POL00362224
POL00362224
Briefing Pack
Governance
POL-BSFF-0190734
POL00362224
POL00362224
Contents:
Practical information...
Post Office Limited Board Non-executive Members .....
Post Office Limited Group Executive Members......
Post Office Legal Ownership Structurs
Post Office Board Governance Structure..
Matters Reserved to the Board ....
sao sey
Current Board Committee roles.
71 Audit, Risk & Compliance .....
Fads Remuneration Committee...
7.3 Nominations Committee
8. Directors’ Roles......
9. Board Dates...
10. Board Future Agendas .
ii, Glossary of Terms & Project Descriptors...
12. see e cece ee eeeeeeeee- Articles of Association[TOC\o"1-3"\h\z\u]
2
POL-BSFF-0190734_0001
POL00362224
POL00362224
1. Practical Information
1.1 Contact details
Group Executive and Assistants
Executive Telephone Email Assistant
Paula Vennells,
Group CEO
Al Cameron, Group
cFoo
Email
Lisa Jordan (PA)
Mark Davies, Group
Communications,
Brand and Corporate
Affairs Director
Rob Houghton, ClO.
Martin Kirke, Group “(HR Administrator)
HR Director
Jane MacLeod, FA) (also EA to the
Group Director, Chairman and Board Support)
Legal, Governance
and Risk (and
Company Secretary)
Debbie Smith,
‘Owen Woodley
Non-Executive Directors
Name Telephone Email Executive Assistant / Board
Support
Tim Parker, GRO Di Blanchard (EA)
POL Chairman Tel -{""GRO_
Ken McCall,
sID
Carla Stent
Tim Franklin
Tom Cooper
(Shareholder
Representativ
e)
POL-BSFF-0190734_0002
POL00362224
POL00362224
Secretariat
Name Boards/ Committees Telephone Email
Jane MacLeod, Group POL Nomination and
Director of Legal, Remuneration
Governance and Risk Committees
(and Company
Secretary)
Veronica Branton, Head I POL Board
of Secretariat
Sarah Koniarski FRES/ FRESH
ARC
1.2 Meeting times and setting up meetings
The POL Board meeting times vary according to the agenda but ARC meetings (typically five
annually) are generally scheduled in the morning before the POL Board. The Board usually
meets eight times annually, plus an annual strategy session which will normally start with an
afternoon session, followed by a dinner and a full day the following day.
1.3. Dinners
The POL Board has a dinner the night before a meeting from time to time. On occasion
additional meetings (either Committee or ad-hoc meetings) will be arranged around a Board
meeting or the afternoon before the meeting.
1.4 Issuing and accessing papers
Secretariat loads papers onto the Board portal (currently BoardPad) a week before the
meeting. Directors are then able to download the papers and once downloaded you won’t
need a WiFi connection to read them.
Secretariat will also email you to let you know when the papers have been loaded onto the
portal.
1.5 Policies that apply to directors:
Anti-bribery and corruption
Anti Bribery &
Corruption.pdf
Conflicts of interest
PO_Conflict interest
Policy v 15 FINAL 29
POL-BSFF-0190734_0003
1.6
1.7
1.8
1.9
1.10
POL00362224
POL00362224
Gifts & Hospitality
a
A
Internal Gifts and
Hospitality User Gui
Accommodation and Travelling Expenses
Reasonable travelling, hotel and other out of pocket expenses are reimbursed in full when
directors incur expenditure for and on behalf of the Company. All reimbursements are made
upon the submission of relevant receipts or other supporting documents. An expenses claim
is in your reading room on BoardPad and expenses should be sent monthly to Diane
Blanchard ([ HYPERLINK "mailto:
aa))
The current business policy is attached. In general the policy is to economise wherever
possible, avoiding first class travel by rail or air.
Hospitality
Directors may spend reasonable amounts on hospitality in the course of Company business.
Expenditure will be reimbursed by the Company if it is incurred wholly, exclusively and necessarily in
the performance of the director’s duties, and supported by the relevant receipts. To date the Inland
Revenue has not regarded hospitality of this nature to be a taxable benefit.
Telephone charges
The Company pays for the cost of calls made on official business, and rental charges for telephone
and related equipment installed at directors’ homes or in their cars for official purposes. The cost of
any personal calls made using a Company mobile telephone shall be reimbursed to the Company.
Directors & Officers insurance
The Company has a Directors & Officers policy has in place that covers all past, present and
future directors of the policyholder or any subsidiaries.
Information we need from you
Secretariat and HR will request the information required from you as part of the on-boarding
process. We'll also liaise with you about induction sessions.
In addition, we ask directors to:
review their register of interests where requested and advise Secretariat of any changes as
they arise
Submit any entries for the gifts and hospitality register in accordance with the policy. Non-
Executive Directors should seek the advice of the Company Secretary before accepting any
gifts or hospitality on behalf of Post Office.
POL-BSFF-0190734_0004
POL00362224
POL00362224
POL-BSFF-0190734_0005
POL00362224
POL00362224
Post Office Limited Board non-executive members
Tim Parker, Chairman
Joined the Board in October 2015
Chairman of the Nominations Committee and Member of the
Remuneration Committee
Tim has been CEO of several well-known companies: Kenwood,
Clarks, Kwik-Fit, the AA and Samsonite. He has served as a Non-
Executive Director on a number of FTSE 100 companies: Legal and
General, Alliance Boots and Compass Group, and has been a Board
member of the Audit Commission and the South West Regional
Development Agency. He has been an Industrial Partner at CVC
Capital Partners.
Tim is the Executive Chairman of Samsonite Corporation and Non-
Executive Chairman of National Trust.
Tom Cooper, Non- Executive Director
Joined the Board in March 2018
Member of the Audit, Risk and Compliance Committee
Tom Cooper was appointed a Director at UKGI and started in
November 2017.
He was most recently Global Co-Chairman of M&A at Deutsche Bank
where he has spent the last 8 years. Addition to working with clients
on transactions, he chaired the Fairness Opinion Committee in EMEA
and was a member of the committee responsible for approving
franchise lending to Deutsche Bank’s corporate clients in EMEA.
Before joining Deutsche Bank, he worked at UBS Investment Bank for
21 years. He had various roles including working with UK clients,
Nordic Coverage, Transport, Utilities and M&A. He finished his career
at UBS as Head of European M&A.
He started his career at KMPG.
Tim Franklin, Non- Executive Director
Joined the Board in September 2012
Member of the Audit, Risk and Compliance Committee and a Non-
Executive Director of the Post Office Management Services Board
Tim Franklin joined the Board of Post Office Limited as a Non-
Executive Director in September 2012. Tim’s executive career spans
both building societies and banking. Prior to his board roles in the
mutual sector, he was Director of Customer Programmes and Loyalty
and Managing Director of Savings at Barclays. Tim’s experience
extends across the private and public sectors too. He is Senior
Independent Director at HM Land Registry where he chairs the Audit
Committee and was previously on the Boards of Reclaim Fund
Limited, Mutual Plus Limited and the Link Cash Machines Network.
[SHAPE \* MERGEFORMAT ] Ken McCall, Senior Independent Director
Joined the Board in January 2016
Chairman of the Remuneration Committee and Member of both the
Audit, Risk and Compliance and the Nominations Committees
7
POL-BSFF-0190734_0006
POL00362224
POL00362224
Ken’s position with Europcar is Group Chief Operating Officer and
Head of Global Operations. Formerly, he was Chief Executive of DHL
Express UK and Ireland, instrumental in achieving a full business
turnaround and transformation. Previous positions include Chief
Executive of TNT Asia, Middle East, African and Indian sub-continents.
Ken has extensive experience in mails, logistics and business
transformation.
Ken is a Non-Executive Director of Supergroup ple.
Carla Stent, Non-Executive Director
Joined the Board in January 2016
Chairman of the Audit, Risk and Compliance Committee
Carla, a qualified Chartered Accountant, has held a number of senior
positions in banking, private equity and in retail industries. She has
had direct responsibility for corporate finance and post-merger
integration, strategy, business operations, brand development and
management and business transformation. Carla has worked at Board
level for organisations including Barclays Bank ple and Virgin Group
and was a Non- Executive Director of Christian Aid.
Carla is a Non-Executive Director of JPM Morgan Elect plc, Marex
Spectron Limited and Power to Change Trust (which she also chairs).
POL-BSFF-0190734_0007
POL00362224
POL00362224
2. Post Office Limited Group Executive
Paula Vennells — Group Chief Executive
Paula has worked for Post Office Limited since 2007 in a number of senior roles including
Managing Director. She became Chief Executive on 1 April 2012. Previously Paula spent
five years with Whitbread plc, latterly as Group Commercial Director. She began her
career with Unilever and L’Oreal and held directorships in sales and marketing with a
number of major retailers including Dixons Stores Group and Argos. She is currently a
Non-Executive Director and Trustee for Hymns Ancient and Modern Group, a Trustee of
Go ON UK and a member of the Future High Street Forum.
pn “~~; Alisdair Cameron — Chief Financial and Operating Officer
Alisdair became the Chief Financial Officer of Post Office in January 2015. He is also a
Non-Executive Director on the Board of Oxford University Hospitals. From 2002 to 2014
Alisdair worked in a variety of roles for Centrica plc, a FTSE 100 company, including
Director of Audit & Risk, Group Financial Controller, Finance Director of British Gas and
Managing Director of British Gas Enterprise. Previously he was a partner with Arthur
Keemmmmaccunmamaama” Andersen and served as a trustee of the e-Learning Foundation.
Perea emer on,
vy]
O
Martin Kirke — Group HR Director
I Martin was promoted to be HR Director for the Post Office in November 2016 having
G RO I joined in March as 2016 to head the engagement and Industrial Relations. He previously
I held HR and Change Director roles at Ericsson, Serco and BP where he was HR Global
I Operations Director for Europe, Middle East, Africa and Asia-Pacific. Martin has
I previously held non-executive director roles and has experience outside HR as a General
Manager in Telecoms services.
Debbie Smith — Chief Executive - Retail
Debbie was appointed as Chief Executive Retail in January 2018 and is responsible for
I supporting Post Offices to become simpler to run and creating and distributing market-
leading products that customers want in mails, government services and payments.
Having joined Boots in 1987, Debbie has held a wide range of business leadership roles in
the UK, latterly as Managing Director of Boots in the Republic of Ireland, and brings a
wealth of experience from the retail sector as we drive home the transformation of our
business to ensure that it matters as much tomorrow as it does today.
vy]
ie)
Rob Houghton - Group Chief Information Officer
Rob is an experienced Change and IT professional, and joined Post Office Ltd as Group
CIO in May 2016. Prior to Post Office, Rob held a variety of IT leadership roles within
Aviva globally. He lived and worked in the US for four years as North American ClO, was
the Asia/ Europe CIO and latterly was the UK Life ClO managing the Friends Life/ Aviva
integration and subsequent IT organisation. Rob’s first role was as a software engineer in
BT and then he joined consulting and outsourcing firm CSC, where he operated
extensively across Middle East and Africa.
POL-BSFF-0190734_0008
POL00362224
POL00362224
Mark Davies — Group Communications, Brand & Corporate Affairs Director
Mark joined Post Office Ltd as Communications Director in July 2012 after two years as
Communications and Campaigns Director for the charity Rethink Mental Illness. Prior to
that he spent five years as Special Adviser to the Rt Hon Jack Straw MP, working in the
Foreign and Commonwealth Office, the House of Commons and the Ministry of Justice.
He worked as Special Adviser to Baroness Amos, then Leader of the House of Lords, for
18 months in 2004-05. Mark began his career in journalism in 1990 and during 13 years
as a reporter, writer and editor he worked for the Liverpool Echo, the Liverpool Daily
Post, CNN and the BBC.
Owen Woodley ~ Chief Executive — Financial Services & Telecoms
Owen is Chief Executive Office for the Financial Services & Telecoms strategic business
unit. He joined the Post Office in 2016 and was Managing Director of Post Office
Money.
Prior to this, Owen spent four years as Managing Director of the retail business at
Lloyds Bank with responsibility for the branch network and the bank’s significant
customer base.
Owen had previously launched and run a new UK bank in the wake of the financial
crisis, Shawbrook, which focused on commercial property and asset finance lending.
He started his career at Barclays where he undertook a number of senior roles in the
UK in retail and commercial banking. He also worked extensively in risk management
and business development across sub-Saharan Africa. He was at different points
responsible for the joint venture business in Barclaycard and was UK Regional Director
for Barclays in the Midlands and London.
Owen has held a number of other board positions and currently sits on the Board of
Governors at Nottingham Trent University. He is also the Chair of the Trustee Board at
the Drive Forward Foundation, a Charity providing support to care leavers.
[HYPERLINK "https://www.linkedin.com/in/owen-woodley-4b226124/" ]
Jane MacLeod - General Counsel and Company Secretary
Jane MacLeod joined the Post Office in January 2015 as General Counsel and is a
member of the Post Office Group Executive.
Educated at the Australian National University, Jane qualified as a solicitor in 1985 and
has subsequently gained significant experience both in private practice and in-house in
a variety of roles, most recently as General Counsel with Phoenix Group Holdings
where she was a member of Group Executive Committee with responsibility for the
Legal and Corporate Secretariat functions.
Jane’s background is in corporate finance particularly in relation to financial services.
Her responsibilities at the Post Office now include Legal, Governance, Risk & Internal
Audit, and Information Security.
10
POL-BSFF-0190734_0009
POL00362224
POL00362224
3. Post Office Legal Ownership Structure
Legal Ownership and Structure
The shares in Post Office Limited are held by the Secretary of State for Business, Energy and Industrial
Strategy (SoS BEIS). In addition, SoS BEIS, holds a special share in Post Office Limited and the rights
attached to that special share are enshrined within Post Office Limited Articles of Association. SoS
BEIS, through UK Government Investments Limited (UKGI), has no day to day involvement in the
operations of Post Office Limited or in the management of its branch network and staff. However,
UKGI has the right to appoint non-executive directors to the Board. Tom Cooper is the current
representative of UKGI representative and was appointed by the Board on 27 March 2018.
4. Post Office Board Internal Governance Structure
To assist in the execution of its corporate governance responsibilities, the Board hasestablished three
committees which deal with specific topics requiring independent oversight. The Audit, Risk and
Compliance; Nominations; and Remuneration Committees are each chaired by anon-executive
director.
The Board delegates responsibilities and authorities to these committees which operate within terms
of reference approved by the Board. The terms of reference for all committees are reviewed annually
in March to confirm that each committee has delivered against them during the year. The reviews in
March 2018 raised no issues.
Terms of Reference for the committees are available on the Post Office Limited website
corporate. postoffice.co.uk/our-leadership.
5. Matters reserved to the Board
BOARD TERMS OF REFERENCE - Including the Schedule of Matters reserved for Board decision
The Board of Post Office Limited is collectively responsible for setting the Company’s primary business
objectives, for establishing a proper governance framework to manage and monitor risk and for
ensuring that the Company has the resources and leadership required to achieve its stated objectives.
Directors’ statutory duties are set out in the Companies Act 2006. The primary duty of the directors is
to promote the success of Post Office Limited as a Company for the benefit of its Government
shareholder and the wider stakeholder community.
The Board remains accountable for performance to UKGI. The Board is required to notify UKGI of
certain activities and capital commitments and to seek the consent of UKGI, as Shareholder, for certain
actions, as set out in the Articles of Association.
11
POL-BSFF-0190734_0010
POL00362224
POL00362224
A. BOARD COMPOSITION
The Board is made up of two executive directors and six non-executive directors, including the
Chairman.
