two people who hold (or who act as proxies for) at least
one-third of the total nominal value of the existing shares of the
class are a quorum at a class meeting. However, if this quorum is not
present at an adjourned meeting, one person who holds a share or shares
of the class (or his proxy) is a quorum. One person can be treated as
constituting a meeting for this purpose.
35.5 This Article also applies to the variation or abrogation of special
rights of shares forming part of a class. Each part of the class which
is being treated differently is viewed as a separate class in operating
this Article.
36 More about the special rights of shares
36.1 The special rights of existing shares are not regarded as varied:
(a) if new shares are created or issued; or
(b) if the Company buys back any of its own shares.
36.2 But this does not apply if the terms or rights of the existing shares
expressly say otherwise or on the allotment of new shares with more
favourable voting rights than the existing shares.
TRANSFERRING SHARES
37 General provisions about transfers of shares
37.1 Unless the Articles say otherwise, any shareholder can transfer some or
all of his shares to another person. Every transfer of shares which are
in certificated form must be in writing, and either in the usual
standard form, or in any other form approved by the directors. Every
transfer of shares which are in uncertificated form must be carried out
by means of a relevant system.
37.2 No fee is payable to the Company for transferring shares or registering
changes relating to the ownership of shares.
38 More about transfers of shares in certificated form
38.1 The transfer form must be delivered to the office where the Register is
kept or another place determined by the directors. The transfer form
must have with it:
(a) the share certificate for the shares to be transferred; and
(b) any other evidence which the directors ask for to prove that
the person wishing to make the transfer is entitled to do this.
38.2 However, if a transfer is by a recognised clearing house or its nominee
or by a recognised investment exchange, a share certificate is only
needed if a certificate has been issued for the shares in question.
38.3 A share transfer form must be signed, or made effective in some other
way, by the person making the transfer. It need not be made effective
by using a seal of that person.
38.4 A share transfer form must also be signed, or made effective in some
other way, by the person the share is being transferred to, if the
share is not a fully paid-up share. It need not be made effective by
using a seal of that person.
38.5 The person making a transfer will be treated as continuing to be the
shareholder until the name of the person to whom a share is being
transferred is put on the Register for that share.
38.6 If the Company registers a transfer, it may keep the transfer form.
38.7 A transfer form must be properly stamped (for payment of stamp duty)
where this is required.
39 Transfers which may not be registered
39.1 The directors can refuse to register a transfer of any shares in
certificated form which are not fully paid-up. They do not have to give
any reasons for refusing. But, if any of the class of shares which are
not fully paid-up are admitted to the Official List, the directors
cannot refuse to register a transfer if this would stop dealings in
those shares from taking place on an open and proper basis.
39.2 The directors can refuse to register a transfer of shares in
certificated form if a single transfer form is used to transfer more
than one class of shares. Each class needs a separate form.
39.3 The directors can refuse to register an allotment or transfer of shares
which is in favour of more than four joint holders.
39.4 If the directors decide not to register an allotment or transfer of a
share, they must notify the person to whom the shares were to be
allotted or transferred and, in the case of shares in certificated
form, the Company must return the letter of allotment or transfer form
to the person who delivered it to the Company. This must be done no
later than two months after:
(a) the Company receives the letter of allotment or transfer (in
the case of shares held in certificated form); or
(b) the instruction from the Operator of the relevant system was
received by the Company (in the case of shares held in
uncertificated form).
40 Closing the Register
40.1 In the case of shares in certificated form, the directors can decide to
suspend the registration of transfers by closing the Register for no
more than 30 days a year. This can be for part of a day, a day, or more
than a day. Suspension periods can vary between different classes of
shares.
40.2 In the case of shares in uncertificated form, the Register shall not be
closed without the consent of the Operator of a relevant system.
41 Overseas branch registers etc.
The Company can use all the powers that the legislation gives to keep
an overseas branch register, local register or other register, or to
keep duplicate registers, in any place. The directors can make and
change any regulations they decide on relating to these registers, so
far as the legislation allows this.
PERSONS AUTOMATICALLY ENTITLED TO SHARES BY LAW
42 Death of a shareholder
42.1 When a sole shareholder dies (or a shareholder who is the last survivor
of joint shareholders dies), his legal personal representatives will be
the only people whom the Company will recognise as being entitled to
his shares.
42.2 If a shareholder who is a joint shareholder dies, the remaining joint
shareholder or shareholders will be the only people whom the Company
will recognise as being entitled to his shares.
42.3 But this Article does not discharge the estate of any shareholder from
any liability.
43 Registering persons automatically entitled by law
Someone who becomes automatically entitled to a share by law can either
be registered as the shareholder, or can select someone else to have
the share transferred to. The person who is automatically entitled by
law must provide any evidence of his entitlement which is reasonably
required by the directors.
44 A person who wants to be registered must give notice
If someone who is automatically entitled to shares by law wants to be
registered as a shareholder, he must deliver or send a notice to the
Company saying that he has made this decision. He must sign this
notice, and it must be in the form which the directors require. All of
the provisions of these Articles about registering transfers of shares
apply to it. The directors have the same power to refuse to register
the automatically entitled person as they would have had in deciding
whether to register a transfer by the person who was previously
entitled to the shares.
45 Having another person registered
45.1 If someone who is automatically entitled to a share by law wants the
share to be transferred to someone else, he must do this:
(a) if the share is in certificated form, by signing a transfer
form transferring the share to the person he has selected; or
(b) if the share is in uncertificated form, by a transfer by means
of a relevant system.
45.2 The directors have the same power to refuse to register the person
selected as they would have had in deciding whether to register a
transfer by the person who was previously entitled to the shares.
46 The rights of people automatically entitled to shares by law
46.1 A person who is automatically entitled to a share by law and who gives
appropriate evidence of this to the Company is entitled to any
dividends or other money relating to the share, even though he is not
registered as the holder of that share. But the directors can withhold
the dividend and other money until a person has been properly
registered as the shareholder as laid down in the Articles. They can do
this if the person is notified that he is required to be registered and
does not comply within 60 days. They can also withhold the dividend if
the person who was previously entitled to the share could have had his
dividend withheld.
46.2 Unless he is registered as the holder of the share the person
automatically entitled to a share by law is not entitled:
(a) to receive notices of shareholders' meetings, or to attend or
vote at these meetings;
(b) to any of the other rights and benefits of being a shareholder;
unless the directors decide to allow this.
SHAREHOLDERS WHO CANNOT BE TRACED
47 Shareholders who cannot be traced
47.1 Subject to the CREST Regulations, the Company can sell any shares (by
instructing such person as the Company thinks appropriate to sell them
at the best price reasonably obtainable at the time of sale) if:
(a) during the 10 years before the earliest of the advertisements
referred to in the next point, at least three dividends have
been paid and none have been claimed;
(b) after this 10-year period, the Company announces that it
intends to sell the shares by placing an advertisement in a
national newspaper and in a newspaper appearing in the area
which includes the address held by the Company for serving
notices relating to the shares; and
(c) during this 10-year period, and for three months after the
advertisements appear, the Company has not heard from the
shareholder or any person who is automatically entitled to the
shares by law or received any indication of the whereabouts or
existence of such shareholder or other person.
If during the 10 year period, further shares have been issued to the
shareholder, and all these requirements (other than 47.1(a)) have been
satisfied in regard to the further shares, the Company may also sell
the further shares.
47.2 To sell any shares in this way, the Company can authorise someone to
transfer the shares to the new holder. This transfer will be just as
effective as if it had been made by the registered holder of the
shares, or by a person who is automatically entitled to the shares by
law. The ownership of the person to whom the shares are transferred
will not be affected even if the sale is irregular or invalid in any
way.
47.3 The net sale proceeds belong to the Company until claimed under this
Article, but it must pay these to the shareholder who could not be
traced, or to the person who is automatically entitled to his shares by
law, if that shareholder, or that other person, asks for it.
47.4 The Company must record the name of that shareholder, or the person who
was automatically entitled to the shares by law, as a creditor for this
money in its accounts. The money is not held on trust, and no interest
is payable on the money. The Company can keep any money which it has
earned by using the net sale proceeds. The Company can use the money
for its business, or it can invest the money in any way that the
directors decide. But the money cannot be invested in the Company's
shares, or in the shares of any holding company of the Company.
GENERAL MEETINGS
48 The Annual General Meeting
The Company must hold an Annual General Meeting once every year, in
addition to any other General Meetings which are held in the year. The
notice calling the meeting must say that the meeting is the Annual
General Meeting. There must not be a gap of more than 15 months between
one Annual General Meeting and the next. The directors will decide when
and where to hold the Annual General Meeting.
49 Extraordinary General Meetings and Separate General Meetings
49.1 If a General Meeting is not an Annual General Meeting, it is called an
Extraordinary General Meeting.
49.2 If a separate meeting of holders of shares of a class is called,
otherwise than for varying or abrogating the rights of the shares of
that class, the provisions of these Articles relating to General
Meetings will apply to such a meeting with any necessary changes. Any
such meeting is called a separate general meeting. For the purposes of
this Article 49.2, a General Meeting where Ordinary Shareholders are
the only shareholders who can attend and vote in their capacity as
shareholders will also constitute a separate general meeting of the
holders of the Ordinary Shares.
50 Calling an Extraordinary General Meeting
The directors can decide to call an Extraordinary General Meeting at
any time. Extraordinary General Meetings must also be called promptly
in response to a requisition by shareholders under the legislation.
51 Notice of meetings
51.1 At least 21 clear days' notice in writing (which includes, subject to
the legislation, electronic mail) must be given for every Annual
General Meeting and for any other meeting where it is proposed to pass
a Special Resolution or to pass on some other resolution of which
"special notice" under the Companies Act has been given to the
Company. For every other General Meeting at least 14 clear days'
notice in writing (which includes, subject to the legislation,
electronic mail)
must be given. However, a shorter period of notice can be given:
(a) for an Annual General Meeting, if all the members who are
entitled to attend and vote agree; or
(b) for an Extraordinary General Meeting, if a majority of the
members agree and those members hold at least 95 per cent by
nominal value of the shares which can be voted at the meeting.
51.2 Any notice of meeting must:
(a) say, if applicable, that it is an Annual General Meeting;
(b) say where the meeting is to be held;
(c) give the date and time of the meeting;
(d) give the general nature of the business of the meeting;
(e) say if any resolution will be proposed as a Special Resolution
or Extraordinary Resolution; and
(f) say with reasonable prominence that a shareholder who can
attend and vote can appoint one or more proxies (who need not
be shareholders) to vote for him on a poll.
51.3 Subject to Article 51.4, notices of meetings must be given to the
shareholders, unless the Articles or the rights of the share say they
are not entitled to receive them from the Company. Notice must also be
given to each of the directors and to the Company's auditors. The day
when the notice is served or is treated as served (see Article 146),
and the day of the meeting do not count towards the period of notice.
51.4 The Company can decide that only those persons entered on the Register
at the close of business on a day fixed by the Company are entitled to
receive notice of a meeting. This day must not be more than 21 days
before the day that the notice is sent.
51.5 If the Company cannot effectively call a General Meeting by sending
notices through the post, because the postal service is suspended or
restricted in either the United Kingdom or the United States (in this
Article called the "affected territory"), the directors can give
notice of the meeting to shareholders with addresses in the affected
territory by publishing a notice in the affected territory. If it
becomes possible to use the postal service again more than seven days
before the meeting, the Company must send confirmation of the notice
through the post. Article 142.3 describes how the advertising must be
carried out. Notice published in this way will be treated as being
properly served on shareholders who are entitled to receive it at noon
on the day when the advertisement appears.
52 The proceedings at a General Meeting will still be valid if a person
who is entitled to these things:
(a) is not given notice of the meeting;
(b) is not sent a form of proxy;
but this only applies if the omission was accidental.
53 A General Meeting can be moved at short notice
53.1 If the directors consider that it is impractical, or unreasonable, to
hold a General Meeting on the date or at the time or place stated in
the notice calling the meeting, they can move or postpone the meeting,
or do both of these things. If the directors do this, an announcement
of the date, time and place of the rearranged meeting will, if
practical, be published:
(a) in the United Kingdom, in at least two United Kingdom national
newspapers; and
(b) in the United States, in The Wall Street Journal and The New
York Times or such other newspaper published in the United
States as the directors consider to be appropriate.
53.2 Notice of the business of the meeting does not need to be given again.
The directors must take reasonable steps to ensure that any
shareholder trying to attend the meeting at the original time and
place is informed of the new arrangements. If a meeting is rearranged
in this way, proxy forms can be delivered, in the way required by
Article 79, until 48 hours before the rearranged meeting. The
directors can also move or postpone the rearranged meeting, or both,
under this Article.
