Exhibit 3(b)
Company Number: 1833679
Companies Act 1985
Public Company Limited by Shares
FORM OF
ARTICLES OF ASSOCIATION
OF
VODAFONE AIRTOUCH PUBLIC LIMITED COMPANY
lp
One Silk Street
London EC2Y 8HQ
Tel: 0171 456 2000
Ref: SMW/NYG
TABLE OF CONTENTS
Article No. Page No.
Preliminary Articles
Table A and other standard regulations do not apply 1
The meaning of words and phrases used in the Articles 2
Share Capital
Form of the Company's share capital 3
Fixed Rate Shares
Right of Fixed Rate Shares to profits 4
Right of Fixed Rate Shares to capital 5
Voting rights of Fixed Rate Shares 6
Varying the rights of Fixed Rate Shares 7
Changing Capital
The power to increase capital 8
Application of the Articles to new shares 9
The power to change capital 10
Fractions of shares 11
The power to reduce capital 12
Buying back shares 13
Shares
The special rights of the shares 14
The directors' power to deal with shares 15
The directors' authority to allot "relevant securities" 16
and "equity securities"
Power to pay commission and brokerage 17
Renunciations of allotted but unissued shares 18
No trusts or similar interests recognised 19
Shares in Uncertificated Form
Holding shares in uncertificated form and effect 20
of the CREST Regulations
Share Certificates
Certificates 21
Replacement share certificates 22
Calls on shares
The directors can make calls on shares 23
The liability for calls 24
Interest and expenses on unpaid calls 25
Sums which are payable when a share is allotted 26
are treated as a call
Calls can be for different amounts 27
Paying calls early 28
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TABLE OF CONTENTS
Article No. Page No.
Forfeiting shares
Notice following non-payment of a call 29
Contents of the notice 30
Forfeiture if the notice is not complied with 31
Forfeiture will include unpaid dividends 32
Dealing with forfeited shares 33
Cancelling forfeiture 34
The position of shareholders after forfeiture 35
Liens on partly paid shares
The Company's lien on shares 36
Enforcing the lien by selling the shares 37
Using the proceeds of the sale 38
Evidence of forfeiture or enforcement of lien 39
Changing share rights
Changing the special rights of shares 40
More about the special rights of shares 41
Transferring shares
Share transfers 42
More about transfers of shares in certificated form 43
The Company can refuse to register certain transfers 44
Closing the register 45
Overseas branch registers 46
Persons automatically entitled to shares by law
When a shareholder dies 47
Registering personal representatives 48
A person who wants to be registered must give notice 49
Having another person registered 50
The rights of people automatically entitled to shares 51
by law
Shareholders who cannot be traced
Shareholder who cannot be traced 52
General Meetings
The Annual General Meeting 53
Extraordinary General Meetings 54
Calling an Extraordinary General Meeting 55
Notice of General Meetings 56
Proceedings at General Meetings
The Chairman of a General Meeting 57
Security, and other arrangements at General Meetings 58
Overflow meeting rooms 59
The quorum needed for General Meetings 60
The procedure if there is no quorum 61
Adjourning meetings 62
Amending Resolutions 63
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TABLE OF CONTENTS
Article No. Page No.
Voting Procedures
How votes are taken 64
How a poll is taken 65
Where there cannot be a poll 66
A General Meeting continues after a poll is demanded 67
Timing of a poll 68
The chairman's casting vote 69
The effect of a declaration by the chairman 70
Voting Rights
The votes of shareholders 71
Shareholders who owe money to the Company 72
Suspension of rights on non-disclosure of interest 73
Votes of shareholders who are of unsound mind 74
The votes of joint holders 75
Proxies
Appointment of proxies 76
Completing proxy forms 77
Delivering proxy forms 78
Cancellation of proxy's authority 79
Authority of proxies 80
Representatives of companies 81
Challenging votes 82
Directors
The number of directors 83
Qualification to be a director 84
Directors' fees and expenses 85
Special pay 86
Directors' expenses 87
Directors' pensions and other benefits 88
Appointing directors to various posts 89
Changing Directors
Age limits 90
Retiring directors 91
Eligibility for re-election 92
Re-electing a director who is retiring 93
Election of two or more directors 94
People who can be directors 95
The power to fill vacancies and appoint extra directors 96
Removing and appointing directors by an ordinary 97
resolution
When directors are disqualified 98
Directors' Meetings
Directors' meetings 99
Who can call directors' meetings 100
How directors' meetings are called 101
Quorum 102
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TABLE OF CONTENTS
Article No. Page No.
The Chairman of directors' meetings 103
Voting at directors' meetings 104
Directors can act even if there are vacancies 105
Directors' meetings by video conference and telephone 106
Resolutions in writing 107
The validity of directors' actions 108
Directors' Interests
Directors' interests in transactions with the Company 109
When directors can vote on things in which they are 110
interested
More about directors' interests 111
Directors' Committees
Delegating powers to committees 112
Committee procedure 113
Directors' Powers
The directors' management powers 114
Power to establish local boards 115
The power to appoint attorneys 116
Borrowing powers 117
Borrowing restrictions 118
Alternate Directors
Alternate directors 119
The Company Secretary
The Secretary and Deputy and Assistant Secretaries 120
The Seal
The Seal 121
Authenticating Documents
Establishing that documents are genuine 122
Reserves
Setting up reserves 123
Dividends
No dividends are payable except out of profits 124
Final dividends 125
Fixed and interim dividends 126
Dividends not in cash 127
Calculation and currency of dividends 128
Deducting amounts owing from dividends and other money 129
Payments to shareholders 130
Record dates for payments and other matters 131
Dividends which are not claimed 132
Waiver of dividends 133
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TABLE OF CONTENTS
Article No. Page No.
Capitalising Reserves
Capitalising reserves 134
Scrip Dividends
Ordinary Shareholders can be offered the right to 135
receive extra shares instead of cash dividends
Accounts
Accounting and other records 136
Location and inspection of records 137
Sending copies of accounts and other documents 138
Auditors
Acts of auditors 139
Auditors at General Meetings 140
Notices
Serving and delivering notices and other documents 141
Notices to joint holders 142
Notices for shareholders with foreign addresses 143
When notices are served 144
Serving notices and documents on shareholders who have 145
died or are bankrupt
If documents are accidentally not sent 146
Minutes and Records
Minutes 147
Availability of records for inspection and notifying 148
the registrar of companies
Winding Up
Directors' powers to petition 149
Distribution of assets in kind 150
Destroying Documents
Destroying documents 151
Indemnity Insurance
Indemnity 152
Insurance 153
Share Warrants
Issue of Share Warrants 154
Directors can accept a certificate instead of a 155
Share Warrant
Requesting a Share Warrant 156
Replacing Share Warrants 157
Rights of the Bearer 158
Bearers of Share Warrants participating in securities 159
offers
Communications with Bearers of Share Warrants 160
Issuing shares to which the Share Warrant relates 161
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TABLE OF CONTENTS
Article No. Page No.
ADA Depositary
ADR Depositary can appoint proxies 162
The ADR Depositary must keep a Proxy Register 163
Appointed Proxies can only attend shareholders' 164
meetings if properly appointed
Rights of Appointed Proxies 165
Sending information to an Appointed Proxy 166
The Company can pay dividends to an Appointed Proxy 167
The Proxy Register may be fixed at a certain date 168
The nature of an Appointed Proxy's interest 169
Validity of the appointment of Appointed Proxies 170
Glossary
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Company Number 1833679
The Companies Act 1985
Company Limited by Shares
ARTICLES OF ASSOCIATION
Adopted by a Special Resolution passed on [Effective Date] 1999
of
VODAFONE AIRTOUCH PUBLIC LIMITED COMPANY
PRELIMINARY ARTICLES
1 Table A and other standard regulations do not apply
Art 1
The regulations in Table A of the Companies Act 1948, and any similar
regulations in the Companies Acts do not apply to the Company.
2 The meaning of words and phrases used in 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 phrases. The Glossary is not part of the Memorandum or
Articles, and it does not affect their meaning. Throughout the Articles,
those words and expressions explained in this Article 2.1 are printed in
bold and those explained in the Glossary are printed in italics.
Words and Phrases Meaning
Adjusted Total of Capital This is defined in Article 118.2.
and Reserves
ADR Depositary A custodian or other person or persons approved by
the directors who (a) holds shares in the Company
under arrangements where either the custodian or
some other person issues American Depositary
Receipts which evidence American Depositary Shares
representing shares in the Company; and/or (b) is
appointed by or on behalf of the Company to hold
Share Warrants.
American Depositary These represent shares in the Company and are
Shares evidenced by American Depositary Receipts.
American Depositary These represent American Depositary Shares either
Receipts physically or in the form of Direct Registration
Receipts.
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Words and Phrases Meaning
Appointed Proxy This is defined in Article 162.1.
approved transfer This is defined in Article 73.9, for the purposes
of Article 73.
Articles The Company's Articles of Association, including
any changes made to them.
Bearer This is defined in Article 154.1.
class meeting This is defined in Article 40.1.
Common Seal Any seal which the Company may have under the
Companies Acts and which the Company may use to
execute documents.
Companies Act 1985 The Companies Act 1985, as amended by the
Companies Act 1989.
Companies Acts The Companies Act 1985, the CREST Regulations and
other legislation relating to companies and
affecting the Company (including any orders,
regulations or other subordinated legislation made
under them) in force from time to time.
company Includes any company, corporate body and any
corporation established anywhere in the world.
company representative This is defined in Article 81.1.
the Company Vodafone AirTouch Public Limited Company.
CREST Regulations The Uncertificated Securities Regulations 1995.
default shares This is defined in Article 73.1, for the purposes
of Article 73.
Direct Registration Receipt An American Depositary Receipt in uncertificated
form, the ownership of which is recorded in the
Direct Registration System.
Direct Registration System The system maintained by the ADR Depositary in
which the ADR Depositary records the ownership of
Direct Registration Receipts.
direction notice This is defined in Article 73.3 for the purposes
of Article 73.
elected shares This is defined in Article 135.8.
electronic mail Includes any electronic transmission in any form
through any medium (including transmissions by
fax).
equity securities The meaning of equity securities is given in
Section 94 Companies Act 1985.
equity shares Shares in the capital of the Company which are
regarded as equity share capital pursuant to
Section 744 Companies Act 1985.
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Words and Phrases Meaning
Fixed Rate Shares The 7 per cent cumulative fixed rate shares of
(pound)1 each in the Company.
Group This is defined in Article 118.2, for the purposes
of Article 118.
London Stock Exchange London Stock Exchange Limited.
Memorandum The Memorandum of Association of the Company.
non equity securities Securities which are not equity securities.
operator CRESTCo Limited or any other operator of a
relevant system under the CREST Regulations.
Ordinary Shareholder A holder of the Company's Ordinary Shares.
Ordinary Shares Ordinary shares of US$0.10 each in the Company.
paid-up share or Includes a share or other security which is
other security treated ("credited") as paid up.
pay Includes any kind of reward or payment for
services.
prescribed period This is defined in Article 16.5, for the purposes
of Article 16.
recognised clearing house A clearing house granted recognition under the
Financial Services Act 1986.
recognised investment An investment exchange granted recognition under
exchange the Financial Services Act 1986.
Record Date This is defined in Article 168.1, for the purposes
of Article 168.
Register The Company's register of members.
Registered Office The Company's registered office.
Relevant Company This is defined in Article 153.1, for the purposes
of Article 153.
relevant securities The meaning of relevant securities is given in
Section 80 of the Companies Act 1985.
relevant system A relevant system under the CREST Regulations
whose operator allows shares or other securities
of the Company to be transferred using that
system.
relevant value This is defined in Article 135.4, for the purposes
of Article 135.
rights of any share The rights attached to a share when it is issued,
or afterwards.
rights issue This is defined in Article 16.5, for the purposes
of Article 16.
Secretary Any person appointed by the directors to do work
as the company secretary including any assistant
or deputy secretary.
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Words and Phrases Meaning
securities offer This is defined in Article 159.3, for the purposes
of Article 159.
Securities Seal A seal used to stamp securities issued by the
Company in certificated form as evidence that the
Company has issued them.
Share Warrant A share warrant to bearer issued by the Company.
shareholder A holder of the Company's shares.
shareholders' meeting A meeting of shareholders including both a General
Meeting of the Company and a class meeting.
shares Shares which are in issue at the relevant time.
sterling The currency of the United Kingdom.
subsidiary A subsidiary as defined in Section 736 of the
Companies Act 1985.
subsidiary undertaking A subsidiary undertaking as defined in Section 258
of the Companies Act 1985.
takeover offer A takeover offer as defined in Section 428 of the
Companies Act 1985.
terms of a share The terms on which a share was issued.
Transfer Office The place where the Register is kept.
United Kingdom Great Britain and Northern Ireland.
US dollars The currency of the United States of America.
working day A day on which banks in the United Kingdom are
generally open for business, excluding Saturdays,
Sundays and public holidays.
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 and to other persons.
2.6 References to a person or people include companies, unincorporated
associations and so on.
2.7 References to officers include directors, managers and the Secretary, but
not the Company's auditors.
2.8 References to the directors are to the board of directors unless the way
in which directors is used does not allow this meaning.
2.9 Any headings in these Articles are only included for convenience. They do
not affect the meaning of the Articles.
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2.10 When an Act or other legislation or the Articles are referred to, the
version which is current at any particular time will apply.
2.11 Where the Articles give any 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.
2.12 Any word which is defined in the Companies Acts (excluding any
modification to them by a further act or statutory instrument which is not
in force when these Articles are adopted) 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 Acts.
2.13 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.
2.14 Where the Articles refer to changing the amount of shares this means doing
any or all of the following:
o subdividing the shares into other shares with a smaller
nominal value;
o consolidating the shares into other shares with a larger
nominal value; and
o dividing shares which have been consolidated into shares with
a larger nominal value than the original shares had.
2.15 Where the Articles refer to any document being made effective this means
being signed, sealed or executed in some other legally valid way.
2.16 Where the Articles refer to months or years, these are calendar months or
years.
2.17 Articles which apply to fully-paid shares can also apply to stock.
References in those Articles to share or shareholder include stock or
stockholder.
2.18 Where the Articles refer to shares in certificated form, this means that
ownership of the shares can be transferred using a written transfer
document (rather than in accordance with the CREST Regulations) and that a
share certificate is usually issued to the owner.
2.19 Where the Articles refer to shares in uncertificated form, this means that
ownership of the shares can be transferred in accordance with the CREST
Regulations without using a written transfer document and that no share
certificate is issued to the owner.
2.20 Where the Articles refer to a period of clear days, the period does not
include the date the notice is delivered, or treated as being delivered,
nor the date of the General Meeting or other relevant event.
SHARE CAPITAL
3 Form of the Company's share capital
Art 4
The Company's share capital at the date when these Articles are adopted is
(pound)50,000 and US$816,000,000. This is made up of 50,000 7 per cent.
cumulative fixed rate shares of (pound)1 each and 8,160,000,000 ordinary
shares of US$0.10 each.
FIXED RATE SHARES
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4 Right of Fixed Rate Shares to profits
4.1 If the Company has profits which are available for distribution and the
directors resolve that these should be distributed, the holders of the
Fixed Rate Shares are entitled, before the holders of any other class of
shares, to be paid in respect of each financial year or other accounting
period of the Company a fixed cumulative preferential dividend
("preferential dividend") at the rate of 7 per cent. per annum on the
nominal value of the Fixed Rate Shares which is paid up or treated as paid
up.
4.2 Subject to Article 4.3 below, the preferential dividend will be paid
yearly, on 31 March in respect of each financial year ending on or before
that date. If this date is not a working day, the payment will be made on
the next working day.
4.3 When the Company has to calculate a dividend on the Fixed Rate Shares for
a period other than a calendar year ending on 31 March (being another
accounting period, the first dividend period arising for the Fixed Rate
Shares or otherwise), the daily dividend rate will be worked out by
dividing the yearly dividend rate by 365 days. This daily rate will then
be multiplied by the actual number of days which have passed in the
relevant period, but not including the date of payment, to give the amount
payable for that period.
4.4 Except as provided in this Article, the Fixed Rate Shares do not have any
other right to share in the Company's profits.
5 Right of Fixed Rate Shares to capital
5.1 If the Company is wound up (but in no other circumstances involving a
repayment of capital or distribution of assets to shareholders whether by
reduction of capital, redeeming or buying back shares or otherwise), the
holders of the Fixed Rate Shares will be entitled, before the holders of
any other class of shares to:
o repayment of the amount paid up or treated as paid up on the nominal
value of each Fixed Rate Share;
o the amount of any dividend which is due for payment on, or after,
the date the winding up commenced which is payable for a period
ending on or before that date. This applies even if the dividend has
not been declared or earned;
o any arrears of dividend on any Fixed Rate Shares held by them. This
applies even if the dividend has not been declared or earned; and
o a proportion of any dividend in respect of the financial year or
other accounting period which began before the winding up commenced
but ends after that date. The proportion will be the amount of the
dividend that would otherwise have been payable for the period which
ends on that date. This applies even if the dividend has not been
declared or earned.
5.2 If there is a winding up to which Article 5.1 applies, and there is not
enough to pay the amounts due on the Fixed Rate Shares, the holders of the
Fixed Rate Shares will share what is available in proportion to the
amounts to which they would otherwise be entitled. The holders of the
Fixed Rate Shares will be given preference over the holders of other
classes of shares which rank behind them in sharing in the Company's
assets.