ROLE INCUMBENT
Chairman Tim Parker
(Chairman of Nominations Committee)
Senior Independent Director Ken McCall
(Chairman of Remuneration Committee)
Non-Executive Director Carla Stent
(Chairman of Audit, Risk & Compliance Committee)
Non-Executive Director Tim Franklin
Non-Executive Director Tom Cooper from 27 March 2018
(Government appointee)
Non-Executive Director Virginia Holmes’ replacement is to be
confirmed
Chief Executive Paula Vennells
CFOO Alisdair Cameron
The Company Secretary (Jane MacLeod) acts as Secretary to the Board.
The composition of the Board is monitored by the Nominations Committee, which makes
recommendations to the Board for the appointment or retirement of directors, taking into account
the need for a diverse board membership with a range of appropriate skills and experience. All
appointments are subject to the consent of the Shareholder.
Non-executive directors form the majority of the Board. The term of office of each non-executive
director is set by the Shareholder. Non-executive Directors are usually appointed for a minimum
period of three years. The initial term of office may be renewed for a further period but normally
non-executive directors will not serve for longer than six years.
B. BOARD MEETINGS
The Board meets as often as required. Typically 8 Board meetings are held each year. In addition,
separate Strategy sessions are held twice a year. Board dinners are held the evening before the
Board meeting from time to time.
The quorum for the transaction of business at a Board meeting is two directors (one executive, one
non-executive).
The Board may meet in person, by telephone or by other electronic means, so long as each
member can contribute to the business of the meeting simultaneously.
Meetings may be convened by the Secretary, at the request of the Chairman, or by any director, at
any time.
Notice of each meeting shall be given to all directors and, unless there are special circumstances,
shall be given at least 3 working days before each meeting.
The Secretary (or a nominated deputy) shall attend all Board meetings and keep minutes and
records of all decisions and actions.
12
POL-BSFF-0190734_0011
POL00362224
POL00362224
Other Post Office employees and/or external consultants may attend for part or the whole of any
Board meeting at the invitation of the Chairman.
The Secretary will be accountable to the Chairman for the provision of relevant and timely
information to the Board and for ensuring regular reporting from Board Committees and the Group
Executive to the full Board.
The non-executive directors will meet twice at least once each year without the executive directors
being present.
DUTIES AND RESPONSIBILITIES
In addition to its legal duties, the Board has the following specific responsibilities:
¢ Setting the strategic direction of the Post Office
¢ Establishment of the Post Office’s vision and values
¢ Setting the Company’s risk appetite and ensuring a proper framework exists for the
management of risk
¢ Maintenance of proper accounting and tax records, as required by the Companies Act 2006
Maintenance of a sound system of internal control so that the Company can meet its statutory
and regulatory obligations
* Maintenance of the reputation of the Post Office as a public institution, including consideration
of new products and activities which may attract public interest or have an impact on the value
of the Post Office brand
¢ Ensuring regular and active communications with the Shareholder, particularly on the
Company’s performance against the Strategic Plan and other key indicators
© Delegation of authority to Board Committees and to the Post Office Group Executive, according
to their respective Terms of Reference
¢ Formal evaluation of the performance of the Board, Board Committees and individual directors.
The Board may delegate authority to the Group Executive or to any Board Committee to deal with
any particular matter or to complete a project or task on behalf of the Board. A Board Committee
includes both standing committees such as the Audit, Risk and Compliance Committee (ARC), the
Nominations and Remuneration Committees and any ad-hoc sub-committees. The Board approves
the terms of reference for all its committees and receives reports on their activities, including
copies of the minutes. Directors of the Board constitute the majority of members of any Board
Committee.
. SCHEDULE OF MATTERS RESERVED FOR BOARD DECISION
The following matters are reserved specifically for Board decision. Where indicated (*), the Board
may delegate authority to a Board Committee to bring forward a recommendation for approval or
to complete a project or task on behalf of the Board.
Section 1: Strategy and management
¢ Approval of the annual operating plan and budget.
e Approval of the Strategic Plan to be submitted to Government and any changes to it.
© Approval of the Funding Agreement with Government and monitoring of the achievement of
milestones contained within the plan.
13
POL-BSFF-0190734_0012
POL00362224
POL00362224
¢ Approval of the criteria for measurement of performance (Key Performance Indicators) and
annual review of such criteria.
© Ensuring that any necessary corrective action is taken in the light of reviews of performance
against budget and against the Strategic Plan and Funding Agreement.
e — Setting the policy for diversity, talent management and succession planning within Post Office.
¢ Approval of any extension of the Group’s activities into new business areas or outside the UK.
* — Any decision to cease to operate all or any material part of the Group’s business.
Section 2: Ownership, capital structure and constitution
* Consideration of any recommendations for major changes to the Group’s ownership and/or
control structure.
e¢ Approval of changes to the Group’s capital structure including any proposal to issue new
classes of shares, to redeem, consolidate or redesignate existing shares or to reduce the share
capital.
* Proposals for changes to the Articles of Association or other constitutional documents
applicable to the Post Office from time to time.
¢ — Approval of the incorporation of any new Group company, partnership or joint venture entity,
including any subscription or application for allotment of shares.
e Approval for the dissolution of any Group company, partnership or joint venture entity.
Section 3: Financial reporting and controls
¢ Approval of the annual report and accounts, including any corporate governance statement
and any specific reports required by Company law" (Board-appointed sub-committee).
e¢ — Approval of any half year financial report or trading statement for publication® (Board-appointed
sub-committee).
e — Approval and declaration of any dividends or other proposed distributions, subject to the
Articles of Association and confirmation of the sufficiency of distributable reserves.
© Approval of any significant changes in accounting policies or practices” (ARC).
¢ Approval of treasury and banking policies, including methods of mitigating against foreign
currency exposure and any use of financial derivatives * (ARC).
* Monitoring of the independence of internal and external auditors * (ARC).
¢ Approval of the appointment or removal of the external auditor’ (ARC).
e — Ensuring that an effective risk management system is maintained as part of a sound system of
internal controls and internal risk management * (ARC).
Section 4: Financial commitments
Shareholder consent is required for:
© contracts > £50m (other than in the ordinary course of business)
¢ all strategic acquisitions and disposals
e all proposals to enter into financial instruments, bank borrowings and any proposed loan
facility (above £20m)
® approval of major asset disposal.
Any of these categories would need to be recommended by the POL Board to the Shareholder.
14
POL-BSFF-0190734_0013
POL00362224
POL00362224
* Contracts of £5m or more (excluding operational BAU expenditure such as agents’
remuneration bill).
e Contracts were there is a risk of liability or loss or a wider risk that requires escalation to the
Board, including:
- a granting of a security in excess of £5m;
- anewarea of business which might bring Post Office within the scope of oversight of a
regulator to which it has not previously been subject;
- amatter which gives rise to risk [in excess of £5m] in maintaining service commitment to
customers in line with Post Office’s social purpose (for which POL has an averse risk
statement);
= amatter which could risk disruption to Post Office’s credit facility (averse risk appetite — POL
is to ensure loan remains below £950m with maintenance of £200m headroom);
- amatter where there is realistic possibility of CMA intervention.
¢ Consideration of any material changes to pension arrangements for Post Office employees, in
particular affecting the rate of contributions required to be made.
¢ Determination of the appropriate investment strategy for Post Office pension funds and
monitoring of performance by the investment managers.
Section 5: Appointments and Senior Remuneration
© Recommendation of the appointment of any person as a Director * (Nominations Committee).
e Following receipt of consent from the Shareholder, formal appointment of any person as a
Director, including the designation of an individual to serve as Chairman, Senior Independent
Director, Chief Executive, CFOO or Chairman of any Board Committee.
¢ Confirmation of the division of responsibilities between the Chairman and the Chief Executive.
® Appointment and any termination of appointment of the Company Secretary.
* Recommendations to the Shareholder on changes to remuneration policy and packages for
Executive Directors * (Remuneration Committee).
« Recommendations to the Shareholder on fees to be paid to Non-Executive Directors.
e — Introduction of any long term incentive scheme and approval of the performance criteria and
the amount of any awards to be made under any long term incentive scheme * (Remuneration
Committee).
¢ — Approval of any annual bonus schemes involving participation by Directors" (Remuneration
Committee).
¢ Confirmation of the terms of any suspension or termination of service of an Executive Director
as an employee of the Company, subject to the law and their Director’s contract *
(Remuneration Committee).
¢ Appointments to the Boards of subsidiary and joint venture companies.
© — Appointment of specified individuals to authenticate the Post Office Limited seal.
¢ Appointment of the Group’s principal professional advisers.
15
POL-BSFF-0190734_0014
POL00362224
POL00362224
Section 6: Governance
Ensuring delivery of the obligations on the Post Office set by the Postal Services Act 2011,
including the publication of an annual Network Report and Postal Heritage Report.
Approval of the Group’s overall corporate governance arrangements.
Performance evaluation of the Board, Board Committees and individual Board members (or
confirmation of why this has not occurred).
Approval of Group policies including, but not limited to, the Health and Safety Policy, Anti-
Money Laundering Policy, Whistle-Blowing policy and/or Code of Conduct and Anti-
Corruption Policy.
Approval of the overall levels of insurance for the Group, including directors’ and officers’
liability insurance and any arrangements for indemnity of directors.
Any proposal to make political donations.
Changes to the Schedule of Matters Reserved for Board decision.
16
POL-BSFF-0190734_0015
POL00362224
POL00362224
6. Board Committee Terms of Reference
The terms of reference for the Board Committees are at: [ HYPERLINK
"http://corporate.postoffice.co.uk/our-leadership" ]. The purpose of each Committee and main
business items for the Audit, Risk and Compliance Committee are shown below.
6.1 AUDIT, RISK AND COMPLIANCE COMMITTEE
1. PURPOSE
The purpose of the Audit, Risk and Compliance Committee (“ARC” or the “Committee”) is to assist the
Board of Directors in fulfilling its fiduciary responsibilities by:
¢ Contributing an independent view on the accounting, financial control and financial reporting
practices of the Company
© Taking all reasonable steps to ensure accurate and informative corporate financial reporting and
disclosures which meet appropriate accounting and corporate governance standards
e Providing oversight of the company’s risk management systems, operational controls and key
systems.
e The responsibilities undertaken by the ARC under delegated authority from the Board will be
subject always to the powers and duties of the Board, as set out in the Articles of Association.
2. ARC MEMBERSHIP
Chairman : Carla Stent
Members 5 Tim Franklin, Tom Cooper and Ken McColl
Company Secretary : Jane MacLeod
External Audit 3 Ernst & Young
Head of Internal Audit : Johann Appel
6.2, REMUNERATION COMMITTEE
1, PURPOSE
The purpose of the Remuneration Committee is to recommend to the Board the remuneration
strategy and any changes to individual elements of the remuneration package for executive directors
of Post Office Limited (the Company); members of the Group Executive who report directly to the
Chief Executive; other significant senior level appointments with comparable remuneration; and to
provide an oversight function for the remuneration of the directors of the Post Office Management
Services Limited (POMS) board, as determined by the Board. Any changes in remuneration for
directors of the Company must be approved in advance by the Shareholder. The remuneration of the
Chairman and of non-executive directors will be set by the Shareholder.
2. REMCO MEMBERSHIP
Chairman 2 Ken McCall
Members 5 Post Office Board Chairman
Company Secretary t Jane MacLeod
17
POL-BSFF-0190734_0016
POL00362224
POL00362224
6.3 NOMINATIONS COMMITTEE
1. PURPOSE
The purpose of the Nominations Committee is to recommend the appointment of individuals to the
Board of Post Office Limited (the Company); to its sub-committees; to Group Executive positions which
report directly to the Chief Executive; the Company Secretary; and to the Post Office Management
Services Limited (POMS) Board. The Committee will also consider and, if necessary, recommend to the
Board any proposals to remove or replace individuals holding office as a Director of the Company or
POMS or reporting directly to the Chief Executive and the Company Secretary. It is acknowledged that
the actions of the Committee will be subject always to the Articles of Association of the Company,
under which any proposal for the appointment or removal of a director of the Company requires the
consent of the Shareholder.
2. NOMCO MEMBERSHIP
Chairman B Post Office Board Chairman
Members 5 Ken McCall
Company Secretary : Jane MacLeod
18
POL-BSFF-0190734_0017
POL00362224
POL00362224
7. Directors’ Roles
DUTIES AND RESPONSIBILITIES OF DIRECTORS
Directors owe a variety of duties to the Company. Among other duties, directors have a duty to
exercise reasonable care, skill and diligence, a duty to promote the success of the Company and a duty
to act within their powers. Directors must not use their power for an improper purpose, take personal
advantage of the Company’s opportunities, allow their personal interests to conflict with those of the
Company nor misapply the Company's assets.
The Institute of Chartered Secretaries and Administrators which provides a helpful guide to these
duties: https://www.icsa.org.uk/assets/files/free-guidance-notes/directors-general-duties (1).pdf
ENTITLEMENT TO INDEPENDENT PROFESSIONAL ADVICE
Directors may seek independent financial or legal advice related to their duties as a Board director,
which will be at the expense of the Company. Access to these advisers should be arranged via the
company secretary.
DIRECTORS AND OFFICERS INSURANCE
Each director and officer of Post Office companies is covered by directors and officers insurance,
currently through AIG Europe (UK) Limited. Cover is provided in respect of loss to each insured
individual, subject to the aggregate limit of the policy (the indemnity limit is £60m at the time of
writing), arising from a claim made against them, in respect of any wrongful act while acting in the
capacity as a director, officer or employee of the Company (subject to policy terms and conditions).
Cover is also provided in respect of loss to the Company in the event of any wrongful act by an insured
person in their capacity as a director, officer or employee of the Company, where such losses are
indemnified by the Company (subject to policy terms and conditions). Further details of the insurance
cover are available from the company secretary.
COMPANIES ACT 2006, DIRECTORS’ CONFLICT OF INTERESTS
A director has a statutory duty to avoid a situation where he has, or can have, a conflict of interest or
possible conflict of interest with the Company’s interests. This duty can be avoided if the company’s
articles provide authorisation for such a situation and the position has been authorized in advance by
the Board. The Articles do contain such a provision and all directors of the Company are required to
declare any conflicts of interest. If any such conflict or potential conflict exists, this should be declared
to the Board who can consider it and decide whether they are prepared to authorise the conflict. If
directors are in any doubt about whether a conflict exists, they should contact the company secretary.
19
POL-BSFF-0190734_0018
8. Board Dates for 2018
POL00362224
POL00362224
29th 29%
09.30 - 11.30 12.30-17.30
8th 8th
10.00 - 11.00 11.00 - 12.00
27th 27th
09.30 - 11.30 11.45 - 16.30
17th 24th 24th 24th
09.30 - 11.30 11.15 - 16.00 09.30 - 10.30 10.30 - 11.00
26th & 27th
TBA
31st 31st
09.30 - 11.30 11.45 — 16.30
25th 25th 25th
11.45 - 16.30 10.00 — 11.00 11.00 - 11.30
30th 30th
09.30 - 11.30 11.45 - 16.30
27th 27th 27th
11.45 - 16.30 09.30 — 10.30 10.30 - 11.00
20
POL-BSFF-0190734_0019
Board Dates for 2019
POL00362224
POL00362224
29th 29th
09.30 - 11.30 11.45 - 16.30
aoe 12th
10.00 - 11.00 11.00 - 12.00
26th 26th
09.30 - 11.30 11.45 - 16.30
21st 28th 28 28th
09.30 - 11.30 11.15 - 16.30 09.30 - 10.00 10.00 ~ 11.00
25th & 26th
TBA
30th 30th
09.30 - 11.30 11.45 - 16.30
24th 24th 24th
11.15 - 16.30 09.30 - 10.00 10.00 - 11.00
29th 29th
09.30 - 11.30 11.45 - 16.30
26th 26" 26th
11.15 - 16.30 09.30 - 10.00 10.00 - 11.00
21
POL-BSFF-0190734_0020
POL00362224
POL00362224
Board Future Agenda
Recurring Items
Occurrence Item
Every Board Meeting Minutes of previous Board meeting and Matters Arising
Board Status report
Minutes of Committee meetings and updates from the Chairs
Chief Executive’s Report
Financial Performance Update
Sealings (for noting)
NB The Health & Safety Report, the Cyber Security Report and the Internal Audit
report will be tabled at the ARC and included in the ARC minutes. Anything
significant which needs Board discussion will be highlighted by the Chair of
the ARC.