PROCEEDINGS AT GENERAL MEETINGS
54 The chairman of a meeting
54.1 The Chairman of the directors will be the chairman at every General
Meeting, if he is willing and able to take the chair.
54.2 If the Company does not have a Chairman, or if the Chairman is not
willing and able to chair the meeting, a Vice-Chairman will chair the
meeting if he is willing and able to take the chair. If more than one
Vice-Chairman is present, they will agree between themselves who will
chair the meeting and if they cannot agree, the Vice-Chairman who has
been a director longest will chair the meeting.
54.3 If the Company does not have a Chairman or a Vice-Chairman, or if
neither the Chairman or any Vice-Chairman are willing and able to
chair the meeting, after waiting 5 minutes from the time that the
meeting is due to start, the directors who are present will choose
one of themselves to act as chairman. If there is only one director
present, he will be chairman, if he agrees.
54.4 If there is no director willing and able to be chairman or if no
director is present after waiting 5 minutes from the time that a
meeting is due to start, then the shareholders who are present at the
meeting and entitled to vote will decide which one of them is to be
chairman.
54.5 To avoid any doubt, nothing in the Articles restricts or excludes any
of the powers or rights of a chairman of a meeting which are given by
the general law.
55 Special Business at General Meetings
All the things which take place at an Extraordinary General Meeting
are regarded as "special". The same is true for the things done at an
Annual General Meeting except for:
(a) the declaration of dividends;
(b) the consideration and adoption of the accounts and balance
sheet and the reports of the directors and auditors and other
documents which are required to be annexed to the accounts;
(c) the appointment and re-appointment of directors;
(d) the appointment of the auditors (unless the Companies Act
requires special notice of this resolution);
(e) fixing or determining the method of fixing the remuneration of
the directors or the auditors, or both.
56 Security, other arrangements and orderly conduct at General Meetings
56.1 The directors or the Company Secretary can take any action and can put
in place any arrangements both before and during any General Meeting
that they consider appropriate for:
(a) the safety of people attending a General Meeting;
(b) proper and orderly conduct at a General Meeting; or
(c) the meeting to reflect the wishes of the majority.
This includes the power to refuse entry to, or eject from meetings,
people who fail to comply with any arrangements made.
56.2 The chairman of a meeting may take any action he considers appropriate
for proper and orderly conduct at a general meeting. The chairman has
the final decision on matters of procedure and on matters that arise
incidentally from the business of the meeting. The chairman also has
the final decision on whether a matter is procedural or incidental.
57 Overflow meeting rooms
The directors can arrange for any people who they consider cannot be
seated in the main meeting room, where the chairman will be, to attend
and take part in a General Meeting in an overflow room or rooms. Any
overflow room will have a live video link from the main room, and a
two-way sound link. The notice of the meeting does not have to give
details of any arrangements under this Article. The directors can
decide on how to divide people between the main room and any overflow
room. If any overflow room is used, the meeting will be treated as
being held, and taking place, in the main room.
58 Telephone Meetings
58.1 If the directors so decide, any or all of the members (or their
proxies) can take part in a general meeting by way of a conference
telephone or using video teleconference equipment or by use of similar
equipment designed to allow everybody to take part in the meeting.
58.2 Taking part in this way will be counted as being present at the
meeting and entitles a member (or his proxy) to vote and count in the
quorum. A meeting which takes place by conference telephone or using
video teleconference equipment will be treated as taking place at the
place where the chairman is.
59 The quorum needed for meetings
Before a General Meeting starts to do business, there must be a quorum
present. If there is not, the meeting cannot carry out any business.
The meeting can still choose a chairman, which does not count as
carrying out business for these purposes. Unless the Articles say
otherwise, a quorum for all purposes is two people who are entitled to
vote. They can be personally present or proxies for shareholders or a
combination of shareholders and proxies. In the Articles, a
shareholder which is a company is considered to be present if it is
represented by a duly authorised representative.
60 The procedure if there is no quorum
This Article applies if a quorum is not present within five minutes of
the time fixed for a General Meeting to start or if there is no longer
a quorum present at any time during a General Meeting. If the meeting
was called by shareholders it is dissolved. Any other meeting is
adjourned to any day, time and place stated in the notice of meeting.
If the notice does not provide for this, the meeting is adjourned to a
day, time and place decided on by the chairman. At the reconvened
meeting, a quorum is one shareholder personally present or a proxy for
one shareholder.
61 Directors and other persons at General Meetings
61.1 All of the directors can attend and speak at shareholders' meetings.
The directors can do this whether or not they are also shareholders.
61.2 The chairman of a meeting may also allow any other person to attend
and speak where he considers that this will help the business of the
meeting.
62 Adjourning meetings
62.1 The chairman of a meeting can adjourn a meeting which has a quorum
present for any reason, whether or not this is agreed by the meeting.
For example, the chairman may adjourn the meeting if he considers
that:
(a) there is not enough room for the number of shareholders who
wish to attend the meeting;
(b) the behaviour of the people present prevents, or is likely to
prevent, the business of the meeting being carried out in an
orderly way; or
(c) an adjournment is necessary for any other reason, so that the
business of the meeting can be properly carried out.
62.2 The adjournment can be to a time, date and place proposed by the
chairman. It can also be an indefinite adjournment.
62.3 The chairman must adjourn a meeting if the meeting directs him to do
this. In these circumstances the meeting will decide how long the
adjournment will be, and where it will adjourn to.
62.4 If a meeting is adjourned indefinitely, the directors will fix the
time, date and place of the adjourned meeting.
62.5 Meetings can be adjourned more than once. But if a meeting is
adjourned for three months or more or indefinitely, at least 7 clear
days' notice must be given for the adjourned meeting in the same way
as was required for the original meeting. If a meeting is adjourned
for less than three months, there is no need to give notice about the
adjourned meeting, or about the business to be considered there.
62.6 A reconvened meeting can only deal with business that could have
been dealt with at the meeting which was adjourned.
62.7 Meetings can only be adjourned as set out in this Article 62, or in
Article 60 above.
63 Confidential information
No shareholder at a shareholders' meeting is entitled to require
disclosure of or any information about any detail of the Company's
trading, or any matter that is or may be in the nature of a trade
secret, commercial secret or secret process, or that may relate to the
conduct of the business of the Company, if the directors decide it
would be inexpedient in the interests of the Company to make that
information public.
64 Amending resolutions
64.1 Amendments can be proposed to any resolution if they are only clerical
amendments, or amendments to correct some other obvious error in the
resolution.
64.2 No other amendments can be proposed to any Special or Extraordinary
Resolution.
64.3 Amendments to an Ordinary Resolution which are within the scope of the
resolution can be proposed if:
(a) notice of the proposed amendment is delivered to the Registered
Office at least 48 hours before the time of the meeting, or
adjourned meeting; or
(b) the chairman of the meeting decides that the amendment is
appropriate for consideration by the meeting.
No other amendments can be proposed to an Ordinary Resolution.
64.4 If the Chairman, acting in good faith, rules an amendment out of
order, any error in that ruling will not affect the validity of a vote
on the resolution.
VOTING PROCEDURES
65 How votes are taken
If a resolution is put to the vote at a General Meeting, it will be
decided by poll.
66 How a poll is taken
66.1 The chairman of the meeting decides how a poll will be carried out.
The result is treated as the decision of the meeting where the poll
was demanded, even if the poll is carried out after the meeting.
66.2 The chairman can:
(a) appoint scrutineers (who need not be shareholders);
(b) set a day, time and place which he decides on for the result of
the poll to be declared.
66.3 If a poll is called, a shareholder can vote either personally or by
his proxy. If a shareholder votes on a poll, he does not have to use
all of his votes; nor does he have to cast all his votes in the same
way.
67 Timing of a poll
A poll on a vote to elect the chairman of the meeting or to adjourn
the meeting must be taken immediately at the meeting. Any other poll
can either be taken immediately at the meeting or at another time
(within 30 days of the meeting) and place as decided by the chairman.
No notice is required for a poll which is not taken immediately if the
time and place of the poll are announced at the meeting. Otherwise 7
clear days' notice must be given of the time and place of the poll.
68 The chairman's casting vote
If the votes are equal the chairman of the meeting is entitled to a
further, casting vote. This is in addition to any other votes which he
may have as a shareholder, or as a proxy.
69 Shareholders which are companies
69.1 A shareholder which is a company can appoint any one person it chooses
to act as its representative at a shareholders' meeting.
69.2 Anyone appointed under Article 69.1 can exercise any powers which the
shareholder appointing him would have if it were an individual
shareholder.
69.3 If a person appointed under Article 69.1 attends a General Meeting or
other meeting for which he is appointed, he is treated for the purpose
of these Articles as if he were a shareholder present in person and
holding the shares to which the appointment relates.
70 Approved Depositaries
70.1 Subject to these Articles and the legislation, an Approved Depositary
can appoint as its proxy or proxies in relation to any Ordinary Shares
which it holds, anyone it thinks fit and can decide how and on what
terms to appoint them. Each appointment must state the number of
Ordinary Shares it relates to and the total number of Ordinary Shares
in respect of which appointments exist at any time must not be more
than the total number of Ordinary Shares (the 'Depositary Shares')
which are registered in the name of the Approved Depositary or its
nominee at that time.
70.2 The Approved Depositary must keep a register (the 'Proxy Register') of
each person it has appointed as a proxy under Article 70.1 (an
'Appointed Proxy') and the number of Depositary Shares (his 'Appointed
Number') to which the appointment relates. The directors will decide
what information about each Appointed Proxy is to be recorded in the
Proxy Register. Any person authorised by the Company may inspect the
Proxy Register during usual business hours and the Approved Depositary
will give such person any information which he requests as to the
contents of the Proxy Register.
70.3 An Appointed Proxy may only attend a General Meeting if he provides
the Company with written evidence of his appointment as such. This
must be in a form agreed between the directors and the Approved
Depositary.
70.4 Subject to the legislation and to these Articles, and so long as the
Approved Depositary or a nominee of the Approved Dispositary holds at
least his Appointed Number of Ordinary Shares, an Appointed Proxy is
entitled to attend a General Meeting which holders of Ordinary Shares
are entitled to attend, and he is entitled to the same rights, and
subject to the same obligations, in relation to his Appointed Number
of Depositary Shares as if he had been validly appointed in accordance
with Articles 78 and 79 by the registered holder of these shares as
its proxy in relation to those shares.
70.5 An Appointed Proxy may appoint another person as his proxy for his
Appointed Number of Depositary Shares, as long as the appointment is
made and deposited in accordance with Articles 78 and 79, and these
Articles apply to that appointment and to the person so appointed as
though those Depositary Shares were registered in the name of the
Appointed Proxy and the appointment was made by him in that capacity.
The directors may require such evidence as they think appropriate to
decide that such appointment is effective.
70.6 For the purposes of determining who is entitled as an Appointed Proxy
to exercise the rights conferred by Articles 70.4 and 70.5 and the
number of Depositary Shares in respect of which a person is to be
treated as having been appointed as an Appointed Proxy for these
purposes, the Approved Depositary can decide that the Appointed
Proxies who are so entitled are the people entered in the Proxy
Register at a time and on a date (a 'Record Time') agreed between the
Approved Depositary and the Company.
70.7 When a Record Date is decided for a particular purpose:-
(a) an Appointed Proxy is to be treated as having been appointed
for that purpose for the number of shares appearing against his
name in the Proxy Register as at the Record Time; and
(b) changes to entries in the Proxy Register after the Record Time
will be ignored for this purpose.
70.8 Except for recognising the rights given in relation to General
Meetings by appointments made by Appointed Proxies pursuant to
Article 70.5, the Company is entitled to treat any person entered in
the Proxy Register as an Appointed Proxy as the only person (other
than the Approved Depositary) who has any interest in the Depositary
Shares in respect of which the Appointed Proxy has been appointed.
70.9 At a General Meeting the Chairman has the final decision as to whether
any person has the right to vote or exercise any other right relating
to any Depositary Shares. In any other situation, the Directors have
the final decision as to whether any person has the right to exercise
any right relating to any Depositary Shares.
71 Written resolutions
Subject to the legislation, the Company may pass a resolution in the
form of a written resolution. It is just as effective as if it were
passed at a General Meeting which had been convened and held properly.
The resolution must be signed by or on behalf of each shareholder who
would have been entitled to vote on it at a General Meeting if he was
present and it was proposed. For this purpose, different shareholders
can sign different copies of the resolution provided that the copies
are all the same. These copies can be fax or electronic copies.
