FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
October 2, 2002
The Royal Bank of Scotland Group plc
42 St Andrew Square
Edinburgh EH2 2YE
Scotland
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F.
Form 20-F x Form 40-F
---------------- --------------
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.
Yes No x
--- ---
This Report on Form 6-K shall be deemed incorporated by reference into the
Registration Statement on Form F-3 (No. 333-73950) filed with the Commission on
November 23, 2001 and to be a part thereof from the date on which it was filed,
to the extent not superseded by documents or reports subsequently filed or
furnished.
THE ROYAL BANK OF SCOTLAND plc
TABLE OF CONTENTS
Item
----
1 Memorandum and Articles of Association of the Registrant,
as amended.
2 Form of 5% Subordinated Notes due October 1, 2014.
3 Indenture dated September 30, 2002 between the Registrant
and the Bank of New York, as Trustee.
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly
authorised.
October 2, 2002
THE ROYAL BANK OF SCOTLAND GROUP plc
(Registrant)
By: /s/ H Campbell
--------------------
Name: H Campbell
Title: Head of Group Secretariat
ITEM 1
THE COMPANIES ACTS 1948 to 1983
---------------------------------------
A PUBLIC COMPANY LIMITED BY SHARES
---------------------------------------
MEMORANDUM OF ASSOCIATION
of
THE ROYAL BANK OF SCOTLAND GROUP
public limited company
(amended by Resolution of the Directors passed on 28th January, 1982, by
Special Resolutions passed on 12th January, 1984 and 14th January, 1993)
---------------------------------------
1. The name of the Company is "The Royal Bank of Scotland Group public
limited company".*
2. The Company is to be a public company.
3. The registered office of the Company will be situate in Scotland.
**4. The objects for which the Company is established are:-
(1) To carry on in any part of the world the business of banking in all
or any of its aspects, conformably with the laws relating to banking
whether passed before or after the date of adoption of this clause in
any of the territories in which the powers hereby conferred are
exercised, and generally in carrying on its said business and as
ancillary thereto to do all acts and things which may seem desirable
to be done in the conduct of the businesses of banking or dealing in
money and securities for money or which may conduce or be calculated
directly or indirectly to facilitate or render profitable the
prosecution or such businesses or may be calculated to promote the
profitable employment or use of the assets of the Company; and, in
particular, and without prejudice to such generality:-
(i) to issue notes of all denominations or amounts payable to bearer
subject to compliance with any legal requirements from time to
time applicable thereto and to any special liability which may
attach by law thereto and to perform the obligations thereby
undertaken;
(ii) to receive, collect, obtain, and retain money on deposit,
current or savings account or on loan or otherwise, and whether
at interest or otherwise, and to obtain the use and control of
money and securities and to transmit the same and to employ and
use the same in any manner thought fit;
*Note - The Company was incorporated under the name "National and Commercial
Banking Group Limited" and its name was changed to "The Royal Bank of Scotland
Group Limited" by Special Resolution passed on 4th July, 1979. By Resolution of
the Directors passed on 28th January, 1982, pursuant to section 8 of the
Companies Act, 1980, the name of the Company was changed to "The Royal Bank of
Scotland Group public limited company".
**Note - This clause was substituted by Special Resolution passed on 12th
January, 1984.
(iii) to advance, lend, place or deposit money, securities or any
other property of every kind whether without security or with
security of any nature or kind whatsoever, heritable or
moveable, real or personal or otherwise, and generally to grant
credit or credit facilities of any nature and to make or
negotiate loans and advances, whether to be made by the Company,
by the Company and others or by others, to any company or
person, all upon such terms as to interest or otherwise as may
be thought fit;
(iv) to draw, accept, endorse, grant, discount, acquire, tender for,
subscribe, buy, sell, issue, negotiate, transfer, hold, invest
or deal in and borrow against, secure, retire, pay or otherwise
dispose of or deal with cheques, orders, drafts, bills of
exchange, promissory notes, and other instruments, securities
and obligations of every kind (whether or not transferable or
negotiable);
(v) to grant, issue, negotiate, honour, retire, pay and meet
obligations arising from bankers' cards, cheque, guarantee and
cash cards, credit cards, letters of credit, circular notes,
travel and travellers cheques, drafts and other instruments, and
all other cheques, instruments, cards or devices (whether
evidenced or recorded by visible, electronic or other means)
used for the payment of debts, discharge of obligations or the
transfer of funds, certificates and securities, whether to
bearer or otherwise, and whether providing for the payment of
money or the delivery of bullion or otherwise; to make the same
or any of them assignable absolutely or otherwise; and generally
to transact business in relation to all kinds of payment or
transfer systems or methods used by bankers or others for the
transfer of funds and settlement of debts or transactions
(whether in securities or otherwise);
(vi) to buy, hold, sell and deal in foreign exchange, currency,
bullion, specie, commodities and futures of any description and
precious and other metals;
(vii) to receive money, valuables, securities, deeds, and any other
items or documents on deposit or for safe custody or otherwise,
and with or without undertaking liability for any loss thereof
or injury thereto and with or without remuneration.
(2) To carry on the business of a holding company in all its aspects and
to co-ordinate, finance, assist, subsidise and manage all or any part
of the businesses and operations of any and all companies in which
the Company is interested whether as a shareholder or otherwise and
whether directly or indirectly.
(3) To finance or assist in financing the purchase, improvement,
retention, hire, lease or sale of any heritable or moveable, real or
personal property of all and every kind or description by way of hire
purchase, instalment finance, rental finance, deferred payment,
factoring or leasing or otherwise, and to institute, enter into,
carry on, subsidise, finance or assist in subsidising or financing
the purchase, improvement, retention, hire, lease, sale or
maintenance of any heritable /
2
heritable or moveable, real or personal property of all and every
kind and description upon any terms whatsoever, to acquire and
discount agreements or any rights thereunder, by way of hire
purchase, instalment finance, rental finance, deferred payment or
otherwise, whether proprietary or contractual, and to acquire by
assignation, charge, assignment, or otherwise debts due and owing to
any company or person and to collect such debts.
(4) To subscribe, enter into or tender for, purchase or otherwise
acquire, and to hold, dispose of and deal with the shares, stock,
securities and evidence of indebtedness or of the right to
participate in profits or assets or other similar documents issued by
any company or person or any other kind of heritable or moveable,
real or personal property including (but without limitation) futures
contracts or arrangements of any nature and interest exchange
arrangements and any options or other rights in respect of any
securities or any other kind of heritable or moveable, real or
personal property as aforesaid and generally both in relation to
securities and in relation to any other kind of heritable or
moveable, real or personal property to carry on the business of a
dealing company in all its aspects; and to promote, effect, insure,
guarantee, underwrite, secure the subscription or placing of,
subscribe or tender for or procure subscription of (whether
conditionally or absolutely), participate in, manage (whether on
commission or not) carry out or perform any other function in
relation to any issue (public or private) of the securities of any
company or person, and any options or rights in respect thereof and
to lend money for the purposes of or to facilitate any such issue.
(5) To enter into any guarantee, bond, recognisance or contract of
warranty or indemnity or suretyship of any nature whatsoever and
generally, whether with or without the Company receiving any
consideration, to guarantee or to grant any indemnity in respect of
or to secure or support or otherwise be responsible or liable for
(whether by way of bond, guarantee or otherwise and with or without a
personal covenant and with or without a heritable security or other
fixed security or assignation in security or assignation or
assignment or other conveyance or mortgage or pledge of or charge
over or set-off against or lien upon all or any part of the
undertaking and assets, present and future, and the uncalled capital
of the Company or in any other manner) the performance of any
contracts, obligations or commitments of any company or person
(including but without limitation any company which is for the time
being a subsidiary or a holding company of the Company or another
subsidiary of a holding company of the Company or which is in any way
whatsoever allied to or associated with the Company or with any such
holding company or subsidiary or in which the Company or any such
holding company, subsidiary or allied or associated company is
interested whether as a shareholder or otherwise and whether directly
or indirectly) and in particular (but without prejudice to the
generality of the foregoing) by all or any of such methods or in any
other manner to guarantee, provide security for, support and become
responsible or liable for or in respect of the validity, reliability
or authenticity of all kinds of titles, securities, instruments,
deeds and documents and the payment of capital, principal, premiums,
dividends, interest and other moneys and the performance of any
obligations secured by or payable or performable under or in respect
of any securities, to undertake the insurance, counter-insurance and
reinsurance of all kinds of risks, to obtain and receive all kinds of
guarantees, /
3
guarantees, counter-guarantees, indemnities and counter-indemnities,
to take all other kinds of security whether by way of bond, personal
covenant, heritable or other fixed security, assignation in security,
assignment, mortgage, pledge, or charge or otherwise howsoever for or
in respect of the performance or implementation of any obligations of
any person or company and generally to carry on the business of a
guarantee and indemnity company in all its aspects.
(6) To undertake and carry on business as promoters, agents, financiers,
managers, traders, importers, exporters, concessionaires, jobbers,
brokers, including commodity and mortgage brokers and stockbrokers,
merchants, factors, mercantile agents, shipbrokers, underwriters,
warehousemen, surveyors, auctioneers, valuers, property consultants
and managers, land and estate agents, contractors, travel agents and
aircraft, ship, hovercraft, and road and rail transport owners,
hirers, charterers and operators; to undertake insurance and
reinsurance and generally carry on the business of insurance in all
its aspects; to act as agent, broker or underwriter for the placing
of life, marine, fire, accident, fidelity, travel and all other
classes of insurance; to act as agent or representative of owners or
other persons having or claiming to have, any interest in vessels,
aircraft, hovercraft, cargoes, freights, motor or railway vehicles or
other machinery or other general merchandise, and any other subjects
of insurance; and generally to undertake and carry on every kind of
professional, mercantile, property or agency business in all its
aspects and to become a subscriber to or member of or otherwise
associated with any exchange or similar organisation or trade or
other association.
(7) To act as and to undertake and execute the office and duties of
executor, administrator, trustee or custodian trustee, and to
undertake the duties and exercise the rights of a trust corporation
and to undertake and execute trusts of all kinds, whether private or
public, and whether inter vivos, contractual or mortis causa,
including religious, educational or charitable trusts, and generally
to carry on what is usually known as trustee and executor business,
and in particular and without prejudice to the foregoing generality
to undertake and execute the office of trustee or executor or
administrator of wills, estates or settlements, trustee of deeds or
documents securing debentures, debenture stock or other securities of
any company or person or of pension, superannuation, benevolent or
other funds or unit trusts, to establish, promote, continue and
manage unit trusts, investment trusts, mutual funds and corporations,
associations and partnerships of all types and to act as agent,
factor, attorney, tutor, curator, judicial factor, receiver,
liquidator, guardian, manager, member of committee or any other
office of trust or responsibility with or without remuneration; and
to make deposits, enter into recognisances and bonds of caution or
security and otherwise give security for the due execution, and
performance of the duties, of any of the said offices; with the power
to the Company to charge interest at such rates as the Company may
from time to time fix on all or any advances made or debts incurred
by the Company while acting in any of such capacities.
(8) /
4
(8) To accept, carry on, manage, sell, realise, transfer, dispose of and
deal with any business comprised or included in any trust, settlement
or estate of which the Company is trustee, executor, administrator,
agent, factor, attorney, tutor, curator, judicial factor, guardian,
liquidator, receiver, manager, member of committee or otherwise.
(9) To undertake on behalf of customers and others the investment,
holding and management, realisation and re-investment of moneys,
securities, investments and property of every kind upon such terms as
may be thought desirable, to provide investment management services,
to accept and hold either in the name of the Company or in any of its
subsidiaries, or in any other manner moneys, securities, investments
and property of any description paid, transferred, assigned or
conveyed to or vested in the Company for management by it.
(10) To provide management, advisory, consultancy, secretarial,
accountancy, statistical, legal and any technical, executive,
supervisory or business services of any kind whatsoever for or in
relation to any company, person, business or property of any
description whatsoever.
(11) To undertake the office of treasurer, factor, registrar, director,
secretary and transfer agent and to keep for any company or person
any register relating to any stocks, funds, shares, or securities,
and to undertake any duties in relation to the registration of
transfers, the issue of certificates or otherwise.
(12) To create and issue any securities for any purpose including (but
without limitation) by way of security or indemnity for or in respect
of or by way of satisfaction of any liability whether of the Company
or of any other company or person.
(13) To carry on the business of acquiring, selling, installing,
operating, leasing, renting and providing data processing, storage
and retrieval equipment and systems, computers, programs and other
software, bureaux services and communication and information storage
and retrieval systems of every kind.
(14) To apply for and take out, purchase or otherwise acquire any trade
and service marks and names, designs, patents, patent rights,
inventions, secret processes, copyrights, concessions, licences,
grants or other exclusive or non-exclusive rights of any kind and to
develop and turn to account and deal with the same in such manner as
may be thought fit and to make experiments and tests and to carry on
all kinds of research and development work.
(15) To seek for and secure and to utilise and develop any openings for
the employment of capital and if thought fit to engage and employ
specialists to investigate, explore and examine, whether specifically
or generally, the prospects, character, situation, conditions and
circumstances of any businesses, undertakings and concerns and any
concessions, rights, properties or assets of any nature whatsoever.
(16) To establish and maintain branches, agencies and representative or
other offices in any part of the world and to act as agents, and to
act for and represent, or employ /
5
employ as agents, any company or person resident in the United
Kingdom or elsewhere.
(17) To procure the Company to be registered, licensed or otherwise
legally recognised in or under the laws of any place outside
Scotland.
(18) To procure the quotation, registration or listing of securities of
the Company or securities derived from or related to securities of
the Company on any stock exchange or other market for securities in
any part of the world.
(19) To take or concur in any steps or proceedings (including the
undertaking of any obligation, monetary or otherwise) calculated to
uphold or support the credit of the Company or any business with
which it is associated directly or indirectly or to obtain, maintain,
restore or justify public confidence, or to avert or minimise damage
directly or indirectly affecting or likely to affect the business of
the Company or any such other business as aforesaid.
(20) To borrow or raise money in any manner and on any terms whatsoever
including (but without limitation) by the issue of securities, and to
secure the repayment of any money borrowed, raised or owing or the
performance of any obligation or guarantee by granting floating
charges, heritable or other fixed securities, assignations in
security, assignations or other conveyances or assignments or by
mortgage or pledge of or charge over or lien upon, the whole or any
part of the Company's property or assets (present and future) and any
uncalled capital of the Company.
(21) To purchase or otherwise acquire or undertake the whole or any part
of, or any interest in, the business, property, assets and
liabilities of any company or person carrying on or interested in any
business which the Company is empowered to carry on or possessed of
property or assets suitable for the purposes of the Company which the
Company is empowered to hold or deal in or with, and to continue or
participate in the continuance of any such whole, part or interest so
purchased, acquired or undertaken.
(22) To invest or lend or employ the funds of the Company in or upon such
investments, securities, futures contracts or other arrangements and
all other kinds of property (whether heritable or moveable, real or
personal), rights or options or in such other manner as may be
thought fit, to hold, sell or otherwise deal with such investments,
securities, futures contracts, arrangements and other kinds of
property, rights or options as aforesaid and generally to carry on
the business of an investment company in all its aspects.
(23) To enter into such agreements and arrangements with bankers and
others as to the general principles to be applied and method or
procedure to be adopted in carrying out banking or other business in
any country or district, or for regulating any of the details of such
business, as may be proper and convenient.
(24) To enter into partnership or into any arrangement for sharing
profits, union of interests, co-operation, joint adventure,
reciprocal concession or otherwise with any company or person
carrying on or engaged in or about to carry on or engage in any
business or transaction capable of being conducted so as directly or
/
6
or indirectly to benefit the Company and to lend money to, guarantee
the contracts and obligations of, or otherwise assist any such
company or person and to take or otherwise acquire shares and
securities of any such company or person, and to sell, hold, re-issue
with or without guarantee or otherwise deal with the same.
(25) To amalgamate the Company with or to make arrangements for securing
reciprocity of interests between the Company and any other company or
person having objects similar to the objects of the Company or any of
them, and that by the issue or sale to such other company or person
of any of the securities of the Company or by purchase of all or any
of the securities or other interest in the business of any such other
company or person or by an arrangement of the nature of partnership
or by an exchange of such securities or interests or by the sale of
the whole or any part of the assets of the Company for the time being
or by the purchase or acquisition of the whole or any part of the
assets of such other company or person, and to exchange any of the
assets of the Company for the time being for any other assets which
the Company is entitled to hold; and to promote and facilitate any
arrangements by way of sale or otherwise of shares and securities of
the Company by the holders thereof having for its eventual object all
or any of these purposes.
(26) To acquire and carry on any business carried on by a subsidiary or a
holding company of the Company or another subsidiary of a holding
company of the Company.
(27) To promote or join in the promotion of any company whether or not
having objects similar (wholly or in part) to those of the Company
including (but without limitation) the promotion of any company for
the purpose of acquiring or taking over any part of the property and
assets and liabilities of the Company or any subsidiary of the
Company or of any other person or company.
(28) To purchase, take on lease, hire, take options over, exchange or
otherwise acquire and to hold, administer, sell, feu, excamb, lease,
grant options over, pledge, burden, charge, realise, invest, improve,
manage, build, construct, equip, work, develop, turn to account and
otherwise dispose of and deal with assets, moneys, lands, buildings,
estates, works, structures, facilities, rights, concessions,
licences, grants, patents, trade marks and other property, heritable
and moveable, real and personal of every kind and wherever situated,
and all or any part of the undertaking, properties, assets and rights
of the Company or any undertaking, properties, assets and rights in
which the Company may be interested with others.
(29) To subscribe, donate or guarantee money or provide sponsorship for
any international, national, charitable, benevolent, educational,
social, sporting, public, general or useful object or for any
exhibition or trade or other association or for any purpose which may
be considered likely directly or indirectly to further the interests
of the Company or of its members or of any business with which the
Company is associated directly or indirectly.
(30) /
7
(30) To establish and maintain, take over, contribute to or otherwise
subsidise or support any pension, superannuation, benevolent,
sickness, medical or life assurance fund, scheme or arrangement
(whether contributory or otherwise) for the benefit of, and to pay,
give or procure the payment or giving of donations, gratuities,
pensions, allowances, bonuses, emoluments or any other benefits to,
any individuals who are or were at any time Directors, officers,
employees, servants or agents of the Company or of any other company
which is or was at any time its holding company or which is or was at
any time a subsidiary of the Company or of any such holding company
or which is or was at any time in any way whatsoever allied to or
associated with the Company or with any such holding company or
subsidiary or in which the Company or any such holding company or
subsidiary or allied or associated company is or was at any time
interested whether as a shareholder or otherwise and whether directly
or indirectly or of any predecessor in business of the Company or of
any subsidiary of the Company or of any such other company and the
husbands, wives, widowers, widows, children, families, dependants and
personal representatives of any such individuals as aforesaid and any
other persons whose service or services have directly or indirectly
been of benefit to the Company or to any such other company or to any
such predecessor in business or who are considered to have any moral
claim on the Company or on any such other company or on any such
predecessor in business and to establish and maintain, take over,
contribute to or otherwise subsidise or support any companies,
institutions, associations, clubs, schools, buildings, housing
schemes, trusts or funds which may be considered likely to benefit
any such persons as aforesaid or to further the interests of the
Company or of any such other company or of any such predecessor in
business and make or provide for or procure the making of payments
for or towards insuring any such persons as aforesaid against risks
of all kinds.
(31) To establish, maintain, take over, operate, contribute to, subsidise
and support any scheme, arrangement, fund or trust under or pursuant
to which individuals who are or were at any time Directors, officers,
employees, servants or agents of the Company or of any other company
which is or was at any time its holding company or which is or was at
any time a subsidiary of the Company or of any such holding company
or which is or was at any time in any way whatsoever allied to or
associated with the Company or with any such holding company or
subsidiary or in which the Company or any such holding company or
subsidiary or allied or associated company is or was at any time
interested whether as a shareholder or otherwise howsoever and
whether directly or indirectly or of any predecessor in business of
the Company or of any such holding company or subsidiary or of any
such other company and the husbands, wives, widowers, widows,
children, families, dependants and personal representatives of any
such individuals as aforesaid may share or participate in the profits
of the Company or of any such holding company or subsidiary or of any
such other company or may in any other manner whatsoever acquire
rights or benefits which are referable to or dependent upon or
otherwise connected with the success or prosperity of the Company or
of any such holding company or subsidiary or of any such other
company or under or pursuant to which trustees may acquire shares in
or other securities of the Company or any other company to be held
for the benefit of such persons as aforesaid or any of them and
(without prejudice to the generality of the foregoing) to such extent
and in such /
8
such manner as shall be legally permissible to lend or otherwise
provide or procure or subsidise the lending or other provision of
money to or directly or indirectly for the benefit of any such
persons as aforesaid with a view to shares in or any other securities
of the Company or of any such holding company or subsidiary or of any
such other company being acquired or held by or directly or
indirectly for the benefit of any such persons as aforesaid.
(32) (i) To purchase and maintain insurance for or for the benefit of any
persons who are or were at any time Directors, officers or
employees of the Company, or of any other company which is its
holding company or in which the Company or such holding company
or any of the predecessors of the Company or of such holding
company has any interest, whether direct or indirect, or which
is in any way allied to or associated with the Company, or of
any subsidiary undertaking of or any other body, whether or not
incorporated ("body") owned by or in which an interest is owned
by the Company or any such other company, or who are or were at
any time trustees of any pension fund or employees' share scheme
in which employees of the company or any such company or
subsidiary undertaking or body are interested, including
(without prejudice to the generality of the foregoing) insurance
against any liability incurred by such persons in respect of any
act or omission in the actual or purported execution and/or
discharge of their duties and/or the exercise or purported
exercise of their powers and/or otherwise in relation to or in
connection with their duties, powers or offices in relation to
the Company or any such other company, subsidiary undertaking,
body, pension fund or employees' share scheme; and
(ii) to such extent as may be permitted by law otherwise to indemnify
or to exempt any such person against or from any such liability.
For the purposes of this paragraph (32) "subsidiary undertaking" and
"employees' share scheme" shall have the same meanings as in the
Companies Act 1989 and the Companies Act 1985 respectively.
(33) To take over, accept, acquire, carry on or procure the carrying on
of, the whole or any part of, or any interest in, any business or
undertaking in which any customers or debtors (contingent or
otherwise) of the Company or of any predecessor in business or
subsidiary of the Company may be engaged or interested or the
carrying on of which may be beneficial to the Company or any property
or assets which any such customer or debtor may be possessed of or
interested in, and to enter into and perform any obligations in
connection therewith.
(34) To distribute among members of the Company in specie whether by way
of dividend, bonus or otherwise any property of the Company or any
proceeds of sale or other disposal of any property or assets of the
Company, provided that no such distribution shall be made amounting
to a reduction of capital, except with the sanction, if any, for the
time being required by law.
(35) /
9
(35) To accept all charters, dispositions, leases, charges, securities,
conveyances, transfers, mortgages, assignations, assignments,
surrenders or other deeds or instruments affecting heritable or
moveable, real or personal property to be granted to the Company, and
to execute and subscribe all charters, dispositions, leases, charges,
securities, conveyances, transfers, mortgages, assignations,
assignments, surrenders or other deeds or instruments to be granted
by the Company.
(36) To enter into any arrangements with any Governments or authorities
international, supreme, municipal, local or otherwise and to obtain
from any such Government or authority any rights, privileges,
charters, contracts, licences, or concessions which it may seem
desirable to obtain and to carry out, exercise and comply therewith.
(37) To take, make, execute, enter into, commence, carry on, prosecute and
defend all actions, steps, contracts, agreements, negotiations, legal
and other proceedings, compromises, arrangements and schemes, and to
apply for, promote and obtain any Acts of Parliament, Orders in
Council, Provisional Orders, Statutory Instruments or other
legislation or any acts, enactments, decrees, licences, concessions,
orders or authorities of any Government or authority, international,
supreme, municipal, local or otherwise, which may seem desirable for
the purpose of extending or varying the objects or powers of the
Company, or altering its constitution, or better enabling the Company
to carry out its objects or otherwise advancing the Company's
interests or those of any of its subsidiaries or of any person or
company associated in business with the Company or with any of its
subsidiaries and to oppose any bills, instruments, orders,
proceedings or applications or other matters whatsoever which may
seem likely directly or indirectly to prejudice any such interests.
(38) To do all or any of such things in any part of the world as
principals, agents, nominees, attorneys, contractors, trustees or
otherwise and by or through agents, nominees, subsidiaries,
attorneys, contractors, trustees or otherwise and either alone or in
conjunction with others.
(39) To carry on any other business or activity and do anything of any
nature which may seem capable of being conveniently carried on or
done in connection or in conjunction with or as ancillary to the
above or by way of extension thereof, or likely directly or
indirectly to enhance the value of or render profitable or more
profitable all or any part of the Company's undertaking, property or
assets or any property in which the Company may be interested or to
utilise its know-how or expertise or to further any of its objects or
otherwise to advance the interests of the Company or of its members.
(40) To do all such other things as may be deemed incidental or conducive
to the attainment of the above objects or any of them.
And it is hereby declared that (i) "company" in this clause, except where
used in reference to this Company, shall include any Government or any
authority or body (whether statutory, international, supreme, local,
municipal, public or otherwise), association, partnership, syndicate or
other body of persons, whether incorporated or not incorporated, and
whether formed, incorporated, domiciled or resident in the United /
10
United Kingdom or elsewhere, (ii) "person" shall include any person acting
in any capacity whatsoever, (iii) "subsidiary" and "holding company" shall
be construed in accordance with Section 154 of the Companies Act, 1948 (or
any provision of any Act amending, extending or re-enacting the same),
(iv) "securities" shall include any fully, partly or nil paid or no par
value share, stock, unit, debenture, debenture or loan stock perpetual,
redeemable or otherwise, deposit receipt, certificate of title,
certificate of deposit, depositary receipt, bill, bond, note, warrant,
coupon, option, right to subscribe or convert, fund or similar right,
interest or obligation payable to bearer or otherwise, (v) references in
this clause (express or implied and howsoever worded) to money, debts,
payments, securities, loans, advances, credits, drafts, cheques,
instruments, devices, letters of credit, obligations, funds or
transactions of any kind shall be construed respectively as references to
money, debts, payments, securities, loans, advances, credits, drafts,
cheques, instruments, devices, letters of credit, obligations, funds or
transactions of any kind expressed or payable in sterling or in any other
currency or in any combination of currencies, (vi) "and" and "or" shall
mean "and/or" where the context so permits, (vii) "other" and "otherwise"
shall not be construed ejusdem generis where a wider construction is
possible, and (viii) the objects specified in the different paragraphs of
this clause shall not, except where the context expressly so requires, be
in any way limited or restricted by reference to or inference from the
terms of any other paragraph or the order in which the paragraphs occur or
by reference to the name of the Company, but may be carried out in as full
and ample a manner and shall be construed in as wide a sense as if each of
the said paragraphs defined the objects of a separate, distinct and
independent company.
5. The liability of the members is limited.
11
6. The share capital* of the Company is(pound)2 divided into eight Ordinary
Shares of 5s. each
*Note - The share capital of the Company was increased:-
(i) by Special Resolution passed on 2nd April, 1968 to (pound)6 by the
creation of two 11 per cent Cumulative Preference Shares of (pound)1
each and two 5 1/2 per cent Cumulative Preference Shares of (pound)1
each, and
(ii) by Ordinary Resolutions passed on 17th July, 1968 to (pound)30,000,000
by the creation of 116,399,992 additional Ordinary Shares of 5s each,
499,998 additional 11 per cent Cumulative Preference Shares of
(pound)1 each and 399,998 additional 5 1/2 per cent Cumulative
Preference Shares of (pound)1 each.
(iii) by Ordinary Resolution passed on 10th January, 1974 to
(pound)60,000,000 by the creation of 120,000,000 additional Ordinary
Shares of 25p each.
(iv) by Ordinary Resolution passed on 8th February, 1985 to
(pound)90,000,000 by the creation of 120,000,000 additional Ordinary
Shares of 25p each.
(v) by Special Resolution passed on 30th August, 1989 to
(pound)290,000,000 by the creation of 200,000,000 Non-cumulative
Sterling Preference Shares of (pound)1 each.
(vi) by Ordinary Resolution passed on 30th August, 1989 to
(pound)460,900,000 by the creation of 683,600,000 additional Ordinary
Shares of 25p each.
(vii) by Special Resolution passed on 30th August, 1989 by US$160,000 by the
creation of 16,000,000 Non-cumulative Dollar Preference Shares of
US$0.01 each.
(viii) by Special Resolution passed on 16th January, 1992 by US$160,000 by
the creation of 16,000,000 Category II Non-cumulative Dollar
Preference Shares of US$0.01 each.
(ix) by Special Resolution passed on 14th January, 1993 by US$200,000 by
the creation of 20,000,000 additional Category II Non-cumulative
Dollar Preference Shares of US$0.01 each.
(x) by Ordinary Resolution passed on 18th January, 1996 the creation of
15,000,000 additional Category II Non-cumulative Dollar Preference
Shares of US$0.01 each.
(xi) by Special Resolution passed on 16th January, 1997 the creation of
8,000,000 additional Category II Non-cumulative Dollar Preference
Shares of US$0.01 each.
(xii) by Ordinary Resolution passed on 16th January, 1997 the creation of
100,000,000 additional Non-cumulative Sterling Preference Shares of
(pound)1 each.
(xiii) by Ordinary Resolution passed on 15th January, 1998 the creation of
8,000,000 additional Category II Non-cumulative Dollar Preference
Shares of US$0.01 each.
(xiv) by Ordinary Resolution passed on 14th January, 1999 the creation of
30,000,000 additional Category II Non-cumulative Dollar Preference
Shares of US$0.01 each.
(xv) by Ordinary Resolution passed on 13th January, 2000 the creation of
43,000,000 additional Category II Non-cumulative Dollar Preference
Shares of US$0.01 each.
(xvi) by Special Resolutions passed on 13th January, 2000 the creation of
25,000,000 Non- cumulative Euro Preference Shares of (euro)0.01 each,
the creation of 82,500,000 additional Category II Non-cumulative
Dollar Preference Shares of US$0.01 each, the creation of 41,000,000
additional Non-cumulative Euro Preference Shares of (euro)0.01 each,
the creation of 500,000 Non-cumulative Convertible Sterling Preference
Shares of US$0.01 each and 2,000,000 Non-cumulative Convertible Euro
Preference Shares of (euro)0.01 each.
(xvii) by Special Resolution passed on 28th February, 2000 the creation of
3,039,375,406 additional Ordinary Shares of 25p each, the creation of
900,000 Category II Non-cumulative Convertible Preference Shares of
(pound)0.25 each.
(xviii) by Special Resolution passed on 20th June, 2000 the creation of
2,700,000 Additional Value Shares of (pound)0.01each and
32,300,000,000 Non-Voting Deferred Shares of (pound)0.01 each.
(xix) By Special Resolution passed on 11th April 2001 the creation of
900,000 additional Non-cumulative Convertible Dollar Preference Shares
of US$0.01 each, 500,000 additional Non-cumulative Convertible
Sterling Preference Shares of (pound)0.01 each, 1,000,000 additional
Non-cumulative Convertible Dollar Preference Shares of US$0.01 each
and 1,000,000 additional Non-cumulative Convertible Euro Preference
Shares of (euro)0.01each.
12
WE, the several persons whose names and addresses are subscribed, are desirous
of being formed into a Company, in pursuance of this Memorandum of Association,
and we respectively agree to take the number of Shares in the capital of the
Company set opposite our respective names.
--------------------------------------------------------------------------------
Names, Addresses and Descriptions Number of Shares taken by
of Subscribers each Subscriber
--------------------------------------------------------------------------------
THOMAS GORDON WATERLOW, ONE
Belhaven House, Dunbar,
Deputy Chairman,
The Royal Bank of Scotland
ALEXANDER PATERSON ROBERTSON, ONE
Bridgend, 116 Bo'ness Road, Grangemouth,
Director and Deputy General Manager,
The Royal Bank of Scotland
ALFRED GEORGE CAMPBELL, ONE
9 Barnton Avenue, Edinburgh,
Director and Assistant General Manager,
The Royal Bank of Scotland
JAMES THOMSON, ONE
32 Telford Road, Edinburgh,
Assistant General Manager,
The Royal Bank of Scotland
IAN WILSON MACDONALD, ONE
24 Hermitage Drive, Edinburgh 10,
Chairman,
National Commercial Bank of Scotland Limited
GEORGE TURCAN CHIENE, ONE
74 Ravelston Dykes, Edinburgh,
Writer to the Signet
PATRICK JAMES OLIPHANT, ONE
Strathaird, Easter Belmont Road, Edinburgh,
Deputy Keeper of the Signet
JOHN GREIG DUNBAR, ONE
23 Corrennie Gardens, Edinburgh,
Company Director -----
TOTAL SHARES TAKEN EIGHT
-----
DATED the 18th day of March, 1968
WITNESS to the above signatures
ROBERT DAVID DARNEY BERTRAM
1 St Colme Street, Edinburgh
Apprentice Writer to the Signet
13
THE COMPANIES ACTS 1985 AND 1989
------------------------------------------------------------------------
A PUBLIC COMPANY LIMITED BY SHARES
------------------------------------------------------------------------
NEW ARTICLES OF ASSOCIATION
of
THE ROYAL BANK OF SCOTLAND GROUP
public limited company
Adopted by Special Resolution passed on the 15th day of
January, 1998 (as amended by Special Resolutions passed on
the 13th day of January 2000,
the 28th day of February 2000, the 20th day of June 2000
and the 11th day of April 2001)
------------------------------------------------------------------------
PRELIMINARY
1. Non-application of statutory regulations
The regulations in Table A in the Companies (Tables A to F) Regulations
1985 (and any Table A applicable to the Company under any former enactment
relating to companies) shall not apply to the Company.
2. Definitions and Interpretation
In these presents (if not inconsistent with the subject or context) the
words standing in the first column of the table next hereinafter contained
shall bear the meanings set opposite to them respectively in the second
column thereof.
Words Meanings
"Additional Value Shares" The meaning given in
Article 4D.
"Applicable Exchange Rate" Such market rate of exchange
as the Directors may consider
appropriate for the purchase
of any relevant Foreign
Currency for Sterling or for
any other Foreign Currency on
such date as the Directors may
consider appropriate.
"Category II Non-cumulative Convertible The meaning given in
Sterling Preference Share" Article 4C.
"Category II Non-cumulative Dollar The meaning given in
Preference Share" Article 4(E)(1).
"Certificated share" A share which is not an
uncertificated share.
"communication" The same meaning as in the
Electronic Communications
Act 2000.
"Convertible Preference Shares" The meaning given in Article 4B(4).
"Cumulative Preference Shares" The 5 1/2 per cent Cumulative
Preference Shares and the 11
per cent Cumulative Preference
Shares.
"Directors" The Board of Directors of
the Company, or an
authorised Committee
thereof.
"Dividend" Dividend and/or bonus.
"electronic communication" The same meaning as in the
Electronic Communications Act 2000.
"Euro" and "(euro)" The single currency of those member
states of the European
Union participating in
European Monetary Union
from time to time.
"Foreign Currency" Any lawful currency other than
Sterling.
"In Writing" Written, or produced by any legible
and non-transitory
substitute for writing, or
partly one and partly
another.
"The London Stock Exchange" The London Stock Exchange Limited.
"London Stock Exchange dealing day" A day, other than a
Saturday, Sunday or public
holiday in the UK when the
London Stock Exchange is
open or was due to be open
for trading.
"Month" Calendar month.
"New Preference Shares" The Non-cumulative Sterling
Preference Shares, the
Non-cumulative Dollar Preference
Shares, the Non-cumulative Euro
Preference Shares, the Category II
Non-cumulative Dollar Preference
Shares, the Convertible Preference
Shares and the Category II
Non-cumulative Convertible Sterling
Preference Shares (which classes of
non-cumulative preference shares
all rank pari passu inter se as
regards participation in the
profits and assets of the Company),
together with any other share in
the capital of the Company (other
than the Cumulative Preference
Shares) which is expressed to rank
as regards participation in the
profits or assets of the Company in
some or all respects pari passu
therewith.
2
"New Shares" New Preference Shares or any
further shares in the capital of
the Company issued subsequent to
30th August 1989.
"Non-cumulative Convertible Dollar The meaning given in Article 4B(2).
Preference Share"
"Non-cumulative Convertible Euro The meaning given in Article 4B(3).
Preference Share"
"Non-cumulative Convertible Sterling The meaning given in Article 4B(1).
Preference Share"
"Non-cumulative Dollar Preference The 16,000,000 Non-cumulative
Shares" Dollar Preference Shares of US$0.01
each in the capital of the Company.
"Non-cumulative Euro Preference Share" The meaning given in Article 4A.
"Non-cumulative Sterling Preference The 200,000,000 Non-cumulative
Shares" Sterling Preference Shares
of(pound)1 each in the capital of
the Company.
"Office" The registered office of the
Company for the time being.
"Operator" A person approved by the
Treasury as operator of a
relevant system under the
Uncertificated Securities
Regulations.
"Paid" Paid or credited as paid.
"Participating class" A class of shares title to
which is permitted by an
Operator to be transferred
by means of a relevant system.
"Relevant Section" Section 133 of the 1989 Act.
"Relevant system" Any computer-based system and
procedures, permitted by the
Uncertificated Securities
Regulations and the rules of the
London Stock Exchange, which enable
title to units of a security to be
evidenced and transferred without a
written instrument and which
facilitate supplementary and
incidental matters and shall
include, without limitation, the
relevant system of which CRESTCO
Limited is the Operator.
"Seal" The Common Seal of the Company.
"Securities Seal" An official seal kept by the Company
by virtue of Section 40 of the 1985
Act.
3
"The Statutes" The 1985 Act, the 1989 Act and
every other Act for the time being
in force concerning companies and
affecting the Company.
"Subsidiary undertaking" A subsidiary undertaking as defined
in Section 258 of the 1985 Act.
"These presents" These Articles of Association in
their present form or as from time
to time altered.
"Transfer Office" The place where the Register of
Members is situate for the time
being.
"Uncertificated share" A share of a class which is for the
time being a participating class
title to which is recorded in the
Register of Members as being held
in uncertificated form.
"The Uncertificated Securities The Uncertificated Securities
Regulations" Regulations 1995 as amended from
time to time and any provisions of
or under the Statutes which
supplement or replace such
Regulations.
"Undertaking" An undertaking as defined in Section
259 of the 1985 Act.
"The United Kingdom" Great Britain and Northern Ireland.
"US$" and "Dollars" The lawful currency for the time
being of the United States of
America.
"Year" Calendar Year.
"5 1/2 per cent Cumulative The 400,000 5 1/2 per cent
Preference Shares" Cumulative Preference Shares of
(pound)1 each in the capital of the
Company.
"11 per cent Cumulative The 500,000 11 per cent Cumulative
Preference Shares" Preference Shares of (pound)1 each
in the capital of the Company.
The word "Act" related to a particular year refers to the Companies Act of that
year.
The expressions "debenture" and "debenture-holder" shall include "debenture
stock" and "debenture stockholder" respectively.
The expression "Base Rate" means the Base Rate from time to time of The Royal
Bank of Scotland public limited company.
The expression "Secretary" shall (subject to the provisions of the Statutes)
include any deputy secretary, assistant secretary and any other person
appointed by the Directors to perform any of the duties of the Secretary and
where two or more persons are appointed to act as joint secretaries shall
include any one of those persons.
4
The expressions "recognised clearing house" and "recognised investment
exchange" shall mean any clearing house or investment exchange (as the
case may be) granted recognition under the Financial Services Act 1986.
All such of the provisions of these presents as are applicable to paid up
shares (other than those relating to share warrants) shall apply to stock,
and the words "share" and "shareholder" shall be construed accordingly.
5
Words denoting the singular shall include the plural and vice versa. Words
denoting the masculine gender shall include the feminine gender. Words
denoting persons shall include partnerships, companies and corporations.
References to any statute or statutory provision shall (if not
inconsistent with the subject or context) include any statutory
modification or re-enactment thereof for the time being in force.
Any words or expressions defined in the 1985 Act or the 1989 Act or the
Uncertificated Securities Regulations shall (if not inconsistent with the
subject or context) bear the same meaning in these presents, save that the
word "company" shall include any body corporate.
Headings and sub-headings to Articles are inserted for convenience only
and shall not affect the construction of these presents.
Where for any purpose an Ordinary Resolution of the Company is expressed
to be required under the provisions of these presents, a Special or
Extraordinary Resolution shall also be effective, and where an
Extraordinary Resolution is so expressed to be required a Special
Resolution shall also be effective.
In Articles 84(A), 88, 110(A), 157 and 158 to 161 (inclusive) "address",
in relation to electronic communications, includes any number or address
used for the purposes of such communications.
BUSINESS
3. Business activities
Any activity or kind of business which the Company is either expressly or
by implication authorised to undertake may be undertaken by the Directors
at such time or times as they shall think fit, and further may be suffered
by them to be in abeyance, whether such activity or kind of business may
have been actually commenced or not, so long as the Directors may deem it
expedient not to commence or proceed with the same.
CAPITAL
4. Share capital
The share capital of the Company at the date of adoption of these presents
is (pound)560,900,000 divided into 500,000 11 per cent *Cumulative
Preference Shares of (pound)1 each, 400,000 5 1/2 per cent *Cumulative
Preference Shares of (pound)1 each, 300,000,000 Non-cumulative Sterling
Preference Shares of (pound)1 each and 1,040,000,000 Ordinary Shares of
25p each, and US$830,000 divided into 16,000,000 Non-cumulative Dollar
Preference Shares of US$0.01 each and 67,000,000 Category II
Non-cumulative Dollar Preference Shares of US$0.01
--------
* NOTE: The rates of dividend specified in this Article in relation to the 11
per cent Cumulative Preference Shares and the 5 1/2 per cent Cumulative
Preference Shares are the rates which were in force to 6th April 1973; at 30th
August, 1989 the rates of dividend on such shares are 7 per cent plus tax
credit and 3.85 per cent plus tax credit respectively.
6
each.** The rights as regards participation in the profits and assets of
the Company attaching to those shares shall be as follows:-
(A) Dividend rights of cumulative preference shares
The 11 per cent Cumulative Preference Shares and the 5 1/2 per cent
Cumulative Preference Shares shall confer the right to a fixed
cumulative preferential dividend at the rate of 11 per cent and 5 1/2
per cent per annum respectively on the amounts for the time being
paid up or credited as paid up on such shares, to be paid if and so
far as in the opinion of the Directors the profits of the Company
justify such payments on the 31st day of May and the 31st day of
December in every year in respect of the half-years ending on the
last preceding day of March or September. Such dividends shall rank
pari passu and pro rata with each other and shall be paid in priority
to any dividend on the New Preference Shares or on any other class of
share.
(B) Capital rights of cumulative preference shares
On a winding up or liquidation, voluntary or otherwise the surplus
assets of the Company available for distribution amongst the members
shall be applied:-
FIRSTLY - in paying to the holders of the 11 per cent Cumulative
Preference Shares and the 5 1/2 per cent Cumulative Preference Shares
respectively the arrears (if any) of the fixed cumulative
preferential dividends thereon (whether earned or declared or not and
including (i) the amount of any dividend which is due for payment
after the date of commencement of winding up or liquidation but which
is payable in respect of a half-year period ending on or before such
date and (ii) any further amount of dividend payable in respect of
the period from the beginning of the half-year period then current to
the date of commencement of winding up or liquidation) to the date on
which repayment is made, in terms of the immediately succeeding
paragraph or, if no such repayment is made, the date of payment of
such arrears; and
SECONDLY - in repaying to the holders of the 11 per cent Cumulative
Preference Shares and the 5 1/2 per cent Cumulative Preference Shares
respectively, the amounts paid up or credited as paid up on such
shares together with a premium of 50p per
** NOTE: At the annual general meeting of the Company held on 14th January
1999, the share capital of the Company was increased by the creation of
30,000,000 additional Category II Non-cumulative Dollar Preference Shares of
US$0.01 each. At the annual general meeting and an extraordinary general
meeting of the Company, both held on 13th January 2000, the share capital of
the Company was increased by the creation of 125,500,000 additional Category II
Non-cumulative Dollar Preference Shares of US$0.01 each, 66,000,000
Non-cumulative Euro Preference Shares of (euro)0.01 each, 500,000
Non-cumulative Convertible Sterling Preference Shares of (pound)0.01 each,
2,000,000 Non-cumulative Convertible Dollar Preference Shares of US$0.01 each
and 2,000,000 Non-cumulative Convertible Euro Preference Shares of (euro)0.01
each. At an extraordinary general meeting of the Company held on 28th February
2000, the share capital of the Company was further increased by the creation of
3,039,375,406 additional Ordinary Shares of 25p each and 900,000,000 Category
II Non-cumulative Convertible Sterling Preference Shares of 25p each. At an
extraordinary general meeting of the Company held on 20 June 2000, the share
capital of the company was further increased by the creation of 2.7 billion
Additional Value Shares of (pound)0.01 each and 32.3 billion Non-Voting
Deferred Shares of (pound)0.01 each. At the annual general meeting of the
Company held on 11th April 2001, the share capital of the Company was further
increased by the creation of 900,000 additional Non-cumulative Convertible
Dollar Preference Shares of US$0.01 each, 500,000 additional Non-cumulative
Convertible Sterling Preference Shares of (pound)0.01 each, 1,000,000
additional Non-cumulative Convertible Dollar Preference Shares of US$0.01 each
and 1,000,000 additional Non-cumulative Convertible Euro Preference Shares of
(euro)0.01 each.
7
share in the case of the 11 per cent Cumulative Preference Shares and
of 20p per share in the case of the 5 1/2 per cent Cumulative
Preference Shares.
Any payments made to the holders of the 11 per cent Cumulative
Preference Shares and the 5 1/2 per cent Cumulative Preference Shares
in terms of paragraphs FIRSTLY or SECONDLY above shall rank pari
passu and pro rata with each other and (in the case of payments in
terms of paragraph FIRSTLY) in priority to and (in the case of
repayments in terms of paragraph SECONDLY) pari passu and pro rata
with any payments to be made to the holders of the Non-cumulative
Sterling Preference Shares and the Non-cumulative Dollar Preference
Shares pursuant to Articles 4(C)(2) and 4(D)(2) respectively below
and to the holders of any other New Preference Shares.
(C) Non-cumulative sterling preference shares
(1) The Non-cumulative Sterling Preference Shares shall rank after
the Cumulative Preference Shares to the extent specified in this
Article 4, and shall rank pari passu inter se and (save as
aforesaid) with the Cumulative Preference Shares and with all
other New Preference Shares. They shall confer the rights and be
subject to the restrictions set out in this Article 4(C) and
shall also confer such further rights (not being inconsistent
with the rights set out in this Article 4(C)) as may be attached
by the Directors to such shares in accordance with this Article
4(C) prior to allotment. Whenever the Directors have power under
this Article to determine any of the rights attached to any of
the Non-cumulative Sterling Preference Shares, the rights so
determined need not be the same as those attached to the
Non-cumulative Sterling Preference Shares then allotted or in
issue. The Non-cumulative Sterling Preference Shares may be
issued in one or more separate series, and each series shall be
identified in such manner as the Directors may determine without
any such determination or identification requiring any
alteration to these presents.
(2) Each Non-cumulative Sterling Preference Share shall confer the
following rights as to participation in the profits and assets
of the Company, receipt of notices, attendance and voting at
meetings and redemption:-
(a) Income
the right (subject to the provisions of paragraph (b) of
this sub-Article, if applicable) to a non-cumulative
preferential dividend either fixed or not exceeding a
specified amount payable in Sterling at such rate on such
dates (each a "dividend payment date") in respect of such
periods (each a "dividend period") and on such other terms
and conditions as may be determined by the Directors prior
to allotment thereof. References in these presents to a
"dividend" on the Non-cumulative Sterling Preference Shares
include a reference to each dividend in respect of each
dividend period applicable thereto and references in this
Article 4(C) to dividend payment dates and dividend periods
are to dividend payment dates and dividend periods in
respect of the Non-cumulative Sterling Preference Shares
only. Such dividends shall be paid in priority to the
payment of any dividends on the Ordinary Shares. The
Non-cumulative Sterling Preference Shares shall rank for
dividend after the Cumulative Preference Shares, pari passu
with all other New Preference Shares
8
expressed to rank pari passu therewith as regards
participation in profits and otherwise in priority to any
other share capital in the Company.
(b) Further provisions as to income
All or any of the following provisions shall apply in
relation to any particular Non-cumulative Sterling
Preference Shares if so determined by the Directors prior
to allotment thereof:-
(i) if, in the opinion of the Directors, the distributable
profits of the Company are sufficient to cover the
payment in full of dividends on the Non-cumulative
Sterling Preference Shares on any dividend payment
date, and also the payment in full of all other
dividends stated to be payable on such date on any
other New Preference Share expressed to rank pari
passu therewith as regards participation in profits,
after payment in full, or the setting aside of a sum
to cover the payment in full, of all dividends stated
to be payable on such date on any Cumulative
Preference Share, then each such dividend shall be
declared and paid in full;
(ii) if, in the opinion of the Directors, the distributable
profits of the Company are insufficient to cover the
payment in full of dividends on the Non-cumulative
Sterling Preference Shares on any dividend payment
date, and also the payment in full of all other
dividends stated to be payable on such date on any
other New Preference Share expressed to rank pari
passu therewith as regards participation in profits,
after payment in full, or the setting aside of a sum
to cover the payment in full, of all dividends stated
to be payable on or before such date on any Cumulative
Preference Share, then dividends shall be declared by
the Directors pro rata for the Non-cumulative Sterling
Preference Shares and such other New Preference Shares
to the extent of the available distributable profits
(if any) to the intent that the amount of dividend
declared per share on each such Non-cumulative
Sterling Preference Share and other New Preference
Share will bear to each other the same ratio as the
dividends accrued per share on each such
Non-cumulative Sterling Preference Share and other New
Preference Share bear to each other. If it shall
subsequently appear that any such dividend which has
been paid should not, in accordance with the
provisions of this sub-paragraph, have been so paid,
then provided the Directors shall have acted in good
faith, they shall not incur any liability for any loss
which any shareholder may suffer in consequence of
such payment having been made;
(iii) if, in the opinion of the Directors, the payment of
any dividend on any Non-cumulative Sterling Preference
Shares would breach or cause a breach of the Bank of
England's capital adequacy requirements applicable to
the Company
9
and/or any of its subsidiaries, then none of such
dividend shall be declared or paid;
(iv) subject to sub-paragraphs (v) and (vi) below, the
Non-cumulative Sterling Preference Shares shall carry
no further right to participate in the profits of the
Company and if and to the extent that any dividend or
part thereof is on any occasion not paid for the
reasons described in sub-paragraph (ii) or (iii)
above, the holders of such shares shall have no claim
in respect of such non-payment;
(v) if any dividend or part thereof on any Non-cumulative
Sterling Preference Share is not payable for the
reasons specified in sub-paragraph (ii) or (iii) above
and if they so resolve, the Directors may, subject to
the Statutes, pay a special non-cumulative
preferential dividend on the Non-cumulative Sterling
Preference Shares at a rate not exceeding(pound)0.01
per share (but so that reference elsewhere in this
Article and in Article 4(D) to any dividend payable on
any Non-cumulative Sterling Preference Shares shall
not be treated as including a reference to any such
special dividend);
(vi)(A) the provisions of this sub-paragraph (vi) shall
apply where any dividend or any part thereof otherwise
payable on a particular dividend payment date on any
Non-cumulative Sterling Preference Shares ("a Relevant
Payment") is, for the reasons specified in
sub-paragraph (ii) or (iii) above, not payable and the
amounts (if any) standing to the credit of the
Company's profit and loss account together with the
amount of the reserves of the Company available for
the purpose are in aggregate sufficient to be applied
and capable of being applied in paying up in full at
par additional Non-cumulative Sterling Preference
Shares on the basis hereinafter provided in this
sub-paragraph (vi);
(B) on the date for payment of the Relevant Payment had
such payment been payable in cash, the Directors
shall, subject to the Statutes, allot and issue
credited as fully paid to each holder of
Non-cumulative Sterling Preference Shares such
additional nominal amount of Non-cumulative Sterling
Preference Shares as is equal to an amount determined
by multiplying the cash amount of the Relevant Payment
which would have been payable to him had such payment
been made in cash (exclusive of any associated tax
credit) by a factor to be determined by the Directors
prior to allotment of the Non-cumulative Sterling
Preference Shares;
(C) for the purposes of paying up additional
Non-cumulative Sterling Preference Shares to be
allotted pursuant to this sub-paragraph (vi), the
Directors shall capitalise, out of such of the
accounts or reserves of the Company available for the
purpose as they shall determine (including any Share
10
Premium Account), a sum equal to the aggregate nominal
amount of the additional Non-cumulative Sterling
Preference Shares then to be allotted and shall make
all appropriations and applications of such sum and
all allotments and issues of fully paid Non-cumulative
Sterling Preference Shares for the purpose of giving
effect to this sub-paragraph (vi);
(D) the additional Non-cumulative Sterling Preference
Shares so allotted pursuant to this sub-paragraph (vi)
shall confer the same rights and be subject to the
same limitations as, and shall rank pari passu and pro
rata in all respects with, the relevant Non-cumulative
Sterling Preference Shares save only as regards
participation in the Relevant Payment;
(E) if any additional Non-cumulative Sterling Preference
Shares falling to be allotted pursuant to this
sub-paragraph (vi) cannot be allotted by reason of any
insufficiency in the Company's authorised share
capital or in the amount of relevant securities which
the Directors are authorised to allot in accordance
with Section 80 of the 1985 Act, the Directors shall
convene a General Meeting, to be held as soon as
practicable, for the purpose of considering a
Resolution or Resolutions effecting an appropriate
increase in the authorised share capital and granting
the Directors appropriate authority to allot relevant
securities; and
(F) the Directors may undertake and do such acts and
things as they may consider necessary or expedient for
the purpose of giving effect to the provisions of this
sub-paragraph (vi);
(vii) if any date on which dividends are payable on
Non-cumulative Sterling Preference Shares is not a day
on which banks in London are open for business, and on
which foreign exchange dealings may be conducted in
London ("a Sterling Business Day"), then payment of
the dividend payable on such date will be made on the
next succeeding Sterling Business Day and without any
interest or other payment in respect of such delay
unless such day shall fall within the next calendar
month whereupon such payment will be made on the
preceding Sterling Business Day;
(viii) dividends payable on Non-cumulative Sterling
Preference Shares shall accrue from and to the dates
determined by the Directors prior to allotment
thereof, and the amount of dividend payable in respect
of any period shorter than a full dividend period will
be calculated on the basis of a 365 day year and the
actual number of days elapsed in such period;
(ix) if the dividend stated to be payable on the
Non-cumulative Sterling Preference Shares on the most
recent dividend payment date has not been declared and
paid in full, or if a sum has not been set aside to
provide for such payment in full, no dividends may be
declared on any other share capital
11
of the Company (other than the Cumulative Preference
Shares), and no sum may be set aside for the payment
thereof, unless, on the date of declaration relative
to any such payment, an amount equal to the dividend
stated to be payable on the Non-cumulative Sterling
Preference Shares in respect of the then current
dividend period is set aside for the payment in full
of such dividend on the dividend payment date relating
to the then current dividend period;
(x) if any dividend stated to be payable on the
Non-cumulative Sterling Preference Shares on any
dividend payment date has not been declared and paid
in full, or if a sum has not been set aside to provide
for such payment in full, the Company may not redeem
or purchase or otherwise acquire for any consideration
any other share capital of the Company and may not set
aside any sum nor establish any sinking fund for the
redemption, purchase or other such acquisition
thereof, until such time as dividends stated to be
payable on the Non-cumulative Sterling Preference
Shares in respect of successive dividend periods
together aggregating no less than twelve months shall
thereafter have been declared and paid in full; and
(xi) notwithstanding any provision of this Article 4(C),
but subject to sub-paragraphs (ii) and (iii) above and
the special rights attaching to any other New
Preference Share, the Directors shall pay a dividend
on any Non-cumulative Sterling Preference Shares
allotted after the coming into force of the Relevant
Section and due to be redeemed on any Redemption Date
(as defined in sub-paragraph (2)(f)(ii) of this
Article 4(C)), payable on the Sterling Business Day
immediately preceding such Redemption Date. The
dividend payable pursuant to this sub-paragraph (xi)
shall be the amount of any dividend on the relevant
Non-cumulative Sterling Preference Shares which would
(apart from the proposed redemption thereof) be due
for payment on the relevant Redemption Date.
(c) Capital
The right on a winding up or liquidation, voluntary or
otherwise, other than (unless otherwise provided by the
terms of issue of such share) a redemption or purchase by
the Company of any shares of any class, to receive in
Sterling out of the surplus assets of the Company available
for distribution amongst the members:-
(i) after payment of the arrears (if any) of the fixed
cumulative preferential dividends stated to be payable
in the Cumulative Preference Shares to the holders
thereof in accordance with Article 4(B) FIRSTLY, and
pari passu with the holders of any other New
Preference Shares expressed to rank pari passu
therewith as regards participation in profits and in
12
priority to the holders of the Ordinary Shares of the
Company a sum equal to:-
(A) the amount of any dividend which is due for
payment after the date of commencement of winding
up or liquidation but which is payable in respect
of a period ending on or before such date; and
(B) any further amount of dividend payable in respect
of the period from the preceding dividend payment
date to the date of payment in accordance with
sub-paragraph (i);
but only to the extent that any such amount or further
amount was, or would have been, payable as a
dividend in accordance with or pursuant to this
Article 4(C) (other than pursuant to this
provision); and
(ii) subject thereto, pari passu with the holders of the
Cumulative Preference Shares and any other New
Preference Shares expressed to rank pari passu
therewith as regards participation in surplus assets
and in priority to the holders of the Ordinary Shares
of the Company, a sum equal to the amount paid up or
credited as paid up on the Non-cumulative Sterling
Preference Shares (including any premium paid to the
Company in respect thereof on issue).
If upon any such winding-up or liquidation, the amounts
available for payment are insufficient to cover the amounts
payable in full on the Cumulative Preference Shares, the
Non-cumulative Sterling Preference Shares and on any other
New Preference Shares expressed to rank pari passu
therewith as regards participation in surplus assets, then
the holders of the Cumulative Preference Shares, the
Non-cumulative Sterling Preference Shares and such other
New Preference Shares will share rateably in the
distribution of surplus assets (if any) in proportion to
the full respective preferential amounts to which they are
entitled. No Non-cumulative Sterling Preference Share shall
confer any right to participate in the surplus assets of
the Company other than that set out in this sub-paragraph
(2)(c) of this Article 4(C).
(d) Receipt of Notice
The right to have sent to the holder of each Non-cumulative
Sterling Preference Share (at the same time as the same are
sent to the holders of Ordinary Shares) a copy of the
Company's Annual Report and Accounts and Interim Financial
Statement, together with notice of any General Meeting of
the Company at which such holder is entitled to attend and
vote.
13
(e) Attendance and Voting at Meetings
The right to attend at a General Meeting of the Company and
to speak to or vote upon any Resolution proposed thereat in
the following circumstances:-
(i) in respect of a Resolution which is to be proposed at
the Meeting either varying or abrogating any of the
rights attached to the Non-cumulative Sterling
Preference Shares or proposing the winding up of the
Company (and then in each such case only to speak to
and vote upon any such Resolution);
(ii) in circumstances where the dividend stated to be
payable on the Non-cumulative Sterling Preference
Shares in respect of such number of dividend periods
as the Directors shall determine prior to allotment
thereof has not been declared and paid in full, and
until such date as the Directors shall likewise
determine; and
(iii) in such other circumstances as the Directors may
determine prior to allotment of the Non-cumulative
Sterling Preference Shares,
but not otherwise, together with the right, in such
circumstances and on such terms, if any, as the Directors
may determine prior to allotment of the Non-cumulative
Sterling Preference Shares, to seek to requisition a
General Meeting of the Company. Whenever holders of
Non-cumulative Sterling Preference Shares are entitled to
vote on a Resolution, on a show of hands every such holder
who is present in person shall have one vote and, on a
poll, every such holder who is present in person or by
proxy shall have such number of votes as may be determined
by the Directors prior to allotment of such Non-cumulative
Sterling Preference Shares.
(f) Redemption
(i) Unless the Directors shall, prior to the allotment of
any series of Non-cumulative Sterling Preference
Shares, determine that such series shall be
non-redeemable, each series of Non-cumulative Sterling
Preference Shares shall, subject to the provisions of
the Statutes, be redeemable at the option of the
Company in accordance with the following provisions.
(ii) In the case of any particular Non-cumulative Sterling
Preference Shares which are to be so redeemable:-
(A) the Company may, subject thereto, redeem on any
Redemption Date (as hereinafter defined) all or
some only of the Non-cumulative Sterling
Preference Shares by giving to the holders of the
Non-cumulative Sterling Preference Shares to be
14
redeemed not less than 14 days' prior notice in
writing (a "Notice of Redemption") of the
relevant Redemption Date. "Redemption Date"
means, in relation to any Non-cumulative Sterling
Preference Share, any date which either (i) falls
no earlier than such date (if any) as may be
fixed by the Directors, prior to allotment of
that share, as being the earliest date on which
the Company may redeem such share, and the date
so fixed shall be no earlier than five years and
one day, and no later than thirty years and one
day, after the relevant date of allotment, or
(ii) if no date is fixed by the Directors as
aforesaid under (i) above in relation to that
share, falls no earlier than five years and one
day after the date of allotment of the
Non-cumulative Sterling Preference Share to be
redeemed;
provided that in relation to any Non-cumulative
Sterling Preference Share allotted after the
coming into force of the Relevant Section, (i)
subject to (ii) below, the Directors may, prior
to the allotment of that share, fix the date on
or by which, or dates between which, such share
is to be or may be redeemed and such date or
dates fixed by the Directors may be in place of
or in addition to any date derived from or fixed
under the provisions of sub-paragraph (A) above,
(ii) the Redemption Date shall be a dividend
payment date (as defined in Article 4(C)(2)(a)),
and (iii) the Company shall only redeem such
share if the Directors have applied the
provisions of Article 4(C)(2)(b)(xi) thereto and
such provisions have been satisfied n full in
relation to such share;
(B) there shall be paid on each Non-cumulative
Sterling Preference Share so redeemed, in
Sterling, the aggregate of the nominal amount
thereof together with any premium paid on issue
and together with (in the case of any
Non-cumulative Sterling Preference Shares
allotted prior to the coming into force of the
Relevant Section) arrears (if any) of dividends
thereon (whether earned or declared or not) in
respect of the period from the dividend payment
date last preceding the Redemption Date to the
Redemption Date;
(C) in the case of a redemption of some only of the
Non-cumulative Sterling Preference Shares in any
series, the Company shall for the purpose of
determining the particular Non-cumulative
Sterling Preference Shares to be redeemed cause a
drawing to be made at the Office or such other
place as the Directors
15
may approve in the presence of the Auditors for
the time being of the Company;
(D) any Notice of Redemption given under
sub-paragraph (ii)(A) above shall specify the
applicable Redemption Date, the particular
Non-cumulative Sterling Preference Shares to be
redeemed and the redemption price (specifying (in
the case of any Non-cumulative Sterling
Preference Shares allotted prior to the coming
into force of the Relevant Section) the amount of
the accrued and unpaid dividend per share to be
included therein and stating that dividends on
the Non-cumulative Sterling Preference Shares to
be redeemed will cease to accrue on redemption),
and shall state the place or places at which
documents of title in respect of such
Non-cumulative Sterling Preference Shares are to
be presented and surrendered for redemption and
payment of the redemption monies is to be
effected. Upon such Redemption Date, the Company
shall redeem the particular Non-cumulative
Sterling Preference Shares to be redeemed on that
date subject to the provisions of this paragraph
and of the Statutes. No defect in the Notice of
Redemption or in the giving thereof shall affect
the validity of the redemption proceedings;
(E) subject to sub-paragraph (I) below, the
provisions of this and the following
sub-paragraph shall have effect in relation to
Non-cumulative Sterling Preference Shares for the
time being issued and registered in the Register
of Members ("Registered Shares") and represented
by certificates ("Certificates"). Payments in
respect of the amount due on redemption of a
Registered Share shall be made by Sterling cheque
drawn on a bank in London or upon the request of
the holder or joint holders not later than the
date specified for the purpose in the Notice of
Redemption by transfer to a Sterling account
maintained by the payee with a bank in London.
Such payment will be against presentation and
surrender of the relative Certificate at the
place or one of the places specified in the
Notice of Redemption and if any Certificate so
surrendered includes any Non-cumulative Sterling
Preference Shares not to be redeemed on the
relevant Redemption Date the Company shall within
14 days thereafter issue to the holder, free of
charge, a fresh Certificate in respect of such
Non-cumulative Sterling Preference Shares. All
payments in respect of redemption monies will in
all respects be subject to any applicable fiscal
or other laws;
16
(F) as from the relevant Redemption Date the dividend
on the Non-cumulative Sterling Preference Shares
due for redemption shall cease to accrue except
on any such Non-cumulative Sterling Preference
Share in respect of which, upon the due surrender
of the Certificate in accordance with
sub-paragraph (E) above, payment of the
redemption monies due on such Redemption Date
shall be improperly withheld or refused, in which
case such dividend, at the rate then applicable,
shall be deemed to have continued and shall
accordingly continue to accrue from the relevant
Redemption Date to the date of payment of such
redemption monies Such Non-cumulative Sterling
Preference Share shall not be treated as having
been redeemed until the redemption monies in
question together with the accrued dividend
thereon shall have been paid;
(G) if the due date for the payment of the redemption
monies on any Non-cumulative Sterling Preference
Share is not a Sterling Business Day then payment
of such monies will be made on the next
succeeding day which is a Sterling Business Day
and without any interest or other payment in
respect of such delay unless such day shall fall
within the next calendar month whereupon such
payment will be made on the preceding Sterling
Business Day;
(H) the receipt of the holder for the time being of
any Registered Share (or in the case of joint
holders the receipt of any one of them) in
respect of the monies payable on redemption on
such Registered Share shall constitute an
absolute discharge to the Company; and
(I) subject as aftermentioned, the provisions of
sub-paragraphs (E) and (F) above shall have
effect in relation to Registered Shares which are
in uncertificated form within the meaning of the
Uncertificated Securities Regulations 1995 (as in
force on the date of adoption of this Article) in
the same manner as they have effect in relation
to Registered Shares represented by Certificates,
save that (i) any provision of the said
paragraphs requiring presentation and surrender
of a Certificate shall be satisfied in the manner
prescribed or permitted by the said Regulations
(or by any enactment or subordinate legislation
which amends or supersedes those Regulations) or
(subject to those Regulations or such enactment
or subordinate legislation) in such manner as may
from time to time be prescribed by the
Directors), and (ii) the
17
Company shall not be under any obligation to issue
a fresh Certificate under sub-paragraph (E);
(iii) upon the redemption of any Non-cumulative Sterling
Preference Share the nominal amount of such shares
comprised in the capital of the Company shall
thereafter be divided into, and reclassified as,
Ordinary Shares without any further resolution or
consent being required.
(g) Purchase
(i) Subject to the provisions of the Statutes and any
other applicable laws, the Company may at any time and
from time to time purchase any Non-cumulative Sterling
Preference Shares upon such terms as the Directors
shall determine provided that, in the case of
Non-cumulative Sterling Preference Shares which are
listed on the London Stock Exchange, the purchase
price, exclusive of expenses and accrued dividends,
shall not exceed (a) in the case of a purchase in the
open market, or by tender (which shall be available
alike to all holders of the Non-cumulative Sterling
Preference Shares), the average of the closing middle
market quotations of such Non-cumulative Sterling
Preference Shares on the London Stock Exchange (as
derived from The London Stock Exchange Daily Official
List) for the last 10 dealing days preceding the date
of purchase or (if higher), in the case of a purchase
in the open market only, the market price on the date
of purchase provided that such market price is not
more than 105 per cent of such average and (b) in the
case of a purchase by private treaty, 120 per cent of
the closing middle market quotation of such
Non-cumulative Sterling Preference Shares on the
London Stock Exchange (as derived from The London
Stock Exchange Daily Official List) for the last
dealing day preceding the date of purchase; but so
that this proviso shall not apply to any purchase of
Non-cumulative Sterling Preference Shares made in the
ordinary course of a business of dealing in
securities.
(ii) Upon the purchase of any Non-cumulative Sterling
Preference Shares the nominal amount of such shares
comprised in the capital of the Company shall
thereafter be divided into, and reclassified as,
Ordinary Shares without any further resolution or
consent being required.
(3) Save with the written consent of the holders of three-quarters
in nominal value of, or with the sanction of an Extraordinary
Resolution passed at a separate General Meeting of the holders
of the Non-cumulative Sterling Preference Shares, the Directors
shall not, pursuant to Article 148 or 149, capitalise any part
of the amounts available for distribution and referred to
therein if after such capitalisation the aggregate of such
amounts would be less than such multiple, if any, as may be
determined by the Directors prior to the first allotment of
Non-cumulative Sterling Preference Shares, of the aggregate
amount of the dividends (exclusive of any associated tax credit)
18
payable in the twelve month period following such capitalisation
on the Non-cumulative Sterling Preference Shares then in issue
and any other New Preference Shares then in issue expressed to
rank pari passu therewith as regards participation in profits.
(4)(a) Save with the written consent of the holders of three-quarters
in nominal value of, or with the sanction of an Extraordinary
Resolution passed at a separate General Meeting of the holders
of, the Non-cumulative Sterling Preference Shares, the Directors
shall not authorise or create, or increase the amount of, any
shares of any class or any security convertible into shares of
any class ranking as regards rights to participate in the
profits or assets of the Company (other than on a redemption or
purchase by the Company of any such shares) in priority to the
Non-cumulative Sterling Preference Shares;
(b) The special rights attached to any series of Non-cumulative
Sterling Preference Shares allotted or in issue shall not
(unless otherwise provided by their terms of issue) be deemed to
be varied by the creation or issue of any New Shares ranking as
regards participation in the profits or assets of the Company in
some or all respects pari passu with or after such
Non-cumulative Sterling Preference Shares. Any New Shares
ranking pari passu with such Non-cumulative Sterling Preference
Shares in some or all respects may without their creation or
issue being deemed to vary the special rights attached to any
Non-cumulative Sterling Preference Share then in issue either
carrying rights identical in all respects with such
Non-cumulative Sterling Preference Shares or any of them or
rights differing therefrom in any respect, including, but
without prejudice to the generality of the foregoing, in that:-
(i) the rate of or means of calculating the dividend may differ
and the dividend may be cumulative or non-cumulative;
(ii) the New Shares or any series thereof may rank for dividend
as from such date as may be provided by the terms of issue
thereof and the dates for payment of dividend may differ;
(iii) the New Shares may be denominated in Sterling or in any
Foreign Currency;
(iv) a premium may be payable on return of capital or there may
be no such premium;
(v) the New Shares may be redeemable at the option of the
holder or of the Company, or may be non-redeemable and if
redeemable at the option of the Company, they may be
redeemable at different dates and on different terms from
those applying to the Non-cumulative Sterling Preference
Shares; and
(vi) the New Shares may be convertible into Ordinary Shares or
any other class of shares ranking as regards participation
in the profits and assets of the Company pari passu with or
after such Non-cumulative Sterling Preference Shares in
each case on such terms and conditions as may be prescribed
by the terms of issue thereof.
19
(D) Non-cumulative dollar preference shares
(1) The Non-cumulative Dollar Preference Shares shall rank after the
Cumulative Preference Shares to the extent specified in this
Article 4, and shall rank pari passu inter se and (save as
aforesaid) with the Cumulative Preference Shares and with all
other New Preference Shares. They shall confer the rights and be
subject to the restrictions set out in this Article 4(D) and
shall also confer such further rights (not being inconsistent
with the rights set out in this Article 4(D)) as may be attached
by the Directors to such shares in accordance with this Article
4(D) prior to allotment. Whenever the Directors have power under
this Article to determine any of the rights attached to any of
the Non-cumulative Dollar Preference Shares, the rights so
determined need not be the same as those attached to the
Non-cumulative Dollar Preference Shares then allotted or in
issue. The Non-cumulative Dollar Preference Shares may be issued
in one or more separate series, and each series shall be
identified in such manner as the Directors may determine without
any such determination or identification requiring any
alteration to these presents.
(2) Each Non-cumulative Dollar Preference Share shall confer the
following rights as to participation in the profits and assets
of the Company, receipt of notices, attendance and voting at
meetings and redemption:-
(a) Income
the right (subject to the provisions of paragraph (b) of
this sub-Article, if applicable) to a non-cumulative
preferential dividend not exceeding a specified amount
payable in Dollars at such rate (which may be fixed or
variable and may be subject to recalculation at fixed
intervals) on such dates (each a "dividend payment date")
in respect of such periods (each a "dividend period") and
on such other terms and conditions as may be determined by
the Directors prior to allotment thereof. References in
these presents to a "dividend" on the Non-cumulative Dollar
Preference Shares include a reference to each dividend in
respect of each dividend period applicable thereto and
references in this Article 4(D) to dividend payment dates
and dividend periods are to dividend payment dates and
dividend periods in respect of the Non-cumulative Dollar
Preference Shares only. Such dividends shall be paid in
priority to the payment of any dividends on the Ordinary
Shares. The Non-cumulative Dollar Preference Shares shall
rank for dividend after the Cumulative Preference Shares,
pari passu with all other New Preference Shares expressed
to rank pari passu therewith as regards participation in
profits and otherwise in priority to any other share
capital in the Company.
