EXHIBIT 1
Registered No. 4031152
THE COMPANIES ACTS
PUBLIC COMPANY LIMITED BY SHARES
MEMORANDUM OF ASSOCIATION
of
NATIONAL GRID GROUP PLC
1. (1)The Company's name is "National Grid Group plc".
2. (2)The Company is to be a public company.
3. The Company's registered office is to be situated in England and
Wales.
4. The objects for which the Company is established are:-
4.1 to carry on the business of a holding company and to acquire by
purchase, exchange, subscription or otherwise and to hold the whole or
any part of the shares, stocks, debentures and other securities and
interests of and in any corporations, companies, associations or firms
for the time being engaged, concerned or interested in any industry,
trade or business and to promote the beneficial co-operation of any
such corporations, companies, associations or firms as well with one
another as with the Company and to exercise in respect of such
investments and holdings all the rights, powers and privileges of
ownership including the right to vote thereon;
4.2 to employ the funds of the Company in the development and expansion of
the business of the Company and all or any of its subsidiary or
associated companies and in any other company whether now existing or
hereafter to be formed and engaged in any like business of the Company
or any of its subsidiary or associated companies or in any other
industry ancillary thereto or in any business which can conveniently
be carried on in connection therewith;
4.3 to co-ordinate the administration, policies, management, supervising,
control, research, development, planning, manufacture, trading and any
and all other activities of, and to act as financial advisers and
consultants to, any company or
- ------------
(1) The Company's name was changed on 30 August 2000 from Intercede 1610
Limited to New National Grid Limited by a special resolution passed on 30
August 2000; from New National Grid Limited to New National Grid plc on 29
November 2000 by a special resolution passed on 28 November 2000; and from
New National Grid plc to National Grid Group plc on 31 January 2002 by a
special resolution passed on 7 December 2001.
(2) The Company was re-registered as a public limited company on 29 November
2000 pursuant to a special resolution passed on 28 November 2000.
companies or group of companies now or hereafter formed or
incorporated or acquired which may be or may become related or
associated in any way with the Company or with any company related or
associated therewith and either without remuneration or on such terms
as to remuneration as may be agreed;
4.4 to advance and lend money with or without security and to guarantee
the performance of the contracts or obligations or the repayment of
capital, principal, dividends, interest or premiums payable on any
stock, shares, securities or debentures of, or other investments in,
any company or person and in particular (but without limiting the
generality of the foregoing) of any company which is for the time
being the Company's holding company (as defined by section 736
Companies Act 1985) or another subsidiary (as defined by that section)
of the Company's holding company and to give all kinds of indemnities;
4.5 to organise, incorporate, reorganise, finance, aid and assist,
financially or otherwise, companies, corporations, syndicates,
partnerships, associations and firms of all kinds and to underwrite or
guarantee the subscription of, shares, stocks, debentures, debenture
stock, bonds, loans, obligations, securities or notes of any kind, and
to make and carry into effect arrangements for the issue,
underwriting, resale, exchange or distribution thereof;
4.6 to carry on the business of land and property developers of every and
any description and to acquire by purchase, lease, concession, grant,
licence or otherwise such lands, buildings, leases, underleases,
rights, privileges, stocks, shares and debentures in public or private
companies, corporate or unincorporate, policies of insurance and other
such property as the Company may deem fit and shall acquire the same
for the purposes of investment and development and with a view to
receiving the income therefrom; and to enter into any contracts and
other arrangements of all kinds with persons having dealings with the
Company on such terms and for such periods of time as the Company may
from time to time determine, on a commission or fee basis or
otherwise, and to carry on any other trade or business, whatever, of a
like and similar nature;
4.7 to carry on all kinds of promotion business and, in particular, to
form, constitute, float, lend money to, assist, manage and control any
companies, associations or undertakings whatsoever and to market,
advertise or promote goods, services, material (tangible or
intangible) or any other thing whatsoever;
4.8 to vary the investments and holdings of the Company as may from time
to time be deemed desirable;
4.9 to act as trustee of any kind including trustee of any deeds
constituting or securing any debentures, debenture stock or other
securities or obligations and to undertake and execute any trust or
trust business (including the business of acting as trustee under
wills and settlements), and to do anything that may be necessary or
assist in the obtaining of any benefit under the estate of an
individual, and also to undertake the office of executor,
administrator, secretary, treasurer or registrar or to become manager
of any business, and to keep any register or undertake any
registration duties, whether in relation to securities or otherwise;
-2-
4.10 to provide technical, cultural, artistic, educational, entertainment
or business material, facilities, information or services and to carry
on any business involving any such provision;
4.11 to carry on the business of commission agents, factors, general
merchants and dealers in every description of goods, exporters and
importers, concessionaires, wholesale and retail traders, carriers,
warehousemen, designers, advertising contractors or agents, or
trustees, brokers or agents for any company;
4.12 to manufacture, develop, process, refine, repair, purchase, sell,
export, import, deal in or let on hire all kinds of goods, substances,
articles, services and material (tangible or intangible) of any kind
which may be advantageous to the Company or which any of the customers
or other companies having dealings with the Company may from time to
time require;
4.13 to provide services of any kind including the carrying on of advisory,
consultancy, brokerage and agency business of any kind;
4.14 to acquire and carry on any business carried on by a subsidiary or a
holding company of the Company or another subsidiary of a holding
company of the Company;
4.15 to enter into any arrangements with any government or authority or
person and to obtain from any such government or authority or person
any legislation, orders, rights, privileges, franchises and
concessions and to carry out, exercise and comply with the same;
4.16 to purchase, take on lease or in exchange, hire, renew, or otherwise
acquire and hold for any estate or interest, and to sell, let, grant
licences, easements, options and other rights over or otherwise deal
with or dispose of, in whole or in part, any lands, buildings,
machinery, rights, stock-in-trade, business concerns, choses in
action, and any other real and personal property of any kind including
all of the assets of the Company and to perform any services or render
any consideration and to construct, equip, alter and maintain any
buildings, works and machinery necessary or convenient for the
Company's business and in each case for any consideration (including
in particular but without detracting from the generality of the
foregoing for any securities or for a share of profit or a royalty or
other periodical or deferred payment);
4.17 to enter into partnership or any other arrangement for sharing profits
or joint venture or co-operation with any company carrying on, engaged
in or about to carry on or engage in any business or transaction
capable of being conducted so as directly or indirectly to benefit the
Company, and to subsidise or otherwise assist any such company;
4.18 to invest money of the Company (or any of its subsidiaries) in any
investments and to hold, sell or otherwise deal with investments or
currencies or other financial assets and to carry on the business of
an investment company;
4.19 to lend or advance money or otherwise give credit or provide financial
accommodation to any company with or without security and to deposit
money
-3-
with any company and to carry on the business of a banking, finance or
insurance company;
4.20 for any reason whatsoever to mortgage, charge, pledge or otherwise
secure, either with or without the Company receiving any consideration
or advantage, all or any part of the undertaking, property, assets,
rights and revenues present and future and uncalled capital of the
Company and to guarantee, indemnify or otherwise support or secure,
either with or without the Company receiving any consideration or
advantage and whether by personal covenant or by mortgaging, charging,
pledging or otherwise securing all or any part of the undertaking,
property, assets, rights and revenues present and future and uncalled
capital of the Company or by any or all such methods or by any other
means whatsoever, the liabilities and obligations of any person, firm
or company including but not limited to any company which is for the
time being the holding company or a subsidiary undertaking (both as
defined in the Companies Act 1985 as amended) of the Company or of the
Company's holding company as so defined;
4.21 to borrow and raise money and accept money on deposit and to secure or
discharge any debt or obligation of or binding on the Company or any
other company and in particular by mortgaging or charging all or any
part of the undertaking, property and assets (present or future) and
the uncalled capital of the Company, or by the creation and issue, on
such terms as may be thought expedient, of securities of any
description;
4.22 to undertake interest rate and currency swaps, options, swap option
contracts, forward exchange contracts, forward rate agreements,
futures contracts or other financial instruments including hedging
agreements and derivatives of any kind and all or any of which may be
on a fixed and/or floating rate basis and/or in respect of Sterling,
any other currencies, basket of currencies including but not limited
to European Currency Units (as the same may from time to time be
designated or constituted) or commodities of any kind and in the case
of such swaps, options, swap option contracts, forward exchange
contracts, forward rate agreements, futures contracts or other
financial instruments including hedging agreements and derivatives of
any kind that may be undertaken by the Company on a speculative basis
or otherwise;
4.23 to undertake any transaction which is a rate swap transaction, basis
swap, forward rate transaction, commodity swap, commodity option,
equity or equity index swap, equity or equity index option, bond
option, interest rate option, foreign exchange transaction, cap
transaction, floor transaction, collar transaction, currency swap
transaction, cross-currency rate swap transaction, currency option or
any other similar transaction (including any option with respect to
any of these transactions) or combination of these transactions and
whether for the purposes of risk management, on a speculative basis or
otherwise;
4.24 to draw, make, accept, indorse, discount, execute, issue, negotiate
and deal in promissory notes, bills of exchange, shipping documents
and other instruments and securities (whether negotiable, transferable
or otherwise) and to buy, sell and deal in foreign currencies;
-4-
4.25 to buy, sell, export, manufacture and deal in all kinds of goods,
stores and equipment whether in connection with any of the above
activities or otherwise and to act as agents for all purposes;
4.26 to apply for, purchase or otherwise acquire any patents, licences,
concessions, privileges and like rights, conferring a non-exclusive or
exclusive or limited right to use, or any secret or other information
as to any invention which is capable of being used for any of the
purposes of the Company, or the acquisition of which may seem
calculated directly or indirectly to benefit the Company and to use,
exercise, develop, grant licences in respect of, or otherwise turn to
account, the rights and information so acquired;
4.27 to apply for and take out, purchase or otherwise acquire, sell,
licence, transfer, deal or trade in any way in trade marks and names,
service marks and names, designs, patents, patent rights, inventions,
secret processes, know-how and information and any form of
intellectual property and to carry on the business of an inventor,
designer or research organisation;
4.28 to sell, improve, manage, develop, lease, mortgage, let, charge,
dispose of, turn to account, or otherwise deal with all or any part of
the undertaking or property or rights of the Company, and to sell the
undertaking of the Company, or any part thereof for such consideration
as the Company may think fit, and in particular for cash, shares,
debentures or debenture stock or other obligations, whether fully paid
or otherwise, of any other company;
4.29 to issue and allot securities of the Company for cash or in payment or
part payment for any real or personal property purchased or otherwise
acquired by the Company or any services rendered to the Company or as
security for any obligation or amount (even if less than the nominal
amount of such securities) or for any other purpose;
4.30 to give any remuneration or other compensation or reward for services
rendered or to be rendered in placing or procuring subscriptions of,
or otherwise assisting in the issue of, any securities of the Company
or in or about the formation of the Company or the conduct or course
of its business, and to establish or promote, or concur or participate
in establishing or promoting, any company, fund or trust and to
subscribe for, underwrite, purchase or otherwise acquire securities of
any company, fund or trust and to carry on the business of company,
fund, trust or business promoters or managers and of underwriters or
dealers in securities, and to act as director of, and as secretary,
manager, registrar or transfer agent for, any other company;
4.31 to grant or procure the grant of donations, gratuities, pensions,
annuities, allowances, or other benefits, including benefits on death,
to any directors, officers or employees or former directors, officers
or employees of the Company or any company which at any time is or was
a subsidiary or a holding company of the Company or another subsidiary
of a holding company of the Company or otherwise associated with the
Company or of any predecessor in business of any of them, and to the
relations, connections or dependants of any such persons, and to other
persons whose service or services have directly or indirectly been of
benefit to the Company or whom the board of directors of the Company
-5-
considers have any moral claim on the Company or to their relations,
connections or dependants, and to establish or support any funds,
trusts, insurances or schemes (including in particular but without
detracting from the generality of the foregoing any trust or scheme
relating to the grant of any option over, or other interest in, any
share in the capital of the Company or of any other company, or in any
debenture or security of any corporation or company, including the
Company) or any associations, institutions, clubs or schools, or to do
any other thing likely to benefit any such persons or otherwise to
advance the interests of such persons or the Company or its members,
and to subscribe, guarantee or pay money for any purpose likely,
directly or indirectly, to further the interests of such persons or
the Company or its members or for any national, charitable,
benevolent, educational, social, public, general or useful object;
4.32 to promote or assist in promoting any company or companies in any part
of the world and to subscribe shares therein or other securities
thereof for the purpose of carrying on any business which the Company
is authorised to carry on, or for any other purpose which may seem
directly or indirectly calculated to benefit the Company;
4.33 to amalgamate with any other company in any manner whatsoever (whether
with or without a liquidation of the Company);
4.34 to procure the Company to be registered or recognised in any country
or place in any part of the world;
4.35 to cease carrying on or wind-up any business or activity of the
Company, and to cancel any registration of and to wind-up or procure
the dissolution of the Company in any state or territory;
4.36 to compensate for loss of office any directors or other officers of
the Company and to make payments to any persons whose office,
employment or duties may be terminated by virtue of any transaction in
which the Company is engaged;
4.37 to pay out of the funds of the Company the costs, charges and expenses
of and incidental to the formation and registration of the Company,
and any company promoted by the Company, and the issue of the capital
of the Company and any such other company and of and incidental to the
negotiations between the promoters preliminary to the formation of the
Company, and also all costs and expenses of and incidental to the
acquisition by the Company of any property or assets and of and
incidental to the accomplishment of all or any formalities which the
Company may think necessary or proper in connection with any of the
matters aforesaid;
4.38 to effect insurances against losses, damages, risks and liabilities of
all kinds which may affect the Company or any subsidiary of it or
company associated with it or in which it is or may be interested;
4.39 to purchase and maintain insurance for or for the benefit of any
persons who are or were at any time directors, officers, employees or
auditors of the Company, or of any other company which is its holding
company or in which the Company or such holding company has any
interest whether direct or indirect or which is in
-6-
any way allied to or associated with the Company or of any subsidiary
undertaking of the Company or of any such other company, or who are or
were at any time trustees of any pension fund in which any employees
of the Company or of any such other company or subsidiary undertaking
are interested, including (without prejudice to the generality of the
foregoing) insurance against any liability incurred by such persons in
respect of any act or omission in the actual or purported execution
and/or discharge of their powers and/or otherwise in relation to their
duties, powers or offices in relation to the Company or any such other
company, subsidiary undertaking or pension fund and to such extent as
may be permitted by law otherwise to indemnify or to exempt any such
person against or from any such liability. For the purposes of this
clause "holding company" and "subsidiary undertaking" shall have the
same meanings as in the Companies Act 1985 (as amended);
4.40 to act as directors or managers of or to appoint directors or managers
of any subsidiary company or of any other company in which the Company
is or may be interested;
4.41 to contribute by donation, subscription, guarantee or otherwise to any
public, general, charitable, political or useful object whatsoever;
4.42 to distribute among the members in cash, specie or kind any property
of the Company, or any proceeds of sale or disposal of any property of
the Company, but so that no distribution amounting to a reduction of
capital be made except with the sanction (if any) for the time being
required by law;
4.43 to do all or any of the above things in any part of the world, and
either as principals, agents, trustees, contractors or otherwise and
either alone or in conjunction with others, and either by or through
agents, sub-contractors, trustees, subsidiaries or otherwise;
4.44 to carry on any other activity and do anything of any nature which in
the opinion of the board of directors of the Company is or may be
capable of being conveniently carried on or done by the Company in
connection with the above, or may seem to the Company calculated
directly or indirectly to enhance the value of or render more
profitable all or any part of the Company's undertaking, property or
assets or otherwise to advance the interests of the Company or any of
its members; and
4.45 to do all such things as in the opinion of the board of directors of
the Company are or may be incidental or conducive to the above objects
or any of them.
And it is hereby declared that for the purposes of this clause:-
(a) the word "company" shall (except where referring to this Company)
be deemed to include any person or partnership or other body of
persons, whether incorporated or not incorporated, and whether
formed, incorporated, resident or domiciled in the United Kingdom
or elsewhere;
-7-
(b) "associated companies" shall mean any two or more companies if
one has control of the other or others, or any person has control
of both or all of them;
(c) "securities" shall include any fully, partly or nil paid or no
par value share, stock, unit, debenture or loan stock, deposit
receipt, bill, note, warrant, coupon, right to subscribe or
convert, or similar right or obligation;
(d) "and" and "or" shall mean "and/or";
(e) "other" and "otherwise" shall not be construed ejusdem generis
where a wider construction is possible; and
(f) the objects specified in each paragraph of this clause shall,
except if at all where otherwise expressed, be in no way limited
or restricted by reference to or inference from the terms of any
other paragraph or the name of the Company or the nature of any
business carried on by the Company or the order in which such
objects are stated, but may be carried out in as full and ample a
manner and shall be construed in as wide a sense as if each of
the said paragraphs defined the objects of a separate, distinct
and independent company.
5. The liability of the members is limited.
6. (3)The capital of the Company was, by virtue of a Special Resolution
of the Company and with the sanction of an Order of the High Court of
Justice dated 25 January 2002, reduced from (pound)250,000,001 divided
into 2,500,000,000 ordinary shares of 10 pence each and the special
rights non-voting redeemable preference share of (pound)1 to
(pound)249,950,001 divided into 2,499,500,000 ordinary shares of 10
pence each and the special rights non-voting redeemable preference
share of (pound)1 by the cancellation and extinguishment of the
500,000 issued ordinary shares of 10 pence each.
The Special Resolution further provided for the creation of 500,000
ordinary
- ------------
(3) On incorporation, being 11 July 2000, the authorised share capital of the
Company comprised 100 ordinary shares of (pound)1 each. On 28 November
2000, the one issued and each authorised but unissued ordinary share of
(pound)1 each was sub-divided into 10 ordinary shares of 10 pence each and
the authorised share capital of the Company increased to (pound)250,000,000
by the creation of 2,499,999,000 new ordinary shares of 10 pence each. On 7
December 2001, a special resolution was passed increasing the authorised
share capital from (pound)250,000,000 to (pound)250,000,001 by the creation
of a special rights non-voting redeemable preference share of (pound)1. The
share capital of the Company was reduced from (pound)250,000,001 to
(pound)249,950,001 by the cancellation and extinguishment of the 500,000
issued ordinary shares of 10 pence each by virtue of a special resolution
passed on 7 January 2002 and with the sanction of an Order of the High
Court of Justice dated 25 January 2002. The reduction became effective on
31 January 2002. The special resolution further provided for the creation
of 500,000 ordinary shares of 10 pence each to take effect upon the
reduction of capital taking effect. Accordingly, as at 31 January 2002, the
authorised share capital of the Company was (pound)250,000,001, divided
into 2,500,000,000 ordinary shares of 10 pence each and one special rights
non-voting redeemable preference share of (pound)1.
-8-
shares of 10 pence each to take effect upon the reduction of capital
taking effect. Accordingly, by virtue of the said Special Resolution,
the share capital is (pound)250,000,001, divided into 2,500,000,000
ordinary shares of 10 pence each and one special rights non-voting
redeemable preference share of (pound)1. Forthwith upon the Scheme of
Arrangement between National Grid Group plc (now named National Grid
Holdings One plc) and its shareholders dated 10 December 2001 becoming
effective, 1,498,036,707 ordinary shares of 10 pence each were issued
and were deemed to be fully paid up and the remainder are unissued and
the special rights non-voting redeemable preference share of (pound)1
was issued and was fully paid up.
-9-
The person whose name and address is subscribed wishes to form a Company
pursuant to this Memorandum of Association, and agrees to take the number of
shares in the capital of the Company set opposite its name.
- --------------------------------------------------------------------------------
NAME, ADDRESS AND NUMBER OF SHARES TAKEN BY SUBSCRIBER
- --------------------------------------------------------------------------------
One
Mitre House Nominees Limited
Mitre House
160 Aldersgate Street
London EC1A 4DD
- --------------------------------------------------------------------------------
Dated this 11th day of August 2000.