72 The effect of a declaration by the chairman
72.1 Any of the following declarations by the chairman of the meeting which
is entered in the minutes of the meeting is conclusive proof that:
(a) a resolution has been carried;
(b) a resolution has been carried unanimously;
(c) a resolution has been carried by a particular majority;
(d) a resolution has been lost; or
(e) a resolution has been lost by a particular majority.
72.2 There is no need to prove the number, or proportion, of votes recorded
for or against the resolution.
VOTING RIGHTS
73 The votes of shareholders
73.1 Where there is a poll, a shareholder who is present in person or by
proxy has one vote for every share which he holds. This is subject to
Article 73.2 below and to the other provisions of the Articles and to
any special rights or restrictions which are given to any class of
shares. A representative of a company has one vote for every share
which he is treated as holding (see Article 69).
73.2 For the purposes of determining which people may attend or vote at a
meeting and how many votes such people have, the notice of the meeting
may give a time by which people must be entered on the Register in
order to be entitled to attend or vote at the meeting. This time must
be not more than 48 hours before the time fixed for the meeting.
74 Shareholders who owe money to the Company
Unless the directors decide otherwise, the only people who can attend
or vote at shareholders' meetings are shareholders who have paid the
Company all calls, and all other sums, relating to their shares which
are due at the time of the meeting. This applies both to attending a
meeting personally and to appointing a proxy.
75 Failure to comply with a notice under Section 212 of the Companies Act
75.1 This Article applies if any shareholder, or any person appearing to be
interested in shares held by such holder, has been properly served
with a notice under Section 212 of the Companies Act, requiring
information about interests in shares, and has failed for a period of
14 days to supply to the Company the information required by that
notice. Then (unless the directors otherwise decide) the shareholder
is not (for so long as the failure continues) entitled to attend or
vote either personally or by proxy at a shareholders' meeting or to
exercise any other right in relation to shareholders' meetings as
holder of:
(a) the shares in relation to which the default occurred (called
'default shares');
(b) any further shares which are issued in respect of default
shares; and
(c) any other shares held by the shareholder holding the default
shares.
75.2 Any person who acquires shares subject to restrictions under Article
75.1 is subject to the same restrictions, unless:
(a) the transfer was an approved transfer (see Article 75.11);
(b) the transfer was by a shareholder who was not himself in
default in supplying the information required by the notice
under Article 75.1 and a signed declaration as referred to in
Article 75.3 is provided.
75.3 Where the default shares represent 0.25 per cent or more of the
existing shares of a class, the directors can in their absolute
discretion direct, by giving notice (a direction notice) to the
shareholder, that:
(a) any dividend or part of a dividend or other money which would
otherwise be payable on the default shares shall be retained by
the Company (without any liability to pay interest when such
money is finally paid to the shareholder); and/or
(b) the shareholder shall not be entitled to elect to receive shares
in place of dividends withheld; and/or
(c) (subject to the requirements of the relevant system in relation
to shares in uncertificated form) no transfer of any of the
shares held by the shareholder shall be registered unless:
(i) 'either' the transfer is an approved transfer (see
Article 75.11);
(ii) 'or' the shareholder is not himself in default as
regards supplying the information required; and (in this
case)
(a) the transfer is of part only of his holding; and
(b) when presented for registration, the transfer is
accompanied by a signed declaration by the
shareholder. This must be in a form satisfactory
to the directors and state that after due and
careful enquiry the shareholder is satisfied
that none of the shares included in the transfer
are default shares.
75.4 Any direction notice may treat certificated and uncertificated shares
of a shareholder as separate holdings and either apply only to
certificated shares or to uncertificated shares or make different
provision for certificated and uncertificated shares. In the case of
shares in uncertificated form the directors can only use their
discretion to prevent a transfer if this is allowed by the CREST
Regulations.
75.5 The Company must send a copy of the direction notice to each other
person who appears to be interested in the shares covered by the
notice, but if it fails to do so, this does not invalidate the
direction notice.
75.6 Once a direction notice has been given, the directors are free to
cancel it or exclude any shares from it at any time they think fit,
but otherwise it has the effect which it states while the default
resulting in the notice continues. In addition, a direction notice
ceases to apply when the directors decide that the default resulting
in the notice has been cured (which they must do within one week of
the default being cured). The Company must give the shareholder
immediate written notice of the directors' decision.
75.7 A direction notice also ceases to apply to any shares which are
transferred by a shareholder in a transfer which would be permitted
under Article 75.3 even where a direction notice restricts transfers.
75.8 Where a person who appears to be interested in shares has been served
with a notice under Section 212 of the Companies Act and the shares in
which he appears to be interested are held by an Approved Depositary,
this Article shall be treated as applying only to the shares which are
held by the Approved Depositary in which that person appears to be
interested and not (so far as that person's apparent interest is
concerned) to any other shares held by the Approved Depositary.
75.9 Where the shareholder on which a notice under Section 212 of the
Companies Act is served is an Approved Depositary, the obligations of
the Approved Depositary as a shareholder will be limited to disclosing
to the Company any information relating to any person who appears to
be interested in the shares held by it which has been recorded by it
in accordance with the arrangement under which it was appointed as an
Approved Depositary.
75.10 For the purposes of this Article a person is treated as appearing to
be interested in any shares if the shareholder holding such shares has
been served with a notice under Section 212 of the Companies Act and:
(a) the shareholder has named such person as being so interested; or
(b) (after taking into account the response of the shareholder to
such notice and any other relevant information) the Company
knows or has reasonable cause to believe that the person in
question is or may be interested in the shares.
75.11 For the purposes of this Article a transfer of shares is an 'approved
transfer' if:
(a) it is a transfer of shares to an offeror under an acceptance of
a takeover offer (as defined in Section 428 of the Companies
Act); or
(b) the directors are satisfied that the transfer is made pursuant
to a bona fide sale of the whole of the beneficial ownership of
the shares to a party unconnected with the shareholder or with
any person appearing to be interested in the shares. This
includes such a sale made through the London Stock Exchange or
any other stock exchange outside the United Kingdom on which
the Company's shares are normally traded. For this purpose any
associate (as that term is defined in Section 435 of the
Insolvency Act 1986) is included amongst the persons who are
connected with the shareholder or any person appearing to be
interested in the shares.
75.12 This Article does not restrict in any way the provisions of the
Companies Act which apply to failures to comply with notices under
Section 212 of that Act.
76 Votes of shareholders who are of unsound mind
This Article applies where a court or official with powers relating to
mental disorder has appointed a person to manage a shareholder's
affairs, including the exercise of voting rights on shares. The person
appointed to act for the shareholder can vote for the shareholder and
exercise other rights at shareholders' meetings. This includes
appointing a proxy and voting on a poll. However, this only applies if
any evidence which the directors may require of the person's authority
to do these things is delivered to the office where the Register is
kept or some other place specified in accordance with the Articles for
delivery of proxies at least 24 hours before the time fixed for the
relevant meeting (or adjourned meeting).
77 The votes of joint holders
This Article applies to shares held by joint shareholders. If more
than one of the joint shareholders votes, the only votes which will
count are the votes of the person whose name is listed before the
names of the other(s) of these voters on the Register for the share.
78 Completing proxy forms
78.1 A proxy form can be in any form which is commonly used, or in any
other form which the directors approve. It must provide for two-way
voting on all resolutions to be proposed at a meeting other than those
relating to procedure. A proxy form must be sent by post or, subject
to the legislation, by fax or by electronic mail, by the Company to
all persons entitled to notice of a meeting and to attend and vote
at it.
78.2 A proxy form must be in writing. A proxy form given by an individual
must be signed by the shareholder appointing the proxy, or by an
attorney who has been properly appointed in writing. If a proxy is
appointed by a company, the form should be either sealed with the
company's seal or signed by an officer or an attorney who is properly
authorised to act on behalf of the company. Signatures need not be
witnessed.
78.3 The directors may decide to allow a proxy to be appointed in
electronic form, for example via the Internet , by telephone, or by
fax, subject to any limitations, restrictions or conditions they
decide, and subject to the legislation, and Article 78.2 does not
apply to a proxy form delivered in such a way but the directors may
require such evidence as they think appropriate to decide that the
proxy appointment is effective.
78.4 A proxy need not be a shareholder. A shareholder can appoint more
than one proxy for the same meeting. He can appoint a proxy and still
attend and vote in person.
79 Delivering proxy forms
79.1 A proxy form must be delivered to the place or places within the
United Kingdom or in the United States, or, if the directors decide to
accept proxy forms delivered electronically, by telephone, or by fax
in the way, stated in the notice of meeting, or in the proxy form. If
no other place is stated, it must be delivered to the office where the
Register
is kept. It must be delivered at least:
(a) 48 hours before the time fixed for the meeting, or adjourned
meeting; or
(b) 48 hours before a poll is taken, if the poll is not taken on
the same day as the meeting or adjourned meeting.
79.2 If a proxy form is signed by an attorney, the power of attorney or
other authority relied on to sign it, or a copy which has been
certified by a notary or in accordance with the Powers of Attorney Act
1971, or an office copy, must be delivered with the proxy form, unless
the power of attorney has already been registered with the Company.
79.3 If Article 79 is not complied with, the proxy will not be able to act
for the person who appointed him.
79.4 A proxy form delivered by an Approved Depositary except in respect of
a person appointed in accordance with Article 70 may be delivered to
the appropriate place referred to in Article 79.1 by fax or in any
other way the directors decide.
79.5 If a proxy form which relates to several meetings has been properly
delivered for one meeting, or adjourned meeting, it does not need to be
delivered again for any later meeting which the proxy form covers.
80 Revocation of proxies
80.1 Any vote by a proxy or by a company representative will be valid even
though:
(a) the person who appointed the proxy has died or is of unsound
mind;
(b) the proxy form has been revoked;
(c) the appointment of the company representative has been revoked;
or
(d) the authority of the person who signed the proxy form for the
shareholder has been revoked.
80.2 However, this does not apply if written notice of such a fact has been
received at the office where the Register is kept or at any other
place specified as a place where the proxy could be delivered (or such
notice has been given electronically or by telephone if the
appointment could have been made in these ways) at least 24 hours
before:
(a) the meeting or adjourned meeting starts; or
(b) the time fixed on a later day to take a poll.
81 Proxies speaking at meetings
A proxy may not speak at a meeting (except to demand a poll) without
the permission of the chairman.
82 Proxies for amendments and adjournments
A proxy is entitled to vote on any amendment of a resolution put to
the meeting to which his appointment relates. The proxy can vote as he
thinks fit. His appointment as proxy is equally valid for the original
meeting and any adjournment.
83 Expiry of proxies
83.1 The appointment of a proxy other than an Appointed Proxy only remains
valid for 12 months.
83.2 Where more than one valid proxy form is delivered for the same meeting
in respect of the same shares, the one delivered last is taken to
replace the others. If the proxy forms conflict and the Company cannot
tell which was delivered last, none is valid.
84 Challenging votes
Any objection to the right of any person to vote must be made at the
meeting (or adjourned meeting) or poll at which the vote is cast. If a
vote is not disallowed at the meeting or poll, it is valid for all
purposes and if a vote is not counted at a meeting, this will not
affect the decision of the meeting. Any objection must be raised with
the chairman of the meeting. His decision is final.
DIRECTORS
85 The number of directors
There must be at least six directors, and not more than 24. This does
not include alternate directors. But the shareholders can vary this
maximum and/or minimum by passing an Ordinary Resolution.
86 Qualification to be a director
A director need not be a shareholder.
87 Directors' fees and expenses
87.1 The directors can decide on the amount, timing and manner of payment of
fees to be paid by the Company to the directors for acting as
directors. These fees can be satisfied in cash or in any other form.
87.2 If the directors decide to satisfy any of these fees in shares or in
any other non-cash form, the value of the shares or other assets to be
counted towards this limit will be their value at the time the
entitlement to them is first allocated, or provisionally allocated, to
the director. This value will be taken into account for the purpose of
the limit in the year in which the entitlement is first allocated, or
provisionally allocated, and not in any later year when the fees,
shares or other assets are actually paid or delivered to the director.
This paragraph applies even if:
(a) the director's entitlement to the fees, or to receive the
assets, is subject to conditions which will, or may, be
fulfilled at a later time;
(b) the fees, shares or other assets are to be, or may be, paid or
delivered to the director at a later time or the director
elects, agrees or is required to receive the cash equivalent of
the shares or other assets as determined by reference to their
value at such later time;
(c) the Company has not paid for the relevant shares or other
assets at the time the director first becomes, or becomes
provisionally, entitled to them, and their value subsequently
changes.