Bi-Annually People Update: Year End Performance Review (May) and half year review
(November)
Business Report & Accounts (May) and interim (October)
Annually Adoption/confirmation of the policies which are reserved to the Board
(March)
Approval of the Annual Budget and Operating Plan (March)
Review of Risk Management and Internal controls in line with UK Corporate
Governance Code (March)
Approval of STIP and LTIP Payments for Executive Directors (May)
Approval of STIP and LTIP Performance Conditions (May)
Board Strategy Away Day (June)
Proposed Board dates for following year (July)
Board Effectiveness Review initiated (October ) report (January )
Insurances (September) recommended by the ARC
22
POL-BSFF-0190734_0021
MEETING AGENDAS TO DATE FOR MAY, JUNE AND JULY 2018
POL00362224
POL00362224
Meeting Date
Agenda Items
26 May 2018
Board Meeting Recurring Items, plus:
Retail Performance
RM Negotiation Update
Customer Hub Update
Future of cash
HNGT Business Case
POMs regulatory capital
“Pe FP PY
Postmaster Litigation
26" & 27" June 2018
Board Away Days: Retail , IT and Post Office insurance
31% July 2018
Board Meeting Recurring Items, plus:
1. FS&T Performance
2. UKGI Change Report
3. Digital Suppliers — preferred options
4.
. Postmaster Litigation
Minutes from previous meetings will be provided on BoardPad.
23
POL-BSFF-0190734_0022
POL00362224
POL00362224
10. Glossary of Terms
Below is a listing of key abbreviations used throughout Post Office together with additional terminology
utilised within Post Office:
AEI Application, Enrolment and Identity
AP Action Point (used in minutes)
AR Appointed Representative
ARC Audit, Risk and Compliance Committee
API Application Programming Interface
ATM Automated Teller Machine
BACS Bankers' Automated Clearing Services
BAU Business as Usual
BEIS Department of Business, Energy & Industrial Strategy
BOI Bank of Ireland
BPMA British Postal Museum and Archive
CAG Change Approval Group
CAGR Compound Annual Growth Rate
cDP Common Digital Platform
CEIRF Collective Engagement & Industrial Relations Framework
CFS Core Financial System
CMA Community Managers Association
COSA Crown Office Staffing Arrangement (agreement with CWU)
CPI Consumer Price Index
cRM Customer Relationship Management
cTP Crown Transformation Programme
CViT Cash and Valuables in Transit
CWU Communication Workers Union
DA Distribution Agreement between POL and POMS (since we have MSA listed)
DMB Directly Managed Branch (previously referred to as ‘Crowns’)
DPC Direct Product Contribution
DPO Data Protection Officer
DRO Departmental Records Officer
DVLA Driver and Vehicle Licensing Agency
DVSA Driver and Vehicle Standards Agency (formerly VOSA — see below)
DwpP Department of Work & Pensions
EBITDAS Earnings Before Interest, Tax, Depreciation, Amortisation and Subsidy
24
POL-BSFF-0190734_0023
eKYC
EPOS
EUC
ExCo
FBU
FCA
FOoG
FRES
FRESH
FS
FSC
FSJVA
FS&T
GDPR
GE
Horizon
HRSC
IDA
IDD
IDV or ID &V
IPA
IPS
JIC
Junction
LDF
LTIP
MDA
MSA
MtSF
ND
NDA
Network Tower
Contract
NFSP.
NS&I
NSP
Enhanced Know Your Customer
Electronic Point of Sale
End User Computing
Executive Committee
Fair, Balanced and Understandable
Financial Conduct Authority
Front Office of Government
First Rate Exchange Services Limited
First Rate Exchange Services Holdings Limited
Financial Services
Financial Services Centre
Financial Services Joint Venture Agreement between Bol and POL dated
[2012]
Financial Services & Telecoms business unit
General Data Protection Regulation
Group Executive
IT in branch counter system supplied by Fujitsu. Versions include HNGX,
HNGA, HNGT
Human Resources Service Centre
Identity Assurance (Services)
Insurance Distribution Directive
Identity verification
Information Protection and Assurance Team
Identity and Passport Services
Joint Insurance Committee
Travel Insurance JV between [BGL and POMS]
Leadership Development Forum
Long Term Incentive Plan
Master Distribution Agreement between RMG and POL
Master Services Agreement between POL and POMS
Managing the Surplus Framework (Agreement with CWU)
Network development — plan to expand the size of the network with more,
smaller branches including whitespace.
Non Disclosure Agreement
IT contract with Verizon (previously BT) providing IT telecoms services in
POL offices and across the branch network
National Federation of SubPostmasters
National Savings & Investments
Network Subsidy Payment
25
POL00362224
POL00362224
POL-BSFF-0190734_0024
NT
NTP
Pcl
PID
PO
POAC
POCA
POFS
POL
POLIC
Polo
POMS
POSH
RemCo
RM
RMG
RMHB
RMPP.
RMSEPP
RMDCP
RBS
RPI
SGEI
ShEx
SIA
SLP
SLT
SMCR
SPMO
State Aid
STIP
UKBA
UKGI
VOSA
Network Transformation
Network Transformation Programme
Peripheral Component Interconnect - used in the Payment Card Industry
(MasterCard data security standard)
Project Initiation Document
Purchase Order
Post Office Advisory Council
Post Office Card Account
Post Office Financial Services
Post Office Limited
Post Office Investment Committee
Current Account
Post Office Management Services Limited
Postal Services Holdings Limited (In Liquidation)
Remuneration Committee
Royal Mail
Royal Mail Group
Royal Mail Holdings Board
Royal Mail Pension Plan
Royal Mail Senior Executive Pension Plan
Royal Mail Defined Contribution Plan
Royal Bank of Scotland
Retail Price Index
Services of General Economic Interest
Shareholder Executive (now replaced with UKGI)
Security Industry Authority
Senior Leadership Population
Senior Leadership Team
Senior Managers and Certification Regime
Strategic Project Management Office
a European Commission (EC) term which refers to forms of public
assistance, given to undertakings on a discretionary basis, which has the
potential to distort competition and affect trade between Member States of
the European Union
Short Term Incentive Plan
UK Borders Agency
UK Government Investments (owned by HM Treasury and is the successor
to the Shareholder Executive)
Vehicle and Operator Services Agency
26
POL00362224
POL00362224
POL-BSFF-0190734_0025
Project List:
Project
Name
Eagle
EUM
Everest
Falcon
Finch
Gamma
Hawk
Tris
Jaguar
Maypole
Mercury
Panther
Peregrine
Robin
Solar
Sparrow
Titan
Ultra
Wave
Date
2012
2016-18
2017
2016-17
2016-17
2007
2015
2016-17
2017
2017-18
2017
2016-17
2017-18
2013-15
2015
Explanation
Sale of POFS to the Bank of Ireland, restructure
commission rates for personal financial services
and extend the contract to 2023.
Enhanced User Management - a project to
ensure that Post Office can ensure that only
properly vetted and trained persons have access
to Horizon.
Re-negotiation of contract with Fujitsu to increase
variability of IT cost base.
Implementation of Financial Services strategic
plan.
Removal of in branch Financial Services
specialists.
Acontract variation with POFS generating £100m
cash and income over a number of years in
return for a series of commitments through to
2020.
Acquisition of the 50% of the Insurance business
jointly owned by POL and Bol and which was
injected into POMS.
Review and restructure of the Supply Chain
operations.
Acquisition of New Call telecoms customers.
The procurement project leading to the
implementation of POCA.
Development and Roll-out of HNGT-Lite.
Proposed acquisition of clients and customers in
the payments market from [Payzone].
Re-negotiation of the BoI FSJVA.
A de-risking project in respect of pensions which
removed the link to final salary in respect of pre-
2008 defined benefit pension accrual.
Initial Complaint Review and Mediation Scheme
(regarding complaints concerning Horizon
reliability).
Project to activate POMS as a trading company as
distributor of travel insurance.
Review of the viability of moving agents to
corporate structures and contracts.
The project to introduce a mobile service offering.
27
POL00362224
POL00362224
POL-BSFF-0190734_0026
11. — Articles of Association
Company No. 2154540
THE COMPANIES ACT 2006
A PRIVATE COMPANY LIMITED BY SHARES
NEW
ARTICLES OF ASSOCIATION
of
Post Office Limited
(adopted by a written resolution passed on 12 September 2013)
Registered office
148 Old Street
London
EC1V 9HQ
28
POL00362224
POL00362224
POL-BSFF-0190734_0027
POL00362224
POL00362224
Company No. 2154540
ARTICLES OF ASSOCIATION
of
Post Office Limited
(adopted by a written resolution passed on 12 September 2013)
INTERPRETATION
1. EXCLUSION OF MODEL ARTICLES.
No regulations set out in any statute, or in any statutory instrument or other subordinate legislation
made under any statute concerning companies shall apply as the regulations or articles of the
company.
2. DEFINITIONS
In these articles unless the context otherwise requires -
“the Act" means the Companies Act 2006 (including any orders, regulations or other subordinate
legislation made under it) to the extent from time to time in force;
“the articles" means these articles of association of the company as altered from time to time by
special resolution and the expression "this article" shall be construed accordingly;
“the board" means the board of directors from time to time of the company or the directors present
at a meeting of the directors at which a quorum is present;
“business day" means any day which is not a Saturday or Sunday or a public holiday;
“clear days" in relation to the period of a notice, means 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;
“Enlarged Group” means the company, its ultimate parent company and all subsidiaries of such
ultimate parent company, but excluding any subsidiary of the ultimate parent company which is a
USP Listco (and its subsidiaries);
“executed” includes any mode of execution;
“group” means the company and its subsidiary undertakings (as defined in Section 1162 of the
Companies Act 2006) from time to time;
“the holder" in relation to shares means the member whose name is entered in the register of
members as the holder of the shares;
“member” means a member of the company;
29
POL-BSFF-0190734_0028
POL00362224
POL00362224
“network subsidiary” means any subsidiary of Royal Mail Holdings plc (other than any subsidiary
of Royal Mail Holdings pic which is a USP Listco (and its subsidiaries)) which is, or any of whose
wholly owned subsidiaries is, engaged in the provision of a network of places from which postal
services and/or services provided under arrangements between a UK government department and
that subsidiary or any of its wholly owned subsidiaries, are provided directly to the public;
“office” means the registered office of the company;
"Parent" means the parent undertaking of the company (as defined in Section 1162 of the
Companies Act 2006);
“Primary Territories” means all those countries or parts of the world being members of the
Organisation for Economic Co-operation and Development, and (whether or not the same are or
become members of the said organisation) each of the Isle of Man, the Channel Islands and
Gibraltar, together with such other territories as shall be agreed in writing between the Special
Shareholder and the company;
“public holiday" has the meaning given to that term in the Postal Services Act 2000;
“the register" means the register of members of the company;
“Relevant Decision” has the meaning given to that term in article 13(A);
“Relevant Issue” has the meaning given to that term in article 13(D);
“relevant transaction" means any actual or proposed acquisition, sale or other disposition (whether
by security or otherwise) or parting with or sharing of ownership (including, without limitation, by
partnership, joint venture or otherwise) of any assets, rights or property whatsoever by any member
of the group, other than:
(a) any transaction in the ordinary course of business (including without limitation the
taking of assets on lease or hire purchase);
(b) any transaction between the company and any other member of the Enlarged Group
or between members of the Enlarged Group; and
(c) any transaction approved in any Strategic Plan;
“Royal Mail Holdings pic” means the company incorporated in England and Wales with registered
number 4074919;
“the seal" means the common seal of the company;
“secretary” means 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;
“Secretary of State" means one of Her Majesty's Secretaries of State;
“share rights" has the meaning given to such term in section 15 of the Postal Services Act 2011;
"shares" shall be interpreted in accordance with section 15 of the Postal Services Act 2011;
30
POL-BSFF-0190734_0029
POL00362224
POL00362224
“Special Share" means the one special rights redeemable preference share of £1.00 in the capital
of the company;
“Special Shareholder” means the holder of the Special Share;
“Strategic Plan" means the strategic plan relating to the operation and overall strategic direction of
the group described in article 72;
“Trade Mark" means the registered trade mark "The Post Office" anywhere in the world;
“the United Kingdom" means Great Britain and Northern Ireland;
“USP Listco” means a company:
(a) shares in which are or have been admitted to the premium listing segment of the
Official List of the Financial Conduct Authority of the United Kingdom (acting in its
capacity as the competent authority for the purpose of Part VI of the Financial
Services and Markets Act 2000) and admitted to trading on the main market for listed
securities of the London Stock Exchange plc; and
(b) which is or has been, or a subsidiary of which is or has been, designated as the
universal service provider under section 35 of the Postal Services Act 2011; and
“wholly owned by the Crown” shall be interpreted in accordance with Part 1 of the Postal Services
Act 2011.
Unless the context otherwise requires, words or expressions contained in these articles bear the
same meaning as in the Act but exclude any statutory modification thereof not in force when these
articles become binding on the company. Subject to the foregoing sentence, references to any
provision of any enactment or any subordinate legislation (as defined by section 21(1) of the
Interpretation Act 1978) include any modification or re-enactment of that provision for the time being
in force.
References to "writing" include references to any method of representing or reproducing words in a
legible and non-transitory form, whether in electronic form or otherwise.
References in articles 82, 83 and 94 to (i) a contract include references to any proposed contract and
to any transaction or arrangement or proposed transaction or arrangement whether or not
constituting a contract; and (ii) a conflict of interest include a conflict of interest and duty and a
conflict of duties.
Headings are included only for convenience and shall not affect meaning.
If, and for so long as, the company has only one member, these articles shall (in the absence of any
express provision to the contrary) apply with such modification as may be necessary in relation to the
company.
31
POL-BSFF-0190734_0030
POL00362224
POL00362224
FORM OF RESOLUTION
FORM OF RESOLUTION
Aresolution in writing executed by or on behalf of each member who would have been entitled to
vote upon it if it had been proposed at a general meeting at which he was present shall be as
effectual as if it had been passed at a general meeting properly convened and held and may consist
of several instruments in the like form each executed by or on behalf of one or more of the members.
LIMITED LIABILITY
LIMITED LIABILITY
The liability of members of the company is limited to the amount, if any, unpaid on the shares in the
company held by them.
SHARE CAPITAL
RIGHTS ATTACHED TO SHARES.
Subject to the provisions of the Act and to any rights conferred on the holders of any other shares,
any share may be issued with or have attached to it such rights and restrictions as the company may
by ordinary resolution decide or, if no such resolution has been passed or so far as the resolution
does not make specific provision, as the board may decide.
REDEEMABLE SHARES
Subject to the provisions of the Act, shares may be issued which are to be redeemed or are to be
liable to be redeemed at the option of the company or the holder.
