NISA RETAIL LIMITED ARTICLES OF ASSOCIATION

Transcription

1 Company No NISA RETAIL LIMITED ARTICLES OF ASSOCIATION Adopted on 29 th September 2014

2 CONTENTS 1. PRELIMINARY AND INTERPRETATION 2. SHARES 3. LIEN 3A. SCHEME OF ARRANGEMENT 4. BOARD DISCRETION TO REGISTER A TRANSFER 5. TRANSFER NOTICE 6. CHANGE OF CONTROL - TAG ALONG RIGHTS 7. CHANGE OF CONTROL - DRAG ALONG RIGHTS 8. ANNUAL GENERAL MEETINGS 9. GENERAL MEETINGS 10. VOTING ON A POLL: VOTES CAST IN ADVANCE 11. PROXIES RIGHT TO VOTE ON A SHOW OF HANDS 12. APPOINTMENT AND TERMINATION OF PROXY 13. DIRECTORS 14. APPOINTMENT OF DIRECTORS 15. BOARD COMPOSITION 16. RETIREMENT OF DIRECTORS 17. APPOINTMENT AND REAPPOINTMENT OF DIRECTORS AT ANNUAL GENERAL MEETINGS 18. DIRECTORS - EXCESS NOMINATIONS 19. DISQUALIFICATION AND REMOVAL OF DIRECTORS 20. SUSPENSION OF NISA RETAIL MEMBER DIRECTORS 21. DIRECTORS' POWERS 22. DIRECTORS' INTERESTS 23. QUORUM OF DIRECTORS' MEETING 24. ALTERNATE DIRECTORS 25. INDEMNITY 26. NOTICES 27. DUTY TO AVOID CONFLICTS OF DUTY

3 A PRIVATE COMPANY LIMITED BY SHARES ARTICLES OF ASSOCIATION OF NISA RETAIL LIMITED 1. PRELIMINARY AND INTERPRETATION 1.1 The Regulations contained in Table A in the Schedule to the (Tables A to F) Regulations 1985 (SI 1985/805) as amended by the Companies (Tables A to F) (Amendment) Regulations 1985 (SI 1985/1052), the Companies Act 1985 (Electronic Communications) Order 2000 (SI 2000/3373), the Companies (Tables A - F) (Amendment) Regulations 2007 (SI 2007/2541) and the Companies (Tables A - F) (Amendment) (No. 2) Regulations 2007 (SI 2007/2826) (such Table being hereinafter referred to as Table A ) shall apply to the Company save in so far as they are excluded or varied hereby: that is to say, Clauses 8, 26, 54, (inclusive), 94, 118 of Table A shall not apply to the Company; and in addition to the remaining Clauses of Table A, as varied hereby, the following shall be the Articles of Association of the Company. 1.2 Save as provided in Article 1.3 words and expressions contained in these Articles shall bear the same meanings as in the Act or any statutory modification thereto in force at the date at which these Articles became binding on the Company. 1.3 In these Articles:- the Act means the Companies Act 2006 including any statutory modification or re-enactment thereof for the time being in force; Articles means these Articles of Association; 1

4 the Board means the board of Directors of the Company from time to time; Business Day means a day other than a Saturday, Sunday or a public holiday on which banks are open for commercial business in the City of London; Co-op means Co-operative Group Holdings (2011) Limited, a registered society incorporated in England and Wales (registered number 28501R) whose registered office is at 1 Angel Square, Manchester, M60 0AG; the Chairman means the Chairman for the time being of the Board; the Chief Executive means any person for the time being appointed by the Board to perform the duties of Chief Executive Officer of the Company; "Companies Acts" means every statute for the time being in force concerning companies (including any statutory instrument or other subordinate legislation made under statute), so far as it applies to the Company; Connected Party means a connected person as defined in Section 1122 of the Corporation Tax Act 2010 or any person, firm or company in which a Shareholder (or undertaking controlling that Shareholder) has the ability to exercise material influence as understood by the Enterprise Act 2002; 2

