Vodafone 2003 Annual Report Download - page 143

Vodafone Group Plc Annual Report & Accounts and Form 20-F 2003 141
the dividend or use it in some other way for the benefit of the Company until the
dividend is claimed. If the dividend remains unclaimed for 12 years after either
the passing of the relevant resolution either declaring that dividend or providing
for payment of that dividend, it will be forfeited and belong to the Company.
Voting rights
The Company’s Articles of Association provide that voting on Substantive
Resolutions (any resolution which is not a Procedural Resolution) at a general
meeting shall be decided on a poll. On a poll, each shareholder who is entitled to
vote and be present in person or by proxy has one vote for every share held.
Procedural Resolutions (i.e. resolutions of a procedural nature, such as a
resolution to adjourn a General Meeting or a resolution on the choice of
Chairman of a General Meeting) shall be decided on a show of hands, where
each shareholder who is present at the meeting has one vote regardless of the
number of shares held, unless a poll is demanded. In addition, the Articles of
Association allow persons appointed as proxies of shareholders entitled to vote at
general meetings to vote on a show of hands, as well as to vote on a poll and
attend and speak at general meetings. Holders of the Company’s ordinary shares
do not have cumulative voting rights.
Under English law, two shareholders present in person constitute a quorum for
purposes of a general meeting, unless a company’s articles of association
specify otherwise. The Company’s Articles of Association do not specify
otherwise, except that the shareholders do not need to be present in person, and
may instead be present by proxy, to constitute a quorum.
Under English law, shareholders of a public company such as the Company are
not permitted to pass resolutions by written consent.
Record holders of the Company’s ADSs are entitled to attend, speak and vote on
a poll or a show of hands at any general meeting of the Company’s shareholders
by the Depositary’s appointment of them as proxies with respect to the
underlying ordinary shares represented by their ADSs. Alternatively, holders of
ADSs are entitled to vote by supplying their voting instructions to the Depositary
or its nominee, who will vote the ordinary shares underlying their ADSs in
accordance with their instructions.
Liquidation rights
In the event of the liquidation of the Company, after payment of all liabilities and
deductions in accordance with English law, the holders of the Company’s 7%
cumulative fixed rate shares would be entitled to a sum equal to the capital paid
up on such shares, together with certain dividend payments, in priority to holders
of the Company’s ordinary shares.
Pre-emptive rights and new issues of shares
Under Section 80 of the Companies Act, directors are, with certain exceptions,
unable to allot relevant securities without the authority of the shareholders in a
general meeting. Relevant securities as defined in the Companies Act include the
Company’s ordinary shares or securities convertible into the Company’s ordinary
shares. In addition, Section 89 of the Companies Act imposes further restrictions
on the issue of equity securities (as defined in the Companies Act, which include
the Company’s ordinary shares and securities convertible into ordinary shares)
which are, or are to be, paid up wholly in cash and not first offered to existing
shareholders. The Company’s Articles of Association allow shareholders to
authorise directors for a period up to five years to allot (a) relevant securities
generally up to an amount fixed by the shareholders and (b) equity securities for
cash other than in connection with a rights issue up to an amount specified by
the shareholders and free of the restriction in Section 89. In accordance with
institutional investor guidelines, the amount of relevant securities to be fixed by
shareholders is normally restricted to one third of the existing issued ordinary
share capital, and the amount of equity securities to be issued for cash other
than in connection with a rights issue is restricted to 5% of the existing issued
ordinary share capital.
Disclosure of interests in the Company’s shares
There are no provisions in the Articles whereby persons acquiring, holding or
disposing of a certain percentage of the Company’s shares are required to make
disclosure of their ownership percentage, although there are such requirements
under the Companies Act.
The basic disclosure requirement under Sections 198 to 211 of the Companies
Act imposes upon a person interested in the shares of the Company a statutory
obligation to notify the Company in writing and containing details set out in the
Companies Act where:
(a) he acquires (or becomes aware that he has acquired) or ceases to have
(or becomes aware that he has ceased to have) an interest in shares
comprising any class of the Company’s issued and voting share capital;
and
(b) as a result, EITHER he obtains, or ceases to have:
(i) a “material interest”in 3%, or more; or
(ii) an aggregate interest (whether “material”or not) in 10%, or more of the
Company’s voting capital; or
(iii) the percentage of his interest in the Company’s voting capital remains
above the relevant level and changes by a whole percentage point.
A “material interest”means, broadly, any beneficial interest (including those of a
spouse or a child or a step-child, those of a company which is accustomed to
act in accordance with the relevant person’s instructions or in which one third or
more of the votes are controlled by such person and certain other interests set
out in the Companies Act) other than those of an investment manager or an
operator of a unit trust/recognised scheme/collective investment scheme/open-
ended investment company.
Sections 204 to 206 of the Companies Act set out particular rules of disclosure
where two or more parties (each a “concert party”) have entered into an
agreement to acquire interests in shares of a public company, and the
agreement imposes obligations/restrictions on any concert party with respect to
the use, retention or disposal of the shares in the company and an acquisition of
shares by a concert party pursuant to the agreement has taken place.
Under Section 212 of the Companies Act, the Company may by notice in writing
require a person that the Company knows or has reasonable cause to believe is
or was during the preceding three years interested in the Company’s shares to
indicate whether or not that is correct and, if that person does or did hold an
interest in the Company’s shares, to provide certain information as set out in the
Companies Act.
Sections 324 to 329 of the Companies Act further deal with the disclosure by
persons (and certain members of their families) of interests in shares or debentures
of the companies of which they are directors and certain associated companies.
There are additional disclosure obligations under Rule 3 of the Substantial
Acquisitions Rules where a person acquires 15% or more of the voting rights of
a listed company or when an acquisition increases his holding of shares or rights
over shares so as to increase his voting rights beyond that level by a whole
percentage point. Notification in this case should be to the Company, the Panel
on Takeovers and Mergers and the UK Listing Authority through one of its
approved regulatory information services no later than 12 noon on the business
day following the date of the acquisition.