AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 24, 1999
REGISTRATION NO. 333-________
---------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
THE DIALOG CORPORATION PLC
(Exact Name of Registrant as Specified in Its Charter)
ENGLAND AND WALES NONE
(State or Other Jurisdiction of (IRS Employer Identification No.)
Incorporation or Organization)
THE COMMUNICATIONS BUILDING
48 LEICESTER SQUARE
LONDON WC2H 7DB, ENGLAND
(Address, Including Zip Code, of Principal Executive Offices)
NON-QUALIFIED STOCK OPTIONS
THE DIALOG CORPORATION PLC 1997 STOCK OPTION PLAN
THE DIALOG CORPORATION PLC 1998 EMPLOYEE STOCK PURCHASE PLAN
(Full Title of the Plans)
BRIAN HOLLAND, ESQ.
CORPORATE COUNSEL
THE DIALOG CORPORATION
11000 REGENCY PARKWAY
CARY, NORTH CAROLINA 27511
(Name, Address, Including Zip Code, and Telephone Number
of Agent for Service)
COPIES OF CORRESPONDENCE TO:
GREGORY C. SMITH, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
525 UNIVERSITY AVENUE, SUITE 220
PALO ALTO, CALIFORNIA 94301
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
==================================================================================================
Proposed Maximum Proposed Maximum Amount of
Title of Securities Amount to be Offering Price Aggregate Offering Registration
to be Registered (1) Registered Per Share (2) Price (2) Fee (2
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Ordinary Shares, 18,086,000 (3) $1.56 to $3.73 $30,120,324 $8,374
nominal value 1p per
share,underlying
American Depositary
Shares
</TABLE>
----------------------
(1) American Depositary Shares (each, an "ADS"), each representing
four Ordinary Shares, nominal value 1p per share (the "Ordinary
Shares"), of The Dialog Corporation plc (the "Registrant"),
issuable upon deposit of the Ordinary Shares, have been
registered on a separate Registration Statement on Form F-6,
filed October 10, 1995 (Registration No. 33-97982).
(2) Estimated solely for purposes of calculating the registration fee
pursuant to Rules 457(c) and (h) under the Securities Act of
1933, as amended (the "Securities Act"), based on (a) non-
qualified stock options ("NQSOs") to purchase 25,000, 25,000,
26,844 and 16,928 Ordinary Shares, represented by 6,250, 6,250,
6,711 and 4,232 ADSs, respectively, having respective exercise
prices of $10.63, $8.00, $14.90 and $11.81 per ADS, (b) options
to purchase 30,000, 608,500, 119,000, 440,000 and 923,000
Ordinary Shares, represented by 7,500, 152,125, 29,750, 110,000
and 230,750 ADSs, respectively, granted under the Registrant's
1997 Stock Option Plan (the "1997 Stock Option Plan"), having
respective exercise prices of $11.88, $11.00, $11.81, $9.90 and
$8.00 per ADS, (c) options to purchase 176,272, 32,988 and 61,620
Ordinary Shares, represented by 44,068, 8,247 and 15,405 ADSs,
respectively, granted under the Registrant's 1998 Employee Stock
Purchase Plan (the "1998 Stock Purchase Plan"), having respective
exercise prices of $8.65, $10.49 and $8.50 per ADS, and (d)
options or other rights to purchase 15,600,848 Ordinary Shares
available to be granted under the 1997 Stock Option Plan or the
1998 Employee Stock Purchase Plan or pursuant to agreements
granting non-qualified stock options (the average of the high and
low sale prices for an Ordinary Share as reported on the London
Stock Exchange being 98.25p and the noon buying rate in New York
City for cable transfers in British pounds as certified for
customs purposes by the Federal Reserve Bank of New York being
pound sterling 0.627983 per U.S. dollar, each on June 18, 1999).
(3) Plus such additional number of Ordinary Shares as may be issuable
pursuant to the antidilution provisions of the Nonstatutory Stock
Options, the 1997 Stock Option Plan and the 1998 Stock Purchase
Plan, in accordance with Rule 416(a) under the Securities Act.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The document(s) containing the information specified in Part I of Form
S-8 have been or will be sent or given to employees as specified by Rule
428(b)(1) under the Securities Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3.INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange
Commission (the "Commission") by or on behalf of The Dialog Corporation plc
(formerly M.A.I.D plc), a corporation organized under the laws of England
and Wales, pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), are incorporated herein by reference:
(a) Annual Report on Form 20-F (File No. 0-26936) for the fiscal year
ended December 31, 1998, filed with the Commission on June 24,
1999;
(b) The description of the ADSs and the Ordinary Shares which is
contained in the Registrant's Registration Statement (File No.
0-26936) on Form 8-A filed with the Commission on October 10,
1995, and any amendment or report filed for the purpose o
updating such description.
All documents subsequently filed by the Registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the
filing of a post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference herein and to be a
part hereof from the date of filing of such documents. Any statement
contained herein or in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded for
purposes of this registration statement to the extent that a statement
contained herein or in any other subsequently filed document that is or is
deemed to be incorporated by reference herein modifies or supersedes such
previous statement. Any statement so modified or superseded shall not be
deemed to constitute a part of this registration statement, except as so
modified or superseded.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 310 of the Companies Act 1985 of Great Britain, as amended
(the "Companies Act"), provides:
(1) This section applies to any provision, whether contained in a
company's articles or in any contract with the company or
otherwise, for exempting any officer of the company or any person
(whether an officer or not) employed by the company as auditor
from, or indemnifying him against, any liability which by virtue
of any rule of law would otherwise attach to him in respect of
any negligence, default, breach of duty or breach of trust of
which he may be guilty in relation to the company.
(2) Except as provided by the following subsection, any such
provision is void.
(3) This section does not prevent a company --
(a) from purchasing and maintaining for any such officer or
auditor insurance against any such liability, or
(b) from indemnifying any such officer or auditor against any
liability incurred by him --
(i) in defending any proceedings (whether civil or
criminal) in which judgment is given in his favour or
he is acquitted, or
(ii) in connection with any application under section 144(3)
or (4) (acquisition of shares by innocent nominee) or
section 727 (general power to grant relief in case of
honest and reasonable conduct) in which relief is
granted to him by the court.
Section 727 of the Companies Act provides:
(1) If in any proceedings for negligence, default, breach of duty or
breach of trust against an officer of a company or a person
employed by a company as auditor (whether he is or is not an
officer of the company) it appears to the court hearing the case
that that officer or person is or may be liable in respect of the
negligence, default, breach of duty or breach of trust, but that
he has acted honestly and reasonably, and that having regard to
all the circumstances of the case (including those connected with
his appointment) he ought fairly to be excused for the
negligence, default, breach of duty or breach of trust, that
court may relieve him, either wholly or partly, from his
liability on such terms as it thinks fit.
(2) If any such officer or person as above-mentioned has reason to
apprehend that any claim will or might be made against him in
respect of any negligence, default, breach of duty or breach of
trust, he may apply to the court for relief; and the court on the
application has the same power to relieve him as under this
section it would have had if it had been a court before which
proceedings against that person for negligence, default, breach
of duty or breach of trust had been brought.
(3) Where a case to which subsection (1) applies is being tried by a
judge with a jury, the judge, after hearing the evidence, may, if
he is satisfied that the defendant or defender ought in pursuance
of that subsection to be relieved either in whole or in part from
the liability sought to be enforced against him, withdraw the
case in whole or in part from the jury and forthwith direct
judgement to be entered for the defendant or defender on such
terms as to costs or otherwise as the judge may think proper.
Article 142 of the Articles of Association of the Registrant provides
that, subject to the provisions of the Companies Act but without prejudice
to any indemnity to which he may otherwise be entitled, every Director,
alternate Director, Secretary or other officer of the Registrant (excluding
the Auditor) shall be entitled to be indemnified out of the assets of the
Registrant against all costs, charges, losses, damages and liabilities
incurred by him in the actual or purported execution or discharge of his
duties or exercise of his powers or otherwise in relation to such duties,
including (without limitation) any liability incurred in defending any
proceedings (whether civil or criminal) which relate to anything done or
omitted or alleged to have been done or omitted by him as an officer or
employee of the Registrant and in which judgment is given in his favor or
in which he is acquitted or in connection with any application in which
relief is granted to him by any court of competent jurisdiction or which
are otherwise disposed of without any finding or admission of any material
breach of duty on his part.
The Registrant has obtained directors and officers insurance providing
indemnification for certain of the Registrant's directors, officers,
affiliates, partners or employees for certain liabilities.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
Exhibit No. Description
----------- ----------
4.1 New Articles of Association of The Dialog Corporation plc
(formerly M.A.I.D plc)
4.2 Memorandum of Association of The Dialog Corporation plc
(formerly M.A.I.D plc) (filed as Exhibit 3.2 to the
Registrant's Registration Statement on Form F-1 (File no.
33-97786) filed October 4, 1995 and incorporated herein by
reference)
4.3 Form of Deposit Agreement among The Dialog Corporation plc
(formerly M.A.I.D plc), The Bank of New York, as depositary,
and owners and holders from time to time of the American
Depositary Receipts issued thereunder (including as an
exhibit the form of American Depositary Receipt) (filed as
Exhibit 4.1 to the Registrant's Amendment No. 2 to
Registration Statement on Form F-1 (File no. 33-97786) filed
November 11, 1995 and incorporated herein by reference)
5.1 Opinion of Theodore Goddard regarding the legality of the
securities being registered
23.1 Consent of PricewaterhouseCoopers, independent accountants
23.2 Consent of Theodore Goddard (included in Exhibit 5.1 hereto)
24.1 Power of Attorney (included on the signature page hereto)
99.1 The Dialog Corporation plc 1997 Stock Option Plan
99.2 The Dialog Corporation plc 1998 Employee Stock Purchase Plan
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high and of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than 20 percent
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement; and
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the
registration statement or any material change to such information
in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished
to the Commission by the Registrant pursuant to Section 13 or Section 15(d)
of the Exchange Act that are incorporated by reference herein.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each filing
of the registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in London, England, on this 22nd day of June,
1999.
THE DIALOG CORPORATION plc
By: /s/ David G. Mattey
---------------------------------
David G. Mattey
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in
the capacities and on the dates indicated.
POWER OF ATTORNEY
Each person whose signature appears below constitutes and
appoints Daniel M. Wagner and David G. Mattey and each of them, jointly and
severally, as his true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities, to sign any or all amendments
(including post-effective amendments) to this registration statement, and
to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he or she
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or his or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
/s/ Daniel M. Wagner President and Chief Executive June 22, 1999
------------------------- Officer (Principal Executive
Daniel M. Wagner Officer), Director
/s/ David G. Mattey Chief Financial Officer June 22, 1999
------------------------- (Principal Financial and
David G. Mattey Accounting Officer), Director
/s/ Michael S. Mander Director June 22, 1999
-------------------------
Michael S. Mander
/s/ Ian J. Barton Director June 22, 1999
-------------------------
Ian J. Barton
Director June ___, 1999
-------------------------
Marmaduke J. Hussey
/s/ Stephen Maller Director June 22, 1999
-------------------------
Stephen Maller
/s/ Jason Molle Director June 22, 1999
-------------------------
Jason Molle
Director June ___, 1999
-------------------------
Ciaran G. Morton
Director June ___, 1999
-------------------------
Patrick Sommers
/s/ Richard Swank Director June 22, 1999
-------------------------
Richard Swank
/s/ Allen L. Thomas Deputy Chairman June 22, 1999
-------------------------
Allen L. Thomas
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
4.1 New Articles of Association of The Dialog Corporation plc
(formerly M.A.I.D plc)
4.2 Memorandum of Association of The Dialog Corporation plc
(formerly named M.A.I.D plc) (filed as Exhibit 3.2 to the
Registrant's Registration Statement on Form F-1 (File no.
33-97786) filed October 4, 1995 and incorporated herein by
reference)
4.3 Form of Deposit Agreement among The Dialog Corporation plc
(formerly M.A.I.D plc), The Bank of New York, as depositary,
and owners and holders from time to time of the American
Depositary Receipts issued thereunder (including as an
exhibit the form of American Depositary Receipt) (filed as
Exhibit 4.1 to the Registrant's Amendment No. 2 t
Registration Statement on Form F-1 (File no. 33-97786) filed
November 11, 1995 and incorporated herein by reference)
5.1 Opinion of Theodore Goddard regarding the legality of the
securities being registered
23.1 Consent of PricewaterhouseCoopers, independent accountants
23.2 Consent of Theodore Goddard (included in Exhibit 5.1 hereto)
24.1 Power of Attorney (included on the signature page hereof)
99.1 The Dialog Corporation plc 1997 Stock Option Plan
99.2 The Dialog Corporation plc 1998 Employee Stock Purchase Plan
THE COMPANIES ACT 1985
PUBLIC COMPANY LIMITED BY SHARES
THE DIALOG CORPORATION PLC
---------------------------------------
NEW ARTICLES OF ASSOCIATION
---------------------------------------
(Adopted by Special Resolution passed on 10 November 1997)
THEODORE
GODDARD
London
THE DIALOG CORPORATION PLC
NEW ARTICLES OF ASSOCIATION
CONTENTS
ARTICLE PAGE
PRELIMINARY
1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Exclusion of Table A . . . . . . . . . . . . . . . . . . . . . . . . 4
CAPITAL
3. Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4. Allotment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
5. Share warrants to bearer . . . . . . . . . . . . . . . . . . . . . . 4
6. Commissions and brokerage . . . . . . . . . . . . . . . . . . . . . 5
7. Trusts not recognised . . . . . . . . . . . . . . . . . . . . . . . 5
8. Purchase of own shares . . . . . . . . . . . . . . . . . . . . . . . 5
VARIATION OF CLASS RIGHTS
9. Sanction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
10. Class meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ALTERATION OF SHARE CAPITAL
11. Increase, consolidation, sub-division and cancellation . . . . . . . 6
12. Fractions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
13. Reduction of share capital . . . . . . . . . . . . . . . . . . . . . 7
CERTIFICATED SHARES
14. Right to certificates . . . . . . . . . . . . . . . . . . . . . . . 8
15. Replacement certificates . . . . . . . . . . . . . . . . . . . . . . 8
UNCERTIFICATED SHARES
16. Uncertificated shares . . . . . . . . . . . . . . . . . . . . . . . 8
LIEN ON SHARES
17. Company's lien on shares not fully paid . . . . . . . . . . . . . 10
18. Enforcement of lien by sale . . . . . . . . . . . . . . . . . . . 10
19. Application of sale proceeds . . . . . . . . . . . . . . . . . . . 10
CALLS
20. Calls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
21. Liability of joint holders . . . . . . . . . . . . . . . . . . . . 11
22. Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
23. Differentiation . . . . . . . . . . . . . . . . . . . . . . . . . 11
24. Payment in advance of calls . . . . . . . . . . . . . . . . . . . 11
25. Restrictions if calls unpaid . . . . . . . . . . . . . . . . . . . 11
26. Sums due on allotment treated as calls . . . . . . . . . . . . . . 12
FORFEITURE
27. Forfeiture after notice of unpaid call . . . . . . . . . . . . . . 12
28. Notice after forfeiture . . . . . . . . . . . . . . . . . . . . . 12
29. Consequences of forfeiture . . . . . . . . . . . . . . . . . . . . 12
30. Disposal of forfeited share . . . . . . . . . . . . . . . . . . . 13
31. Proof of forfeiture . . . . . . . . . . . . . . . . . . . . . . . 13
UNTRACED MEMBERS
32. Sale of shares . . . . . . . . . . . . . . . . . . . . . . . . . . 13
33. Application of sale proceeds . . . . . . . . . . . . . . . . . . . 14
TRANSFER OF SHARES
34. Form of transfer . . . . . . . . . . . . . . . . . . . . . . . . . 15
35. Registration of a certificated share transfer . . . . . . . . . . 15
36. Registration of an uncertificated share transfer . . . . . . . . . 16
37. Renunciation of allotments . . . . . . . . . . . . . . . . . . . . 16
38. No fee on registration . . . . . . . . . . . . . . . . . . . . . . 16
39. Closing of Register of Members . . . . . . . . . . . . . . . . . . 16
TRANSMISSION OF SHARES
40. On death . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
41. Election of person entitled by transmission . . . . . . . . . . . 16
42. Rights on transmission . . . . . . . . . . . . . . . . . . . . . . 17
GENERAL MEETINGS
43. Annual and extraordinary general meetings . . . . . . . . . . . . 17
44. Convening of extraordinary general meetings . . . . . . . . . . . 17
45. Notice of general meetings . . . . . . . . . . . . . . . . . . . . 18
46. Quorum for general meeting . . . . . . . . . . . . . . . . . . . . 19
47. Procedure if quorum not present . . . . . . . . . . . . . . . . . 19
48. Chairman of general meeting . . . . . . . . . . . . . . . . . . . 19
49. Rights of Directors and others to attend meetings . . . . . . . . 19
50. Accommodation of members at meeting . . . . . . . . . . . . . . . 19
51. Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
52. Power to adjourn . . . . . . . . . . . . . . . . . . . . . . . . . 20
53. Notice of adjourned meeting . . . . . . . . . . . . . . . . . . . 20
54. Business of adjourned meeting . . . . . . . . . . . . . . . . . . 20
VOTING
55. Voting at a general meeting . . . . . . . . . . . . . . . . . . . 20
56. Poll procedure . . . . . . . . . . . . . . . . . . . . . . . . . . 21
57. Votes of members . . . . . . . . . . . . . . . . . . . . . . . . . 21
58. Chairman's casting vote . . . . . . . . . . . . . . . . . . . . . 22
59. Voting restrictions on an outstanding call . . . . . . . . . . . . 22
PROXIES
60. Proxy instrument . . . . . . . . . . . . . . . . . . . . . . . . . 22
61. Termination of proxy or corporate authority . . . . . . . . . . . 23
62. Corporate representatives . . . . . . . . . . . . . . . . . . . . 24
63. Amendment to resolutions . . . . . . . . . . . . . . . . . . . . . 24
64. Objection to error in voting . . . . . . . . . . . . . . . . . . . 24
FAILURE TO DISCLOSE INTERESTS IN SHARES
65. Failure to disclose interests in shares . . . . . . . . . . . . . 24
APPOINTMENT, RETIREMENT AND REMOVAL OF DIRECTORS
66. Number of Directors . . . . . . . . . . . . . . . . . . . . . . . 27
67. No share qualification . . . . . . . . . . . . . . . . . . . . . . 27
68. Company's power to appoint Directors . . . . . . . . . . . . . . . 27
69. Board's power to appoint Directors . . . . . . . . . . . . . . . . 27
70. Appointment of executive Directors . . . . . . . . . . . . . . . . 28
71. Eligibility of new Directors . . . . . . . . . . . . . . . . . . . 28
72. Rotational retirement at annual general meeting . . . . . . . . . 28
73. Position of retiring Director . . . . . . . . . . . . . . . . . . 28
74. No age limit . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
75. Removal by ordinary resolution . . . . . . . . . . . . . . . . . . 29
76. Vacation of Director's office . . . . . . . . . . . . . . . . . . 29
ALTERNATE DIRECTORS
77. Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
78. Responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . 30
79. Participation at Board meetings . . . . . . . . . . . . . . . . . 30
80. Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
81. Termination of appointment . . . . . . . . . . . . . . . . . . . . 31
BOARD POWERS
82. Board powers . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
83. Directors below the minimum number . . . . . . . . . . . . . . . . 31
84. Delegation to executive Directors . . . . . . . . . . . . . . . . 32
85. Delegation to committees . . . . . . . . . . . . . . . . . . . . . 32
86. Local management . . . . . . . . . . . . . . . . . . . . . . . . . 32
87. Delegation to agents . . . . . . . . . . . . . . . . . . . . . . . 32
88. Exercise of voting power . . . . . . . . . . . . . . . . . . . . . 33
89. Provision for employees . . . . . . . . . . . . . . . . . . . . . 33
90. Overseas registers . . . . . . . . . . . . . . . . . . . . . . . . 33
91. Associate directors . . . . . . . . . . . . . . . . . . . . . . . 33
92. Borrowing powers . . . . . . . . . . . . . . . . . . . . . . . . . 33
DIRECTORS' REMUNERATION, EXPENSES AND BENEFITS
93. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
94. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
95. Remuneration of executive Directors . . . . . . . . . . . . . . . 37
96. Special remuneration . . . . . . . . . . . . . . . . . . . . . . . 37
97. Pensions and other benefits . . . . . . . . . . . . . . . . . . . 37
DIRECTORS' PROCEEDINGS
98. Board meetings . . . . . . . . . . . . . . . . . . . . . . . . . . 37
99. Notice of Board meetings . . . . . . . . . . . . . . . . . . . . . 37
100. Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
101. Board chairman . . . . . . . . . . . . . . . . . . . . . . . . . . 38
102. Voting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
103. Telephone participation . . . . . . . . . . . . . . . . . . . . . 38
104. Written resolutions . . . . . . . . . . . . . . . . . . . . . . . 38
105. Committee proceedings . . . . . . . . . . . . . . . . . . . . . . 39
106. Minutes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
107. Validity of proceedings . . . . . . . . . . . . . . . . . . . . . 39
INTERESTS OF DIRECTORS
108. Permitted interests . . . . . . . . . . . . . . . . . . . . . . . 39
109. Disclosure of interests to Board . . . . . . . . . . . . . . . . . 40
110. Interested Director not to vote or count for quorum . . . . . . . 40
111. Director's interest in own appointment . . . . . . . . . . . . . . 41
112. Conclusive rulings on Directors' interests . . . . . . . . . . . . 41
113. Connected persons . . . . . . . . . . . . . . . . . . . . . . . . 41
114. Suspension or relaxation of provisions concerning
Directors' interests . . . . . . . . . . . . . . . . . . . . . . . 42
SECRETARY
115. Secretary . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SEALS AND DOCUMENT AUTHENTICATION
116. Application of Seal . . . . . . . . . . . . . . . . . . . . . . . 42
117. Official seal for use abroad . . . . . . . . . . . . . . . . . . . 42
118. Directors or Secretary to authenticate or certify . . . . . . . . 43
DIVIDENDS AND OTHER PAYMENTS
119. Declaration . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
120. Interim dividends . . . . . . . . . . . . . . . . . . . . . . . . 43
121. Entitlement to dividends . . . . . . . . . . . . . . . . . . . . . 43
122. Payment methods . . . . . . . . . . . . . . . . . . . . . . . . . 43
123. Deductions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
124. Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
125. Unclaimed dividends . . . . . . . . . . . . . . . . . . . . . . . 45
126. Uncashed dividends . . . . . . . . . . . . . . . . . . . . . . . . 45
127. Dividends in kind . . . . . . . . . . . . . . . . . . . . . . . . 45
128. Scrip dividends . . . . . . . . . . . . . . . . . . . . . . . . . 45
129. Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
130. Capitalisation of profits and reserves . . . . . . . . . . . . . . 47
RECORD DATES
131. Board to fix date . . . . . . . . . . . . . . . . . . . . . . . . 48
ACCOUNTS
132. Access to accounting records . . . . . . . . . . . . . . . . . . . 48
133. Distribution of annual accounts . . . . . . . . . . . . . . . . . 49
NOTICES
134. Notices to be in writing . . . . . . . . . . . . . . . . . . . . . 49
135. Service on members . . . . . . . . . . . . . . . . . . . . . . . . 49
136. Notices by advertisement . . . . . . . . . . . . . . . . . . . . . 50
137. Evidence of giving notice . . . . . . . . . . . . . . . . . . . . 50
138. Notice binding on transferees . . . . . . . . . . . . . . . . . . 50
139. Notice to persons entitled by transmission . . . . . . . . . . . . 50
DOCUMENT DESTRUCTION
140. Document destruction . . . . . . . . . . . . . . . . . . . . . . . 51
WINDING UP
141. Division of assets . . . . . . . . . . . . . . . . . . . . . . . . 51
INDEMNITY
142. Right to indemnity . . . . . . . . . . . . . . . . . . . . . . . . 52
143. Power to insure . . . . . . . . . . . . . . . . . . . . . . . . . 52
Company number: 1890236
THE COMPANIES ACT 1985
PUBLIC COMPANY LIMITED BY SHARES
ARTICLES OF ASSOCIATION
of
THE DIALOG CORPORATION PLC
The name of the Company was changed from M.A.I.D plc to The Dialog
Corporation plc by way of a Special Resolution of the Members of
the Company passed on 10 November 1997.
(Adopted by Special Resolution passed on 10 November 1997)
PRELIMINARY
1. Definitions
(A) In these Articles the following words have the following meanings:
ACT the Companies Act 1985;
THE ACTS the Companies Act and every other statute
concerning companies and affecting the
Company. This includes any orders, regulations
or further legislation made under the
Companies Act or other statute as well as any
re-enactment;
ADR DEPOSITARY A custodian or depositary or their nominee,
which, under a contract with the Company
approved by the Board, holds the Company's
shares and issues American Depositary
Receipts;
AMERICAN DEPOSITARY American depositary receipts which are issued
RECEIPTS by the ADR Depositary. American Depositary
Receipts represent American Depositary Shares
and are proof of rights relating to American
Depositary Shares or a right to receive them;
AMERICAN DEPOSITARY American depositary shares, which represent
RECEIPTS interests in the Company's shares deposited
with the ADR Depositary. Each American
Depositary Share represents 4 ordinary shares
of 1p each in the Company;
APPROVED DEPOSITARY A custodian or other person (or their nominee)
who is appointed by a contract with the
Company or in some other way acting under that
appointment. The custodian or other person (or
their nominee) holds or is interested in
shares in the Company on behalf of someone
else and issues securities or other documents
proving ownership or in some other way shows
the entitlement of the owner to such shares or
interests. The contract only has effect to the
extent that the Board has approved such
arrangements;
Examples of an Approved Depositary will
include the ADR Depositary. It also includes
the trustees of any share scheme set up by the
Company or any scheme or arrangement set up
for the benefit of the Company's employees or
the employees of any of the Company's
subsidiary undertakings (if that share scheme
or scheme or arrangement has been approved by
the Board and approved in a general meeting);
ARTICLES these articles of association;
AUDITORS the auditors of the Company;
BOARD the board of Directors or the Directors
present or deemed to be present at a duly
convened meeting at which a quorum is present;
CERTIFICATED in relation to a share, a share which is
recorded in the Register of Members as being
held in certificated form;
CLEAR DAYS in relation to a period of a notice, that
period excluding the day when the notice is
given and the day for which it is given or on
which it is to take effect;
COMPANY The Dialog Corporation plc, registered in
England with number 1890236;
DIRECTOR a director of the Company;
EXECUTION any mode of execution (and "executed" shall be
construed accordingly);
GROUP the group comprising the Company and its
subsidiary undertakings (not including any
parent undertaking of the Company);
GROUP UNDERTAKING any undertaking in the Group, including the
Company;
HOLDER in relation to a share, the member whose name
is entered in the Register of Members as the
holder of that share;
LONDON STOCK EXCHANGE London Stock Exchange Limited;
MEMBER a member of the Company or, if the context
otherwise requires, a member of the Board or
of any committee;
OPERATOR the Operator (as defined in the Uncertificated
Securities Regulations) of the relevant
Uncertificated System;
ORDINARY SHARES ordinary shares of 1 pence each in the
Company;
PAID or PAID UP paid up or credited as paid up;
PARTICIPATING a share or class of shares or a renounceable
SECURITY right of allotment of a share, title to which
is permitted to be transferred by means of an
Uncertificated System in accordance with the
Uncertificated Securities Regulations;
RECOGNISED PERSON a recognised clearing house or a nominee of a
recognised clearing house or of a recognised
investment exchange who is designated as its
nominee for the purposes of section 185 of the
Act;
REGISTERED OFFICE the registered office of the Company;
REGISTER OF MEMBERS the Company's register of members kept
pursuant to the Act or, as the case may be,
any overseas branch register kept pursuant to
these Articles;
SEAL the common seal of the Company or any official
or securities seal that the Company has or may
have as permitted by the Act;
SECRETARY the secretary of the Company or any other
person appointed to perform any of the duties
of the secretary of the Company including a
joint, temporary, assistant or deputy
secretary;
SHARE a share in the capital of the Company;
UNCERTIFICATED in relation to a share, a share to which title
is recorded in the Register of Members as
being held in uncertificated form and title to
which may be transferred by means of an
Uncertificated System in accordance with the
Uncertificated Securities Regulations;
UNCERTIFICATED the Uncertificated Securities Regulations 1995
SECURITIES (SI 1995 No. 3272); and
REGULATIONS
UNCERTIFICATED a relevant system, as defined in the
SYSTEM Uncertificated Securities Regulations.