(b) Further provisions as to income
All or any of the following provisions shall apply in
relation to any particular Non-cumulative Dollar Preference
Shares if so determined by the Directors prior to allotment
thereof:-
20
(i) if, in the opinion of the Directors, the distributable
profits of the Company are sufficient to cover the
payment in full of dividends on the Non-cumulative
Dollar Preference Shares on any dividend payment date
and also the payment in full of all other dividends
stated to be payable on such date on any other New
Preference Share expressed to rank pari passu
therewith as regards participation in profits, after
payment in full, or the setting aside of a sum to
cover the payment in full, of all dividends stated to
be payable on such date on any Cumulative Preference
Share, then each such dividend shall be declared and
paid in full;
(ii) if, in the opinion of the Directors, the distributable
profits of the Company are insufficient to cover the
payment in full of dividends on the Non-cumulative
Dollar Preference Shares on any dividend payment date
and also the payment in full of all other dividends
stated to be payable on such date on any other New
Preference Share expressed to rank pari passu
therewith as regards participation in profits, after
payment in full, or the setting aside of a sum to
cover the payment in full, of all dividends stated to
be payable on or before such date on any Cumulative
Preference Share, then dividends shall be declared by
the Directors pro rata for the Non-cumulative Dollar
Preference Shares and such other New Preference Shares
to the extent of the available distributable profits
(if any) to the intent that the amount of dividend
declared per share on each such Non-cumulative Dollar
Preference Share and other New Preference Share will
bear to each other the same ratio as the dividends
accrued per share on each such Non-cumulative Dollar
Preference Share and other New Preference Share bear
to each other. If it shall subsequently appear that
any such dividend which has been paid should not, in
accordance with the provisions of this sub-paragraph,
have been so paid, then provided the Directors shall
have acted in good faith, they shall not incur any
liability for any loss which any shareholder may
suffer in consequence of such payment having been
made;
(iii) if in the opinion of the Directors, the payment of
any dividend on any Non-cumulative Dollar Preference
Shares would breach or cause a breach of the Bank of
England's capital adequacy requirements applicable to
the Company and/or any of its subsidiaries, then none
of such dividend shall be declared or paid;
(iv) subject to sub-paragraph (v) below, the Non-cumulative
Dollar Preference Shares shall carry no further right
to participate in the profits of the Company and if
and to the extent that any dividend or part thereof is
on any occasion not paid for the reasons described in
sub-paragraph (ii) or (iii) above, the holders of such
shares shall have no claim in respect of such
non-payment;
21
(v) if any dividend or part thereof on any Non-cumulative
Dollar Preference Share is not payable for the reasons
specified in sub-paragraphs (ii) or (iii) above and if
they so resolve, the Directors may, subject to the
Statutes, pay a special non-cumulative preferential
dividend on the Non-cumulative Dollar Preference
Shares at a rate not exceeding one (1) US cent per
share (but so that reference elsewhere in this Article
and in Article 4(C) to any dividend payable on any
Non-cumulative Dollar Preference Shares shall not be
treated as including a reference to any such special
dividend);
(vi) if any date on which dividends are payable on
Non-cumulative Dollar Preference Shares is not a day
on which banks in London and the City of New York are
open for business, and on which foreign exchange
dealings may be conducted in such cities ("a Dollar
Business Day"), then payment of the dividend payable
on such date will be made on the succeeding Dollar
Business Day and without any interest or other payment
in respect of such delay unless such day shall fall
within the next calendar month whereupon such payment
will be made on the preceding Dollar Business Day;
(vii) dividends payable on Non-cumulative Dollar Preference
Shares shall accrue from and to the dates determined
by the Directors prior to allotment thereof, and the
amount of dividend payable in respect of any period
shorter than a full dividend period will be calculated
on the basis of twelve 30 day months, a 360 day year
and the actual number of days elapsed in such period;
(viii) if any dividend stated to be payable on the
Non-cumulative Dollar Preference Shares on the most
recent dividend payment date has not been declared and
paid in full, or if a sum has not been set aside to
provide for such payment in full, no dividends may be
declared on any other share capital of the Company
(other than the Cumulative Preference Shares), and no
sum may be set aside for the payment thereof, unless,
on the date of declaration relative to any such
payment, an amount equal to the dividend stated to be
payable on the Non-cumulative Dollar Preference Shares
in respect of the then current dividend period is set
aside for the payment in full of such dividend on the
dividend payment date relating to the then current
dividend period; and
(ix) if any dividend stated to be payable on the
Non-cumulative Dollar Preference Shares on any
dividend payment date has not been declared and paid
in full, or if a sum has not been set aside to provide
for such payment in full, the Company may not redeem
or purchase or otherwise acquire for any consideration
any other share capital of the Company, and may not
set aside any sum nor establish any sinking fund for
the redemption or purchase or other such acquisition
thereof,
22
until such time as dividends stated to be payable on
the Non-cumulative Dollar Preference Shares in
respect of successive dividend periods together
aggregating no less than twelve months shall
thereafter have been declared and paid in full.
(c) Capital
The right on a winding up or liquidation, voluntary or
otherwise other than (unless otherwise provided by the
terms of issue of such share) a redemption or purchase by
the Company of any shares of any class to receive in
Dollars out of the surplus assets of the Company available
for distribution amongst the members:-
(i) after payment of the arrears (if any) of the fixed
cumulative preferential dividends stated to be payable
on the Cumulative Preference Shares to the holders
thereof in accordance with Article 4(B) FIRSTLY and
pari passu with the holders of any other New
Preference Shares expressed to rank pari passu
therewith as regards participation in profits and in
priority to the holders of the Ordinary Shares of the
Company a sum equal to:-
(A) the amount of any dividend which is due for
payment after the date of commencement of the
winding up or liquidation but which is payable in
respect of a period ending on or before such
date; and
(B) any further amount of dividend payable in respect
of the period from the preceding dividend payment
date to the date of payment in accordance with
this sub-paragraph (i);
but only to the extent that any such amount or
further amount was, or would have been payable as
a dividend in accordance with or pursuant to this
Article 4(D) (other than pursuant to this
provision); and
(ii) subject thereto, pari passu with the holders of the
Cumulative Preference Shares and any other New
Preference Shares expressed to rank pari passu
therewith as regards participation in surplus assets
in priority to the holders of the Ordinary Shares of
the Company, a sum equal to the amount paid up or
credited as paid up on the Non-cumulative Dollar
Preference Shares (including any premium paid to the
Company in respect thereof on issue).
If upon any such winding-up or liquidation, the amounts
available for payment are insufficient to cover the amounts
payable in full on the Cumulative Preference Shares, the
Non-cumulative Dollar Preference Shares and on any other
New Preference Shares expressed to rank pari passu
therewith as regards participation in surplus assets, then
the holders of the Cumulative Preference Shares,
23
the Non-cumulative Dollar Preference Shares and such other
New Preference Shares will share rateably in the
distribution of surplus assets (if any) in proportion to
the full respective preferential amounts to which they are
entitled. No Non-cumulative Dollar Preference Share shall
confer any right to participate in the surplus assets of
the Company other than that set out in this sub-paragraph
(2)(c) of this Article 4(D).
(d) Receipt of Notices
The right to have sent to the holder of each Non-cumulative
Dollar Preference Share (at the same time as the same are
sent to the holders of Ordinary Shares) a copy of the
Company's Annual Report and Accounts and Interim Financial
Statement together with notice of any General Meeting of
the Company at which such holder is entitled to attend and
vote.
(e) Attendance and Voting at Meetings
The right to attend at a General Meeting of the Company and
to speak to or vote upon any Resolution proposed thereat in
the following circumstances:-
(i) in respect of a Resolution which is to be proposed at
the Meeting either varying or abrogating any of the
rights attached to the Non-cumulative Dollar
Preference Shares or proposing the winding up of the
Company (and then in each such case only to speak to
and vote upon any such Resolution);
(ii) in circumstances where the dividend stated to be
payable on the Non-cumulative Dollar Preference Shares
in respect of such number of dividend periods as the
Directors shall determine prior to allotment thereof
has not been declared and paid in full, and until such
date as the Directors shall likewise determine; and
(iii) in such other circumstances as the Directors may
determine prior to allotment of the Non-cumulative
Dollar Preference Shares,
but not otherwise, together with the right, in such
circumstances, if any, as the Directors may determine prior
to allotment of the Non-cumulative Dollar Preference
Shares, to seek to requisition a General Meeting of the
Company for which purpose the Non-cumulative Dollar
Preference Shares will be deemed to carry the number of
votes determined pursuant to the following sentence.
Whenever holders of Non-cumulative Dollar Preference Shares
are so entitled to vote on a Resolution, on a show of hands
every such holder who is present in person shall have one
vote and, on a poll, every such holder who is present in
person or by proxy shall have such number of votes for each
Non-cumulative Dollar Preference Share held as
24
may be determined by the Directors prior to allotment of
such Non-cumulative Dollar Preference Shares.
(f) Redemption
(i) Unless the Directors shall, prior to the allotment of
any series of Non-cumulative Dollar Preference Shares,
determine that such series shall be non-redeemable,
each series of Non-cumulative Dollar Preference Shares
shall, subject to the provisions of the Statutes, be
redeemable at the option of the Company in accordance
with the following provisions.
(ii) In the case of any series of Non-cumulative Dollar
Preference Shares which are to be so redeemable:-
(A) the Company may, subject thereto, redeem on any
Redemption Date (as hereinafter defined) all or
some only of the Non-cumulative Dollar Preference
Shares by giving to the holders of the
Non-cumulative Dollar Preference Shares to be
redeemed not less than 30 days' nor more than 60
days' prior notice in writing (a "Notice of
Redemption") of the relevant Redemption Date.
"Redemption Date" means, in relation to a
Non-cumulative Dollar Preference Share, any date
which falls no earlier than five years and one
day after the date of allotment of the
Non-cumulative Dollar Preference Share to be
redeemed;
(B) there shall be paid on each Non-cumulative Dollar
Preference Share so redeemed, in Dollars, the
aggregate of the nominal amount thereof together
with any premium paid on issue together with,
where applicable, the Relevant Redemption Premium
(defined below) and together with arrears (if
any) of dividends thereon (whether earned or
declared or not) in respect of the period from
the dividend payment date last preceding the
Redemption Date to the Redemption Date. "Relevant
Redemption Premium" means an amount calculated in
accordance with the following formula as applied
in relation to a Redemption Date notified under
sub-paragraph (A) above which falls within the
period of twelve months commencing on the date
following the fifth, sixth, seventh, eighth or
ninth anniversary of the relevant date of
allotment ("the Relevant Date"), as the case may
be. The formula for calculation of the Relevant
Redemption Premium shall be
A x B
25
where:-
"A" is the amount of dividend excluding any
associated tax credit (not expressed as a
percentage) calculated at the date of allotment
to which the holder of the Non-cumulative Dollar
Preference Share to be redeemed would become
entitled in respect of the twelve months
following allotment by virtue of the terms of
issue thereof on the assumption that such amount
of dividend had accrued on the Non-cumulative
Dollar Preference Share during such period and
was payable at the end of such period and on the
further assumption that there shall be no change
in the associated tax credit affecting the amount
of dividend payable in respect of such period;
and
"B" in relation to a Redemption Date falling
within the period of twelve months commencing on
the day following the fifth anniversary of the
Relevant Date, is 66.66 per cent,
or
in relation to a Redemption Date falling within
the period of twelve months commencing on the day
following the sixth anniversary of the Relevant
Date, is 53.33 per cent,
or
in relation to a Redemption Date falling within
the period of twelve months commencing on the day
following the seventh anniversary of the Relevant
Date, is 40.00 per cent,
or
in relation to a Redemption Date falling within
the period of twelve months commencing on the day
following the eighth anniversary of the Relevant
Date, is 26.66 per cent,
or
in relation to a Redemption Date falling within
the period of twelve months commencing on the day
following the ninth anniversary of the Relevant
Date is 13.33 per cent. No Relevant Redemption
Premium shall be payable when the Redemption Date
falls after the tenth anniversary of the Relevant
Date. The product of the above formula in respect
of a Non-cumulative Dollar Preference Share may,
26
in the Directors' discretion, be rounded down to
the nearest whole cent;
(C) in the case of a redemption of some only of the
Non-cumulative Dollar Preference Shares in any
series, the Company shall for the purpose of
determining the particular Non-cumulative Dollar
Preference Shares to be redeemed cause a drawing
to be made at the Office or such other place as
the Directors may approve in the presence of the
Auditors for the time being of the Company;
(D) any Notice of Redemption given under
sub-paragraph (ii) (A) above shall specify the
applicable Redemption Date, the particular
Non-cumulative Dollar Preference Shares to be
redeemed and the redemption price (specifying the
amount of the accrued and unpaid dividend per
share to be included therein and stating that
dividends on the Non-cumulative Dollar Preference
Shares to be redeemed will cease to accrue on
redemption), and shall state the place or places
at which documents of title in respect of such
Non-cumulative Dollar Preference Shares are to be
presented and surrendered for redemption and
payment of the redemption monies is to be
effected. Upon such Redemption Date, the Company
shall redeem the particular Non-cumulative Dollar
Preference Shares to be redeemed on that date
subject to the provisions of this paragraph and
of the Statutes. No defect in the Notice of
Redemption or in the giving thereof shall affect
the validity of the redemption proceedings;
(E) the provisions of this and the following
sub-paragraphs shall have effect in relation to
Non-cumulative Dollar Preference Shares for the
time being issued and registered in the Register
of Members ("Registered Shares") and represented
by certificates ("Certificates") and in relation
to Non-cumulative Dollar Preference Shares which,
in accordance with Article 52 of these presents,
are for the time being issued and represented by
a Warrant (as defined in the said Article 52)
("Bearer Shares"). Payments in respect of the
amount due on redemption of a Registered Share
shall be made by Dollar cheque drawn on a bank in
London or in the City of New York or upon the
request of the holder or joint holders not later
than the date specified for the purpose in the
Notice of Redemption by transfer to a Dollar
account maintained by the payee with a bank in
London or in the City of New York. Such payment
will be against presentation and surrender
27
of the relative Certificate at the place or one
of the places specified in the Notice of
Redemption and if any Certificate so surrendered
includes any Non-cumulative Dollar Preference
Shares not to be redeemed on the relevant
Redemption Date the Company shall within fourteen
days thereafter issue to the holder, free of
charge, a fresh Certificate in respect of such
Non-cumulative Dollar Preference Shares. Payment
in respect of the amount due on redemption of a
Bearer Share shall be made by Dollar cheque drawn
on a bank in London or in the City of New York or
upon the request of the holder not later than the
date specified for the purpose in the Notice of
Redemption by transfer to a Dollar account
maintained by the payee with a bank in London or
in the City of New York. Such payments will be
made against presentation and surrender of the
Warrant and all unmatured dividend coupons and
talons (if any) at the place or the places
specified in the Notice of Redemption. Upon the
relevant Redemption Date all unmatured dividend
coupons and any talon for additional dividend
coupons appertaining thereto (whether or not
returned) shall become void and no payment will
be made in respect thereof. If the Warrant so
surrendered represents any Non-cumulative Dollar
Preference Shares not to be redeemed on the
relevant Redemption Date the Company shall issue,
free of charge, a fresh Warrant representing such
Bearer Shares which are not to be redeemed on
such Redemption Date.
All payments in respect of redemption monies will
in all respects be subject to any applicable
fiscal or other laws;
(F) as from the relevant Redemption Date the dividend
on the Non-cumulative Dollar Preference Shares
due for redemption shall cease to accrue except
on any such Non-cumulative Dollar Preference
Share in respect of which, upon the due surrender
of the Certificate or, as the case may be, the
Warrant and all unmatured dividend coupons and
talons (if any) in respect thereof, in accordance
with sub-paragraph (E) above, payment of the
redemption monies due on such Redemption Date
shall be improperly withheld or refused, in which
case such dividend, at the rate then applicable,
shall be deemed to have continued and shall
accordingly continue to accrue from the relevant
Redemption Date to the date of payment of such
redemption monies. Such Non-cumulative Dollar
Preference Share shall not be treated as having
been redeemed until the redemption monies
28
in question together with the accrued dividend
thereon shall have been paid;
(G) if the due date for the payment of the redemption
monies on any Non-cumulative Dollar Preference
Shares is not a Dollar Business Day then payment
of such monies will be made on the next
succeeding day which is a Dollar Business Day and
without any interest or other payment in respect
of such delay unless such day shall fall within
the next calendar month whereupon such payment
will be made on the preceding Dollar Business
Day; and
(H) the receipt of the holder for the time being of
any Registered Share (or in the case of joint
holders the receipt of any one of them) and the
receipt of the person delivering any Warrant to
the place or one of the places specified pursuant
to sub-paragraph (D) above in respect of the
monies payable on redemption on such Registered
Share or, as the case may be, such Bearer Share,
shall constitute an absolute discharge to the
Company.
(g) Purchase
Subject to the provisions of the Statutes and any other
applicable laws, the Company may at any time and from time
to time purchase any Non-cumulative Dollar Preference
Shares upon such terms as the Directors shall determine
provided that, in the case of Non-cumulative Dollar
Preference Shares which are listed on the London Stock
Exchange, the purchase price, exclusive of expenses and
accrued dividends, shall not exceed (i) in the case of a
purchase in the open market, or by tender (which shall be
available alike to all holders of the Non-cumulative Dollar
Preference Shares), the average of the closing middle
market quotations of such Non-cumulative Dollar Preference
Shares on the London Stock Exchange (as derived from The
London Stock Exchange Daily Official List) for the last ten
dealing days preceding the date of purchase or (if higher),
in the case of a purchase in the open market only, the
market price on the date of purchase provided that such
market price is not more than 105 per cent of such average
and (ii) in the case of a purchase by private treaty, 120
per cent of the closing middle market quotation of such
Non-cumulative Dollar Preference Shares on the London Stock
Exchange (as derived from The London Stock Exchange Daily
Official List) for the last dealing day preceding the date
of purchase: but so that this proviso shall not apply to
any purchase of Non-cumulative Dollar Preference Shares
made in the ordinary course of a business of dealing in
securities.
(3)(a) Save with the written consent of the holders of
three-quarters in nominal value of, or with the sanction of
an Extraordinary Resolution passed at a separate General
Meeting of the holders of, the Non-cumulative Dollar
Preference Shares, the Directors shall not authorise or
create, or increase the
29
amount of, any shares of any class or any security
convertible into shares of any class ranking as regards
rights to participate in the profits or assets of the
Company (other than on a redemption or purchase by the
Company of any such shares) in priority to the
Non-cumulative Dollar Preference Shares.
(b) The special rights attached to any series of Non-cumulative
Dollar Preference Shares allotted or in issue shall not
(unless otherwise provided by their terms of issue) be
deemed to be varied by the creation or issue of any New
Shares ranking as regards participation in the profits or
assets of the Company in some or all respects pari passu
with or after such Non-cumulative Dollar Preference Shares.
Any new shares ranking in some or all respects pari passu
with such Non-cumulative Dollar Preference Shares may
without their creation or issue being deemed to vary the
special rights attached to any Non-cumulative Dollar
Preference Share then in issue either carry rights
identical in all respects with such Non-cumulative Dollar
Preference Shares or any of them or carry rights differing
therefrom in any respect, including, but without prejudice
to the generality of the foregoing, in that:-
(i) the rate or means of calculating the dividend may
differ and the dividend may be cumulative or
non-cumulative;
(ii) the New Shares or any series thereof may rank for
dividend as from such date as may be provided by the
terms of issue thereof and the dates for payment of
dividend may differ;
(iii) the New Shares may be denominated in Sterling or in
any Foreign Currency;
(iv) a premium may be payable on return of capital or there
may be no such premium;
(v) the New Shares may be redeemable at the option of the
holder or of the Company, or may be non-redeemable and
if redeemable at the option of the Company, they may
be redeemable at different dates and on different
terms from those applying to the Non-cumulative Dollar
Preference Shares; and
(vi) the New Shares may be convertible into Ordinary Shares
or any other class of shares ranking as regards
participation in the profits and assets of the Company
pari passu with or after such Non-cumulative Dollar
Preference Shares in each case on such terms and
conditions as may be prescribed by the terms of issue
thereof.
(E) Category II non-cumulative dollar preference shares
(1) The rights as regards participation in profits and assets of the
Company, receipt of notice, attendance and voting at meetings
and redemption attaching to the Category II Non-cumulative
Dollar Preference Shares of US$0.01 each in the capital of the
Company( "Category II Non-cumulative Dollar Preference Shares")
shall be as provided by this Article 4(E).
30
(2) Article 4(D) (in its present form or as from time to time
altered) shall apply to the Category II Non-cumulative Dollar
Preference Shares but with the following modifications:-
(a) subject to (b) below, for any reference (however worded and
whether express or implied) to Non-cumulative Dollar
Preference Shares there shall be deemed to be substituted a
reference to Category II Non-cumulative Dollar Preference
Shares;
(b) references to "New Preference Shares" shall be deemed to
include the Non-cumulative Dollar Preference Shares;
(c) in Article 4(D)(2)(e) the words "and on such terms" shall
be deemed to be inserted after "such circumstances" and the
words "for which purpose the Non-cumulative Dollar
Preference Shares will be deemed to carry the number of
votes determined pursuant to the following sentence" shall
be deemed to be deleted;
(d) in relation to any Category II Non-cumulative Dollar
Preference share allotted prior to 16 January 1997 or
allotted on exchange of any Exchangeable Capital
Securities, Series A of the Company, in Article
4(D)(2)(f)(ii)(A) the last sentence shall be deemed to be
deleted and the following deemed to be substituted
therefor:-
""Redemption Date" means, in relation to any Category II
Non-cumulative Dollar Preference Share, any date which
either (i) falls no earlier than such date (if any) as may
be fixed by the Directors, prior to allotment of that
share, as being the earliest date on which the Company may
redeem such share, and the date so fixed shall be no
earlier than five years and one day, and no later than ten
years and one day, after the relevant date of allotment, or
(ii) if no date is fixed by the Directors as aforesaid
under (i) above in relation to that share, falls no earlier
than five years and one day after the date of allotment of
the Category II Non-cumulative Dollar Preference Share to
be redeemed";
(e) in relation to any Category II Non-cumulative Dollar
Preference Shares allotted on or after 16 January 1997
(other than on exchange of any Exchangeable Capital
Securities, Series A of the Company), sub-paragraphs (A)
and (B) of Article 4(D)(2)(f)(ii) shall be deemed to be
deleted and the following deemed to be substituted
therefor:-
"(A) the Company may, subject thereto, redeem on any
Redemption Date (as hereinafter defined) all or some
only of the Category II Non-cumulative Dollar
Preference Shares by giving to the holders of the
Category II Non-cumulative Dollar Preference Shares to
be redeemed not less than 30 days nor more than 60
days prior notice in writing (a "Notice of
Redemption") of the relevant Redemption Date.
"Redemption Date" means, in relation to a Category II
Non-cumulative Dollar Preference Share, any date which
falls no earlier than three years and one day (or such
longer period (if any) as may be fixed by the
Directors prior to allotment
31
of such Share) after the date of allotment of the
Category II Non-cumulative Dollar Preference Share to
be redeemed ("the Relevant Date") (provided that the
Directors may determine prior to allotment that a
Redemption Date must, in addition to falling as
aforesaid, fall on such anniversary (or on such
anniversaries) of the date of allotment as may be
fixed by the Directors prior to allotment);
(B) there shall be paid on each Category II Non-cumulative
Dollar Preference Share so redeemed, in Dollars, the
aggregate of the nominal amount thereof together with
any premium paid on issue together with, where
applicable, the Relevant Redemption Premium (defined
below) and together with arrears (if any) of dividends
thereon (whether earned or declared or not) in respect
of the period from the dividend payment date last
preceding the Redemption Date to the Redemption Date.
"Relevant Redemption Premium" means an amount
calculated in accordance with such one (if any) of the
following three formulae as applied in relation to a
Redemption Date notified under sub-paragraph (A) above
which falls within the period of twelve months
commencing on the date following the third, fourth,
fifth, sixth or seventh anniversary of the Relevant
Date, as the case may be, as may be determined by the
Directors prior to the Relevant Date. The formula for
calculation of the Relevant Redemption Premium shall
be:-
(a) A x B
where:-
"A" is the amount of dividend excluding any
associated tax credit (not expressed as a
percentage) calculated at the date of allotment
to which the holder of the Category II
Non-cumulative Dollar Preference Share to be
redeemed would become entitled in respect of the
twelve months following allotment by virtue of
the terms of issue thereof on the assumption that
such amount of dividend had accrued on the
Category II Non-cumulative Dollar Preference
Share during such period and was payable at the
end of such period and on the further assumption
that there shall be no change in the associated
tax credit affecting the amount of dividend
payable in respect of such period; and
"B" in relation to a Redemption Date falling
within the period of twelve months commencing on
the day following the third anniversary of the
Relevant Date, is 66.66 per cent.,
or
32
in relation to a Redemption Date falling within
the period of twelve months commencing on the day
following the fourth anniversary of the Relevant
Date, is 53.33 per cent.,
or
in relation to a Redemption Date falling within
the period of twelve months commencing on the day
following the fifth anniversary of the Relevant
Date, is 40.00 per cent.,
or
in relation to a Redemption Date falling within
the period of twelve months commencing on the day
following the sixth anniversary of the Relevant
Date, is 26.66 per cent.,
or
in relation to a Redemption Date falling within
the period of twelve months commencing on the day
following the seventh anniversary of the Relevant
Date is 13.33 per cent; or
(b) C x D
where:-
"C" is the amount of dividend excluding any
associated tax credit (not expressed as a
percentage) calculated at the date of allotment
to which the holder of the Category II
Non-cumulative Dollar Preference Share to be
redeemed would become entitled in respect of the
twelve months following allotment by virtue of
the terms of issue thereof on the assumption that
such amount of dividend had accrued on the
Category II Non-cumulative Dollar Preference
Share during such period and was payable at the
end of such period and on the further assumption
that there shall be no change in the associated
tax credit affecting the amount of dividend
payable in respect of such period; and
"D" in relation to a Redemption Date falling
within the period of twelve months commencing on
the day following the third anniversary of the
Relevant Date, is 50 per cent.,
or
33
in relation to a Redemption Date falling within
the period of twelve months commencing on the day
following the fourth anniversary of the Relevant
Date, is 40 per cent.,
or
in relation to a Redemption Date falling within
the period of twelve months commencing on the day
following the fifth anniversary of the Relevant
Date, is 30 per cent.,
or
in relation to a Redemption Date falling within
the period of twelve months commencing on the day
following the sixth anniversary of the Relevant
Date, is 20 per cent.,
or
in relation to a Redemption Date falling within
the period of twelve months commencing on the day
following the seventh anniversary of the Relevant
Date is 10 per cent; or
(c) E x F
where:-
"E" is the amount of US$25; and
"F" in relation to a Redemption Date falling
within the period of twelve months commencing on
the day following the third anniversary of the
Relevant Date, is 33.33 per cent.,
or
in relation to a Redemption Date falling within
the period of twelve months commencing on the day
following the fourth anniversary of the Relevant
Date, is 26.66 per cent.,
or
in relation to a Redemption Date falling within
the period of twelve months commencing on the day
following the fifth anniversary of the Relevant
Date, is 20 per cent.,
or
34
in relation to a Redemption Date falling within
the period of twelve months commencing on the day
following the sixth anniversary of the Relevant
Date, is 13.33 per cent.,
or
in relation to a Redemption Date falling within
the period of twelve months commencing on the day
following the seventh anniversary of the Relevant
Date, is 6.66 per cent.
No Relevant Redemption Premium shall be payable when
the Redemption Date falls after the eighth anniversary
of the Relevant Date. The product of any of the above
formulae in respect of a Category II Non-cumulative
Dollar Preference Share may, in the Directors'
discretion, be rounded down to the nearest whole cent.
The Directors may, in their discretion, determine in
relation to any Category II Non-cumulative Dollar
Preference Share, prior to the Relevant Date, that
none of the above formulae shall apply, in which event
no Relevant Redemption Premium shall be payable;"",
and
(f) notwithstanding the terms of sub-paragraph (e) above, in
relation to any Category II Non-cumulative Dollar
Preference Shares allotted on or after 14 January 2000
(other than on exchange of any Exchangeable Capital
Securities, Series A of the Company) the provisions of
sub-paragraph (A) and (B) set out in sub-paragraph (e)
above shall have effect subject to the following
modifications:
(i) the reference in sub-paragraph (A) to three years and
one day shall be deemed to be a reference to five
years and one day;
(ii) notwithstanding the terms of sub-paragraph (B), a
Relevant Redemption Premium shall only be payable when
the relevant Redemption Date falls after the tenth
anniversary of the Relevant Date and on or prior to
the twentieth anniversary of the Relevant Date (the
"redemption premium period "). The formula for
calculation of such Relevant Redemption Premium
(subject to rounding down as specified in
sub-paragraph (B)) shall be as specified in (iii)
below. The Directors may, in their discretion,
determine in relation to any Category II
Non-cumulative Dollar Preference Share, prior to the
Relevant Date, that no Relevant Redemption Premium
shall be payable;
(iii) the formula for calculating the Relevant Redemption
Premium shall be:
A x B
35
where:
"A" is as defined in sub-paragraph (e) above;
"B" is, in relation to any Redemption Date falling
within the redemption premium period, a percentage
determined from the table below by reference to the
anniversary of the Relevant Date specified in the
left-hand column which is the latest to occur prior to
that Redemption Date:
Anniversary of the
Relevant Date Percentage
------------- ----------
tenth 50%
eleventh 45%
twelfth 40%
thirteenth 35%
fourteenth 30%
fifteenth 25%
sixteenth 20%
seventeenth 15%
eighteenth 10%
nineteenth 5%
(3) For the avoidance of doubt, the Category II Non-cumulative
Dollar Preference Shares are, for the purposes of Articles
4(C) and 4(D), New Preference Shares expressed to rank pari
passu with the Non-cumulative Sterling Preference Shares
and the Non-cumulative Dollar Preference Shares as regards
participation in surplus profits and surplus assets.
(F) Subject to the provisions of Article 4 and to the special rights
attached to the Non-cumulative Sterling Preference Shares and
the Non-cumulative Dollar Preference Shares and the Category II
Non-cumulative Dollar Preference Shares and the Non-cumulative
Euro Preference Shares and the Convertible Preference Shares (as
defined in Article 4B) and the Category II Non-cumulative
Convertible Sterling Preference Shares and to any special rights
which are or may be attached to any other class of shares (i)
the profits of the Company available for dividend and resolved
to be distributed shall be distributed by way of dividend
amongst the holders of the Ordinary Shares and (ii) on a winding
up or liquidation, voluntary or otherwise, the residue, if any,
of the surplus assets of the Company available for distribution
amongst the members shall belong to the holders of the Ordinary
Shares and be divided amongst them in proportion to the amounts
paid up or credited as paid up on such shares held by them
respectively.
4A. Non-cumulative Euro Preference Shares
Each Non-cumulative Euro Preference Share of (euro)0.01 forming part of
the share capital of the Company (a "Non-cumulative Euro Preference
Share") shall confer the rights as to participation in the profits and
assets of the Company, receipt of notices, attendance and votings at
meetings and redemption specified or referred to in Schedule 1 to these
presents ("Schedule 1", which Schedule shall be regarded as part of these
presents).
36
4B. Non-cumulative Convertible Preference Shares
(1) Non-cumulative Convertible Sterling Preference Shares: Each
Non-cumulative Convertible Sterling Preference Share of (pound)0.01
forming part of the share capital of the Company (a "Non-cumulative
Convertible Sterling Preference Share") shall confer the rights as to
participation in the profits and assets of the Company, receipt of
notices, attendance and voting at meetings, redemption and conversion
specified or referred to in Parts 1 and 4 of Schedule 2 to these
presents ("Schedule 2" which schedule shall be regarded as part of
these presents).
(2) Non-cumulative Convertible Dollar Preference Shares: Each
Non-cumulative Convertible Dollar Preference Share of US$0.01 forming
part of the share capital of the Company (a "Non-cumulative
Convertible Dollar Preference Share") shall confer the rights as to
participation in the profits and assets of the Company, receipt of
notices, attendance and voting at meetings, redemption and conversion
specified or referred to in Parts 2 and 4 of Schedule 2.
(3) Non-cumulative Convertible Euro Preference Shares: Each
Non-cumulative Convertible Euro Preference Share of (euro) 0.01
forming part of the share capital of the Company (a "Non-cumulative
Convertible Euro Preference Share") shall confer the rights as to
participation in the profits and assets of the Company, receipt of
notices, attendance and voting at meetings, redemption and conversion
specified or referred to in Parts 3 and 4 of Schedule 2.
(4) In Schedule 2, "Convertible Preference Shares" means all or any of
the Non-cumulative Convertible Sterling Preference Shares, the
Non-cumulative Convertible Dollar Preference Shares and the
Non-cumulative Convertible Euro Preference Shares (each a
"Convertible Preference Share").
4C. Category II Non-cumulative Convertible Sterling Preference Shares
Each Category II Non-cumulative Convertible Preference Share of
(pound)0.25 forming part of the share capital of the Company (a "Category
II Non-cumulative Convertible Sterling Preference Share") shall confer the
rights as to participation in the profits and assets of the Company,
receipt of notices, attendance and voting at meetings, redemption and
conversion specified or referred to in Schedule 3 to these presents
("Schedule 3" which schedule shall be regarded as part of these presents).
4D. Additional Value Shares
Each Additional Value Share of (pound)0.01 forming part of the share
capital of the Company (an "Additional Value Share") shall confer the
rights as to participation in the profits and assets of the Company,
receipt of notices, attendance and voting at meetings and conversion
specified or referred to in Schedule 4 to these presents ("Schedule 4")
which schedule shall be regarded as part of these presents.
5. Shares with special rights and redeemable shares
Without prejudice to any special rights previously conferred on the
holders of any shares or class of shares for the time being issued (which
special rights may be varied or abrogated only in the manner provided by
the next following Article), any share in the Company may be issued with
such preferred, deferred or other special rights, or subject to such
restrictions, whether in regard to participation in the profits or assets
of the Company, voting or
37
otherwise, as the Company may from time to time by Ordinary Resolution
determine (or, failing any such determination or in pursuance of any power
conferred on the Directors by these presents or by Ordinary Resolution, as
the Directors may determine) and subject to the provisions of the Statutes
the Company may issue any shares which are, or at the option of the
Company or the holder are to be liable, to be redeemed.
VARIATION OF RIGHTS
6. Method of varying class rights
Whenever the share capital of the Company is divided into different
classes of shares, the special rights attached to any class may, subject
to the provisions of the Statutes, be varied or abrogated either with the
consent in writing of the holders of three-fourths of the issued shares of
the class or with the sanction of an Extraordinary Resolution passed at a
separate General Meeting of the holders of the shares of the class (but
not otherwise) and may be so varied or abrogated either whilst the Company
is a going concern or during or in contemplation of a winding up. To every
such separate General Meeting all the provisions of these presents
relating to General Meetings of the Company and to the proceedings thereat
shall mutatis mutandis apply, except that the necessary quorum shall be
two persons at least holding or representing by proxy one-third in nominal
amount of the issued shares of the class (but so that if at any adjourned
meeting a quorum as above defined is not present, any two holders of
shares of the class present in person or by proxy shall be a quorum) and
that any holder of shares of the class present in person or by proxy may
demand a poll and that every such holder shall on a poll have one vote for
every share of the class held by him. The foregoing provisions of this
Article shall apply to the variation or abrogation of the special rights
attached to some only of the shares of any class as if the shares
concerned and the remaining shares of such class formed separate classes.
7. When share rights deemed to be varied
The special rights attached to any class of shares having preferential
rights shall not unless otherwise expressly provided by the terms of issue
thereof be deemed to be varied by the creation or issue of further shares
ranking as regards participation in the profits or assets of the Company
in some or all respects pari passu therewith but in no respect in priority
thereto.
ALTERATION OF CAPITAL
8. Increase of capital
The Company may from time to time by Ordinary Resolution increase its
capital by such sum to be divided into shares of such amounts, and
denominated in such currencies, as the resolution shall prescribe.
9. New shares
All new shares shall be subject to the provisions of the Statutes and of
these presents with reference to allotment, payment of calls, lien,
transfer, transmission, forfeiture and otherwise.
10 (A). Alterations permitted by ordinary resolution
The Company may by Ordinary Resolution:-
38
(1) Consolidate and divide all or any of its share capital into
shares of larger amount than its existing shares.
(2) Cancel any shares which, at the date of the passing of the
resolution, have not been taken, or agreed to be taken, by any
person and diminish the amount of its capital by the amount of
the shares so cancelled.
(3) Sub-divide its shares, or any of them, into shares of smaller
amount than is fixed by the Memorandum of Association (subject,
nevertheless, to the provisions of the Statutes), and so that
the resolution whereby any share is sub-divided may determine
that, as between the holders of the shares resulting from such
sub-division, one or more of the shares may, as compared with
the others, have any such preferred, deferred or other special
rights, or be subject to any such restrictions, as the Company
has power to attach to unissued or new shares.
(B). Fractions arising
Upon any consolidation of fully paid shares into shares of larger
amount the Directors may settle any difficulty which may arise with
regard thereto and in particular may as between the holders of shares
so consolidated determine which shares are consolidated into each
consolidated share and in the case of any shares registered in the
name of one holder (or joint holders) being consolidated with shares
registered in the name of one holder (or joint holders) may make such
arrangements for the allocation, acceptance or sale of the
consolidated share and for the distribution of any moneys received in
respect thereof as may be thought fit and for the purpose of giving
effect thereto may appoint some person to transfer the consolidated
share or any fractions thereof and to receive the purchase price
thereof and any transfer executed in pursuance thereof shall be
effective and after such transfer has been registered no person shall
be entitled to question its validity.
11. Power to purchase own shares
Subject to the provisions of the Statutes, and to any rights conferred on
the holders of any class of shares and to any requirements imposed by the
London Stock Exchange in respect of securities admitted to listing, the
Company may purchase, or enter into a contract under which it will or may
purchase, any of its own shares (including any redeemable shares). Neither
the Company nor the Directors shall be required to select the shares to be
purchased rateably or in any other particular manner as between the
holders of shares of the same class or as between them and the holders of
shares of any other class or in accordance with the rights as to dividends
or capital conferred by any class of shares.
Unless otherwise provided by the terms of issue, the rights attached to
any New Preference Share shall not be deemed to be varied or abrogated by
the purchase or redemption by the Company of any of its shares ranking as
regards participation in the profits or assets of the Company pari passu
with or postponed to such share.
12. Power to reduce capital
The Company may reduce its share capital or any capital redemption
reserve, share premium account or other undistributable reserve in any
manner and with and subject to any incident authorised, and consent
required, by law. Unless otherwise provided by the terms of issue, the
rights attached to any New Preference Share shall not be deemed to be
varied or abrogated by a reduction of any share capital ranking as regards
participation in the profits and assets of the Company pari passu with or
postponed to such share.
39
SHARES
13 (A). Shares at the disposal of the Directors
Subject to the provisions of the Statutes relating to authority,
pre-emption rights and otherwise and of any resolution of the Company
in General Meeting passed pursuant thereto and of these presents, all
unissued shares in the Company shall be at the disposal of the
Directors and they may allot (with or without conferring a right of
renunciation), grant options over or otherwise dispose of them to
such persons, at such times and on such terms as they think proper.
No share in the Company may be allotted (a) for cash in a currency
other than that in which it is denominated or (b) for a consideration
other than cash unless the value ascribed thereto is denominated in
the same currency as such share.
(B). Directors' authority to allot shares and power to allot shares for
cash
(1) The Directors shall be generally and unconditionally authorised
pursuant to and in accordance with Section 80 of the 1985 Act to
exercise for each Section 80 prescribed period all the powers of
the Company to allot and to make offers or agreements to allot
relevant securities up to an aggregate nominal amount equal to
the Section 80 amount (save that the Directors shall not be
authorised hereunder to issue any New Preference Shares).
(2) During each Section 89 prescribed period the Directors shall be
empowered to allot and to make offers or agreements to allot
equity securities wholly for cash pursuant to and within the
terms of the said authority:-
(i) in connection with a rights issue;
(ii) pursuant to any authority conferred upon the Directors in
accordance with and pursuant to Article 143; and
(iii) otherwise than pursuant to sub-paragraphs (i) or (ii)
above, up to an aggregate nominal amount equal to the
Section 89 amount;
as if Section 89(1) of the 1985 Act did not apply to any such
allotment.
(3) By such authority and power, the Directors may during such
period make offers or agreements which would or might require
the allotment of securities after the expiry of such period.
(4) For the purposes of this Article 13(B):
(i) "rights issue" means an offer of equity securities to
holders on a fixed record date of (a) Ordinary Shares in
proportion to their respective holdings and (b) other
equity securities to the extent required or permitted by
the rights attached thereto (but subject to such exclusions
or other arrangements as the Directors may deem necessary
or expedient in relation to fractional entitlements or
legal or practical problems under the laws of, or the
requirements of any recognised regulator body or any stock
exchange in, any territory);
40
(ii) "Section 80 prescribed period" means, in the first
instance, a period of 5 years commencing on the day of the
adoption of these Articles and thereafter shall mean any
other period (not exceeding 5 years on any occasion) for
which the authority conferred by sub-paragraph (1) above is
renewed or extended by an Ordinary Resolution of the
Company stating the Section 80 amount for such period;
(iii) "Section 89 prescribed period" means, in the first
instance, the period from the date of the adoption of these
Articles to the date of the Annual General Meeting in 1999
or 15 months from the day of the adoption of these
Articles, whichever is the earlier, and shall thereafter
mean any period (not exceeding 15 months on any occasion)
for which the authority and power conferred by
sub-paragraph (2) above is renewed by a Special Resolution
of the Company stating the Section 89 amount for such
period;
(iv) "Section 80 amount" shall for the first Section 80
prescribed period be (pound)44,956,071 and for any other
Section 80 prescribed period shall be that stated in the
relevant Ordinary Resolution or any increased amount fixed
by Ordinary Resolution;
(v) "Section 89 amount" shall for the first Section 89
prescribed period be (pound)10,751,951 and for any other
Section 89 prescribed period shall be that stated in the
relevant Special Resolution; and
(vi) the nominal amount of any securities shall be taken to be,
in the case of rights to subscribe for or to convert any
securities into shares of the Company, the nominal amount
of such shares which may be allotted pursuant to such
rights.
14. Commission
In addition to all other powers of paying commissions, the Company may
exercise the powers of paying commissions conferred by the Statutes to the
full extent thereby permitted. The Company may also on any issue of shares
pay such brokerage as may be lawful. Subject to the Statutes, any such
commission or brokerage may be satisfied by the payment of cash or by the
allotment of fully or partly paid shares or partly in one way and partly
in another.
15. Renunciation
The Directors may at any time after the allotment of any share but before
any person has been entered in the Register of Members as the holder
recognise a renunciation thereof by the allottee in favour of some other
person and may accord to any allottee of a share a right to effect such
renunciation upon and subject to such terms and conditions as the
Directors may think fit to impose
16. Interests not recognised
Except as required by law, no person shall be recognised by the Company as
holding any share upon any trust, and the Company shall not be bound by or
compelled in any way to recognise (even when having notice thereof) any
equitable, contingent, future or partial interest in any share, or any
interest in any fractional part of a share, or (except only as by these
presents or by law otherwise provided) any other right in respect of any
share, except
41
an absolute right to the entirety thereof in the registered holder or, in
the case of a share warrant, in the bearer of the warrant for the time
being.
EVIDENCE OF TITLE TO SHARES
17. Uncertificated Shares
(A) Pursuant and subject to the Uncertificated Securities Regulations,
the Directors may permit title to shares of any class to be evidenced
otherwise than by a certificate and title to shares of such a class
to be transferred by means of a relevant system and may make
arrangements for a class of shares (if all shares of that class are
in all respects identical) to become a participating class. Title to
shares of a particular class may only be evidenced otherwise than by
a certificate where that class of shares is for the time being a
participating class. The Directors may also, subject to compliance
with the Uncertificated Securities Regulations and the rules of any
relevant system, determine at any time that title to shares of any
class may from a date specified by the Directors no longer be
evidenced otherwise than by a certificate or that title to shares of
such a class shall cease to be transferred by means of any particular
relevant system. For the avoidance of doubt, shares which are
uncertificated shares shall not be treated as forming a class of
shares which are separate from certificated shares with the same
rights.
(B) In relation to a class of shares which is, for the time being, a
participating class and for so long as it remains a participating
class, no provision of these Articles shall apply or have effect to
the extent that it is inconsistent in any respect with:-
(i) the holding of shares of that class in uncertificated form;
(ii) the transfer of title to shares of that class by means of a
relevant system; and
(iii) any provision of the Uncertificated Securities Regulations.
(C) Shares of a class which is for the time being a participating class
may be changed from uncertificated form, and from certificated to
uncertificated form, in accordance with and subject as provided in
the Uncertificated Securities Regulations and the rules of any
relevant system, and the Directors shall record on the register of
members that the shares are held in certificated or uncertificated
form as appropriate.
18. Certificated shares
Subject to the provisions of the Uncertificated Securities Regulations,
the rules of any relevant system and these presents, every person (except
a person to whom the Company is not by law required to issue a
certificate) whose name is entered as a member in the register of members
in respect of any shares of any one class upon the issue or transfer
thereof shall be entitled without payment to a certificate therefor (in
the case of issue) within one month (or such longer period as the terms of
issue shall provide) after allotment or (in the case of a transfer of
fully paid shares) within fourteen days after lodgement of a transfer or
receipt of the relevant Operator-instruction by the Company or (in the
case of a transfer of partly paid shares) within two months after
lodgement of a transfer or receipt of the relevant Operator-instruction by
the Company or (upon payment of such reasonable charge (if any) for every
certificate after the first as the Directors shall from time to time
determine) to several certificates, each for one or more of his shares of
any class. Provided that the Company shall not be bound to register more
than four persons as the joint holders of a share and in the case
42
of a
share held jointly by several persons the Company shall not be bound to
issue more than one certificate for each class of shares so held and
delivery of a certificate to one of such persons shall be deemed
sufficient delivery to all. A member who has transferred some but not all
of the shares comprised in a share certificate shall be entitled to a
certificate for the balance without charge.
19. Authentication and form of certificates
Every certificate for shares or debentures or other securities of the
Company shall (except to the extent that the terms and conditions for the
time being relating thereto otherwise provide) be issued under the Seal
(or under a Securities Seal or, in the case of shares on a branch
register, an official seal for use in the relevant territory) and (subject
as hereinafter provided) shall bear the autographic signatures at least of
one Director and the Secretary. Provided that the Directors may by
resolution determine, either generally or in any particular case or cases,
that such signatures or either of them shall be dispensed with or shall be
affixed by some method or system of mechanical signature or that
certificates may be signed or authenticated by some other person or
persons. Every such certificate shall specify the number and class of
shares, debentures or other securities to which it relates and the amount
paid up thereon. No certificate shall be issued representing shares,
debentures or other securities of more than one class. No certificate need
be issued in respect of shares, debentures or other securities held by a
recognised clearing house or a nominee of a recognised clearing house or
of a recognised investment exchange or any other person in respect of whom
the Company is not required by law to complete and have ready for delivery
a certificate as provided herein. Notwithstanding the foregoing provisions
of this Article, the Directors may by resolution determine, either
generally or in any particular case or cases, that certificates for
shares, debentures or other securities shall bear the signatures or
facsimile signatures of two authorised officers of the Company and need
not be issued under the Seal or the Securities Seal or an official seal.
20. Cancellation and replacement of certificates
(A) Any two or more certificates representing shares of any one class
held by any member may at his request be cancelled and a single new
certificate for all such shares issued in lieu subject, if the
Directors so require, to payment of the reasonable out of pocket
expenses of the Company in providing the same.
(B) If any member shall surrender for cancellation a share certificate
representing shares held by him and request the Company to issue in
lieu two or more share certificates representing such shares in such
proportions as he may specify, the Directors may, if they think fit,
comply with such request.
(C) If a share certificate shall be damaged, defaced, worn out, or
alleged to have been lost, stolen or destroyed, it shall be replaced
by a new certificate on request without fee but on such terms (if
any) as to evidence and indemnity and to payment of any exceptional
out-of-pocket expenses of the Company in investigating the evidence
and preparing the indemnity as the Directors may decide and, where it
is defaced or worn out, after delivery of the old certificate to the
Company.
(D) In the case of shares held jointly by several persons any such
request may be made by any one of the joint holders.
43
CALLS ON SHARES
21. Power to make calls
The Directors may from time to time make calls upon the members in respect
of any monies unpaid on their shares (whether on account of the nominal
value of the shares or by way of premium) and not by the terms of issue
thereof made payable at fixed times. Each member shall (subject to being
given at least fourteen days' notice specifying the time or times and
place of payment) pay to the Company at the time or times and place so
specified the amount called on his shares. A call may be revoked or
postponed as the Directors may determine.
22. Time when call made
A call shall be deemed to have been made at the time when the resolution
of the Directors authorising the call was passed and may be made payable
by instalments.
23. Liability of joint holders
The joint holders of a share shall be jointly and severally liable to pay
all calls in respect thereof.
24. Interest payable
If a sum called in respect of a share is not paid before or on the day
appointed for payment thereof, the person from whom the sum is due shall
pay interest on the sum from the day appointed for payment thereof to the
time of actual payment at such rate (not exceeding 5 per cent per annum
above the Base Rate, or in the absence of any Base Rate, 20 per cent per
annum) as the Directors determine and all expenses that may have been
incurred by the Company by reason of such non-payment, but the Directors
shall be at liberty in any case or cases to waive payment of such interest
and expenses wholly or in part.
25. Deemed calls
Any sum (whether on account of the nominal value of the share or by way of
premium) which by the terms of issue of a share becomes payable upon
allotment or at any fixed date shall for all the purposes of these
presents be deemed to be a call duly made and payable on the date on which
by the terms of issue the same becomes payable. In the case of non-payment
all the relevant provisions of these presents as to payment of interest
and expenses, forfeiture or otherwise shall apply as if such sum had
become payable by virtue of a call duly made and notified.
26. Differentiation of calls
The Directors may at any time and from time to time differentiate between
the holders as to the amount of calls to be paid and the times of payment.
27. Payment of calls in advance
The Directors may if they think fit receive from any member willing to
advance the same all or any part of the monies (whether on account of the
nominal value of the shares or by way of premium) uncalled and unpaid upon
the shares held by him and such payment in advance of calls shall
extinguish pro tanto the liability upon the shares in respect of which it
is made and upon the monies so received (until and to the extent that the
same would but for such advance
44
become payable) the Company may pay interest at such rate (not exceeding
the Base Rate or, in the absence of any Base Rate, 12 per cent per annum)
as the member paying such sum and the Directors agree upon. The Directors
may at any time repay monies paid in advance of calls upon giving to the
member not less than one month's notice in writing.
FORFEITURE, SURRENDER AND LIEN
28. Notice requiring payment of calls on default
If a member fails to pay the whole or any part of any call or instalment
of a call on the day appointed for payment thereof, the Directors may at
any time thereafter during such time as any part of such call or
instalment remains unpaid, serve a notice on him requiring payment of so
much of the call or instalment as is unpaid together with any accrued
interest and any costs, charges and expenses incurred by the Company by
reason of such non-payment.
29. Content of notice
The notice shall name a further day (not being less than seven days from
the date of service of the notice) on or before which, and the place
where, the payment required by the notice is to be made, and shall state
that in the event of non-payment in accordance therewith the shares on
which the call was made will be liable to be forfeited.
30. Forfeiture for non-compliance
If the requirements of any such notice as aforesaid are not complied with,
any share in respect of which such notice has been given may at any time
thereafter, before payment of all calls, interest, costs, charges and
expenses due in respect thereof has been received by the Company, be
forfeited by a resolution of the Directors to that effect. Such forfeiture
shall include all dividends declared in respect of the forfeited share and
not actually paid before forfeiture. The Directors may accept a surrender
of any share liable to be forfeited hereunder. 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.
31. Sale of forfeited shares
A share so forfeited or surrendered shall become the property of the
Company and may (subject to the provisions of the Statutes) be sold,
re-allotted or otherwise disposed of either to the person who was before
such forfeiture or surrender the holder thereof or entitled thereto or to
any other person upon such terms and in such manner as the Directors shall
think fit and at any time before a sale, re-allotment or disposition the
forfeiture or surrender may be cancelled on such terms as the Directors
think fit. The Directors may, if necessary, authorise some person to
transfer a forfeited or surrendered share to any such other person as
aforesaid.
32. Extinction of rights
A member whose shares have been forfeited or surrendered shall cease to be
a member in respect of the forfeited or surrendered shares but shall
notwithstanding the forfeiture or surrender remain liable to pay to the
Company all moneys which at the date of forfeiture or surrender were
presently payable by him to the Company in respect of the shares with
interest thereon at 5 per cent per annum above the Base Rate or, in the
absence of any Base
45
Rate, 20 per cent per annum (or in either case such lower rate as the
Directors may approve) from the date of forfeiture or surrender until
payment but the Directors may waive payment of such moneys and/or interest
either wholly or in part and the Directors may enforce payment without any
allowance for the value of the shares at the time of forfeiture or
surrender.
33. Company to have lien on shares
The Company shall have a first and paramount lien on every share (not
being a fully paid share) for all moneys (whether presently payable or
not) called or payable at a fixed time in respect of such share and the
Company shall also, insofar as is permitted by the Statutes, have a first
and paramount lien on all shares (other than fully paid shares) standing
registered in the name of a single member for all the debts and
liabilities of such member or his estate to the Company and that whether
the same shall have been incurred before or after notice to the Company of
any equitable or other interest of any person other than such member and
whether the period for the payment or discharge of the same shall have
actually arrived or not and notwithstanding that the same are joint debts
or liabilities of such member or his estate and any other person, whether
a member of the Company or not. The Company's lien (if any) on a share
shall extend to all dividends or other moneys payable thereon or in
respect thereof. The Directors may waive any lien which has arisen and may
declare any share to be exempt wholly or partially from the provisions of
this Article.
34. Enforcement of lien by sale
The Company may sell in such manner as the Directors think fit any share
on which the Company has a lien, but no sale shall be made unless some sum
in respect of which the lien exists is presently payable nor until the
expiration of fourteen days after a notice in writing stating and
demanding payment of the sum presently payable and giving notice of the
intention to sell in default shall have been given to the registered
holder for the time being of the share or the person entitled thereto by
reason of death or bankruptcy.
35. Application of proceeds
The net proceeds of such sale after payment of the costs of such sale
shall be applied in or towards payment or satisfaction of the debts or
liabilities in respect whereof the lien exists so far as the same are
presently payable and any residue shall (upon surrender to the Company for
cancellation of the certificate (if any) for the shares sold and subject
to a like lien for debts or liabilities not presently payable as existed
upon the shares prior to the sale) be paid to the person entitled to the
shares at the time of the sale. For giving effect to any such sale the
Directors may authorise some person to transfer the shares sold to, or in
accordance with the directions of, the purchaser.
36. Giving effect to the sale
A statutory declaration in writing that the declarant is a Director or the
Secretary of the Company and that a share has been duly forfeited or
surrendered or sold to satisfy a lien of the Company on a date stated in
the declaration shall be conclusive evidence of the facts therein stated
as against all persons claiming to be entitled to the share. Such
declaration and the receipt of the Company for the consideration (if any)
given for the share on the sale, re-allotment or disposal thereof together
with the share certificate (if any) delivered to a purchaser or allottee
thereof shall (subject to the execution of a transfer if the same be
required) constitute a good title to the share and the person to whom the
share is sold, re-allotted or disposed of shall be registered as the
holder of the share and shall not be bound to
46
see to the application of the purchase money (if any) nor shall his title
to the share be affected by any irregularity or invalidity in the
proceedings in reference to the forfeiture, surrender, sale, re-allotment
or disposal of the share.
TRANSFER OF SHARES
37. Transfers
Subject to such of the restrictions of these presents as may be
applicable:-
(i) any member may transfer all or any of his uncertificated shares by
means of a relevant system in such manner provided for, and subject
as provided in the Uncertificated Securities Regulations and the
rules of any relevant system, and accordingly no provision of these
present shall apply in respect of an uncertificated share to the
extent that it requires or contemplates the effecting of a transfer
by an instrument in writing or the production of a certificate for
the share to be transferred; and
(ii) any member may transfer all or any of his certificated shares by an
instrument of transfer in any usual form or in any other form which
the Directors may approve.
38. Execution of transfers
The instrument of transfer of a certificated share shall be executed by or
on behalf of the transferor and (except in the case of fully paid shares)
by or on behalf of the transferee. The transferor shall be deemed to
remain the holder of the shares concerned until the name of the transferee
is entered in the Register of Members in respect thereof. All instruments
of transfer which are registered may be retained by the Company.
39. Suspension of registration
Subject to the Statutes and the requirements of the London Stock Exchange,
the registration of transfers may be suspended and the Register of Members
closed at such times and for such period as the Directors may from time to
time determine and either generally or in respect of any class of shares:
Provided that such registration shall not be suspended and the Register of
Members shall not be closed for more than thirty days in any year.
40. Right to decline to register transfer of partly paid shares
The Directors may in their absolute discretion and without assigning any
reason therefor decline to register any transfer of shares (not being
fully paid shares) provided that where any such share is listed on the
London Stock Exchange, such discretion may not be exercised in such a way
as to prevent dealings in the shares of that class from taking place on an
open and proper basis. If the Directors refuse to register a transfer they
shall within two months after the date on which the transfer was lodged
with the Company or, in the case of uncertificated shares, within two
months after the date on which the relevant Operator-instruction is
received, send to the transferee notice of the refusal.
41. Further rights to decline to register transfer
(A) The Directors may only decline to register a transfer of an
uncertificated share in the circumstances set out in the
Uncertificated Securities Regulations, and where, in the
47
case of a transfer to joint holders, the number of joint holders to
whom the uncertificated share is to be transferred exceeds four.
(B) The Directors may decline to register any transfer of a certificated
share unless:-
(i) the instrument of transfer is lodged at the Transfer Office or
at such other place as the Directors may from time to time
determine accompanied by the certificate for the shares to which
it relates and such other evidence as the Directors may
reasonably require to show the right of the transferor to make
the transfer;
(ii) the instrument of transfer is in respect of only one class of
share; and
(iii) in the case of a transfer to joint holders, the number of joint
holders to whom the share is to be transferred does not exceed
four.
42. No fee payable for registration of transfers
No fee will be charged by the Company in respect of the registration of
any instrument of transfer or confirmation or probate or letter of
administration or certificate of marriage or death or power of attorney or
other document relating to or affecting the title to any shares or
otherwise for making any entry in the Register of Members affecting the
title to any shares.
43. Renunciations recognised
Nothing in these presents shall preclude the Directors from recognising a
renunciation of the allotment of any share by the allottee in favour of
some other person. In this Article "allottee" includes provisional
allottee and any person in whose favour an allotment has been previously
renounced.
DESTRUCTION OF DOCUMENTS
44. Destruction of documents
The Company shall be entitled to destroy (a) all share certificates which
have been cancelled at any time after the expiration of one year from the
date of such cancellation, and (b) all notifications of change of name and
address and all dividend mandates which have been cancelled or have ceased
to have effect at any time after the expiration of two years from the date
of the recording of such notification or, as the case may be, the date of
such cancellation or cessation, and (c) all instruments of transfer of
shares which have been registered at any time after the expiration of six
years from the date of registration thereof, and (d) any other documents
on the basis of which any entry in the Register of Members has been made
at any time after the expiration of six years from the date of the first
entry in the Register of Members in respect thereof, and it shall
conclusively be presumed in favour of the Company that every entry in the
Register of Members purporting to have been made on the basis of an
instrument of transfer or other document so destroyed was duly and
properly made and that every instrument of transfer so destroyed was a
valid and effective instrument duly and properly registered and every
share certificate so destroyed was a valid and effective document duly and
properly cancelled and every other document hereinbefore mentioned so
destroyed was a valid and effective document in accordance with the
recorded particulars thereof in the books or records of the Company.
48
Provided always that:-
(i) The provisions aforesaid shall apply only to the destruction of a
document in good faith and without express notice of any claim
(regardless of the parties thereto) to which the document might be
relevant;
(ii) Nothing herein contained shall be construed as imposing upon the
Company any liability in respect of the destruction of any such
document earlier than as aforesaid or in any other circumstances
which would not attach to the Company in the absence of this Article;
(iii) References herein to the destruction of any document include
references to the disposal thereof in any manner.
TRANSMISSION OF SHARES
45. Transmission
In case of the death of a registered shareholder, the survivors or
survivor where the deceased was a joint holder, and the executors or
administrators of the deceased where he was a sole or only surviving
holder, shall be the only persons recognised by the Company as having any
title to his interest in the shares, but nothing in this Article shall
release the estate of a deceased holder (whether sole or joint) from any
liability in respect of any share solely or jointly held by him.
46(A). Registration on death, bankruptcy, etc
Subject to the provisions of the preceding Article any person becoming
entitled to a share in consequence of the death or bankruptcy of a member
or otherwise by operation of law may (subject as provided elsewhere in
these presents) upon such evidence being produced as may from time to time
properly be required by the Directors (and in the case of shares in
uncertificated form, subject to the facilities and requirements of the
relevant system) either (a) be registered as holder of the share in a
representative capacity or (b) be registered himself as holder of the
share or (c) transfer such share to some other person. The Directors
shall, in any case, have the same right to decline or suspend registration
as they would have had in the case of a transfer of the share by that
member before his death, bankruptcy or other event giving rise to the
transmission of his entitlement by operation of law, as the case may be.
(B). Election for registration
The intimation to the Company, by or on behalf of any person becoming
entitled to a share in accordance with paragraph (A) of this Article, of
the evidence therein required shall be deemed to be a request by such
person to be registered as holder of the share in a representative
capacity unless such person shall otherwise elect as aftermentioned,
provided always that such registration shall not impose any personal
liability upon such person in respect of the share. If the person so
becoming entitled shall elect to be registered himself, he shall deliver
or send to the Company a notice in writing in a form acceptable to the
Directors signed by him stating that he so elects and if he shall elect to
have another person registered he shall testify his election by, in
respect of shares in certificated form, executing to that person a
transfer of the share or, in respect of shares in uncertificated form,
making such other arrangements as are consistent with the Uncertificated
Securities Regulations and the facilities and requirements of the relevant
system for their transfer to such person. All the
49
limitations, restrictions and provisions of these presents relating to the
right to transfer and the registration of transfers of shares shall be
applicable to any such notice or transfer as aforesaid as if the death or
bankruptcy of the member, or other event giving rise to the transmission
of his entitlement by operation of law, had not occurred and the notice or
transfer were a transfer signed by that member.
47. Rights of persons entitled by transmission
Save as otherwise provided by or in accordance with these presents, a
person becoming entitled to a registered share in consequence of the death
or bankruptcy of a member or otherwise by operation of law (upon supplying
to the Company such evidence as the Directors may reasonably require to
show his title to the share) shall be entitled to the same dividends and
other advantages as those to which he would be entitled if he were the
registered holder of the share except that he shall not be entitled in
respect thereof (except with the authority of the Directors) to exercise
any right conferred by membership in relation to meetings of the Company
until he shall have been registered as a member in respect of the share;
Provided that the Directors may at any time give notice requiring such
person to elect either to be registered or to transfer the share and, if
the notice is not complied with within such period (being not less than 42
days) as the Directors may fix, the Company may thereafter:
(a) withhold payment of all dividends and other monies payable in respect
of the share (but any such action shall not constitute the Company a
trustee in respect of any such dividends or other monies) and suspend
any other advantages to which such person would otherwise be entitled
in respect of the share until the requirements of the notice have
been complied with; and/or
(b) sell the share at the best price reasonably obtainable in such manner
as the Directors think fit and, subject to the provisions of these
presents generally, the provisions of Article 48(B) shall apply to
such sale.
UNTRACED SHAREHOLDERS
48(A). Power to dispose of shares of untraced shareholders
The Company shall be entitled to sell at the best price then reasonably
obtainable the shares of a member or the shares to which a person is
entitled by virtue of transmission on death or bankruptcy if and provided
that:-
(i) during the period of twelve years ending on the date of the
publication of the advertisement referred to in sub-paragraph (ii)
below (or, if published on different dates, the later or latest
thereof) at least three cash dividends (whether interim or final)
have become payable on or in respect of the shares in question but
all dividends or other moneys payable on or in respect of such shares
during such period remain unclaimed; and
(ii) the Company shall have inserted an advertisement in one daily
newspaper with a national circulation in the United Kingdom, one
Scottish daily newspaper and one newspaper circulating in the area in
which the last known address of the member or the address at which
service of notices upon such member or other person may be effected
in accordance with these presents is located, giving notice of its
intention to sell the said shares; and
50
(iii) during the said period of twelve years and the period of three
months following the date of the publication of the said
advertisement (or, if published on different dates, the later or
latest thereof) the Company shall have received indication neither of
the whereabouts nor of the existence of such member or person; and
(iv) if the shares in question are listed on the London Stock Exchange,
notice shall have been given to the London Stock Exchange of the
Company's intention to make such sale.
(B). Sale procedure and application of proceeds
To give effect to any such sale the Company may appoint some person to
execute as transferor an instrument of transfer of the said shares and
such instrument of transfer shall be as effective as if it had been
executed by the registered holder of, or person entitled by transmission
to, such shares and the title of the transferee shall not be affected by
any irregularity or invalidity in the proceedings relating thereto. The
Directors may authorise the conversion of shares to be sold which are
certificated shares into uncertificated shares, and vice versa (so far as
is consistent with the Uncertificated Securities Regulations and the
facilities and requirements of the relevant system) for their transfer to,
or in accordance with the directions of, the transferee. The net proceeds
of sale shall belong to the Company which shall be obliged to account to
the former member or other person previously entitled as aforesaid for an
amount equal to such proceeds and shall enter the name of such former
member or other person in the books of the Company as a creditor for such
amount. No trust shall be created in respect of the debt, no interest
shall be payable in respect of the same and the Company shall not be
required to account for any money earned on the net proceeds, which may be
employed in the business of the Company or invested in such investments
(other than shares of the Company or its holding company if any) as the
Directors may from time to time think fit.
STOCK
49. Conversion into stock
The Company may from time to time by Ordinary Resolution convert any fully
paid shares into stock or reconvert any stock into fully paid shares of
any denomination. If and whenever any shares of any class in the capital
of the Company for the time being shall have been issued and be fully paid
and at that time the shares of that class previously issued shall stand
converted into stock such further shares upon being fully paid shall ipso
facto be converted into stock transferable in the same units as the
existing stock of that class.
50. Transfer of stock
The holders of stock may transfer the same or any part thereof in the same
manner and subject to the same regulations as and subject to which the
shares from which the stock arose might previously to conversion have been
transferred (or as near thereto as circumstances admit) but no stock shall
be transferable except in such units (not being greater than the nominal
amount of the shares from which the stock arose) as the Directors may from
time to time determine.
51. Rights of stockholders
The holders of stock shall according to the amount of the stock held by
them have the same rights, privileges and advantages as regards dividend,
return of capital, voting and other
51
matters as if they held the shares from which the stock arose; but no such
right, privilege or advantage (except as regards participation in the
profits or assets of the Company) shall be conferred by an amount of stock
which would not, if existing in shares, have conferred such right,
privilege or advantage.
SHARE WARRANTS TO BEARER
52(A). Power to issue share warrants to bearer
Subject to the provisions of the 1985 Act, the Company may issue share
warrants to bearer (each a "Warrant") and the Directors may accordingly,
with respect to any share which is fully paid up and with respect to any
one or more such shares as may be specified from time to time in a Warrant
(in any case in which they shall in their discretion think fit so to do)
issue a Warrant stating that the bearer of the Warrant is entitled to the
shares therein specified, and may in any case in which a Warrant is so
issued provide by coupons or otherwise for payment of the future dividends
or other moneys in respect of the shares included in such Warrant.
(B). Bearer deemed to be a member
Subject to the provisions of these presents and of the 1985 Act the bearer
of a Warrant shall be deemed to be a member of the Company, and shall be
entitled to the same privileges and advantages as if his name had been
included in the Register of Members as the holder of the shares specified
in such Warrant.
(C). Meetings
No person shall, as the bearer of a Warrant, be entitled (a) to sign a
requisition for calling a meeting, or to give notice of intention to
submit a resolution to a meeting, or (b) to attend or vote by himself or
by his proxy or exercise any privilege as a member at a meeting, unless he
shall, in case (a) before or at the time of lodging such requisition, or
giving such notice of intention as aforesaid, or in case (b) four days at
least before the day fixed for the meeting, have deposited at the Office
or a bank to be named or approved by the Company for that purpose the
Warrant in respect of which he claims to act, attend or vote as aforesaid
(the place at which the Warrant is so deposited being in this Article
called "the depository"), and unless the Warrant shall remain so deposited
until after the meeting and any adjournment thereof shall have been held.
The names of more than one person as joint holders of a Warrant shall not
be received.
(D). Certificate to attend meetings
To any person so depositing a Warrant there shall be delivered a
certificate stating his name and address, and describing the shares
included in the Warrant so deposited, and bearing the date of issue of the
certificate, and such certificate shall entitle him or his proxy, duly
appointed as hereinafter provided, to attend and vote at any General
Meeting held within three months from the date of the certificate and
prior to delivery up thereof pursuant to paragraph (E) of this Article in
the same way as if he were the registered holder of the shares specified
in the certificate.
(E). Return of warrant after meeting
Upon delivery up of the certificate at the depository, the bearer of the
certificate shall be entitled to receive the Warrant in respect of which
the certificate was given.
52
(F). Exercise of other rights
The holder of a Warrant shall not, save as aforesaid, be entitled to
exercise any right as a member unless (if called upon by any Director or
the Secretary so to do) he produce his Warrant or the certificate of its
deposit, and state his name and address.
(G). Issue of new warrants
The Directors may issue new Warrants or coupons in such manner, subject to
such conditions and in respect of such number of shares as they think fit
from time to time and the Directors shall be empowered at any time and
from time to time to amend any Warrant then in issue so that by virtue of
such amendments the number of shares which such Warrant from time to time
represents is accurately shown therein provided that no new Warrant or
coupon shall be issued in place of one lost unless the Directors are
satisfied beyond reasonable doubt that the original has been destroyed.
(H). Transfer of shares included in warrant
The shares included in any Warrant shall be transferred by the delivery of
the Warrant without any written transfer and without registration, and to
shares so included the provisions hereinbefore contained with reference to
the transfer of shares shall not apply.
(I). Coupon for dividend
The delivery to the Company or to a duly authorised agent of the Company
of a coupon shall be a good discharge to the Company for the dividend
represented thereby.
(J). Surrender of warrant and registration of holder
Upon surrender of his Warrant to the Company for cancellation, together
with all coupons for the future dividends on the shares comprised in the
Warrant and an application in writing signed by him in such form and
authenticated in such manner as the Directors shall require requesting to
be registered as a member in respect of the shares included in the Warrant
and stating in such application his name, address and occupation, the
bearer of a Warrant shall be entitled to have his name entered as a member
in respect of the shares included in the Warrant, but the Company shall in
no case be responsible for any loss or damage incurred by any person by
reason of the Company entering in its Register of Members, upon surrender
of a Warrant, the name of any person not the true and lawful owner of the
Warrant surrendered.
(K). Variation of terms
The Directors may from time to time as they think fit make and vary the
terms and conditions upon which Warrants may be issued and any matters
incidental thereto. Subject to these presents the bearer of a Warrant
shall be subject to the conditions for the time being in force relating to
Warrants whether made before or after the issue of such Warrant.
GENERAL MEETINGS
53. Types of general meetings
An Annual General Meeting shall be held once in every year, at such time
(within a period of not more than fifteen months after the holding of the
last preceding Annual General Meeting)
53
and place as may be determined by the Directors. All other General
Meetings shall be called Extraordinary General Meetings.
54. Extraordinary general meetings
The Directors may whenever they think fit, and shall on requisition in
accordance with the Statutes, proceed to convene an Extraordinary General
Meeting.
55. Application to class meeting where no variation of rights involved
The provisions of these presents relating to General Meetings shall apply,
with necessary modifications, to any separate meeting of the holders of
any class of shares of the Company held otherwise than in connection with
the variation or abrogation of the rights attached to shares of the class.
All matters to be resolved at any such separate meeting shall, unless
otherwise required by these presents or by statute, be resolved by
Extraordinary Resolution, meaning for the purposes of this Article a
resolution duly passed by a majority consisting of not less than
three-quarters of the votes given upon the resolution at such meeting of
which notice specifying the intention to propose the resolution as an
Extraordinary Resolution shall have been duly given.
NOTICE OF GENERAL MEETINGS
56. Period of notice
An Annual General Meeting and any General Meeting at which it is proposed
to pass a Special Resolution or (save as provided by the Statutes) a
resolution of which special notice has been given to the Company, shall be
called by twenty one days' notice in writing at the least, and any other
General Meeting by fourteen days' notice in writing at the least
(exclusive in either case of the day on which it is served or deemed to be
served and of the day for which it is given) given in manner hereinafter
mentioned to the Auditors and to all members other than such as are not
under the provisions of these presents entitled to receive such notices
from the Company: Provided that a General Meeting notwithstanding that it
has been called by a shorter notice than that specified above shall be
deemed to have been duly called if it is so agreed:-
(A) in the case of an Annual General Meeting, by all the members entitled
to attend and vote thereat; and
(B) in the case of an Extraordinary General Meeting by a majority in
number of the members having a right to attend and vote thereat being
a majority together holding not less than 95 per cent in nominal
value of the shares giving that right.
Provided also that the accidental omission to give any notice of a
meeting, or the accidental omission to send any document relating to any
meeting, or the non-receipt of any such notice or document by any person
entitled thereto shall not invalidate the proceedings at any General
Meeting.
A notice of General Meeting may specify a time, being not more than 48
hours before the time fixed for the meeting, by which a person must be
entered on the Register of Members in order to have the right to attend or
vote at the meeting. Changes made to the entries on the Register of
Members after the time so specified shall be disregarded in determining
the rights of any person to attend or vote at the meeting.
