National Grid 2014 Annual Report Download - page 178

by the UK Corporate Governance Code, all Directors wishing
tocontinue in office currently offer themselves for re-election
annually. No person is disqualified from being a Director
orisrequired to vacate that office by reason of attaining
amaximumage.
A Director is not required to hold shares in National Grid
inordertoqualify as a Director.
Rights, preferences and restrictions
(i) Dividend rights
National Grid may not pay any dividend otherwise than out of
profits available for distribution under the Companies Act 2006
and other applicable provisions of English law. In addition, as a
public company, National Grid may only make a distribution if, at
the time of the distribution, the amount of its net assets is not less
than the aggregate of its called up share capital and undistributable
reserves (as defined in the Companies Act 2006) and to the extent
that the distribution does not reduce the amount of those assets
toless than that aggregate. Subject to the foregoing, shareholders
may, by ordinary resolution, declare dividends in accordance with
the respective rights of the shareholders, but not exceeding the
amount recommended by the Board. The Board may pay interim
dividends if it considers that National Grid’s financial position
justifies the payment. Any dividend or interest unclaimed for
12years from the date when it was declared or became due
forpayment will be forfeited and revert to National Grid.
(ii) Voting rights
Subject to any rights or restrictions attached to any shares and to
any other provisions of the Articles, at any general meeting on a
show of hands, every shareholder who is present in person will
have one vote and on a poll, every shareholder will have one vote
for every share which they hold. On a show of hands or poll,
shareholders may cast votes either personally or by proxy and
aproxy need not be a shareholder. Under the Articles, all
substantive resolutions at a general meeting must be decided on
apoll, and resolutions of a procedural nature are decided by a
show of hands, unless a poll is demanded in accordance with
theArticles.
(iii) Liquidation rights
In a winding up, a liquidator may, in each case with the sanction
ofa special resolution passed by the shareholders and any
othersanction required under English law, (a) divide among the
shareholders the whole or any part of National Grid’s assets
(whether the assets are of the same kind or not) and may, for this
purpose, value any assets and determine how the division should
be carried out as between shareholders or different classes of
shareholders, or (b) transfer any part of the assets to trustees
ontrust for the benefit of the shareholders as the liquidator
determines, but in neither case will a shareholder be compelled
toaccept assets upon which there is a liability.
Variation of rights
Subject to applicable provisions of English law, the rights attached
to any class of shares of National Grid may be varied or cancelled
with the written consent 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 meeting of the holders of
the shares of that class.
Articles of Association
The following description is a summary of the material terms of
ourArticles and applicable English law. The following description
is a summary only and is qualified in its entirety by reference to
theArticles.
Summary
The Articles set out the internal regulations of the Company and
cover such matters as the rights of shareholders and the conduct
of the Board and general meetings. Copies are available upon
request and are displayed on the Company’s website.
Amendments to the Articles have to be approved by at least 75%
of those voting in person or by proxy at a general meeting of the
Company. Subject to company law and the Articles, the Directors
may exercise all the powers of the Company, and may delegate
authorities to committees and day-to-day management and
decision-making to individual Executive Directors. The committee
structure is set out on page 48.
General
The Company is incorporated under the name National Grid plc
and is registered in England and Wales with registered number
4031152. Under the Companies Act 2006, the Company’s objects
areunrestricted.
Directors
Under the Articles, a Director must disclose any personal interest
in a matter and may not vote in respect of that matter, subject
tocertain limited exceptions. As permitted under the Companies
Act 2006, the Articles provide that the non conflicted Directors of
the Company may authorise a conflict or potential conflict for a
particular matter. In doing so, the non conflicted Directors must
act in a way they consider, in good faith, will be most likely to
promote the success of the Company for the benefit of the
shareholders as a whole.
The Directors (other than a Director acting in an executive
capacity) are paid fees for their services, which in total must not
exceed £2,000,000 a year or any higher sum as decided by an
ordinary resolution at a general meeting of shareholders. In
addition, special pay may be awarded to a Director who acts in
anexecutive capacity, serves on a committee, performs services
which the Directors consider to extend beyond the ordinary duties
of a Director, devotes special attention to the business of National
Grid or goes or lives abroad on the Company’s behalf. Directors
may also receive reimbursement for expenses properly incurred,
and may be awarded pensions and other benefits. The
compensation awarded to the Executive Directors is determined
by the Remuneration Committee and further details of Directors’
remuneration are set out in the Remuneration Report (see pages
58 to 73).
The Directors are empowered to exercise all the powers of
National Grid to borrow money, subject to the limitation that
theaggregate principal amount of all borrowings of its Group
outstanding at any time must not exceed £35 billion or any other
amount approved by shareholders by an ordinary resolution at
ageneral meeting.
Directors can be appointed or removed by the Board or
shareholders in a general meeting. Directors must stand for
election at the first AGM following their appointment to the Board.
Each Director must retire at least every three years but will be
eligible for re-election. In accordance with best practice introduced
Other disclosures
176 National Grid Annual Report and Accounts 2013/14