(B) In these Articles:
(i) words or expressions which are not defined in paragraph (A) of this
Article have the same meanings (where applicable) as in the Act as
in force on the date of the adoption of these Articles;
(ii) a reference to any statute or any statutory instrument or any
provision of a statute or of a statutory instrument includes a
reference to any statutory modification or re-enactment of it for
the time being in force, as (where applicable) amended or modified
or extended by any other statute or any order, regulation,
instrument or other subordinate legislation made under such statute
or statutory provision or under the statute under which such
statutory instrument was made;
(iii) words in the singular include the plural and vice versa, words
importing any gender include all genders and a reference to a
"PERSON" includes any individual, firm, partnership, unincorporated
association, company, corporation or other body corporate;
(iv) references to "WRITING" or "WRITTEN" include printing, typewriting,
lithography, photography and any other modes of representing or
reproducing words in a legible and non-transitory form;
(v) a reference to an Uncertificated System is a reference to the
Uncertificated System in respect of which the particular share or
class of shares or renounceable right of allotment of a share is a
Participating Security;
(vi) where an ordinary resolution is expressed to be required for any
purpose, a special or extraordinary resolution is also effective for
such purpose and where an extraordinary resolution is required for
any purpose, a special resolution is also effective for such
purpose; and
(vii) headings do not affect the interpretation of any Article.
2. Exclusion of Table A
The regulations contained in Table A as prescribed under the Act do
not apply to the Company.
CAPITAL
3. Capital
The authorised share capital of the Company at the date of the
adoption of these Articles is pound sterling1,998,270 which is
divided into 199,827,000 Ordinary Shares of 1 pence each.
4. Allotment
(A) Subject to the Act and these Articles, the unissued shares shall be
at the disposal of the Board, who may offer, allot, grant options
over or otherwise dispose of them to such persons and on such terms
as it may decide (including, without limitation, terms relating to
the renunciation of any allotment).
(B) Subject to the Act and without prejudice to any rights attached to
any existing shares, any share may be issued with such rights or
restrictions as the Company may by ordinary resolution determine
(or, if the Company has not so determined, as the Board may
determine).
(C) Subject to the Act, any share may be issued which is, or is to be
liable, to be redeemed at the option of the Company or the holder on
such terms and in such manner as may be provided by these Articles.
5. Share warrants to bearer
(A) Subject to the Act, the Company may, with respect to any full paid
shares, issue a warrant (a "SHARE WARRANT") stating that the bearer
of the warrant is entitled to the shares specified in it. The
Company may provide (by coupons or otherwise) for the payment of
future dividends on the shares included in a share warrant.
(B) The powers referred to in paragraph (A) of this Article may be
exercised by the Board, which may determine and vary the terms on
which a share warrant is to be issued, including (without
limitation) terms on which:
(i) a new share warrant or coupon may be issued in the place of one
damaged, defaced, worn out or lost (provided that no new share
warrant shall be issued to replace one that has been lost unless the
Board is satisfied beyond reasonable doubt that the original has
been destroyed);
(ii) the bearer of the share warrant may be entitled to receive notice of
and to attend, vote and demand a poll at general meetings;
(iii) dividends may be paid; and
(iv) any share warrant may be surrendered and the name of the holder
entered in the Register of Members in respect of the shares
specified in it.
(C) Subject to the terms on which a share warrant is issued and to these
Articles, the bearer of a share warrant shall be deemed to be a
member for all purposes. The bearer of a share warrant shall be
subject to the terms in force and applicable to such share warrant,
whether made before or after its issue.
6. Commissions and brokerage
The Company may exercise all powers of paying commissions in
relation to a subscription for shares or other allotment conferred
by the Act. Subject to the Act, such commissions may be satisfied in
cash or by the allotment of fully or partly paid shares or partly in
one way and partly in the other. The Company may also pay such
brokerage in relation to a subscription for shares as may be lawful.
7. Trusts not recognised
Except as required by law, no person shall be recognised by the
Company as holding any share on any trust and (except as otherwise
provided by these Articles or by law) the Company shall not be bound
by or recognise any interest in any share except an absolute right
of the holder to share in its entirety (even if the Company has
notice of such interest).
8. Purchase of own shares
Subject to the Act and to any rights attached to any shares, the
Company may purchase, or enter into a contract under which it will
or may purchase, any of its own shares of any class (including any
redeemable shares) in any way. Any shares to be so purchased may be
selected for purchase in any manner whatsoever.
VARIATION OF CLASS RIGHTS
9. Sanction
(A) If the share capital of the Company is divided into shares of
different classes, any of the rights attached to any class of shares
(notwithstanding that the Company may be or be about to be in
liquidation) may be varied or abrogated in such manner (if any) as
may be provided by such rights or, in the absence of any such
provision, either with the consent in writing of the holders of not
less than three-quarters in nominal value of the issued shares of
the class or with the sanction of an extraordinary resolution passed
at a separate meeting of the holders of shares of the class duly
convened and held in accordance with these Articles.
(B) Subject to the terms of issue of or rights attached to any shares,
the rights or privileges attached to any class of shares shall be
deemed not to be varied or abrogated by;
(i) the creation or issue of any new shares ranking pari passu in all
respects (save as to the date from which such new shares shall rank
for dividend) with or subsequent to those already issued;
(ii) the reduction of the capital paid up on such shares or by the
purchase or redemption by the Company of any of its own shares in
accordance with the Act and these Articles; or
(iii) the Board resolving that a class of shares is to become or is to
cease to be, or the Operator permitting such class of shares to
become or to cease to be, a Participating Security.
10. Class meetings
A separate meeting for the holders of a class of shares shall be
convened and conducted as nearly as possible in the same way as an
extraordinary general meeting, except that:
(i) no member, other than a Director, shall be entitled to notice of it
or to attend unless he is a holder of shares of that class;
(ii) no vote may be given except in respect of a share of that class;
(iii) the quorum at the meeting other than an adjourned meeting shall be
two persons present in person holding or representing by proxy at
least one-third in nominal value of the issued shares of that class
and at an adjourned meeting the quorum shall be one person holding
shares of the class in question or his proxy; and
(iv) a poll may be demanded by a member present in person or by proxy and
entitled to vote at the meeting and on a poll each member shall have
one vote for every share of that class of which he is the holder.
ALTERATION OF SHARE CAPITAL
11. Increase, consolidation, sub-division and cancellation
The Company may by ordinary resolution:
(i) increase its share capital by a sum to be divided into shares of an
amount prescribed by the resolution;
(ii) consolidate and divide all or any of its share capital into shares
of a larger amount than its existing shares;
(iii) subject to the Act, sub-divide all or any of its shares into shares
of a smaller amount and may by the resolution decide that one or
more of the shares resulting from the sub-division may have any
preference or other advantage as compared with the others; and
(iv) cancel shares which, at the date of the passing of the resolution,
have not been taken or agreed to be taken by a person and diminish
the amount of its share capital by the amount of the shares so
cancelled.
12. Fractions
(A) If, as the result of a consolidation and division or a sub-division
of shares, fractions of shares become attributable to members, the
Board may on behalf of the members deal with the fractions as it
thinks fit, including (without limitation) in either of the ways
prescribed in this Article below.
(B) The Board may sell shares representing the fractions to any person
(including, subject to the Act, the Company) for the best price
reasonably obtainable and distribute the net proceeds of sale in due
proportion amongst the persons to whom such fractions are
attributable (except that if the amount due to a person is less than
pound sterling3.00, or such other sum as the Board may decide, the
Company may retain such sum for its own benefit). To give effect to
such sale the Board may:
(i) in the case of certificated shares, authorise a person to execute an
instrument of transfer of shares to the purchaser or as the
purchaser may direct; and
(ii) in the case of uncertificated shares, exercise any power conferred
on it by Article 16(I) (uncertificated shares) to effect a transfer
of the shares.
(C) The purchaser will not be bound to see to the application of the
purchase monies in respect of any such sale. The title of the
transferee to the shares will not be affected by any irregularity in
or invalidity of the proceedings connected with the sale or
transfer. Any instrument or exercise referred to at paragraph (B) of
this Article shall be effective as if it had been executed or
exercised by the holder of the shares to which it relates.
(D) In relation to the fractions the Board may issue, subject to the
Act, to a member credited as fully paid by way of capitalisation the
minimum number of shares required to round up his holding of shares
to a number which, following a consolidation and division or a sub-
division, leaves a whole number of shares (such issue being deemed
to have been effected immediately before the consolidation or the
sub-division, as the case may be). The amount required to pay up
those shares may be capitalised as the Board thinks fit out of
amounts standing to the credit of any reserve or fund of the Company
(including any share premium account, capital redemption reserve and
profit and loss account), whether or not available for distribution,
and applied in paying up in full the appropriate number of shares. A
resolution of the Board capitalising part of any such reserve or
fund will have the same effect as if the capitalisation had been
made with the sanction of an ordinary resolution of the Company
pursuant to Article 130 (capitalisation of profits and reserves). In
relation to the capitalisation the Board may exercise all the powers
conferred on it by Article 130 without the sanction of an ordinary
resolution of the Company.
13. Reduction of share capital
Subject to the Act and to any rights attached to any shares, the
Company may by special resolution reduce its share capital or any
capital redemption reserve, share premium account or other
undistributable reserve in any way.
CERTIFICATED SHARES
14. Right to certificates
(A) Subject to the Act, the requirements of the London Stock Exchange
and these Articles, every person (except a Recognised Person), upon
becoming the holder of a certificated share is entitled, without
charge, to one certificate for all the certificated shares of a
class registered in his name or, in the case of certificated shares
of more than one class being registered in his name, to a separate
certificate for each class of shares, unless the terms of issue of
the shares provide otherwise.
(B) Where a member (other than a Recognised Person) transfers part of
his shares comprised in a certificate he shall be entitled, without
charge, to one certificate for the balance of certificated shares
retained by him.
(C) The Company is not bound to issue more than one certificate for
certificated shares held jointly by two or more persons. Delivery of
a certificate to one joint holder shall be sufficient delivery to
all joint holders.
(D) A certificate shall specify the number and class and the
distinguishing numbers (if any) of the shares in respect of which it
is issued and the amount paid up on the shares. It shall be issued
under the Seal, which may be affixed to or printed on it, or in such
other manner as the Board may approve, having regard to the terms of
issue and the requirements of the London Stock Exchange.
15. Replacement certificates
If any certificate is worn-out, defaced, lost or destroyed, the
Company may cancel it and issue a replacement certificate subject to
such terms as the Board may decide as to evidence and indemnity
(with or without security) and to payment of any exceptional
out-of-pocket expenses of the Company in investigating such evidence
and preparing such indemnity or such security but otherwise free of
charge, and the certificate is worn-out or defaced) on delivery up
of the old certificate.
UNCERTIFICATED SHARES
16. Uncertificated shares
(A) The Board may resolve that a class of shares is to become, or is to
cease to be, a Participating Security.
(B) Shares of a class shall not be treated as forming a separate class
from other shares of the same class as a consequence only of such
shares being held in uncertificated form.
(C) Any share of a class which is a Participating Security may be
changed from an uncertificated share to a certificated share and
from a certificated share to an uncertificated share in accordance
with the Uncertificated Securities Regulations.
(D) These Articles apply to uncertificated shares of a class which is a
Participating Security only to the extent that these Articles are
consistent with the holding of such shares in uncertificated form,
with the transfer of title to such shares by means of the
Uncertificated System and with the Uncertificated Securities
Regulations.
(E) The Board may lay down regulations not included in these Articles
which:
(i) apply to the issue, holding or transfer of uncertificated shares (in
addition to or in substitution for any provisions in these
Articles);
(ii) set out (where appropriate) the procedures for conversion and/or
redemption of uncertificated shares; and/or
(iii) the Board considers necessary or appropriate to ensure that these
Articles are consistent with the Uncertificated Securities
Regulations and/or the Operator's rules and practices.
(F) Such regulations will apply instead of any relevant provisions in
these Articles which relate to certificates and the transfer,
conversion and redemption of shares or which are not consistent with
the Uncertificated Securities Regulations, in all cases to the
extent (if any) stated in such regulations. If the Board makes any
such regulations, paragraph (D) of this Article will (for the
avoidance of doubt) continue to apply to these Articles, when read
in conjunction with those regulations.
(G) Any instruction given by means of an Uncertificated System as
referred to in these Articles shall be a dematerialised instruction
given in accordance with the Uncertificated Securities Regulations,
the facilities and requirements of the Uncertificated System and the
Operator's rules and practices.
(H) For any purpose under these Articles, the Company may treat a
member's holding of uncertificated shares and of certificated shares
of the same class as if they were separate holdings, unless the
Board otherwise decides.
(I) Where the Company is entitled under the Act, the Operator's rules
and practices, these Articles or otherwise to dispose of, forfeit,
enforce a lien over or sell or otherwise procure the sale of any
shares of a class which is a Participating Security which are held
in uncertificated form, the Board may take such steps (subject to
the Uncertificated Securities Regulations and to such rules and
practices) as may be required or appropriate, by instruction by
means of an Uncertificated System or otherwise, to effect such
disposal, forfeiture, enforcement or sale including by (without
limitation):
(i) requesting or requiring the deletion of any computer-based entries
in the Uncertificated System relating to the holding of such shares
in uncertificated form;
(ii) altering such computer-based entries so as to divest the holder of
such shares of the power to transfer such shares other than to a
person selected or approved by the Company for the purpose of such
transfer;
(iii) requiring any holder of such shares, by notice in writing to him, to
change his holding of such uncertificated shares into certificated
form within any specified period;
(iv) requiring any holder of such shares to take such steps as may be
necessary to sell or transfer such shares as directed by the
Company;
(v) otherwise rectify or change the Register of Members in respect of
any such shares in such manner as the Board considers appropriate
(including, without limitation, by entering the name of a transferee
into the Register of Members as the next holder of such shares);
and/or
(vi) appointing any person to take any steps in the name of any holder of
such shares as may be required to change such shares from
uncertificated form to certificated form and/or to effect the
transfer of such shares (and such steps shall be effective as if
they had been taken by such holder).
LIEN ON SHARES
17. Company's lien on shares not fully paid
The Company has a first and paramount lien on each issued share (not
being a fully paid share) for all amounts payable to the Company
(whether presently payable or not) at a fixed time or called in
respect of such share. The Board may resolve that any share be
exempt wholly or in part from this Article. The lien applies to all
dividends on any such share and to all amounts payable by the
Company in respect of such share.
18. Enforcement of lien by sale
(A) For the purpose of enforcing the Company's lien on any shares, the
Board may sell them in such manner as it decides if an amount in
respect of which the lien exists is presently payable and is not
paid within 14 clear days following the giving of a notice to the
holder (or any person entitled to the share as a consequence of
death or bankruptcy) demanding payment of the amount due within such
14 clear day period and stating that if the notice is not complied
with the shares may be sold. CCD-0077
(B) To give effect to such sale the Board may:
(i) in the case of certificated shares, authorise a person to execute an
instrument of transfer of shares in the name and on behalf of the
holder of, or the person entitled by transmission to, them to the
purchaser or as the purchaser may direct; and
(ii) in the case of uncertificated shares, exercise any power conferred
on it by Article 16(I) (uncertificated shares) to effect a transfer
of the shares.
(C) The purchaser will not be bound to see to the application of the
purchase monies in respect of any such sale. The title of the
transferee to the shares will not be affected by any irregularity in
or invalidity of the proceedings connected with the sale or
transfer. Any instrument or exercise referred to at paragraph (B) of
this Article shall be effective as if it had been executed or
exercised by the holder of, or the person entitled by transmission
to, the shares to which it relates.
19. Application of sale proceeds
The net proceeds of any sale of shares subject to the Company's lien
under these Articles (after payment of the sale costs) shall be
applied in or towards satisfaction of the amount then due to the
Company in respect of the lien. Any balance shall be paid to the
original holder of, or the person entitled (but for such sale) by
transmission to, the shares on (in the case of certificated shares)
surrender to the Company for cancellation of the certificate for
such shares and (in all cases) subject to the Company having a lien
on such balance on the same basis as applied to such shares for any
amount not presently payable as existed on such shares before the
sale.
CALLS
20. Calls
Subject to the terms on which shares are allotted, the Board may
make calls on the members in respect of any amounts unpaid on their
shares (whether in respect of nominal value or premium) and not
payable on a date fixed by or in accordance with the allotment
terms. Each member shall (subject to receiving at least 14 clear
days' notice specifying when and where the payment is to be made)
pay to the Company the amount called as required by such notice. A
call may be made payable by instalments. A call shall be deemed to
have been made when the resolution of the Board authorising it is
passed. A call may, before the Company's receipt of any amount due
under it, be revoked or postponed in whole or in part as the Board
may decide. A person upon whom a call is made will remain liable for
calls made on him notwithstanding the subsequent transfer of the
shares in respect of which the call was made.
21. Liability of joint holders
The joint holders of a share shall be jointly and severally liable
to pay all calls in respect of it.
22. Interest
If the whole of the sum payable in respect of any call is not paid
by the day it becomes due and payable, the person from whom it is
due shall pay all costs, charges and expenses that the Company may
have incurred by reason of such non-payment, together with interest
on the unpaid amount from the day it became due and payable until it
is paid at the rate fixed by the terms of the allotment of the share
or in the notice of the call or, if no rate is fixed, at such rate,
not exceeding 20 per cent. per annum (compounded on a six monthly
basis), as the Board shall determine. The Board may waive payment of
such costs, charges, expenses or interest in whole or in part.
23. Differentiation
Subject to the allotment terms, the Board may differentiate between
the holders of shares in the amounts and times of payment of calls
on their shares.
24. Payment in advance of calls
The Board may receive from any member all or any part of the amount
uncalled and unpaid on the shares held by him. The member's
liability on the shares to which such payment relates shall be
reduced by such amount. The Company may pay interest on such amount
from the time of receipt until the time when such amount would, but
for such advance, have become due and payable at such rate as the
Board may decide.
25. Restrictions if calls unpaid
Unless the Board decides otherwise, no member shall be entitled to
receive any dividend or to be present or vote at any meeting or to
exercise any right or privilege as a member until he has paid all
calls due and payable on every share held by him, whether alone or
jointly with any other person, together with interest and expenses
(if any) to the Company.
26. Sums due on allotment treated as calls
Any sum payable in respect of a share on allotment or at any fixed
date, whether in respect of the nominal value of the share or by way
of premium or as an instalment of a call, shall be deemed to be a
call. If such sum is not paid, these Articles shall apply as if it
had become due and payable by virtue of a call.
FORFEITURE
27. Forfeiture after notice of unpaid call
(A) If a call or an instalment of a call remains unpaid after it has
become due and payable, the Board may give to the person from whom
it is due not less than 14 clear days' notice requiring payment of
the amount unpaid together with any interest which may have accrued
and any costs, charges and expenses that the Company may have
incurred by reason of such non-payment. The notice shall state the
place where payment is to be made and that if the notice is not
complied with the shares in respect of which the call was made will
be liable to be forfeited. If the notice is not complied with, any
shares in respect of which it was given may, before the payment
required by the notice has been made, be forfeited by a resolution
of the Board. The forfeiture will include all dividends and other
amounts payable in respect of the forfeited shares not paid before
the forfeiture.
(B) The Board may accept the surrender of a share which is liable to be
forfeited in accordance with these Articles. All provisions in these
Articles which apply to the forfeiture of a share also apply to the
surrender of a share.
28. Notice after forfeiture
When a share has been forfeited, the Company shall give notice of
the forfeiture to the person who was before forfeiture the holder of
the share or the person entitled by transmission to the share. No
forfeiture will be invalidated by any omission to give such notice.
An entry of the fact and date of forfeiture shall be made in the
Register of Members.
29. Consequences of forfeiture
(A) A share shall, on its forfeiture, become the property of the
Company.
(B) All interest in and all claims and demands against the Company in
respect of a share and all other rights and liabilities incidental
to the share as between its holder and the Company shall, on its
forfeiture, be extinguished and terminate except as otherwise stated
in these Articles or, in the case of past members, as provided by
the Act.
(C) The holder of a share which is forfeited shall:
(i) on its forfeiture cease to be a member in respect of it;
(ii) if a certificated share, surrender to the Company for cancellation
the certificate for the share;
(iii) remain liable to pay to the Company all monies payable in respect of
the share at the time of forfeiture, with interest from such time of
forfeiture until the time of payment, in the same manner in all
respects as if the share had not been forfeited; and
(iv) remain liable to satisfy all (if any) claims and demands which the
Company might have enforced in respect of the share at the time of
forfeiture without any deduction or allowance for the value of the
share at the time of forfeiture or for any consideration received on
its disposal.
30. Disposal of forfeited share
(A) Subject to the Act, a forfeited share may be sold, re-allotted or
otherwise disposed of on such terms and in such manner as the Board
may decide either to the person who was before the forfeiture the
holder or to any other person. At any time before the disposal, the
forfeiture may be cancelled on such terms as the Board may decide.
Where for the purpose of its disposal a forfeited share is to be
transferred to any transferee, the Board may:
(i) in the case of certificated shares, authorise a person to execute an
instrument of transfer of shares in the name and on behalf of their
holder to the purchaser or as the purchaser may direct; and
(ii) in the case of uncertificated shares, exercise any power conferred
on it by Article 16(I) (uncertificated shares) to effect a transfer
of the shares.
(B) The purchaser will not be bound to see to the application of the
purchase monies in respect of any such sale. The title of the
transferee to the shares will not be affected by any irregularity in
or invalidity of the proceedings connected with the sale or
transfer. Any instrument or exercise referred to at paragraph (A) of
this Article shall be effective as if it had been executed or
exercised by the holder of, or the person entitled by transmission
to, the shares to which it relates.
31. Proof of forfeiture
A statutory declaration by a Director or the Secretary that a share
has been forfeited on a specified date shall be conclusive evidence
of the facts stated in it against all persons claiming to be
entitled to the share. The declaration shall (subject to the
execution of any necessary instrument of transfer) constitute good
title to the share. The person to whom the share is disposed of
shall not be bound to see to the application of the consideration
(if any) given for it on such disposal. His title to the share will
not be affected by irregularity in, or invalidity of, the
proceedings connected with the forfeiture or disposal.
UNTRACED MEMBERS
32. Sale of shares
(A) The Company may sell at the best price reasonably obtainable any
share of a member, or any share to which a person is entitled by
transmission, if:
(i) during the period of twelve years prior to the date of the publication
of the advertisements referred to in this paragraph (A) (or, if
published on different dates, the earlier or earliest of them) no
cheque, warrant or money order in respect of such share sent by or on
behalf of the Company through the post in a pre-paid envelope
addressed to the member or to the person entitled by transmission to
the share, at his address in the Register of Members or other address
last known to the Company has been cashed and the Company has received
no communication in respect of such share from such member or person,
provided that during such twelve year period the Company has paid at
least three cash dividends (whether interim or final) and no such
dividend has been claimed by the person entitled to it;
(ii) on or after the expiry of such twelve year period the Company has
given notice of its intention to sell such share by advertisements
in a national newspaper and in a newspaper circulating in the area
in which the address in the Register of Members or other last known
address of the member or the person entitled by transmission to the
share or the address for the service of notices on such member or
person notified to the Company in accordance with these Articles is
located;
(iii) such advertisements, if not published on the same day, are published
within 30 days of each other;
(iv) during a further period of three months following the date of
publication of such advertisements (or, if published on different
dates, the date on which the requirements of this paragraph (A)
concerning the publication of newspaper advertisements are met) and
prior to the sale the Company has not received any communication in
respect of such share from the member or person entitled by
transmission; and
(v) the Company has informed the London Stock Exchange of its intention
to make such sale, if shares of the class concerned are listed on
the London Stock Exchange.
(B) If during such twelve year period, or during any subsequent period
ending on the date when all the requirements of paragraph (A) of
this Article have been met in respect of any shares, any additional
shares have been issued in respect of those held at the beginning
of, or previously so issued during, any such subsequent period and
all the requirements of paragraph (A) of this Article have been
satisfied with regard to such additional shares, the Company may
also sell the additional shares.
(C) To give effect to a sale pursuant to paragraph (A) or paragraph (B)
of this Article, the Board may:
(i) in the case of certificated shares, authorise a person to execute an
instrument of transfer of shares in the name and on behalf of the
holder of, or the person entitled by transmission to, them to the
purchaser or as the purchaser may direct; and
(ii) in the case of uncertificated shares, exercise any power conferred
on it by Article 16(I) (uncertificated shares) to effect a transfer
of the shares.