54
For the purposes of this Article (and without prejudice to the other
provisions of these presents), the cases in which notice in writing is to
be taken as given to a member include any case in which the notice of
meeting is sent, or treated as given, using electronic communications in
accordance with Section 369(4A) and (4B) of the 1985 Act, and the
provisions of subsection (4D) of that Section shall apply in respect of
the publication of such notice on a web site.
57. Contents of notice
(A) Every notice calling a General Meeting shall specify the place and
the day and hour of the meeting, and there shall appear with
reasonable prominence in every such notice a statement that a member
entitled to attend and vote is entitled to appoint a proxy to attend
and, on a poll, vote instead of him and that a proxy need not be a
member of the Company.
(B) In the case of an Annual General Meeting, the notice shall also
specify the meeting as such.
(C) In cases where forms of appointment of proxy are sent out with
notices, the accidental omission to send such forms of appointment of
proxy to, or the non-receipt of such forms of appointment of proxy
by, any person entitled to receive notice shall not invalidate the
proceedings at any General Meeting.
(D) In the case of any General Meeting at which business other than
routine business is to be transacted, the notice shall specify the
general nature of such business; and if any resolution is to be
proposed as an Extraordinary Resolution or as a Special Resolution,
the notice shall contain a statement to that effect.
58. Routine business
Routine business shall mean and include only business transacted at an
Annual General Meeting of the following classes, that is to say:-
(A) sanctioning or declaring dividends;
(B) considering and adopting the accounts, the reports of the Directors
and Auditors and other documents required to be annexed to the
accounts;
(C) re-appointing the retiring Auditors (unless they were last appointed
otherwise than by the Company in General Meeting);
(D) fixing the remuneration of the Auditors or determining the manner in
which such remuneration is to be fixed;
(E) appointing or re-appointing Directors to fill vacancies arising at
the meeting on retirement by rotation or otherwise.
59. Notice of resolutions
The Directors shall on the requisition of members in accordance with the
provisions of the Statutes, but subject as therein provided:-
55
(A) Give to the members entitled to receive notice of the next Annual
General Meeting, notice of any resolution which may properly be moved
and is intended to be moved at that meeting;
(B) Circulate to the members entitled to have notice of any General
Meeting, any statement of not more than one thousand words with
respect to the matter referred to in any proposed resolution or the
business to be dealt with at that meeting.
60. Postponement of general meetings
If the Directors, in their absolute discretion, consider that it is
impractical or unreasonable for any reason to hold a General Meeting on
the date or at the time or place specified in the notice calling the
General Meeting, they may postpone the General Meeting to another date,
time and place. When a meeting is so postponed, notice of the date, time
and place of the postponed meeting shall be placed in at least one leading
Scottish and one leading London daily newspaper. Notice of the business to
be transacted at such postponed meeting shall not be required.
PROCEEDINGS AT GENERAL MEETINGS
61. Overflow arrangements for general meetings
(A) The Directors may, notwithstanding that the notice of any General
Meeting may specify the place of the meeting (the "principal place"),
at which the chairman of the meeting shall preside, make arrangements
for simultaneous attendance and participation at other places by
members and proxies entitled to attend the General Meeting but unable
to attend and participate at the principal place.
(B) Such arrangements for simultaneous attendance at the meeting may
include arrangements regarding the level of attendance at the other
places provided that they shall operate so that any members and
proxies excluded from attendance at the principal place are able to
attend at one or more of the other places. For the purposes of all
other provisions of these presents any such meeting shall be treated
as being held and taking place at the principal place.
(C) The Directors may, for the purpose of facilitating the organisation
and administration of any General Meeting to which such arrangements
apply, from time to time make arrangements, whether involving the
issue of tickets (on a basis intended to afford all members and
proxies entitled to attend the meeting an equal opportunity of being
admitted to the principal place) or the imposition of some random
means of selection or otherwise as they shall in their absolute
discretion consider to be appropriate, and may from time to time vary
any such arrangements or make new arrangements in their place and the
entitlement of any member or proxy to attend a General Meeting at the
principal place shall be subject to the arrangements as may be for
the time being in force whether stated in the notice of meeting to
apply to that meeting or notified to the members concerned subsequent
to the provision of the notice of the meeting.
62. Quorum
No business other than the appointment of a chairman of the meeting shall
be transacted at any General Meeting unless a quorum is present at the
time when the meeting proceeds to
56
business. Five members present in person and entitled to vote at such
meeting shall be a quorum for all purposes.
63. If quorum not present
If within fifteen minutes from the time appointed for a General Meeting
(or such longer time not exceeding one hour as the chairman of the meeting
may determine to wait) a quorum is not present, the meeting, if convened
on the requisition of members, shall be dissolved. In any other case it
shall stand adjourned to such other day and at such other time and place
as may have been specified for the purpose in the notice convening the
meeting or (if not so specified) as the chairman of the meeting may
determine; in the latter case, not less than seven days' notice of the
adjourned meeting shall be given in like manner as in the case of the
original meeting. If at such adjourned meeting a quorum is not present
within fifteen minutes from the time appointed for holding the meeting,
the members present in person or by proxy and entitled to vote at such
meeting shall be a quorum.
64. Security arrangements
The Directors may direct that persons wishing to attend any General
Meeting should submit to such searches or other security arrangements or
restrictions as the Directors shall consider appropriate in the
circumstances and shall be entitled in their absolute discretion to, or to
authorise one or more persons who shall include a Director or the
Secretary or the chairman of the meeting to, refuse entry to, or to eject
from, such General Meeting any person who fails to submit to such searches
or to otherwise comply with such security arrangements or restrictions.
65. Chairman
The Chairman of the Directors, failing whom one of any Deputy Chairmen
failing whom one of any Vice-Chairmen (to be chosen, if more than one are
present and in default of agreement amongst themselves, by lot) shall
preside as chairman at a General Meeting. If there be no such Chairman or
Deputy Chairman or Vice-Chairman, or if at any meeting none of them be
present within fifteen minutes after the time appointed for holding the
meeting and willing to act, the Directors present shall choose one of
their number (or, if no Director be present or if all the Directors
present decline to take the chair, the members present and entitled to
vote at such meeting shall choose one of their number) to be chairman of
the meeting. The chairman of the meeting who presides pursuant to this
Article may, at any time during a General Meeting of the Company, nominate
any Director of the Company to be the chairman of the meeting for the
remainder of or for any part of the meeting.
66. Orderly Conduct
The chairman shall take such action as he thinks fit to promote the
orderly conduct of the business of the meeting as laid down in the notice
of the meeting and the chairman's decision, taken in good faith, on
matters of procedure or arising incidentally from the business of the
meeting shall be final as shall be his determination as to whether any
matter is of such a nature.
67. Entitlement to attend and speak
Each Director shall be entitled to attend and speak at any General Meeting
of the Company and at any separate General Meeting of the holders of any
class of shares in the Company. The chairman may invite any person to
attend and speak at any General Meeting of the
57
company whom the chairman considers to be equipped by knowledge or
experience of the Company's business to assist in the deliberations of the
meeting.
68. Adjournments
The chairman of the meeting may with the consent of any General Meeting at
which a quorum is present (and shall if so directed by the meeting)
adjourn the meeting from time to time (or sine die) and from place to
place. In addition, the chairman of the meeting may at any time without
the consent of the meeting adjourn the meeting (whether or not it has
commenced or a quorum is present) to another time and/or place where it
appears to him that (a) the members wishing to attend cannot be
conveniently accommodated in the place appointed for the meeting, (b) the
conduct of persons present prevents or is likely to prevent the orderly
continuation of business or (c) adjournment is otherwise necessary so that
the business of the meeting may be properly conducted. Nothing in this
Article shall limit any other power vested in the chairman to adjourn the
meeting. No business shall be transacted at any adjourned meeting except
business which might lawfully have been transacted at the meeting from
which the adjournment took place.
The chairman may adjourn the meeting notwithstanding that by reason of
such adjournment some members may be unable to be present at the adjourned
meeting. Any such member may nevertheless (without prejudice to the other
provisions of these presents) execute a form of proxy for the adjourned
meeting which, if delivered by him to the chairman or the Secretary of the
Company, shall be valid even though it is given at less notice than would
otherwise be required by these presents.
69. Time and place of adjourned meetings
When a meeting is adjourned sine die, the time and place for the adjourned
meeting shall be fixed by the Directors. When a meeting is adjourned for
thirty days or more or sine die not less than seven days' notice of the
adjourned meeting shall be given in like manner as in the case of an
original meeting. Save as aforesaid and save as expressly provided in
Article 63, it shall not be necessary to give any notice of an adjournment
or of the business to be transacted at an adjourned meeting.
70. Amendments to resolutions
If an amendment shall be proposed to any resolution under consideration
but shall in good faith be ruled out of order by the chairman of the
meeting the proceedings on the substantive resolution shall not be
invalidated by any error in such ruling. In the case of a resolution duly
proposed as a Special or Extraordinary Resolution no amendment thereto
(other than a mere clerical amendment to correct a patent error) may in
any event be considered or voted upon. In the case of a resolution duly
proposed as an Ordinary Resolution no amendment thereto (other than an
amendment to correct a patent error) may be considered or voted upon
unless either at least forty-eight 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 the same has been lodged at the Office or the chairman
decides in his absolute discretion that it may be considered or voted
upon.
71. Method of voting
At any General Meeting a resolution put to the vote of the meeting shall
be decided on a show of hands unless a poll is (before or on the
declaration of the result of the show of hands
58
or on the withdrawal of any other demand for a poll as hereinafter
mentioned) demanded by either:-
(A) the chairman of the meeting; or
(B) not less than three members present in person or by proxy and
entitled to vote: or
(C) the depository for the time being under any deposit agreement between
the Company and such depository providing for the deposit of any New
Preference Shares, provided such depository is present in person and
entitled to vote; or
(D) a member or members present in person or by proxy and representing
not less than one tenth of the total voting rights of all the members
having the right to vote at the meeting; or
(E) a member or members present in person or by proxy and holding shares
in the Company conferring a right to vote at the meeting being shares
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.
72. Declaration of result and conduct of poll
A demand for a poll may be withdrawn only with the approval of the
chairman and if it is so withdrawn:-
(a) before the result of a show of hands is declared, the meeting shall
continue as if the demand had not been made; or
(b) after the result of a show of hands is declared, the demand shall not
be taken to have invalidated the result,
but if a demand is withdrawn, the chairman of the meeting or other member
or members so entitled may himself or themselves demand a poll. Unless a
poll be duly demanded (and the demand be 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, and an entry to that
effect in the minute book, shall be conclusive evidence of that fact
without proof of the number or proportion of the votes recorded for or
against such resolution. If a poll is duly demanded (and the demand be not
withdrawn), it shall be taken in such manner (including the use of ballot
or voting papers or tickets) as the chairman of the meeting may direct,
and the result of a poll shall be deemed to be the resolution of the
meeting at which the poll was demanded. The chairman of the meeting may
(and if so directed by the meeting shall) appoint scrutineers and may
adjourn the meeting to some place and time fixed by him for the purpose of
declaring the result of the poll.
73. Chairman's casting vote
In the case of an equality of votes, whether on a show of hands or on a
poll, the chairman of the meeting at which the show of hands takes place
or at which the poll is demanded shall be entitled to a casting vote in
addition to the votes to which he may be entitled as a member or as a
representative or proxy of a member.
59
74. When poll to be taken
A poll demanded on the election of a chairman or on a question of
adjournment shall be taken forthwith. A poll demanded on any other
question shall be taken either immediately or at such subsequent time
(being not more than thirty days after the date of the meeting at which
the poll was demanded) and place as the chairman may direct. No notice
need be given of a poll not taken immediately.
75. Continuance of meeting
The demand for a poll shall not prevent the continuance of a meeting for
the transaction of any business other than the question on which the poll
has been demanded.
VOTES OF MEMBERS
76. Right to vote
Subject to any special rights or restrictions as to voting attached by or
in accordance with these presents to any class of shares and to the
provisions of these presents, on a show of hands every member who is
present in person shall have one vote and on a poll every member who is
present in person or by proxy shall have one vote for each 25p in nominal
amount of the shares held by him.
77. Votes of joint holders
In the case of joint holders of a share the vote of the senior who tenders
a vote, whether in person or by proxy, shall be accepted to the exclusion
of the votes of the other joint holders and for this purpose seniority
shall be determined by the order in which the names stand in the Register
of Members in respect of the joint holding.
78. Member under incapacity
A member who is a patient for any purpose of any statute relating to
mental health or in respect of whom an order has been made by any court
having jurisdiction for the protection or management of the affairs of
persons incapable of managing their own affairs, may vote, whether on a
show of hands or on a poll, by his committee, receiver, curator bonis or
other person in the nature of a committee, receiver or curator bonis
appointed by such court, and any such committee, receiver, curator bonis
or other person may, on a poll, vote by proxy, provided that such evidence
as the Directors may require of the authority of the person claiming to
vote shall have been deposited at the Transfer Office, or at such other
place (if any) as is specified for the delivery of instruments of proxy in
accordance with these presents, not less than forty eight hours before the
time appointed for holding the meeting or adjourned meeting or (in the
case of a poll taken otherwise than at, or on the same day as, the meeting
or adjourned meeting) for the taking of the poll at which it is desired to
vote.
79. Calls in arrears
No member shall, unless the Directors otherwise determine, be entitled in
respect of shares held by him to vote at a General Meeting either
personally or by proxy or to exercise any other right conferred by
membership in relation to meetings of the Company if any call or other sum
presently payable by him to the Company in respect of shares in the
Company remains unpaid.
60
80. Objection to voting
If (i) any objection shall be raised to the qualification of any person to
vote or to the admissibility of any vote or (ii) any votes have been
counted which ought not to have been counted or which might have been
rejected or (iii) any votes are not counted which ought to have been
counted, the objection or error shall not vitiate the decision of the
meeting or adjourned meeting on any resolution unless the same is raised
or pointed out at the meeting or, as the case may be, the adjourned
meeting at which the vote objected to is given or tendered or at which the
error occurs. Any objection or error raised or pointed out in due time
shall be referred to the chairman of the meeting and shall only vitiate
the decision of the meeting on any resolution if the chairman decides that
the same may have affected the decision of the meeting. The decision of
the chairman on such matters shall be final and conclusive.
81. Votes on a poll
On a poll votes may be given either personally or by proxy and a person
entitled to more than one vote need not use all his votes or cast all the
votes he uses in the same way.
82. Proxy need not be a member
A proxy need not be a member of the Company.
83. Form and execution of proxies
An appointment of a proxy shall be in any usual or common form or in any
other form which the Directors may prescribe or accept and, in the case of
an instrument in writing:-
(a) in the case of an individual shall be signed by the appointor or by
his attorney; and
(b) in the case of a corporation shall be either given under its common
seal or executed in any manner prescribed by the Statutes to have the
same effect as if given under the common seal of the corporation or
signed on its behalf by an attorney or duly authorised officer of the
corporation.
The Directors may, but shall not be bound to, require evidence of the
authority of any such attorney or officer. The signature on such
instrument need not be witnessed.
An appointment of a proxy may be contained in an electronic communication
in accordance with these presents, authenticated or executed in such a
manner as is specified by the Directors.
84. Delivery of forms of proxy
(A) An appointment of a proxy (together with any evidence of authority
required by the directors pursuant to the immediately preceding
Article) must:-
(a) in the case of an instrument in writing, be delivered to such
place or one of such places (if any) as may be specified for
that purpose in, or by way of note to, or in any documents
accompanying, the notice convening the meeting or any notice of
any adjournment (or, if no place is so specified, to the
Transfer Office); and
61
(b) in the case of an appointment contained in an electronic
communication, be received at such address as may have been
specified for that purpose in (i) the notice convening the
meeting or notice of any adjournment, (ii) any instrument of
proxy sent out by the Company in relation to the meeting or
adjourned meeting, or (iii) any invitation contained in an
electronic communication to appoint a proxy issued by the
Company in relation to the meeting or adjourned meeting,
in each case not later than forty-eight hours before the time
appointed for the holding of the meeting or adjourned meeting or (in
the case of a poll taken otherwise than at, or on the same day as,
the meeting or adjourned meeting) for the taking of the poll at which
it is to be used, and, subject to paragraph (B) of this Article, in
default shall not be treated as valid; provided that an appointment
of a proxy relating to more than one meeting (including any
adjournment thereof) having once been so delivered or received for
the purposes of any meeting shall not require again to be delivered
or received in relation to any subsequent meetings to which it
relates. No appointment of a proxy shall be valid after the
expiration of twelve months from the date stated in it as the date of
its execution or, in the case of an appointment contained in an
electronic communication, the date it was sent.
(B) A Director, the Secretary or some person authorised for the purpose
by the Secretary may, in the case of an instrument appointing a proxy
in writing:
(a) accept a photocopy, or a copy delivered by facsimile
transmission, of the instrument appointing the proxy (and of the
power of attorney (if any) under which it is signed, or a copy
of such authority certified notarially or in some other way
approved by the Directors); and/or
(b) accept an instrument appointing a proxy which has not been
properly executed or is not supported by the relevant documents
as required by paragraph (A) of this Article
as a valid instrument of proxy where such person determines, in good
faith, that the documents deposited indicate in sufficient detail the
member's intention to appoint a proxy.
85. Differing proxies
When two or more valid but differing appointments of proxy are delivered
in respect of the same share for use at the same meeting, the one which is
last delivered or received (regardless of its date or of the date of its
execution) shall be treated as replacing and revoking the others as
regards that share and if the Company is unable to determine which was
last delivered or received none of them shall be treated as valid in
respect of that share.
86. Issue of forms of proxy
Subject to the provisions of the Statutes, the Directors may, if they
think fit, at the expense of the Company, issue forms of proxy for use by
the members with or without prepaid postage and with or without inserting
therein the names of any of the Directors or any other person as proxies.
62
87. Rights conferred by form of proxy
An appointment of a proxy shall be deemed to include the right to demand
or join in demanding a poll but shall not confer any further right to
speak at the meeting, except with the permission of the chairman of the
meeting, and shall be deemed to confer authority to vote on any resolution
or amendment of a resolution put to the meeting for which it is given
(including, for the avoidance of doubt, any resolution which properly
comes before the meeting where notice of the same was not included in the
notice of the meeting nor specific reference thereto made in the
appointment of a proxy) as the proxy thinks fit. An appointment of a proxy
shall, unless the contrary is stated thereon, be valid as well for any
adjournment of the meeting as for the meeting to which it relates.
88. Intervening events
A vote cast by proxy shall not be invalidated by the previous death or
insanity of the principal or by the revocation of the appointment of proxy
or of the authority under which the appointment was executed provided that
no intimation of such death, insanity or revocation shall have been
received by the Company at the Transfer Office or such other place (if
any) as is specified for the delivery of instruments of proxy or, in the
case of an appointment of proxy contained in an electronic communication,
at the address at which such appointment was duly received, in each case
in accordance with these presents prior to one hour before the
commencement of the meeting or adjourned meeting or (in the case of a poll
taken otherwise than at, or on the same day as the meeting or adjourned
meeting) the time appointed for the taking of the poll at which the vote
is cast.
RESTRICTIONS ON VOTING AND OTHER SHARE RIGHTS
89(A). Disenfranchisement
Without prejudice to any other rights or remedies of the Company where, in
respect of any shares in the Company ("the default shares", which
expression shall include any further shares which are allotted or issued
in respect of such shares), any holder of such shares or other person
appearing to be interested in such shares fails to comply with any notice
(in this Article called a "statutory notice") given to that holder or
other person by the Company pursuant to Part VI of the 1985 Act or, in
purported compliance with such a statutory notice, makes a statement which
is false in a material particular, then not earlier than fourteen days
after the service of such statutory notice, the Directors may serve upon
such holder a notice (in this Article called a "disenfranchisement
notice") stating or to the effect that the default shares and, if the
Directors so determine, any other shares held by the holder shall from the
service of the disenfranchisement notice confer on him, and on any
transferee to which any of such shares are transferred other than pursuant
to an approved transfer (as defined in paragraph (D) of this Article) or
pursuant to paragraph (B)(i) of this Article, no right to attend or vote,
in person or by proxy, either at any General Meeting of the Company or at
any separate General Meeting of the holders of the shares of the relevant
class or to exercise any other right conferred by membership in relation
to any such meeting.
(B). Other restrictions
Where the default shares are Ordinary Shares representing at least 0.25
per cent in nominal value of the issued ordinary share capital as at the
date of service of the disenfranchisement notice, the disenfranchisement
notice may also at the discretion of the Directors (subject in the case of
(i) below, to the requirements of the Uncertificated Securities
Regulations) direct that:-
63
(i) no transfer of any of the shares held by such holder shall be
registered unless (a) such holder is not himself in default as
regards supplying the information requested and the transfer is part
only of such holder's holding and, when presented for registration,
is accompanied by a certificate by such holder in a form satisfactory
to the Directors to the effect that, after due and careful enquiry,
such holder is satisfied that no person in default as regards
supplying such information is interested in any of the shares the
subject of the transfer or (b) such transfer is an approved transfer;
and/or
(ii) any dividend or other moneys which would otherwise be payable on the
default shares shall be retained by the Company in whole or in part
without any liability to pay interest thereon when such moneys are
finally paid to such holder and the holder shall not be entitled to
elect pursuant to Article 143 to receive shares instead of that
dividend.
(C). Cessation of disenfranchisement
Any disenfranchisement notice shall have effect in relation to default
shares in accordance with its terms but shall cease to have effect:-
(i) on the expiry of seven days after the Company has received in writing
all information required by it in respect of those default shares
pursuant to every statutory notice served on the holder of such
shares and each other person appearing to be interested in such
shares; or
(ii) when the Company receives notice that an approved transfer to a third
party has occurred; or
(iii) if and to the extent that the Directors so determine.
(D). Person interested in shares; approved transfers
For the purposes of this Article 89:-
(a) a person shall be treated as appearing to be interested in any shares
if the holder of such shares has given to the Company a notification
under Section 212 of the 1985 Act and either (a) the holder has named
such person as being so interested, or (b) (after taking into account
the said notification and any other relevant Section 212
notification) the Company knows or has reasonable cause to believe
that the person in question is or may be interested in the shares;
and
(b) A transfer of Ordinary Shares is an approved transfer if, but only
if:-
(i) it is a transfer to an offeror by way of or in pursuance of
acceptance of a takeover offer (as defined for the purposes of
Part XIIIA of the 1985 Act) for the Company; or
(ii) the Directors are satisfied that the transfer is made pursuant
to a bona fide sale of the whole of the beneficial ownership of
the shares to a person unconnected with the holder or with any
other person appearing to be interested in such shares
(including any such sale made through a recognised investment
exchange or any stock exchange outside the United Kingdom on
which the Company's ordinary shares (or rights in respect of
those shares)
64
are normally traded). For the purposes of this sub-paragraph
(ii) any associate (as defined in Section 435 of the Insolvency
Act 1986) shall be included amongst the persons who are
connected with the holder or any person appearing to be
interested in such shares.
CORPORATIONS ACTING BY REPRESENTATIVES
90. Authority of representatives
Any corporation which is a member of the Company 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 of any class
of members of the Company. The person so authorised shall be entitled to
exercise the same powers on behalf of such corporation as the corporation
could exercise if it were an individual member of the Company and such
corporation shall for the purposes of these presents be deemed to be
present in person at any such meeting if a person so authorised is present
thereat.
DIRECTORS
91. Limit on number of directors
Subject as hereinafter provided the Directors shall not be more than
twenty-five in number. The Company may by Ordinary Resolution from time to
time vary the maximum number of Directors.
92. Directors need not be members
A Director shall not be required to hold any shares of the Company by way
of qualification. A Director who is not a member of the Company shall
nevertheless be entitled to receive notice of and attend and speak at
General Meetings and all separate meetings of the holders of any class of
shares of the Company.
93. Directors' fees
Each of the Directors may be paid a fee at such rate as may from time to
time be determined by the Directors provided that, (a) the aggregate of
all fees so paid to Directors shall not exceed (pound)250,000 per annum or
such higher amount as may from time to time be decided by ordinary
resolution of the Company, (b) the Directors shall have no authority or
power under this Article to determine the fees payable in respect of any
period commencing prior to 15 January 1999, and (c) unless and until the
Directors exercise their authority and power under this Article to
determine the fees payable to a Director, such Director shall be entitled
to ordinary remuneration at the rate last determined pursuant to Article
89 of the Articles of Association of the Company in force immediately
prior to adoption of these presents. Such fees shall accrue from day to
day and in the case of any Director shall, unless and to the extent that
the Directors otherwise determine, be independent of any remuneration to
which such Director may be entitled under any other provision of these
articles or in respect of any other office or appointment under the
Company or any other company in which the Company may be interested.
94. Expenses
The Directors may repay to any Director all such reasonable expenses as he
may incur in attending and returning from meetings of the Directors or of
any committee or General
65
Meetings or otherwise in or about the business of the Company or the
discharge of his duties as a Director, including (without limitation) any
professional fees incurred by him (with the approval of the Directors or
in accordance with any procedures stipulated by the Directors) in taking
independent advice in connection with the discharge of such duties.
95. Extra remuneration
Any Director who is appointed to any executive office (including for this
purpose the office of Chairman or Deputy Chairman or Vice-Chairman whether
or not such office is held in an executive capacity) or who serves on any
committee or who otherwise performs services which in the opinion of the
Directors are outside the scope of the ordinary duties of a Director, may
be paid such extra remuneration by way of salary, commission or otherwise
as the Directors may determine.
96(A). Retirement and other benefits
Without prejudice to the general power of the Directors under these
presents to exercise on behalf of the Company (by establishment or
maintenance of schemes or otherwise) all the powers of the Company to give
or procure the giving of pensions, annuities or other allowances or
benefits to or for the benefit of any person, and without restricting the
generality of their other powers, the Directors shall have power to pay
and agree to pay pensions or other retirement, superannuation, death or
disability benefits or other allowances and benefits to any Director or
ex-Director of the Company or of any company which is a subsidiary
undertaking of the Company or is allied to or associated with the Company
or any such subsidiary undertaking or of any predecessor in business of
the Company or any other company as aforesaid and to the husbands, wives,
widowers, widows, children, families, dependants and personal
representatives of any such Director or ex-Director, and for the purpose
of providing any such pensions or other benefits to establish or
contribute to any trust, scheme, association, arrangement or fund or to
pay premiums, and shall have power to establish trusts, schemes,
associations, arrangements or funds considered to be for the benefit of
any such persons aforesaid. A Director or ex-Director shall not be
accountable to the Company or the members for any such pension, allowance
or other benefit and the receipt of the same shall not disqualify any
person from being or becoming a Director of the Company.
(B). Insurance
Without prejudice to the provisions of Article 169, the Directors shall
have the power to purchase and maintain insurance for or for the benefit
of any persons who are or were at any time directors, officers or
employees of the Company, or of any other company which is its holding
company or in which the Company or such holding company or any of the
predecessors of the Company or of such holding company has any interest,
whether direct or indirect, or which is in any way allied to or associated
with the Company, or of any subsidiary undertaking of or any other body,
whether or not incorporated ("body"), owned by or in which an interest is
owned by the Company or any such other company, or who are or were at any
time trustees of any pension fund or employees' share scheme in which
employees of the Company or any such other company or subsidiary
undertaking or body are interested, including (without prejudice to the
generality of the foregoing) insurance against any liability incurred by
such persons in respect of any act or omission in the actual or purported
execution and/or discharge of their duties and/or the exercise or
purported exercise of their powers and/or otherwise in relation to or in
connection with their duties, powers or offices in relation to the Company
or any such other company, subsidiary undertaking, body, pension fund or
employees' share scheme.
66
97(A). Directors' interests in contracts with the Company
Subject to the provisions of the Statutes and Article 113, a Director or
alternate Director may be a customer of the Company or of any of its
subsidiary undertakings or be party to or in any way interested in any
contract or arrangement or transaction to which the Company is a party or
in which the Company is in any way interested and he may hold and be
remunerated (in addition to any other remuneration provided for by or
pursuant to any other Article) in respect of any office or place of profit
(other than the office of Auditor of the Company or any subsidiary
thereof) under the Company or any other company in which the Company is in
any way interested and he (or any firm of which he is a member) may act in
a professional capacity for the Company or any such other company and be
remunerated therefor and in any such case as aforesaid (unless otherwise
agreed) the Director may retain for his own absolute use and benefit all
profits and advantages accruing to him thereunder or in consequence
thereof.
(B). Appointments with other companies
A Director of the Company may be or become a director or other officer of,
or otherwise interested in, any undertaking promoted by the Company or in
which the Company may be interested, and (unless otherwise agreed) shall
not be accountable to the Company or the members for any remuneration,
profit or other benefit received by him as a director or officer of, or
from his interest in, such other undertaking. The Directors may also cause
the voting power conferred by the shares in any other undertaking held or
owned by the Company to be exercised in such manner in all respects as
they think fit, including the exercise thereof in favour of any resolution
appointing themselves or any of them to be directors, officers or servants
of such other undertaking, or voting or providing for the payment of
remuneration to the directors, officers or servants of such other
undertaking.
98(A). Executive office
The Directors may from time to time appoint one or more of their body to
be holder of any executive office (including, where considered
appropriate, the office of Chairman, Deputy Chairman or Vice-Chairman,
Managing, Joint Managing, Deputy or Assistant, Managing Director or Chief,
Deputy Chief or Assistant Chief Executive) on such terms and for such
period as they may (subject to the provisions of the Statutes) determine
and without prejudice to the terms of any contract entered into in any
particular case, may at any time revoke any such appointment.
(B). When termination of appointment automatic
The appointment of any Director to any of the executive offices
specifically mentioned in paragraph (A) above shall automatically
determine if he ceases to be a Director but without prejudice to any claim
for damages for breach of any contract of service between him and the
Company.
(C). When termination of appointment not automatic
The appointment of any Director to any other executive office shall not
automatically determine if he ceases from any cause to be a Director,
unless the contract or resolution under which he holds office shall
expressly state otherwise in which event the termination of his office if
he ceases to be a Director shall be without prejudice to any claim for
damages for breach of any contract of service between him and the Company.
67
99. Delegation of powers
The Directors may entrust to and confer upon any Director any of the
powers exercisable by them as Directors upon such terms and conditions and
with such restrictions as they think fit, and either collaterally with or
to the exclusion of their own powers, and may from time to time revoke,
withdraw, alter or vary all or any of such powers.
APPOINTMENT AND RETIREMENT OF DIRECTORS
100. Age Limit
Any provisions of the Statutes which, subject to the provisions of these
presents, would have the effect of rendering any person ineligible for
appointment as a Director or liable to vacate office as Director on
account of his having reached any specified age or of requiring special
notice or any other special formality in connection with the appointment
of any Director over a specified age shall apply to the Company.
101. Vacation of office of director
The office of a Director shall be vacated in any of the following events,
namely:-
(A) if pursuant to any provisions of the Statutes he is removed or
prohibited from being a Director;
(B) if he shall resign by writing under his hand left at the Office or if
he shall tender his resignation and the Directors shall resolve to
accept the same;
(C) if he shall have a receiving order made against him, become bankrupt,
apparently insolvent, execute a trust deed for behalf of his
creditors or shall compound with his creditors generally;
(D) if he shall become of unsound mind or otherwise incapax;
(E) if he shall be absent from meetings of the Directors for three months
without leave and his alternate Director (if any) shall not during
such period have attended in his stead and the Directors shall
resolve that his office be vacated; or
(F) if he shall be removed from office by notice in writing served upon
him signed by all his co-Directors, but so that in the case of a
Director holding an executive office which automatically determines
on his ceasing to be a Director such removal shall be deemed an act
of the Company and shall have effect without prejudice to any claim
for damages in respect of the consequent termination of his executive
office.
102. Retirement of directors by rotation
At the Annual General Meeting in each year any Director bound to retire
under Article 108 and one-third of the other Directors for the time being
(or, if their number is not three or a multiple of three, the number
nearest to one-third) shall retire from office, but:-
(a) if any Director has at the start of the Annual General Meeting in any
year been in office for three years or more since his last
appointment or re-appointment (or would be if the Annual General
Meeting in that year was on a date numerically
68
corresponding to the date of his last appointment or re-appointment),
he shall retire; and
(b) if there is only one Director who is subject to retirement by
rotation, he shall retire.
103. Selection of directors to retire
The Directors to retire by rotation shall include (so far as necessary to
obtain the number required) any Director who wishes to retire and not to
offer himself for re-election. Any further Directors so to retire shall be
those of the other Directors subject to retirement by rotation who have
been longest in office since their last re-election or appointment and so
that as between persons who become or were last re-elected Directors on
the same day those to retire shall (unless they otherwise agree among
themselves) 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 of Directors of the Company at the date of the notice convening
the Annual General Meeting and no Director shall be required to retire or
be relieved from retiring by reason of any change in the number or
identity of the Directors after the date of such notice but before the
close of the meeting. Subject in the case of a Director who is over the
age of seventy to a resolution of which special notice has been given
being passed as required by Section 293(5) of the 1985 Act, a retiring
Director shall be eligible for re-election.
104. When directors deemed to be reappointed
The Company at the meeting at which a Director retires under any provision
of these presents may (subject to Article 106) by Ordinary Resolution fill
up the office being vacated by electing thereto the retiring Director or
some other person eligible for appointment. In default the retiring
Director shall be deemed to have been re-elected except in any of the
following cases:-
(A) where at such meeting it is expressly resolved not to fill up such
office or a resolution for the re-election of such Director is put to
the meeting and lost;
(B) where such Director has given notice in writing to the Company that
he is unwilling to be re-elected;
(C) where the default is due to the moving of a resolution in
contravention of the next following Article;
(D) where such Director has attained any retiring age applicable to him
as Director;
(E) where, if such Director was re-elected, he would be required to
vacate the office of Director pursuant to Article 101.
The retirement shall not have effect until the conclusion of the meeting
except where a resolution is passed to elect some other person in the
place of the retiring Director or a resolution for his re-election is put
to the meeting and lost and accordingly a retiring Director who is
re-elected or deemed to have been re-elected will continue in office
without break, save that notwithstanding the provisions of Section 293(6)
of the 1985 Act, a person re-appointed a Director on retiring on account
of age, or a person appointed at an Annual General Meeting in place of a
Director so retiring, shall be deemed for the purpose of the rotation of
Directors to have been elected at the meeting at which he was so
re-appointed or appointed and not before.
69
105. Resolution
A resolution for the appointment of two or more persons as Directors by a
single resolution shall not be moved at any General Meeting unless a
resolution that it shall be so moved has first been agreed to by the
meeting without any vote being given against it; and any resolution moved
in contravention of this provision shall be void.
106. Notice of intention to appoint a director
No person other than a Director retiring at the meeting shall, unless
recommended by the Directors for election, be eligible for appointment as
a Director at any General Meeting unless not less than seven nor more than
forty two days (inclusive of the date on which the notice is given) before
the day appointed for the meeting there shall have been left at the
Office, addressed to the Secretary, notice in writing signed by some
member (other than the person to be proposed) duly qualified to attend and
vote at the meeting for which such notice is given of his intention to
propose such person for appointment stating the particulars which would,
if he were so appointed, be required to be included in the Company's
Register of Directors together with notice in writing signed by the person
to be proposed of his willingness to be elected.
107. Removal and replacement of directors
The Company may in accordance with and subject to the provisions of the
Statutes by Ordinary Resolution of which special notice has been given
remove any Director from office notwithstanding any provision of these
presents or of any agreement between the Company and such Director, but
without prejudice to any claim he may have for damages for breach of any
such agreement, and by Ordinary Resolution appoint another person in place
of a Director so removed from office and any person so appointed shall be
treated for the purpose of determining the time at which he or any other
Director is to retire by rotation as if he had become a Director on the
day on which the Director in whose place he is appointed was last elected
as a Director. In default of such appointment the vacancy arising upon the
removal of a Director from office may be filled by the Directors as a
casual vacancy.
108. Appointment by ordinary resolution or by directors
The Company may by Ordinary Resolution appoint any person to be a Director
either to fill a casual vacancy or as an additional Director. Without
prejudice and in addition thereto, the Directors shall have the power at
any time so to do, but so that the total number of Directors shall not at
any time exceed the maximum number (if any) fixed by or in accordance with
these presents. Any person so appointed by the Directors shall hold office
only until the next Annual General Meeting and shall then be eligible for
re-election, but shall not be taken into account in determining the number
of Directors who are to retire by rotation at such meeting.
ALTERNATE DIRECTORS
109(A). Power to appoint alternate directors
Any Director (other than an alternate Director) may at any time by writing
under his hand and deposited at the Office, or received by the Secretary
or delivered at a meeting of the Directors, appoint any person (including
another Director) to be his alternate Director and may in like manner at
any time terminate such appointment. If such alternate Director is not
70
another Director, such appointment, unless previously approved by the
Directors, shall have effect only upon and subject to being so approved.
(B). Termination
The appointment of an alternate Director shall automatically determine on
the happening of any event which if he were a Director would cause him to
vacate such office or if his appointor ceases to be a Director or if the
approval of the Directors to his appointment is withdrawn. An alternate
Director may by writing under his hand left at the Office resign such
appointment.
(C). Alternate to receive notices
An alternate Director shall (except when absent from the United Kingdom)
be entitled, if his appointor so requests, to receive notices of meetings
of the Directors to the same extent as, but in lieu of, the Director
appointing him and shall be entitled to attend and vote as a Director and
be counted for the purposes of a quorum at any such meeting at which the
Director appointing him is not personally present and generally at such
meeting to perform all functions, powers and duties of his appointor as a
Director and for the purposes of the proceedings at such meeting the
provisions of these presents shall apply as if he were a Director. If he
shall himself be a Director or shall attend any such meeting as an
alternate for more than one Director his voting rights shall be
cumulative. If his appointor is for the time being absent from the United
Kingdom or temporarily unable to act through ill-health or disability his
signature to any resolution in writing of the Directors shall be as
effective as the signature of his appointor. To such extent as the
Directors may from time to time determine in relation to any committees
formed under Article 118 the foregoing sentences shall also apply mutatis
mutandis to any meeting of any such committee of which his appointor is a
member. An alternate Director shall not (save as aforesaid) have power to
act as a Director nor shall he be deemed to be a Director for the purposes
of these presents.
(D). Alternate may be paid expenses but not remuneration
An alternate Director may be repaid expenses, and shall be entitled to be
indemnified, by the Company to the same extent mutatis mutandis as if he
were a Director but he shall not be entitled to receive from the Company
any remuneration except only such proportion (if any) of the remuneration
otherwise payable to his appointor as such appointor may by notice in
writing to the Company from time to time direct.
PROCEEDINGS OF DIRECTORS
110(A). Meetings of directors
Subject to the provisions of these presents, the Directors may meet
together for the despatch of business, adjourn and otherwise regulate
their meetings as they think fit. Questions arising at any meeting shall
be determined by a majority of votes. In case of an equality of votes the
chairman of the meeting shall have a second or casting vote. A Director
may, and the Secretary on the requisition of a Director shall, at any time
summon a meeting of the Directors. Notice of a meeting of Directors shall
be deemed to be properly given to a Director if it is given to him
personally or by word of mouth or sent in writing or by electronic
communication to him at his last known address or any other address given
by him to the Company for this purpose. A Director absent or intending to
be absent from the United Kingdom may request that notices of meetings of
Directors shall during his absence be sent in writing or by electronic
communication to him at an address given by him to the Company
71
for this purpose, but such notices need not be given any earlier than
notices given to Directors not so absent and if no such request is made it
shall not be necessary to give notice of a meeting of Directors to any
Director who is for the time being absent from the United Kingdom. A
Director may waive notice of any meeting either prospectively or
retrospectively.
(B). Participation in meetings by telephone
Any one or more (including, without limitation, all) of the Directors, or
any committee of the Directors, may participate in a meeting of the
Directors or of such committee:-
(a) by means of a conference telephone or similar communications
equipment allowing all persons participating in the meeting to hear
each other at the same time; or
(b) by a succession of telephone calls to Directors from the chairman of
the meeting following disclosure to them of all material points.
Participating by such means shall constitute presence in person at a
meeting. Such meeting shall be deemed to have occurred, in the case of
(a), at the place where most of the Directors participating are present
or, if there is no such place, where the chairman of the meeting is
present and, in the case of (b), where the chairman of the meeting is
present.
111. Authority to vote
A Director who is unable to attend any meeting of the Directors and has
not appointed an alternate Director may authorise any other Director to
vote for him at that meeting, and in that event the Director so authorised
shall have a vote for each Director by whom he is so authorised in
addition to his own vote. Any such authority must be in writing or by
cable. telegram, telex or facsimile which must be produced at the meeting
at which the same is to be used and be left with the Secretary for
retention.
112. Quorum
The quorum necessary for the transaction of the business of the Directors
may be fixed by the Directors and unless so fixed at any other number
shall be three. A meeting of the Directors at which a quorum is present
shall be competent to exercise all powers and discretions for the time
being exercisable by the Directors.
113. Directors' interests
A Director who is in any way, whether directly or indirectly, interested
in a contract or proposed contract (or any transaction or arrangement
whether or not constituting a contract) with the Company shall declare the
nature of his interest in accordance with the provisions of the Statutes.
114(A). Restrictions on voting
Save as herein provided, a Director shall not vote at any meeting of the
Directors in respect of any contract or arrangement or any other proposal
whatsoever in which he has an interest which (together with any interest
of any person connected with him within the meaning of Section 346 of the
1985 Act) 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
72
through, the Company). A Director shall not be counted in the quorum at a
meeting in relation to any resolution on which he is debarred from voting.
(B). Where interest does not prevent voting
Subject to the provisions of the Statutes a Director shall (in the absence
of some other material interest than is indicated below) be entitled to
vote (and be counted in the quorum) in respect of any resolution
concerning any of the following matters, namely:-
(i) the giving of any security or indemnity to him pursuant to Article
168 or in respect of money lent or obligations incurred by him at the
request of or for the benefit of the Company or any of its subsidiary
undertakings;
(ii) the giving of any security or indemnity to a third party in respect
of a debt or obligation of the Company or any of its subsidiary
undertakings for which he himself has assumed responsibility in whole
or in part under a guarantee or indemnity or by the giving of
security;
(iii) any proposal concerning an offer of shares or debentures or other
securities of or by the Company or any of its subsidiary undertakings
for subscription or purchase in which offer 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) any proposal concerning any other company (not being a company in
which he owns one per cent or more) in which he is interested,
directly or indirectly and whether as an officer, or shareholder,
creditor or otherwise howsoever;
(v) any proposal concerning the adoption, modification or operation of a
pension fund or retirement death or disability benefits scheme or
employees' share scheme which relates both to Directors and employees
of the Company or of any of its subsidiary undertakings and does not
provide in respect of any Director as such any privilege or advantage
not accorded to the employees to which the fund or scheme relates;
(vi) any contract or arrangement for the benefit of employees of the
Company or of any of its subsidiary undertakings under which he
benefits or stands to benefit in a similar manner to the employees
and which does not accord to any Director as such any privilege or
advantage not accorded to the employees to whom the contract or
arrangement relates; and;
(vii) any proposal concerning insurance which the Company proposes to
purchase and/or maintain for the benefit of any Directors of the
Company or for persons who include Directors of the Company, provided
that for the purposes of this sub-paragraph (vii), insurance shall
mean only insurance against liability incurred by a Director in
respect of any act or omission by him referred to in Article 96(B),
or any other insurance which the Company is empowered to purchase
and/or maintain for, or for the benefit of, any groups of persons
consisting of or including Directors of the Company.
For the purposes of sub-paragraph (iv) above, a company shall be deemed to
be one in which a Director owns one per cent or more if and so long as
(but only if and so long as) he, taken together with any person connected
with him within the meaning of Section 346 of the 1985 Act, is to his
knowledge (either directly or indirectly) the holder of or beneficially
interested in one per cent or more of any class of the equity share
capital of that company or of the voting rights available to members of
that company. For the purpose of this paragraph there
73
shall be disregarded any shares held by the Director or any such person as
simple trustee under the laws of Scotland or bare or custodian trustee
under the laws of England and Wales and in which he has no beneficial
interest, any shares comprised in a trust in which his, or any such
person's, interest is in reversion or remainder or fee if and so long as
some other person is entitled to receive the income of the trust, and any
shares comprised in an authorised unit trust scheme in which he, or any
such person, is interested only as a unit holder. Where a company in which
a Director owns one per cent or more is materially interested in a
contract or arrangement or other proposal, he also shall be deemed to be
materially interested in that contract, arrangement or other proposal.
(C). Consideration of matters involving two or more directors
Where proposals are under consideration concerning the appointment
(including fixing or varying the terms of appointment) of two or more
Directors to offices or employments with the Company or any company in
which the Company is interested, such proposals may be divided and
considered in relation to each Director separately and in such case each
of the Directors concerned (if not debarred from voting under paragraph
(B)(iv) of this Article) shall be entitled to vote (and be counted in the
quorum) in respect of each resolution except that concerning his own
appointment.
(D). Materiality of directors' interests
If any question shall arise at any meeting as to the materiality of a
Director's interest or as to the entitlement of any Director to vote and
such question is not resolved by his voluntarily agreeing to abstain from
voting, such question shall be referred to the chairman of the meeting (or
in the case of a question as to the materiality of an interest or
entitlement to vote of the chairman, one of the Deputy Chairmen or in his
absence one of the Vice-Chairmen) and his ruling in relation to any other
Director shall be final and conclusive except in a case where the nature
or extent of the interests of such Director has not been fairly disclosed.
(E). Alternate Directors
In relation to an alternate Director, the interest of his appointor shall,
for the purposes of this Article, 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.
(F). Relaxation of provisions
Subject to the Statutes, the Company may by Special Resolution suspend or
relax the provisions of this Article to any extent or ratify any
transaction not duly authorised by reason of a contravention of this
Article.
115. Proceedings in case of vacancies
The continuing Directors may act notwithstanding any vacancies in their
number, but if and so long as the number of Directors is reduced below the
number fixed by or in accordance with these presents as the necessary
quorum of Directors the continuing Directors or Director may act for the
purpose of filling up such vacancies or of summoning General Meetings of
the Company, but not for any other purpose. If there be no Directors or
Director able or willing to act, then any two members may summon a General
Meeting for the purpose of appointing Directors.
74
116. Chairman
The Directors may elect a Chairman and one or more Deputy Chairmen and one
or more Vice-Chairmen and determine the period for which each is to hold
office. The Chairman or, in his absence, one of any Deputy Chairmen or, in
his absence, one of any Vice-Chairmen shall preside at meetings of the
Directors, but if no Chairman or Deputy Chairman or Vice-Chairman shall
have been appointed, or if at any meeting none of them be present within
five minutes after the time appointed for holding the same, the Directors
present may choose one of their number to be chairman of the meeting. If
at any time there is more than one Deputy Chairman or Vice-Chairman the
right (in the absence of the Chairman or of the Chairman and the Deputy
Chairmen respectively) to preside at a meeting of Directors shall be
determined as between the Deputy Chairmen (in the absence of the Chairman)
or Vice-Chairmen (in the absence of the Chairman and the Deputy Chairmen)
present (if more than one) by seniority in length of appointment or
otherwise as resolved by the Directors.
117. Resolutions in writing
A resolution in writing signed by all the Directors for the time being in
the United Kingdom and all the alternate Directors (if any) for the time
being in the United Kingdom whose appointors are for the time being absent
from the United Kingdom (provided that their number is sufficient to
constitute a quorum) or by all the members of a committee formed under the
next following Article for the time being shall be as valid and effective
as a resolution passed at a meeting of the Directors or, as the case may
be, of such committee duly convened and held and may consist of several
documents in the like form, each signed by one or more of the Directors or
alternate Directors or members of the committee concerned.
118. Committees of directors
The Directors may delegate any of their powers, authorities or discretions
(including, for the avoidance of doubt, any powers, authorities or
discretions relating to the remuneration of Directors, the varying of
Directors' terms and conditions of employment or the conferring of any
benefit on Directors) to committees consisting of one or more members of
their body and (if thought fit) one or more other persons co-opted as
hereinafter provided. Insofar as any such power, authority or discretion
is delegated to a committee, any reference in these presents to the
exercise by the Directors of the power, authority or discretion so
delegated shall be read and construed as if it were a reference to the
exercise by such committee. Any committee so formed shall in the exercise
of the powers, authority or discretions so delegated conform to any
regulations which may from time to time be imposed by the Directors. Any
such regulations may provide for or authorise the co-option to the
committee of persons other than Directors and for such co-opted members to
have voting rights as members of the committee but so that (i) the number
of co-opted members shall be less than one half of the total number of
members of the committee and (ii) no resolution of the committee shall be
effective unless a majority of the members of the committee present at the
meeting when the resolution is passed are Directors. The Directors may
authorise any such committee to sub-delegate all or any of the powers,
authorities and discretions delegated to it, and the Directors may at any
time dissolve any such committee or revoke, vary or suspend any delegation
made to any such committee.
119. Proceedings of committee
The meetings and proceedings of any such committee consisting of two or
more members (including the exercise of all powers, authorities and
discretions vested in such committee) shall be governed by the provisions
of these presents regulating the meetings and proceedings
75
of the Directors, so far as the same are applicable and are not superseded
by any regulations made by the Directors under the last preceding Article.
120. Validity of proceedings
All acts done by any meeting of Directors, or of any such committee, or by
any person acting as a Director, shall as regards all persons dealing in
good faith with the Company, notwithstanding that there was some defect in
the appointment or continuance in office of any such Directors (or their
alternates), or member of the committee, or person acting as aforesaid, or
that they or any of them were disqualified 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 (or
alternate Director) or member of the committee and had been entitled to
vote.
BORROWING POWERS
121. Power to borrow and grant security
The Directors may exercise all the powers of the Company to borrow money,
and to mortgage or charge its undertaking, property and uncalled capital,
and to issue debentures and other securities, whether outright or as
collateral security for any debt, guarantee, liability or obligation of
the Company or of any third party.
GENERAL POWERS OF DIRECTORS
122. Business to be managed by the directors
The business and affairs of the Company shall be managed by the Directors,
who may exercise all such powers of the Company as are not by the Statutes
or by these presents required to be exercised by the Company in General
Meeting, subject nevertheless to any regulations of these presents, to the
provisions of the Statutes and to such regulations, being not inconsistent
with the aforesaid regulations or provisions, as may be prescribed by
Special Resolution of the Company, but no regulation so made by the
Company shall invalidate any prior act of the Directors which would have
been valid if such regulation had not been made. The general powers given
by this Article shall not be limited or restricted by any special
authority or power given to the Directors by any other Article.
123. Local boards, etc
The Directors may make such arrangements as they think fit for the
management and transaction of the Company's affairs in any specified
locality whether in the United Kingdom or elsewhere and without prejudice
to the generality of the foregoing may at any time and from time to time
(a) establish Regional, Divisional or Local Boards, Committees or Agencies
in the United Kingdom or elsewhere, (b) appoint any one or more of the
Directors or any other person or persons to be members thereof for such
period and at such remuneration as the Directors may deem fit, (c) revoke
from time to time any such appointment, (d) fix the quorum of the said
Regional, Divisional or Local Boards and Committees, (e) delegate to such
Regional, Divisional or Local Boards, Committees and Agencies from time to
time all or such powers, authorities and discretions vested in the
Directors (other than the power to make calls) as the Directors may deem
expedient, with power to sub-delegate, and (f) annul or vary any such
delegation, but no person dealing in good faith and without notice of any
such annulment or variation shall be affected thereby.
76
124. Powers of attorney
The Directors may from time to time and at any time by power of attorney
or factory and commission or otherwise appoint any company, firm or person
or any fluctuating body of persons, whether nominated directly or
indirectly by the Directors, to be the Attorney or Attorneys or
Commissioner or Commissioners of the Company for such purposes and with
such powers, authorities and discretions (not exceeding those vested in or
exercisable by the Directors under these presents) and for such period and
subject to such conditions as they may think fit, and any such power of
attorney or factory and commission may contain such provisions for the
protection and convenience of persons dealing with any such Attorney or
Commissioner as the Directors may think fit, and may also authorise any
such Attorney or Commissioner to sub-delegate all or any of the powers,
authorities and discretions vested in him. The Directors may delegate all
or any of their powers under this Article.
125. Official seal for use abroad
The Company may exercise the powers conferred by the Statutes with regard
to having an official seal for use abroad and such powers shall be vested
in the Directors.
126. Overseas registers
Subject to and to the extent permitted by the Statutes, the Company, or
the Directors on behalf of the Company, may cause to be kept in any
territory outside the United Kingdom a branch register of members resident
in such territory, and the Directors may make and vary such regulations as
they may think fit respecting the keeping of any such register.
127. Execution by the Company
All cheques, promissory notes, drafts, bills of exchange, and other
negotiable or transferable instruments, and all receipts for moneys paid
to the Company, shall be signed, drawn, accepted, endorsed, or otherwise
executed, as the case may be, in such manner as the Directors or any duly
authorised committee shall from time to time determine.
DEPARTMENTAL, REGIONAL OR LOCAL DIRECTORS
AND OTHER APPOINTEES
128(A). Use of designation "Director"
The Directors may from time to time appoint any person to be a
Departmental, Regional or Local Director or (without prejudice to the
powers conferred by Article 123) to any other appointment including the
word "Director" in its title (any person so appointed pursuant to this
Article being in this Article called "an Appointee").
(B). Powers and duties of Appointee
The Directors may from time to time define, limit or restrict the powers
and duties of an Appointee and determine his remuneration and may at any
time remove any such person from such office but without prejudice to any
claim for damages for breach of any contract of service between him and
the Company. Any person so appointed as an Appointee shall not, by reason
only of such appointment, be a Director of the Company for any of the
purposes of these presents or of the Statutes, nor shall he have, by
reason only of such appointment, any of the powers or duties of a Director
save in so far as specific powers or duties may be vested
77
in him by the Directors as aforesaid. The Directors may at any time
determine the use of any designation or title including the word
"Director".
(C). Attendance at board meetings
An Appointee shall not be entitled, by reason only of such appointment, to
receive notice of or to attend at any meeting of the Directors unless he
is specifically invited by the Directors to do so, and as an Appointee he
shall not be entitled to vote thereat.
(D). Appointment of other officers
The Directors may from time to time appoint Chief General Managers, Deputy
Chief General Managers, Assistant Chief General Managers, Senior General
Managers, General Managers, Deputy General Managers, Assistant General
Managers and any other officers on such terms and for such period as the
Directors may think fit. The Directors may from time to time define, limit
or restrict the powers and duties of any person appointed to any such
office and determine his remuneration and may at any time remove any such
person from such office but without prejudice to any claim for damages for
breach of any contract of service between him and the Company.
SECRETARY
129. Secretary
The Secretary shall be appointed by the Directors on such terms and for
such period as they may think fit. Any Secretary so appointed may at any
time be removed from office by the Directors, but without prejudice to any
claim for damages for breach of any contract of service between him and
the Company. If thought fit two or more persons may be appointed as Joint
Secretaries. The Directors may also appoint from time to time on such
terms as they may think fit one or more Deputy Secretaries and Assistant
Secretaries. Anything by the Statutes or by these presents required or
authorised to be done by or to the Secretary may, if the office is vacant
or there is for any other reason no Secretary capable of acting, be done
by or to any Deputy or Assistant Secretary, or if there is no Deputy or
Assistant Secretary capable of acting, by or to any officer of the Company
authorised generally or specially in that behalf by the Directors.
SEALS
130(A). Custody of seal
The Directors shall provide for the safe custody of the Seal and any
Securities Seal and neither shall be used without the authority of the
Directors or a committee authorised by the Directors in that behalf.
(B). Formalities for affixing the seal
Every deed, contract, document, instrument or other writing to which the
Seal shall be affixed shall (except as permitted by Article 19) be signed
by a Director or by some other person appointed by the Directors for the
purpose and countersigned by the Secretary or by a second Director or by
some other person appointed by the Directors for the purpose. Such
signature and counter-signature shall not require to be witnessed.
78
(C). Use of securities seal
The Securities Seal shall be used only for sealing securities issued by
the Company and documents creating or evidencing securities so issued. Any
such securities or documents sealed with the Securities Seal shall not
require to be signed.
EXECUTION OF DOCUMENTS
131. Execution of documents
Subject to the provisions of the Statutes, all deeds, contracts,
documents, instruments or other writings not executed under Seal may be
signed by a Director or by the Secretary or by some other person appointed
by the Directors or by a duly authorised committee for that purpose and
that whether or not relating to heritable or real property. Provided that
this Article and the provisions of Article 130(B) are without prejudice to
any other manner of execution of documents permitted or prescribed by the
Statutes.
AUTHENTICATION OF DOCUMENTS
132. Authentication of documents
Any Director or the Secretary or any person appointed by the Directors or
by a duly authorised committee for the purpose shall have power to
authenticate any documents affecting the constitution of the Company and
any resolutions passed by the Company or the Directors or any committee,
and any books, records, documents and accounts relating to the business of
the Company, and to certify copies thereof or extracts therefrom as true
copies or extracts; and where any books, records, documents or accounts
are elsewhere than at the Office the officer, servant or agent of the
Company having the custody thereof shall be deemed to be a person
appointed by the Directors as aforesaid. A document purporting to be a
copy of a resolution, or an extract from the minutes of a meeting, of the
Company or of the Directors or any committee which is certified as
aforesaid shall be conclusive evidence in favour of all persons dealing
with the Company upon the faith thereof that such resolution has been duly
passed or, as the case may be, that such minutes or extract is a true and
accurate record of proceedings at a duly constituted meeting.
DIVIDENDS
133. Declaration of dividends
The Company may by Ordinary Resolution declare dividends but no dividend
shall be payable except out of the profits of the Company available for
distribution under the provisions of the Statutes, or in excess of the
amount recommended by the Directors, or in contravention of the special
rights attaching to any share. Unless and to the extent that the rights
attached to any shares or the terms of issue thereof otherwise provide,
all dividends shall be declared and paid according to the amounts paid on
the shares in respect of which the dividend is paid, and shall (as regards
any shares not fully paid throughout the period in respect of which the
dividend is paid) be apportioned and paid pro rata according to the
amounts paid on the shares during any portion or portions of the period in
respect of which the dividend is paid. The amounts of any such pro rata
apportionments shall be determined by the Directors as they think fit in
all respects including as to any Applicable Exchange Rate applied by them
for the purposes of converting any amount denominated in one currency into
another currency for such determination. Provided that the Directors act
bona fide they shall not incur any responsibility to the holders of any
share in respect of the determination of such
79
pro rata apportionment. For the purposes of this Article no amount paid on
a share in advance of calls shall be treated as paid on the share.
134(A). Interim dividends
If and so far as in the opinion of the Directors the profits of the
Company justify such payment, the Directors may (subject to the special
rights attaching to any share and provided that the Directors may in any
event pay an interim dividend on the Ordinary Shares at a rate not
exceeding (pound)0.01 per Ordinary Share) subject to the Statutes declare
and pay the fixed dividends or dividends not exceeding a specified amount
on any class of shares carrying a fixed dividend or dividends not
exceeding a specified amount expressed to be payable on fixed dates on the
half-yearly or other dates prescribed for the payment thereof and may also
from time to time subject to the Statutes declare and pay interim
dividends on shares of any class of such amount and on such dates and in
respect of such periods as they think fit. For the purpose of ascertaining
the distributable profits or reserves of the Company available for
distribution at any time and the extent to which the same may cover fixed
dividends or dividends not exceeding a specified amount expressed to be
payable at such time, the Directors may convert any such profits or
reserves denominated in, and any fixed dividend or dividends not exceeding
a specified amount expressed to be payable in, a Foreign Currency into
Sterling at the Applicable Exchange Rate.
(B). Directors' responsibility
Provided that the Directors act bona fide, they shall not incur any
responsibility to the holders of any share conferring a preference which
may at any time be issued for any damage they may suffer by reason of the
payment of an interim dividend on any shares ranking after such preference
shares. A resolution of the Directors declaring the interim dividend shall
(once announced) be irrevocable and have the same effect in all respects
as if such dividend had been declared upon the recommendation of the
Directors by an Ordinary Resolution of the Company.
135. Profits and losses from past date
Subject to the provisions of the Statutes, where any asset, business or
property is bought by, transferred to or vested in the Company as from a
past date (whether such date be before or after the incorporation of the
Company) the profits and losses thereof as from such date may at the
discretion of the Directors in whole or in part be carried to revenue
account and treated for all purposes as profits or losses of the Company.
Subject as aforesaid, if any shares or securities are purchased cum
dividend or interest, such dividend or interest may at the discretion of
the Directors be treated as revenue, and it shall not be obligatory to
capitalise the same or any part thereof.
136. Interest not payable
No dividend or other moneys payable on or in respect of a share shall bear
interest as against the Company. The provisions of this Article shall not
affect the provisions of Article 48.
137. Permitted deductions
The Directors may deduct from any dividend or other moneys payable to any
member on or in respect of a share all sums of money (if any) presently
payable by him to the Company on account of calls or otherwise.
80
138. Retention of dividends
The Directors may retain any dividend or other moneys payable on or in
respect of a share on which the Company has a lien, and may apply the same
in or towards satisfaction of the debts, liabilities or engagements in
respects of which the lien exists.
139. Waiver of dividends
The waiver in whole or in part of any dividend on any share by any
document (whether or not under seal) shall be effective only if such
document is signed by the shareholder (or the person entitled to the share
in consequence of the death or bankruptcy of the holder or otherwise by
operation of law) and delivered to the Company and if or to the extent
that the same is accepted as such or acted upon by the Company.
140. Unclaimed dividends
All dividends or other moneys payable on or in respect of a share
unclaimed after having been declared may be invested or otherwise made use
of by the Directors for the benefit of the Company until, subject as
provided by these presents, claimed. The payment by the Directors of any
unclaimed dividend or other moneys payable on or in respect of a share
into a separate account shall not constitute the Company a trustee in
respect thereof. The provisions of this Article shall not affect the
provisions of Article 48.
141. Forfeiture of unclaimed dividends
Any dividend unclaimed after a period of twelve years from the date of
declaration of such dividend shall be forfeited and shall revert to the
Company.
142. Dividends in specie
The Company may upon the recommendation of the Directors by Ordinary
Resolution direct payment of a dividend in whole or in part by the
distribution of specific assets (and in particular of paid-up shares or
debentures of any other company) and the Directors shall give effect to
such resolution, and where any difficulty arises in regard to such
distribution, the Directors may (a) settle the same as they think
expedient and in particular may issue fractional certificates or may
authorise any person to sell and transfer any fractions or disregard
fractions altogether, (b) fix the value for distribution of such specific
assets or any part thereof, (c) determine that cash payments shall be made
to any members upon the footing of the value so fixed in order to adjust
the rights of those entitled to participate in the dividend, and (d) vest
any such specific assets in trustees as may seem expedient to the
Directors.
143. Scrip dividend
The Directors may, subject to the rights attached to any class of share
and in addition to the provisions of Article 4(C)(2)(b)(vi), with the
prior sanction of an Ordinary Resolution of the Company, offer the holders
of Ordinary Shares the right to elect to receive Ordinary Shares, credited
as fully paid, instead of cash in respect of all or part of such dividend
or dividends as are specified by such resolution. Such offer may be made
by the Directors upon such terms and conditions as they think fit,
provided that the following provisions shall apply in any event:-
81
(A) the said Ordinary Resolution may specify all or part of a particular
dividend (whether or not already declared) or may specify all or any
dividends (or any part of such dividends) declared or to be declared
or paid within a specified period, but such period may not end later
than the beginning of the fifth Annual General Meeting following the
date of the meeting at which such resolution is passed;
(B) 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 equal to (but not greater than) the cash
amount (disregarding any tax credit) of the dividend that such holder
elects to forego provided always that, in calculating the
entitlement, the Directors may at their discretion adjust the figure
obtained by dividing the relevant value by the amount payable on the
Ordinary Shares up or down so as to procure that the entitlement of
each shareholder to new Ordinary Shares may be represented by a
simple numerical ratio. For this purpose "relevant value" shall be
calculated by reference to the average of the middle market
quotations for the Company's Ordinary Shares on the London Stock
Exchange, as derived from the Daily Official List, on 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 the Directors on such basis as they consider fair
and reasonable. A certificate or report by the Auditors as to the
amount of the average quotation in respect of any dividend shall be
conclusive evidence of that amount;
(C) the basis of allotment shall be such that no member may receive a
fraction of a share. The Directors may make such provisions as they
think fit for any fractional entitlements, including provisions
whereby, in whole or in part, fractional entitlements are disregarded
or the benefit thereof accrues to the Company and/or under which
fractional entitlements are accrued and/or retained and in each case
accumulated on behalf of any shareholder and such accruals or
retentions are applied to the allotment by way of bonus to or cash
subscription on behalf of such shareholder of fully paid Ordinary
Shares;
(D) the Directors, after determining the basis of allotment, shall notify
the holders of Ordinary Shares of the right of election offered to
them, and shall send with, or following, such notification, forms of
election and specify the procedure to be followed and the place at
which, and the latest date and time by which, duly completed forms of
election must be lodged in order to be effective. Electronic
communications may, if the Directors so determine, be used in
accordance with these presents (instead of documents in writing) for
the notification of the right of election and the sending of
completed forms of election;
(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 whereof the said election has been duly made ("the
elected Ordinary Shares") and instead thereof additional Ordinary
Shares shall be allotted to the holders of the elected Ordinary
Shares on the basis of allotment determined as aforesaid. For such
purpose the Directors shall capitalise out of such of the sums
standing to the credit of any of the Company's reserves (including
Share Premium Account and Capital Redemption Reserve) or any of the
profits which could otherwise have been applied in paying dividends
in cash as the Directors may determine, a sum equal to the aggregate
nominal amount of the additional Ordinary Shares to be allotted on
such basis and apply the same in paying up in full the appropriate
number of unissued Ordinary Shares for allotment and distribution to
and amongst the holders of the elected Ordinary Shares on such basis.
A resolution of the Directors capitalising any part of
82
the reserves or profits hereinbefore mentioned shall have the same
effect as if such capitalisation had been declared by Ordinary
Resolution of the Company in accordance with Article 148;
(F) the additional Ordinary Shares so allotted shall rank pari passu in
all respects with the fully paid Ordinary Shares then in issue save
only as regards participation in the relevant dividend;
(G) any resolution of the Company or the Directors, passed on or after
the date of adoption of these presents, declaring a dividend in
respect of which (or in respect of any part of which) a right of
election is offered under this Article (whether before or after the
passing of the resolution) shall be deemed to include (if not
expressly included) a provision that the dividend declared (or the
part thereof in respect of which the right of election is offered)
shall not be payable in respect of Ordinary Shares as regards which a
valid acceptance of the offer under this Article shall have been
received by the Company not later than the final time for receipt of
forms of election;
(H) unless the Directors otherwise determine, or unless the
Uncertificated Securities Regulations and/or the rules of the
relevant system concerned otherwise require, the new Ordinary Share
or shares which a member has elected to receive instead of cash in
respect of the whole (or some part) of the specified dividend
declared in respect of his elected Ordinary Shares shall be in
uncertificated form (in respect of the member's elected Ordinary
Shares which were in uncertificated form on the date of the member's
election) and in certificated form (in respect of the member's
elected Ordinary Shares which were in certificated form on the date
of the member's election); and
(I) the Directors may also from time to time establish, continue or vary
a procedure for election mandates, which, for the avoidance of doubt,
may include an election by means of a relevant system and mandates
given before the adoption of these presents, under which a holder of
Ordinary Shares may elect to receive Ordinary Shares credited as
fully paid instead of cash in respect of all future rights offered to
that holder under this Article until the election mandate is revoked
or deemed to be revoked in accordance with the procedure;
(J) the Directors may undertake and do such acts and things as they may
consider necessary or expedient for the purpose of giving effect to
the provisions of this Article;
(K) notwithstanding the foregoing, the Directors may at any time prior to
payment of the relevant dividend determine, if it appears to them
desirable to do so because of a change in circumstances, that the
dividend shall be payable wholly in cash after all and if they so
determine then all elections made shall be disregarded. The dividend
shall be payable wholly in cash if the ordinary share capital of the
Company ceases to be listed on the Official List of the London Stock
Exchange at any time prior to the due date of issue of the additional
shares or if the listing is suspended and not reinstated by the date
immediately preceding the due date of such issue;
(L) the Directors may on any occasion determine that rights of election
hereunder shall be subject to such exclusions, restrictions or other
arrangements as the Directors may deem necessary or expedient in
relation to legal or practical problems under the laws
83
of, or the requirements of any recognised regulating body or any
stock exchange in, any territory; and
(M) this Article shall have effect without prejudice to the other
provisions of these presents and such provisions shall also have
effect without prejudice to the provisions of this Article.
144(A). Procedure for payment
Any dividend or other monies payable in cash on or in respect of a share
may be paid by cheque, warrant or other financial instrument sent through
the post to the registered address of the member or person entitled
thereto (or, if two or more persons are registered as joint holders of the
share or are entitled thereto in consequence of the death or bankruptcy of
the holder or otherwise by operation of law, to any one of such persons),
or to such person and such address as such member or person or persons may
by writing direct Every such cheque shall be crossed and bear across its
face the words "account payee" or "a/c payee" either with or without the
word "only", and every such cheque or warrant or other financial
instrument shall be made payable to the order of the person to whom it is
sent or to such person as the holder or joint holders or person or persons
entitled to the share in consequence of the death or bankruptcy of the
holder or otherwise by operation of law may direct. Payment of the cheque
or warrant or other financial instrument by the banker upon whom it is
drawn or, in respect of uncertificated shares, the making of payment in
accordance with the facilities and requirements of the relevant system,
shall be a good discharge to the Company. Every such cheque or warrant or
other financial instrument shall be sent at the risk of the person
entitled to the money represented thereby. In addition, any such dividend
or other monies may be paid by any usual or common banking or funds
transfer method (including, without limitation, direct debit, bank
transfer and electronic funds transfer) and to or through such person as
the holder or joint holders may in writing direct, and the Company shall
have no responsibility for any sums lost or delayed in the course of any
such transfer or where it has acted on any such directions.
(B). Uncertificated shares
In respect of uncertificated shares every such payment of dividend or
other monies made by any method referred to in this Article 144 may be
made in any such manner as may be consistent with the facilities and
requirements of the relevant system. Without prejudice to the generality
of the foregoing, in respect of uncertificated shares, such payment may
include the sending by the Company or by any person on its behalf of an
instruction to the Operator of the relevant system to credit the cash
memorandum account of the holder or joint holders, or of such person as
the holder or joint holders may in writing direct.
(C). Uncashed Dividends
The Company may cease to send any cheque, warrant or other financial
instrument through the post or employ any other means of payment,
including payment by means of a relevant system, for any dividend payable
on any shares in the Company which is normally paid in that manner on
those shares if in respect of at least two consecutive dividends payable
on those shares the cheques, warrants or other financial instruments have
been returned undelivered or remain uncashed or that means of payment has
failed. In addition, the Company may cease to send any cheque, warrant or
other financial instrument through the post or may cease to employ any
other means of payment if, in respect of one dividend payable on those
shares, the cheque, warrant or other financial instrument has been
returned undelivered or remains uncashed or that means of payment has
failed and reasonable
84
enquiries have failed to establish any new address or account of the
registered holder. Subject to the provisions of these presents, the
Company may recommence sending cheques, warrants or other financial
instruments or employing such other means in respect of dividends payable
on those shares if the holder or person entitled to transmission requests
such recommencement in writing. All monies represented by cheques,
warrants or other financial instruments or means of payment not sent or
employed under this paragraph (C) shall be deemed to be unclaimed
dividends or monies and the provisions of Articles 48 and 140 shall apply
thereto.
(D). Currency of payment
Subject to the provisions of these presents and to the rights attaching to
or the terms of issue of any shares, any dividends or other monies on or
in respect of a share may be paid in such currency on the basis of the
Applicable Exchange Rate as the Directors may think fit or otherwise
determine.
145. Receipts where joint holders
If two or more persons are registered as joint holders of any share, or
are entitled jointly to a share in consequence of the death or bankruptcy
of the holder, any one of them may give effectual receipts for any
dividend or other monies payable or property distributable on or in
respect of the share.
RECORD DATE
146. Record date
Notwithstanding any other provision of these presents but without
prejudice to the rights attached to any shares and subject to the
Statutes, the Company or the Directors may by resolution specify any date
(the "record date") as the date at the close of business (or such other
time as the Directors may determine) 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 and such record date may be on or at any time before
the date on which the same is paid or made or (in the case of any
dividend, distribution, interest, allotment or issue) at any time after
the same is recommended, resolved, declared or announced but without
prejudice to the rights inter se in respect of the same of transferors and
transferees of any such shares or other securities.
RESERVES
147(A). Reserves
The Directors may from time to time subject to the rights attaching to any
share set aside out of the profits of the Company and carry to reserve
such sums in such currencies as they think proper which, at the discretion
of the Directors, shall be applicable 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. The
Directors may divide the reserve into such special funds denominated in
such currencies as they think fit, and may consolidate into one fund
denominated in such currencies as they think fit any special funds or any
parts of any special funds into which the reserve may have been divided.
The Directors may also without placing the same to reserve carry forward
any profits. In carrying sums to reserve and in applying the same the
Directors shall comply with the provisions of the Statutes and these
presents.