Witness to the above signature:
Andrew Boden
Mitre House
160 Aldersgate Street
London EC1A 4DD
-10-
Registered No. 4031152
THE COMPANIES ACTS
PUBLIC COMPANY LIMITED BY SHARES
MEMORANDUM OF ASSOCIATION
of
NATIONAL GRID GROUP PLC
CMS CAMERON MCKENNA
MITRE HOUSE
160 ALDERSGATE STREET
LONDON EC1A 4DD
T +44(0)207 367 3000
F +44(0)207 367 2000
Registered No. 4031152
THE COMPANIES ACTS
PUBLIC COMPANY LIMITED BY SHARES
ARTICLES OF ASSOCIATION
OF
NATIONAL GRID GROUP PLC
(Adopted by a special resolution
passed on 7 December 2001)
Incorporated on 11 July 2000
CMS Cameron McKenna
Mitre House
160 Aldersgate Street
London EC1A 4DD
T +44(0)20 7367 3000
F +44(0)20 7367 2000
File Ref: IAS/037459.00578
Doc Ref: (52102221)
TABLE OF CONTENTS
DEFINITIONS AND INTERPRETATION.................................................1
1 Definitions and interpretation............................................1
2. Table A excluded..........................................................5
3. Form of resolutions.......................................................5
SHARE CAPITAL........................................................5
4. Share capital.............................................................5
5. Rights attached to shares.................................................5
6. Redeemable shares.........................................................5
7. Unissued shares...........................................................5
8. Payment of commissions....................................................6
9. Trusts not recognised.....................................................6
10. Variation of rights.......................................................6
11. Matters not constituting a variation of rights............................7
CERTIFICATES.........................................................7
12. Right to certificates.....................................................7
13. Execution of certificates.................................................7
14. Replacement certificates..................................................8
15. Uncertificated securities.................................................8
LIEN.................................................................9
16. Company's lien............................................................9
17. Enforcing lien by sale after notice.......................................9
18. Manner of sale............................................................9
19. Application of sale proceeds..............................................9
CALLS ON SHARES.....................................................10
20. Calls....................................................................10
21. Time of call.............................................................10
22. Liability of joint shareholders..........................................10
23. Interest.................................................................10
24. Sums due on allotment or by way of instalment treated as calls...........10
25. Power to differentiate...................................................11
26. Advance payment of calls.................................................11
FORFEITURE OF SHARES................................................11
27. Notice if call not paid..................................................11
28. Forfeiture if notice not complied with...................................11
29. Notice of forfeiture.....................................................11
30. Sale of forfeited share..................................................12
31. Arrears to be paid notwithstanding forfeiture............................12
32. Statutory declaration and validity of sale...............................12
UNTRACED SHAREHOLDERS...............................................13
33. Power to sell shares of untraced shareholders............................13
34. Manner of sale and creation of debt in respect of net proceeds...........13
TRANSFER OF SHARES..................................................14
35. Form and execution of transfer...........................................14
36. Right to refuse registration of partly paid share........................14
37. Other rights to refuse registration......................................15
38. Notice of refusal........................................................15
39. Suspension of registration...............................................15
40. No fee for registration..................................................15
41. Retention of documents...................................................16
42. Other Registers..........................................................16
TRANSMISSION OF SHARES..............................................16
43. Transmission on death....................................................16
44. Election by person entitled by transmission..............................16
45. Rights in respect of the share...........................................17
ALTERATION OF CAPITAL...............................................17
46. Increase, consolidation, sub-division and cancellation...................17
47. Fractions................................................................17
48. Reduction of capital.....................................................18
STOCK...............................................................18
49. Articles applicable to stock.............................................18
50. Conversion of shares into stock..........................................18
51. Transfer of stock........................................................18
52. Rights attaching to stock................................................18
PURCHASE OF OWN SHARES..............................................19
53. Purchase of own shares...................................................19
SPECIAL PROVISIONS RELATING TO SHARES...............................19
54. The Special Share........................................................19
55. Disclosure of Interests..................................................21
56. Limitations on Shareholdings.............................................24
57. Obligations relating to the Transmission Licence Holder..................30
GENERAL MEETINGS....................................................31
58. Annual general meetings..................................................31
59. Extraordinary general meetings...........................................31
60. Convening an extraordinary general meeting...............................31
NOTICE OF GENERAL MEETINGS..........................................32
61. Length of notice period..................................................32
62. Contents of notices......................................................32
63. Omission or non-receipt of notice........................................32
64. Change of date, time or place of meeting.................................33
PROCEEDINGS AT GENERAL MEETINGS.....................................33
65. Quorum...................................................................33
66. Procedure if quorum not present..........................................33
67. Chairman of general meeting..............................................33
68. Directors' right to attend and speak.....................................34
69. Meeting at more than one place and/or in a series of rooms...............34
70. Security arrangements....................................................34
71. Adjournments.............................................................35
72. Notice of adjourned meeting..............................................35
VOTES OF SHAREHOLDERS...............................................36
73. Method of voting.........................................................36
74. Votes of shareholders....................................................36
75. Votes of joint holders...................................................37
76. Corporations acting by representatives...................................37
77. Votes of shareholder suffering incapacity................................37
78. No right to vote where sums overdue on shares............................37
79. Votes on a poll..........................................................37
80. Right to withdraw demand for a poll......................................38
81. Procedure if poll demanded...............................................38
82. When poll to be taken....................................................38
83. Continuance of other business after poll demanded........................38
84. Chairman's casting vote..................................................38
85. Proposal or amendment of resolution......................................38
86. Amendment of resolution ruled out of order...............................39
87. Objections or errors in voting...........................................39
PROXIES.............................................................39
88. Execution of an appointment of proxy.....................................39
89. Times for delivery of an appointment of proxy............................40
90. Form of appointment of proxy.............................................41
91. Validity of proxy........................................................41
92. Maximum validity of proxy................................................42
DIRECTORS...........................................................42
93. Number of Directors......................................................42
94. No shareholding qualification for Directors..............................42
REMUNERATION OF DIRECTORS...........................................42
95. Ordinary remuneration....................................................42
96. Expenses.................................................................42
97. Extra remuneration.......................................................43
ALTERNATE DIRECTORS.................................................43
98. Appointment, removal and resignation.....................................43
99. Alternate to be responsible for his own acts and remuneration
of alternate.............................................................44
EXECUTIVE DIRECTORS.................................................44
100. Executive Directors......................................................44
POWERS AND DUTIES OF DIRECTORS......................................45
101. General powers of the Company vested in the Board........................45
DELEGATION OF DIRECTORS' POWERS.....................................45
102. Agents...................................................................45
103. Delegation to individual Directors.......................................45
104. Delegation to committees.................................................45
105. Power to establish local boards etc. ....................................46
SPECIFIC POWERS.....................................................47
106. Provision for employees..................................................47
107. Borrowing Powers.........................................................47
APPOINTMENT, RETIREMENT AND REMOVAL OF DIRECTORS....................52
108. Number to retire by rotation.............................................52
109. Position of Retiring Director............................................53
110. Eligibility for appointment as a Director................................53
111. Power of the Company to appoint Directors................................53
112. Power of the Board to appoint Directors..................................53
113. Company's power to remove a Director and appoint another in his place....54
114. Vacation of office by Directors..........................................54
115. Director not to retire on account of age.................................54
DIRECTORS' INTERESTS................................................55
116. Contracts between a Director and the Company or a company in which
the Company is interested................................................55
DIRECTORS' GRATUITIES AND PENSIONS..................................58
117. Directors' gratuities and pensions.......................................58
PROCEEDINGS OF THE BOARD............................................59
118. Board meetings...........................................................59
119. Notice of Board meetings.................................................59
120. Voting...................................................................59
121. Quorum...................................................................59
122. Number of Directors below minimum number.................................59
123. Appointment of chairman..................................................60
124. Competence of the Board..................................................60
125. Participation in meetings by telephone...................................60
126. Written resolutions......................................................60
127. Company books............................................................60
128. Validity of acts of the Board or a committee.............................61
SECRETARY...........................................................61
129. Appointment and removal of Company Secretary.............................61
THE SEAL............................................................61
130. Use of seal..............................................................61
131. Execution as a deed without sealing......................................62
132. Official seal............................................................62
DIVIDENDS...........................................................62
133. Company may declare dividends............................................62
134. Board may pay interim dividends and fixed dividends......................62
135. Calculation and currency of dividends....................................62
136. Waiver of dividends......................................................63
137. Non-cash dividends.......................................................63
138. Scrip dividends..........................................................63
139. Enhanced scrip dividends.................................................65
140. Right to deduct amounts due on shares from dividends.....................65
141. No interest on dividends.................................................66
142. Payment procedure........................................................66
143. Receipt by joint shareholders............................................67
144. Where payment of dividends need not be made..............................67
145. Unclaimed dividends......................................................67
CAPITALISATION OF PROFITS...........................................67
146. Capitalisation of profits................................................67
AUTHENTICATION OF DOCUMENTS.........................................69
147. Authentication of documents..............................................69
RECORD DATES........................................................69
148. Power to choose record date..............................................69
ACCOUNTS AND OTHER RECORDS..........................................69
149. Records to be kept.......................................................69
150. Copy of accounts to be sent to shareholders..............................69
151. Inspection of records....................................................70
152. Destruction of documents.................................................70
NOTICES.............................................................71
153. Form of notices..........................................................71
154. Service of notice........................................................71
155. When notice deemed served................................................72
156. Service of notice on person entitled by transmission.....................73
157. Record date for service..................................................73
158. Loss of entitlement to receive notices...................................73
159. Notice when post not available...........................................73
WINDING-UP..........................................................74
160. Distribution in kind.....................................................74
161. Power of sale............................................................74
INDEMNITY...........................................................74
162. Officer's indemnity......................................................74
163. Power to insure..........................................................75
ADR DEPOSITARIES....................................................75
164. ADR Depositaries.........................................................75
Registered No. 4031152
THE COMPANIES ACTS
PUBLIC COMPANY LIMITED BY SHARES
ARTICLES OF ASSOCIATION
of
NATIONAL GRID GROUP PLC
(the "Company")
(Adopted in substitution for and to the exclusion of all existing
articles of association by a special resolution passed on 7 December 2001)
DEFINITIONS AND INTERPRETATION
1. DEFINITIONS AND INTERPRETATION
1.1 In these Articles, the following words and expressions have the
meanings indicated below:
"ACT": the Companies Act 1985
"ADR DEPOSITARY": a custodian or depositary or his nominee, approved
by the Board, under contractual arrangements with the Company by which
he or that nominee holds shares in the Company and he or another
person issues American Depositary Receipts evidencing rights in
relation to those shares or a right to receive them
"ADR HOLDER": a person who has an interest in shares of the Company
evidenced by an American Depositary Receipt
"ADDRESS": includes (but only in relation to electronic
communications) any number or address used for the purposes of such
communications
"AFFILIATE": in respect of any company, means every associated
company, subsidiary, subsidiary undertaking, holding company or
associated company, subsidiary or subsidiary undertaking of a holding
company, of such company
"THESE ARTICLES": these articles of association as originally adopted
or as altered from time
-1-
to time
"ASSOCIATED COMPANY": an undertaking in which a company has a
participating interest (as defined in section 260 of the Act) which is
not a subsidiary of such company
"AUDITORS": the auditors of the Company for the time being or, in the
case of joint auditors, any one of them
"BOARD": the board of Directors from time to time of the Company or
those Directors present at a duly convened meeting of the Directors at
which a quorum is present
"BUSINESS DAY": a day (excluding Saturdays, Sundays and public
holidays) on which banks are open for business in the City of London
"CASH MEMORANDUM ACCOUNT": an account so designated by the Operator
"CLEAR DAYS": in relation to the period of a notice, that period
excluding the day when the notice is given or deemed to be given and
the day for which it is given or on which it is to take effect (and
"clear business days" shall be construed accordingly)
"COMMUNICATION": as defined in the Electronic Communications Act 2000
"CREST MEMBER": a person who has been admitted by the Operator as a
system-member
"DIRECTOR": a director for the time being of the Company
"ELECTRONIC COMMUNICATION": as defined in the Electronic
Communications Act 2000
"LONDON STOCK EXCHANGE": London Stock Exchange plc
"NATIONAL GRID GROUP": the Company and each of its wholly owned
subsidiaries from time to time
"OFFICE": the registered office of the Company
"OPERATOR": CRESTCO Limited or such other person as may for the time
being be approved by Her Majesty's Treasury as Operator under the
Regulations
"PAID UP": paid up or credited as paid up
"PERSON ENTITLED BY TRANSMISSION": a person entitled to a share in
consequence of the death or bankruptcy of a shareholder or of any
other event giving rise to its transmission by operation of law and
whose name is entered in the Register in respect of the share
"RECOGNISED CLEARING HOUSE": a recognised clearing house within the
meaning of the Financial Services and Markets Act 2000 acting in
relation to a recognised investment exchange
"RECOGNISED INVESTMENT EXCHANGE": a recognised investment exchange
within the
-2-
meaning of the Financial Services and Markets Act 2000
"REGISTER": the register of shareholders of the Company
"REGULATIONS": the Uncertificated Securities Regulations 2001
"RELEVANT SYSTEM": the computer-based system, and procedures, which
enable title to units of a security to be evidenced and transferred
without a written instrument, and which facilitate supplementary and
incidental matters in accordance with the Regulations
"RESTRICTED PERSON": any person who is bound by the Balancing and
Settlement Code by virtue of being a party to the BSC Framework
Agreement dated 14 August 2000 or the holder of a licence under the
Electricity Act 1989, any Affiliate thereof or the trustees (acting in
that capacity) of any trust established by such person or Affiliate
thereof
"SEAL": the common seal of the Company or any official seal kept by
the Company pursuant to the Statutes
"SECRETARY": the secretary of the Company or any other person
appointed to perform the duties of the secretary of the Company,
including a joint, assistant or deputy secretary and any person
appointed to perform the duties of secretary temporarily or in any
particular case
"SHAREHOLDER" or "HOLDER": in relation to shares, the person whose
name is entered in the Register as the holder of the shares
"SPECIAL SHARE": the one special rights redeemable preference share
of(pound)1
"SPECIAL SHAREHOLDER": the person whose name is entered in the
Register as the holder of the Special Share
"STATUTES": every statute (including any statutory instrument, order,
regulation or subordinate legislation made under it) for the time
being in force concerning companies and affecting the Company,
including the Regulations
"SYSTEM'S RULES": the rules, regulations, procedures, facilities and
requirements of the relevant system concerned
"TRANSFER INSTRUCTION": a properly authenticated dematerialised
instruction on a relevant system in accordance with the Regulations in
such form, in such manner and from such person as the Board may
determine
"TRANSMISSION LICENCE": the licence to transmit electricity for the
purpose of enabling a supply to be given to any premises or enabling a
supply to be so given in England (other than the Scilly Isles) and
Wales, which was granted to The National Grid Company plc on 26 March
1990 pursuant to section 6(1)(b) of the Electricity Act 1989, as
amended from time to time, or any licence which succeeds or replaces
all or part of such licence
"TRANSMISSION LICENCE HOLDER": the holder from time to time of the
Transmission
-3-
Licence (at the date of adoption of these Articles being The National
Grid Company plc)
"UK LISTING AUTHORITY": the Financial Services Authority acting in its
capacity as the competent authority for the purposes of Part VI of the
Financial Services and Markets Act 2000
"UNITED KINGDOM": Great Britain and Northern Ireland
1.2 The expressions "DEBENTURE" and "DEBENTURE HOLDER" include "DEBENTURE
STOCK" and "DEBENTURE STOCKHOLDER".
References to writing include any method of reproducing or
representing words in a legible and non-transitory form.
References to the execution of a document include references to its
being executed under hand or under seal or by any other method.
References to the execution of an electronic communication include
references to its being executed by such means as the Board may from
time to time approve (including for the purpose of establishing the
authenticity or integrity of the communication). Except insofar as
these Articles expressly require a communication to be in writing, any
electronic communication purporting to contain a copy of a document
need not be in writing provided that it faithfully and intelligibly
reproduces all the relevant information given in writing in the
document. References to anything given, sent or received by, or
contained in, an electronic communication include references to its
being published on a web site and such publication being notified (by
electronic communication or otherwise) to the relevant person in such
manner that, where relevant, that person would be deemed to have
notice of it, and access on that web site to it, for at least the
duration of any relevant period of notice or availability prescribed
by these Articles or by the Statutes.
Unless the context otherwise requires, any words or expressions
defined in the Statutes bear the same meaning in these Articles (or
any part of these Articles) as the meaning in force at the date of the
adoption of these Articles (or that part), save that the word
"COMPANY" shall include any body corporate.
Except where the contrary is stated, a reference to a statute or a
statutory provision includes any amendment or re-enactment of it.
Words importing the singular number only include the plural and vice
versa. Words importing the masculine gender include the feminine and
neuter gender. Words importing persons include corporations.
References to a meeting shall not be taken as requiring more than one
person to be present if any quorum requirement can be satisfied by one
person.
References to any security as being in certificated form or
uncertificated form refer, respectively, to that security being a
certificated unit of a security or an uncertificated unit of a
security for the purposes of the Regulations.
-4-
Headings are inserted for convenience only and shall not affect the
construction of these Articles.
2. TABLE A EXCLUDED
None of the regulations contained in Table A in the Schedule to the
Companies (Tables A to F) Regulations 1985 or any other Statute shall
apply as regulations or articles of the Company.
3. FORM OF RESOLUTIONS
A special or extraordinary resolution shall be effective for any
purpose for which an ordinary resolution is expressed to be required
under the Statutes or these Articles and a special resolution shall be
effective for any purpose for which an extraordinary resolution is
expressed to be required.
SHARE CAPITAL
4. SHARE CAPITAL
At the date of adoption of these Articles, the authorised share
capital of the Company is (pound)250,000,001 divided into
2,500,000,000 ordinary shares of ten pence each and one special rights
redeemable preference share of (pound)1.
5. RIGHTS ATTACHED TO SHARES
Subject to the Statutes and without prejudice to any rights attached
to any existing shares, any share may be issued with such rights or
restrictions as the Company may by ordinary resolution determine (or,
in the absence of any such determination or in so far as such ordinary
resolution does not make specific provision, as the Board may
determine).
6. REDEEMABLE SHARES
Subject to the Statutes and without prejudice to any rights attached
to any existing shares, shares may be issued which are to be redeemed
or which are liable to be redeemed at the option of the Company or of
the relevant shareholder on such terms and in such manner as may be
provided for by these Articles.
7. UNISSUED SHARES
Subject to the Statutes and these Articles, the Board may offer,
allot, grant options over, or otherwise dispose of unissued shares or
rights to subscribe for, or to convert any security
-5-
into, such shares to such persons and on such terms as they think fit.
8. PAYMENT OF COMMISSIONS
The Company may exercise the powers of paying commissions and
brokerage conferred or permitted by the Statutes. Subject to the
Statutes, any such commission may be satisfied by the payment of cash
or by the allotment (or an option to call for the allotment) of fully
or partly paid shares or partly in one way and partly the other.
9. TRUSTS NOT RECOGNISED
Except as required by law, no person shall be recognised by the
Company as holding any share upon any trust and the Company shall not
be bound by or recognise (except as otherwise provided by these
Articles or by law or under an order of a court of competent
jurisdiction) any interest in any share except an absolute right to
the whole of the share in the shareholder.
10. VARIATION OF RIGHTS
10.1 Subject to the Statutes, all or any of the rights attached to any
class may (unless otherwise provided by the terms of issue of the
shares of that class) be varied or abrogated with the written consent
(including by electronic communication) of the holders of
three-fourths in nominal value of the issued shares of that class, or
with the sanction of an extraordinary resolution passed at a separate
meeting of the holders of the shares of that class. The provisions of
the Statutes and of these Articles relating to general meetings shall
mutatis mutandis apply to any such separate meeting and to any meeting
of the holders of shares of a class held otherwise than in connection
with the variation or abrogation of the rights attached to shares of
that class, except that:
10.1.1 the necessary quorum shall be two persons between them
holding or representing by proxy not less than one-third in
nominal amount of the issued shares of that class or, at any
adjourned meeting of holders of shares of that class at
which such a quorum is not present, shall be any holder of
shares of that class who is present in person or by proxy
whatever the number of shares held by him;
10.1.2 any holder of shares of that class present in person or by
proxy may demand a poll; and
10.1.3 every holder of shares of that class shall on a poll have
one vote in respect of every share of that class held by
him.
10.2 The provisions of this Article shall apply to the variation or
abrogation of the special rights attached to some only of the shares
of any class (and to any meeting of the holders of such shares held
otherwise than in connection with the variation or abrogation of those
rights) as if each group of shares of the class differently treated
formed a separate class.
-6-
11. MATTERS NOT CONSTITUTING A VARIATION OF RIGHTS
The rights attached to any share or class of shares shall not, unless
otherwise expressly provided by its terms of issue, be deemed to be
varied, abrogated or breached by:
11.1.1 the creation or issue of further shares ranking pari passu
with it; or
11.1.2 the purchase or redemption by the Company of any of its own
shares (whether of that or any other class).
CERTIFICATES
12. RIGHT TO CERTIFICATES
12.1 Except as otherwise provided in these Articles, every person whose
name is entered in the Register as a shareholder in the Company shall
be entitled, within the time specified by the Statutes and without
payment, to one certificate for all the shares of each class
registered in his name. Upon a transfer of part of the shares of any
class registered in his name, every shareholder shall be entitled
without payment to one certificate for the balance of his
shareholding in certificated form. Upon request and upon payment, for
every certificate after the first, of such reasonable sum (if any) as
the Board may determine, every shareholder shall be entitled to
receive several certificates for shares in certificated form of one
class registered in his name (subject to surrender for cancellation
of any existing certificate representing such shares). Every
shareholder shall be entitled to receive one certificate in
substitution for several certificates for shares in certificated form
of one class registered in his name upon surrender to the Company of
all the share certificates representing such shares.
12.2 Subject as provided in the preceding part of this Article, the
Company shall not be bound to issue more than one certificate in
respect of certificated shares registered in the names of two or more
persons and delivery of a certificate to one joint shareholder shall
be a sufficient delivery to all of them.
13. EXECUTION OF CERTIFICATES
Every certificate for share or loan capital or other securities of
the Company (other than letters of allotment, scrip certificates or
similar documents) shall be issued under the Seal (or in such other
manner as the Board, having regard to the terms of issue, the
Statutes and the regulations of the UK Listing Authority, may
authorise) and each share certificate shall specify the shares to
which it relates, the distinguishing number (if any) of the shares
and the amount paid up on the shares. The Board may determine, either
generally or in relation to any particular case, that any signature
on any certificate need not be autographic but may be applied by some
mechanical or other means, or printed on the certificate, or that
certificates need not be signed.
-7-
14. REPLACEMENT CERTIFICATES
If a share certificate for certificated shares is worn out, defaced
or damaged then, upon its surrender to the Company, it shall be
replaced free of charge. If a share certificate for certificated
shares is or is alleged to have been lost or destroyed it may be
replaced without fee but on such terms (if any) as to evidence and
indemnity and to payment of any exceptional out-of-pocket expenses of
the Company in investigating such evidence and preparing such
indemnity as the Board thinks fit. The Company shall be entitled to
treat an application for a replacement certificate made by one of
joint shareholders as being made on behalf of all the shareholders
concerned.
15. UNCERTIFICATED SECURITIES
15.1 Unless otherwise determined by the Board and permitted by the
Regulations, the Company shall not issue and no person shall be
entitled to receive a certificate in respect of any share or other
security issued by the Company for so long as it is in uncertificated
form.
15.2 Conversion of securities in certificated form into uncertificated
form, and vice versa, may be made in such manner as the Board may, in
its absolute discretion, think fit (subject always to the Statutes,
the Regulations and the facilities and requirements of the relevant
system).
15.3 All registers of holders relating to securities issued by the Company
will be maintained as required by the Regulations and by the rules of
the relevant system and will distinguish between securities held in
uncertificated form and securities held in certificated form. Unless
the Board shall otherwise determine, holdings of the same holder or
joint holders in certificated form shall be treated as separate from
the same person or persons' holdings in uncertificated form, but a
class of securities shall not be treated as two classes by virtue
only of the fact that it comprises securities in certificated form
and securities in uncertificated form (even if, as a result of any
provision of these Articles or the Regulations, securities are
treated differently according to whether they are in certificated or
uncertificated form).
15.4 No certificate will normally be issued in respect of securities held
by a recognised clearing house or a nominee of a recognised clearing
house or of a recognised investment exchange.
15.5 The provisions of these Articles shall not apply to shares of any
class which are in uncertificated form to the extent that such
Articles are inconsistent with:
15.5.1 the holding of shares of that class in uncertificated form;
15.5.2 the transfer of title to shares of that class by means of a
relevant system; or
15.5.3 any provision of the Regulations.
-8-
LIEN
16. COMPANY'S LIEN
The Company shall have a first and paramount lien on every share (not
being a fully paid share) for all monies (whether presently payable
or not) called or payable at a fixed time in respect of that share.
The Company's lien on a share shall extend to any amount payable in
respect of it. The Board may at any time resolve that any share shall
be wholly or in part exempt from this Article.
17. ENFORCING LIEN BY SALE AFTER NOTICE
The Company may sell, in such manner as the Board determines, any
shares on which the Company has a lien if a sum in respect of which
the lien exists is presently payable and is not paid within 14 clear
days after a notice has been given to the holder of the share or the
person entitled by transmission to his share, demanding payment and
indicating that if the notice is not complied with the shares will be
sold.
18. MANNER OF SALE
To give effect to a sale, the Board may authorise and instruct some
person (which may include the shareholder concerned):
18.1.1 in the case of shares held in certificated form to execute
an instrument of transfer of the shares sold; and
18.1.2 in the case of shares held in uncertificated form, subject
to the system's rules, to send a transfer instruction,
and/or to take other steps as may be necessary, to give
effect to such a sale in accordance with the Regulations;
in each case to, or in accordance with the directions of, the
purchaser and a transfer of certificated shares in this way will be
valid even if in respect of any of the shares no certificate
accompanies the instrument of transfer. The transferee shall not be
bound to see to the application of the purchase money and his title
to the shares shall not be affected by any irregularity or invalidity
of the proceedings in reference to the sale.
19. APPLICATION OF SALE PROCEEDS
The net proceeds of the sale, after payment of the costs, shall be
applied in or towards payment of so much of the sum for which the
lien exists as is presently payable, and any residue shall (in the
case of shares held in certificated form, upon surrender to the
Company for cancellation of the certificate for the shares sold and
in the case of shares held in uncertificated form, within a
reasonable time following receipt by the Company of the net proceeds
of sale and subject in each such case to a like lien for any monies
not presently payable as existed upon the shares before the sale) be
paid to the person entitled to the shares immediately before the
sale.
-9-
CALLS ON SHARES
20. CALLS
Subject to the terms of issue, the Board may from time to time make
calls upon the shareholders in respect of any money unpaid on their
shares (whether in respect of the nominal amount or by way of
premium). Each shareholder shall (subject to receiving at least 14
clear days' notice specifying when and where payment is to be made)
pay to the Company as required by the notice the amount called on his
shares. A call may be made payable by instalments. A call may, at any
time before receipt by the Company of any sum due under the call, be
revoked in whole or in part and payment of a call may be postponed in
whole or in part, as the Board may determine. A person upon whom a
call is made shall remain liable for all calls made upon him
notwithstanding the subsequent transfer of the shares in respect of
which the call was made.
21. TIME OF CALL
A call shall be deemed to have been made at the time when the
resolution of the Board authorising the call was passed.
22. LIABILITY OF JOINT SHAREHOLDERS
The joint holders of a share shall be jointly and severally liable to
pay all calls in respect of the share.
23. INTEREST
If a call remains unpaid after it has become due and payable, the
person from whom it is due and payable shall pay all costs, charges
and expenses that the Company may have incurred by reason of such
non-payment, together with interest on the amount unpaid from the day
it became due and payable until the day it is paid at the rate fixed
by the terms of issue of the share or in the notice of the call or,
if no rate is fixed, at the appropriate rate (as defined by the Act)
but the Board may waive payment of the interest wholly or in part.
24. SUMS DUE ON ALLOTMENT OR BY WAY OF INSTALMENT TREATED AS CALLS
An amount payable in respect of a share on allotment or at any fixed
date, whether in respect of the nominal amount of the share or by way
of premium or as an instalment of a call, shall be deemed to be a
call and, if it is not paid these Articles shall apply as if that
amount had become due and payable by virtue of a call.
-10-
25. POWER TO DIFFERENTIATE
Subject to the terms of issue, the Board may, on the issue of shares,
differentiate between the allottees or shareholders in the amount of
calls to be paid and the times of payment.
26. ADVANCE PAYMENT OF CALLS
The Board may, if it thinks fit, receive from any shareholder willing
to advance them all or any part of the monies unpaid and uncalled
upon the shares held by him and may pay interest upon the monies so
advanced (to the extent such monies exceed the amount of the calls
due and payable upon the shares in respect of which they have been
advanced) at such rate (not exceeding 15 per cent. per annum unless
the Company by ordinary resolution otherwise directs) as the Board
may determine. A payment in advance of calls shall extinguish, to the
extent of it, the liability upon the shares in respect of which it is
advanced.