(D) The purchaser will not be bound to see to the application of the
purchase monies in respect of any such sale. The title of the
transferee to the shares will not be affected by any irregularity in
or invalidity of the proceedings connected with the sale or
transfer. Any instrument or exercise referred to at paragraph (C) of
this Article shall be effective as if it had been executed or
exercised by the holder of, or the person entitled by transmission
to, the shares to which it relates.
33. Application of sale proceeds
The Company shall account to the member or other person entitled to
such share for the net proceeds of such sale by carrying all monies
in respect of the sale to a separate account. The Company shall be
deemed to be a debtor to, and not a trustee for, such member or
other person in respect of such monies. Monies carried to such
separate account may either be employed in the business of the
Company or invested as the Board may think fit. No interest shall be
payable to such member or other person in respect of such monies and
the Company shall not be required to account for any money earned on
them.
TRANSFER OF SHARES
34. Form of transfer
(A) Subject to these Articles, a member may transfer all or any of his
shares:
(i) in the case of certificated shares, by an instrument of transfer in
writing in any usual form or in another form approved by the Board,
which must be executed by or on behalf of the transferor and (in the
case of a transfer of a share which is not fully paid) by or on
behalf of the transferee; or
(ii) in the case of uncertificated shares, without a written instrument
in accordance with the Uncertificated Securities Regulations.
(B) The transferor shall remain the holder of the share transferred
until the name of the transferee is entered in the Register of
Members in respect of it.
35. Registration of a certificated share transfer
(A) Subject to these Articles, the Board may, in its absolute discretion
and without giving a reason, refuse to register the transfer of a
certificated share or the renunciation of a renounceable letter of
allotment unless it is:
(i) in respect of a share which is fully paid;
(ii) in respect of a share on which the Company has no lien;
(iii) in respect of only one class of shares;
(iv) in favour of a single transferee or renouncee or not more than four
joint transferees or renouncees;
(v) duly stamped (if required); and
(vi) delivered for registration to the Registered Office or such other
place as the Board may decide, accompanied by the certificate for
the shares to which it relates (except in the case of a transfer by
a Recognised Person where a certificate has not been issued, or in
the case of a renunciation) and any other evidence as the Board may
reasonably require to prove the title to such share of the
transferor or person renouncing and the due execution by him of the
transfer or renunciation or, if the transfer or renunciation is
executed by some other person on his behalf, the authority of such
person to do so,
provided that the Board shall not refuse to register any transfer or
renunciation of any certificated shares listed on the London Stock
Exchange on the ground that they are partly paid in circumstances
where such refusal would prevent dealings in such shares on the
London Stock Exchange from taking place on an open and proper basis.
(B) If the Board refuses to register a transfer or renunciation pursuant
to this Article, it shall, within two months after the date on which
the transfer or renunciation was delivered to the Company, send
notice of the refusal to the transferee or renouncee. An instrument
of transfer or renunciation which the Board refuses to register
shall (except in the case of suspected fraud) be returned to the
person delivering it. All instruments of transfer which are
registered may, subject to these Articles, be retained by the
Company.
36. Registration of an uncertificated share transfer
(A) The Board shall register a transfer of title to any uncertificated
share or the renunciation or transfer of any renounceable right of
allotment of a share which is a Participating Security held in
uncertificated form in accordance with the Uncertificated Securities
Regulations, except that the Board may refuse (subject to any
relevant requirements of the London Stock Exchange) to register any
such transfer or renunciation which is in favour of more than four
persons jointly or in any other circumstance permitted by the
Uncertificated Securities Regulations.
(B) If the Board refuses to register any such transfer or renunciation
the Company shall, within two months after the date on which the
instruction relating to such transfer or renunciation was received
by the Company, send notice of the refusal to the transferee or
renouncee.
37. Renunciation of allotments
The Board may, at its discretion, recognise and give effect to a
renunciation of the allotment of any share by the allottee in favour
of some other person.
38. No fee on registration
No fee shall be charged for the registration of a transfer of a
share or the renunciation of a renounceable letter of allotment or
other document relating to or affecting the title to any share.
39. Closing of Register of Members
The registration of transfers of shares or of any class of shares
may be suspended at such times and for such periods (not exceeding
thirty days in any year) as the Board may decide (subject to the
Uncertificated Securities Regulations in the case of any shares of a
class which is a Participating Security).
TRANSMISSION OF SHARES
40. On death
If a member dies, the survivors or survivor where he was a joint
holder, or his personal representatives where he was the sole or
only surviving holder, shall be the only persons recognised by the
Company as having any title to his shares. Nothing in these Articles
shall release the estate of a deceased holder from any liability in
respect of a share which has been held by him solely or jointly.
41. Election of person entitled by transmission
(A) A person becoming entitled to a share in consequence of the death or
bankruptcy of a member, or of any other event giving rise to a
transmission of such entitlement by operation of law, may, on such
evidence as to his title being produced as the Board may require,
elect either to become registered as the holder of such share or to
have some person nominated by him so registered. If he elects to be
registered himself, he shall give notice to the Company to that
effect. If he elects to have some other person registered, he shall:
(i) in the case of a certificated share, execute an instrument of
transfer of such share to such person; and
(ii) in the case of an uncertificated share, either:
(a) procure that all appropriate instructions are given by
means of the Uncertificated System to effect the transfer
of such share to such person; or
(b) change the uncertificated share to certificated form and
then execute an instrument of transfer of such share to
such person.
(B) All the provisions of these Articles relating to the transfer of
shares shall apply to the notice or instrument of transfer or
instructions (as the case may be) referred to at paragraph (A) of
this Article if it were an instrument of transfer executed, or they
were instructions given, by the member and the event giving rise to
the transmission had not occurred.
(C) The Board may give notice requiring a person to make the election
referred to in paragraph (A) of this Article. If such notice is not
complied with within sixty days, the Board may withhold payment of
all dividends and other amounts payable in respect of the share
until notice of election has been made.
42. Rights on transmission
A person becoming entitled by transmission to a share shall have the
rights to which he would be entitled if he were the holder of the
share, except that he shall not, before being registered as its
holder, be entitled in respect of it to attend or vote at any
general meeting or at any separate meeting of the holders of any
class of shares.
GENERAL MEETINGS
43. Annual and extraordinary general meetings
(A) The Company shall hold annual general meetings, which shall be
convened by the Board, in accordance with the Act.
(B) All general meetings other than annual general meetings shall be
called extraordinary general meetings.
44. Convening of extraordinary general meetings
The Board may convene an extraordinary general meeting whenever it
thinks fit. An extraordinary general meeting shall also be convened
on such requisition, or in default may be convened by such
requisitionists, as provided by the Act and no business shall be
transacted at such meeting except that stated by the requisition or
proposed by the Board. If there are not within the United Kingdom
sufficient Directors to call a general meeting, any Director may
call a general meeting.
45. Notice of general meetings
(A) An annual general meeting, and an extraordinary general meeting
convened for the passing of a special resolution, shall be convened
by not less than 21 clear days' notice in writing. All other
extraordinary general meetings shall be convened by not less than 14
clear days' notice in writing.
(B) Subject to the Act and notwithstanding that it is convened by
shorter notice than that specified in paragraph (A) of this Article,
a general meeting shall be deemed to have been duly convened if it
is so agreed:
(i) in the case of an annual general meeting, by all the members
entitled to attend and vote at the meeting; and
(ii) in the case of any other meeting, by a majority in number of the
members having a right to attend and vote at the meeting, being a
majority together holding not less than 95 per cent. in nominal
value of the shares giving that right.
(C) The notice of meeting shall specify:
(i) whether the meeting is an annual general meeting or an extraordinary
general meeting;
(ii) the place, the day and the time of the meeting;
(iii) subject to the requirements of the London Stock Exchange, the
general nature of the business to be transacted;
(iv) if the meeting is convened to consider a special or extraordinary
resolution, the intention to propose the resolution as such; and
(v) with reasonable prominence, that a member entitled to attend and
vote is entitled to appoint one or more proxies to attend and, on a
poll, vote instead of him and that a proxy need not also be a
member.
(D) The notice of meeting:
(i) shall be given to the members (other than a member who, under these
Articles or any restrictions imposed on any shares, is not entitled
to receive notice from the Company), to the Directors and to the
Auditors; and
(ii) may specify a time by which a person must be entered on the Register
of Members in order for such person to have the right to attend or
vote at the meeting (subject to the Uncertificated Securities
Regulations if the Company is then a participating issuer for the
purpose of the Uncertificated Securities Regulations).
(E) The Board may determine that the members entitled to receive notice
of a meeting are those persons entered on the Register of Members at
the close of business on a day determined by the Board (subject to
the Uncertificated Securities Regulations if the Company is then a
participating issuer for the purpose of the Uncertificated
Securities Regulations).
(F) The accidental omission to send a notice of meeting or, in cases
where it is intended that it be sent out with the notice, an
instrument of proxy to, or the non-receipt of either by, any person
entitled to receive such notice shall not invalidate the proceedings
at that meeting.
46. Quorum for general meeting
No business shall be transacted at a general meeting unless a quorum
is present. Two persons entitled to vote on the business to be
transacted, each being a member or a proxy for a member or a duly
authorised representative of a corporation which is a member, shall
be a quorum. The absence of a quorum will not prevent the
appointment of a chairman of the meeting in accordance with these
Articles. Such appointment shall not be treated as being part of the
business of the meeting.
47. Procedure if quorum not present
If within fifteen minutes (or such longer time not exceeding one
hour as the chairman of the meeting may decide to wait) after the
time appointed for the holding of the meeting a quorum is not
present, or if during meeting a quorum ceases to be present, the
meeting:
(i) if convened on the requisition of members, shall be dissolved; and
(ii) in any other case shall stand adjourned to the same day in the next
week or to such other day and at such other time and place as the
chairman (or, in default, the Board) may decide.
If at such adjourned meeting a quorum is not present within fifteen
minutes after the time appointed for holding it one person entitled
to vote at the business to be transacted, being a member or a proxy
for a member or a duly authorised representative of a corporation of
a member, shall be a quorum.
48. Chairman of general meeting
The chairman (if any) of the Board or, in his absence, the vice-
chairman (if any) shall preside as chairman at a general meeting. If
there is no chairman or vice-chairman, or if at a meeting neither is
present within five minutes after the time fixed for the start of
the meeting, or neither is willing to act, the Directors present
shall select one of their number to be chairman of the meeting. If
only one Director is present and willing to act, he shall be
chairman of the meeting. In default, the members present in person
and entitled to vote shall choose one of their number to be chairman
of the meeting.
49. Rights of Directors and others to attend meetings
A Director (and any other person invited by the chairman of the
meeting to do so) shall be entitled to attend and speak at a general
meeting and at a separate meeting of the holders of any class of
shares, whether or not he is a member.
50. Accommodation of members at meeting
If it appears to the chairman of the meeting that the meeting place
specified in the notice convening the meeting is inadequate to
accommodate all members entitled and wishing to attend, the meeting
will be duly constituted and its proceedings valid if the chairman
is satisfied that adequate facilities are available to ensure that a
member who is unable to be accommodated is able:
(i) to participate in the business for which the meeting has been
convened;
(ii) to hear and see all persons present who speak (whether by the use of
microphones, loud-speakers, audio-visual communications equipment or
otherwise), whether in the meeting place or elsewhere; and
(iii) to be heard and seen by all other persons present in the same way.
51. Security
In addition to any measures which the Board may be required to take
due to the location or venue of the meeting, the Board may make any
arrangement and impose any restriction it considers appropriate and
reasonable in the circumstances to ensure the security of a meeting
including, without limitation, the searching of any person attending
the meeting and the imposing of restrictions on the items of
personal property that may be taken into the meeting place. The
Board may refuse entry to a meeting to a person who refuses to
comply with any such arrangements or restrictions.
52. Power to adjourn
(A) The chairman of the meeting may, with the consent of any meeting at
which a quorum is present, and shall, if so directed by the meeting,
adjourn the meeting from time to time (or indefinitely) and from
place to place.
(B) Without prejudice to any other power of adjournment which the
chairman of the meeting may have under these Articles, at common law
or otherwise, the chairman may, without the consent of the meeting,
adjourn the meeting from time to time (or indefinitely) and from
place to place if he decides that it is necessary or appropriate to
do so in order to:
(i) secure the proper and orderly conduct of the meeting; or
(ii) give all persons entitled to do so a reasonable opportunity of
speaking and voting at the meeting; or
(iii) ensure that the business of the meeting is properly concluded or
disposed of.
53. Notice of adjourned meeting
Whenever a meeting is adjourned for 30 days or more or indefinitely,
at least seven clear days' notice, specifying the place, the day and
time of the adjourned meeting and the general nature of the business
to be transacted, shall be given in the same manner as in the case
of an original meeting. Except in these circumstances, no member
shall be entitled to any notice of an adjournment or of the business
to be transacted at any adjourned meeting.
54. Business of adjourned meeting
No business shall be transacted at any adjourned meeting other than
the business which might properly have been transacted at the
meeting from which the adjournment took place.
VOTING
55. Voting at a general meeting
(A) At a general meeting a resolution put to the vote of the meeting
shall be decided on a show of hands unless before, or on the
declaration of the result of, the show of hands a poll is demanded
by either:
(i) the chairman of the meeting;
(ii) at least five members having the right to vote at the meeting;
(iii) a member or members representing not less than one-tenth of the
total voting rights of all the members having the right to vote at
the meeting; or
(iv) a member or members holding shares conferring a right to vote on the
resolution on which an aggregate sum has been paid up equal to not
less than one-tenth of the total sum paid up on all the shares
conferring that right.
(B) Unless a poll is so demanded and the demand is not withdrawn, a
declaration by the chairman of the meeting that a resolution has
been carried, or carried unanimously, or by a particular majority,
or lost, or not carried by a particular majority, and an entry to
that effect in the minutes of the meeting, shall be conclusive
evidence of the fact without proof of the number or proportion of
the votes recorded in favour of or against such resolution.
(C) A demand for a poll may be withdrawn before the poll is taken, but
only with the consent of the chairman of the meeting. A demand so
withdrawn shall validate the result of a show of hands declared
before the demand was made.
56. Poll procedure
(A) Any poll duly demanded on the election of a chairman of a meeting or
on any question of adjournment shall be taken forthwith. A poll duly
demanded on any other matter shall be taken in such manner and at
such time and place, not being more than thirty days from the date
of the meeting or adjourned meeting at which the poll was demanded,
as the chairman shall direct. The chairman may appoint scrutineers
who need not be members. No notice need be given of a poll not taken
immediately if the time and place at which it is to be taken are
announced at the meeting at which it is demanded. In any other case
at least seven clear days' notice shall be given specifying the time
and place at which the poll is to be taken. The result of the poll
shall be deemed to be the resolution of the meeting at which the
poll was demanded.
(B) The demand for a poll (other than on the election of a chairman or
any question of adjournment) shall not prevent the continuance of
the meeting for the transaction of any business other than the
question on which a poll has been demanded. If a poll is demanded
before the declaration of the result on a show of hands and the
demand is duly withdrawn, the meeting shall continue as if the
demand had not been made.
(C) On a poll votes may be given in person or by proxy. A member
entitled to more than one vote need not, if he votes, use all his
votes or cast all the votes he uses in the same way.
57. Votes of members
(A) Subject to any rights or restrictions attaching to any shares:
(i) on a show of hands every member who (being an individual) is present
in person or (being a corporation) is present by a duly authorised
representative who is not himself a member entitled to vote shall
have one vote; and CCD-0077
(ii) on a poll every member shall have one vote for every share of which
he is the holder.
(B) In the case of joint holders, the vote of the senior who tenders a
vote shall be accepted to the exclusion of the votes of the other
joint holders. Seniority shall be determined by the order in which
the names of the holders stand in the Register of Members in respect
of the joint holding.
(C) A member in respect of whom an order has been made by any court or
official having jurisdiction (whether in the United Kingdom or
elsewhere) in matters concerning mental disorder or incapacity may
vote, on a show of hands or on a poll, by his guardian or other
person duly authorised to act on his behalf, who may vote on a poll
by proxy. Evidence to the satisfaction of the Board of the authority
of the person claiming the right to vote shall be deposited at the
Registered Office, or at such other place as is specified in
accordance with these Articles for the deposit of instruments of
proxy, not less than 48 hours before the time appointed for holding
the meeting or adjourned meeting at which the right to vote is to be
exercised, and in default the right to vote shall not be
exercisable.
58. Chairman's casting vote
In the case of an equality of votes, either on a show of hands or on
a poll, the chairman of the meeting shall be entitled to a further
or casting vote in addition to any other vote he may have or be
entitled to exercise.
59. Voting restrictions on an outstanding call
No member shall have the right (unless the Board otherwise decides)
to attend or vote at any general meeting or at any separate meeting
of the holders of any class of shares, either in person or by
representative or proxy, or to exercise any other right in respect
of any share held by him unless all amounts presently payable by him
to the Company in respect of such share (including any costs,
interest or expenses) have been paid.
PROXIES
60. Proxy instrument
(A) An instrument appointing a proxy shall be in writing in any usual
form or in any other form which the Board may approve and shall be
executed by or on behalf of the appointor. A corporation may execute
a form of proxy either under its common seal or under the hand of a
duly authorised officer. A member may appoint more than one proxy to
attend on the same occasion, but only one proxy may be appointed in
respect of any one share. Deposit of an instrument of proxy shall
not preclude a member from attending and voting at the meeting or at
any adjournment of it.
(B) The instrument appointing a proxy and any authority under which it
is executed or a copy of the authority certified notarially or in
some other way approved by the Board may:
(i) be deposited at the Registered Office or at such other place in the
United Kingdom as is specified in the notice convening the meeting,
or in any instrument of proxy sent out by the Company in relation to
the meeting, not less than 48 hours before the time for holding the
meeting or adjourned meeting at which the person named in the
instrument proposes to vote; or
(ii) in the case of a poll taken more than 48 hours after it was
demanded, be deposited at the place referred to in paragraph B(i) of
this Article after the poll has been demanded and not less than 24
hours before the time appointed for taking the poll; or
(iii) where the poll is not taken forthwith but is taken not more than 48
hours after it was demanded, be delivered at the meeting to the
chairman of the meeting or to the Secretary or to any Director,
and an instrument of proxy which is not deposited or delivered in a
manner so permitted shall be invalid. An instrument appointing a
proxy will not be valid after twelve months from the date of its
execution, except at an adjourned meeting or on a poll demanded at a
meeting or an adjourned meeting in cases where the meeting was
originally held within twelve months from such date.
(C) When two or more valid but differing instruments of proxy are
delivered in respect of the same share for use at the same meeting
and in respect of the same matter, the one which is last validly
delivered (regardless of its date or of the date of its execution)
shall be treated as replacing and revoking the other or others as
regards that share. If the Company is unable to determine which
instrument was last validly delivered, none of them shall be treated
as valid in respect of that share.
(D) An instrument appointing a proxy shall be deemed (unless the
contrary is stated in it) to confer authority to demand or join in
demanding a poll and to vote on a resolution or amendment of a
resolution put to, or other business which may properly come before,
the meeting or meetings for which it is given or any adjournment of
any such meeting, as the proxy thinks fit. Such instrument shall not
confer any further right to speak at the meeting, except with the
permission of the chairman of the meeting.
(E) The Board may at the expense of the Company send instruments of
proxy to the members by post or otherwise (with or without provision
for their return pre-paid) for use at any general meeting or at any
separate meeting of the holders of any class of shares, either in
blank or nominating as proxy in the alternative any one or more of
the Directors or any other person. If for the purpose of any meeting
invitations to appoint as proxy a person or one of a number of
persons specified in the invitations are issued at the Company's
expense, they shall be issued to all (and not to some only) of the
members entitled to be sent notice of the meeting and to vote at it.
The accidental omission to send such an instrument or to give such
an invitation to, or the non-receipt of such instrument by, any
member entitled to attend and vote at a meeting shall not invalidate
the proceedings at that meeting.
61. Termination of proxy or corporate authority
A vote given or poll demanded by proxy or by the duly authorised
representative of a corporation shall be valid notwithstanding the
previous termination of the authority of the person voting or
demanding a poll, unless notice of the termination was received by
the Company at the Registered Office, or at such other place at
which the instrument of proxy was duly deposited, at least one hour
before the commencement of the meeting or adjourned meeting at which
the vote is given or the poll demanded or (in the case of a poll not
taken on the same day as the meeting or adjourned meeting) the time
appointed for taking the poll.
62. Corporate representatives
A corporation which is a member may, by resolution of its directors
or other governing body, authorise such person as it thinks fit to
act as its representative at any meeting of the Company or at any
separate meeting of the holders of any class of shares. Any person
so authorised shall be entitled to exercise the same powers on
behalf of the corporation (in respect of that part of the
corporation's holdings to which the authority relates) as the
corporation could exercise if it were an individual member. The
corporation shall for the purposes of these Articles be deemed to be
present in person at any such meeting if a person so authorised is
present at it. All references in these Articles to attendance and
voting in person shall be construed accordingly. A Director, the
Secretary or some other person authorised for the purpose by the
Secretary may require the representative to produce a certified copy
of the resolution so authorising him or such other evidence of his
authority reasonably satisfactory to such person before permitting
him to exercise his powers.
63. Amendment to resolutions
(A) If an amendment shall be proposed to any resolution but shall in
good faith be ruled out of order by the chairman of the meeting, any
error in such ruling shall not invalidate the proceedings on the
substantive resolution.
(B) In the case of a resolution duly proposed as a special or
extraordinary resolution, no amendment to it (other than an
amendment to correct a patent error) may be considered or voted on
and in the case of a resolution duly proposed as an ordinary
resolution no amendment to it (other than an amendment to correct a
patent error) may be considered or voted on unless either at least
48 hours prior to the time appointed for holding the meeting or
adjourned meeting at which such ordinary resolution is to be
proposed notice in writing of the terms of the amendment and
intention to move it has been lodged at the Registered Office or the
chairman of the meeting in his absolute discretion decides that it
may be considered or voted on.
64. Objection to error in voting
No objection shall be raised to the qualification of any voter or to
the counting of, or failure to count, any vote, except at the
meeting or adjourned meeting at which the vote objected to is given
or tendered or at which the error occurs. Any such objection or
error shall be referred to the chairman of the meeting and will only
invalidate the result of the voting if, in the chairman's opinion,
it is of sufficient magnitude to affect the decision of the meeting.
The chairman's decision on such matters shall be final and binding
on all concerned.
FAILURE TO DISCLOSE INTERESTS IN SHARES
65. Failure to disclose interests in shares
(A) For the purpose of this Article:
(i) "EXEMPT TRANSFER" means, in relation to shares held by a member:
(a) a transfer pursuant to acceptance of a takeover offer (as defined in
section 428 of the Act) for the Company or in relation to any of its
shares;
(b) a transfer in consequence of a sale made through the London Stock
Exchange or any stock exchange selected by the Company outside the
United Kingdom on which any shares are normally traded; or
(c) a transfer which is shown to the satisfaction of the Board to be
made in consequence of a sale in good faith of the whole of the
beneficial interest in the shares to a person who is unconnected
with the member and with any other person appearing to be interested
in the shares;
(ii) "INTERESTED" is construed as it is for the purpose of section 212 of
the Act;
(iii) a person, other than the member holding a share, shall be treated as
appearing to be interested in such share if the member has informed
the Company that the person is or may be so interested, or if the
Company (after taking account of information obtained from the
member or, pursuant to a section 212 notice, from anyone else) knows
or has reasonable cause to believe that the person is or may be so
interested;
(iv) reference to a person having failed to give to the Company
information required by a section 212 notice, or being in default of
supplying such information, includes references to his having:
(a) failed or refused to give all or any part of such information; and
(b) given information which he knows to be false in a material
particular or recklessly given information which is false in a
material particular; and
(v) "TRANSFER" means a transfer of a share or (where applicable) a
renunciation of a renounceable letter of allotment or other
renounceable document of title relating to a share.
(B) Where notice is given by the Company under section 212 of the Act (a
"SECTION 212 NOTICE") to a member or another person appearing to be
interested in shares held by such member (the "DEFAULT
SHAREHOLDER"), and the Default Shareholder has failed in relation to
any shares ("DEFAULT SHARES"), which expression applies also to any
shares issued after the date of the section 212 notice in respect of
those shares and to any other shares registered in the name of the
Default Shareholder at any time whilst the default subsists) to give
the Company the information required within 14 days after the date
of the section 212 notice, unless the Board otherwise decides:
(i) the Default Shareholder is not entitled in respect of the Default
Shares to be present or to vote (either in person or by proxy) at a
general meeting or at a separate meeting of the holders of a class
of shares or on a poll, or to exercise other rights conferred by
membership in relation to the meeting or poll; and
(ii) where the Default Shares represent at least 0.25 per cent. in
nominal value of the issued shares of their class:
(a) a dividend (or any part of a dividend) payable in respect of the
Default Shares (except on a winding up of the Company) may be
withheld by the Company, which shall have no obligation to pay
interest on such dividend;
(b) the Default Shareholder shall not be entitled to elect, pursuant to
Article 128 (scrip dividends) or otherwise, to receive shares
instead of a dividend; and
(c) the Board may, in its absolute discretion, refuse to register the
transfer of any Default Shares (subject, in the case of any
uncertificated shares, to the Uncertificated Securities Regulations)
unless:
(1) the transfer is an Exempt Transfer; or
(2) the Default Shareholder is not himself in default in
supplying the information required and proves to the
satisfaction of the Board that no person in default of
supplying the information required is interested in any of
the shares which are the subject of the transfer.
(C) The sanctions under paragraph (B) of this Article shall cease to
apply seven days after the earlier of:
(i) receipt by the Company of notice of an Exempt Transfer, but only in
relation to the shares transferred; and
(ii) receipt by the Company, in a form satisfactory to the Board, of all
the information required by the section 212 notice.
(D) The Board may:
(i) give notice in writing to any Default Shareholder holding Default
Shares in uncertificated form requiring the Default Shareholder:
(a) to change his holding of such shares from uncertificated form into
certificated form within an specified period; and
(b) then to hold such Default Shares in certificated form for so long as
the default subsists; and
(ii) appoint any person to take any steps, by instruction by means of an
Uncertificated System or otherwise, in the name of any holder of
Default Shares as may be required to change such shares from
uncertificated form into certificated form (and such steps shall be
effective as if they had been taken by such holder).
(E) When the Company serves a section 212 notice on an Approved
Depository as a shareholder, the Approved Depository need only
disclose the information relating to the Default Shares which has
been recorded:
(i) in the case of the ADR Depository, under any agreement between
the ADR Depository and the Company; or
(ii) in any other cases, under the arrangements entered into by the
Company or approved by the Board, under which the Approved
Depositary was appointed; and
the sanctions under paragraph (B) of this Article will not take
effect unless and until the Approved Depositary has been given a
notice naming any person (other than the Approved Depositary) who
has or appears to have an interest in a particular number of the
Default Shares.