85
(B). Limitation on carrying sums to reserve
Notwithstanding the provisions of paragraph (A) of this Article:-
(i) unless the Directors shall determine in relation to any New
Preference Shares prior to the allotment thereof that this paragraph
(B)(i) shall not apply thereto the Directors shall not set aside out
of profits and carry to any reserve fund referred to in paragraph
(A), or carry forward in the manner described in paragraph (A), any
sum then required for the payment of dividend payable on any New
Preference Shares which may be properly applied for that purpose; and
(ii) if at any time there shall be insufficient profits standing to the
credit of the profit and loss account (or any other of the Company's
accounts or reserves) and available for distribution for the payment
of any such dividend referred to in paragraph (B) (i) above, the
Directors shall (subject to the Statutes) withdraw from any such
reserve fund referred to in paragraph (A) such sum (calculated at the
Applicable Exchange Rate) as may be required for payment of any such
dividend (and so that the Directors shall not require the consent of
the Company in General Meeting to such withdrawal). Subject to the
Statutes, any sum so withdrawn (and any profits previously carried
forward pursuant to paragraph (A) subsequently required for the
payment of any such dividend) may be applied in or towards payment of
such dividend.
(C). Different currencies
Any consolidation of or any credit to, debit from or other transfer
between reserves denominated in different currencies shall be effected at
the Applicable Exchange Rate.
CAPITALISATION OF PROFITS AND RESERVES
148. Power to capitalise profits
148(A) Subject to the Statutes and to the rights attaching to any share, the
Company may upon the recommendation of the Directors by Ordinary
Resolution and subject as hereinafter provided, resolve to capitalise any
part of the undivided profits of the Company (whether or not the same are
available for distribution) or any part of any sum standing to the credit
of any of the Company's reserves (including Share Premium Account and
Capital Redemption Reserve), provided that such sum be not required for
paying the dividends on any shares carrying a fixed cumulative
preferential dividend, and authorise the Directors to appropriate the
profits or sum resolved to be capitalised either in accordance with the
rights attaching to any share or to the Ordinary Shareholders in the
proportions in which such profits or sum would have been divisible amongst
them had the same been applied or been applicable in paying a dividend on
the Ordinary Shares and to apply such profits or sum on their behalf
either in or towards paying up the amounts (if any) for the time being
unpaid on any shares held by them respectively, or in paying up in full
unissued shares or debentures or other securities or obligations of the
Company of a nominal amount equal to such profits or sum, such shares or
debentures or other securities or obligations to be allotted and
distributed credited as fully paid up to and amongst them in the
proportion aforesaid, or partly in one way and partly in the other:
86
Provided that any Share Premium Account and Capital Redemption Reserve and
any profits which are not available for distribution may only be applied
hereunder in the paying up of unissued shares to be allotted as fully
paid.
148(B) In addition and without limiting the generality of paragraph (A) of this
Article, the Directors may at any time without any resolution of the
shareholders capitalise any profit or reserve which may be capitalised
pursuant to paragraph (A) of this Article and which is required to be
capitalised to enable the Company to allot and issue fully paid shares to
the holders of convertible securities pursuant to the rights of conversion
conferred upon such holders and in any such case the Directors shall apply
any sum so capitalised in paying up and issuing to such holders such
number of shares of such nominal amounts and conferring such rights and
being subject to such restrictions as shall be required to enable the
Company to comply with its obligations.
149(A). Procedure for capitalisation
Whenever such a resolution as aforesaid shall have been passed the
Directors shall make all appropriations and applications of the profits or
sum resolved to be capitalised thereby and all allotments and issues of
fully paid shares or debentures or other securities (if any) and generally
shall do all acts and things required to give effect thereto, with full
power to the Directors to make such provisions as they think fit for the
case of shares or debentures or other securities becoming distributable in
fractions (including provisions whereby any fractional entitlements which
would arise on the basis aforesaid are disregarded or the benefit thereof
accrues to the Company rather than to the members concerned) and also to
authorise any person to enter on behalf of all the members interested into
an agreement with the Company providing for any such capitalisation and
for matters incidental thereto and any agreement made under such authority
shall be effective and binding on all concerned.
(B). Power to capitalise on adjustment of subscription price in an employees'
share scheme
Notwithstanding any other provisions contained in these presents, if an
adjustment is made to the subscription price payable by an option holder
under any employees' share scheme which results in the adjusted price per
share payable on the exercise of an option in respect of an Ordinary Share
being less than the nominal value of such Ordinary Share (the "adjusted
price"), the Directors may capitalise all or part of the Company's
reserves available for distribution (excluding any Share Premium Account,
Capital Redemption Reserve or other undistributable reserve), upon the
issue of any Ordinary Share in respect of and following the exercise of
the relevant option (the "new share"). The amount to be so capitalised
shall be equal to the difference between the adjusted price and the
nominal value of the new share. The Directors shall apply such amount in
paying up in full the balance payable on the new share. The Directors may
take such steps as they consider necessary to ensure that the Company has
sufficient reserves available for such application. No further authority
of the Company in General Meeting is required.
MINUTES AND BOOKS
150. Keeping of minutes and books
The Directors shall cause Minutes to be made in books to be provided for
the purpose:-
(A) Of the names of the Directors or their alternates and any other
persons present at each meeting of Directors and of any committee
formed under Article 118.
87
(B) Of all resolutions and proceedings at all meetings of the Company and
of any class of members of the Company and of the Directors and of
committees formed under Article 118.
Any such Minute shall be conclusive evidence of any such proceedings if it
purports to be signed by the chairman of the meeting at which the
proceedings were had, or by the chairman of the next succeeding meeting.
151. Safeguarding of minutes and books
Any register, index, minute book, book of account or other book required
by these presents or the Statutes to be kept by or on behalf of the
Company may be kept either by making entries in bound books or by
recording them in any other manner. In any case in which bound books are
not used, the Directors shall take adequate precautions for guarding
against falsification and for facilitating its discovery.
ACCOUNTS
152. Right to inspect accounts
Accounting records sufficient to show and explain the Company's
transactions and otherwise complying with the Statutes shall be kept at
the Office, or, subject to the Statutes, at such other place or places as
the Directors think fit, and shall always be open to the inspection of the
Directors. No member (other than a Director) shall have any right of
inspecting any account or book or document of the Company except as
conferred by statute or ordered by a court of competent jurisdiction or
authorised by the Directors.
153. Preparation and laying of accounts
The Directors shall from time to time in accordance with the provisions of
the Statutes cause to be prepared and to be laid before a General Meeting
of the Company such profit and loss accounts, balance sheets, group
accounts (if any) and reports as may be necessary.
154. Accounts to be sent to members
A copy of every balance sheet and profit and loss account which is to be
laid before a General Meeting of the Company (including every document
required by law to be attached or annexed thereto) and of the Directors'
and Auditors' reports or (where permitted by the Statutes and/or any
applicable regulations and if the Directors so resolve from time to time)
a copy of a summary financial statement instead of such balance sheet,
profit and loss account and reports shall, not less than twenty one days
before the date of the meeting, be sent to every member of, and every
holder of debentures of, the Company and to every other person who is
entitled to receive notices of meetings from the Company under the
provisions of the Statutes or of these presents; Provided that this
Article shall not require a copy of these documents to be sent to more
than one of joint holders or to any person who is not entitled to receive
notices of meetings and of whose address the Company is not aware, but any
member or holder of debentures to whom a copy of these documents has not
been sent shall be entitled to receive a copy free of charge on
application at the Office. Whenever listing or quotation on any stock
exchange for all or any of the shares or debentures or other securities of
the Company shall for the time being be in force, there shall be forwarded
to the appropriate officer of such stock exchange such number of copies of
such documents and/or statements as may for the time being be required
under its regulations or practice.
88
Reference in this Article (other than in the immediately preceding
sentence) to copies of the above-mentioned documents and/or statements
being sent to any person include (without prejudice to any other provision
of these presents) references to copies of such documents and/or
statements being sent, or treated as sent, to such person using electronic
communications in accordance with Section 238(4A) and (4B) or Section
251(2A) and (2B) of the 1985 Act, and the provisions of Section 238(4D)
and 251(2D) of the 1985 Act shall apply in respect of the publication of
such documents and/or statements on a web site.
AUDITORS
155. Validity of acts of auditors
Subject to the provisions of the Statutes, all acts done by any person
acting as an Auditor shall, as regards all persons dealing in good faith
with the Company, be valid, notwithstanding that there was some defect in
his appointment or that he was at the time of his appointment not
qualified for appointment or subsequently became disqualified.
156. Rights of auditors
The Auditor shall be entitled to attend any General Meeting and to receive
all notices of and other communications relating to any General Meeting
which any member is entitled to receive, and to be heard at any General
Meeting on any part of the business of the meeting which concerns him as
Auditor. Notwithstanding the references to notice in writing in Article
56, electronic communications may be used by the Company pursuant to
Section 390(1A) of the 1985 Act (and the provisions of the 1985 Act
therein referred to) to give notice of General Meetings to the Auditors.
NOTICES
157. Notices to be in writing
Any notice to be given to or by any person pursuant to these presents
shall, unless otherwise provided in these presents, be in writing or be
given using electronic communications to an address for the time being
notified for that purpose to the person giving the notice.
158(A). Service of notices
Any notice or document (including a share certificate) may be served on or
delivered to any member by the Company either personally or by sending it
through the post in a prepaid cover addressed to such member at his
registered address, or (if he has no registered address within the United
Kingdom) to the address, if any, within the United Kingdom supplied by him
to the Company as his address for the service of notices, or by delivering
it to such address addressed as aforesaid or, in respect of any
shareholder, in accordance with any of the rights attaching to his shares
for the time being, or by means of a relevant system, or by sending it
using electronic communications to an address for the time being notified
to the Company by the member, or in accordance with any other arrangements
approved by the member concerned (which may consist of the Company placing
such notice or document on a web site and sending the member concerned
notification of the notice or document on the web site in lieu of sending
the notice or document). In the case of a member registered on a branch
register any such notice or document may be posted either in the United
Kingdom or in the territory in which such branch register is maintained.
89
(B). When notice deemed served
Where a notice or other document is served or sent by post, service or
delivery shall be deemed to be effected at the expiration of twenty-four
hours (or where second-class mail is employed, forty-eight hours) after
the time when the cover containing the same is posted and in proving such
service or delivery it shall be sufficient to prove that such cover was
properly addressed, stamped and posted. Any notice or documents not sent
by post but left by the Company at a registered address shall be deemed to
have been served or delivered on the day it was so left. Any notice served
or delivered by the Company by means of a relevant system shall be deemed
to have been served or delivered when the Company or any sponsoring system
participant acting on its behalf sends the issuer-instruction relating to
the notice. Any notice or document sent by using electronic communication
shall be deemed to be served or delivered at the expiration of forty-eight
hours after the time it was sent, and in proving such service or delivery,
proof that a notice or document contained in an electronic communication
was sent in accordance with guidance issued by the Institute of Chartered
Secretaries and Administrators shall be conclusive evidence that the
notice or document was served or delivered. Any notice or document served
or delivered by the Company by any other means authorised by the member
concerned shall be deemed to have been served when the Company has carried
out the action it has been authorised to take for that purpose.
(C). Record Date for Service
Any notice or document may be served or delivered by the Company by
reference to the Register of Members as it stands at any time not more
than 15 days before the date of service or delivery. No change in the
register after that time shall invalidate that service or delivery. Where
any notice or document is served on or delivered to any person in respect
of a share in accordance with these presents, no person deriving any title
or interest in that share shall be entitled to any further service or
delivery of that notice or document.
159. Notice to joint holders
In respect of joint holdings all notices shall be given to that one of the
joint holders whose name stands first in the Register of Members and
notice so given shall be sufficient notice to all the joint holders in
their capacity as such. For such purposes a joint holder having no
registered address in the United Kingdom and not having supplied an
address within the United Kingdom for the service of notices shall be
disregarded.
160. Notice to persons entitled by transmission
A person entitled to a share in consequence of the death or bankruptcy of
a member or otherwise by operation of law upon such evidence being
produced as may from time to time properly be required by the Directors
and upon supplying an address within the United Kingdom for the service of
notices, shall be entitled to have served upon or delivered to him at such
address any notice or document to which the member would have been
entitled, and such service or delivery shall for all purposes be deemed a
sufficient service or delivery of such notice or document on all persons
interested (whether jointly with or as claiming through or under him) in
the share. Save as aforesaid any notice or document delivered or sent by
post to or left at the registered address of any member in pursuance of
these presents shall, notwithstanding that such member be then dead or
bankrupt or in liquidation, and whether or not the Company have notice of
his death or bankruptcy or liquidation be deemed to have been duly served
or delivered in respect of any share registered in the name of such member
as sole or joint holder.
90
161. Untraced members
A member who (having no registered address within the United Kingdom) has
not supplied to the Company an address within the United Kingdom for the
service of notices shall not be entitled to receive notices from the
Company. If on three consecutive occasions notices 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, or if, after any
one such occasion, the Directors or any committee authorised by the
Directors in that behalf are of the opinion, after the making of all
reasonable enquiries, that any further notices to such member would, if
sent as aforesaid, likewise be returned undelivered, such member shall not
thereafter be entitled to receive notices from the Company until he shall
have communicated with the Company and supplied in writing to the Transfer
Office a new registered address or address within the United Kingdom for
the service of notices.
162. Signature
The signature of any notice required to be given by the Company, and given
in writing, may be typed or printed or otherwise written.
163. Advertisement of notices
Any notice required to be given by the Company to the members or any of
them, and not expressly provided for by or pursuant to these presents,
shall be sufficiently given if given by advertisement inserted once in at
least one leading Scottish newspaper and one newspaper with a national
circulation in the United Kingdom.
164. Notice during disruption of postal services
If at any time by reason of the suspension or curtailment of postal
services within the United Kingdom the Company is unable effectively to
convene a General Meeting by notices sent through the post, a General
Meeting may be convened by a notice advertised in at least one newspaper
with a national circulation in the United Kingdom and one leading Scottish
newspaper published on the same date and such notice shall be deemed to
have been duly served on all members entitled thereto at noon on the day
when the advertisement appears. In any such case the Company shall send
confirmatory copies of the notice by post if at least six clear days prior
to the meeting the posting of notices to addresses throughout the United
Kingdom again becomes practicable.
165. Notice to warrant holders
The holders of share warrants shall not, unless otherwise expressed
therein, be entitled in respect thereof to receive notices from the
Company.
166. Statutory requirements
Nothing in any of the preceding nine Articles shall affect any requirement
of the Statutes that any particular offer, notice or other document be
served in any particular manner.
Nothing in any of the preceding nine Articles shall prevent or restrict
the Company using any method of sending, or giving access to, any
particular offer, notice or other document which the Statutes or any other
provision of these presents permits or enables the Company to use.
91
WINDING UP
167. Liquidator may distribute in specie
If the Company shall be wound up (whether the liquidation is voluntary,
under9 supervision, or by the Court) the Liquidator may, with the authority
of an Extraordinary Resolution, divide among the members in specie or kind
the whole or any part of the assets of the Company and whether or not the
assets shall consist of property of one kind or shall consist of
properties of different kinds, and may for such purpose set such value as
he deems fair upon any one or more class or classes of property and may
determine how such division shall be carried out as between the members or
different classes of members. The Liquidator may, with the like authority,
vest any part of the assets in trustees upon such trusts for the benefit
of members as the Liquidator with the like authority shall think fit, and
the liquidation of the Company may be closed and the Company dissolved,
but so that no contributory shall be compelled to accept any shares or
other property in respect of which there is a liability.
PROVISION FOR EMPLOYEES
168. Provision for employees
The Directors may by resolution exercise any power conferred by the
Statutes to make provision for the benefit of persons employed or formerly
employed by the Company or any of its subsidiaries in connection with the
cessation or the transfer to any person of the whole or part of the
undertaking of the Company or that subsidiary.
INDEMNITY
169. Indemnity
Subject to the provisions of and so far as may be consistent with the
Statutes, every Director, Secretary or other officer of the Company, and,
if the Directors so determine, an Auditor, shall be entitled to be
indemnified out of the assets of the Company against all costs, charges,
losses, expenses and liabilities incurred by him in the actual or
purported execution and/or discharge of his duties and/or the exercise or
purported exercise of his powers and/or otherwise in relation to or in
connection with his duties, powers or office including (without prejudice
to the generality of the foregoing) any liability incurred by him in
defending any proceedings, 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 or Auditor of the Company and in which decree or
judgment is given in his favour (or the proceedings are otherwise disposed
of without any finding or admission of any material breach of duty on his
part) or in which he is acquitted or in connection with any application
for relief from liability in respect of any such act or omission in which
relief is granted to him by the Court.
92
Schedule 1
Non-cumulative Euro Preference Shares
1. The Non-cumulative Euro Preference Shares are New Preference Shares.
They shall rank after the Cumulative Preference Shares to the extent
specified in Article 4 and this Schedule 1, and shall rank pari passu
inter se and (save as aforesaid) with the Cumulative Preference Shares
and with all other New Preference Shares. They shall confer the rights
and be subject to the restrictions set out in this Schedule 1 and
shall also confer such further rights as may be attached by the
Directors to such shares in accordance with this Schedule 1 prior to
allotment. Whenever the Directors have power under this Schedule 1 to
determine any of the rights attached to any of the Non-cumulative Euro
Preference Shares, the rights so determined need not be the same as
those attached to the Non-cumulative Euro Preference Shares then
allotted or in issue. The Non-cumulative Euro Preference Shares may be
issued in one or more separate series, and each series shall be
identified in such manner as the Directors may determine without any
such determination or identification requiring any alteration to these
presents.
2. Each Non-cumulative Euro Preference Share shall confer the following
rights as to participation in the profits and assets of the Company,
receipt of notices, attendance and voting at meetings and
redemption:--
2.1 Income
The right (subject to the provisions of paragraph 2.2, if applicable)
to a non-cumulative preferential dividend not exceeding a specified
amount payable in Euro at such rate on such dates (each a "dividend
payment date") in respect of such periods (each a "dividend period")
and on such other terms and conditions as may be determined by the
Directors prior to allotment thereof. References in these presents to
a "dividend" on the Non-cumulative Euro Preference Shares include a
reference to each dividend in respect of each dividend period
applicable thereto and references in this Schedule 1 to dividend
payment dates and dividend periods are to dividend payment dates and
dividend periods in respect of the Non-cumulative Euro Preference
Shares only. Such dividends shall be paid in priority to the payment
of any dividends on the Ordinary Shares. The Non-cumulative Euro
Preference Shares shall rank for dividend after the Cumulative
Preference Shares, pari passu with the Non-cumulative Sterling
Preference Shares, the Non-cumulative Dollar Preference Shares, the
Category II Non-cumulative Dollar Preference Shares and all other New
Preference Shares expressed to rank pari passu therewith as regards
participation in profits and otherwise in priority to any other share
capital in the Company.
2.2 Further provisions as to income
All or any of the following provisions shall apply in relation to any
particular Non-cumulative Euro Preference Shares if so determined by
the Directors prior to allotment thereof:--
(i) if, in the opinion of the Directors, the distributable
profits of the Company are sufficient to cover the payment in
full of dividends on the Non-cumulative Euro Preference
Shares on any dividend payment date and also the payment in
full of all other dividends stated to be payable on such date
on any other New Preference Share expressed to rank pari
passu therewith as regards participation in profits, after
payment in full, or the setting aside of a sum to cover the
payment in full, of all
93
dividends stated to be payable on such date on any Cumulative
Preference Share, then each such dividend shall be declared
and paid in full;
(ii) if, in the opinion of the Directors, the distributable
profits of the Company are insufficient to cover the payment
in full of dividends on the Non-cumulative Euro Preference
Shares on any dividend payment date and also the payment in
full of all other dividends stated to be payable on such date
on any other New Preference Share expressed to rank pari
passu therewith as regards participation in profits, after
payment in full, or the setting aside of a sum to cover the
payment in full, of all dividends stated to be payable on or
before such date on any Cumulative Preference Share, then
dividends shall be declared by the Directors pro rata for the
Non-cumulative Euro Preference Shares and such other New
Preference Shares to the extent of the available
distributable profits (if any) to the intent that the amount
of dividend declared per share on each such Non-cumulative
Euro Preference Share and other New Preference Share will
bear to each other the same ratio as the dividends accrued
per share on each such Non-cumulative Euro Preference Share
and other New Preference Share bear to each other. If it
shall subsequently appear that any such dividend which has
been paid should not, in accordance with the provisions of
this sub-paragraph, have been so paid, then provided the
Directors shall have acted in good faith, they shall not
incur any liability for any loss which any shareholder may
suffer in consequence of such payment having been made;
(iii) if in the opinion of the Directors, the payment of any
dividend on any Non-cumulative Euro Preference Shares would
breach or cause a breach of the capital adequacy requirements
of the Financial Services Authority (or any person or body to
whom the banking supervision functions of the Financial
Services Authority are transferred) applicable to the Company
and/or any of its subsidiaries, then none of such dividend
shall be declared or paid;
(iv) subject to sub-paragraph (v) below, the Non-cumulative Euro
Preference Shares shall carry no further right to participate
in the profits of the Company and if and to the extent that
any dividend or part thereof is on any occasion not paid for
the reasons described in sub-paragraph (ii) or (iii) above,
the holders of such shares shall have no claim in respect of
such non-payment;
(v) if any dividend or part thereof on any Non-cumulative Euro
Preference Share is not payable for the reasons specified in
sub-paragraphs (ii) or (iii) above and if they so resolve,
the Directors may, subject to the Statutes, pay a special
non-cumulative preferential dividend on the Non-cumulative
Euro Preference Shares at a rate not exceeding (euro)0.01 per
share (but so that reference elsewhere in this Schedule 1 and
in these presents to any dividend payable on any
Non-cumulative Euro Preference Shares shall not be treated as
including a reference to any such special dividend);
(vi) if any date on which dividends are payable on Non-cumulative
Euro Preference Shares is not a day on which TARGET is
operating and on which banks in London are open for business,
and on which foreign exchange dealings may be conducted in
Euro ("a Euro Business Day"), then payment of the dividend
payable on such date will be made on the succeeding Euro
Business Day and without any interest or other payment in
respect of such delay unless such day shall fall within the
next calendar month whereupon such payment will be made on
the preceding Euro Business Day; for these purposes "TARGET"
means the Trans-European Real-Time Gross Settlement Express
Transfer (TARGET) system;
94
(vii) dividends payable on Non-cumulative Euro Preference Shares
shall accrue from and to the dates determined by the
Directors prior to allotment thereof, and the amount of
dividend payable in respect of any period shorter than a full
dividend period will be calculated on the basis of twelve 30
day months, a 360 day year and the actual number of days
elapsed in such period;
(viii) if any dividend stated to be payable on the Non-cumulative
Euro Preference Shares on the most recent dividend payment
date has not been declared and paid in full, or if a sum has
not been set aside to provide for such payment in full, no
dividends may be declared on any other share capital of the
Company (other than the Cumulative Preference Shares), and no
sum may be set aside for the payment thereof, unless, on the
date of declaration relative to any such payment, an amount
equal to the dividend stated to be payable on the
Non-cumulative Euro Preference Shares in respect of the then
current dividend period is set aside for the payment in full
of such dividend on the dividend payment date relating to the
then current dividend period; and
(ix) if any dividend stated to be payable on the Non-cumulative
Euro Preference Shares on any dividend payment date has not
been declared and paid in full, or if a sum has not been set
aside to provide for such payment in full, the Company may
not redeem or purchase or otherwise acquire for any
consideration any other share capital of the Company, and may
not set aside any sum nor establish any sinking fund for the
redemption or purchase or other such acquisition thereof,
until such time as dividends stated to be payable on the
Non-cumulative Euro Preference Shares in respect of
successive dividend periods together aggregating no less than
twelve months shall thereafter have been declared and paid in
full.
2.3 Capital
The right on a winding up or liquidation, voluntary or otherwise other
than (unless otherwise provided by the terms of issue of such share) a
redemption or purchase by the Company of any shares of any class to
receive in Euro out of the surplus assets of the Company available for
distribution amongst the members:--
(i) after payment of the arrears (if any) of the fixed cumulative
preferential dividends stated to be payable on the Cumulative
Preference Shares to the holders thereof in accordance with
Article 4(B) FIRSTLY and pari passu with the holders of any
other New Preference Shares expressed to rank pari passu
therewith as regards participation in profits and in priority
to the holders of the Ordinary Shares of the Company a sum
equal to:--
(A) the amount of any dividend which is due for payment
after the date of commencement of the winding up or
liquidation but which is payable in respect of a
period ending on or before such date; and
(B) any further amount of dividend payable in respect of
the period from the preceding dividend payment date
to the date of payment in accordance with this
sub-paragraph (i);
but only to the extent that any such amount or further amount
was, or would have been payable as a dividend in accordance
with or pursuant to this Schedule 1 (other than pursuant to
this provision); and
95
(ii) subject thereto, pari passu with the holders of the
Cumulative Preference Shares and any other New Preference
Shares expressed to rank pari passu therewith as regards
participation in surplus assets in priority to the holders of
the Ordinary Shares of the Company, a sum equal to the amount
paid up or credited as paid up on the Non-cumulative Euro
Preference Shares (including any premium paid to the Company
in respect thereof on issue).
If upon any such winding-up or liquidation, the amounts available for
payment are insufficient to cover the amounts payable in full on the
Cumulative Preference Shares, the Non-cumulative Euro Preference
Shares and on any other New Preference Shares expressed to rank pari
passu therewith as regards participation in surplus assets, then the
holders of the Cumulative Preference Shares, the Non-cumulative Euro
Preference Shares and such other New Preference Shares will share
rateably in the distribution of surplus assets (if any) in proportion
to the full respective preferential amounts to which they are
entitled. No Non-cumulative Euro Preference Share shall confer any
right to participate in the surplus assets of the Company other than
that set out in this paragraph 2.3.
2.4 Receipt of Notices
The right to have sent to the holder of each Non-cumulative Euro
Preference Share (at the same time as the same are sent to the holders
of Ordinary Shares) a copy of the Company's Annual Report and Accounts
and Interim Financial Statement together with notice of any General
Meeting of the Company at which such holder is entitled to attend and
vote.
2.5 Attendance and Voting at Meetings
The right to attend at a General Meeting of the Company and to speak
to or vote upon any Resolution proposed thereat in the following
circumstances:--
(i) in respect of a Resolution which is to be proposed at the
Meeting either varying or abrogating any of the rights
attached to the Non-cumulative Euro Preference Shares or
proposing the winding up of the Company (and then in each
such case only to speak to and vote upon any such
Resolution);
(ii) in circumstances where the dividend stated to be payable on
the Non-cumulative Euro Preference Shares in respect of such
number of dividend periods as the Directors shall determine
prior to allotment thereof has not been declared and paid in
full, and until such date as the Directors shall likewise
determine; and
(iii) in such other circumstances as the Directors may determine
prior to allotment of the Non-cumulative Euro Preference
Shares,
but not otherwise, together with the right, in such circumstances and
on such terms, if any, as the Directors may determine prior to
allotment of the Non-cumulative Euro Preference Shares, to seek to
requisition a General Meeting of the Company. Whenever holders of
Non-cumulative Euro Preference Shares are so entitled to vote on a
Resolution, on a show of hands every such holder who is present in
person shall have one vote and, on a poll, every such holder who is
present in person or by proxy shall have such number of votes for each
Non-cumulative Euro Preference Share held as may be determined by the
Directors prior to allotment of such Non-cumulative Euro Preference
Shares.
96
2.6 Redemption
(i) Unless the Directors shall, prior to the allotment of any
series of Non-cumulative Euro Preference Shares, determine
that such series shall be non-redeemable, each series of
Non-cumulative Euro Preference Shares shall, subject to the
provisions of the Statutes, be redeemable at the option of
the Company in accordance with the following provisions.
(ii) In the case of any series of Non-cumulative Euro Preference
Shares which are to be so redeemable:--
(A) the Company may, subject thereto, redeem on any
Redemption Date (as hereinafter defined) all or some
only of the Non-cumulative Euro Preference Shares by
giving to the holders of the Non-cumulative Euro
Preference Shares to be redeemed not less than 30
days' nor more than 60 days' prior notice in writing
(a "Notice of Redemption") of the relevant
Redemption Date. "Redemption Date" means, in
relation to a Non-cumulative Euro Preference Share,
any date which falls no earlier than five years and
one day (or such longer period (if any) as may be
fixed by the Directors prior to allotment of such
Share) after the date of allotment of the
Non-cumulative Euro Preference Share to be redeemed;
(B) there shall be paid on each Non-cumulative Euro
Preference Share so redeemed, in Euro, the aggregate
of the nominal amount thereof together with any
premium paid on issue together with, where
applicable, the Relevant Redemption Premium (defined
below) and together with arrears (if any) of
dividends thereon (whether earned or declared or
not) in respect of the period from the dividend
payment date last preceding the Redemption Date to
the Redemption Date. "Relevant Redemption Premium"
means an amount calculated in accordance with such
one (if any) of the following three formulae as
applied in relation to a Redemption Date notified
under sub-paragraph (A) above which falls within the
period of twelve months commencing on the date
following the fifth, sixth, seventh, eighth or ninth
anniversary of the relevant date of allotment ("the
Relevant Date"), as the case may be, as may be
determined by the Directors prior to the Relevant
Date. The formula for calculation of the Relevant
Redemption Premium shall be:--
(a) A x B
where:--
"A" is the amount of dividend excluding any
associated tax credit (not expressed as a
percentage) calculated at the date of
allotment to which the holder of the
Non-cumulative Euro Preference Share to be
redeemed would become entitled in respect
of the twelve months following allotment by
virtue of the terms of issue thereof on the
assumption that such amount of dividend had
accrued on the Non-cumulative Euro
Preference Share during such period and was
payable at the end of such period and on
the further assumption that there shall be
no change in the associated tax credit
affecting the amount of dividend payable in
respect of such period; and
97
"B" in relation to a Redemption Date
falling within the period of twelve months
commencing on the day following the fifth
anniversary of the Relevant Date, is 66.66
per cent.,
or
in relation to a Redemption Date falling
within the period of twelve months
commencing on the day following the sixth
anniversary of the Relevant Date, is 53.33
per cent.,
or
in relation to a Redemption Date falling
within the period of twelve months
commencing on the day following the seventh
anniversary of the Relevant Date, is 40 per
cent.,
or
in relation to a Redemption Date falling
within the period of twelve months
commencing on the day following the eighth
anniversary of the Relevant Date, is 26.66
per cent.,
or
in relation to a Redemption Date falling
within the period of twelve months
commencing on the day following the ninth
anniversary of the Relevant Date is 13.33
per cent.;
or
(b) C x D
where:--
"C" is the amount of dividend excluding any
associated tax credit (not expressed as a
percentage) calculated at the date of
allotment to which the holder of the
Non-cumulative Euro Preference Share to be
redeemed would become entitled in respect
of the twelve months following allotment by
virtue of the terms of issue thereof on the
assumption that such amount of dividend had
accrued on the Non-cumulative Euro
Preference Share during such period and was
payable at the end of such period and on
the further assumption that there shall be
no change in the associated tax credit
affecting the amount of dividend payable in
respect of such period; and
"D" in relation to a Redemption Date
falling within the period of twelve months
commencing on the day following the fifth
anniversary of the Relevant Date, is 50 per
cent.,
or
in relation to a Redemption Date falling
within the period of twelve months
commencing on the day following the sixth
anniversary of the Relevant Date, is 40 per
cent.,
98
or
in relation to a Redemption Date falling
within the period of twelve months
commencing on the day following the seventh
anniversary of the Relevant Date, is 30 per
cent.,
or
in relation to a Redemption Date falling
within the period of twelve months
commencing on the day following the eighth
anniversary of the Relevant Date, is 20 per
cent.,
or
in relation to a Redemption Date falling
within the period of twelve months
commencing on the day following the ninth
anniversary of the Relevant Date is 10 per
cent.; or
(c) E x F
where:--
"E" is the amount of(euro)25; and
"F" in relation to a Redemption Date
falling within the period of twelve months
commencing on the day following the fifth
anniversary of the Relevant Date, is 33.33
per cent.,
or
in relation to a Redemption Date falling
within the period of twelve months
commencing on the day following the sixth
anniversary of the Relevant Date, is 26.66
per cent.,
or
in relation to a Redemption Date falling
within the period of twelve months
commencing on the day following the seventh
anniversary of the Relevant Date, is 20 per
cent.,
or
in relation to a Redemption Date falling
within the period of twelve months
commencing on the day following the eighth
anniversary of the Relevant Date, is 13.33
per cent.,
or
in relation to a Redemption Date falling
within the period of twelve months
commencing on the day following the ninth
anniversary of the Relevant Date, is 6.66
per cent.
99
No Relevant Redemption Premium shall be payable when
the Redemption Date falls after the tenth
anniversary of the Relevant Date. The product of any
of the above formulae in respect of a Non-cumulative
Euro Preference Share may, in the Directors'
discretion, be rounded down to the nearest whole
Euro.
The Directors may, in their discretion, determine in
relation to any Non-cumulative Euro Preference
Share, prior to the Relevant Date, that none of the
above formulae shall apply, in which event no
Relevant Redemption Premium shall be payable;
(C) in the case of a redemption of some only of the
Non-cumulative Euro Preference Shares in any series,
the Company shall for the purpose of determining the
particular Non-cumulative Euro Preference Shares to
be redeemed cause a drawing to be made at the Office
or such other place as the Directors may approve in
the presence of the Auditors for the time being of
the Company;
(D) any Notice of Redemption given under sub-paragraph
(A) above shall specify the applicable Redemption
Date, the particular Non-cumulative Euro Preference
Shares to be redeemed and the redemption price
(specifying the amount of the accrued and unpaid
dividend per share to be included therein and
stating that dividends on the Non-cumulative Euro
Preference Shares to be redeemed will cease to
accrue on redemption), and shall state the place or
places at which documents of title in respect of
such Non-cumulative Euro Preference Shares are to be
presented and surrendered for redemption and payment
of the redemption monies is to be effected. Upon
such Redemption Date, the Company shall redeem the
particular Non-cumulative Euro Preference Shares to
be redeemed on that date subject to the provisions
of this paragraph and of the Statutes. No defect in
the Notice of Redemption or in the giving thereof
shall affect the validity of the redemption
proceedings;
(E) subject to sub-paragraph (I) below, the provisions
of this and the following sub-paragraph shall have
effect in relation to Non-cumulative Euro Preference
Shares for the time being issued and registered in
the Register of Members ("Registered Shares") and
represented by certificates ("Certificates") and in
relation to Non-cumulative Euro Preference Shares
which, in accordance with Article 52 of these
presents, are for the time being issued and
represented by a Warrant (as defined in the said
Article 52) ("Bearer Shares"). Payments in respect
of the amount due on redemption of a Registered
Share shall be made by Euro cheque drawn on a bank
in London or upon the request of the holder or joint
holders not later than the date specified for the
purpose in the Notice of
100
Redemption by transfer to a Euro account maintained
by the payee with a bank in London. Such payment
will be against presentation and surrender of the
Warrant and all unmatured dividend coupons and
talons (if any) at the place or the places specified
in the Notice of Redemption. Upon the relevant
Redemption Date all unmatured dividend coupons and
any talon for additional dividend coupons
appertaining thereto (whether or not returned) shall
become void and no payment will be made in respect
thereof. If the Warrant so surrendered represents
any Non-cumulative Euro Preference Shares not to be
redeemed on the relevant Redemption Date the Company
shall issue, free of charge, a fresh Warrant
representing such Bearer Shares which are not to be
redeemed on such Redemption Date.
All payments in respect of redemption monies will in
all respects be subject to any applicable fiscal or
other laws;
(F) as from the relevant Redemption Date the dividend on
the Non-cumulative Euro Preference Shares due for
redemption shall cease to accrue except on any such
Non-cumulative Euro Preference Share in respect of
which, upon the due surrender of the Certificate or,
as the case may be, the Warrant and all unmatured
dividend coupons and talons (if any) in respect
thereof, in accordance with sub-paragraph (E) above,
payment of the redemption monies due on such
Redemption Date shall be improperly withheld or
refused, in which case such dividend, at the rate
then applicable, shall be deemed to have continued
and shall accordingly continue to accrue from the
relevant Redemption Date to the date of payment of
such redemption monies. Such Non-cumulative Euro
Preference Share shall not be treated as having been
redeemed until the redemption monies in question
together with the accrued dividend thereon shall
have been paid;
(G) if the due date for the payment of the redemption
monies on any Non-cumulative Euro Preference Shares
is not a Euro Business Day then payment of such
monies will be made on the next succeeding day which
is a Euro Business Day and without any interest or
other payment in respect of such delay unless such
day shall fall within the next calendar month
whereupon such payment will be made on the preceding
Euro Business Day;
(H) the receipt of the holder for the time being of any
Registered Share (or in the case of joint holders
the receipt of any one of them) and the receipt of
the person delivering any Warrant to the place or
one of the places specified pursuant to
sub-paragraph (D) above in respect of the monies
payable on redemption on such Registered Share or,
as the case may be, such Bearer Share, shall
constitute an absolute discharge to the Company; and
(I) subject as aftermentioned, the provisions of
sub-paragraphs (E) and (F) above shall have effect
in relation to Registered Shares which are in
uncertificated form within the meaning of the
Uncertificated Securities Regulations 1995 (as in
force on the date of adoption of this Schedule 1) in
the same manner as they have effect in relation to
Registered Shares represented by Certificates, save
that (i) any provision of the said paragraphs
requiring presentation and surrender of a
Certificate shall be satisfied in the manner
prescribed or permitted by the said Regulations (or
by any enactment or subordinate legislation which
amends or supersedes those Regulations) or (subject
to those Regulations or such enactment or
subordinate legislation) in
101
such manner as may from time to time be prescribed
by the Directors), and (ii) the Company shall not be
under any obligation to issue a fresh Certificate
under sub-paragraph (E).
2.7 Purchase
Subject to the provisions of the Statutes and any other applicable
laws, the Company may at any time and from time to time purchase any
Non-cumulative Euro Preference Shares upon such terms as the Directors
shall determine provided that, in the case of Non-cumulative Euro
Preference Shares which are listed on the London Stock Exchange, the
purchase price, exclusive of expenses and accrued dividends, shall not
exceed (i) in the case of a purchase in the open market, or by tender
(which shall be available alike to all holders of the Non-cumulative
Euro Preference Shares), the average of the closing middle market
quotations of such Non-cumulative Euro Preference Shares on the London
Stock Exchange (as derived from The London Stock Exchange Daily
Official List) for the last ten dealing days preceding the date of
purchase or (if higher), in the case of a purchase in the open market
only, the market price on the date of purchase provided that such
market price is not more than 105 per cent. of such average and (ii)
in the case of a purchase by private treaty, 120 per cent. of the
closing middle market quotation of such Non-cumulative Euro Preference
Shares on the London Stock Exchange (as derived from The London Stock
Exchange Daily Official List) for the last dealing day preceding the
date of purchase: but so that this proviso shall not apply to any
purchase of Non-cumulative Euro Preference Shares made in the ordinary
course of a business of dealing in securities.
3. (a) Save with the written consent of the holders of
three-quarters in nominal value of, or with the sanction of
an Extraordinary Resolution passed at a separate General
Meeting of the holders of, the Non-cumulative Euro Preference
Shares, the Directors shall not authorise or create, or
increase the amount of, any shares of any class or any
security convertible into shares of any class ranking as
regards rights to participate in the profits or assets of the
Company (other than on a redemption or purchase by the
Company of any such shares) in priority to the Non-cumulative
Euro Preference Shares.
(b) The special rights attached to any series of Non-cumulative
Euro Preference Shares allotted or in issue shall not (unless
otherwise provided by their terms of issue) be deemed to be
varied by the creation or issue of any New Shares ranking as
regards participation in the profits or assets of the Company
in some or all respects pari passu with or after such
Non-cumulative Euro Preference Shares. Any new shares ranking
in some or all respects pari passu with such Non-cumulative
Euro Preference Shares may without their creation or issue
being deemed to vary the special rights attached to any
Non-cumulative Euro Preference Share then in issue either
carry rights identical in all respects with such
Non-cumulative Euro Preference Shares or any of them or carry
rights differing therefrom in any respect, including, but
without prejudice to the generality of the foregoing, in
that:--
(i) the rate or means of calculating the dividend may
differ and the dividend may be cumulative or
non-cumulative;
(ii) the New Shares or any series thereof may rank for
dividend as from such date as may be provided by the
terms of issue thereof and the dates for payment of
dividend may differ;
(iii) the New Shares may be denominated in Sterling or in
any Foreign Currency;
102
(iv) a premium may be payable on return of capital or
there may be no such premium;
(v) the New Shares may be redeemable at the option of
the holder or of the Company, or may be
non-redeemable and if redeemable at the option of
the Company, they may be redeemable at different
dates and on different terms from those applying to
the Non-cumulative Euro Preference Shares; and
(vi) the New Shares may be convertible into Ordinary
Shares or any other class of shares ranking as
regards participation in the profits and assets of
the Company pari passu with or after such
Non-cumulative Euro Preference Shares in each case
on such terms and conditions as may be prescribed by
the terms of issue thereof.
103
SCHEDULE 2
PART 1
Non-cumulative Convertible Sterling Preference Shares
1. The Non-cumulative Convertible Sterling Preference Shares are New
Preference Shares. They shall rank after the Cumulative Preference
Shares to the extent specified in Article 4 and this Schedule 2, and
shall rank pari passu inter se and (save as aforesaid) with the
Cumulative Preference Shares and with all other New Preference Shares.
They shall confer the rights and be subject to the restrictions set
out or referred to in this Part 1 of Schedule 2 and shall also confer
such further rights (not being inconsistent with the rights set out or
referred to in this Part 1) as may be attached by the Directors to
such shares in accordance with this Part 1 prior to allotment.
Whenever the Directors have power under this Part to determine any of
the rights attached to any of the Non-cumulative Convertible Sterling
Preference Shares, the rights so determined need not be the same as
those attached to the Non-cumulative Convertible Sterling Preference
Shares then allotted or in issue. The Non-cumulative Convertible
Sterling Preference Shares may be issued in one or more separate
series, and each series shall be identified in such manner as the
Directors may determine without any such determination or
identification requiring any alteration to these presents.
2. Each Non-cumulative Convertible Sterling Preference Share shall confer
the following rights as to participation in the profits and assets of
the Company, receipt of notices, attendance and voting at meetings,
redemption and conversion:
2.1 Income
The right (subject to the provisions of paragraph 2.2, if applicable)
to a non-cumulative preferential dividend not exceeding a specified
amount payable in Sterling at such rate (which, in the case of any
series allotted after 11th April 2001, may be fixed or variable and
may be subject to recalculation at fixed intervals) on such dates
(each a "dividend payment date") in respect of such periods (each a
"dividend period") and on such other terms and conditions as may be
determined by the Directors prior to allotment thereof. References in
these presents to a "dividend" on the Non-cumulative Convertible
Sterling Preference Shares include a reference to each dividend in
respect of each dividend period applicable thereto and references in
this Part of the Schedule to dividend payment dates and dividend
periods are to dividend payment dates and dividend periods in respect
of the Non-cumulative Convertible Sterling Preference Shares only.
Such dividends shall be paid in priority to the payment of any
dividends on the Ordinary Shares. The Non-cumulative Convertible
Sterling Preference Shares shall rank for dividend after the
Cumulative Preference Shares, pari passu with the Non-cumulative
Sterling Preference Shares, the Non-cumulative Dollar Preference
Shares, the Category II Non-cumulative Dollar Preference Shares, all
other Convertible Preference Shares and all other New Preference
Shares expressed to rank pari passu therewith as regards participation
in profits and otherwise in priority to any other share capital in the
Company.
2.2 Further provisions as to income
All or any of the following provisions shall apply in relation to any
particular Non-cumulative Convertible Sterling Preference Shares if so
determined by the Directors prior to allotment thereof:-
104
(i) if, in the opinion of the Directors, the distributable
profits of the Company are sufficient to cover the payment in
full of dividends on the Non-cumulative Convertible Sterling
Preference Shares on any dividend payment date and also the
payment in full of all other dividends stated to be payable
on such date on any other New Preference Share expressed to
rank pari passu therewith as regards participation in
profits, after payment in full, or the setting aside of a sum
to cover the payment in full, of all dividends stated to be
payable on such date on any Cumulative Preference Share, then
each such dividend shall be declared and paid in full;
(ii) if, in the opinion of the Directors, the distributable
profits of the Company are insufficient to cover the payment
in full of dividends on the Non-cumulative Convertible
Sterling Preference Shares on any dividend payment date and
also the payment in full of all other dividends stated to be
payable on such date on any other New Preference Share
expressed to rank pari passu therewith as regards
participation in profits, after payment in full, or the
setting aside of a sum to cover the payment in full, of all
dividends stated to be payable on or before such date on any
Cumulative Preference Share, then dividends shall be declared
by the Directors pro rata for the Non-cumulative Convertible
Sterling Preference Shares and such other New Preference
Shares to the extent of the available distributable profits
(if any) to the intent that the amount of dividend declared
per share on each such Non-cumulative Convertible Sterling
Preference Share and other New Preference Share will bear to
each other the same ratio as the dividends accrued per share
on each such Non-cumulative Convertible Sterling Preference
Share and other New Preference Share bear to each other. If
it shall subsequently appear that any such dividend which has
been paid should not, in accordance with the provisions of
this sub-paragraph, have been so paid, then provided the
Directors shall have acted in good faith, they shall not
incur any liability for any loss which any shareholder may
suffer in consequence of such payment having been made;
(iii) if, in the opinion of the Directors, the payment of any
dividend on any Non-cumulative Convertible Sterling
Preference Shares would breach or cause a breach of the
capital adequacy requirements of the Financial Services
Authority (or any person or body to whom the banking
supervision functions of the Financial Services Authority are
transferred) applicable to the Company and/or any of its
subsidiaries, then none of such dividend shall be declared or
paid;
(iv) subject to sub-paragraph (v) below, the Non-cumulative
Convertible Sterling Preference Shares shall carry no further
right to participate in the profits of the Company and if and
to the extent that any dividend or part thereof is on any
occasion not paid for the reasons described in sub-paragraph
(ii) or (iii) above, the holders of such shares shall have no
claim in respect of such non-payment;
(v) if any dividend or part thereof on any Non-cumulative
Convertible Sterling Preference Share is not payable for the
reasons specified in sub-paragraphs (ii) or (iii) above and
if they so resolve, the Directors may, subject to the
Statutes, pay a special non-cumulative preferential dividend
on the Non-cumulative Convertible Sterling Preference Shares
at a rate not exceeding (pound)0.01 per share (but so that
reference elsewhere in this Schedule 2 and in these presents
to any dividend payable on any Non-cumulative Convertible
Sterling Preference Shares shall not be treated as including
a reference to any such special dividend);
(vi) if any date on which dividends are payable on Non-cumulative
Convertible Sterling Preference Shares is not a day on which
banks in London are open for business, and
105
on which foreign exchange dealings may be conducted in London
("a Sterling Business Day"), then payment of the dividend
payable on such date will be made on the succeeding Sterling
Business Day and without any interest or other payment in
respect of such delay unless such day shall fall within the
next calendar month whereupon such payment will be made on
the preceding Sterling Business Day;
(vii) dividends payable on Non-cumulative Convertible Sterling
Preference Shares shall accrue from and to the dates
determined by the Directors prior to allotment thereof, and
the amount of dividend payable in respect of any period
shorter than a full dividend period will be calculated on the
basis of twelve 30 day months, a 360 day year and the actual
number of days elapsed in such period;
(viii) if any dividend stated to be payable on the Non-cumulative
Convertible Sterling Preference Shares on the most recent
dividend payment date has not been declared and paid in full,
or if a sum has not been set aside to provide for such
payment in full, no dividends may be declared on any other
share capital of the Company (other than the Cumulative
Preference Shares), and no sum may be set aside for the
payment thereof, unless, on the date of declaration relative
to any such payment, an amount equal to the dividend stated
to be payable on the Non-cumulative Convertible Sterling
Preference Shares in respect of the then current dividend
period is set aside for the payment in full of such dividend
on the dividend payment date relating to the then current
dividend period; and
(ix) if any dividend stated to be payable on the Non-cumulative
Convertible Sterling Preference Shares on any dividend
payment date has not been declared and paid in full, or if a
sum has not been set aside to provide for such payment in
full, the Company may not redeem or purchase or otherwise
acquire for any consideration any other share capital of the
Company, and may not set aside any sum nor establish any
sinking fund for the redemption or purchase or other such
acquisition thereof, until such time as dividends stated to
be payable on the Non-cumulative Convertible Sterling
Preference Shares in respect of successive dividend periods
together aggregating no less than twelve months shall
thereafter have been declared and paid in full.
2.3 Capital
The right on a winding up or liquidation, voluntary or otherwise other
than (unless otherwise provided by the terms of issue of such share) a
redemption or purchase by the Company of any shares of any class to
receive in Sterling out of the surplus assets of the Company available
for distribution amongst the members:-
(i) after payment of the arrears (if any) of the fixed cumulative
preferential dividends stated to be payable on the Cumulative
Preference Shares to the holders thereof in accordance with
Article 4(B) FIRSTLY and pari passu with the holders of any
other New Preference Shares expressed to rank pari passu
therewith as regards participation in profits and in priority
to the holders of the Ordinary Shares of the Company a sum
equal to:-
(A) the amount of any dividend which is due for payment
after the date of commencement of the winding up or
liquidation but which is payable in respect of a
period ending on or before such date; and
106
(B) any further amount of dividend payable in respect of
the period from the preceding dividend payment date
to the date of payment in accordance with this
sub-paragraph (i);
but only to the extent that any such amount or further amount
was, or would have been payable as a dividend in accordance
with or pursuant to this Part of Schedule 2 (other than
pursuant to this provision); and
(ii) subject thereto, pari passu with the holders of the
Cumulative Preference Shares and any other New Preference
Shares expressed to rank pari passu therewith as regards
participation in surplus assets in priority to the holders of
the Ordinary Shares of the Company, a sum equal to the amount
paid up or credited as paid up on the Non-cumulative
Convertible Sterling Preference Shares (including any premium
paid to the Company in respect thereof on issue).
If upon any such winding-up or liquidation, the amounts available for
payment are insufficient to cover the amounts payable in full on the
Cumulative Preference Shares, the Non-cumulative Convertible Sterling
Preference Shares and on any other New Preference Shares expressed to
rank pari passu therewith as regards participation in surplus assets,
then the holders of the Cumulative Preference Shares, the
Non-cumulative Convertible Sterling Preference Shares and such other
New Preference Shares will share rateably in the distribution of
surplus assets (if any) in proportion to the full respective
preferential amounts to which they are entitled. No Non-cumulative
Convertible Sterling Preference Share shall confer any right to
participate in the surplus assets of the Company other than that set
out in this paragraph 2.3.
2.4 Receipt of Notices
The right to have sent to the holder of each Non-cumulative
Convertible Sterling Preference Share (at the same time as the same
are sent to the holders of Ordinary Shares) a copy of the Company's
Annual Report and Accounts and Interim Financial Statement together
with notice of any General Meeting of the Company at which such holder
is entitled to attend and vote.
2.5 Attendance and Voting at Meetings
The right to attend at a General Meeting of the Company and to speak
to or vote upon any Resolution proposed thereat in the following
circumstances:-
(i) in respect of a Resolution which is to be proposed at the
Meeting either varying or abrogating any of the rights
attached to the Non-cumulative Convertible Sterling
Preference Shares or proposing the winding up of the Company
(and then in each such case only to speak to and vote upon
any such Resolution);
(ii) in circumstances where the dividend stated to be payable on
the Non-cumulative Convertible Sterling Preference Shares in
respect of such number of dividend periods as the Directors
shall determine prior to allotment thereof has not been
declared and paid in full, and until such date as the
Directors shall likewise determine; and
(iii) in such other circumstances as the Directors may determine
prior to allotment of the Non-cumulative Convertible Sterling
Preference Shares, but not otherwise, together with the
right, in such circumstances and on such terms, if any, as
the Directors may determine prior to allotment of the
Non-cumulative Convertible Sterling Preference
107
Shares, to seek to requisition a General Meeting of the
Company. Whenever holders of Non-cumulative Convertible
Sterling Preference Shares are so entitled to vote on a
Resolution, on a show of hands every such holder who is
present in person shall have one vote and, on a poll, every
such holder who is present in person or by proxy shall have
such number of votes for each Non-cumulative Convertible
Sterling Preference Share held as may be determined by the
Directors prior to allotment of such Non-cumulative
Convertible Sterling Preference Shares.
2.6 Redemption
Each series of Non-cumulative Convertible Sterling Preference Shares
shall, subject to the provisions of the Statutes, be redeemable at the
option of the Company in accordance with the following provisions:-
(A) the Company may, subject thereto, redeem on any Redemption
Date (as hereinafter defined) all or some only of the
Non-cumulative Convertible Sterling Preference Shares by
giving to the holders of the Non-cumulative Convertible
Sterling Preference Shares to be redeemed not less than 120
days' nor more than 150 days' prior notice in writing (a
"Notice of Redemption ") of the relevant Redemption Date.
"Redemption Date" means, in relation to a Non-cumulative
Convertible Sterling Preference Share, any date which falls
no earlier than ten years and one day after the date of
allotment of the Non-cumulative Convertible Sterling
Preference Share to be redeemed; provided that the Directors
may determine, prior to allotment of any series of
Non-cumulative Convertible Sterling Preference Shares, that
this sub-paragraph (A) shall have effect in relation to that
series as if the reference to ten years was a reference to
such longer period (not exceeding thirty years) as they
determine prior to allotment. The Company shall not be
entitled (save with the consent of the relevant holder) to
give a Notice of Redemption under this sub-paragraph (A) in
respect of any share for which a Conversion Notice (as
defined in paragraph 5 of Part 4 of this Schedule 2) has been
given in accordance with that Part and not withdrawn;
(AA) notwithstanding the foregoing, in relation to any series of
Non-cumulative Convertible Sterling Preference Shares
allotted after 11th April 2001, sub-paragraph (A) above shall
have effect as if the references to ten years, in both places
where they occur, were references to five years;
(B) there shall be paid on each Non-cumulative Convertible
Sterling Preference Share so redeemed, in Sterling, the
aggregate of the nominal amount thereof together with any
premium paid on issue and together with arrears (if any) of
dividends thereon (whether earned or declared or not) in
respect of the period from the dividend payment date last
preceding the Redemption Date to the Redemption Date;
(C) in the case of a redemption of some only of the
Non-cumulative Convertible Sterling Preference Shares in any
series, the Company shall for the purpose of determining the
particular Non-cumulative Convertible Sterling Preference
Shares to be redeemed cause a drawing to be made at the
Office or such other place as the Directors may approve in
the presence of the Auditors for the time being of the
Company, provided that there shall be excluded from such
drawing any Non-cumulative Convertible Sterling Preference
Shares to be converted pursuant to Part 4 of this Schedule 2;
(D) any Notice of Redemption given under sub-paragraph (A) above
shall specify the applicable Redemption Date, the particular
Non-cumulative Convertible Sterling Preference Shares to be
redeemed and the redemption price (specifying the amount
108
of the accrued and unpaid dividend per share to be included
therein and stating that dividends on the Non-cumulative
Convertible Sterling Preference Shares to be redeemed will
cease to accrue on redemption), and shall state the place or
places at which documents of title in respect of such
Non-cumulative Convertible Sterling Preference Shares are to
be presented and surrendered for redemption and payment of
the redemption monies is to be effected. Upon such Redemption
Date, the Company shall redeem the particular Non-cumulative
Convertible Sterling Preference Shares to be redeemed on that
date subject to the provisions of this paragraph and of the
Statutes. No defect in the Notice of Redemption or in the
giving thereof shall affect the validity of the redemption
proceedings;
(E) subject to sub-paragraph (I) below, the provisions of this
and the following sub-paragraph shall have effect in relation
to Non-cumulative Convertible Sterling Preference Shares for
the time being issued and registered in the Register of
Members ( "Registered Shares ") and represented by
certificates ( "Certificates ") and in relation to
Non-cumulative Convertible Sterling Preference Shares which,
in accordance with Article 52 of these presents, are for the
time being issued and represented by a Warrant (as defined in
the said Article 52) ( "Bearer Shares "). Payments in respect
of the amount due on redemption of a Registered Share shall
be made by Sterling cheque drawn on a bank in London or upon
the request of the holder or joint holders not later than the
date specified for the purpose in the Notice of Redemption by
transfer to a Sterling account maintained by the payee with a
bank in London. Such payment will be against presentation and
surrender of the relative Certificate at the place or one of
the places specified in the Notice of Redemption and if any
Certificate so surrendered includes any Non-cumulative
Convertible Sterling Preference Shares not to be redeemed on
the relevant Redemption Date (other than Non-cumulative
Convertible Sterling Preference Shares to be converted
pursuant to Part 4 of this Schedule 2) the Company shall
within fourteen days thereafter issue to the holder, free of
charge, a fresh Certificate in respect of such Non-cumulative
Convertible Sterling Preference Shares. Payment in respect of
the amount due on redemption of a Bearer Share shall be made
by Sterling cheque drawn on a bank in London or upon the
request of the holder not later than the date specified for
the purpose in the Notice of Redemption by transfer to a
Sterling account maintained by the payee with a bank in
London. Such payments will be made against presentation and
surrender of the Warrant and all unmatured dividend coupons
and talons (if any) at the place or the places specified in
the Notice of Redemption. Upon the relevant Redemption Date
all unmatured dividend coupons and any talon for additional
dividend coupons appertaining thereto (whether or not
returned) shall become void and no payment will be made in
respect thereof. If the Warrant so surrendered represents any
Non-cumulative Convertible Sterling Preference Shares not to
be redeemed on the relevant Redemption Date (other than
Non-cumulative Convertible Sterling Preference Shares to be
converted pursuant to Part 4 of this Schedule 2) the Company
shall issue, free of charge, a fresh Warrant representing
such Bearer Shares which are not to be redeemed on such
Redemption Date.
All payments in respect of redemption monies will in all
respects be subject to any applicable fiscal or other laws;
(F) as from the relevant Redemption Date the dividend on the
Non-cumulative Convertible Sterling Preference Shares due for
redemption shall cease to accrue except on any such
Non-cumulative Convertible Sterling Preference Share in
respect of which, upon the due surrender of the Certificate
or, as the case may be, the
109
Warrant and all unmatured dividend coupons and talons (if
any) in respect thereof, in accordance with sub-paragraph (E)
above, payment of the redemption monies due on such
Redemption Date shall be improperly withheld or refused, in
which case such dividend, at the rate then applicable, shall
be deemed to have continued and shall accordingly continue to
accrue from the relevant Redemption Date to the date of
payment of such redemption monies. Such Non-cumulative
Convertible Sterling Preference Share shall not be treated as
having been redeemed until the redemption monies in question
together with the accrued dividend thereon shall have been
paid;
(G) if the due date for the payment of the redemption monies on
any Non-cumulative Convertible Sterling Preference Shares is
not a Sterling Business Day then payment of such monies will
be made on the next succeeding day which is a Sterling
Business Day and without any interest or other payment in
respect of such delay unless such day shall fall within the
next calendar month whereupon such payment will be made on
the preceding Sterling Business Day;
(H) the receipt of the holder for the time being of any
Registered Share (or in the case of joint holders the receipt
of any one of them) and the receipt of the person delivering
any Warrant to the place or one of the places specified
pursuant to sub-paragraph (D) above in respect of the monies
payable on redemption on such Registered Share or, as the
case may be, such Bearer Share, shall constitute an absolute
discharge to the Company; and
(I) subject as aftermentioned, the provisions of sub-paragraphs
(E) and (F) above shall have effect in relation to Registered
Shares which are in uncertificated form within the meaning of
the Uncertificated Securities Regulations 1995 (as in force
on the date of adoption of this Schedule 2) in the same
manner as they have effect in relation to Registered Shares
represented by Certificates, save that (i) any provision of
the said paragraphs requiring presentation and surrender of a
Certificate shall be satisfied in the manner prescribed or
permitted by the said Regulations (or by any enactment or
subordinate legislation which amends or supersedes those
Regulations) or (subject to those Regulations or such
enactment or subordinate legislation) in such manner as may
from time to time be prescribed by the Directors), and (ii)
the Company shall not be under any obligation to issue a
fresh Certificate under sub-paragraph (E).
2.7 Purchase
Subject to the provisions of the Statutes and any other applicable
laws, the Company may at any time and from time to time purchase any
Non-cumulative Convertible Sterling Preference Shares upon such terms
as the Directors shall determine provided that, in the case of
Non-cumulative Convertible Sterling Preference Shares which are listed
on the London Stock Exchange, the purchase price, exclusive of
expenses and accrued dividends, shall not exceed (i) in the case of a
purchase in the open market, or by tender (which shall be available
alike to all holders of the Non-cumulative Convertible Sterling
Preference Shares), the average of the closing middle market
quotations of such Non-cumulative Convertible Sterling Preference
Shares on the London Stock Exchange (as derived from The London Stock
Exchange Daily Official List) for the last ten dealing days preceding
the date of purchase or (if higher), in the case of a purchase in the
open market only, the market price on the date of purchase provided
that such market price is not more than 105 per cent of such average
and (ii) in the case of a purchase by private treaty, 120 per cent of
the closing middle market quotation of such Non-cumulative Convertible
Sterling Preference Shares on the London Stock Exchange (as derived
from The London Stock Exchange Daily Official List) for the last
dealing day
110
preceding the date of purchase: but so that this proviso shall not
apply to any purchase of Non-cumulative Convertible Sterling
Preference Shares made in the ordinary course of a business of dealing
in securities.
2.8 Conversion
The Non-cumulative Convertible Sterling Preference Shares shall be
convertible into Ordinary Shares in the manner set out in (and subject
to the provisions of) Part 4 of this Schedule 2. The provisions of
paragraph 2.6 of this Part 1 regarding redemption are without
prejudice to any provisions in the said Part 4 providing for the
effecting of conversion by means of redemption.
3. (a) Save with the written consent of the holders of
three-quarters in nominal value of, or with the sanction of
an Extraordinary Resolution passed at a separate General
Meeting of the holders of, the Non-cumulative Convertible
Sterling Preference Shares, the Directors shall not authorise
or create, or increase the amount of, any shares of any class
or any security convertible into shares of any class ranking
as regards rights to participate in the profits or assets of
the Company (other than on a redemption or purchase by the
Company of any such shares) in priority to the Non-cumulative
Convertible Sterling Preference Shares.
(b) The special rights attached to any series of Non-cumulative
Convertible Sterling Preference Shares allotted or in issue
shall not (unless otherwise provided by their terms of issue)
be deemed to be varied by the creation or issue of any New
Shares ranking as regards participation in the profits or
assets of the Company in some or all respects pari passu with
or after such Non-cumulative Convertible Sterling Preference
Shares. Any new shares ranking in some or all respects pari
passu with such Non-cumulative Convertible Sterling
Preference Shares may without their creation or issue being
deemed to vary the special rights attached to any
Non-cumulative Convertible Sterling Preference Share then in
issue either carry rights identical in all respects with such
Non-cumulative Convertible Sterling Preference Shares or any
of them or carry rights differing therefrom in any respect,
including, but without prejudice to the generality of the
foregoing, in that:-
(i) the rate or means of calculating the dividend may
differ and the dividend may be cumulative or
non-cumulative;
(ii) the New Shares or any series thereof may rank for
dividend as from such date as may be provided by the
terms of issue thereof and the dates for payment of
dividend may differ;
(iii) the New Shares may be denominated in Sterling or in
any Foreign Currency;
(iv) a premium may be payable on return of capital or
there may be no such premium;
(v) the New Shares may be redeemable at the option of
the holder or of the Company, or may be
non-redeemable and if redeemable at the option of
the Company, they may be redeemable at different
dates and on different terms from those applying to
the Non-cumulative Convertible Sterling Preference
Shares; and
111
(vi) the New Shares may be convertible into Ordinary
Shares or any other class of shares ranking as
regards participation in the profits and assets of
the Company pari passu with or after such
Non-cumulative Convertible Sterling Preference
Shares in each case on such terms and conditions as
may be prescribed by the terms of issue thereof.
112
PART 2
Non-cumulative Convertible Dollar Preference Shares
1. The Non-cumulative Convertible Dollar Preference Shares are New
Preference Shares. They shall rank after the Cumulative Preference
Shares to the extent specified in Article 4 and this Schedule 2, and
shall rank pari passu inter se and (save as aforesaid) with the
Cumulative Preference Shares and with all other New Preference Shares.
They shall confer the rights and be subject to the restrictions set out
or referred to in this Part 2 of Schedule 2 and shall also confer such
further rights (not being inconsistent with the rights set out or
referred to in this Part 2) as may be attached by the Directors to such
shares in accordance with this Part 2 prior to allotment. Whenever the
Directors have power under this Part to determine any of the rights
attached to any of the Non-cumulative Convertible Dollar Preference
Shares, the rights so determined need not be the same as those attached
to the Non-cumulative Convertible Dollar Preference Shares then
allotted or in issue. The Non-cumulative Convertible Dollar Preference
Shares may be issued in one or more separate series, and each series
shall be identified in such manner as the Directors may determine
without any such determination or identification requiring any
alteration to these presents.
2. Each Non-cumulative Convertible Dollar Preference Share shall confer
the following rights as to participation in the profits and assets of
the Company, receipt of notices, attendance and voting at meetings,
redemption and conversion:
2.1 Income
The right (subject to the provisions of paragraph 2.2, if applicable)
to a non-cumulative preferential dividend not exceeding a specified
amount payable in Dollars at such rate (which, in the case of any
series allotted after 11th April 2001, may be fixed or variable and may
be subject to recalculation at fixed intervals) on such dates (each a
"dividend payment date") in respect of such periods (each a "dividend
period") and on such other terms and conditions as may be determined by
the Directors prior to allotment thereof. References in these presents
to a "dividend" on the Non-cumulative Convertible Dollar Preference
Shares include a reference to each dividend in respect of each dividend
period applicable thereto and references in this Part of the Schedule
to dividend payment dates and dividend periods are to dividend payment
dates and dividend periods in respect of the Non-cumulative Convertible
Dollar Preference Shares only. Such dividends shall be paid in priority
to the payment of any dividends on the Ordinary Shares. The
Non-cumulative Convertible Dollar Preference Shares shall rank for
dividend after the Cumulative Preference Shares, pari passu with the
Non-cumulative Sterling Preference Shares, the Non-cumulative Dollar
Preference Shares, the Category II Non-cumulative Dollar Preference
Shares, all other Convertible Preference Shares and all other New
Preference Shares expressed to rank pari passu therewith as regards
participation in profits and otherwise in priority to any other share
capital in the Company.
2.2 Further provisions as to income
All or any of the following provisions shall apply in relation to any
particular Non-cumulative Convertible Dollar Preference Shares if so
determined by the Directors prior to allotment thereof:-
(i) if, in the opinion of the Directors, the distributable profits
of the Company are sufficient to cover the payment in full of
dividends on the Non-cumulative Convertible Dollar Preference
Shares on any dividend payment date and also the payment in
full of all other dividends stated to be payable on such date
on any other
113
New Preference Share expressed to rank pari passu therewith as
regards participation in profits, after payment in full, or the
setting aside of a sum to cover the payment in full, of all
dividends stated to be payable on such date on any Cumulative
Preference Share, then each such dividend shall be declared and
paid in full;
(ii) if, in the opinion of the Directors, the distributable profits
of the Company are insufficient to cover the payment in full of
dividends on the Non-cumulative Convertible Dollar Preference
Shares on any dividend payment date and also the payment in
full of all other dividends stated to be payable on such date
on any other New Preference Share expressed to rank pari passu
therewith as regards participation in profits, after payment in
full, or the setting aside of a sum to cover the payment in
full, of all dividends stated to be payable on or before such
date on any Cumulative Preference Share, then dividends shall
be declared by the Directors pro rata for the Non-cumulative
Convertible Dollar Preference Shares and such other New
Preference Shares to the extent of the available distributable
profits (if any) to the intent that the amount of dividend
declared per share on each such Non-cumulative Convertible
Dollar Preference Share and other New Preference Share will
bear to each other the same ratio as the dividends accrued per
share on each such Non-cumulative Convertible Dollar Preference
Share and other New Preference Share bear to each other. If it
shall subsequently appear that any such dividend which has been
paid should not, in accordance with the provisions of this
sub-paragraph, have been so paid, then provided the Directors
shall have acted in good faith, they shall not incur any
liability for any loss which any shareholder may suffer in
consequence of such payment having been made;
(iii) if, in the opinion of the Directors, the payment of any
dividend on any Non-cumulative Convertible Dollar Preference
Shares would breach or cause a breach of the capital adequacy
requirements of the Financial Services Authority (or any person
or body to whom the banking supervision functions of the
Financial Services Authority are transferred) applicable to the
Company and/or any of its subsidiaries, then none of such
dividend shall be declared or paid;
(iv) subject to sub-paragraph (v) below, the Non-cumulative
Convertible Dollar Preference Shares shall carry no further
right to participate in the profits of the Company and if and
to the extent that any dividend or part thereof is on any
occasion not paid for the reasons described in sub-paragraph
(ii) or (iii) above, the holders of such shares shall have no
claim in respect of such non-payment;
(v) if any dividend or part thereof on any Non-cumulative
Convertible Dollar Preference Share is not payable for the
reasons specified in sub-paragraphs (ii) or (iii) above and if
they so resolve, the Directors may, subject to the Statutes,
pay a special non-cumulative preferential dividend on the
Non-cumulative Convertible Dollar Preference Shares at a rate
not exceeding 1 (one) US cent per share (but so that reference
elsewhere in this Schedule 2 and in these presents to any
dividend payable on any Non-cumulative Convertible Dollar
Preference Shares shall not be treated as including a reference
to any such special dividend);
(vi) if any date on which dividends are payable on Non-cumulative
Convertible Dollar Preference Shares is not a day on which
banks in London and the City of New York are open for business,
and on which foreign exchange dealings may be conducted in such
cities (a "Dollar Business Day"), then payment of the dividend
payable on such date will be made on the succeeding Dollar
Business Day and without any interest or other payment in
respect of such delay unless such day shall fall within the
114
next calendar month whereupon such payment will be made on the
preceding Dollar Business Day;
(vii) dividends payable on Non-cumulative Convertible Dollar
Preference Shares shall accrue from and to the dates determined
by the Directors prior to allotment thereof, and the amount of
dividend payable in respect of any period shorter than a full
dividend period will be calculated on the basis of twelve 30
day months, a 360 day year and the actual number of days
elapsed in such period;
(viii) if any dividend stated to be payable on the Non-cumulative
Convertible Dollar Preference Shares on the most recent
dividend payment date has not been declared and paid in full,
or if a sum has not been set aside to provide for such payment
in full, no dividends may be declared on any other share
capital of the Company (other than the Cumulative Preference
Shares), and no sum may be set aside for the payment thereof,
unless, on the date of declaration relative to any such
payment, an amount equal to the dividend stated to be payable
on the Non-cumulative Convertible Dollar Preference Shares in
respect of the then current dividend period is set aside for
the payment in full of such dividend on the dividend payment
date relating to the then current dividend period; and
(ix) if any dividend stated to be payable on the Non-cumulative
Convertible Dollar Preference Shares on any dividend payment
date has not been declared and paid in full, or if a sum has
not been set aside to provide for such payment in full, the
Company may not redeem or purchase or otherwise acquire for any
consideration any other share capital of the Company, and may
not set aside any sum nor establish any sinking fund for the
redemption or purchase or other such acquisition thereof, until
such time as dividends stated to be payable on the
Non-cumulative Convertible Dollar Preference Shares in respect
of successive dividend periods together aggregating no less
than twelve months shall thereafter have been declared and paid
in full.
2.3 Capital
The right on a winding up or liquidation, voluntary or otherwise other
than (unless otherwise provided by the terms of issue of such share) a
redemption or purchase by the Company of any shares of any class to
receive in Dollars out of the surplus assets of the Company available
for distribution amongst the members:-
(i) after payment of the arrears (if any) of the fixed cumulative
preferential dividends stated to be payable on the Cumulative
Preference Shares to the holders thereof in accordance with
Article 4(B) FIRSTLY and pari passu with the holders of any
other New Preference Shares expressed to rank pari passu
therewith as regards participation in profits and in priority
to the holders of the Ordinary Shares of the Company a sum
equal to:-
(A) the amount of any dividend which is due for payment
after the date of commencement of the winding up or
liquidation but which is payable in respect of a period
ending on or before such date; and
(B) any further amount of dividend payable in respect of
the period from the preceding dividend payment date to
the date of payment in accordance with this
sub-paragraph (i);
115
but only to the extent that any such amount or further
amount was, or would have been payable as a dividend in
accordance with or pursuant to this Part of Schedule 2
(other than pursuant to this provision); and
(ii) subject thereto, pari passu with the holders of the Cumulative
Preference Shares and any other New Preference Shares expressed
to rank pari passu therewith as regards participation in
surplus assets in priority to the holders of the Ordinary
Shares of the Company, a sum equal to the amount paid up or
credited as paid up on the Non-cumulative Convertible Dollar
Preference Shares (including any premium paid to the Company in
respect thereof on issue).
If upon any such winding-up or liquidation, the amounts
available for payment are insufficient to cover the amounts
payable in full on the Cumulative Preference Shares, the
Non-cumulative Convertible Dollar Preference Shares and on any
other New Preference Shares expressed to rank pari passu
therewith as regards participation in surplus assets, then the
holders of the Cumulative Preference Shares, the Non-cumulative
Convertible Dollar Preference Shares and such other New
Preference Shares will share rateably in the distribution of
surplus assets (if any) in proportion to the full respective
preferential amounts to which they are entitled. No
Non-cumulative Convertible Dollar Preference Share shall confer
any right to participate in the surplus assets of the Company
other than that set out in this paragraph 2.3.
2.4 Receipt of Notices
The right to have sent to the holder of each Non-cumulative Convertible
Dollar Preference Share (at the same time as the same are sent to the
holders of Ordinary Shares) a copy of the Company's Annual Report and
Accounts and Interim Financial Statement together with notice of any
General Meeting of the Company at which such holder is entitled to
attend and vote.