FORFEITURE OF SHARES
27. NOTICE IF CALL NOT PAID
If a call or instalment of a call remains unpaid after it has become
due and payable, the Board may at any time serve a notice on the
shareholder requiring payment of so much of the call or instalment as
remains unpaid together with any interest which may have accrued
thereon and any costs, charges and expenses incurred by the Company
by reason of such non-payment. The notice shall specify a further day
(not being less than 14 clear days from the date of the notice) on or
before which, and the place where, the payment required by the notice
is to be made and shall indicate that if the notice is not complied
with the shares in respect of which the call was made or instalment
is payable will be liable to be forfeited. The Board may accept the
surrender of any share liable to be forfeited and, in such case,
references in these Articles to forfeiture shall include surrender.
28. FORFEITURE IF NOTICE NOT COMPLIED WITH
If any notice served under the immediately preceding Article is not
complied with, any share in respect of which the notice was given
may, before payment of all calls or instalments and interest due in
respect of it is made, be forfeited by (and with effect from the time
of the passing of) a resolution of the Board that such share be
forfeited. The forfeiture shall include all dividends declared and
other monies payable in respect of the forfeited shares and not paid
before the forfeiture.
29. NOTICE OF FORFEITURE
When any share has been forfeited, notice of the forfeiture shall be
served upon the person who was, before the forfeiture, the holder,
but a forfeiture shall not be invalidated by any failure to give such
notice. An entry of such notice and an entry of the forfeiture with
the
-11-
date thereof shall forthwith be made in the Register in respect of
such share. However, no forfeiture shall be invalidated by any
omission to make such entries as aforesaid.
30. SALE OF FORFEITED SHARE
Until cancelled in accordance with the Statutes, a forfeited share
shall be deemed to be the property of the Company and may be sold,
re-allotted or otherwise disposed of either to the person who was the
holder before the forfeiture or to any other person upon such terms
and in such manner as the Board thinks fit. To give effect to a sale
or other disposal, the Board may:
30.1.1 in the case of shares held in certificated form, authorise a
person to execute an instrument of transfer; and
30.1.2 in the case of shares held in uncertificated form, authorise
and instruct a person (which may include the person who was
the holder prior to the forfeiture of the shares concerned),
subject to the relevant system's rules, to send a transfer
instruction, and/or take other such steps as may be
necessary, to give effect to such a sale or other disposal
in accordance with the Regulations,
to the designated transferee (and a transfer of certificated shares
in this way will be valid even if in respect of any of the shares no
certificate accompanies the instrument of transfer). The Company may
receive any consideration given for the share on its disposal and may
register the transferee as holder of the share. At any time before a
sale, re-allotment or other disposition, the forfeiture may be
cancelled on such terms as the Board thinks fit.
31. ARREARS TO BE PAID NOTWITHSTANDING FORFEITURE
A person whose shares have been forfeited shall cease to be a
shareholder in respect of the forfeited shares and, in the case of
shares held in certificated form, shall surrender to the Company for
cancellation the certificate for the forfeited shares but in all
cases shall remain liable to the Company for all monies which at the
date of forfeiture were presently payable by him to the Company in
respect of those shares with interest thereon from the date of
forfeiture until payment at such rate (not exceeding 15 per cent. per
annum) as the Board may determine. The Board may waive payment wholly
or in part and the Board may enforce payment without any allowance
for the value of the shares at the time of forfeiture or for any
consideration received on their disposal.
32. STATUTORY DECLARATION AND VALIDITY OF SALE
A statutory declaration by a Director or the Secretary that a share
has been forfeited on a specified date shall be conclusive evidence
of the facts stated in it as against all persons claiming to be
entitled to the share. The declaration shall (subject to the
completion of any formalities necessary to effect a transfer)
constitute a good title to the share and the person to whom the share
is disposed of shall be registered as the holder and shall be
discharged
-12-
from all calls made prior to such disposition and shall not be bound
to see to the application of the consideration (if any), nor shall his
title to the share be affected by any irregularity in or invalidity of
the proceedings in reference to the forfeiture, sale, re-allotment or
other disposal of the share.
UNTRACED SHAREHOLDERS
33. POWER TO SELL SHARES OF UNTRACED SHAREHOLDERS
Subject to the Regulations, the Company shall be entitled to sell at
the best price reasonably obtainable any shares of a shareholder or
any shares to which a person is entitled by transmission if in
respect of those shares:
33.1 for a period of at least 12 years (the "QUALIFYING PERIOD"), no
cheque, warrant or other financial instrument or payment sent by the
Company in the manner authorised by these Articles has been cashed;
the Company has paid at least three dividends; and no dividend has
been claimed;
33.2 the Company has at the expiration of the qualifying period given
notice of its intention to sell such shares by two advertisements,
one in a national newspaper published in the United Kingdom and the
other in a newspaper circulating in the area in which the last known
address of the shareholder or the address at which service of notices
may be effected in the manner authorised by these Articles is
located; and
33.3 so far as the Board is aware, the Company has not during the
qualifying period or the period of three months after the date of
such advertisements (or the later of the two dates if they are
published on different dates) and prior to the exercise of the power
of sale received any communication from the shareholder or person
entitled by transmission.
34. MANNER OF SALE AND CREATION OF DEBT IN RESPECT OF NET PROCEEDS
34.1 To give effect to any such sale (as referred to in Article 33), the
Board may authorise and instruct a person:
34.1.1 in the case of shares held in certificated form, to execute
an instrument of transfer of the shares; and
34.1.2 in the case of shares held in uncertificated form, subject
to the relevant system's rules, to send a transfer
instruction, and take such other steps as may be necessary,
to give effect to such a transfer in accordance with the
Regulations,
and such instrument of transfer or transfer instruction and the
taking of other steps as may be necessary in accordance with the
Regulations as aforesaid shall be as effective as if they had been
executed by the holder of, or the person entitled by transmission to,
the shares. The transfer of certificated shares in this way will be
valid even if in respect of any of the shares no certificate
accompanies the instrument of transfer. The transferee shall not be
bound to see to the application of the purchase money and his title
shall not be affected by
-13-
any irregularity in, or invalidity of, the proceedings relating to the
sale.
34.2 The net proceeds of sale shall belong to the Company which shall be
indebted to the former shareholder or person entitled by transmission
for an amount equal to such proceeds and shall enter the name of such
former shareholder or other person in the books of the Company as a
creditor for such amount. No trust shall be created in respect of the
debt, no interest shall be payable in respect of it and the Company
shall not be required to account for any monies earned on the net
proceeds, which may be employed in the business of the Company or
otherwise invested as the Board thinks fit.
TRANSFER OF SHARES
35. FORM AND EXECUTION OF TRANSFER
35.1 Subject to such of the restrictions of these Articles as may be
applicable, a shareholder may transfer all or any of his shares, in
the case of shares held in certificated form, by an instrument of
transfer in any usual form or in any other form which the Board may
approve or, in the case of shares held in uncertificated form, in
accordance with the Regulations and the system's rules and otherwise
in such manner as the Board in its absolute discretion shall
determine. An instrument of transfer shall be executed by or on
behalf of the transferor and (unless the share is fully paid) by or
on behalf of the transferee. Subject to the Statutes, the transferor
shall be deemed to remain the holder of the share until the name of
the transferee is entered in the Register in respect of it.
35.2 Subject to the Statutes and notwithstanding any other provisions of
these Articles, the Board shall have power to implement any
arrangements it may think fit to enable:
35.2.1 title to any securities of the Company to be evidenced and
transferred without a written instrument in accordance with
the Regulations and the facilities and requirements of the
relevant system concerned; and
35.2.2 rights attaching to such securities to be exercised
notwithstanding that such securities are held in
uncertificated form where, in the Board's opinion, these
Articles do not otherwise allow or provide for such
exercise.
36. RIGHT TO REFUSE REGISTRATION OF PARTLY PAID SHARE
Subject to the Statutes, the Board may refuse to register the
transfer of a share which is not fully paid without giving any reason
for so doing provided that, where any such shares are admitted to the
Official List of the UK Listing Authority, such discretion may not be
exercised in such a way as to prevent dealings in the shares of that
class from taking place on an open and proper basis.
-14-
37. OTHER RIGHTS TO REFUSE REGISTRATION
Subject to the Statutes, the Board may also refuse to register the
transfer of a share:
37.1 in the case of shares held in certificated form, if it is not lodged,
duly stamped (if necessary), at the Office or at such other place as
the Board may appoint and accompanied by the certificate for the
shares to which it relates (where a certificate has been issued in
respect of the shares and these Articles do not provide for such a
transfer to be valid without production of the certificate) and/or
such other evidence as the Board may reasonably require to show the
right of the transferor to make the transfer (and, if the instrument
of transfer is executed by some other person on his behalf, the
authority of that person to do so);
37.2 if it is not in respect of one class of share only;
37.3 if it is in favour of more than four transferees jointly;
37.4 if it is in favour of a minor, bankrupt or person of mental ill
health;
37.5 without prejudice to the foregoing, in the case of shares held in
uncertificated form, in any other circumstances permitted by the
Regulations and/or the relevant system's rules;
37.6 where the Board is obliged or entitled to refuse to do so as a result
of any failure to comply with a notice under section 212 of the Act;
or
37.7 to the extent it is obliged to refuse to do so in accordance with
Article 56.6.
38. NOTICE OF REFUSAL
If the Board refuses to register a transfer it shall, in the case of
shares held in certificated form, within two months after the date on
which the transfer was lodged and in the case of shares held in
uncertificated form, within two months after the date on which the
relevant transfer instruction was received by or on behalf of the
Company, send to the transferee notice of the refusal.
39. SUSPENSION OF REGISTRATION
The registration of transfers may be suspended at such times and for
such periods (not exceeding 30 days in any calendar year) as the
Board may determine but if the Company is a participating issuer
within the meaning of the Regulations the Register will not be closed
without the prior consent of the Operator.
40. NO FEE FOR REGISTRATION
No fee shall be charged for the registration of any instrument of
transfer or document relating to or affecting the title to any share.
-15-
41. RETENTION OF DOCUMENTS
Any instrument of transfer which is registered may be retained by the
Company, but any instrument of transfer which the Board refuses to
register shall be returned to the person lodging it when notice of
the refusal is given.
42. OTHER REGISTERS
Subject to the Statutes, the Company may keep an overseas, local or
other register in any place, and the Board may make and vary such
regulations as it may think fit concerning the keeping of that
register.
TRANSMISSION OF SHARES
43. TRANSMISSION ON DEATH
If a shareholder dies, the survivor or survivors where he was a joint
shareholder, and his personal representatives where he was a sole
shareholder or the only survivor of joint shareholders shall be the
only persons recognised by the Company as having any title to his
shares; but nothing contained in this Article shall release the
estate of a deceased shareholder from any liability in respect of any
share solely or jointly held by him.
44. ELECTION BY PERSON ENTITLED BY TRANSMISSION
Any person becoming entitled to a share in consequence of the death
or bankruptcy of a shareholder or of any other event giving rise to
its transmission by operation of law may, upon such evidence being
produced as the Board may require and subject (where relevant) to the
system's rules, elect either to become the holder of the share or to
have some person nominated by him registered as the transferee. If he
elects to become the shareholder, he shall give notice to the Company
to that effect. If he elects to have another person registered, he
shall, subject (where relevant) to the system's rules, effect or
procure a transfer of the share in favour of that person. All the
provisions of these Articles relating to the transfer of shares shall
apply to the notice or instrument of transfer as if the death or
bankruptcy of the shareholder or other event giving rise to the
transmission had not occurred and the notice or instrument of
transfer was an instrument of transfer executed by the shareholder.
-16-
45. RIGHTS IN RESPECT OF THE SHARE
A person becoming entitled to a share in consequence of the death or
bankruptcy of a shareholder or of any other event giving rise to its
transmission by operation of law shall have the same rights to which
he would be entitled if he were the shareholder of that share, except
that he shall not be entitled in respect of it to attend or vote at
any general meeting of the Company or at any separate meeting of the
holders of any class of shares in the Company until he is registered
as the holder of the share. The Board may at any time give notice to
such person requiring him to elect either to become the holder of the
share or to transfer the share and if the notice is not complied with
within 60 clear days from the date of the notice, the Board may
withhold payment of all dividends and other monies payable in respect
of the share until he complies with the notice.
ALTERATION OF CAPITAL
46. INCREASE, CONSOLIDATION, SUB-DIVISION AND CANCELLATION
The Company may by ordinary resolution:
46.1 increase its share capital by new shares of such amount as the
resolution prescribes;
46.2 consolidate and divide all or any of its share capital into shares of
larger amount than its existing shares;
46.3 subject to the Statutes, sub-divide its shares, or any of them, into
shares of smaller amount and the resolution may determine that, as
between the shares resulting from the sub-division, any of them may
have any preference or advantage or have such qualified or deferred
rights or be subject to any restrictions as compared with the others;
and
46.4 cancel any shares which, at the date of the passing of the
resolution, have not been taken, or agreed to be taken, by any person
and diminish the amount of its share capital by the amount of the
shares so cancelled.
47. FRACTIONS
Whenever as a result of a consolidation, division or sub-division of
shares any shareholder would become entitled to fractions of a share,
the Board may deal with the fractions as it thinks fit and, in
particular, may sell the shares representing the fractions to any
person (including, subject to the Statutes, the Company) and may
distribute the net proceeds of sale in due proportion among those
shareholders save for amounts of (pound)3.00 or less, which shall be
retained for the benefit of the Company. To give effect to any such
sale, the Board may authorise and instruct a person to take such
steps as may be necessary (subject, in the case of shares held in
uncertificated form, to the system's rules) to transfer or deliver
the shares to, or in accordance with the directions of, the
purchaser. Subject to the Statutes, where a shareholder holds shares
in both certificated and uncertificated form, the Board may for these
purposes treat them as separate holdings, and may at its discretion
arrange
-17-
for any shares representing fractions to be entered in the Register as
held in certificated or uncertificated form in order to facilitate
their sale under this Article. The transferee shall not be bound to
see to the application of the purchase money and his title shall not
be affected by any irregularity in, or invalidity of, the proceedings
relating to the sale.
48. REDUCTION OF CAPITAL
Subject to the Statutes, the Company may by special resolution reduce
its share capital, any capital redemption reserve and any share
premium account or other undistributable reserve in any manner.
STOCK
49. ARTICLES APPLICABLE TO STOCK
In these Articles, "STOCK" means a unit or units comprising paid up
shares (of the same or different denominations) in any combination
which have been converted in accordance with the next following
Article. The provisions of these Articles applicable to paid up
shares shall apply to stock, and the word "SHARE" shall include
"STOCK", and "SHAREHOLDER" and "HOLDER" (where it relates to shares)
shall include "STOCKHOLDER".
50. CONVERSION OF SHARES INTO STOCK
50.1 The Company may by ordinary resolution convert any fully paid up
shares into stock and re-convert any stock into fully paid up shares
of any denomination.
50.2 Any such resolution to convert shares of a particular class into
stock which does not expressly disapply this paragraph of this
Article shall (notwithstanding any other terms of the resolution)
operate automatically to convert shares of that class which
subsequently become fully paid into stock on the same basis, but not
if the stock initially created by the resolution has been
re-converted into shares of any denomination.
51. TRANSFER OF STOCK
Stock may be transferred in accordance with these Articles which,
prior to conversion, applied to the shares from which the stock arose
or as near thereto as circumstances allow, but the Board may from
time to time fix the minimum amount of stock which is transferable
(which minimum amount shall not exceed the nominal amount of the
shares from which the stock arose), in which case stock may be
transferred in the sum of the minimum amount or a multiple of it.
52. RIGHTS ATTACHING TO STOCK
A holder of stock shall, according to the amount of the stock held by
him, have the same rights (including voting rights) as if he held the
shares from which the stock arose, but no
-18-
such rights (except participation in dividends and in assets on a
winding-up) shall be conferred by an amount of stock which would not,
if existing in shares, have conferred those rights.
PURCHASE OF OWN SHARES
53. PURCHASE OF OWN SHARES
Subject to the Statutes and to any rights conferred on the holders of
any class of shares, the Company may purchase all or any of its
shares of any class (including any redeemable shares). The Company
may not purchase any of its shares unless the purchase has been
sanctioned (at the time that authority for a market purchase is given
or an off-market purchase contract is approved) by such resolution of
the Company as may be required by the Statutes and by an
extraordinary resolution passed at a separate general meeting (or
meetings if there is more than one class) of the holders of any
securities which entitle the holders to convert them into equity
share capital of the Company. Neither the Company nor the Board shall
be required to select the shares to be purchased rateably or in any
particular manner as between the holders of shares of the same class
or as between them and the holders of shares of any other class or in
accordance with the rights as to dividends or capital attached to any
class of shares.
SPECIAL PROVISIONS RELATING TO SHARES
54. THE SPECIAL SHARE
54.1 The Special Share may only be issued to, held by and transferred to
one of Her Majesty's Secretaries of State, another Minister of the
Crown, the Solicitor for the affairs of Her Majesty's Treasury or any
other person acting on behalf of the Crown.
54.2 Notwithstanding any provision in these Articles to the contrary, each
of the following matters shall be deemed to be a variation of the
rights attaching to the Special Share and shall accordingly be
effective only with the consent in writing of the Special Shareholder
and without such consent shall not be done or caused to be done:
54.2.1 the amendment, or removal, or the alteration of the effect
of (which, for the avoidance of doubt, shall be taken to
include the ratification of any breach of) all or any of the
following:
(a) in Article 1, the definitions of "Act", "Affiliate",
"associated company", "Board", "National Grid Group",
"recognised clearing house", "recognised investment
exchange", "Restricted Person", "Special Share",
"Special Shareholder", "Transmission Licence" and
"Transmission Licence Holder";
(b) this Article;
(c) Article 55 (save to the extent that any amendment,
removal or alteration
-19-
thereof is required to comply with the Listing Rules of
the UK Listing Authority, as amended from time to
time); and
(d) Articles 56 and 57;
54.2.2 the creation or issue of any shares in the Company with
voting rights attached, not being:
(a) shares comprised or shares which would, following
issue, be comprised in the relevant share capital (as
defined in section 198(2) of the Act) of the Company;
or
(b) shares which do not or shares which, following issue,
would not constitute equity share capital (as defined
in section 744 of the Act) and which, when aggregated
with all other such shares, carry (or would, if in
issue, carry) the right to cast less than 15 per cent.
of the maximum number of votes capable of being cast on
a poll on any resolution at any general meeting of the
Company (whether or not the votes could be cast on a
poll in relation to all resolutions at all general
meetings);
54.2.3 the variation of any rights (save for dividend rights and
rights to repayment of capital) attached to any shares in
the Company (and, for the avoidance of doubt, the creation
or issue of shares falling within paragraphs 54.2.2(a) or
(b) above shall not be regarded as a variation for the
purposes of this paragraph);
54.2.4 the disposal by the Company or the disposal by any other
member of the National Grid Group, to any person who is not
a member of the National Grid Group, of all or any of the
shares or of any rights or interests therein held by such
company in the Transmission Licence Holder or in any company
which directly or indirectly holds shares therein, or the
entering into by the Company or any other member of the
National Grid Group of any agreement or arrangement with any
person who is not a member of the National Grid Group with
respect to, or to the exercise of any rights attaching to,
such shares;
54.2.5 any scheme or arrangement which if put into effect would
relieve the Transmission Licence Holder or any other
Affiliate of the Company of, or otherwise modify, the
obligations required to be imposed on such person by the
Company by virtue of the provisions of Article 57;
54.2.6 the voluntary winding-up of the Company, a special
resolution to the effect that the Company should be wound
up by the court, the presentation by the Company or by the
Directors (whether solely or jointly with each other or
with any other person) of a petition for the winding-up of
the Company by the court or any proposal for any of the
foregoing;
54.2.7 the presentation by the Company (whether solely or jointly
with any other person) of a petition to the court for, or
the exercise by the Company of any rights in support of,
the winding-up of the Transmission Licence Holder or any
proposal for either of the foregoing;
-20-
54.2.8 the presentation by the Company or by the Directors
(whether solely or jointly with each other or with any
other person) of a petition applying for an administration
order pursuant to section 9 of the Insolvency Act 1986 or
any proposal therefor;
54.2.9 the proposal by the Board of a voluntary arrangement
pursuant to section 1 of the Insolvency Act 1986; and
54.2.10 the establishment of a holding company for the Company.
54.3 For the purposes of:
54.3.1 paragraph 54.2.4 of this Article:
(a) "DISPOSAL" shall include any sale, exchange, gift,
lease, licence, mortgage, charge or the grant of any
other encumbrance or the permitting of any encumbrance
to subsist or any other disposition to a third party;
and
(b) "AGREEMENTS OR ARRANGEMENTS" shall include all
agreements or arrangements of the type contemplated by
section 204(2)(a) of the Act (as if that section
extended to all shares in the relevant company
howsoever acquired).
54.3.2 paragraph 54.2.10 of this Article, the term "HOLDING
COMPANY" shall have the meaning given to it in sections
736, 736A and 736B of the Act as substituted by section 144
of the Companies Act 1989.
54.4 The Special Shareholder shall be entitled to receive notice of, and
to attend and speak at, any general meeting or any separate meeting
of the holders of any class of shares, but the Special Share shall
carry no right to vote nor any other rights at any such meeting.
54.5 In a distribution of capital in the winding-up of the Company, the
Special Shareholder shall be entitled to repayment of the capital
paid up or treated for the purposes of the Act as paid up on the
Special Share in priority to any repayment of capital to any other
shareholder. The Special Share shall confer no other right to
participate in the capital, and no right to participate in the
profits, of the Company.
54.6 The Special Shareholder may, after consulting the Company and subject
to the provisions of the Act, require the Company to redeem the
Special Share at par at any time by giving notice to the Company and
delivering to it the relevant share certificate.
55. DISCLOSURE OF INTERESTS
55.1 If a shareholder, or any other person appearing to be interested in
shares held by that shareholder, has been given notice under section
212 of the Act, he shall, if requested, also be obliged, in addition
to giving the Company the information thereby required, to notify the
Company if he is a Relevant Person (as defined in Article 56.2.7
below) or a Restricted Person. If he has failed in relation to any
shares (the "DEFAULT SHARES") to give the
-21-
Company the information required from him under the notice within the
prescribed period from the date of the notice, the following sanctions
shall apply (subject to paragraph 55.6 below), unless the Board
otherwise determines:
55.1.1 the shareholder shall not be entitled in respect of the
default shares to attend or vote (either in person or by
representative or proxy) at any general meeting or at any
separate meeting of the holders of any class of shares; and
55.1.2 where the default shares represent 0.25 per cent. or more of
their class:
(a) any dividend (including any non-cash dividend) or money
payable in respect of the shares shall be withheld by
the Company, which shall not have any obligation to pay
interest on it, and the shareholder shall not be
entitled to elect, pursuant to Article 139 below, to
receive shares instead of that dividend; and
(b) no transfer, other than an approved transfer, of any
shares held by the shareholder shall be registered
unless:
(i) the shareholder is not himself in default as
regards supplying the information required; and
(ii) the shareholder provides evidence to the
satisfaction of the Board that no person in
default as regards supplying such information is
interested in any of the shares the subject of the
transfer
provided that, in the case of shares in uncertificated
form, the Directors may only exercise their discretion
not to register a transfer if permitted to do so by the
Regulations.
55.2 Where the sanctions under paragraph 55.1 above apply in relation to
any shares, they shall cease to have effect -
55.2.1 if the shares are transferred by means of an approved
transfer; or
55.2.2 when the Board is satisfied that the information required
by the notice mentioned in that paragraph has been received
in writing by the Company.