This paragraph (E) does not limit the powers of the Board under
paragraph (B) of this Article in any other way.
(F) (i) Where a person has received a section 212 notice and the shares
in which he appears to be interested are represented by an
American Depositary Receipt, he will be treated as having an
interest in the number of American Depositary Shares which are
represented by that receipt. If there are no other reasons, he
will not be treated as being interested in the rest of the
American Depositary Shares in the Company held by the ADR
Depositary.
(ii) In any other case where any person (but not an Approved
Depositary) has received a section 212 notice and the shares in
which he appears to be interested are held by an Approved
Depositary, this paragraph (F) will be treated as only applying
to those shares in which he appears to be interested. It will
not apply to any other shares held by the Approved Depositary.
(G) If a person described in paragraph (F) of this Article fails to
comply with a section 212 notice, the Approved Depositary will only
be subject to the sanctions in paragraph (B) for the number of
shares in which such person is treated as having an interest under
paragraph (F).
(H) The provisions of this Article are in addition and without prejudice
to the provisions of the Act.
APPOINTMENT, RETIREMENT AND REMOVAL OF DIRECTORS
66. Number of Directors
Unless and until otherwise determined by the Company by ordinary
resolution, the number of Directors shall be not less than three and
not more than twenty.
67. No share qualification
A Director need not hold any shares.
68. Company's power to appoint Directors
(A) Subject to these Articles, the Company may by ordinary resolution
appoint a person who is willing to act to be a Director, either to
fill a vacancy or as an addition to the existing Directors, subject
to the total number of Directors not exceeding any maximum number
fixed in accordance with these Articles.
(B) A resolution for the appointment of two or more persons as Directors
by a single resolution at a general meeting shall be void unless an
ordinary resolution that the resolution for appointment be proposed
in such way has first been agreed to by the meeting without any vote
being given against it.
69. Board's power to appoint Directors
Without prejudice to the Company's power to appoint a person to be a
Director pursuant to these Articles, the Board shall have power at
any time to appoint any person who is willing to act as a Director,
either to fill a vacancy or as an addition to the existing Board,
subject to the total number of Directors not exceeding any maximum
number fixed in accordance with these Articles. Any Director so
appointed shall, if still a Director, retire at the next annual
general meeting after his appointment and be eligible to stand for
election as a Director at such meeting. Such person shall not be
taken into account in determining the number or identity of
Directors who are to retire by rotation at such meeting.
70. Appointment of executive Directors
Subject to the Act, the Board may appoint one or more Director to
hold employment or executive office with the Company for such term
(subject to the Act) and on any other conditions the Board thinks
fit. The Board may revoke, terminate or vary the terms of any such
appointment, without prejudice to a claim for damages for breach of
contract between the Director and the Company.
71. Eligibility of new Directors
No person, other than a Director retiring (by rotation or
otherwise), shall be appointed or re-appointed a Director at any
general meeting unless:
(i) he is recommended for appointment by the Board; or
(ii) not less than seven nor more than 42 days (inclusive of the date on
which the notice is given) before the date appointed for the
meeting, a notice executed by a member (other than the person to be
proposed) qualified to vote at the meeting has been given to the
Company at the Registered Office of the intention to propose such
person for appointment or re-appointment, stating the particulars
which would, if he were so appointed or re-appointed, be required to
be included in the Company's register of directors, accompanied by a
notice executed by that person of his willingness to be appointed or
re-appointed.
72. Rotational retirement at annual general meeting
(A) At each annual general meeting one-third of the Directors who are
subject to retirement by rotation or, if their number is not three
nor a multiple of three, the number nearest to but not exceeding
one-third, shall retire from office. If there are fewer than three
Directors who are subject to retirement by rotation, one Director
shall retire from office.
(B) Subject to the Act and these Articles, the Directors to retire by
rotation at each annual general meeting shall be, so far as
necessary to obtain the number required, first, any Director who
wishes to retire and not offer himself for re-election and secondly,
those Directors who have been longest in office since their last
appointment or re-appointment. As between two or more Directors who
have been in office an equal length of time, the Director to retire
shall, in default of agreement between them, be determined by lot.
The Directors to retire on each occasion (both as to number and
identity) shall be determined by the composition of the Board at the
start of business seven days before the date of the notice convening
the annual general meeting notwithstanding any change in the number
or identity of the Directors after that time but before the close of
the meeting.
73. Position of retiring Director
(A) A Director who retires at an annual general meeting (whether by
rotation or otherwise) may, if willing to act, be re-appointed. If
he is not re-appointed or deemed to have been re-appointed, he shall
retain office until the meeting appoints someone in his place or, if
it does not do so, until the end of the meeting.
(B) At any general meeting at which a Director retires by rotation the
Company may fill the vacancy and, if it does not do so, the retiring
Director shall, if willing, be deemed to have been re-appointed
unless it is expressly resolved not to fill the vacancy or a
resolution for the re-appointment of the Director is put to the
meeting and lost or such Director has attained any retiring age
applicable to him as Director pursuant to the Act.
74. No age limit
(A) No person shall be disqualified from being appointed or re-appointed
as a Director and no Director shall be requested to vacate that
office by reason of his attaining the age of seventy or any other
age.
(B) It shall not be necessary to give special notice under the Act of
any resolution appointing, re-appointing or approving the
appointment of a Director by reason of his age.
(C) Where a general meeting is convened at which a Director will be
proposed for appointment or re-appointment who, to the knowledge of
the Directors, will be seventy or more at the date of the meeting,
the Board shall give notice of his age in the notice convening the
meeting or in any document sent with it. The accidental omission to
give such notice shall not invalidate any proceedings at the meeting
or any appointment or re-appointment of such Director.
75. Removal by ordinary resolution
In addition to any power of removal under the Act, the Company may:
(i) by ordinary resolution remove any Director before the expiration of
his period of office, but without prejudice to any claim for damages
which he may have for breach of any contract of service between him
and the Company; and
(ii) by ordinary resolution appoint another person who is willing to act
to be a Director in his place (subject to these Articles).
Any person so appointed shall be treated, for the purposes of
determining the time at which he or any other Director is to retire,
as if he had become a Director on the day on which the person in
whose place he is appointed was last appointed or re-appointed a
Director.
76. Vacation of Director's office
(A) Without prejudice to the provisions in these Articles for retirement
(by rotation or otherwise) the office of a Director shall be vacated
if:
(i) he resigns by notice in writing delivered to the Secretary at the
Registered Office or tendered at a Board meeting;
(ii) holding office as a Director for a fixed term only, such term
expires;
(iii) he ceases to be a Director by virtue of any provision of the Act, is
removed from office pursuant to these Articles or the Act or becomes
prohibited by law from being a Director;
(iv) he becomes bankrupt, has an interim receiving order made against
him, makes any arrangement or compounds with his creditors generally
or applies to the court for an interim order in connection with a
voluntary arrangement under any legislation relating to insolvency;
(v) an order is made by any court of competent jurisdiction on the
ground (however formulated) of mental disorder for his detention or
for the appointment of a guardian or receiver or other person to
exercise powers with respect to his property or affairs or he is
admitted to hospital in pursuance of an application for admission
for treatment under any legislation relating to mental health and
the Board resolves that his office be vacated;
(vi) he is absent, without permission of the Board, from Board meetings
for six consecutive months (whether or not an alternate Director
attends in his place) and the Board resolves that his office be
vacated;
(vii) he is removed from office by notice in writing addressed to him at
his address as shown in the Company's register of directors and
signed by not less than three-quarters of all the Directors in
number and being at least three in number (without prejudice to any
claim for damages which he may have for breach of contract against
the Company); or
(viii) in the case of a Director who holds executive office, his
appointment to such office is terminated or expires and the Board
resolves that his office be vacated.
(B) A resolution of the Board declaring a Director to have vacated
office pursuant to this Article shall be conclusive as to the fact
and grounds of vacation stated in the resolution.
ALTERNATE DIRECTORS
77. Appointment
A Director (other than an alternate Director) may appoint any other
Director or any person approved for that purpose by the Board and
willing to act, to be his alternate by notice in writing delivered
to the Secretary at the Registered Office, or in any other manner
approved by the Board. No appointment of an alternate Director who
is not already a Director shall be effective until his consent to
act as a Director in the form prescribed by the Act has been
received at the Registered Office. An alternate Director need not
hold a share qualification and shall not be counted in reckoning any
maximum or minimum number of Directors allowed by these Articles.
CCD-0077
78. Responsibility
Every person acting as an alternate Director shall be an officer of
the Company, shall alone be responsible to the Company for his own
acts and defaults and shall not be deemed to be the agent of the
Director appointing him.
79. Participation at Board meetings
An alternate Director shall (subject to his giving to the Company an
address within the United Kingdom at which notices may be served on
him) be entitled to receive notice of all meetings of the Board and
all committees of the Board of which his appointor is a member and,
in the absence from such meetings of his appointor, to attend and
vote at such meetings and to exercise all the powers, rights, duties
and authorities of his appointor. A Director acting as alternate
Director shall have a separate vote at Board meetings for each
Director for whom he acts as alternate Director, but he shall count
as only one for the purpose of determining whether a quorum is
present.
80. Interests
An alternate Director shall be entitled to contract and be
interested in and benefit from contracts or arrangements with the
Company and to be repaid expenses and to be indemnified in the same
way and to the same extent as a Director. However, he shall not be
entitled to receive from the Company any fees for his services as
alternate, except only such part (if any) of the fee payable to his
appointor as such appointor may by notice in writing to the Company
direct. Subject to this Article, the Company shall pay to an
alternate Director such expenses as might properly have been paid to
him if he had been a Director.
81. Termination of appointment
An alternate Director shall cease to be an alternate Director:
(i) if his appointor revokes his appointment by notice delivered to the
Secretary at the Registered Office or in any other manner approved
by the Board; or
(ii) if his appointor ceases for any reason to be a Director, provided
that if any Director retires but is re-appointed or deemed to be re-
appointed at the same meeting, any valid appointment of the
alternate Director which was in force immediately before his
retirement shall remain in force; or
(iii) if any event happens in relation to him which, if he were a
Director, would cause his office as Director to be vacated.
BOARD POWERS
82. Board powers
Subject to the Act, the Company's memorandum of association and
these Articles and to any directions given by special resolution of
the Company, the business of the Company shall be managed by the
Board, which may exercise all the powers of the Company whether
relating to the management of the business or not. No alteration of
the memorandum of association or of these Articles nor any such
direction shall invalidate any prior act of the Board which would
have been valid if such alteration had not been made or such
direction had not been given. The provisions in these Articles
giving specific powers to the Board shall not limit the general
powers given by this Article.
83. Directors below the minimum number
If the number of Directors is less than the minimum prescribed in
accordance with these Articles, the remaining Director or Directors
shall act only for the purposes of appointing an additional Director
or Directors to make up such minimum or of convening a general
meeting of the Company for the purpose of making such appointment.
If there are no Director or Directors able or willing to act, any
two members may summon a general meeting for the purpose of
appointing Directors. Any additional Director so appointed shall
hold office (subject to these Articles) only until the dissolution
of the annual general meeting next following such appointment unless
he is re-elected during such meeting.
84. Delegation to executive Directors
The Board may delegate to a Director holding executive office any of
its powers, authorities and discretions for such time and on such
terms and conditions as it shall think fit. The Board may grant to a
Director the power to sub-delegate, and may retain or exclude the
right of the Board to exercise the delegated powers, authorities or
discretions collaterally with the Director. The Board may at any
time revoke the delegation or alter its terms and conditions.
85. Delegation to committees
The Board may delegate any of its powers, authorities and
discretions (including, without limitation, those relating to the
payment of monies or other remuneration to, and the conferring of
benefits on, a Director) for such time and on such terms and
conditions as it shall think fit to a committee consisting of one or
more Directors and (if thought fit) one or more other persons. The
Board may grant to the committee the power to sub-delegate, and may
retain or exclude the right of the Board to exercise the delegated
powers, authorities or discretions collaterally with the committee.
The Board may at any time revoke the delegation or alter its terms
and conditions or discharge the committee in whole or in part. Where
a provision of the Articles refers to the exercise of a power,
authority or discretion by the Board and that power, authority or
discretion has been delegated by the Board to a committee, the
provision shall be construed as permitting the exercise of the
power, authority or discretion by the committee.
86. Local management
The Board may establish local or divisional boards, agencies or
branch offices for managing the affairs of the Company in a
specified locality, either in the United Kingdom or elsewhere, and
may appoint persons to be members of a local or divisional board,
agency or branch office and may fix their remuneration. The Board
may delegate to a local or divisional board, agency or branch office
any of its powers, authorities and discretions for such time and on
such terms and conditions as it thinks fit. The Board may grant to
such local or divisional board, agency or branch office the power to
sub-delegate, may retain or exclude the right of the Board to
exercise the delegated powers, authorities or discretions
collaterally with the local or divisional board, agency or branch
office and may authorise the members of a local or divisional board,
agency or branch (or any of them) to fill a vacancy or to act
despite a vacancy. The Board may at any time revoke or alter the
terms and conditions of the appointment or delegation. Subject to
the terms and conditions imposed by the Board, the proceedings of a
local or divisional board, agency or branch office with two or more
members are governed by those Articles that regulate the proceedings
of the Board, so far as applicable.
87. Delegation to agents
The Board may, by power of attorney or otherwise, appoint a person
to be the agent of the Company and may delegate to such person any
of its powers, authorities and discretions for such purposes, for
such time and on such terms and conditions (including as to
remuneration) as it thinks fit. The Board may grant the power to
sub-delegate and may retain or exclude the right of the Board to
exercise the delegated powers, authorities or discretions
collaterally with the agent. The Board may at any time revoke or
alter the terms and conditions of the appointment or delegation.
88. Exercise of voting power
The Board may exercise or cause to be exercised the voting power
conferred by shares in any other company held or owned by the
Company, or any power of appointment to be exercised by the Company,
in any manner it thinks fit (including the exercise of the voting
power or power of appointment in favour of the appointment of any
Director as a director or other officer or employee of such company
or in favour of the payment of remuneration to the directors,
officers or employees of such company).
89. Provision for employees
The Board may exercise any power conferred on the Company by the Act
to make provision for the benefit of persons employed or formerly
employed by any Group Undertaking (or any member of his family or
any person who is dependent on him) in connection with the cessation
or the transfer to any person of the whole or part of the
undertaking of such Group Undertaking.
90. Overseas registers
Subject to the Act and the Uncertificated Securities Regulations,
the Board may exercise the powers conferred on the Company with
regard to the keeping of an overseas branch, local or other register
in relation to members and may make and vary such regulations as it
thinks fit concerning the keeping of any such register.
91. Associate directors
The Board may appoint any person (not being a Director) to any
office or employment having a designation or title including the
word "director" or attach to any existing office or employment with
the Company such designation or title and may terminate any such
appointment or the use of such designation or title. The inclusion
of the word "director" in the designation or title of any such
office or employment shall not imply that such person is, or is
deemed to be, or is empowered in any respect to act as, a Director
for any of the purposes of the Act or these Articles. CCD-0077
92. Borrowing powers
(A) Subject to this Article, the Board may exercise all the powers of
the Company to borrow money and to mortgage or charge all or part of
the undertaking, property and assets (present or future) and
uncalled capital of the Company and, subject to the Act, to create
and issue debentures and other securities, whether outright or as
collateral security for a debt, liability or obligation of the
Company or of a third party.
(B) The Board shall restrict the borrowings of the Company and shall
exercise all voting and other rights or powers of control
exercisable by the Company in relation to its subsidiary
undertakings so as to ensure (as regards subsidiary undertakings, to
the extent possible by such exercise) that the aggregate principal
amount outstanding in respect of Monies Borrowed by Group
Undertakings does not at any time, without the previous sanction of
an ordinary resolution, exceed a sum equal to the higher of (i)
pound sterling250,000,000, (ii) 400,000,000 United States dollars
and (iii) three times the Adjusted Capital and Reserves.
(C) In this Article:
(i) "ADJUSTED CAPITAL AND RESERVES" means a sum equal to the aggregate
of:
(a) the amount paid up on the Company's share capital; and
(b) the amount standing to the credit or debit of the Group's
consolidated reserves (including any share premium account, capital
redemption reserve and revaluation reserve),
all as shown in the consolidated balance sheet but after:
(c) making all adjustments which are in the opinion of the Board,
necessary or appropriate to take account of:
(1) a change in the amount paid up on the Company's share
capital or the amount standing to the credit or debit of
the Group's consolidated reserves arising out of the
allotment of shares (for this purpose if a proposed
allotment of shares for cash has been underwritten, those
shares shall be deemed to have been allotted and the
amount, including any premium, of the subscription monies
payable in respect of those shares by the date six months
following allotment shall be deemed to have been paid up
to the extent underwritten on the date on which the issue
of those shares was underwritten or, if the underwriting
was conditional, the date on which it became
unconditional); and
(2) other changes in circumstances since the date of the
consolidated balance sheet; and
(d) excluding (so far as not already excluded):
(1) amounts attributable to such issued equity capital of any
subsidiary undertaking as is not attributable, directly or
indirectly, to the Company;
(2) any sum set aside for taxation (other than deferred
taxation);
(e) adding back the amount of goodwill that would have remained on the
consolidated balance sheet (as adjusted) if all goodwill arising on
acquisitions of Group Undertakings since the date of incorporation
of the Company which has been written off against reserves had been
carried on the balance sheet as an asset;
(ii) "MONIES BORROWED" means all monies borrowed by Group Undertakings
including, without limitation:
(a) any amount raised by acceptance under an acceptance credit facility
(other than acceptances relating to the purchase of goods or
services in the ordinary course of trading and outstanding for six
months or less);
(b) any amount raised under a note purchase facility;
(c) the amount of any liability in respect of a lease or hire purchase
contract which would, in accordance with generally accepted
accounting standards in the United Kingdom, be treated as a finance
or capital lease; and
(d) any amount raised under another transaction (including, without
limitation, a forward sale or purchase agreement) having the
commercial effect of a borrowing;
but excluding:
(e) borrowings by one Group Undertaking from another;
(f) borrowings for the purpose of, and applied within six months of
being made in, repaying the whole or part of borrowings that
constitute Monies Borrowed, pending their application for such
purpose within such period;
and, in calculating Monies Borrowed, there shall be deducted:
(g) an amount equal to the aggregate of:
(1) all cash in hand and cash deposits repayable on demand
with any bank or financial institution (not itself a Group
Undertaking); and
(2) investments which are readily convertible into known
amounts of cash with notice of 48 hours or less,
in each case beneficially owned, directly or indirectly, by a
Group Undertaking and whether denominated in sterling or in a
currency other than sterling; and
(iii) references to a "CONSOLIDATED BALANCE SHEET" or "CONSOLIDATED PROFIT
AND LOSS ACCOUNT" are references the Group's latest published
audited consolidated balance sheet and profit and loss account or,
if the Company has no subsidiary undertakings, the Company's latest
published audited balance sheet and profit and loss account.
(D) To calculate the amount of Monies Borrowed on a particular day,
monies denominated or repayable in a currency other than sterling
shall be converted for the purpose of calculating the sterling
equivalent under sub-paragraphs (i) and (iii) of paragraph (B) of
this Article, and monies denominated or repayable in a currency
other than United States dollars shall be converted for the purpose
of calculating the United States dollar equivalent under
sub-paragraph (ii) of paragraph (B) of this Article, either:
(i) at the rate of exchange specified in a forward purchase contract,
currency option, back-to-back loan, swap or other arrangements taken
out or entered into to reduce the risk associated with fluctuations
in rates of exchange in respect of repayment of those monies (a
"HEDGING AGREEMENT"); or
(ii) if those monies were borrowed on or before the date of the
consolidated balance sheet and repayment of those monies has not
been covered by a hedging agreement, at the more favourable to the
Company of:
(a) the rate of exchange used for the conversion of that currency in the
consolidated balance sheet; or
(b) the middle-market rate of exchange quoted by a clearing bank
specified by the Board at the close of business in London on the
business day immediately preceding the day on which the calculation
is made; or
(iii) if those monies were borrowed after the date of the consolidated
balance sheet and repayment of those monies has not been covered by
a hedging agreement, at the more favourable to the Company of:
(a) the middle-market rate of exchange quoted by a clearing bank
specified by the Board at the close of business in London on the
date of the consolidated balance sheet; or
(b) the middle-market rate of exchange quoted by a clearing bank
specified by the Board at the close of business in London on the
business day immediately preceding the day on which the calculation
is made.
(E) The Auditors' written confirmation for the purpose of this Article
as to the amount of the Adjusted Capital and Reserves or the
aggregate amount of Monies Borrowed shall be conclusive and binding
on all concerned. The Board may act in reliance on a bona fide
estimate of the amount of the Adjusted Capital and Reserves or the
aggregate amount of Monies Borrowed without having requested or
obtained such written confirmation from the Auditors. If in
consequence the limit on Monies Borrowed set out in this Article is
inadvertently exceeded, the amount of Monies Borrowed equal to the
excess may be disregarded for 90 days after the date on which by
reason of a determination of the Auditors or otherwise the Board
became aware that this situation has or may have arisen.
(F) No debt incurred or security given in respect of Monies Borrowed in
excess of the limit imposed by this Article shall be invalid or
ineffectual, except where express notice that the limit has been or
will be exceeded has been given to the leader or recipient of the
security at the time when the debt is incurred or security given. No
lender or other person dealing with the Company shall be concerned
to see or enquire whether such limit is observed.
DIRECTORS' REMUNERATION, EXPENSES AND BENEFITS
93. Fees
The Company shall pay to the Directors (but not alternate Directors)
for their services as Directors such amount of aggregate fees as the
Board decides (not exceeding pound sterling250,000 per annum or such
larger amount as the Company may by ordinary resolution decide). The
aggregate fees shall be divided among the Directors in such
proportions as the Board decides or, if no decision is made,
equally. A fee payable to a Director pursuant to this Article shall
be distinct from any salary, remuneration or other amount payable to
him pursuant to other provisions of these Articles and accrues from
day to day.
94. Expenses
A Director may also be paid all travelling, hotel and other expenses
properly incurred by him in connection with his attendance at
meetings of the Board or of committees of the Board or general
meetings or separate meetings of the holders of any class of shares
or otherwise in connection with the discharge of his duties as a
Director, including (without limitation) any professional fees
incurred by him (with the approval of the Board or in accordance
with any procedures stipulated by the Board) in taking independent
professional advice in connection with the discharge of such duties.
95. Remuneration of executive Directors
The salary or remuneration of a Director appointed to hold
employment or executive office in accordance with the Articles may
be a fixed sum of money, or wholly or in part governed by business
done or profits made, or as otherwise decided by the Board, and may
be in addition to or instead of a fee payable to him for his
services as Director pursuant to these Articles.
96. Special remuneration
A Director who, at the request of the Board, goes or resides abroad,
makes a special journey or performs a special service on behalf of
or for the Company (including, without limitation, services as a
chairman or vice-chairman of the Board, services as a member of any
Board committee and services which the Board considers to be outside
the scope of the ordinary duties of a Director) may be paid such
reasonable additional remuneration (whether by way of salary, bonus,
commission, percentage of profits or otherwise) and expenses as the
Board may decide.
97. Pensions and other benefits
The Board may exercise all the powers of the Company to provide
pensions or other retirement or superannuation benefits and to
provide death or disability benefits or other allowances or
gratuities (by insurance or otherwise) for a person who is or has at
any time been a Director or a director of a company which is or was
a Group Undertaking, a company which is or was allied to or
associated with the Company or with a Group Undertaking or a
predecessor in business of the Company or of a Group Undertaking
(and for any member of his family, including a spouse or former
spouse, or a person who is or was dependent on him). For this
purpose the Board may establish, maintain, subscribe and contribute
to any scheme, trust or fund and pay premiums. The Board may arrange
for this to be done by the Company alone or in conjunction with
another person. A Director or former Director is entitled to receive
and retain for his own benefit any pension or other benefit provided
in accordance with this Article and is not obliged to account for it
to the Company.
DIRECTORS' PROCEEDINGS
98. Board meetings
Subject to these Articles, the Board may regulate its proceedings as
it thinks fit.
99. Notice of Board meetings
A Director may, and the Secretary at the request of a Director
shall, call a meeting of the Board. Notice of a Board meeting shall
be deemed to be duly given to a Director if it is given to him
personally or by word of mouth or sent in writing to his last known
address within the United Kingdom or any other address within the
United Kingdom given to the Company by him for such purpose. It
shall not be necessary to give notice of a Board meeting to a
Director who is absent from the United Kingdom unless the Director
has notified the Company in writing of an address in the United
Kingdom at which notice of such meetings is to be given to him when
he is absent from the United Kingdom. A Director may waive the
requirement that notice of any Board meeting be given to him, either
prospectively or retrospectively.
100. Quorum
No business shall be transacted at any meeting of the Board unless a
quorum is present. The quorum may be fixed by the Board and unless
so fixed at any other number shall be two. An alternate Director who
is not himself a Director shall, if his appointor is not present, be
counted in the quorum. A duly convened Board meeting at which a
quorum is present shall be competent to exercise any and all of the
authorities, discretions and powers vested in or exercisable by the
Board.
101. Board chairman
The Board may appoint any Director to be, and may remove, a chairman
and a vice-chairman of the Board. The chairman or, in his absence,
the vice-chairman, shall preside at all Board meetings. If there is
no chairman or vice-chairman, or if at a Board meeting neither the
chairman nor the vice-chairman is present within five minutes after
the time appointed for the meeting, or if neither of them is willing
to act as chairman, the Directors present may choose any Director
present to be chairman of the meeting.
102. Voting
Questions arising at a meeting shall be decided by a majority of
votes. In the case of an equality of votes, the chairman shall have
a second or casting vote.
103. Telephone participation
A Director or his alternate Director may participate in a meeting of
the Board or a committee of the Board through the medium of
conference telephone or any other form of communication equipment if
all persons participating in the meeting are able to hear and speak
to each other throughout the meeting. A person participating in this
way shall be deemed to be present in person at the meeting and shall
be counted in a quorum and entitled to vote. Subject to the Act, all
business transacted in this way by the Board or a committee of the
Board shall be deemed for the purposes of the Articles to be validly
and effectively transacted at a meeting of the Board or a committee
of the Board although fewer than two Directors are physically
present at the same place. The meeting shall be deemed to take place
where the largest group of those participating is assembled or, if
there is no such group, where the chairman of the meeting then is.