87.3 Unless an Ordinary Resolution is passed saying otherwise, the fees will
be divided between some or all of the directors in the way that they
decide. If they fail to decide, the fees will be shared equally by the
directors, except that any director holding office as a director for
only part of the period covered by the fee is only entitled to a pro
rata share covering that part period.
88 Special pay
88.1 The directors can award special pay to any director who:
(a) holds any executive post;
(b) acts as Chairman or Vice-Chairman;
(c) serves on any committee of the directors; or
(d) performs any other services which the directors consider to
extend beyond the ordinary duties of a director.
88.2 Special pay can take the form of salary, commission or other benefits
or can be paid in some other way. This is decided on by the directors.
89 Directors' expenses
89.1 The directors can also repay to a director all reasonable travelling,
hotel and other expenses properly incurred:
(a) to attend and return from shareholders' or debenture holders'
meetings;
(b) to attend and return from directors' meetings;
(c) to attend and return from meetings of committees of the
directors; or
(d) in other ways in connection with performance of their duties for
the Company.
89.2 The directors can award extra pay to any director who, at the request
of the directors, performs special services or goes or lives abroad for
any purposes of the Company.
90 Directors' pensions and other benefits
90.1 It is entirely for the directors to decide whether to provide:
(a) pensions;
(b) insurance;
(c) gratuities; or
(d) other allowances or benefits
to any people who are, or who were, directors or employees of the
Company or any of its subsidiaries or any associated or acquired
company or business. The directors can decide to extend these
arrangements to any family member of such a person or anyone who is or
was dependent on him. This includes a present or former spouse. The
directors can decide to contribute to any scheme or fund or to pay
premiums to a third party for these purposes.
90.2 As permitted by section 719 of the Companies Act, the directors can
make appropriate provision for the benefit of any present or former
employee of the Company or any of its subsidiaries in connection with
the cessation or the transfer of all or some of the undertaking of the
Company or that subsidiary. The directors must decide on any provision
of this kind by passing a resolution in accordance with section 719 of
the Companies Act.
91 Appointing directors to various posts
91.1 Subject to the legislation, the directors can appoint any director as
Chief Executive, and can appoint one or more directors as managing
director or to any other executive position (except the Company's
auditor) they decide on. So far as the legislation allows, they can
decide on how long these appointments will be for, and on their terms.
They can also vary or end such appointments.
91.2 A director will automatically stop holding any executive office if he
is no longer a director. If a director's appointment ends by virtue of
this Article, this does not prejudice any claim for breach of contract
against the Company which may otherwise apply. He will not stop being a
director because he stops holding the executive office.
91.3 The directors can determine the pay and benefits of any managing
director or other director appointed to an executive position. The pay
and benefits can take any form at all. It may include membership of any
pension or life assurance scheme or similar arrangement or any payment
to him or his dependants after retirement or death.
91.4 The directors can give a managing director or any other director
appointed to an executive post any of the powers which they jointly
have as directors. These powers can be given on terms and conditions
decided on by the directors either in parallel with, or in place of,
the powers of the directors acting jointly. The directors can change
the basis on which such powers are given or withdraw such powers from
the executive.
CHANGING DIRECTORS
92 Age limits
Provisions of the legislation which, read with these Articles, would
restrict the appointment of a director or require him to stop being a
director because he has reached a particular age do not apply to the
Company. This includes restrictions and requirements involving special
formalities once an age limit is reached.
93 Retiring by rotation
At every Annual General Meeting one-third of the current directors must
retire as directors. If one-third is not a whole number, the number of
directors to retire is the number which is nearest to one-third. If
there are less than three directors, they will all retire.
94 Selecting the directors to retire by rotation
94.1 This Article states, subject to the legislation, which directors must
retire at an Annual General Meeting under Article 93:
(a) first, any director who was in office at the time of the two
previous annual general meetings and who did not retire by
rotation at either of them;
(b) secondly, if the number of directors retiring remains less than
the minimum number who must retire by rotation under these
Articles, additional directors up to that number must retire.
The directors who must retire in this manner are those who
have been directors longest since they were last elected. If
there are directors who were last elected on the same date,
they can agree on who is to retire. If they do not agree,
they must draw lots to decide.
94.2 The selection of directors to retire is based on the number and
identity of the directors when the notice of the Annual General
Meeting is given. It is not affected by anything which happens
between then and the meeting.
95 Re-electing a director who is retiring
95.1 At the General Meeting at which a director retires the shareholders can
pass an Ordinary Resolution to re-elect the director or to elect some
other eligible person in his place. If such an Ordinary Resolution is
not passed, the retiring director is automatically re-elected unless:
(a) the meeting expressly resolves not to appoint a director to fill
the vacancy;
(b) the director has told the Company in writing that he does not
wish to be re-elected;
(c) the Ordinary Resolution is not passed because Article 96 is
breached; or
(d) a resolution to re-appoint the director is put to the meeting
and not passed.
95.2 A director retiring at a General Meeting retires at the end of that
meeting or (if earlier) when a resolution is passed to appoint someone
in his place or when a resolution to re-appoint him as a director is
lost. Where a retiring director is re-elected (or treated as
re-elected under Article 95.1) he continues as a director without a
break.
96 Election of two or more directors
A single resolution for the election of two or more directors is void
unless the putting of the resolution in this form has been approved by
an earlier procedural vote taken at the General Meeting, with no votes
cast against.
97 People who can be directors
97.1 Only the following people can be elected as directors at a
General Meeting:
(a) a director who is retiring at the meeting;
(b) a person who is recommended by the directors;
(c) a person who has been proposed in the following way. A
shareholder who is entitled to attend and vote at the meeting
(other than the proposed director) must deliver a written
notice to the Company saying that he intends to propose the
person for election. This notice must be delivered at least 14
clear days before the meeting, but not more than 35 clear days
before. The person to be proposed must confirm in writing that
he is willing to be elected, and his confirmation must be
included with the notice. The notice must include the details
which would need to be included in the Company's register of
directors.
98 The power to fill vacancies and appoint extra directors
98.1 The directors can appoint any person as an extra director (if Article
85 allows this), or to fill a vacancy. Any director appointed in this
way must retire at the first Annual General Meeting after his
appointment. At this Annual General Meeting he can be elected by the
shareholders as a director. A director who retires in this way is not
taken into account in deciding which and how many directors should
retire by rotation at the Annual General Meeting (see Article 94).
98.2 At a General Meeting the shareholders can also pass an Ordinary
Resolution to fill a vacancy or to appoint an extra director (if
Article 85 allows this). The shareholders can also decide the rotation
in which any extra directors must retire. The new director must be
willing to act.
99 Removing and appointing directors by an Ordinary Resolution
99.1 The shareholders can pass an Ordinary Resolution to remove a director,
even though his time in office has not ended. This applies despite
anything else said in the Articles, or in any agreement between the
Company and any director. Special notice of the Ordinary Resolution
must be given to the Company as required by the legislation. But if a
director is removed in this way, it will not affect any claim which he
may have for damages for breach of any contract of service he may
have.
99.2 For a period of three years from the date of the completion of the
merger of Glaxo Wellcome plc and SmithKline Beecham plc, the service
contract of any executive director can only be terminated if
two-thirds of the directors present and voting at a board meeting vote
in favour of a resolution to do so.
99.3 The shareholders can pass an Ordinary Resolution to appoint a person
to replace a director who has been removed in this way. A person
appointed under this Article to replace a director who has been
removed retires by rotation under Article 94 when the director he
replaces would have been due to retire. If no director is appointed
under this Article, the vacancy can be filled under Article 98.
100 When directors are disqualified
100.1 Any director automatically ceases to be a director in any of the
following circumstances:
(a) If a bankruptcy order is made against him.
(b) If he makes any arrangement or composition with his creditors
or applies for an interim order under Section 253 of the
Insolvency Act 1986 in connection with a voluntary arrangement
under that Act.
(c) If he is or may be suffering from mental disorder and either:
(i) he is admitted to hospital as a result of an application
under the Mental Health Act 1983 or any similar law of
any jurisdiction; or
(ii) a court order has been made for his detention or for
the appointment of someone to exercise powers over his
property or affairs.
(d) If he has missed directors' meetings for a continuous period
of six months, without permission from the directors, and the
directors pass a resolution stating that he has ceased to be a
director.
(e) If he is prohibited from being a director under the
legislation.
(f) If (not being appointed for a fixed term) he gives the Company
notice of his resignation.
(g) If he gives the Company a letter in which he offers to resign
and the directors decide to accept this offer.
(h) If there are at least 3 other directors, and all of the other
directors sign a notice requiring the director to resign. He
will cease to be a director when the notice is served on him.
But if a director is removed in this way this is an act of the
Company which does not affect any claim for damages for breach
of any contract of service which he may have.
100.2 If a director stops being a director for any reason, he will also
automatically cease to be a member of any committee or sub-committee
of the directors.
DIRECTORS' MEETINGS
101 Directors' meetings
The directors can decide when to have meetings and how they shall be
conducted, and on the quorum. They can also adjourn their meetings.
This is subject to the provisions of these Articles.
102 Who can call directors' meetings
A meeting can be called by any director. The Company Secretary must
also call a meeting if a director requests a meeting.
103 How directors' meetings are called
Meetings are called by serving a notice on all the directors. Any
director can waive notice of any meeting, including one which has
already taken place. Notice is served personally or by word of mouth
or sent in writing to the director's last known address or any other
address supplied to the Company. The address may be in the United
Kingdom or elsewhere, and notice given to a director who is out of the
United Kingdom does not need to be given any earlier than notice given
to directors who are in the United Kingdom. Any director can waive
notice of any directors' meeting, including one which has already
taken place.
104 Quorum
If no other quorum is fixed by the directors, four directors are a
quorum. A meeting at which a quorum is present can exercise all the
powers and discretions of the directors. If no director objects, a
director who ceases to be a director at a meeting can stay and be
counted in the quorum if a quorum would not otherwise be present.
105 The chairman of directors' meetings
The directors can elect any directors as Chairman or as one or more
Vice-Chairmen and may at any time remove any of them from that office.
If the Chairman is at a meeting, he will chair it unless he does not
wish to do so. If the Chairman does not take the chair, a Vice-Chairman
will do so, if one is present and willing to do so. If more than one
Vice-Chairman is present, the most senior Vice-Chairman is entitled to
take the chair, unless the directors decide otherwise. If there is no
Chairman or Vice-Chairman present and willing to take the chair within
five minutes of the time when the meeting is due to start, the
directors who are present can choose which one of them will be the
chairman of the meeting.
106 Voting at directors' meetings
Matters for decision which arise at a directors' meeting will be
decided by a majority vote. If votes are equal, the chairman of the
meeting shall have a second, casting vote.
107 Directors can act even if there are vacancies
107.1 The remaining directors or a sole remaining director can continue to
act even if one or more of them ceases to be a director. But if the
number of directors falls below the number fixed as a quorum the
remaining director(s) can only:
(a) either appoint further directors to make up the shortfall; or
(b) convene a General Meeting.
107.2 If no director or directors are willing or able to act under this
Article, any two shareholders can call a General Meeting to appoint
extra directors.
108 Telephone meetings
108.1 Any or all of the directors, or members of a committee, can take part
in a meeting of the directors or of a committee:
(a) by way of a conference telephone or video teleconference
equipment or by use of similar equipment designed to allow
everybody to take part in the meeting; or
(b) by a series of telephone calls from the chairman of the
meeting.
108.2 Taking part in this way will be counted as being present at the
meeting and entitles a director to vote and count in the quorum. A
meeting which takes place by conference telephone or using video
conference equipment or by a series of calls from the chairman will be
treated as taking place at the place where the chairman is.
109 Resolutions in writing
This Article applies to a written resolution which is signed by all of
the directors who would be entitled to vote on the resolution at a
directors' meeting or committee meeting and who are at least sufficient
in number to form a quorum. This kind of resolution is just as valid
and effective as a resolution passed by the directors at a meeting or
committee meeting which is properly called and held. The resolution
can be passed using several copies of a document, if each document is
signed by one or more directors. These copies can be fax or electronic
copies. This Article also applies to written resolutions by committees
of directors. A resolution agreed and signed by an alternate director
need not be agreed and signed by his appointor, and vice versa.