55.3 For the purposes of this Article -
55.3.1 a person other than the shareholder holding a share shall
be treated as appearing to be interested in that share if
the shareholder has informed the Company that the person
is, or may be, so interested, or if the Company (after
taking account of any information obtained from the
shareholder or, pursuant to a section 212 notice, from
anyone else) knows or has reasonable cause to believe that
the person is, or may be, so interested;
55.3.2 "INTERESTED" shall be construed as it is for the purpose of
section 212 of the Act;
-22-
55.3.3 reference to a person having failed to give the Company the
information required by a notice, or being in default as
regards supplying such information, includes (i) reference
to his having failed or refused to give all or any part of
it and (ii) reference to his having given information which
he knows to be false in a material particular or having
recklessly given information which is false in a material
particular;
55.3.4 "THE PRESCRIBED PERIOD" means -
(a) in a case where the default shares represent at least
0.25 per cent. of their class, fourteen days; and
(b) in any other case, twenty-eight days;
55.3.5 an "APPROVED TRANSFER" means, in relation to any shares held
by a shareholder:-
(a) a transfer pursuant to acceptance of an offer made to
all the holders (or all the holders other than the
person making the offer and his associates (as such
term is defined in section 430E of the Act)) of the
shares in the Company to acquire those shares or a
specified proportion of them, or to all the holders (or
all the holders other than the person making the offer
and his associates (as such term is defined in Section
430E of the Act)) of a particular class of those shares
to acquire the shares of that class or a specified
proportion of them; or
(b) a transfer in consequence of a sale made through a
recognised clearing house, a recognised investment
exchange or other stock exchange outside the United
Kingdom on which the Company's shares are normally
traded; or
(c) a transfer which is shown to the satisfaction of the
Board to be made in consequence of a sale of the whole
of the beneficial interest in the shares to a person
who is unconnected with the shareholder and with any
other person appearing to be interested in the shares.
55.4 Where, on the basis of information obtained from a shareholder in
respect of any share held by him, the Company gives a notice under
section 212 of the Act to any other person, it shall at the same time
send a copy of the notice to the shareholder, but the accidental
omission to do so, or the non-receipt by the shareholder of the copy,
shall not invalidate or otherwise affect the application of paragraph
55.1.1 above.
55.5 Where the shareholder on whom the notice under section 212 of the Act
is served is the ADR Depositary acting in its capacity as such, the
obligations of the ADR Depositary as a shareholder pursuant to the
preceding provisions of this Article shall be limited to disclosing
to the Company such information relating to the shares in question as
has been recorded pursuant to the terms entered into between the ADR
Depositary and the Company provided that nothing in this paragraph
55.5 shall in any other way restrict the powers of the Board under
this Article.
-23-
55.6 Where a notice under section 212 of the Act is served upon the ADR
Depositary acting in its capacity as such, or upon any other person
appearing to be interested in shares held by the ADR Depositary, the
sanctions under paragraph 55.1.1 shall not be effective unless the
Company serves upon the ADR Depositary a notice stating that a
specified ADR Holder or ADR Holders is or are believed to be
interested in a specified number of shares, and that those shares are
default shares (as defined in paragraph 55.1).
56. LIMITATIONS ON SHAREHOLDINGS
56.1 The purpose of this Article is to prevent:
56.1.1 any person (other than a Permitted Person as defined below)
directly or indirectly having or controlling the right to
cast on a poll 15 per cent. or more of the votes at general
meetings of the Company; and
56.1.2 Restricted Persons directly or indirectly having or
controlling the right to cast on a poll at general meetings
of the Company percentages equal to or in excess of such
lower percentages of the votes as are set out in paragraph
56.2.5 below.
56.2 In this Article:
56.2.1 "ADDITIONAL INTEREST" means any such interest as is referred
to in paragraph 56.2.2 (b) below;
56.2.2 "INTEREST", in relation to shares, means:
(a) any interest which would be taken into account in
determining for the purposes of Part VI of the Original
Act whether a person has a notifiable interest
(including any interest which he would be taken as
having for those purposes); and
(b) any interest (an "ADDITIONAL INTEREST") mentioned in
section 209(1)(a), (b), (d), (e), (g) or (h) of the
Original Act (except that of a bare or custodian
trustee under the laws of England and Wales and of a
simple trustee under the laws of Scotland) or mentioned
in section 208(4)(b) of the Original Act (but on the
basis that the entitlement there referred to could
arise under an agreement within the meaning in section
204(5) and (6) of the Act),
and "INTERESTED" shall be construed accordingly;
56.2.3 the "ORIGINAL ACT" means the Companies Act 1985 as in force
at 11 December 1995 and notwithstanding any repeal,
modification or re-enactment thereof after that date
(including for the avoidance of doubt, any amendment,
replacement or repeal by regulations made by the Secretary
of State pursuant to section 210A of the Act to the
definition of relevant share capital in section 198(2) or to
the provisions as to what is taken to be an interest in
shares in section 208 or as to what interests are to be
disregarded in section 209 or the percentage giving rise to
-24-
a notifiable interest in section 199(2));
56.2.4 "PERMITTED PERSON" means:
(a) an ADR Depositary, acting in its capacity as such;
(b) a recognised clearing house or a nominee of a
recognised clearing house or of a recognised investment
exchange, in each case acting in its capacity as such;
(c) the chairman of a meeting of the Company or of a
meeting of the holders of Relevant Share Capital or of
any class thereof when exercising the voting rights
conferred on him under paragraph 56.9 below;
(d) a trustee (acting in that capacity) of any employees'
share scheme of the Company;
(e) any person who has an interest but who, if the
incidents of his interest were governed by the laws of
England and Wales, would in the opinion of the Board be
regarded as a bare trustee of that interest, in respect
of that interest only;
(f) an underwriter or sub-underwriter in respect of
interests in shares which exist only by virtue of a
contingent obligation to purchase or subscribe for such
shares pursuant to an underwriting or sub-underwriting
agreement approved by the Board or in respect of
interests in shares purchased or subscribed for by it
pursuant to such an obligation;
(g) any other person who under arrangements approved by the
Board subscribes or otherwise acquires Relevant Share
Capital (or interests therein) which has been allotted
or issued with a view to that person (or purchasers
from that person) offering the same to the public, for
a period not exceeding three months from the date of
the relevant allotment or issue (and in respect only of
the shares so subscribed or otherwise acquired);
(h) Japan Securities Clearing Corporation and/or its
nominee acting in its capacity as a clearing house in
respect of dealings on the Tokyo Stock Exchange;
(i) The Depository Trust Company and/or its nominee acting
in the capacity of a clearing agency in respect of
dealings in American Depositary Receipts;
(j) any person who has an interest, and who shows to the
satisfaction of the Board that he has it by virtue only
of being entitled to exercise or control the exercise
(within the meaning of section 203(4) of the Original
Act) of one-third or more of the voting power at
general meetings of a company which is a Permitted
Person within (a) to (i) above; or
-25-
(k) a CREST member acting as trustee of shares in respect
of which no other person (other than a Permitted
Person) is or becomes a Relevant Person (including,
without limitation, by virtue of being deemed to be
one);
56.2.5 "RELEVANT PERSON" means:
(a) any person (whether or not identified and regardless of
whether he in addition falls within paragraph 56.2.5
(b) below) who has, or who appears to the Board to
have, an interest in shares which carry the right to
cast 15 per cent. or more of the total votes attaching
to Relevant Share Capital of all classes (taken as a
whole) and capable of being cast on a poll, or who is
deemed for the purposes of this Article to be a
Relevant Person; or
(b) any person (whether or not identified) who is, or who
appears to the Board to be, a Restricted Person having
an interest in shares which carry the right to cast 1
per cent. or more of the total votes attaching to
Relevant Share Capital of all classes (taken as a
whole) and capable of being cast on a poll;
56.2.6 "RELEVANT SHARE CAPITAL" means the relevant share capital
(as defined in section 198(2) of the Original Act), and
references therein to the temporary suspension of voting
rights shall for the purposes of this Article include
shares subject to the provisions of Article 56.4;
56.2.7 "RELEVANT SHARES" means all shares comprised in the
Relevant Share Capital in which a Relevant Person has, or
appears to the Board to have, an interest or which are
deemed for the purposes of this Article to be Relevant
Shares; and
56.2.8 "REQUIRED DISPOSAL" means a disposal or disposals of such a
number of Relevant Shares (or interests therein) as will
cause a Relevant Person to cease to be a Relevant Person,
not being a disposal to another Relevant Person (other than
a Permitted Person) or a disposal which constitutes any
other person (other than a Permitted Person) becoming a
Relevant Person;
and, for the purposes of this Article, where the Board resolves that
it has made reasonable enquiries and that it is unable to determine:
(a) whether or not a particular person has an interest in any
particular shares comprised in Relevant Share Capital, or
(b) who is interested in any particular shares so comprised,
the shares concerned shall be deemed to be Relevant Shares and all
persons interested in them to be Relevant Persons.
56.3 No Restricted Person shall be entitled in any circumstances, in
respect of any part of its interest in the Company's shares which
carries the right to cast in excess of 1 per cent. of the total votes
attaching to the Relevant Share Capital of all classes (taken as a
whole) and
-26-
capable of being cast on a poll, to vote (either in person or by
representative or proxy) at any general meeting or at any separate
meeting of the holders of any class of shares.
56.4 Subject to paragraphs 56.5, 56.15 and 56.16 below and without
prejudice to Article 55 above, the provisions of Part VI of the
Original Act shall apply in relation to the Company as if those
provisions extended to Additional Interests and accordingly the
rights and obligations arising under that Part shall apply in
relation to the Company, its shareholders and all persons interested
in Relevant Share Capital, as extended by this paragraph; but so that
Additional Interests shall, when disclosed to the Company, be entered
in a separate register kept by the Company for that purpose. The
rights and obligations created by this paragraph in respect of
interests in shares (including, but not limited to, Additional
Interests) are in addition to and separate from those arising under
Part VI of the Act.
56.5 Sections 210(3) to (6) inclusive, 211(10), 213(3) (so far as it
relates to section 211(10)), 214(5), 215(8), 216(1) to (4) inclusive,
217(7), 218(3), 219(3) and (4), 454, 455, 732 and 733 of the Original
Act shall not apply in respect of Additional Interests.
56.6 If, to the knowledge of the Board, any person other than a Permitted
Person is or becomes a Relevant Person (including, without
limitation, by virtue of being deemed to be one), the Board shall
give notice to all persons (other than persons referred to in
paragraph 56.11 below) who appear to the Board to have interests in
the Relevant Shares and, if different, to the registered holders of
those shares. The notice shall set out the restrictions referred to
in paragraph 56.9 below and call for a Required Disposal to be made
within 21 days of the giving of the notice to the holder or such
longer period as the Board considers reasonable. If the Relevant
Shares are held by an ADR Depositary, the notice shall state that:
56.6.1 a specified ADR Holder or ADR Holders (the "RELEVANT ADR
HOLDER(S)"), as the case may be, is or are believed or
deemed to be ADR Holders through which a Relevant Person or
Persons have interests in either case as specified in the
notice; and
56.6.2 the Board believes that each Relevant ADR Holder or the
Relevant Person or Persons believed or deemed to have
interests through such Relevant ADR Holder, is or are
deemed to be interested in a specific number of shares.
The Board may extend the period in which any such notice is required
to be complied with and may withdraw any such notice (whether before
or after the expiration of the period referred to) if it appears to
it that there is no Relevant Person in relation to the shares
concerned. After the giving of such a notice, and save for the
purpose of a Required Disposal under this or the following paragraph,
no transfer of any of the Relevant Shares may be registered until
either the notice is withdrawn or a Required Disposal has been made
to the satisfaction of the Board and registered.
56.7 If a notice given under paragraph 56.6 above has not been complied
with in all respects to the satisfaction of the Board and has not been
withdrawn, the Board shall so far as it is able, make a Required
Disposal (or procure that a Required Disposal is made) and shall give
written notice of the disposal to those persons on whom the notice was
served. The Relevant Person(s) and the registered holder(s) of the
shares duly disposed of shall be deemed to have irrevocably and
unconditionally authorised the Board to make such
-27-
Required Disposal. The manner, timing and terms of any such Required
Disposal made or sought to be made by the Board (including but not
limited to the price or prices at which the same is made and the
extent to which assurance is obtained that no transferee, except a
Permitted Person, is or would become a Relevant Person) shall be such
as the Board determines, based on advice from bankers, brokers, or
other appropriate persons consulted by it for the purpose, to be
reasonably practicable having regard to all the circumstances,
including but not limited to the number of shares to be disposed of
and the requirement that the disposal be made without delay; and the
Board shall not be liable to any person for any of the consequences of
reliance on such advice. If, in relation to the Required Disposal to
be made by the Board, Relevant Shares are held by more than one holder
(treating joint holders of any Relevant Shares as a single holder) the
Board shall cause as nearly as practicable the same proportion of each
holding (so far as known to them) of the Relevant Shares to be sold.
56.8 For the purposes of effecting any Required Disposal of shares in
certificated form, the Board may authorise in writing any officer or
employee of the Company to execute any necessary transfer on behalf
of any shareholder and may enter the name of the transferee in the
Register in respect of the transferred shares notwithstanding the
absence of any share certificate and may issue a new certificate to
the transferee and an instrument of transfer executed by such person
shall be as effective as if it had been executed by the registered
holder of the transferred shares and the title of the transferee
shall not be affected by any irregularity or invalidity in the
proceedings relating thereto. A Required Disposal of shares in
uncertificated form can be made by a relevant system, to the extent
allowed by the Regulations and the Board shall be entitled to require
the holder of that uncertificated share by notice to give any
instructions necessary or to take any action (including appointing
any person to take any step) to transfer title to that share by means
of a relevant system. The net proceeds of the disposal shall be
received by the Company whose receipt shall be a good discharge for
the purchase money, and shall be paid (without any interest being
payable in respect of it and after deduction of any expenses incurred
by the Board in the sale) to the former holder (or in the case of
joint holders, the first of them named in the register):
56.8.1 in the case of shares in certificated form, together with,
if appropriate, a new certificate in respect of the balance
of the Relevant Shares to which he is entitled upon
surrender by him or on his behalf of any certificate in
respect of the Relevant Shares sold and formerly held by
him; or
56.8.2 in the case of shares in uncertificated form, when the
disposal has been made using a relevant system.
56.9 A holder of a Relevant Share on whom a notice has been given under
(and complying with) paragraph 56.6 above shall not in respect of
that share be entitled, until such time as the notice has been
complied with to the satisfaction of the Board or withdrawn, to
attend or vote at any general meeting of the Company or meeting of
the holders of Relevant Share Capital or of any class thereof, or to
exercise any other right as a shareholder in relation to any such
meeting; and the rights to attend (whether in person or by
representative or proxy), to speak and to demand and vote on a poll
which would have attached to the Relevant Share had it not been a
Relevant Share shall vest in the chairman of any such
-28-
meeting. The manner in which the chairman exercises or refrains from
exercising any such rights shall be entirely at his discretion. The
chairman of any such meeting shall be informed by the Board of any
share becoming or being deemed to be a Relevant Share.
56.10 Without prejudice to the provisions of the Act and subject to
paragraph 56.2.4 above, the Board may assume without enquiry that a
person is not a Relevant Person unless the information contained in
the registers kept by the Company under Part VI of the Act or under
Part VI of the Original Act (as applied and extended by this
Article), including the separate register to be kept under paragraph
56.4 above, appears to the Board to indicate to the contrary or the
Board has reason to believe otherwise, in which circumstances the
Board shall make reasonable enquiries to discover whether any person
is a Relevant Person.
56.11 The Board shall not be obliged to give any notice required under this
Article to be given to any person if they do not know either his
identity or his address. The absence of such a notice in those
circumstances and any accidental error in or failure to give any
notice to any person to whom notice is required to be given under
this Article shall not prevent the implementation of, or invalidate,
any procedure under this Article.
56.12 If any Director has reason to believe that a person (not being a
Permitted Person) is a Relevant Person, he shall inform the other
Directors.
56.13 Save as otherwise provided in this paragraph, the provisions of these
Articles applying to the giving of notice of meetings to shareholders
shall apply to the giving to a shareholder of any notice required by
this Article. Any notice required by this Article to be given to a
person who is not a shareholder, or who is a shareholder whose
registered address is not within the United Kingdom and who has not
given to the Company an address within the United Kingdom at which
notices may be given to him, shall be deemed validly served if it is
delivered by hand or sent by post in a prepaid envelope addressed or
by other prepaid delivery service to that person at the address (or
if more than one, at one of the addresses), if any, at which the
Board believes him to be resident or carrying on business or to his
last known address as shown on any of the Register and the list of
ADR Holders maintained by an ADR Depositary. If the notice is
delivered by hand, it shall be treated as being delivered at the time
it is handed to or left for such person. If the notice is sent by
prepaid post or other delivery service it shall be deemed to have
been given on the day following that on which the envelope containing
the same is posted or given to a delivery agent, unless it was sent
by second class post or there is only one class of post, in which
case it shall be deemed to have been given on the day next but one
after it was posted. Proof that the envelope containing the notice
was properly addressed, prepaid and posted or given to delivery
agents with postage or delivery prepaid shall be conclusive evidence
that the notice was given.
56.14 Any resolution or determination of, or decision or exercise of any
discretion or power by, the Board or any Director or by the chairman
of any meeting under or pursuant to the provisions of this Article
(including without prejudice to the generality of the foregoing as to
what constitutes reasonable enquiry or as to the manner, timing and
terms of any Required Disposal made by the Board under paragraph 56.7
above) shall be final and conclusive. Any disposal or transfer made,
or other thing done, by or on behalf of, or on the authority of, the
Board or any Director pursuant to the foregoing provisions of this
-29-
Article shall be conclusive and binding on all persons concerned and
shall not be open to challenge, whether as to its validity or
otherwise on any ground whatsoever. The Board shall not be required
to give any reasons for any decision, determination or declaration
taken or made in accordance with this Article.
56.15 Paragraph 56.4 of this Article shall not apply to an ADR Depositary
in its capacity as such. An ADR Holder shall be deemed for the
purposes of this Article to have an interest in the number of shares
in the Company held by the ADR Depositary and represented by the
relevant American Depositary Receipt and not (in the absence of any
other reason why he should be so treated) in the remainder of the
shares in the Company held by the ADR Depositary.
56.16 Paragraph 56.4 of this Article shall not apply to a recognised
clearing house or a nominee of a recognised clearing house or of a
recognised investment exchange, in each case acting in its capacity
as such, nor shall it apply to a CREST member acting as trustee.
Where in that capacity interests in shares in the Company are held by
a recognised clearing house or a nominee of a recognised clearing
house or of a recognised investment exchange or a CREST member acting
as trustee under arrangements recognised by the Company for the
purposes of this Article any person who has rights in relation to
shares in the Company in which such a recognised clearing house or a
nominee of a recognised clearing house or of a recognised investment
exchange or a CREST member acting as trustee has an interest shall be
deemed to be interested in the number of shares in the Company for
which such a recognised clearing house or a nominee of a recognised
clearing house or of a recognised investment exchange or a CREST
member acting as trustee is or may become liable to account to him
and any interest which (by virtue of his being a tenant in common in
relation to interests in shares in the Company so held by such a
recognised clearing house or a nominee of a recognised clearing house
or of a recognised investment exchange or a CREST member acting as
trustee) he would otherwise be treated for the purposes of this
Article as having in a larger number of shares in the Company shall
(in the absence of any other reason why he should be so treated) be
disregarded.
56.17 This Article shall apply notwithstanding any provision in any other
of these Articles which is inconsistent with or contrary to it.
57. OBLIGATIONS RELATING TO THE TRANSMISSION LICENCE HOLDER
The Company shall procure that, without the consent in writing of the
Special Shareholder:
57.1 the Transmission Licence shall not be held by any person outside the
National Grid Group;
57.2 the National Grid Group shall not cease to carry on, or dispose of or
relinquish operational control over any asset required to carry on,
the Transmission Business or the Interconnectors Business (as defined
in the Transmission Licence as at 11 December 1995), save where such
cessation, disposal or relinquishment is required by law or is
permitted pursuant to or by virtue of the terms of the Transmission
Licence (and the term "DISPOSE" shall be construed in accordance with
the definition of "disposal" in Condition 16 of the Transmission
Licence as at 11 December 1995);
-30-
57.3 neither the Company nor any Affiliate of the Company shall carry on
in the United Kingdom any activity which requires a generation or
supply licence or which is exempted from such requirement under or by
virtue of the Electricity Act 1989, save where such activity is
expressly permitted under the terms of the Transmission Licence and
that neither the Company nor any Affiliate of the Company shall be
engaged outside the United Kingdom in the generation of electricity
to be imported into the United Kingdom;
57.4 no employee or director of a Restricted Person which is neither the
Company nor any other member of the National Grid Group shall be a
director of the Company, the Transmission Licence Holder or of any
holding company thereof (which term shall have the meaning ascribed
to it in Article 54.3.2 of these Articles); and
57.5 the Transmission Licence Holder shall not carry on activities other
than:
57.5.1 those required or contemplated on the part of the
Transmission Licence Holder (in its capacity as the holder
of the Transmission Licence) by the Transmission Licence or
the Electricity Act 1989 or connected therewith or
consequential thereto; or
57.5.2 those carried on by The National Grid Company plc at or
prior to 11 December 1995,
Provided that (but subject to paragraph 57.3 above) nothing in this
paragraph 57.5 shall prevent the acquisition of any share capital by
the Transmission Licence Holder in any company.
GENERAL MEETINGS
58. ANNUAL GENERAL MEETINGS
Subject to the requirements of the Statutes, annual general meetings
shall be held at such time and place as the Board may determine.
59. EXTRAORDINARY GENERAL MEETINGS
Any general meeting of the Company other than an annual general
meeting shall be called an extraordinary general meeting.
60. CONVENING AN EXTRAORDINARY GENERAL MEETING
The Board may convene an extraordinary general meeting whenever it
thinks fit and shall do so on requisition in accordance with the
Statutes.
-31-
NOTICE OF GENERAL MEETINGS
61. LENGTH OF NOTICE PERIOD
An annual general meeting and an extraordinary general meeting
convened for the passing of a special resolution or a resolution
appointing a person as a director shall be convened by at least 21
clear days' notice. All other extraordinary general meetings shall be
convened by at least 14 clear days' notice. Notwithstanding that a
meeting of the Company is convened by shorter notice than that
specified in this Article, it shall be deemed to have been properly
convened if it is so agreed:
61.1.1 in the case of an annual general meeting, by all the
shareholders entitled to attend and vote at the meeting; and
61.1.2 in the case of any other meeting, by a majority in number of
the shareholders having a right to attend and vote at the
meeting, being a majority together holding not less than 95
per cent. in nominal value of the shares giving that right.
Subject to these Articles and to any restrictions imposed on any
shares, the notice shall be given to all the shareholders, to all
persons entitled by transmission and to the Directors and Auditors.
The Board may determine that shareholders entitled to receive such
notices are those shareholders entered on the Register at the close
of business on a day determined by the Board (provided that it is not
more than 21 days before the day that the notices are sent).
62. CONTENTS OF NOTICES
Every notice calling a general meeting shall specify the place, the
day and the time of the meeting and the general nature of the
business to be transacted. In the case of an annual general meeting,
the notice shall also specify the meeting as such. A notice convening
a meeting to pass a special or extraordinary resolution shall contain
a statement to that effect. Every notice calling a meeting of the
Company shall specify with reasonable prominence that a shareholder
entitled to attend and vote is entitled to appoint one or more
proxies to attend and vote in his place and that a proxy need not be
a shareholder. Every such notice shall also specify the address or
addresses where appointments of proxy are to be deposited, delivered
or received if the Board determines any such address to be other than
the Office.
63. OMISSION OR NON-RECEIPT OF NOTICE
No proceedings at any meeting shall be invalidated by any accidental
omission to give notice of the meeting, or to send an instrument of
proxy, to any person entitled to receive it or, in the case of notice
by electronic communication, to invite any such person to appoint a
proxy in that communication, or by reason of any such person not
receiving such any such notice, instrument or invitation.
-32-
64. CHANGE OF DATE, TIME OR PLACE OF MEETING
If for any reason the Board considers it impractical or undesirable
to hold a meeting on the day, at the time or in the place specified
in the notice calling the meeting it can change the date, time and
place of the meeting (or whichever it requires), and may do so more
than once in relation to the same meeting. References in these
Articles to the time of the holding of the meeting shall be construed
accordingly. The Board will, insofar as it is practicable, announce
by advertisement in at least one newspaper with a national
circulation the date, time and place of the meeting as changed, but
it shall not be necessary to restate the business of the meeting in
that announcement.
PROCEEDINGS AT GENERAL MEETINGS
65. QUORUM
No business shall be transacted at any general meeting unless a
quorum is present when the meeting proceeds to business, but the
absence of a quorum shall not preclude the choice or appointment of a
chairman of the meeting, which shall not be treated as part of the
business of the meeting. Save as otherwise provided by these
Articles, two shareholders present in person or by proxy and entitled
to vote shall be a quorum for all purposes.
66. PROCEDURE IF QUORUM NOT PRESENT
If within five minutes (or such longer time not exceeding one hour as
the chairman of the meeting may decide to wait) after the time
appointed for the commencement of the meeting a quorum is not
present, the meeting shall (if requisitioned in accordance with the
Statutes) be dissolved or (in any other case) stand adjourned to such
other day (not being less than ten nor more than 28 days later) and
at such time and place as the chairman of the meeting may decide and
at such adjourned meeting one shareholder present in person or by
proxy (whatever the number of shares held by him) shall be a quorum.