104. Written resolutions
(A) A resolution in writing executed by all the Directors for the time
being entitled to receive notice of a Board meeting and in number
not being less than a quorum, or by all the members of a committee
of the Board for the time being entitled to receive notice of the
meetings of such committee and in number not being less than a
quorum of such committee, shall be as valid and effective for all
purposes as a resolution duly passed at a meeting of the Board (or
committee, as the case may be).
(B) Such a resolution:
(i) may consist of several documents in the same form each executed by
one or more of the Directors or members of the relevant committee,
including executions evidenced by facsimile transmission;
(ii) need not be signed by an alternate Director if it is signed by his
appointor;
(iii) if signed by an alternate Director, need not also be signed by his
appointor; and
(iv) to be effective, need not be signed by a Director who is prohibited
by these Articles from voting on it, or by his alternate.
105. Committee proceedings
Proceedings of committees of the Board shall be conducted in
accordance with regulations prescribed by the Board (if any).
Subject to those regulations, such proceedings shall be conducted in
accordance with applicable provisions of these Articles regulating
the proceedings of the Board. Where the Board resolves to delegate
any of its powers, authorities and discretions to a committee and
such resolution states that the committee shall consist of any one
or more unnamed Directors, it shall not be necessary to give notice
of a meeting of such committee to any Directors other than the
Director or Directors who form the committee.
106. Minutes
(A) The Board shall cause minutes to be made of:
(i) all appointments of officers and committees made by the Board and of
any such officer's remuneration; and
(ii) the names of Directors present at every meeting of the Board, a
committee of the Board, the Company or the holders of any class of
shares or debentures, and all orders, resolutions and proceedings of
such meetings.
(B) Any such minutes, if purporting to be signed by the chairman of the
meeting at which the proceedings were held or by the chairman of the
next succeeding meeting or the Secretary, shall be prima facie
evidence of the matters stated in them.
107. Validity of proceedings
All acts done by a meeting of the Board, or of a committee of the
Board, or by a person acting as a Director, alternate Director or a
committee member shall, notwithstanding that it may be discovered
afterwards that there was a defect in the appointment of any person
so acting or that any of them were disqualified from holding office,
or had vacated office, or were not entitled to vote, be as valid as
if every such person had been duly appointed and was qualified and
had continued to be a Director, alternate Director or committee
member and entitled to vote.
INTERESTS OF DIRECTORS
108. Permitted interests
(A) Subject to the Act and compliance with the next Article, a Director,
notwithstanding his office:
(i) may enter into or otherwise be interested in any contract,
arrangement, transaction or proposal with the Company or in which
the Company is otherwise interested, either in connection with his
tenure of any office or place of profit or as vendor, purchaser or
otherwise;
(ii) may hold any other office or place of profit under the Company
(except that of auditor) in conjunction with the office of Director
and may act by himself or through his firm in a professional
capacity for the Company, and in any such case on such terms as to
remuneration and otherwise as the Board may arrange, either in
addition to or in lieu of any remuneration provided for by any other
Article;
(iii) may be a director or other officer of, or employed by, or a party to
any contract, arrangement, transaction or proposal with or otherwise
interested in, any body corporate promoted by the Company or in
which the Company is otherwise interested or as regards which the
Company has any powers of appointment; and
(iv) shall not be liable to account to the Company for any profit,
remuneration or other benefit realised by any such office,
employment, contract, arrangement, transaction or proposal,
and no such contract, arrangement, transaction or proposal shall be
avoided on the grounds of any such interest or benefit.
109. Disclosure of interests to Board
A Director who, to his knowledge, is in any way (directly or
indirectly) interested in any contract or arrangement or any other
proposal with the Company shall declare the nature of his interest
at the meeting of the Board at which the question of entering into
the contract, arrangement or proposal is first considered, if he
knows his interest then exists or, in any other case, at the first
meeting of the Board after he knows that he is or has become so
interested. For the purposes of this Article:
(i) a general notice given to the Board by a Director that he is to be
regarded as having an interest (of the nature and extent specified
in the notice) in any contract, arrangement or proposal in which a
specified person or class of persons is interested shall be deemed
to be a sufficient disclosure under this Article in relation to such
contract, arrangement or proposal of the nature and extent so
specified; and
(ii) an interest of which a Director has no knowledge and of which it is
unreasonable to expect him to have knowledge shall not be treated as
his interest.
110. Interested Director not to vote or count for quorum
A Director shall not vote on, or be counted in the quorum in
relation to, any resolution of the Board or of a committee of the
Board concerning any contract or arrangement or any other proposal
to which the Company is or is to be a party and in which he has an
interest which is to his knowledge a material interest (otherwise
than by virtue of his interests in shares or debentures or other
securities of, or otherwise in or through, the Company), other than
a resolution:
(i) relating to the giving of any security, guarantee or indemnity to
him in respect of money lent or obligations incurred by him or by
any other person at the request of or for the benefit of a Group
Undertaking;
(ii) relating to the giving of any security, guarantee or indemnity in
respect of a debt or obligation of a Group Undertaking for which he
himself has assumed responsibility in whole or in part under a
guarantee or indemnity or by the giving of security;
(iii) relating to, or in the context of, an offer of securities by a Group
Undertaking in which he is or may be entitled to participate as a
holder of securities or in the underwriting or sub-underwriting of
which he is to participate;
(iv) relating to another company in which he does not have to his
knowledge an interest in shares (as that term is used in sections
198 to 211 of the Act) representing one per cent. or more of either
any class of the equity share capital, or the voting rights in, such
company;
(v) relating to an arrangement for the benefit of employees of any Group
Undertaking which does not award him any privilege or benefit not
generally awarded to the employees to whom such arrangement relates;
or
(vi) concerning insurance which the Company proposes to maintain or
purchase for the benefit of Directors or for the benefit of persons
including Directors.
111. Director's interest in own appointment
A Director shall not vote or be counted in the quorum on any
resolution of the Board or committee of the Board concerning his own
appointment (including fixing or varying or recommending the terms
of his appointment or its termination) as a holder of any office or
place of profit with the Company or any company in which the Company
is interested. Where proposals are under consideration concerning
the appointment (including fixing or varying or recommending the
terms of appointment or the termination thereof) of two or more
Directors to offices or places of profits with the Company or any
company in which the Company is interested, such proposals may be
divided and a separate resolution considered in relation to each
Director. In such case each of the Directors concerned (if not
debarred from voting under these Articles) shall be entitled to vote
(and be counted in the quorum) in respect of each resolution except
that concerning his own appointment.
112. Conclusive rulings on Directors' interests
(A) If any question arises at any meeting as to the materiality of the
interest of a Director (other than the chairman of the meeting) or
as to the entitlement of any Director (other than the chairman) to
vote or be counted in the quorum and such question is not resolved
by his voluntarily agreeing to abstain from voting or being counted
in the quorum, such question shall be referred to the chairman of
the meeting. The chairman's ruling in relation to such Director
shall be conclusive and binding on all concerned.
(B) If any question arises at any meeting as to the materiality of the
interest of the chairman of the meeting or as to his entitlement to
vote or be counted in the quorum and such question is not resolved
by his voluntarily agreeing to abstain from voting or being counted
in the quorum, such question shall be decided by a resolution of the
Directors or committee members present at the meeting (excluding the
chairman), whose majority vote shall be conclusive and binding on
all concerned.
113. Connected persons
For the purposes of the provisions of these Articles concerning a
Director's interests in relation to the Company, the interest of a
person who is for the purposes of the Act connected (within the
meaning of section 346 of the Act) with a Director shall be (if
known by the Director to be an interest of any such connected
person) treated as the interest of the Director and, in relation to
an alternate Director, the interest of his appointor shall be
treated as the interest of the alternate Director in addition to an
interest which the alternate Director otherwise has. This Article
applies to an alternate Director as if he were a Director.
114. Suspension or relaxation of provisions concerning Directors'
interests
Subject to the Act, the Company may by ordinary resolution suspend,
vary or relax any provision in these Articles concerning a
Director's interests in relation to the Company, either generally or
in respect of any particular matter, or ratify any contract,
arrangement or other proposal not authorised by reason of a
contravention of any such provision.
SECRETARY
115. Secretary
(A) Subject to the Act, the Board shall appoint a Secretary and may
appoint one or more persons to be a joint, deputy or assistant
Secretary on such terms and conditions as it thinks fit. The Board
may remove a person appointed pursuant to this Article from office
and appoint another or others in his place.
(B) Any provision of the Act or of these Articles requiring or
authorising a thing to be done by or to a Director and the Secretary
shall not be satisfied by its being done by or to the same person
acting both as a Director and as, or in the place of, the Secretary.
SEALS AND DOCUMENT AUTHENTICATION
116. Application of Seal
(A) Any Seal may be used only by the authority of the Board or of a
committee of the Board. The Board may decide who is to sign an
instrument to which the Seal is to be affixed either generally or in
relation to a particular instrument or type of instrument. The Board
may decide, either generally or in a particular case, that a
signature may be dispensed with or affixed by mechanical means.
Unless otherwise decided by the Board:
(i) share certificates and certificates issued in respect of debentures
or other securities (subject to the provisions of the relevant
instrument) need not be signed or, if signed, a signature may be
applied by mechanical or other means or may be printed; and
(ii) every other instrument to which the Seal is affixed shall be signed
by one Director and by the Secretary or a second Director.
(B) Every share certificate or share warrant shall be issued either
under the Seal (which may be affixed to it or printed on by
mechanical or other means) or in such other manner as the Board,
having regard to the terms of issue, the Act and the regulations of
the London Stock Exchange, may authorise. All references in these
Articles to the Seal shall be construed in relation to share
certificates and share warrants accordingly.
117. Official seal for use abroad
The Company may exercise the powers conferred by the Act with regard
to having an official seal for use abroad, and those powers shall be
vested in the Board.
118. Directors or Secretary to authenticate or certify
A Director or the Secretary or any person appointed by the Board for
the purpose may authenticate any documents affecting the
constitution of the Company (including the memorandum of association
and these Articles) and any resolutions passed by the Company or
holders of a class of shares or the Board or any committee of the
Board and any books, records, documents and accounts relating to the
business of the Company, and may certify copies of or extracts from
any such items as true copies or extracts.
DIVIDENDS AND OTHER PAYMENTS
119. Declaration
Subject to the Act and these Articles, the Company may by ordinary
resolution declare a dividend to be paid to members according to
their respective rights and interests in the profits of the Company.
No such dividend shall exceed the amount recommended by the Board.
120. Interim dividends
Subject to the Act, the Board may pay such interim dividends
(including any dividend payable at a fixed rate) as appears to the
Board to be justified by the profits of the Company available for
distribution. If at any time the share capital is divided into
different classes, the Board may pay such interim dividends on
shares which rank after shares conferring preferential rights with
regard to dividend as well as on shares conferring preferential
rights, unless at the time of payment any preferential dividend is
in arrear. If the Board acts in good faith, it shall not incur any
liability to the holders of shares conferring preferential rights
for any loss that they may suffer by the lawful payment of an
interim dividend on any shares ranking after those with preferential
rights.
121. Entitlement to dividends
Except as otherwise provided by these Articles or the rights
attached to shares:
(i) a dividend shall be declared and paid according to the amounts paid
up (otherwise than in advance of calls) on the nominal value of the
shares on which the dividend is paid;
(ii) dividends shall be apportioned and paid proportionately to the
amounts paid up on the nominal value of the shares during any
portion or portions of the period in respect of which the dividend
is paid, but if any share is issued on terms that it shall rank for
dividend as from a particular date, it shall rank for dividend
accordingly; and
(iii) a dividend may be paid in any currency decided by the Board.
122. Payment methods
(A) The Company may pay a dividend, interest or other amount payable in
respect of a share in cash or by cheque, warrant or money order or
by a bank or other funds transfer system or (in respect of any
uncertificated share) through the Uncertificated System. Any joint
holder or other person jointly entitled to a share may give an
effective receipt for a dividend, interest or other amount paid in
respect of such share.
(B) The Company may send a cheque, warrant or money order by post:
(i) in the case of a sole holder, to his registered address;
(ii) in the case of joint holders, to the registered address of the
person whose name stands first in the Register of Members;
(iii) in the case of a person or persons entitled by transmission to a
share, as if it were a notice given in accordance with Article 139
(notice to persons entitled by transmission); or
(iv) in any case, to a person and address that the person or persons
entitled to the payment may in writing direct.
(C) Every cheque, warrant or money order shall be sent at the risk of
the person or persons entitled to the payment and shall be made
payable to the order of the person or persons entitled or to such
other person or persons as the person or persons entitled may in
writing direct. The payment of the cheque, warrant or money order
shall be a good discharge to the Company. If payment is made by a
bank or other funds transfer or through the Uncertificated System,
the Company shall not be responsible for amounts lost or delayed in
the course of transfer. If payment is made by or on behalf of the
Company through the Uncertificated System the Company shall not be
responsible for any default in accounting for such payment to the
member or other person entitled to such payment by a bank or other
financial intermediary of which the member or other person is a
customer for settlement purposes in connection with the
Uncertificated System.
(D) The Board may:
(i) lay down procedures for making any payments in respect of
uncertificated shares through the Uncertificated System;
(ii) allow any holder of uncertificated shares to elect to receive or not
to receive any such payment through the Uncertificated System; and
(iii) lay down procedures to enable any such holder to make, vary or
revoke any such election.
(E) The Company may make, or procure the making of, any payment in
respect of a member's uncertificated shares through the
Uncertificated System in accordance with any authority given to the
Company to do so (whether in writing, through the Uncertificated
System or otherwise) by or on behalf of the member in a form
satisfactory to the Board. The making of such payment in accordance
with such authority shall be a good discharge to the Company.
(F) The Board may withhold payment of a dividend (or part of a dividend)
payable to a person entitled by transmission to a share until he has
provided any evidence of his entitlement that the Board may
reasonably require.
123. Deductions
The Board may deduct from any dividend or other amounts payable to
any person in respect of a share all such sums as may be due from
him to the Company on account of calls or otherwise in relation to
any shares.
124. Interest
No dividend or other money payable in respect of a share shall bear
interest against the Company, unless otherwise provided by the
rights attached to the share.
125. Unclaimed dividends
All unclaimed dividends or other monies payable by the Company in
respect of a share may be invested or otherwise made use of by the
Board for the benefit of the Company until claimed. The payment of
any unclaimed dividend or other amount payable by the Company in
respect of a share into a separate account shall not constitute the
Company a trustee in respect of it. Any dividend unclaimed after a
period of twelve years from the date the dividend became due for
payment shall be forfeited and shall revert to the Company.
126. Uncashed dividends
If, in respect of a dividend or other amount payable in respect of a
share:
(i) a cheque, warrant or money order is returned undelivered or left
uncashed; or
(ii) a transfer made by a bank or other funds transfer system is not
accepted,
on two consecutive occasions, or one occasion and reasonable
enquiries have failed to establish another address or account of the
person entitled to the payment, the Company shall not be obliged to
send or transfer a dividend or other amount payable in respect of
such share to such person until he notifies the Company of an
address or account to be used for such purpose.
127. Dividends in kind
A general meeting declaring a dividend may, upon the recommendation
of the Board, direct that it shall be satisfied wholly or partly by
the distribution of assets (including, without limitation, paid up
shares or securities of any other company). Where any difficulty
arises concerning such distribution, the Board may settle it as it
thinks fit. In particular (without limitation), the Board may:
(i) issue fractional certificates or ignore fractions;
(ii) fix the value for distribution of any assets, and may determine that
cash shall be paid to any member on the footing of the value so
fixed in order to adjust the rights of members; and
(iii) vest any assets in trustees on trust for the persons entitled to the
dividend.
128. Scrip dividends
(A) The Board may, with the prior authority of an ordinary resolution
and subject to such terms and conditions as the Board may determine,
offer any holders of Ordinary Shares the right to elect to receive
Ordinary Shares, credited as fully paid, instead of cash in respect
of the whole (or some part, to be determined by the Board) of any
dividend specified by the ordinary resolution, subject to the Act
and to the provisions of this Article.
(B) An ordinary resolution under paragraph (A) of this Article may
specify a particular dividend (whether or not declared), or may
specify all or any dividends declared within a specified period, but
such period may not end later than the beginning of the fifth annual
general meeting next following the date of the meeting at which the
ordinary resolution is passed.
(C) The entitlement of each holder of Ordinary Shares to new Ordinary
Shares shall be such that the relevant value of the entitlement
shall be as nearly as possible (without rounding up fractions) equal
to (but not greater than) the cash amount (disregarding any tax
credit) that such holder would have received by way of dividend. For
this purpose, "RELEVANT VALUE" shall be calculated by reference to
the average of the middle market quotations for the Ordinary Shares
on the London Stock Exchange as derived from the London Stock
Exchange Daily Official List for the day on which the Ordinary
Shares are first quoted "ex" the relevant dividend and the four
subsequent dealing days, or in such other manner as may be
determined by or in accordance with the ordinary resolution. A
written confirmation or report by the Auditors as to the amount of
the relevant value in respect of any dividend shall be conclusive
evidence of that amount.
(D) The Board may make any provision it considers appropriate in
relation to an allotment made or to be made pursuant to this Article
(whether before or after the passing or the ordinary resolution
referred to in paragraph (A) of this Article), including (without
limitation):
(i) the giving of notice to holders of the right of election offered to
them;
(ii) the provision of forms of election (whether in respect of a
particular dividend or dividends generally);
(iii) determination of the procedure for making and revoking elections;
(iv) the place at which, and the latest time by which, forms of election
and other relevant documents must be lodged in order to be
effective;
(v) the disregarding or rounding up or down or carrying forward of
fractional entitlements, in whole or in part, or the accrual of the
benefit of fractional entitlements to the Company (rather than to
the holders concerned); and
(vi) the exclusion from any offer of any holders of Ordinary Shares where
the Board considers that the making of the offer to them would or
might involve the contravention of the laws of any territory or that
for any other reason the offer should not be made to them.
(E) The dividend (or that part of the dividend in respect of which a
right of election has been offered) shall not be payable on Ordinary
Shares in respect of which a valid election has been made ("THE
ELECTED ORDINARY SHARES"). Instead additional Ordinary Shares shall
be allotted to the holders of the elected Ordinary Shares on the
basis of allotment determined under this Article. For such purpose,
the Board may capitalise out of any amount for the time being
standing to the credit of any reserve or fund of the Company
(including any share premium account, capital redemption reserve and
profit and loss account), whether or not available for distribution,
a sum equal to the aggregate nominal amount of the additional
Ordinary Shares to be allotted on that basis and apply it in paying
up in full the appropriate number of unissued Ordinary Shares for
allotment and distribution to the holders of the elected Ordinary
Shares on that basis.
(F) The additional Ordinary Shares when allotted shall rank pari passu
in all respects with the fully paid Ordinary Shares in issue on the
record date for the dividend in respect of which the right of
election has been offered, except that they will not rank for any
dividend or other entitlement which has been declared, paid or made
by reference to such record date.
(G) The Board may:
(i) do all acts and things which it considers necessary or expedient to
give effect to any such capitalisation, and may authorise any person
to enter on behalf of all the members interested into an agreement
with the Company providing for such capitalisation and incidental
matters and any agreement so made shall be binding on all concerned;
(ii) establish and vary a procedure for election mandates in respect of
future rights of election and determine that every duly effected
election in respect of any Ordinary Shares shall be binding on every
successor in title to the holder of such shares; and
(iii) terminate, suspend or amend any offer of the right to elect to
receive Ordinary Shares in lieu of any cash dividend at any time and
generally implement any scheme in relation to any such offer on such
terms and conditions as the Board may from time to time determine
and take such other action as the Board may deem necessary or
desirable from time to time in respect of any such scheme.
129. Reserves
The Board may set aside out of the profits of the Company and carry
to reserve such sums as it thinks fit. Such sums standing to reserve
may be applied, at the Board's discretion, for any purpose to which
the profits of the Company may properly be applied and, pending such
application, may either be employed in the business of the Company
or be invested in such investments as the Board thinks fit. The
Board may divide the reserve into such special funds as it thinks
fit and may consolidate into one fund any special funds or any parts
of any special funds into which the reserve may have been divided as
it thinks fit. The Board may also carry forward any profits without
placing them to reserve.
130. Capitalisation of profits and reserves
The Board may, with the authority of an ordinary resolution:
(i) subject to this Article, resolve to capitalise any undivided profits
of the Company not required for paying any preferential dividend
(whether or not available for distribution) or any sum standing to
the credit of any reserve or fund of the Company (including any
share premium account, capital redemption reserve and profit and
loss account), whether or not available for distribution;
(ii) appropriate the sum resolved to be capitalised to the members in
proportion to the nominal amounts of the shares (whether or not
fully paid) held by them respectively which would entitle them to
participate in a distribution of that sum if the shares were fully
paid and the sum were then distributable and were distributed by way
of dividend and apply such sum on their behalf either in or towards
paying up the amounts, if any, unpaid on any shares held by them
respectively, or in paying up in full unissued shares or debentures
of the Company of a nominal amount equal to that sum, and allot the
shares or debentures credited as fully paid to those members or as
the Board may direct, in those proportions, or partly in one way and
partly in the other, but so that the share premium account, the
capital redemption reserve, and any profits which are not available
for distribution may, for the purposes of this Article, only be
applied in paying up unissued shares to be allotted to members
credited as fully paid;
(iii) resolve that any shares so allotted to any member in respect of a
holding by him of any partly paid shares shall, so long as such
shares remain partly paid, rank for dividend only to the extent that
such partly paid shares rank for dividend;
(iv) make such provision by the issue of fractional certificates (or by
ignoring fractions or by accruing the benefit thereof to the Company
rather than to the holders concerned) or by payment in cash or
otherwise as the Board may determine in the case of shares or
debentures becoming distributable in fractions;
(v) authorise any person to enter on behalf of all the members concerned
into an agreement with the Company providing for either:
(a) the allotment to them respectively, credited as fully paid, of any
further shares to which they are entitled upon such capitalisation;
or
(b) the payment up by the Company on behalf of such holders by the
application thereto of their respective proportions of the reserves
or profits resolved to be capitalised, of the amounts or any part of
the amounts remaining unpaid on their existing shares,
and so that any such agreement shall be binding on all such
members; and
(vi) generally do all acts and things required to give effect to such
resolution.
RECORD DATES
131. Board to fix date
Notwithstanding any other provision of these Articles but without
prejudice to the rights attached to any shares and subject to the
Act, the Company or the Board may fix any date ("THE RECORD DATE")
as the date at the close of business (or such other time as the
Board may decide) on which persons registered as the holders of
shares or other securities shall be entitled to receipt of any
dividend, distribution, interest, allotment, issue, notice,
information, document or circular. A record date may be on or at any
time before any date on which such item is paid, made, given or
served or (in the case of any dividend, distribution, interest,
allotment or issue) after any date on which such item is
recommended, resolved, declared or announced.
ACCOUNTS
132. Access to accounting records
No member (other than an officer of the Company) shall have any
right of inspecting any accounting record or other document of the
Company unless he is authorised to do so by statute, by order of the
court, by the Board or by an ordinary resolution.
133. Distribution of annual accounts
(A) In respect of each financial year, a copy of the Company's annual
accounts, Directors' report and Auditors' report on those accounts
shall be sent by post or delivered to every member, every holder of
debentures, and every other person who is entitled to receive
notices of general meetings, in each case not less than 21 clear
days before the date of the meeting at which copies of those
documents are to be laid in accordance with the Act. This Article
does not require copies of such documents to be sent or delivered to
a person who is not entitled to receive notices of general meetings
and of whose address the Company is unaware or to more than one of
the joint holders of shares or debentures.
(B) Where permitted in accordance with the Act, the Company may send a
summary financial statement to any member instead of or in addition
to the documents referred to in paragraph (A) of this Article.
NOTICES
134. Notices to be in writing
Any notice to be given to or by any person pursuant to these
Articles shall be in writing, except that a notice calling a meeting
of the Board need not be in writing.
135. Service on members
(A) A notice or other document may be given by the Company to any member
either personally or by sending it by post in a pre-paid envelope
addressed to such member at his registered address or by leaving it
at that address or by any other means authorised in writing by the
member concerned. Any such notice or document to be given to a
member registered on an overseas branch register may be posted
either from the United Kingdom or in the territory in which such
branch register is maintained.
(B) In the case of joint holders of a share, all notices and documents
shall be given to the person whose name stands first in the Register
of Members in respect of that share. Notice so given shall be
sufficient notice to all the joint holders.
(C) If a member (or, in the case of joint holders, the person first
named in the Register of Members) has a registered address outside
the United Kingdom but has given to the Company an address in the
United Kingdom at which notices may be given to him or has an
address which is registered on an overseas branch register, he shall
be entitled to have notices given to him at that address. Otherwise
no such member (including any such joint holder) shall be entitled
to receive any notice or other document from the Company.
(D) Any notice to be given to a member may be given by reference to the
Register of Members as it stands at any time within the period of 21
days before the notice is given or (where applicable) any other
period in accordance with the requirements of the London Stock
Exchange. No change in the Register of Members after that time shall
invalidate the giving of such notice.
(E) If on three consecutive occasions notices or other documents have
been sent through the post to any member at his registered address
or his address for the service of notices but have been returned
undelivered, such member shall not be entitled to receive notices or
other documents from the Company until he shall have communicated
with the Company and supplied in writing a new registered address or
address within the United Kingdom for the service of notices.
136. Notices by advertisement
(A) If by reason of the suspension or curtailment of postal services in
the United Kingdom the Company is unable effectively to convene a
general meeting by notices sent through the post, any such meeting
may be convened by notice advertised once in at least one national
newspaper. The Company shall send a copy of the notice to members by
post if at least seven clear days before the meeting the posting of
notices to addresses throughout the United Kingdom again becomes
practicable.
(B) Any notice to be given by the Company to the members or any of them,
and not otherwise provided for by these Articles, shall be
sufficiently given if given by advertisement in at least one
national newspaper.
137. Evidence of giving notice
(A) A notice or other document addressed to a member at his registered
address or address for giving notice in the United Kingdom shall be,
if sent by post, deemed to have been given within 24 hours of
posting if pre-paid as first class post and within 48 hours of
posting if pre-paid as second class post. In proving that notice
has been given it shall be sufficient to prove that the envelope
containing the notice or document was properly addressed, pre-paid
and posted.
(B) A notice or document not sent by post but left at a registered
address or address for giving notice in the United Kingdom shall be
deemed to be given on the day it is left.
(C) Any notice given by advertisement in accordance with this Article
shall be deemed to have been served at noon on the day on which the
advertisement first appears.
(D) A member present either in person or by proxy, or in the case of a
corporate member by a duly authorised representative, at any meeting
of the Company or of the holders of any class of shares shall be
deemed to have received due notice of such meeting and, where
required, of the purposes for which it was called.