2.5 Attendance and Voting at Meetings
The right to attend at a General Meeting of the Company and to speak to
or vote upon any Resolution proposed thereat in the following
circumstances:-
(i) in respect of a Resolution which is to be proposed at the
Meeting either varying or abrogating any of the rights attached
to the Non-cumulative Convertible Dollar Preference Shares or
proposing the winding up of the Company (and then in each such
case only to speak to and vote upon any such Resolution);
(ii) in circumstances where the dividend stated to be payable on the
Non-cumulative Convertible Dollar Preference Shares in respect
of such number of dividend periods as the Directors shall
determine prior to allotment thereof has not been declared and
paid in full, and until such date as the Directors shall
likewise determine; and
(iii) in such other circumstances as the Directors may determine
prior to allotment of the Non-cumulative Convertible Dollar
Preference Shares,
but not otherwise, together with the right, in such circumstances and
on such terms, if any, as the Directors may determine prior to
allotment of the Non-cumulative Convertible Dollar Preference Shares,
to seek to requisition a General Meeting of the Company. Whenever
holders of Non-cumulative Convertible Dollar Preference Shares are so
entitled to vote on a
116
Resolution, on a show of hands every such holder who is present in
person shall have one vote and, on a poll, every such holder who is
present in person or by proxy shall have such number of votes for each
Non-cumulative Convertible Dollar Preference Share held as may be
determined by the Directors prior to allotment of such Non-cumulative
Convertible Dollar Preference Shares.
2.6 Redemption
Each series of Non-cumulative Convertible Dollar Preference Shares
shall, subject to the provisions of the Statutes, be redeemable at the
option of the Company in accordance with the following provisions:-
(A) the Company may, subject thereto, redeem on any Redemption Date
(as hereinafter defined) all or some only of the Non-cumulative
Convertible Dollar Preference Shares by giving to the holders
of the Non-cumulative Convertible Dollar Preference Shares to
be redeemed not less than 120 days' nor more than 150 days'
prior notice in writing (a "Notice of Redemption") of the
relevant Redemption Date. "Redemption Date" means, in relation
to a Non-cumulative Convertible Dollar Preference Share, any
date which falls no earlier than five years and one day (or
such longer period (if any) as may be fixed by the Directors
prior to allotment of such Share) after the date of allotment
of the Non-cumulative Convertible Dollar Preference Share to be
redeemed. The Company shall not be entitled (save with the
consent of the relevant holder) to give a Notice of Redemption
under this sub-paragraph (A) in respect of any share for which
a Conversion Notice (as defined in paragraph 5 of Part 4 of
this Schedule 2) has been given in accordance with that Part
and not withdrawn;
(B) there shall be paid on each Non-cumulative Convertible Dollar
Preference Share so redeemed, in Dollars, the aggregate of the
nominal amount thereof together with any premium paid on issue
and together with arrears (if any) of dividends thereon
(whether earned or declared or not) in respect of the period
from the dividend payment date last preceding the Redemption
Date to the Redemption Date;
(C) in the case of a redemption of some only of the Non-cumulative
Convertible Dollar Preference Shares in any series, the Company
shall for the purpose of determining the particular
Non-cumulative Convertible Dollar Preference Shares to be
redeemed cause a drawing to be made at the Office or such other
place as the Directors may approve in the presence of the
Auditors for the time being of the Company, provided that there
shall be excluded from such drawing any Non-cumulative
Convertible Dollar Preference Shares to be converted pursuant
to Part 4 of this Schedule 2;
(D) any Notice of Redemption given under sub-paragraph (A) above
shall specify the applicable Redemption Date, the particular
Non-cumulative Convertible Dollar Preference Shares to be
redeemed and the redemption price (specifying the amount of the
accrued and unpaid dividend per share to be included therein
and stating that dividends on the Non-cumulative Convertible
Dollar Preference Shares to be redeemed will cease to accrue on
redemption), and shall state the place or places at which
documents of title in respect of such Non-cumulative
Convertible Dollar Preference Shares are to be presented and
surrendered for redemption and payment of the redemption monies
is to be effected. Upon such Redemption Date, the Company shall
redeem the particular Non-cumulative Convertible Dollar
Preference Shares to be redeemed on that date subject to the
provisions of this paragraph and of
117
the Statutes. No defect in the Notice of Redemption or in the
giving thereof shall affect the validity of the redemption
proceedings;
(E) subject to sub-paragraph (I) below, the provisions of this and
the following sub-paragraph shall have effect in relation to
Non-cumulative Convertible Dollar Preference Shares for the
time being issued and registered in the Register of Members (
"Registered Shares") and represented by certificates (
"Certificates") and in relation to Non-cumulative Convertible
Dollar Preference Shares which, in accordance with Article 52
of these presents, are for the time being issued and
represented by a Warrant (as defined in the said Article 52) (
"Bearer Shares"). Payments in respect of the amount due on
redemption of a Registered Share shall be made by Dollar cheque
drawn on a bank in London or in the City of New York or upon
the request of the holder or joint holders not later than the
date specified for the purpose in the Notice of Redemption by
transfer to a Dollar account maintained by the payee with a
bank in London or in the City of New York. Such payment will be
against presentation and surrender of the relative Certificate
at the place or one of the places specified in the Notice of
Redemption and if any Certificate so surrendered includes any
Non-cumulative Convertible Dollar Preference Shares not to be
redeemed on the relevant Redemption Date (other than
Non-cumulative Convertible Dollar Preference Shares to be
converted pursuant to Part 4 of this Schedule 2) the Company
shall within fourteen days thereafter issue to the holder, free
of charge, a fresh Certificate in respect of such
Non-cumulative Convertible Dollar Preference Shares. Payment in
respect of the amount due on redemption of a Bearer Share shall
be made by Dollar cheque drawn on a bank in London or in the
City of New York or upon the request of the holder not later
than the date specified for the purpose in the Notice of
Redemption by transfer to a Dollar account maintained by the
payee with a bank in London or in the City of New York. Such
payments will be made against presentation and surrender of the
Warrant and all unmatured dividend coupons and talons (if any)
at the place or the places specified in the Notice of
Redemption. Upon the relevant Redemption Date all unmatured
dividend coupons and any talon for additional dividend coupons
appertaining thereto (whether or not returned) shall become
void and no payment will be made in respect thereof. If the
Warrant so surrendered represents any Non-cumulative
Convertible Dollar Preference Shares not to be redeemed on the
relevant Redemption Date (other than Non-cumulative Convertible
Dollar Preference Shares to be converted pursuant to Part 4 of
this Schedule 2) the Company shall issue, free of charge, a
fresh Warrant representing such Bearer Shares which are not to
be redeemed on such Redemption Date. All payments in respect of
redemption monies will in all respects be subject to any
applicable fiscal or other laws;
(F) as from the relevant Redemption Date the dividend on the
Non-cumulative Convertible Dollar Preference Shares due for
redemption shall cease to accrue except on any such
Non-cumulative Convertible Dollar Preference Share in respect
of which, upon the due surrender of the Certificate or, as the
case may be, the Warrant and all unmatured dividend coupons and
talons (if any) in respect thereof, in accordance with
sub-paragraph (E) above, payment of the redemption monies due
on such Redemption Date shall be improperly withheld or
refused, in which case such dividend, at the rate then
applicable, shall be deemed to have continued and shall
accordingly continue to accrue from the relevant Redemption
Date to the date of payment of such redemption monies. Such
Non-cumulative Convertible Dollar Preference Share shall not be
treated as having been redeemed until the redemption monies in
question together with the accrued dividend thereon shall have
been paid;
118
(G) if the due date for the payment of the redemption monies on any
Non-cumulative Convertible Dollar Preference Shares is not a
Dollar Business Day then payment of such monies will be made on
the next succeeding day which is a Dollar Business Day and
without any interest or other payment in respect of such delay
unless such day shall fall within the next calendar month
whereupon such payment will be made on the preceding Dollar
Business Day;
(H) the receipt of the holder for the time being of any Registered
Share (or in the case of joint holders the receipt of any one
of them) and the receipt of the person delivering any Warrant
to the place or one of the places specified pursuant to
sub-paragraph (D) above in respect of the monies payable on
redemption on such Registered Share or, as the case may be,
such Bearer Share, shall constitute an absolute discharge to
the Company; and
(I) subject as aftermentioned, the provisions of sub-paragraphs (E)
and (F) above shall have effect in relation to Registered
Shares which are in uncertificated form within the meaning of
the Uncertificated Securities Regulations 1995 (as in force on
the date of adoption of this Schedule 2) in the same manner as
they have effect in relation to Registered Shares represented
by Certificates, save that (i) any provision of the said
paragraphs requiring presentation and surrender of a
Certificate shall be satisfied in the manner prescribed or
permitted by the said Regulations (or by any enactment or
subordinate legislation which amends or supersedes those
Regulations) or (subject to those Regulations or such enactment
or subordinate legislation) in such manner as may from time to
time be prescribed by the Directors), and (ii) the Company
shall not be under any obligation to issue a fresh Certificate
under sub-paragraph (E).
2.7 Purchase
Subject to the provisions of the Statutes and any other applicable
laws, the Company may at any time and from time to time purchase any
Non-cumulative Convertible Dollar Preference Shares upon such terms as
the Directors shall determine provided that, in the case of
Non-cumulative Convertible Dollar Preference Shares which are listed on
the London Stock Exchange, the purchase price, exclusive of expenses
and accrued dividends, shall not exceed (i) in the case of a purchase
in the open market, or by tender (which shall be available alike to all
holders of the Non-cumulative Convertible Dollar Preference Shares),
the average of the closing middle market quotations of such
Non-cumulative Convertible Dollar Preference Shares on the London Stock
Exchange (as derived from The London Stock Exchange Daily Official
List) for the last ten dealing days preceding the date of purchase or
(if higher), in the case of a purchase in the open market only, the
market price on the date of purchase provided that such market price is
not more than 105 per cent of such average and (ii) in the case of a
purchase by private treaty, 120 per cent of the closing middle market
quotation of such Non-cumulative Convertible Dollar Preference Shares
on the London Stock Exchange (as derived from The London Stock Exchange
Daily Official List) for the last dealing day preceding the date of
purchase: but so that this proviso shall not apply to any purchase of
Non-cumulative Convertible Dollar Preference Shares made in the
ordinary course of a business of dealing in securities.
2.8 Conversion
The Non-cumulative Convertible Dollar Preference Shares shall be
convertible into Ordinary Shares in the manner set out in (and subject
to the provisions of) Part 4 of this Schedule 2. The provisions of
paragraph 2.6 of this Part 2 regarding redemption are without prejudice
to
119
any provisions in the said Part 4 providing for the effecting of
conversion by means of redemption.
3. (a) Save with the written consent of the holders of three-quarters
in nominal value of, or with the sanction of an Extraordinary
Resolution passed at a separate General Meeting of the holders
of, the Non-cumulative Convertible Dollar Preference Shares,
the Directors shall not authorise or create, or increase the
amount of, any shares of any class or any security convertible
into shares of any class ranking as regards rights to
participate in the profits or assets of the Company (other than
on a redemption or purchase by the Company of any such shares)
in priority to the Non-cumulative Convertible Dollar Preference
Shares.
(b) The special rights attached to any series of Non-cumulative
Convertible Dollar Preference Shares allotted or in issue shall
not (unless otherwise provided by their terms of issue) be
deemed to be varied by the creation or issue of any New Shares
ranking as regards participation in the profits or assets of
the Company in some or all respects pari passu with or after
such Non-cumulative Convertible Dollar Preference Shares. Any
new shares ranking in some or all respects pari passu with such
Non-cumulative Convertible Dollar Preference Shares may without
their creation or issue being deemed to vary the special rights
attached to any Non-cumulative Convertible Dollar Preference
Share then in issue either carry rights identical in all
respects with such Non-cumulative Convertible Dollar Preference
Shares or any of them or carry rights differing therefrom in
any respect, including, but without prejudice to the generality
of the foregoing, in that:-
(i) the rate or means of calculating the dividend may
differ and the dividend may be cumulative or
non-cumulative;
(ii) the New Shares or any series thereof may rank for
dividend as from such date as may be provided by the
terms of issue thereof and the dates for payment of
dividend may differ;
(iii) the New Shares may be denominated in Sterling or in any
Foreign Currency;
(iv) a premium may be payable on return of capital or there
may be no such premium;
(v) the New Shares may be redeemable at the option of the
holder or of the Company, or may be non-redeemable and
if redeemable at the option of the Company, they may be
redeemable at different dates and on different terms
from those applying to the Non-cumulative Convertible
Dollar Preference Shares; and
(vi) the New Shares may be convertible into Ordinary Shares
or any other class of shares ranking as regards
participation in the profits and assets of the Company
pari passu with or after such Non-cumulative
Convertible Dollar Preference Shares in each case on
such terms and conditions as may be prescribed by the
terms of issue thereof.
120
PART 3
Non-cumulative Convertible Euro Preference Shares
1. The Non-cumulative Convertible Euro Preference Shares are New
Preference Shares. They shall rank after the Cumulative Preference
Shares to the extent specified in Article 4 and this Schedule 2, and
shall rank pari passu inter se and (save as aforesaid) with the
Cumulative Preference Shares and with all other New Preference Shares.
They shall confer the rights and be subject to the restrictions set out
or referred to in this Part 3 of Schedule 2 and shall also confer such
further rights (not being inconsistent with the rights set out or
referred to in this Part 3) as may be attached by the Directors to such
shares in accordance with this Part 3 prior to allotment. Whenever the
Directors have power under this Part to determine any of the rights
attached to any of the Non-cumulative Convertible Euro Preference
Shares, the rights so determined need not be the same as those attached
to the Non-cumulative Convertible Euro Preference Shares then allotted
or in issue. The Non-cumulative Convertible Euro Preference Shares may
be issued in one or more separate series, and each series shall be
identified in such manner as the Directors may determine without any
such determination or identification requiring any alteration to these
presents.
2. Each Non-cumulative Convertible Euro Preference Share shall confer the
following rights as to participation in the profits and assets of the
Company, receipt of notices, attendance and voting at meetings,
redemption and conversion:
2.1 Income
The right (subject to the provisions of paragraph 2.2, if applicable)
to a non-cumulative preferential dividend not exceeding a specified
amount payable in Euro at such rate (which, in the case of any series
allotted after 11th April 2001, may be fixed or variable and may be
subject to recalculation at fixed intervals) on such dates (each a
"dividend payment date") in respect of such periods (each a "dividend
period") and on such other terms and conditions as may be determined by
the Directors prior to allotment thereof. References in these presents
to a "dividend" on the Non-cumulative Convertible Euro Preference
Shares include a reference to each dividend in respect of each dividend
period applicable thereto and references in this Part of the Schedule
to dividend payment dates and dividend periods are to dividend payment
dates and dividend periods in respect of the Non-cumulative Convertible
Euro Preference Shares only. Such dividends shall be paid in priority
to the payment of any dividends on the Ordinary Shares. The
Non-cumulative Convertible Euro Preference Shares shall rank for
dividend after the Cumulative Preference Shares, pari passu with the
Non-cumulative Sterling Preference Shares, the Non-cumulative Dollar
Preference Shares, the Category II Non-cumulative Dollar Preference
Shares, all other Convertible Preference Shares and all other New
Preference Shares expressed to rank pari passu therewith as regards
participation in profits and otherwise in priority to any other share
capital in the Company.
2.2 Further provisions as to income
All or any of the following provisions shall apply in relation to any
particular Non-cumulative Convertible Euro Preference Shares if so
determined by the Directors prior to allotment thereof:-
(i) if, in the opinion of the Directors, the distributable profits
of the Company are sufficient to cover the payment in full of
dividends on the Non-cumulative Convertible Euro Preference
Shares on any dividend payment date and also the payment in
full of all other dividends stated to be payable on such date
on any other
121
New Preference Share expressed to rank pari passu therewith as
regards participation in profits, after payment in full, or the
setting aside of a sum to cover the payment in full, of all
dividends stated to be payable on such date on any Cumulative
Preference Share, then each such dividend shall be declared and
paid in full;
(ii) if, in the opinion of the Directors, the distributable profits
of the Company are insufficient to cover the payment in full of
dividends on the Non-cumulative Convertible Euro Preference
Shares on any dividend payment date and also the payment in
full of all other dividends stated to be payable on such date
on any other New Preference Share expressed to rank pari passu
therewith as regards participation in profits, after payment in
full, or the setting aside of a sum to cover the payment in
full, of all dividends stated to be payable on or before such
date on any Cumulative Preference Share, then dividends shall
be declared by the Directors pro rata for the Non-cumulative
Convertible Euro Preference Shares and such other New
Preference Shares to the extent of the available distributable
profits (if any) to the intent that the amount of dividend
declared per share on each such Non-cumulative Convertible Euro
Preference Share and other New Preference Share will bear to
each other the same ratio as the dividends accrued per share on
each such Non-cumulative Convertible Euro Preference Share and
other New Preference Share bear to each other. If it shall
subsequently appear that any such dividend which has been paid
should not, in accordance with the provisions of this
sub-paragraph, have been so paid, then provided the Directors
shall have acted in good faith, they shall not incur any
liability for any loss which any shareholder may suffer in
consequence of such payment having been made;
(iii) if, in the opinion of the Directors, the payment of any
dividend on any Non-cumulative Convertible Euro Preference
Shares would breach or cause a breach of the capital adequacy
requirements of the Financial Services Authority (or any person
or body to whom the banking supervision functions of the
Financial Services Authority are transferred) applicable to the
Company and/or any of its subsidiaries, then none of such
dividend shall be declared or paid;
(iv) subject to sub-paragraph (v) below, the Non-cumulative
Convertible Euro Preference Shares shall carry no further right
to participate in the profits of the Company and if and to the
extent that any dividend or part thereof is on any occasion not
paid for the reasons described in sub-paragraph (ii) or (iii)
above, the holders of such shares shall have no claim in
respect of such non-payment;
(v) if any dividend or part thereof on any Non-cumulative
Convertible Euro Preference Share is not payable for the
reasons specified in sub-paragraphs (ii) or (iii) above and if
they so resolve, the Directors may, subject to the Statutes,
pay a special non-cumulative preferential dividend on the
Non-cumulative Convertible Euro Preference Shares at a rate not
exceeding (euro) 0.01 per share (but so that reference
elsewhere in this Schedule 2 and in these presents to any
dividend payable on any Non-cumulative Convertible Euro
Preference Shares shall not be treated as including a reference
to any such special dividend);
(vi) if any date on which dividends are payable on Non-cumulative
Convertible Euro Preference Shares is not a day on which TARGET
is operating and banks in London are open for business, and on
which foreign exchange dealings may be conducted in London (a
"Euro Business Day"), then payment of the dividend payable on
such date will be made on the succeeding Euro Business Day and
without any interest or other payment in respect of such delay
unless such day shall fall within the next
122
calendar month whereupon such payment will be made on the
preceding Euro Business Day; for these purposes "TARGET" means
the Trans-European Real-Time Gross Settlement Express Transfer
(TARGET) system;
(vii) dividends payable on Non-cumulative Convertible Euro Preference
Shares shall accrue from and to the dates determined by the
Directors prior to allotment thereof, and the amount of
dividend payable in respect of any period shorter than a full
dividend period will be calculated on the basis of twelve 30
day months, a 360 day year and the actual number of days
elapsed in such period;
(viii) if any dividend stated to be payable on the Non-cumulative
Convertible Euro Preference Shares on the most recent dividend
payment date has not been declared and paid in full, or if a
sum has not been set aside to provide for such payment in full,
no dividends may be declared on any other share capital of the
Company (other than the Cumulative Preference Shares), and no
sum may be set aside for the payment thereof, unless, on the
date of declaration relative to any such payment, an amount
equal to the dividend stated to be payable on the
Non-cumulative Convertible Euro Preference Shares in respect of
the then current dividend period is set aside for the payment
in full of such dividend on the dividend payment date relating
to the then current dividend period; and
(ix) if any dividend stated to be payable on the Non-cumulative
Convertible Euro Preference Shares on any dividend payment date
has not been declared and paid in full, or if a sum has not
been set aside to provide for such payment in full, the Company
may not redeem or purchase or otherwise acquire for any
consideration any other share capital of the Company, and may
not set aside any sum nor establish any sinking fund for the
redemption or purchase or other such acquisition thereof, until
such time as dividends stated to be payable on the
Non-cumulative Convertible Euro Preference Shares in respect of
successive dividend periods together aggregating no less than
twelve months shall thereafter have been declared and paid in
full.
2.3 Capital
The right on a winding up or liquidation, voluntary or otherwise other
than (unless otherwise provided by the terms of issue of such share) a
redemption or purchase by the Company of any shares of any class to
receive in Euro out of the surplus assets of the Company available for
distribution amongst the members:-
(i) after payment of the arrears (if any) of the fixed cumulative
preferential dividends stated to be payable on the Cumulative
Preference Shares to the holders thereof in accordance with
Article 4(B) FIRSTLY and pari passu with the holders of any
other New Preference Shares expressed to rank pari passu
therewith as regards participation in profits and in priority
to the holders of the Ordinary Shares of the Company a sum
equal to:-
(A) the amount of any dividend which is due for payment
after the date of commencement of the winding up or
liquidation but which is payable in respect of a period
ending on or before such date; and
(B) any further amount of dividend payable in respect of
the period from the preceding dividend payment date to
the date of payment in accordance with this
sub-paragraph (i);
123
but only to the extent that any such amount or further amount
was, or would have been payable as a dividend in accordance
with or pursuant to this Part of Schedule 2 (other than
pursuant to this provision); and
(ii) subject thereto, pari passu with the holders of the Cumulative
Preference Shares and any other New Preference Shares expressed
to rank pari passu therewith as regards participation in
surplus assets in priority to the holders of the Ordinary
Shares of the Company, a sum equal to the amount paid up or
credited as paid up on the Non-cumulative Convertible Euro
Preference Shares (including any premium paid to the Company in
respect thereof on issue).
If upon any such winding-up or liquidation, the amounts
available for payment are insufficient to cover the amounts
payable in full on the Cumulative Preference Shares, the
Non-cumulative Convertible Euro Preference Shares and on any
other New Preference Shares expressed to rank pari passu
therewith as regards participation in surplus assets, then the
holders of the Cumulative Preference Shares, the Non-cumulative
Convertible Euro Preference Shares and such other New
Preference Shares will share rateably in the distribution of
surplus assets (if any) in proportion to the full respective
preferential amounts to which they are entitled. No
Non-cumulative Convertible Euro Preference Share shall confer
any right to participate in the surplus assets of the Company
other than that set out in this paragraph 2.3.
2.4 Receipt of Notices
The right to have sent to the holder of each Non-cumulative Convertible
Euro Preference Share (at the same time as the same are sent to the
holders of Ordinary Shares) a copy of the Company's Annual Report and
Accounts and Interim Financial Statement together with notice of any
General Meeting of the Company at which such holder is entitled to
attend and vote.
2.5 Attendance and Voting at Meetings
The right to attend at a General Meeting of the Company and to speak to
or vote upon any Resolution proposed thereat in the following
circumstances:-
(i) in respect of a Resolution which is to be proposed at the
Meeting either varying or abrogating any of the rights attached
to the Non-cumulative Convertible Euro Preference Shares or
proposing the winding up of the Company (and then in each such
case only to speak to and vote upon any such Resolution);
(ii) in circumstances where the dividend stated to be payable on the
Non-cumulative Convertible Euro Preference Shares in respect of
such number of dividend periods as the Directors shall
determine prior to allotment thereof has not been declared and
paid in full, and until such date as the Directors shall
likewise determine; and
(iii) in such other circumstances as the Directors may determine
prior to allotment of the Non-cumulative Convertible Euro
Preference Shares,
but not otherwise, together with the right, in such circumstances and
on such terms, if any, as the Directors may determine prior to
allotment of the Non-cumulative Convertible Euro Preference Shares, to
seek to requisition a General Meeting of the Company. Whenever holders
of Non-cumulative Convertible Euro Preference Shares are so entitled to
vote on a
124
Resolution, on a show of hands every such holder who is present in
person shall have one vote and, on a poll, every such holder who is
present in person or by proxy shall have such number of votes for each
Non-cumulative Convertible Euro Preference Share held as may be
determined by the Directors prior to allotment of such Non-cumulative
Convertible Euro Preference Shares.
2.6 Redemption
Each series of Non-cumulative Convertible Euro Preference Shares shall,
subject to the provisions of the Statutes, be redeemable at the option
of the Company in accordance with the following provisions:-
(A) the Company may, subject thereto, redeem on any Redemption Date
(as hereinafter defined) all or some only of the Non-cumulative
Convertible Euro Preference Shares by giving to the holders of
the Non-cumulative Convertible Euro Preference Shares to be
redeemed not less than 120 days' nor more than 150 days' prior
notice in writing (a "Notice of Redemption") of the relevant
Redemption Date. "Redemption Date" means, in relation to a
Non-cumulative Convertible Euro Preference Share, any date
which falls no earlier than five years and one day (or such
longer period (if any) as may be fixed by the Directors prior
to allotment of such Share) after the date of allotment of the
Non-cumulative Convertible Euro Preference Share to be
redeemed. The Company shall not be entitled (save with the
consent of the relevant holder) to give a Notice of Redemption
under this sub-paragraph (A) in respect of any share for which
a Conversion Notice (as defined in paragraph 5 of Part 4 of
this Schedule 2) has been given in accordance with that Part
and not withdrawn;
(B) there shall be paid on each Non-cumulative Convertible Euro
Preference Share so redeemed, in Euro, the aggregate of the
nominal amount thereof together with any premium paid on issue
and together with arrears (if any) of dividends thereon
(whether earned or declared or not) in respect of the period
from the dividend payment date last preceding the Redemption
Date to the Redemption Date;
(C) in the case of a redemption of some only of the Non-cumulative
Convertible Euro Preference Shares in any series, the Company
shall for the purpose of determining the particular
Non-cumulative Convertible Euro Preference Shares to be
redeemed cause a drawing to be made at the Office or such other
place as the Directors may approve in the presence of the
Auditors for the time being of the Company, provided that there
shall be excluded from such drawing any Non-cumulative
Convertible Euro Preference Shares to be converted pursuant to
Part 4 of this Schedule 2;
(D) any Notice of Redemption given under sub-paragraph (A) above
shall specify the applicable Redemption Date, the particular
Non-cumulative Convertible Euro Preference Shares to be
redeemed and the redemption price (specifying the amount of the
accrued and unpaid dividend per share to be included therein
and stating that dividends on the Non-cumulative Convertible
Euro Preference Shares to be redeemed will cease to accrue on
redemption), and shall state the place or places at which
documents of title in respect of such Non-cumulative
Convertible Euro Preference Shares are to be presented and
surrendered for redemption and payment of the redemption monies
is to be effected. Upon such Redemption Date, the Company shall
redeem the particular Non-cumulative Convertible Euro
Preference Shares to be redeemed on that date subject to the
provisions of this paragraph and of the Statutes. No defect in
the Notice of Redemption or in the giving thereof shall affect
the validity of the redemption proceedings;
125
(E) subject to sub-paragraph (I) below, the provisions of this and
the following sub-paragraph shall have effect in relation to
Non-cumulative Convertible Euro Preference Shares for the time
being issued and registered in the Register of Members
("Registered Shares") and represented by certificates
("Certificates") and in relation to Non-cumulative Convertible
Euro Preference Shares which, in accordance with Article 52 of
these presents, are for the time being issued and represented
by a Warrant (as defined in the said Article 52) ("Bearer
Shares"). Payments in respect of the amount due on redemption
of a Registered Share shall be made by Euro cheque drawn on a
bank in London or upon the request of the holder or joint
holders not later than the date specified for the purpose in
the Notice of Redemption by transfer to a Euro account
maintained by the payee with a bank in London. Such payment
will be against presentation and surrender of the relative
Certificate at the place or one of the places specified in the
Notice of Redemption and if any Certificate so surrendered
includes any Non-cumulative Convertible Euro Preference Shares
not to be redeemed on the relevant Redemption Date (other than
Non-cumulative Convertible Euro Preference Shares to be
converted pursuant to Part 4 of this Schedule 2) the Company
shall within fourteen days thereafter issue to the holder, free
of charge, a fresh Certificate in respect of such
Non-cumulative Convertible Euro Preference Shares. Payment in
respect of the amount due on redemption of a Bearer Share shall
be made by Euro cheque drawn on a bank in London or upon the
request of the holder not later than the date specified for the
purpose in the Notice of Redemption by transfer to a Euro
account maintained by the payee with a bank in London. Such
payments will be made against presentation and surrender of the
Warrant and all unmatured dividend coupons and talons (if any)
at the place or the places specified in the Notice of
Redemption. Upon the relevant Redemption Date all unmatured
dividend coupons and any talon for additional dividend coupons
appertaining thereto (whether or not returned) shall become
void and no payment will be made in respect thereof. If the
Warrant so surrendered represents any Non-cumulative
Convertible Euro Preference Shares not to be redeemed on the
relevant Redemption Date (other than Non-cumulative Convertible
Euro Preference Shares to be converted pursuant to Part 4 of
this Schedule 2) the Company shall issue, free of charge, a
fresh Warrant representing such Bearer Shares which are not to
be redeemed on such Redemption Date.
All payments in respect of redemption monies will in all
respects be subject to any applicable fiscal or other laws;
(F) as from the relevant Redemption Date the dividend on the
Non-cumulative Convertible Euro Preference Shares due for
redemption shall cease to accrue except on any such
Non-cumulative Convertible Euro Preference Share in respect of
which, upon the due surrender of the Certificate or, as the
case may be, the Warrant and all unmatured dividend coupons and
talons (if any) in respect thereof, in accordance with
sub-paragraph (E) above, payment of the redemption monies due
on such Redemption Date shall be improperly withheld or
refused, in which case such dividend, at the rate then
applicable, shall be deemed to have continued and shall
accordingly continue to accrue from the relevant Redemption
Date to the date of payment of such redemption monies. Such
Non-cumulative Convertible Euro Preference Share shall not be
treated as having been redeemed until the redemption monies in
question together with the accrued dividend thereon shall have
been paid;
(G) if the due date for the payment of the redemption monies on any
Non-cumulative Convertible Euro Preference Shares is not a Euro
Business Day then payment of such
126
monies will be made on the next succeeding day which is a Euro
Business Day and without any interest or other payment in
respect of such delay unless such day shall fall within the
next calendar month whereupon such payment will be made on the
preceding Euro Business Day;
(H) the receipt of the holder for the time being of any Registered
Share (or in the case of joint holders the receipt of any one
of them) and the receipt of the person delivering any Warrant
to the place or one of the places specified pursuant to
sub-paragraph (D) above in respect of the monies payable on
redemption on such Registered Share or, as the case may be,
such Bearer Share, shall constitute an absolute discharge to
the Company; and
(I) subject as aftermentioned, the provisions of sub-paragraphs (E)
and (F) above shall have effect in relation to Registered
Shares which are in uncertificated form within the meaning of
the Uncertificated Securities Regulations 1995 (as in force on
the date of adoption of this Schedule 2) in the same manner as
they have effect in relation to Registered Shares represented
by Certificates, save that (i) any provision of the said
paragraphs requiring presentation and surrender of a
Certificate shall be satisfied in the manner prescribed or
permitted by the said Regulations (or by any enactment or
subordinate legislation which amends or supersedes those
Regulations) or (subject to those Regulations or such enactment
or subordinate legislation) in such manner as may from time to
time be prescribed by the Directors), and (ii) the Company
shall not be under any obligation to issue a fresh Certificate
under sub-paragraph (E).
2.7 Purchase
Subject to the provisions of the Statutes and any other applicable
laws, the Company may at any time and from time to time purchase any
Non-cumulative Convertible Euro Preference Shares upon such terms as
the Directors shall determine provided that, in the case of
Non-cumulative Convertible Euro Preference Shares which are listed on
the London Stock Exchange, the purchase price, exclusive of expenses
and accrued dividends, shall not exceed (i) in the case of a purchase
in the open market, or by tender (which shall be available alike to all
holders of the Non-cumulative Convertible Euro Preference Shares), the
average of the closing middle market quotations of such Non-cumulative
Convertible Euro Preference Shares on the London Stock Exchange (as
derived from The London Stock Exchange Daily Official List) for the
last ten dealing days preceding the date of purchase or (if higher), in
the case of a purchase in the open market only, the market price on the
date of purchase provided that such market price is not more than 105
per cent of such average and (ii) in the case of a purchase by private
treaty, 120 per cent of the closing middle market quotation of such
Non-cumulative Convertible Euro Preference Shares on the London Stock
Exchange (as derived from The London Stock Exchange Daily Official
List) for the last dealing day preceding the date of purchase: but so
that this proviso shall not apply to any purchase of Non-cumulative
Convertible Euro Preference Shares made in the ordinary course of a
business of dealing in securities.
2.8 Conversion
The Non-cumulative Convertible Euro Preference Shares shall be
convertible into Ordinary Shares in the manner set out in (and subject
to the provisions of) Part 4 of this Schedule 2. The provisions of
paragraph 2.6 of this Part 3 regarding redemption are without prejudice
to any provisions in the said Part 4 providing for the effecting of
conversion by means of redemption.
127
3. (a) Save with the written consent of the holders of three-quarters
in nominal value of, or with the sanction of an Extraordinary
Resolution passed at a separate General Meeting of the holders
of, the Non-cumulative Convertible Euro Preference Shares, the
Directors shall not authorise or create, or increase the amount
of, any shares of any class or any security convertible into
shares of any class ranking as regards rights to participate in
the profits or assets of the Company (other than on a
redemption or purchase by the Company of any such shares) in
priority to the Non-cumulative Convertible Euro Preference
Shares.
(b) The special rights attached to any series of Non-cumulative
Convertible Euro Preference Shares allotted or in issue shall
not (unless otherwise provided by their terms of issue) be
deemed to be varied by the creation or issue of any New Shares
ranking as regards participation in the profits or assets of
the Company in some or all respects pari passu with or after
such Non-cumulative Convertible Euro Preference Shares. Any new
shares ranking in some or all respects pari passu with such
Non-cumulative Convertible Euro Preference Shares may without
their creation or issue being deemed to vary the special rights
attached to any Non-cumulative Convertible Euro Preference
Share then in issue either carry rights identical in all
respects with such Non-cumulative Convertible Euro Preference
Shares or any of them or carry rights differing therefrom in
any respect, including, but without prejudice to the generality
of the foregoing, in that:-
(i) the rate or means of calculating the dividend may
differ and the dividend may be cumulative or
non-cumulative;
(ii) the New Shares or any series thereof may rank for
dividend as from such date as may be provided by the
terms of issue thereof and the dates for payment of
dividend may differ;
(iii) the New Shares may be denominated in Sterling or in any
Foreign Currency;
(iv) a premium may be payable on return of capital or there
may be no such premium;
(v) the New Shares may be redeemable at the option of the
holder or of the Company, or may be non-redeemable and
if redeemable at the option of the Company, they may be
redeemable at different dates and on different terms
from those applying to the Non-cumulative Convertible
Euro Preference Shares; and
(vi) the New Shares may be convertible into Ordinary Shares
or any other class of shares ranking as regards
participation in the profits and assets of the Company
pari passu with or after such Non-cumulative
Convertible Euro Preference Shares in each case on such
terms and conditions as may be prescribed by the terms
of issue thereof.
128
PART 4
Conversion of Convertible Preference Shares
1. Each holder of Convertible Preference Share(s) shall be entitled in the
manner set out in (and subject to the provisions of) this Part 4 to
convert into fully paid Ordinary Shares such of his Convertible
Preference Shares as have not, as at the Conversion Notice Date, either
been redeemed or been the subject of a valid Notice of Redemption given
under paragraph 2.6 of Part 1, 2 or 3 (as applicable) of this Schedule
2 and specifying a date on or before the Second Conversion Date as the
Redemption Date.
2. For the purposes of this Part 4:
(A) the First Conversion Date shall be 25 London Stock Exchange
dealing days prior to the Second Conversion Date and the Second
Conversion Date shall be, in relation to any Convertible
Preference Share, the date specified as such by the Directors
prior to allotment thereof which falls not earlier than five
years and one day after the issue of that share;
(B) the Conversion Notice Date shall be 120 days prior to the
Second Conversion Date;
(C) the conversion right shall be exercisable by completion of a
Conversion Notice (as defined in paragraph 5 below) submitted
by holders of Convertible Preference Shares ("Converting
Holders") setting out the number of Convertible Preference
Shares which are to be converted pursuant to such notice (the
"Conversion Amount") and lodging such Conversion Notice with
the Company's Registrar at any time during the period and in
the manner referred to in paragraph 8 below;
(D) the Redemption Amount in relation to a Convertible Preference
Share means the nominal amount thereof together with any
premium paid on issue;
(E) The First Exchange Rate shall be the applicable Foreign
Currency/Sterling exchange rate determined by the Broker (as
defined below) as determination agent by taking the weighted
average (rounded, if necessary, to the nearest (pound)0.0001,
(pound)0.00005 being rounded upwards) of the spot rate of
exchange for the purchase of the Foreign Currency in which the
relevant Conversion Amount is denominated with Sterling as
quoted at the request of the Broker by three major banks in the
London foreign exchange market selected by the Broker at 11:00
a.m. (London time) on each day during the Broker Bid Period (as
defined below) that such banks provide such quote to the
Broker. The Second Exchange Rate shall be the applicable
Foreign Currency/Sterling exchange rate determined by the
Broker as determination agent by taking the weighted average
(rounded, if necessary, to the nearest(pound)0.0001,
(pound)0.00005 being rounded upwards) of the spot rate of
exchange for the purchase of the Foreign Currency in which the
relevant Conversion Amount is denominated with sterling as
quoted at the request of the Broker by three major banks in the
London foreign exchange market selected by the Broker at 11:00
a.m. (London time) on each day during the Calculation Period
(as defined below) that such banks provide such request to the
Broker. For the avoidance of doubt, references in this Part 4
to the conversion of any Conversion Price into the Foreign
Currency in which the relevant Conversion Amount is denominated
shall only apply in the case of a Conversion Amount denominated
in Foreign Currency, and shall otherwise be disregarded.
129
Each Convertible Preference Share which is the subject of a Conversion
Notice shall be subject to the cash settlement provisions of this Part
4. The Company will use its reasonable endeavours, to the extent
permitted by applicable law, to arrange for the sale of the Ordinary
Shares into which such Convertible Preference Shares will convert so as
to raise net cash proceeds of an amount equal to the aggregate
Redemption Amount of such Convertible Preference Shares. The sale will
be conducted by means of a process pursuant to which a broker selected
by the Company (the "Broker") will solicit bids for the relevant
Ordinary Shares (the "Placing"). Such bids will be solicited during the
period of the 20 London Stock Exchange dealing days ending five London
Stock Exchange dealing days before the First Conversion Date (the
"Broker Bid Period").
3. The number of Ordinary Shares to be issued on the conversion of each
Convertible Preference Share shall be determined by dividing the
Redemption Amount by the Conversion Price.
(A) In the case of Convertible Preference Shares which are
converted on the First Conversion Date, the Conversion Price
shall be established by reference to the bids received and
accepted by the Broker pursuant to the Placing and shall be
converted into the Foreign Currency in which the relevant
Conversion Amount is denominated by reference to the First
Exchange Rate (provided that the Company will not in any
circumstances be obliged to issue Ordinary Shares in connection
with the Placing at a price per share of less than either (aa)
95% of the weighted average closing price per Ordinary Share on
the London Stock Exchange during the Broker Bid Period; or (bb)
their nominal amount. The Directors shall specify prior to
allotment of any particular series of Convertible Preference
Shares which of (aa) or (bb) shall apply in respect of that
series (the "Base Price")). The Conversion Price shall be the
highest price per Ordinary Share at or above the Base Price at
which the Broker is able to place Ordinary Shares so as to
raise net cash proceeds (converted as aforesaid) of an amount
equal to the aggregate Redemption Amount of the Conversion
Amount.
On the First Conversion Date:
(i) the Company shall issue to the Broker or as the Broker
shall direct the Ordinary Shares so placed (and lodging
by a Converting Holder of a Conversion Notice with the
Company's Registrar shall be deemed irrevocably to
authorise and instruct the Directors to allot the
Ordinary Shares arising on conversion of his
Convertible Preference Shares pursuant to this Part 4
to the Broker or as the Broker shall direct);
(ii) the Broker shall collect the net cash proceeds of the
Placing, exchange such proceeds at the First Exchange
Rate into the currency in which the Convertible
Preference Shares which have been converted are
denominated and hold such proceeds in separate bank
account(s) until the Second Conversion Date.
(B) On the Second Conversion Date the net cash proceeds of the
Placing (if any) held by the Broker (the "Total Cash Amount")
shall be paid to the Converting Holders such that each
Converting Holder receives the Redemption Amount of his
Conversion Amount, provided that if the Total Cash Amount falls
short of the aggregate Redemption Amount of the Conversion
Amount:
(i) the Total Cash Amount shall be paid to the Converting
Holders pro rata to their holding of Conversion Amount,
(and the amount (if any) by which the
130
cash paid or payable to a Converting Holder falls short
of the aggregate Redemption Amount of his Conversion
Amount shall be the "Remaining Redemption Amount"); and
(ii) the Company shall issue to each Converting Holder the
whole number of Ordinary Shares (if any) calculated by
dividing the Remaining Redemption Amount by the
Conversion Price, being 95% of the weighted average
closing price per Ordinary Share on the London Stock
Exchange during the period of the 20 London Stock
Exchange dealing days ending five London Stock Exchange
dealing days before the Second Conversion Date (the
"Calculation Period") (converted into Sterling at the
Second Exchange Rate).
Fractions of Ordinary Shares will not be issued on conversion and no
cash adjustment will be made. However, if more than one Convertible
Preference Share held by any holder is to be converted and the Ordinary
Shares arising on conversion are to be registered in the same name, the
number of Ordinary Shares to be issued in respect thereof shall be
calculated on the basis of the aggregate Redemption Amount of such
Convertible Preference Shares.
If at the time that the Conversion Price or Base Price is to be
calculated the Ordinary Shares are not listed and traded on the London
Stock Exchange, references in this article to the London Stock Exchange
shall be to such other exchange on which the Ordinary Shares are listed
and traded.
4. The entitlement of holders of Convertible Preference Shares to convert
such shares into fully paid Ordinary Shares shall be conditional on:-
(A) the Company, as at the First Conversion Date or the Second
Conversion Date (as the case may be), having sufficient
authorised but unissued share capital to issue the Ordinary
Shares falling to be issued on such date in connection with the
conversion of Convertible Preference Shares;
(B) the number of Ordinary Shares into which the Directors have
been authorised pursuant to Section 80 of the 1985 Act to issue
rights to convert being sufficient, as at the First Conversion
Date or the Second Conversion Date (as the case may be) to
allot the Ordinary Shares falling to be allotted on such date
in connection with the conversion of Convertible Preference
Shares or the Directors having been authorised prior to such
date pursuant to section 80 to allot such shares (together with
the condition set out in (A) above, the "Relevant Shareholder
Approvals"); and
(C) the delivery by the relevant Converting Holder of the
Certificates (or an appropriate form of indemnity) for such
Convertible Preference Shares as are the subject of a
Certificated Conversion Notice (as defined in paragraph 6
below) or (as the case may be) the transfer of such Convertible
Preference Shares as are the subject of an Uncertificated
Conversion Notice (as defined in paragraph 7 below) into such
account as may be specified in such notice.
The Company undertakes to review, prior to each Annual General Meeting
(the "relevant Annual General Meeting"), whether sufficient Relevant
Shareholder Approvals would be available to permit the allotment and
issue of three times the number of Ordinary Shares that would fall to
be allotted and issued if all of the Convertible Preference Shares were
to be converted into Ordinary Shares on a deemed conversion date (the
"Deemed Conversion Date") which was 60 days prior to the relevant
Annual General Meeting, using a deemed Conversion Price of 95% of the
weighted average closing price per Ordinary Share on the
131
London Stock Exchange during the 20 London Stock Exchange dealing days
ending five London Stock Exchange dealing days prior to such Deemed
Conversion Date converted into the Foreign Currency in which the
relevant Conversion Amount is denominated by reference to the First
Exchange rate provided that for these purposes the Broker Bid Period
shall be the 20 London Stock Exchange dealing days ending five London
Stock Exchange dealing days prior to such Deemed Conversion Date. If
and to the extent that the Relevant Shareholder Approvals would be
insufficient to permit the allotment and issue of three times the
number of Ordinary Shares that would fall to be so allotted and issued,
the Company undertakes to propose such resolutions at the relevant
succeeding Annual General Meeting, that, when approved, would permit
the allotment and issue of three times the number of Ordinary Shares
that would fall to be so allotted and issued.
If the Relevant Shareholder Approvals are insufficient to permit the
allotment and issue of such number of Ordinary Shares as fall to be
allotted and issued on the First Conversion Date or the Second
Conversion Date in connection with the conversion of Convertible
Preference Shares, the Company undertakes to convert the maximum number
of Convertible Preference Shares which it is legally permitted to
convert under the existing Relevant Shareholder Approvals pro rata to
the respective Conversion Amounts of Converting Holders. Converting
Holders may, within 60 days of the Second Conversion Date submit a
written notice to the Company (the "Withdrawal Notice") setting out the
number of Convertible Preference Shares which they wish to withdraw
from the conversion procedure set out in this Part 4. Any Convertible
Preference Shares so withdrawn will lose the right to convert into
Ordinary Shares. In relation to any Convertible Preference Shares so
withdrawn which are the subject of a Certificated Conversion Notice,
the Company will as soon as practicable after receipt of the relevant
Withdrawal Notice, return the relevant Certificates for such shares
which were lodged with the relevant Conversion Notice. In relation to
any Convertible Preference Shares so withdrawn which are the subject of
an Uncertificated Conversion Notice, the Company will as soon as
practicable after receipt of the relevant Withdrawal Notice, transfer
the relevant Convertible Preference Shares into such account as may be
specified by the relevant Converting Holder. Any Convertible Preference
Shares which were the subject of a Conversion Notice and which could
not be converted under the Relevant Shareholder Approvals in place as
at the First Conversion Date and the Second Conversion Date and which
are not the subject of a Withdrawal Notice shall be "Unconverted
Preference Shares". The Company undertakes that for so long as
Unconverted Preference Share(s) remain outstanding, such resolutions
will be proposed at each subsequent Annual General Meeting that, when
approved, would permit the conversion of the Unconverted Preference
Shares. Following shareholder approval of the relevant resolutions, the
Unconverted Preference Shares will be converted into Ordinary Shares
and paragraphs 2 and 3 of this Part 4 shall apply to the conversion of
such Unconverted Preference Shares subject to the following
amendments:-
(A) the Second Conversion Date shall be 60 London Stock Exchange
dealing days after the granting of shareholder approval for the
relevant resolutions; and
(B) the Conversion Price shall be converted into the Foreign
Currency in which the relevant Conversion Amount is denominated
by reference to the Second Exchange Rate, provided that for
these purposes the Calculation Period shall be the 20 London
Stock Exchange dealing days ending five London Stock Exchange
dealing days prior to the Second Conversion Date.
5. For the purposes of this Part 4, a Conversion Notice means, in relation
to any Convertible Preference Shares that, as at the date of such
notice, are Registered Shares (as defined in Part 1, 2 or 3 (as the
case may be) of this Schedule 2), a Certificated Conversion Notice (as
132
defined in paragraph 6 below) or, in relation to any Convertible
Preference Shares that, as at the date of such notice, are Bearer
Shares (as defined in Part 1, 2 or 3 (as the case may be) of this
Schedule 2), an Uncertificated Conversion Notice (as defined in
paragraph 7 below).
6. In relation to any Convertible Preference Shares that, as at the date
of the relevant Conversion Notice are Registered Shares, the right to
convert shall be exercised if the registered holder of any such
Convertible Preference Shares, shall have delivered to the Company's
Registrar, at any time during the period referred to in paragraph 8
below, a duly signed and completed Conversion Notice in such form as
may from time to time be prescribed by the Directors (and obtainable
from the Company's Registrar) (a "Certificated Conversion Notice")
together with the Certificate for such shares (or an appropriate form
of indemnity).
7. In relation to any Convertible Preference Shares that, as at the date
of the relevant Conversion Notice, are Bearer Shares, the right to
convert shall be exercised if an Uncertificated Conversion Notice is
received as referred to below at any time during the period referred to
in paragraph 8 below. For these purposes, an Uncertificated Conversion
Notice shall mean an instruction and/or notification received by the
Company or such person as it may require in such form and having such
effect as may in each case from time to time be prescribed by the
Directors (subject always to the facilities and requirements of the
relevant system) and details of which shall be obtainable from the
Company's Registrar. Without prejudice to the generality of the
foregoing, the form of Conversion Notice referred to above may be such
as to require the holder of the Convertible Preference Shares concerned
to transfer such Convertible Preference Shares into such account as may
be specified by the Company in the Uncertificated Conversion Notice.
8. The period referred to in paragraphs 6 and 7 above for the delivery of
a Conversion Notice is the period falling not less than 90 and not more
than 120 days prior to the Second Conversion Date. Unless the Directors
otherwise determine in any case or cases, a Conversion Notice once
delivered shall be irrevocable (save by means of a valid Withdrawal
Notice given pursuant to paragraph 4).
9. The following provisions shall apply to conversion of the Convertible
Preference Shares:-
(A) conversion may be effected in such manner as the Directors
shall, subject to the requirements of applicable law and the
provisions hereof, from time to time determine and, without
prejudice to the generality of the foregoing, may be effected:
(aa) by the redemption of Convertible Preference Shares on
the relevant Conversion Date for the Redemption Amount
(converted into Sterling by reference to the rate which
the Directors determine on the First Conversion Date in
the case of Convertible Preference Shares converted on
the First Conversion Date and on the Second Conversion
Date in the case of Convertible Preference Shares
converted on the Second Conversion Date to be the
appropriate rate for the purchase of Sterling with the
currency in which the relevant Redemption Amount is
denominated) and the application of the redemption
moneys on behalf of the holder of the Convertible
Preference Shares so redeemed as herein provided. In
the case of a conversion effected by means of the
redemption of Convertible Preference Shares, the
Directors may effect redemption of the relevant
Convertible Preference Shares out of profits of the
Company which would otherwise be available for
dividend, out of the proceeds of a fresh issue of
shares or in any other manner for the time being
permitted by law. In the case of redemption
133
out of profits, the Directors shall apply the
Redemption Amount (converted into Sterling as
aforesaid) in the name of the holder of the Convertible
Preference Shares to be converted in subscribing for
the appropriate number of Ordinary Shares as determined
in accordance with the provisions hereof at such
premium per Ordinary Share as shall represent the
amount (if any) by which the aggregate Redemption
Amount (converted into Sterling as aforesaid) exceeds
the aggregate nominal amount of the Ordinary Shares to
which the holder is so entitled divided by the number
of such Ordinary Shares. In the case of redemption out
of the proceeds of a fresh issue of shares, the
Directors may arrange for the issue of the appropriate
number of Ordinary Shares to the secretary of the
Company or any other person selected by the Directors
on terms that such person will subscribe and pay, as
agent on the holder's behalf, for such shares at such
premium per Ordinary Share as shall represent the
amount (if any) by which the aggregate Redemption
Amount (converted into Sterling as aforesaid) exceeds
the aggregate nominal amount of the Ordinary Shares to
which the holder is so entitled divided by the number
of such Ordinary Shares (and such person shall be
deemed to have authority to borrow for such purpose)
and, in any such case, the Conversion Notice given by
or relating to a holder of the relevant Convertible
Preference Shares shall be deemed irrevocably to
authorise and instruct the Directors to apply the
Redemption Amount (converted into Sterling as
aforesaid) in payment to the holder's agent, who shall
be entitled to retain the same for his own benefit
without being accountable therefor to the holder. In
relation to any Convertible Preference Shares which at
the date of the relevant Conversion Notice are Bearer
Shares, and which are to be redeemed in accordance with
this paragraph 9(A)(aa) the Directors shall be entitled
in their absolute discretion to determine the
procedures for the redemption and cancellation of such
Convertible Preference Shares (subject always to the
facilities and requirements of the relevant system
concerned and to the redemption on the relevant
Conversion Date of the Convertible Preference Shares
concerned) and the provisions of this paragraph shall
apply mutatis mutandis in respect of such redemption;
or
(bb) by means of a capitalisation issue and consolidation.
In that case the requisite capitalisation issue and
consolidation may be effected pursuant to the authority
conferred by the passing of the resolution which
created the Convertible Preference Shares, by the
Company capitalising from profits or reserves
(including any share premium account or capital
redemption reserve) such number of new Ordinary Shares
as shall bring the total nominal amount of the
Convertible Preference Shares (converted into sterling
by reference to the rate which the Directors determine
on the First Conversion Date in the case of Convertible
Preference Shares converted on the First Conversion
Date and on the Second Conversion Date in the case of
Convertible Preference Shares converted on the Second
Conversion Date to be the appropriate rate for the
purchase of Sterling with the currency in which the
relevant Redemption Amount is denominated) and the new
Ordinary Shares to at least the total nominal amount of
the Ordinary Shares into which the Convertible
Preference Shares will convert on the relevant
Conversion Date, consolidating all the relevant shares
into one share (the "Consolidated Share") and
sub-dividing the Consolidated Share into the number of
Ordinary Shares arising from the conversion of the
Convertible Preference Shares. The balance of such
sub-divided share (including any fraction) shall be
non-voting deferred shares of such nominal amount as
the
134
Directors may determine ("Non-Voting Deferred Shares"),
shall be certificated shares and shall have the
following rights and restrictions:-
(1) on a winding-up or other return of capital, the
Non-Voting Deferred Shares shall entitle the
holders of the shares only to payment of the
amounts paid up on those shares, after
repayment to the holders of the Ordinary Shares
of the nominal amount paid up on the Ordinary
Shares held by them respectively and the
payment of (pound)0.01 on each Ordinary Share;
(2) the Non-Voting Deferred Shares shall not
entitle the holders of the shares to the
payment of any dividend or to receive notice of
or to attend or vote at any general meeting of
the Company;
(3) the Non-Voting Deferred Shares shall not, save
as provided in sub-paragraph (4) below, be
transferable;
(4) such conversion shall be deemed to confer
irrevocable authority on the Company to appoint
any person to execute on behalf of the holders
of any Non-Voting Deferred Shares an instrument
of transfer of the shares, and/or an agreement
to transfer the shares, to such person or
persons as the Company may determine as a
custodian of the shares or to purchase or to
cancel the shares in accordance with the
provisions of the Statutes in any such case for
not more than (pound)0.01 for all the shares
being transferred, purchased or cancelled (to
be paid to such one of the holders as may be
selected by lot) without obtaining the sanction
of the holder or holders of the shares, and
pending such transfer or purchase or
cancellation to retain the certificate for such
Non-Voting Deferred Shares; and
(5) the Company may at its option at any time after
the creation of any Non-Voting Deferred Shares
redeem all of those shares then in issue at a
price not exceeding (pound)0.01 for all the
shares redeemed at any one time (to be paid to
such one of the holders as may be selected by
lot), upon giving the holders of the Non-Voting
Deferred Shares not less than 28 days' previous
notice in writing of its intention so to do,
fixing a time and place for the redemption. The
Non-Voting Deferred Shares will not be listed
on the London Stock Exchange. Upon or after the
redemption of any Non-Voting Deferred Shares
pursuant to this sub-paragraph (bb) the
Directors may pursuant to the authority
conferred by the passing of the resolution
which created the Convertible Preference Shares
consolidate and/or sub-divide and/or convert
the authorised Non-Voting Deferred Share
capital existing as a consequence of such
redemption into shares of any other class of
share capital into which the authorised share
capital of the Company is or may at that time
be divided of a like nominal amount (as nearly
as may be) as the shares of such class or into
unclassified shares of the same nominal amount
(as nearly as may be) as the shares of such
class or into unclassified shares of the same
nominal amount as the Non-Voting Deferred
Shares;
(B) the preferential dividend on Convertible Preference Shares
which converted pursuant to this Part 4 shall cease to accrue
with effect from the First Conversion Date in the
135
case of Convertible Preference Shares converted on such date
and with effect from the Second Conversion Date in the case of
Convertible Preference Shares converted on such date. Ordinary
Shares arising on conversion will be allotted and registered as
of the First Conversion Date in the case of Ordinary Shares
arising from Convertible Preference Shares converted on such
date and as of the Second Conversion Date in the case of
Ordinary Shares arising from Convertible Preference Shares
converted on such date, in each case to and in the name of the
holder of the relevant Convertible Preference Shares or,
subject to paragraph 3(A)(i) of this Part 4, his nominee and
shall rank pari passu with the Ordinary Shares in issue on such
Conversion Date except that the Ordinary Shares so allotted
will not rank for any dividend or other distribution which has
been announced, declared, recommended or resolved prior to such
Conversion Date by the Directors or by the Company in general
meeting to be paid or made, if the record date for such
dividend or other distribution is on or prior to such
Conversion Date or (in any other case) if and so far as an
adjustment relating to the dividend, distribution or right has
become effective;
(C) unless the Directors otherwise determine, or unless the
Uncertificated Securities Regulations and/or the requirements
of the relevant system otherwise require, the Ordinary Shares
arising on conversion of any Convertible Preference Shares
shall be or shall be issued (as appropriate) as certificated
shares (where the Convertible Preference Shares converted were,
on the date of the relevant Conversion Notice, Registered
Shares or where the relevant Converting Holder has not
specified a Crest account for this purpose in the relevant
Uncertificated Conversion Notice) or as uncertificated shares
(where the Convertible Preference Shares converted were, on the
date of the relevant Conversion Notice, uncertificated shares
and the relevant Converting Holder has specified a Crest
account for this purpose in the relevant Uncertificated
Conversion Notice), provided that if the Company is unable
under the facilities and requirements of the relevant system to
issue Ordinary Shares in respect of the person entitled thereto
in uncertificated form, such shares shall be issued as
certificated shares; and
(D) the Company shall procure that there shall be despatched or
made free of charge (but uninsured and at the risk of the
holder or the person entitled thereto, or the first-named
thereof, as the case may be):-
(aa) a certificate in respect of Ordinary Shares arising on
conversion which are, in accordance with sub-paragraph
(C) above, certificated shares, and a new certificate
for any unconverted Convertible Preference Shares
comprised in any share certificate surrendered by the
holder, not later than 28 days after the relevant
Conversion Date; and
(bb) payment in respect of the accrued preferential dividend
on the Convertible Preference Shares converted, on the
payment date in respect of such dividend next following
the relevant Conversion Date (unless such Conversion
Date is also a dividend payment date, in which case on
such dividend payment date).
(E) For the purposes of this paragraph 9, whether any Convertible
Preference Shares are certificated shares or uncertificated
shares on the relevant Conversion Date shall be determined by
reference to the register of members as at 12.01 a.m. on the
relevant Conversion Date or such other time as the Directors
may (subject to the facilities and requirements of the relevant
system concerned) in their absolute discretion determine.
136
(F) The Company shall use reasonable endeavours to procure that the
Ordinary Shares arising on conversion of Convertible Preference
Shares are admitted to the Official List of The London Stock
Exchange at the earliest practicable date following issue and
allotment of such.
137
SCHEDULE 3
Non-Cumulative Category II Convertible Sterling Preference Shares
1. The Non-cumulative Category II Convertible Sterling Preference Shares
are New Preference Shares. They shall rank after the Cumulative
Preference Shares to the extent specified in Article 4 and this
Schedule 3, and shall rank pari passu inter se and (save as aforesaid)
with the Cumulative Preference Shares and with all other New Preference
Shares. They shall confer the rights and be subject to the restrictions
set out or referred to in this Schedule 3. The Non-cumulative Category
II Convertible Sterling Preference Shares may be issued in one or more
separate series, and each series shall be identified in such manner as
the Directors may determine without any such determination or
identification requiring any alteration to these presents.
2. Each Non-cumulative Category II Convertible Sterling Preference Share
shall confer the following rights as to participation in the profits
and assets of the Company, receipt of notices, attendance and voting at
meetings, redemption and conversion:
2.1 Income
The right (subject to the provisions of paragraph 2.2, if applicable)
to a non-cumulative preferential dividend at nine per cent per annum,
accruing daily, payable twice yearly on 31 March and 30 September (each
a "dividend payment date" and each such period being a "dividend
period") (whether earned or declared or not) with the first dividend
payment date being 31 March 2000. References in these presents to a
"dividend" on the Non-cumulative Category II Convertible Sterling
Preference Shares include a reference to each dividend in respect of
each dividend period applicable thereto and references in this Schedule
to dividend payment dates and dividend periods are to dividend payment
dates and dividend periods in respect of the Non-cumulative Category II
Convertible Sterling Preference Shares only. Such dividends shall be
paid in priority to the payment of any dividends on the Ordinary
Shares. The Non-cumulative Category II Convertible Sterling Preference
Shares shall rank for dividend after the Cumulative Preference Shares,
pari passu with the Non-cumulative Sterling Preference Shares, the
Non-cumulative Dollar Preference Shares, the Category II Non-cumulative
Dollar Preference Shares, all other Convertible Preference Shares and
all other New Preference Shares expressed to rank pari passu therewith
as regards participation in profits and otherwise in priority to any
other share capital in the Company.
2.2 Further provisions as to income
The following provisions shall apply:
(i) if, in the opinion of the Directors, the distributable profits
of the Company are sufficient to cover the payment in full of
dividends on the Non-cumulative Category II Convertible
Sterling Preference Shares on any dividend payment date and
also the payment in full of all other dividends stated to be
payable on such date on any other New Preference Share
expressed to rank pari passu therewith as regards participation
in profits, after payment in full, or the setting aside of a
sum to cover the payment in full, of all dividends stated to be
payable on such date on any Cumulative Preference Share, then
each such dividend shall be paid in full;
(ii) if, in the opinion of the Directors, the distributable profits
of the Company are insufficient to cover the payment in full of
dividends on the Non-cumulative
138
Category II Convertible Sterling Preference Shares on any
dividend payment date and also the payment in full of all other
dividends stated to be payable on such date on any other New
Preference Share expressed to rank pari passu therewith as
regards participation in profits, after payment in full, or the
setting aside of a sum to cover the payment in full, of all
dividends stated to be payable on or before such date on any
Cumulative Preference Share, then dividends shall be paid pro
rata for the Non-cumulative Category II Convertible Sterling
Preference Shares and such other New Preference Shares to the
extent of the available distributable profits (if any) to the
intent that the amount of dividend paid per share on each such
Non-cumulative Category II Convertible Sterling Preference
Share and other New Preference Share will bear to each other
the same ratio as the dividends accrued per share on each such
Non-cumulative Category II Convertible Sterling Preference
Share and other New Preference Share bear to each other. If it
shall subsequently appear that any such dividend which has been
paid should not, in accordance with the provisions of this
sub-paragraph, have been so paid, then provided the Directors
shall have acted in good faith, they shall not incur any
liability for any loss which any shareholder may suffer in
consequence of such payment having been made;
(iii) if, in the opinion of the Directors, the payment of any
dividend on any Non-cumulative Category II Convertible Sterling
Preference Shares would breach or cause a breach of the capital
adequacy requirements of the Financial Services Authority (or
any person or body to whom the banking supervision functions of
the Financial Services Authority are transferred) applicable to
the Company and/or any of its subsidiaries, then none of such
dividend shall be declared or paid;
(iv) subject to sub-paragraph (v) below, the Non-cumulative Category
II Convertible Sterling Preference Shares shall carry no
further right to participate in the profits of the Company and
if and to the extent that any dividend or part thereof is on
any occasion not paid for the reasons described in
sub-paragraph (ii) or (iii) above, the holders of such shares
shall have no claim in respect of such non-payment;
(v) if any date on which dividends are payable on Non-cumulative
Category II Convertible Sterling Preference Shares is not a day
on which banks in London are open for business (a Sterling
Business Day), then payment of the dividend payable on such
date will be made on the succeeding Sterling Business Day and
without any interest or other payment in respect of such delay
unless such day shall fall within the next calendar month
whereupon such payment will be made on the preceding Sterling
Business Day;
(vi) dividends payable on Non-cumulative Category II Convertible
Sterling Preference Shares shall accrue from and including the
date of issue thereof, and the amount of dividend payable in
respect of any period shorter than a full dividend period will
be calculated on the basis of twelve 30 day months, a 360 day
year and the actual number of days elapsed in such period;
(vii) if any dividend stated to be payable on the Non-cumulative
Category II Convertible Sterling Preference Shares on the most
recent dividend payment date has not been paid in full, no
dividends may be paid on any other share capital of the Company
(other than the Cumulative Preference Shares); and
(viii) if any dividend stated to be payable on the Non-cumulative
Category II Convertible Sterling Preference Shares on any
dividend payment date has not been paid in full, or if a sum
has not been set aside to provide for such payment in full, the
Company may
139
not redeem or purchase or otherwise acquire for any
consideration any other share capital of the Company, and may
not set aside any sum nor establish any sinking fund for the
redemption or purchase of other such acquisition thereof, until
such time as dividends stated to be payable on the
Non-cumulative Category II Convertible Sterling Preference
Shares in respect of successive dividend periods together
aggregating no less than twelve months shall thereafter have
been declared and paid in full.
2.3 Capital
Subject to sub-paragraph 2.3(iii), the right on a winding up or
liquidation, voluntary or otherwise other than (unless otherwise
provided by the terms of issue of such share) a redemption or purchase
by the Company of any shares of any class to receive in Sterling out of
the surplus assets of the Company available for distribution amongst
the members:
(i) after payment of the arrears (if any) of the fixed cumulative
preferential dividends stated to be payable on the Cumulative
Preference Shares to the holders thereof in accordance with
Article 4(B) FIRSTLY and pari passu with the holders of any
other New Preference Shares expressed to rank pari passu
therewith as regards participation in profits and in priority
to the holders of the Ordinary Shares of the Company a sum
equal to:
(A) the amount of any dividend which is due for payment
after the date of commencement of the winding up or
liquidation but which is payable in respect of a period
ending on or before such date; and
(B) any further amount of dividend payable in respect of
the period from the preceding dividend payment date to
the date of payment in accordance with this
sub-paragraph (i);
but only to the extent that any such amount or further amount
was, or would have been payable as a dividend in accordance
with or pursuant to this Schedule 3 (other than pursuant to
this provision); and
(ii) subject thereto, pari passu with the holders of the Cumulative
Preference Shares and any other New Preference Shares expressed
to rank pari passu therewith as regards participation in
surplus assets in priority to the holders of the Ordinary
Shares of the Company, a sum equal to the amount paid up or
credited as paid up on the Non-cumulative Category II
Convertible Sterling Preference Shares (including any premium
paid to the Company in respect thereof on issue).
If upon any such winding-up or liquidation, the amounts
available for payment are insufficient to cover the amounts
payable in full on the Cumulative Preference Shares, the
Non-cumulative Category II Convertible Sterling Preference
Shares and on any other New Preference Shares expressed to rank
pari passu therewith as regards participation in surplus
assets, then the holders of the Cumulative Preference Shares,
the Non-cumulative Category II Convertible Sterling Preference
Shares and such other New Preference Shares will share rateably
in the distribution of surplus assets (if any) in proportion to
the full respective preferential amounts to which they are
entitled. No Non-cumulative Category II Convertible Sterling
Preference Share shall confer any right to participate in the
surplus assets of the Company other than that set out in this
paragraph 2.3.
140
(iii) If, whilst any Non-cumulative Category II Convertible Sterling
Preference Shares remain in issue, an effective resolution is
passed or an order of a court of competent jurisdiction is made
for the winding-up of the Company, then (unless it be for the
purpose of a solvent reconstruction, amalgamation, merger or
other similar arrangement) the Company will forthwith give
notice in writing to the holders of any Non-cumulative Category
II Convertible Sterling Preference Shares that such a
resolution has been passed or such an order has been made. Any
holder of any Non-cumulative Category II Convertible Sterling
Preference Shares shall be entitled at any time within three
months after the date on which such notice is published to
elect by notice in writing delivered to the Company to be
treated as if he had, immediately before the date of the
passing of such resolution or the making of such order
exercised his right to convert in respect of some or all (as
specified in such latter notice) of any Non-cumulative Category
II Convertible Sterling Preference Shares held by him pursuant
to the procedure for conversion set out in paragraph 2.7 below
and by reference to a deemed Conversion Date being the date of
the passing of such resolution or the making of such order and
he shall be entitled to receive out of the assets which would
otherwise be available in the liquidation to the Ordinary
Shareholders, such a sum, if any, which he would have received
had he been the holder of the Ordinary Shares to which he would
have become entitled by virtue of such exercise.
2.4 Receipt of Notices
The right to have sent to the holder of each Non-cumulative Category II
Convertible Sterling Preference Share (at the same time as the same are
sent to the holders of Ordinary Shares) a copy of the Company's Annual
Report and Accounts and Interim Financial Statement and any other
document sent to holders of Ordinary Shares.
2.5 Attendance and Voting at Meetings
The right to attend at a General Meeting of the Company and to speak to
or vote upon any Resolution proposed thereat in the following
circumstances:
(i) in respect of a Resolution which is to be proposed at the
Meeting either varying or abrogating any of the rights attached
to the Non-cumulative Category II Convertible Sterling
Preference Shares or proposing the winding up of the Company
(and then in each such case only to speak to and vote upon any
such Resolution); and
(ii) in circumstances where, at the date of the notice convening the
relevant meeting, the dividend stated to be payable on the
Non-cumulative Category II Convertible Sterling Preference
Shares in respect of the last completed dividend period has not
been paid in full, and until the next dividend payment date
when the dividend in respect of a dividend period is paid in
full
but not otherwise, together with the right, in such circumstances and
on such terms, if any, as the Directors may determine prior to
allotment of the Non-cumulative Category II Convertible Sterling
Preference Shares, to seek to requisition a General Meeting of the
Company. Whenever holders of Non-cumulative Category II Convertible
Sterling Preference Shares are so entitled to vote on a Resolution, on
a show of hands every such holder who is present in person shall have
one vote and, on a poll, every such holder who is present in person or
by proxy shall have such number of votes for each Non-cumulative
Category II Convertible Sterling Preference Share held he would have
had if that share had been converted into Ordinary Shares on the date
of the notice of the meeting pursuant to the
141
conversion procedure set out in paragraph 2.7 of this Schedule 3 and at
a price per Ordinary Share calculated on the basis that the date of the
notice of the meeting was a Conversion Date.
2.6 Redemption
Each series of Non-cumulative Category II Convertible Sterling
Preference Shares shall, subject to the provisions of the Statutes, and
subject, where applicable, to the prior consent of the Financial
Services Authority, be redeemable at the option of the Company in
accordance with the following provisions:
(A) the Company may, subject thereto, redeem on any Redemption Date
(as hereinafter defined) all or some only of the Non-cumulative
Category II Convertible Sterling Preference Shares by giving to
the holders of the Non-cumulative Category II Convertible
Sterling Preference Shares to be redeemed not less than 7 days'
nor more than 14 days' prior notice in writing (a Notice of
Redemption) of the relevant Redemption Date. Redemption Date
means in relation to a Non-cumulative Category II Convertible
Sterling Preference Share, any date which falls no earlier than
30 days after the date of allotment of the Non-cumulative
Category II Convertible Sterling Preference Share to be
redeemed. The Company shall not be entitled (save with the
consent of the relevant holder) to give a Notice of Redemption
under this sub-paragraph (A) in respect of any share for which
a Conversion Notice (as defined in paragraph 2.7(v) of this
Schedule 3) has been given in accordance with that Part and not
withdrawn;
(B) there shall be paid on each Non-cumulative Category II
Convertible Sterling Preference Share so redeemed in Sterling,
the aggregate of the nominal amount thereof together with any
premium paid on issue and together with accruals (if any) of
dividends thereon in respect of the period from the dividend
payment date last preceding the Redemption Date (whether earned
or declared or not) to the Redemption Date;
(C) in the case of a redemption of some only of the Non-cumulative
Category II Convertible Sterling Preference Shares in any
series, the Company shall for the purpose of determining the
particular Non-cumulative Category II Convertible Sterling
Preference Shares to be redeemed cause a drawing to be made at
the Office or such other place as the Directors may approve in
the presence of the Auditors for the time being of the Company,
provided that there shall be excluded from such drawing any
Non-cumulative Category II Convertible Sterling Preference
Shares to be converted pursuant to paragraph 2.7 of this
Schedule 3;
(D) any Notice of Redemption given under sub-paragraph (A) above
shall specify the applicable Redemption Date, the particular
Non-cumulative Category II Convertible Sterling Preference
Shares to be redeemed and the redemption price (specifying the
amount of the accrued and unpaid dividend per share to be
included therein and stating that dividends on the
Non-cumulative Category II Convertible Sterling Preference
Shares to be redeemed will cease to accrue on redemption), and
shall state the place or places at which documents of title in
respect of such Non-cumulative Category II Convertible Sterling
Preference Shares are to be presented and surrendered for
redemption and payment of the redemption monies is to be
effected. Upon such Redemption Date, the Company shall redeem
the particular Non-cumulative Category II Convertible Sterling
Preference Shares to be redeemed on that date subject to the
provisions of this paragraph and of the Statutes. No defect in
142
the Notice of Redemption or in the giving thereof shall affect
the validity of the redemption proceedings;
(E) subject to sub-paragraph (I) below, the provisions of this and
the following sub-paragraph shall have effect in relation to
Non-cumulative Category II Convertible Sterling Preference
Shares for the time being issued and registered in the Register
of Members (Registered Shares) and represented by certificates
(Certificates) and in relation to Non-cumulative Category II
Convertible Sterling Preference Shares which, in accordance
with Article 52 of these presents, are for the time being
issued and represented by a Warrant (as defined in the said
Article 52) (Bearer Shares). Payments in respect of the amount
due on redemption of a Registered Share shall be made by
Sterling cheque drawn on a bank in London or upon the request
of the holder or joint holders not later than the date
specified for the purpose in the Notice of Redemption by
transfer to a Sterling account maintained by the payee with a
bank in London. Such payment will be against presentation and
surrender of the relative Certificate at the place or one of
the places specified in the Notice of Redemption and if any
Certificate so surrendered includes any Non-cumulative Category
II Convertible Sterling Preference Shares not to be redeemed on
the relevant Redemption Date (other than Non-cumulative
Category II Convertible Sterling Preference Shares to be
converted pursuant to paragraph 2.7 of this Schedule 3) the
Company shall within fourteen days thereafter issue to the
holder, free of charge, a fresh Certificate in respect of such
Non-cumulative Category II Convertible Sterling Preference
Shares. Payment in respect of the amount due on redemption of a
Bearer Share shall be made by Sterling cheque drawn on a bank
in London or upon the request of the holder not later than the
date specified for the purpose in the Notice of Redemption by
transfer to a Sterling account maintained by the payee with a
bank in London. Such payments will be made against presentation
and surrender of the Warrant and all unmatured dividend coupons
and talons (if any) at the place or the places specified in the
Notice of Redemption. Upon the relevant Redemption Date all
unmatured dividend coupons and any talon for additional
dividend coupons appertaining thereto (whether or not returned)
shall become void and no payment will be made in respect
thereof. If the Warrant so surrendered represents any
Non-cumulative Category II Convertible Sterling Preference
Shares not to be redeemed on the relevant Redemption Date
(other than Non-cumulative Category II Convertible Sterling
Preference Shares to be converted pursuant to paragraph 2.7 of
this Schedule 3) the Company shall issue, free of charge, a
fresh Warrant representing such Bearer Shares which are not to
be redeemed on such Redemption Date.