The Company shall give not less than seven clear days' notice of any
meeting adjourned through want of a quorum and the notice shall
specify that one shareholder present in person or by proxy (whatever
the number of shares held by him) shall be a quorum.
67. CHAIRMAN OF GENERAL MEETING
67.1 The chairman (if any) of the Board or, in his absence, the deputy
chairman (if any) shall preside as chairman at every general meeting.
If there is no such chairman or deputy chairman, or if at any meeting
neither the chairman nor a deputy chairman is present within five
minutes after the time appointed for the commencement of the meeting,
or if neither of them is willing to act as chairman, the Directors
present shall choose one of their number to act, or if one Director
only is present he shall preside as chairman, if willing to act. If
no Director is present, or if each of the Directors present declines
to take the chair, the persons present and entitled to vote shall
elect one of their number to be chairman.
67.2 The chairman of the meeting may invite any person to attend and speak
at any general
-33-
meeting of the Company whom he considers to be equipped by knowledge
or experience of the Company's business to assist in the deliberations
of the meeting.
67.3 The decision of the Chairman of the meeting as to points of order,
matters of procedure or arising incidentally out of the business of a
general meeting shall be conclusive, as shall be his decision, acting
in good faith, on whether a point or matter is of this nature.
68. DIRECTORS' RIGHT TO ATTEND AND SPEAK
Each Director shall be entitled to attend and to speak at any general
meeting of the Company and at any separate general meeting of the
holders of any class of shares or debentures in the Company.
69. MEETING AT MORE THAN ONE PLACE AND/OR IN A SERIES OF ROOMS
69.1 A general meeting or adjourned meeting may be held at more than one
place. The notice of meeting will specify the place at which the
chairman will be present (the "PRINCIPAL PLACE") and a letter
accompanying the notice will specify any other place(s) at which the
meeting will be held simultaneously (but any failure to do this will
not invalidate the notice of meeting).
69.2 A general meeting or adjourned meeting will be held in one room or a
series of rooms at the place specified in the notice of meeting or
any other place at which the meeting is to be held simultaneously.
69.3 If the meeting is held in more than one place and/or in a series of
rooms, it will not be validly held unless all persons entitled to
attend and speak at the meeting are able:
69.3.1 if excluded from the Principal Place or the room in which
the chairman is present, to attend at one of the other
places or rooms; and
69.3.2 to communicate with one another audio visually throughout
the meeting.
The Board may make such arrangements as it thinks fit for
simultaneous attendance and participation at the meeting and may vary
any such arrangements or make new arrangements. Arrangements may be
notified in advance or at the meeting by whatever means the Board
thinks appropriate to the circumstances. Each person entitled to
attend the meeting will be bound by the arrangements made by the
Board.
69.4 Where a meeting is held in more than one place and/or a series of
rooms, then for the purpose of these Articles the meeting shall
consist of all those persons entitled to attend and participate in
the meeting who attend at any of the places or rooms.
70. SECURITY ARRANGEMENTS
The Board may direct that shareholders or proxies wishing to attend
any general meeting should submit to such searches or other security
arrangements or restrictions as the Board
-34-
shall consider appropriate in the circumstances and shall be entitled
in its absolute discretion to refuse entry to such general meeting to
any shareholder or proxy who fails to submit to such searches or to
otherwise comply with such security arrangements or restrictions. If a
shareholder or proxy has gained entry to a general meeting and refuses
to comply with any such security arrangements or restrictions or
disrupts the proper and orderly conduct of the general meeting, the
chairman of the meeting may at any time without the consent of the
general meeting require such shareholder or proxy to leave or be
removed from the meeting.
71. ADJOURNMENTS
71.1 The chairman of the meeting may at any time without the consent of
the meeting adjourn any meeting (whether or not it has commenced or a
quorum is present) either indefinitely or to such time and place as
he may decide if it appears to him that:
71.1.1 the shareholders wishing to attend cannot be conveniently
accommodated in the place appointed for the meeting;
71.1.2 the conduct of persons present prevents, or is likely to
prevent, the orderly continuation of business; or
71.1.3 an adjournment is otherwise necessary so that the business
of the meeting may be properly conducted.
71.2 In addition, the chairman of the meeting may at any time with the
consent of any meeting at which a quorum is present (and shall if so
directed by the meeting) adjourn the meeting either indefinitely or
to such time and place as he may decide. When a meeting is adjourned
indefinitely the time and place for the adjourned meeting shall be
fixed by the Board.
71.3 No business shall be transacted at any adjourned meeting except
business which might properly have been transacted at the meeting had
the adjournment not taken place.
72. NOTICE OF ADJOURNED MEETING
If a meeting is adjourned indefinitely or for 30 days or more or for
lack of a quorum, at least seven clear days' notice specifying the
place, the day and the time of the adjourned meeting shall be given,
but it shall not be necessary to specify in the notice the nature of
the business to be transacted at the adjourned meeting. Otherwise, it
shall not be necessary to give notice of an adjourned meeting.
-35-
VOTES OF SHAREHOLDERS
73. METHOD OF VOTING
73.1 While any of the shares are admitted to the Official List of the UK
Listing Authority, special and extraordinary resolutions shall in all
cases be decided only on a poll (whether or not one is demanded).
Otherwise, at any general meeting a resolution put to the vote of the
meeting shall be decided on a show of hands unless before or on the
declaration of the result of the show of hands or on the withdrawal
of any other demand for a poll a poll is duly demanded. Subject to
the Statutes, a poll may be demanded by:
73.1.1 the chairman of the meeting;
73.1.2 at least five shareholders present in person or by proxy and
entitled to vote at the meeting;
73.1.3 any shareholder or shareholders present in person or by
proxy and representing in aggregate at least one-tenth of
the total voting rights of all the shareholders having the
right to attend and vote at the meeting; or
73.1.4 any shareholder or shareholders present in person or by
proxy and holding shares conferring a right to attend and
vote at the meeting, being shares on which an aggregate sum
has been paid up equal to not less than one-tenth of the
total sum paid up on all the shares conferring that right.
73.2 Unless a poll is so demanded and the demand is not withdrawn, a
declaration by the chairman of the meeting that a resolution (which
is not a special or extraordinary resolution) has been carried or
carried unanimously or by a particular majority or not carried by a
particular majority or lost and an entry to that effect in the
minutes of the meeting shall be conclusive evidence of the fact
without proof of the number or proportion of the votes recorded in
favour of or against such resolution.
74. VOTES OF SHAREHOLDERS
74.1 Subject to any rights or restrictions attached to any shares and to
any other provisions of these Articles, on a show of hands every
shareholder who is present in person shall have one vote and on a
poll every shareholder shall have one vote for every share of which
he is the holder.
74.2 If the notice of the meeting has specified a time (which is not more
than 48 hours before the time fixed for the meeting) by which a
person must be entered on the Register in order to have the right to
attend and vote at the meeting, no person registered after that time
shall be eligible to attend and vote at the meeting by right of that
registration, even if present at the meeting. References in these
Articles to shareholders present in person shall be construed
accordingly.
-36-
75. VOTES OF JOINT HOLDERS
In the case of joint holders of a share the vote of the senior who
tenders a vote, whether in person or by proxy, shall be accepted to
the exclusion of the votes of the other joint holders; and seniority
shall be determined by the order in which the names of the holders
stand in the Register.
76. CORPORATIONS ACTING BY REPRESENTATIVES
A corporation which is a shareholder may by resolution of its
directors or other governing body authorise such person as it thinks
fit to act as its representative at any general meeting of the
Company or of any class of shareholders of the Company. The person so
authorised shall be entitled to exercise the same powers (other than
the power to appoint a proxy) on behalf of the corporation which he
represents as that corporation could exercise if it were an
individual shareholder of the Company and such corporation shall for
the purposes of these Articles be deemed to be present in person at
any such meeting if a person so authorised is present at that
meeting.
77. VOTES OF SHAREHOLDER SUFFERING INCAPACITY
A shareholder in respect of whom an order has been made by any
competent court or official on the ground that he is or may be
suffering from mental disorder or is otherwise incapable of managing
his affairs may vote, whether on a show of hands or on a poll, by any
person authorised in such circumstances to do so on his behalf and
that person may vote on a poll by proxy. The vote of such shareholder
shall not be valid unless evidence to the satisfaction of the Board
of the authority of the person claiming to exercise the right to vote
is deposited at the Office, or at such other place as is specified in
accordance with these Articles for the deposit of appointments of
proxy otherwise than by electronic communication, not later than the
last time at which an appointment of proxy should have been delivered
in order to be valid for use at that meeting or on the holding of
that poll.
78. NO RIGHT TO VOTE WHERE SUMS OVERDUE ON SHARES
No shareholder shall, unless the Board otherwise decides, vote at any
general meeting or at any separate meeting of holders of any class of
shares in the Company, either in person or by proxy, or exercise any
other right or privilege as a shareholder in respect of any share in
the Company held by him unless all monies presently payable by him in
respect of that share have been paid.
79. VOTES ON A POLL
On a poll votes may be given either personally or by proxy. A
shareholder may appoint more than one proxy to attend on the same
occasion. A shareholder entitled to more than one vote on a poll need
not use all his votes or cast all the votes he uses in the same way.
-37-
80. RIGHT TO WITHDRAW DEMAND FOR A POLL
The demand for a poll may, before the earlier of the close of the
meeting and the taking of the poll, be withdrawn but only with the
consent of the chairman of the meeting and, if a demand is withdrawn,
any other shareholders entitled to demand a poll may do so. If a
demand is withdrawn, it shall not be taken to have invalidated the
result of a show of hands declared before the demand was made. If a
poll is demanded before the declaration of the result of a show of
hands and the demand is duly withdrawn, the chairman of the meeting
may give whatever directions he considers necessary to ensure that
the business of the meeting proceeds as it would have if the demand
had not been made.
81. PROCEDURE IF POLL DEMANDED
If a poll is duly demanded, it shall be taken in such manner as the
chairman of the meeting directs and he may appoint scrutineers (who
need not be shareholders) and fix a time and place for declaring the
result of the poll. The result of the poll shall be deemed to be the
resolution of the meeting at which the poll was demanded.
82. WHEN POLL TO BE TAKEN
A poll demanded on the election of a chairman of the meeting or on a
question of adjournment shall be taken forthwith. A poll demanded on
any other question shall be taken either forthwith or on such date
(being not more than 30 days after the poll is demanded) and at such
time and place and in such manner or by such means as the chairman of
the meeting directs. No notice need be given of a poll not taken
immediately if the time and place at which it is to be taken are
announced at the meeting at which it is demanded. In any other case,
at least seven clear days' notice shall be given specifying the time
and place at which the poll is to be taken. The result of the poll
shall be deemed to be the resolution of the meeting at which the poll
was demanded.
83. CONTINUANCE OF OTHER BUSINESS AFTER POLL DEMANDED
The demand for a poll shall not prevent the continuance of a meeting
for the transaction of any business other than the question on which
the poll was demanded.
84. CHAIRMAN'S CASTING VOTE
In the case of an equality of votes at a general meeting, whether on
a show of hands or on a poll, the chairman of the meeting shall be
entitled to a casting vote in addition to any other vote he may have.
85. PROPOSAL OR AMENDMENT OF RESOLUTION
A resolution proposed by the chairman of the meeting does not need to
be seconded. In the case of a resolution duly proposed as an
extraordinary or special resolution, no
-38-
amendment to that resolution (other than an amendment to correct a
patent error) may be considered or voted upon. In the case of a
resolution duly proposed as an ordinary resolution no amendment to
that resolution (other than an amendment to correct a patent error)
may be considered or voted upon unless at least two clear business
days prior to the time appointed for holding the meeting or adjourned
meeting at which such ordinary resolution is to be proposed, notice of
the terms of the amendment and of the intention to move the amendment
has been (i) lodged in writing at the Office or (ii) received by
electronic communication at the address specified for the purpose of
receiving electronic communications in an electronic communication
containing the notice of meeting, or the chairman of the meeting in
his absolute discretion decides in good faith that it may be
considered and voted upon.
86. AMENDMENT OF RESOLUTION RULED OUT OF ORDER
If an amendment is proposed to any resolution under consideration
which the chairman of the meeting rules out of order, the proceedings
on the substantive resolution shall not be invalidated by any error
in such ruling.
87. OBJECTIONS OR ERRORS IN VOTING
If:
87.1.1 any objection shall be raised to the qualification of any
voter;
87.1.2 any votes have been counted which ought not to have been
counted or which might have been rejected; or
87.1.3 any votes are not counted which ought to have been counted
the objection or error shall not vitiate the decision of the meeting
or adjourned meeting on any resolution unless it is raised or pointed
out at the meeting or, as the case may be, the adjourned meeting at
which the vote objected to is given or tendered or at which the error
occurs. Any objection or error shall be referred to the chairman of
the meeting and shall only vitiate the decision of the meeting on any
resolution if the chairman of the meeting decides that the same may
have affected the decision of the meeting. The decision of the
chairman of the meeting on such matters shall be conclusive.
PROXIES
88. EXECUTION OF AN APPOINTMENT OF PROXY
88.1 If the appointment of a proxy is:
88.1.1 an instrument not contained in an electronic communication,
it shall be executed under the hand of the appointor or of
his attorney authorised in writing or, if the appointor is
a corporation, either under its seal or under the hand of
an officer, attorney or other person authorised to sign it;
-39-
88.1.2 contained in an electronic communication, it shall be
executed by or on behalf of the appointor.
Subject as provided in this Article, in the case of an appointment of
proxy purporting to be executed on behalf of a corporation by an
officer of that corporation it shall be assumed, unless the contrary
is shown, that such officer was duly authorised to do so on behalf of
that corporation without further evidence of that authorisation.
88.2 The Board may (but need not) allow proxies to be appointed by means
of electronic communication, and if it does it may make such
appointments subject to such stipulations, conditions or
restrictions, and require such evidence of valid execution, as the
Board thinks fit.
88.3 A proxy need not be a shareholder.
89. TIMES FOR DELIVERY OF AN APPOINTMENT OF PROXY
89.1 The appointment of a proxy and (if required under these Articles) the
power of attorney or other authority under which it is signed, or a
copy of such authority certified notarially or in some other way
approved by the Board, shall:
89.1.1 in the case of an instrument not contained in an electronic
communication, be deposited at the Office (or at such other
place within the United Kingdom as is specified for the
purpose in the notice convening the meeting or in the
instrument) not less than 48 hours before the time of the
holding of the meeting or adjourned meeting at which the
person named in the appointment proposes to vote; or
89.1.2 in the case of an appointment contained in an electronic
communication, where an address has been specified for the
purpose of receiving electronic communications:
(a) in the notice convening the meeting, or
(b) in any instrument of proxy sent out by the Company in
relation to the meeting, or
(c) in any invitation contained in an electronic
communication to appoint a proxy issued by the Company
in relation to the meeting,
be received at such address (or, where the thing in
question is not contained in an electronic communication,
at the Office or at such other place as may be specified
for the purpose) not less than 48 hours before the time for
holding the meeting or adjourned meeting at which the
person named in the appointment proposes to vote;
-40-
89.1.3 in the case of a poll taken more than 48 hours after it is
demanded, be deposited or received as aforesaid after the
poll has been demanded and not less than 24 hours before
the time appointed for the taking of the poll; or
89.1.4 where the poll is not taken forthwith but is taken not more
than 48 hours after it was demanded, be delivered at the
meeting at which the poll was demanded to the chairman of
the meeting or to any Director,
and an appointment of proxy which is not deposited, delivered or
received in a manner so permitted shall be invalid.
89.2 When two or more valid but differing appointments of proxy are
deposited, delivered or received in respect of the same share for use
at the same meeting, the one which is last deposited, delivered or
received (regardless of its date or of the date of execution) shall
be treated as replacing the others as regards that share; if the
Company is unable to determine which was last deposited, delivered or
received, none of them shall be treated as valid in respect of that
share. The deposit, delivery or receipt of an appointment of a proxy
shall not preclude a shareholder from attending and voting in person
at the meeting or poll concerned.
90. FORM OF APPOINTMENT OF PROXY
90.1 The appointment of a proxy shall be in any usual form or any other
form which the Board may approve and may relate to more than one
meeting. The Board may, if it thinks fit but subject to the Statutes,
include with the notice of any meeting forms of appointment of proxy
for use at the meeting.
90.2 The appointment of a proxy shall be deemed to include the right:
90.2.1 to demand or join in demanding a poll;
90.2.2 to speak at the meeting to the same extent as his appointor
would be entitled to if present in person; and
90.2.3 (except to the extent that the appointment comprises
instructions to vote in a particular way) to vote or
abstain as the proxy thinks fit on any business properly
dealt with at the meeting, including a vote on any
amendment of a resolution put to the meeting or on any
motion to adjourn.
90.3 The appointment shall, unless the contrary is stated in it, be as
valid for any adjournment of the meeting as for the meeting to which
it relates (regardless of any change of date, time or place effected
in accordance with these Articles).
91. VALIDITY OF PROXY
A vote given or poll demanded by proxy or by the duly authorised
representative of a corporation shall be valid, notwithstanding the
previous determination of the authority of
-41-
the person voting or demanding a poll unless notice of such
determination was received by the Company at the Office (or at such
other place at which the instrument of proxy was duly deposited or,
where the appointment of the proxy was contained in an electronic
communication, at the address at which such appointment was duly
received) not later than the last time at which an appointment of
proxy should have been deposited, delivered or received in order to be
valid for use at the meeting or on the holding of the poll at which
the vote was given or the poll demanded.
92. MAXIMUM VALIDITY OF PROXY
An appointment of proxy shall cease to be valid after the expiration
of 12 months from the date of its execution except that it will
remain valid after that for the purposes of a poll or an adjourned
meeting if the meeting at which the poll was demanded or the
adjournment moved was held within the 12 month period.
DIRECTORS
93. NUMBER OF DIRECTORS
Unless otherwise determined by ordinary resolution of the Company,
the number of Directors (disregarding alternate directors) shall not
be less than two but shall not be subject to any maximum number.
94. NO SHAREHOLDING QUALIFICATION FOR DIRECTORS
No shareholding qualification for Directors shall be required.
REMUNERATION OF DIRECTORS
95. ORDINARY REMUNERATION
Each of the Directors (other than any Director who for the time being
holds an executive office or employment with the Company or a
subsidiary of the Company) shall be paid a fee for his services at
such rate as may from time to time be determined by the Board or by a
committee authorised by the Board provided that the aggregate of such
fees (excluding any amounts payable under any other provision of
these Articles) shall not exceed (pound)500,000 per annum or such
higher amount as the Company by ordinary resolution may determine
from time to time. Such fee shall be deemed to accrue from day to
day.
96. EXPENSES
The Directors may be paid all travelling, hotel and other expenses
properly incurred by them in the conduct of the Company's business
performing their duties as Directors
-42-
including all such expenses incurred in connection with attending and
returning from meetings of the Board or any committee of the Board or
general meetings or separate meetings of the holders of any class of
shares or debentures of the Company or otherwise in connection with
the business of the Company.
97. EXTRA REMUNERATION
Any Director who is appointed to any executive office or who serves
on any committee or who devotes special attention to the business of
the Company or goes or resides abroad for any purposes of the Company
shall receive such remuneration or extra remuneration by way of
salary, commission, participation in profits or otherwise as the
Board or any committee authorised by the Board may determine in
addition to or in lieu of any remuneration paid to, or provided for,
such Director by or pursuant to any other of these Articles.
ALTERNATE DIRECTORS
98. APPOINTMENT, REMOVAL AND RESIGNATION
98.1 Any Director (other than an alternate Director) may, by notice in
writing which is delivered to the Secretary at the Office or
delivered in any other manner (including by electronic communication)
approved by the Board, appoint any person to be his alternate and may
revoke any such appointment. If the alternate Director is not already
a Director, the appointment, unless previously approved by the Board,
shall have effect only upon and subject to its being so approved. Any
appointment of an alternate will only have effect once the person who
is to be appointed has consented to act. If his appointor so
requests, an alternate Director shall (subject to his giving to the
Company an address for service within the United Kingdom) be entitled
to receive notice of all meetings of the Board or of committees of
the Board of which his appointor is a member, to attend and vote and
be counted in the quorum as a Director at any such meeting at which
his appointor is not personally present, and generally, in the
absence of his appointor, at the meeting to exercise and discharge
all the functions, powers and duties of his appointor as a Director
and for the purposes of the proceedings at the meeting, these
Articles shall apply as if he were a Director.
98.2 A Director present at a meeting of the Board or committee of the
Board and appointed alternate for another Director shall have an
additional vote for each of his appointors absent from such meeting
(but shall count as one only for the purpose of determining whether a
quorum is present).
98.3 Execution by an alternate Director of any document (including,
without limitation, any deed) on behalf of the Company or any
resolution in writing of the Board or a committee of the Board shall,
unless the notice of his appointment provides to the contrary, be as
effective as execution by his appointor.
98.4 An alternate Director shall cease to be an alternate Director if he
resigns or if for any
-43-
reason his appointment is revoked or if his appointor ceases to be a
Director; but, if a Director retires by rotation or otherwise but is
reappointed or deemed to have been reappointed at the meeting at which
he retires, any appointment of an alternate Director made by him which
was in force immediately prior to his retirement shall continue after
his reappointment as if he had not retired. The appointment of an
alternate Director shall be revoked on the happening of any event
which, if he were a Director, would cause him to vacate such office
under these Articles. All appointments and revocations of appointments
and resignations of alternate Directors shall be in writing and left
at the Office or delivered at a meeting of the Board, or in any other
manner approved by the Board.
99. ALTERNATE TO BE RESPONSIBLE FOR HIS OWN ACTS AND REMUNERATION OF
ALTERNATE
An alternate Director shall be deemed an officer of the Company and
shall be subject to these Articles relating to Directors (except as
regards power to appoint an alternate and remuneration) and an
alternate Director shall not be deemed the agent of his appointor and
shall alone be responsible to the Company for his acts and defaults.
An alternate Director may contract and be interested in and benefit
from contracts or arrangements or transactions and be paid expenses
and indemnified to the same extent as if he were a Director but, save
to the extent that his appointor directs the payment to him of part
or all of the remuneration which would otherwise be payable to his
appointor, he shall not be entitled to any remuneration from the
Company for acting in that capacity.
EXECUTIVE DIRECTORS
100. EXECUTIVE DIRECTORS
100.1 The Board or any committee authorised by the Board may from time to
time appoint one or more of its body to hold any employment or
executive office with the Company for such period (subject to the
Statutes) and on such other terms as the Board or any committee
authorised by the Board may decide and may revoke or terminate any
appointment so made. Any revocation or termination of the appointment
shall be without prejudice to any claim for damages that the Director
may have against the Company or that the Company may have against the
Director for any breach of any contract of service between him and
the Company. A Director so appointed may be paid such remuneration
(whether by way of salary, commission, participation in profits or
otherwise) in such manner as the Board or any committee authorised by
the Board may decide and either in addition to or in place of his
ordinary remuneration as a Director.
100.2 The Board may from time to time appoint any person to any office or
employment having a descriptive designation or title including the
word "director" or attach to any existing office or employment with
the Company such a designation or title and may at any time determine
any such appointment or the use of any such designation or title. The
inclusion of the word "director" in the designation or title of any
such office or employment with the Company shall not imply that the
holder of the office is a director of the Company nor shall such
holder thereby be empowered in any respect to act as a director of
the Company or be deemed to be a director for any of the purposes of
the Statutes or these Articles.
-44-
POWERS AND DUTIES OF DIRECTORS
101. GENERAL POWERS OF THE COMPANY VESTED IN THE BOARD
Subject to the Statutes, the Memorandum of Association of the Company
and these Articles and to any directions given by the Company in
general meeting by special resolution, the business of the Company
shall be managed by the Board which may exercise all the powers of
the Company. No alteration of the Memorandum of Association or these
Articles and no such special resolution shall invalidate any prior
act of the Board which would have been valid if that alteration had
not been made or that resolution had not been passed. The powers
given by this Article shall not be limited by any special power given
to the Board by any other Article.