110 The validity of directors' actions
Everything which is done by any directors' meeting, or by a committee
of the directors, or by a person acting as a director, or as an
alternate director, or as a member of a committee, will be valid even
though it is discovered later that any director, or person acting as a
director, was not properly appointed. This also applies if it is
discovered later that anyone was disqualified from being a director,
or had ceased to be a director, or was not entitled to vote. In any of
these cases in favour of anyone dealing with the Company in good faith
anything done will be as valid as if there was no defect or
irregularity of the kind referred to in this Article.
DIRECTORS' INTERESTS
111 Directors' interests in transactions with the Company
111.1 If the legislation allows and he has disclosed the nature and extent
of his interest to the directors, a director can:
(a) hold any other position (other than auditor) in the Company as
well as being a director;
(b) have any kind of interest in any existing or proposed contract,
transaction or arrangement with or involving the Company or in
which the Company has an interest;
(c) have any kind of interest in any existing or proposed contract,
transaction or arrangement with or involving another company
in which the Company has some interest;
(d) be a director or other officer of, or employed by, or
otherwise interested in, any body corporate promoted by the
Company or in which the Company is otherwise interested;
(e) either alone or through some firm with which he is associated
do paid professional work for the Company (other than as
auditor of the Company).
111.2 A director does not have to hand over to the Company any benefit he
receives as a result of anything allowed under Article 111.1. Nothing
allowed under Article 111.1 will be invalidated just because of the
interest or benefit which the director has.
112 When directors can vote on things which they are interested in
112.1 Unless the Articles say otherwise, a director cannot cast a vote at a
directors' meeting or a committee meeting on any contract, arrangement
or any other kind of proposal in which he has an interest or duty, and
which he knows is a material one. A director may not be included in the
quorum of a meeting in relation to any resolution he is not allowed to
vote on.
112.2 For the purposes of Article 112:
(a) interests of a person who is connected with a director under
section 346 of the Companies Act are added to the interests of
the director himself;
(b) interests or duties purely as a result of an interest in the
Company's shares, debentures or other securities are
disregarded; and
(c) in relation to an alternate director, an interest of his
appointor is treated as an interest of the alternate director
in addition to any interest which the alternate director has
otherwise.
112.3 But, if the legislation allows this, a director can vote, and be
counted in the quorum, on any resolution about any of the following
things, as long as the only material interests he has in it are
included in the following list:
(a) a resolution to give him, or any other person, any guarantee,
any security, or any indemnity, for any money which he, or
that other person, has lent at the request of, or for the
benefit of the Company, or any of its subsidiaries;
(b) a resolution to give him, or any other person, any guarantee,
any security, or any indemnity, for any liability which he, or
that other person, has incurred at the request of, or for the
benefit of, the Company, or any of its subsidiaries;
(c) a resolution to give any guarantee, security or indemnity to
any other person for a debt or obligation which is owed by the
Company or any of its subsidiaries, to that other person, if
the director has (by giving a guarantee, indemnity or
security), taken any responsibility for some or all of that
debt or obligation;
(d) a resolution about any proposal relating to an offer for
subscription, purchase or exchange of any shares or debentures,
or other securities, of or by the Company, or any of its
subsidiaries, if the director takes part or intends to take
part in the underwriting or sub-underwriting of the offer;
(e) a resolution about any proposal involving any other company if
the director (together with any person connected with the
director under section 346 of the Companies Act) has a direct
or indirect interest of any kind in that company (including an
interest by holding any position in that company, or by being a
shareholder of that company). But this does not apply if he
knows that he, and any persons connected with him, hold an
interest in shares (as defined for sections 198 to 211 of the
Companies Act) representing 1 per cent or more of:
(i) any class of equity share capital; or
(ii) the voting rights in any such company;
Any of these interests of 1 per cent or more are treated for
the purposes of this Article as being material interests (but
see Article 112.5);
(f) any arrangement for the benefit of employees of the Company, or
any of its subsidiaries, which limits the privileges or
benefits which he can receive to those generally given to the
employees to whom the arrangement relates; or
(g) a resolution about any proposal relating to any insurance which
the Company can buy and renew for the benefit of directors, or
of a group of people which includes directors.
112.4 This Article 112.4 applies if the directors are considering proposals
about appointing two or more directors to positions with the Company or
any company in which the Company is interested. It also applies if the
directors are considering setting or changing the terms of the
appointment. These proposals can be split up to deal with each director
separately. If this is done, each director can vote and be included in
the quorum for each resolution, except the one concerning him. But he
cannot vote if the resolution relates to appointing him to a company
which the Company is interested in if he has an interest of 1 per cent
or more in that company in the way described in Article 112.3.
112.5 For the purposes of determining whether a proposal concerns a company
in which a director is interested, the following are to be ignored:
(a) any shares held by a director as bare or custodian trustee and
in which he has no beneficial interest;
(b) 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
(c) any shares comprised in an authorised unit trust in which the
director is only interested as a unit holder.
112.6 A director shall not be counted in the quorum present at a meeting in
relation to a resolution on which he is not entitled to vote.
112.7 If any question comes up at a meeting about whether a director has a
material interest, or whether he can vote, and the director does not
agree to abstain from voting on the issue, the question shall be
referred to the chairman of the meeting. The chairman's ruling about
any other director is final and conclusive, unless the kind and extent
of the director's interests have not been fairly disclosed to the
directors. If a question arises in respect of the Chairman, it shall
be determined by a resolution on which the Chairman shall not vote.
The resolution is final and conclusive, unless the kind and extent of
the Chairman's interests have not been fairly disclosed to the
directors.
113 More about directors' interests
For the purpose of Articles 111 and 112:
(a) a general notice given to the directors that a director has an
interest of the kind stated in the notice in any contract,
transaction or arrangement involving any company or person
identified in the notice is treated as a standing disclosure
that the director has such interest;
(b) interests which are unknown to the director and which it is
unreasonable to expect him to know about are ignored; and
(c) subject to the legislation, the Company may by Ordinary
Resolution suspend or relax the provisions of Articles 111 and
112 to any extent or ratify any contract which has not been
properly authorised in accordance with Article 111 and/or 112.
DIRECTORS' COMMITTEES
114 Delegating powers to committees
114.1 The directors can delegate any of their powers or discretions to
committees. This includes powers or discretions relating to directors'
pay or giving benefits to directors. Any committee may consist of any
persons selected by the directors and must comply with any regulations
laid down by the directors. If the directors have delegated any power
or discretion to a committee, any references in these Articles to the
directors exercising that power or discretion include its exercise by
the committee.
114.2 Unless the directors decide not to allow this, a committee can
sub-delegate powers and discretions to sub-committees. References in
these Articles to committees include sub-committees permitted under
this Article.
115 Committee procedure
The Articles which regulate directors' meetings and their procedure
will also apply to committee meetings (if they can apply to committee
meetings), unless these are inconsistent with any regulations for the
committee which have been laid down under Article 114.
DIRECTORS' POWERS
116 The directors' management powers
116.1 The directors shall manage the Company's business. They can exercise
all the Company's powers. But this does not apply where the Articles,
or the legislation, say that powers can only be exercised by the
shareholders voting to do so at a General Meeting. The general
management powers under this Article are not limited in any way by
specific powers given to the directors by other Articles.
116.2 The directors are, however, subject to:
(a) the provisions of the legislation;
(b) the requirements of the Memorandum of Association of the Company
and these Articles; and
(c) any regulations laid down by the shareholders by passing a
Special Resolution at a General Meeting.
116.3 However, if any alteration is made to the Memorandum or Articles or
the shareholders lay down any regulation relating to something which
the directors have already done which was within their powers, such
alteration or regulation cannot invalidate the directors' previous
action.
117 The power to appoint attorneys and agents
117.1 The directors can appoint anyone (including the members of a group
which changes over time) as the Company's attorney or agent by
granting a power of attorney or by authorising them in some other way.
The directors can decide on the powers, authorities and discretions of
attorneys or agents. But they cannot give an attorney or agent any
power, authority or discretion which the directors do not have under
these Articles. They can revoke or vary any appointment of an attorney
or agent.
117.2 The directors can decide how long the appointment of an agent or
attorney will last for, and they can attach any conditions to it. The
appointment can also include any provisions which the directors decide
on for the protection and convenience of anybody dealing with the agent
or attorney. They can also allow the agent or attorney to delegate any
or all of his powers, authorities or discretions to any other person.
117.3 The directors may:
(a) delegate any of their authority, powers or discretions to any
manager or agent of the Company;
(b) allow managers or agents to delegate to other persons;
(c) remove any people they have appointed in any of these ways; and
(d) cancel or change anything that they have delegated, although
this will not affect anybody who acts in good faith who has not
had any notice of any cancellation or change.
117.4 Any appointment or delegation which is referred to in this Article
117 can be on any conditions decided on by the directors.
117.5 The ability of the directors to delegate under this Article 117
applies to all their powers and is not limited because certain
Articles refer to powers being exercised by the directors or by a
committee authorised by the directors, while other Articles do not.
118 Shares held by the Company
The directors can exercise the voting power of any shares in any
company held by the Company. They can decide how to do this. This
includes voting for any resolution appointing its members or any of
the directors of that company, or voting on or providing for the
payment of the directors of that company.
119 Borrowing powers
So far as the legislation allows, the directors may exercise all the
powers of the Company:
(a) to borrow money;
(b) to mortgage or charge all or any of the Company's undertaking,
property (present and future) and uncalled capital;
(c) to issue debentures and other securities; and
(d) to give security either outright or as collateral security for
any debt, liability or obligation of the Company or of any
third party.
ALTERNATE DIRECTORS
120 Alternate Directors
120.1 Any director (other than an alternate director) may appoint any person
(including another director) to act in his place (called an 'alternate
director'). That appointment requires the approval of the directors,
unless the appointment of the appointee as the relevant director's
alternate has previously been approved or the appointee is another
director. A director appoints an alternate director by delivering a
signed notice to the Company.
120.2 Except as set out in this Article, an alternate director does not have
power to act as a director and is not deemed to be a director for the
purposes of these Articles.
120.3 The appointment of an alternate director ends on the expiry of the
period for which he was appointed if any has been specified, or on the
happening of any event which, if he were a director, would cause him
to vacate such office. It also ends if his appointor ceases to be a
director, unless that director retires at a General Meeting at which
he is elected again. He can resign his office by notice to the Company.
A director can also remove his alternate by a written notice delivered
to the Company.
120.4 An alternate director is entitled to receive notices of meetings of the
directors, or of committees of which his appointor is a member. He is
entitled 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 perform all functions of his appointor as a director.
The provisions of the Articles regulating the meeting apply as if he
(instead of his appointor) were a director. If he is himself a director
or attends any such meeting as an alternate for more than one
director, he can vote cumulatively for himself and for each other
director he represents but he may not be counted more than once for
the purposes of the quorum. An alternate director's signature to any
resolution in writing of the directors is as effective as the
signature of his appointor.
120.5 An alternate director is entitled to contract and be interested in and
benefit from contracts, transactions or arrangements and be repaid
expenses and to be indemnified to the same extent as if he were a
director, but is not entitled to receive any pay from the Company as
alternate director.
120.6 Except if the Articles say otherwise, an alternate director is
responsible for his own acts and defaults. No one else is responsible
for him. He is not the agent of the appointing director.
THE COMPANY SECRETARY AND MINUTES
121 The Secretary
121.1 The Secretary is appointed by the directors. The directors decide on
the terms and period of his appointment. The directors may also remove
the Secretary, but this does not affect any claim for damages against
the Company for breach of any contract of employment he may have.
121.2 The directors can also appoint one or more people to be deputy or
assistant Secretary. The directors decide on the terms and period of
their employment. The directors can also remove any deputy or
assistant Secretary, but this does not affect any claim for damages
against the Company for breach of any contract of service he may have.
Anything which the Articles require, or allow, to be done by the
Secretary can also be done by any deputy or assistant Secretary.
121.3 Where the legislation or the Articles require or authorise something
to be done by a director and the Secretary, it must not be done by one
person alone acting as both a director and as, or in place of, the
Secretary.
122 Minutes
The directors must keep minutes of all appointments of officers made
by the directors. They must also keep minutes of all shareholders'
meetings, directors' meetings and meetings of committees of the
directors. The minutes must include the names of the directors
present. If the minutes appear to be signed by the Chairman of the
particular meeting, they are sufficient evidence of the facts
they contain.
THE SEAL
123 The Seal
123.1 The Seal can only be used with the authority of the directors or of a
committee authorised by the directors.
123.2 The directors can decide who is to sign any document which is sealed
using the Seal. Where they do not decide, it can be signed by a
director and the secretary or by two directors.