PAYMENT OF COMMISSION
The company may exercise the powers of paying commissions conferred by the Act. Subject to the
provisions of the Act, any such commission may be satisfied by the payment of cash or by the
allotment of fully or partly paid shares or partly in one way and partly in the other.
TRUSTS NOT RECOGNISED
Except as required by law, no person shall be recognised by the company as holding any share upon
any trust and (except as otherwise provided by the articles or by law) the company shall not be
bound by or recognise any interest in any share except an absolute right to the entirety thereof in the
holder.
VARIATION OF CLASS RIGHTS
Subject to the provisions of the Act, if at any time the capital of the company is divided into different
classes of shares, the rights attached to any class may be varied, either while the company is a
going concern or during or in contemplation of a winding-up:
(A) in such manner (if any) as may be provided by those rights; or
32
POL-BSFF-0190734_0031
POL00362224
POL00362224
(B) in the absence of any such provision, with the consent in writing of the holders of three-
quarters in nominal value of the issued shares of that class, or with the sanction of a special
resolution passed at a separate general meeting of the holders of the shares of that class,
but not otherwise. The provisions of these articles relating to general meetings shall, with any
necessary modifications, apply to every such separate general meeting, except that the necessary
quorum at any such meeting other than an adjourned meeting shall be two persons together holding
or representing by proxy at least one-third in nominal value of the issued shares of the class in
question (unless there is only one person who holds issued shares in the class, in which case the
quorum shall be one person) and at an adjourned meeting shall be one person holding shares of the
class in question or his proxy.
33
POL-BSFF-0190734_0032
POL00362224
POL00362224
THE SPECIAL SHARE
SPECIAL SHAREHOLDER
(A) The Special Share may only be issued to the Secretary of State and may be transferred to
and held by the Treasury, another Minister of the Crown or any other duly authorised person
(including, without limitation, any nominee) acting on behalf of the Crown.
(B) The Special Shareholder shall be entitled to receive notice of, and to attend and speak at,
any general meeting or any meeting of any other class of shareholders of the company, but
the Special Share shall carry no right to vote nor any other rights at any such meeting.
(C) On a distribution of capital in a winding-up of the company the Special Shareholder shall be
entitled to repayment of the lower of (i) the capital paid up on the Special Share; and (ii) an
amount equal to 24% of the assets available for distribution to equity holders of the company.
Any such distribution will be made in priority to any repayment of capital to any other
member. In this article 10(C) the term “equity holders” shall have the meaning given by
sections 158 and 159 of the Corporation Tax Act 2010 and the “assets available for
distribution to equity holders” shall be determined in the same manner as they are
determined for the purposes of section 166 of the Corporation Tax Act 2010.
(D) Save as provided above, the Special Share shall confer no right to a dividend or any other
right to participate in the capital or profits of the company.
(E) The Special Shareholder may, subject to the provisions of the Act, require the company to
redeem the Special Share at par (such sum being payable on redemption) at any time by
serving written notice upon the company and delivering to the company the relevant share
certificate. The company shall not be able to redeem the Special Share without the prior
consent of the Special Shareholder.
(F) In the event that:
(i) the Special Shareholder shall give directions to Royal Mail Holdings plc under
section 72 of the Postal Services Act 2000; and
(ii) Royal Mail Holdings plc requires the company or any member of the group to do
anything to comply with those directions
then for such time as the company remains wholly-owned by the Crown the company shall
take all steps within its power to do what those directions require to be done by the company,
and exercise such rights as it has over any subsidiary to procure that such subsidiary does
what those directions require to be done by such subsidiary, within the timeframe so
required.
(G) The provisions of this article 10 shall be subject to article 116.
VARIATION OF SPECIAL SHARE RIGHTS.
Matters requiring consent
Notwithstanding any provision in these articles to the contrary (save for article 116 to which this
article 11 shall be subject), each of the following shall be deemed to be a variation of the rights
34
POL-BSFF-0190734_0033
POL00362224
POL00362224
attaching to the Special Share and accordingly shall occur and be effective only with the prior written
consent of the Special Shareholder:
(A) the alteration or deletion of, or the ratification of any breach of, all or any part of these
articles;
(B) the voluntary winding-up of any member of the group, the passing of a special resolution to
the effect that any member of the group should be wound-up by the court, the presentation
(whether solely or jointly with any other person) of a petition for the winding-up of any
member of the group, or any proposal for any of the foregoing;
(C) the presentation (whether solely or jointly with any other person) of a petition applying for the
appointment of an administrator of any member of the group, or any proposal therefor;
(D) the issue or allotment of any shares or granting of any share rights in the company;
(E) the variation of any rights attached to any shares in the company in so far as such variation
affects the rights attached to the Special Share;
(F) the declaration or payment of any dividend or the making of any distribution by the company
other than in accordance with the Strategic Plan;
(G) any distribution, payment or return to shareholders of the company out of capital of the
company;
(H) the redemption or purchase by the company of any share in itself or the reduction of the
share capital of the company, or any uncalled or unpaid liability in respect thereof, capital
redemption reserve or share premium account of the company or the passing of any
resolution authorising any of the foregoing;
(I) the adoption of any accounting reference date or any material variation of the accounting
practices and policies to be applied in the preparation of the accounts of any member of the
group, if different from the practices or policies then adopted or applied by other members of
the group (other than any accounting practice or policy required to be adopted by law or
required by generally accepted accounting principles applying in the place of incorporation of
the company or the relevant member of the group);
(J) the:
(a) appointment or removal from office of any director of the company; or
(b) appointment or removal of any person as chief executive of the company (whether or
not immediately prior to that appointment he was a director of the company and
whether or not immediately after his removal he continues to be a director of the
same), and "chief executive" shall refer to any person carrying out the general
management functions of a chief executive officer of the company or the group,
or any change in the prescribed minimum number of directors of the company or the
appointment of any person other than a director of the Parent or the company as an
alternate director of any director of the company;
35
POL-BSFF-0190734_0034
(L)
(M)
(N)
(0)
(R)
POL00362224
POL00362224
the adoption of a Strategic Plan or any material variation or amendment of a Strategic Plan
previously adopted;
save as specifically provided for in the approved Strategic Plan, any substantial alteration in
the nature of the business carried on by the company;
the entry into any relevant transaction under which the company, directly or indirectly, ceases
to own or retain any such interest as it may have in any asset in the absence of which the
group might reasonably be considered to be unable to continue to perform the business of
the company as provided for in the Strategic Plan, except in circumstances under which the
relevant asset remains available for exclusive use by any one or more members of the group
for the remainder of its useful economic life or until it is fully depreciated;
any arrangement whereby the directors of any member of the group shall cease to determine
the general policy of the relevant member of the group and the scope of the activity and
operation of the relevant member of the group or cease to determine all matters involving
major or unusual decisions material to the business of the group taken as a whole or
otherwise whereby the control of the management of the relevant member of the group shall
pass from the directors thereof to any third party or body;
the entry into or implementation of a relevant transaction by any member of the group which
involves or is likely to involve (either individually or when taken together with all other related
relevant transactions (other than any related relevant transaction previously approved under
this article 11.1(O) entered into or implemented in the previous 12 months)) the incurrence of
a commitment or liability, or the payment of a sum, by any member of the group which is an
amount in excess of £50,000,000;
the entry by any member of the group into any relevant transaction which is not on
commercial terms and is not considered by the directors of that member to be in the interests
of that member;
(i) the sale, assignment, charging, mortgaging or outright disposal by any member of the
group of any Trade Mark in any of the Primary Territories (ii) the granting of an exclusive
licence by any member of the group which prevents the group from using any Trade Mark in
any of the Primary Territories (iii) the taking of any action by any member of the group with
the intention of jeopardising any Trade Mark in any of the Primary Territories (iv) the taking of
any action by any member of the group which has the effect of causing any Trade Mark in
any of the Primary Territories to cease to subsist, or (v) the taking of any decision or action
which has the effect of allowing rights in respect of any Trade Mark in any of the Primary
Territories to lapse;
the approval of or agreement to or any material variation or amendment to:
(a) the remuneration (including, without limitation, salary, share options, bonuses,
benefits in kind and pension rights) paid or granted by any member of the group to
any director of the company if that director was appointed by the Special
Shareholder or the appointment of that director was duly consented to or deemed
consented to by the Special Shareholder in accordance with the provisions of article
11.1(J); or
(b) the terms and conditions of employment or engagement by any member of the group
of any of the directors of the company if that director was appointed by the Special
36
POL-BSFF-0190734_0035
(S)
POL00362224
POL00362224
Shareholder or the appointment of that director was duly consented to or deemed
consented to by the Special Shareholder in accordance with the provisions of article
11.1(J);
(a) the incurring of (or entry into of any commitment to incur) any borrowing by any
member of the group in circumstances where the borrowing:
(i) (1) individually; or
(2) taken together with the aggregate principal amount in respect of
borrowings already incurred in the same accounting period without
approval under this article11.1(S); or
(3) if part of any series of related borrowings to finance a single
investment, then taken together with the aggregate principal amount
incurred in respect of such related borrowings
exceeds £75,000,000; or
(ii) is to be provided from any source other than another member of the
Enlarged Group, the National Loans Fund or the Crown, save in respect of
borrowings which are due from the Secretary of State, the Bank of England
and (other) Monetary Financial Institutions, a Local Authority or a Public
Corporation; or
(iii) if taken together with the aggregate principal amount outstanding of all
money borrowed by the group from any source (excluding amounts
borrowed by any member of the group from any other member of the
Enlarged Group, other than amounts to be taken into account under article
11.1(S) (b) (v) below) exceeds an amount equal to the lesser of
£2,000,000,000 and 2.5 times the aggregate of:
(1) the amount paid up on the issued share capital of the company; and
(2) the total of the capital and revenue reserves of the group, including
any share premium account, capital redemption reserve and credit
balance on the profit and loss account, but excluding sums set aside
for taxation and amounts attributable to outside shareholders in
subsidiary undertakings of the company and deducting any debit
balance on the profit and loss account, all as shown in the then
latest audited consolidated balance sheet and profit and loss
account of the group (or if consolidated financial statements are not
prepared, as would have been shown in such consolidated financial
statements had they been prepared), but adjusted as may be
necessary in respect of any variation in the paid up share capital or
share premium account or capital redemption reserve of the
company since the date of that balance sheet and further adjusted
as may be necessary to reflect any change since that date in the
companies comprising the group;
(b) for the purposes of this article 11.1(S), but without prejudice to the generality of the
terms "borrowing" and "borrowed":
37
POL-BSFF-0190734_0036
POL00362224
POL00362224
(i) amounts borrowed for the purpose of repaying the whole or any part of any
amounts previously borrowed and then outstanding (including any premium
payable on final repayment) and to be applied for that purpose within six
months of the borrowing shall not, pending such application, be taken into
account as money borrowed;
(ii) the principal amount (including any premium payable on final repayment) of
any debt securities issued in whole or in part for a consideration other than
cash shall be taken into account as money borrowed by the member of the
group issuing them;
(iii) money borrowed by any member of the group and not owing to another
member of the group shall be taken into account as money borrowed and
money borrowed by any member of the group and owing to another member
of the group shall not be so taken into account;
(iv) borrowings of an undertaking which became a subsidiary undertaking of the
company after the date as at which the latest audited balance sheet was
prepared shall not, pending the date of the next consolidated audited
balance sheet, be taken into account as money borrowed to the extent that
the amount of those borrowings does not exceed their amount immediately
after such undertaking became a subsidiary undertaking;
(v) amounts outstanding under any arrangement entered into in the ordinary
course of its business by any member of the group for the leasing or hire
purchase of any assets shall not be taken into account as money borrowed;
and
(vi) any amounts outstanding under sections 71(2) (b), (c), (d) and (e) of the
Postal Services Act 2000 shall be taken into account as moneys borrowed.
for the purposes of this article 11.1(S) the following phrases shall have the following
meanings:
“Local Authority" has the meaning given to it in sections 1(2) and (3) of the Local
Government Act 1999 extended to include any district, iskand or regional council in
Scotland or any county or district council in Northern Ireland;
“Public Corporation" means anybody within the definition of that expression in the
edition of the "Classification of Accounts Guide Part Ill — Sector Categories" current
at the time that the relevant borrowings are made; and
“The Bank of England and (other) Monetary Financial Institutions" means
anybody within the definition of that expression in the edition of "Classification of
Accounts Guide Part Ill — Sector Categories" current at the time that the relevant
borrowings are made;
in calculating the aggregate amount of borrowings for the purpose of this article
11.1(S), money borrowed by any member of the group which is denominated or
repayable in a currency other than sterling shall be treated as converted into sterling:
38
POL-BSFF-0190734_0037
POL00362224
POL00362224
(i) at the rate of exchange used for the conversion of that currency in the latest
audited balance sheet of that member; or
(ii) if no rate was so used, at the middle-market rate of exchange prevailing in
London at the close of business on the date of that balance sheet, but if the
amount in sterling resulting from conversion at that rate would be greater
than that resulting from conversion at the middle-market rate prevailing in
London at the close of business on the business day immediately preceding
the day on which the calculation falls to be made, the latter rate shall apply
instead;
(e) no debt incurred or security given in respect of money borrowed in excess of the
above limit shall be invalid or ineffectual except in the case of express notice to the
lender or the recipient of the security at the time when the debt was incurred or
security given that the limit hereby imposed had been or was thereby exceeded, but
no lender or other person dealing with the company shall be concerned to see or
enquire whether such limit is observed;
(T) the appointment or removal of any person as chairman of the company; and
(U) any action taken by the company or the board (including any appointment, removal or re-
designation) which would have the effect that the board ceased to include directors
appointed to the post of Chairman, Chief Executive and Finance Director (or directors
carrying out the general functions denoted by such posts).
Approval Procedure
(A) Whenever the company wishes to obtain the Special Shareholder's consent to any matter
set out in article 11.1 (other than article 11.1(S)):
(a) the company shall give notice to the Special Shareholder, such notice to:-
(i) be in writing;
(ii) be addressed to such persons as the Special Shareholder shall, from time to
time, notify in writing to the company;
(iii) be delivered by hand or such other means (which may include electronic
means) to which the Special Shareholder has provided (and not revoked) its
written consent specifically for the purpose of receiving such notices;
(iv) clearly state that it is important and requires immediate attention;
(v) clearly identify itself as a notice served pursuant to this article 11.2(A) and
that failure to respond within ten business days will result in the Special
Shareholder being deemed to have given his consent to the matter in
question; and
(vi) contain or annex such information as can reasonably be expected to enable
the Special Shareholder to consider the matter being proposed.
39
POL-BSFF-0190734_0038
(B)
(C)
(D)
POL00362224
POL00362224
(b) On or before the date which falls ten business days after the date of receipt of such
notice (the "Initial Expiry Date") the Special Shareholder shall give written notice to
the secretary stating:
(i) his consent to the matter contained in the notice; or
(ii) his refusal to consent to the matter contained in the notice (providing in
reasonable detail and on a confidential basis the reasons for such refusal);
or
(iii) that he requires a further ten business days in which to consider the matter,
commencing on the business day following the Initial Expiry Date.
If on or before the Initial Expiry Date the Special Shareholder gives written notice to the
company pursuant to article 11.2(A)(b)(iii) the Special Shareholder shall, on or before the
date which falls ten business days after the Initial Expiry Date, give a further written notice to
the secretary stating:
(a) his consent to the matter contained in the notice; or
(b) his refusal to consent to the matter contained in the notice (providing in reasonable
detail and on a confidential basis the reasons for such refusal).