5.3 Except as provided in this Article 5, the Fixed Rate Shares do not have
any other right to share in the Company's surplus assets.
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6 Voting rights of Fixed Rate Shares
6.1 The holders of the Fixed Rate Shares are only entitled to receive notice
of General Meetings, or to attend, speak and vote at General Meetings, as
set out below.
o If a resolution is to be proposed at the General Meeting to wind up
the Company, they are entitled to receive notice of the General
Meeting and can attend, but are not entitled to speak or vote.
o If a resolution is to be proposed at the General Meeting which would
vary or abrogate the rights attached to the Fixed Rate Shares, they
are entitled to receive notice of the General Meeting and are
entitled to attend, speak and vote but only in respect of such
resolution or any motion to adjourn the General Meeting before such
resolution is voted on.
6.2 If the holders of the Fixed Rate Shares are entitled to vote at a General
Meeting, each holder present in person or by proxy (or, being a company,
by a company representative) has one vote on a show of hands and on a poll
every holder who is present in person or by proxy (or, being a company, by
a company representative) shall have one vote in respect of each fully
paid Fixed Rate Share.
7 Varying the rights of Fixed Rate Shares
The rights of the holders of the Fixed Rate Shares will be regarded as
being varied or abrogated if any resolution is passed for the reduction of
the amount of capital paid up on the Fixed Rate Shares but not for the
repayment of the Fixed Rate Shares at par.
Accordingly, this can only take place if:
o holders of at least three quarters in nominal value of the Fixed
Rate Shares agree in writing; or
o an extraordinary resolution is passed at a separate class meeting by
the holders of the Fixed Rate Shares approving the proposal,
in accordance with Article 40.
CHANGING CAPITAL
8 The power to increase capital
Art 44
The shareholders can increase the Company's share capital by passing an
ordinary resolution. The resolution must fix the:
o amount of the increase;
o nominal value of the new shares; and
o currency or currencies in which the nominal value of such shares is
to be expressed.
9 Application of the Articles to new shares
Art 45
The provisions of the Articles about allotment, payment of calls,
transfers, automatic entitlement by law, forfeiture, lien and all other
things apply to new shares under Article 8 in the same way as if they were
part of the Company's existing share capital.
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10 The power to change capital
Art 47
The shareholders can pass ordinary resolutions to do any of the following:
Art 47(a)
o consolidate, or consolidate and then divide, all or any part of the
Company's share capital into new shares of a larger nominal value
than the existing shares;
Art 47(c)
o 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;
Art 47(b)
o divide some or all of the shares into shares which are of a smaller
nominal value than is fixed in the Memorandum. This is subject to
any restrictions under the Companies Acts. The resolution can
provide that, as between the shares resulting from such
sub-division, different rights and restrictions which the Company
can apply to new shares may apply to all or any of the different
divided shares.
11 Fractions of shares
Art 47(a)
11.1 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. If the directors decide to sell any shares representing
fractions, they must do so for the best price reasonably obtainable and
distribute the net proceeds of sale among shareholders in proportion to
their fractional entitlements in accordance with their rights and
interests. The directors can sell to any person (including the Company, if
the Companies Acts allow this) and can authorise any person to transfer
those shares to the buyer or in accordance with the buyer's instructions.
The buyer does not need to take any steps to see how any money he paid is
used. Nor will his ownership be affected if the sale was irregular or
invalid in any way.
11.2 So far as the Companies Acts allow, when shares are consolidated or
divided, the directors can treat a shareholder's shares which are held in
certificated form and in uncertificated form as separate shareholdings.
The directors can also arrange for any shares which result from a
consolidation or division and which represent rights to fractions of
shares to be entered in the Register as shares in certificated form where
this makes it easier to sell them.
12 The power to reduce capital
Art 47(d)
The Company's shareholders can pass a special resolution to reduce in any
way:
o the Company's share capital; or
o any capital redemption reserve, share premium account or other
undistributable reserve.
This is subject to any restrictions under the Companies Acts.
13 Buying back shares
Art 47(e)
The Company can buy back, or agree to buy back in the future, any shares
of any class (including redeemable shares) in accordance with the
Companies Acts. However, if the Company has other shares in issue which
are listed on the London Stock Exchange and which are convertible at any
time into the class of equity shares to be repurchased, the holders of the
convertible shares must first pass an extraordinary resolution approving
the buy-back at a separate class meeting. A resolution is not required,
however, if the terms on which the convertible shares were issued allow
the buy-back.
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SHARES
14 The special rights of new shares
Art 46
14.1 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 to the right to
vote.
Art 46
14.2 The powers conferred by Article 14.1 are subject to the provisions of
Article 14.5.
Art 46
14.3 The rights and restrictions referred to in Article 14.1 can be decided by
an ordinary resolution passed by the shareholders. The directors can also
take these decisions if they do not conflict with any resolution passed by
the shareholders.
Art 46
14.4 If the Companies Acts allow this, the rights of any new shares can include
rights for the holder and/or the Company to have them redeemed.
Art 46
14.5 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.
15 The directors' power to deal with shares
Art 6.1
15.1 The directors can decide how to deal with any shares which have not been
issued. The directors can:
Art 37
o allot them on any terms, which can 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
(see also Article 18);
o grant options to give people a right to acquire shares in the
future; or
o dispose of the shares in any other way.
15.2 The directors are free to decide with whom they deal, when they deal with
the shares, and the terms on which they deal.
15.3 For the purposes of Article 15.1, the Directors must comply with:
o the provisions of the Companies Acts relating to authority,
pre-emption rights and other matters; and
o any resolution of a General Meeting which is passed under the
Companies Acts.
16 The directors' authority to allot "relevant securities" and "equity
securities"
16.1 This Article regulates the authority of the directors to allot relevant
securities and their power to allot equity securities for cash.
Art 6.2
Art 6.4(iii)
16.2 The directors are authorised, generally and without conditions, under
Section 80 of the Companies Act 1985, to allot relevant securities. They
are authorised to allot them for any prescribed period. The maximum amount
of relevant securities which the directors can allot in each prescribed
period is the Section 80 Amount.
Art 6.3
16.3 Under the directors' general authority in Article 16.2, they have the
power to allot equity securities, entirely paid for in cash, free of the
restriction in Section 89(1) of the Companies Act
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Art 6.3(i)
Art 6.3(ii)
1985. They have the power to allot them for any prescribed period. There
is no maximum amount of equity securities which the directors can allot
when the allotment is in connection with a rights issue. In all other
cases, the maximum amount of equity securities which the directors can
allot is the Section 89 Amount.
Art 6.4
16.4 During any prescribed period, the directors can make offers and enter into
agreements which would, or might, require shares or other securities to be
allotted after that period has ended.
16.5 For the purposes of this Article:
Art 6.4(i)
o rights issue means an offer of equity securities which is open for a
period decided on by the directors to the people who are registered
on a particular date (chosen by the directors) as holders of:
(i) Ordinary Shares, in proportion to their holdings of
Ordinary Shares; and
(ii) other classes of equity securities or non-equity
securities which give them the right to receive the
offer in accordance with their rights.
However, the directors can 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):
o sell any fractions of equity securities to which people would
be entitled and keep the net proceeds for the Company's
benefit or make other appropriate arrangements to deal with
such fractions;
o 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 or as a
result of shares being represented by American Depositary
Shares; or
o treat a shareholder's holdings in certificated form and
uncertificated form as separate shareholdings.
Art 6.4(ii)
o prescribed period means in the first instance the period ending on
the date of the Annual General Meeting in 1999 or on 21 October
1999, whichever is the earlier. After this, the prescribed period
means a period of no more than five years fixed by the shareholders
by passing a resolution at a General Meeting. The shareholders can,
by passing further resolutions, renew or extend this power
(including the first prescribed period), for periods of no more than
five years each. Such resolutions can take the form of:
o an ordinary resolution fixing a period under Article 16.2; or
o a special resolution fixing a period under Article 16.3; or
o a special resolution fixing identical periods under Article
16.2 and under Article 16.3; or
o a special resolution fixing different periods under Article
16.2 and under Article 16.3.
Art 6.4
o The Section 80 Amount for the first prescribed period is that fixed
at the Annual General Meeting of the Company held on 21 July 1998,
being (pound)30,000,000. For any subsequent prescribed period the
Section 80 Amount is that stated in a relevant resolution passed by
the shareholders at a General Meeting.
o The Section 89 Amount for the first prescribed period is that fixed
at the Annual General Meeting of the Company held on 21 July 1998,
being (pound)7,713,968. For any subsequent
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16
prescribed period the Section 89 Amount is that stated in a relevant
special resolution passed by the shareholders at a General Meeting.
Art 6.4(v)
o 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.
17 Power to pay commission and brokerage
Art 7
17.1 The Company can use all the powers given by the Companies Acts to pay
commission or brokerage to any person who:
o applies, or agrees to apply, for any new shares; or
o gets anybody else to apply, or agree to apply for, any new shares.
Art 7
17.2 The rate per cent. or amount of the commission paid or agreed to be paid
must be disclosed as required by the Companies Acts and must not exceed 10
per cent. of the price at which the shares in respect of which the
commission is paid are issued (or an equivalent amount).
Art 37
18 Renunciations of allotted but unissued shares
Where a share has been allotted to a person but that person has not yet
been entered on the Register, the directors can recognise a transfer
(called a renunciation) by that person of his right to the share in favour
of some other person. The ability to renounce allotments only applies if
the terms on which the share is allotted are consistent with renunciation.
The directors can impose terms and conditions regulating renunciation
rights and can allow renunciation rights to be participating securities
(as defined in the CREST Regulations) in their own right.
19 No trusts or similar interests recognised
Art 8
19.1 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 is not of any concern to
the Company, for example if a share is held on any kind of trust.
Art 8
19.2 The only exception to what is said in Article 19.1 is for any right:
o which is expressly given by these Articles; or
o which the Company has a legal duty to recognise.
SHARES IN UNCERTIFICATED FORM
20 Holding shares in uncertificated form and effect of the CREST Regulations
20.1 Subject to the Articles and so far as the Companies Acts allow this, the
directors can decide that any class of shares can:
o be held in uncertificated form and that title to such shares can be
transferred using a relevant system; or
o no longer be held and transferred in uncertificated form.
20.2 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
the:
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17
o holding of shares of that class in uncertificated form;
o transfer of title to shares of that class by means of a
relevant system; or
o CREST Regulations.
SHARE CERTIFICATES
21 Certificates
Art 11
21.1 When a shareholder is first registered as the holder of any class of
shares in certificated form, he is entitled to receive, free of charge,
one certificate for all the shares in certificated form of that class
which he holds. If he holds shares of more than one class in certificated
form, he is entitled to receive a separate share certificate for each
class.
21.2 The Company must also observe any requirements of the CREST Regulations
when issuing share certificates. Where the Companies Acts allow, the
Company does not need to issue share certificates.
21.3 If a shareholder receives more shares in certificated form of any class he
is entitled, without charge, to another certificate for the additional
shares.
Art 11
Art 32
21.4 If a shareholder transfers part of his shares covered by a certificate, he
is entitled, free of charge, to a new certificate for the balance if the
balance is also held in certificated form. The old certificate will be
cancelled.
Art 11
21.5 The Company does not have to issue more than one certificate for any share
in certificated form, even if that share is held jointly.
Art 11
21.6 When the Company delivers a certificate to one joint holder of shares in
certificated form, this is treated as delivery to all of the joint
shareholders.
21.7 If requested in writing to do so, the Company can deliver a certificate to
a broker or agent who is acting for a person who is buying shares in
certificated form, or who is having shares transferred to him in
certificated form.
Art 10
21.8 The directors can decide how share certificates are made effective. For
example, they can be:
o signed by two directors or one director and the Secretary;
o sealed with the Common Seal or the Securities Seal (or in the case
of shares on a branch Register, an official seal for use in the
relevant territory); or
o printed, in any way, with a copy of the signature of those directors
and the Secretary. The copy can be made or produced mechanically,
electronically or in any other way the directors approve.
Art 10
Art 11
21.9 A share certificate must state the number and class of shares to which it
relates and the amount paid up on those shares. It cannot be for shares of
more than one class.
Art 12
21.10 If all the issued shares of the Company, or a particular class of shares,
are fully paid up and rank equally with each other for all purposes, none
of those shares will (unless the directors pass a resolution to the
contrary) have a distinguishing number as long as it remains fully paid up
and ranks equally for all purposes with all the shares of the same class
which are issued and fully paid up.
Art 9
21.11 The time limit for the Company to prepare a share certificate for shares
in certificated form is:
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18
o one month after the allotment of a new share;
o five working days after a valid transfer of fully-paid shares is
presented for registration; or
o two months after a valid transfer of partly-paid shares is presented
for registration.
Art 9
21.12 Article 21.11 only applies to the extent that the terms of issue of shares
do not provide otherwise.
21.13 Share certificates will also be prepared and sent earlier where the London
Stock Exchange requires it.
22 Replacement share certificates
22.1 If a shareholder has four or more share certificates for shares of the
same class which are in certificated form, he can ask the Company for
these to be cancelled and replaced by a single new certificate. The
Company must comply with this request, without making a charge for doing
so.
Art 11
22.2 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, upon the payment by the shareholder of a reasonable
sum determined by the directors, must comply with this request.
Art 13
22.3 A shareholder can ask the Company for a new certificate if the original
is:
o damaged or defaced; or
o lost, stolen, or destroyed.
Art 13
22.4 If a certificate has been damaged or defaced, the Company can require
satisfactory evidence and for the certificate to be delivered to it before
issuing a replacement. If a certificate is lost, stolen or destroyed, the
Company can require satisfactory evidence, together with an indemnity,
before issuing a replacement. In each case the directors can impose such
other terms as they think fit.
Art 13
22.5 The directors can require the shareholder to pay the Company's exceptional
out-of-pocket expenses for issuing any share certificates under Article
22.3.
22.6 Any one joint shareholder can request replacement certificates under this
Article.
CALLS ON SHARES
23 The directors can make calls on shares
Art 15
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 be payable. If the terms of
issue of the shares allow this, the directors can:
Art 16
o make calls as often, and whenever, they think fit;
o decide when and where the money is to be paid;
o decide that the money can be paid by instalments; or
o wholly or partly revoke or postpone any call.
A call is treated as having been made as soon as the directors pass a
resolution authorising it.
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19
24 The liability for calls
Art 16
Art 18
24.1 A shareholder who has received at least 14 days' notice giving details of
the amount called, the time (or times) and place for payment must pay the
call as required by the notice. Joint shareholders are liable jointly and
severally to pay any money called for in respect of their shares.
Art 16
24.2 A shareholder due to pay the amount called shall still have to pay the
call even if, after the call was made, he transfers the shares to which
the call related.
25 Interest and expenses on unpaid calls
Art 21
If a call is made and the money due remains unpaid, the shareholder is
liable to pay interest on the money and any expenses incurred by the
Company because of his failure to pay the call on time. The interest will
run from the day the money is due until it has actually been paid. The
yearly interest rate will be a reasonable rate fixed by the directors (or,
where they do not fix a reasonable rate, 10 per cent.). The directors can
decide not to charge any or all of such expenses and interest.
26 Sums which are payable when a share is allotted are treated as a call
Art 20
If the terms of a share require any money to be paid at the time the share
is allotted, or at any fixed date (whether in relation to the nominal
value of the shares or any premium which may apply), then the liability to
pay the money will be treated in the same way as a liability for 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.
27 Calls can be for different amounts
Art 19
On an issue of shares, if the terms of such shares allow, the directors
can decide that allottees or the subsequent holders of such shares can be
called on to pay different amounts, or that they can be called on at
different times.
28 Paying calls early
Art 22
28.1 The directors can accept payment in advance of some or all of the money
due 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 at a rate (up to a maximum yearly
interest rate of 10 per cent.) agreed between the directors and the
shareholder.
Art 22
28.2 The money which is paid in advance in this way shall not be included in
calculating the dividend payable on the shares in respect of which the
money paid in advance has been paid.
FORFEITING SHARES
29 Notice following non-payment of a call
Art 23
Articles 29 to 39 apply if a shareholder fails to pay the whole amount of
a call, or an instalment of a call, by the date on which it is due. The
directors can serve a notice on him any time after the date on which the
call or the instalment is due, if the whole amount immediately due has not
been paid.
30 Contents of the notice
A notice served under Article 29 must:
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20
Art 23
o demand payment of the amount immediately payable, plus any interest;
Art 24
o give a date by when the total must be paid, but this must be at least 14
days after the notice is served on the shareholder;
Art 24
o state where the payment(s) must be made; and
Art 24
o state that if the full amount demanded is not paid by the time and place
stated, the Company can forfeit the shares on which the call or instalment
was due.
31 Forfeiture if the notice is not complied with
Art 25
If a notice served under Article 29 is not complied with, the shares to
which it relates can be forfeited at any time while any amount (including
interest) is still outstanding. This is done by the directors passing a
resolution stating that the shares have been forfeited.
32 Forfeiture will include unpaid dividends
Art 25
All dividends which are due on (and other money payable in respect of) the
forfeited shares, but not yet paid, will also be forfeited.