123.3 The directors can use all the powers given by the legislation
relating to official seals for use abroad.
123.4 The directors can decide to print share or debenture certificates which
are sealed with the Seal with a copy of a signature or with no
signature at all. The directors can decide this either in relation
to a particular certificate, or in general.
AUTHENTICATING DOCUMENTS
124 Establishing that documents are genuine
124.1 Any director, or the Secretary, has power to authenticate any of the
following things, and to certify copies or extracts from them as true
copies or extracts:
(a) any documents relating to the Company's constitution;
(b) any resolutions passed by the shareholders or by any class of
shareholders, or by the directors or by a committee of the
directors; and
(c) any books, documents, records or accounts which relate to the
Company's business.
124.2 The directors can also give this power to others. When any books,
documents, records and accounts are not kept at the Registered Office,
the officer of the Company who holds them is treated as a person who
has been authorised by the directors to authenticate any of them, and
to provide certified copies or extracts from them.
124.3 This Article 124.3 applies to a document which appears to be a copy of
a resolution or an extract from the minutes of any meeting, and which
is certified as a copy or extract as described in Article 124.1 or
124.2. This document is conclusive evidence for anyone who deals with
the Company on the strength of the document that:
(a) the resolution has been properly passed; or
(b) the minutes or extract are a true and accurate record of the
proceedings of a valid meeting.
DIVIDENDS
125 Final dividends
As far as the legislation allows, the Company's shareholders can
declare dividends by passing an Ordinary Resolution. No such dividend
can exceed the amount recommended by the directors.
126 Interim and fixed dividends
126.1 As far as the legislation allows, the directors can, if they consider
that the profits of the Company justify such payments:
(a) declare and pay interim dividends on shares of any class of
such amounts and on such dates and for such periods as they
decide; and
(b) declare and pay the fixed dividends on any class of shares
carrying a fixed dividend on the dates prescribed for the
payment of such dividends.
126.2 No interim dividend can be declared or paid on shares which do not
have preferred rights, if at the time of declaration any dividend on
shares which have preferred dividend rights is in arrears.
126.3 If the directors act in good faith, they are not liable to the holders
of any shares for any loss they may suffer because a lawful dividend
has been paid under this Article on other shares which rank behind
their shares.
127 Currency of payment
127.1 Unless the rights or terms of any shares, or the Articles, say
otherwise, a dividend or any other money payable in respect of a share
can be declared or paid in whatever currency the directors decide.
127.2 The directors can decide that a particular Approved Depositary should
be able to receive dividends in a currency other than the currency in
which it is declared and can make arrangements accordingly. In
particular, if an Approved Depositary has chosen or agreed to receive
dividends in another currency, the directors can make arrangements
with the Approved Depositary for payment to be made to the Approved
Depositary for value on the date on which the relevant dividend is
paid, or a later date decided on by the directors.
127.3 When a dividend is to be paid in a currency other than the currency in
which it was declared the exchange rate to be used for conversion of
the dividend is whatever market rate the directors consider to be
appropriate as at the close of business on the last business day
before:
(a) the date when the directors publicly announce their intention
to recommend the particular dividend, if it is a dividend
declared by the shareholders passing a resolution at a General
Meeting; or
(b) the date when the directors declare the particular dividend, in
any other case.
127.4 The decision of the directors regarding the exchange rate is
conclusive and binding.
128 Distributions in kind
128.1 If the directors recommend this, the Company's shareholders can pass
an Ordinary Resolution to direct all or part of a dividend to be paid
by distributing specific assets (and in particular paid-up shares or
debentures of any other company). The directors must give effect to
such resolution.
128.2 Where any difficulty arises on such a distribution, the directors
can settle it as they think appropriate. In particular, they can:
(a) issue certificates for fractions, or authorise any person to
sell and transfer fractions, or ignore fractions altogether;
(b) value assets for distribution purposes;
(c) pay cash of a similar value to adjust the rights of
shareholders; and/or
(d) vest any assets in trustees.
129 No dividends are payable except out of profits
No dividend can be paid otherwise than out of profits available for
distribution under the legislation.
130 Apportioning dividends according to amounts paid up
All dividends will be divided and paid in proportions based on the
amounts which have been paid up on the shares during any of the period
for which the dividend is paid. Sums which have been paid up in
advance of calls do not count as paid up for this purpose. But if the
rights or terms of any share say that it will be entitled to a
dividend as if it were a fully paid-up, or partly paid-up, share
from a particular date (in the past or the future), it will be
entitled to a dividend on this basis. This Article applies unless the
rights or terms of any shares say otherwise.
131 Deducting amounts owing from dividends and other money
131.1 If a shareholder owes any money for calls on shares, or money relating
in any other way to shares, the directors can deduct any of this money
from:
(a) any dividend on any shares held by the shareholder; or
(b) any other money payable by the Company in connection with the
shares.
131.2 Money deducted in this way can be used to pay amounts owed to the
Company in connection with the shares.
132 Payments to shareholders
132.1 Any dividend or other money payable in cash relating to a share (in
whatever currency) can be paid by cheque or warrant payable to the
shareholder who is entitled to it, and sent to the address recorded
for him on the Register, or to someone else named in a written
instruction from the shareholder (or from all joint shareholders). In
the case of shares held in uncertificated form, such payment can also
be made by means of a relevant system. A dividend can also be paid by
inter-bank transfer or a similar automated payment method to an
account named in a written instruction from the person receiving the
payment. Alternatively, a dividend can be paid in some other way
authorised by the shareholder (or all joint shareholders).
132.2 For joint shareholders, the dividend will be paid to the person whose
name appears first in the Register. In the case of joint shareholders,
or persons jointly and automatically entitled to shares by law, the
Company can rely on a receipt for a dividend or other money paid on
shares from any one such person.
132.3 Cheques and warrants are sent, and payment in any other way is made,
at the risk of the people who are entitled to the money. The Company
is treated as having paid a dividend if such a cheque or warrant is
cleared, or if a payment by means of a relevant system or a transfer
of funds by a bank is made in accordance with instructions given by
the Company.
132.4 No dividend or other sum payable by the Company on or in respect of
any of its shares carries a right to interest from the Company, unless
the rights of the shares say otherwise.
132.5 The directors can pay the dividends or interest relating to a share to
the person who is entitled to the share by transmission. He must first
produce any certificate or other evidence which he would need to
produce when applying to be registered as a shareholder in respect of
the share.
133 Record date
Any dividend on any shares can be paid to the holder or holders of the
shares shown on the Register at a particular time on a particular date
stated in the resolution passed for payment of the dividend. It will
be based on the number of shares registered at that time. This Article
applies whether what is being done is the result of a resolution of
the directors or a resolution passed at a General Meeting. The date
can be before the relevant resolution was passed. This Article does
not affect any rights to payments or other benefits on shares as
between a person who has transferred the shares and the person who
has acquired them.
134 Dividends which are not claimed
134.1 The directors can invest any dividends or other amounts payable on a
share which have not been claimed until the dividends or other amounts
are claimed or the directors can use them in any other way for the
Company's benefit until they are claimed.
134.2 The Company will not be a trustee of the money and will not be liable
to pay interest on it. If a dividend has not been claimed for 12 years
after the passing of the resolution for payment of that dividend, the
Company will no longer have to pay the dividend.
134.3 The Company can stop paying dividends by cheque or other payment order
if cheques or other payment orders for two dividends in a row are sent
back or not cashed. It can also stop after one such dividend if it
cannot establish a new address for the shareholder after making
reasonable enquiries. The Company must start paying dividends in this
way again if the shareholder or a person automatically entitled to the
shares by law claims a dividend or cashes a dividend cheque or
warrant.
CAPITALISING RESERVES
135 Capitalising reserves
135.1 Without any need of approval from the Company's shareholders,
the directors can change into capital any sum:
(a) which is part of any of the Company's reserves (including
premiums received when any shares were issued, capital
redemption reserves or other undistributable reserves); or
(b) which the Company is holding as net profits which are not
required for paying any preferential dividend (whether or not
available for distribution).
135.2 The directors can use the sum which is changed into capital by setting
it aside for the ordinary shareholders on the Register at the close of
business on the date stated in the resolution or fixed as stated in
the resolution. The sum set aside can be used to pay up in full shares
of the Company and allot such shares and distribute them to
shareholders as bonus shares in proportion to their holdings of
Ordinary Shares at the time. The shares can be Ordinary Shares or
shares of some other class. Alternatively, debentures or other
obligations can be allotted in the same way. The sum set aside can
also be used for or towards paying up any amounts which are unpaid on
partly paid shares held by the ordinary shareholders in the same
proportion. A combination of these things can also be done. However,
profits which are not available for distribution can only be used to
pay up shares to be allotted to shareholders fully paid. This
Article is subject to the rights of any existing shares.
135.3 If any difficulty arises in operating this Article, the directors can
resolve it in any way which they decide. For example, they can deal
with entitlements to fractions of a share. They can decide that the
benefit of share fractions belongs to the Company or that share
fractions are ignored or deal with fractions in some other way.
135.4 The directors can appoint any person to sign any contract with the
Company on behalf of those who are entitled to shares under the
resolution. Such a contract is binding on all concerned. The contract
can provide for either:
(a) allotment of fully paid shares, debentures or other obligations
to the shareholders entitled upon capitalisation; or
(b) proportional payment by the Company of the amounts unpaid on
existing shares.
SCRIP DIVIDENDS AND DIVIDEND REINVESTMENT
136 Shareholders can be offered the right to receive new shares
instead of cash dividends
136.1 The directors can offer Ordinary Shareholders the right to choose to
receive new Ordinary Shares, which are fully paid up, instead of all
or part of their cash dividend. Before they can do this, the Company's
shareholders must have passed an Ordinary Resolution authorising the
directors to make this offer.
136.2 The Ordinary Resolution can apply to a particular dividend or
dividends, or it can apply to some or all of the dividends which may be
declared or paid in a specified period.
136.3 The directors can offer shareholders the right to request new shares
instead of cash for:
(a) the next dividend; or
(b) all future dividends (if a share alternative is made available),
until they tell the Company that they no longer wish to receive
new shares.
136.4 The directors can also allow shareholders to choose between these
alternatives.
136.5 A shareholder is entitled to Ordinary Shares whose total relevant
value is as near as possible to the cash dividend he would have
received but not in excess of it. The relevant value of a share is
the average market value of the Company's Ordinary Shares for the
five dealing days starting from, and including, the day when the
shares are first quoted "ex-dividend" or a later day chosen by the
directors. This average market value is worked out from the average
middle market quotations for the Company's Ordinary Shares on the
London Stock Exchange, as published in its Daily Official List.
136.6 No shareholders will receive a fraction of a share. The directors can
decide how to deal with any fraction left over. For example, the
directors can decide that:
(a) the Company can have the benefit of the left over fractions;
(b) the fractions will be retained and accumulated for the benefit
of the relevant shareholder (without interest) and later used
up in the allotment of fully paid shares by a capitalisation
made in the same way as under Article 136.10;
(c) the fractions will be accumulated for the benefit of the
relevant shareholder (without interest) and later used to
acquire further fully paid shares by cash subscription; or
(d) the fractions will be paid to the shareholder either at the
time of payment of the dividend or at some later time such as
when the shareholder transfers his shares.
136.7 The directors must notify shareholders in writing of their right to
request new shares instead of cash and of the procedure which they
must follow in order to exercise this right.
136.8 The directors can exclude or restrict the right to opt for new shares
in the case of shareholders with registered addresses in places other
than the United Kingdom or the United States, where they decide that
this is necessary or convenient because:
(a) in the absence of a registration statement or other formalities,
the offer of this right would be, or might be considered to be,
unlawful; or
(b) they consider that compliance with such formalities would be
impracticable;
where special formalities would otherwise apply in connection with the
offer of new shares.
136.9 The directors can exclude or restrict the right to opt for new shares
in the case of any shareholder who is an Approved Depositary or a
nominee for an Approved Depositary. They can do this if the offer or
exercise of the right to or by the people on whose behalf the Approved
Depositary holds the shares would suffer from legal or practical
problems of the kind mentioned in Article 136.8. If other shareholders
(other than those excluded under Article 136.8) have the right to opt
for new shares, the directors must be satisfied that an appropriate
dividend reinvestment plan or similar arrangement is available to a
substantial majority of the people on whose behalf the Approved
Depositary holds shares or that such arrangements will be available
promptly. The first sentence of this Article 136.9 does not apply
until the directors are satisfied of this.