The Special Shareholder may, at any time, request from the company such further
information as it reasonably requires in order to assist it to consider the matter being
proposed and the company shall deliver such information to the Special Shareholder as soon
as reasonably practicable thereafter.
If the company does not receive any notice from the Special Shareholder pursuant to article
11.2(A) (b) on or before the Initial Expiry Date or pursuant to article 11.2(B) within the further
period referred to therein, the company shall be entitled to undertake the matter contained in
the notice issued by it pursuant to article 11.2(A) (a) and the consent of the Special
Shareholder shall be deemed irrevocably given to such matter.
In favour of any third party dealing with any member of the group a certificate by any director
or the secretary to the effect that the Special Shareholder shall have been deemed to have
given his consent to any matter as a result of the operation of article 11.2(D) above shall be
conclusive and binding as to that fact.
Whenever the company wishes to obtain the Special Shareholder’s consent to any matter
set out in article11.1(S), the company shall give notice to the Special Shareholder in
accordance with articles 11.2(A)(a)(i) to (iv) and (vi), such notice to clearly identify itself as a
notice served pursuant to this article 11.3 and that failure to respond within 28 business days
will result in the Special Shareholder being deemed to have given his consent to the matter
in question.
On or before the date which falls 28 business days after the date of receipt of such notice
(the "Expiry Date") the Special Shareholder shall give written notice to the secretary stating:
(a) his consent to the matter contained in the notice; or
40
POL-BSFF-0190734_0039
12.
13.
POL00362224
POL00362224
(b) his refusal to consent to the matter contained in the notice (providing in reasonable
detail and on a confidential basis the reasons for such refusal).
(C) The Special Shareholder may, at any time before the Expiry Date request from the company
such further information as it reasonably requires in order to assist it to consider the matter
being proposed and the company shall deliver such information to the Special Shareholder
as soon as reasonably practicable thereafter.
(D) If the company does not receive any notice from the Special Shareholder pursuant to article
11.3(B) on or before the Expiry Date the company shall be entitled to undertake the matter
contained in the notice issued by it pursuant to article 11.3(A)and the consent of the Special
Shareholder shall be deemed irrevocably given to such matter.
(E) In favour of a third party dealing with any member of the group a certificate by any director or
the secretary to the effect that the Special Shareholder shall have been deemed to have
given its consent to any matter as a result of the operation of article 11.3(D) above shall be
conclusive and binding as such.
Delivery of any notice served upon the Special Shareholder under articles11.2 or 11.3 shall
be evidenced by a receipt acknowledging delivery signed and dated by one of the
addressees of the relevant notice and such notice shall be deemed to have been received
on the date on which the receipt acknowledging delivery of the same is signed.
The directors of the company will exercise all powers exercisable by the company in relation
to group subsidiaries so as to ensure that no subsidiary shall take any action which (either
alone or when taken together with any other action) would result in the variation of any of the
rights attached to the Special Share.
The provisions of this article 11 shall be subject to article 116.
INFORMATION
(A) Notwithstanding any other provision of these articles, the Special Shareholder shall be
entitled to request such information in relation to the affairs of the group (or any particular
member of the group) as it may consider necessary or desirable. The company shall use its
reasonable endeavours to comply promptly with such requests for information from time to
time, but only in so far as the company has such information within its possession or such
information can reasonably be obtained by it.
(B) Notwithstanding any other provision of these articles the company shall, at the request of the
Special Shareholder, procure that such specified or other relevant directors and senior
managers of the company shall meet with the Special Shareholder (or its representatives) to
discuss the affairs of the group (or any particular member of the group) and the company
shall release such directors or managers from any obligation of confidentiality owed to the
company for the purpose of these discussions.
NOTIFICATION
(A) The board shall, prior to taking any final decision on a Relevant Issue (a "Relevant
Decision"), give to the Special Shareholder notice in writing setting out details of the
Relevant Issue and the preliminary decision (if any) reached by the board in relation thereto.
41
POL-BSFF-0190734_0040
14.
(Cc)
(D)
(E)
POL00362224
POL00362224
Any notice given pursuant to article 13(A) shall be given not less than ten business days
before the Relevant Decision is taken unless, as a result of the urgency of the Relevant
Issue, it would, in the opinion of the board, be materially prejudicial to the company or the
group to delay making a decision on the Relevant Issue, in which case the notice may be
given on shorter notice but not less than three business days prior to the taking of the
Relevant Decision.
Any notice provided to the Special Shareholder under article 13(A) shall:
(i) be in writing;
(ii) be delivered by hand;
(iii) clearly identify that it is important, requires immediate attention, and that it is a notice
served under article 13; and
(iv) contain or annex such information as is reasonably necessary to enable the Special
Shareholder to consider the Relevant Issue.
An issue is a Relevant Issue if, in the reasonable opinion of the board:
(i) it is not set out in reasonable detail in an approved Strategic Plan;
(ii) it is an issue which may have material adverse effect upon the business or financial
prospects of either a USP Listco (or any of its subsidiaries) or any network subsidiary
and a corresponding benefit to the other of them; and
(iii) it is an issue which involves the entry by the company into any arrangement which
falls within either of the following categories, namely:
(a) it involves or is likely to involve the incurring of a capital commitment or
liability, or the payment of a capital sum, in each case by a USP Listco (or
any of its subsidiaries) or network subsidiary, of an amount in excess of
£20,000,000 (and for this purpose a series of related transactions in any six
month period shall be aggregated); or
(b) it has or is likely to have a net impact on the annual net revenues after tax of
a USP Listco (or any of its subsidiaries) or network subsidiary in excess of
£20,000,000 per six months.
For the purposes of this article, the board shall procure that any Relevant Issue is referred to
the board for consideration.
SHARE CERTIFICATES
RIGHT TO SHARE CERTIFICATES.
Every member, upon becoming the holder of any shares, shall be entitled without payment to one
certificate for all the shares of each class held by him (and, upon transferring a part of his holding of
shares of any class, to a certificate for the balance of such holding) or several certificates each for
one or more of his shares upon payment for every certificate after the first of such reasonable sum
as the board may determine. Every certificate shall be executed under the seal or otherwise in
42
POL-BSFF-0190734_0041
15.
16.
17.
18.
19.
POL00362224
POL00362224
accordance with the Act or in such other manner as the board may approve and shall specify the
number, class and distinguishing numbers (if any) of the shares to which it relates and the amount or
respective amounts paid up thereon. The company shall not be bound to issue more than one
certificate for shares held jointly by several persons and delivery of a certificate to one joint holder
shall be a sufficient delivery to all of them.
REPLACEMENT OF SHARE CERTIFICATES
If a share certificate is defaced, worn out, lost or destroyed, it may be renewed on such terms (if any)
as to evidence and indemnity and payment of the expenses reasonably incurred by the company in
investigating evidence as the board may determine but otherwise free of charge, and (in the case of
defacement or wearing out) on delivery up of the old certificate.
LIEN
COMPANY’S LIEN ON SHARES NOT FULLY PAID
The company shall have a first and paramount lien on every share (not being a fully paid share) for
all moneys (whether presently payable or not) payable at a fixed time or called in respect of that
share. The board may at any time declare any share to be wholly or in part exempt from the
provisions of this article. The company's lien on a share shall extend to any amount payable in
respect of it.
ENFORCING LIEN BY SALE
The company may sell in such manner as the board may determine 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 fourteen clear days after notice has been given to the holder of the share or to the person
entitled to it in consequence of the death or bankruptcy of the holder, demanding payment and
stating that if the notice is not complied with the shares may be sold. To give effect to a sale, the
board may authorise some person to execute an instrument of transfer of the shares sold to, or in
accordance with the directions of, the purchaser. The title of the transferee to the shares shall not be
affected by any irregularity in or invalidity of the proceedings in reference to the sale.
APPLICATION OF PROCEEDS OF SALE
The net proceeds of the sale, after payment of the costs, shall be applied in payment of so much of
the sum for which the lien exists as is presently payable, and any residue shall (upon surrender to
the company for cancellation of the certificate for the shares sold and subject to a like lien for any
moneys not presently payable as existed upon the shares before the sale) be paid to the person
entitled to the shares at the date of the sale.
CALLS ON SHARES AND FORFEITURE
CALLS
Subject to the terms of allotment, the board may make calls upon the members in respect of any
moneys unpaid on their shares (whether in respect of nominal value or premium) and each member
shall (subject to receiving at least fourteen 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 required to be paid by instalments. A call may be revoked in whole or part and payment of a
call may be postponed in whole or part as the board may decide. A person upon whom a call is
43
POL-BSFF-0190734_0042
20.
21.
22.
23.
24.
25.
26.
POL00362224
POL00362224
made shall remain liable for calls made upon him notwithstanding the subsequent transfer of the
shares in respect whereof the call was made. A call shall be deemed to have been made at the time
when the resolution of the board authorising the call was passed.
LIABILITY OF JOINT HOLDERS
The joint holders of a share shall be jointly and severally liable to pay all calls in respect thereof.
INTEREST DUE ON NON-PAYMENT
If a call remains unpaid after it has become due and payable the person from whom it is due and
payable shall pay interest on the amount unpaid from the day it became due and payable until it is
paid at the rate fixed by the terms of allotment 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.
SUMS DUE ON ALLOTMENT TREATED AS CALLS
An amount payable in respect of a share on allotment or at any fixed date, whether in respect of
nominal value or premium or as an instalment of a call, shall be deemed to be a call and if it is not
paid the provisions of the articles shall apply as if that amount had become due and payable by
virtue of a call.
POWER TO DIFFERENTIATE
Subject to the terms of allotment, the board may make arrangements on the issue of shares for a
difference between the holders in the amounts and times of payment of calls on their shares.
FORFEITURE OF SHARES
NOTICE IF CALL OR INSTALMENT NOT PAID
If a call remains unpaid after it has become due and payable the board may give to the person from
whom it is due not less than fourteen clear days’ notice requiring payment of the amount unpaid
together with any interest which may have accrued. The notice shall name the place where payment
is to be made and shall state that if the notice is not complied with the shares in respect of which the
call was made will be liable to be forfeited.
FORFEITURE FOR NON-COMPLIANCE WITH NOTICE
If the notice is not complied with any share in respect of which it was given may, before the payment
required by the notice has been made, be forfeited by a resolution of the board and the forfeiture
shall include all dividends or other moneys payable in respect of the forfeited shares and not paid
before the forfeiture.
SALE OF FORFEITED SHARES:
Subject to the provisions of the Act, a forfeited share may be sold, re allotted or otherwise disposed
of on such terms and in such manner as the board determines either to the person who was before
the forfeiture the holder or to any other person and at any time before sale, re allotment or other
disposition, the forfeiture may be cancelled on such terms as the board thinks fit. Where for the
44
POL-BSFF-0190734_0043
27.
28.
29.
30.
34.
POL00362224
POL00362224
purposes of its disposal a forfeited share is to be transferred to any person the board may authorise
some person to execute an instrument of transfer of the share to that person.
ARREARS TO BE PAID NOTWITHSTANDING FORFEITURE
Aperson any of whose shares have been forfeited shall cease to be a member in respect of them
and shall surrender to the company for cancellation the certificate for the shares forfeited but shall
remain liable to the company for all moneys which at the date of forfeiture were presently payable by
him to the company in respect of those shares with interest at the rate at which interest was payable
on those moneys before the forfeiture or, if no interest was so payable, at the appropriate rate (as
defined in the Act) from the date of forfeiture until payment but the board may waive payment wholly
or in part or enforce payment without any allowance for the value of the shares at the time of
forfeiture or for any consideration received on their disposal.
STATUTORY DECLARATION AS TO FORFEITURE
Astatutory 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 and the declaration shall (subject to the execution of an instrument of transfer if
necessary) constitute a good title to the share and the person to whom the share is disposed of 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 or disposal
of the share.
TRANSFER OF SHARES
EXECUTION OF TRANSFER
The instrument of transfer of a share may be in any usual form or in any other form which the board
may approve and shall be executed by or on behalf of the transferor and, unless the share is fully
paid, by or on behalf of the transferee.
RIGHT TO DECLINE REGISTRATION
The board may refuse to register the transfer of a share which is not fully paid to a person of whom
they do not approve and they may refuse to register the transfer of a share on which the company
has a lien or where such transfer is restricted by the Act or the articles. They may also refuse to
register a transfer unless -
(A) it is lodged at the office or at such other place as the board may appoint and is accompanied
by the certificate for the shares to which it relates and such other evidence as the board may
reasonably require to show the right of the transferor to make the transfer;
(B) itis in respect of only one class of shares; and
(C) it is in favour of not more than four transferees.
NO FEE FOR REGISTRATION
No fee shall be charged for the registration of any instrument of transfer or other document relating
to or affecting the title to any share.
45
POL-BSFF-0190734_0044
32.
33.
34,
35.
36.
37.
POL00362224
POL00362224
RETENTION OF INSTRUMENT OF TRANSFER
The company shall be entitled to retain any instrument of transfer which is registered, 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.
TRANSMISSION OF SHARES
TRANSMISSION ON DEATH
If a member dies the survivor or survivors where he was a joint holder, and his personal
representatives where he was a sole holder or the only survivor of joint holders, shall be the only
persons recognised by the company as having any title to his interest; but nothing herein contained
shall release the estate of a deceased member from any liability in respect of any share which had
been jointly held by him.
ELECTION OF PERSON ENTITLED BY TRANSMISSION
Aperson becoming entitled to a share in consequence of the death or bankruptcy of a member may,
upon such evidence being produced as the board may properly require, 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 holder he shall give notice to the company to that effect. If he elects to have
another person registered he shall execute an instrument of transfer of the share to that person. All
the articles relating to the transfer of shares shall apply to the notice or instrument of transfer as if it
were an instrument of transfer executed by the member and the death or bankruptcy of the member
had not occurred.
RIGHTS OF PERSON ENTITLED BY TRANSMISSION
Aperson becoming entitled to a share in consequence of the death or bankruptcy of a member shall
have the rights to which he would be entitled if he were the holder of the share, except that he shall
not be entitled to attend or vote at any meeting of the company or at any separate meeting of the
holders of any class of shares in the company, in respect of the share before being registered as the
holder of the share, unless authorised to do so by the board.
ALTERATION OF SHARE CAPITAL
SUB-DIVISION
The company may by ordinary resolution sub-divide its shares, or any of them, into shares of smaller
amount provided that none of the shares resulting from the sub-division may have any right,
preference or advantage not attached to the shares immediately prior to the sub-division.
FRACTIONS
Whenever as a result of a consolidation, consolidation and sub-division, or sub-division of shares
any members would become entitled to fractions of a share, the board may deal with the fractions as
it thinks fit, including by aggregating and selling them or by dealing with them in some other way. The
board may sell shares representing fractions to any person (including, subject to the provisions of the
Act, the company) and may authorise some person to execute an instrument of transfer of the
shares to, or in accordance with the directions of, the purchaser. The transferee shall not be bound
46
POL-BSFF-0190734_0045
38.
39.
40.
41.
42.
43.
POL00362224
POL00362224
to see to the application of the purchase money nor shall his title to the shares be affected by any
irregularity in or invalidity of the proceedings in reference to the sale.
GENERAL MEETINGS
OMISSION OR NON-RECEIPT OF NOTICE
The accidental omission to give notice of a meeting to, or the non receipt of notice of a meeting by,
any person entitled to receive notice shall not invalidate the proceedings at that meeting.
Amember present in person or by proxy at a meeting shall be deemed to have received proper
notice of that meeting and, where applicable, of the purpose of that meeting.