5 Director means an individual who is an Executive Director, Nisa Retail Member Director or independent Non-Executive Director; and Directors means any and/or all of the Executive Directors, the Nisa Retail MemberDirectors and independent Non- Executive Directors; Effective Date has the meaning given to it in the Scheme; Executive Director means an executive of the Company appointed an Executive Director pursuant to Article 14.1 or Article 17 and where the context so requires or admits includes the Chief Executive; Event of Default means any or all of the events listed in Article 2.5; Former Nisa Retail Member means a person, firm or company who has ceased for whatsoever reason to be a Nisa Retail Member; General Meetings means Shareholder meetings of the Company; New-Member has the meaning given to it in Article 3c; 3

6 Nisa Retail Member means a person, firm or company which enjoys an active wholesale or retail relationship with the Company in accordance with all terms and conditions applicable from time to time, such person, firm or company to be deemed a Nisa Retail Member only for so long as such relationship with the Company is, in the Board's opinion, valid and subsisting; Nisa Retail Member Director "Nisa Retail Members Terms and Conditions" Non-Executive Director Person Connected with a Nisa Retail Member means an individual being a Nisa Retail Member or a Person Connected with a Nisa Retail Member who is in either case appointed a Nisa Retail Member Director pursuant to Article 14.3 or Article 17; means the terms and conditions of the Company, as adopted from time to time, governing a Shareholder's trading relationship with the Company; means an individual appointed a nonexecutive director pursuant to Article 14.2 or Article 17; means, where a Nisa Retail Member is a body corporate or partnership (including a limited liability partnership), an individual who is a partner, director, employee or full-time consultant of such Nisa Retail Member or an individual who holds at least 75 per cent of the equity rights and 75 per cent of the voting rights of such Nisa Retail Member; Post-Scheme Shares has the meaning given to it in Article 3c; 4

7 Sale Price means the price per Share to be applied to all transfers of Shares from time to time as stated to apply by the Board in accordance with the Article 5.5; Scheme has the meaning given to it in Article 3a; Scheme Record Time Scheme Shares has the meaning given to it in the Scheme; has the meaning given to it in the Scheme; Share(s) means the ordinary shares of 1 each in the capital of the Company; Shareholder means a shareholder for the time being of the Company; Trust UK Food and Grocery Market means the Nisa Retail Shareholders' Trust established by the Company for the purpose of facilitating transfers of Shares in the Company; means the market within the UK (excluding the Republic of Ireland) for retailers and wholesalers that supply, distribute or sell a range of grocery and household products (including food, pet food, drinks (alcoholic and non-alcoholic), cleaning products, toiletries, and household goods), and also include specialist grocery stores, frozen food stores and limited assortment discounters stores; and Vendor Voting Record Time means a person on whom the Company, in accordance with Article 5.1, has served a Transfer Notice; and. has the meaning given to it in the Scheme. 5

8 1.4 Clause 1 of Table A shall be modified by deleting the definition "Act" and substituting in its place the definition given in these Articles and by deleting the words communication means the same as in the Electronic Communications Act electronic communication means the same as in the Electronic Communications Act The liability of the Shareholders of the Company is limited to the amount, if any, unpaid on the shares held by them. 1.6 The objects, for which the Company is established, are unrestricted and shall include, but not be limited to, the provision of benefits to its shareholders who shall be independent retailers and wholesalers in food and drink markets by negotiating the cost price of products and providing a supply chain for its members. 2. SHARES 2.1 Subject to the provisions of the Companies Acts, all Shares shall be under the control of the Board and the Board may allot, grant options over or otherwise deal with or dispose of the same to such persons and generally on such terms and in such manner as they think fit. In accordance with Section 567(1) of the Act, Sections 561 and 562 of the Act shall not apply to an allotment of securities (within the meaning of Section 560 of the Act) by the Company With the exception of the Trust, the Shares in the Company shall only be allotted or transferred to such persons or companies who are Nisa Retail Members No Shareholder (with the exception of the Trust) may hold in aggregate more than 250 Shares and in the event of any Shareholder (with the exception of the Trust) acquiring or for any reason holding in aggregate more than 250 Shares then the provisions of Article 5 shall apply and a Transfer Notice may be served by the Board in relation to such excess of Shares over the said maximum of With the exception of the Trust, each Shareholder must hold at least 1 To be deleted with effect from the Effective Date 2 To be deleted with effect from the Effective Date 6