136.10 So far as a shareholder opts to receive new shares, the dividend, or
the part of the dividend, on the shares for which he has opted to
receive new shares (which are called the elected shares), will not be
declared or payable. Instead, new Ordinary Shares will be allotted on
the basis set out earlier in this Article 136. To do this the
directors will convert into capital the sum equal to the total nominal
amount of the new Ordinary Shares to be allotted. They will use this
sum to pay up in full the appropriate number of new Ordinary Shares.
These will then be allotted and distributed to the holders of the
elected shares as set out above. The sum to be converted into capital
can be taken from any amount which is then in any reserve or fund
(including the share premium account and any capital redemption reserve
or any of the Company's distributable profits). Article 135 applies to
this process, so far as it is consistent with this Article 136.
136.11 The new Ordinary Shares rank equally in all respects with the existing
fully paid-up Ordinary Shares at the time when the new Ordinary Shares
are allotted. But they are not entitled to share in the dividend from
which they arose and do not allow the holder to opt for new shares
instead of that dividend.
137 Dividend plans generally
137.1 The directors can implement and maintain one or more share dividend or
distribution reinvestment plans including or instead of offering new
shares under Article 136. The terms and conditions of any plan can be
decided by the directors, who can change them if they choose. They can
decide to make a plan available to some shareholders only, or to part
of the dividends only. It is for the directors to decide to suspend or
terminate a plan at any time.
137.2 The terms of a plan can give shareholders the right to:
(a) choose to receive new fully paid shares;
(b) subscribe for cash for unissued shares in the Company, payable
in full or by instalments;
(c) apply cash in paying up in full or by instalments any unpaid or
partly paid shares held on the terms of the plan;
(d) forgo a dividend and receive instead fully paid bonus shares; or
(e) accept any other option or participate in any other
arrangements thought by the directors to be appropriate.
137.3 This Article 137 is, as regards an offer of new shares instead of a
cash dividend, subject to the provisions of Article 136 and of any
Ordinary Resolution passed under Article 136.1.
ACCOUNTS
138 Accounting and other records
The directors must make sure that proper accounting records that
comply with the legislation are kept to record and explain the
Company's transactions.
139 Location and inspection of records
139.1 The accounting records must be kept:
(a) at the Registered Office; or
(b) at any other place which the legislation allows, and the
directors decide on.
139.2 The Company's officers always have the right to inspect the accounting
records.
139.3 Anyone else (including a shareholder) does not have any right to
inspect any books or papers of the Company unless:
(a) the legislation or a proper court order gives him that right; or
(b) the directors authorise him to do so.
140 Sending copies of accounts and other documents
140.1 This Article applies to every balance sheet and profit and loss
account to be laid before the Company's shareholders at a General
Meeting with any other document which the law requires to be attached
to these.
140.2 Copies of the documents set out in Article 140.1 must be sent to the
Company's shareholders and debenture holders and all other people to
whom the Articles, or the legislation, require the Company to send
them. This must be done at least 21 days before the relevant General
Meeting. But the Company need not send these documents to:
(a) shareholders who are sent summary financial statements in
accordance with the legislation;
(b) more than one joint holder of shares or debentures; or
(c) any person for whom the Company does not have a current address.
AUDITORS
141 Appointment of Auditors
141.1 The appointment, duties and pay of the auditors are governed by the
legislation.
141.2 Subject to the legislation, all acts done by any person acting as an
Auditor shall, as regards all persons dealing in good faith with the
Company, be valid, even if he was not properly appointed or he was at
the time of his appointment not qualified for appointment or
subsequently became disqualified.
141.3 The auditors may speak at any General Meeting on any part of the
business of the meeting which concerns them as Auditors.
NOTICES
142 Serving and delivering notices and other documents
142.1 The Company can serve or deliver any notice or other document,
including a share certificate, on or to a shareholder:
(a) personally;
(b) by posting it in a letter (with postage paid) to the address
recorded for him on the Register;
(c) by delivering it to that address;
(d) by fax (except in the case of a share certificate) to a fax
number given by him to the Company;
(e) by electronic mail (except in the case of a share certificate)
to an electronic address given by him to the Company;
(f) as authorised in writing by the relevant shareholder; or
(g) through CREST, where the notice or document relates to
uncertificated shares.
142.2 However, these Articles do not affect any provision of the legislation
requiring offers, notices or documents to be served in a particular
way.
142.3 Where the Articles or the rights of any shares allow notices to be
given to shareholders by advertisement, the notice must be published
as set out in this Article. A notice in the United Kingdom must be
published in at least two national newspapers. A notice in the United
States must be published in The Wall Street Journal and The New York
Times or such other newspapers published in the United States as the
directors consider to be appropriate.
143 Notices to joint holders
When a notice or document is to be given to joint shareholders it
shall be given to the joint shareholder who is listed first on the
Register for the share or shares, but ignoring any joint shareholder
without a United Kingdom or United States address. A notice given in
this way is treated as given to all of the joint holders.
144 Notices for shareholders with foreign addresses
This Article applies to a shareholder whose address on the Register is
outside the United Kingdom or the United States. He can give the
Company a United Kingdom or United States address where notices or
documents can be given to him. If he does, he is entitled to have
notices or documents given to him at that address. Otherwise, he is
not entitled to receive any notices from the Company.
145 Shareholders attending meetings
A shareholder who attends any shareholders' meeting is considered to
have received notice of that meeting and, if required, of the purpose
for which it was called. This applies to a shareholder who attends in
person or by proxy.
146 When notices are served
146.1 It is conclusive evidence that a notice or other document has been
given if it is shown that:
(a) the envelope containing the notice or document was properly
addressed; and
(b) it was put into the postal system with postage paid.
146.2 Letters sent by first class post from and to addresses in the United
Kingdom or from and to addresses in the United States are treated as
given the day after posting. In all other cases, letters are treated
as having been given on the third day after posting.
146.3 A notice given by fax is treated as being served or delivered the day
after the fax was sent.
146.4 A notice given by electronic mail is treated as being served or
delivered when it is sent.
146.5 A notice sent through CREST is treated as being served or delivered
when the Company or any CREST participant acting for the Company,
sends the instruction relating to the notice.
146.6 A notice or document served or delivered by the Company by any other
means authorised in writing by a shareholder is treated as being served
or delivered when the Company has done what it was authorised to do by
that shareholder for service or delivery.
147 Serving notices and documents on shareholders who have died or are
bankrupt
This Article applies where a shareholder has died, or become bankrupt
or is in liquidation, or suffers from mental disorder but is still
registered as a shareholder. It applies whether he is registered as a
sole or joint shareholder. A person who is automatically entitled to
such shareholder's shares by law and who proves this to the reasonable
satisfaction of the directors can give a United Kingdom address for
service of notices and documents. If this is done, notices and
documents must be sent to that address. Otherwise, if any notice, or
other document, is served on the shareholder named on the Register, or
sent to him in accordance with the Articles, this will be valid
despite his death, bankruptcy or liquidation or mental disorder.
This applies even if the Company knew about these things. If notices
or documents are served or sent in accordance with this Article, there
is no need to send them to, or serve them in any other way on any
other people who may be involved.
148 Notices to predecessors
Anyone who becomes entitled to a share is bound by any notice in
respect of that share which was properly given to a person from whom
he derives his title before his name is entered in the Register.
This does not apply to a direction notice under Article 75.
149 Notices to directors
The Company can give any notice or other document to a director:
(a) personally; or
(b) by posting it in a letter (with postage paid) to the address
given by him to the Company for this purpose; or
(c) by delivering it to that address; or
(d) by faxing it to the number given by him to the Company for this
purpose; or
(e) by electronic mail to an electronic address given by him to the
Company for this purpose.
150 Notices to the Company
Anyone can serve any summons, notice, order or other document on the
Company or any officer of the Company:
(a) by posting it in a letter (with postage paid) to the Company or
any officer of the Company at the Registered Office; or
(b) by delivering it to that address.
WINDING UP
151 Directors' power to petition
The directors can present a petition to the Court in the name and on
behalf of the Company for the Company to be wound up.
152 Distribution of assets in kind
152.1 If the Company is wound up (whether the liquidation is voluntary,
under supervision of the Court, or by the Court) the liquidator can,
with the authority of an Extraordinary Resolution passed by the
shareholders, divide among the shareholders in kind the whole or any
part of the assets of the Company. This applies whether the assets
consist of property of one kind or different kinds. For this purpose,
the liquidator can set such value as he considers fair upon any
property and decide how such division is carried out as between
shareholders or different groups of shareholders. The liquidator can
also, with the authority of an Extraordinary Resolution passed by the
shareholders, transfer any part of the assets to trustees upon such
trusts for the benefit of shareholders as the liquidator decides. The
liquidation of the Company can then be closed and the Company
dissolved. However, no past or present shareholder can be compelled to
accept any shares or other property under this Article which carries
a liability.
152.2 The power of sale of a liquidator includes a power to sell wholly or
in part for shares or debentures or other obligations of another
company, whether it is already in existence or is about to be formed
for the purpose of the sale.
DESTROYING DOCUMENTS
153 Destroying documents
153.1 Provided that it complies with the rules (as defined in the CREST
Regulations) which apply to shares held in uncertificated form, the
Company can destroy:
(a) all transfer forms for shares, and documents sent to support a
transfer, and any other documents which were the basis for
making an entry on the Register, after six years from the date
of registration;
(b) all dividend payment instructions and notifications of a change
of address or name, after two years from the date these were
registered;
(c) all cancelled share certificates, after one year from the date
they were cancelled;
(d) all paid dividend warrants and cheques, after one year from the
date of payment; and
(e) all proxy forms, after one year from the poll at which they
were used or after one month from the meeting to which they
relate if there was no poll.
153.2 If the Company destroys a document in accordance with Article 153.1,
it is conclusively treated as having been a valid and effective
document in accordance with the Company's records relating to the
document. Any action of the Company in dealing with the document in
accordance with its terms before it was destroyed is conclusively
treated as properly taken. This Article only applies to documents
which are destroyed in good faith and if the Company is not on notice
of any claim to which the document may be relevant.
153.3 This Article does not make the Company liable:
(a) if it destroys a document earlier than referred to in Article
153.1; or
(b) if the Company would not be liable if this Article did not
exist.
153.4 This Article applies whether a document is destroyed or disposed of in
some other way.
INDEMNITY AND INSURANCE
154 Indemnity
154.1 So far as the legislation allows, every director, Secretary or other
officer of the Company shall be indemnified by the Company out of its
own funds against all costs, charges, losses, expenses and liabilities
incurred by him:
(a) in performing his duties; and/or
(b) in exercising his powers; and/or
(c) in supposedly doing any of these things; and/or
(d) otherwise in relation to or in connection with his duties,
powers or office.
154.2 The liabilities covered by Article 154.1 include, for example, any
liability incurred by him in defending any proceedings, civil or
criminal, which relate to anything done or omitted or claimed to have
been done or omitted by him as an officer or employee of the Company:
(a) in which judgment is given in his favour; or
(b) in which the proceedings are otherwise disposed of without any
finding or admission of any material breach of duty on his
part; or
(c) in which he is acquitted; or
(d) in connection with any application under any legislation for
relief from liability in respect of any such act or omission
where relief is granted to him by the Court.
154.3 So far as the legislation allows, every director, Secretary or other
officer of the Company is exempted from any liability to the Company
where that liability would be covered by the indemnity in Article
154.1.
155 Insurance
155.1 For the purpose of this Article each of the following is a
'Relevant Company':
(a) the Company;
(b) any holding company of the Company;
(c) any body, whether or not incorporated, in which the Company or
such holding company or any of the predecessors of the Company
or of such holding company has or had any interest, whether
direct or indirect; and
(d) any body, whether or not incorporated, which is in any way
allied to or associated with the Company, or any subsidiary of
the Company or such other body.
155.2 Without limiting Article 154 in any way, the directors can arrange for
the Company to purchase and maintain insurance for or for the benefit
of any persons who are or were at any time:
(a) directors, officers or employees of any Relevant Company; or
(b) trustees of any pension fund or employees' share scheme in
which employees of any Relevant Company are interested.
155.3 This includes, for example, insurance against any liability
incurred by such persons for any act or omission:
(a) in performing their duties; and/or
(b) in exercising their powers; and/or
(c) in supposedly doing any of these things; and/or
(d) otherwise in relation to their duties, powers or offices.
FURTHER PROVISIONS ON SHARES HELD IN UNCERTIFICATED FORM
156 Holding shares in uncertificated form
156.1 Subject to the Articles and legislation, the directors can decide that
any class of shares can be held in uncertificated form and that title
to such shares can be transferred by means of a relevant system, and
the directors may make arrangements for any class of shares to be held
and transferred in this form. The directors can also decide that
shares of any class must cease to be held and transferred in
uncertificated form.