33 Dealing with forfeited shares
Art 26
Art 28
33.1 The directors can sell, dispose of or re-allot any forfeited share on any
terms and in any way that they decide. The Company may keep the
consideration received from doing this. The directors can, if necessary,
authorise any person to transfer a forfeited share to any other person and
may cause such other person to be registered as the holder of the share.
Art 28
33.2 The new shareholder's ownership of the share will not be affected if the
steps taken to 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, and the new shareholder is not obliged to enquire as to how the
purchase money (if any) is used.
34 Cancelling forfeiture
Art 26
34.1 After a share has been forfeited, the directors can cancel the forfeiture.
But they can only do this before the share has been sold, re-allotted or
disposed of. This can be on any terms that they decide.
34.2 If a share has not been sold or disposed of after three years from the
date of forfeiture, the directors must cancel the share.
35 The position of shareholders after forfeiture
Art 27
35.1 A shareholder loses all rights in connection with forfeited shares. If the
shares are in certificated form, he must surrender any certificate for
those shares to the Company for cancellation. A person is still liable to
pay calls which have been made, but not paid, before the forfeiture of his
shares. He must also pay interest on the unpaid amount (at the rate of
interest which was payable on the unpaid amount before the forfeiture)
until it is paid. If no interest was payable before the forfeiture on the
unpaid amount, the directors can fix the rate of interest on the unpaid
amount, but it must not be more than 10 per cent. a year, until it is
paid.
Art 27
35.2 The shareholder 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 33, unless the
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21
directors decide to allow credit for all or any of that value. The
directors may also decide to waive any payment due either completely or in
part.
LIENS ON PARTLY PAID SHARES
36 The Company's lien on shares
Art 29
The Company has a lien on all partly-paid shares. This lien has priority
over claims of others to the shares and extends to all dividends and other
money payable on the shares or in respect of them. This lien is for any
money owed to the Company for the shares. The directors can decide to give
up any lien which has arisen or that any share for a specified period of
time be entirely or partly exempt from this Article. They can also decide
to suspend any lien which would otherwise apply to particular shares.
Unless otherwise agreed, the registration of a transfer of any share over
which the Company has a lien shall operate as a waiver of that lien.
37 Enforcing the lien by selling the shares
Art 30
Art 31
Art 30
37.1 If the directors want to enforce the lien referred to in Article 36, they
can sell some or all of the shares in any way they decide. The directors
can authorise someone to transfer the shares sold. But they cannot sell
the shares until all of the following conditions are met:
o the money owed by the shareholder must be immediately payable;
o 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;
o the written notice must have been served on the shareholder, or on
any person who is automatically entitled to the shares by law; and
o the money has not been paid by at least 14 days after the notice has
been served.
Art 31
37.2 The new shareholder's ownership of the share will not be affected if the
sale or disposal of the share was invalid or irregular, or if anything
that should have been done was not done and is not obliged to enquire as
to how the purchase money (if any) is used.
38 Using the proceeds of the sale
Art 31
If the directors sell any shares under Article 37, the net proceeds will
first be used 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 any person who would otherwise be automatically entitled to the shares
by law provided that 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. If the shares are in
certificated form, the Company need not pay over anything left under this
Article until the certificate representing the shares sold has been
delivered to the Company for cancellation.
39 Evidence of forfeiture or enforcement of lien
Art 28
A director, or the Secretary, can make a statutory declaration declaring:
Art 31
o that he is a director or the Secretary of the Company;
o that a share has been properly forfeited or sold to satisfy a lien
under the Articles; and
o when the share was forfeited or sold.
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22
This will be conclusive evidence of these facts which cannot be disputed
as against all persons claiming to be entitled to the share.
CHANGING SHARE RIGHTS
40 Changing the special rights of shares
Art 14(A)
40.1 If the Company's share capital is split into different classes of share,
and if the Companies Acts allow this and unless the Articles or rights
attached to any class of share say otherwise, the special rights which are
attached to any of these classes of share can be varied or abrogated if
this is approved by an extraordinary resolution in accordance with
Articles 40 and 41. 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 relevant class (by nominal value) can give their consent in
writing.
Art 14(A)
40.2 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
if winding up is being considered.
Art 14(A)
40.3 All the Articles relating to General Meetings apply, with any necessary
changes, to a class meeting, but with the following adjustments:
o 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. However, if this quorum is not present at an
adjourned class meeting, one person who holds shares of the class,
or his proxy, is a quorum, regardless of the number of shares he
holds.
o Anybody who is personally present, or who is represented by a proxy,
can demand a poll.
o On a poll, the holders of shares will have one vote for every share
of the class which they hold.
40.4 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.
41 More about the special rights of shares
Art 14(B)
The special rights of shares or of any class of shares are not regarded as
varied or abrogated if:
o new shares are created, or issued, which rank equally with or behind
those shares or that class of shares in sharing in profits or assets
of the Company;
o the Company buys back its own shares.
But this does not apply if the terms of the shares or class of shares
expressly provide otherwise.
TRANSFERRING SHARES
42 Share transfers
42.1 Unless the Articles provide otherwise, any shareholder can transfer some
or all of his shares to another person.
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23
Art 32
42.2 Every transfer of shares in certificated form must be in writing, and
either in the usual standard form, or in any other form approved by the
directors.
42.3 Transfers of uncertificated shares are to be carried out using a relevant
system and must comply with the CREST Regulations.
43 More about transfers of shares in certificated form
Art 34(A)(i)
43.1 The transfer form for shares in certificated form must be delivered to the
Transfer Office (or any other place the directors may decide). The
directors may refuse to recognise a transfer unless the transfer form:
o has with it the share certificate for the shares to be transferred
and any other evidence which the directors ask for to prove that the
person wishing to make the transfer is entitled to do this;
o is properly stamped (for payment of stamp duty) where this is
required;
Art 34(A)(ii)
o is being used to transfer only one class of shares; and
Art 34(A)(iii)
o is in favour of not more than four joint holders.
43.2 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.
Art 32
43.3 If the share being transferred is a fully paid share, a share transfer
form must be signed by the person making the transfer. If the transfer is
being made by a company, the share transfer form does not need to be under
that company's seal.
Art 32
43.4 If the share being transferred is not a fully paid-up share a share
transfer form must also be signed by the person to whom the share is being
transferred. If the transfer is being made to a company, the transfer form
does not need to be under that company's seal.
Art 32
43.5 The person making a transfer of shares 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.
Art 35
43.6 No fee is payable to the Company for transferring shares or registering
changes relating to the ownership of shares.
44 The Company can refuse to Register certain transfers
Art 33
44.1 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 those shares are listed on the
London Stock Exchange, the directors cannot refuse to register a transfer
if this would stop dealings in the shares from taking place on an open and
proper basis.
Art 34(B)
44.2 If the directors decide not to register a transfer of a share, they must
notify the person to whom such share was to be transferred. This must be
done no later than two months after the Company receives the transfer (in
the case of a share in certificated form).
45 Closing the Register
Art 36
The directors can decide to suspend the registration of transfers by
closing the Register. This can be for part of a day, a day, or more than a
day. Suspension periods can vary between different classes of shares. But
the Register cannot be closed for more than 30 days a year. In
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24
the case of shares in uncertificated form, the Register must not be closed
without the consent of the operator of a relevant system.
46 Overseas branch registers
The Company can use all the powers that the Companies Acts give to keep an
overseas branch register. The directors can make and change any
regulations they decide on relating to this register, as long as the
Companies Acts allow this.
PERSONS AUTOMATICALLY ENTITLED TO SHARES BY LAW
47 When a shareholder dies
Art 39
47.1 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.
Art 39
47.2 If a shareholder who is a joint shareholder dies, the remaining joint
shareholder or shareholders will be the only people who the Company will
recognise as being entitled to his shares.
Art 39
47.3 This Article does not discharge the estate of any joint shareholder from
any liability.
48 Registering personal representatives
Art 40
A person who becomes automatically entitled to a share by law can either
be registered as the shareholder, or can select some other person to whom
the share is to be transferred. The person who is automatically entitled
by law must provide any evidence of his entitlement which is reasonably
required by the directors.
49 A person who wants to be registered must give notice
Art 41
If a person 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. This notice will
be treated as a transfer form and 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.
50 Having another person registered
Art 41
If a person who is automatically entitled to a share by law wants the
share to be transferred to another person, he must do the following:
o for a share in certificated form sign a transfer form to the person
he has selected; and
o for a share in uncertificated form transfer such share using a
relevant system.
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.
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25
51 The rights of people automatically entitled to shares by law
Art 42
51.1 A person who is automatically entitled to a share by law is entitled to
any dividends or other money relating to the share, even though he is not
registered as the holder of that share. However, if the directors have
served a notice on any such person requesting him to choose between
registering himself or transferring the share, and such person does not
comply with the notice within 90 days, the directors can withhold the
dividend and other money until the notice has been properly complied with.
Art 42
51.2 Unless and until he is registered as a shareholder the person
automatically entitled to a share by law is not entitled:
o to receive notices of General Meetings, or to attend or vote at
these meetings; and
o (subject to Article 51.1) to any of the other rights and benefits of
being a shareholder,
unless the directors decide to allow this.
SHAREHOLDERS WHO CANNOT BE TRACED
52 Shareholder who cannot be traced
52.1 The Company can sell any shares at the best price reasonably obtainable
if:
Art 43(A)(i)
o during the previous 12 years, at least three dividends on the shares
have been payable and none has been claimed;
Art 43(A)(ii)
o after this 12-year period, the Company announces that it intends to
sell the shares by placing an advertisement in a United Kingdom
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;
Art 43(A)(iii)
o during this 12-year period, and for three months after the last
advertisement appears in the newspapers, the Company has received no
indication as to the whereabouts or existence of the shareholder or
any person who is automatically entitled to the shares by law; and
Art 43(A)(iv)
o where the shares are listed on the London Stock Exchange, the
Company has notified the London Stock Exchange that it intends to
sell the shares.
Art 43(B)
52.2 To sell any shares in this way, the Company can authorise any person to
transfer the shares. 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.
Art 43(B)
52.3 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 the shares by law, if
that shareholder, or that other person, asks for it.
Art 43(B)
52.4 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
on 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.
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26
52.5 In the case of uncertificated shares, this Article is subject to any
restrictions which apply under the CREST Regulations.
GENERAL MEETINGS
53 The Annual General Meeting
Art 48
Art 52
Art 50
Except as provided in the Companies Acts, each year the Company must hold
an Annual General Meeting, in addition to any other General Meetings which
are held in the year. The notice calling the Annual General 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 Annual General Meeting must be held in accordance with the
Companies Acts. The directors must decide when and where to hold the
Annual General Meeting.
54 Extraordinary General Meetings
Art 49
If a General Meeting is not an Annual General Meeting, it is called an
Extraordinary General Meeting.
55 Calling an Extraordinary General Meeting
Art 51
Art 50
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 Companies Acts. If an
Extraordinary General Meeting is not called in response to such a request
by shareholders, it can be called by the shareholders who requested the
Extraordinary General Meeting in accordance with the Companies Acts. Any
Extraordinary General Meeting requisitioned in this way by shareholders
shall be called in the same manner as nearly as possible to that in which
General Meetings are called by the directors. The directors must decide
when and where to hold an Extraordinary General Meeting.
56 Notice of General Meetings
Art 52
56.1 At least 21 clear days' notice in writing (or, where the Companies Acts
permit, by electronic mail) must be given for every Annual General Meeting
and for any other General Meeting where it is proposed to pass a special
resolution or to pass some other resolution of which special notice under
the Companies Acts has been given to the Company. For every other General
Meeting at least 14 clear days' notice in writing (or, where the Companies
Acts permit, by electronic mail) must be given.
Art 53
However, a shorter period of notice can be given:
o for an Annual General Meeting, if all the shareholders entitled to
attend and vote agree; or
o for an Extraordinary General Meeting, if a majority of the
shareholders entitled to attend and vote agree and those
shareholders hold at least 95 per cent. by nominal value of the
shares which can be voted at the meeting.
56.2 Any notice of General Meeting must state:
Art 52
o where the General Meeting is to be held;
o the date and time of the General Meeting;
o the general nature of the business of the General Meeting;
o if any resolution will be proposed as a special resolution or
extraordinary resolution; and
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Art 54
o in a reasonably prominent place that a shareholder entitled to
attend and vote can appoint one or more proxies (who need not be
shareholders) to attend, speak and vote instead of that shareholder.
Art 52
56.3 Notices of General Meetings must be given to the shareholders, except in
cases where the Articles or the rights attached to the shares state that
the holders are not entitled to receive them from the Company. Notice must
also be given to the Company's auditors. The day when the notice is served
(see Article 144), or is treated as served, and the day of the General
Meeting do not count towards the period of notice. In relation to any
class of shares some of which are in uncertificated form the Company can
decide that only people who are entered on the Register at the close of
business on a particular day are entitled to receive such a notice. That
day shall be a day chosen by the Company and falling not more than 21 days
before the notice is sent.
Art 55
56.4 Unless the Companies Act 1985 does not require it, the Company must, on
the requisition in writing of such number of shareholders as is specified
in the Companies Act 1985, send to shareholders:
o entitled to receive notice of the next Annual General Meeting notice
of any resolution which may properly be proposed and is intended to
be proposed at that meeting; and
o entitled to receive notice of any General Meeting any statement of
not more than one thousand words with respect to the matter referred
to in any proposed resolution or the business to be dealt with at
that meeting.
Notice of any such resolution shall be given, and any such statement shall
be circulated, to shareholders of the Company entitled to have notice of
the General Meeting sent to them. The cost of this, unless the Company
decides otherwise, must be borne by the requisitionists.
PROCEEDINGS AT GENERAL MEETINGS
57 The Chairman of a General Meeting
Art 61
57.1 The Chairman of the directors will be the chairman at every General
Meeting, if he is present and willing to take the chair.
Art 61
57.2 If the Company does not have a Chairman, or if the Chairman is not present
and willing to chair the General Meeting, a Deputy Chairman will chair the
meeting if he is present and willing to take the chair.
57.3 Where there is more than one deputy chairman at a General Meeting and
there is more than one present, and the chairman is not there, the deputy
chairman to take the chair will be the longest serving deputy chairman
present.
Art 61
57.4 If the Company does not have a Chairman or a Deputy Chairman, or if
neither the Chairman or any Deputy Chairman are present and willing to
chair the General Meeting, after waiting ten minutes from the time that a
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 is willing.
Art 61
57.5 If there is no director present and willing to be chairman, then the
shareholders who are personally present at the General Meeting and
entitled to vote will decide which one of them is to be chairman.
57.6 To avoid any doubt, nothing in these Articles restricts or excludes any of
the powers or rights of a chairman of a meeting which are given by the
general law.
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58 Security, and other arrangements at General Meetings
Either the chairman of a General Meeting, or the Secretary, can take any
action he considers necessary for:
o the safety of people attending a General Meeting; or
o proper and orderly conduct at a General Meeting.
59 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 must have a live video and two way sound link with the main room for
the General Meeting, where the chairman will be. The video and sound link
must enable those in all the rooms to see and hear what is going on in the
other rooms. The notice of the General 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 General Meeting will be treated as being
held, and taking place, in the main room.
60 The quorum needed for General Meetings
Art 59
Before a General Meeting starts to conduct business, there must be a
quorum present. If there is not, the meeting cannot carry out any
business. Unless other 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 duly authorised company representatives or a
combination of shareholders, duly authorised company representatives for
companies and proxies.
61 The procedure if there is no quorum
Art 60
61.1 This Article 61 applies if a quorum is not present either within 30
minutes of the time fixed for a General Meeting to start or within any
longer period (being no longer than an hour from the time fixed for the
General Meeting to start) on which the chairman may decide. If the General
Meeting was called by shareholders it is cancelled. Any other General
Meeting is adjourned to the same day in the next week (or if that day is a
public holiday, then the next day which is not a Saturday, Sunday or
public holiday) at the same time and place or to any other day and time
and place which the directors decide.
61.2 If a quorum is not present within 15 minutes of the time fixed for the
start of the adjourned meeting, the adjourned General Meeting shall be
cancelled.
62 Adjourning meetings
Art 62
62.1 The chairman of a General Meeting can adjourn a meeting which has a quorum
present, if this is agreed by those present at the General Meeting. This
can be to a time, date and place proposed by the chairman or may be an
indefinite adjournment. The chairman must adjourn the General Meeting if
the General Meeting directs him to. In these circumstances the General
Meeting will decide how long the adjournment will be, and where it will
adjourn to. If a General Meeting is adjourned indefinitely, the directors
will fix the time, date and place of the adjourned General Meeting.
Art 62
62.2 General Meetings can be adjourned more than once. But if a General Meeting
is adjourned for more than 30 days or indefinitely, at least seven days'
notice must be given of the adjourned General Meeting in the same way as
was required for the original General Meeting. If a General
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29
Meeting is adjourned for less than 30 days, there is no need to give
notice of the adjourned General Meeting, or about the business to be
considered there.
Art 62
62.3 An adjourned General Meeting can only deal with business that could have
been dealt with at the original General Meeting before it was adjourned.
63 Amending Resolutions
If the chairman of a General Meeting, acting in good faith, rules an
amendment to a resolution out of order, any error in that ruling will not
affect the validity of a vote on the original resolution.