All payments in respect of redemption monies will in all
respects be subject to any applicable fiscal or other laws;
(F) as from the relevant Redemption Date the dividend on the
Non-cumulative Category II Convertible Sterling Preference
Shares due for redemption shall cease to accrue except on any
such Non-cumulative Category II Convertible Sterling Preference
Shares in respect of which, upon the due surrender of the
Certificate or, as the case may be, the Warrant and all
unmatured dividend coupons and talons (if any) in respect
thereof, in accordance with sub-paragraph (E) above, payment of
the redemption monies due on such Redemption Date shall be
improperly withheld or refused, in which case such dividend, at
the rate then applicable, shall be deemed to have continued and
shall accordingly continue to accrue from the relevant
Redemption Date to the date of payment of such redemption
monies. Such Non-cumulative Category II Convertible Sterling
Preference Share shall not be treated as
143
having been redeemed until the redemption monies in question
together with the accrued dividend thereon shall have been
paid;
(G) if the due date for the payment of the redemption monies on any
Non-cumulative Category II Convertible Sterling Preference
Shares is not a Sterling Business Day then payment of such
monies will be made on the next succeeding day which is a
Sterling Business Day and without any interest or other payment
in respect of such delay unless such day shall fall within the
next calendar month whereupon such payment will be made on the
preceding Sterling Business Day;
(H) the receipt of the holder for the time being of any Registered
Share (or in the case of joint holders the receipt of any one
of them) and the receipt of the person delivering any Warrant
to the place or one of the places specified pursuant to
sub-paragraph (D) above in respect of the monies payable on
redemption on such Registered Share or, as the case may be,
such Bearer Share, shall constitute an absolute discharge to
the Company; and
(I) subject as aftermentioned, the provisions of sub-paragraph (E)
and (F) above shall have effect in relation to Registered
Shares which are in uncertificated form within the meaning of
the Uncertificated Securities Regulations 1995 (as in force on
the date of adoption of this Schedule 3) in the same manner as
they have effect in relation to Registered Shares represented
by Certificates, save that (i) any provision of the said
paragraphs requiring presentation and surrender of a
Certificate shall be satisfied in the manner prescribed or
permitted by the said Regulations (or by any enactment or
subordinate legislation which amends or supersedes those
Regulations) or (subject to those Regulations or such enactment
or subordinate legislation) in such manner as may from time to
time be prescribed by the Directors), and (ii) the Company
shall not be under any obligation to issue a fresh Certificate
under sub-paragraph (E).
2.7 Conversion
(i) Each holder of Non-cumulative Category II Convertible Sterling
Preference Shares shall be entitled in the manner set out in
(and subject to the provisions of) this paragraph 2.7 to
convert into fully paid Ordinary Shares such of his
Non-cumulative Category II Convertible Sterling Preference
Shares as have not, as at the last date, prior to the relevant
Conversion Date, for the provision of notice of conversion
under sub-paragraph (viii) below, either been redeemed or been
the subject of a valid Notice of Redemption given under
paragraph 2.6 of this Schedule 3.
(ii) If, as at the Final Conversion Date, any of the Non-cumulative
Category II Convertible Sterling Preference Shares have not
been either redeemed, the subject of a valid Notice of
Redemption given under paragraph 2.6 of this Schedule 3 or
converted into Ordinary Shares, then all such Non-cumulative
Category II Convertible Sterling Preference Shares will convert
into fully paid Ordinary Shares in the manner set out in (and
subject to the provisions of) this paragraph 2.7.
(iii) For the purpose of this paragraph 2.7:
(A) the Conversion Dates shall be 30 September 2001, 31
March 2002, 30 September 2002 and the Final Conversion
Date (which is also for the avoidance of doubt a
Conversion Date) shall be 31 March 2003;
144
(B) the conversion right referred to in sub-paragraph (i)
above shall be exercisable by completion of a
Conversion Notice (as defined in sub-paragraph (v)
below) submitted by holders of Non-cumulative Category
II Convertible Sterling Preference Shares (Converting
Holders) setting out the number of Non-cumulative
Category II Convertible Sterling Preference Shares
which are to be converted pursuant to such notice (the
Conversion Amount) and lodging such Conversion Notice
with the Company's Registrar at any time during the
period and in the manner referred to in sub-paragraph
(viii) below;
(C) the Redemption Amount in relation to a Non-cumulative
Category II Convertible Sterling Preference Share means
the nominal amount thereof together with any premium
paid on issue;
(iv) The number of Ordinary Shares to be issued on the conversion of
each Non-cumulative Category II Convertible Sterling Preference
Share shall be determined by dividing the Redemption Amount by
the Conversion Price. In the case of Non-cumulative Category II
Convertible Sterling Preference Shares which are converted on
any of the Conversion Dates, the Conversion Price shall be the
higher of:
(A) the weighted average closing price per Ordinary Share
on the London Stock Exchange during the period of the
20 London Stock Exchange dealing days (on which the
trading in the Ordinary Shares is not fully suspended)
ending five London Stock Exchange dealing days before
the relevant Conversion Date; and
(B) (pound)5
Fractions of Ordinary Shares will not be issued on conversion
and no cash adjustment will be made. However, if more than one
Non-cumulative Category II Sterling Preference Share held by
any holder is to be converted and the Ordinary Shares arising
on conversion are to be registered in the same name, the number
of Ordinary Shares to be issued in respect thereof shall be
calculated on the basis of the aggregate Redemption Amount of
such Non-cumulative Category II Sterling Preference Shares.
If at the time that the Conversion Price is to be calculated
the Ordinary Shares are not listed and traded on the London
Stock Exchange, references in this article to the London Stock
Exchange shall be to such other exchange on which the Ordinary
Shares are listed and traded.
(v) For the purposes of conversion pursuant to sub-paragraph (i)
above, a Conversion Notice means, in relation to any
Non-cumulative Category II Convertible Sterling Preference
Shares, which as at the date of such notice, are Registered
Shares (as defined in paragraph 2.6 of this Schedule 3), a
Certificated Conversion Notice (as defined in sub-paragraph
(vi) below) or, in relation to any Non-cumulative Category II
Convertible Sterling Preference Shares that, as at the date of
such notice, are Bearer Shares (as defined in the said
paragraph 2.6), an Uncertificated Conversion Notice (as defined
in sub-paragraph (vii) below).
(vi) In relation to any Non-cumulative Category II Convertible
Sterling Preference Shares that, as at the date of the relevant
Conversion Notice, are Registered Shares, the right to convert
shall be exercised if the registered holder of any such
Category II
145
Convertible Sterling Preference Shares, shall have delivered to
the Company's Registrar, at any time during the period referred
to in sub-paragraph (viii) below, a duly signed and completed
Conversion Notice in such form as may from time to time be
prescribed by the Directors (and obtainable from the Company's
Registrar) (a Certified Conversion Notice) together with the
Certificate for such shares (or an appropriate form of
indemnity).
(vii) In relation to any Non-cumulative Category II Convertible
Sterling Preference Shares that, as at the date of the relevant
Conversion Notice, are Bearer Shares, the right to convert
shall be exercised if an Uncertificated Conversion Notice is
received as referred to below at any time during the period
referred to in sub-paragraph (viii) below. For these purposes,
an Uncertificated Conversion Notice shall mean an instruction
and/or notification received by the Company or such person as
it may require in such form and having such effect as may in
each case from time to time be prescribed by the Directors
(subject always to the facilities and requirements of the
relevant system) and details of which shall be obtainable from
the Company's Registrar. Without prejudice to the generality of
the foregoing, the form of Conversion Notice referred to above
may be such as to require the holder of the Non-cumulative
Category II Convertible Sterling Preference Shares concerned to
transfer such Non-cumulative Category II Convertible Sterling
Preference Shares into such account as may be specified by the
Company in the Uncertified Conversion Notice.
(viii) The period referred to in sub-paragraphs (vi) and (vii) above
for the delivery of a Conversion Notice is the period falling
not less than 7 and not more than 30 days prior to the relevant
Conversion Date. Unless the Directors otherwise determine in
any case or cases, a Conversion Notice once delivered shall be
irrevocable.
(ix) The following provisions shall apply to conversion of the
Non-cumulative Category II Convertible Sterling Preference
Shares:-
(A) conversion may be effected in such manner as the
Directors shall, subject to the requirements of
applicable law and the provisions hereof, from time to
time determine and, without prejudice to the generality
of the foregoing, may be effected:
(aa) by the redemption of Non-cumulative Category II
Convertible Sterling Preference Shares on the
relevant Conversion Date for the Redemption
Amount and the application of the redemption
moneys on behalf of the holder of the
Non-cumulative Category II Convertible Sterling
Preference Shares so redeemed as herein
provided. In the case of a conversion effected
by means of the redemption of Non-cumulative
Category II Convertible Sterling Preference
Shares, the Directors may effect redemption of
the relevant Non-cumulative Category II
Convertible Sterling Preference Shares out of
profits of the Company which would otherwise be
available for dividend, out of the proceeds of
a fresh issue of shares or in any other manner
for the time being permitted by law. In the
case of redemption out of profits, the
Directors shall apply the Redemption Amount in
the name of the holder of the Non-cumulative
Category II Convertible Sterling Preference
Shares to be converted in subscribing for the
appropriate number of Ordinary Shares as
determined in accordance with the provisions
hereof at such premium per Ordinary Share as
shall represent the amount (if any) by which
the aggregate Redemption Amount exceeds the
aggregate nominal amount of the Ordinary Shares
to which the holder is so entitled divided by
the number of such Ordinary Shares. In the case
of redemption out of the proceeds of a fresh
issue of shares, the Directors may arrange for
the secretary of the Company or any other
person selected by the Directors to subscribe
and pay, as agent on the holder's behalf, for
the appropriate number of Ordinary Shares at
such premium per Ordinary Share as shall
represent the amount (if
146
any) by which the aggregate Redemption Amount
exceeds the aggregate nominal amount of the
Ordinary Shares to which the holder is so
entitled divided by the number of such Ordinary
Shares (and such person shall be deemed to have
authority to borrow for such purpose) and, in
any such case, a holder of Non-cumulative
Category II Convertible Sterling Preference
Shares shall be deemed irrevocably to have
authorised and instructed the Directors to
apply the Redemption Amount in payment to the
holder's agent, who shall be entitled to retain
the same for his own benefit without being
accountable therefor to the holder. In relation
to any Non-cumulative Category II Convertible
Sterling Preference Shares which at the date of
the relevant Conversion Notice are Bearer
Shares, and which are to be redeemed in
accordance with this sub-paragraph (ix)(A)(aa)
the Directors shall be entitled in their
absolute discretion to determine the procedures
for the redemption and cancellation of such
Non-cumulative Category II Convertible Sterling
Preference Shares (subject always to the
facilities and requirements of the relevant
system concerned and to the redemption on the
relevant Conversion Date of the Non-cumulative
Category II Convertible Sterling Preference
Shares concerned) and the provisions of this
sub-paragraph shall apply mutatis mutandis in
respect of such redemption; or
(bb) by means of a capitalisation issue and
consolidation. In that case the requisite
capitalisation issue and consolidation may be
effected pursuant to the authority conferred by
the passing of the resolution which created the
Non-cumulative Category II Convertible Sterling
Preference Shares, by the Company capitalising
from profits or reserves (including any share
premium account, merger reserve or capital
redemption reserve) such number of new Ordinary
Shares as shall bring the total nominal amount
of the Non-cumulative Category II Convertible
Sterling Preference Shares and the new Ordinary
Shares to at least the total nominal amount of
the Ordinary Shares into which the
Non-cumulative Category II Convertible Sterling
Preference Shares will convert on the relevant
Conversion Date, consolidating all the relevant
shares into one share (the Consolidated Share)
and sub-dividing the Consolidated Share into
the number of Ordinary Shares arising from the
conversion of the Convertible Preference
Shares. The balance of such sub-divided share
(including any fraction) shall be non-voting
deferred shares of such nominal amount as the
Directors may determine (Non-Voting Deferred
Shares), shall be certificated shares and shall
have the following rights and restrictions:
147
(1) on a winding-up or other return of
capital, the Non-Voting Deferred Shares
shall entitle the holders of the shares
only to payment of the amounts paid up
on those shares, after repayment of the
holders of the Ordinary Shares of the
nominal amount paid up on the Ordinary
Shares held by them respectively and
the payment of (pound)0.01 on each
Ordinary Share;
(2) the Non-Voting Deferred Shares shall
not entitle the holders of the shares
to the payment of any dividend or to
receive notice of or to attend or vote
at any general meeting of the Company;
(3) the Non-Voting Deferred Shares shall
not, save as provided in sub-paragraph
(4) below, be transferable;
(4) such conversion shall be deemed to
confer irrevocable authority on the
Company to appoint any person to
execute on behalf of the holders or any
Non-Voting Deferred Shares an
instrument of transfer of the shares,
and/or an agreement to transfer the
shares, to such person or persons as
the Company may determine as a
custodian of the shares or to purchase
or to cancel the shares in accordance
with the provisions of the Statutes in
any such case for not more than
(pound)0.01 for all the shares being
transferred, purchased or cancelled (to
be paid to such one of the holders as
may be selected by lot) without
obtaining the sanction of the holder or
holders of the shares, and pending such
transfer or purchase or cancellation to
retain the certificate for such
Non-Voting Deferred Shares; and
(5) the Company may at its option at any
time after the creation of any
Non-Voting Deferred Shares redeem all
of those shares then in issue at a
price not exceeding (pound)0.01 for all
the shares redeemed at any one time (to
be paid to such one of the holders as
may be selected by lot), upon giving
the holders of the Non-Voting Deferred
Shares not less than 28 days' previous
notice in writing of its intention so
to do, fixing a time and place for the
redemption. The Non-Voting Deferred
Shares will not be listed on the London
Stock Exchange. Upon or after the
redemption of any Non-Voting Deferred
Shares pursuant to this sub-paragraph
(bb) the Directors may pursuant to the
authority conferred the passing of the
resolution which created the
Non-cumulative Category II Convertible
Sterling Preference Shares consolidate
and/or sub-divide and/or convert the
authorised Non-Voting Deferred Share
capital existing as a consequence of
such redemption into shares of any
other class of share capital into which
the authorised share capital of the
Company is or may at that time be
divided of a like nominal amount (as
nearly as may be) as the shares of such
class or into unclassified shares of
the same nominal amount (as nearly as
may be) as the shares of such class or
into
148
unclassified shares of the same nominal
amount as the Non-Voting Deferred Shares.
(B) the preferential dividend on Non-cumulative Category II
Convertible Sterling Preference Shares which are
converted pursuant to this paragraph 2.7 shall cease to
accrue with effect from the relevant Conversion Date.
Ordinary Shares arising on conversion will be allotted
and registered as of the relevant Conversion Date, in
each case to and in the name of the holder of the
relevant Non-cumulative Category II Convertible
Sterling Preference Shares and shall rank pari passu
with the Ordinary Shares in issue on such Conversion
Date except that the Ordinary Shares so allotted will
not rank for any dividend or other distribution which
has been announced, declared, recommended or resolved
prior to such Conversion Date by the Directors or by
the Company in general meeting to be paid or made, if
the record date for such dividend or other distribution
is on or prior to such Conversion Date;
(C) unless the Directors otherwise determine, or unless the
Uncertificated Securities Regulations and/or the
requirements of the relevant system otherwise require,
the Ordinary Shares arising on conversion of any
Non-cumulative Category II Convertible Sterling
Preference Shares shall be or shall be issued (as
appropriate) as certificated shares (where the
Non-cumulative Category II Convertible Sterling
Preference Shares converted were, on the date of the
relevant Conversion Notice, Registered Shares or where
the relevant Converting Holder has not specified a
Crest account for this purpose in the relevant
Uncertificated Conversion Notice) or as uncertificated
shares (where the Non-cumulative Category II
Convertible Sterling Preference Shares converted were,
on the date of the relevant Conversion Notice,
uncertificated shares and the relevant Converting
Holder has specified a Crest account for this purpose
in the relevant Uncertificated Conversion Notice),
provided that if the Company is unable under the
facilities and requirements of the relevant system to
issue Ordinary Shares in respect of the person entitled
thereto in uncertificated form, such shares shall be
issued as certificates shares; and
(D) the Company shall procure that there shall be
dispatched or made free of charge (but uninsured and at
the risk of the holder or the person entitled thereto,
or the first-named thereof, as the case may be):
(aa) a certificate in respect of Ordinary Shares
arising on conversion which are, in accordance
with sub-paragraph (C) above, certificated
shares, and a new certificate for any
unconverted Non-cumulative Category II
Convertible Sterling Preference Shares
comprised in any share certificate surrendered
by the holder, not later than 28 days after the
relevant Conversion Date; and
(bb) payment in respect of the accrued preferential
dividend on the Non-cumulative Category II
Convertible Sterling Preference Shares
converted, on the payment date in respect of
such dividend next following the relevant
Conversion Date (unless such Conversion Date is
also a dividend payment date, or unless there
are no Non-cumulative Category II Convertible
Sterling Preference Shares outstanding
following such conversion in which case on such
dividend payment date).
149
(E) For the purposes of this paragraph 2.7, whether any
Non-cumulative Category II Convertible Sterling
Preference Shares are certificated shares or
uncertificated shares on the relevant Conversion Date
shall be determined by reference to the register of
members as at 12.01 a.m. on the relevant Conversion
Date or such other time as the Directors may (subject
to the facilities and requirements of the relevant
system concerned) in their absolute discretion
determine.
(F) The Company shall use reasonable endeavours to procure
that the Ordinary Shares arising on conversion of
Non-cumulative Category II Convertible Sterling
Preference Shares are admitted to the Official List of
The London Stock Exchange at the earliest practicable
date following issue and allotment of such.
(G) The Company shall ensure that at the relevant
Conversion Dates sufficient authorised but unissued
share capital is available in order to permit
conversion of the Non-cumulative Category II
Convertible Sterling Preference Shares outstanding on
such relevant Conversion Date;
3. (a) save with the written consent of the holder(s) of
three-quarters in nominal value of, or with the sanction of an
Extraordinary Resolution passed at a separate General Meeting
of the holders of, the Non-cumulative Category II Convertible
Sterling Preference Shares, the Directors shall not: (i)
authorise or create, or increase the amount of, any shares of
any class or any security convertible into shares of any class
ranking as regards rights to participate in the profits or
assets of the Company (other than on a redemption or purchase
by the Company of any such shares) in priority to the
Non-cumulative Category II Convertible Sterling Preference
Shares; or (ii) delist the Ordinary Shares from the London
Stock Exchange, except in connection with a listing of such
shares on another stock exchange of comparable standing;
(b) the special rights attached in any series of Non-cumulative
Category II Convertible Sterling Preference Shares allotted or
in issue shall not (unless otherwise provided by their terms of
issue) be deemed to be varied by the creation or issue of any
New Shares ranking as regards participation in the profits and
assets of the Company pari passu with or after such
Non-cumulative Category II Convertible Sterling Preference
Shares. Any new shares ranking pari passu with such
Non-cumulative Category II Convertible Sterling Preference
Shares may without their creation or issue being deemed to vary
the special rights attached to any Non-cumulative Category II
Convertible Sterling Preference Share then in issue either
carry rights identical in all respects with such Non-cumulative
Category II Convertible Sterling Preference Shares or any of
them or carry rights differing therefrom in any respect,
including, but without prejudice to the generality of the
foregoing, in that:
(i) the rate or means of calculating the dividend may
differ and the dividend may be cumulative or
non-cumulative;
(ii) the New Shares or any series thereof may rank for
dividend as from such date as may be provided by the
terms of issue thereof and the dates for payment of
dividend may differ;
(iii) the New Shares may be denominated in Sterling or any
Foreign Currency;
150
(iv) a premium may be payable on return of capital or there
may be no such premium;
(v) the New Shares may be redeemable at the option of the
holder or of the Company, or may be non-redeemable and
if redeemable at the option of the Company, they may be
redeemable at different dates and on different terms
from those applying to the Non-cumulative Category II
Convertible Sterling Preference Shares; and
(vi) the New Shares may be convertible into Ordinary Shares
or any other class of shares ranking as regards
participation in the profits and assets of the Company
pari passu with or after such Non-cumulative Category
II Convertible Sterling Preference Shares in each case
on such terms and conditions as may be prescribed by
the terms of issue thereof.
(c) Prior to 30 September 2000 the directors may, in their absolute
discretion and without giving any reason refuse to register the
transfer of a Non-cumulative Category II Sterling Convertible
Preference Share to any person, whether or not it is fully
paid.
151
SCHEDULE 4
Additional Value Shares
1. The Company shall have a class of Additional Value Shares. They shall
confer the rights and be subject to the restrictions set out or
referred to in this Schedule 4.
2. Each Additional Value Share shall confer the following rights as to
participation in the profits and assets of the Company, receipt of
notices, attendance and voting at meetings and conversion.
2.1 Income
The right to dividends to be paid out of the distributable profits of
the Company, subject in each case to declaration by and at the
discretion of the Directors and the provisions of sub-paragraph 2.2, as
follows:
(i) 15 pence per Additional Value Share on 1 December 2001;
(ii) 30 pence per Additional Value Share on 1 December 2002; and
(iii) 55 pence per Additional Value Share on 1 December 2003 (the
"Final Dividend Date").
References in this Schedule to a "dividend" on the Additional Value
Shares include a reference to each dividend paid on the Additional
Value Shares (whether or not in accordance with the proposed dividends
set out in this sub-paragraph 2.1 and including any dividend of a
lesser amount than stated or any dividend aggregating two or more such
dividends or any part thereof) and references to "dividend payment
dates" are to dividend payment dates in respect of the Additional Value
Shares only (such dividend payment dates being, subject to
sub-paragraph 2.2, those specified in this sub-paragraph 2.1).
2.2 Further provisions as to income
The following provisions shall apply:
(i) In deciding whether to declare and pay a dividend on the
Additional Value Shares the Directors shall have regard inter
alia to the following factors:
(A) whether the distributable profits of the Company are
sufficient to cover the payment in full of dividends on
the Additional Value Shares on any dividend payment
date and also the payment in full of all other
dividends (if any) stated to be payable on any
Cumulative Preference Share or New Preference Share
provided that in any event the Directors shall not pay
any dividend due on the Additional Value Shares if in
their opinion the distributable profits of the Company
are not likely to be sufficient to pay any dividend due
on any Cumulative Preference Share or New Preference
Share due for payment within 90 days of the relevant
dividend payment date;
(B) whether the distributable profits of the Company are
adequate or are likely to be adequate having regard to
the Company's obligation to make dividend payments on
any Cumulative Preference Share or New Preference
Share;
152
(C) the effect of the payment of such dividend on the
regulatory capital structure of the Company and on its
consolidated banking and trading book target and
trigger ratios as prescribed by the Financial Services
Authority Limited from time to time; and
(D) the Company's best interests having regard to its
future cash requirements and actual and contingent
liabilities.
(ii) Without prejudice to the foregoing and for the avoidance of
doubt, no dividend shall be paid on the Additional Value Shares
if and to the extent that such payment would constitute an
unauthorised variation or abrogation of the rights as to
participation in profits attached to the Cumulative Preference
Shares or any New Preference Shares.
(iii) Holders of Additional Value Shares shall have no claim in
respect of the failure of the Directors to declare and/or pay
any dividend(s) and the Directors shall not be bound to give
their reasons for not declaring or paying such a dividend save
that the Directors shall
announce their intention in respect of the payment of any dividend
referred to in sub-paragraph 2.1 no later than 14 days prior to the
relevant dividend payment date (save in respect of the Final Dividend
Date in which case notice must be given on or before 1 September 2003).
(iv) Dividends declared by the Directors shall be payable without
necessity for any resolution on the part of the Company in
General Meeting on the relevant dividend payment date to
holders of Additional Value Shares entered on the register of
members at the close of business on the date which falls one
calendar month before the relevant dividend payment date (or on
such other date prior to the relevant dividend payment date as
the Directors may in their absolute discretion decide).
(v) Subject to sub-paragraph 2.1 and this sub-paragraph 2.2, if and
to the extent that any dividend is not declared for payment on
any dividend payment date (whether in whole or in part), such
amount shall fall to be considered for payment on the following
dividend payment date in addition to any dividend falling to be
considered for payment on that date.
(vi) No Additional Value Share shall carry any right to participate
in the profits of the Company other than as set out in
sub-paragraph 2.1 above and this sub-paragraph 2.2.
(vii) If any dividend payment date in respect of which dividends are
declared to be payable in accordance with sub-paragraph 2.1
above is not a day on which banks in London are open for
business (a "Business Day"), then payment of the dividend
payable on such date will be made on the next succeeding
Business Day and without any interest or other payment in
respect of such delay.
(viii) Save as set out in sub-paragraph 2.7(xiv) and for the avoidance
of doubt, the Company shall be free to pay dividends or make
other distributions to any holder of any other class of shares
in the capital of the Company (including for the avoidance of
doubt, the Cumulative Preference Shares, New Preference Shares
and the Ordinary Shares) notwithstanding that the Directors
have not declared and/or paid any dividend on the Additional
Value Shares.
153
2.3 Capital
The right on a winding up, liquidation or other return of capital other
than a redemption or purchase by the Company of any shares of any
class, to receive in respect of each Additional Value Share in Sterling
out of the surplus assets of the Company available for distribution
amongst the members in priority to the holders of the Ordinary Shares
of the Company but after payment of all amounts outstanding to holders
of Cumulative Preference Shares and New Preference Shares and any other
share in the capital of the Company expressed to rank as to
participation in capital or assets in priority to the Additional Value
Shares, an amount of (pound)1 less the aggregate amount of any
dividends paid in respect of each Additional Value Share prior to the
date of the winding up or liquidation (but for the avoidance of doubt
excluding any distribution paid in the winding up or liquidation).
If on any such winding up, liquidation or other return of capital the
amounts available for payment are insufficient to cover in full the
amounts payable on the Additional Value Shares on such return of
capital, the holders of such Additional Value Shares will share
rateably in the distribution of assets (if any) in proportion to the
full amounts to which they are respectively entitled under this
sub-paragraph 2.3.
No Additional Value Share shall confer any further right to participate
in the capital or assets of the Company available for distribution
among the members other than as set out in this sub-paragraph 2.3.
2.4 Receipt of Notices
The right to have sent to the holder of each Additional Value Share (at
the same time as the same are sent to the holders of Ordinary Shares) a
copy of the Company's Annual Report and Accounts and/or Interim
Financial Statement together with any notice of any General Meeting of
the Company at which such holder is entitled to attend and vote.
2.5 Attendance and Voting at Meetings
The right to attend at a General Meeting of the Company and to speak to
or vote upon any Resolution proposed thereat in circumstances where it
is proposed at the Meeting either to vary or abrogate any of the rights
attached to the Additional Value Shares or proposing the winding up of
the Company (and then in each such case only to speak to and vote upon
any such Resolution) but not otherwise.
Whenever holders of Additional Value Shares are so entitled to vote on
a Resolution, on a show of hands every such holder who is present in
person shall have one vote and, on a poll, every such holder who is
present in person or by proxy shall have such number of votes for the
Additional Value Shares held by him as he would have had if those
shares had been converted into Ordinary Shares on the date of the
notice of the meeting pursuant to the conversion procedure set out in
paragraph 2.7 of this Schedule 4 and at a price per Additional Value
Share calculated on the basis that the date of the notice of the
meeting was the Second Conversion Date.
2.6 De-listing and Conversion into Non-Voting Deferred Shares
The Directors shall be entitled (without being required to obtain the
sanction of any holder of any Additional Value Share) in their absolute
discretion and shall have irrevocable authority at any time after the
payment of aggregate dividends of (pound)1 in respect of each
Additional Value Share to procure that the Additional Value Shares be
de-listed from the Official List of the UK
154
Listing Authority and from trading on the London Stock Exchange's
market for listed securities. The Additional Value Shares shall convert
automatically into non-voting deferred shares of (pound)0.01
("Non-Voting Deferred Shares"), which shall be certificated shares and
shall have the following rights and restrictions only:
(i) On a winding-up or other return of capital, the Non-Voting
Deferred Shares shall entitle the holders of such shares only
to payment of the amounts paid up on those shares, after
repayment to the holders of Ordinary Shares of the nominal
amount paid up on the Ordinary Shares held by them respectively
and the payment of (pound)100,000 on each Ordinary Share.
(ii) The Non-Voting Deferred Shares shall not entitle the holders of
such shares to the payment of any dividend or other
distribution or to receive notice of or to attend or vote at
any general meeting of the Company or otherwise receive any
shareholder communication.
(iii) The Non-Voting Deferred Shares shall not, save as provided
below or otherwise with the written consent of the Directors,
be transferable.
(iv) Notwithstanding any other provision in these presents and
unless specifically required by the provisions of the 1985 Act,
the Company shall not be required to issue any certificates in
respect of any Non-Voting Deferred Shares.
(v) Following conversion, the Non-Voting Deferred Shares shall be
transferred for no consideration to such person as may be
nominated by the Directors, whether or not an officer of the
Company (and for such purposes the Directors shall have
irrevocable authority to appoint a person on behalf of any
holder of Non-Voting Deferred Shares to enter into an agreement
to transfer and to execute and deliver a transfer of his
Non-Voting Deferred Shares to such other person).
2.7 Conversion into Ordinary Shares
(i) If on 1 September 2003 aggregate dividends of(pound)1 have not
been paid in respect of each Additional Value Share, then
unless the Directors have resolved that a dividend be paid on
the Additional Value Shares on or before the Final Dividend
Date of such amount that aggregate dividends paid on Additional
Value Shares will be(pound)1 (and that dividend is duly paid on
or before the Final Dividend Date or the following Business Day
where that date is not a Business Day), the Additional Value
Shares shall be converted into fully paid up Ordinary Shares in
the manner set out (and subject to the provisions of) this
paragraph 2.7 and the Company shall use its reasonable efforts,
to the extent permitted by applicable law, to arrange for a
sale of the Ordinary Shares arising on conversion pursuant to
paragraph 2.7(iii) below.
(ii) For the purpose of this paragraph 2.7:
(A) the Settlement Amount in relation to each Additional
Value Share means an amount of (pound)1 less the
aggregate amount of any dividends paid in respect of
that share;
(B) the Aggregate Settlement Amount in relation to any
particular holding of Additional Value Shares means the
aggregate Settlement Amount relating to the number of
Additional Value Shares comprised in that holding and
where the
155
context requires, the Aggregate Settlement Amount
relating to all Additional Value Shares to be
converted;
(C) the First Conversion Date shall be 25 London Stock
Exchange trading days prior to the Second Conversion
Date and the Second Conversion Date shall be the Final
Dividend Date;
(D) the expression "holder" shall include a person entitled
by transmission and the expressions "hold" and
"holding" shall be construed accordingly; and
(E) each joint holding in respect of which names of the
joint holders differ or are listed in a different order
shall be treated as a separate holding and the
expressions "held" and "holder" shall be construed
accordingly.
(iii) The Company will use its reasonable efforts, to the extent
permitted by applicable law, to arrange for the sale of the
Ordinary Shares into which such Additional Value Shares will
convert so as to raise net cash proceeds of an amount equal to
the Aggregate Settlement Amount in respect of such Additional
Value Shares. The sale will be conducted by means of a process
pursuant to which a broker selected by the Company (the
"Broker") will solicit bids for the relevant Ordinary Shares
(the "Placing"). Such bids will be solicited during the period
of 20 London Stock Exchange trading days ending five London
Stock Exchange trading days before the First Conversion Date.
The Company will not in any circumstances be obliged to procure
the transfer of Ordinary Shares in connection with the Placing
at a price per share of less than the nominal value of the
Ordinary Shares (the "Base Price").
(iv) On the First Conversion Date there shall be converted in
accordance with sub-paragraph 2.7(xv) the whole or such
proportion of each holding of Additional Value Shares as shall
be determined by the Directors in the light of the outcome of
the Placing. The number of Ordinary Shares into which each
Additional Value Share which is converted on the First
Conversion Date is to be converted shall be such that the
aggregate number of Ordinary Shares arising on the First
Conversion Date shall be sufficient for the purposes of the
Placing.
(v) On the First Conversion Date:
(A) the Company shall procure the transfer to the Broker or
as the Broker shall direct, of the Ordinary Shares so
placed; and
(B) the Broker shall collect the net cash proceeds of the
Placing and hold such proceeds in separate bank
account(s) until the Second Conversion Date.
The Directors shall have irrevocable authority on behalf of
each holder of an Additional Value Share to appoint any person
on behalf of such holder to enter into an agreement to transfer
and to execute and deliver a transfer of the Ordinary Shares
resulting from conversion on the First Conversion Date.
(vi) If the proceeds of the Placing are sufficient to enable the
Company to pay to each holder of Additional Value Shares the
Aggregate Settlement Amount in respect of his holding, the
whole of the Additional Value Shares shall be converted on the
First Conversion Date and on the Second Conversion Date the net
cash proceeds of the Placing (if any) held by the Broker (the
"Total Cash Amount") shall be paid to the persons who were
holders of the Additional Value Shares immediately prior to
conversion.
156
(vii) If the proceeds of the Placing are not sufficient to enable the
Company to pay to each holder of Additional Value Shares the
Aggregate Settlement Amount then part only of the Additional
Value Shares (determined in accordance with paragraph (iv)
above) shall be converted on the First Conversion Date and on
the Second Date:
(A) the Total Cash Amount shall be paid to the persons who
were holders of the Additional Value Shares immediately
prior to conversion pro rata to their holding of
Additional Value Shares, and the amount (if any) by
which the cash paid or payable to a holder falls short
of the Aggregate Settlement Amount shall be the
"Remaining Settlement Amount"; and
(B) on the Second Conversion Date the remaining Additional
Value Shares shall be converted into such number of
Ordinary Shares so that the persons who were holders of
Additional Value Shares immediately prior to conversion
receive the whole number of Ordinary Shares (if any)
calculated by dividing the Remaining Settlement Amount
by the Conversion Price, being the higher of (i) 95% of
the weighted average closing price per Ordinary Share
on the London Stock Exchange during the period of 20
London Stock Exchange dealing days ending five London
Stock Exchange dealing days before the Second
Conversion Date and (ii) the nominal value of the
Ordinary Shares.
(viii) If there is no Placing or if a dividend resolved upon as at 1
September 2003 is not paid on the Final Dividend Date (or the
following Business Day where that date is not a Business Day)
then on or as soon as possible after the Second Conversion Date
all the Additional Value Shares shall be converted into such
number of Ordinary Shares so that each holder receives the
whole number of Ordinary Shares (if any) calculated by dividing
the Settlement Amount by the Conversion Price, being the higher
of (i) 95% of the weighted average closing price per Ordinary
Share on the London Stock Exchange during the period of 20
London Stock Exchange dealing days ending five London Stock
Exchange dealing days before the Second Conversion Date and
(ii) the nominal value of the Ordinary Shares.
(ix) Where the conversion would otherwise result in a holder being
entitled to a fraction of an Ordinary Share such holder's
entitlement shall be rounded up or down as the Directors may
determine.
(x) If at the time that the Conversion Price or Base Price is to be
calculated the Ordinary Shares are not traded on the London
Stock Exchange, references in this article to the London Stock
Exchange shall be to such other competent authority or exchange
with or on which the Ordinary Shares are listed or traded (as
the case may be).
(xi) The conversion of Additional Value Shares into fully paid
Ordinary Shares shall be conditional on:
(A) the Company, as at the First Conversion Date or the
Second Conversion Date (as the case may be), having
sufficient authorised but unissued share capital to
issue such Non-Voting Deferred Shares of (pound)0.01 as
may fall to be issued on such date in connection with
the conversion of Additional Value Shares;
(B) the number of Non-Voting Deferred Shares of (pound)0.01
which the Directors have been authorised to issue
pursuant to Section 80 of the 1985 Act being
sufficient, as at the First Conversion Date or the
Second Conversion Date (as the case may
157
be) to allot the shares falling to be allotted on such
date in connection with the conversion of Additional
Value Shares or the Directors having been authorised
prior to such date pursuant to section 80 to allot such
shares (together with the condition set out in (A)
above, the "Relevant Shareholder Approvals"); and
(C) there being sufficient profits or reserves available
for capitalisation to enable the Company to allot
credited as fully paid the number of Non-Voting
Deferred Shares of (pound)0.01 each falling to be
allotted as aforesaid.
(xii) The Company shall use its reasonable efforts to ensure that
sufficient authorised but unissued share capital and sufficient
profits or reserves are available in order to permit conversion
of the Additional Value Shares outstanding on the relevant
Conversion Date. If the Relevant Shareholder Approvals (or
profits or reserves) are insufficient to permit the allotment
and issue of such number of Non-Voting Deferred Shares as fall
to be allotted and issued on the First Conversion Date or the
Second Conversion Date in connection with the conversion of
Additional Value Shares, the Company undertakes to convert the
maximum number of Additional Value Shares which it is legally
permitted to convert under the existing Relevant Shareholder
Approvals (and having regard to existing profits or reserves)
pro rata to the respective entitlement of holders. Any
Additional Value Shares which could not be converted as at the
First Conversion Date and the Second Conversion Date shall be
"Unconverted Additional Value Shares".
(xiii) Unconverted Additional Value Shares will be converted into
Ordinary Shares as soon as the Company has sufficient
authorised and unissued shares, and sufficient available
profits or reserves, to permit conversion of Unconverted
Additional Value Shares in full. Paragraphs (ii) to (x) of this
Paragraph 2.7 shall apply to the conversion of such Unconverted
Additional Value Shares provided that the Second Conversion
Date shall be 60 London Stock Exchange dealing days after the
first day of the month following the month in which the Company
becomes able to convert such shares in full. The Company
undertakes that for so long as Unconverted Additional Value
Shares remain outstanding:
(A) such resolutions will be proposed at each subsequent
Annual General Meeting that, when approved, would
permit the Unconverted Additional Value Shares to be
converted in full; and
(B) no available profit or reserve will be applied by the
Company for any other purpose.
(xiv) If any Additional Value Shares are to be converted pursuant to
this paragraph 2.7, but have not, on the Final Dividend Date
(or the following Business Day where that date is not a
Business Day) been so converted, ("converted" for the avoidance
of doubt, comprising the payment to each holder of Additional
Value Shares of the Aggregate Settlement Amount and/or the
allotment of Ordinary Shares in respect of the settlement of
any Remaining Settlement Amount (as the case may be)) no
dividends may be declared on any Ordinary Share in the capital
of the Company, and no sum may be set aside for the payment
thereof, unless on the date of declaration relative to any such
payment, the Aggregate Settlement Amount has been paid in full
or set aside or Ordinary Shares delivered in respect of the
Aggregate Settlement Amount or any Remaining Settlement Amount.
158
(xv) The following provisions shall apply to conversion of the
Additional Value Shares:
(A) Conversion of Additional Value Shares may be effected
in such manner as the Directors shall, subject to the
requirements of applicable law and the provisions
hereof, from time to time determine and, without
prejudice to the generality of the foregoing, may be
effected, in each case pursuant to the authority
conferred by the passing of the resolution which
created the Additional Value Shares, by the Company:
(aa) capitalising from profits or reserves
(including, without limitation, any share
premium account, merger reserve or capital
redemption reserve) and allotting and issuing
to a holder of Additional Value Shares to be
converted such number of new Non-Voting
Deferred Shares of(pound)0.01 each having the
rights and restrictions set out in paragraph
2.6 above as shall bring the total nominal
amount of the Additional Value Shares and the
new Non-Voting Deferred Shares to the total
nominal amount of the Ordinary Shares into
which the Additional Value Shares are to be
converted on the relevant Conversion Date,
consolidating all the Non-Voting Deferred
Shares and Additional Value Shares to be
converted into one Share (the "Consolidated
Share") and sub-dividing and redesignating the
Consolidated Share into the number of Ordinary
Shares into which the Additional Value Shares
are to be converted;
(bb) consolidating such Additional Value Shares into
one share (the "Consolidated Share") and
sub-dividing and redesignating the Consolidated
Share into the number of Ordinary Shares into
which the Additional Value Shares are to be
converted and as to any balance into Non-Voting
Deferred Shares of (pound)0.01 such Non-Voting
Deferred Shares being certificated shares
having the rights and restrictions set out in
sub-paragraph 2.6 above.
(B) Ordinary Shares arising on conversion shall rank pari
passu with the Ordinary Shares in issue on the relevant
Conversion Date except that the Ordinary Shares so
arising will not rank for any dividend or other
distribution which has been announced, declared,
recommended or resolved on prior to the relevant
Conversion Date by the Directors or by the Company in
general meeting, if the record date for such dividend
or other distribution is on or prior to the relevant
Conversion Date.
(C) Unless the Directors otherwise determine, or unless the
Uncertificated Securities Regulations and/or the
requirements of the relevant system otherwise require,
the Ordinary Shares arising on conversion of any
Additional Value Shares shall be in certificated form
(where the Additional Value Shares converted were, on
the date of conversion, in certificated form) or as
uncertificated shares (where the Additional Value
Shares converted were, on the date of conversion, in
Uncertificated Form) provided that if the Company is
unable under the facilities and requirements of the
relevant system to arrange for Ordinary Shares in
respect of the person entitled thereto to be held in
Uncertificated Form, such shares shall be in
certificated form.
(D) The Company shall procure that there shall be
dispatched or made free of charge (but uninsured and at
the risk of the holder or the person entitled thereto,
or the first-named thereof, as the case may be) a
certificate in respect of Ordinary
159
Shares arising on conversion which are, in accordance
with sub-paragraph 2.7(xv)(C) above, certificated
shares not later than 28 days after the relevant
Conversion Date.
(E) For the purposes of this paragraph 2.7(xv), whether any
Additional Value Shares are in certificated form or
Uncertificated Form on the Conversion Date shall be
determined by reference to the register of members as
at 12.01 a.m. on the relevant Conversion Date or such
other time as the Directors may (subject to the
facilities and requirements of the relevant system
concerned) in their absolute discretion determine.
(F) The Company shall use reasonable efforts to procure
that the Ordinary Shares arising on conversion of
Additional Value Shares are admitted to the Official
List of the UK Listing Authority and admitted to
trading on the London Stock Exchange's market for
listed securities at the earliest practicable date.
2.8 Class Rights
The Company may from time to time create, allot and issue further
shares, whether ranking pari passu with, in priority to, or behind the
Additional Value Shares in any respect (including, without limitation,
as to priority in payment of dividends or as to capital in a
liquidation of the Company), and such creation, allotment or issue of
any such further shares (whether or not ranking in any respect in
priority to the Additional Value Shares and whether or not the same
confer on the holders voting rights more favourable than those
conferred by the Additional Value Shares) shall be deemed not to
involve a variation of the rights attaching to the Additional Value
Shares for any purpose.
2.9 Additional Limitations
No Additional Value Share shall (save as otherwise specifically set out
herein) confer any right to participate in:
(i) the profits or assets of the Company;
(ii) any offer or invitation by way of rights or otherwise to
subscribe for additional shares in the capital of the Company;
or
(iii) any future capitalisation or bonus issue of shares in the
capital of the Company.
160
INDEX TO ARTICLES OF ASSOCIATION
Subject Description Article No. Page No.
------- ----------- ----------- --------
ACCOUNTS Accounts to be sent to members 154 89
Preparation and laying of accounts 153 89
Right to inspect accounts 152 88
AUDITORS Rights of auditors 156 89
Validity of acts of auditors 155 89
AUTHENTICATION OF DOCUMENTS Authentication of documents 132 79
BUSINESS Business activities 3 6
CALLS ON SHARES Deemed calls 25 44
Differentiation of calls 26 45
Interest payable 24 44
Liability of joint holders 23 44
Payment of calls in advance 27 45
Power to make calls 21 44
Time when call made 22 44
CAPITAL Alteration of capital:
Alterations permitted by ordinary
resolution 10(A) 39
Fractions arising 10(B) 39
Increase of capital 8 38
New shares 9 39
Power to purchase own shares 11 39
Power to reduce capital 12 40
Share capital:
Additional Value Shares 4D and Schedule 4 37
Capital rights of cumulative preference shares 4(B) 7
Category II non-cumulative dollar preference
shares 4(E) 30
Category II Non-cumulative Convertible 4C and 37
Sterling Preference Shares Schedule 3
Dividend rights of cumulative preference
shares 4(A) 7
Non-cumulative dollar preference shares 4(D) 20
Non-cumulative euro preference shares 4A and Schedule 1 36
Non-cumulative convertible preference shares
(sterling, dollar and euro) 4B and Schedule 2 37
Non-cumulative sterling preference shares 4(C) 8
Shares with special rights and redeemable
shares 5 38
161
Subject Description Article No. Page No.
------- ----------- ----------- --------
Variation of rights:
Method of varying class rights 6 38
When share rights deemed to be varied 7 38
CAPITALISATION OF PROFITS Power to capitalise on adjustment of subscription
AND RESERVES price in an employee's share scheme 149(B) 87
Power to capitalise profits 148 87
Procedure for capitalisation 149(A) 87
CORPORATIONS ACTING BY Authority of representatives 90 65
REPRESENTATIVES
DEPARTMENTAL, REGIONAL OR Appointment of other officers 128(D) 78
LOCAL DIRECTORS AND OTHER Attendance at board meetings 128(C) 78
APPOINTEES Powers and duties of appointee 128(B) 78
Use of designation "Director" 128(A) 78
DESTRUCTION OF DOCUMENTS Destruction of documents 44 48
DIRECTORS Alternate directors:
Alternate may be paid expenses but not
remuneration 109(D) 71
Alternate to receive notices 109(C) 71
Power to appoint alternate directors 109(A) 71
Termination 109(B) 71
Appointments with other companies 97(B) 67
Appointment & retirement of directors:
Age limit 100 68
Appointment by ordinary resolution or by
directors 108 70
Notice of intention to appoint a director 106 70
Removal and replacement of directors 107 70
Resolution 105 70
Retirement of directors by rotation 102 69
Selection of directors to retire 103 69
Vacation of office of director 101 68
When directors deemed to be
re-appointed 104 69
162
Subject Description Article No. Page No.
------- ----------- ----------- --------
Borrowing powers:
Power to borrow and grant security 121 76
Delegation of powers 99 68
Directors need not be a member 92 65
Directors' interests in contracts with the
company 97(A) 67
Directors' fees 93 65
Executive Office 98(A) 67
Expenses 94 66
Extra remuneration 95 66
General powers of directors:
Business to be managed by the directors 122 76
Execution by the company 127 77
Local boards, etc 123 77
Official seal for use abroad 125 77
Overseas registers 126 77
Powers of attorney 124 77
Insurance 96(B) 66
Limit on number of directors 91 65
Proceedings of directors:
Alternate directors 114(E) 74
Authority to vote 111 72
Chairman 116 75
Committees of directors 118 75
Consideration of matters involving two or
more directors 114(C) 74
Director's interests 113 73
Materiality of directors' interests 114(D) 74
Meetings of directors 110(A) 72
Participation in meetings by telephone 110(B) 72
Proceedings in case of vacancies 115 75
Proceedings of committee 119 76
Quorum 112 72
Relaxation of provisions 114(F) 75
Resolutions in writing 117 75
Restrictions on voting 114(A) 73
Validity of proceedings 120 76
Where interest does not prevent voting 114(B) 73
Retirement and other benefits 96(A) 66
When termination of appointment automatic 98(B) 68
When termination of appointment not automatic 98(C) 68
163
Subject Description Article No. Page No.
------- ----------- ----------- --------
DIVIDENDS Currency of payment 144(D) 85
Declaration of dividends 133 80
Directors' responsibility 134(B) 80
Dividends in specie 142 82
Dividends on uncertificated shares 144(B) 85
Forfeiture of unclaimed dividends 141 81
Interest not payable 136 81
Interim dividends 134(A) 80
Permitted deductions 137 81
Procedure for payment 144(A) 84
Profits and losses from past date 135 81
Receipts where joint holders 145 85
Retention of dividends 138 81
Scrip dividend 143 82
Uncashed dividends 144(C) 85
Unclaimed dividends 140 81
Waiver of dividends 139 81
EVIDENCE OF TITLE TO SHARES Authentication and form of certificates 19 43
Cancellation and replacement of certificates 20 43
Certificated shares 18 42
Uncertificated shares 17 42
EXECUTION OF DOCUMENTS Execution of documents 131 79
FORFEITURE, SURRENDER AND Application of proceeds 35 46
LIEN Company to have lien on shares 33 46
Content of notice 29 45
Enforcement of lien by sale 34 46
Extinction of rights 32 46
Forfeiture for non-compliance 30 45
Giving effect to the sale 36 47
Notice requiring payment of calls on default 28 45
Sale of forfeited shares 31 45
GENERAL MEETINGS Application to class meeting where no variation
of rights involved 55 54
Extraordinary general meetings 54 54
Types of general meetings 53 54
Notice of general meetings:
Contents of notice 57 55
Notice of resolutions 59 56
Period of notice 56 54
Postponement of general meetings 60 56
Routine business 58 55
164
Subject Description Article No. Page No.
------- ----------- ----------- --------
Proceedings at general meetings:
Adjournments 68 58
Amendments to resolutions 70 58
Chairman 65 57
Chairman's casting vote 73 60
Continuance of meeting 75 60
Declaration of result and conduct of poll 72 59
Entitlement to attend and speak 67 58
If quorum not present 63 57
Orderly conduct 66 58
Overflow arrangements for general meetings 61 56
Method of voting 71 59
Quorum 62 57
Security arrangements 64 57
Time and place of adjourned meetings 69 58
When poll to be taken 74 60
Restrictions on voting and other share rights:
Cessation of disenfranchisement 89(C) 64
Disenfranchisement 89(A) 63
Other restrictions 89(B) 64
Person interested in shares; approved
transfers 89(D) 64
Votes of members:
Calls in arrears 79 61
Delivery of forms of proxy 84 62
Differing proxies 85 62
Form and execution of proxies 83 61
Intervening events 88 63
Issue of forms of proxy 86 63
Member under incapacity 78 60
Objection to voting 80 61
Proxy need not be a member 82 61
Right to vote 76 60
Rights conferred by form of proxy 87 63
Votes of joint holders 77 60
Votes on a poll 81 61
INDEMNITY Indemnity 169 93
MINUTES AND BOOKS Keeping of minutes and books 150 88
Safeguarding of minutes and books 151 88
165
Subject Description Article No. Page No.
------- ----------- ----------- --------
NOTICES Advertisement of notices 163 91
Notice to be in writing 157 90
Notice during disruption of postal services 164 92
Notice to joint holders 159 91
Notice to persons entitled by transmission 160 91
Notice to warrant holders 165 92
Record date for service 158(C) 90
Service of notices 158(A) 90
Signature 162 91
Statutory requirements 166 92
Untraced members 161 91
When notice deemed served 158(B) 90
PRELIMINARY Definitions and interpretation 2 1
Non-applications of statutory regulations 1 1
PROVISION FOR EMPLOYEES Provision for employees 168 92
RECORD DATE Record date 146 85
RESERVES Different currencies 147(C) 86
Limitation on carrying sums to reserve 147(B) 86
Reserves 147(A) 86
SEALS Custody of seal 130(A) 79
Formalities for affixing the seal 130(B) 79
Use of securities seal 130(C) 79
SECRETARY Secretary 129 78
SHARES Calls on (see CALLS ON SHARES)
Commission 14 41
Directors' authority to allot shares and power to
allot shares for cash 13(B) 40
Interest not recognised 16 42
Renunciation 15 41
Restriction on share rights (see GENERAL MEETINGS)
Shares at the disposal of the directors 13(A) 40
SHARE WARRANTS TO BEARER Bearer deemed to be a member 52(B) 52
Certificate to attend meetings 52(D) 53
Coupon for dividend 52(I) 53
Exercise of other rights 52(F) 53
Issue of new warrants 52(G) 53
Meetings 52(C) 52
166
Subject Description Article No. Page No.
------- ----------- ----------- --------
Power to issue share warrants to bearer 52(A) 52
Return of warrant after meeting 52(E) 53
Surrender of warrant and registration of holder 52(J) 53
Transfer of shares included in warrant 52(H) 53
Variation of terms 52(K) 54
STOCK Conversion into stock 49 51
Rights of shareholders 51 52
Transfer of stock 50 52
TRANSFER OF SHARES Execution of transfers 38 47
Further rights to decline to register transfer 41 48
No fee payable for registration of transfers 42 48
Renunciations recognised 43 48
Right to decline to register transfer of partly
paid shares 40 47
Suspension of registration 39 47
Transfers 37 47
TRANSMISSION OF SHARES Election for registration 46(B) 50
Registration on death, bankruptcy, etc 46(A) 49
Rights of persons entitled by transmission 47 50
Transmission 45 49
UNTRACED SHAREHOLDERS Power to dispose of shares of untraced
shareholders 48(A) 50
Sale procedure and application of proceeds 48(B) 51
WINDING UP Liquidator may distribute in specie 167 92
167
No 45551
THE COMPANIES ACT 1985
----------------------------
COMPANY LIMITED BY SHARES
----------------------------
SPECIAL RESOLUTIONS
of
THE ROYAL BANK OF SCOTLAND
GROUP PUBLIC LIMITED COMPANY
------------------------
Passed on 26 April 2002
------------------------
At the ANNUAL GENERAL MEETING of the members of THE ROYAL BANK OF SCOTLAND
GROUP PUBLIC LIMITED COMPANY duly convened and held at The Edinburgh
International Conference Centre, Edinburgh on 26 April 2002 the following
Resolutions were duly passed as SPECIAL RESOLUTIONS of the Company:-
SPECIAL RESOLUTIONS
1. "THAT: the power conferred on the directors by paragraph (2) of Article
13(B) of the Company's Articles of Association be renewed for the period
ending on the day of the Annual General Meeting in 2003 or on 26th July
2003, whichever is the earlier, and for that purpose the "Section 89
amount" shall be (pound)35,750,676."
2. "THAT:, pursuant to Article 11 of the Articles of Association of the
Company, the Company is generally and unconditionally authorised to make
market purchases (within the meaning of Section 163(3) of the Companies
Act 1985) of ordinary shares of 25p each in the capital of the Company,
provided that:
(i) the maximum number of ordinary shares to be purchased is 286,005,407
(representing 10 % of the issued ordinary share capital);
(ii) the minimum price which may be paid for an ordinary share is 25p
per share which amount shall be exclusive of expenses;
(iii) the maximum price which may be paid for an ordinary share is, in
respect of an ordinary share contracted to be purchased on any day,
an amount (exclusive of expenses) equal to 105 % of the average of
the mid-market quotations for an ordinary share of the Company as
derived from The Daily Official List of The London Stock Exchange
for the 5 business days immediately preceding the day on which the
ordinary share is contracted to be purchased;
(iv) the authority hereby conferred shall expire at the conclusion of
the next Annual General Meeting of the Company following the
passing of this resolution, unless such authority is renewed prior
to such time; and
(v) the Company may conclude a contract to purchase ordinary shares
under the authority hereby conferred prior to the expiry of such
authority which will or may be executed wholly or partly after such
expiry, and may make a purchase of ordinary shares in pursuance of
any such contract as if the authority hereby conferred had not
expired."
Hew Campbell
Deputy Secretary
ITEM 2
FORM OF SUBORDINATED NOTES
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY
BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A
NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE.
THE ROYAL BANK OF SCOTLAND GROUP plc
5% SUBORDINATED NOTE DUE OCTOBER 1, 2014
No. $
CUSIP No. 780097 AL 5
ISIN No. US780097AL55
THE ROYAL BANK OF SCOTLAND GROUP plc (herein called the "Company," which
term includes any successor person under the Indenture (as defined on the
reverse hereof)), for value received, hereby promises to pay to Cede & Co., or
registered assigns, the principal sum of DOLLARS on October 1, 2014 or on such
earlier date as the principal hereof may become due in accordance with the
terms hereof and to pay interest thereon semi-annually in arrears on April 1
and October 1 of each year, commencing April 1, 2003, and ending on October 1,
2014 (each, a "Payment Date"); provided, however, that if the Company does not
make a payment of principal or interest on any Payment Date, the obligation to
make such payment shall be deferred until (x) in the case of a payment of
principal, the first Business Day after the date that falls six months after
the original due date for payment and (y) in the case of a payment of interest,
the date upon which a dividend is paid on any class of share capital of the
Company (each, a "Deferred Payment Date"). Failure by the Company to make any
such payment prior to such Deferred Payment Date shall not constitute a Default
by the Company or otherwise allow any Holder to sue the Company for such
Payment or take any other action. Any payment so deferred shall accrue interest
at the rate prevailing immediately before the original due date with respect to
such payment. Any payment so deferred shall not be treated as due for any
purpose (including, without limitation, for the purposes of ascertaining
whether or not a Default has occurred) until the Deferred Payment Date.
Interest shall accrue on this Subordinated Note from day to day from the
date of issuance hereof or from the most recent Payment Date at the rate of 5%
per annum, until the principal amount hereof is paid or made available for
payment.
Payments of interest on this Subordinated Note shall be computed on the
basis of a 360-day year of twelve 30-day months and, in the case of an
incomplete month, the actual number of days elapsed.
Payment of the principal amount of, and any interest on, this Subordinated
Note will be made in such coin or currency of the United States of America as
at the time of payment is legal tender for payment of public and private debts.
Such payment shall be made to the Holder including through a Paying Agent of
the Company outside the United Kingdom for collection by the Holder. If the
date for payment of the principal amount hereof or interest thereon is not a
Business Day, then (subject as provided in the Indenture) such payment shall be
made on the next succeeding Business Day with the same force and effect as if
made on such date for payment and without any interest or other payment in
respect of such delay.
Prior to due presentment of this Subordinated Note for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Subordinated Note is registered as the
owner of such Subordinated Note for the purpose of receiving payment of
principal and interest, if any, on such Subordinated Note and for all other
purposes whatsoever, whether or not such Subordinated Note be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
Reference is hereby made to the further provisions of this Subordinated
Note set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this
Subordinated Note shall not be entitled to any benefit under the Indenture or
be valid or obligatory for any purpose.
2
IN WITNESS WHEREOF, the Company has caused this Subordinated Note to be
duly executed.
Dated: October 2, 2002 THE ROYAL BANK OF SCOTLAND GROUP plc
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
3
CERTIFICATE OF AUTHENTICATION
This is one of the Subordinated Notes of the series designated herein
referred to in the within-mentioned Indenture.
Dated: October 2, 2002 THE BANK OF NEW YORK,
as Trustee
By:
------------------------------------
Authorized Signatory
4
This Subordinated Note is one of a duly authorized issue of securities of
the Company (herein called the "Subordinated Notes") issued and to be issued in
one or more series under an Indenture, dated as of September 30, 2002 (herein
called the "Indenture"), among the Company, as issuer, and The Bank of New
York, as Trustee (herein called the "Trustee," which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Subordinated Notes and of the terms upon
which the Subordinated Notes are, and are to be, authenticated and delivered.
This Subordinated Note is one of the series designated on the face hereof,
initially limited in aggregate principal amount to $750,000,000. The Company
may, without the consent of the holders of the Subordinated Notes, issue
additional Subordinated Notes having the same raking and interest rate,
maturity date, redemption terms and other terms as the Subordinated Notes. Any
such Subordinated Notes, together with this Note, will constitute a single
series of securities under the Indenture. The Subordinated Notes will initially
be issued in the form of one or more global Subordinated Notes (each, a "Global
Subordinated Note"). Except as provided in the Indenture, a Global Subordinated
Note shall not be exchangeable for one or more definitive Subordinated Notes.
The Subordinated Notes of this series will constitute unsecured
obligations of the Company, subject to the subordination provisions described
herein, and will rank pari passu without any preference among themselves.
The rights of the holders of the Subordinated Notes of this series are, to
the extent and in the manner set forth in Section 12.01 of the Indenture,
subordinated to the claims of other creditors of the Company, and this series
of Subordinated Notes is issued subject to the provisions of that Section
12.01, and the holders of this series of Subordinated Notes, by accepting the
same, agree to and shall be bound by such provisions. The provisions of Section
12.01 of the Indenture and the terms of this paragraph are governed by, and
shall be construed in accordance with, the laws of England.
If an Event of Default with respect to the Subordinated Notes of this
series shall have occurred and be continuing, the Trustee or the Holder or
Holders of not less than 25% in aggregate principal amount of the Outstanding
Subordinated Notes of this series may declare the principal amount of, and any
accrued interest on, all the Subordinated Notes to be due and payable
immediately, in the manner, with the effect and subject to the conditions
provided in the Indenture.
If a Default with respect to the Subordinated Notes of this series shall
have occurred and be continuing, the Trustee may pursue all legal remedies
available to it, including commencing a proceeding in England or Scotland (but
not
1
elsewhere) for the winding-up of the Company; provided that the Trustee may
not, upon the occurrence of a Default, declare the principal amount of any of
the outstanding Subordinated Notes of this series to be due and payable.
By acceptance of the Subordinated Notes of this series, the Trustee and
the Holder will be deemed to have waived any right of set-off or counterclaim
with respect to such Subordinated Notes that they might otherwise have against
the Company, whether before or during a winding-up of the Company.
Subject to the provisions of this paragraph, all amounts of principal and
interest on any Subordinated Notes of this Series will be paid by the Company
without deduction or withholding for, or on account of, any and all present and
future income, stamp and other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings now or hereafter imposed, levied, collected,
withheld or assessed by or on behalf of the United Kingdom or any political
subdivision or authority thereof or therein having the power to tax (the
"Taxing Jurisdiction"), unless such deduction or withholding is required by
law. If deduction or withholding of any such taxes, levies, imposts, duties,
charges, fees, deductions or withholdings shall at any time be required by the
Taxing Jurisdiction, the Company will pay such additional amounts of, or in
respect of, the principal amount of, and interest on, the Subordinated Notes of
this series ("Additional Amounts") as may be necessary in order that the net
amounts paid to the Holders after such deduction or withholding shall equal the
respective amounts of principal and interest which would have been payable in
respect of such Subordinated Notes had no such deduction or withholding been
required, provided, however, that the foregoing will not apply to any such tax,
levy, impost, duty, charge, fee, deduction or withholding which would not have
been payable or due but for the fact that:
(i) the Holder or the beneficial owner of the Subordinated Note is a
domiciliary, national or resident of, or engaging in business or maintaining a
permanent establishment or physically present in, the Taxing Jurisdiction or
otherwise has some connection with the Taxing Jurisdiction other than the
holding or ownership of a Subordinated Note, or the collection of any payment
of (or in respect of) principal of, or interest on, any Subordinated Note,
(ii) except in the case of a winding-up of the Company in the United
Kingdom, the relevant Subordinated Note is presented (where presentation is
required) for payment in the United Kingdom,
(iii) the relevant Subordinated Note is presented (where presentation is
required) for payment more than 30 days after the date payment became due or
was provided for, whichever is later, except to the extent that the Holder
would have been entitled to such Additional Amount on presenting (where
presentation is required) the same for payment at the close of such 30 day
period,
2
(iv) the Holder or the beneficial owner of the relevant Subordinated Note
or the beneficial owner of any payment of principal of, or interest on, such
Subordinated Note failed to comply with a request of the Company or its
liquidator or other authorized person addressed to the Holder (x) to provide
information concerning the nationality, residence or identity of the Holder or
such beneficial owner or (y) to make any declaration or other similar claim to
satisfy any information requirement, which in the case of (x) or (y), is
required or imposed by a statute, treaty, regulation or administrative practice
of the Taxing Jurisdiction as a precondition to exemption from all or part of
such tax, assessment or other governmental charge,
(v) the withholding or deduction is imposed on a payment to or for the
benefit of an individual and is required to be made pursuant to any European
Union Directive on the taxation of savings implementing the proposal for a
European Union Directive presented by the European Union Commission on July 18,
2001 or any law implementing or complying with, or introduced in order to
conform to, such directive,
(vi) the Subordinated Note is presented (where presentation is required)
for payment by or on behalf of a holder who would have been able to avoid such
withholding or deduction by presenting (where presentation is required) the
Subordinated Note to another paying agent in a Member State of the European
Union, or
(vii) any combination of clauses (i) through (vi) above,
nor shall Additional Amounts be paid with respect to the principal of, and
interest on, the Subordinated Note to any holder who is a fiduciary or
partnership or settlor with respect to such fiduciary or a member of such
partnership other than the sole beneficial owner of such payment to the extent
such payment would be required by the laws of any Taxing Jurisdiction to be
included in the income for tax purposes of a beneficiary or partner or settlor
with respect to such fiduciary or a member of such partnership or a beneficial
owner who would not have been entitled to such Additional Amounts, had it been
the holder.
References herein to the payment of the principal of or interest on any
Subordinated Note shall be deemed to include mention of the payment of
Additional Amounts provided for in the foregoing paragraph to the extent that,
in such context, Additional Amounts are, were or would be payable under the
foregoing provisions.
The Subordinated Notes of this series are redeemable, as a whole but not
in part, at the option of the Company, on not less than 30 nor more than 60
days' notice, on any Payment Date, at a redemption price equal to 100% of the
principal amount, together with accrued but unpaid interest, in respect of the
Subordinated
3
Notes to the date fixed for redemption, if, at any time, the Company shall
determine that as a result of a change in or amendment to the laws or
regulations of the Taxing Jurisdiction (including any treaty to which such
Taxing Jurisdiction is a party), or any change in the official application or
interpretation of such laws or regulations (including a decision of any court
or tribunal) which change or amendment becomes effective on or after September
25, 2002:
(a) in making payment under the Subordinated Notes in respect of principal
or interest it has or will or would on the next Interest Payment Date become
obligated to pay Additional Amounts;
(b) the payment of interest on the next Payment Date in respect of any of
the Subordinated Notes would be treated as "distributions" within the meaning
of Section 209 of the Income and Corporation Taxes Act 1988 of the United
Kingdom (or any statutory modification or re-enactment thereof for the time
being); or
(c) on the next Payment Date the Company would not be entitled to claim a
deduction in respect of such payment of interest in computing its United
Kingdom taxation liabilities (or the value of such deduction to the Company
would be materially reduced).
In any case where the Company shall determine that as a result of any
change in the official application or interpretation of any laws or regulations
it is entitled to redeem the Subordinated Notes of this series, the Company
shall be required to deliver to the Trustee prior to the giving of any notice
of redemption a written legal opinion of independent United Kingdom counsel of
recognized standing (selected by the Company) in a form satisfactory to the
Trustee confirming that the relevant change in the official application or
interpretation of such laws or regulations has occurred and that the Company is
entitled to exercise its right of redemption.
If the Company elects to redeem the Subordinated Notes of this series, the
Subordinated Notes will cease to accrue interest from the date of redemption,
provided the redemption price has been paid in accordance with the Indenture.
Upon payment of (i) the amount of principal so declared due and payable
and (ii) accrued and unpaid interest, all of the Company's obligations in
respect of the payment of the principal of, and accrued and unpaid interest on,
the Subordinated Notes of this series shall terminate.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Subordinated Debt Securities of
each series to be affected thereby by the Company and the Trustee with the
4
consent of the Holders of not less than 66 2/3% in principal amount of the
Subordinated Debt Securities at the time outstanding of each such series. The
Indenture also contains provisions permitting the Holders of a majority in
aggregate principal amount of the outstanding Subordinated Debt Securities of
each series, on behalf of the Holders of all Subordinated Debt Securities of
such series, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Subordinated Note shall be
conclusive and binding upon such Holder and upon all future Holders of this
Subordinated Note and of any Subordinated Note issued in exchange herefor or in
lieu hereof, whether or not notation of such consent or waiver is made upon
this Subordinated Note.
No reference herein to the Indenture and no provision of this Subordinated
Note or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay, if and when due and payable, the
principal of, and interest on, this Subordinated Note at the times, place and
rate, and in the coin or currency, herein prescribed.
As set forth in, and subject to, the provisions of the Indenture, no
Holder of any Subordinated Note of this series will have the right to institute
any proceeding with respect to the Indenture, this Subordinated Note or any
remedy thereunder; provided, however, that such limitations do not apply to a
suit instituted by the Holder hereof for the enforcement of payment of the
principal or interest as and when the same shall have become due and payable in
accordance with the terms hereof and the Indenture.
No reference herein to the Indenture and no provision of this Subordinated
Note or of the Indenture shall alter or impair the right of the Holder of this
Subordinated Note, which is absolute and unconditional, to receive payment of
the principal of, and interest on, this Subordinated Note when due and payable
in accordance with the provisions of this Subordinated Note and the Indenture.
This Subordinated Note will be governed by the laws of the State of New
York except that the subordination provisions contained herein will be governed
by the laws of England.
Unless otherwise defined herein, all terms used in this Subordinated Note
which are defined in the Indenture shall have the meanings assigned to them in
the Indenture.
ITEM 3
================================================================================
THE ROYAL BANK OF SCOTLAND GROUP plc,
as Issuer
TO
THE BANK OF NEW YORK,
as Trustee
INDENTURE
Dated as of September 30, 2002
Subordinated Debt Securities
================================================================================
DAVIS POLK & WARDWELL
THE ROYAL BANK OF SCOTLAND GROUP plc
Reconciliation and tie between Trust Indenture Act of 1939, as amended by
the Trust Indenture Reform Act of 1990, and Subordinated Debt Securities
Indenture, dated September 30, 2002.