156.2 Shares held in uncertified form may be changed to become shares held
in certificated form and shares held in certificated form may be
changed to become shares held in uncertificated form, provided the
requirements of the CREST regulations are met.
157 Predominance of CREST Regulations
The provisions of these Articles do not apply to shares of any class
which are held in uncertificated form to the extent that the Articles
are inconsistent with:
(a) the holding of shares of that class in uncertificated form;
(b) the transfer of title to shares of that class by means of a
relevant system; or
(c) any provision of the CREST Regulations.
GLOSSARY
About the glossary
This glossary is to help readers understand the Company's Articles of
Association. Words are explained as they are used in the Articles - they might
mean different things in other documents. The glossary is not legally part of
the Articles, and it does not affect their meaning. The definitions are
intended to be a general guide - they are not precise. Words which are printed
in 'bold' in a definition have their own definition in the glossary.
'abrogate' If the 'special rights' of a share are abrogated, they are cancelled
or withdrawn.
'adjourn' Where a meeting breaks, to be continued at a later time or day, at the
same or a different place.
'allot' When new shares are allotted, they are set aside for the person they are
intended for. This will normally be after the person has agreed to pay for a
new share, or has become entitled to a new share for any other reason. As soon
as a share is allotted, that person gets the right to have his name put on the
register of shareholders. When he has been registered, the share has also been
'issued'.
'asset' Anything which is of any value to its owner.
'attorney' An attorney is a person who has been appointed to act for another
person. The person is appointed by a formal document, called a 'power of
attorney'.
'automatically entitled to a share by law' In some situations, a person will be
entitled to have shares which are registered in somebody else's name registered
in his own name, or he can require the shares to be transferred to another
person. When a shareholder dies, or the sole survivor of joint shareholders
dies, his personal representatives have this right. If a shareholder is made
bankrupt, his trustee in bankruptcy has the right.
'beneficial interest' The person to whom something really belongs has the
beneficial interest in it. This person may not be the registered (or "legal"
owner) of the thing. For example, if a parent holds shares for his or her
child, the child is the beneficial owner, and the parent is the legal owner.
See also 'trustee'.
'brokerage' Commission which is paid to a broker by a company 'issuing' shares,
where the broker's clients have applied for shares.
'call' A call to pay money which is due on shares which has not yet been paid.
This happens if the Company issues shares which are 'partly paid', where money
remains to be paid to the Company for the shares. The money which has not been
paid can be called for. If all the money to be paid on a share has been paid,
the share is called a 'fully paid' share.
'capitalise' To convert some or all of the 'reserves' of a company into capital
(such as shares).
'capital redemption reserve' A reserve of funds which a company may have to set
up to keep its capital base when shares are 'redeemed' or bought back.
'charge' See 'lien and charge'.
'company representative' If a company owns shares, it can appoint a company
representative to attend a shareholders' meeting to speak and vote for it.
'consolidate' When shares are consolidated, they are combined with other shares
- -for example every three (pound)1 shares might be consolidated into one new
(pound)3 share.
'debenture' A typical debenture is a long-term borrowing by a company. The loan
usually has to be repaid at a fixed date in the future, and carries a fixed
rate of interest.
'declare' When a dividend is declared, it becomes due to be paid.
'dividend' warrant A dividend warrant is similar to a cheque for a dividend.
'documents of title' The documents which show that a person owns something (for
example, a share certificate).
'equity securities' For section 89 of the Companies Act this means all the
shares of a company except:
(a) shares which only have a limited right to share in the company's income
or assets;
(b) shares held as a result of share schemes for employees (such as profit
sharing schemes);
(c) some shares held by the founders of the company; and
(d) bonus shares issued when the company 'capitalises reserves'.
Also included are securities which can be converted into such shares, or which
allow their holder to 'subscribe' for such shares.
'ex-dividend' When a share goes ex-dividend, a person who buys it will not be
entitled to the dividend which has been 'declared' shortly before he bought it.
When a share has gone ex- dividend, the seller is entitled to this dividend,
even though it will be paid after he has sold his share.
'executed' A document is executed when it is signed, or sealed or made valid in
some other way.
'exercise' When a power is exercised, it is put to use.
'forfeit' When a share is forfeited it is taken away from the shareholder and
goes back to the Company. This process is called "forfeiture". This can happen
if a call on a partly paid share is not paid on time.
'fully paid shares' When all of the money which is due to the Company for a
share has been paid, a share is called a fully paid share.
'good title' If a person has good title to a share, he owns it outright.
'holding company' A company which controls another company (for example by
owning a majority of its shares) is called the holding company of that other
company. The other company is the 'subsidiary' of the holding company.
'indemnity' If a person gives another person an indemnity, he promises to make
good any losses or damage which the other might suffer. The person who gives
the indemnity is said to "indemnify" the other person.
'in issue' See 'issue'.
'instruments' Formal legal documents.
'issue' When a share has been issued, everything has been done to make the
shareholder the owner of the share. In particular, the shareholder's name has
been put on the register of shareholders. Existing shares which have been
issued and not cancelled are 'in issue'.
'liabilities' Debts and other obligations.
'lien and charge' Where the Company has a lien and charge over shares, it can
take the dividends, and any other payments relating to the shares which it has a
charge over, or it can sell the shares, to repay the debt and so on.
'members' Shareholders.
'nominal amount or value' The value of the share in the Company's accounts. The
nominal value of the (pound)1 Ordinary Shares is (pound)1. This value is shown
on the share certificate for a share in certificated form. When the Company
issues new shares this can be for a price which is at a 'premium' to the nominal
value. When shares are bought and sold on the stock market this can be for more,
or less, than the nominal value. The nominal value is sometimes also called the
"par value".
'office copy' An exact copy of an official document, supplied by the office
which holds, or issued, the original.
'Ordinary Resolution' A decision reached by a simple majority of votes - that is
by more than 50 per cent of the votes cast.
'paid up' If no money remains to be paid on a share, it is said to be
'paid up'.
'partly paid shares' If any money remains to be paid on a share, it is said to
be 'partly paid'. The unpaid money can be "called" for.
'personal representatives' A person who is entitled to deal with the property
(the estate) of a person who has died. If the person who has died left a valid
will, the will appoints executors who are personal representatives. If the
person died without a will, the courts will appoint one or more administrators
to be the personal representatives.
'poll' On a poll vote, the number of votes which a shareholder has will depend
on the number of shares which he owns. An Ordinary Shareholder has one vote for
each share he owns. A poll vote is different to a show of hands vote, where
each person who is entitled to vote has just one vote, however many shares he
owns.
'power of attorney' A formal document which legally appoints one or more persons
to act on behalf of another person.
'pre-emption rights' The right of some shareholders which is given by the
Companies Act to be offered a proportion of certain classes of newly 'issued'
shares and other securities before they are offered to anyone else. This offer
must be made on terms which are at least as favourable as the terms offered to
anyone else.
'premium' If the Company 'issues' a new share for more than its 'nominal value'
(for example because the market value is more than the nominal value), the
amount above the nominal value is the premium.
'proxy' A proxy is a person who is appointed by a shareholder to attend a
meeting and vote for that shareholder. A proxy is appointed by using a 'proxy
form'. A proxy does not have to be a shareholder. A proxy can only vote on a
'poll', and not on a show of hands.
'proxy form' A form which a shareholder uses to appoint a 'proxy' to attend a
meeting and vote for him. The proxy form must be delivered to the Company before
the meeting to which it relates.
'quorum' The minimum number of shareholders who must be present before a meeting
can start. When this number is reached, the meeting is said to be quorate.
'rank' or 'ranking' When either capital or income is distributed to
shareholders, it is paid out according to the rank (or ranking) of the shares.
For example, a share which ranks before (or above) another share in sharing in
the Company's income is entitled to have its dividends paid first, before any
dividends are paid on shares which rank below (or after) it. If there is not
enough income to pay dividends on all shares, the available income must be used
first to pay dividends on shares which rank first, and then to shares which rank
below. The same applies for repayments of capital. Capital must be paid first to
shares which rank first in sharing in the Company's capital, and then to shares
which rank below.
'recognised clearing house' A clearing house which has been authorised to carry
on business by the UK authorities. A clearing house is a central computer system
for settling transactions between members of the clearing house.
'recognised investment exchange' An investment exchange which has been
officiallyrecognised by the UK authorities. An investment exchange is a place
where investments, such as shares, are traded. The London Stock Exchange is a
recognised investment exchange.
'redeem and redemption' When a share is redeemed, it goes back to the Company in
return for a sum of money (the redemption price) which was fixed before the
share was issued. This process is called redemption. A share which can be
redeemed is called a redeemable share.
'relevant securities' Any shares of a company, except shares held as a result of
share schemes for employees (such as profit sharing schemes) and some shares
held by the founders of the company. Also included are any securities which can
be converted into such shares, or which allow their holders to 'subscribe' for
such shares.
'relevant system' A computer based system and procedures enabling title to
shares to be evidenced and transferred without a written instrument, currently
operated by CrestCo.
'renunciation' Where a share has been 'allotted', but nobody has been entered on
the share register for the share, it can be 'renounced' to another person. This
transfers the right to have the share registered to another person. This
process is called renunciation.
'requisition of a meeting' A formal process which shareholders can use to call a
meeting of shareholders. Generally speaking the shareholders who want to call a
meeting must hold at least 10 per cent of the 'issued' shares.
'reserve fund' A fund which has been set aside in the accounts of a company -
profits which are not paid out to shareholders as dividends, or used up in some
other way, are held in a reserve fund by the company.
'retire by rotation' At every Annual General Meeting a proportion of the
directors retires in turn. This gives the shareholders the chance to confirm
their appointments by voting on whether to re-elect them.
'revoke' To withdraw, or cancel.
'rights issue' A way by which companies raise extra share capital. Usually the
existing shareholders will be offered the chance to buy a certain number of new
shares, depending on how many they already have. For example, shareholders may
be offered the chance to buy one new share for every four they already have.
'share premium account' If a new share is issued by the Company for more than
its 'nominal value' (because the market value is more than the nominal value)
then the amount above the nominal value is the premium, and the total of these
premiums is held in a 'reserve fund' (which cannot be used to pay dividends)
called the share premium account.
'Special Resolution' A decision reached by a majority of at least 75 per cent of
votes cast. Shareholders must be given at least 21 days' notice of any Special
Resolution.
'special rights' These are the rights of a particular class of shares, as
distinct from rights which apply to all shares generally. Typical examples of
special rights are where the shares 'rank', their rights to sharing in income
and assets and voting rights.
'statutory declaration' A formal way of declaring something in writing.
Particular words and formalities must be used - these are laid down by the
Statutory Declarations Act of 1835.
'subscribe for shares' To agree to take new shares in a company (usually for a
cash payment).
'subdividing shares' When shares are subdivided they are split into shares which
have a smaller 'nominal amount'. For example, a (pound)1 share might be
subdivided into two 50p shares.
'subject to' Means that something else has priority, or prevails, or must be
taken into account. When a statement is subject to another statement this means
that the first statement must be read in the light of the other statement,
which will prevail if there is any conflict.
'subscribers to shares' The people who first buy the shares.
'subsidiary' A company which is controlled by another company (for example
because the other company owns a majority of its shares) is called a subsidiary
of that company.
'subsidiary undertaking' This is a term used by the Companies Act. It is a wider
definition than 'subsidiary'. Generally speaking it is a company which is
controlled by another company because the other company:
(a) has a majority of the votes in the company either alone, or acting with
others;
(b) is a shareholder who can appoint or remove a majority of the directors;
or
(c) can exercise dominant influence over the company because of anything in
the company's memorandum or articles, or because of a certain kind of
contract.
'trustees' People who hold property of any kind for the benefit one or more
other people under a kind of arrangement which the law treats as a trust. The
people whose property is held by the trustees are called the 'beneficial
owners'.
'underwrite' A person who agrees to buy new shares if they are not bought by
other people underwrites the share offer.
'unincorporated associations' Associations, partnerships, societies and other
bodies which the law does not treat as a separate legal person to their members.
'warrant' See the definition of 'dividend warrant'.
'wind up' The formal process to put an end to a company. When a company is wound
up its assets are distributed. The assets go first to creditors who have
supplied property and services, and then to shareholders. Shares which 'rank'
first in sharing in a company's assets will receive any funds which are left
over before any shares which rank after (or below) them.
viii
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