VOTING PROCEDURES
64 How votes are taken
Art 63
64.1 If an ordinary resolution or any question is put to the vote at a General
Meeting, it will be decided by a show of hands of the shareholders present
in person or by proxy, unless a poll is demanded when, or before, the
result of the show of hands is declared by the chairman. A poll can be
demanded by:
Art 63
o the chairman of the General Meeting;
Art 63(a)
o at least two shareholders at the General Meeting (including
proxies of shareholders entitled to vote) who are entitled to
vote;
Art 63(b)
o one or more shareholders at the General Meeting who are
entitled to vote (including proxies of shareholders entitled
to vote) and who have, between them, at least 10 per cent of
the total votes of all shareholders who have the right to vote
at the General Meeting; or
Art 79
Art 63(c)
Art 79
o one or more shareholders who have shares which allow them to
vote at the General Meeting (including proxies of shareholders
entitled to vote), where the total amount which has been paid
up on their shares is at least 10 per cent of the total sum
paid up on all shares which give the right to vote at the
General Meeting.
64.2 All special resolutions and extraordinary resolutions shall only be
decided on a poll.
Art 68
64.3 A demand for a poll can be withdrawn if the chairman agrees to this. If a
poll is demanded, and this demand is then withdrawn, any declaration by
the chairman of the result of a vote on that resolution by a show of
hands, which was made before the poll was demanded, will stand.
65 How a poll is taken
Art 65
65.1 If a poll is demanded or held in the way allowed by the Articles, the
chairman of the General Meeting can decide where, when and how it will be
carried out. The result is treated as the decision of the General Meeting
where the poll was demanded, even if the poll is carried out after the
General Meeting.
Art 65
65.2 The chairman can:
o decide that a ballot, voting papers or tickets will be used;
o appoint one or more scrutineers (who need not be
shareholders);
o decide to adjourn the General Meeting to such day, time and
place as he decides for the result of the poll to be declared.
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30
Art 75
65.3 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 or cast all his votes in the same way.
66 Where there cannot be a poll
Notwithstanding any other provision in these Articles, a poll is not
allowed on a vote to elect a chairman of a General Meeting, nor is a poll
allowed on a vote to adjourn a General Meeting, unless the chairman of the
General Meeting demands a poll.
67 A General Meeting continues after a poll is demanded
Art 67
A demand for a poll on a particular matter does not stop a General Meeting
from continuing and dealing with matters other than the question on which
the poll was demanded.
68 Timing of a poll
Art 66
Art 68
A poll on a resolution to adjourn the General Meeting must be taken
immediately at the General Meeting. Any other poll can either be taken
immediately at the General Meeting or within 30 days from the date it was
demanded and at a time and place decided on by the chairman. No notice is
required for a poll which is not taken immediately if the time and place
at which it is to be taken are announced at the General Meeting at which
it is demanded. In any other case, at least seven clear days' notice must
be given specifying the time and place at which the poll is to be taken.
69 The chairman's casting vote
Art 69
If the votes are equal, either on a show of hands or on a poll, the
chairman of the General Meeting is entitled to a further, casting vote.
This is in addition to any other votes which the chairman may have as a
shareholder, or as a proxy.
70 The effect of a declaration by the chairman
Art 63
The following applies when there is a vote by a show of hands, and no poll
is demanded, or any demand for a poll is withdrawn. A corresponding entry
in the minute book is conclusive proof of the following declarations by
the chairman of the General Meeting:
o a resolution has been carried;
o a resolution has been carried unanimously;
o a resolution has been carried by a particular majority;
o a resolution has been lost; or
o a resolution has been lost by a particular majority.
There is no need to prove the validity, number, or proportion of votes
recorded for or against a resolution.
VOTING RIGHTS
71 The votes of shareholders
Art 70
At a General Meeting, on a show of hands every shareholder who is present
in person and every person present who has been duly appointed as a proxy
shall have one vote, provided that each such person is entitled to attend
and vote at that General Meeting. Where there is a poll, a shareholder who
is present in person (or by proxy) who is entitled to be present and to
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31
vote has one vote for every share which he holds. This is subject to any special
rights or restrictions which are given to any class of shares by, or in
accordance with, the Articles.
72 Shareholders who owe money to the Company
Art 74(A)
Unless the Articles provide otherwise, the only people who are entitled to
attend and/or vote at General Meetings or to exercise any other right
conferred by being a shareholder in relation to General 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 General Meeting.
This applies both to attending the General Meeting personally and to
appointing a proxy.
73 Suspension of rights on non-disclosure of interest
Art 74(B)
73.1 This Article applies if any shareholder, or any person appearing to be
interested in shares held by that shareholder, has been properly served
with a notice under Section 212 of the Companies Act 1985, requiring
information about interests in shares, and has failed for a period of 14
days from the date of the notice to supply to the Company the information
required by that notice. Then (subject to the provisions of this Article
and 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 a shareholders' meeting as holder of:
o the shares in relation to which the default occurred (called default
shares);
o any further shares which are issued in respect of default shares;
and
o any other shares held by the shareholder holding the default shares.
Art 74(B)
73.2 Any person who acquires shares subject to restrictions under Article 73.1
is subject to the same restrictions, unless:
o the transfer was an approved transfer (see Article 73.9); or
o the transfer was by a shareholder who was not himself in default in
supplying the information required by the notice under Article 73.1
and a certificate in accordance with Article 73.3 is provided.
Art 74(C)
73.3 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 by
notice (a direction notice) to the shareholder direct that:
o 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 that dividend or
money is finally paid to the shareholder);
o the shareholder will not be allowed to choose to receive shares in
place of dividends in accordance with Article 135; and/or
o subject to Article 73.4, no transfer of any of the shares held by
the shareholder will be registered unless:
o either the transfer is an approved transfer (see Article
73.9);
o or the shareholder is not himself in default as regards
supplying the information required; and (in this case)
o the transfer is of part only of his holding; and
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32
o when presented for registration, the transfer is accompanied
by a certificate by the shareholder. This certificate 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.
73.4 Any direction notice can treat shares of a shareholder in certificated and
uncertificated form as separate shareholdings and either apply only to
shares in certificated form or to shares in uncertificated form or apply
differently to shares in certificated and uncertificated form. 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.
Art 74(D)
73.5 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.
Art 74(E)(i)
73.6 A direction notice has the effect which it states while the default
resulting in the notice continues. It then ceases to apply when the
directors decide (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.
Art 74(E)(ii)
73.7 A direction notice also ceases to apply to any shares which are
transferred by a shareholder in a transfer permitted under Article 73.3
even where a direction notice restricts transfers.
Art 74(F)(i)
73.8 For the purposes of this Article a person is treated as appearing to be
interested in any shares if the shareholder holding those shares has been
served with a notice under Section 212 of the Companies Act 1985 and:
o the shareholder has named that person as being so interested;
or
o (after taking into account the response of the shareholder to
the notice and any other relevant information) the Company
knows or reasonably believes that the person in question is or
may be interested in the shares.
73.9 For the purposes of this Article a transfer of shares is an approved
transfer if:
Art 70(F)(iii)
o it is a transfer of shares to an offeror under an acceptance
of a takeover offer; or
o the directors are satisfied that the transfer is made in
connection with a sale in good faith of the whole of the
beneficial ownership of the shares to a person 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 word
is defined in Section 435 of the Insolvency Act 1986) is
included amongst the people who are connected with the
shareholder or any person appearing to be interested in the
shares.
73.10 Where a person who has an interest in American Depositary Shares receives
a notice under this Article 73, that person is considered for the purposes
of this Article 73 to have an interest in the number of shares represented
by those American Depositary Shares which is specified in the notice and
not in the remainder of the shares held by the ADR Depositary.
73.11 Where the ADR Depositary receives a notice under this Article 73, the ADR
Depositary shall only be required to supply information relating to any
person who has an interest in the shares held by the ADR Depositary which
has been recorded by the ADR Depositary under the arrangements made with
the Company (including in the Proxy Register maintained under Article 163)
when it was appointed as the ADR Depositary.
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Art 70(G)
73.12 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.
74 Votes of shareholders who are of unsound mind
Art 73
74.1 This Article 74 applies where a court which claims jurisdiction to protect
people who are unable to manage their own affairs has made an order
detaining a shareholder or appointing a person to manage his property or
affairs.
Art 73
74.2 The receiver or other person appointed by the court order to act for the
shareholder can vote for the shareholder on a show of hands or on a poll
at General Meetings. However, this Article only applies if the receiver or
other person appointed by the court delivers to the Transfer Office (or
the place stated in the notice for the delivery of the proxy form) at
least 48 hours before the relevant General Meeting (or adjourned General
Meeting) such evidence as the directors may require of such person's
authority to act.
Art 73
74.3 If the receiver or other person appointed by the court fails to deliver
the appropriate evidence to the Transfer Office (or the place stated in
the proxy form) in accordance with Article 74.2, the right to vote shall
not be exercisable.
75 The votes of joint holders
Art 72
Where a share is held by joint shareholders any one joint shareholder can
vote at any General Meeting (either personally or by proxy) in respect of
such share as if he were the only shareholder. If more than one of the
joint shareholders votes (either personally or by proxy), the only vote
which will count is the vote of that one of them who is listed first on
the Register for the share.
PROXIES
76 Appointment of proxies
Art 76
76.1 Any shareholder may appoint another person, who need not be another
shareholder, as his proxy to act at a General Meeting on his behalf.
76.2 Proxies may also be appointed to act at General Meetings in the
circumstances, and in the manner, provided for in Articles 158.2, 162,
164, 165 and 168, and Articles 76 to 80 should be read subject to their
terms.
Art 76
76.3 A shareholder can appoint more than one proxy to attend on the same
occasion.
77 Completing proxy forms
77.1 A proxy form:
o must be in writing; and
Art 77
Art 79
o can be in any form which is commonly used, or in any other form
which the directors approve.
77.2 A proxy form given by:
Art 77
o an individual must be signed by the shareholder appointing the
proxy, or by an agent who has been properly appointed in writing; or
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34
o a company must be sealed with the company's seal or signed by an
officer who is authorised to act on behalf of the company.
Art 79
Unless the contrary is shown, the directors are entitled to assume that
where a proxy form purports to have been signed by an officer on behalf of
a company that such officer was duly authorised by such company without
requiring any further evidence. Signatures need not be witnessed.
Art 80(A)
Art 80(B)
77.3 All notices convening General Meetings which are sent to shareholders
entitled to vote at the General Meeting, must, at the expense of the
Company, be accompanied by a proxy form. The proxy form must make
provision for two-way voting on all resolutions intended to be proposed,
other than resolutions which are merely procedural.
Art 80(C)
77.4 The accidental omission to send out a proxy form to a shareholder entitled
to it (or non receipt by him of the proxy form) will not invalidate any
resolution passed or proceedings at the General Meeting to which the proxy
form relates.
78 Delivering proxy forms
Art 78
78.1 A proxy form must be delivered to the place stated in the notice of the
General Meeting, or in the proxy form, or, if no place is stated, to the
Transfer Office or, if the directors decide to accept proxies by
electronic mail, in the way that they specify. It must be delivered at
least:
o 48 hours before a General Meeting, an adjourned General
Meeting or a poll taken on the same day as the meeting; or
Art 78
o 24 hours before a poll is taken, if the poll is not taken on
the same day as the General Meeting or adjourned General
Meeting.
78.2 To the extent that the Companies Acts permit, directors can decide to
accept proxies delivered by electronic mail, subject to any limitations,
restrictions or conditions they decide to apply and Articles 77.1 and 77.2
may be disapplied in relation to a proxy form delivered in this way.
Art 78
78.3 If a proxy form is signed by an agent, the power of attorney or other
authority relied on to sign it, or a copy which has been certified by a
notary, or certified in some other way specified by the directors, must
(if required by the Company) be delivered with the proxy form in
accordance with the instructions for delivery of proxy forms which are set
out in the notice of General Meeting or on the proxy form, unless the
power of attorney or other form of authority has already been registered
with the Company.
Art 78
78.4 If this Article 78 is not complied with, the proxy will not be able to act
for the person who appointed him.
Art 78
78.5 If a proxy form which relates to several General Meetings has been
properly delivered for one General Meeting or adjourned General Meeting,
it does not need to be delivered again for any later General Meeting which
the proxy form covers.
Art 79
78.6 Unless the proxy form says otherwise, it will be valid at an adjourned
General Meeting as well as for the original General Meeting to which it
relates.
78.7 A shareholder can attend and vote at a General Meeting on a show of hands
or on a poll even if he has appointed a proxy to attend and vote at that
meeting. However, if he votes in person on a resolution, then as regards
that resolution his appointment of a proxy will not be valid.
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79 Cancellation of proxy's authority
Art 81
79.1 Any vote cast in the way a proxy form authorises, or any demand for a poll
made by a proxy, will be valid even though:
o the shareholder who appointed the proxy has died or is of
unsound mind;
o the proxy form has been revoked; or
o the authority of the person who signed the proxy form for the
shareholder has been revoked.
79.2 However, this does not apply if written notice of the fact has been
received at the Transfer Office (or at such other place within the United
Kingdom which is specified for the deposit of proxy forms in accordance
with these Articles) before:
o the General Meeting or adjourned General Meeting starts; or
o the time fixed on a later day to take a poll,
when the vote is taken or poll demanded.
80 Authority of proxies
Art 79
80.1 A proxy is entitled to speak at a General Meeting.
Art 79
80.2 A proxy form gives the proxy the authority to demand a poll, or to join
others in demanding one. A demand for a poll made by a proxy for a
shareholder is treated in the same way as a demand by the shareholder
himself.
Art 79
80.3 Unless the proxy form provides otherwise, a proxy form entitles a proxy to
vote on any amendment to a resolution put to the General Meeting for which
it was given as the proxy thinks fit.
81 Representatives of companies
Art 71
81.1 A company which is a shareholder can authorise any person to act as its
representative at any General Meeting which it is entitled to attend. This
person is called a company representative. The directors of that company
must pass a resolution to appoint the company representative. If the
governing body of that company is not a board of directors, the resolution
can be passed by its governing body. A company representative can exercise
all the powers on behalf of the company which the company could exercise
if it were an individual shareholder present at the General Meeting in
person. This includes the power to vote on a show of hands when the
company representative is present in person at a General Meeting.
Art 81
81.2 Any vote cast by a company representative, and any demand he makes for a
poll, is valid even if he is, for any reason, no longer authorised to
represent the company. However, this does not apply if written notice of
the fact that he is no longer authorised has been received at the Transfer
Office (or at such other place within the United Kingdom which is
specified for the deposit of proxy forms in accordance with these
Articles) before the deadlines which apply to notice of cancellation of
proxies under Article 79.
82 Challenging votes
Art 64
Any objection to the right of any person to vote or the way in which the
votes have been counted must be made at the General Meeting (or adjourned
General Meeting) at which the vote is cast. If a vote is not disallowed at
the General Meeting, it is valid for all purposes. Any such objection
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36
must be raised with the chairman of the General Meeting and will only
change the decision of the General Meeting on any resolution if the
chairman of the General Meeting decides that the vote cast may have
affected the decision of the General Meeting. His decision on matters
referred to him under this Article is final.
DIRECTORS
83 The number of directors
Art 82
There must be at least three directors (other than alternate directors),
but the shareholders can vary the number of directors by passing an
ordinary resolution.
84 Qualification to be a director
Art 83
A director need not be a shareholder, but a director who is not a
shareholder is entitled to attend and speak at shareholders' meetings.
85 Directors' fees and expenses
Art 85
85.1 Each of the directors shall be paid a fee for his services. The directors
can decide on the amount, timing and manner of payment of directors' fees,
but the total of the fees paid to all of the directors (excluding amounts
paid as special pay under Article 86, amounts paid as expenses under
Article 87 and any payments under Article 88) must not exceed:
o (pound)1 million a year; or
o any higher sum decided on by an ordinary resolution at a
General Meeting.
This remuneration shall accrue from day to day.
85.2 Unless an ordinary resolution is passed which provides 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 broken period.
86 Special pay
86.1 The directors can award special pay if any director performs extra or
special services of any kind including:
Art 87
Art 108
o holding any executive post;
o acting as chairman or deputy chairman (whether or not this
office is executive or non-executive);
Art 87
o travelling or staying outside his main residence for any
business or purposes of the Company; and
o serving on any committee of the directors.
Art 87
88.2 Special pay can take the form of salary, commission or other benefits or
expenses or more than one of such forms or can be paid in some other way.
This is decided on by the directors and may be a fixed sum or percentage
of profits or otherwise. Such special pay can be either in addition to or
instead of any other fees, expenses and other benefits a director may be
entitled to receive.
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37
87 Directors' expenses
Art 86
In addition to any fees and expenses paid under Articles 85 and 86, the Company
will repay to a director all expenses properly incurred in:
o attending and returning from shareholders' meetings;
o attending and returning from directors' meetings;
o attending and returning from meetings of committees of the
directors; or
o in or with a view to the performance of their duties.
88 Directors' pensions and other benefits
Art 92(A)
88.1 The directors may pay or provide:
o pensions;
o annual payments;
o gratuities; or
o other allowances or benefits
to any people who are, or who were, directors who had a salary or place of
profit with the Company or with any company which is or has been a
subsidiary of the Company or a predecessor in business of the Company or
any such subsidiary. The directors can decide to extend these arrangements
to any member of his family (including a spouse and a former spouse) or to
any person who was or is dependent on him. The directors can also decide
to contribute (before as well as after he ceases to receive a salary or
occupy a place of profit) to any scheme or fund or to pay premiums to a
third party for these purposes.