DELEGATION OF DIRECTORS' POWERS
102. AGENTS
The Board may, by power of attorney or otherwise, appoint any person
to be the agent of the Company on such terms (including terms as to
remuneration) and subject to such conditions as it may decide and may
delegate to any person so appointed any of its powers, authorities
and discretions (with power to sub-delegate). The Board may remove
any person so appointed and may revoke or vary the delegation but no
person dealing in good faith and without notice of the revocation or
variation shall be affected by it. The power to delegate contained in
this Article shall be effective in relation to the powers,
authorities and discretions of the Board generally and shall not be
limited by the fact that in certain Articles, but not in others,
express reference is made to particular powers, authorities or
discretions being exercised by the Board or by committee authorised
by the Board.
103. DELEGATION TO INDIVIDUAL DIRECTORS
The Board may entrust to and confer upon a Director any of its
powers, authorities and discretions (with power to sub-delegate) upon
such terms (subject to the Statutes) and subject to such conditions
and with such restrictions as it may decide and either collaterally
with or to the exclusion of its own powers, authorities and
discretions. The Board may from time to time revoke or vary all or
any of them but no person dealing in good faith and without notice of
the revocation or variation shall be affected by it. The power to
delegate contained in this Article shall be effective in relation to
the powers, authorities and discretions of the Board generally and
shall not be limited by the fact that in certain Articles, but not in
others, express reference is made to particular powers, authorities
or discretions being exercised by the Board or by a committee
authorised by the Board.
104. DELEGATION TO COMMITTEES
104.1 The Board may delegate any of its powers, authorities and discretions
(with power to sub-
-45-
delegate) to any committee consisting of such person or persons as it
thinks fit (whether a member or members of its body or not) provided
that the majority of the members of the committee are Directors.
Subject to any restriction on sub-delegation imposed by the Board, any
committee so formed may exercise its power to sub-delegate by
sub-delegating to any person or persons (whether or not a member or
members of the Board or of the committee). Subject to any regulations
imposed on it by the Board, the proceedings of any committee
consisting of two or more members shall be governed by the provisions
in these Articles for regulating proceedings of the Board so far as
applicable except that no meeting of that committee shall be quorate
for the purpose of exercising any of its powers, authorities or
discretions unless a majority of the committee present at the meeting
are Directors. A member of a committee shall be paid such remuneration
(if any) in such manner as the Board may decide, and, in the case of a
Director, either in addition to or in place of his ordinary
remuneration as a Director.
104.2 The power to delegate contained in this Article shall be effective in
relation to the powers, authorities and discretions of the Board
generally and shall not be limited by the fact that in certain
Articles, but not in others, express reference is made to particular
powers, authorities or discretions being exercised by the Board or by
a committee authorised by the Board.
105. POWER TO ESTABLISH LOCAL BOARDS ETC.
The Board may:
105.1 establish any divisional, departmental, regional, local or area
boards, divisions or managing agencies for introducing, conducting or
managing all or any of the business or affairs of the Company, either
in the United Kingdom or elsewhere;
105.2 make regulations for the proceedings and activities of any such
establishment (but so that otherwise its proceedings shall be
governed by those of these Articles which regulate proceedings of the
Board to the extent that they are capable of applying to it);
105.3 appoint any persons (whether Directors or not) as regional directors,
local directors, divisional directors, area directors, advisory
directors, managers or agents or to serve in any other capacity in
connection with any such establishment, and may fix their
remuneration;
105.4 delegate to any such establishment and to any such appointee
(including anyone appointed before this Article was adopted) any of
the powers, authorities and discretions vested in the Board, with
power to sub-delegate;
105.5 authorise any such appointees to fill any vacancies in any such
establishment and to act notwithstanding vacancies,
provided that any such appointment or delegation shall be made upon
such terms and subject to such conditions as the Board may think fit,
and the Board may remove any persons so appointed, and may revoke,
suspend or vary any such delegation but this shall not affect the
position of any person dealing in good faith who has not had notice
that the
-46-
Board has done so. No such appointee shall be a Director as such or be
entitled to be present at any meeting of the Board (except at the
request of the Board and, if present at such request, he shall not be
entitled to vote at that meeting) or have power under the terms of
this Article to enter into any contract or transact any business on
behalf of the Company except to the extent (if any) specifically
authorised by the Board.
SPECIFIC POWERS
106. PROVISION FOR EMPLOYEES
The Board may exercise any power conferred by the Statutes to make
provision for the benefit of persons employed or formerly employed by
the Company or any of its subsidiaries in connection with the
cessation or the transfer to any person of the whole or part of the
undertaking of the Company or that subsidiary.
107. BORROWING POWERS
107.1 The Board may exercise all the powers of the Company to borrow money
and to mortgage or charge all or any part of the undertaking,
property and assets (present and future) and uncalled capital of the
Company and, subject to the Statutes, to issue debentures and other
securities, whether outright or as collateral security, for any debt,
liability or obligation of the Company or of any third party.
107.2 The Board shall restrict the borrowings of the Company and exercise
all voting and other rights or powers of control exercisable by the
Company in relation to its subsidiary undertakings (if any) so as to
secure (but as regards subsidiary undertakings only in so far as by
the exercise of such rights or powers of control the Board can
secure) that the aggregate principal amount from time to time
outstanding of all borrowings by the Group (exclusive of borrowings
owing by one member of the Group to another member of the Group)
shall not at any time without the previous sanction of an ordinary
resolution of the Company exceed an amount equal to four times the
Adjusted Capital and Reserves.
107.3 For the purposes of this Article:
107.3.1 the "ADJUSTED CAPITAL AND RESERVES" means the aggregate of:
(a) the amount paid up on the issued share capital of the
Company;
(b) the amounts standing to the credit of the capital and
revenue reserves of the Company and its subsidiary
undertakings (including any share premium account,
capital redemption reserve, reserves arising on a
revaluation of fixed assets or on consolidation and any
credit balance on profit and loss account);
(c) the amounts, so far as attributable to the Company or a
subsidiary undertaking, standing to the credit of
investment grants equalisation
-47-
account, deferred regional development grants
equalisation account or any other equalisation account
of a similar nature; and
(d) the amounts, so far as attributable to the Company or a
subsidiary undertaking, set aside for the purpose of
deferred tax or any other account of a similar nature;
as shown by the then latest audited balance sheet but after:
(e) making such adjustments as may be appropriate to
reflect any variation in the amount of the paid up
share capital or reserves since the date of the
relevant audited balance sheet and any variation in the
amounts attributable to the interest of the Company in
the share capital of any subsidiary undertaking and so
that for this purpose if any issue or proposed issue of
shares by a member of the Group for cash has been
underwritten then such shares shall be deemed to have
been issued and the amount (including any premium) of
the subscription monies payable in respect thereof (not
being monies payable later than six months after the
date of allotment) shall to the extent so underwritten
be deemed to have been paid up on the date when the
issue of such shares was underwritten (or, if such
underwriting was conditional, on the date when it
became unconditional);
(f) making such adjustments as may be appropriate in
respect of any distribution declared, recommended or
made by any member of the Group (otherwise than to a
member of the Group) out of profits earned up to and
including the date of the audited balance sheet of the
Group to the extent that such distribution is not
provided for in such balance sheet;
(g) deducting the amount of any debit balance on profit and
loss account existing at the date of the relevant
audited balance sheet to the extent that a deduction
has not already been made on that account;
(h) adding back sums equivalent to the amount of goodwill
arising on acquisitions of companies and businesses
remaining part of the Group at the date of calculation
and which, at that date, had been written off against
share capital and reserves in accordance with United
Kingdom accounting practice; and
(i) making such other (if any) adjustments as the Auditors
after consultation with the Board may consider
appropriate.
107.3.2 "BORROWINGS" include not only items referred to as
borrowings in the audited balance sheet but also the
following, except in so far as otherwise taken into
account:
(a) the nominal amount of any issued share capital and the
principal amount of any debentures or borrowed monies
of any person, the beneficial
-48-
interest in which is not for the time being owned by a
member of the Group, and the payment or repayment of
which is the subject of a guarantee or indemnity by a
member of the Group or is secured on the assets of any
member of the Group;
(b) the outstanding amount raised by acceptances by any
bank or accepting house under any acceptance credit
opened on behalf of and in favour of any member of the
Group, not being acceptances of trade bills for the
purchase of goods or services in the ordinary course of
business;
(c) the principal amount of any debenture (whether secured
or unsecured) of a member of the Group, which debenture
is owned otherwise than by another member of the Group
Provided that where the amount raised by the Company or
any of its subsidiary undertakings by the issue of any
debentures, debenture stocks, loan stocks, bonds, notes
or other indebtedness is less than the nominal or
principal amount thereof (including for these purposes
any fixed or minimum premium payable on final
redemption or repayment but disregarding the expenses
of any such issue) the amount to be treated as monies
borrowed for the purpose of this Article shall, so long
as the nominal or principal amount of such monies
borrowed is not presently due and payable, be the
nominal or principal amount thereof (together with any
fixed or minimum premium payable on final redemption or
repayment) but after deducting therefrom the unexpired
portion of any discount applied to such amount in the
audited balance sheet of the Group. Any references in
this Article to debentures or monies borrowed or the
nominal or principal amount thereof shall, accordingly,
be read subject to this Article 107.3.2(c);
(d) the principal amount of any preference share capital of
any subsidiary undertaking owned otherwise than by a
member of the Group;
(e) any fixed or minimum premium payable on the repayment
of any borrowing or deemed borrowing; and
(f) the capital value of any financial lease required to be
capitalised and treated as a liability in the audited
balance sheet by any applicable accounting standard (as
defined in section 256 of the Act) from time to time in
force;
but do not include:
(g) monies borrowed by a member of the Group for the
purpose of repaying the whole or any part of any
borrowings of such member of the Group or any other
member of the Group for the time being outstanding and
so to be applied within six months of being so
borrowed, pending their application for such purpose
within such period;
(h) monies borrowed by a member of the Group for the
purpose of financing any contract in respect of which
any part of the price receivable
-49-
by that member or any other member of the Group is
guaranteed or insured by the Export Credits Guarantee
Department, or by any other governmental department or
agency fulfilling a similar function, up to an amount
equal to that part of the price receivable under the
contract which is so guaranteed or insured;
(i) for a period of twelve months from the date upon which
a company becomes a member of the Group, an amount
equal to the monies borrowed by such company
outstanding at the date when it becomes such a member
provided always that monies borrowed by the Group
(including monies otherwise excluded by the application
of this sub-paragraph) must not exceed an amount equal
to five times the Adjusted Capital and Reserves; and
(j) an amount equal to the minority proportion of
monies borrowed by a partly owned subsidiary of the
Group (after excluding any monies borrowed owing
between members of the Group) except to the extent that
such monies borrowed are guaranteed by the Company or
any wholly owned subsidiary undertaking of the Company.
For these purposes the minority proportion shall be the
proportion of the issued equity share capital of such
partly owned subsidiary which is not for the time being
beneficially owned within the Group. Monies borrowed by
a member of the Group from a partly owned subsidiary of
the Group which would fall to be excluded as being
monies borrowed owing between members of the Group
shall nevertheless be included to the extent of an
amount equal to such minority proportion of such monies
borrowed; and
(k) sums advanced or paid to any member of the Group (or
its agents or nominee) by customers of any member of
the Group as unexpended customer receipts or progress
payments pursuant to any contract between such customer
and a member of the Group in relation thereto;
provided that, in calculating borrowings under this Article
there shall be credited (subject, in the case of any item
held or deposited by a partly owned subsidiary undertaking,
to the exclusion of a proportion thereof equal to the
proportion of the issued equity share capital of the partly
owned subsidiary undertaking which is not attributable to
the Company or any subsidiary undertaking of the Company)
against the amount of any monies borrowed the aggregate of:
(i) cash in hand of the Group; and
(ii) cash deposits and the balance on each current
account of the Group with banks in the United
Kingdom and/or elsewhere if the remittance of the
cash to the United Kingdom is not prohibited by
any law, regulation, treaty or official
directive; and
(iii) the amount of all assets ("SHORT TERM ASSETS") as
might be included in "Investments - short term
loans and deposits" in a
-50-
consolidated balance sheet of the Group prepared
as at the date of the relevant calculation in
accordance with the principles with which the
then latest audited balance sheet was produced;
and
(iv) the amount of any cash or short term assets
securing the repayment by the Group of any amount
borrowed by the Group deposited or otherwise
placed with the trustee or similar entity in
respect of the relevant borrowing; and
107.3.3 where the aggregate principal amount of borrowings required
to be taken into account for the purposes of this Article
on any particular date is being ascertained:
(a) monies borrowed by the Company or any subsidiary
undertaking expressed in or calculated by reference to
a currency other than sterling shall be converted into
sterling by reference to the rate of exchange used for
the conversion of such currency in preparation of the
audited balance sheet which forms the basis of the
calculation of the Adjusted Capital and Reserves or, if
such calculation did not involve the relevant currency,
by reference to the rate of exchange or approximate
rate of exchange ruling as at the date of the aforesaid
audited balance sheet as the Auditors may consider
appropriate for this purpose; and
(b) if under the terms of any borrowing, the amount of
money that would be required to discharge the principal
amount of such borrowing in full if it fell to be
repaid (at the option of the Company or by reason of
default) on such date is less than the amount that
would otherwise be taken into account in respect of
such borrowing for the purpose of this Article, the
amount of such borrowing to be taken into account for
the purpose of this Article shall be such lesser
amount;
107.3.4 "AUDITED BALANCE SHEET" means the audited balance sheet of
the Company prepared for the purposes of the Statutes or, if
an audited consolidated balance sheet of the Company and its
subsidiary undertakings (with such exceptions as may be
permitted in the case of a consolidated balance sheet
prepared for the purposes of the Statutes) has been prepared
for those purposes for the same financial year, means that
audited consolidated balance sheet in which event all
references to reserves and profit and loss account shall be
deemed to be references to consolidated reserves and
consolidated profit and loss account respectively and there
shall be excluded any amounts attributable to outside
interests in subsidiary undertakings;
107.3.5 the Company may from time to time change the accounting
convention on which the audited balance sheet is based,
provided that any new convention adopted complies with the
requirements of the Statutes; if the Company should prepare
its main audited balance sheet on the basis of one such
convention, but a supplementary audited balance sheet or
statement on the basis of another, the main audited balance
sheet shall be taken as the audited balance sheet for the
purposes of this Article;
-51-
107.3.6 no amount shall be taken into account more than once in the
same calculation; and
107.3.7 the "GROUP" means the Company and its subsidiary
undertakings (if any) other than those subsidiary
undertakings authorised or required to be excluded from
consolidation in the Company's group accounts pursuant to
section 229 of the Act.
107.4 The report or opinion of the Auditors as to the amount of the
Adjusted Capital and Reserves at any time shall be conclusive and
binding on all concerned. Nevertheless the Board may act in reliance
on a bona fide estimate of the amount of the Adjusted Capital and
Reserves at any time and if in consequence the limit contained in
this Article 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 report or opinion of the
Auditors or otherwise the Board became aware that such a situation
has or may have arisen.
107.5 Notwithstanding the foregoing, no lender or other person dealing with
the Company shall be concerned to see or inquire whether the limit
imposed by this Article is observed and no borrowing incurred or
security given in excess of such limit shall be invalid or
ineffectual, except in the case of express notice to the lender or
the recipient of the security at the time when the borrowing was
incurred or the security given that the limit imposed by this Article
had been or was thereby exceeded.
APPOINTMENT, RETIREMENT AND REMOVAL OF DIRECTORS
108. NUMBER TO RETIRE BY ROTATION
108.1 Any Director not otherwise required to retire at an annual general
meeting shall do so unless he was appointed or re-appointed as a
Director at either of the last two annual general meetings before
that meeting.
108.2 At every annual general meeting one-third of the Directors or, if
their number is not three or a multiple of three, the number which is
nearest to but not greater than one-third (unless there are fewer
than three Directors, in which case one of those Directors) shall
retire. Subject to the Statutes and these Articles, the Directors to
retire by rotation on each occasion (both as to number and identity)
shall be determined by the composition of the Board at start of
business on the date of the notice convening the annual general
meeting and shall comprise: first, any Director who wishes to retire
and not to offer himself for re-election; and secondly, those who
have been longest in office since their last appointment or
reappointment (but as between persons who became or were last
reappointed Directors on the same day, those to retire shall be
determined by lot or as the Directors concerned may agree among
themselves). No Director shall be required to retire or be relieved
from retiring by reason of any change in the number or identity of
the Directors after that time on the date of the notice but before
the close of the meeting.
-52-
109. POSITION OF RETIRING DIRECTOR
Subject to these Articles, the Company at the meeting at which a
Director retires may fill the vacated office and, in default, the
retiring Director shall, if willing to act, be deemed to have been
reappointed unless at the meeting it is resolved not to fill the
vacancy or unless a resolution for the reappointment of the Director
is put to the meeting and lost. If he is not reappointed or deemed to
be reappointed, he shall retain office until the meeting appoints
someone in his place or, if it does not do so, until the end of the
meeting.
110. ELIGIBILITY FOR APPOINTMENT AS A DIRECTOR
No person other than a Director retiring, whether by rotation or
otherwise, shall be appointed or reappointed a Director at any
general meeting unless:
110.1 he is recommended by the Board; or
110.2 not less than seven nor more than 42 clear days before the day
appointed for the meeting, notice executed by a shareholder qualified
to vote at the meeting (not being the person to be proposed) has been
delivered to the Office (or received by electronic communication at
the address specified for the purpose of receiving electronic
communications in an electronic communication containing the notice
of meeting) of the intention to propose that person for appointment
or reappointment stating the particulars which would, if he were so
appointed or reappointed, be required to be included in the Company's
register of Directors together with notice executed by that person of
his willingness to be appointed or reappointed.
111. POWER OF THE COMPANY TO APPOINT DIRECTORS
Subject to these Articles, the Company may by ordinary resolution
appoint any person who is willing to act to be a Director, either to
fill a vacancy on or as an addition to the existing Board, but so
that the total number of Directors shall not at any time exceed any
maximum number fixed by or in accordance with these Articles. A
resolution for the appointment of two or more persons as Directors by
a single resolution shall be void unless a resolution that it shall
be so proposed has first been agreed to by the meeting without any
vote being given against it.
112. POWER OF THE BOARD TO APPOINT DIRECTORS
Without prejudice to the power of the Company in general meeting
under these Articles to appoint any person to be a Director, the
Board may appoint a person who is willing to act to be a Director,
either to fill a vacancy or as an addition to the existing Board, but
so that the total number of Directors shall not at any time exceed
any maximum number fixed by or in accordance with these Articles. Any
Director so appointed shall hold office only until the next following
annual general meeting and shall not be taken into account in
determining the Directors or the number of Directors who are to
retire by rotation at the meeting. If not reappointed at such annual
general meeting, he shall vacate office at the
-53-
conclusion of the meeting.
113. COMPANY'S POWER TO REMOVE A DIRECTOR AND APPOINT ANOTHER IN HIS PLACE
In addition to any power conferred by the Statutes, the Company may
by an ordinary resolution remove any Director before the expiration
of his period of office and may, subject to these Articles, by
ordinary resolution appoint another person who is willing to act to
be a Director in his place. Any person so appointed shall be treated,
for the purposes of determining the time at which he or any other
Director is to retire, as if he had become a Director on the day on
which the person in whose place he is appointed was last appointed or
reappointed a Director.
114. VACATION OF OFFICE BY DIRECTORS
Without prejudice to the provisions for retirement by rotation or
otherwise contained in these Articles, the office of a Director shall
be vacated if:
114.1 he resigns his office by notice delivered to the Office or tendered at
a meeting of the Board;
114.2 he becomes bankrupt or makes any arrangement or composition with his
creditors generally;
114.3 he is or has been suffering from mental ill health or becomes a
patient for any purpose of any statute relating to mental health and
the Board resolves that his office is vacated;
114.4 without the permission of the Board, he is absent from meetings of
the Board for six consecutive months (whether or not an alternate
appointed by him attends) and the Board resolves that his office is
vacated;
114.5 he ceases to be a Director by virtue of the Statutes or is prohibited
by law from being a Director or is removed from office under these
Articles;
114.6 his resignation is requested by all other Directors (provided those
Directors are not less than three in number) by notice delivered to
the Office or tendered at a meeting of the Board and, for this
purpose, like notices each signed by a Director shall be as effective
as a single notice signed by all the Directors; or
114.7 his contract of service as a Director expires or is terminated without
being renewed within 14 days.
115. DIRECTOR NOT TO RETIRE ON ACCOUNT OF AGE
No person shall be disqualified from being appointed a Director, and
no Director shall be required to vacate that office, by reason only
of the fact that he has attained the age of 70 years or any other age
nor shall it be necessary by reason of his age to give special notice
under the Statutes of any resolution. Where the Board convenes any
general meeting of the Company at which (to the knowledge of the
Board) a Director will be proposed for
-54-
appointment or reappointment who will have attained the age of 70
years or more at the date for which the meeting is convened, the Board
shall give notice of his age in years in the notice convening the
meeting or in any document accompanying the notice, but the accidental
omission to do so shall not invalidate any proceedings, or any
appointment or reappointment of that Director, at that meeting.
DIRECTORS' INTERESTS
116. CONTRACTS BETWEEN A DIRECTOR AND THE COMPANY OR A COMPANY IN WHICH THE
COMPANY IS INTERESTED
116.1 A Director who, to his knowledge, is in any way, whether directly or
indirectly, interested in a contract with the Company shall declare
the nature of his interest at the meeting of the Board at which the
question of entering into the contract is first taken into
consideration if he knows his interest then exists or, in any other
case, at the first meeting of the Board after he knows that he is or
has become so interested. A general notice to the Board by a Director
to the effect that:
116.1.1 he is a member of a specified company or firm and is to be
regarded as interested in any contract which may after the
date of the notice be made with that company or firm; or
116.1.2 he is to be regarded as interested in any contract which
may after the date of the notice be made with a specified
person who is connected with him,
shall be deemed to be a sufficient declaration of interest under this
Article in relation to any such contract.
For the purposes of this Article 116:
116.1.3 a general notice given to the Board that a Director is to
be regarded as having an interest of the nature and extent
specified in the notice in any contract in which a
specified person or class of persons is interested shall be
deemed to be a disclosure that the Director has an interest
in any such contract of the nature and extent so specified;
and
116.1.4 an interest of which a Director has no knowledge and of
which it is unreasonable to expect him to have knowledge
shall not be treated as his interest.
116.2 Subject to the Statutes, and provided that a Director has disclosed
to the Board the nature and extent of his material interest, that
Director notwithstanding his office:
116.2.1 may hold any other office or place of profit with the
Company (except that of Auditor) in conjunction with the
office of Director and may act by himself or through his
firm in a professional capacity for the Company (otherwise
than as Auditor) and in either such case on such terms as
to remuneration (whether by way of salary, commission,
participation in profits or otherwise) and otherwise as
-55-
the Board may determine; any such remuneration shall be
either in addition to or in lieu of any remuneration
provided for, by or pursuant to any other Article;
116.2.2 may be a party to, or otherwise interested in, any contract
with the Company or in which the Company is otherwise
interested;
116.2.3 may be a director or other officer of, or employed by, or a
party to any contract with, or otherwise interested in, any
body corporate promoted by the Company or in which the
Company is otherwise interested or as regards which the
Company has any powers of appointment; and
116.2.4 shall not, by reason of his office, be accountable to the
Company for any remuneration or benefit which he derives
from any such office or employment or from any such
contract or from any interest in such body corporate and no
such office, employment or contract shall be liable to be
avoided on the ground of any such interest or benefit.
116.3 The Board may cause any voting power conferred by the shares in any
other company held or owned by the Company or any power of
appointment to be exercised in such manner in all respects as it
thinks fit, including the exercise of either of such powers in favour
of a resolution appointing the Directors, or any of them, to be
directors or officers of the other company, or in favour of the
payment of remuneration to the directors or officers of the other
company.