Subordinated Debt
Trust Indenture Securities
Act Section Indenture Section
----------- -----------------
ss.310(a)(1)................................................ 6.09
(a)(2)................................................ 6.09
(a)(3)................................................ Not Applicable
(a)(4)................................................ Not Applicable
(b)................................................... 6.08,6.10
(c) .................................................. Not Applicable
ss.311(a)................................................... 6.13
(b)................................................... 6.13
(b)(2)................................................ 7.03(a), 7.03(b)
(c) .................................................. Not Applicable
ss.312(a)................................................... 7.01, 7.02(a)
(b)................................................... 7.02(b)
(c) .................................................. 7.02(c)
ss.313(a)................................................... 7.03(a)
(b)................................................... 7.03(a)
(c) .................................................. 1.06, 7.03(a)
(d)................................................... 7.03(b)
ss.314(a)................................................... 7.04, 10.06
(b)................................................... Not Applicable
(c)(1)................................................ 1.02
(c)(2)................................................ 1.02
(c)(3)................................................ Not Applicable
(d)................................................... Not Applicable
(e) .................................................. 1.02
(f) .................................................. Not Applicable
ss.315(a)................................................... 6.01
(b)................................................... 6.02, 7.03(a)
(c) .................................................. 6.01
(d)................................................... 6.01
(d)(1)................................................ 6.01
(d)(2)................................................ 6.01
(d)(3)................................................ 6.01
(e) .................................................. 5.14
ss.316(a)(1)(A)............................................. 5.02, 5.12
Trust Indenture Securities
Act Section Indenture Section
----------- -----------------
(a)(l)(B)............................................. 5.13
(a)(2)................................................ Not Applicable
(a)(last sentence).................................... 1.01
(b)................................................... 5.08
ss.317(a)(1)................................................ 5.03
(a)(2)................................................ 5.04
(b)................................................... 10.03
ss.318(a)................................................... 1.07
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Subordinated Debt Securities Indenture.
ii
TABLE OF CONTENTS
PAGE
----
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.01. Definitions................................................... 1
SECTION 1.02. Compliance Certificates and Opinions.......................... 11
SECTION 1.03. Form of Documents Delivered to Trustee........................ 11
SECTION 1.04. Acts of Holders............................................... 12
SECTION 1.05. Notices, Etc. to Trustee and Company.......................... 13
SECTION 1.06. Notice to Holders; Waiver..................................... 13
SECTION 1.07. Conflict with Trust Indenture Act............................. 14
SECTION 1.08. Effect of Headings and Table of Contents...................... 15
SECTION 1.09. Successors and Assigns........................................ 15
SECTION 1.10. Separability Clause........................................... 15
SECTION 1.11. Benefits of Subordinated Debt Securities Indenture............ 15
SECTION 1.12. Governing Law................................................. 15
SECTION 1.13. Saturdays, Sundays and Legal Holidays......................... 15
SECTION 1.14. Appointment of Agent for Service.............................. 16
SECTION 1.15. Calculation Agent............................................. 16
ARTICLE 2
SUBORDINATED DEBT SECURITY FORMS
SECTION 2.01. Forms Generally............................................... 17
SECTION 2.02. Form of Trustee's Certificate of Authentication............... 17
ARTICLE 3
THE SUBORDINATED DEBT SECURITIES
SECTION 3.01. Amount Unlimited; Issuable in Series.......................... 18
SECTION 3.02. Denominations................................................. 21
SECTION 3.03. Execution, Authentication, Delivery and Dating................ 22
SECTION 3.04. Temporary Subordinated Debt Securities........................ 23
SECTION 3.05. Registration, Registration of Transfer and Exchange........... 23
SECTION 3.06. Mutilated, Destroyed, Lost and Stolen Subordinated Debt
Securities.................................................. 28
SECTION 3.07. Payment; Interest Rights Preserved............................ 29
SECTION 3.08. Persons Deemed Owners......................................... 30
PAGE
----
SECTION 3.09. Cancellation.................................................. 30
SECTION 3.10. Computation of Interest....................................... 31
SECTION 3.11. Cusip Numbers................................................. 31
ARTICLE 4
SATISFACTION AND DISCHARGE
SECTION 4.01. Satisfaction and Discharge of Subordinated Debt Securities
Indenture................................................... 31
SECTION 4.02. Application of Trust Money.................................... 33
SECTION 4.03. Repayment to Company ......................................... 33
ARTICLE 5
REMEDIES
SECTION 5.01. Events of Default............................................. 33
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment............ 34
SECTION 5.03. Defaults; Collection of Indebtedness and Suits for
Enforcement by Trustee...................................... 35
SECTION 5.04. Trustee May File Proofs of Claim.............................. 36
SECTION 5.05. Trustee May Enforce Claims Without Possession of Subordinated
Debt Securities............................................. 37
SECTION 5.06. Application of Money Collected................................ 37
SECTION 5.07. Limitation on Suits........................................... 38
SECTION 5.08. Unconditional Right of Holders to Receive Principal, Premium
Interest, if any............................................ 39
SECTION 5.09. Restoration of Rights and Remedies............................ 39
SECTION 5.10. Rights and Remedies Cumulative................................ 39
SECTION 5.11. Delay or Omission Not Waiver.................................. 40
SECTION 5.12. Control by Holders............................................ 40
SECTION 5.13. Waiver of past Defaults....................................... 40
SECTION 5.14. Undertaking for Costs ........................................ 41
ARTICLE 6
THE TRUSTEE
SECTION 6.01. Certain Duties and Responsibilities........................... 41
SECTION 6.02. Notice of Defaults............................................ 42
SECTION 6.03. Certain Rights of Trustee..................................... 42
SECTION 6.04. Not Responsible for Recitals or Issuance of Subordinated Debt
Securities ................................................. 43
SECTION 6.05. May Hold Subordinated Debt Securities......................... 44
ii
PAGE
----
SECTION 6.06. Money Held in Trust........................................... 44
SECTION 6.07. Compensation and Reimbursement................................ 44
SECTION 6.08. Disqualification; Conflicting Interests....................... 45
SECTION 6.09. Corporate Trustee Required; Eligibility....................... 45
SECTION 6.10. Resignation and Removal; Appointment of Successor............. 46
SECTION 6.11. Acceptance of Appointment by Successor........................ 48
SECTION 6.12. Merger, Conversion, Consolidation or Succession to Business... 49
SECTION 6.13. Preferential Collection of Claims............................. 50
SECTION 6.14. Appointment of Authenticating Agent .......................... 50
ARTICLE 7
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 7.01. Company to Furnish Trustee Names and Addresses of Holders..... 52
SECTION 7.02. Preservation of Information; Communication to Holders......... 52
SECTION 7.03. Reports by Trustee............................................ 53
SECTION 7.04. Reports by Company ........................................... 53
ARTICLE 8
CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER
SECTION 8.01. Company May Consolidate, Etc., Only on Certain Terms.......... 54
SECTION 8.02. Successor Corporation Substituted............................. 55
SECTION 8.03. Assumption of Obligations .................................... 55
ARTICLE 9
SUPPLEMENTAL INDENTURES
SECTION 9.01. Supplemental Indentures Without Consent of Holders............ 57
SECTION 9.02. Supplemental Indentures with Consent of Holders............... 58
SECTION 9.03. Execution of Supplemental Indentures.......................... 60
SECTION 9.04. Effect of Supplemental Indentures............................. 60
SECTION 9.05. Conformity with Trust Indenture Act........................... 60
SECTION 9.06. Reference in Subordinated Debt Securities to Supplemental
Indentures.................................................. 60
ARTICLE 10
COVENANTS
SECTION 10.01. Payment of Principal, Premium, and Interest.................. 61
SECTION 10.02. Maintenance of Office or Agency.............................. 61
SECTION 10.03. Money for Payments to Be Held in Trust....................... 62
iii
PAGE
----
SECTION 10.04. Additional Amounts........................................... 63
SECTION 10.05. Corporate Existence.......................................... 65
SECTION 10.06. Statement as to Compliance................................... 66
SECTION 10.07. Original Issue Document ..................................... 66
ARTICLE 11
REDEMPTION OF SUBORDINATED DEBT SECURITIES
SECTION 11.01. Applicability of Article..................................... 66
SECTION 11.02. Election to Redeem; Notice to Trustee........................ 66
SECTION 11.03. Selection by Trustee of Subordinated Debt Securities to Be
Redeemed................................................... 66
SECTION 11.04. Notice of Redemption......................................... 67
SECTION 11.05. Deposit of Redemption Price.................................. 68
SECTION 11.06. Subordinated Debt Securities Payable on Redemption Date...... 68
SECTION 11.07. Subordinated Debt Securities Redeemed in Part................ 68
SECTION 11.08. Optional Redemption Due to Changes in Tax Treatment.......... 69
SECTION 11.09. [Reserved] .................................................. 70
ARTICLE 12
SUBORDINATION OF SUBORDINATED DEBT SECURITIES
SECTION 12.01. Subordinated Debt Securities Subordinate to Claims of Senior
Creditors.................................................. 70
SECTION 12.02. Provisions Solely to Define Relative Rights.................. 70
SECTION 12.03. Trustee to Effectuate Subordination.......................... 70
SECTION 12.04. No Waiver of Subordination Provisions........................ 71
SECTION 12.05. Notice to Trustee............................................ 71
SECTION 12.06. Reliance on Judicial Order or Certificate of Liquidating
Agent ..................................................... 71
SECTION 12.07. Trustee Not Fiduciary for Senior Creditors................... 72
SECTION 12.08. Rights of Trustee as Senior Creditor; Preservation of
Trustee's Rights........................................... 73
SECTION 12.09. Article Applicable to Paying Agents.......................... 73
SECTION 12.10. Exchanges Not Deemed Payment ................................ 73
ARTICLE 13
EXCHANGE OF SUBORDINATED DEBT SECURITIES
SECTION 13.01. Applicability of Article..................................... 74
SECTION 13.02. Election to Exchange; Notice to Trustee...................... 74
SECTION 13.03. Notice of Exchange........................................... 74
iv
PAGE
----
SECTION 13.04. Deposit of Interest.......................................... 75
SECTION 13.05. Surrender of Subordinated Debt Securities.................... 75
SECTION 13.06. Issuance of Dollar Preference Shares or Exchange Securities.. 76
SECTION 13.07. Effect of Exchange........................................... 76
SECTION 13.08. Validity of Dollar Preference Shares or Exchange Securities.. 77
SECTION 13.09. Legal and Regulatory Compliance.............................. 77
SECTION 13.10. Taxes and Charges............................................ 78
SECTION 13.11. Trustee Not Liable........................................... 79
v
SUBORDINATED DEBT SECURITIES INDENTURE, dated as of September 30, 2002
between THE ROYAL BANK OF SCOTLAND GROUP plc, a company incorporated in Great
Britain and registered in Scotland (the "Company"), having its registered
office at 36 St Andrew Square, Edinburgh EH2 2YB, United Kingdom and THE BANK
OF NEW YORK, a New York banking corporation, as Trustee (the "Trustee"), having
its Corporate Trust Office at 101 Barclay Street, New York, New York, 10286.
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Subordinated Debt Securities Indenture to provide for the issuance from time to
time of its Subordinated Debt Securities (the "Subordinated Debt Securities"),
to be issued in one or more series, represented by one or more Global
Securities in registered form without coupons for payments attached, or
represented by definitive Subordinated Debt Securities in registered form
without coupons for payments attached, the amount and terms of each such series
to be determined as hereinafter provided.
All things necessary to make this Subordinated Debt Securities Indenture a
valid and binding agreement of the Company, in accordance with its terms, have
been done.
NOW, THEREFORE, THIS SUBORDINATED DEBT SECURITIES INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Subordinated Debt Securities by the Holders thereof, it is mutually covenanted
and agreed, for the equal and proportionate benefit of all Holders of
Subordinated Debt Securities as follows:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.01. Definitions. For all purposes of this Subordinated Debt
Securities Indenture, except as otherwise expressly provided or unless the
context otherwise requires:
9
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with accounting principles
generally accepted in the United Kingdom; and
(4) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Subordinated Debt Securities Indenture as a
whole and not to any particular Article, Section or other subdivision; and
(5) any reference to an "Article" or a "Section" refers to an Article
or Section of this Subordinated Debt Securities Indenture.
Certain terms, used principally in Articles Six and Thirteen, are defined
in those Articles.
"Act", when used with respect to any Holder, has the meaning specified in
Section 1.04.
"Additional Amounts" shall have the meaning set forth in Section 10.04, of
this Agreement.
"ADR Custodian" means the custodian under the ADR Deposit Agreement.
"ADR Deposit Agreement" means the Deposit Agreement dated as of August 17,
1992, and amended and restated as of February 8, 1999, and as further amended
and restated as of November 2, 2001 as may be further amended from time to time
between the Company and The Bank of New York and the holders from time to time
of American Depositary Receipts issued thereunder.
"ADR Depositary" means the depositary under the ADR Deposit Agreement.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when
2
used with respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Agent Member" means a member of, or participant in, any Depositary.
"Auditors" means the Auditors from time to time of the Company or if there
shall be joint Auditors of the Company any one or more of such joint Auditors.
"Authenticating Agent" means any Person authorized by the Trustee to act on
behalf of the Trustee to authenticate Subordinated Debt Securities.
"Authorized Newspaper" means a newspaper in an official language of the
country of publication customarily published at least once a day for at least
five days in each calendar week and of general circulation in the place in
connection with which the term is used, which, in the United Kingdom, will be
the Financial Times of London, if practicable, and which, in the United States,
will be the Wall Street Journal, if practicable, and which, in Luxembourg, will
be the Luxemburger Wort, if practicable and for so long as and only with
respect to any Subordinated Debt Securities listed on the Luxembourg Stock
Exchange, and if it shall be impracticable in the opinion of the Trustee to
make any publication of any notice required hereby in any such newspaper, shall
mean any publication or other notice in lieu thereof which is made or given
with the approval of the Trustee.
"Board of Directors" means either the board of directors, or any committee
of such board duly authorized to act with respect hereto, of the Company, which
board of directors or committee may, to the extent permitted by applicable law,
delegate its authority.
"Board Resolution" means a copy of a resolution certified by the Secretary
or a Deputy or Assistant Secretary of the Company to have been duly adopted by
the Board of Directors or an authorized committee thereof and to be in full
force and effect on the date of such certification and delivered to the
Trustee.
"Business Day" means, with respect to any Place of Payment, except as may
otherwise be provided in the form of Subordinated Debt Securities of any
particular series, each Monday, Tuesday, Wednesday, Thursday and Friday which
is not a day on which banking institutions in that Place of Payment are
authorized or obligated by law or executive order to close.
3
"Calculation Agent" means the Person, if any, authorized by the Company to
calculate the interest rate or other amounts from time to time in relation to
any series of Subordinated Debt Securities.
"Clearstream Luxembourg" means, Clearstream Banking, societe anonyme, or
its nominee or its or their successor.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or, if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Company" means the Person named as the "Company" in the first paragraph
of this Subordinated Debt Securities Indenture until a successor corporation
shall have become such pursuant to the applicable provisions of this
Subordinated Debt Securities Indenture, and thereafter "Company" shall mean
such successor corporation.
"Company Request" and "Company Order" mean, respectively, a written
request or order signed in the name of the Company by an Executive Director or
Director or the Secretary or a Deputy or Assistant Secretary, and delivered to
the Trustee.
"Corporate Trust Office" means the office of the Trustee in which its
corporate trust business is principally administered, located at 101 Barclay
Street, Floor 21 West, New York, New York 10286.
The term "corporation" includes corporations, associations, companies and
business trusts.
"Default" has the meaning specified in Section 5.03.
"Deferred Interest" has the meaning specified in Section 3.07.
"Deferred Payment Date" has the meaning specified in Section 3.07.
"Deferred Record Date", when used for the interest payable on any
Deferred Payment Date on registered Subordinated Debt Securities of any
series, means the date specified for the purpose pursuant to Section 3.01.
"Depositary" means, with respect to any series of Subordinated Debt
Securities, a clearing agency that is designated to act as Depositary for the
Global
4
Securities evidencing all or part of such Subordinated Debt Securities as
contemplated by Section 3.01.
"Discount Security" means any Subordinated Debt Security which provides
for an amount less than the principal amount to be due and payable upon a
declaration of the Maturity thereof pursuant to Section 5.02.
"Dollar" or "$" or any similar reference means the coin or currency of the
United States of America as at the time of payment is legal tender for the
payment of public and private debts.
"Dollar Preference Shares" means a designated series of non-cumulative
dollar preference shares, nominal value of $.01 each, of the Company for which,
if applicable to a particular series of Subordinated Debt Securities, the
Company may exchange or convert any series of Subordinated Debt Securities.
"DTC" means the Depository Trust & Clearing Company or its nominee or its
or their successor.
"euro"or "(euro)" means the single currency of the participating member
states in the Third Stage of European economic and monetary union pursuant to
the Treaty establishing the European Community (as amended from time to time).
"participating member states" means those member states of the European Union
from time to time which adopt a single, shared currency in the Third Stage, as
defined and identified in the EMU legislation.
"Euroclear" means, the Euroclear Bank S.A./N.V. as operator of the
Euroclear System, or its nominee, or its or their successor.
"Event of Default" has the meaning specified in Section 5.01.
"Exchange Act" means the United States Securities Exchange Act of 1934, as
amended.
"Exchange Date", when used with respect to any applicable series of
Subordinated Debt Securities, has the meaning specified in Section 13.03.
"Exchange Securities" has the meaning specified in Section 3.01(l).
"Foreign Currency" means the euro or any currency issued by the government
of any country (or a group of countries or participating member states) other
than the United States which as at the time of payment is legal tender for the
payment of public and private debts.
5
"Foreign Government Securities" means with respect to Subordinated Debt
Securities of any series that are denominated in a Foreign Currency,
non-callable (i) direct obligations of the participating member state or
government that issued such Foreign Currency for the payment of which
obligations its full faith and credit is pledged or (ii) obligations of a
Person controlled or supervised by and acting as an agency or instrumentality
of such participating member state or government, the payment of which
obligations is unconditionally guaranteed as a full faith and credit obligation
of such participating member state or government. For the avoidance of doubt,
for all purposes hereof, euro shall be deemed to have been issued by each
participating member state from time to time.
"Global Security" means a global certificate evidencing all or part of a
series of Subordinated Debt Securities, authenticated and delivered to the
Holder and registered in the name of the Holder or its nominee.
"Holder" means a Person in whose name a Subordinated Debt Security in
global or definitive form is registered in the Subordinated Debt Security
Register.
The term "interest", when used with respect to a Discount Security which
by its terms bears interest only after Maturity, means interest payable after
Maturity.
"Interest Payment Date", when used with respect to any Subordinated Debt
Security, means the Stated Maturity of any instalment of interest on such
Subordinated Debt Security.
"Liquidator" has the meaning specified in Section 12.06.
"Maturity", when used with respect to any Subordinated Debt Security,
means the date, if any, on which the principal of such Subordinated Debt
Security becomes due and payable as therein or herein provided, whether by call
for redemption, winding-up of the Company or otherwise.
"Officer's Certificate" means a certificate delivered to the Trustee and
signed by an Executive Director or an Assistant Director or the Secretary or a
Deputy or Assistant Secretary of the Company.
"Opinion of Counsel" means a written opinion of legal advisors, who may be
an employee of or legal advisors for the Company or other legal advisors.
"Outstanding", when used with respect to Subordinated Debt Securities or
any series of Subordinated Debt Securities means, as of the date of
determination, all Subordinated Debt Securities or all Subordinated Debt
6
Securities of such series, as the case may be, theretofore authenticated and
delivered under this Subordinated Debt Securities Indenture, except:
(i) Subordinated Debt Securities theretofore cancelled by the Trustee
or delivered to the Trustee for cancellation;
(ii) Subordinated Debt Securities, or portions thereof, for whose
payment or redemption money, U.S. Government Obligations or Foreign
Government Securities in the necessary amount have been theretofore
deposited with the Trustee or any Paying Agent (other than the Company) in
trust or set aside and segregated in trust by the Company (if the Company
shall act as its own Paying Agent) for the Holders of such Subordinated
Debt Securities; provided, that, if such Subordinated Debt Securities are
to be redeemed, notice of such redemption has been duly given pursuant to
this Subordinated Debt Securities Indenture or provision therefor
satisfactory to the Trustee has been made; and
(iii) Subordinated Debt Securities which have been paid pursuant to
Section 11.06 or in exchange for or in lieu of which other Subordinated
Debt Securities have been authenticated and delivered pursuant to this
Subordinated Debt Securities Indenture, other than any such Subordinated
Debt Securities in respect of which there shall have been presented to the
Trustee proof satisfactory to it that such Subordinated Debt Securities
are held by a bona fide purchaser in whose hands such Subordinated Debt
Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Subordinated Debt Securities of any series
have given any request, demand, authorization, direction, notice, consent or
waiver hereunder, (i) the principal amount of a Subordinated Debt Security
denominated in a Foreign Currency shall be the Dollar equivalent, determined on
the date of original issuance of such Subordinated Debt Security, of the
principal amount of such Subordinated Debt Security; and (ii) Subordinated Debt
Securities beneficially owned by the Company or any other obligor upon the
Subordinated Debt Securities or any Affiliate of the Company or of such other
obligor shall be disregarded and deemed not to be Outstanding except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Subordinated Debt Securities which a Responsible Officer of the Trustee
actually knows to be so beneficially owned shall be so disregarded; provided,
further, however, that Subordinated Debt Securities so beneficially owned which
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such
7
Subordinated Debt Securities and that the pledgee is not the Company or any
other obligor upon the Subordinated Debt Securities or any Affiliate of the
Company or of such other obligor.
"Paying Agent" means any Person (which may include the Company) authorized
by the Company to pay the principal of (and premium, if any) or interest, if
any on any Subordinated Debt Securities on behalf of the Company.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment", when used with respect to the Subordinated Debt
Securities of any series, means the place or places where the principal of (and
premium, if any) and interest, if any, on the Subordinated Debt Securities of
that series are payable as specified pursuant to Section 3.01 or, if not so
specified, as specified in Section 10.02.
"Predecessor Security" of any particular Subordinated Debt Security means
every previous Subordinated Debt Security evidencing all or a portion of the
same debt as that evidenced by such particular Subordinated Debt Security; and,
for the purposes of this definition, any Subordinated Debt Security
authenticated and delivered under Section 3.06 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Subordinated Debt Security shall be deemed
to evidence the same debt as the mutilated, destroyed, lost or stolen
Subordinated Debt Security.
"Redemption Date", when used with respect to any Subordinated Debt
Security to be redeemed, means the date fixed for such redemption by or
pursuant to this Subordinated Debt Securities Indenture.
"Redemption Price", when used with respect to any Subordinated Debt
Security to be redeemed, means the price at which it is to be redeemed pursuant
to this Subordinated Debt Securities Indenture.
"Regular Record Date" for the interest payable on any Interest Payment
Date on registered Subordinated Debt Securities of any series means the date
specified for the purpose pursuant to Section 3.01.
"Responsible Officer", when used with respect to the Trustee, means any
officer of the Trustee assigned to or working in the corporate trust department
of the Trustee or, with respect to a particular corporate trust matter, any
other officer to whom such matter is referred because of his or her knowledge
of and
8
familiarity with the particular subject and who shall have direct
responsibility for the administration of this Subordinated Debt Securities
Indenture.
"Senior Creditors" means creditors of the Company except creditors in
respect of Subordinated Indebtedness.
"Stated Maturity", when used with respect to any Subordinated Debt
Security or any instalment of principal thereof or interest thereon, means the
date, if any, specified in, or determined in accordance with the terms of, such
Subordinated Debt Security as the fixed date on which the principal of such
Subordinated Debt Security is due and payable.
"Subordinated Debt Securities", has the meaning set forth in the recitals
of the Company herein and more particularly means any series of Subordinated
Debt Securities issued, authenticated and delivered under this Subordinated
Debt Securities Indenture.
"Subordinated Debt Securities Indenture" means this instrument as
originally executed or as it may from time to time be supplemented or amended
by one or more indentures supplemental hereto entered into pursuant to the
applicable provisions hereof and shall include the terms and forms of
particular series of Subordinated Debt Securities established pursuant to
Section 3.01.
"Subordinated Debt Security" means one of the Subordinated Debt
Securities.
"Subordinated Debt Security Register" and "Subordinated Debt Security
Registrar" have the respective meanings specified in Section 3.05.
"Subordinated Indebtedness" means claims in respect of any liability of
the Company however arising for the payment of money, the right to payment of
which by the Company by the terms thereof that are or are expressed to be,
subordinated (whether only in the event of a winding-up of the Company or
otherwise) to the claims of all or any of the creditors of the Company.
"Subsidiary" has the meaning attributed thereto by Section 736 of the
Companies Act 1985 of Great Britain as in force at the date as of which this
instrument was executed.
"Taxing Jurisdiction" has the meaning specified in Section 10.04.
"Trustee" means the Person named as the "Trustee" in the first paragraph
of this instrument until a successor trustee shall have become such pursuant to
the
9
applicable provisions of this Subordinated Debt Securities Indenture, and
thereafter "Trustee" shall mean the Person who is then the Trustee hereunder,
and if at any time there is more than one such Person, "Trustee" shall mean and
include each such Person; and "Trustee" as used with respect to the
Subordinated Debt Securities of any series shall mean the Trustee with respect
to the Subordinated Debt Securities of such series.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended by
the Trust Indenture Reform Act of 1990, as in force at the date as of which
this instrument was executed, except as provided in Section 9.05.
"United Kingdom" means the United Kingdom of Great Britain and Northern
Ireland.
"United States" and "U.S." mean the United States of America and, except
in the case of Sections 6.09 and 6.14, its territories and possessions.
"U.S. Government Obligations" means noncallable (i) direct obligations of
the United States for which its full faith and credit are pledged and/or (ii)
obligations of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States, the payment of which is unconditionally
guaranteed as a full faith and credit obligation of the United States, and
shall also include a depository receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act of 1933, as amended) as custodian with respect to
any such U.S. Government Obligation or a specific payment of principal of or
interest on any such U.S. Government Obligation held by such custodian for the
account of the holder of such depository receipt, provided that (except as
required by law) such custodian is not authorized to make any deduction from
the amount payable to the holder of such depository receipt from any amount
received by the custodian in respect of the U.S. Government Obligation or the
specific payment of principal of or interest on the U.S. Government Obligation
evidenced by such depository receipt.
"U.S. Person" means a person who, for U.S. tax purposes, is a citizen or
resident of the United States, any corporation, partnership or other entity
organized under the laws of the United States or any political subdivision
thereof or an estate or trust the income of which is subject to United States
income taxation, regardless of its source.
"Vice President", when used with respect to the Trustee, means any vice
president, whether or not designated by a number or a word or words added
before or after the title "vice president".
10
"Voting Stock" means stock or other interests of any class or classes,
however designated, having ordinary voting power for the election of a majority
of the board of directors of a corporation, other than stock or other interests
having such power only by reason of the happening of a contingency.
SECTION 1.02. Compliance Certificates and Opinions. Upon any application
or request by the Company to the Trustee to take any action under any provision
of this Subordinated Debt Securities Indenture, the Company shall furnish to
the Trustee an Officer's Certificate stating that all conditions precedent, if
any, provided for in this Subordinated Debt Securities Indenture relating to
the proposed action have been complied with and an Opinion of Counsel stating
that in the opinion of the legal advisor rendering such opinion all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Subordinated Debt Securities
Indenture relating to such particular application or request, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Subordinated Debt Securities Indenture shall
include:
(a) a statement that each Person signing such certificate or opinion has
read such covenant or condition and the definitions herein relating thereto;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of each such Person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether, in the opinion of each such Person, such
condition or covenant has been complied with.
SECTION 1.03. Form of Documents Delivered to Trustee. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified
by, or covered by the opinion of, only one such Person, or that they be so
certified or covered by only one document, but one such Person may certify or
give an
11
opinion with respect to some matters and one or more other such Persons
as to other matters, and any such Person may certify or give an opinion as to
such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, legal advisors, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or opinion of, or
representations by, legal advisors may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, an
officer or officers of the Company stating that the information with respect to
such factual matters is in the possession of the Company, unless such legal
advisors know, or in the exercise of reasonable care should know, that the
certificate or opinion or representation with respect to such matters is
erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Subordinated Debt Securities Indenture, they may, but
need not, be consolidated and form one instrument.
SECTION 1.04. Acts of Holders. (a) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this
Subordinated Debt Securities Indenture to be given or taken by Holders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent duly appointed in
writing; and, except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are delivered to the
Trustee and, when it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Subordinated Debt Securities Indenture and (subject to Section 6.01) conclusive
in favor of the Trustee and the Company, if made in the manner provided in this
Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. When such
execution is by a signer acting in a capacity other than his individual
capacity,
12
such certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(c) The ownership of registered Subordinated Debt Securities shall be
proved by the Subordinated Debt Security Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Subordinated Debt Security shall bind every
future Holder of the same Subordinated Debt Security and the Holder of every
Subordinated Debt Security issued upon the registration of transfer thereof or
in exchange therefor or in lieu thereof in respect of any thing done, omitted
or suffered to be done by the Trustee or the Company in reliance thereon,
whether or not notation of such action is made upon such Subordinated Debt
Security or such other Subordinated Debt Security.
SECTION 1.05. Notices, Etc. to Trustee and Company. Any request, demand,
authorization, direction, notice, consent, waiver or Act of Holders or other
document provided or permitted by this Subordinated Debt Securities Indenture
to be made upon, given or furnished to, or filed with,
(a) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided)
if made, given, furnished or filed in writing (which may be via facsimile)
to the Trustee at its Corporate Trust Office, or
(b) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided)
if in writing and mailed, in the case of the Company, first-class postage
prepaid, addressed to it at the address of its principal office specified
in the first paragraph of this Subordinated Debt Securities Indenture
(unless another address has been previously furnished in writing to the
Trustee by the Company, in which case at the last such address) marked
"Attention: Company Secretary".
SECTION 1.06. Notice to Holders; Waiver. When this Subordinated Debt
Securities Indenture provides for notice to Holders of any event, such notice
shall be sufficiently given (unless otherwise herein expressly provided) if
given in writing and mailed, first-class postage prepaid, to each Holder of a
registered Subordinated Debt Security affected by such event in the manner and
to the extent provided in Section 313(c) of the Trust Indenture Act with
respect to reports pursuant to Section 7.03(a).
13
For so long as the Subordinated Debt Securities of any series are
represented by Global Securities, the Company will deliver a copy of all
notices with respect to such series to the Holder (if the address of such
Holder is known to the Company).
When notice to Holders of registered Subordinated Debt Securities is given
by mail, neither the failure to mail such notice, nor any defect in any notice
so mailed, to any particular Holder shall affect the sufficiency of such notice
with respect to other Holders. Where this Subordinated Debt Securities
Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall not be
a condition precedent to the validity of any action taken in reliance upon such
waiver. In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder.
If the Subordinated Debt Securities are listed on the Luxembourg Stock
Exchange, all notices to Holders, will be published in an Authorized Newspaper
in Luxembourg.
SECTION 1.07. Conflict with Trust Indenture Act. If any provision hereof
limits, qualifies or conflicts with another provision hereof which is required
to be included in this Subordinated Debt Securities Indenture by any of the
provisions of the Trust Indenture Act, such required provision shall control.
If at any future time any provision required to be included herein by the Trust
Indenture Act as in force at the date as of which this Subordinated Debt
Securities Indenture was executed or any limitation imposed by the Trust
Indenture Act at such date on any provision otherwise included herein would not
be so required or imposed (in whole or in part) if this Subordinated Debt
Securities Indenture were executed at such future time, the Company and the
Trustee may enter into one or more indentures supplemental hereto pursuant to
Section 9.01 to change or eliminate (in whole or in part) such provision or
limitation of this Subordinated Debt Securities Indenture in conformity with
the requirements of the Trust Indenture Act as then in force, except that
(subject to Article Nine) no provision or limitation required to be included
herein by Sections 310(a)(1) and (a)(2), 315(a), (c), (d)(l), (d)(2), (d)(3)
and (e), 316(a)(1)(A), (a)(l)(B), (a)(2), (a) (last sentence) and (b) of the
Trust Indenture Act as in force at the date as of which this Subordinated Debt
Securities Indenture was executed may be so changed or eliminated.
14
SECTION 1.08. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
SECTION 1.09. Successors and Assigns. All covenants and agreements in this
Subordinated Debt Securities Indenture by the Company shall bind its successors
and assigns, whether so expressed or not.
SECTION 1.10. Separability Clause. In case any provision in this
Subordinated Debt Securities Indenture or in the Subordinated Debt Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 1.11. Benefits of Subordinated Debt Securities Indenture. Nothing
in this Subordinated Debt Securities Indenture or in the Subordinated Debt
Securities, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, and the Holders of Subordinated
Debt Securities, any benefit or any legal or equitable right, remedy or claim
under this Subordinated Debt Securities Indenture.
SECTION 1.12. Governing Law. This Subordinated Debt Securities Indenture
and the Subordinated Debt Securities shall be governed by and construed in
accordance with the laws of the State of New York, except as stated in Section
2.01 and except for Section 12.01, which shall be governed by and construed in
accordance with the laws of England, and except that the authorization and
execution of this Subordinated Debt Securities Indenture and the Subordinated
Debt Securities shall be governed by the respective jurisdictions of
organization of the Company and the Trustee, as the case may be.
SECTION 1.13. Saturdays, Sundays and Legal Holidays. The terms of the
Subordinated Debt Securities shall provide that, in any case where any Interest
Payment Date, Redemption Date, Exchange Date, Maturity or Stated Maturity, of a
Subordinated Debt Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Subordinated Debt Securities
Indenture or the Subordinated Debt Securities other than a provision in the
Subordinated Debt Securities that specifically states that such provision shall
apply in lieu of this Section) payments of interest, if any (and premium, if
any) or principal and the exchange of the Subordinated Debt Security need not
be made at such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment (or such other Business Day as
shall be provided in such Subordinated Debt Security) with the same force and
effect as if made on such Interest Payment Date, Redemption Date, Exchange
Date, Maturity or Stated Maturity, provided that no interest shall accrue on
such payment for the
15
period from and after such Interest Payment Date, Redemption Date, Exchange
Date, Maturity or Stated Maturity, as the case may be.
SECTION 1.14. Appointment of Agent for Service. The Company has designated
and appointed CT Corporation System, 111 Eighth Avenue, 13th floor, New York,
New York 10011 as its authorized agent upon which process may be served in any
suit or proceeding in any Federal or State court in the Borough of Manhattan,
The City of New York arising out of or relating to the Subordinated Debt
Securities or this Subordinated Debt Securities Indenture, but for that purpose
only, and agrees that service of process upon said CT Corporation System shall
be deemed in every respect effective service of process upon it in any such
suit or proceeding in any Federal or State court in the Borough of Manhattan,
The City of New York, New York. Such appointment shall be irrevocable so long
as any of the Subordinated Debt Securities remain Outstanding until the
appointment of a successor by the Company and such successor's acceptance of
such appointment. Upon such acceptance, the Company shall notify the Trustee of
the name and address of such successor. The Company further agrees to take any
and all action, including the execution and filing of any and all such
documents and instruments, as may be necessary to continue such designation and
appointment of said CT Corporation System in full force and effect so long as
any of the Subordinated Debt Securities shall be Outstanding. The Trustee shall
not be obligated and shall have no responsibility with respect to any failure
by the Company to take any such action. The Company hereby submits (for the
purposes of any such suit or proceeding) to the jurisdiction of any such court
in which any such suit or proceeding is so instituted, and waives, to the
extent it may effectively do so, any objection it may have now or hereafter to
the laying of the venue of any such suit or proceeding.
SECTION 1.15. Calculation Agent. If the Company appoints a Calculation
Agent pursuant to Section 3.01 with respect to any series of Subordinated Debt
Securities, any determination of the interest rate on, or other amounts in
relation to, such series of Subordinated Debt Securities in accordance with the
terms of such series of Subordinated Debt Securities by such Calculation Agent
shall (in the absence of manifest error, bad faith or willful misconduct) be
binding on the Company, the Trustee and all Holders and (in the absence of
manifest error, bad faith or willful misconduct) no liability to the Holders
shall attach to the Calculation Agent in connection with the exercise or
non-exercise by it of its powers, duties and discretions.
16
ARTICLE 2
SUBORDINATED DEBT SECURITY FORMS
SECTION 2.01. Forms Generally. The Subordinated Debt Securities of each
series shall be issuable as registered securities without coupons and in such
forms as shall be established by or pursuant to action of the Company's Board
of Directors, or in one or more indentures supplemental hereto, pursuant to
Section 3.01, in each case with such insertions, omissions, substitutions and
other variations as are required or permitted by this Subordinated Debt
Securities Indenture, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with any applicable law or rule or regulation made pursuant
thereto or with the rules of any securities exchange or Depositary therefor, or
as may, consistently herewith, be determined by the officers executing such
Subordinated Debt Securities, all as evidenced by any such execution; provided,
however, that such Subordinated Debt Securities shall have endorsed thereon a
statement in the following form or in substantially the following form:
"The rights of the holder of the Subordinated Debt Security are, to the
extent and in the manner set forth in Section 12.01 of the Subordinated
Debt Securities Indenture, subordinated to the claims of other creditors
of the Company, and this Subordinated Debt Security is issued subject to
the provisions of that Section 12.01, and the holder of this Subordinated
Debt Security, by accepting the same, agrees to and shall be bound by such
provisions. The provisions of Section 12.01 of the Subordinated Debt
Securities Indenture and the terms of this paragraph are governed by, and
shall be construed in accordance with, the laws of England."
The Trustee's certificates of authentication shall be in substantially the
form set forth in Section 2.02 or Section 6.14.
The definitive Subordinated Debt Securities shall be printed, lithographed
or engraved or produced by any combination of these methods or may be produced
in any other manner permitted by the rules of any securities exchange on which
the Subordinated Debt Securities may be listed, all as determined by the
officers executing such Subordinated Debt Securities, as evidenced by their
execution thereof.
SECTION 2.02. Form of Trustee's Certificate of Authentication. The
Trustee's certificate of authentication shall be in substantially the following
form:
17
CERTIFICATE OF AUTHENTICATION
This is one of the Subordinated Debt Securities of the series designated
herein referred to in the within-mentioned Subordinated Debt Securities
Indenture.
THE BANK OF NEW YORK
as Trustee
By:
-------------------------
Authorized Signatory
ARTICLE 3
THE SUBORDINATED DEBT SECURITIES
SECTION 3.01. Amount Unlimited; Issuable in Series. The aggregate
principal amount of Subordinated Debt Securities which may be authenticated and
delivered under this Subordinated Debt Securities Indenture is unlimited. The
Subordinated Debt Securities may be issued in one or more series.
There shall be established by or pursuant to action of the Board of
Directors of the Company or established in one or more indentures supplemental
hereto, prior to the initial issuance of Subordinated Debt Securities of any
series,
(a) the title of the Subordinated Debt Securities of the series
(which shall distinguish the Subordinated Debt Securities of the series
from all other Subordinated Debt Securities);
(b) any limit upon the aggregate principal amount of the Subordinated
Debt Securities of the series which may be authenticated and delivered
under this Subordinated Debt Securities Indenture (except for Subordinated
Debt Securities authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Subordinated Debt Securities
of the series pursuant to Section 3.04, 3.05, 3.06, 9.06 or 11.07);
(c) the date or dates, if any, on which the principal of (and
premium, if any, on) the Subordinated Debt Securities of the series is
payable;
18
(d) the rate or rates, if any, at which the Subordinated Debt
Securities of the series shall accrue interest or the manner of
calculation of such rate or rates, if any, the date or dates from which
such interest shall accrue, the Interest Payment Dates on which such
interest shall be payable or the manner of determination of such Interest
Payment Dates, if other than as specified in Section 3.07(a), the Deferred
Payment Date(s) or other terms applicable to deferred payments and, in the
case of registered Subordinated Debt Securities, the Regular Record Date
for the interest payable on any Interest Payment Date, the Deferred Record
Date for the interest payable on any Deferred Payment Date and any dates
required to be established pursuant to Section 7.01;
(e) whether any premium, upon redemption or otherwise, shall be
payable by the Company on Subordinated Debt Securities of the series;
(f) the place or places where the principal of (and premium, if any)
and any interest on Subordinated Debt Securities of the series shall be
payable, and the Paying Agent or Paying Agents who shall be authorized to
pay principal of (and premium, if any) and interest on Subordinated Debt
Securities of such series, at least one of such Paying Agents having
offices or agencies in the Borough of Manhattan, The City of New York and
if the Subordinated Debt Securities are listed on the Luxembourg Stock
Exchange, in Luxembourg;
(g) other than with respect to any redemption of the Subordinated
Debt Securities pursuant to Section 11.08, whether or not such series of
Subordinated Debt Securities are to be redeemable, in whole or in part, at
the Company's option and, if so redeemable, the period or periods within
which, the price or prices at which and the terms and conditions upon
which, Subordinated Debt Securities of the series may be redeemed,
including the date referred to in Section 11.08;
(h) the obligation, if any, of the Company to redeem or purchase
Subordinated Debt Securities of the series pursuant to any sinking fund or
analogous provisions or at the option of a Holder thereof and the period
or periods within which, the price or prices at which, and the terms and
conditions upon which Subordinated Debt Securities of the series shall be
redeemed or purchased, in whole or in part, pursuant to such obligation;
(i) if other than denominations of $25 and any multiple thereof, the
denominations in which Subordinated Debt Securities of the series in each
applicable form shall be issuable;
19
(j) if other than the principal amount thereof, the portion, or the
manner of calculation of such portion, of the principal amount of
Subordinated Debt Securities of the series which shall be payable upon a
declaration of acceleration or acceleration of the Maturity thereof
pursuant to Section 5.02, upon redemption of Subordinated Debt Securities
of any series which are redeemable before their Stated Maturity, or which
the Trustee shall be entitled to file and prove a claim pursuant to
Section 5.04;
(k) if Additional Amounts, pursuant to Section 10.04, will not be
payable;
(l) whether the Subordinated Debt Securities of any series shall be
exchangeable at the option of the Company into Dollar Preference Shares or
other securities of the Company ("Exchange Securities") pursuant to
Article Thirteen and if so the terms of the Dollar Preference Shares or
the nature and terms of the Exchange Securities into which such
Subordinated Debt Securities are exchangeable and any additional or other
provisions relating to such exchange;
(m) if other than Dollars, provisions, if any, for the Subordinated
Debt Securities of the series to be denominated, and payments thereon to
be made, in Foreign Currencies and specifying the manner and place of
payment thereon and any other terms with respect thereto;
(n) if other than the coin or currency in which the Subordinated Debt
Securities of that series are denominated, the coin or currency in which
payment of the principal of (and premium, if any) or interest, if any, on
the Subordinated Debt Securities of such series shall be payable;
(o) if the principal of (and premium, if any) or interest, if any, on
the Subordinated Debt Securities of such series are to be payable, at the
election of the Company or a Holder thereof, in a coin or currency other
than that in which the Subordinated Debt Securities are denominated, the
period or periods within which, and the terms and conditions upon which,
such election may be made;
(p) whether the Subordinated Debt Securities of the series shall be
issued in whole or in part in the form of one or more Global Securities
and the initial Holder with respect to such Global Security or
Subordinated Debt Securities;
20
(q) if the Subordinated Debt Securities of such series are to be
issuable in definitive form (whether upon original issue or upon exchange
of a temporary Subordinated Debt Security of such series or otherwise)
only upon receipt of certain certificates or other documents or
satisfaction of other conditions, then the form and terms of such
certificates, documents or conditions;
(r) if the amounts of payments of principal of (and premium, if any)
or interest, if any, on the Subordinated Debt Securities of the series may
be determined with reference to an index or are otherwise not fixed on the
original issue date thereof, the manner in which such amounts shall be
determined and the Calculation Agent, if any, who shall be appointed and
authorized to calculate such amounts;
(s) any other Events of Default, Defaults or covenants with respect
to the Subordinated Debt Securities of such series and if other than as
specified in Section 5.03, the terms of any Default;
(t) if other than as provided in Section 12.01, the subordination
terms with respect to the Subordinated Debt Securities of the series;
(u) the forms of Subordinated Debt Securities of the series; and
(v) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Subordinated Debt Securities
Indenture).
All Subordinated Debt Securities of any one series shall be substantially
identical except as to denomination and except as may otherwise be provided in
or pursuant to such action or in any such indenture supplemental hereto.
If the forms of Subordinated Debt Securities of any series, or any of the
terms thereof, are established by action taken by the Board of Directors of the
Company, copies of the Board Resolutions in respect thereof shall be delivered
to the Trustee at or prior to the delivery of the Company Order pursuant to
Section 3.03 for the authentication and delivery of such Subordinated Debt
Securities.
SECTION 3.02. Denominations. The Subordinated Debt Securities of each
series shall be issuable in such denominations as shall be specified as
contemplated by Section 3.01. In the absence of any such specification with
respect to Subordinated Debt Securities of any series, the Subordinated Debt
Securities of each series shall be issuable in denominations of $25 each and
any integral multiple thereof. Unless otherwise specified in accordance with
Section
21
3.01, any Global Security issued and delivered to the Holder shall be
issued in the form of units with each $25 principal amount of such Global
Security constituting one unit.
SECTION 3.03. Execution, Authentication, Delivery and Dating. The
Subordinated Debt Securities shall be executed on behalf of the Company by any
two Directors or by one Director and a Deputy Secretary to the Company. The
signature of any of these officers on the Subordinated Debt Securities may be
manual or facsimile. Subordinated Debt Securities bearing the manual or
facsimile signatures of individuals who were at any time the proper officers of
the Company shall bind the Company, notwithstanding that such individuals or
any of them have ceased to hold such offices prior to the authentication and
delivery of such Subordinated Debt Securities.
At any time and from time to time after the execution and delivery of this
Subordinated Debt Securities Indenture, the Company may deliver Subordinated
Debt Securities of any series executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Subordinated Debt Securities, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Subordinated Debt
Securities. In authenticating such Subordinated Debt Securities and accepting
the additional responsibilities under this Subordinated Debt Securities
Indenture in relation to such Subordinated Debt Securities the Trustee shall be
entitled to receive, and (subject to Section 6.01) shall be fully protected in
relying upon, an Opinion of Counsel stating that the form and terms thereof
have been established in conformity with the provisions of this Subordinated
Debt Securities Indenture.
The Trustee shall not be required to authenticate such Subordinated Debt
Securities if the issue of such Subordinated Debt Securities pursuant to this
Subordinated Debt Securities Indenture will affect the Trustee's own rights,
duties or immunities under the Subordinated Debt Securities and this
Subordinated Debt Securities Indenture or otherwise in a manner which is not
reasonably acceptable to the Trustee.
Each registered Subordinated Debt Security shall be dated the date of its
authentication.
No Subordinated Debt Security appertaining thereto shall be entitled to
any benefit under this Subordinated Debt Securities Indenture or be valid or
obligatory for any purpose unless there appears on such Subordinated Debt
Security a certificate of authentication substantially in the form provided for
herein executed by or on behalf of the Trustee by manual signature, and such
certificate upon any Subordinated Debt Security shall be conclusive evidence,
and
22
the only evidence, that such Subordinated Debt Security has been duly
authenticated and delivered hereunder and that such Subordinated Debt Security
is entitled to the benefits of this Subordinated Debt Securities Indenture.
SECTION 3.04. Temporary Subordinated Debt Securities. Pending the
preparation of definitive Subordinated Debt Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Subordinated Debt Securities substantially of the tenor of
the definitive Subordinated Debt Securities in lieu of which they are issued,
which Subordinated Debt Securities may be printed, lithographed, typewritten,
photocopied or otherwise produced. Temporary Subordinated Debt Securities shall
be issuable as registered Subordinated Debt Securities without coupons attached
in any authorized denomination, and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Subordinated Debt Securities may determine, all as evidenced by such execution.
If temporary Subordinated Debt Securities of any series are issued, the
Company will cause, if so required by the terms of such temporary Subordinated
Debt Securities, definitive Subordinated Debt Securities of such series to be
prepared without unreasonable delay. After the preparation of definitive
Subordinated Debt Securities of such series, the temporary Subordinated Debt
Securities of such series shall be exchangeable for definitive Subordinated
Debt Securities of such series containing identical terms and provisions upon
surrender of the temporary Subordinated Debt Securities of such series at the
office or agency of the Company in a Place of Payment for that series, without
charge to the Holder. Upon surrender for cancellation of any one or more
temporary Subordinated Debt Securities of any series the Company shall execute,
and the Trustee shall authenticate and deliver in exchange therefor, a like
aggregate principal amount of definitive Subordinated Debt Securities of the
same series of authorized denominations containing identical terms and
provisions. Until so exchanged, unless otherwise provided therein or in a
supplemental indenture relating thereto, the temporary Subordinated Debt
Securities of any series shall in all respects be entitled to the same benefits
(but shall be subject to all the limitations of rights) under this Subordinated
Debt Securities Indenture as definitive Subordinated Debt Securities of such
series.
SECTION 3.05. Registration, Registration of Transfer and Exchange.
(a) Global Securities. This Section 3.05(a) shall apply to Global
Securities unless otherwise specified, as contemplated by Section 3.01.
23
Each Global Security in registered form authenticated under this
Subordinated Debt Securities Indenture shall be registered in the name of the
Depositary designated for such Global Security or a nominee thereof and
delivered to such Depositary or a nominee thereof or custodian therefor, and
each such Global Security shall constitute a single Subordinated Debt Security
for all purposes of this Subordinated Debt Securities Indenture.
With respect to Global Securities in registered form, unless the Global
Security is presented by an authorized representative of the Holder to the
Company or its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of a nominee of the Holder and any
payment is made to such nominee, any transfer, pledge or other use of the
Global Security in registered form for value or otherwise shall be wrongful
since the registered owner of such Global Security, the nominee of the Holder,
has an interest in such Global Security.
Except as otherwise specified as contemplated by Section 3.01 hereof, any
Global Security shall be exchangeable for definitive Subordinated Debt
Securities only as provided in this paragraph. A Global Security shall be
exchangeable pursuant to this Section only (i) if the relevant Depositary
notifies the Trustee that it is unwilling or unable to continue to act as
Depositary and a successor depositary is not appointed by the Trustee within
120 days of such notification, (ii) if, in the event of a winding-up of the
Company, the Company fails to make a payment on the Subordinated Debt
Securities when due, or (iii) at any time if the Company at its option and in
its sole discretion determines that the Global Securities of a particular
series should be exchanged for definitive Subordinated Debt Securities of that
series in registered form. Any Global Security that is exchangeable pursuant to
the preceding sentence shall be exchangeable for, unless otherwise specified or
contemplated by Section 3.01, definitive Subordinated Debt Securities in
registered form bearing interest (if any) at the same rate or pursuant to the
same formula, having the same date of issuance, the same date or dates from
which such interest shall accrue, the same Interest Payment Dates on which such
interest shall be payable or the manner of determination of such Interest
Payment Dates, redemption provisions, if any, specified currency and other
terms and of differing denominations aggregating a like amount as the Global
Security so exchangeable. Definitive Subordinated Debt Securities in registered
form shall be registered in the names of the owners of the beneficial interests
in such Global Securities as such names are from time to time provided by the
Holder to the Trustee.
Any Global Security that is exchangeable pursuant to the preceding
paragraph, unless otherwise specified as contemplated by Section 3.01, shall be
24
exchangeable for Subordinated Debt Securities issuable in authorized
denominations of a like aggregate principal amount and tenor.
No Global Security in registered form may be transferred except as a whole
by the Holder to a nominee of the Holder or by the Holder or any such nominee
to a successor of the Holder or a nominee of such successor. Except as provided
above, owners solely of beneficial interests in a Global Security shall not be
entitled to receive physical delivery of Subordinated Debt Securities in
definitive form and will not be considered the holders thereof for any purpose
under this Subordinated Debt Securities Indenture.
In the event that a Global Security is surrendered for redemption or
exchange for Dollar Preference Shares or Exchange Securities in part pursuant
to Section 11.07 or Section 13.05, the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Global Security, without
service charge, a new Global Security in a denomination equal to and in
exchange for the unredeemed or unexchanged portion of the principal of the
Global Security so surrendered.
The Agent Members and any other beneficial owners shall have no rights
under this Subordinated Debt Securities Indenture with respect to any Global
Security held on their behalf by a Holder, and such Holder may be treated by
the Company, the Trustee, and any agent of the Company or the Trustee as the
owner of such Global Security for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Trustee, or any agent
of the Company or the Trustee, from giving effect to any written certification,
proxy or other authorization furnished by a Holder or impair, as between any
such Holder or other clearance service and its Agent Members and Holders, the
operation of customary practices governing the exercise of the rights of a
holder of any security, including without limitation the granting of proxies or
other authorization of participants to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action which a
Holder is entitled to give or take under this Subordinated Debt Securities
Indenture.
In connection with any exchange of interests in a Global Security for
definitive Subordinated Debt Securities of another authorized form, as provided
in this subsection 3.05(a), then without unnecessary delay but in any event not
later than the earliest date on which such interests may be so exchanged, the
Company shall deliver to the Trustee definitive Subordinated Debt Securities in
aggregate principal amount equal to the principal amount of such Global
Security or the portion to be exchanged executed by the Company. On or after
the earliest date on which such interests may be so exchanged, such Global
Security shall be surrendered by the Holder to the Trustee, as the Company's
agent for such purpose,
25
to be exchanged, in whole or from time to time in part, for definitive
Subordinated Debt Securities without charge (unless the definitive Subordinated
Debt Securities in registered form are to be issued to an Excepted Person (as
defined in Section 13.10) in which case the Company or Trustee may require
payment of any taxes or governmental charges arising) and the Trustee shall
authenticate and deliver, in exchange for each portion of such Global Security,
an equal aggregate principal amount of definitive Subordinated Debt Securities
of authorized denominations as the portion of such Global Security to be
exchanged. Any Global Security that is exchangeable pursuant to this Section
3.05 shall be exchangeable for Subordinated Debt Securities issuable in the
denominations specified as contemplated by Section 3.01 and registered in such
names as the Holder of such Global Security shall direct. If a definitive
Subordinated Debt Security in registered form is issued in exchange for any
portion of a Global Security after the close of business at the office or
agency where such exchange occurs on any record date and before the opening of
business at such office or agency on the relevant Interest Payment Date,
interest will not be payable on such Interest Payment Date in respect of such
definitive Subordinated Debt Security, but will be payable on such Interest
Payment Date only to the person to whom payments of interest in respect of such
portion of such Global Security are payable.
A Depositary may grant proxies and otherwise authorize any person,
including Agent Members and persons that may hold interests through Agent
Members, to take any action which a holder is entitled to take under this
Subordinated Debt Securities Indenture with respect to the Subordinated Debt
Securities.
(b) Except as otherwise specified pursuant to Section 3.01, registered
Subordinated Debt Securities of any series may only be exchanged for a like
aggregate principal amount of registered Subordinated Debt Securities of such
series of other authorized denominations containing identical terms and
provisions. Subordinated Debt Securities to be exchanged shall be surrendered
at an office or agency of the Company designated pursuant to Section 10.02 for
such purpose, and the Company shall execute, and the Trustee shall authenticate
and deliver, in exchange therefor the Subordinated Debt Security or
Subordinated Debt Securities of the same series which the Holder making the
exchange shall be entitled to receive.
Except as otherwise specified pursuant to Section 3.01, the Company shall
cause to be kept in the principal corporate trust office of the Trustee a
register (the register maintained in such office and in any other office or
agency of the Company in a Place of Payment being herein sometimes collectively
referred to as the "Subordinated Debt Security Register" provided, no such
Subordinated
26
Debt Security Register shall be maintained in any office or agency in the
United Kingdom other than in Scotland) in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of registered Subordinated Debt Securities and of transfers of such
Subordinated Debt Securities. The Trustee is hereby appointed "Subordinated
Debt Security Registrar" for the purpose of registering Subordinated Debt
Securities in registered form and transfers of Subordinated Debt Securities in
registered form as herein provided.
Registered Subordinated Debt Securities shall be transferable only on the
Subordinated Debt Security Register. Upon surrender for registration of
transfer of any registered Subordinated Debt Security of any series at an
office or agency of the Company designated pursuant to Section 10.02 for such
purpose, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new registered Subordinated Debt Securities of the same series of any
authorized denominations containing identical terms and provisions, of a like
aggregate principal amount.
All Subordinated Debt Securities issued upon any registration of transfer
or exchange of Subordinated Debt Securities shall be the valid obligations of
the Company, evidencing the same debt, and entitled to the same benefits under
this Subordinated Debt Securities Indenture, as the Subordinated Debt
Securities surrendered upon such registration of transfer or exchange.
Every registered Subordinated Debt Security presented or surrendered for
registration of transfer or for exchange shall (if so required by the Company
or the Trustee) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company and the Subordinated Debt Security
Registrar duly executed, by the registered Holder thereof or his attorney duly
authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Subordinated Debt Securities, but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of
Subordinated Debt Securities, other than exchanges pursuant to Section 3.04,
9.06 or 11.07 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer of
or exchange any Subordinated Debt Security of any series during a period
beginning at the opening of business 15 days before the day of the giving of a
notice of redemption of Subordinated Debt Securities of such series selected
for redemption under Section 11.03 and ending at the close of business on the
day of the giving of
27
such notice, or (ii) to register the transfer of or exchange any Subordinated
Debt Security so selected for redemption in whole or in part, except the
unredeemed portion of any Subordinated Debt Securities being redeemed in part.
SECTION 3.06. Mutilated, Destroyed, Lost and Stolen Subordinated Debt
Securities. If any mutilated Subordinated Debt Security (including any Global
Security) is surrendered to the Trustee, the Company may execute and the
Trustee shall, in the case of a Subordinated Debt Security, authenticate and
deliver in exchange therefor a new Subordinated Debt Security of the same
series containing identical terms and provisions and of like amount, and
bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and to the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Subordinated
Debt Security (including any Global Security) and (ii) such security or
indemnity as may be required by them to save each of them and any agent of any
of them harmless, then, in the absence of notice to the Company or the Trustee
that such Subordinated Debt Security has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and deliver in lieu of any such destroyed, lost or stolen
Subordinated Debt Security a new Subordinated Debt Security of the same series
containing identical terms and provisions and of like amount, and bearing a
number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Subordinated Debt
Security has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a new Subordinated Debt Security, pay such
Subordinated Debt Security.
Upon the issuance of any new Subordinated Debt Security under this
Section, the Company may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the Trustee) connected
therewith.
Every new Subordinated Debt Security of any series issued pursuant to this
Section in lieu of any destroyed, lost or stolen Subordinated Debt Security
shall constitute an original additional contractual obligation of the Company,
whether or not the destroyed, lost or stolen Subordinated Debt Security shall
be at any time enforceable by anyone, and shall be entitled to all the benefits
of this Subordinated Debt Securities Indenture equally and proportionately with
any and all other Subordinated Debt Securities of that series duly issued
hereunder.
28
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Subordinated Debt Securities.
SECTION 3.07. Payment; Interest Rights Preserved. (a) Except as otherwise
provided as contemplated by Section 3.01 with respect to any series of
Subordinated Debt Securities, if the Company does not make a payment of
principal of (and premium, if any, on) or interest, if any, with respect to any
series of Subordinated Debt Securities on the original due date for payment,
the obligation to make such payment shall be deferred until (i) in the case of
a payment of interest, the date upon which a dividend is paid on any class of
the Company's share capital and (ii) in the case of a payment of principal, the
first Business Day after the date that falls six months after the original due
date for payment (a "Deferred Payment Date"). Failure by the Company to make
any such payment prior to such Deferred Payment Date shall not constitute a
Default by the Company or otherwise allow any Holder to sue the Company for
such payment or take any other action. Each payment so deferred will accrue
interest at the rate prevailing immediately before the original due date with
respect to such payment. Any amount the due date of which is deferred pursuant
to the above shall not be treated as due for any purpose (including, without
limitation, for the purposes of ascertaining whether or not a Default has
occurred) until the Deferred Payment Date.
(b) Except as otherwise provided as contemplated by Section 3.01 with
respect to any series of Subordinated Debt Securities, interest, if any, on any
Subordinated Debt Securities which is payable, and is paid or duly provided
for, on any Interest Payment Date shall be paid, in the case of registered
Subordinated Debt Securities, to the Person in whose name that Subordinated
Debt Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest or, in the case
of Global Securities held by any Holder, to the Holder including through a
Paying Agent of the Company designated pursuant to Section 3.01 outside the
United Kingdom for collection by the Holder.
In the case of registered Subordinated Debt Securities where payment is to
be made in Dollars, payment at any Paying Agent's office outside The City of
New York will be made in Dollars by check drawn on, or, at the request of the
Holder, by transfer to a Dollar account maintained by the payee with, a bank in
The City of New York.
In the case of registered Subordinated Debt Securities where payment is to
be made in a Foreign Currency, payment will be made as established pursuant to
Section 3.01.
29
Any interest on any Subordinated Debt Security of any series which is
payable, but is not punctually paid or duly provided for, on any Interest
Payment Date is herein called "Deferred Interest". Deferred Interest on any
registered Subordinated Debt Security of any series shall forthwith cease to be
payable to the Holder on the relevant Regular Record Date by virtue then of
having been such Holder, and such Deferred Interest may be paid, in the case of
registered Subordinated Debt Securities, to the Person in whose name that
Subordinated Debt Security (or one or more Predecessor Subordinated Debt
Securities) is registered at the close of business on the Deferred Record Date
for such interest or may be paid by the Company, at its election, to the person
who is the Holder on the record date established by the Company for such
purpose.
Subject to the foregoing provisions of this Section, each Subordinated
Debt Security delivered under this Subordinated Debt Securities Indenture upon
registration of transfer of or in exchange for or in lieu of any other
Subordinated Debt Security shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Subordinated Debt
Security.
SECTION 3.08. Persons Deemed Owners. Prior to due presentment of a
registered Subordinated Debt Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name such Subordinated Debt Security is registered as the owner
of such Subordinated Debt Security for the purpose of receiving payment of
principal of (and premium, if any) and (subject to Section 3.07) interest, if
any, on such Subordinated Debt Security and for all other purposes whatsoever,
whether or not such Subordinated Debt Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
SECTION 3.09. Cancellation. All Subordinated Debt Securities surrendered
for payment, redemption, registration of transfer or exchange shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly cancelled by it. The Company may at any time deliver to
the Trustee for cancellation any Subordinated Debt Securities previously
authenticated and delivered hereunder and all Subordinated Debt Securities so
delivered shall be promptly cancelled by the Trustee. No Subordinated Debt
Securities shall be authenticated in lieu of or in exchange for any
Subordinated Debt Securities cancelled as provided in this Section, except as
expressly permitted by the provisions of the Subordinated Debt Securities of
any series or pursuant to the provisions of this Subordinated Debt Securities
Indenture. The Trustee shall deliver to the Company all cancelled Subordinated
Debt Securities held by the Trustee.
30
SECTION 3.10. Computation of Interest. Except as otherwise specified
pursuant to Section 3.01 for Subordinated Debt Securities of any series,
payments of interest on the Subordinated Debt Securities of each series shall
be computed on the basis of a 360-day year of twelve 30-day months.
SECTION 3.11. Cusip Numbers. The Company in issuing any series of the
Subordinated Debt Securities may use CUSIP, "ISIN" and/or "Common Code" numbers
(if then generally in use) or any successor to such numbers and thereafter with
respect to such series, the Trustee shall use "CUSIP", "ISIN" and/or "Common
Code" numbers or successor numbers in notices of redemption as a convenience to
Holders; provided that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Subordinated
Debt Securities or as contained in any notice of a redemption and that reliance
may be placed only on the other identification numbers printed on the
Subordinated Debt Securities, and any such redemption shall not be affected by
any defect in or omission of such numbers. The Company will promptly notify the
Trustee of any change in the "CUSIP", "ISIN" and/or "Common Code" numbers or
successor numbers.
ARTICLE 4
SATISFACTION AND DISCHARGE
SECTION 4.01. Satisfaction and Discharge of Subordinated Debt Securities
Indenture. This Subordinated Debt Securities Indenture shall upon Company
Request cease to be of further effect with respect to Subordinated Debt
Securities of any series (except as to any surviving rights of registration of
transfer or exchange of Subordinated Debt Securities of such series herein
expressly provided for), and the Trustee, at the expense of the Company, shall
execute proper instruments acknowledging satisfaction and discharge of this
Subordinated Debt Securities Indenture with respect to the Subordinated Debt
Securities of such series when
(a) either
(i) all Subordinated Debt Securities of such series theretofore
authenticated and delivered (other than (A) Subordinated Debt Securities
which have been destroyed, lost or stolen and which have been replaced or
paid as provided in Section 3.06 and (B) Subordinated Debt Securities for
whose payment money has theretofore been deposited in trust or segregated
and held in trust by the Company and thereafter repaid to the
31
Company or discharged from such trust, as provided in Section 10.03) have
been delivered to the Trustee for cancellation; or
(ii) all such Subordinated Debt Securities not theretofore delivered
to the Trustee for cancellation
(A) have become due and payable or will become due and payable
at their Stated Maturity within one year, or
(B) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the
Company, or 31
(C) are to be exchanged for Dollar Preference Shares or Exchange
Securities and notice of exchange of such Subordinated Debt
Securities for Dollar Preference Shares or Exchange Securities
pursuant to Article Thirteen shall have been given,
and the Company has deposited or caused to be deposited with the Trustee, as
trust funds in trust for the purpose, an amount in cash, or U.S. Government
Obligations (with respect to Subordinated Debt Securities denominated in
Dollars) or Foreign Government Securities (with respect to Subordinated Debt
Securities denominated in the same Foreign Currency) maturing, in the case of
(A) and (B) above, as to principal and interest, if any, and, in the case of
(C) above, as to accrued interest, if any, in such amounts and at such times as
will ensure the availability of cash sufficient to pay and discharge all claims
with respect to such Subordinated Debt Securities not theretofore delivered to
the Trustee for cancellation, in the case of (A) and (B) above, for principal
(and premium, if any) and accrued interest, if any, and, in the case of (iii)
above, as to accrued interest, if any, to the date of such deposit (in the case
of Subordinated Debt Securities which have become due and payable) or to the
Redemption Date or the Exchange Date, as the case may be;
(b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company with respect to the Subordinated Debt Securities
of such series; and
(c) the Company has delivered to the Trustee an Officer's Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of
32
this Subordinated Debt Securities Indenture with respect to the
Subordinated Debt Securities of such series have been complied with.
Notwithstanding any satisfaction and discharge of this Subordinated Debt
Securities Indenture, the obligations of the Company to the Trustee under
Section 6.07, the obligations of the Trustee to any Authenticating Agent under
Section 6.14 and, if cash, U.S. Government Obligations and/or Foreign
Government Securities shall have been deposited with the Trustee pursuant to
subclause 4.01(a)(ii) of clause 4.01(a) of this Section, the obligations of the
Trustee under Section 4.02 and the last paragraph of Section 10.03 shall
survive such satisfaction and discharge.
SECTION 4.02. Application of Trust Money. Subject to the provisions of the
last paragraph of Section 10.03, all cash, U.S. Government Obligations and
Foreign Government Securities deposited with the Trustee pursuant to Section
4.01 shall be held in trust and such cash and the proceeds from such U.S.
Government Obligations and/or Foreign Government Securities shall be applied by
it, in accordance with the provisions of the Subordinated Debt Securities of
such series, and this Subordinated Debt Securities Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as
Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of
the principal (and premium, if any) and interest for the payment of which such
cash, U.S. Government Obligations and/or Foreign Government Securities have
been deposited with the Trustee.
SECTION 4.03. Repayment to Company. The Trustee, the Calculation Agent and
any Paying Agent promptly shall pay to the Company upon Company Request any
excess money, U.S. Government Obligations and/or Foreign Government Securities
held by them at any time with respect to any series of Subordinated Debt
Securities.
ARTICLE 5
REMEDIES
SECTION 5.01. Events of Default. "Event of Default", wherever used herein
with respect to Subordinated Debt Securities of a particular series, means (i)
the making of an order by a court of competent jurisdiction which is not
successfully appealed within 30 days of the making of such order, or valid
adoption by the shareholders of the Company of an effective resolution, for the
winding-up of the Company (other than under or in connection with a scheme of
amalgamation or reconstruction not involving bankruptcy or insolvency) or (ii)
33
any other Event of Default provided with respect to Subordinated Debt
Securities of such series pursuant to Section 3.01.
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default occurs with respect to Subordinated Debt Securities of any
series and is continuing, then in every such case the Trustee or the Holder or
Holders of not less than 25% in aggregate principal amount of the Outstanding
Subordinated Debt Securities of such series may declare the principal amount
(or, in the case of Discount Securities, the accreted face amount together with
accrued interest, if any, on) of all the Subordinated Debt Securities of that
series to be due and payable immediately, by a notice in writing to the Company
(and to the Trustee if given by the Holder or Holders), and upon any such
declaration such principal amount (or specified amount) shall become
immediately due and payable.
At any time after such a declaration of acceleration with respect to
Subordinated Debt Securities of any series has been made but before a judgment
or decree for payment of the money due has been obtained by the Trustee as
hereinafter in this Article provided, the Holder or Holders of a majority in
aggregate principal amount of the Outstanding Subordinated Debt Securities of
such series, by written notice to the Company and the Trustee, may rescind or
annul such declaration of acceleration and its consequences (including any
Event of Default under another series of Subordinated Debt Securities arising
therefrom) but only if
(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(i) the principal of (and premium, if any, on) any Subordinated
Debt Securities of such series which have become due otherwise than
by such declaration of acceleration and any due and payable interest,
and overdue interest, if any, thereon at the rate or rates prescribed
therefor in such Subordinated Debt Securities,
(ii) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel; and
(b) all Events of Default with respect to Subordinated Debt
Securities of such series have been remedied.
No such rescission or annulment shall affect any subsequent default or
impair any right consequent thereon.
34
SECTION 5.03. Defaults; Collection of Indebtedness and Suits for
Enforcement by Trustee. Except as otherwise provided as contemplated by Section
3.01 with respect to any series of Subordinated Debt Securities, "Default"
wherever used herein with respect to Subordinated Debt Securities of a
particular series, means any one of the following events (whatever the reason
for such Default and whether it shall be voluntary or involuntary or be
effected by operation of law pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):
(a) the Company fails to pay any instalment of interest on any
Subordinated Debt Security of such series on or before its Deferred
Payment Date and such failure continues for 14 days; or
(b) the Company fails to pay all or any part of the principal of (and
premium, if any, on) any Subordinated Debt Security of such series on its
Deferred Payment Date, or when such principal shall otherwise become due
and payable, whether upon redemption or otherwise, and such failure
continues for seven days;
If a Default occurs and is continuing, the Trustee may pursue all legal
remedies available to it, including commencing a proceeding in England or
Scotland (but not elsewhere) for the winding-up of the Company, provided that
the Trustee may not, upon the occurrence of a Default, declare the principal
amount of any of the Outstanding Subordinated Debt Securities to be due and
payable.
The Trustee and Holders of Subordinated Debt Securities by their
acceptance thereof will be deemed to have waived any right of set-off or
counterclaim or combination of accounts with respect to the Subordinated Debt
Securities or this Subordinated Debt Securities Indenture (or between the
obligations under or in respect of any Subordinated Debt Securities and any
liability owed by a Holder or the Trustee to the Company) that they might
otherwise have against the Company, whether before or during a winding up of
the Company.
Notwithstanding the foregoing, failure to make any payment in respect of a
series of Subordinated Debt Securities shall not be a Default in respect of
such Subordinated Debt Securities if such payment is withheld or refused (i) in
order to comply with any fiscal or other law or regulation or with the order of
any court of competent jurisdiction, in each case applicable to such payment,
or (ii) in case of doubt as to the validity or applicability of any such law,
regulation or order, in accordance with advice given as to such validity or
applicability at any time before the expiry of such period of 14 days (in the
case of payments under clause 5.03(a) above) or seven days (in the case of
payments under clause
35
5.03(b) above) by independent legal advisers acceptable to the Trustee,
provided, however, that the Trustee may by notice to the Company require the
Company to take such action (including but not limited to proceedings for a
declaration by a court of competent jurisdiction) as the Trustee may be advised
in an Opinion of Counsel, upon which opinion the Trustee may conclusively rely,
is appropriate and reasonable in the circumstances to resolve such doubt, in
which case the Company shall forthwith take and expeditiously proceed with such
action and shall be bound by any final resolution of the doubt resulting
therefrom. If any such action results in a determination that the relevant
payment can be made without violating any applicable law, regulation or order
then the provisions of the preceding sentence shall cease to have effect and
the payment shall become due and payable on the expiration of 14 days (in the
case of payments under clause 5.03(a) above) or seven days (in the case of
payments under clause 5.03(b) above) after the Trustee gives written notice to
the Company informing it of such resolution.
No recourse for the payment of the principal of (or premium, if any) or
interest, if any, on any Subordinated Debt Security, or for any claim based
thereon or otherwise in respect thereof and no recourse under or upon any
obligation, covenant or agreement of the Company in this Subordinated Debt
Securities Indenture, or in any Subordinated Debt Security, or because of the
creation of any indebtedness represented thereby, shall be had against any
incorporator, stockholder, officer or director, past, present or future, of the
Company or of any successor corporation of the Company, either directly or
through the Company or any successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment
or penalty or otherwise; it being expressly understood that to the extent
lawful all such liability is hereby expressly waived and released as a
condition of, and as a consideration for, the execution of this Subordinated
Debt Securities Indenture and the issue of the Subordinated Debt Securities.
SECTION 5.04. Trustee May File Proofs of Claim. In case of the pendency of
any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition, winding-up or other judicial proceeding
relative to the Company or any other obligor upon the Subordinated Debt
Securities of any series or to the property of the Company or such other
obligor or their creditors (other than under or in connection with a scheme of
amalgamation or reconstruction not involving bankruptcy or insolvency), the
Trustee (irrespective of whether the principal of the Subordinated Debt
Securities of such series shall then be due and payable as therein expressed or
by declaration or otherwise and irrespective of whether the Trustee shall have
made any demand on the Company for the payment of overdue principal (and
premium, if any) or interest, if any) shall be entitled and empowered, by
intervention in such
36
proceeding or otherwise, to take any and all actions authorized under the Trust
Indenture Act in order to have claims of the Holders and the Trustee allowed in
any such proceeding. In particular, the Trustee shall be authorized to collect
and receive any moneys and other property payable or deliverable on any such
claims and to distribute the same; and any custodian, receiver, assignee,
trustee, liquidator, sequestrator or other similar official in any such
judicial proceeding is hereby authorized by each Holder of a Subordinated Debt
Security to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to such Holders
or holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due to the Trustee under Section 6.07.
Subject to Article Eight and Section 9.02, nothing herein contained shall
be deemed to authorize the Trustee to authorize or consent to or accept or
adopt on behalf of any Holder of any Subordinated Debt Security any plan of
reorganization, arrangement, adjustment, or composition affecting any
Subordinated Debt Securities or the rights of any Holder of any Subordinated
Debt Security or to authorize the Trustee to vote in respect of the claim of
any such Holder or holder in any such proceeding.
The provisions of this Section 5.04 are subject to the provisions of
Section 12.01.
SECTION 5.05. Trustee May Enforce Claims Without Possession of
Subordinated Debt Securities. All rights of action and claims under this
Subordinated Debt Securities Indenture or the Subordinated Debt Securities may
be prosecuted and enforced by the Trustee without the possession of any of the
Subordinated Debt Securities or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel
(subject, with regard to the Company, to the provisions of Section 12.01) be
for the ratable benefit of the Holders of the Subordinated Debt Securities in
respect of which such judgment has been recovered.
SECTION 5.06. Application of Money Collected. Any money collected by the
Trustee pursuant to this Article in respect of any series of Subordinated Debt
Securities shall be applied in the following order, at the date or dates fixed
by the Trustee and, in case of the distribution of such money on account of
principal (and premium, if any) or interest, if any, upon presentation of such
Subordinated Debt
37
Securities and the notation thereon of the payment if only partially paid and
upon surrender thereof if fully paid:
FIRST: To the payment of all amounts applicable to such series of
Subordinated Debt Securities in respect of which or for the benefit of which
such money has been collected due the Trustee under Section 6.07;
SECOND: To the payment of the amounts then due and unpaid for principal of
(and premium, if any) and interest, if any, on such series of Subordinated Debt
Securities in respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind, according to
the amounts due and payable on such Subordinated Debt Securities for principal
(and premium, if any) and interest, if any, respectively; and
THIRD: To the payment of the balance, if any, to the Company or any other
Person or Persons legally entitled thereto.