88.2 No director or former director is accountable to the Company or its
shareholders for a benefit of any kind given in accordance with this
Article. The receipt of a benefit of any kind given in accordance with
this Article does not prevent a person from being or becoming a director.
89 Appointing directors to various posts
Art 107(A)
89.1 The directors can appoint any director as chairman, or a deputy chairman,
or to any executive position on which they decide. So far as the Companies
Acts allow, they can decide on how long these appointments will be for,
and on their terms. Subject to the terms of any contract with the Company,
they can also vary or end these appointments.
Art 107(B)
89.2 A director will automatically stop being chairman, deputy chairman,
managing director, deputy managing director, joint managing director or
assistant managing director if he is no longer a director. Other executive
appointments will only stop if the contract or resolution appointing the
director to a post says so. If a director's appointment ends because of
this Article, this does not prejudice any claim for breach of contract
against the Company which may otherwise apply.
Art 109
89.3 The directors can delegate to a director appointed to an executive post
any of the powers which they jointly have as directors. These powers can
be delegated on such terms and conditions as decided by the directors
either in parallel with, or in place of, the powers of the directors
acting as a board. The directors can change the basis on which these
powers are given or withdraw them from the executive.
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38
CHANGING DIRECTORS
90 Age limits
Art 97
90.1 Provisions of the Companies Acts which, together 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.
Art 97
90.2 However, if it is proposed that a director who has reached the age of 70
be elected or re-elected in a notice convening a General Meeting, the
director's age must be stated in the notice (or document accompanying such
notice). However, the accidental failure to state this will not invalidate
the election or re-election of the director or any other proceedings at
the General Meeting.
91 Retiring directors
At each Annual General Meeting all those directors who were elected or
last re-elected at or before the Annual General Meeting held in the third
calendar year before the current year shall automatically retire.
92 Eligibility for re-election
Art 99
A retiring director is eligible for re-election.
93 Re-electing a director who is retiring
Art 100
93.1 At a General Meeting at which a director retires (whether at an Annual
General Meeting or otherwise), he may be re-elected (as long as the
director has not told the Company in writing that he does not wish to be
re-elected) if the shareholders pass an ordinary resolution to re-elect
him.
Art 98
93.2 A director retiring at a General Meeting retires at the end of that
meeting (or adjourned meeting). Where a retiring director is re-elected he
continues as a director without a break.
94 Election of two or more directors
Art 105
A single resolution for the election of two or more directors is void
unless the shareholders first approve the putting of a resolution in this
form by an earlier procedural vote taken at the General Meeting, with no
votes cast against.
95 People who can be directors
Art 101
95.1 Only the following people can be elected as directors at a General
Meeting:
o A director who is retiring at the General Meeting;
o A person who is recommended by the directors; and
o A person who has been proposed by a shareholder who is entitled to
attend and vote at the General Meeting.
Art 101
95.2 A shareholder proposing a director in accordance with Article 95.1 must
deliver to the Registered Office at least seven days before the General
Meeting, but not more than 42 days before the meeting (this period
includes the date on which the notice is given):
o a signed letter stating that he intends to propose another person
for election as director; and
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39
o written confirmation from the person to be proposed that he is
willing to be elected.
96 The power to fill vacancies and appoint extra directors
Art 103
96.1 The directors can appoint any person as an extra director or to fill a
casual vacancy. Any director appointed in this way automatically retires
at the next General Meeting after his appointment. At this General Meeting
he can be elected by the shareholders as a director.
Art 102
96.2 At a General Meeting the shareholders can also pass an ordinary resolution
to fill a casual vacancy or to appoint an extra director.
Art 103
96.3 Extra directors can only be appointed under this Article up to the limit
(if any) on the total number of directors under the Articles (or any
variation of the limit approved by the shareholders in accordance with the
Articles).
97 Removing and appointing directors by an ordinary resolution
Art 104
97.1 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 in the Articles, or in any agreement between him and the
Company. Special notice of the ordinary resolution must be given to the
Company as required by the Companies Acts. 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 between him and the Company.
Art 104
97.2 Subject to Article 95, the shareholders can pass an ordinary resolution to
elect a person to replace a director who has been removed in the way
described in Article 97.1. If no director is appointed under this Article,
the vacancy can be filled under Article 96.
Art 104
97.3 Any person appointed under Article 97.2 will be treated, for the purpose
of determining the time at which he is to retire, as if he had become a
director on the day on which the director he replaced was last elected.
98 When directors are disqualified
Art 88
98.1 Any director automatically ceases to be a director in any of the following
circumstances if:
Art 88(d)
o a bankruptcy order is made against him;
Art 88(d)
o 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;
Art 88(b)
o a court which claims jurisdiction to protect people who are unable
to manage their own affairs has made an order detaining him or
appointing a person to manage his property or affairs;
Art 88(c)
o he has missed directors' meetings for a continuous period of six
months, without permission from the directors, and the directors
pass a resolution removing him from office;
Art 88(e)
o he is prohibited from being a director under the Companies Acts or
any power conferred on the directors or shareholders under these
Articles;
Art 88(a)
o except where his contract of service prevents him from resigning,
he:
(i) delivers to the Company a written notice of resignation
signed by him or on his behalf; or
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40
(ii) offers to resign and the directors pass a resolution
accepting the offer;
Art 88(f)
o all the other directors sign a notice requiring him to resign. He
will cease to be a director when the notice is served on him. Such a
notice can consist of several documents in the same form signed by
one or more directors.
Art 88(a)
98.2 When a director stops being a director for any reason, he will also
automatically cease to be a member of any committee. Removal from office
will be without prejudice to any claim which he or the Company might bring
in relation to any contract of service between him and the Company.
DIRECTORS' MEETINGS
99 Directors' meetings
Art 110(A)
The directors can decide when and where to have directors' meetings and
how they shall be conducted, and on the quorum. They can also adjourn
their meetings.
100 Who can call directors' meetings
Art 112
A directors' meeting can be called by any director. The Secretary must
also call a directors' meeting if a director asks him to.
101 How directors' meetings are called
Art 112
Art 90(A)(ii)
Directors' meetings are called by giving notice to all the directors. This
notice may be given to a director personally, by word of mouth, by notice
in writing (sent to him at his last known address) or by electronic mail
(sent to him at his last known electronic address or fax number). Any
director can waive notice of any directors' meeting, including one which
has already taken place.
102 Quorum
Art 110(A)
Art 114
102.1 If no other quorum is fixed by the directors, three directors are a
quorum. A directors' meeting at which a quorum is present can exercise all
the powers, authorities and discretions of the directors whether by or
under these Articles or exercisable by the directors generally.
Art 110(A)
102.2 A person who holds office only as an alternate director shall, if his
appointor is not present, be counted in the quorum.
102.3 A director who ceases to be a director at a directors' meeting can
continue to be present and act as a director and be counted in the quorum
until the end of that meeting if no other director objects and a quorum
would not otherwise be present.
103 The chairman of directors' meetings
Art 113
103.1 The directors can elect any director as chairman or as one or more deputy
chairmen for such periods as the directors decide. If the chairman is at a
directors' meeting, he will chair it. In his absence, the chair will be
taken by a deputy chairman, if one is present. If there is no chairman or
deputy chairman present within five minutes of the time when the
directors' meeting is due to start, the directors who are present can
choose which one of them will be the chairman of the directors' meeting.
Art 110(A)
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41
103.2 Where there is more than one deputy chairman present at a meeting, and the
chairman is not there, the deputy chairman to take the chair will be the
longest serving deputy chairman present.
104 Voting at directors' meetings
Matters for decision which arise at a directors' meeting will be decided
by a majority vote. The chairman of the meeting will not have a second,
casting vote.
105 Directors can act even if there are vacancies
Art 111
105.1 The remaining directors 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
minimum which applies under Article 83 (including any variation of that
minimum approved by an ordinary resolution of shareholders), the remaining
director(s) can only:
o either appoint further directors to make up the shortfall; or
o call a General Meeting.
105.2 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.
106 Directors' meetings by video conference and telephone
Art 110(B)
106.1 Any or all of the directors, or members of a committee, can take part in a
directors' meeting of the directors or of a committee by way of a video
conference or conference telephone, or similar equipment, designed to
allow everybody to take part in the directors' meeting.
106.2 Taking part in this way will be counted as being present at the directors'
meeting. A directors' meeting which takes place by way of video
conference, conference telephone or similar equipment will be treated as
taking place where most of the participants are. If there is no largest
group, directors' meetings will be treated as taking place where the
chairman is.
106.3 A directors' meeting held in the way described in Article 106.1 will be
valid as long as in one single place, or in places connected by way of
video conference, telephone conference, or similar equipment, a quorum is
present.
107 Resolutions in writing
Art 117
107.1 This Article applies to a written resolution which is signed by all of the
directors or members of a committee who would be entitled to vote on the
resolution at a directors' meeting or at a committee meeting. This kind of
resolution is just as valid and effective as a resolution passed by those
directors at a directors' meeting which is properly called and held.
Art 117
107.2 The resolution can be passed using several copies of a document, if each
copy is signed by one or more directors. These copies can be faxed copies.
Art 117
107.3 A written resolution signed by an alternate director does not need also to
be signed by his appointor. If the written resolution is signed by a
director who has appointed an alternate director, it does not need to be
signed by the alternate director acting in that capacity.
107.4 A written resolution will be valid at the time it is signed by the last
director.
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42
108 The validity of directors' actions
Art 116
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 a member of a
committee, will, in favour of anyone dealing with the Company in good
faith, be valid even though it is discovered later that any director, or
person acting as a director, was not properly appointed or elected. 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
109 Directors' interests in transactions with the Company
109.1 If the Companies Acts allow, and if he has disclosed to the directors the
nature and extent of his interest, a director can, notwithstanding his
being a director:
Art 90(E)
(a) be a party to, or otherwise interested in, any existing or proposed
contract, transaction or arrangement with the Company or in which
the Company is otherwise interested;
Art 89
(b) be a director of, or occupy an office or place of profit (other than
as Auditor) in, and in any such case on terms (including pay) which
the directors can decide, or be employed by, or be a party to any
existing or proposed contract, transaction or arrangement with, or
otherwise be interested in, any company promoted by the Company or
in which the Company is otherwise interested; or
Art 90(F)
(c) alone (or any firm of which he is a partner, employee or member can)
act in a professional capacity for the Company (other than as
Auditor) and be paid for this.
Art 90(E)
109.2 A director will not, unless he agrees otherwise, have to hand over to the
Company any benefit which he derives from any of the interests described
above, and no contract, transaction or arrangement of the type described
above will be liable to be avoided on the grounds of any director's
interest or benefit.
Art 89
109.3 If the Company holds or owns shares in another company, the directors can
exercise votes attached to such shares or if any of the directors are
directors of such other company, they may vote as directors of that other
company in such manner as they think fit.
110 When directors can vote on things in which they are interested
Art 90(B)
110.1 Unless the Articles say otherwise, a director cannot vote on a resolution
about a contract or any other kind of proposal in which he has a material
interest. For this purpose, any interest of a person who is connected with
a director under Section 346 of the Companies Act 1985 will be treated as
if it were an interest of the director himself. However, the director can
vote if the interest is only an interest in the Company's shares,
debentures or other securities. If a director cannot vote on a resolution,
the director cannot be counted in the quorum when the directors vote on
that resolution.
110.2 However, if the Companies Acts permit, a director can (in the absence of a
material interest other than one which is listed below) vote, and be
counted in the quorum, on any resolution about any of the following
matters, namely:
Art 90(B)(i)
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43
o giving him, or any other person, any guarantee, security or
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
subsidiary undertakings;
o giving him, or any other person, any security or an indemnity for
any liability which he, or that other person, has incurred at the
request, or for the benefit of, the Company or any of its subsidiary
undertakings;
Art 90(B)(ii)
o giving any guarantee, security or indemnity, to him, or any other
person, for a debt or obligation which is owed by the Company, or
any of its subsidiary undertakings, if the director has taken
responsibility by giving a guarantee, indemnity or security for some
or all of that debt or obligation;
Art 90(B)(iv)
o any proposal relating to an offer of any shares, debentures or other
securities, of or by the Company, or any of its subsidiary
undertakings, if the director takes part because he is a holder of
shares, debentures or other securities, or if he takes part in the
underwriting or sub-underwriting of the offer;
Art 90(B)(iii)
o any proposal involving any other company in which the director
(together with any person connected with the director under section
346 of the Companies Act 1985), has any kind of interest (including
holding any position in that company, or being a shareholder of that
company). But this exemption does not apply if he knows that he, and
any people connected with him, hold an interest in shares (as
defined for sections 198 to 211 of the Companies Act 1985)
representing 1 per cent or more of:
o any class of equity share capital of such company (or any
third company through which his interest is derived); or
o the voting rights in that company.
Any such interest of 1 per cent or more is treated for the purposes
of this Article as being material interest;
Art 90(B)(v)
o any proposal relating to an arrangement for the benefit of
employees of the Company, or any of its subsidiary
undertakings, which only gives him benefits which are also
generally given to the employees to whom the arrangement
relates; or
Art 90(B)(vi)
o any proposal relating to any insurance which the Company
proposes to buy or renew for the benefit of directors, or of a
group of people which includes directors.
Art 90(C)
110.3 A director cannot vote or be counted in the quorum on a resolution
relating to appointing that director to a position within the Company or
any company in which the Company has an interest or the terms and
termination of the appointment.
Art 90(C)
110.4 This Article 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 has an interest. It also applies if the
directors are considering the terms or termination of such appointments.
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 in which the Company is
interested in if he has an interest of 1 per cent or more in that company
of the nature described in Article 110.2.
Art 90(D)
110.5 If any question comes up at a directors' meeting about whether a director
has a material interest, or whether he can vote or be counted in the
quorum, and the director does not agree to abstain from voting on the
issue or not be counted in the quorum, the question must be referred to
the
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44
chairman of the directors' meeting (unless the chairman is the director in
question, in which case the other directors will choose another amongst
them to act as chairman in dealing with this question). The chairman's
ruling about any other director is final and conclusive, unless the nature
and extent of the director's interest has not been fairly disclosed to the
other directors.
111 More about directors' interests
For the purpose of Articles 109 and 110 and this Article, a director who
is in any way interested shall state the nature of his interest at a
directors' meeting in accordance with the Companies Acts, and:
Art 90(A)(i)
o 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 which involves any company or person
identified in the notice is treated as a standing disclosure that
the director has that interest;
Art 90(A)(ii)
o an interest of a person who is connected with the director under
section 346 of the Companies Act 1985 will be treated as an interest
of the director;
Art 90(A)(iii)
o interests (whether his or of any person connected with the director
under section 346 of the Companies Act 1985) which are unknown to
the director and which it is unreasonable to expect him to know
about are ignored.
DIRECTORS' COMMITTEES
112 Delegating powers to committees
Art 115
The directors can delegate any of their powers, or discretions, to
committees of one or more directors. This includes powers or discretions
relating to directors' pay or giving benefits to directors. If the
directors have delegated any power or discretion to a committee, any
references in these Articles to using that power or discretion include its
use by the committee. Any committee must comply with any regulations laid
down by the directors. These regulations can require or allow people who
are not directors to be co-opted onto the committee, and can give voting
rights to co-opted members. But:
o there must be more directors on a committee than co-opted members;
and
o a resolution of the committee is only effective if a majority of the
members of the committee present at the time of the resolution were
directors.
113 Committee procedure
Art 115
If a committee includes two or more people, the Articles which regulate
directors' meetings and their procedure will also apply to committee
meetings (if possible), unless these are inconsistent with any regulations
for the committee which have been laid down under Article 112.
DIRECTORS' POWERS
114 The directors' management powers
Art 91
114.1 The Company's business will be managed by the directors. They can use all
the Company's powers except where the Articles, or the Companies Acts,
provide that powers can only be used 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.
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45
114.2 The directors are, however, subject to:
Art 91
o the provisions of the Companies Acts;
o the requirements of the Memorandum or these Articles; and
o any other requirements (whether or not consistent with these
Articles) which are approved by the shareholders by passing a
special resolution at a General Meeting.
However, if any change is made to the Memorandum or these Articles or if
the shareholders approve a requirement relating to something which the
directors have already done which was within their powers, this will not
invalidate any prior act of the directors which would otherwise have been
valid.
115 The power to establish local boards
Art 93(A)
115.1 The directors can set up local committees, local boards or local agencies
to manage any of the Company's business. These can be either in or outside
the United Kingdom. The directors can appoint, remove and re-appoint
anybody (who need not be a director) to be:
o members of any local committee, board or agency; or
o managers or agents of the Company.
115.2 The directors can:
o decide on the pay and other benefits of people appointed under this
Article;
o delegate any of their authority, powers or discretions to:
(i) any local board or committee; or
(ii) any manager, or agent of the Company.
o allow local committees or boards, managers or agents to delegate to
another person;
o allow the members of local committees, boards or agencies to fill
any vacancies on them;
o allow the members of local committees, boards or agencies to
continue to act even though there are vacancies on them;
o remove any people they have appointed under this Article; and
o cancel or change an appointment or delegation made under this
Article, although this will not affect anybody who acts in good
faith who has not had any notice of any cancellation or variation.
Any appointment or delegation by the directors which is referred to in
this Article can be on any terms and conditions decided on by the
directors.