116.4 Save as otherwise provided by these Articles, a Director shall not
vote on, or be counted in the quorum in relation to, any resolution
of the Board or of a committee of the Board concerning any matter in
which he has to his knowledge, directly or indirectly, an interest
(other than his interest in shares or debentures or other securities
of, or otherwise in or through, the Company) or duty which (together
with any interest of a person connected with him within the meaning
of section 346 of the Act) is material and, if he shall do so, his
vote shall not be counted. A Director shall be entitled to vote on
and be counted in the quorum in respect of any resolution concerning
any of the following matters:
116.4.1 the giving to him of any guarantee, security or indemnity
in respect of money lent or obligations incurred by him or
by any other person at the request of or for the benefit
of, the Company or any of its subsidiary undertakings;
116.4.2 the giving by the Company of any guarantee, security or
indemnity to a third party in respect of a debt or
obligation of the Company or any of its subsidiary
undertakings for which he himself has assumed
responsibility in whole or in part and whether alone or
jointly with others under a guarantee or indemnity or by
the giving of security;
116.4.3 his subscribing or agreeing to subscribe for, or purchasing
or agreeing to purchase, any shares, debentures or other
securities of the Company or any of its subsidiary
undertakings as a holder of securities, or his being, or
intending to become, a participant in the underwriting or
sub-underwriting of an offer of any such shares,
debentures, or other securities by the Company or any of
its subsidiary undertakings for subscription, purchase or
exchange;
-56-
116.4.4 any contract concerning any company not being a company in
which the Director owns one per cent. or more (as defined
in this Article), or in which he is interested, directly or
indirectly, and whether through holding shares in that
company or as an officer, creditor or otherwise;
116.4.5 any arrangement for the benefit of employees of the Company
or any of its subsidiary undertakings under which he
benefits in a similar manner as the employees and which
does not accord to any Director as such any privilege or
advantage not accorded to the employees to whom the
arrangement relates; and
116.4.6 any contract concerning any insurance which the Company is
empowered to purchase or maintain for, or for the benefit
of, any Directors or for persons who include Directors.
116.5 A Director shall not vote on, or be counted in the quorum in relation
to, any resolution of the Board concerning his own appointment, or
the settlement or variation of the terms or the termination of his
own appointment, as the holder of any office or place of profit with
the Company or any company in which the Company is interested but,
where proposals are under consideration concerning the appointment,
or the settlement or variation of the terms or the termination of the
appointment, of two or more Directors to offices or places of profit
with the Company or any company in which the Company is interested, a
separate resolution may be put in relation to each Director and in
that case each of the Directors concerned shall be entitled to vote
on and be counted in the quorum in relation to each resolution which
does not concern either: (a) his own appointment or the settlement or
variation of the terms or the termination of his own appointment; or
(b) the appointment of another Director to an office or place of
profit with a company in which the Company is interested and in which
the Director seeking to vote or be counted in the quorum is
interested by virtue of owning of one per cent. or more (as defined
in this Article).
116.6 A company shall be deemed to be a company in which a Director owns
one per cent. or more if and so long as he is directly or indirectly
the holder of or beneficially interested in one per cent. or more of
any class of the equity share capital of such company or of the
voting rights available to members of such company. For this purpose,
there shall be disregarded any shares held by a Director as bare or
custodian trustee and in which he has no beneficial interest, any
shares comprised in a trust in which the Director's interest is in
reversion or remainder (if and so long as some other person is
entitled to receive the income from such trust) and any shares
comprised in an authorised unit trust scheme in which the Director is
interested only as a unit holder.
116.7 Where a company in which a Director owns one per cent. or more is
materially interested in a contract, he shall also be deemed to be
materially interested in that contract.
116.8 For the purposes of this Article, an interest of a person who is, for
any purpose of the Statutes (excluding any statutory modification
thereof not in force when this Article becomes binding on the
Company), connected (which word shall have the meaning given to it by
section 346 of the Act) with a Director shall be treated as an
interest of the Director and, in relation to an alternate director,
an interest of his appointor shall be treated as an interest of the
alternate director without prejudice to any interest which the
alternate director has otherwise.
-57-
116.9 References in this Article to a contract include references to any
proposed contract and to any transaction or arrangement whether or
not constituting a contract.
116.10 If any question shall arise at any meeting of the Board as to the
materiality of the interest of a Director (other than the chairman of
the meeting) or as to the entitlement of any Director (other than the
chairman of the meeting) to vote or be counted in the quorum and the
question is not resolved by his voluntarily agreeing to abstain from
voting or not to be counted in the quorum, the question shall be
referred to the chairman of the meeting and his ruling in relation to
the Director concerned shall be conclusive except in a case where the
nature or extent of his interest (so far as it is known to the
Director) has not been fairly disclosed to the Board. If any question
shall arise in respect of the chairman of the meeting, the question
shall be decided by resolution of the Board (for which purpose the
chairman shall be counted in the quorum but shall not vote on the
matter) and the resolution shall be conclusive except in a case where
the nature or extent of the interest of the chairman of the meeting
(so far as it is known to him) has not been fairly disclosed to the
Board.
116.11 Subject to the Statutes and the Listing Rules (as they may be amended
from time to time) of the UK Listing Authority, the Company may by
ordinary resolution suspend or relax the provisions of this Article
to any extent or ratify any contract not properly authorised by
reason of a contravention of this Article.
DIRECTORS' GRATUITIES AND PENSIONS
117. DIRECTORS' GRATUITIES AND PENSIONS
The Board or any committee authorised by the Board may exercise all
the powers of the Company to provide benefits, whether by the payment
of gratuities, pensions, annuities, allowances, bonuses or by
insurance or otherwise, for any Director or former Director who holds
or who has held but no longer holds any executive office, other
office, place of profit or employment with the Company or with any
body corporate which is or has been a subsidiary undertaking of the
Company or a predecessor in business of the Company or of any such
subsidiary undertaking, and for any member of his family (including a
spouse and a former spouse) or any person who is or was dependent on
him, and may (as well before as after he ceases to hold such office,
place of profit or employment) establish, maintain, support,
subscribe to and contribute to any scheme, trust or fund for the
benefit of all or any such persons and pay premiums for the purchase
or provision of any such benefits. The Board or any committee
authorised by the Board may procure any of these matters to be done
by the Company either alone or in conjunction with any other person.
No Director or former Director shall be accountable to the Company or
the shareholders for any benefit provided pursuant to this Article
and the receipt of any such benefit shall not disqualify any person
from being or becoming a Director.
-58-
PROCEEDINGS OF THE BOARD
118. BOARD MEETINGS
The Board may meet for the despatch of business, adjourn and
otherwise regulate its meetings as it thinks fit. A Director may, and
the Secretary on the requisition of a Director shall, convene a
meeting of the Board.
119. NOTICE OF BOARD MEETINGS
Notice of a Board meeting shall be deemed to be properly given to a
Director if it is given to him personally or by word of mouth or sent
in writing to him or transmitted to him by electronic communication
at his last known address or any other address given by him to the
Company for this purpose. A Director absent or intending to be absent
from the United Kingdom may request the Board that notices of Board
meetings shall during his absence be sent to him at an address given
by him to the Company for this purpose, but such notices need not be
given any earlier than notices given to Directors not so absent and
in the absence of any such request it shall not be necessary to give
notice of a Board meeting to any Director who is for the time being
absent from the United Kingdom. A Director may waive notice of any
meeting either before or after the meeting.
120. VOTING
Questions arising at a meeting shall be decided by a majority of
votes. In the case of an equality of votes, the chairman shall have a
second or casting vote.
121. QUORUM
The quorum necessary for the transaction of the business of the Board
may be fixed by the Board and unless so fixed at any other number
shall be two. Subject to these Articles, any Director who ceases to
be a Director at a Board meeting may continue to be present and to
act as a Director and be counted in the quorum until the termination
of the Board meeting if no other Director objects and if otherwise a
quorum of Directors would not be present.
122. NUMBER OF DIRECTORS BELOW MINIMUM NUMBER
The continuing Directors or a sole continuing Director may act
notwithstanding any vacancies on the Board, but, if the number of
Directors is less than the minimum number fixed by or in accordance
with these Articles, the continuing Directors or Director may act
only for the purpose of filling vacancies on the Board or of
convening a general meeting of the Company. If there are no Directors
or Director able or willing to act, then any two shareholders may
call a general meeting of the Company for the purpose of appointing
Director(s).
-59-
123. APPOINTMENT OF CHAIRMAN
The Board may appoint a Director to be the chairman of the Board and
may at any time remove him from that office. Unless he is unwilling
to do so, the Director so appointed shall preside at every meeting of
the Board at which he is present. But if there is no Director holding
that office, or if the Director holding it is unwilling to preside or
is not present within five minutes after the time appointed for the
meeting, the Directors present may appoint one of their number to be
chairman of the meeting.
124. COMPETENCE OF THE BOARD
A meeting of the Board at which a quorum is present shall be
competent to exercise all powers, authorities and discretions for the
time being vested in or exercisable by the Board.
125. PARTICIPATION IN MEETINGS BY TELEPHONE
All or any of the members of the Board or of any committee of the
Board may participate in a meeting of the Board or that committee by
means of a video conference or conference telephone or any other
communication equipment which allows all persons participating in the
meeting to hear and speak to each other. A person so participating
shall be deemed to be present in person at the meeting and shall be
entitled to vote or be counted in a quorum accordingly. Such a
meeting shall be deemed to take place where the largest group of
those participating is assembled, or, if there is no such group,
where the chairman of the meeting is and shall be deemed to be a
meeting even if there is only one person physically present where it
is deemed to take place.
126. WRITTEN RESOLUTIONS
A resolution in writing signed by all the Directors entitled to
receive notice of a meeting of the Board (if that number is
sufficient to constitute a quorum) or by all the members of a
committee of the Board shall be as valid and effectual as if it had
been passed at a meeting of the Board or that committee duly convened
and held and may be contained in one document (or in several
documents in all substantial respects in like form) each signed by
one or more of the Directors or members of that committee. Any such
document may be constituted by letter or (provided it is in writing)
by electronic communication or otherwise as the Board may from time
to time approve.
127. COMPANY BOOKS
The Board shall cause minutes to be made in books kept for the purpose
of recording:
127.1.1 all appointments of officers made by the Board;
127.1.2 all proceedings at meetings of the Company, of the holders
of any class of shares in the Company and of the Board and
of committees of the Board, including the names of the
Directors or members of a committee of the Board present at
each
-60-
such meeting.
Subject to the Statutes, any such minutes if purporting to be signed
by the chairman of the meeting at which the appointments were made or
proceedings held or by the chairman of the next succeeding meeting,
shall be sufficient evidence of the facts therein stated without any
further proof.
128. VALIDITY OF ACTS OF THE BOARD OR A COMMITTEE
All acts done by the Board or by a committee of the Board, or by a
person acting as a Director or member of a committee of the Board
shall, notwithstanding that it is afterwards discovered that there
was some defect in the appointment of any Director, member of a
committee of the Board, or person acting as a Director, or that any
of them were disqualified from holding office, or had vacated office,
or were not entitled to vote, be as valid as if each such person had
been duly appointed and was qualified and had continued to be a
Director or member of the committee and had been entitled to vote.
SECRETARY
129. APPOINTMENT AND REMOVAL OF COMPANY SECRETARY
Subject to the Statutes, the Secretary shall be appointed by the
Board at such remuneration and upon such terms as it thinks fit and
any Secretary so appointed may be removed by the Board.
THE SEAL
130. USE OF SEAL
130.1 The Seal shall only be used by the authority of the Board or of a
committee authorised by the Board in that behalf. The Board or any
such committee may determine who shall sign any instrument to which
the Seal is affixed and unless otherwise so determined it shall be
signed by one Director and the Secretary or by two Directors, and any
instrument to which an official seal is applied need not, unless the
Board for the time being otherwise decides or the law otherwise
requires, be signed by any person.
130.2 Notwithstanding the provisions of Article 104, a committee authorised
by the Board for the purposes of Article 130.1 may consist entirely
or in any proportion of persons other than Directors. Except in
relation to the provisions covering the proportion of members of a
committee who must be Directors and the related quorum restrictions,
the provisions of Article 104 shall apply to such a committee.
-61-
131. EXECUTION AS A DEED WITHOUT SEALING
Where the Statutes so permit, any instrument signed by one Director
and the Secretary or by two Directors and expressed to be executed by
the Company shall have the same effect as if executed under the Seal,
provided that no instrument shall be so signed which makes it clear
on its face that it is intended by the person or persons making it to
have effect as a deed without the authority of the Board or of a
committee authorised by the Board in that behalf.
132. OFFICIAL SEAL
The Company may exercise the powers conferred by the Statutes with
regard to having an official seal for use abroad, and such powers
shall be vested in the Board.
DIVIDENDS
133. COMPANY MAY DECLARE DIVIDENDS
Subject to the Statutes, the Company may by ordinary resolution
declare dividends in accordance with the respective rights of the
shareholders, but no dividend shall exceed the amount recommended by
the Board. Subject to the Statutes, any determination by the Board of
the amount of profits at any time available for distribution shall be
conclusive.
134. BOARD MAY PAY INTERIM DIVIDENDS AND FIXED DIVIDENDS
Subject to the Statutes, the Board may pay interim dividends if it
appears to the Board that they are justified by the financial
position of the Company. If the share capital of the Company is
divided into different classes, the Board may pay interim dividends
on shares which confer deferred or non-preferred rights to dividends
as well as on shares which confer preferential or special rights to
dividends, but no interim dividend shall be paid on shares carrying
deferred or non-preferred rights if, at the time of payment, any
preferential dividend is in arrears. The Board may also pay at
intervals settled by it any dividend payable at a fixed date if it
appears to the Board that the financial position of the Company
justifies the payment. If the Board acts in good faith, it shall not
incur any liability to the holders of shares conferring preferred
rights for any loss which they may suffer by reason of the lawful
payment of an interim dividend on any shares having deferred or
non-preferred rights.
135. CALCULATION AND CURRENCY OF DIVIDENDS
Except in so far as the rights attaching to any share otherwise
provide, all dividends shall be declared and paid according to the
amounts paid up on the shares on which the dividend is paid, but (for
the purposes of this Article only) no amount paid up on a share in
advance of calls shall be treated as paid up on the share. All
dividends shall be apportioned and paid proportionately to the
amounts paid up on the shares during any portion or portions of the
-62-
period in respect of which the dividend is paid; but, if any share is
issued on terms providing that it shall rank for dividend as from a
particular date, that share shall rank for dividend accordingly.
Dividends may be declared or paid in any currency and the Board may
agree with any shareholder that dividends which may at any time or
from time to time be declared or become due on his shares in one
currency shall be paid or satisfied in another and may agree the
basis of conversion to be applied, and how and when the amount to be
paid in the other currency shall be calculated and paid, and for the
Company or any other person to bear any costs involved.
136. WAIVER OF DIVIDENDS
The waiver in whole or in part of any dividend on any share by any
document (whether or not under seal) shall be effective only if such
document is signed by the holder (or the person becoming entitled by
transmission to the share) and delivered to the Company and if or to
the extent that it is accepted as such or acted upon by the Company.
137. NON-CASH DIVIDENDS
A general meeting declaring a dividend may, upon the recommendation
of the Board, by ordinary resolution direct that it shall be
satisfied wholly or partly by the distribution of assets and, in
particular, of paid-up shares or debentures of any other company and,
where any difficulty arises concerning such distribution, the Board
may settle it as the Board thinks expedient and in particular may
issue fractional certificates or, subject to the Statutes and, in the
case of shares held in uncertificated form, the system's rules,
authorise and instruct any person to sell and transfer any fractions
or may ignore fractions altogether, and may fix the value for
distribution of any assets and may determine that cash shall be paid
to any shareholder upon the basis of the value so fixed in order to
secure equality of distribution and may vest any assets to be
distributed in trustees as the Board may consider expedient.
138. SCRIP DIVIDENDS
Subject to the Statutes, the Board may, if authorised by an ordinary
resolution of the Company, offer the holders of ordinary shares
(subject to such exclusions or other arrangements as the Board may
consider necessary or expedient in relation to any legal or practical
problems under the laws of any overseas territory or the requirements
of any regulatory body or stock exchange) the right to elect to
receive new ordinary shares, credited as fully paid, instead of cash
for all or part (as determined by the Board) of the dividend
specified by the ordinary resolution. The following provisions shall
apply:
138.1 an ordinary resolution may specify a particular dividend or dividends
(whether or not already declared), or may specify all or any
dividends declared within a specified period, but such period may not
end later than the fifth anniversary of the date of the meeting at
which the ordinary resolution is passed;
138.2 the basis of allotment to each holder of ordinary shares shall be
such number of new ordinary shares credited as fully paid as have a
value as nearly as possible equal to (but not
-63-
greater than) the amount of the dividend (disregarding any tax credit)
which he has elected to forego. For this purpose, the "VALUE" of an
ordinary share shall be deemed to be whichever is the greater of its
nominal value and the average of the middle market quotations for the
Company's ordinary shares on the London Stock Exchange as derived from
the Daily Official List on the day on which the shares are first
quoted "ex" the relevant dividend and the four subsequent dealing days
or in such other manner as may be determined by or in accordance with
the ordinary resolution. An opinion or report by the Auditors as to
the amount of the value in respect of any dividend shall be conclusive
evidence of that amount;
138.3 no fraction of an ordinary share shall be allotted and if any holder
of ordinary shares would otherwise be entitled to fractions of a
share, the Board may deal with the fractions as it thinks fit;
138.4 the Board shall not proceed with any election unless the Company has
sufficient unissued shares authorised for issue and sufficient
reserves or funds which may be capitalised to give effect to the
election following the Board's determination of the basis of
allotment;
138.5 on or as soon as practicable after announcing that the Board is to
declare or recommend any dividend, the Board, if it intends to offer
an election for that dividend, shall also announce that intention and
having determined the basis of allotment, shall notify the holders of
ordinary shares (other than any in relation to whom an election
mandate in accordance with this Article is subsisting) of the right
of election offered to them, and shall send with, or following, such
notification, forms of election and shall specify the procedure to be
followed and place at which, and the latest date and time by which,
duly completed forms of election must be received in order to be
effective;
138.6 the dividend (or that part of the dividend in respect of which a
right of election has been offered) shall not be payable on ordinary
shares in respect of which an election has been duly made (the
"ELECTED SHARES") and instead additional ordinary shares shall be
allotted to the holders of elected shares on the basis of allotment
so determined. For such purpose, the Board shall capitalise, out of
any amount standing to the credit of any reserve or fund (including
the profit and loss account), whether or not the same is available
for distribution, as the Board may determine, a sum equal to the
aggregate nominal amount of the additional ordinary shares to be
allotted on that basis and apply it in paying up in full the
appropriate number of unissued ordinary shares for allotment and
distribution to the holders of elected shares on that basis;
138.7 the additional ordinary shares so allotted shall be allotted as of
the record date for the dividend for which the right of election has
been offered and shall rank pari passu in all respects with the fully
paid ordinary shares then in issue except that they will not rank for
the dividend or other distribution entitlement in respect of which
they have been issued. Unless the Board otherwise determines (and
subject always to the Regulations and the relevant system's rules),
the ordinary shares so allotted shall be issued as shares in
certificated form (where the ordinary shares in respect of which they
have been allotted were in certificated form at the Scrip Record
Time) or as shares in uncertificated form (where the ordinary shares
in respect of which they have been allotted were in uncertificated
form at the Scrip Record Time) provided that if the Company is unable
-64-
under the relevant system's rules to issue ordinary shares in
uncertificated form to any person, such shares shall be issued as
shares in certificated form. For these purposes, the "SCRIP RECORD
TIME" means such time on the record date for determining the
entitlements of shareholders to make elections as described in this
Article, or on such other date as the Board may in its absolute
discretion determine.
138.8 The Board may establish or vary a procedure for election mandates
whereby a holder of ordinary shares may elect concerning future
rights of election offered to that shareholder under this Article
until the election mandate is revoked following that procedure.
138.9 The Board may exclude from any offer any holders of ordinary shares
if it believes that it is necessary or expedient to do so in relation
to any legal or practical problems under the laws of, or the
requirements of any regulatory body or stock exchange or other
authority in, any territory or that for any other reason the offer
should not be made to them.
139. ENHANCED SCRIP DIVIDENDS
139.1 Without prejudice to the generality of the immediately preceding
Article, the Board may, in respect of any cash dividend or other
distribution (or any part thereof) declared or payable in relation to
any financial year or period of the Company, offer to each holder of
ordinary shares the right to elect to receive new ordinary shares,
credited as fully paid, in respect of the whole or part of the
ordinary shares held by them instead of such cash dividend, on any
basis described in that Article but so that the entitlement of each
holder of ordinary shares to such new ordinary shares shall be
determined by the Board such that the value (determined on the basis
decided on by the Board) of the new ordinary shares concerned may
exceed the cash amount that such holders of ordinary shares would
otherwise have received by way of dividend and, in respect of such
offer, that Article shall take effect subject to this Article. Any
offer made under this Article shall be an alternative to any offer
made under that Article in respect of a particular cash dividend (but
shall form part of any plan which is in operation thereunder).
139.2 Any exercise by the Board of the powers granted to the Board by this
Article shall be subject to a special resolution approving the
exercise of such powers in respect of the dividend in question or in
respect of any dividends or other distributions declared or payable
in respect of a specified financial year or period of the Company
which include the dividend in question but such year or period may
not end later than the conclusion of the annual general meeting next
following the date of the meeting at which such resolution is passed.
No further sanction shall be required under the immediately preceding
Article in respect of an exercise of powers by the Board under this
Article and any authority granted under this Article shall not
preclude the granting to the Board of a separate authority under that
Article.
140. RIGHT TO DEDUCT AMOUNTS DUE ON SHARES FROM DIVIDENDS
The Board may deduct from any dividend or other monies payable in
respect of a share to a shareholder all sums of money (if any)
presently payable by him to the Company on account of calls or
otherwise in respect of shares of the Company.
-65-
141. NO INTEREST ON DIVIDENDS
No dividend or other monies payable in respect of a share shall bear
interest against the Company unless otherwise provided by the rights
attached to the share.
142. PAYMENT PROCEDURE
142.1 All dividends and interest shall belong and be paid (subject to any
lien of the Company) to those shareholders whose names shall be on
the Register at the date at which such dividend shall be declared or
at the date on which such interest shall be payable respectively, or
at such other date as the Company by ordinary resolution or the Board
may determine notwithstanding any subsequent transfer or transmission
of shares.
142.2 The Company may pay any dividend, interest or other monies payable in
cash in respect of shares by direct debit, bank transfer, cheque,
dividend warrant, money order or by any other method (including by
electronic communication) as the Board may consider appropriate.
142.3 Every such cheque, warrant or order shall be made payable to the
person to whom it is sent, or to such other person as the relevant
shareholder or joint shareholders may in writing direct, and may be
sent by post or equivalent means of delivery directed to the
registered address of the relevant shareholder or, in the case of
joint shareholders, to the registered address of the joint
shareholder whose name stands first in the Register, or to such
person and to such address as the relevant shareholder or joint
shareholders may in writing direct.
142.4 Every such payment made by direct debit or bank transfer shall be
made to the relevant shareholder or joint shareholders or to or
through such other person as the shareholder or joint shareholders
may in writing direct.
142.5 In respect of shares in uncertificated form, where the Company is
authorised to do so by or on behalf of the relevant shareholder or
joint shareholders in such manner as the Board shall from time to
time consider sufficient, the Company may pay any such dividend,
interest or other monies by means of the relevant system. Every such
payment shall be made in such manner as may be consistent with the
system's rules and, without prejudice to the generality of the
foregoing, may include the sending by the Company or by any person on
its behalf of an instruction to the Operator to credit the cash
memorandum account of the relevant shareholder or joint shareholders
or, if permitted by the Company, of such person as the shareholder or
joint shareholders may in writing direct.
142.6 The Company shall not be responsible for any loss of any such cheque,
warrant or order and any payment made in any manner permitted by
these Articles shall be at the sole risk of the relevant shareholder
or joint shareholders. Without prejudice to the generality of the
foregoing, if any such cheque, warrant or order has been, or is
alleged to have been, lost, stolen or destroyed, the Board may, on
request of the person entitled thereto, issue a replacement cheque,
warrant or order subject to compliance with such conditions as to
evidence and indemnity and the payment of out of pocket expenses of
the Company in connection with the request as the Board may think
fit.
-66-
142.7 The issue of such cheque, warrant or order, the collection of funds
from or transfer of funds by a bank in accordance with such direct
debit or bank transfer or, in respect of shares in uncertificated
form, the making of payment in accordance with the system's rules,
shall be a good discharge to the Company.
143. RECEIPT BY JOINT SHAREHOLDERS
If several persons are registered as joint shareholders of any share,
any one of them may give effectual receipts for any dividend or other
monies payable in respect of the share.
144. WHERE PAYMENT OF DIVIDENDS NEED NOT BE MADE
The Company may cease to send any cheque or warrant through the post
or by a delivery agent or to effect payment by any other means for
any dividend or other monies payable in respect of a share which is
normally paid in that manner on that share if in respect of at least
two consecutive dividends payable on that share payment, through no
fault of the Company, has not been effected (or, following one such
occasion, reasonable enquiries have failed to establish any new
postal or delivery address of the shareholder or appropriate details
for effecting payment by other means) but, subject to these Articles,
the Company shall recommence payments in respect of dividends or
other monies payable on that share by that means (or by such other
appropriate means as the shareholder or person shall notify to the
Company) if the shareholder or person entitled by transmission claims
the arrears of dividend.