POSTPONEMENT OF GENERAL MEETINGS.
If the board, in its absolute discretion, considers that it is impractical or unreasonable for any reason
to hold a general meeting on the date or at the time or place specified in the notice calling the
general meeting, it may postpone the general meeting to another date, time and place. When a
meeting is so postponed, notice of the date, time and place of the postponed meeting shall be given
to the members. Notice of the business to be transacted at such postponed meeting shall not be
required.
PROCEEDINGS AT GENERAL MEETINGS
QUORUM
No business shall be transacted at any meeting unless a quorum is present. Two persons entitled to
vote upon the business to be transacted, each being a member or a proxy for a member or a duly
authorised representative of a corporation, shall be a quorum. If, and for so long as, the company
has only one member, that member or the proxy for that member or, where that member is a
corporation, its duly authorised representative shall be a quorum at any general meeting of the
company or of the holders of any class of shares.
PROCEDURE IF QUORUM NOT PRESENT
If such a quorum is not present within half an hour from the time appointed for the meeting, or if
during a meeting such a quorum ceases to be present, the meeting shall stand adjourned to the
same day in the next week at the same time and place or to such time and place as the board may
determine.
CHAIRMAN OF GENERAL MEETING
The chairman, if any, of the board or in his absence some other director nominated by the board
shall preside as chairman of the meeting, but if neither the chairman nor such other director (if any)
be present within fifteen minutes after the time appointed for holding the meeting and willing to act,
the directors present shall elect one of their number to be chairman and, if there is only one director
present and willing to act, he shall be chairman. If no director is willing to act as chairman, or if no
director is present within fifteen minutes after the time appointed for holding the meeting, the
members present and entitled to vote shall choose one of their number to be chairman.
ORDERLY CONDUCT
47
POL-BSFF-0190734_0046
44,
45.
46.
47.
48.
POL00362224
POL00362224
The chairman shall take such action as he thinks fit to promote the orderly conduct of the business of
the meeting as laid down in the notice of the meeting and the chairman's decision on matters of
procedure or arising incidentally from the business of the meeting shall be final as shall be his
determination as to whether any matter is of such a nature.
ENTITLEMENT TO ATTEND AND SPEAK
Each director shall be entitled to attend and speak at any general meeting of the company and at
any separate general meeting of the holders of any class of shares in the company. The chairman
may invite any person to attend and speak at any general meeting of the company whom the
chairman considers to be equipped by knowledge or experience of the company's business to assist
in the deliberations of the meeting. In addition, the chairman may invite any person who has been
nominated for the purpose by a member, where the chairman is satisfied that such time as the
chairman may determine, the member holds any shares in the company as such person's nominee,
to attend and, if the chairman considers it appropriate, to speak at any general meeting of the
company.
ADJOURNMENTS
The chairman may, with reasonable cause but without requiring the consent of the meeting (whether
or not it has commenced or a quorum is present), adjourn any meeting from time to time and from
place to place, but no business shall be transacted at an adjourned meeting other than business
which might properly have been transacted at the meeting had the adjournment not taken place.
When a meeting is adjourned for fourteen days or more, at least seven clear days’ notice shall be
given specifying the time and place of the adjourned meeting and the general nature of the business
to be transacted. Otherwise it shall not be necessary to give any such notice.
AMENDMENTS RULED OUT OF ORDER
If an amendment proposed to any resolution under consideration is ruled out of order by the
chairman, the proceedings on the resolution shall not be invalidated by any error in the ruling.
VOTING
VOTES OF MEMBERS
Subject to any special terms as to voting upon which any shares may be issued or may for the time
being be held and to any other provisions of these articles, on a show of hands every member who
(being an individual) is present in person or by proxy or (being a corporation) is present by a duly
authorised representative or by proxy shall have one vote and on a poll every member shall have
one vote for every share of which he is the holder. For this purpose, where a proxy is given
discretion as to how to vote on a show of hands, this shall be treated as an instruction by the
relevant member to vote in the way in which the proxy elects to exercise that discretion.
METHOD OF VOTING
Aresolution put to the vote of a meeting shall be decided on a show of hands unless before, or on
the declaration of the result of, the show of hands a poll is duly demanded. Subject to the provisions
of the Act, a poll may be demanded -
(A) by the chairman; or
48
POL-BSFF-0190734_0047
49.
50.
51.
52.
53.
POL00362224
POL00362224
(B) by at least two members having the right to vote on the resolution; or
(C) by a member or members representing in the aggregate not less than one tenth of the total
voting rights of all the members having the right to vote on the resolution; or
(D) by a member or members holding shares conferring a right to vote on the resolution 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;
and a demand by a person as proxy for a member shall be the same as a demand by the member.
PROCEDURE IF POLL NOT DEMANDED
Unless a poll is duly demanded a declaration by the chairman that a resolution has been carried or
carried unanimously, or by a particular majority, or lost, or not carried by a particular majority and an
entry to that effect in the 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 the resolution.
WITHDRAWAL OF DEMAND FOR POLL
The demand for a poll may, before the poll is taken, be withdrawn but only with the consent of the
chairman and a demand so withdrawn shall not be taken to have invalidated the result of a show of
hands declared before the demand was made.
PROCEDURE IF POLL DEMANDED
Apoll shall be taken as the chairman directs and he may appoint scrutineers (who need not be
members) 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.
WHEN POLL TO BE TAKEN
Apoll demanded on the election of a chairman or on a question of adjournment shall be taken
forthwith. A poll demanded on any other question shall be taken either forthwith or at such time and
place as the chairman directs not being more than thirty days after the poll is 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. If a poll is demanded before the
declaration of the result of a show of hands and the demand is duly withdrawn, the meeting shall
continue as if the demand had not been made.
NO NOTICE OF POLL
No notice need be given of a poll not taken forthwith if the time and place at which it is to be taken
are announced at the meeting 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.
49
POL-BSFF-0190734_0048
54.
55.
56.
POL00362224
POL00362224
VOTES OF JOINT HOLDERS
In the case of joint holders 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 of members.
VOTING ON BEHALF OF INCAPABLE MEMBER
Amember in respect of whom an order has been made by any court having jurisdiction (whether in
the United Kingdom or elsewhere) in matters concerning mental disorder may vote and may exercise
any other right conferred by membership in relation to general meetings by or through any receiver,
curator bonis or other person authorised in that behalf appointed by that court (and that person may
vote by proxy). Written evidence to the satisfaction of the board of the authority of the person
claiming to exercise the right to vote shall be hand-delivered to the company's registered office, or
delivered by such other means (which may include electronic means) as the board may accept, not
less than forty eight hours before the time appointed for holding the meeting or adjourned meeting at
which the right to vote is to be exercised and in default the right to vote shall not be exercisable.
NO RIGHT TO VOTE WHERE SUMS OVERDUE ON SHARES
No member shall vote at any general meeting or at any separate meeting of the holders of any class
of shares in the company, either in person or by proxy, in respect of any share held by him unless all
moneys presently payable by him in respect of that share have been paid.
50
POL-BSFF-0190734_0049
POL00362224
POL00362224
57. OBJECTIONS OR ERRORS IN VOTING
(A) Its
(i) any objection shall be raised to the qualification of any voter, or
(ii) any votes have been counted which ought not to have been counted or which might
have been rejected, or
(iii) 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 and shall only vitiate the
decision of the meeting on any resolution if the chairman decides that the same may have
affected the decision of the meeting. The decision of the chairman on such matters shall be
conclusive.
(B) The company shall not be obliged to ascertain whether a proxy or representative of a
corporation has voted in accordance with a member's instructions and the failure of a proxy
or representative so to do shall not vitiate the decision of the meeting or adjourned meeting
or poll on any resolution.
PROXIES
58. APPOINTMENT OF PROXY
Votes may be given either personally or by proxy. Amember may appoint more than one proxy to
attend on the same occasion.
59. FORM OF PROXY
An instrument appointing a proxy shall be in writing, executed by or on behalf of the appointor and
shall be in the following form (or in a form as near thereto as circumstances allow or in any other
form which is usual or which the board may approve)-
"Post Office Limited
IMWe, » of ,
being a member/members of the above named company, hereby appoint of
, oF failing him, of , as my/our proxy to vote in my/our
name[s] and on my/our behalf at the general meeting of the company to be held on
20, and at any adjournment thereof.
Signed on 20 ."
60. INSTRUCTIONS TO PROXY
$1
POL-BSFF-0190734_0050
61.
POL00362224
POL00362224
Where it is desired to afford members an opportunity of instructing the proxy how he shall act the
instrument appointing a proxy shall be in the following form (or in a form as near thereto as
circumstances allow or in any other form which is usual or which the board may approve) -
"Post Office Limited
MWe, , of ,
being a member/members of the above named company, hereby appoint of
, or failing him, of , as my/our proxy to vote in my/our
name{[s] and on my/our behalf at the general meeting of the company to be held on
20, and at any adjournment thereof.
This form is to be used in respect of the resolutions mentioned below as follows:
Resolution No.1 *for *against
Resolution No.2 *for *against.
*Strike out whichever is not desired.
Unless otherwise instructed, the proxy may vote as he thinks fit or abstain from voting.
Signed on 20."
DELIVERY OF PROXIES
The instrument appointing a proxy and any authority under which it is executed may be delivered:
(A) in hard copy form at the office (or such other place in the United Kingdom as may be
specified by the company for the receipt of appointments of proxy in hard copy form) to be
received not less than 48 hours (or such shorter time as the board may determine) before
the time appointed for holding the meeting or adjourned meeting at which the person named
in the appointment proposes to vote together with (if required by the board) any authority
under which it is made or a copy of the authority, certified notarially or in accordance with the
Powers of Attorney Act 1971 or in some other manner approved by the board;
(B) by electronic means, to be received at the address specified by the company for the receipt
of appointments of proxy by electronic means not less than 48 hours (or such shorter time as
the board may determine) before the time appointed for holding the meeting or adjourned
meeting at which the person named in the appointment proposes to vote. Any authority
pursuant to which such an appointment is made or a copy of the authority, certified notarially
or in accordance with the Powers of Attorney Act 1971 or in some other manner approved by
the board, must, if required by the board, be received at such address or at the office (or
such other place in the United Kingdom as may be specified by the company for the receipt
of such documents) not less than 48 hours (or such shorter time as the board may
determine) before the time appointed for holding the meeting or adjourned meeting at which
the person named in the appointment proposes to vote;
(C) in the case of a poll taken more than 48 hours after it was demanded, to be received as
aforesaid not less than 24 hours (or such shorter time as the board may determine) before
the time appointed for the taking of the poll;
52
POL-BSFF-0190734_0051
62.
63.
64.
POL00362224
POL00362224
(D) in the case of a poll taken following the conclusion of a meeting or adjourned meeting but not
more than 48 hours after it was demanded, to be received as aforesaid before the end of the
meeting at which it was demanded (or at such later time as the board may determine),
and an appointment of a proxy which is not, or in respect of which the authority or copy thereof is
not, received in a manner so permitted shall be invalid. When two or more valid but differing
appointments of a proxy are received in respect of the same share for use at the same meeting or
poll, the one which is last received (regardless of its date or of the date of its signature) shall be
treated as replacing and revoking the others as regards that share; if the company is unable to
determine which was last received, none of them shall be treated as valid in respect of that share.
The appointment of a proxy shall not preclude a member from attending and voting in person at the
meeting or poll concerned. The proceedings at a general meeting shall not be invalidated where an
appointment of a proxy in respect of that meeting is sent in electronic form as provided in these
articles, but it cannot be read by the recipient because of a technical problem.
CANCELLATION OF PROXY’S AUTHORITY
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 the person voting or
demanding a poll unless notice of the determination was received by the company before the
commencement of the meeting or adjourned meeting at which the vote is given or the poll demanded
or (in the case of a poll taken otherwise than on the same day as the meeting or adjourned meeting)
the time appointed for taking the poll. Such notice of determination shall be received either in hard
copy form by the office or such other place within the United Kingdom as may be specified by the
company in accordance with article 61(A) or in electronic form at the address (if any) specified by the
company in accordance with article 61(B), regardless of whether any relevant proxy appointment
was effected in hard copy form or in electronic form.
APPOINTMENT, RETIREMENT AND REMOVAL OF DIRECTORS
NUMBER OF DIRECTORS
Unless otherwise determined by ordinary resolution and subject to the articles, the number of
directors (other than alternate directors) shall not be subject to any maximum but shall be not less
than two.
ALTERNATE DIRECTORS
(A) Any director (other than an alternate director) may appoint any other director, or, subject to
the articles, any other person approved by the resolution of the board and willing to act, to be
an alternate director and may remove from office an alternate director so appointed by him.
(B) An alternate director shall be entitled to receive notice of all meetings of the board and of all
meetings of committees of the board of which his appointor is a member, to attend and vote
at any such meeting at which the director appointing him is not personally present, and
generally to perform all the functions of his appointor as a director in his absence but shall
not be entitled to receive any remuneration from the company for his services as an alternate
director. But it shall not be necessary to give notice of such a meeting to an alternate
director who is absent from the United Kingdom.
(C) An alternate director shall cease to be an alternate director if his appointor ceases to be a
director; but, if a director retires but is reappointed or deemed to have been reappointed at
53
POL-BSFF-0190734_0052
65.
66.
67.
POL00362224
POL00362224
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.
(D) Any appointment or removal of an alternate director shall be by notice to the company
signed by the director making or revoking the appointment or in any other manner approved
by the board.
(E) Save as otherwise provided in the articles, an alternate director shall be deemed for all
purposes to be a director and shall alone be responsible for his own acts and defaults and he
shall not be deemed to be the agent of the director appointing him.
PERSONS ELIGIBLE AS DIRECTORS
No person shall be appointed or reappointed a director at any general meeting unless -
(A) he is recommended by the directors;
(B) not less than fourteen nor more than thirty-five clear days before the date appointed for the
meeting, notice executed by a member qualified to vote at the meeting has been given to the
company 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; or
(C) he is nominated by the Parent.
NOTICE OF APPOINTMENT OR REAPPOINTMENT
Not less than seven nor more than twenty eight clear days before the date appointed for holding a
general meeting notice shall be given to all who are entitled to receive notice of the meeting of any
person who is recommended by the directors for appointment or reappointment as a director at the
meeting or in respect of whom notice has been duly given to the company of the intention to propose
him at the meeting for appointment or reappointment as a director. The notice shall give the
particulars of that person which would, if he were so appointed or reappointed, be required to be
included in the company’s register of directors.
POWER OF BOARD TO APPOINT DIRECTORS
Subject to the articles, the board may appoint a person who is willing to act to be a director, either to
fill a vacancy or as an additional director, provided that the appointment does not cause the number
of directors to exceed any number fixed by or in accordance with the articles as the maximum
number of directors. A director so appointed shall hold office only until the next following annual
general meeting. If not reappointed at such annual general meeting, he shall vacate office at the
conclusion thereof.
54
POL-BSFF-0190734_0053
POL00362224
POL00362224
68. POSITION OF RETIRING DIRECTORS.
Subject as aforesaid, a director who retires at an annual general meeting may, if willing to act, be
reappointed. If he is not 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, or (if earlier) when a resolution is passed to
appoint someone in his place.
69. DISQUALIFICATION AND REMOVAL OF DIRECTORS
(A) Without prejudice to the provisions of the articles and in addition to any power of removal
conferred by the Act, the company may, by special resolution, remove any director before the
expiry 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.