Art 93(C)
115.3 A person who is employed by, or occupies an office with, the Company may
be given a title which includes the words "Associate Director". This will
not imply that such person is a director of the Company or that he is
entitled to act as a director or be deemed to be a director for the
purposes of these Articles.
116 The power to appoint attorneys
Art 93(B)
116.1 The directors can appoint anyone (including the members of a group which
changes over time) as the Company's attorney or attorneys by granting a
power of attorney or by authorising him or
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46
them in some other way. The attorney or attorneys can either be appointed
directly by the directors, or the directors can give someone else the
power to select attorneys. The directors can decide on the purposes,
powers, authorities and discretions of attorneys.
116.2 The directors can decide for how long a power of attorney will last and
they can apply any terms and conditions to it. The power of attorney can
also include any provisions which the directors decide on for the
protection and convenience of anybody dealing with the attorney. The power
of attorney can also allow the attorney to sub-delegate any or all of his
power, authority or discretion to any other person.
117 Borrowing powers
Art 95(A)
117 So far as the Companies Acts allow, the directors can exercise all the
powers of the Company to:
o borrow money;
o issue (subject to the provisions of the Companies Acts regarding
authority to allot debentures convertible into shares) debentures
and other securities; and
o give any form of:
o guarantee; and
o security, either outright or as collateral and over all or any
of the Company's undertaking, property and uncalled capital,
for any debt, liability or obligation of the Company or of any third
party.
118 Borrowing restrictions
Art 95(B)
118.1 The directors must:
o limit the Borrowings of the Company and
o exercise all voting and other rights or powers of control
exercisable by the Company in relation to its subsidiary
undertakings
to ensure that the total amount of all Borrowings by the Group outstanding
at any time will not exceed:
o for the period from the date of the adoption of these Articles to
(and including) the date of the approval by the directors of the
Group's audited financial statements for the year ending 31 March
2000 the greater of:
o 1.5 times the Adjusted Total of Capital and Reserves at such
time; or
o (pound)15 billion (or its equivalent in any other currency or
currencies) at such time; and
o at any time after the date of the approval by the directors of the
Group's audited financial statements for the year ending 31 March
2000, 1.5 times the Adjusted Total of Capital and Reserves at such
time.
This limitation on Borrowings will only affect subsidiary undertakings to
the extent that the directors can restrict the borrowings of the
subsidiary undertakings by exercising the rights or powers of control
which the Company has over its subsidiary undertakings. The Company may
consent in advance to exceeding the borrowing limit by passing an ordinary
resolution at a General Meeting.
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47
118.2 In this Article:
Group means the Company and its subsidiary undertakings for the time
being;
Adjusted Total of Capital and Reserves means the aggregate of the share
capital and reserves as shown in the latest audited consolidated balance
sheet of the Group (including the amount paid up or credited as paid up on
the issued share capital of the Company, the share premium account,
capital redemption reserve, profit and loss account and other reserves
included within the Group's equity shareholders' funds) (the "Reserves")
but:
o adjusted as appropriate in respect of any variation to the paid up
share capital or reserves since the date of the latest audited
consolidated balance sheet as recorded within the monthly management
accounting records of the Group prepared in accordance with the
accounting bases and principles applied in the preparation of its
latest audited consolidated balance sheet;
o adding any amount which has been deducted at any time from the
Reserves of the Group for goodwill arising on consolidation either
by direct charge to Reserves or by charge to the Group's
consolidated profit and loss account; and
o making such other adjustments (if any) as the auditors of the
Company consider appropriate.
Borrowings means the aggregate amount of all liabilities and obligations
of the Group which in accordance with the accounting bases and principles
of the Group are treated as borrowings in the latest audited consolidated
balance sheet of the Group but:
o adjusted as appropriate in respect of any variation to borrowings
since the date of the latest audited consolidated balance sheet as
recorded within the monthly management accounting records of the
Group prepared in accordance with the accounting bases and
principles applied in its latest audited consolidated balance sheet;
o excluding any borrowings under finance or structured tax lease
arrangements to the extent matched as part of those arrangements by
deposits of cash or cash equivalent investments which are treated by
the creditor concerned as available to reduce its net exposure; and
o making such other adjustments (if any) as the auditors of the
Company consider appropriate.
118.3 The determination of the Company's auditors as to the amount of the
Adjusted Total of Capital and Reserves and the total amount of Borrowings
at any time shall be conclusive and binding on all concerned and for the
purposes of their computation the Company's auditors may at their
discretion make such further or other adjustments (if any) or
determinations as they think fit. Nevertheless the directors may act in
reliance on a bona fide estimate of the amount of the Adjusted Total of
Capital and Reserves and the total amount of Borrowings at any time and if
in consequence the borrowing limit is inadvertently exceeded an amount of
borrowings equal to the excess may be disregarded until the expiration of
three months after the date on which by reason of a determination of the
Company's auditors or otherwise the directors became aware that such a
situation has or may have arisen.
Art 95(C)
118.4 No lender or other person dealing with the Group need be concerned whether
the borrowing limit is observed. No debt incurred or security given in
breach of the borrowing limit will be invalid or ineffective unless the
lender or the recipient of the security had express notice at the time
when the debt was incurred or security given, that the limit had been or
would as a result be breached.
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ALTERNATE DIRECTORS
119 Alternate directors
Art 84
119.1 Any director may appoint any person (including another director) to act in
his place (such person is called an alternate director). Such appointment
requires the approval of the directors, unless the proposed alternate
director is another director. A director appoints an alternate director by
delivering a signed appointment (or in any other manner which has been
approved by the directors) to the Registered Office. An alternate director
need not be a shareholder.
Art 84
119.2 The appointment of an alternate director ends if the director appointing
him ceases to be a director, unless that director retires at a General
Meeting at which he is re-elected under Article 93.1. A director can also
remove his alternate by delivering a signed notice (or doing something
else which has been approved by the directors) delivered to the Registered
Office. An alternate director can also be removed as an alternate by a
resolution of the directors.
Art 84
119.3 An alternate director is entitled to receive notices of directors'
meetings once he has given the Company an address, electronic address or
fax number to which notices may be served on him. 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 the director appointing him as a director. If he
is himself a director or attends any such meeting as an alternate for more
than one director, he will have one vote for each director for whom he
acts as an alternate, in addition to his own vote as a director. However,
he may not be counted more than once for the purposes of the quorum. If
his appointor is temporarily unable to act through ill health or
disability his signature to any resolution in writing of the directors is
as effective as the signature of his appointor.
119.4 If the directors decide to allow this, Article 119.3 also applies in a
similar fashion to any meeting of a committee of which his appointor is a
member.
119.5 An alternate director shall be an officer of the Company and shall alone
be responsible to the Company for his own actions and mistakes. Except as
said in this Article 119, an alternate director:
o does not have power to act as a director;
Art 84
o is not considered to be a director for the purposes of the Articles,
o is not considered to be the agent of his appointor; and
Art 84
o cannot appoint an alternate director.
Art 84
119.6 Subject to the Companies Acts, an alternate director is entitled to
contract and be interested in and benefit from contracts or arrangements
or transactions and to be repaid expenses and to be indemnified to the
same extent as if he were a director. However, he is not entitled to
receive from the Company as alternate director any pay, except only such
part (if any) of the pay otherwise payable to his appointor as such
appointor may direct the Company in writing to pay to his alternate.
THE SECRETARY
120 The Secretary and Deputy and Assistant Secretaries
Art 122(A)
120.1 The Secretary is appointed by the directors. The directors decide on the
terms and period of his appointment so long as allowed to do so by the
Companies Acts. The directors can also remove
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49
the Secretary, but this does not affect any claim for damages against the
Company for breach of any contract between him and the Company.
Art 122(B)
120.2 The directors can also appoint one or more people to be deputy or
assistant secretary. Anything which the Companies Acts allow to be done by
or to the Secretary can, if there is no Secretary, or he is for any reason
not capable of doing what is required of him, also be done by or to any
deputy or assistant secretary. If there is no deputy or assistant
secretary capable of acting, the directors can appoint any officer to do
what would be required of the deputy or assistant secretary.
Art 122(B)
120.3 Anything which the Companies Acts allow to be done by or to a director and
the Secretary, cannot be done by or to one person acting as both a
director and a Secretary.
THE SEAL
121 The Seal
Art 123(A)
121.1 The directors are responsible for arranging for the Common Seal and any
Securities Seal to be kept safely. The Common Seal and any Securities Seal
can only be used with the authority of the directors or of a committee
authorised by the directors to use it. The Securities Seal can be used
only for sealing securities issued by the Company in certificated form and
sealing documents creating or evidencing securities issued by the Company.
Art 123(A)
121.2 Subject to the provisions of these Articles which relate to share
certificates, every document which is sealed using the Common Seal must be
signed personally by:
o one director and the Secretary; or
o two directors; or
o any other persons who are authorised to do so by the directors.
121.3 Where a signature is required to witness the Common Seal, the directors
may decide that the individual need not sign the document personally but
that his signature may be printed on it mechanically, electronically or in
any other way the directors approve.
121.4 Securities and documents which have the Securities Seal stamped on them do
not need to be signed unless the directors or the Companies Acts require
this.
Art 94
121.5 The directors can use all the powers given by the Companies Acts relating
to official seals for use abroad.
Art 123(B)
121.6 Certificates for debentures or other securities of the Company may be
printed in any way and may be sealed and/or signed for in any manner
allowed by these Articles.
121.7 As long as it is allowed by the Companies Acts, any document signed by one
director and the Secretary or by two directors and expressed to be entered
into by the Company shall have the same effect as if it had been made
effective by using the Common Seal. However no document which states that
it is intended to have effect as a deed shall be signed in this way
without the authority of the directors or of a committee authorised by the
directors to give such authority.
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50
AUTHENTICATING DOCUMENTS
122 Establishing that documents are genuine
Art 118
122.1 Any director, or the Secretary, has power to identify as genuine any of
the following and to certify copies or extracts from them as true copies
or extracts:
o any documents relating to the Company's constitution;
o any resolutions passed by the shareholders or any class of
shareholders, or by the directors or by a committee of the
directors; and
o any books, documents, records or accounts which relate to the
Company's business.
The directors can also delegate this power to other people.
Art 118
122.2 When any books, documents, records or accounts are not kept at the
Registered Office, the officer of the Company who has custody of them is
treated as a person who has been authorised by the directors to identify
them as genuine and to provide certified copies or extracts from them.
Art 119
122.3 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 122.1 or 122.2 is conclusive evidence for anyone who
deals with the Company on the strength of the document that:
o the resolution has been properly passed; or
o the extract is a true and accurate record of the proceedings of a
valid meeting.
RESERVES
123 Setting up reserves
Art 124
The directors can, before recommending any dividend, set aside any profits
of the Company and hold them in a reserve. The directors can decide to use
these sums for any purpose for which the profits of the Company can
lawfully be used. Sums held in a reserve can either be employed in the
business of the Company or be invested. The directors can divide the
reserve into separate funds for particular purposes and alter the funds
into which the reserve is divided. The directors can also carry forward
any profits without holding them in a reserve.
DIVIDENDS
124 No dividends are payable except out of profits
Art 126
124.1 No dividend can be paid otherwise than out of profits available for
distribution under the Companies Acts.
Art 125
124.2 The profits of the Company which are determined to be distributed will be
used in the payment of dividends to shareholders in accordance with their
respective rights and priorities.
125 Final dividends
Art 125
Art 126
The directors may recommend the amount of any final dividend. The
shareholders can then declare dividends by passing an ordinary resolution,
but the amount declared cannot exceed the amount recommended by the
directors.
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51
126 Fixed and interim dividends
Art 128
126.1 If the directors consider that the profits of the Company justify such
payments, they can pay:
o fixed dividends on any class of shares carrying a fixed dividend on
the dates fixed for the payment of those dividends; and
o interim dividends on shares of any class of any amounts and on any
dates and for any period which they decide.
126.2 If the directors act in good faith, they are not liable to any
shareholders for any loss they may suffer because a lawful dividend has
been paid under this Article on other shares which rank equally with or
behind their shares.
127 Dividends not in cash
Art 133
If the directors recommend this, 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) rather than cash. The directors must give effect to that
resolution. Where any difficulty arises on the distribution and valuation
of the assets, the directors can settle it as they decide. In particular,
they can:
o issue fractional certificates;
o value assets for distribution purposes;
o pay cash of a similar value to adjust the rights of persons entitled
to the dividend; and/or
o transfer any assets to trustees for persons entitled to the
dividend.
128 Calculation and currency of dividends
Art 127
128.1 All dividends will be divided and paid in proportions based on the amounts
which have been paid up on the shares during any period for which the
dividend is paid. Sums which have been paid up in advance of calls do not
count in calculating the amount of a dividend to be paid on a share. If
the terms on which any share is issued provide that such share 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 attached to any shares, or the terms of any shares, provide
otherwise.
128.2 Unless the rights attached to any shares, or the terms of any shares, or
the Articles provide otherwise, a dividend, or any other money payable in
respect of any share, can be paid to a shareholder in whatever currency
the directors decide, using an appropriate exchange rate selected by the
directors for any currency conversions which are required.
129 Deducting amounts owing from dividends and other money
Art 129
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 (as
long as it is immediately payable) from:
o any dividend on any shares held by the shareholder; or
o any other money payable by the Company in connection with the
shares.
Money deducted in this way can be used to pay amounts owed to the Company
in connection with the shares.
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52
130 Payments to shareholders
Art 132(A)
130.1 Any dividend or other money payable in cash (whether in sterling or
foreign currency) relating to a share can be paid:
o by cheque or warrant or any other similar financial instrument made
payable to the shareholder who is entitled to it and sent direct to
his registered address or, in the case of joint shareholders, to the
shareholder who is first named in the Register and sent direct to
his registered address, or to someone else named in a written
instruction from the shareholder (or from all joint shareholders);
o in the case of shares in uncertificated form, by the use of a
relevant system;
o by inter-bank transfer or other electronic means to an account named
in a written instruction from the person receiving the payment;
and/or
o in some other way agreed between the shareholder (or all joint
shareholders) and the Company.
Art 131
130.2 For joint shareholders, the Company can rely on a receipt for a dividend
or other money paid on shares from any one of them.
Art 132(A)
130.3 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 using a relevant system or bank transfer or other
electronic means is made in accordance with instructions given by the
Company. The Company will not be responsible for a payment which is lost
or delayed.
Art 130
130.4 The Company will not pay interest on any dividend or other money due to a
shareholder in respect of his shares, unless the rights of the shares
provide otherwise.
131 Record dates for payments and other matters
Art 134
Any dividend or distribution on shares of any class can be paid to the
holder or holders of the shares shown on the Register, at the close of
business on whatever day may be provided in the resolution declaring the
dividend or providing for the distribution. The dividend or distribution
will be based on the number of shares registered on that day. 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 any relevant resolution was passed. This Article does not affect
the rights to the dividend or distribution as between past and present
shareholders.
132 Dividends which are not claimed
Art 130
132.1 If a dividend has not been claimed for one year after the passing of
either the resolution passed at a General Meeting declaring that dividend
or the resolution of the directors providing for payment of that dividend,
the directors may invest the dividend or use it in some other way for the
benefit of the Company until the dividend is claimed. If the directors pay
unclaimed dividends into a separate account, the Company will not be a
trustee of the money and will not be liable to pay any interest on it. If
a dividend has not been claimed for 12 years after either the passing of
the relevant resolution either declaring that dividend or providing for
payment of that dividend, it will be forfeited and belong to the Company
again.
Art 132(B)
132.2 The Company can stop paying dividends by cheque, warrant or other payment
order if cheques, warrants or other payment orders for two dividends in a
row are sent back or not cashed. The Company must start paying dividends
in this way again if the shareholder or a person automatically entitled to
the shares by law:
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53
o claims those dividends in writing (before they are forfeited under
Article 132.1); and
o does not tell the Company to start paying future dividends in some
other way.
133 Waiver of dividends
Where a shareholder wants to waive his entitlement to all or any part of a
dividend, he may do so by delivering a letter to that effect, signed by
him, to the Company. If appropriate, the letter may be signed by whoever
has become automatically entitled to the shares by law. For the waiver to
be effective, the Company must accept the letter and act on it. The
Company may, however, decline to act on the letter and continue to pay
dividends to the shareholder accordingly.
CAPITALISING RESERVES
134 Capitalising reserves
Art 135
134.1 Subject to any special rights attaching to any class of shares, the
shareholders can pass an ordinary resolution to allow the directors to
change into capital any sum which:
o 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
o the Company is holding as undistributed profits.
Art 135
134.2 Unless the ordinary resolution states otherwise the directors will use the
sum which is changed into capital for the Ordinary Shareholders on the
Register at the close of business on the day the resolution is passed (or
another date stated in the resolution or fixed as stated in the
resolution). The sum set aside must be used to pay up in full shares of
the Company and to allot such shares and distribute them to holders of
Ordinary Shares as bonus shares in proportion to their holdings of
Ordinary Shares at the time. The shares can be Ordinary Shares or, if the
rights of other existing shares allow this, shares of some other class.
Art 136
134.3 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
fractions of a share belongs to the Company or that fractions of a share
are ignored or deal with fractions of a share in some other way.
Art 136
134.4 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.