9 one Share (or such other minimum holding as may be prescribed from time to time by the Board) In the case of the Trust, there is no maximum or minimum shareholding requirement. 2.4 Subject to the provisions of the Companies Acts, the Company may: issue any Shares which are to be redeemed or are liable to be redeemed at the option of the Company or holder thereof; purchase its own Shares (including any redeemable Shares); and make a payment in respect of the redemption or purchase under Sections or (as the case may be) Section 690 of the 2006 Act of any of its Shares otherwise than out of its distributable profits or the proceeds of a fresh issue of Shares. 2.5 The following shall be Events of Default: if any direct debit in relation to a Shareholder's trading account with the Company is refused or is otherwise not made and credited to the Company account (or the account of the other relevant member of the Company's group) on the due date for payment, or if any cheque is not honoured on presentation; if the Shareholder being a company passes a resolution for its winding up, or is subject to an order or notice for its winding up or striking off, or has an administrator appointed in respect of it, or proposes or makes or is subject to an arrangement or composition with its creditors generally or a scheme of arrangement, or has a receiver or liquidator appointed over any of its assets or undertaking (or the equivalent of any of the foregoing in the case of a member who is an individual, partnership or LLP); if the Shareholder becomes unable to pay its debts as they fall due; or if the Shareholder, being an individual is or may be suffering from mental disorder and either: the Shareholder is admitted to hospital in pursuance of an application for admission for treatment under the Mental 7

10 Health Act 1983 or, in Scotland, an application for admission under the Mental Health (Scotland) Act 1960; or an order is made by a court having jurisdiction (whether in the United Kingdom or elsewhere) in matters concerning mental disorder for the Shareholder's detention or for the appointment of a receiver, curator bonis or other person to exercise powers with respect to the Shareholder's property or affairs if: a Shareholder is in breach of any of the provisions of the Nisa Retail Members Terms and Conditions, these Articles or any other contract or contractual arrangement existing from time totime between the Company and the Shareholder which in the Company's opinion cannot be remedied, or which, in the Company's view can be remedied, but is not remedied within fourteen days of receipt by the Shareholder of notice from the Company specifying the breach complained of and requiring it to be remedied; or a Shareholder is in persistent breach of any of its obligations or referred to in the Nisa Retail Members Terms and Conditions. 2.6 Immediately upon the occurrence of an Event of Default a Transfer Notice shall be deemed to have been served on the relevant Shareholder and the provisions of Article 5 shall apply. 2.7 For as long as any Share shall be held by the Trust, such Share shall not carry the right to vote in any respect thereof whether in person or by proxy, on a poll or a show of hands and Clause 54 of Table A shall be amended accordingly. 3. LIEN 3.1 The Company shall have a first and paramount lien on every Share (whether or not it is a fully paid Share) for all moneys (whether presently payable or not) called or payable at a fixed time in respect of that Share and the Company shall also have a first and paramount lien on all Shares (whether fully paid or not) standing registered in the name of any Shareholder whether 8

11 solely or as one of two or more joint Shareholders for all debts and liabilities owing by him or his estate to the Company in any respect whatsoever and whether or not such debts or liabilities are presently payable or dischargeable. The Company s lien on a Share shall extend to any dividend or other amount payable in respect thereof. 3.2 The liability of any Shareholder in default in respect of a call shall be increased to enable the defrayment of all expenses that may have been incurred by the Company by reason of such non-payment. Clauses 15 and 18 in Table A shall be modified accordingly. 3A. SCHEME OF ARRANGEMENT a) In this Article 3a, the Scheme means the scheme of arrangement dated 24 October 2017 between the Company and the holders of its Scheme Shares under Part 26 of the Companies Act 2006 in its original form or with or subject to any modification, addition or condition approved or imposed by the Court in accordance with its terms. Expressions defined in the Scheme shall have the same meanings in this Article 3a (save as expressly defined in these Articles). b) Notwithstanding any other provision of these Articles, if the Company issues any Ordinary Shares (other than to the Co-op or its nominee(s)) at or after the Voting Record Time and at or before the Scheme Record Time, such shares shall be issued subject to the terms of the Scheme (and shall be Scheme Shares for the purposes thereof) and the holders of such shares shall be bound by the Scheme accordingly. c) Subject to the implementation of the Scheme, if any Ordinary Shares are issued or transferred to any person or his nominee (a New Member ) (other than under the Scheme to the Co-op or its nominee(s)) after the Scheme Record Time (the Post-Scheme Shares ) they shall be immediately transferred to the Co-op (or as it may direct in writing) who shall be obliged to acquire all Post-Scheme Shares in consideration for, and conditional on, the payment by the Co-op of an amount in cash for each Post-Scheme Share as that New Member would have been entitled to under the Scheme for those Post-Scheme Shares had they been Scheme Shares, provided that the cash payment per share to be paid to a New Member pursuant to this paragraph (c) of this Article may be adjusted by the Directors, in such manner as the auditors of the Company may determine, on any reorganisation of or material alteration to the share capital of either the Company (including, without limitation, any subdivision and/or consolidation) effected after the close of business on the Effective Date. References in this Article to Ordinary Shares shall, following such adjustment, be construed accordingly. 9