(B) The office of a director shall be vacated if -
(a) he ceases to be a director by virtue of any provision of the Act or he becomes
prohibited by law from being a director; or
(b) he becomes bankrupt or makes any arrangement or composition with his creditors
generally; or
(c) he is, or may be, suffering from mental disorder and either -
(i) he is admitted to hospital in pursuance of an application for admission for
treatment under the Mental Health Act 1983 or, in Scotland, an application
for admission under the Mental Health (Scotland) Act 1960, or
(ii) an order is made by a court having jurisdiction (whether in the United
Kingdom or elsewhere) in matters concerning mental disorder for his
detention or for the appointment of a receiver, curator bonis or other person
to exercise powers with respect to his property or affairs; or
(d) he resigns his office by notice to the company;
(e) he is removed pursuant to article 69(A) or article 70; or
(f) he shall for more than six consecutive months have been absent without permission
of the board from meetings of the board held during that period and the directors
resolve that his office be vacated.
If the office of a director is vacated for any reason, he shall cease to be a member of any
committee or sub committee of the board.
70. APPOINTMENT OF CHAIRMAN AND DIRECTORS
(A) Chairman
The Special Shareholder shall be entitled from time to time to appoint and remove any
person as chairman of the company by notice in writing delivered to the company and signed
on behalf of the Special Shareholder.
55
POL-BSFF-0190734_0054
71.
72.
POL00362224
POL00362224
(B) Directors
The Special Shareholder shall be entitled from time to time to appoint and to remove any
person as a director of the company by notice in writing delivered to the company and signed
on behalf of the Special Shareholder. The chairman shall be required to consult with and
obtain the approval of the Special Shareholder in relation to the appointment and the
removal of any person as a director.
POWERS OF THE BOARD
GENERAL POWERS OF COMPANY VESTED IN THE BOARD
Subject to the provisions of the Act, these articles and to any directions given by the company by
special resolution (including without limitation article 11.1), the business of the company shall be
managed by the board who may exercise all the powers of the company. No alteration of 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 the articles.
STRATEGIC PLAN
(A) Preparation and approval of Strategic Plan
No later than 31 December each year (or such other time as the Special Shareholder may
from time to time agree with the board) the board shall submit to the Special Shareholder a
draft Strategic Plan in relation to the group for the following five financial years, complying
with the principles set out in article 72(C) below.
(B) Consultation with the Special Shareholder
(a) Further information
Within 10 business days (or such other time as the Special Shareholder may from time to
time agree with the board) following receipt by the Special Shareholder of the draft Strategic
Plan pursuant to article 72(A) above, the Special Shareholder shall be entitled to request
such further information as may reasonably be necessary in order for it to reach an informed
view as to the content, reasonableness and prudence of the draft Strategic Plan. The board
shall, in so far as it is able to do so, comply with any such request within 10 business days of
its receipt (or such other time as the Special Shareholder may from time to time agree with
the board).
(b) Consultation
Following the receipt by the Special Shareholder of the draft Strategic Plan pursuant to
article 72(A) above, and, as appropriate, any further information supplied pursuant to article
72(B)(a) above, the Special Shareholder and the board shall promptly consult upon the
content of the plan (such consultation period to end no later than 20 Business Days (or such
other time as the Special Shareholder may from time to time agree with the board) after
receipt by the Special Shareholder of the draft Strategic Plan and further information
provided pursuant to article 72(B)(a) as the case may be).
56
POL-BSFF-0190734_0055
POL00362224
POL00362224
(c) Approval
The Special Shareholder shall within 20 Business days (or such other time as the Special
Shareholder may from time to time agree with the board) of the end of the consultation
period referred to in article 72(B)(b) above, approve the Strategic Plan, subject to such
qualifications as the Special Shareholder may determine, or shall inform the board of its
reasons for not approving the Strategic Plan, in which event the Special Shareholder shall
request that the board prepare a new Strategic Plan to be submitted to the Special
Shareholder within such time as shall be agreed with the Special Shareholder and in respect
of which the provisions of this article 72 shall apply (mutatis mutandis).
(d) Amendments to the Strategic Plan
The board may from time to time request any changes to be made to any Strategic Plan
approved by the Special Shareholder. Any such request shall be made to the Special
Shareholder. The Special Shareholder may request further information and consult with the
board about the proposed change in accordance with articles 72(B)(a) and (b) above, and
shall then approve (or reject) the change in accordance with article 72(B)(c)
(C) Principles Governing the Strategic Plan
(a) Fundamental Objectives:
The Strategic Plan shall:
(i) clearly set out the group's objectives and contain such information as can
reasonably be expected to enable the Special Shareholder to give
consideration to the strategic direction of the group's activities; and
(ii) provide targets, expressed in terms of both cashflow and accounting rate of
return and sufficient other financial information in order to enable the Special
Shareholder to set the group's profit target and dividend floor and consider
the framework of the group's borrowings.
(b) In particular the Strategic Plan shall:
(i) include a statement of the overall commercial direction and goals of the
group;
(ii) summarise the way in which it has evolved from the previous Strategic Plan,
including a high level evaluation of the value added by the new Strategic
Plan;
(iii) analyse the commercial and regulatory environment in which the group
operates, including the board's view of the way in which the market is
evolving and the development of competitors’ activities;
(iv) set out the group's strategic response to the commercial and regulatory
environment, including:
(1) its principal strategic options;
57
POL-BSFF-0190734_0056
73.
POL00362224
POL00362224
(2) its proposals for meeting the universal service obligation;
(3) its proposals for managing the nationwide network of post offices;
(4) the key issues to be resolved in the Strategic Plan for the following
financial year;
(5) its strategic approach to remuneration of employees, including an
expected ceiling on the aggregate level of employee remuneration;
(6) the resources needed, in particular personnel, technology and
funding;
(7) its high level financial and performance projections, at both the
corporate and line-of-business level, with sensitivity analyses of the
major risks;
(8) outline possibilities and plans for entering into partnerships and
alliances;
(9) clear performance indicators which will enable the group's
performance, in achieving its strategic objectives, to be measured;
and
(10) any proposals for entering into relevant transactions or for making
any substantial alterations in the nature of the business carried on by
any member of the group.
(D) Quarterly Information and Performance
The board shall prepare and discuss each quarter progress reports of the group's
performance in relation to the Strategic Plan, and at the end of each quarter submit to the
Special Shareholder its assessment of the group's performance in comparison with the
Strategic Plan.
(E) Variations from Strategic Plan
If the information provided pursuant to article 72(D) above demonstrates a significant
departure from the Strategic Plan, the board shall prepare a revised Strategic Plan for the
remainder of the relevant financial year and the following four years which shall be submitted
to the Special Shareholder within such time as shall be agreed with the Special Shareholder.
The provisions of article 72(B)(d) above shall apply to such revised Strategic Plan.
(F) Effect of Approval of Strategic Plan
The approval of any Strategic Plan shall be deemed to be an approval of any matter within
that Strategic Plan which would have required approval in accordance with article 11.1 if
such matter is specifically identified with reasonable detail in that Strategic Plan as being
proposed for approval in accordance with that aforementioned article.
BORROWING POWERS
58
POL-BSFF-0190734_0057
74.
75.
76.
77.
78.
79.
80.
POL00362224
POL00362224
The board may exercise all the powers of the company to borrow and to mortgage or charge all or
any part of the undertaking, property and assets (present and future) and uncalled capital of the
company, but subject to the restrictions contained in the articles.
APPOINTMENT OF AGENT
The board may, by power of attorney or otherwise, appoint any person to be the agent of the
company for such purposes and on such conditions as it determine, including authority for the agent
to delegate all or any of his powers.
POWER TO PROVIDE FOR EMPLOYEES
The board may by resolution exercise any power conferred by the Act 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.
POWER TO RECEIVE UNCALLED MONEYS
The board may, if it thinks fit, receive from any member willing to advance the same all or any part of
the moneys uncalled and remaining unpaid on any shares held by him.
DELEGATION OF THE BOARD’S POWERS
The board may delegate any of its powers to any committee consisting of one or more directors with
power to sub-delegate. It may also delegate to any managing director or any director holding any
other executive office such of its powers as it considers desirable to be exercised by him. Any such
delegation may be made subject to any conditions the board may impose, and either collaterally with
or to the exclusion of its own powers and may be revoked or altered. Subject to any such conditions,
the proceedings of a committee with two or more members shall be governed by the articles
regulating the proceedings of the board so far as they are capable of applying.
REMUNERATION OF DIRECTORS
DIRECTORS’ FEES
Subject to the articles, each of the directors shall be paid a fee at such rate as may from time to time
be determined by the board provided that the aggregate of all fees so paid to directors (excluding
amounts payable under any other provision of these articles) shall not exceed £400,000 per annum
or such higher amount as may from time to time be decided by ordinary resolution of the company.
ADDITIONAL REMUNERATION
Subject to the articles, any director who performs services which in the opinion of the board or any
committee authorised by the board go beyond the ordinary duties of a director may be paid such
extra remuneration (whether by way of salary, commission, participation in profits or otherwise) as
the board or any committee authorised by the board may in its discretion decide in addition to any
remuneration provided for by or pursuant to any other article.
DIRECTORS’ EXPENSES
59
POL-BSFF-0190734_0058
POL00362224
POL00362224
The directors may be paid all travelling, hotel, and other expenses properly incurred by them in
connection with their attendance at board meetings or committees of directors or general meetings
or separate meetings of the holders of any class of shares or of debentures of the company or
otherwise in connection with the discharge of their duties.
DIRECTORS’ APPOINTMENTS AND INTERESTS
81. MANAGING DIRECTOR AND EXECUTIVE OFFICE
Subject to the provisions of the Act and the articles, the directors may appoint one or more of their
number to the office of managing director or to any other executive office under the company and
may enter into an agreement or arrangement with any director for his employment by the company
or for the provision by him of any services outside the scope of the ordinary duties of a director. Any
such appointment, agreement or arrangement may be made upon such terms as the directors
determine and they may remunerate any such director for his services as they think fit. Any
appointment of a director to an executive office shall terminate if he ceases to be a director but
without prejudice to any claim to damages for breach of the contract of service between the director
and the company.
82. CONFLICTS OF INTEREST REQUIRING BOARD AUTHORISATION
(A) The board may, subject to the quorum and voting requirements set out in this article,
authorise any matter which would otherwise involve a director breaching his duty under the
Act to avoid conflicts of interest (a “Conflict”).
Adirector seeking authorisation in respect of a Conflict shall declare to the board the nature and
extent of his interest in that Conflict as soon as is reasonably practicable. The director shall
provide the board with such details of the relevant matter as are necessary for the board to
decide how to address the Conflict together with such additional information as may be
requested by the board.
Any director (including the relevant director) may propose that the relevant director be authorised in
relation to any matter the subject of a Conflict. Such proposal and any authority given by the
board shall be effected in the same way that any other matter may be proposed to and
resolved upon by the board under the provisions of these articles save that:
the relevant director and any other director with a similar interest shall not count towards the
quorum nor vote on any resolution giving such authority; and
the relevant director and any other director with a similar interest may, if the other members
of the board so decide, be excluded from any board meeting while the Conflict is
under consideration.
Where the board gives authority in relation to a Conflict:
the board may (whether at the time of giving the authority or subsequently) (a) require that
the relevant director is excluded from the receipt of information, the participation in
discussion and/or the making of decisions (whether at meetings of the board or
otherwise) related to the Conflict; and (b) impose upon the relevant director such
other terms for the purpose of dealing with the Conflict as it may determine;
60
POL-BSFF-0190734_0059
POL00362224
POL00362224
the relevant director will be obliged to conduct himself in accordance with any terms
imposed by the board in relation to the Conflict;
the board may provide that where the relevant director obtains (otherwise than through his
position as a director of the company) information that is confidential to a third party,
the director will not be obliged to disclose that information to the company, or to use
or apply the information in relation to the company's affairs, where to do so would
amount to a breach of that confidence;
the terms of the authority shall be recorded in writing (but the authority shall be effective
whether or not the terms are so recorded); and
the board may revoke or vary such authority at any time but this will not affect anything done
by the relevant director prior to such revocation or variation in accordance with the
terms of such authority.
83. OTHER CONFLICTS OF INTEREST.
(A) If a director is in any way directly or indirectly interested in a proposed contract with the
company or a contract that has been entered into by the company, he must declare the
nature and extent of that interest to the directors in accordance with the Act.
(B) Provided he has declared his interest in accordance with article 83(A) a director may:
(i) be party to, or otherwise interested in, any contract with the company or in which the
company has a direct or indirect interest;
(ii) hold any other office or place of profit with the company (except that of auditor) in
conjunction with his office of director for such period and upon such terms, including
as to remuneration, as the board may decide;
(ili) act by himself or through a firm with which he is associated in a professional
capacity for the company or any other company in which the company may be
interested (otherwise than as auditor);
(iv) be or become a director or other officer of, or employed by or otherwise be
interested in any holding company or subsidiary company of the company or any
other company in which the company may be interested; and
(v) be or become a director of any other company in which the company does not have
an interest and which cannot reasonably be regarded as giving rise to a conflict of
interest at the time of his appointment as a director of that other company.
(C) Adirector shall not, by reason of his office or of the fiduciary relationship thereby established
be liable to account to the company for any remuneration, profit or other benefit realised by
reason of his having any type of interest authorised under article 82(A) or permitted under
article 83(B) and no contract shall be liable to be avoided on the grounds of a director having
any type of interest authorised under article 82(A) or permitted under article 83(B).
61
POL-BSFF-0190734_0060
84.
85.
86.
87.
88.
89.
90.
POL00362224
POL00362224
DIRECTORS’ GRATUITIES AND PENSIONS
DIRECTORS’ GRATUITIES AND PENSIONS
Subject to the articles, the board may exercise all the powers of the company to provide benefits,
either by the payment of gratuities or pensions or by insurance or in any other manner whether
similar to the foregoing or not, for any director or former director or the relations, connections or
dependants of any director or former director who holds or has held any executive office or
employment with the company or with any body corporate which is or has been a subsidiary of the
company or with a predecessor in business of the company or of any such body corporate and may
contribute to any fund and pay premiums for the purchase or provision of any such benefit. No
director or former director shall be accountable to the company or the members 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 of the company.
PROCEEDINGS OF DIRECTORS
BOARD MEETINGS
Subject to the provisions of the articles, the board may regulate its proceedings as it thinks fit. A
director may, and the secretary at the request of a director shall, call a meeting of the board.
NOTICE
Notice of a meeting of the board 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 at his last known address or any other
address given by him to the company for this purpose, or by any other means authorised in writing
by the director concerned. Notice shall be given in this manner to all directors including any director
who is for the time being absent from the United Kingdom. A director may waive notice of any
meeting either prospectively or retrospectively.
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. A director who is also an alternate director
shall be entitled in the absence of his appointor to a separate vote on behalf of his appointor in
addition to his own vote.
QUORUM
The quorum 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. A person who holds office only as an alternate director shall,
if his appointor is not present, be counted in the quorum.
DIRECTORS BELOW MINIMUM THROUGH VACANCIES.
The continuing directors or a sole continuing director may act notwithstanding any vacancies in their
number, but, if the number of directors is less than the number fixed as the quorum, the continuing
directors or director may act only for the purpose of filling vacancies or of calling a general meeting.
CHAIRMAN
62
POL-BSFF-0190734_0061
91.
92.
93.
94.
POL00362224
POL00362224
The chairman shall be the person appointed pursuant to article 70. In the absence of such
appointment the directors may (subject to article 11) appoint one of their number 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
chairman 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 if the chairman 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.