138. Notice binding on transferees
A person who becomes entitled to a share by transfer, transmission or
otherwise shall be bound by any notice in respect of that share
(other than a notice given by the Company under section 212 of the
Act) which, before his name is entered in the Register of Members,
has been given to the person from whom he derives his title.
139. Notice to persons entitled by transmission
A notice or other document may be given by the Company to a person
entitled by transmission to a share in consequence of the death or
bankruptcy of a member or otherwise by sending or delivering it in
any manner authorised by these Articles for the giving of notice to
a member, addressed to that person by name, or by the title of
representative of the deceased or trustee of the bankrupt or by any
similar or equivalent description, at the address, if any, in the
United Kingdom supplied for that purpose by the person claiming to
be so entitled. Until such an address has been supplied, a notice or
other document may be given in any manner in which it might have
been given if the event giving rise to the transmission had not
occurred. The giving of notice in accordance with this Article shall
be sufficient notice to all other persons interested in the share.
DOCUMENT DESTRUCTION
140. Document destruction
(A) The Company may destroy:
(i) any share certificate or other evidence of title to shares which has
been cancelled at any time after one year from the date of such
cancellation;
(ii) any mandate for the payment of dividends or other amounts or any
variation or cancellation of such mandate or any notification of
change of name or address at any time after two years from the date
such mandate, variation, cancellation or notification was recorded
by the Company;
(iii) any instrument or other evidence of transfer of shares or
renunciation of an allotment of shares which has been registered at
any time after six years from the date of registration; and
(iv) any other document on the basis of which an entry in the Register is
made at any time after six years from the date an entry in the
Register was first made in respect of it,
and the Company may destroy any such document earlier than the
relevant date, provided that a permanent record of the document is
made (on microfilm, computer disc or otherwise) which is not
destroyed before that date.
(B) It shall be conclusively presumed in favour of the Company that
every entry in the Register of Members purporting to have been made
on the basis of a document destroyed in accordance with this Article
was duly and properly made, that every instrument of transfer so
destroyed was duly registered, that every share certificate so
destroyed was duly cancelled and that every other document so
destroyed was valid and effective in accordance with the recorded
particulars in the records of the Company, provided that:
(i) this Article shall apply only to the destruction of a document in
good faith and without express notice of any claim (regardless of
the parties to it) to which the document might be relevant;
(ii) nothing in this Article imposes on the Company any liability in
respect of the destruction of any such document otherwise than as
provided for in this Article which would not attach to the Company
in the absence of this Article; and
(iii) references in this Article to the destruction of any document
include references to the disposal of it in any manner.
WINDING UP
141. Division of assets
(A) On a winding up of the Company, the Company's assets available for
distribution shall be divided among the members in proportion to the
nominal amounts of capital paid up or credited as paid up on the
shares held by them, subject to the terms of issue of or rights
attached to any shares.
(B) On a winding up of the Company (whether voluntary, under supervision
or by the Court) the liquidator may, on obtaining any sanction
required by law, divide among the members in kind the whole or any
part of the assets of the Company, whether or not the assets consist
of property of one kind or of different kinds. For this purpose the
liquidator may set the value he deems fair on a class or classes of
property, and may determine on the basis of such valuation and in
accordance with the then existing rights of members how the division
is to be carried out between members or classes of members. The
liquidator may not, however, distribute to a member without his
consent an asset to which there is attached a liability or potential
liability for the owner.
INDEMNITY
142. Right to indemnity
Subject to the Act, but without prejudice to any indemnity to which
he may be otherwise entitled, every Director, alternate Director,
Secretary or other officer of the Company (excluding the Auditor)
shall be entitled to be indemnified out of the assets of the Company
against all costs, charges, losses, damages and liabilities incurred
by him in the actual or purported execution or discharge of his
duties or exercise of his powers or otherwise in relation to such
duties, including (without limitation) any liability incurred in
defending any proceedings (whether civil or criminal) which relate
to anything done or omitted or alleged to have been done or omitted
by him as an officer or employee of the Company and in which
judgment is given in his favour or in which he is acquitted or in
connection with any application in which relief is granted to him by
any court of competent jurisdiction or which are otherwise disposed
of without any finding or admission of any material breach of duty
on his part.
143. Power to insure
Subject to the Act, the Board may purchase and maintain insurance at
the expense of the Company for the benefit of any person who is or
was at any time a Director or other officer or employee of any
company which is a Group Undertaking or in which the Company has an
interest whether direct or indirect or who is or was at any time a
trustee of any pension fund or employee benefits trust in which any
employee of any such company is or has been interested indemnifying
such person against any liability which may attach to him or loss or
expenditure which he may incur in relation to anything done or
alleged to have been done or omitted to be done as a Director,
officer, employee or trustee.
[Letterhead of Theodore Goddard]
The Dialog Corporation plc
The Communications Building
48 Leicester Square
London
WC2H 7DB
18 June 1999
Dear Sirs,
1 INTRODUCTION
1.1 We are the solicitors to The Dialog Corporation plc (the
"COMPANY") a public company incorporated with limited
liability in England.
1.2 We are writing to you with our opinion in connection with
the filing with the Securities and Exchange Commission
(the "COMMISSION") of the Company's Registration Statement
on Form S-8 (the "REGISTRATION STATEMENT") under the
Securities Act of 1933, as amended (the "SECURITIES ACT")
relating to in aggregate 18,086,000 ordinary shares of 1
pence each in the capital of the Company ("ORDINARY
SHARES") which may be issued pursuant to the exercise of
the following options granted or available to be granted
over the following number of American Depositary Shares
("ADSs"):-
1.2.1 6,250 ADSs issuable by the Company upon exercise of an
option granted to Mr Roger Summit under a non-statutory
stock option outside the Company's 1997 Share Option Plan
(the "1997 PLAN") but subject to the terms and conditions
of the 1997 Plan pursuant to an agreement dated 12 December
1997 between the Company and Mr Roger Summit (the "SUMMIT
AGREEMENT") and 6,250 ADSs issuable by the Company on
exercise of an option granted to Mr Summit under a
non-statutory stock option outside the 1997 Plan and dated
1 April 1999 (the "SUMMIT OPTION");
1.2.2 530,125 ADSs issuable by the Company upon the exercise of
options granted pursuant to the 1997 Plan;
1.2.3 67,720 ADSs issuable by the Company upon the exercise of
options granted pursuant to the Company's 1998 Employee
Stock Purchase Plan (the "1998 PLAN");
1.2.4 6,711 ADSs issuable by the Company upon the exercise of an
option granted pursuant to an option agreement between the
Company (1) and Richard Swank (2) dated 14 November 1997
and 4,232 ADSs issuable by the Company upon the exercise
of an option granted pursuant to an option agreement
between the Company (1) and Richard Swank (2) dated 8
September 1998 (the "SWANK OPTION AGREEMENTS");
1.2.5 3,900,212 ADSs relating to options or other rights to
purchase available to be granted under the 1997 Plan and
1998 Plan.
1.3 The headings used in this letter are for ease of reference
only.
2 DOCUMENTS EXAMINED
2.1 For the purpose of this opinion, we have examined the
following copy documents provided by the Company:-
2.1.1 the rules of the 1997 Plan as at the date hereof;
2.1.2 the rules of the 1998 Plan as at the date hereof;
2.1.3 the form of Purchase Plan Offering Document to be used in
connection with the 1998 Plan (the "1998 PURCHASE PLAN
OFFERING DOCUMENT");
2.1.4 the Summit Agreement;
2.1.5 the Summit Option;
2.1.6 the Swank Option Agreements;
2.1.7 minutes of a meeting of the board of directors of the
Company passed on 13th November 1997 resolving, inter
alia, to:
(a) adopt and approve the rules of the 1997 Plan;
(b) grant the following options pursuant to the 1997
Plan subject to closing of the acquisition pursuant
to a Stock Purchase Agreement dated 29 September
1997 between the Company and Knight - Ridder
Business Information Services, Inc. ("KR
INFORMATION ACQUISITION AGREEMENT");
NAME NUMBER OF ADSs
Jeffery S Galt 25,000
Marck A Shipley 25,000
Peter Papano 12,500
(c) approve and grant an option to Richard Swank to
purchase ADSs pursuant to the Swank Option
Agreement dated 14 November 1997;
(d) authorise the Renumeration Committee to grant
options pursuant to the 1997 Plan;
2.1.8 minutes of a meeting of the board of directors of the
Company passed on 25 March 1998 and 25 June 1998 approving
the rules of the 1998 Plan and the Purchase Plan Offering
Document;
2.1.9 notice of an extraordinary general meeting of the Company
held on 10 November 1997 (the "EGM NOTICE");
2.1.10 notice of an annual general meeting of the Company held on
16 June 1998 (the "AGM NOTICE"):
2.1.11 minutes of the Meeting referred to in paragraph 2.1.8
above signed by Marmaduke Hussey recording that all of the
resolutions referred to in the EGM Notice had been validly
passed (the "EGM RESOLUTIONS") and a certified copy of the
minutes of the meeting referred to in paragraph 2.1.9
above certified by Jonathan Ball, the Company Secretary,
recording that all of the resolutions referred to in the
AGM Notice had been validly passed (the "AGM
RESOLUTIONS");
2.1.12 minutes of meetings of the Remuneration Committee of the
Company held on:-
(a) 12 December 1997;
(b) 9 April 1998;
(c) 30 April 1998;
(d) 5 June 1998;
(e) 8 September 1998;
(f) 8 October 1998; and
(g) 1 April 1999;
2.1.13 two sets of minutes of meetings of the board of directors
of the Company each passed on 17 March 1999 ratifying the
grant of options of the initial offering and the second
offering under the 1998 Plan;
2.1.14 board minutes of a meeting of the board of directors of
the Company passed on 24 March 1999 ratifying execution of
the Swank Option Agreement dated 8 September 1998 and
approving the third offering under the 1998 Plan;
2.1.15 resolutions of the remuneration committee of the board of
directors of the Company dated on 1 April 1999; and
2.1.16 a draft Registration Statement as set out in the Annexure
attached to this letter.
2.2 We have also examined a copy of the Memorandum and
Articles of Association of the Company current at the date
hereof.
2.3 We have examined no other contracts, instruments or other
documents entered into by or affecting the Company or any
corporate records of the Company other than those
specified in this paragraph 2 and paragraph 4 below and
have not made any other enquiries concerning the Company.
3 GENERAL ASSUMPTIONS AND CAVEATS
3.1 In giving this opinion, we have assumed;
3.1.1 each ADS represents four Ordinary Shares;
3.1.2 the genuineness of all signatures;
3.1.3 the conformity to original documents of all documents
submitted to us as copies, the authenticity of all
certifications of such copies and the authenticity and
completeness of such original documents;
3.1.4 the legal capacity of natural persons;
3.1.5 the veracity, accuracy and completeness of all statements
or opinions as to matters of fact made by an officer or
officers of the Company (whether in writing or orally) to
us and upon which we have relied without making any
further enquiry in giving this opinion;
3.1.6 that the resolutions of the board of directors of the
Company referred to at paragraphs 2.1.7, 2.1.8, 2.1.12,
2.1.13, 2.1.14 and 2.1.15 above were duly passed at
properly convened and held meetings of such directors
validly holding office and that duly qualified quorums of
such directors voted in favour of such resolutions and
that any provisions contained in the Companies Act 1985
(as amended) (the "COMPANIES ACT") and/or the Company's
Articles of Association relating to the declaration of
directors' interests or the power of interested directors
to vote were duly observed and that such resolutions have
not been amended or rescinded and will at all times in the
future remain in full force and effect;
3.1.7 that the Memorandum and Articles of Association of the
Company as referred to at paragraph 2.2 above have not
been amended;
3.1.8 that the provisions of the Shipley Agreement and the Swank
Option Agreements and the options granted pursuant to the
1997 Plan and the 1998 Plan constitute legally binding and
enforceable obligations of the parties thereto under all
applicable laws;
3.1.9 that the EGM Resolutions were duly passed at a properly
convened Extraordinary General Meeting of the Company on
10 November 1997, that a quorum of members was present
throughout the meeting and that the requisite majority
voted in favour of approving the resolutions and that such
resolutions have not been and will not be amended or
rescinded and will remain at all times in the future in
full force and effect;
3.1.10 that the AGM Resolutions were duly passed at a properly
convened Annual General Meeting of the Company on 16 June
1998, that a quorum of members was present throughout the
meeting and that the requisite majority voted in favour of
approving the said resolutions and that such resolutions
numbered 7, 8 and 9 in the AGM Notice have not been and
will not be amended or rescinded at any time in the future
and will remain at all times in the future in full force
and effect;
3.1.11 that no additional matters would have been disclosed by
company searches of the file of the Company maintained by
the Registrar of Companies (as defined in paragraph 4.1
below) being carried out since the carrying out of the
search referred to in paragraph 4.1 below;
3.1.12 that the grant of options referred to in paragraphs 1.2.1
to 1.2.4 (inclusive) have been and will at the date of
issue of any Ordinary Shares pursuant to the exercise of
the options referred to in those paragraphs be validly
granted under the Plan or agreement (as the case may be)
under which they are purported to be granted; and
3.1.13 that the directors of the Company have approved the grant
and the terms of the Summit Option.
3.2 In giving this opinion we have also assumed that:-
3.2.1 at the date of grant of the options referred to in
paragraphs 1.2.1 to 1.2.4 (inclusive):-
3.2.1.1 the Company had sufficient duly created and duly
authorised but unissued Ordinary Shares for the
options in question;
3.2.1.2 the directors of the Company had the requisite
authority to grant those options and were
empowered to grant those options as if Section 89
of the Companies Act did not apply to any such
grant; and
3.2.1.3 the directors of the Company or a duly authorised
Committee thereof passed the necessary resolutions
to grant these options.
3.2.2 at the date of grant of any option or other rights
referred to in paragraph 1.2.5 and at the date of issue of
any of the Ordinary Shares pursuant to the exercise of
options granted under the 1997 Plan and the 1998 Plan, the
Swank Option Agreements and the Summit Agreement (together
the "OPTION DOCUMENTS"):-
3.2.2.1 the Company will have sufficient duly created and
duly authorised but unissued Ordinary Shares;
3.2.2.2 the directors of the Company will have the
requisite authority to grant the options and allot
the Ordinary Shares and will be empowered to grant
such options and allot such Ordinary Shares as if
Section 89 of the Companies Act did not apply to
any such grant or allotment;
3.2.2.3 options and other rights referred to in paragraph
1.2.5 will have been validly granted under the
1997 Plan and/or the 1998 Plan (as the case may
be);
3.2.2.4 options referred to in paragraph 1.2 will be
validly exercised;
3.2.2.5 such Ordinary Shares will be duly issued in
accordance with the relevant Option Document;
3.2.2.6 the full subscription price payable for the issue
of such Ordinary Shares shall have been paid to
the Company in cleared funds;
3.2.2.7 the directors of the Company or a duly authorised
Committee thereof will have passed and not amended
or revoked the necessary resolutions to grant the
relevant options and allot and issue such Ordinary
Shares; and
3.2.2.8 the resolutions referred to in paragraph 3.2.1.3
above will not have been amended or revoked;
3.2.3 there will be no restrictions imposed otherwise than
pursuant to the laws of England as at the date hereof or
the current Memorandum and Articles of Association of the
Company, affecting the ability of the Company to issue
Ordinary Shares; and
3.2.4 the Company will not have become insolvent, subject to
liquidation or winding-up procedures, receivership or
administration or struck-off the register or otherwise
become subject to any legal disability to issue shares in
the capital of the Company.
Our opinion will not apply if the price payable for the issue of any
Ordinary Share is less than the nominal value of such Ordinary Share.
We have not taken any steps to verify any of the above assumptions.
3.3 Apart from the knowledge of those members of this firm who
have had the conduct of the preparation of this opinion,
this opinion is not given on the basis of knowledge (if
any) as to factual matters concerning the Company or any
of its subsidiaries which may be possessed by any other
member of this firm.
3.4 We are qualified to practise in the laws of England and
Wales only and we are not expert in, and we neither
express nor imply any opinion as to, the laws of any
jurisdiction other than the laws of England and Wales as
applied by the courts of competent jurisdiction of England
and Wales as at the date hereof. In particular, but
without limitation, we have made no investigation into the
federal laws of the United States or the laws of any state
in the United States (or of any political or judicial
subdivision thereof) (as to which we express no opinion)
nor do we give any opinion on the Company's ADSs or
American Depositary Receipts referred to in any of the
documents described in paragraph 2.1.
3.5 We have made no investigation and express no opinion as to
whether the Company has obtained all and any necessary
consents, approvals or licences of any court or
governmental agency of any applicable jurisdiction outside
the United Kingdom of Great Britain and Northern Ireland
(the "UNITED KINGDOM") for the performance of its
obligations under the Option Documents;
3.6 We have not investigated whether the Company is or will by
reason of the matters contemplated by the Option Documents
be in breach of any of its obligations under any
agreement, document, deed or instrument except such
documents as stated herein.
3.7 We have not been involved in the drafting or preparation
of the Registration Statement and therefore express no
opinion as to the effectiveness of it to achieve the
purposes contemplated by it.
3.8 Our opinion is subject to the provisions of the Emergency
Laws (Re-enactments and Repeals) Act 1964 (and directions
issued by H.M. Treasury pursuant thereto) which contain
certain restrictions in relation to securities held by
residents of Iraq.
4 SEARCHES AND ENQUIRIES
4.1 We carried out on 7 June 1999 a search of the public
file of the Company, being the file maintained in respect
of the Company by the Registrar of Companies of England
and Wales (the "REGISTRAR OF COMPANIES") in accordance
with the Companies Act. It should be noted that such file
is not necessarily complete or up to date and we have not
conducted any further search since such date. We have
examined and relied upon such of the records, documents,
certificates and instruments as shown thereby as in our
judgment are necessary or appropriate to enable us to give
the opinions expressed in this letter.
4.2 We have made no enquiry of the High Court of Justice in
England and Wales (the "HIGH COURT") as to whether any
petitions for winding-up or administration have been
presented and are outstanding against the Company. We
have assumed for the purpose of this Opinion that no such
petition has been presented, resolution passed or order or
appointment made.
4.3 We have carried out no other searches and enquiries other
than that specified in paragraph 4.1.
5 THE OPINION
Based upon and relying upon, and subject to the foregoing, we are of the
opinion that the Ordinary Shares to be issued pursuant to the exercise
of options granted under the Option Documents will be validly issued and
will be fully paid or credited as fully paid.
6 CONFIDENTIALITY AND GOVERNING LAW
6.1 We have acted for the Company alone and this opinion is
for the use and benefit of the Company only in connection
with filing of the Registration Statement with the
Commission under the Securities Act. It shall not be
disclosed or communicated to any other party or relied on
by any other party or for any other purpose or quoted or
referred to in any public document, or filed with any
governmental agency or other person without, in each such
case, our prior written consent.
6.2 We hereby consent to the filing of this opinion with the
Commission as Exhibit 5.1 to the Registration Statement
and to the use of our name in the Registration Statement
in the form and context to which it appears in the
Annexure.
6.3 The terms of this opinion shall be governed by and
construed in accordance with the laws of England.
Yours faithfully,
Theodore Goddard
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated May 28, 1999 which appears on
page 55 of The Dialog Corporation PLC's Annual Report on Form 20-F for the
year ended December 31, 1998.
PricewaterhouseCoopers
24 June 1999
London, England
THE DIALOG CORPORATION PLC
1997 STOCK OPTION PLAN
APPROVED IN PRINCIPLE BY BOARD OF DIRECTORS OCTOBER 16, 1997
APPROVED BY SHAREHOLDERS NOVEMBER 10, 1997
ADOPTED BY BOARD OF DIRECTORS NOVEMBER 13, 1997
TERMINATION DATE: NOVEMBER 9, 2007
1. PURPOSES.
(a) GENERAL PURPOSE. The purpose of the Plan is to provide a means
by which selected Employees of the Company based in the United States and
Employees of the United States Affiliates of the Company may be given an
opportunity to acquire beneficial ownership of securities of the Company by
purchasing ADSs of the Company, evidenced by ADRs of the Company
("Shares").
(b) SPECIFIC PURPOSE. The Company, by means of the Plan, seeks to
retain the services of persons who are now Employees of the Company based
in the United States and Employees of United States Affiliates of the
Company, to secure and retain the services of new Employees and to provide
incentives for such persons to exert maximum efforts for the success of the
Company and its Affiliates.
(c) TYPE OF OPTION. The Company intends that the Options issued
under the Plan shall, in the discretion of the Board, be either Incentive
Stock Options or Nonstatutory Stock Options. All Options shall be
separately designated Incentive Stock Options or Nonstatutory Stock Options
at the time of grant, and in such form as issued pursuant to Section 6 of
the Plan, and a separate certificate or certificates will be issued for
Shares purchased on exercise of each type of Option.
2. DEFINITIONS.
(a) "ACT" means the United Kingdom Income and Corporation Taxes
Act of 1988 and any modification, consolidation, re-enactment or extension
of such Act.
(b) "ADMISSION" means the admission by the Council of the London
Stock Exchange Limited of all or any of the ordinary share capital of the
Company to the Official List of the London Stock Exchange Limited first
becoming effective.
(c) "ADR" means an American Depositary Receipt, the evidentiary
document for an underlying holding of one or more ADS.
(d) "ADS" means an American Depositary Share of the Company
reserving four (4) Ordinary Shares. The ADSs are evidenced by ADRs and are
approved for quotation on the Nasdaq National Market under the symbol
"DIALY." Option Holders who exercise their Options under the Plan will
become holders of ADRs, with all the rights of ADR holders. For purposes of
the Code and the current double taxation convention between the United
States and the United Kingdom, beneficial owners of ADSs who are U.S.
persons will be treated as the beneficial owners of the underlying Ordinary
Shares represented by the ADSs evidenced by the ADRs.
(e) "AFFILIATE" means any parent corporation or subsidiary
corporation, whether now or hereafter existing, as those terms are defined
in Sections 424(e) and (f) respectively, of the Code.
(f) "ANY OTHER EXECUTIVE OPTION SCHEME" means any employee share
option scheme (other than any savings related share option scheme approved
by the United Kingdom Board of the Inland Revenue) adopted by the Company
or any of its Subsidiaries in general meeting which provides for the
granting of options to employees.
(g) "BOARD" means the Board of Directors of the Company.
(h) "CODE" means the United States Internal Revenue Code of 1986,
as amended.
(i) "COMMITTEE" means a Committee appointed by the Board in
accordance with subsection 3(c) of the Plan.
(j) "COMPANIES ACT" means the United Kingdom Companies Act of 1985
and any modifications, consolidation, re-enactment or extension of such
Act.
(k) "COMPANY" means the company registered in England with
registered number 1890236 and currently known as The Dialog Corporation
plc.
(l) "CONTINUOUS SERVICE" means the absence of any interruption or
termination of service to the Company or an Affiliate in the capacity of an
Employee. The Board or the Chief Executive Officer of the Company may
determine, in that party's sole discretion, whether Continuous Service
shall be considered interrupted in the case of: (i) any leave of absence
approved by the Board or the Chief Executive Officer of the Company,
including sick leave, military leave or any other personal leave; or (ii)
transfers between the Company, Affiliates or their successors.
(m) "CONTROL" has the same meaning as in Section 840 of the Act.
(n) "COVERED EMPLOYEE" means the Chief Executive Officer and the
four (4) other highest compensated officers of the Company for whom total
compensation is required to be reported to Shareholders of the Company
under the Exchange Act, as determined for purposes of Section 162(m) of the
Code.
(o) "DATE OF GRANT" means the date of the Board resolution
granting the Option.
(p) "DIRECTOR" means a member of the Board.
(q) "EARNINGS" means at the Board's discretion, either:
(i) the cash earnings including bonuses of the office(s) or
employments(s) by virtue of which an Employee is eligible to participate in
the Plan during the period of twelve (12) months ending on the relevant
Date of Grant or the last accounting period of the Company, if greater; or
(ii) the aggregate annual rate of cash earnings of an
Employee from all such office(s) and employment(s) on the Date of Grant of
an Option plus any cash bonus paid to him or her during the period of
twelve (12) months ending on that Date of Grant.
(r) "EMPLOYEE" means any person, including Officers and Directors,
employed by the Company who is based in the United States or employed by
any United States Affiliate of the Company and who, in the case of an
Officer or a Director, is required to devote substantially the whole of his
or her time and attention to the affairs of the employer corporation and
normally to work not less than twenty-five (25) hours per week (excluding
meal breaks).
(s) "EXCHANGE ACT" means the United States Securities Exchange Act
of 1934, as amended.
(t) "FAIR MARKET VALUE" means the value of a security, as
determined in good faith by the Board. If the security is listed on any
established stock exchange or traded on the Nasdaq National Market or the
Nasdaq SmallCap Market, the Fair Market Value of the security shall be
(rounded up where necessary to the nearest whole penny or cent) the closing
sales price for such security (or the closing bid, if no sales were
reported) as quoted on such exchange or market (or the exchange or market
with the greatest volume of trading in the relevant security of the
Company) on the trading day prior to the Date of Grant, as reported in The
Wall Street Journal or such other source as the Board deems reliable.
(u) "INCENTIVE STOCK OPTION" means an Option intended to qualify
as an incentive stock option within the meaning of Section 422 of the Code
and the regulations promulgated thereunder.
(v) "NON-EMPLOYEE DIRECTOR" means a Director who either (i) is not
a current Employee or Officer of the Company or its parent or subsidiary,
does not receive compensation (directly or indirectly) from the Company or
its parent or subsidiary for services rendered as a consultant or in any
capacity other than as a Director (except for an amount as to which
disclosure would not be required under Item 404(a) of Regulation S-K
promulgated pursuant to the Securities Act ("Regulation S-K")), does not
possess an interest in any other transaction as to which disclosure would
be required under Item 404(a) of Regulation S-K, and is not engaged in a
business relationship as to which disclosure would be required under Item
404(b) of Regulation S-K; or (ii) is otherwise considered a "non-employee
director" for purposes of Rule 16b-3.
(w) "NONSTATUTORY STOCK OPTION" means an Option not intended to
qualify as an Incentive Stock Option.
(x) "OFFICER" means a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.
(y) "OPTION" means a stock option granted pursuant to the Plan.
(z) "OPTION AGREEMENT" means a written agreement between the
Company and an Option Holder evidencing the terms and conditions of an
individual Option grant. Each Option Agreement shall be subject to the
terms and conditions of the Plan.
(aa) "OPTION HOLDER" means a person to whom an Option is granted
pursuant to the Plan or, if applicable, such other person who holds an
outstanding Option.