SCRIP DIVIDENDS
135 Ordinary Shareholders can be offered the right to receive extra shares
instead of cash dividends
Art 134(A)
135.1 The directors can offer Ordinary Shareholders the right to choose to
receive extra Ordinary Shares, which are credited as fully paid-up,
instead of some or all of their cash dividend. Before they can do this,
the shareholders must have passed an ordinary resolution authorising the
directors to make this offer.
Art 134(A)(i)
135.2 The ordinary resolution can apply to a particular dividend or dividends
(whether declared or not). Alternatively, it can apply to some or all of
the dividends which may be declared or paid in a specified period. The
specified period must end no later than five years after the ordinary
resolution is passed.
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54
Art 134(A)(v)
135.3 The directors can offer Ordinary Shareholders or persons automatically
entitled by operation of law the right to request new Ordinary Shares
instead of cash for:
o the next dividend; or
o all future dividends (if shares are made available as an alternative
to a cash dividend), until they tell the Company that they no longer
wish to receive new Ordinary Shares.
The directors can also allow Ordinary Shareholders to choose between these
alternatives.
Art 134(A)(ii)
135.4 An Ordinary Shareholder opting for new shares is entitled to Ordinary
Shares whose total relevant value is as near as possible to the cash
dividend (disregarding any tax credit) he would have received, but no
greater than such cash dividend.
The relevant value of an Ordinary Share is a value calculated in the
manner set out in the ordinary resolution or, if the ordinary resolution
does not set out how the relevant value of an Ordinary Share is to be
calculated, then the relevant value of an Ordinary Share is the average
value of the Ordinary Shares for the five dealing days starting from, and
including, the day when the shares are first quoted "ex dividend". This
average value is worked out from the average middle market quotations for
the Ordinary Shares on the London Stock Exchange, as published in its
Daily Official List. A certificate or report from the Company's auditors
as to the amount of the relevant value will be conclusive evidence of that
amount.
Art 134(A)(iv)
135.5 After the directors have decided to apply this Article to a dividend, they
must notify eligible Ordinary Shareholders in writing (or where the
Companies Acts permit, by electronic mail) of their right to choose new
Ordinary Shares. This notice should also set out the procedure by which
the Ordinary Shareholders must notify the Company if they wish to receive
new Ordinary Shares. Where Ordinary Shareholders have already chosen to
receive new Ordinary Shares in place of all cash future dividends, if new
Ordinary Shares are available, the Company will not notify them of a right
to receive new Ordinary Shares. Instead, the Company will remind them that
they have already chosen to receive new Ordinary Shares and explain to
them how to tell the Company if they wish to start receiving cash
dividends again.
Art 134(A)(iii)
135.6 The directors can set a minimum number of Ordinary Shares in respect of
which the right to choose new Ordinary Shares can be exercised. No
Ordinary Shareholder or person who is automatically entitled to an
Ordinary Share by law will receive a fraction of a share. The directors
can decide how to deal with any fractions left over and the Company can,
if the directors decide, receive the benefit of any or all of these.
Art 134(A)(vi)
135.7 The directors can exclude or restrict the right to choose new Ordinary
Shares, or make any other arrangements where they decide that:
o this is necessary or convenient to deal with any legal or practical
problems in relation to holders of Ordinary Shares with registered
addresses in any particular territory under the laws of any
territory, or requirements of any recognised regulatory body or
stock exchange in any territory; or
o special formalities would otherwise apply in connection with the
offer of new Ordinary Shares (including Ordinary Shares being
represented by American Depositary Shares); or
o it would be impractical or unduly onerous to give the right to any
Ordinary Shareholder or that for some other reason the offer should
not be made to them.
Art 134(A)(viii)
135.8 If an Ordinary Shareholder chooses to receive new Ordinary Shares, no
dividend on the Ordinary Shares for which he has chosen to receive new
Ordinary Shares (which are called the
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55
elected shares), will be declared or payable. Instead, new Ordinary Shares
will be allotted on the basis set out earlier in this Article. To do this
the directors will convert into capital a sum equal to the total nominal
value 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, any capital redemption reserve and the profit and loss account).
Article 134 applies to this process, so far as it is consistent with this
Article 135.
Art 134(A)(ix)
135.9 The new Ordinary Shares rank equally in all respects with the existing
fully paid-up Ordinary Shares at the time the new Ordinary Shares are
allotted. The new Ordinary Shares are not entitled to share in the
dividend from which they arose or any other dividend or distribution or
other entitlement which has been declared, made or paid or is payable by
reference to such record date or earlier record date.
135.10 Unless the directors decide otherwise or the CREST Regulations or the
rules of a relevant system require otherwise, any new Ordinary Shares
which an Ordinary Shareholder has chosen to receive instead of some or all
of his cash dividend will be:
o shares in uncertificated form if the corresponding elected shares
were uncertificated shares on the record date for that dividend;
and
o shares in certificated form if the corresponding elected shares were
shares in certificated form on the record date for that dividend.
135.11 The directors can decide that new Ordinary Shares will not be available
in place of any cash dividend. They can decide this at any time before new
Ordinary Shares are allotted in place of such dividend, whether before or
after Ordinary Shareholders have chosen to receive new Ordinary Shares.
Art 134(A)(x)
135.12 The directors have the power to do all acts and things they consider
necessary to give effect to this Article.
ACCOUNTS
136 Accounting and other records
Art 137
136.1 The directors must make sure that proper accounting records that comply
with the Companies Acts are kept. These records must explain the Company's
transactions and show its financial position at any time with reasonable
accuracy.
Art 139
136.2 The directors must, in accordance with the Companies Acts, ensure that the
profit and loss accounts, balance sheets, group accounts (if any) and
reports specified in the Companies Acts are prepared and laid before the
Company at a General Meeting.
Art 140
136.3 The auditors' report must be laid before the Company in General Meeting
and must be open for inspection as required by the Companies Acts.
137 Location and inspection of records
Art 138
137.1 The accounting records must be kept:
o at the Registered Office; or
o at any other place which the Companies Acts allow and the
directors decide on.
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137.2 The Company's officers always have the right to inspect the accounting
records.
ART 138
137.3 No shareholder (other than a shareholder who is also an officer) has any
right to inspect any books or papers of the Company unless:
o the Companies Acts or a proper court order give him that
right; or
o the directors authorise him to do so; or
o he is authorised by an ordinary resolution to do so.
138 Sending copies of accounts and other documents
Art 141
138.1 This Article applies to every directors' and auditors' report and balance
sheet and profit and loss account to be laid before the shareholders at a
General Meeting with any other document which the Companies Acts requires
to be attached to these.
Art 141
138.2 Copies of the documents set out in Article 138.1 must be delivered or sent
by post to the shareholders and debenture holders at their registered
addresses and to all other people to whom the Articles, or the Companies
Acts or the requirements of the London Stock Exchange (or of any other
stock exchange on which all or any of the shares of the Company have been
admitted for listing) require the Company to send them. This must be done
at least 21 days before the relevant General Meeting. However, the Company
need not send these documents to shareholders who are sent summary
financial statements in accordance with the Companies Acts.
138.3 Shareholders or debenture holders who are not sent copies of the above
documents in Article 138.2 can receive a copy free of charge by applying
to the Company at the Registered Office.
AUDITORS
139 Acts of Auditors
Art 142
The directors must appoint auditors for the Company. The duties of the
auditors will be regulated in accordance with the Companies Acts. So far
as the Companies Acts allow, the actions of a person acting as an auditor
are valid in favour of anyone dealing with the Company in good faith, even
if there was some defect in the person's appointment or qualification to
act as an auditor.
140 Auditors at General Meetings
The Company's auditor can attend any General Meeting. He can speak at
General Meetings on any business which is relevant to him as auditor.
NOTICES
141 Serving and delivering notices and other documents
Art 143
141.1 The Company can serve or deliver any offer, notice or other document,
including a share certificate, on or to a shareholder:
o personally;
o by posting it in a letter (with postage paid) to the
shareholder's registered address or by causing it to be left
at that address in some other way; or
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57
o so far as the Companies Acts allow (and except in relation to
share certificates), by electronic mail to an electronic
address or fax number in the United Kingdom notified by the
shareholder in writing.
Art 146(A)
141.2 If the Company cannot effectively call a General Meeting by sending
notices through the post, because the post is suspended or restricted in
the United Kingdom, the directors can call the General Meeting by
publishing a notice in at least one United Kingdom national newspaper.
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 first appears. If it becomes possible to use the post again
more than seven days before the General Meeting, the Company must send
confirmation of the notice by post.
Art 146(B)
141.3 Any notice given by the Company to its shareholders (except for a notice
convening a shareholders' meeting) can (if it is not possible to send a
notice by post) be sufficiently given by placing an advertisement of the
notice once in at least one national newspaper.
141.4 However, Articles 141 to 146 do not affect any provision of the Companies
Acts requiring offers, notices or documents to be served in a particular
way.
142 Notices to joint holders
Art 144
When a notice or document is to be given to joint shareholders it must 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 address under Article 143. A notice given in this way is treated
as given to all of the joint holders.
143 Notices for shareholders with foreign addresses
Art 145
This Article applies to a shareholder whose address on the Register is
outside the United Kingdom. He can give the Company a United Kingdom
address where notices or documents can be served on him. If he does, he is
entitled to have notices or documents served on him at that address.
Otherwise, he is not entitled to receive any notices from the Company.
144 When notices are served
144.1 If a notice or document is delivered or served by hand, it is treated as
being delivered or served at the time it is handed to the shareholder or
left at his registered address.
Art 147
144.2 If a notice or document is sent through the post, it is treated as being
served or delivered at the expiration of 24 hours after it was posted in
the United Kingdom.
144.3 It can be proved conclusively that a notice or other document was served
by post by showing that the envelope containing the notice or document
was:
o properly addressed and
o put into the post and sent with postage prepaid.
144.4 To the extent permitted by the Companies Acts and these Articles a notice
or document sent by electronic mail is treated as being served or
delivered at the expiration of two hours from the time on the day it was
sent.
Art 147
144.5 If a notice is given by advertisement, it is treated as being served or
delivered on the day on which the advertisement appears.
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58
145 Serving notices and documents on shareholders who have died or are
bankrupt
Art 148
Art 149
This Article applies where a shareholder has died, or become bankrupt or
has become of unsound mind, but is still registered as a shareholder. It
applies whether he is registered as a sole or joint shareholder. 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 or, bankruptcy or becoming of unsound mind. 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.
146 If documents are accidentally not sent
Art 56
If any notice, or other document relating to any meeting or other
proceeding, is accidentally not sent, or is not received, the meeting or
other proceeding will not be invalid as a result.
MINUTES AND RECORDS
147 Minutes
Art 120
147.1 The directors must ensure that minutes are entered in books kept for the
purpose of:
o all appointments of officers made by the directors;
o the names of the directors present at each directors' meeting and of
any committee of the directors;
o all resolutions and proceedings at all General Meetings of the
Company, the holders of any class of shares in the Company, the
directors and any committees of the directors;
and every director present at any directors' meeting or committee meeting
must sign his name in a book to be kept for that purpose.
147.2 If any such minute purports to be signed by the chairman of the meeting at
which the proceedings took place or by the chairman of the next succeeding
meeting this shall be conclusive evidence of the proceedings.
148 Availability of records for inspection and notifying the Registrar of
Companies
Art 121
148.1 The Company must keep and make available for inspection as required by the
Companies Acts:
Art 121(A)
Art 106
o a register of the directors and Secretary which must include all
information required by the Companies Acts (and from time to time
the Company must notify the registrar of companies of changes to the
register and the date of the change in the manner required by the
Acts);
Art 121 (B)
o copies and memoranda of directors' service contracts with the
Company and any of its subsidiaries;
Art 121 (C)
o a register of directors' interests in shares or debentures of the
Company or any other body corporate, being the Company's subsidiary
or holding company or a subsidiary of the Company's holding company.
This register must be produced and remain open at each Annual
General Meeting; and
Art 121 (D)
o a register for recording information relating to interests in the
share capital of the Company.
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Art 96
148.2 The directors must ensure that a register is kept in accordance with the
Companies Acts of all charges specifically affecting property of the
Company and of all floating charges relating to assets or property of the
Company, and the directors must comply with the Companies Acts in relation
to registration of charges.
WINDING UP
149 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.
Art 150
150 Distribution of assets in kind
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 and
any other sanction required by the Companies Acts, divide among the
shareholders 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 place whatever value he
considers fair upon any property and decide how the division is carried
out as between shareholders or different classes of shareholders. The
liquidator can also, with the authority of an extraordinary resolution
passed by the shareholders and any other sanction required by the
Companies Acts, transfer any part of the assets to trustees upon any
trusts for the benefit of shareholders which the liquidator decides.
However no past or present shareholder can be compelled to accept any
shares or other securities under this Article which carry a liability.
DESTROYING DOCUMENTS
Art 38
151 Destroying documents
151.1 The Company can destroy all:
o forms of transfer of 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;
o dividend payment instructions and notifications of a change of
address or name, after two years from the date these were
registered; and
o cancelled share certificates, one year after the date they were
cancelled.
Art 38
151.2 A document destroyed in accordance with Article 151.1 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.
Art 38(a)
151.3 Articles 151.1 and 151.2 only apply to documents which are destroyed in
good faith and if the Company has not been informed that keeping the
documents is relevant to any claim.
151.4 For documents relating to shares in uncertificated form, the Company must
also comply with any rules (as defined in the CREST Regulations) which
limit its ability to destroy these documents.
Art 38(b)
151.5 This Article does not make the Company liable if it:
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60
o destroys a document earlier than referred to in Article 151.1; or
o would not be liable if this Article did not exist.
Art 38(c)
151.6 This Article applies whether a document is destroyed or disposed of in any
other manner.
INDEMNITY AND INSURANCE
152 Indemnity
Art 151
152.1 So far as the Companies Acts allow, 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:
o in performing or omitting to perform his duties; and/or
o in exercising or omitting to exercise his powers; and/or
o in purporting to do any of these things; and/or
o otherwise in relation to or in connection with his duties, powers or
office.
152.2 So far as the Companies Acts allow, 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 152.1.
153 Insurance
Art 92(B)
153.1 For the purpose of this Article each of the following is a Relevant
Company:
o the Company;
o any holding company of the Company;
o any company in which the Company or its holding company or any of
the predecessors of the Company or of its holding company has or had
any interest, whether direct or indirect; and
o any company which is in any way allied to or associated with the
Company, or any subsidiary undertaking of the Company or such other
company.
153.2 Without limiting Article 152 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:
o directors, officers or employees of any Relevant Company; or
o trustees of any pension fund or employees' share scheme in which
employees of any Relevant Company are interested.
This includes, for example, insurance against any liability incurred by
them for any act or omission:
o in performing or omitting to perform their duties; and/or
o in exercising or omitting to exercise their powers; and/or
o in claiming to do any of these things; and/or
o otherwise in relation to their duties, powers or offices.
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61
SHARE WARRANTS
154 Issue of Share Warrants
154.1 The Company can issue Share Warrants which state that the bearer of the
Share Warrant ("Bearer") is entitled to the shares specified in the Share
Warrant. The Company can only do this in a way which is allowed under the
Companies Acts and in Articles 154 to 161. Share Warrants can provide for
the payment of future dividends and other distributions relating to the
shares. Payment can be made by exchanging coupons which can be attached to
the Share Warrants, or in any other way which the directors determine.
154.2 The Bearer of a Share Warrant is entitled to the number of shares which
are specified in it. These shares can be transferred by one person
delivering the Share Warrant to another.
154.3 Subject to Article 154.2, the provisions of the Articles relating to share
certificates and transferring shares do not apply to Share Warrants.
154.4 Each Share Warrant must be issued under the Seal.
154.5 The directors can decide on the language and form of, and the number of
shares represented by, each Share Warrant.
155 Directors can accept a certificate instead of a Share Warrant
155.1 The directors can accept a certificate from the persons referred to in
Article 155.2 stating that they hold Share Warrants on behalf of someone
named in the certificate as proof of matters set out in such certificate.
The certificate will be in such form as the directors decide (including
details of the number of shares to which the Share Warrant relates).
155.2 The only people who may deliver a certificate to the Company are the ADR
Depositary or any bank or agent which has been appointed by the Company.
For the purposes of Articles 154 to 160, the Company can treat the deposit
of the certificate as though the Share Warrant itself had been deposited
at the Transfer Office.
155.3 As long as the certificate is in a form agreed by the directors, the
Company does not need to make any further enquiry into the accuracy of the
information contained in the certificate.
156 Requesting a Share Warrant
156.1 A Share Warrant will only be issued if a shareholder requests in writing
that a Share Warrant is issued for some or all of the shares which are
registered in his name.
156.2 The request must be addressed to the directors at the Transfer Office. The
directors can specify the form of the request, and can require that
evidence is sent with the request to prove the identity of the person
making the request and his right to the shares. The directors do not have
to agree to this request.
156.3 Where a shareholder requests that Share Warrants are issued in relation to
shares registered in his name, and there are share certificates in respect
of those shares, a Share Warrant will only be issued once the share
certificates have been delivered to the Transfer Office for cancellation.
158.4 A person who requests a Share Warrant (including a person requesting a
Share Warrant in the circumstances described in Article 157) is
responsible (and will re-imburse the Company) for all and any stamp
duties, stamp duty reserve tax, bearer instrument duty,
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62
taxes, charges, fees, interest and penalties payable in connection with
the issue of the Share Warrants. This Article 156.4 applies unless the
person requesting the Share Warrant agrees otherwise with the Company.
