BT 2016 Annual Report Download - page 248

254 BT Group plc
Annual Report 2016
Articles of Association (Articles)
The following is a summary of the principal provisions of BT’s
Articles, a copy of which has been filed with the Registrar of
Companies. A ‘holder of shares’ and a ’shareholder’ is, in either
case, the person entered on the company’s register of members
as the holder of the relevant shares. Shareholders can choose
whether their shares are to be evidenced by share certificates (ie
in certificated form) or held in electronic (ieuncertificated) form in
CREST (the electronic settlement system in the UK).
BT adopted new Articles of Association with effect from July
2015, to provide additional flexibility for BT when trying to
trace shareholders and to amend the provisions in line with the
provisions of the UK Corporate Governance code by providing for
automatic retirement of all the directors at each AGM.
(a) Voting rights
Subject to the restrictions described below, on a show of hands,
every shareholder present in person or by proxy at any general
meeting has one vote and, on a poll, every shareholder present in
person or by proxy has one vote for each share which they hold.
Voting at any meeting of shareholders is by a show of hands unless
a poll is demanded by the chairman of the meeting or by at least
five shareholders at the meeting who are entitled to vote (or their
proxies), or by one or more shareholders at the meeting who are
entitled to vote (or their proxies) and who have, between them, at
least 10% of the total votes of all shareholders who have the right
to vote at the meeting.
No person is, unless the Board decides otherwise, entitled to
attend or vote at any general meeting or to exercise any other right
conferred by being a shareholder if they or any person appearing
to be interested in those shares has been sent a notice under
section 793 of the Companies Act 2006 (which confers upon
public companies the power to require information with respect to
interests in their voting shares) and they or any interested person
has failed to supply to the company the information requested
within 14 days after delivery of that notice.
These restrictions end seven days after the earlier of the date
the shareholder complies with the request satisfactorily or the
company receives notice that there has been an approved transfer
of the shares.
(b) Variation of rights
Whenever the share capital of the company is split into different
classes of shares, the special rights attached to any of those classes
can be varied or withdrawn either:
(i) with the sanction of a special resolution passed at a separate
meeting of the holders of the shares of that class; or
(ii) with the consent in writing of the holders of at least 75% in
nominal value of the issued shares of that class.
At any separate meeting, the necessary quorum is two persons
holding or representing by proxy not less than one-third in nominal
amount of the issued shares of the class in question (but at any
adjourned meeting, any person holding shares of the class or his
proxy is a quorum).
The company can issue new shares and attach any rights and
restrictions to them, as long as this is not restricted by special rights
previously given to holders of any existing shares. Subject to this,
the rights of new shares can take priority over the rights of existing
shares, or existing shares can take priority over them, or the new
shares and the existing shares can rank equally.
(c) Changes in capital
The company may by ordinary resolution:
(i) divide all or any of its share capital into shares with a smaller
nominal value; and
(ii) consolidate and divide all or part of its share capital into shares
of a larger nominal value.
The company may also:
(i) buy back its own shares; and
(ii) by special resolution reduce its share capital, any capital
redemption reserve and any share premium account.
(d) Dividends
The company’s shareholders can declare dividends by passing
an ordinary resolution provided that no dividend can exceed the
amount recommended by the directors. Dividends must be paid
out of profits available for distribution. If the Board considers that
the profits of the company justify such payments, they can pay
interim dividends on any class of shares of the amounts and on
the dates and for the periods they decide. Fixed dividends will be
paid on any class of shares on the dates stated for the payments of
those dividends.
The directors can offer ordinary shareholders the right to choose
to receive new ordinary shares, which are credited as fully paid,
instead of some or all of their cash dividend. Before they can do
this, the company’s shareholders must have passed an ordinary
resolution authorising the directors to make this offer.
Any dividend which has not been claimed for ten years after it
was declared or became due for payment will be forfeited and will
belong to the company.
(e) Distribution of assets on winding up
If the company is wound up (whether the liquidation is voluntary,
under supervision of the court or by the court) the liquidator
can, with the authority of a special resolution passed by the
shareholders, divide among the shareholders all or any part of the
assets of the company. This applies whether the assets consist
of property of one kind or different kinds. For this purpose, the
liquidator can place whatever value the liquidator considers fair on
any property and decide how the division is carried out between
shareholders or different groups of shareholders. The liquidator can
also, with the same authority, transfer any assets to trustees upon
any trusts for the benefit of shareholders which the liquidator
decides. The liquidation of the company can then be finalised
and the company dissolved. No past or present shareholder can
be compelled to accept any shares or other property under the
Articles which could give that shareholder a liability.
(f) Transfer of shares
Certificated shares of the company may be transferred in writing
either by an instrument of transfer in the usual standard form or
in another form approved by the Board. The transfer form must
be signed or made effective by or on behalf of the person making
the transfer. The person making the transfer will be treated as
continuing to be the holder of the shares transferred until the
name of the person to whom the shares are being transferred is
entered in the register of members of the company.
The Board may refuse to register any transfer of any share held in
certificated form:
(i) which is in favour of more than four joint holders; or
(ii) unless the transfer form to be registered is properly stamped
to show payment of any applicable stamp duty and delivered
to the company’s registered office or any other place the
Board decide. The transfer must have with it: the share
certificate for the shares to be transferred; any other evidence
which the Board ask for to prove that the person wanting