(bb) "ORDINARY SHARE" means a fully paid ordinary share of one
pence (1p) in the capital of the Company. The Company's Shares currently
are traded on the London Stock Exchange Limited in London, England.
(cc) "OUTSIDE DIRECTOR" means a Director who either (i) is not a
current employee of the Company or an "affiliated corporation" (within the
meaning of the Treasury regulations promulgated under Section 162(m) of the
Code), is not a former employee of the Company or an "affiliated
corporation" receiving compensation for prior services (other than benefits
under a tax qualified pension plan), was not an officer of the Company or
an "affiliated corporation" at any time, and is not currently receiving
direct or indirect remuneration from the Company or an "affiliated
corporation" for services in any capacity other than as a Director, or (ii)
is otherwise considered an "outside director" for purposes of Section
162(m) of the Code.
(dd) "PLAN" means this 1997 Stock Option Plan.
(ee) "RULE 16B-3" means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3 as in effect with respect to the Company at the
time discretion is being exercised regarding the Plan.
(ff) "SECURITIES ACT" means the United States Securities Act of
1933, as amended.
(gg) "SUBSIDIARY" means a company which is both under the Control
of the Company and which is a subsidiary of the Company within the meaning
of Section 736 of the Companies Act.
3. ADMINISTRATION.
(a) GENERAL. The Plan shall be administered by the Board unless
and until the Board delegates administration to a Committee, as provided in
subsection 3(c) of the Plan.
(b) POWERS. Provided that none of the rights of an Option Holder
are altered adversely, the Board shall have the power, subject to, and
within the limitations of, the express provisions of the Plan:
(1) To determine from time to time which of the persons
eligible under the Plan shall be granted Options; when and how each Option
shall be granted; whether an Option will be an Incentive Stock Option or a
Nonstatutory Stock Option; the provisions of each Option granted (which
need not be identical), including the time or times such Option may be
exercised in whole or in part; and the number of Shares for which an Option
shall be granted to each such person.
(2) To construe and interpret the Plan and Options
granted under it, and to establish, amend and revoke rules and regulations
for its administration. The Board, in the exercise of this power, may
correct any defect, omission or inconsistency in the Plan or in any Option
Agreement, in a manner and to the extent it shall deem necessary or
expedient to make the Plan fully effective.
(3) To amend the Plan or an Option as provided in Section
11 of the Plan.
(c) COMMITTEE. The Board may delegate administration of the Plan
to a Committee of the Board composed of two (2) or more members, all of the
members of which Committee may be, in the discretion of the Board,
Non-Employee Directors and/or Outside Directors. If administration is
delegated to a Committee, the Committee shall have, in connection with the
administration of the Plan, the powers theretofore possessed by the Board,
including the power to delegate to a subcommittee of two (2) or more
Outside Directors any of the administrative powers the Committee is
authorized to exercise (and references in this Plan to the Board shall
thereafter be to the Committee or such a subcommittee), subject, however,
to such resolutions, not inconsistent with the provisions of the Plan, as
may be adopted from time to time by the Board. The Board may abolish the
Committee at any time and revest in the Board the administration of the
Plan. Notwithstanding anything in this Section 3 of the Plan to the
contrary, the Board or the Committee may delegate to a committee of one or
more members of the Board the authority to grant Options to eligible
persons who (1) are not then subject to Section 16 of the Exchange Act
and/or (2) are either (i) not then Covered Employees and are not expected
to be Covered Employees at the time of recognition of income resulting from
such Option, or (ii) not persons with respect to whom the Company wishes to
comply with Section 162(m) of the Code.
4. SHARES SUBJECT TO THE PLAN.
(a) RESERVE. Subject to the provisions of Section 11 of the Plan
relating to adjustments upon changes in securities, the Shares that may be
sold pursuant to Incentive Stock Options shall not exceed in the aggregate
two million two hundred and forty eight thousand and fifty-seven
(2,248,057) Shares, representing eight million nine hundred and ninety two
thousand two hundred and twenty nine (8,992,229) Ordinary Shares. If any
Option shall for any reason expire or otherwise terminate, in whole or in
part, without having been exercised in full, the Shares not purchased under
such Option shall revert to and again become available for issuance under
the Plan.
(b) SOURCE. The Shares subject to the Plan may be unissued Shares
or Shares which have been bought on the open market at prevailing market
prices or otherwise.
(c) NONSTATUTORY STOCK OPTION GRANT LIMITS.
(1) No Nonstatutory Stock Options shall be granted on any
Date of Grant or any proposed Date of Grant if, as a result:
(i) the aggregate number of Ordinary Shares
represented by the number of Shares issued or issuable pursuant to grants
made under this Plan plus the aggregate number of Ordinary Shares issued or
issuable pursuant to grants made under the Company's 1994 Savings Related
Share Option Scheme, the Company's 1994 Unapproved Executive Share Option
Scheme and the Company's 1994 Executive Share Option Scheme and pursuant to
grants or appropriations made during the ten (10) years preceding such Date
of Grant under all other share schemes (including non-approved,
savings-related and profit sharing schemes) established after Admission by
the Company would exceed ten percent (10%) of the issued share capital of
the Company on that Date of Grant; or
(ii) the aggregate number of Ordinary Shares
represented by the number of Shares issued or issuable pursuant to grants
made under this Plan plus the aggregate number of Ordinary Shares issued or
issuable pursuant to grants made under the Company's 1994 Unapproved
Executive Share Option Scheme and the Company's 1994 Executive Share Option
Scheme and pursuant to grants made during the ten (10) years preceding such
Date of Grant under all other share option schemes (whether or not approved
by the Board of Inland Revenue but not being a savings-related share option
scheme) established after Admission by the Company would exceed seven and
one-half percent (7.5%) of the issued share capital or the Company on that
Date of Grant; or
(iii) the aggregate number of Ordinary Shares issued
or issuable pursuant to grants made under the schemes mentioned in
subsection 4(c)(1)(ii) above in the preceding three (3) years would exceed
six percent (6%) of the issued share capital of the Company on that Date of
Grant.
(2) For the avoidance of doubt, Shares and Ordinary
Shares which shall have been the subject of Options or rights granted under
any other share scheme or plan which have lapsed shall not be taken into
account for the purposes of this subsection 4(c).
5. ELIGIBILITY.
(A) EMPLOYEES. Only an Employee may be granted an Option under
the Plan.
(b) SECTION 162(M) LIMIT. Subject to the provisions of Section 11
relating to adjustments upon changes in stock, no person shall be eligible
to be granted in any calendar year Options covering more than sixty two
thousand five hundred (62,500) Shares, representing two hundred and fifty
thousand (250,000) Ordinary Shares.
(c) 10% OWNERS. No person shall be eligible for the grant of an
Incentive Stock Option if, on the Date of Grant, such person owns (or is
deemed to own pursuant to Section 424(d) of the Code) securities possessing
more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or of any of its Affiliates unless the
exercise price of such Incentive Stock Option is at least one hundred ten
percent (110%) of the Fair Market Value of a Share on the Date of Grant and
the Incentive Stock Option is not exercisable after the expiration of five
(5) years from the Date of Grant.
(d) GENERAL LIMITATION ON INDIVIDUAL GRANTS. On any Date of Grant
the aggregate Fair Market Value for Shares which may be issued on the
exercise of any Option then granted shall not, when aggregated with the
Fair Market Value for any Shares which remain to be issued on the exercise
of Options granted to the Option Holder in question or which could have
been acquired but for the surrender or lapse of any such Option during the
period of ten (10) years immediately preceding such Date of Grant under (i)
the Plan or (ii) Any Other Executive Share Scheme exceed either eight (8)
times the Option Holder's Earnings.
(e) $100,000 LIMITATION FOR INCENTIVE STOCK OPTIONS. To the extent
that the aggregate Fair Market Value (determined at the time of grant) of
Shares with respect to which Incentive Stock Options are exercisable for
the first time by any Option Holder during any calendar year under all
plans of the Company and its Affiliates exceeds one hundred thousand
dollars ($100,000), the Options or portions thereof which exceed such limit
(according to the order in which they were granted) shall be treated as
Nonstatutory Stock Options.
6. OPTION PROVISIONS.
Each Option shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate. The provisions of separate
Options need not be identical, but each Option shall include (through
incorporation of provisions hereof by reference in the Option or otherwise)
the substance of each of the following provisions:
(a) TERM. No Option shall be exercisable after the expiration of
ten (10) years from the date it was granted.
(b) PRICE. The exercise price of each Option shall be not less
than one hundred percent (100%) of the Fair Market Value of a Share subject
to the Option on the date the Option is granted. Notwithstanding the
foregoing, an Option may be granted with an exercise price lower than that
set forth in the preceding sentence if such Option is granted pursuant to
an assumption or substitution for another option in a manner satisfying the
provisions of Section 424(a) of the Code.
(c) CONSIDERATION. The purchase price of Shares acquired pursuant
to an Option, to the extent permitted by applicable statutes and
regulations, may consist entirely of (i) cash or check or (ii) such other
consideration and method of payment for the issuance of Shares to the
extent permitted under applicable law.
(d) TRANSFERABILITY. An Incentive Stock Option shall not be
transferable except by will or by the laws of descent and distribution, and
shall be exercisable during the lifetime of the person to whom the
Incentive Stock Option is granted only by such person. A Nonstatutory Stock
Option but not an Incentive Stock Option, may be transferred to the extent
provided in the Option Agreement; provided that if the Option Agreement
does not expressly permit the transfer of a Nonstatutory Stock Option, the
Nonstatutory Stock Option shall not be transferable except by will, by the
laws of descent and distribution or pursuant to a domestic relations order
satisfying the requirements of Rule 16 of the Exchange Act and shall be
exercisable during the lifetime of the person to whom the Option is granted
only by such person or any transferee pursuant to a domestic relations
order. Notwithstanding the foregoing, the person to whom the Option is
granted may, by delivering written notice to the Company, in a form
satisfactory to the Company, designate a third party who, in the event of
the death of the Option Holder, shall thereafter be entitled to exercise
the Option.
(e) VESTING. The total number of Shares subject to an Option may,
but need not, be allotted in periodic installments (which may, but need
not, be equal). The Option Agreement may provide that from time to time
during each of such installment periods, the Option may become exercisable
("vest") with respect to some or all of the Shares allotted to that period,
and may be exercised with respect to some or all of the Shares allotted to
such period and/or any prior period as to which the Option became vested
but was not fully exercised. The Option may be subject to such other terms
and conditions on the time or times when it may be exercised (which may be
based on performance or other criteria) as the Board may deem appropriate.
The provisions of this subsection 6(e) of the Plan are subject to any
Option provisions governing the minimum number of Shares as to which an
Option may be exercised.
(f) SECURITIES LAW COMPLIANCE. The Company may require any Option
Holder, or any person to whom an Option is transferred under subsection
6(d) of the Plan, as a condition of exercising any such Option, (1) to give
written assurances satisfactory to the Company as to the Option Holder's
knowledge and experience in financial and business matters and/or to employ
a purchaser representative reasonably satisfactory to the Company who is
knowledgeable and experienced in financial and business matters, and that
he or she is capable of evaluating, alone or together with the purchaser
representative, the merits and risks of exercising the Option; and (2) to
give written assurances satisfactory to the Company stating that such
person is acquiring the Shares subject to the Option for such person's own
account and not with any present intention of selling or otherwise
distributing the Shares. The foregoing requirements, and any assurances
given pursuant to such requirements, shall be inoperative if (i) the
issuance of the Shares upon the exercise of the Option has been registered
under a then currently effective registration statement under the
Securities Act, or (ii) as to any particular requirement, a determination
is made by counsel for the Company that such requirement need not be met in
the circumstances under the then applicable securities laws. The Company
may require the Option Holder to provide such other representations,
written assurances or information which the Company shall determine is
necessary, desirable or appropriate to comply with applicable securities
and other laws as a condition of granting an Option to such Option Holder
or permitting the Option Holder to exercise such Option. The Company may,
upon advice of counsel to the Company, place legends on Share certificates
issued under the Plan as such counsel deems necessary or appropriate in
order to comply with applicable securities laws, including, but not limited
to, legends restricting the transfer of the Shares.
(g) TERMINATION OF CONTINUOUS SERVICE OF OPTION HOLDER. In the
event an Option Holder's Continuous Service terminates (other than upon the
Option Holder's death or disability), the Option Holder may exercise his or
her Option (to the extent that the Option Holder was entitled to exercise
it at the date of termination) but only within such period of time ending
on the earlier of (i) the date three (3) months after the termination of
the Option Holder's Continuous Service (or such longer or shorter period
specified in the Option Agreement, which shall not be less than thirty (30)
days unless such termination is for cause), or (ii) the expiration of the
term of the Option as set forth in the Option Agreement. If, after
termination, the Option Holder does not exercise his or her Option within
the time specified in the Option Agreement, the Option shall terminate, and
the Shares covered by such Option shall revert to and again become
available for issuance under the Plan.
An Option Holder's Option Agreement may also provide that, if the
exercise of the Option following the termination of the Option Holder's
Continuous Service (other than upon the Option Holder's death or
disability) would be prohibited at any time solely because the issuance of
Shares would violate the registration requirements under the Securities
Act, then the Option shall terminate on the earlier of (i) the expiration
of the term of the Option as described in subsection 6(a) or (ii) the
expiration of a period of three (3) months after the termination of the
Option Holder's Continuous Service during which the exercise of the Option
would not be in violation of such registration requirements (if such
provisions would result in an extension of the time during which the Option
may be exercised beyond the period described in the first paragraph of this
subsection 6(f)).
(h) DISABILITY OF OPTION HOLDER. In the event an Option Holder's
Continuous Service terminates as a result of the Option Holder's
disability, the Option Holder may exercise his or her Option (to the extent
that the Option Holder was entitled to exercise it at the date of
termination), but only within such period of time ending on the earlier of
(i) the date twelve (12) months following such termination (or such longer
or shorter period specified in the Option Agreement, which in no event
shall be less than six (6) months), or (ii) the expiration of the term of
the Option as set forth in the Option Agreement. If, at the date of
termination, the Option Holder is not entitled to exercise his or her
entire Option, the Shares covered by the unexercisable portion of the
Option shall revert to and again become available for issuance under the
Plan. If, after termination, the Option Holder does not exercise his or her
Option within the time specified herein, the Option shall terminate, and
the Shares covered by such Option shall revert to and again become
available for issuance under the Plan.
(i) DEATH OF OPTION HOLDER. In the event of the death of an Option
Holder during, or within a period specified in the Option after the
termination of, the Option Holder's Continuous Service, the Option may be
exercised (to the extent the Option Holder was entitled to exercise the
Option at the date of death) by the Option Holder's estate, by a person who
acquired the right to exercise the Option by bequest or inheritance or by a
person designated to exercise the option upon the Option Holder's death
pursuant to subsection 6(d), but only within the period ending on the
earlier of (i) the date eighteen (18) months following the date of death
(or such longer or shorter period specified in the Option Agreement, which
in no event shall be less than six (6) months), or (ii) the expiration of
the term of such Option as set forth in the Option Agreement. If, at the
time of death, the Option Holder was not entitled to exercise his or her
entire Option, the Shares covered by the unexercisable portion of the
Option shall revert to and again become available for issuance under the
Plan. If, after death, the Option is not exercised within the time
specified herein, the Option shall terminate, and the Shares covered by
such Option shall revert to and again become available for issuance under
the Plan.
(j) WITHHOLDING. To the extent provided by the terms of an Option
Agreement and permissible under applicable law, the Option Holder may
satisfy any foreign, federal, state or local tax withholding obligation
relating to the exercise of such Option by any of the following means or by
a combination of such means: (i) tendering a cash payment or (ii)
authorizing the Company to withhold Shares from the Shares otherwise
issuable to the Option Holder as a result of the exercise of the Option.
7. CANCELLATION AND RE-GRANT OF OPTIONS.
(a) GENERAL. The Board shall have the authority to effect, at any
time and from time to time, (i) the repricing of any outstanding Options
under the Plan and/or (ii) with the consent of any adversely affected
holders of Options, the cancellation of any outstanding Options under the
Plan and the grant in substitution therefor of new Options under the Plan
covering the same or different numbers of Shares but having an exercise
price per Share not less than one hundred percent (100%) of the Fair Market
Value for an Option or, in the case of an Incentive Stock Option held by a
10% stockholder (as described in subsection 5(b)), not less than one
hundred ten percent (110%) of the Fair Market Value per Share on the new
grant date. Notwithstanding the foregoing, the Board may grant an Option
with an exercise price lower than that set forth above if such Option is
granted as part of a transaction to which Section 424(a) of the Code
applies.
(b) SECTION 162(M) REQUIREMENTS. Shares subject to an Option
canceled under this Section 7 shall continue to be counted against the
maximum award of Options permitted to be granted pursuant to subsection
5(c) of the Plan. The repricing of an Option under this Section 7,
resulting in a reduction of the exercise price, shall be deemed to be a
cancellation of the original Option and the grant of a substitute Option;
in the event of such repricing, both the original and the substituted
Options shall be counted against the maximum awards of Options permitted to
be granted pursuant to subsection 5(c) of the Plan. The provisions of this
subsection 7(b) shall be applicable only to the extent required by Section
162(m) of the Code.
8. COVENANTS OF THE COMPANY.
(a) MAINTENANCE OF SHARE CAPITAL. The Company shall maintain
sufficient unissued share capital to satisfy all rights to subscribe for
ADSs from time to time subsisting under options granted pursuant to the
Plan.
(b) SECURITIES LAWS. The Company shall seek to obtain from each
regulatory commission or agency having jurisdiction over the Plan such
authority as may be required to issue and sell Shares upon exercise of the
Options; provided, however, that this undertaking shall not require the
Company to register under the Securities Act either the Plan, any Option,
any Shares issued or issuable pursuant to any such Option. If, after
reasonable efforts, the Company is unable to obtain from any such
regulatory commission or agency the authority which counsel for the Company
deems necessary for the lawful issuance and sale of Shares under the Plan,
the Company shall be relieved from any liability for failure to issue and
sell Shares upon exercise of such Options unless and until such authority
is obtained.
9. USE OF PROCEEDS FROM SHARES.
Proceeds from the sale of Shares pursuant to Options shall
constitute general funds of the Company.
10. MISCELLANEOUS.
(a) ACCELERATION. The Board shall have the power to accelerate the
time at which an Option may first be exercised or the time during which an
Option or any part thereof will vest pursuant to subsection 6(e) of the
Plan, notwithstanding the provisions in the Option stating the time at
which it may first be exercised or the time during which it will vest.
(b) OPTION HOLDER. Neither an Option Holder nor any person to whom
an Option is transferred under subsection 6(d) of the Plan shall be deemed
to be the holder of, or to have any of the rights of a holder with respect
to, any Shares unless and until such person has satisfied all requirements
for exercise of the Option pursuant to its terms.
(c) SERVICE RIGHTS. Nothing in the Plan or any instrument executed
or Option granted pursuant thereto shall confer upon any person any right
to continue in the service of the Company or any Affiliate or shall affect
the right of the Company or any Affiliate to terminate the service of any
Option Holder.
11. ADJUSTMENTS UPON CHANGES IN SHARES.
(A) CORPORATE TRANSACTIONS. If any change is made in the Shares
subject to the Plan, or subject to any Option, without the receipt of
consideration by the Company (through merger, consolidation,
reorganization, recapitalization, reincorporation, stock dividend, dividend
in property other than cash, stock split, liquidating dividend, combination
of shares, exchange of shares, change in corporate structure or other
transaction not involving the receipt of consideration by the Company), the
Plan will be appropriately adjusted in the class(es) and maximum number of
Shares subject to the Plan pursuant to subsection 4(a) and the maximum
number of Shares subject to award to any person during any calendar year
pursuant to subsection 5(c), and the outstanding Options will be
appropriately adjusted in the class(es) and number of Shares and price per
Share of Shares subject to such outstanding Options. Such adjustments shall
be made by the Board, the determination of which shall be final, binding
and conclusive. (The conversion of any convertible securities of the
Company shall not be treated as a "transaction not involving the receipt of
consideration by the Company".)
(b) CHANGE IN CONTROL. In the event of: (1) a dissolution,
liquidation, or sale of all or substantially all of the assets of the
Company; (2) a merger or consolidation in which the Company is not the
surviving corporation; (3) a reverse merger in which the Company is the
surviving corporation but the Ordinary Shares outstanding immediately
preceding the merger are converted by virtue of the merger into other
property, whether in the form of securities, cash or otherwise; or (4) the
acquisition by any person, entity or group within the meaning of Section
13(d) or 14(d) of the Exchange Act, or any comparable successor provisions
(excluding any employee benefit plan, or related trust, sponsored or
maintained by the Company or any Affiliate of the Company) of the
beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the Exchange Act, or comparable successor rule) of securities of the
Company representing at least fifty percent (50%) of the combined voting
power entitled to vote in the election of directors, then: (i) any
surviving or acquiring corporation shall assume Options outstanding under
the Plan or shall substitute similar options (including an option to
acquire the same consideration paid to Shareholders in the transaction
described in this subsection 11(b)) for those outstanding under the Plan,
or (ii) in the event any surviving or acquiring corporation refuses to
assume such Options or to substitute similar options for those outstanding
under the Plan, the vesting of such Options and the time during which such
Options may be exercised shall be accelerated prior to such event and,
other than an event specified in item (4) above, the Options terminated if
not exercised after such acceleration and at or prior to such event.
12. AMENDMENT OF THE PLAN AND OPTIONS.
(a) AMENDMENT OF PLAN; MANDATORY SHAREHOLDER APPROVAL. The Board
at any time, and from time to time, may amend the Plan. However, except as
provided in Section 11 of the Plan relating to adjustments upon changes in
securities and except as to minor amendments to benefit the administration
of the Option Plan, to take account of a change in legislation or to obtain
or maintain favorable tax, exchange control or regulatory treatment for
Option Holders or the Company or any Subsidiary, no amendment shall be
effective unless approved by the Shareholders of the Company to the extent
Shareholder approval is necessary for the Plan to satisfy the requirements
of Section 422 of the Code, Rule 16b-3 under the Exchange Act and any
London Stock Exchange Limited, Nasdaq or other securities exchange listing
requirements. Currently under United States law Shareholder approval within
twelve (12) months before or after the adoption of the amendment is
required where the amendment will increase the number of Shares reserved
for Options under the Plan. In addition, Shareholder approval is required
by the regulations of the London Stock Exchange Limited for any amendment
to the advantage of Option Holders in respect to the following: eligibility
to participate in the Plan; limits on the number of Shares which may be
issued pursuant to the Plan; the maximum entitlement of individual
participants under the Plan; the adjustments of awards under the Plan on a
variation of share capital; and the restrictions on vesting and release of
Options.
(b) DISCRETIONARY SHAREHOLDER APPROVAL. The Board may in its sole
discretion submit any other amendment to the Plan for Shareholder approval,
including, but not limited to, amendments to the Plan intended to satisfy
the requirements of Section 162(m) of the Code and the regulations
promulgated thereunder regarding the exclusion of performance-based
compensation from the limit on corporate deductibility of compensation paid
to certain executive officers.
(c) EXPRESS AMENDMENTS CONTEMPLATED. It is expressly contemplated
that the Board may amend the Plan in any respect the Board deems necessary
or advisable to provide Option Holders with the maximum benefits provided,
or to be provided, under the provisions of the Code and the regulations
promulgated thereunder relating to Incentive Stock Options and/or to bring
the Plan and/or Incentive Stock Options granted under it into compliance
therewith.
(d) NO IMPAIRMENT BY PLAN AMENDMENT. Rights and obligations under
any Option granted before amendment of the Plan shall not be impaired by
any amendment of the Plan unless (i) the Company requests the consent of
the person to whom the Option was granted and (ii) such person consents in
writing.
(e) NO IMPAIRMENT BY OPTION AMENDMENT. The Board at any time, and
from time to time, may amend the terms of any one or more Options;
provided, however, that the rights and obligations under any Option shall
not be impaired by any such amendment unless (i) the Company requests the
consent of the person to whom the Option was granted and (ii) such person
consents in writing.
13. TERMINATION OR SUSPENSION OF THE PLAN.
(a) GENERAL. The Board may suspend or terminate the Plan at any
time. Unless sooner terminated, the Plan shall terminate ten (10) years
from the date the Plan is adopted by the Board or approved by the
Shareholders of the Company, whichever is earlier. No Options may be
granted under the Plan while the Plan is suspended or after it is
terminated.
(b) NO IMPAIRMENT BY TERMINATION OR SUSPENSION. Rights and
obligations under any Option granted while the Plan is in effect shall not
be impaired by suspension or termination of the Plan, except with the
written consent of the person to whom the Option was granted.
14. EFFECTIVE DATE OF PLAN.
The Plan shall become effective as determined by the Board, but no
Options granted under the Plan shall be exercised unless and until the Plan
has been approved by the Shareholders of the Company, which approval shall
be within twelve (12) months before or after the date the Plan is adopted
by the Board.
THE DIALOG CORPORATION PLC
1998 EMPLOYEE STOCK PURCHASE PLAN
(AMERICAN DEPOSITARY SHARES)
APPROVED IN PRINCIPLE BY BOARD OF DIRECTORS MARCH 25, 1998
APPROVED BY SHAREHOLDERS JUNE 17, 1998
ADOPTED BY BOARD OF DIRECTORS JUNE 25, 1998
TERMINATION DATE: JUNE 16, 2008
1. PURPOSE.
(a) The purpose of the 1998 Employee Stock Purchase Plan (the
"Plan") is to provide a means by which Employees of Affiliates of the
Company may be given an opportunity to acquire beneficial ownership of
securities of the Company by purchasing Shares.
(b) The Company, by means of the Plan, seeks to retain the services
of such Employees, to secure and retain the services of new Employees and
to provide incentives for such persons to exert maximum efforts for the
success of the Company and its Affiliates.
(c) The Company intends that the Rights to purchase Shares granted
under the Plan be considered options issued under an "employee stock
purchase plan," as that term is defined in Section 423(b) of the Code.
2. DEFINITIONS.
(a) "Act" means the United Kingdom Income and Corporation Taxes Act
of 1988 and any modification, consolidation, re-enactment or extension of
such Act.
(b) "Admission" means the admission by the Council of the London
Stock Exchange Limited of all or any of the ordinary share capital of the
Company to the Official List of the London Stock Exchange Limited first
becoming effective.
(c) "ADR" means an American Depositary Receipt, the evidentiary
document for an underlying holding of one or more ADSs.