12 d) To give effect to any transfer of Post-Scheme Shares, the Company may appoint any person as attorney for the New Member to transfer the Post-Scheme Shares to the Co-op and/or its nominee(s) and do all such other things and execute and deliver all such documents as may in the opinion of the attorney be necessary or desirable to vest the Post-Scheme Shares in the Coop or its nominee(s) and pending such vesting to exercise all such rights attaching to the Post- Scheme Shares as the Co-op may direct. If an attorney is so appointed, the New Member shall not thereafter (except to the extent that the attorney fails to act in accordance with the directions of the Co-op) be entitled to exercise any rights attaching to the Post-Scheme Shares unless so agreed by the Co-op. The attorney shall be empowered to execute and deliver as transferor a form of transfer or other instrument or instruction of transfer on behalf of the New Member (or any subsequent holder) in favour of the Co-op or its nominees and the Company may give a good receipt for the consideration for the Post-Scheme Shares and may register the Co-op or its nominees as holder thereof and issue to it certificates for the same. The Company shall not be obliged to issue a certificate to the New Member for the Post-Scheme Shares. e) The Co-op shall settle or procure the settlement of the consideration due under paragraph (c) of this Article within 14 days after the transfer of the Post-Scheme Shares to the Co-op and/or its nominee(s). f) Notwithstanding any other provision of these Articles, neither the Company nor the Directors shall register the transfer of any Scheme Shares effected between the Scheme Record Time and the Effective Date, save where the Board determines it is necessary in order to rectify any discrepancies where a Nisa Retail Member is not the registered shareholder. 4. BOARD DISCRETION TO REGISTER A TRANSFER The Board may, in its absolute discretion decline to register the transfer of a Share, whether or not it is a fully paid share and shall refuse to register the transfer of any Share to any person or company who is not either a Nisa Retail Member or the Trust. Clause 24 in Table A shall be amended accordingly. 5. TRANSFER NOTICE 5.1 If any Shareholder: being a person who is not a Nisa Retail Member shall become entitled to any share by reason of the death or act of insolvency of a Nisa Retail Member; enters into a trading relationship of any type with any person which 10

13 the Company deems (in its absolute discretion) to be a competitor of the Company is a Nisa Retail Member and the Company in its absolute discretion gives written notice to such Nisa Retail Member to terminate the membership of such Nisa Retail Member if it appears to the Board that the continued membership of that Nisa Retail Member would prejudice the Company or all or any part of its members; has a market share of the UK Food and Grocery Market either alone or together with any Connected Party which exceeds two per cent or such other threshold as the Board may from time to time determine; or ceases to be a Nisa Retail Member for whatever reason (including, without limitation, termination by the Company of the relationship with such Nisa Retail Member, whether or not the Company is in breach of any trading agreement with such Nisa Retail Member by such termination), then upon becoming aware of the same, the Board shall serve upon such Shareholder or other person or Insolvency Practitioner or (in the event of the death of a Nisa Retail Member) his legal personal representative a notice (hereinafter referred to as a Transfer Notice ) requiring him to transfer any Shares standing in the name of such Shareholder or former Shareholder (hereinafter referred to as Sale Shares ) in accordance with the provisions of Article 5.3. The Transfer Notice shall specify that the price at which the Sale Shares shall be transferred shall be the Sale Price. 5.2 If any Shareholder shall be in contravention of the maximum shareholding prescribed by Article 2.3.1, the Board may serve a Transfer Notice on the Shareholder requiring such person to transfer such excess of Shares over the prescribed limit in accordance with the following provisions of this Article 5. The Transfer Notice shall specify the number of Shares to be transferred and that the price at which the Sale Shares shall be transferred shall be the Sale Price. 5.3 The Sale Shares shall be offered by the Transfer Notice in the following order of priority: 11

