Vodafone 2011 Annual Report Download - page 137

Vodafone Group Plc Annual Report 2011 135
Additional information
Directors
The Company’s articles of association provide for a Board of directors,
consisting of not fewer than three directors, who shall manage the business
and affairs of the Company.
The directors are empowered to exercise all the powers of the Company
subject to any restrictions in the articles of association, the Companies Act
(as defined in the articles of association) and any special resolution.
Under the Company’s articles of association a director cannot vote in
respect of any proposal in which the director, or any person connected with
the director, has a material interest other than by virtue of the director’s
interest in the Company’s shares or other securities. However, this restriction
on voting does not apply to resolutions i) giving the director or a third party
any guarantee, security or indemnity in respect of obligations or liabilities
incurred at the request of or for the benefit of the Company, ii) giving any
guarantee, security or indemnity to the director or a third party in respect
of obligations of the Company for which the director has assumed
responsibility under an indemnity or guarantee, iii) relating to an offer of
securities of the Company in which the director is entitled to participate as
a holder of shares or other securities or in the underwriting of such shares or
securities, iv) concerning any other company in which the director (together
with any connected person) is a shareholder or an officer or is otherwise
interested, provided that the director (together with any connected person)
is not interested in 1% or more of any class of the Company’s equity share
capital or the voting rights available to its shareholders, v) relating to the
arrangement of any employee benefit in which the director will share
equally with other employees and vi) relating to any insurance that the
Company purchases or renews for its directors or any group of people
including directors.
The directors are empowered to exercise all the powers of the Company to
borrow money, subject to the limitation that the aggregate amount of
all liabilities and obligations of the Group outstanding at any time shall
not exceed an amount equal to 1.5 times the aggregate of the Group’s
share capital and reserves calculated in the manner prescribed in the
articles of association unless sanctioned by an ordinary resolution of the
Company’s shareholders.
The Company can make market purchases of its own shares or agree to do
so in the future provided it is duly authorised by its members in a general
meeting and subject to and in accordance with Section 701 of the
Companies Act 2006.
At each AGM all directors who were elected or last re-elected at or before
the AGM held in the third calendar year before the current year shall
automatically retire. In 2005 the Company reviewed its policy regarding the
retirement and re-election of directors and, although it is not intended to
amend the Company’s articles of association in this regard, the Board has
decided in the interests of good corporate governance that all of the
directors wishing to continue in office should offer themselves for
re-election annually.
Directors are not required under the Company’s articles of association to
hold any shares of the Company as a qualification to act as a director,
although executive directors participating in long-term incentive plans must
comply with the Company’s share ownership guidelines. In accordance with
best practice in the UK for corporate governance, compensation awarded
to executive directors is decided by a remuneration committee consisting
exclusively of non-executive directors.
In addition, as required by The Directors’ Remuneration Report Regulations,
the Board has, since 2003, prepared a report to shareholders on the
directors’ remuneration which complies with the regulations (see pages 62
to 73). The report is also subject to a shareholder vote.
Rights attaching to the Company’s shares
At 31 March 2011 the issued share capital of the Company was comprised
of 50,000 7% cumulative fixed rate shares of £1.00 each and 51,577,525,830
ordinary shares (excluding treasury shares) of 113
/7 US cents each.
Dividend rights
Holders of 7% cumulative fixed rate shares are entitled to be paid in respect
of each financial year, or other accounting period of the Company, a fixed
cumulative preferential dividend of 7% per annum on the nominal value of
the fixed rate shares. A fixed cumulative preferential dividend may only be
paid out of available distributable profits which the directors have resolved
should be distributed. The fixed rate shares do not have any other right to
share in the Company’s profits.
Holders of the Company’s ordinary shares may, by ordinary resolution,
declare dividends but may not declare dividends in excess of the amount
recommended by the directors. The Board of directors may also pay interim
dividends. No dividend may be paid other than out of profits available for
distribution. Dividends on ordinary shares can be paid to shareholders in
whatever currency the directors decide, using an appropriate exchange rate
for any currency conversions which are required.
If a dividend has not been claimed for one year after the date of the
resolution passed at a general meeting declaring that dividend or the
resolution of the directors providing for payment of that dividend, the
directors may invest 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 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 (i.e. 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 is present in person or by proxy has one vote for every
share held. Procedural resolutions (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. The articles of association also allow persons appointed as
proxies by two or more shareholders entitled to vote at general meetings to
vote for and against a resolution on a show of hands.
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 corporate
representatives 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.
Employees are able to vote any shares held under the Vodafone Group
Share Incentive Plan and ‘My ShareBank’ (a vested nominee share account)
through the respective plan’s trustees.
Holders of the Company’s 7% cumulative fixed rate shares are only entitled
to vote on any resolution to vary or abrogate the rights attached to the fixed
rate shares. Holders have one vote for every fully paid 7% cumulative fixed
rate share.