VALIDITY OF ACTS OF BOARD OR COMMITTEE
All acts done by the board, or by a committee of directors, or by a person acting as a director or
member of a committee shall, notwithstanding that it be afterwards discovered that there was a
defect in the appointment of any director or member of a committee or person so acting 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 every 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.
RESOLUTION IN WRITING
Aresolution 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 directors
shall be as valid and effectual as if it had been passed at a board meeting or (as the case may be) a
committee of directors duly convened and held and may consist of several documents in the like
form each signed by one or more directors; but a resolution signed by an alternate director need not
also be signed by his appointor and, if it is signed by a director who has appointed an alternate
director, it need not be signed by the alternate director in that capacity.
PARTICIPATION IN BOARD MEETINGS BY TELEPHONE
All or any of the members of the board or any committee of the board may participate in a board
meeting or that committee by means of a conference telephone or any communication equipment
which allows all persons participating in the meeting to hear 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
then is.
PERMITTED INTERESTS AND VOTING
(A) Save as otherwise provided by the articles, a director shall not vote at a meeting of the board
or of a committee of directors on any resolution concerning a matter in which he has, directly
or indirectly, an interest or duty unless that interest or duty cannot reasonably regarded as
likely to give rise to a conflict of interest or his interest or duty arises only because the case
falls within one or more of the following paragraphs -
(a) the resolution relates to the giving to him of a guarantee, security, or indemnity in
respect of money lent to, or an obligation incurred by him for the benefit of, the
company or any of its subsidiaries; and/or
(b) the resolution relates to the giving to a third party of a guarantee, security, or
indemnity in respect of an obligation of the company or any of its subsidiaries for
63
POL-BSFF-0190734_0062
95.
96.
(Cc)
(D)
POL00362224
POL00362224
which the director has assumed responsibility in whole or part and whether alone or
jointly with others under a guarantee or indemnity or by the giving of security; and/or
(c) his interest arises by virtue of his subscribing or agreeing to subscribe for any
shares, debentures or other securities of the company or any of its subsidiaries, or
by virtue of 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 subsidiaries for subscription, purchase or exchange; and/or
(d) the resolution relates in any way to a retirement benefits scheme which has been
approved, or is conditional upon approval, by the HM Revenue and Customs for
taxation purposes.
For the purposes of this article, 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.
Adirector shall not be counted in the quorum present at a meeting in relation to a resolution
‘on which he is not entitled to vote.
The company may by ordinary resolution suspend or relax to any extent, either generally or
in respect of any particular matter, any provision of the articles prohibiting a director from
voting at a meeting of the board or of a committee of directors.
Where proposals are under consideration concerning the appointment of two or more
directors to offices or employments with the company or any body corporate in which the
company is interested the proposals may be divided and considered in relation to each
director separately and (provided he is not for another reason precluded from voting) each of
the directors concerned shall be entitled to vote and be counted in the quorum in respect of
each resolution except that concerning his own appointment.
If a question arises at a meeting of the board or of a committee of directors as to the right of
a director to vote, the question may, before the conclusion of the meeting, be referred to the
chairman of the meeting and his ruling in relation to any director other than himself shall be
final and conclusive.
SECRETARY
APPOINTMENT AND REMOVAL OF COMPANY SECRETARY
Subject to the provisions of the Act, the secretary shall be appointed by the directors for such term,
at such remuneration and upon such conditions as they may think fit; and any secretary so appointed
may be removed by them.
MINUTES:
KEEPING OF MINUTES
The directors shall cause minutes to be made in books kept for the purpose -
(A)
of all appointments of officers made by the directors; and
64
POL-BSFF-0190734_0063
97.
98.
99.
100.
101.
POL00362224
POL00362224
(B) of 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 directors, including the names of the
directors present at each such meeting.
DIVIDENDS
DECLARATION OF DIVIDENDS
Subject to the provisions of the Act and the articles, the company may by ordinary resolution declare
dividends in accordance with the respective rights of the members, but no dividend shall exceed the
amount recommended by the board.
PAYMENT OF INTERIM AND FIXED DIVIDENDS BY BOARD
Subject to the provisions of the Act and the articles, the board may pay interim dividends if it appears
to it that they are justified by the profits of the company available for distribution. If the share capital
is divided into different classes, the board may pay interim dividends on shares which confer
deferred or non preferred rights with regard to dividend as well as on shares which confer
preferential rights with regard to dividend, but no interim dividend shall be paid on shares carrying
deferred or non preferred rights if, at the time of payment, any preferential dividend is in arrear. The
board may also pay at intervals settled by them any dividend payable at a fixed rate if it appears to
them that the profits available for distribution justify the payment. Provided the directors act in good
faith they shall not incur any liability to the holders of shares conferring preferred rights for any loss
they may suffer by the lawful payment of an interim dividend on any shares having deferred or non
preferred rights.
CALCULATION OF DIVIDENDS
Except as otherwise provided by the rights attached to shares, all dividends shall be declared and
paid according to the amounts paid up on the shares on which the dividend is paid but no
outstanding amount paid up on a share in advance of the applicable call date shall be treated for the
purposes of this article 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 period in
respect of which the dividend is paid; but, if any share is issued on terms provided that it shall rank
for dividend as from a particular date, that share shall rank for dividend accordingly.
DIVIDENDS NOT IN CASH
Without prejudice to article 98 above, a general meeting declaring a dividend may, upon the
recommendation of the board, direct that it shall be satisfied wholly or partly by the distribution of
assets and, where any difficulty arises in regard to the distribution, the board may settle the same
and in particular may issue fractional certificates and fix the value for distribution of any assets and
may determine that cash shall be paid to any member upon the footing of the value so fixed in order
to adjust the rights of members and may vest any assets in trustees.
PAYMENT OF DIVIDENDS
Any dividend or other moneys payable in respect of a share may be paid by cheque sent by post to
the registered address of the person entitled or, if two or more persons are the holders of the share
or are jointly entitled to it by reason of the death or bankruptcy of the holder, to the registered
address of that one of those persons who is first named in the register of members or to such person
and to such address as the person or persons entitled may in writing direct. Every cheque shall be
65
POL-BSFF-0190734_0064
102.
103.
104.
105.
106.
POL00362224
POL00362224
made payable to the order of the person or persons entitled or to such other person as the person or
persons entitled may in writing direct and payment of the cheque shall be a good discharge to the
company. Any joint holder or other person jointly entitled to a share as aforesaid may give receipts
for any dividend or other moneys payable in respect of the share.
NO INTEREST ON DIVIDENDS
No dividend or other moneys payable in respect of a share shall bear interest against the company
unless otherwise provided by the rights attached to the share.
AMOUNTS DUE ON SHARES MAY BE DEDUCTED FROM DIVIDENDS
The board may deduct from any dividend or other moneys payable to a member by the company on
or in respect of any shares 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.
FORFEITURE OF UNCLAIMED DIVIDENDS
Any dividend which has remained unclaimed for twelve years from the date when it became due for
payment shall, if the directors so resolve, be forfeited and cease to remain owing by the company.
ACCOUNTS
RECORDS TO BE KEPT
The board shall cause to be kept accounting records sufficient to show and explain the company's
transactions, and such as to disclose with reasonable accuracy at any time the financial position of
the company at that time, and which accord with the Act.
CAPITALISATION OF PROFITS
POWER TO CAPITALISE RESERVES AND FUNDS
The board may with the authority of an ordinary resolution of the company -
(A) subject as hereinafter provided, resolve to capitalise any undivided profits of the company
not required for paying any preferential dividend (whether or not they are available for
distribution) or any sum standing to the credit of the company’s share premium account or
capital redemption reserve (including retained earnings);
(B) appropriate the sum resolved to be capitalised to the members who 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 in paying up in full 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 members, or as they may direct, in those
proportions, or partly in one way and partly in the other; but the share premium account, the
capital redemption reserve, retained earnings and any profits which are not available for
distribution may, for the purposes of this article, only be applied in paying up shares that are
then to be allotted and distributed to members credited as fully paid;
66
POL-BSFF-0190734_0065
107.
108.
109.
110.
111.
POL00362224
POL00362224
(C) resolve that any shares so allotted to any member in respect of a holding by him of any
partly paid shares shall so long as such shares remain partly paid rank for dividend only to
the extent that the latter shares rank for dividend;
(D) make such provision by the issue of fractional certificates or by payment in cash or otherwise
as they determine in the case of shares or debentures becoming distributable under this
article in fractions; and
(E) authorise any person to enter on behalf of all the members 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, any agreement
made under such authority being binding on all such members.
RECORD DATES
RECORD DATES
Notwithstanding any other provision of these articles, but without prejudice to the rights attached to
any shares, the company or the directors may fix a date as the record date by reference to which a
dividend will be declared or paid or a distribution, allotment or issue made, and that date may be
before, on or after the date on which the dividend, distribution, allotment or issue is declared, paid or
made. Where such a record date is fixed, references in these articles to a holder of shares or
member to whom a dividend is to be paid or a distribution, allotment or issue is to be made shall be
construed accordingly.
NOTICES
NOTICES IN WRITING
Any notice to be given to or by any person pursuant to the articles shall be in writing except that a
notice calling a meeting of the board need not be in writing.
SERVICE OF NOTICES
Subject to the articles, the company may give any notice to a member either personally, by post in a
prepaid envelope addressed to the member at his registered address or by leaving it at that address
or such other means (which may include electronic means) to which the member has provided (and
not revoked) its written consent for the receipt of such notices. In the case of joint holders of a
share, all notices shall be given to the joint holder whose name stands first in the register of
members in respect of the joint holding and notice so given shall be sufficient notice to all the joint
holders. Amember whose registered address is not within the United Kingdom and who gives to the
company an address within the United Kingdom at which notices may be given to him shall be
entitled to have notices given to him at that address, but otherwise no such member shall be entitled
to receive any notice from the company.
DEEMED RECEIPT OF NOTICE BY MEMBERS PRESENT AT MEETING
Amember present, either in person or by proxy, at any meeting of the company or of the holders of
any class of shares in the company shall be deemed to have received notice of the meeting and,
where requisite, of the purposes for which it was called.
SHAREHOLDERS BOUND BY NOTICE
67
POL-BSFF-0190734_0066
112.
113.
114.
POL00362224
POL00362224
Every person who becomes entitled to a share shall be bound by any notice in respect of that share
which, before his name is entered in the register of members, has been duly given to a person from
whom he derives his title.
TIME OF SERVICE
(A) Any notice, document or other information, if served, sent or supplied by the company by
post, shall be deemed to have been received on the day following that on which it was
posted if first class post was used or 48 hours after it was posted if first class post was not
used and, in proving that a notice, document or other information was served, sent or
supplied, it shall be sufficient to prove that the notice, document or other information was
properly addressed, prepaid and put in the post.
(B) Any notice, document or other information not served, sent or supplied by post but left by the
company at a registered address or at an address (other than an address for the purposes of
communications by electronic means) notified to the company in accordance with these
articles by a person who is entitled by transmission to a share shall be deemed to have been
received on the day it was so left.
(C) Any notice, document or other information served, sent or supplied by the company using
electronic means shall be deemed to have been received on the day on which it was sent
notwithstanding that the company subsequently sends a hard copy of such notice, document
or information by post. In proving that a notice, document or other information served, sent or
supplied by electronic means was served, sent or supplied, it shall be sufficient to prove that
it was properly addressed.
(D) Any notice, document or other information served, sent or supplied by the company by any
other means authorised in writing by the member concerned shall be deemed to have been
received when the company has carried out the action it has been authorised to take for that
purpose.
SERVICE OF NOTICE ON PERSON ENTITLED BY TRANSMISSION
Anotice may be given by the company to the persons entitled to a share in consequence of the
death or bankruptcy of a member by sending or delivering it, in any manner authorised by the articles
for the giving of notice to a member, addressed to them by name, or by the title of representatives of
the deceased, or trustee of the bankrupt or by any like description at the address, if any, within the
United Kingdom supplied for that purpose by the persons claiming to be so entitled. Until such an
address has been supplied, a notice may be given in any manner in which it might have been given if
the death or bankruptcy had not occurred.
WINDING UP
DISTRIBUTION OF ASSETS OTHERWISE THAN IN CASH
If the company is wound up, the liquidator may, with the sanction of a special resolution of the
company and any other sanction required by the Act, divide among the members in specie the whole
or any part of the assets of the company and may, for that purpose, value any assets and determine
how the division shall be carried out as between the members or different classes of members. The
liquidator may, with the like sanction, vest the whole or any part of the assets in trustees upon such
trusts for the benefit of the members as he with the like sanction determines, but no member shall be
compelled to accept any assets upon which there is a liability.
68
POL-BSFF-0190734_0067
115.
116.
POL00362224
POL00362224
INDEMNITY
INDEMNITY OF DIRECTORS
To the extent permitted by the Act, the company may indemnify any director, former director or
company secretary of the company against any liability and may purchase and maintain for any
director, former director or company secretary of the company insurance against any liability. No
director or former director or company secretary of the company shall be accountable to the
company or the members 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 of the company.
PROVISIONS RELATING TO ARTICLES 10 AND 11
ARTICLES SUBJECT TO RELEVANT LAW
(A) Nothing contained in articles 10 and 11 shall have effect so as to require the company or any
of the directors to (i) take any action; (ii) omit to take any action; or (iii) procure that any
subsidiary of the company takes or omits to take any action which action or omission would,
in the reasonable opinion of the board of the company or of such subsidiary, give rise to
criminal or civil liability on the part of the company, such subsidiary or any of the directors of
the company or such subsidiary, or any liability on any of the aforesaid for breach of any
statutory or common law duty or requirement (for the purposes of this article 116, a "relevant
breach").
(B) If a relevant breach is capable of ratification by the shareholders of the company or
subsidiary concerned, and such ratification would have the effect of removing or avoiding the
consequences of the relevant breach (insofar as such consequences affect or would affect
the company or subsidiary or any of their respective directors), then subject to the
shareholders concerned providing a written undertaking to the company or subsidiary, as the
case may be, that the requisite ratification will be provided, the action or omission which
would (but for ratification), have given rise to the relevant breach shall be effected or, as the
case may be, procured by the company as though this article 116 did not apply in relation
thereto.
(C) For the purposes of this article 116, the "reasonable opinion of the board" in relation to a
matter shall mean the reasonable opinion of the board of directors of the company or
subsidiary concerned, having (i) as soon as is reasonably practicable taken and having had
due regard to appropriate legal and/or financial advice, (ii) following the receipt of such
advice, having promptly provided the same to the Special Shareholder and consulted with
the Special Shareholder in relation to the said advice, and to the formation of the board's
opinion on the relevant matter, and having had due regard to the views (if any) of the Special
Shareholder notified to it in relation thereto, and (iii) where the Special Shareholder gives
notice under article 116(D), having had due regard to the independent advice consequently
received and having consulted the Special Shareholder in relation thereto.
(D) If in any case where the company or the directors seek to rely upon article 116(A) in respect
of any matter, the Special Shareholder has within 7 days of receipt of legal and/or financial
advice pursuant to article 116(C) notified the company that it requires independent advice to
be taken in relation to the relevant matter(s) from an independent legal and/or financial
adviser approved by the Special Shareholder, such advice to be addressed to the company,
its directors and the Special Shareholder, the company shall (i) obtain such advice and (ii)
(subject to article 116(A)) not take any decision or action in relation to the relevant matter,
69
POL-BSFF-0190734_0068
POL00362224
POL00362224
until such advice shall have been obtained and the board shall have consulted the Special
Shareholder in relation thereto.
(E) Nothing in this article 116 shall fetter any statutory power, or remove or alter any obligation
imposed on any person by statute.
70
POL-BSFF-0190734_0069