14 5.3.1 if the Board so determines and subject to the Companies Acts, to the Company, and subject thereto; to the Trust, and in the event that the Trust declines to accept the offer to purchase the Sale Shares or does not accept the offer within 30 days of being so offered; subject to the prescribed maximum in accordance with Article 2.3.1, to any Nisa Retail Member (or Nisa Retail Members) or the Trust as the Company may from time to time direct until all of the Sale Shares have been transferred. For the purposes of this Article 5, those specified in Articles to (inclusive) which accept the offer in the Transfer Notice shall be the Purchaser. 5.4 Any Transfer Notice served shall be irrevocable. Unless a Transfer Notice is served in relation to an excess of Shares held by a Shareholder over the prescribed maximum in accordance with Article 2.3.1, any Transfer Notice served on a Shareholder must be in respect of such Shareholder's entire holding of Shares. 5.5 The Sale Price shall be such price per Share as is determined by the formula A divided by B, where: A = per cent of the net asset value of the Company as shown in the most recent audited accounts of the Company from time to time; and B = the number of Shares in issue at the date of determination (including any Shares held by the Trust). 5.6 The person or persons nominated by the Company to purchase the Sale Shares pursuant to Article shall pay the Sale Price for the Sale Shares in accordance with the Transfer Notice and in any event within one month of the date of the Transfer Notice. 12

15 5.7 If the Vendor makes default in transferring the Sale Shares, the Company may receive the Sale Price on behalf of the person entitled thereto and the Vendor shall be deemed to have appointed any one Director or the Secretary of the Company as his agent to execute the transfer of the Shares to the Purchaser and on the execution of any such transfer, the Company shall hold the Sale Price in trust for the Vendor. The receipt of the Company for the Sale Price shall be a good discharge to the Purchaser of the Shares and after his name has been entered in the Company's register of members in purported exercise of the aforesaid power, the validity of the proceedings shall not be questioned by any person. The Vendor shall in such case be bound to deliver up his certificate for the said Shares and on such delivery shall be entitled to receive the Sale Price without interest. 6. CHANGE OF CONTROL - TAG ALONG RIGHTS 6.1 Subject to the provisions of Articles 2.2 and 2.3, no transfer of Non-Trust Shares which would result, if made and registered, in a person or persons Acting in Concert (other than the Trust) obtaining or increasing a Controlling Interest, will be made or registered unless: an Approved Offer is made by the proposed transferee(s) ( Buyer ) or, at the Buyer's written request, by the Company as agent for the Buyer; and the Buyer complies in all respects with the terms of the Approved Offer at the time of completion of the sale and purchase of Shares pursuant to it. 6.2 For the purposes of this Article 6 and Article 7: Approved Offer means an offer in writing served on the Trust, offering to purchase all the Shares held by the Trust which: is stipulated to be open for acceptance for at least 15 Business Days; offers the same consideration for each Trust Share as that for the each Non-Trust Share proposed to be sold and thereby giving rise to a person or persons Acting in Concert or increasing a Controlling Interest; 13

16 is on terms that the sale and purchase of Trust Shares in respect of which the offer is accepted will be completed at the same time as that sale and purchase of the Non-Trust Shares giving rise to the obtaining of a Controlling Interest Acting in Concert has the meaning given to it in the City Code on Takeovers and Mergers; Controlling Interest in relation to a person means the ownership by that person and his or its Connected Party of Shares carrying the right to more than 50 per cent of the total number of votes which may be cast in a poll at a general meeting of the Company; Non-Trust Shares means any and all those Shares in the Company not registered in the name of the Trust; and Trust Shares means those Shares in the Company which at the time in question are registered in the name of the Trust. 7. CHANGE OF CONTROL - DRAG ALONG RIGHTS 7.1 Whenever an Approved Offer is made, those holding over 50 per cent of the Non-Trust Shares shall have the right ( Drag Along Right ) to require (in the manner set out in Article 7.2) the Trust to accept the Approved Offer in full. 7.2 The Drag Along Right may be exercised by the service of notice to that effect on the Trust at the same time as, or within five Business Days following the making of the Approved Offer. Such notice will be accompanied by all documents required to be executed by the Trust to give effect to the relevant transfer. 7.3 On the exercise of the Drag Along Right, the Trust will be bound to accept the Approved Offer in respect of its entire holding of Shares and to comply with the obligations assumed by virtue of such acceptance. 14