157 Replacing Share Warrants
157.1 If a Share Warrant is damaged or defaced, the Bearer can request a new
one, once he returns the damaged or defaced Share Warrant to the directors
at the Transfer Office. Once any payments of the types described in
Article 156.4 are made (if any), a new Share Warrant will be issued.
157.2 If a Share Warrant is said to have been lost, stolen or destroyed, the
directors can issue a replacement (although they do not have to do so).
The directors can require satisfactory evidence of the loss, theft or
destruction, an indemnity, the payment of any exceptional out of pocket
expenses, and payments of the types described in Article 156.4 before
issuing a replacement.
157.3 The Bearer can ask the directors to cancel his existing Share Warrant and
replace it with two (or more) Share Warrants which together represent the
same number of shares which the original single Share Warrant represented.
The directors do not have to comply with this request. If they do, the
Bearer will have to surrender his original Share Warrant and can be
required by the directors to make any payments of the types described in
Article 156.4 before the new Share Warrants are issued.
158 Rights of the Bearer
158.1 The Bearer (or a person who has deposited his Share Warrant in accordance
with Article 158.2 or if the directors so decide, Article 155.2) shall be
entitled to the same rights and be subject to the same obligations as
those to which he would be entitled or subject if he were the registered
holder of the shares to which the Share Warrant relates. This is subject
to the provisions of Articles 154 to 161.
158.2 Where a Bearer deposits his Share Warrant, together with a written
declaration giving his name and address, at the Transfer Office (or some
other place specified by the directors) he has certain rights at any
General Meeting provided that such Share Warrant is deposited at least 48
hours in advance of such meeting. For as long as the Share Warrant remains
so deposited, the person who deposited it will have the following rights
as if he were the registered holder from the time of deposit of the shares
specified in the Share Warrant at a General Meeting:
o the right to sign a form requiring a General Meeting;
o the right to give notice of his intention to submit a resolution at
a General Meeting;
o the right to attend, speak and vote, appoint a proxy and exercise
the other rights of a shareholder at a General Meeting.
158.3 Any Share Warrant which is deposited in accordance with Article 158.2 must
remain deposited until the end of the General Meeting at which the person
who deposited the Share Warrant desires to attend or be represented.
158.4 If a person presents a Share Warrant at the Transfer Office, the Company
is entitled to assume that this person is the owner of the Share Warrant.
The Company can pay dividends or moneys relating to the shares specified
in the Share Warrant which are due to this person either to such person or
to an account specified by him. If the Company does this, it shall have
performed its obligation to pay that dividend or those moneys.
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63
159 Bearers of Share Warrants participating in securities offers
159.1 In the case of a securities offer, there is no need to contact any Bearer
individually. Instead, all the Company need do is advertise the details of
the securities offer in a leading United Kingdom national daily newspaper
(and any other newspapers the directors decide on).
159.2 If, following the publication of the advertisement referred to above, the
Bearer deposits the Share Warrant (or, if appropriate, the coupon attached
to the Share Warrant) at the Transfer Office (or some other place
mentioned in the advertisement), within the time limit set out in the
securities offer, he shall have the same right to participate in the
securities offer as if he were the registered holder of the shares
specified in the Share Warrant.
159.3 For the purposes of this Article, a securities offer means an offer of
shares, securities or debentures to shareholders or any class of
shareholders, or a proposed issue of shares pursuant to Article 134.
160 Communications with Bearers of Share Warrants
160.1 In the case of any communication (for example, a notice of General
Meeting, a circular or annual report) with shareholders, there is no need
for the Company to contact any Bearer individually. Instead, all the
Company need do is advertise the communication in a leading United Kingdom
national daily newspaper (and any other newspapers the directors decide
on), giving an address where copies of the communication may be obtained
by the Bearer.
160.2 The Company must communicate with the Bearer in a different way, if the
London Stock Exchange requires this.
161 Issuing shares to which the Share Warrant relates
161.1 The Bearer can ask to be registered as a shareholder (or that another
person be so registered) in respect of all or any of the shares specified
in the Share Warrant. In order to do so he must deposit at the Transfer
Office (or another place specified by the directors):
o the Share Warrant; and
o a signed declaration in a form agreed by the directors which sets
out the names and addresses of the persons, and the numbers of
shares, in whose name he wishes such shares to be registered.
161.2 The Company will comply with a request made in accordance with Article
161.1 only upon the payment (or reimbursement) by the Bearer of all and
any stamp duties, stamp duty reserve tax, bearer instrument duty, taxes,
charges, fees, interest and penalties payable in connection with the issue
of the shares. The Company may, however, agree that any such taxes or
costs do not have to be paid by the Bearer.
161.3 If the Company complies with a request made in accordance with Article
161.1, the person named in the declaration will be entitled to have his
name entered as a member in the Register in respect of the shares
specified in the declaration and to receive a share certificate for them.
161.4 If the declaration does not deal with all the shares to which the Share
Warrant relates, a new Share Warrant for the remaining shares will be
issued, without charge, to the person who deposited the old Share Warrant.
The new Share Warrant will only be issued upon the cancellation of the old
Share Warrant.
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64
ADR DEPOSITARY
162 ADR Depositary can appoint proxies
162.1 The ADR Depositary can appoint more than one person to be its proxy. As
long as the appointment complies with the requirements in Article 162.2,
the appointment can be made in any way and on any terms which the ADR
Depositary thinks fit. Each person appointed in this way is called an
Appointed Proxy.
162.2 The appointment must set out the number of shares in relation to which an
Appointed Proxy is appointed. This number is called the Appointed Number.
The Appointed Numbers of all Appointed Proxies appointed by the ADR
Depositary, when added together, must not be more than the number of
Depositary Shares (as calculated in Article 162.3).
162.3 The Depositary Shares attributable to the ADR Depositary consist of the
total of the number of shares:
o registered in the name of the ADR Depositary;
o represented by Share Warrants which have been deposited by the ADR
Depositary with the Company in accordance with Article 158; and
o represented by Share Warrants which are set out in a certificate
from the ADR Depositary accepted by the directors in accordance with
Article 155.
163 The ADR Depositary must keep a Proxy Register
163.1 The ADR Depositary must keep a register of the names and addresses of all
the Appointed Proxies. This is called the Proxy Register. The Proxy
Register will also set out the Appointed Number of shares of each
Appointed Proxy. This can be shown by setting out the number of American
Depositary Receipts which each Appointed Proxy holds and stating that the
Appointed Number of shares can be ascertained by multiplying the said
number of American Depositary Receipts by such number which for the time
being is equal to the number of shares which any one American Depositary
Receipt represents.
163.2 The ADR Depositary must let anyone whom the directors nominate inspect the
Proxy Register during usual business hours on a working day. The ADR
Depositary must also provide, as soon as possible, any information
contained in the Proxy Register if it is demanded by the Company or its
agents.
164 Appointed Proxies can only attend General Meetings if properly appointed
An Appointed Proxy may only attend a General Meeting if he provides the
Company with written evidence of his appointment by the ADR Depositary for
that General Meeting. This must be in a form agreed between the directors
and the ADR Depositary.
165 Rights of Appointed Proxies
Subject to the Companies Acts and these Articles and so long as the
Depositary Shares are sufficient to include an Appointed Proxy's Appointed
Number:
o at a General Meeting which an Appointed Proxy is entitled to attend,
he is entitled to the same rights and has the same obligations in
relation to his Appointed Number of shares as if the ADR Depositary
was the registered holder of such shares and he had been validly
appointed in accordance with Articles 76, 77 and 78 by the ADR
Depositary as its proxy in relation to those shares; and
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65
o an Appointed Proxy can himself appoint another person to be his
proxy in relation to his Appointed Number of shares, as long as the
appointment is made and deposited in accordance with Articles 76, 77
and 78 and, if it is, the provisions of these Articles will apply to
such an appointment as though the Appointed Proxy was the registered
holder of such shares and the appointment was made by him in that
capacity.
166 Sending information to an Appointed Proxy
The Company can send to an Appointed Proxy at his address in the Proxy
Register all the same documents which are sent to shareholders.
167 The Company can pay dividends to an Appointed Proxy
The Company can pay to an Appointed Proxy at his address in the Proxy
Register all dividends or other moneys relating to the Appointed Proxy's
Appointed Number of shares instead of paying this amount to the ADR
Depositary. If the Company does this, it will not have any obligation to
make this payment to the ADR Depositary as well.
168 The Proxy Register may be fixed at a certain date
168.1 In order to determine which persons are entitled as Appointed Proxies to:
o exercise the rights conferred by Article 165;
o receive documents sent pursuant to Article 166; and
o be paid dividends pursuant to Article 167
and the Appointed Number of shares in respect of which a person is to be
treated as having been appointed as an Appointed Proxy for such purpose,
the ADR Depositary may determine that the Appointed Proxies who are
entitled are the persons entered in the Proxy Register at the close of
business on a date (a "Record Date") determined by the ADR Depositary in
consultation with the Company.
168.2 When a Record Date is determined for a particular purpose:
o the Appointed Number of shares in respect of an Appointed Proxy will
be treated as the number appearing against his name in the Proxy
Register as at the close of business on the Record Date;
o this can be shown by setting out the number of American Depositary
Receipts which each Appointed Proxy holds and stating that the
number of shares can be ascertained by multiplying the said number
of American Depositary Receipts by such number which for the time
being is equal to the number of shares which any one American
Depositary Receipt represents; and
o changes to entries in the Proxy Register after the close of business
on the Record Date will be ignored in determining the entitlement of
any person for the purpose concerned.
169 The nature of an Appointed Proxy's interest
Except as required by the Companies Acts, no Appointed Proxy will be
recognised by the Company as holding any interest in shares upon any
trust. Except for recognising the rights given in relation to General
Meetings by appointments made by Appointed Proxies pursuant to Article
165, the Company is entitled to treat any person entered in the Proxy
Register as
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66
an Appointed Proxy as the only person (other than the ADR Depositary) who
has any interest in the shares in respect of which the Appointed Proxy has
been appointed.
170 Validity of the appointment of Appointed Proxies
170.1 If any question arises as to whether any particular person or persons has
or have been validly appointed to vote (or exercise any other right) in
respect of any shares (for example because the total number of shares in
respect of which appointments are recorded in the Proxy Register is more
than the number of Depositary Shares) this question will, if it arises at
or in relation to a General Meeting be determined by the chairman of the
General Meeting. His decision (which can include declining to recognise a
particular appointment or appointments as valid) will, if made in good
faith, be final and binding on all persons interested.
170.2 If a question of the type described in Article 170.1 arises in any
circumstances other than at or in relation to a General Meeting, the
question will be determined by the directors. Their decision (which can
include declining to recognise a particular appointment or appointments as
valid) will also, if made in good faith, be final and binding on all
persons interested.
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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
and italic in a definition have their own legal definition as well as a more
general explanation of their meaning in this glossary.
abrogate If the special rights of a share are abrogated, they are cancelled or
withdrawn.
accrue If interest is accruing, it is running or mounting up, day by
day.
adjourned In relation to a shareholders' meeting, means that the meeting has
come to an end for the time being, to be continued at a later time or day, at
the same or a different place and adjourned and adjourn shall be construed
accordingly.
agent A person who has been appointed to act for another person.
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.
allottee A person to whom a share is allotted (see renunciation).
asset Any property of any description which is of any value to its owner.
attorney An attorney is a person who has been appointed to act for another
person in a particular way. 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 A person on whose behalf or for whose benefit a trustee
holds shares has a beneficial interest in those shares.
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 ensure that the Company's capital base remains the same when shares are
redeemed or bought back. It is equivalent to the amount by which the Company's
issued share capital is reduced by the redemption or purchase.
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68
casual vacancy A vacancy amongst the directors which occurs by reason of the
death, resignation or disqualification of a director, or from the failure of an
elected direct to accept his appointment, or for any other reason except the
retirement of a director in accordance with the Articles.
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.
cumulative dividends If a dividend which is cumulative cannot be paid in one
year because the company does not have enough profits to cover the payment, the
shareholder has the right to receive the dividend in a future year, when the
company has enough profits to pay the dividend. Compare this with a
non-cumulative dividend.
debenture A typical debenture is a type of 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 Generally, when a final dividend is declared, it becomes due to be paid.
dividend arrears Any dividend arrears. This includes any dividends on shares
with cumulative rights which could not be paid, but which have been carried
forward.
dividend warrant A dividend warrant is similar to a check for a dividend.
documents of title The documents which show that a person owns something (for
example, a share certificate).
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.
extraordinary resolution A decision reached by a majority of at least 75 per
cent. of votes cast. The Companies Act requires extraordinary resolutions to be
passed in certain situations.
forfeit When a share is forfeited it is taken away from the shareholder and
becomes the property of the Company which can do with it as it likes. 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.
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69
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
are "in issue".
liabilities Debts and other obligations.
liable jointly and severally Where more than one person is liable jointly and
severally it means that any one of them may be sued, or they can all be sued
together.
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 means shareholders.
negotiable instrument A document such as a check, which can be freely
transferred from one person to another.
nominal value The nominal value of the share. The nominal value of the 5p
Ordinary Shares is 5p. This value is shown on the share certificate for a share,
if there is one. 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".
non-cumulative dividends If a dividend which is non-cumulative cannot be paid in
one year because the Company does not have enough profits available to cover the
payment, the shareholder does not have the right to receive the dividend in a
future year. This is the opposite to a cumulative dividend
objects of a company The business activities that the Company is authorised to
carry on. The Company's objects are set out in Clause 4 of its Memorandum.
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.
par value See nominal value.
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 A poll vote is usually a card vote but to the extent permitted by the
Companies Acts may be an electronic vote. 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.
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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
shareholders' meeting and vote for that shareholder. A proxy is appointed by
using a proxy form. A proxy does not have to be a shareholder. At a
shareholders' meeting a proxy can vote on a poll and, if the Articles permit, he
can also vote on a show of hands and speak.
proxy form A form which a shareholder uses to appoint a proxy to attend a
shareholders 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 or directors who must be present
before a meeting can start. When this number is reached, the meeting is said to
be "quorate".
rank & 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 ahead of) 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 behind (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 ahead, and then to shares which rank behind. The
same applies for repayments of capital. Capital must be paid first to shares
which rank ahead in sharing in the Company's capital, and then to shares which
rank behind. The Company's Fixed Rate Shares rank ahead of its Ordinary Shares.
Where certain shares rank equally with other shares, both types of shares have
the same rights as each other.
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
officially recognised 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 is effectively bought back by
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 system This is a term used in the CREST Regulations for a
computer-based system which allows shares without share certificates to be
transferred without using transfer forms. The CREST system for paperless share
dealing is a "relevant system".
renunciation Where a share has been allotted, but no one has been entered on the
share register as the holder of the share, it can be renounced by the allottee
to another person. This transfers the right to be registered as the holder of
the share to another person. This process is called renunciation.
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71
requisition a meeting A formal process which shareholders can use to call a
shareholders' meeting. Generally speaking the shareholders who want to call a
meeting must hold at least 10 per cent of the issued shares.
reserve fund or reserves 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. The capital
redemption reserve and share premium account are also reserve funds.
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.
securities All shares, bonds and other investment instruments issued by a
company which entitle the holder to a share in the profits or assets of that
company, to receive a cash payment from a company or to subscribe for such a
security.
securities seal A seal used to stamp the Company's securities as evidence that
the Company has issued them. The Company's securities seal is like the Company's
Common Seal but with the addition of the word "securities".
share premium account If a new share is issued by the Company for more than its
nominal value (generally 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.
show of hands A shareholder raises his hand to vote at a shareholders' meeting
(unless there is a poll). Each person who is entitled to vote has just one vote,
however many shares he holds.
special notice This term is defined in Section 379 Companies Act 1985. Broadly,
if special notice of a resolution is required by the Companies Acts, the
resolution is not valid unless the Company has been told about the intention to
propose it at least 28 days before the shareholders' meeting at which it is
proposed (although in certain circumstances the meeting can be on a date less
than 28 days from the date of the notice).
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.
stock When shares are converted into stock the holder's interest in the Company
is expressed by reference to a sum of money divided into transferable units. For
example, the interest of a shareholder with one hundred (pound)1 shares might be
converted into (pound)100 worth of stock transferable in units of (pound)1 each.
subordinate Where a right or interest is subordinated to something else, it
ranks behind it.
subscribe for shares To agree to take new shares in a company (usually for a
cash payment).
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subdividing shares When shares are subdivided they are split into shares which
have a smaller nominal value. 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 acquire 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:
o has a majority of the votes in the company either alone, or acting
with others;
o is a shareholder who can appoint or remove a majority of the
directors; or
o 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.
takeover offer An offer to acquire all the shares, or all the shares of any
class, in a company (except shares already held by the person making the offer).
The terms of the offer must be the same for all the shares to which the offer
relates. This is defined in more detail in the Companies Act 1985.
trustees People who hold property of any kind for the benefit of 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 beneficiary.
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.
wider-range investments The law restricts the investments which some trustees
can invest in. Where this restriction applies, the trustees can invest up to
three quarters of their funds in wider-range investments. These are, generally
speaking, shares which are quoted on the London Stock Exchange, and which are
earning dividends.
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, and then to
shareholders. Shares which rank first in sharing in the Company's assets will
receive any funds which are left over before any shares which rank after (or
behind) them.
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