SECTION 5.07. Limitation on Suits. No Holder of any Subordinated Debt
Security of any series shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Subordinated Debt Securities
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(a) such Holder has previously given written notice to the Trustee of
a continuing Event of Default or Default with respect to Subordinated Debt
Securities of the same series specifying such Event of Default or Default
and stating that such notice is a "Notice of Default" hereunder;
(b) the Holders of not less than 25% in aggregate principal amount of
the Outstanding Subordinated Debt Securities of such series shall have
made written request to the Trustee to institute proceedings in respect of
such Event of Default or Default in its own name, as Trustee hereunder;
(c) such Holder of a Subordinated Debt Security has offered to the
Trustee reasonable indemnity satisfactory to it against the costs,
expenses and liabilities to be incurred in compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
38
majority in principal amount of the Outstanding Subordinated Debt
Securities of such series;
it being understood and intended that no one or more Holders of Subordinated
Debt Securities of a particular series shall have any right in any manner
whatever by virtue of, or by availing of, any provision of this Subordinated
Debt Securities Indenture to affect, disturb or prejudice the rights of any
other such Holders or holders, or to obtain or to seek to obtain priority or
preference over any other such Holders or holders or to enforce any right under
this Subordinated Debt Securities Indenture, except in the manner herein
provided and for the equal and ratable benefit of all Holders of Subordinated
Debt Securities of such series.
SECTION 5.08. Unconditional Right of Holders to Receive Principal, Premium
and Interest, if any. Notwithstanding any other provision in this Subordinated
Debt Securities Indenture, the Holder of any Subordinated Debt Security shall
have the right, which is absolute and unconditional, to receive payment of the
principal of (and premium, if any) and (subject to Section 3.07) interest, if
any, on such Subordinated Debt Security on the respective Stated Maturities as
expressed in such Subordinated Debt Security (or, in the case of redemption or
exchange, on the Redemption Date or Exchange Date, as the case may be) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder or holder.
SECTION 5.09. Restoration of Rights and Remedies. If the Trustee or any
Holder of any Subordinated Debt Security has instituted any proceeding to
enforce any right or remedy under this Subordinated Debt Securities Indenture
and such proceeding has been discontinued or abandoned for any reason, or has
been determined adversely to the Trustee or to such Holder, then and in every
such case, subject to any determination in such proceeding, the Company, the
Trustee and the Holders of Subordinated Debt Securities shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Trustee and the Holders of Subordinated Debt
Securities shall continue as though no such proceeding had been instituted.
SECTION 5.10. Rights and Remedies Cumulative. Except as otherwise provided
with respect to the replacement or payment of mutilated, destroyed, lost or
stolen Subordinated Debt Securities in the last paragraph of Section 3.06, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders of Subordinated Debt Securities is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or
39
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or
remedy.
SECTION 5.11. Delay or Omission Not Waiver. No delay or omission of the
Trustee or of any Holder of any Subordinated Debt Security to exercise any
right or remedy accruing upon any Event of Default or Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or
Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders of Subordinated Debt
Securities may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders of Subordinated Debt Securities, as
the case may be.
SECTION 5.12. Control by Holders. The Holders of a majority in aggregate
principal amount of the Outstanding Subordinated Debt Securities of any series
shall have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee with respect to the Subordinated Debt Securities
of such series, provided that
(a) such direction shall not be in conflict with any rule of law or
with this Subordinated Debt Securities Indenture;
(b) the Trustee shall not determine that the action so directed would
be unjustly prejudicial to the Holders of any Subordinated Debt Securities
of any series not taking part in such direction with respect to which the
Trustee is acting as the Trustee; and
(c) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 5.13. Waiver of past Defaults. The Holders of not less than a
majority in aggregate principal amount of the Outstanding Subordinated Debt
Securities of any series may on behalf of the Holders of all the Subordinated
Debt Securities of such series waive any past Event of Default or Default
hereunder with respect to such series and its consequences, except an Event of
Default or Default
(a) in the payment of the principal of (or premium, if any) or
interest, if any, on any Subordinated Debt Security of such series, or
(b) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the
40
Holder of each Outstanding Subordinated Debt Security of such series
affected.
Upon any such waiver, such Event of Default or Default shall cease to
exist, and any Event of Default or Default with respect to any series arising
therefrom shall be deemed to have been cured and not to have occurred for every
purpose of this Subordinated Debt Securities Indenture, but no such waiver
shall extend to any subsequent or other Event of Default or Default or impair
any right consequent thereon.
SECTION 5.14. Undertaking for Costs. All parties to this Subordinated Debt
Securities Indenture agree, and each Holder of any Subordinated Debt Security
by his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Subordinated Debt Securities Indenture, or in any suit against the
Trustee for any action taken, suffered or omitted by it as Trustee, the filing
by any party litigant to such suit of an undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees and expenses, against any party litigant
in such suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; but the provisions of this Section shall
not apply to any suit instituted by the Trustee, to any suit instituted by any
Holder or group of Holders holding in the aggregate more than 10% in principal
amount of the Outstanding Subordinated Debt Securities of any series, or to any
suit instituted by any Holder for the enforcement of the payment of the
principal of (or premium, if any) or interest, if any, on any Subordinated Debt
Security on or after the respective Stated Maturities expressed in such
Subordinated Debt Security (or, in the case of redemption or exchange, on or
after the Redemption Date or the Exchange Date, as the case may be).
ARTICLE 6
THE TRUSTEE
SECTION 6.01. Certain Duties and Responsibilities. The duties and
responsibilities of the Trustee shall be as provided by the Trust Indenture
Act. Notwithstanding the foregoing, no provision of this Subordinated Debt
Securities Indenture shall require the Trustee to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it. Whether or not therein expressly so
41
provided, every provision of this Subordinated Debt Securities Indenture
relating to the conduct or affecting the liability of or affording protection
to the Trustee shall be subject to the provisions of this Section 6.01.
SECTION 6.02. Notice of Defaults. Within 90 days after the occurrence of
any Event of Default or Default hereunder with respect to Subordinated Debt
Securities of any series of which a Responsible Officer of the Trustee has
actual knowledge the Trustee shall transmit in the manner and to the extent
provided in Section 1.06 to Holders of Subordinated Debt Securities of such
series notice of such Event of Default or Default hereunder known to the
Trustee, unless such Event of Default or Default shall have been cured or
waived; provided, however, that, the Trustee shall be protected in withholding
such notice if it determines in good faith that the withholding of such notice
is in the interest of the Holders of Subordinated Debt Securities of such
series.
SECTION 6.03. Certain Rights of Trustee. Subject to the provisions of
Section 6.01:
(a) the Trustee may conclusively rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, coupon or other evidence of
indebtedness or other paper or document (whether in its original or
facsimile form) believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors of the Company may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Subordinated Debt
Securities Indenture the Trustee shall deem it desirable that a matter be
proved or established prior to taking, suffering or omitting any action
hereunder, the Trustee (unless other evidence be herein specifically
prescribed) may, in the absence of bad faith on its part, rely upon an
Officer's Certificate;
(d) the Trustee may consult with counsel of its own selection and the
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon;
42
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Subordinated Debt Securities
Indenture at the request or direction of any of the Holders pursuant to
this Subordinated Debt Securities Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity satisfactory
to it against the costs, expenses and liabilities which might be incurred
by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, coupon or other evidence of indebtedness or other
paper or document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see
fit at the expense of the Company and shall incur no liability by reason
of such inquiry or investigation;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent (other than an officer or employee of
the Trustee) or attorney appointed with due care by it hereunder;
(h) the Trustee shall not be liable for any action taken, suffered,
or omitted to be taken by it in good faith and reasonably believed by it
to be authorized or within the discretion or rights or powers conferred
upon it by this Subordinated Debt Securities Indenture;
(i) the Trustee shall not be deemed to have notice of any Default or
Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in fact
such a default is received by the Trustee at the Corporate Trust Office of
the Trustee; and
(j) the rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in
each of its capacities hereunder, and each agent, custodian and other
Person employed by the Trustee to act hereunder.
SECTION 6.04. Not Responsible for Recitals or Issuance of Subordinated
Debt Securities. The recitals contained herein and in the Subordinated Debt
43
Securities, except the Trustee's certificates of authentication, shall be taken
as the statements of the Company, and neither the Trustee nor any
Authenticating Agent assumes any responsibility for their correctness. The
Trustee makes no representations as to the validity or sufficiency of this
Subordinated Debt Securities Indenture or of the Subordinated Debt Securities,
except that the Trustee represents and warrants that it has duly authorized,
executed and delivered this Subordinated Debt Securities Indenture. Neither the
Trustee nor any Authenticating Agent shall be accountable for the use or
application by the Company of Subordinated Debt Securities or the proceeds
thereof.
SECTION 6.05. May Hold Subordinated Debt Securities. The Trustee, any
Authenticating Agent, any Paying Agent, any Subordinated Debt Security
Registrar and any Calculation Agent or any other agent of the Company, in its
individual or any other capacity, may become the owner or pledgee of
Subordinated Debt Securities and, subject to Sections 6.08 and 6.13, may
otherwise deal with the Company with the same rights it would have if it were
not Trustee, Authenticating Agent, Paying Agent, Subordinated Debt Security
Registrar, Calculation Agent or such other agent.
SECTION 6.06. Money Held in Trust. Money held by the Trustee in trust
hereunder need not be segregated from other funds except to the extent required
by law. The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed with the Company.
SECTION 6.07. Compensation and Reimbursement.
The Company agrees
(a) to pay to the Trustee from time to time compensation for all
services rendered by it hereunder as agreed upon in writing by the Company
from time to time (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust);
(b) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision of this
Subordinated Debt Securities Indenture (including the reasonable
compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as shall be
determined by a court of competent jurisdiction to have been caused by its
own negligence or bad faith; and
44
(c) to fully indemnify the Trustee for, and to hold it harmless
against, any and all loss, liability, claim, damage or expense (including
legal fees and expenses) incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder including the costs and
expenses of defending itself against any claim or liability in connection
with the exercise or performance of any of its powers or duties hereunder
but excluding any tax liabilities of the Trustee in respect of its net
profits.
The Trustee shall notify the Company in writing of the commencement of any
action or claim in respect of which indemnification may be sought promptly
after a Responsible Officer of the Trustee becomes aware of such commencement
(provided that the failure to make such notification shall not affect the
Trustee's rights hereunder) and the Company shall be entitled to participate
in, and to the extent it shall wish, to assume the defense thereof, including
the employment of counsel reasonably satisfactory to the Trustee. The Trustee
shall not compromise or settle any such action or claim without the written
consent of the Company, which consent shall not be unreasonably withheld.
The provisions of this Section 6.07 shall survive termination of this
Subordinated Debt Securities Indenture or the resignation or removal of the
Trustee.
As security for the performance of the obligations of the Company under
this Section, the Trustee shall have a senior claim to which the Subordinated
Debt Securities are hereby made subordinate, upon all property and funds held
or collected by the Trustee as such, except funds held in trust for the payment
of principal of (or premium, if any) or interest, if any, on the Subordinated
Debt Securities.
SECTION 6.08. Disqualification; Conflicting Interests. If the Trustee has
or shall acquire a conflicting interest within the meaning of the Trust
Indenture Act, the Trustee shall either eliminate such interest or resign, to
the extent and in the manner provided by, and subject to the provisions of, the
Trust Indenture Act and this Subordinated Debt Securities Indenture.
SECTION 6.09. Corporate Trustee Required; Eligibility. There shall at all
times be a Trustee hereunder with respect to each series which shall be a
corporation organized and doing business under the laws of the United States,
any State thereof or the District of Columbia, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000, subject to supervision or examination by Federal or State or
District of Columbia authority and, if there be such corporation willing and
able to act as
45
trustee on reasonable and customary terms, having its corporate trust office or
agency in the Borough of Manhattan, The City of New York, New York. If such
corporation publishes reports of condition at least annually, pursuant to law
or to the requirements of said supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time the Trustee shall cease
to be eligible in accordance with the provisions of this Section, it shall
resign immediately in the manner and with the effect hereinafter specified in
this Article 6.
SECTION 6.10. Resignation and Removal; Appointment of Successor. (a) No
resignation or removal of the Trustee and no appointment of a successor Trustee
pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the applicable
requirements of Section 6.11.
(b) The Trustee may resign at any time with respect to the Subordinated
Debt Securities of one or more series by giving written notice thereof to the
Company. If the instrument of acceptance by a successor Trustee required by
Section 6.11 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition
any court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Subordinated Debt Securities of such series.
(c) The Trustee may be removed at any time with respect to the
Subordinated Debt Securities of any series by Act of the Holders of a majority
in principal amount of the Outstanding Subordinated Debt Securities of such
series delivered to the Trustee and to the Company. If the instrument of
acceptance by a successor Trustee required by Section 6.11 shall not have been
delivered to the Trustee within 30 days after the giving of such notice of
removal, the Trustee may petition at the expense of the Company any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Subordinated Debt Securities of such series.
(d) If at any time:
(i) the Trustee shall fail to comply with Section 6.08 after written
request therefor by the Company or by any Holder who has been a bona fide
Holder of a Subordinated Debt Security of the series as to which the
Trustee has a conflicting interest for at least six months, or
(ii) the Trustee shall cease to be eligible under Section 6.09 and
shall fail to resign after written request therefor by the Company or by
any
46
Holder who has been a bona fide Holder of a Subordinated Debt Security for
at least six months, or
(iii) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge, or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, or
(iv) the Trustee shall fail to perform its obligations to the Company
under the Subordinated Debt Securities Indenture in any material respect,
then, in any such case, (A) the Company by a Board Resolution may remove
the Trustee with respect to any or all series of Subordinated Debt
Securities or (B) subject to Section 5.14 (and except in the case of
subparagraph 6.10(d)(iv) above), any Holder who has been a bona fide
Holder of a Subordinated Debt Security for at least six months (and, in
the case of Section 6.10(d)(i) above, who is a Holder of a Subordinated
Debt Security of the series as to which the Trustee has a conflicting
interest) may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the
Trustee with respect to all Subordinated Debt Securities and the
appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, with
respect to the Subordinated Debt Securities of one or more series, the Company,
by a Board Resolution, shall promptly appoint a successor Trustee or Trustees
with respect to the Subordinated Debt Securities of such series (it being
understood that any successor Trustee may be appointed with respect to the
Subordinated Debt Securities of one or more or all of such series and at any
time there shall be only one Trustee with respect to the Subordinated Debt
Securities of any particular series), and shall comply with the applicable
requirements of Section 6.11. If, within one year after such resignation,
removal or incapability, or the occurrence of such vacancy, a successor Trustee
with respect to the Subordinated Debt Securities of any series shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Subordinated Debt Securities of such series delivered to the
Company and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment in accordance with the
applicable requirements of Section 6.11, become the successor Trustee with
respect to the Subordinated Debt Securities of such series and to that extent
supersede the successor Trustee appointed by the Company.
47
If no successor Trustee with respect to the Subordinated Debt Securities of any
series shall have been so appointed by the Company or the Holders of
Subordinated Debt Securities of such series and accepted appointment in the
manner hereinafter required by Section 6.11, any Holder who has been a bona
fide Holder of a Subordinated Debt Security of such series for at least six
months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Subordinated Debt Securities of such series.
(f) The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Subordinated Debt Securities of any series and
each appointment of a successor Trustee with respect to the Subordinated Debt
Securities of any series in the manner and to the extent provided in Section
1.06. Each notice shall include the name of the successor Trustee with respect
to the Subordinated Debt Securities of such series and the address of its
Corporate Trust Office.
SECTION 6.11. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Subordinated Debt Securities, every such successor Trustee so
appointed shall execute, acknowledge and deliver to the Company and to the
retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee;
but, on request of the Company or the successor Trustee, such retiring Trustee
shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee, all the rights, powers and trusts of
the retiring Trustee and shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such retiring Trustee
hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Subordinated Debt Securities of one or more (but not all)
series, the Company, the retiring Trustee and each successor Trustee with
respect to the Subordinated Debt Securities of such series shall execute and
deliver an indenture supplemental hereto wherein each successor Trustee shall
accept such appointment and which (i) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, each
successor Trustee all the rights, powers, trusts and duties of
48
the retiring Trustee with respect to the Subordinated Debt Securities of such
series to which the appointment of such successor Trustee relates, (ii) if the
retiring Trustee is not retiring with respect to all Subordinated Debt
Securities, shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Subordinated Debt Securities of such
series as to which the retiring Trustee is not retiring shall continue to be
vested in the retiring Trustee, and (iii) shall add to or change any of the
provisions of this Subordinated Debt Securities Indenture as shall be necessary
to provide for or facilitate the administration of the trusts hereunder by more
than one Trustee, it being understood that nothing herein or in such
supplemental indenture shall constitute such Trustees co-trustees of the same
trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such
supplemental indenture the resignation or removal of the retiring Trustee shall
become effective to the extent provided therein and each such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee with respect
to the Subordinated Debt Securities of such series to which the appointment of
such successor Trustee relates; but, on request of the Company or any successor
Trustee, such retiring Trustee shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such retiring Trustee
hereunder with respect to the Subordinated Debt Securities of such series to
which the appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all such rights, powers and trusts referred to in
paragraph (a) or (b) of this Section 6.11, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article 6.
SECTION 6.12. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with which
it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Subordinated Debt Securities shall have
been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating Trustee
may adopt such authentication and deliver the securities so authenticated with
the same effect as if such successor Trustee had itself authenticated such
Subordinated Debt Securities.
49
SECTION 6.13. Preferential Collection of Claims. If and when the Trustee
shall be or become a creditor of the Company (or any other obligor upon the
Subordinated Debt Securities of a series), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor).
SECTION 6.14. Appointment of Authenticating Agent. The Trustee may at any
time appoint an Authenticating Agent or Agents with respect to one or more
series of Subordinated Debt Securities which shall be authorized to act on
behalf of the Trustee to authenticate Subordinated Debt Securities of such
series upon original issue, or issued upon exchange, registration of transfer
or partial redemption thereof or in lieu of destroyed, lost or stolen
Subordinated Debt Securities, and Subordinated Debt Securities so authenticated
shall be entitled to the benefits of this Subordinated Debt Securities
Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Wherever reference is made in this
Subordinated Debt Securities Indenture to the authentication and delivery of
Subordinated Debt Securities by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent shall be acceptable to the Company and shall at all
times be a corporation or national banking association organized and doing
business under the laws of the United States, any State thereof or the District
of Columbia, authorized under such laws to act as Authenticating Agent, having
a combined capital and surplus of not less than $50,000,000 and subject to
supervision or examination by Federal or State or District of Columbia
authority. If such Authenticating Agent publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined
capital and surplus of such Authenticating Agent shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to
be eligible in accordance with the provisions of this Section 6.14, such
Authenticating Agent shall resign immediately in the manner and with the effect
specified in this Section.
Any corporation or national banking association into which an
Authenticating Agent may be merged or converted or with which it may be
consolidated, or any corporation or national banking association resulting from
any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation or national banking association succeeding
to the corporate agency or corporate trust business of an Authenticating Agent,
shall continue to be an Authenticating Agent, provided such corporation or
national
50
banking association shall be otherwise eligible under this Section 6.14, without
the execution or filing of any paper or any further act on the part of the
Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 6.14, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall give
notice to the Holders of Subordinated Debt Securities in the manner and to the
extent provided in Section 1.06. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all the
rights, powers and duties of its predecessor hereunder, with like effect as if
originally named as an Authenticating Agent. No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this Section 6.14.
The Company agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section 6.14.
If an appointment with respect to one or more series is made pursuant to
this Section, the Subordinated Debt Securities of such series may have endorsed
thereon, in lieu of the Trustee's certificate of authentication, an alternate
certificate of authentication in the following form:
This is one of the Subordinated Debt Securities referred to in the
within-mentioned Subordinated Debt Securities Indenture.
THE BANK OF NEW YORK
as Trustee
By: ,
-----------------------
as Authenticating Agent
By:
-----------------------
Authorized Signatory
51
ARTICLE 7
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 7.01. Company to Furnish Trustee Names and Addresses of Holders.
The Company, with respect to any series of Subordinated Debt Securities in
registered form, will furnish or cause to be furnished to the Trustee
(a) quarterly, not more than 15 days after each Regular Record Date
(or after each of the dates to be specified for such purpose for
non-interest bearing Subordinated Debt Securities and Subordinated Debt
Securities on which interest is paid less frequently than quarterly as
contemplated by Section 3.01), a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Holders of
registered Subordinated Debt Securities as of such Regular Record Date or
such specified date, and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the
time such list is furnished.
The Company need not furnish or cause to be furnished to the Trustee
pursuant to this Section 7.01 the names and addresses of Holders of registered
Subordinated Debt Securities so long as the Trustee acts as Subordinated Debt
Security Registrar with respect to such series of Subordinated Debt Securities.
SECTION 7.02. Preservation of Information; Communication to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders (i) contained in the most
recent list furnished to the Trustee as provided in Section 7.01 and (ii)
received by the Trustee in its capacity as Paying Agent or Capital Security
Registrar (if so acting). The Trustee may destroy any list furnished to it as
provided in Section 7.01 upon receipt of a new list so furnished.
(b) The rights of the Holders of Subordinated Debt Securities of any
series to communicate with other Holders with respect to their rights under
this Subordinated Debt Securities Indenture or under the Subordinated Debt
Securities, and the corresponding rights and privileges of the Trustee, shall
be as provided by the Trust Indenture Act.
(c) Every Holder, by receiving and holding a Subordinated Debt Security,
agrees with the Company and the Trustee that neither the Company nor
52
the Trustee nor any agent of any of them shall be held accountable by reason of
the disclosure of any such information as to the names and addresses of the
Holders in accordance with Section 7.02(b) or otherwise made pursuant to the
Trust Indenture Act.
SECTION 7.03. Reports by Trustee.
(a) On or before May 15 in each year following the date hereof, so long as
any Subordinated Debt Securities are Outstanding hereunder, the Trustee shall
transmit to Holders as provided in the Trust Indenture Act a brief report dated
as of a date required by and in compliance with the Trust Indenture Act.
(b) A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each securities exchange upon which the
Trustee has been notified that the Subordinated Debt Securities are listed,
with the Commission and with the Company. The Company will notify the Trustee
when Subordinated Debt Securities are listed on any securities exchange.
(c) The Company will furnish the Trustee with interim and annual reports
and upon receipt thereof, the Trustee will mail such reports to all record
holders of Subordinated Debt Securities. In addition, the Company will furnish
the Trustee with all notices of meetings at which holders of Subordinated Debt
Securities of a particular series are entitled to vote, and all other reports
and communications that are made generally available to holders of Subordinated
Debt Securities. The Trustee will, at the Company's expense, make such notices,
reports and communications available for inspection by holders of Subordinated
Debt Securities in such manner as the Company may determine and, in the case of
any notice received by the Trustee in respect of any meeting at which holders
of Subordinated Debt Securities of a particular series are entitled to vote,
will mail to all such record holders of Subordinated Debt Securities, at the
Company's expense, a notice containing a summary of the information set forth
in such notice of meeting.
SECTION 7.04. Reports by Company. The Company shall:
(a) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies of
such portions of any of the foregoing as the Commission may from time to
time by rules and regulations prescribe) which the Company may be required
to file with the Commission pursuant to Section 13 or Section 15(d) of the
Exchange Act; or, if the Company is not required to file information,
documents or reports pursuant to either of such Sections, then
53
it shall file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such
of the supplementary and periodic information, documents and reports which
may be required pursuant to Section 13 of the Exchange Act in respect of a
security listed and registered on a national securities exchange as may be
prescribed from time to time in such rules and regulations. Delivery of
such reports, information and documents to the Trustee is for
informational purposes only and the Trustee's receipt of such shall not
constitute constrictive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on an Officer's Certificate);
(b) file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance
by the Company with the conditions and covenants of this Subordinated Debt
Securities Indenture as may be required from time to time by such rules
and regulations. Delivery of such reports, information and documents to
the Trustee is for informational purposes only and the Trustee's receipt
of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein,
including the Company's compliance with any of its covenants hereunder (as
to which the Trustee is entitled to rely exclusively on an Officer's
Certificate); and
(c) transmit to Holders, in the manner and to the extent required by
the Trust Indenture Act, within 30 days after the filing thereof with the
Trustee, such summaries of any information, documents and reports required
to be filed by the Company pursuant to paragraphs (a) and (b) of this
Section as may be required by rules and regulations prescribed from time
to time by the Commission.
ARTICLE 8
CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER
SECTION 8.01. Company May Consolidate, Etc., Only on Certain Terms. The
Company may, without the consent of Holders of any Subordinated Debt Securities
of any series Outstanding under this Subordinated Debt Securities Indenture,
consolidate or amalgamate with or merge into any other corporation or
54
convey or transfer or lease its properties and assets substantially as an
entirety to any Person, provided that:
(a) the corporation formed by such consolidation or amalgamation or
into which the Company is merged or the Person which acquires by
conveyance or transfer the properties and assets of the Company
substantially as an entirety (i) shall be a company organized and existing
under the laws of the United Kingdom or any political subdivision thereof,
and (ii) shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the
Trustee, the due and punctual payment of the principal of (and premium, if
any) and interest, if any, on all the Subordinated Debt Securities in
accordance with the provisions of such Subordinated Debt Securities and
this Subordinated Debt Securities Indenture and the performance of every
covenant of this Subordinated Debt Securities Indenture on the part of the
Company to be performed or observed; and
(b) the Company shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that such
consolidation, amalgamation, merger, conveyance or transfer and such
supplemental indenture comply with this Article and that all conditions
precedent herein provided for relating to such transaction have been
complied with.
SECTION 8.02. Successor Corporation Substituted. Upon any consolidation,
amalgamation or merger or any conveyance or transfer of the properties and
assets of the Company substantially as an entirety in accordance with Section
8.01, the successor corporation formed by such consolidation or amalgamation or
into which the Company is merged or to which such conveyance or transfer is
made shall succeed to and be substituted for, and may exercise every right and
power of, the Company under this Subordinated Debt Securities Indenture with
the same effect as if such successor corporation had been named as the Company,
herein, and thereafter, the predecessor corporation shall be relieved of all
obligations and covenants under the Subordinated Debt Securities Indenture and
the Subordinated Debt Securities.
SECTION 8.03. Assumption of Obligations. With respect to the Subordinated
Debt Securities of any series, a wholly-owned subsidiary of the Company (a
"successor entity") may without the consent of any Holder assume the
obligations of the Company (or any corporation which shall have previously
assumed the obligations of the Company) for the due and punctual payment of the
principal of (and premium, if any, on) and interest, if any, on any series of
Subordinated Debt Securities in accordance with the provisions of such
55
Subordinated Debt Securities and this Subordinated Debt Securities Indenture
and the performance of every covenant of this Subordinated Debt Security
Indenture and such series of Subordinated Debt Securities on the part of the
Company to be performed or observed provided, that:
(a) the successor entity shall expressly assume such obligations by
an amendment to the Subordinated Debt Securities Indenture, executed by
the Company and such successor entity, if applicable, and delivered to the
Trustee, in form satisfactory to the Trustee, and the Company shall, by
amendment to the Subordinated Debt Securities Indenture, unconditionally
guarantee (such guarantee shall be given on a subordinated basis
consistent with Article Twelve hereof) all of the obligations of such
successor entity under the Subordinated Debt Securities of such series and
the Subordinated Debt Securities Indenture as so modified by such
amendment (provided, however, that, for the purposes of the Company's
obligation to pay Additional Amounts, if any, payable pursuant to Section
10.04 in respect of the Subordinated Debt Securities, references to such
successor entity's country of organization will be added to references to
the United Kingdom);
(b) such successor entity shall confirm in such amendment to the
Subordinated Debt Securities Indenture that such successor entity will pay
all Additional Amounts, if any, payable pursuant to Section 10.04 in
respect of all the Subordinated Debt Securities (provided, however, that
for these purposes such successor entity's country of organization will be
substituted for the references to the United Kingdom);
(c) immediately after giving effect to such assumption of
obligations, no Event of Default or Default and no event which, after
notice or lapse of time or both, would become an Event of Default or
Default, shall have occurred and be continuing; and
(d) the Company shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that such assumption
complies with this Article and that all conditions precedent herein
provided for relating to such assumption have been complied with.
Upon any such assumption, the successor entity shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Subordinated Debt Securities Indenture with respect to any such
Subordinated Debt Securities with the same effect as if such successor entity
had been named as the Company in this Subordinated Debt Securities Indenture,
and the Company or any legal and valid successor corporation which shall
theretofore have become
56
such in the manner prescribed herein, shall be released from all liability as
obligor upon any such Subordinated Debt Securities except as provided in clause
(a) of this Section 8.03.
In the event of any such assumption, any Additional Amounts, if any,
payable pursuant to Section 10.04 will be payable in respect of taxes, levies,
imposts, duties, charges, fees, deductions or withholdings ("Taxes") imposed by
the jurisdiction in which the assuming corporation is incorporated (subject to
exceptions equivalent to those that apply to any obligation to pay Additional
Amounts in respect of Taxes imposed by any Taxing Jurisdiction) rather than
Taxes imposed by any Taxing Jurisdiction; provided however, that if the Company
makes payment under the guarantee, the Company shall be required to pay
Additional Amounts related to Taxes (subject to the exceptions set forth in
Section 10.04) imposed by any Taxing Jurisdiction by reason of such payments.
ARTICLE 9
SUPPLEMENTAL INDENTURES
SECTION 9.01. Supplemental Indentures Without Consent of Holders. Without
the consent of any Holders, the Company, when authorized by a Board Resolution,
and the Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to the Trustee, for any of
the following purposes:
(a) to evidence the succession of another corporation to the Company
and the assumption by any such successor of the covenants of the Company
herein and in the Subordinated Debt Securities;
(b) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Subordinated Debt Securities (and, if such
covenants are to be for the benefit of less than all series of
Subordinated Debt Securities, stating that such covenants are expressly
being included solely for the benefit of such series) or to surrender any
right or power herein conferred upon the Company;
(c) to add any additional Events of Default or Defaults;
(d) to add to, change or eliminate any of the provisions of this
Subordinated Debt Securities Indenture, or any supplemental indenture,
provided that any such change or elimination shall become effective only
when there is no Subordinated Debt Security Outstanding of any series
57
created prior to the execution of such supplemental indenture effecting
such change or elimination which is entitled to the benefit of such
provision, and adversely affected by such addition, change or elimination;
(e) to secure the Subordinated Debt Securities;
(f) to establish the form or terms of Subordinated Debt Securities of
any series as permitted by Sections 2.01 or 3.01;
(g) to change any Place of Payment, so long as the Place of Payment
as required by Section 3.01 is maintained;
(h) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein or in any supplemental indenture;
(i) to make any other provisions with respect to matters or questions
arising under this Subordinated Debt Securities Indenture, provided such
action shall not adversely affect the interests of the Holders of
Subordinated Debt Securities of any series in any material respect;
(j) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Subordinated Debt
Securities of one or more series and to add to or change any of the
provisions of this Subordinated Debt Securities Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, pursuant to the requirements of
Section 6.11(b); or
(k) to change or eliminate any provision of this Subordinated Debt
Securities Indenture as permitted by Section 1.07.
SECTION 9.02. Supplemental Indentures with Consent of Holders. With the
consent of the Holders of not less than 66b% in aggregate principal amount of
the Outstanding Subordinated Debt Securities of each series affected by such
supplemental Subordinated Debt Securities Indenture (voting as a class), by Act
of said Holders delivered to the Company and the Trustee, the Company, when
authorized by a Board Resolution, and the Trustee may enter into an indenture
or indentures supplemental hereto for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this
Subordinated Debt Securities Indenture or of modifying in any manner the rights
of the Holders of Subordinated Debt Securities of such series under this
Subordinated Debt Securities Indenture; provided, however, that no such
supplemental indenture
58
may, without the consent of the Holder of each Outstanding Subordinated Debt
Security affected thereby,
(a) change the Stated Maturity, if any, of any principal amount or
any interest amounts in respect of any such Subordinated Debt Security,
reduce the principal amount thereof or the rate of interest, if any,
thereon, or any premium payable upon the redemption thereof, or reduce the
amount of principal of a Discount Security that would be due and payable
upon an acceleration of the Maturity thereof pursuant to Section 5.02, or
change the obligation of the Company (or its successor) to pay Additional
Amounts pursuant to Section 10.04 (except as contemplated by Section
8.01(a) and permitted by Section 9.01(a)) on the Subordinated Debt
Securities, or the currency of payment of the principal amount of,
premium, if any, or interest on, any such Subordinated Debt Security, or
impair the right to institute suit for the enforcement of any such payment
on or after the Stated Maturity thereof (or, in the case of redemption or
exchange, on or after the Redemption Date or the Exchange Date as the case
may be); or
(b) reduce the percentage in aggregate principal amount of the
Outstanding Subordinated Debt Securities of any series, the consent of
whose Holders is required for any such supplemental indenture, or the
consent of whose Holders is required for any waiver (of compliance with
certain provisions of this Subordinated Debt Securities Indenture or of
certain defaults hereunder and their consequences) provided for in this
Subordinated Debt Securities Indenture, or
(c) modify any of the provisions of this Section or Section 5.13
except to increase any such percentage or to provide that certain other
provisions of this Subordinated Debt Securities Indenture cannot be
modified or waived without the consent of the Holder of each Outstanding
Subordinated Debt Security affected thereby; provided, however, that this
clause shall not be deemed to require the consent of any Holder with
respect to changes in the references to "the Trustee" and concomitant
changes in this Section, or the deletion of this proviso, in accordance
with the requirements of Sections 6.11(b) and 9.01(j), or
(d) change in any manner adverse to the interests of the Holders of
any Subordinated Debt Securities, the subordination provisions of the
Subordinated Debt Securities or the terms and conditions of the
obligations of the Company in respect of the due and punctual payment of
any amounts due and payable on the Subordinated Debt Securities.
59
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
A supplemental indenture which changes or eliminates any covenant or other
provision of this Subordinated Debt Securities Indenture which has expressly
been included solely for the benefit of one or more particular series of
Subordinated Debt Securities, or which modifies the rights of the Holders of
Subordinated Debt Securities of such series with respect to such covenant or
other provision, shall be deemed not to affect the rights under this
Subordinated Debt Securities Indenture of the Holders of Subordinated Debt
Securities of any other series.
SECTION 9.03. Execution of Supplemental Indentures. In executing, or
accepting the additional trusts created by, any supplemental indenture
permitted by this Article or the modifications thereby of the trusts created by
this Subordinated Debt Securities Indenture, the Trustee shall be entitled to
receive, and (subject to Section 6.01) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Subordinated Debt Securities
Indenture. The Trustee may, but shall not be obliged to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Subordinated Debt Securities Indenture or otherwise.
SECTION 9.04. Effect of Supplemental Indentures. Upon the execution of any
supplemental indenture under this Article, this Subordinated Debt Securities
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Subordinated Debt Securities Indenture for
all purposes; and every Holder of Subordinated Debt Securities theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby, except
as otherwise expressed therein.
SECTION 9.05. Conformity with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article shall conform to the requirements
of the Trust Indenture Act as then in effect.
SECTION 9.06. Reference in Subordinated Debt Securities to Supplemental
Indentures. Subordinated Debt Securities of any series authenticated and
delivered after the execution of any supplemental indenture pursuant to this
Article may, and shall if required by the Trustee, bear a notation in form
approved by the Trustee as to any matter provided for in such supplemental
indenture. If the Company shall so determine, new Subordinated Debt Securities
of any series so modified as to conform, in the opinion of the Trustee and the
Company, to any
60
such supplemental indenture may be prepared and executed by the Company and
such Subordinated Debt Securities may be authenticated and delivered by the
Trustee in exchange for Outstanding Subordinated Debt Securities of such
series.
ARTICLE 10
COVENANTS
SECTION 10.01. Payment of Principal, Premium, and Interest. The Company
covenants and agrees for the benefit of each series of Subordinated Debt
Securities that it will duly and punctually pay the principal of (and premium,
if any) and (subject to Section 3.07) interest, if any, on the Subordinated
Debt Securities of that series in accordance with the terms of the Subordinated
Debt Securities and this Subordinated Debt Securities Indenture.
SECTION 10.02. Maintenance of Office or Agency. The Company will maintain
in each Place of Payment for any series of Subordinated Debt Securities an
office or agency where Subordinated Debt Securities of that series may be
presented or surrendered for payment, where Subordinated Debt Securities of
that series may be surrendered for registration of transfer or exchange and
where notices and demands to or upon the Company in respect of the Subordinated
Debt Securities of that series and this Subordinated Debt Securities Indenture
may be served; provided, however, that at the option of the Company in the case
of registered Subordinated Debt Securities of such series, payment of any
interest thereon may be made by check mailed to the address of the Person
entitled herein as such address shall appear in the Subordinated Debt Security
Register. With respect to the Subordinated Debt Securities of any series, such
office or agency in each Place of Payment shall be specified as contemplated by
Section 3.01, and if not so specified, initially shall be the Corporate Trust
Office of the Trustee. Unless otherwise specified pursuant to Section 3.01, the
Company will maintain in the Borough of Manhattan, The City of New York, an
office or agency where notices and demands to or upon the Company in respect of
Subordinated Debt Securities of any series and this Subordinated Debt
Securities Indenture may be served. The Company will give prompt written notice
to the Trustee of the location, and any change in the location, of such office
or agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at
the Corporate Trust Office of the Trustee. The Company hereby appoints the
Trustee as its agent to receive all presentations, surrenders, notices and
demands.
61
The Company may also from time to time designate one or more other offices
or agencies (in or outside the Borough of Manhattan, The City of New York)
where the Subordinated Debt Securities of one or more series may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; provided, however, that no such designation or rescission
shall in any manner relieve the Company of any obligation to maintain an office
or agency in each Place of Payment (except as otherwise indicated in this
Section) for Subordinated Debt Securities of any series for such purposes. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
SECTION 10.03. Money for Payments to Be Held in Trust. If the Company
shall at any time act as Paying Agent with respect to the Subordinated Debt
Securities of any series, it will, on or before each due date for payment of
the principal of (and premium, if any) or interest, if any, if any, on any of
the Subordinated Debt Securities of that series, segregate and hold in trust
for the benefit of the Persons entitled thereto a sum sufficient to pay the
principal (and premium, if any) or interest, if any, so becoming due until such
sums shall be paid to such Persons or otherwise disposed of as herein provided
and will promptly notify the Trustee of its failure so to act.
Whenever the Company shall have one or more Paying Agents for any series
of Subordinated Debt Securities, it will, prior to each due date for payment of
the principal of (and premium, if any) or interest, if any, on any Subordinated
Debt Securities of that series deposit with a Paying Agent a sum sufficient to
pay the principal (and premium, if any) or interest, if any, so becoming due,
such sum to be held in trust for the benefit of the Persons entitled to such
principal, premium or interest, and (unless such Paying Agent is the Trustee)
the Company will promptly notify the Trustee of its action or its failure so to
act. The Company will cause each Paying Agent for any series of Subordinated
Debt Securities other than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section, that such Paying Agent will:
(a) hold all sums held by it for the payment of the principal of (and
premium, if any) or interest, if any, on Subordinated Debt Securities of
that series in trust for the benefit of the Persons entitled thereto until
such sums shall be paid to such Persons or otherwise disposed of as herein
provided;
(b) give the Trustee notice of any default by the Company (or any
other obligor upon the Subordinated Debt Securities of that series) in the
making of any payment, when due and payable, or principal of (and
62
premium, if any) or interest, if any, on Subordinated Debt Securities of
that series; and
(c) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company may at the time, for the purpose of obtaining the satisfaction
and discharge of this Subordinated Debt Securities Indenture or for any other
purpose, pay, or by Company Order direct any Paying Agent to pay, to the
Trustee all sums held in trust by the Company or such Paying Agent, such sums
to be held by the Trustee upon the same trusts as those upon which such sums
were held by the Company or such Paying Agent; and, upon such payment by any
Paying Agent to the Trustee such Paying Agent shall be released from all
further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of (and premium, if any)
or interest, if any, on any Subordinated Debt Security of any series and
remaining unclaimed for two years after such principal (and premium, if any) or
interest, if any, have become due and payable shall be paid to the Company on
Company Request, or (if then held by the Company) shall be discharged from such
trust; and the Holder of such Subordinated Debt Security shall thereafter, as
an unsecured general creditor, look only to the Company for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such
trust money, and all liability of the Company as trustee thereof, shall
thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Company cause to be published at least once, in an Authorized Newspaper, notice
that such money remains unclaimed and that, after a date specified therein,
which shall not be less than 30 days from the date of such publication, any
unclaimed balance of such money then remaining will be paid to the Company.
SECTION 10.04. Additional Amounts. Unless otherwise specified in any Board
Resolution establishing the terms of Subordinated Debt Securities of a series
in accordance with Section 3.01, all amounts of principal, and premium, if any,
and interest, if any, on any series of Subordinated Debt Securities will be
paid by the Company without deduction or withholding for, or on account of, any
and all present and future income, stamp and other taxes, levies, imposts,
duties, charges, fees, deductions or withholdings now or hereafter imposed,
levied, collected, withheld or assessed by or on behalf of the United Kingdom
or any political subdivision or authority thereof or therein having the power
to tax (the "Taxing Jurisdiction"), unless such deduction or withholding is
required by law.
63
If deduction or withholding of any such taxes, levies, imposts, duties,
charges, fees, deductions or withholdings shall at any time be required by the
Taxing Jurisdiction, the Company will pay such additional amounts of, or in
respect of, the principal amount of, premium, if any, and interest, if any, on
any series of Subordinated Debt Securities ("Additional Amounts") as may be
necessary in order that the net amounts paid to the Holders of Subordinated
Debt Securities of the particular series, after such deduction or withholding,
shall equal the respective amounts of principal, premium, if any, and interest,
if any, which would have been payable in respect of such Subordinated Debt
Securities had no such deduction or withholding been required; provided,
however, that the foregoing will not apply to any such tax, levy, impost, duty,
charge, fee, deduction or withholding which would not have been payable or due
but for the fact that:
(i) the Holder or the beneficial owner of the Subordinated Debt
Security is a domiciliary, national or resident of, or engaging in
business or maintaining a permanent establishment or physically present
in, the Taxing Jurisdiction or otherwise has some connection with the
Taxing Jurisdiction other than the holding or ownership of a Subordinated
Debt Security, or the collection of any payment of (or in respect of)
principal of, premium, if any, or interest, if any, on any Subordinated
Debt Security of the relevant series,
(ii) except in the case of a winding-up of the Company in the United
Kingdom, the relevant Subordinated Debt Security is presented (where
presentation is required) for payment in the United Kingdom,
(iii) the relevant Subordinated Debt Security is presented (where
presentation is required) for payment more than 30 days after the date
payment became due or was provided for, whichever is later, except to the
extent that the Holder would have been entitled to such Additional Amount
on presenting (where presentation is required) the same for payment at the
close of such 30 day period, or
(iv) the Holder or the beneficial owner of the relevant Subordinated
Debt Security or the beneficial owner of any payment of (or in respect of)
principal of, or interest, if any, on such Subordinated Debt Security
failed to comply with a request of the Company or its liquidator or other
authorized person addressed to the Holder (x) to provide information
concerning the nationality, residence or identity of the Holder or such
beneficial owner or (y) to make any declaration or other similar claim to
satisfy any information requirement, which in the case of (x) or (y), is
required or imposed by a statute, treaty, regulation or administrative
64
practice of the Taxing Jurisdiction as a precondition to exemption from
all or part of such tax, assessment or other governmental charge;
(v) the withholding or deduction is imposed on a payment to or for
the benefit of an individual and is required to be made pursuant to any
European Union Directive on the taxation of savings implementing the
proposal for a European Union Directive presented by the European Union
Commission on July 18, 2001 or any law implementing or complying with, or
introduced in order to conform to, such directive;
(vi) the relevant Subordinated Debt Security is presented (where
presentation is required) for payment by or on behalf of a holder who
would have been able to avoid such withholding or deduction by presenting
(where presentation is required) the relevant Subordinated Debt Security
to another paying agent in a Member State of the European Union; or
(vii) any combination of subclauses (i) through (vi) above;
nor shall Additional Amounts be paid with respect to the principal of, and
interest on, the Subordinated Debt Securities to any holder who is a fiduciary
or partnership or settlor with respect to such fiduciary or a member of such
partnership other than the sole beneficial owner of such payment to the extent
such payment would be required by the laws of any Taxing Jurisdiction to be
included in the income for tax purposes of a beneficiary or partner or settlor
with respect to such fiduciary or a member of such partnership or a beneficial
owner who would not have been entitled to such Additional Amounts, had it been
the holder.
Whenever in this Subordinated Debt Securities Indenture there is
mentioned, in any context, the payment of the principal of (and premium, if
any) or interest, if any, on, or in respect of, any Subordinated Debt Security
of any series such mention shall be deemed to include mention of the payment of
Additional Amounts provided for in this Section to the extent that, in such
context, Additional Amounts are, were or would be payable in respect thereof
pursuant to the provisions of this Section and as if express mention of the
payment of Additional Amounts (if applicable) were made in any provisions
hereof where such express mention is not made.
SECTION 10.05. Corporate Existence. Subject to Article Eight, the Company
will do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence.
65
SECTION 10.06. Statement as to Compliance. The Company will deliver to the
Trustee, within 120 days after the end of each fiscal year, a certificate in
compliance with Section 314(a)(4) of the Trust Indenture Act.
SECTION 10.07. Original Issue Document. The Company shall provide to the
Trustee on a timely basis such information, if any, as the Trustee requires to
enable the Trustee to prepare and file any form required to be submitted by the
Company with the Internal Revenue Service and the Holders of the Subordinated
Debt Securities relating to any original issue discount, including, without
limitation, Form 1099-OID or any successor form.
ARTICLE 11
REDEMPTION OF SUBORDINATED DEBT SECURITIES
SECTION 11.01. Applicability of Article. Subordinated Debt Securities of
any series shall be redeemable in accordance with their terms and (except as
otherwise specified pursuant to Section 3.01 for Subordinated Debt Securities
of any series) in accordance with this Article 11.
SECTION 11.02. Election to Redeem; Notice to Trustee. The election of the
Company to redeem any Subordinated Debt Securities shall be evidenced by a
Board Resolution. The Company shall, at least 60 days prior to the Redemption
Date fixed by the Company (unless a shorter notice shall be satisfactory to the
Trustee), notify the Trustee of such Redemption Date, of the principal amount
of Subordinated Debt Securities of such series to be redeemed and, if
applicable, the tenor of the Subordinated Debt Securities to be redeemed. In
the case of any redemption of Subordinated Debt Securities of any series prior
to the expiration of any provision restricting such redemption provided in the
terms of such Subordinated Debt Securities or elsewhere in this Subordinated
Debt Securities Indenture, the Company shall furnish the Trustee with respect
to such Subordinated Debt Securities with an Officer's Certificate evidencing
compliance with or waiver of such provision.
SECTION 11.03. Selection by Trustee of Subordinated Debt Securities to Be
Redeemed. If less than all the Subordinated Debt Securities of any series are
to be redeemed, the particular Subordinated Debt Securities to be redeemed
shall be selected not more than 60 days nor less than 30 days prior to the
Redemption Date by the Trustee, from the Outstanding Subordinated Debt
Securities of such series not previously called for redemption, by such method
as the Trustee shall deem fair and appropriate and which may provide for the
selection for redemption of portions (equal to the minimum authorized
denomination for registered
66
Subordinated Debt Securities of that series or any multiple thereof) of the
principal amount of Subordinated Debt Securities of such series of a
denomination larger than the minimum authorized denomination for Subordinated
Debt Securities of that series.
The Trustee shall promptly notify the Company in writing of the
Subordinated Debt Securities selected for redemption and, in the case of any
Subordinated Debt Securities selected for partial redemption, the principal
amount thereof to be redeemed.
For all purposes of this Subordinated Debt Securities Indenture, unless
the context otherwise requires, all provisions relating to the redemption of
Subordinated Debt Securities shall relate in the case of any Subordinated Debt
Securities redeemed or to be redeemed only in part, to the portion of the
principal amount of such registered Subordinated Debt Security which has been
or is to be redeemed.
SECTION 11.04. Notice of Redemption. Notice of redemption shall be given
not less than 30 nor more than 60 days prior to the Redemption Date to each
Holder of Subordinated Debt Securities to be redeemed in the manner and to the
extent provided in Section 1.06.
All notices of redemption shall state:
(a) the Redemption Date,
(b) the Redemption Price,
(c) if less than all the Outstanding Subordinated Debt Securities of
any series are to be redeemed, the principal amount of the Subordinated
Debt Securities to be redeemed,
(d) that on the Redemption Date the Redemption Price will become due
and payable upon each such Subordinated Debt Security to be redeemed and,
if applicable, that interest thereon will cease to accrue on or after the
said date,
(e) the place or places where such Subordinated Debt Securities are
to be surrendered for payment of the Redemption Price, and
(f) the CUSIP, Common Code and/or ISIN number or numbers, if any,
with respect to such Subordinated Debt Securities.
67
Notice of redemption of Subordinated Debt Securities to be redeemed at the
selection of the Company shall be given by the Company or, at the Company's
Request, by the Trustee in the name and at the expense of the Company.
SECTION 11.05. Deposit of Redemption Price. On or prior to any Redemption
Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if
the Company is acting as Paying Agent, segregate and hold in trust as provided
in Section 10.03) an amount of money sufficient to pay the Redemption Price of,
and (except if the Redemption Date shall be an Interest Payment Date) accrued
but unpaid interest on, all the Subordinated Debt Securities which are to be
redeemed on that date.
SECTION 11.06. Subordinated Debt Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Subordinated Debt
Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified, and from and after such date
(unless the Company shall default in the payment of the Redemption Price and
accrued interest, if any) such Subordinated Debt Securities shall cease to
accrue interest. Upon surrender of any such Subordinated Debt Security for
redemption in accordance with said notice, such Subordinated Debt Security
shall be paid by the Company at the Redemption Price, together with accrued but
unpaid interest to the Redemption Date; provided, however, that with respect to
any Subordinated Debt Securities in registered form, unless otherwise specified
as contemplated by Section 3.01, a payment of interest which is payable on a
Interest Payment Date which is the Redemption Date, shall be payable to the
Holders of such Subordinated Debt Securities, or one or more Predecessor
Securities, registered as such at the close of business on the relevant Regular
or Deferred Record Date according to the terms of the Subordinated Debt
Securities and the provisions of Section 3.07.
If any Subordinated Debt Security called for redemption shall not be so
paid upon surrender thereof for redemption, the Subordinated Debt Security
shall, until paid, continue to accrue interest from and after the Redemption
Date in accordance with its terms and the provisions of Section 3.07.
SECTION 11.07. Subordinated Debt Securities Redeemed in Part. Any
Subordinated Debt Security which is to be redeemed only in part shall be
surrendered at a Place of Payment therefor (with, only in the case of
Subordinated Debt Securities in registered form, if the Company or the Trustee
so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and deliver to the Holder of such
Subordinated Debt Security without
68
service charge, a new Subordinated Debt Security or Subordinated Debt
Securities of the same series of any authorized denomination as requested by
such Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Subordinated Debt Security so
surrendered.
SECTION 11.08. Optional Redemption Due to Changes in Tax Treatment. Unless
otherwise provided as contemplated by Section 3.01 with respect to any series
of Subordinated Debt Securities, the Subordinated Debt Securities are
redeemable, as a whole but not in part, at the option of the Company, on not
less than 30 nor more than 60 days' notice, on any Interest Payment Date, at a
redemption price equal to 100% of the principal amount, together with accrued
but unpaid interest, if any, in respect of such series of Subordinated Debt
Securities to the date fixed for redemption (or, in the case of Discount
Securities, the accreted face amount thereof, together with accrued interest,
if any), if, at any time, the Company shall determine that as a result of a
change in or amendment to the laws or regulations of the Taxing Jurisdiction
(including any treaty to which such Taxing Jurisdiction is a party), or any
change in the official application or interpretation of such laws or
regulations (including a decision of any court or tribunal) which change or
amendment becomes effective on or after a date included in the terms of such
series of Subordinated Debt Securities pursuant to Section 3.01:
(a) in making payment under the Subordinated Debt Securities in
respect of principal or premium, if any, or interest, if any, it has or
will or would on the next Interest Payment Date become obligated to pay
Additional Amounts;
(b) the payment of interest on the next Interest Payment Date in
respect of any of the Subordinated Debt Securities would be treated as
"distributions" within the meaning of Section 209 of the Income and
Corporation Taxes Act 1988 of the United Kingdom (or any statutory
modification or re-enactment thereof for the time being); or
(c) on the next Interest Payment Date the Company would not be
entitled to claim a deduction in respect of such payment of interest in
computing its United Kingdom taxation liabilities (or the value of such
deduction to the Company would be materially reduced).
In any case where the Company shall determine that as a result of any
change in the official application or interpretation of any laws or regulations
it is entitled to redeem the Subordinated Debt Securities of any series, the
Company shall be required to deliver to the Trustee prior to the giving of any
notice of redemption a written legal opinion of independent United Kingdom
counsel of
69
recognized standing (selected by the Company) in a form satisfactory to the
Trustee confirming that the relevant change in the official application or
interpretation of such laws or regulations has occurred and that the Company is
entitled to exercise its right of redemption.
SECTION 11.09. [Reserved].
ARTICLE 12
SUBORDINATION OF SUBORDINATED DEBT SECURITIES
SECTION 12.01. Subordinated Debt Securities Subordinate to Claims of
Senior Creditors.
(a) Unless otherwise provided as contemplated by Section 3.01 with respect
to any series of Subordinated Debt Securities, the Company covenants and
agrees, and each Holder of Subordinated Debt Securities of each series, by his
acceptance thereof, likewise covenants and agrees, that, to the extent and in
the manner hereinafter set forth in this Article Twelve, the Subordinated Debt
Securities of such series and the payment of the principal of, premium, if any
and interest, if any, on each and all of the Subordinated Debt Securities of
such series are hereby expressly made in the event of a winding-up of the
Company subordinate and subject in right of payment to the prior payment in
full of all claims of the Senior Creditors.
(b) The provisions of this Section shall apply only to the payment of
principal, premium, if any, and interest, if any, in respect of the
Subordinated Debt Securities of any series and nothing herein shall affect or
prejudice the payment of the costs, charges, expenses, liabilities or
remuneration of the Trustee or the rights and remedies of the Trustee in
respect thereof.
(c) The provisions of this Section shall not be applicable to any amounts
of principal, premium, if any, and interest, if any, in respect of any of the
Subordinated Debt Securities of any series for the payment of which funds have
been deposited in trust with the Trustee or any Paying Agent or have been set
aside by the Company in trust in accordance with the provisions of this
Subordinated Debt Securities Indenture; provided, however, that at the time of
such deposit or setting aside, and immediately thereafter, the foregoing
provisions of this Section are complied with.
SECTION 12.02. Provisions Solely to Define Relative Rights. The provisions
of this Article Twelve are and are intended solely for the purpose of
70
defining the relative rights of the Holders of the Subordinated Debt Securities
of each series on the one hand and the Senior Creditors on the other hand.
Nothing contained in this Article or elsewhere in this Subordinated Debt
Securities Indenture or in such Subordinated Debt Securities is intended to or
shall (a) impair, as among the Company and the Holders of the Subordinated Debt
Securities, the obligation of the Company, which is absolute and unconditional,
to pay to the holders of such claims the principal of, premium, if any, and
interest, if any, on such Subordinated Debt Securities as and when the same
shall become due and payable in accordance with their terms and this
Subordinated Debt Securities Indenture; or (b) affect the relative rights
against the Company of the Holders of such Subordinated Debt Securities; or (c)
prevent the Trustee or the Holder of any Subordinated Debt Securities of the
series from exercising all remedies otherwise permitted by applicable law upon
default under this Subordinated Debt Securities Indenture, subject to the
rights, if any, under this Article of the Senior Creditors to receive cash,
property or securities otherwise payable or deliverable to the Trustee or such
holder.
SECTION 12.03. Trustee to Effectuate Subordination. Each Holder of a
Subordinated Debt Security by his acceptance thereof authorizes and directs the
Trustee on his behalf to take such action as may be necessary or appropriate to
effectuate the subordination of the Subordinated Debt Securities provided in
this Article Twelve and appoints the Trustee his attorney-in-fact for any and
all such purposes.
SECTION 12.04. No Waiver of Subordination Provisions. No right of any
present or future Senior Creditors to enforce subordination as herein provided
shall at any time in any way be prejudiced or impaired by any act or failure to
act on the part of the Company or by any act or failure to act, in good faith,
by any such Senior Creditor or by any noncompliance by the Company with the
terms, provisions and covenants of this Subordinated Debt Securities Indenture,
regardless of any knowledge thereof any such Senior Creditor may have or be
otherwise charged with.
SECTION 12.05. Notice to Trustee. Upon the occurrence of any Event of
Default or Default, the Company shall give prompt written notice to the Trustee
of any fact known to the Company which would prohibit the making of any payment
when due to or by the Trustee in respect of the Subordinated Debt Securities of
a series. Notwithstanding the provisions of this Article or any other
provisions of this Subordinated Debt Securities Indenture but subject to the
provisions of Section 12.01, the Trustee shall not be charged with knowledge of
the existence of any facts which would prohibit the making of any payment when
due to or by the Trustee in respect of such Subordinated Debt Securities unless
and until the Trustee shall have received written notice thereof from the
Company or a Senior
71
Creditor or from any trustee therefor; and, prior to the receipt of any such
written notice by a Responsible Officer of the Trustee, the Trustee, subject to
the provisions of Section 6.01, shall be entitled in all respects to assume
that no such facts exist; provided, however, that if the Trustee shall not have
received the notice provided for in this Section at least three Business Days
prior to the date upon which by the terms hereof any money may become payable
for any purpose (including, without limitation, the payment of the principal of
and any premium and interest, if any, on any Subordinated Debt Security), then,
subject to the provisions of Section 12.01, the Trustee shall have full power
and authority to receive such money and to apply the same to the purpose for
which such money was received and shall not be affected by any notice to the
contrary which may be received by it within three Business Days prior to such
date.
Subject to the provisions of Section 6.01, the Trustee shall be entitled
to rely on the delivery to it of a written notice by a Person representing
himself to be a Senior Creditor or a trustee therefor, to establish that such
notice has been given by a Senior Creditor, or a trustee therefor. In the event
that the Trustee determines in good faith that further evidence is required
with respect to the right of any Person as a Senior Creditor to participate in
any payment or distribution pursuant to this Article, the Trustee may request
such Person to furnish evidence to the reasonable satisfaction of the Trustee
as to the amount of claims held by such Person, and if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.
SECTION 12.06. Reliance on Judicial Order or Certificate of Liquidating
Agent. Upon any payment or distribution of assets of the Company referred to in
this Article, the Trustee, subject to the provisions of Section 6.01, the
Holders of the Subordinated Debt Securities of the series shall be entitled to
rely upon (i) any order or decree entered by any court in England or Scotland
(but not elsewhere) in which such winding-up of the Company or similar case or
proceeding, including a proceeding for the suspension of payments under English
or Scottish law, is pending, or (ii) a certificate of the liquidator of the
Company (the "Liquidator"), assignee for the benefit of creditors, agent or
other person making such payment or distribution, delivered to the Trustee or
the Holders of such Subordinated Debt Securities, for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the Senior Creditors and other claims against the Company, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article 12.
SECTION 12.07. Trustee Not Fiduciary for Senior Creditors. The Trustee
shall not be deemed to owe any fiduciary duty to the Senior Creditors and shall
not be liable to any such holders if it shall in good faith mistakenly pay over
or
72
distribute to Holders of Subordinated Debt Securities of the series or to the
Company or to any other Person cash, property or securities to which any Senior
Creditors shall be entitled by virtue of this Article or otherwise.
SECTION 12.08. Rights of Trustee as Senior Creditor; Preservation of
Trustee's Rights. The Trustee in its individual capacity shall be entitled to
all the rights set forth in this Article with respect to any claims of Senior
Creditors which may at any time be held by it, to the same extent as any other
Senior Creditor, and nothing in this Subordinated Debt Securities Indenture
shall deprive the Trustee of any of its rights as such holder.
Nothing in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 6.07.
SECTION 12.09. Article Applicable to Paying Agents. At all times when a
Paying Agent other than the Trustee shall have been appointed by the Company
and be then acting hereunder, the term "Trustee" as used in this Article shall
in such case (unless the context otherwise requires) be construed as extending
to and including such Paying Agent within its meaning as fully for all intents
and purposes as if such Paying Agent were named in this Article in addition to
or in place of the Trustee; provided, however, that Section 12.08 shall not
apply to the Company or any Affiliate of the Company if it or such Affiliate
acts as Paying Agent.
SECTION 12.10. Exchanges Not Deemed Payment. For the purposes of this
Article Twelve only, delivery of Dollar Preference Shares or Exchange
Securities upon exchange of Subordinated Debt Securities in accordance with
Article Thirteen, if applicable to a particular series of Subordinated Debt
Securities, shall not be deemed to constitute a payment or distribution on
account of the principal of Subordinated Debt Securities or on account of the
purchase or other acquisition of Subordinated Debt Securities. Nothing
contained in this Article or elsewhere in this Subordinated Debt Securities
Indenture or in the Subordinated Debt Securities is intended to or shall
impair, as among the Company, its creditors and the Holders of the Subordinated
Debt Securities, the right, which if applicable to a particular series of
Subordinated Debt Securities is absolute and unconditional, of the Company to
exchange the Subordinated Debt Securities in accordance with Article Thirteen.
73
ARTICLE 13
EXCHANGE OF SUBORDINATED DEBT SECURITIES
SECTION 13.01. Applicability of Article. If specified pursuant to Section
3.01 for Subordinated Debt Securities of any series, the Subordinated Debt
Securities of any series shall be convertible (conversion being referred to
herein as "exchange") on any Interest Payment Date as a whole or in part, at
the option of the Company, on the basis of the principal amount of each
Subordinated Debt Security, into an equivalent amount in liquidation preference
of the series of Dollar Preference Shares or Exchange Securities specified
pursuant to Section 3.01 and (except as otherwise specified as contemplated by
Section 3.01 for Subordinated Debt Securities of any series) in accordance with
this Article 13.
SECTION 13.02. Election to Exchange; Notice to Trustee. An election of the
Company to exchange Subordinated Debt Securities shall be evidenced by an
Officer's Certificate furnished to the Trustee stating that the Company is
entitled to effect such exchange and setting forth a statement of facts
demonstrating the same.
SECTION 13.03. Notice of Exchange. Not less than 45 days nor more than 60
days prior to any date fixed for exchange of Subordinated Debt Securities of a
series (the "Exchange Date"), the Company shall notify the Trustee in writing
of its election to exchange the Subordinated Debt Securities of such series.
The Trustee shall within 15 days after receipt of notice from the Company, but
in no event less than 30 days nor more than 60 days prior to the Exchange Date,
cause notice of such election to be (i) mailed to the Holder (if the address of
such Holder is known to the Trustee) if the affected Subordinated Debt
Securities are in global form, or (ii) mailed to each Holder of registered
Subordinated Debt Securities of such series to be exchanged in accordance with
Section 1.06.
All notices of exchange shall state:
(A) the Exchange Date;
(B) that on the Exchange Date, the Subordinated Debt Securities
to be exchanged will cease to exist for any purpose on or after such
Exchange Date;
(C) if less than all the Outstanding Subordinated Debt
Securities of any series are to be exchanged, the identification of
the particular Subordinated Debt Securities to be exchanged, which
Subordinated Debt Securities shall be selected by the Trustee, from
the Outstanding Subordinated Debt Securities of such series not
74
previously called for exchange, by such method as the Trustee shall
deem fair and appropriate and which may provide for the selection for
exchange of portions (equal to the minimum authorized denomination
for Subordinated Debt Securities of that series or any multiple
thereof) of the principal amount of Subordinated Debt Securities of
such series of a denomination larger than the minimum authorized
denomination for Subordinated Debt Securities of that series; and
(D) the place or places where such Subordinated Debt Securities
are to be surrendered for exchange; and
(E) the form in which the Company will issue the Dollar
Preference Shares (if not as a single share warrant to bearer
delivered to the ADR Depositary) or Exchange Securities.
Notice of any exchange of Subordinated Debt Securities at the election of
the Company shall be given by the Company or, pursuant to a Company Request by
the Trustee, in the name of and at the expense of the Company.
SECTION 13.04. Deposit of Interest. Prior to any Exchange Date, the
Company shall deposit with the Trustee an amount of money sufficient to pay
accrued interest, if any, to the Exchange Date on all Subordinated Debt
Securities of such series.
SECTION 13.05. Surrender of Subordinated Debt Securities. Any Subordinated
Debt Security which is to be exchanged shall be surrendered at an office or
agency of the Company designated for that purpose pursuant to Section 10.02 not
less than 10 days prior to the Exchange Date (with, only in the case of
registered Subordinated Debt Securities and if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing) accompanied by written
notice specifying the Persons (i) in the case of Dollar Preference Shares, to
whom ADRs should be issued by the ADR Depositary or, if the Company has
notified the Trustee in accordance with Section 13.03 that it will issue Dollar
Preference Shares in definitive form, any direction the Holder may wish to make
as referred to in Section 13.06 or (ii) in the case of Exchange Securities, to
whom such Exchange Securities are to be issued. The Trustee will inform the
Company of all such notices and the Company will, if applicable, direct the ADR
Depositary accordingly under the terms of the ADR Deposit Agreement.
Subordinated Debt Securities surrendered for exchange shall, if surrendered to
any Person other than
75
the Trustee, be delivered to the Trustee for delivery by it to the Company or,
if delivered to the Trustee, shall be delivered by it to the Company.
SECTION 13.06. Issuance of Dollar Preference Shares or Exchange
Securities. On the Exchange Date with respect to Global Securities of a series,
and on or prior to the Exchange Date with respect to definitive Subordinated
Debt Securities of a series, in each case surrendered for exchange as provided
in Section 13.05, the Company shall (i) in the case of Dollar Preference
Shares, unless the Company shall have notified the Trustee otherwise in
accordance with Section 13.03, deliver or procure the delivery of a single
share warrant to bearer to the ADR Depositary representing all of the Dollar
Preference Shares in respect of which such Subordinated Debt Securities are to
be exchanged in accordance with the provisions of this Article Thirteen or (ii)
in the case of Securities, deliver or procure the delivery of the Exchange
Securities to the Trustee or to such other Person as may be specified pursuant
to Section 3.01.
In the event that the Company shall have notified the Trustee in
accordance with Section 13.03 that it will not deliver or procure the delivery
of a single share warrant to bearer in exchange for the Subordinated Debt
Securities of a series surrendered for exchange as provided in Section 13.05,
the Company shall, on or prior to the Exchange Date, with respect to definitive
Subordinated Debt Securities, deliver or procure the delivery of individual
certificates representing the Dollar Preference Shares (or the rights to
receive such Dollar Preference Shares) of such series for which such
Subordinated Debt Securities are to be exchanged in accordance with the
provisions of this Article Thirteen, in the case of Dollar Preference Shares in
registered form, to and registered in the names of the Holders of such
Subordinated Debt Securities in definitive form as they appear on the
Subordinated Debt Security Register or, at the direction of such Holder, in the
name of the ADR Custodian for the account and benefit of the ADR Depositary who
will issue ADRs evidencing ADSs representing the Dollar Preference Shares to
such Holder and, in the case of Dollar Preference Shares in bearer form, to the
bearer of the bearer Subordinated Debt Security in definitive form or, at the
direction of such bearer, to the ADR Custodian for the account and benefit of
the ADR Depositary who will issue ADRs evidencing ADSs representing Dollar
Preference Shares to such Holder.
Any exchange pursuant to this Section 13.06 shall be deemed to have been
made immediately prior to the close of business in New York on the Exchange
Date.
SECTION 13.07. Effect of Exchange. Notice of exchange having been given as
aforesaid, the Subordinated Debt Securities so to be exchanged shall on the
Exchange Date cease to exist for any purpose. Upon surrender of any such
76
Subordinated Debt Security for exchange in accordance with the said notice and
this Article Thirteen, accrued interest, if any, on such Subordinated Debt
Security to the Exchange Date shall be paid by the Company to the Holder
surrendering such Subordinated Debt Security. Such payment shall be a condition
to the exchange and no exchange shall occur unless such payments are made.
On and after the Exchange Date for Subordinated Debt Securities of a
particular series, each Subordinated Debt Security of the series to be
exchanged, until surrendered shall be deemed to evidence rights to receive
Dollar Preference Shares or Exchange Securities of the relevant series with a
liquidation preference equivalent to the principal amount of such Subordinated
Debt Security. Until a Holder has surrendered such Subordinated Debt Security
upon such exchange, such Holder shall be entitled to receive dividends,
payments or other distributions in respect of such Dollar Preference Shares or
Exchange Securities and shall have the same rights with respect to, and shall
be deemed to be the Holder of, such Dollar Preference Shares or Exchange
Securities into which such Subordinated Debt Security was exchanged as if it
had so surrendered such Subordinated Debt Security.
SECTION 13.08. Validity of Dollar Preference Shares or Exchange
Securities. The Company will take all corporate and other action which may be
necessary in order that it may validly and legally issue Dollar Preference
Shares or Exchange Securities upon each exchange of the Outstanding
Subordinated Debt Securities. The Company covenants that the Dollar Preference
Shares or Exchange Securities will when issued upon such exchange be duly
authorized and validly issued, fully paid and not subject to calls for further
funds.
SECTION 13.09. Legal and Regulatory Compliance. Notwithstanding any
provision of this Subordinated Debt Securities Indenture to the contrary, the
right of the Company to cause any exchange of Subordinated Debt Securities of a
series for Dollar Preference Shares or Exchange Securities on any proposed
Exchange Date shall be subject to the fulfillment of the following conditions
with respect to such Subordinated Debt Securities:
(a) as of such Exchange Date, there is no accrued but unpaid interest
(including amounts paid on the Exchange Date);
(b) as of such Exchange Date, no Default or Event of Default shall
have occurred and be continuing with respect to the particular series of
Subordinated Debt Securities;
(c) as of such Exchange Date, there has not been, in any one instance
or in the aggregate, an adverse effect on the rights, powers,
77
privileges, validity or enforceability of the Dollar Preference Shares or
Exchange Securities;
(d) the Dollar Preference Shares to be issued on such Exchange Date
shall be duly authorized and reserved for issuance upon such exchange and,
when issued upon such exchange, will be fully paid and not subject to
calls for further funds;
(e) no consents, authorizations, approvals or exemptions, except in
each case such as shall have been obtained, will be required prior to such
Exchange Date for the issuance and delivery of the Dollar Preference
Shares or Exchange Securities to be issued upon such exchange;
(f) the issuance and delivery of the Dollar Preference Shares or
Exchange Securities to be issued on such Exchange Date shall not violate
(x) the Articles of Association of the Company or (y) any law, rule or
regulation applicable to the Company; and
(g) there shall not have occurred any change in law in Scotland or in
the jurisdiction of the governing law of any Exchange Securities, or any
amendment of the Articles of Association of the Company, prior to such
Exchange Date, materially and adversely affecting the rights and
privileges attached to the Dollar Preference Shares or Exchange Securities
(including, without limitation, the rights of the holders thereof in the
event of a bankruptcy or other similar proceeding with respect to the
Company) or such holders' access to the courts of the United Kingdom and
other applicable governmental authorities to enforce such rights.
SECTION 13.10. Taxes and Charges. The issuance or delivery of Dollar
Preference Shares or Exchange Securities upon exchange of Subordinated Debt
Securities pursuant to this Article Thirteen shall be made without charge to
the exchanging Holder of Subordinated Debt Securities for such Dollar
Preference Shares or Exchange Securities or for any tax or other governmental
charge (other than income or capital gains taxes) in respect of the issuance or
delivery of such Dollar Preference Shares or Exchange Securities; provided,
however, that the Company shall not be required to pay any tax or other
governmental charge which may be payable in respect of (i) issuance or delivery
of Dollar Preference Shares or Exchange Securities to any Person who is or is a
nominee or agent for a Person whose business is or includes the provision of
clearance services within the meaning of Section 96 or Section 70 of the
Finance Act 1986 or whose business is or includes issuing depositary receipts
within the meaning of Section 93 or Section 67 of the Finance Act 1986, other
than the ADR Depositary or ADR Custodian, all such Persons (other than the ADR
Depositary and the ADR
78
Custodian) being "Excepted Persons" or (ii) a transfer involved in the issuance
and delivery of any such Dollar Preference Share or Exchange Securities to any
Person other than any Holder (not being an Excepted Person) of the Subordinated
Debt Security to be exchanged, or in the case of Global Securities, the ADR
Depositary or the ADR Custodian, and the Company shall not be required to issue
or deliver or procure the delivery of such Dollar Preference Shares or Exchange
Securities unless and until the Person requesting the issuance or delivery
thereof shall have paid to the Company the amount of such tax or other
governmental charge or shall have established to the satisfaction of the
Company that such tax or other governmental charge has been paid.
SECTION 13.11. Trustee Not Liable. The Trustee shall not be accountable
with respect to the validity or value (or the kind or amount) of any Dollar
Preference Shares or Exchange Securities which may be issued or delivered upon
the exchange of any Subordinated Debt Security pursuant to this Article
Thirteen, and makes no representation with respect thereto. The Trustee shall
not be responsible for any failure of the Company to issue, transfer or deliver
or procure the delivery of any Dollar Preference Shares or Exchange Securities
upon the surrender of any Subordinated Debt Security for the purpose of
exchange pursuant to this Article Thirteen or to comply with any of the
covenants of the Company or conditions contained in this Article Thirteen.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
79
IN WITNESS WHEREOF, the Company and the Trustee have caused this Subordinated
Debt Securities Indenture to be duly executed, all as of the day and year first
above written.
THE ROYAL BANK OF SCOTLAND
GROUP plc
By:
--------------------------
Name:
Title:
THE BANK OF NEW YORK
------------------------------
Name:
Title:
80