BP 2015 Annual Report Download - page 256

stated in a company’s memorandum. The Act abolished the need to have
object provisions and so at the AGM held on 15 April 2010 shareholders
approved the removal of its objects clause together with all other
provisions of its Memorandum that, by virtue of the Act, are treated as
forming part of the company’s Articles of Association.
Directors
The business and affairs of BP shall be managed by the directors. The
company’s Articles of Association provide that directors may be
appointed by the existing directors or by the shareholders in a general
meeting. Any person appointed by the directors will hold office only until
the next general meeting, notice of which is first given after their
appointment and will then be eligible for re-election by the shareholders.
A director may be removed by BP as provided for by applicable law and
shall vacate office in certain circumstances as set out in the Articles of
Association. In addition, the company may by special resolution remove a
director before the expiration of his/her period of office and, subject to
the Articles of Association, may by ordinary resolution appoint another
person to be a director instead. There is no requirement for a director to
retire on reaching any age.
The Articles of Association place a general prohibition on a director voting
in respect of any contract or arrangement in which the director has a
material interest other than by virtue of such director’s interest in shares
in the company. However, in the absence of some other material interest
not indicated below, a director is entitled to vote and to be counted in a
quorum for the purpose of any vote relating to a resolution concerning
the following matters:
• The giving of security or indemnity with respect to any money lent or
obligation taken by the director at the request or benefit of the
company or any of its subsidiaries.
• Any proposal in which the director is interested, concerning the
underwriting of company securities or debentures or the giving of any
security to a third party for a debt or obligation of the company or any
of its subsidiaries.
• Any proposal concerning any other company in which the director is
interested, directly or indirectly (whether as an officer or shareholder or
otherwise) provided that the director and persons connected with such
director are not the holder or holders of 1% or more of the voting
interest in the shares of such company.
• Any proposal concerning the purchase or maintenance of any
insurance policy under which the director may benefit.
• Any proposal concerning the giving to the director of any other
indemnity which is on substantially the same terms as indemnities
given or to be given to all of the other directors or to the funding by the
company of his expenditure on defending proceedings or the doing by
the company of anything to enable the director to avoid incurring such
expenditure where all other directors have been given or are to be
given substantially the same arrangements.
• Any proposal concerning an arrangement for the benefit of the
employees and directors or former employees and former directors of
the company or any of its subsidiary undertakings, including but
without being limited to a retirement benefits scheme and an
employees’ share scheme, which does not accord to any director any
privilege or advantage not generally accorded to the employees or
former employees to whom the arrangement relates.
The Act requires a director of a company who is in any way interested in
a contract or proposed contract with the company to declare the nature
of the director’s interest at a meeting of the directors of the company.
The definition of ‘interest’ includes the interests of spouses, children,
companies and trusts. The Act also requires that a director must avoid a
situation where a director has, or could have, a direct or indirect interest
that conflicts, or possibly may conflict, with the company’s interests. The
Act allows directors of public companies to authorize such conflicts
where appropriate, if a company’s Articles of Association so permit. BP’s
Articles of Association permit the authorization of such conflicts. The
directors may exercise all the powers of the company to borrow money,
except that the amount remaining undischarged of all moneys borrowed
by the company shall not, without approval of the shareholders, exceed
two times the amount paid up on the share capital plus the aggregate of
the amount of the capital and revenue reserves of the company. Variation
of the borrowing power of the board may only be affected by amending
the Articles of Association.
Remuneration of non-executive directors shall be determined in the
aggregate by resolution of the shareholders. Remuneration of executive
directors is determined by the remuneration committee. This committee
is made up of non-executive directors only. There is no requirement of
share ownership for a director’s qualification.
Dividend rights; other rights to share in company profits;
capital calls
If recommended by the directors of BP, BP shareholders may, by
resolution, declare dividends but no such dividend may be declared in
excess of the amount recommended by the directors. The directors may
also pay interim dividends without obtaining shareholder approval. No
dividend may be paid other than out of profits available for distribution, as
determined under IFRS and the Act. Dividends on ordinary shares are
payable only after payment of dividends on BP preference shares. Any
dividend unclaimed after a period of 12 years from the date of declaration
of such dividend shall be forfeited and reverts to BP. If the company
exercises its right to forfeit shares and sells shares belonging to an
untraced shareholder then any dividends or other monies unclaimed in
respect of those shares will be forfeited after a period of two years.
The directors have the power to declare and pay dividends in any
currency provided that a sterling equivalent is announced. It is not the
company’s intention to change its current policy of paying dividends in
US dollars. At the company’s AGM held on 15 April 2010, shareholders
approved the introduction of a Scrip Dividend Programme (Scrip
Programme) and to include provisions in the Articles of Association to
enable the company to operate the Scrip Programme. The Scrip
Programme was renewed at the company’s AGM held on 16 April 2015
for a further three years. The Scrip Programme enables ordinary
shareholders and BP ADS holders to elect to receive new fully paid
ordinary shares (or BP ADSs in the case of BP ADS holders) instead of
cash. The operation of the Scrip Programme is always subject to the
directors’ decision to make the scrip offer available in respect of any
particular dividend. Should the directors decide not to offer the scrip in
respect of any particular dividend, cash will automatically be paid instead.
Apart from shareholders’ rights to share in BP’s profits by dividend (if any
is declared or announced), the Articles of Association provide that the
directors may set aside:
• A special reserve fund out of the balance of profits each year to make
up any deficit of cumulative dividend on the BP preference shares.
• A general reserve out of the balance of profits each year, which shall
be applicable for any purpose to which the profits of the company may
properly be applied. This may include capitalization of such sum,
pursuant to an ordinary shareholders’ resolution, and distribution to
shareholders as if it were distributed by way of a dividend on the
ordinary shares or in paying up in full unissued ordinary shares for
allotment and distribution as bonus shares.
Any such sums so deposited may be distributed in accordance with the
manner of distribution of dividends as described above.
Holders of shares are not subject to calls on capital by the company,
provided that the amounts required to be paid on issue have been paid
off. All shares are fully paid.
Voting rights
The Articles of Association of the company provide that voting on
resolutions at a shareholders’ meeting will be decided on a poll other
than resolutions of a procedural nature, which may be decided on a show
of hands. If voting is on a poll, every shareholder who is present in
person or by proxy has one vote for every ordinary share held and two
votes for every £5 in nominal amount of BP preference shares held. If
voting is on a show of hands, each shareholder who is present at the
meeting in person or whose duly appointed proxy is present in person
will have one vote, regardless of the number of shares held, unless a poll
is requested.
Shareholders do not have cumulative voting rights.
For the purposes of determining which persons are entitled to attend or
vote at a shareholders’ meeting and how many votes such persons may
cast, the company may specify in the notice of the meeting a time, not
more than 48 hours before the time of the meeting, by which a person
who holds shares in registered form must be entered on the company’s
register of members in order to have the right to attend or vote at the
meeting or to appoint a proxy to do so.
252 BP Annual Report and Form 20-F 2015