17 7.4 If the Trust fails to accept the Approved Offer or, having accepted such offer, fails to complete the sale of any of the Trust Shares pursuant to the Approved Offer, or otherwise fails to take any action required of it under the terms of the Approved Offer, any persons so authorised by the Board may accept the offer on behalf of the Trust, or undertake any action required under the terms of the Approved Offer on the part of the Trust. In particular, such person may execute the necessary transfer(s) on the Trust's behalf; and against: receipt by the Company (on trust for the Trust) of the consideration payable for the Trust Shares (the receipt being a good discharge to the Buyer, who will not be bound to see to the application of it); and compliance by the Buyer and, where relevant, the Company with all other terms of the Approved Offer deliver such transfer(s) to the Buyer (or its nominee). The Board will then authorise registration of the transfer(s) and of the Buyer (or its nominee) as the holder of the Shares so transferred. After registration, the title of the Buyer (or its nominee) as registered holder of such Trust Shares will not be affected by any irregularity in, or invalidity of such proceedings, which will not be questioned by any person. The Trust will in such a case be bound to deliver up its certificate for the Trust Shares to the Company, or a statutory declaration of loss (as appropriate) whereupon the Trust will be entitled to receive the purchase price for the Trust Shares. 8. ANNUAL GENERAL MEETINGS The Company shall be required to hold an Annual General Meeting within 9 months of the Company's financial year end being 31 March. 9. GENERAL MEETINGS 15

18 9.1 A Shareholder which is a corporation may, by resolution of its directors or other governing body, authorise such a person or persons as it thinks fit to act as its representative or representatives at any meeting of the Company or at any meeting of any class of Shareholders of the Company. Unless the Directors otherwise decide, a copy of such authority certified notarially or in some other way from time to time approved by the Directors shall be delivered to the office or to such other place within the United Kingdom as the Directors may determine before such representative is entitled to exercise any power on behalf of the corporation which he represents. The provisions of the Act shall apply to determine the powers that may be exercised at any such meeting by any person so authorised. The corporation shall, for the purposes of these Articles, be deemed to be present in person at any such meeting if any person so authorised is present at it, and all references to attendance and voting in person shall be construed accordingly. 9.2 In the case of an equality of votes, whether on a show of hands or on a poll, the chairman shall be entitled to a casting vote in addition to any other vote he may have. 9.3 Clause 40 of Table A shall be read and construed as if the word eleven were substituted for the word two. 9.4 Clause 41 of Table A shall be read and construed as if the last sentence ended with the words, and if at the adjourned Meeting a quorum is not present within half an hour from the time appointed for the Meeting, the Meeting shall be dissolved. 9.5 Clause 56 of Table A shall be modified by the deletion of the words instruments of proxy, not less than 48 hours before the time appointed for holding and substituting instead the words forms of proxy, within the time limits prescribed by these Articles for deposit of forms of proxy for use at and by including the words or poll after the words adjourned meeting. 9.6 Clause 57 of Table A shall be modified by including after the word shall the phrase unless the directors otherwise determine. 16