(d) "ADS" means an American Depositary Share of the Company
reserving four (4) Ordinary Shares. The ADSs are evidenced by ADRs and are
approved for quotation on the Nasdaq National Market under the symbol
"DIALY." Participants in the Plan will become holders of ADRs, with all the
rights of ADR holders. For purposes of the Code and the current double
taxation convention between the United States and the United Kingdom,
beneficial owners of ADSs who are U.S. persons will be treated as the
beneficial owners of the underlying Ordinary Shares represented by the ADSs
evidenced by the ADRs.
(e) "Affiliate" means any parent corporation or subsidiary
corporation, whether now or hereafter existing, as those terms are defined
in Sections 424(e) and (f), respectively, of the Code.
(f) "Board" means the Board of Directors of the Company.
(g) "Code" means the United States Internal Revenue Code of 1986, as
amended.
(h) "Committee" means a Committee appointed by the Board in
accordance with subparagraph 3(c) of the Plan.
(i) "Companies Act" means the United Kingdom Companies Act of 1985
and any modifications, consolidation, re-enactment or extension of such
Act.
(j) "Company" means the company registered in England with
registered number 1890236 and currently known as The Dialog Corporation
plc.
(k) "Control" has the same meaning as in Section 840 of the Act.
(l) "Date of Grant" means the date of the Board resolution granting
the Right.
(m) "Director" means a member of the Board.
(n) "Eligible Employee" means an Employee who meets the requirements
set forth in the Offering for eligibility to participate in the Offering.
(o) "Employee" means any person, including Officers and Directors,
employed by an Affiliate of the Company. Neither service as a Director nor
payment of a director's fee by the Affiliate shall be sufficient to
constitute "employment" by the Affiliate.
(p) "Employee Stock Purchase Plan" means a plan that grants rights
intended to be options issued under an "employee stock purchase plan," as
that term is defined in Section 423(b) of the Code.
(q) "Exchange Act" means the United States Securities Exchange Act
of 1934, as amended.
(r) "Fair Market Value" means the value of a security, as determined
in good faith by the Board. If the security is listed on any established
stock exchange or traded on the Nasdaq National Market or the Nasdaq
SmallCap Market, the Fair Market Value of the security shall be the closing
sales price (rounded up where necessary to the nearest whole penny or cent)
for such security (or the closing bid, if no sales were reported) as quoted
on such exchange or market (or the exchange or market with the greatest
volume of trading in the relevant security of the Company) on the trading
day prior to the Date of Grant, as reported in The Wall Street Journal or
such other source as the Board deems reliable.
(s) "Non-Employee Director" means a Director who either (i) is not a
current Employee or Officer of the Company or its parent or subsidiary,
does not receive compensation (directly or indirectly) from the Company or
its parent or subsidiary for services rendered as a consultant or in any
capacity other than as a Director (except for an amount as to which
disclosure would not be required under Item 404(a) of Regulation S-K
promulgated pursuant to the Securities Act ("Regulation S-K")), does not
possess an interest in any other transaction as to which disclosure would
be required under Item 404(a) of Regulation S-K, and is not engaged in a
business relationship as to which disclosure would be required under Item
404(b) of Regulation S-K; or (ii) is otherwise considered a "non-employee
director" for purposes of Rule 16b-3.
(t) "Outside Director" means a Director who either (i) is not a
current employee of the Company or an "affiliated corporation" (within the
meaning of the Treasury regulations promulgated under Section 162(m) of the
Code), is not a former employee of the Company or an "affiliated
corporation" receiving compensation for prior services (other than benefits
under a tax qualified pension plan), was not an officer of the Company or
an "affiliated corporation" at any time, and is not currently receiving
direct or indirect remuneration from the Company or an "affiliated
corporation" for services in any capacity other than as a Director, or (ii)
is otherwise considered an "outside director" for purposes of Section
162(m) of the Code.
(u) "Ordinary Share" means a fully paid ordinary share of one pence
(1p) in the capital of the Company. The Company's Ordinary Shares currently
are traded on the London Stock Exchange Limited in London, England.
(v) "Participant" means an Eligible Employee to whom a Right is
granted pursuant to the Plan or, if applicable, such other person who holds
an outstanding Right granted under the Plan.
(w) "Plan" means this 1998 Employee Stock Purchase Plan.
(x) "Right" means a stock option granted pursuant to the Plan.
(y) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3 as in effect with respect to the Company at the
time discretion is being exercised regarding the Plan.
(z) "Securities Act" means the United States Securities Act of 1933,
as amended.
(aa) "Share" means an ADS of the Company, as evidenced by an ADR of
the Company.
(bb) "Subsidiary" means a company which is both under the Control of
the Company and which is a subsidiary of the Company within the meaning of
Section 736 of the Companies Act.
3. ADMINISTRATION.
(a) The Board shall administer the Plan unless and until the Board
delegates administration to a Committee, as provided in subparagraph 3(c).
Whether or not the Board has delegated administration, the Board shall have
the final power to determine all questions of policy and expediency that
may arise in the administration of the Plan.
(b) The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:
(i) To determine when and how Rights to purchase Shares shall be
granted and the provisions of each offering of such Rights (which need not
be identical).
(ii) To designate from time to time which Affiliates of the
Company shall be eligible to participate in the Plan.
(iii) To construe and interpret the Plan and Rights granted
under it, and to establish, amend and revoke rules and regulations for its
administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan, in a manner and to the
extent it shall deem necessary or expedient to make the Plan fully
effective.
(iv) To amend the Plan as provided in paragraph 14.
(v) Generally, to exercise such powers and to perform such acts
as the Board deems necessary or expedient to promote the best interests of
the Company and its Affiliates and to carry out the intent that the Plan be
treated as an Employee Stock Purchase Plan.
(c) The Board may delegate administration of the Plan to a Committee
of the Board composed of two (2) or more members, all of the members of
which Committee may be, in the discretion of the Board, Non-Employee
Directors and/or Outside Directors. If administration is delegated to a
Committee, the Committee shall have, in connection with the administration
of the Plan, the powers theretofore possessed by the Board, including the
power to delegate to a subcommittee of two (2) or more Outside Directors
any of the administrative powers the Committee is authorized to exercise
(and references in this Plan to the Board shall thereafter be to the
Committee or such a subcommittee), subject, however, to such resolutions,
not inconsistent with the provisions of the Plan, as may be adopted from
time to time by the Board. The Board may abolish the Committee at any time
and revest in the Board the administration of the Plan.
4. SHARES SUBJECT TO THE PLAN.
(a) Subject to the provisions of paragraph 13 relating to
adjustments upon changes in securities, the Shares that may be sold
pursuant to Rights granted under the Plan shall not exceed in the aggregate
two million two hundred fifty thousand (2,250,000) Shares, representing
nine million (9,000,000) Ordinary Shares. If any Right granted under the
Plan shall for any reason terminate without having been exercised, the
Shares not purchased under such Right shall again become available for the
Plan.
(b) The Shares subject to the Plan may be unissued Shares or Shares
that have been bought on the open market at prevailing market prices or
otherwise.
(c) No Right shall be granted if, as a result, the aggregate number
of Ordinary Shares represented by the number of Shares issued or issuable
pursuant to grants made under this Plan plus the aggregate number of
Ordinary Shares issued or issuable pursuant to grants made under the
Company's 1994 Savings Related Share Option Scheme, the Company's 1994
Unapproved Executive Share Option Scheme and the Company's 1994 Executive
Share Option Scheme and pursuant to grants or appropriations made during
the ten (10) years preceding such Date of Grant under all other share
schemes (including non-approved, savings-related and profit sharing
schemes) established after Admission by the Company would exceed ten
percent (10%) of the issued share capital of the Company on that Date of
Grant. For the avoidance of doubt, Shares and Ordinary Shares which shall
have been the subject of options or rights granted under any other share
scheme or plan which have lapsed shall not be taken into account for the
purposes of this subparagraph 4(c).
5. GRANT OF RIGHTS; OFFERING.
(a) The Board or the Committee may from time to time grant or
provide for the grant of Rights to purchase Shares of the Company under the
Plan to Eligible Employees (an "Offering") on a date or dates (the
"Offering Date(s)") selected by the Board or the Committee. Each Offering
shall be in such form and shall contain such terms and conditions as the
Board or the Committee shall deem appropriate, which shall comply with the
requirements of Section 423(b)(5) of the Code that all Employees granted
Rights to purchase Shares under the Plan shall have the same rights and
privileges. The terms and conditions of an Offering shall be incorporated
by reference into the Plan and treated as part of the Plan. The provisions
of separate Offerings need not be identical, but each Offering shall
include (through incorporation of the provisions of this Plan by reference
in the document comprising the Offering or otherwise) the period during
which the Offering shall be effective, which period shall not exceed
twenty-seven (27) months beginning with the Offering Date, and the
substance of the provisions contained in paragraphs 6 through 9, inclusive.
(b) If an Employee has more than one Right outstanding under the
Plan, unless he or she otherwise indicates in agreements or notices
delivered hereunder: (i) each agreement or notice delivered by that
Employee will be deemed to apply to all of his or her Rights under the
Plan, and (ii) an earlier-granted Right (or a Right with a lower exercise
price, if two Rights have identical grant dates) will be exercised to the
fullest possible extent before a later-granted Right (or a Right with a
higher exercise price if two Rights have identical grant dates) will be
exercised.
6. ELIGIBILITY.
(a) Rights may be granted only to Employees. Except as provided in
subparagraph 6(b), an Employee shall not be eligible to be granted Rights
under the Plan unless, on the Offering Date, such Employee has been in the
employ of the Affiliate for such continuous period preceding such grant as
the Board or the Committee may require, but in no event shall the required
period of continuous employment be equal to or greater than two (2) years.
(b) The Board or the Committee may provide that each person who,
during the course of an Offering, first becomes an Eligible Employee will,
on a date or dates specified in the Offering which coincides with the day
on which such person becomes an Eligible Employee or which occurs
thereafter, receive a Right under that Offering, which Right shall
thereafter be deemed to be a part of that Offering. Such Right shall have
the same characteristics as any Rights originally granted under that
Offering, as described herein, except that:
(i) the date on which such Right is granted shall be the
"Offering Date" of such Right for all purposes, including determination of
the exercise price of such Right;
(ii) the period of the Offering with respect to such Right shall
begin on its Offering Date and end coincident with the end of such
Offering; and
(iii) the Board or the Committee may provide that if such person
first becomes an Eligible Employee within a specified period of time before
the end of the Offering, he or she will not receive any Right under that
Offering.
(c) No Employee shall be eligible for the grant of any Rights under
the Plan if, immediately after any such Rights are granted, such Employee
owns stock possessing five percent (5%) or more of the total combined
voting power or value of all classes of stock of the Company or of any
Affiliate. For purposes of this subparagraph 6(c), the rules of Section
424(d) of the Code shall apply in determining the stock ownership of any
Employee, and stock which such Employee may purchase under all outstanding
rights and options shall be treated as stock owned by such Employee.
(d) An Eligible Employee may be granted Rights under the Plan only
if such Rights, together with any other Rights granted under all Employee
Stock Purchase Plans of the Company and any Affiliates, as specified by
Section 423(b)(8) of the Code, do not permit such Eligible Employee's
rights to purchase Shares of the Company or any Affiliate to accrue at a
rate which exceeds twenty five thousand dollars ($25,000) of the fair
market value of such Shares (determined at the time such Rights are
granted) for each calendar year in which such Rights are outstanding at any
time.
(e) The Board may provide in an Offering that Employees who are
highly compensated Employees within the meaning of Section 423(b)(4)(D) of
the Code shall not be eligible to participate.
7. RIGHTS; PURCHASE PRICE.
(a) On each Offering Date, each Participant, pursuant to an Offering
made under the Plan, shall be granted the Right to purchase up to the
number of Shares purchasable either:
(i) with a percentage designated by the Board or the Committee
not exceeding fifteen percent (15%) of such Employee's Earnings (as defined
by the Board or the Committee in each Offering) during the period which
begins on the Offering Date (or such later date as the Board or the
Committee determines for a particular Offering) and ends on the date stated
in the Offering, which date shall be no later than the end of the Offering;
or
(ii) with a maximum dollar amount designated by the Board or the
Committee that, as the Board or the Committee determines for a particular
Offering, (1) shall be withheld, in whole or in part, from such Employee's
Earnings (as defined by the Board or the Committee in each Offering) during
the period which begins on the Offering Date (or such later date as the
Board or the Committee determines for a particular Offering) and ends on
the date stated in the Offering, which date shall be no later than the end
of the Offering and/or (2) shall be contributed, in whole or in part, by
such Employee during such period.
(b) The Board or the Committee shall establish one or more dates
during an Offering (the "Purchase Date(s)") on which Rights granted under
the Plan shall be exercised and purchases of Shares carried out in
accordance with such Offering.
(c) In connection with each Offering made under the Plan, the Board
or the Committee may specify a maximum amount of Shares that may be
purchased by any Participant as well as a maximum aggregate amount of
Shares that may be purchased by all Participants pursuant to such Offering.
In addition, in connection with each Offering that contains more than one
Purchase Date, the Board or the Committee may specify a maximum aggregate
amount of Shares which may be purchased by all Participants on any given
Purchase Date under the Offering. If the aggregate purchase of Shares upon
exercise of Rights granted under the Offering would exceed any such maximum
aggregate amount, the Board or the Committee shall make a pro rata
allocation of the Shares available in as nearly a uniform manner as shall
be practicable and as it shall deem to be equitable.
(d) The purchase price of Shares acquired pursuant to Rights granted
under the Plan shall be not less than the lesser of:
(i) an amount equal to eighty-five percent (85%) of the fair
market value of the Shares on the Offering Date; or
(ii) an amount equal to eighty-five percent (85%) of the fair
market value of the Shares on the Purchase Date.
8. PARTICIPATION; WITHDRAWAL; TERMINATION.
(a) An Eligible Employee may become a Participant in the Plan
pursuant to an Offering by delivering a participation agreement to the
Company within the time specified in the Offering, in such form as the
Company provides. Each such agreement shall authorize payroll deductions of
up to the maximum percentage specified by the Board or the Committee of
such Employee's Earnings during the Offering (as defined by the Board or
Committee in each Offering). The payroll deductions made for each
Participant shall be credited to a bookkeeping account for such Participant
under the Plan and either may be deposited with the general funds of the
Company or may be deposited in a separate account in the name of, and for
the benefit of, such Participant with a financial institution designated by
the Company. If the payroll deductions are deposited with a financial
institution, the payment of interest, if any, on such funds shall be made
by the financial institution directly to the Participant's separate
account. To the extent provided in the Offering, a Participant may reduce
(including to zero) or increase such payroll deductions. To the extent
provided in the Offering, a Participant may begin such payroll deductions
after the beginning of the Offering. A Participant may make additional
payments into his or her account only if specifically provided for in the
Offering and only if the Participant has not already had the maximum
permitted amount withheld during the Offering.
(b) At any time during an Offering, a Participant may terminate his
or her payroll deductions under the Plan and withdraw from the Offering by
delivering to the Company a notice of withdrawal in such form as the
Company provides. Such withdrawal may be elected at any time prior to the
end of the Offering except as provided by the Board or the Committee in the
Offering. Upon such withdrawal from the Offering by a Participant, the
Company shall distribute to such Participant all of his or her accumulated
payroll deductions (reduced to the extent, if any, such deductions have
been used to acquire Shares for the Participant) under the Offering, with
or without interest as specified in the Offering, and such Participant's
interest in that Offering shall be automatically terminated. A
Participant's withdrawal from an Offering will have no effect upon such
Participant's eligibility to participate in any other Offerings under the
Plan but such Participant will be required to deliver a new participation
agreement in order to participate in subsequent Offerings under the Plan.
(c) Rights granted pursuant to any Offering under the Plan shall
terminate immediately upon cessation of any participating Employee's
employment with the designated Affiliate for any reason (subject to any
post-employment participation period required by law) or other lack of
eligibility. The Company shall distribute to such terminated Employee all
of his or her accumulated payroll deductions (reduced to the extent, if
any, such deductions have been used to acquire Shares for the terminated
Employee) under the Offering, with or without interest as specified in the
Offering. If the accumulated payroll deductions have been deposited with
the Company's general funds, then the distribution shall be made from the
general funds of the Company, without interest. If the accumulated payroll
deductions have been deposited in a separate account with a financial
institution as provided in subparagraph 8(a), then the distribution shall
be made from the separate account, either with or without accumulated
interest as specified in the Offering.
(d) Rights granted under the Plan shall not be transferable by a
Participant otherwise than by will or the laws of descent and distribution,
or by a beneficiary designation as provided in paragraph 15 and, otherwise
during his or her lifetime, shall be exercisable only by the person to whom
such Rights are granted.
9. EXERCISE.
(a) On each Purchase Date specified therefor in the relevant
Offering, each Participant's accumulated payroll deductions and other
additional payments specifically provided for in the Offering (without any
increase for interest) will be applied to the purchase of Shares up to the
maximum amount of Shares permitted pursuant to the terms of the Plan and
the applicable Offering, at the purchase price specified in the Offering.
No fractional Shares shall be issued upon the exercise of Rights granted
under the Plan unless specifically provided for in the Offering.
(b) Unless otherwise specifically provided in the Offering, the
amount, if any, of accumulated payroll deductions remaining in any
Participant's account after the purchase of Shares on a Purchase Date shall
be distributed in full to the Participant after such Purchase Date. If the
accumulated payroll deductions have been deposited with the Company's
general funds, then the distribution shall be made from the general funds
of the Company, without interest. If the accumulated payroll deductions
have been deposited in a separate account with a financial institution as
provided in subparagraph 8(a), then the distribution shall be made from the
separate account, either with or without accumulated interest as specified
in the Offering.
(c) No Rights granted under the Plan may be exercised to any extent
unless the Shares to be issued upon such exercise under the Plan (including
Rights granted thereunder) are covered by an effective registration
statement pursuant to the Securities Act and the Plan is in material
compliance with all applicable state, foreign and other securities and
other laws applicable to the Plan. If on a Purchase Date in any Offering
hereunder the Plan is not so registered or in such compliance, no Rights
granted under the Plan or any Offering shall be exercised on such Purchase
Date, and the Purchase Date shall be delayed until the Plan is subject to
such an effective registration statement and such compliance, except that
the Purchase Date shall not be delayed more than twelve (12) months and the
Purchase Date shall in no event be more than twenty-seven (27) months from
the Offering Date. If, on the Purchase Date of any Offering hereunder, as
delayed to the maximum extent permissible, the Plan is not registered and
in such compliance, no Rights granted under the Plan or any Offering shall
be exercised and all payroll deductions accumulated during the Offering
(reduced to the extent, if any, such deductions have been used to acquire
Shares) shall be distributed to the Participants, with or without interest
as specified in the Offering. If the accumulated payroll deductions have
been deposited with the Company's general funds, then the distribution
shall be made from the general funds of the Company, without interest. If
the accumulated payroll deductions have been deposited in a separate
account with a financial institution as provided in subparagraph 8(a), then
the distribution shall be made from the separate account, either with or
without accumulated interest as specified in the Offering.
10. COVENANTS OF THE COMPANY.
(a) During the terms of the Rights granted under the Plan, the
Company shall ensure that the amount of Shares required to satisfy such
Rights are available.
(b) The Company shall seek to obtain from each federal, state,
foreign or other regulatory commission or agency having jurisdiction over
the Plan such authority as may be required to issue and sell Shares upon
exercise of the Rights granted under the Plan. If, after reasonable
efforts, the Company is unable to obtain from any such regulatory
commission or agency the authority which counsel for the Company deems
necessary for the lawful issuance and sale of Shares under the Plan, the
Company shall be relieved from any liability for failure to issue and sell
Shares upon exercise of such Rights unless and until such authority is
obtained.
11. USE OF PROCEEDS FROM SHARES.
Proceeds from the sale of Shares pursuant to Rights granted under
the Plan shall constitute general funds of the Company.
12. RIGHTS AS A SHAREHOLDER.
A Participant shall not be deemed to be the holder of, or to have
any of the rights of a holder with respect to, Shares subject to Rights
granted under the Plan unless and until the Participant's Shares acquired
upon exercise of Rights under the Plan are recorded in the books of the
Company.
13. ADJUSTMENTS UPON CHANGES IN SECURITIES.
(a) If any change is made in the Shares subject to the Plan, or
subject to any Right, without the receipt of consideration by the Company
(through merger, consolidation, reorganization, recapitalization,
reincorporation, stock dividend, dividend in property other than cash,
stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or other transaction not involving
the receipt of consideration by the Company), the Plan will be
appropriately adjusted in the class(es) and maximum number of Shares
subject to the Plan pursuant to subparagraph 4(a), and the outstanding
Rights will be appropriately adjusted in the class(es), number of Shares
and purchase limits of such outstanding Rights. Such adjustments shall be
made by the Board, the determination of which shall be final, binding and
conclusive. (The conversion of any convertible securities of the Company
shall not be treated as a transaction that does not involve the receipt of
consideration by the Company.)
(b) In the event of: (i) a dissolution, liquidation, or sale of all
or substantially all of the assets of the Company; (ii) a merger or
consolidation in which the Company is not the surviving corporation; or
(iii) a reverse merger in which the Company is the surviving corporation
but the Ordinary Shares outstanding immediately preceding the merger are
converted by virtue of the merger into other property, whether in the form
of securities, cash or otherwise, then: (1) any surviving or acquiring
corporation shall assume Rights outstanding under the Plan or shall
substitute similar rights (including a right to acquire the same
consideration paid to Shareholders in the transaction described in this
subparagraph 13(b)) for those outstanding under the Plan, or (2) in the
event any surviving or acquiring corporation refuses to assume such Rights
or to substitute similar rights for those outstanding under the Plan, then,
as determined by the Board in its sole discretion such Rights may continue
in full force and effect or the Participants' accumulated payroll
deductions (exclusive of any accumulated interest which cannot be applied
toward the purchase of Shares under the terms of the Offering) may be used
to purchase Shares immediately prior to the transaction described above
under the ongoing Offering and the Participants' Rights under the ongoing
Offering thereafter terminated.
14. AMENDMENT OF THE PLAN.
(a) The Board at any time, and from time to time, may amend the
Plan. However, except as provided in paragraph 13 relating to adjustments
upon changes in securities and except as to minor amendments to benefit the
administration of the Plan, to take account of a change in legislation or
to obtain or maintain favorable tax, exchange control or regulatory
treatment for Participants or the Company or any Subsidiary, no amendment
shall be effective unless approved by the shareholders of the Company to
the extent shareholder approval is necessary for the Plan to satisfy the
requirements of Section 423 of the Code, Rule 16b-3 under the Exchange Act
and any London Stock Exchange, Nasdaq or other securities exchange listing
requirements. Currently under United States law, shareholder approval
within twelve (12) months before or after the adoption of the amendment is
required where the amendment will:
(i) Increase the amount of Shares reserved for Rights under the
Plan;
(ii) Modify the provisions as to eligibility for participation
in the Plan to the extent such modification requires shareholder approval
in order for the Plan to obtain employee stock purchase plan treatment
under Section 423 of the Code or to comply with the requirements of Rule
16b-3; or
(iii) Modify the Plan in any other way if such modification
requires shareholder approval in order for the Plan to obtain employee
stock purchase plan treatment under Section 423 of the Code or to comply
with the requirements of Rule 16b-3.
In addition, shareholder approval is required by the
regulations of the London Stock Exchange Limited for any amendment to the
advantage of Participants in respect to the following: eligibility to
participate in the Plan; limits on the amount of Shares which may be issued
pursuant to the Plan; the maximum entitlement of individual Participants
under the Plan; the adjustments of awards under the Plan on a variation of
share capital; and the restrictions on vesting and release of Rights except
as to minor amendments to benefit the administration of the Plan, to take
account of a change in legislation or to obtain or maintain favorable tax,
exchange control or regulatory treatment for Participants or the Company or
any Subsidiary.
It is expressly contemplated that the Board may amend the
Plan in any respect the Board deems necessary or advisable to provide
Employees with the maximum benefits provided or to be provided under the
provisions of the Code and the regulations promulgated thereunder relating
to Employee Stock Purchase Plans and/or to bring the Plan and/or Rights
granted under it into compliance therewith.
(b) Rights and obligations under any Rights granted before amendment
of the Plan shall not be impaired by any amendment of the Plan, except with
the consent of the person to whom such Rights were granted, or except as
necessary to comply with any laws or governmental regulations, or except as
necessary to ensure that the Plan and/or Rights granted under the Plan
comply with the requirements of Section 423 of the Code.
15. DESIGNATION OF BENEFICIARY.
(a) A Participant may file a written designation of a beneficiary
who is to receive any Shares and/or cash, if any, from the Participant's
account under the Plan in the event of such Participant's death subsequent
to the end of an Offering but prior to delivery to the Participant of such
Shares and cash. In addition, a Participant may file a written designation
of a beneficiary who is to receive any cash from the Participant's account
under the Plan in the event of such Participant's death during an Offering.
(b) The Participant may change such designation of beneficiary at
any time by written notice. In the event of the death of a Participant and
in the absence of a beneficiary validly designated under the Plan who is
living at the time of such Participant's death, the Company shall deliver
such Shares and/or cash to the executor or administrator of the estate of
the Participant, or if no such executor or administrator has been appointed
(to the knowledge of the Company), the Company, in its sole discretion, may
deliver such Shares and/or cash to the spouse or to any one or more
dependents or relatives of the Participant, or if no spouse, dependent or
relative is known to the Company, then to such other person as the Company
may designate.
16. TERMINATION OR SUSPENSION OF THE PLAN.
(a) The Board in its discretion may suspend or terminate the Plan at
any time. Unless sooner terminated, the Plan shall terminate on May 28,
2008, which is within ten (10) years from the date the Plan was approved by
the shareholders of the Company, or if sooner, at the time that all of the
Shares subject to the Plan's reserve, as increased and/or adjusted from
time to time, have been issued under the terms of the Plan. No Rights may
be granted under the Plan while the Plan is suspended or after it is
terminated.
(b) Rights and obligations under any Rights granted while the Plan
is in effect shall not be impaired by suspension or termination of the
Plan, except as expressly provided in the Plan or with the consent of the
person to whom such Rights were granted, or except as necessary to comply
with any laws or governmental regulation, or except as necessary to ensure
that the Plan and/or Rights granted under the Plan comply with the
requirements of Section 423 of the Code.
17. EFFECTIVE DATE OF PLAN.
The Plan shall become effective as determined by the Board, but no
Rights granted under the Plan shall be exercised unless and until the Plan
has been approved by the shareholders of the Company within twelve (12)
months before or after the date the Plan is adopted by the Board or the
Committee, which date may be prior to the effective date set by the Board.