145. UNCLAIMED DIVIDENDS
All dividends, interest or other sums payable unclaimed for one year
after having been declared may be invested or otherwise made use of
by the Board for the benefit of the Company until claimed. The
retention by the Company of, or payment into a separate account of,
any unclaimed dividend or other monies payable on or in respect of a
share into a separate account shall not constitute the Company a
trustee in respect of it. Any dividend or interest unclaimed after a
period of 12 years from the date when it was declared or became due
for payment shall be forfeited and shall revert to the Company.
CAPITALISATION OF PROFITS
146. CAPITALISATION OF PROFITS
146.1 Upon the recommendation of the Board, the Company may pass an
ordinary resolution to the effect that it is desirable to capitalise
all or any part of any undivided profits of the Company not required
for paying any preferential dividend (whether or not they are
available for distribution) or all or any part of any sum standing to
the credit of any reserve or fund (whether or not available for
distribution).
146.2 The Board may appropriate the sum resolved to be capitalised to the
shareholders who
-67-
would have been entitled to it if it were distributed by way of
dividend and in the same proportions and apply such sum on their
behalf either in or towards paying up the amounts, if any, for the
time being unpaid on any shares held by them respectively, or (subject
to approval by ordinary resolution and to any subsisting special
rights previously conferred on any shares or class of shares) in
paying up in full unissued shares of any class (but not redeemable
shares) or debentures of the Company of a nominal amount equal to that
sum, and allot the shares or debentures credited as fully paid to
those shareholders, or as they may direct, in those proportions, or
partly in one way and partly in the other; but for the purposes of
this Article the share premium account, the capital redemption
reserve, and any reserve or fund representing profits which are not
available for distribution may only be applied in paying up in full
unissued shares of the Company.
146.3 The Board may authorise any person to enter on behalf of all the
shareholders concerned into an agreement with the Company providing
for the allotment to them respectively, credited as fully paid, of
any shares or debentures to which they are entitled upon such
capitalisation and any matters incidental thereto, any agreement made
under such authority being binding on all such shareholders.
146.4 If any difficulty arises concerning any distribution of any
capitalised reserve or fund, the Board may subject to the Statutes
and, in the case of shares held in uncertificated form, the system's
rules, settle it as the Board considers expedient and in particular
may issue fractional certificates, authorise any person to sell and
transfer any fractions or resolve that the distribution should be
made as nearly as practicable in the correct proportion or may ignore
fractions altogether, and may determine that cash payments shall be
made to any shareholders in order to adjust the rights of all parties
as the Board considers expedient.
146.5 Where, pursuant to an employees' share scheme, the Company has
granted options to subscribe for shares on terms which provide (inter
alia) for adjustments to the subscription price payable on the
exercise of such options or to the number of shares to be allotted
upon such exercise in the event of any increase or reduction in, or
other reorganisation of, the Company's issued share capital and an
otherwise appropriate adjustment would result in the subscription
price for any share being less than its nominal value, then, subject
to and in accordance with the provisions of the Statutes, the Board
may, on the exercise of any of the options concerned and payment of
the subscription which would have applied had such adjustment been
made, capitalise any such profits or other sum as is mentioned in
Article 146.1 to the extent necessary to pay up the unpaid balance of
the nominal value of the shares which fall to be allotted on the
exercise of such options and apply such amount in paying up such
balance and allot shares fully paid accordingly. The other provisions
of this Article 146 shall apply mutatis mutandis to any such
capitalisation except that the authority of an ordinary resolution of
the Company shall not be required.
-68-
AUTHENTICATION OF DOCUMENTS
147. AUTHENTICATION OF DOCUMENTS
Any director or the Secretary or any person appointed by the Board
for the purpose shall have power to authenticate any documents or
other communications affecting the constitution of the Company and
any resolutions passed by the Company or the Board or any committee
and any books, records, accounts, documents and other communications
relating to the business of the Company and to certify copies or
extracts as true copies or extracts. A document or other
communication purporting to be a copy of a resolution, or an extract
from the minutes of a meeting, of the Company, the Board or any
committee which is certified as such in accordance with this Article
shall be conclusive evidence in favour of all persons dealing with
the Company upon the faith of such document or communication that
such resolution has been duly passed or, as the case may be, that
such minute or extract is a true and accurate record of proceedings
at a duly constituted meeting.
RECORD DATES
148. POWER TO CHOOSE RECORD DATE
Subject to the Statutes and Regulations but notwithstanding any other
provision of these Articles, the Company or the Board may by
resolution specify any date and time as the date and time on which
persons registered as the holders of shares or other securities shall
be entitled to receipt of any dividend, distribution, interest,
allotment or issue, and any such date may be on, or at any time
before, the date on which it is paid, made or despatched or at any
time after it is recommended, resolved, declared or announced, but
without prejudice to the rights inter se of transferors and
transferees of any such shares or other securities in relation to any
such thing.
ACCOUNTS AND OTHER RECORDS
149. RECORDS TO BE KEPT
The Board shall cause accounting records to be kept sufficient to
give a true and fair view of the Company's state of affairs and to
comply with the Statutes.
150. COPY OF ACCOUNTS TO BE SENT TO SHAREHOLDERS
A copy of every profit and loss account and balance sheet, including
all documents required by law to be annexed to the balance sheet
which is to be laid before the Company in general meeting, together
with copies of the Directors' and of the Auditors' reports (or such
other documents which may be required or permitted by law to be sent
in their place) shall not less than 21 clear days before the date of
the meeting be sent to every shareholder (whether or not he is
entitled to receive notices of general meetings of the Company), and
to every holder of debentures of the Company (whether or not he is so
entitled), and to the
-69-
Auditors provided that if the Company is permitted by law to send to
any shareholder, to any holder of debentures of the Company or to the
Auditors any summary financial statement in place of all or any of
such profit and loss account and balance sheet or other documents,
this Article shall impose no greater obligation on the Company than
that imposed by law; but this Article shall not require a copy of
those documents to be sent to any shareholder or holder of debentures
of whose address the Company is unaware or to more than one of any
joint shareholders or joint holders of debentures.
151. INSPECTION OF RECORDS
No person in his capacity as a shareholder, or by right of any
interest in shares (whether under these Articles or otherwise), shall
have any right of inspecting any record, book or document of any
description belonging to the Company except as conferred by the
Statutes or authorised by the Board or by ordinary resolution of the
Company.
152. DESTRUCTION OF DOCUMENTS
152.1 Subject to compliance with the rules (as defined in the Regulations)
applicable to shares of the Company in uncertificated form, the
Company may destroy:
152.1.1 any instrument of transfer of shares and any other document
on the basis of which an entry is made in the Register, at
any time after the expiration of six years from the date of
registration;
152.1.2 any instruction concerning the payment of dividends or
other monies in respect of any share or any notification of
change of name or address, at any time after the expiration
of two years from the date the instruction or notification
was recorded; and
152.1.3 any share certificate which has been cancelled, at any time
after the expiration of one year from the date of
cancellation;
provided that the Company may destroy any such type of document after
such shorter period as the Board may determine if a copy of such
document is retained on microfilm or by other similar means and is
not destroyed earlier than the original might otherwise have been
destroyed in accordance with this Article.
152.2 It shall conclusively be presumed in favour of the Company that every
instrument of transfer so destroyed was a valid and effective
instrument duly and properly registered and that every share
certificate so destroyed was a valid and effective document duly and
properly cancelled and that every other document so destroyed was a
valid and effective document in accordance with its particulars
recorded in the books or records of the Company provided that:
152.2.1 this Article shall apply only to the destruction of a
document in good faith and without express notice that its
retention was relevant to any claim (regardless of the
parties to the claim);
-70-
152.2.2 nothing contained in this Article shall be construed as
imposing upon the Company any liability in respect of the
destruction of any such document earlier than the times
referred to in this Article or in any case where the
conditions of this Article are not fulfilled; and
152.2.3 references in this Article to the destruction of any
document or thing include references to its disposal in any
manner.
NOTICES
153. FORM OF NOTICES
Any notice, document or other communication (including copies of
accounts or summary financial statements) to be given to or by any
person pursuant to these Articles (other than a notice calling a
meeting of directors) shall be in writing except that, if it is given
using electronic communications, it need not be in writing unless
these Articles specifically require it to be.
154. SERVICE OF NOTICE
154.1 Any notice, document or other communication may (to the extent
compatible with the nature of the thing served) be sent by electronic
communication to an address for the time being notified (by the
person wishing to receive the electronic communication) for that
purpose to the person sending the communication. Except insofar as
the Statutes otherwise require, for electronic communications given
by the Company to any shareholder (but not vice versa) the Company
may treat an address notified for the purpose of any electronic
communication as that shareholder's address for all electronic
communications, whatever their content, until the shareholder
notifies the Company otherwise.
154.2 Otherwise, any notice, document (including a share certificate) or
other communication may, to the extent compatible with the nature of
the thing served, be served on or delivered to a shareholder by the
Company:
154.2.1 personally;
154.2.2 by sending it by prepaid post or other prepaid delivery
service in an envelope or other cover addressed to the
shareholder at the address recorded for the shareholder on
the Register or by so addressing the envelope or other
cover and leaving it at that address;
154.2.3 by the relevant system; or
154.2.4 by any other means authorised in writing by the shareholder
concerned.
154.3 In the case of joint shareholders, all notices, documents or other
communications, however sent, shall be served on or delivered to the
joint shareholder whose name stands first in the Register in respect
of the joint shareholding and such service or delivery shall for all
-71-
purposes be deemed sufficient service on or delivery to all the
relevant joint shareholders.
154.4 A shareholder whose registered address is not within the United
Kingdom and who notifies the Company of an address within the United
Kingdom at which notices, documents or other communications may be
served on or delivered to him shall be entitled to have notices or
other communications served on or delivered to him at that address
(in the manner referred to above), but otherwise no such shareholder
shall be entitled to receive any notice, document or other
communications from the Company. Such address may, at the Board's
discretion, be an address for the purposes of electronic
communications.
154.5 The Board may at any time without prior notice (and whether or not the
Company has previously sent electronic communications to that address)
refuse to send electronic communications to any address notified to
the Company for the purposes of electronic communications if it
believes that its refusal is necessary or expedient in relation to any
legal or practical problems under the laws of, or the requirements of
any regulatory body or stock exchange or other authority in, any
territory, or that for any other reason it should not send electronic
communications to that address.
154.6 Subject to the Statutes, the Board may from time to time issue,
endorse or adopt terms and conditions relating to the use of
electronic communications under these Articles.
155. WHEN NOTICE DEEMED SERVED
155.1 Any notice, document or other communication:
155.1.1 if sent by the Company by post or other delivery service
shall be deemed to have been served or delivered on the day
following that on which it was put in the post or given to
the delivery agent and, in proving service or delivery, it
shall be sufficient to prove that the notice, document or
communication was properly addressed, prepaid and put in
the post or duly given to the delivery agent;
155.1.2 if sent by the Company by way of an electronic
communication shall be deemed to have been served or
delivered on the day following the day on which it was
sent, and proof that the notice or communication was sent
in accordance with guidance issued by the Institute of
Chartered Secretaries and Administrators shall be
conclusive evidence that it was served or delivered;
155.1.3 not sent by post or other delivery service but served or
delivered personally or left by the Company at a the
address for that shareholder on the Register shall be
deemed to have been served or delivered on the day and at
the time it was so left;
155.1.4 sent or delivered by a relevant system shall be deemed to
have been served or delivered when the Company (or a
sponsoring system-participant acting on its behalf) sends
the issuer instructions relating to the notice or document;
155.1.5 sent or delivered by the Company by any other means
authorised in writing by the shareholder concerned shall be
deemed to have been served when the Company has carried out
the action it has been authorised to take for that purpose;
and
-72-
155.1.6 to be given by the Company by advertisement shall be deemed
to have been served on the day on which the advertisement
appears.
156. SERVICE OF NOTICE ON PERSON ENTITLED BY TRANSMISSION
Where a person is entitled by transmission to a share, any notice,
document or other communication shall be served upon or delivered to
him by the Company, as if he were the relevant shareholder and his
address were that noted in the Register as the registered address or
(to the extent compatible with the nature of the thing served, and
subject to the Board's discretion) that given by the relevant
shareholder for the purposes of electronic communications. Otherwise,
any notice, document or other communication served on or delivered to
any shareholder pursuant to these Articles shall, notwithstanding
that the shareholder is then dead or bankrupt or that any other event
giving rise to the transmission of the share by operation of law has
occurred and whether or not the Company has notice of the death,
bankruptcy or other event, be deemed to have been properly served or
delivered in respect of any share registered in the name of that
shareholder as sole or joint shareholder.
157. RECORD DATE FOR SERVICE
Any notice, document or other communication may be served on or
delivered to shareholders by the Company by reference to the Register
as it stands at any time not more than 15 days before the date of
service or delivery. No change in the Register after that time shall
invalidate that service or delivery. Where any notice, document or
other communication is served on or delivered to any person in
respect of a share in accordance with these Articles, no person
deriving any title or interest in that share shall be entitled to any
further service or delivery of that notice, document or
communication.
158. LOSS OF ENTITLEMENT TO RECEIVE NOTICES
It on two consecutive occasions notices, documents or other
communications have been sent to any shareholder at his registered
address or his address for the service of notices (including any
address provided by him for the purposes of electronic
communications) but, through no fault of the Company, have been
undelivered, such shareholder shall not from then on be entitled to
receive notices, documents or other communications from the Company
or to provide an address for the purposes of electronic
communications until he has notified to the Company in writing a new
address within the United Kingdom to be either his registered address
or his address for the service of notices.
159. NOTICE WHEN POST NOT AVAILABLE
159.1 If at any time postal services within the United Kingdom are
suspended or curtailed so that the Company is unable effectively to
convene a general meeting or a meeting of the shareholders of any
class of shares in its capital by notice sent through the post, any
such meeting may be convened by a notice advertised in at least one
newspaper with a national circulation and in that event the notice
shall be deemed to have been served on all shareholders and persons
entitled by transmission who are entitled to have notice of the
-73-
meeting served upon them, on the day when the advertisement has
appeared in at least one such paper. If at least six clear days prior
to the meeting the giving of notices by post to addresses throughout
the United Kingdom has, in the Board's opinion, become practicable,
the Company shall send confirmatory copies of the notice by post (or,
where an address for the purposes of electronic communications has
been provided, by electronic communication) to the persons entitled
to receive them.
159.2 At any time that postal services within the United Kingdom are
suspended or curtailed, any other communication considered by the
Board to be capable of being communicated by advertisement shall, if
advertised in at least one such newspaper, be deemed to have been
notified to all shareholders and persons entitled by transmission.
WINDING-UP
160. DISTRIBUTION IN KIND
If the Company commences liquidation, the liquidator may, with the
sanction of a special resolution of the Company and any other
sanction required by the Statutes:
160.1 divide among the shareholders in kind the whole or any part of the
assets of the Company (whether the assets are of the same kind or
not) and may, for that purpose, value any assets and determine how
the division shall be carried out as between the shareholders or
different classes of shareholders or otherwise as the resolution may
provide; or
160.2 vest the whole or any part of the assets in trustees upon such trusts
for the benefit of the contributories as the liquidator, with the
like sanction, shall determine,
but no shareholder shall be compelled to accept any assets upon which
there is a liability. Any such resolution may provide for and
sanction a distribution of any specific assets amongst different
classes of shareholders otherwise than in accordance with their
existing rights, but each shareholder shall in that event have a
right of dissent and other ancillary rights in the same way as if the
resolution were a special resolution passed in accordance with the
Insolvency Act 1986.
161. POWER OF SALE
The power of sale of the liquidator shall include a power to sell
wholly or partly for shares or debentures or other obligations of
another company, either then already constituted or about to be
constituted, for the purpose of carrying out the sale.
INDEMNITY
162. OFFICER'S INDEMNITY
Subject to the Statutes, the Company may indemnify any Director or
other officer against
-74-
any liability. Subject to those provisions, but without prejudice to
any indemnity to which the person concerned may otherwise be entitled,
every Director or other officer of the Company and the Auditors shall
be indemnified out of the assets of the Company against any liability
incurred by him as a Director, other officer of the Company or as
Auditor in defending any proceedings (whether civil or criminal) in
which judgment is given in his favour or he is acquitted or which are
otherwise disposed of without any finding or admission of any material
breach of duty or breach of trust on his part or in connection with
any application under the Statutes in which relief is granted to him
by the court.
163. POWER TO INSURE
Subject to the Statutes, the Board may purchase and maintain
insurance at the expense of the Company for the benefit of any person
who is or was at any time a Director or other officer or employee of
the Company or of any subsidiary undertaking of the Company or in
which the Company has an interest (whether direct or indirect) or who
is or was at any time a trustee of any pension fund or employee
benefits trust in which any employee of the Company or of any such
subsidiary undertaking is or has been interested, indemnifying such
person against any liability which may attach to him or loss or
expenditure which he may incur in relation to anything done or
alleged to have been done or omitted to be done as a Director,
officer, employee or trustee.
ADR DEPOSITARIES
164. ADR DEPOSITARIES
164.1 In this Article:
164.1.1 "ADR PROXY" means an ADR Holder who is for the time being
appointed as proxy by an ADR Depositary pursuant to Article
164.2;
164.1.2 "APPOINTED NUMBER" means, in relation to an ADR Proxy, the
number of Depositary Shares in respect of which the ADR
Proxy's appointment subsists;
164.1.3 "DEPOSITARY SHARES" means shares from time to time
registered in the name of an ADR Depositary or its nominee;
and
164.1.4 "PROXY REGISTER" means the register or system(s) maintained
by the ADR Depositary pursuant to Article 164.3.
164.2 Without prejudice to the right of an ADR Depositary to exercise any
other rights conferred in these Articles, an ADR Depositary may
appoint as its proxy or proxies ADR Holders registered on the books
of the ADR Depositary and may determine the method by which, and the
terms on which, such appointments are made, except that:
164.2.1 each such appointment shall identify the number of
Depositary Shares in respect of which the appointment is
made;
-75-
164.2.2 the aggregate number of Depositary Shares in respect of
which appointments subsist at any one time shall not exceed
the aggregate number of Depositary Shares at that time;
164.2.3 each such appointment shall be deemed to constitute the ADR
Proxy as the ADR Depositary's agent for the purposes of
Article 164.4.2; and
164.2.4 (without prejudice to Article 164.4.2) the provisions of
Articles 88 to 92 (inclusive) shall not apply to any such
appointment in itself.
164.3 The ADR Depositary shall maintain a register or system(s) in which
shall be recorded such details as the Board may determine to identify
each ADR Proxy and that ADR Proxy's Appointed Number of Depositary
Shares from time to time. The Proxy Register shall be open to
inspection by any person authorised by the Company during usual
business hours and the ADR Depositary shall furnish to the Company or
its agents upon demand all such information as to the contents of the
Proxy Register, or any part of it, as may be requested. Except as
required by law, no ADR Proxy shall be recognised by the Company as
holding any interest in shares upon any trust and the Company shall
be entitled to treat any person entered in the Proxy Register as an
ADR Proxy as the only person (other than the ADR Depositary) who has
any interest in the shares in respect of which the ADR Proxy has been
appointed.
164.4 Subject to the Statutes and provided there are sufficient Depositary
Shares to satisfy his Appointed Number, an ADR Proxy shall, in
relation to proceedings at any general meeting:
164.4.1 upon production to the Company at a general meeting of
written evidence of his appointment (which shall be in such
form as the Company and the ADR Depositary shall determine
from time to time) be entitled to the following rights in
relation to his Appointed Number of Depositary Shares:
(a) to attend the meeting, form part of the quorum for the
purposes of Articles 65 and 66, and have access to all
documents made available there;
(b) to speak at the meeting;
(c) to vote on a show of hands and on a poll; and
(d) to demand or join in demanding, or withdraw his demand
for, a poll subject to the terms of Articles 73 and 80;
in each case as though he were the shareholder attending in
person (and in place of the representative (if any) of the
ADR Depositary) in respect of his Appointed Number of
Depositary Shares, but so that he is subject to the same
restrictions (other than under Article 74.2) as would apply
if he were a shareholder; and
164.4.2 be entitled as the agent of the ADR Depositary and in its
name (but not otherwise, and so that his authority in that
capacity shall be no greater than is necessary to give due
effect to this Article 164.4.2) to appoint any person or
persons notified as
-76-
such to the ADR Depositary before or at the meeting as a
proxy or proxies in relation to his Appointed Number of
Depositary Shares. The provisions of Articles 88 to 92
(inclusive) shall apply in relation to any such appointment
except that:
(a) while it shall not be necessary to produce to the
Company any evidence of the ADR Proxy's authority to
execute the appointment of proxy as agent of the ADR
Depositary, the Board may require evidence establishing
to its satisfaction the authenticity of any signature
or other means of execution purporting to have been
effected by the ADR Proxy;
(b) the ADR Proxy shall be entitled to serve notice
pursuant to Article 91 that any such appointment of
proxy is no longer valid;
(c) the deposit, delivery or receipt of any such
appointment of proxy shall not preclude the ADR Proxy
from attending and voting in person at the meeting or
on a poll pursuant to Article 164.4.1 except to the
extent that the representative of the ADR Depositary
attends and votes in person in respect of any of the
Appointed Number of Depositary Shares; and
(d) the Company shall be entitled to assume for all
purposes that any person so appointed has been duly
notified to the ADR Depositary except to the extent
that the ADR Depositary notifies the Company to the
contrary before that person has exercised any rights by
virtue of that appointment.
164.5 The Company may send to the ADR Proxies as appearing in the Proxy
Register at their addresses as so appearing all notices, documents
and other communications which are sent to shareholders. For these
purposes, Articles 153, 154, 155, 156, 158 and 159 shall apply
(mutatis mutandis) as if the ADR Proxies were shareholders in respect
of their respective Appointed Numbers of Depositary Shares and the
Proxy Register were the Register, and no person deriving any title or
interest in any such Depositary Share shall be entitled to any
further service or delivery of that notice, document or
communication.
164.6 Subject to the Statutes and Regulations but notwithstanding any other
provision of these Articles, the Company or the Board may by
resolution specify any date and time as the date and time on which
persons registered as ADR Proxies shall be entitled to attend at any
general meeting and/or to exercise voting rights in respect of which
their appointment as ADR Proxies subsists as identified by the Proxy
Register and any such date may be on, or at any time before, the date
on which the general meeting is held. When the date is determined for
any purpose:
164.6.1 the number of Depositary Shares in respect of which a
person entered in the Proxy Register as an ADR Proxy is to
be treated as having been appointed for the purpose shall
be the number in respect of which his appointment as an ADR
Proxy subsists as identified by the Proxy Register as at
that date; and
164.6.2 changes to entries in the Proxy Register after that date
shall be disregarded in determining the entitlement of any
person for the purpose concerned.
-77-
164.7 If any question shall arise 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 Depositary Shares (whether by reason
of the aggregate number of shares in respect of which appointments
are identified in the Proxy Register exceeding the aggregate number
of Depositary Shares or for any other reason) such question shall if
arising at or in relation to a general meeting be determined by the
chairman of the meeting (and if arising in any other circumstances
shall be determined by the Board) whose determination (which may
include declining to recognise a particular appointment or
appointments as valid) shall, if made in good faith, be conclusive
and binding on all persons interested.
164.8 Without prejudice to Article 135, the Board may at its discretion
make provisions to enable an ADR Depositary to receive dividends duly
payable in a currency or currencies other than the lawful currency of
the United Kingdom. For the purpose of the calculation of the amount
payable in respect of any such dividend, the rate of exchange to be
used to determine the relevant currency equivalent of any sum payable
as a dividend shall be such market rate (whether spot or forward)
selected by the Board as it shall consider appropriate (subject to
such adjustments as the Board may determine) ruling in London on the
date which is the business day last preceding:
164.8.1 in the case of a dividend to be declared by the Company in
general meeting, the date on which the Board publicly
announces its intention to recommend that specific
dividend; and
164.8.2 in the case of any other dividend, the date on which the
Board publicly announces its intention to pay that specific
dividend
provided that where the Board considers the circumstances to be
appropriate it shall determine such relevant currency equivalent of
any sums payable as a dividend by reference to such market rate or
rates or the mean of such market rates prevailing at such time or
times or on such other date or dates, in each case falling before the
time of the relevant announcement, as the Board may in its discretion
select. The decision of the Board regarding the exchange rate shall
be conclusive and binding.
-78-