19 9.7 Clause 59 of Table A shall be modified by including the words and on a show of hands after the words On a poll and by the deletion of the words A member may appoint more than one proxy to attend on the sameoccasion. 9.8 Subject to Article 9.9, a form appointing a proxy shall be in writing in any form which is usual or in such other form which the directors may approve, and shall be executed by or on behalf of the appointor. 9.9 Subject to the Companies Acts and Article 11.1, the Directors may resolve to allow a proxy to be appointed by electronic means subject to such limitations, restrictions or conditions as the Directors think fit (including, without limitation, the ability to require such evidence as they consider appropriate to decide whether the appointment of a proxy in such manner is effective) No objection shall be raised to the qualification of any voter, or to the counting of, or failure to count, any vote, except at the meeting or adjourned meeting at which the vote objected to is tendered or at which the error occurs. Any objection made in due time shall be referred to the chairman of the meeting and shall only vitiate the result of the voting if, in the opinion of the chairman of the meeting, it is of sufficient magnitude to affect the decision of the meeting. The decision of the chairman of the meeting shall be final and conclusive The Company shall not be obliged to check that any proxy or corporate representative exercises the votes of the appointing shareholder, either at all or in accordance with the voting instructions given No vote at any General Meeting of the Company shall be declared or deemed invalid by virtue solely of any failure by any proxy or corporate representative to vote in accordance with the voting instructions given to him by the appointing shareholder. 17

20 10. VOTING ON A POLL: VOTES CAST IN ADVANCE 10.1 To the extent that the Board decides to do so and subject to such terms as may be imposed by the Board from time to time to ensure the identification of the person voting, votes on a resolution on a poll taken at a meeting may include votes cast in advance of that meeting ("Advance Votes") An Advance Vote may be cast by a Shareholder or by any duly appointed proxy of a Shareholder An Advance Vote shall be cast in writing in such form as may be approved by the Board from time to time (including in hard copy or by electronic means) and shall be signed or otherwise authenticated by a Shareholder or his duly appointed proxy In order for any Advance Vote to be valid: (in the case of any Advance Vote cast by hard copy) the Advance Vote form, together with the relevant documents, if any, must be received, left at or sent by post to the registered office of the Company (or such other place within the United Kingdom as may be specified in the notice convening the meeting and/or in any other accompanying document sent out by the Company in relation to the meeting) by the relevant time; or (in the case of any Advance Vote cast by electronic means) the communication casting the Advance Vote by electronic means 18

21 together with the relevant documents must be received at the address by the relevant time The casting of an Advance Vote shall be subject to the Companies Act and these Articles and in particular: shall not preclude a Shareholder from attending and voting at the meeting to which the Advance Vote relates ("relevant meeting") in person or by proxy; an Advance Vote cast by a Shareholder or his duly appointed proxy shall be automatically revoked in the following circumstances: if a Shareholder re-casts his vote; if a Shareholder attends and votes at the relevant meeting (in person or by proxy) on any resolution on which he has cast an Advance Vote; (where an Advance Vote has been cast by a duly appointed proxy) if that proxy's appointment is terminated before the relevant meeting in accordance with these Articles For the purposes of Article : address, for the casting of Advance Votes by electronic means, means the number or address which has been specified by the Company for the purpose of receiving communications for casting Advance Votes by electronic means; relevant documents means, in the case of an Advance Vote cast by a Shareholder either (i) the power of attorney or other authority relied on to cast the Advance Vote, or (ii) a copy of such document certified as a true copy of the original by a notary or solicitor or certified in some other way required or approved by the Board from time to time and, in the case of an Advance Vote cast by a duly appointed proxy of a Shareholder, such identification as may be required by the Board; 19

22 relevant time means: hours before the time appointed for the commencement of the meeting or adjourned meeting to which the Advance Votes relate; and in the case of a poll taken more than 48 hours after it is demanded, 24 hours before the time appointed for the taking of the poll. In calculating the relevant time or any other period of time referred to in this Article , any part of a day that is not a Business Day shall not be taken into account. 11. PROXIES RIGHT TO VOTE ON A SHOW OF HANDS 11.1 The voting rights set out in Articles 9 and 10 are subject to Article 2.7 and to any rights or restrictions attached to any Shares On a show of hands: every Shareholder who is entitled to vote on the resolution and who is present in person shall have one vote; and every proxy present who has been duly appointed by one or more Shareholders entitled to vote on the resolution shall have one vote except that: if a Shareholder votes in person on a resolution then, as regards that resolution, his proxy shall have no vote; and a proxy shall have one vote for and one vote against the resolution if he has been duly appointed by more than one Shareholder entitled to vote on the resolution and either: (a) is instructed by one or more of those Shareholders to vote for the resolution and by one or more others to vote against it; or 20

23 (b) is instructed by one or more of those Shareholders to vote in one way and is given a discretion as to how to vote by one or more others (and wishes to use that discretion to vote in the other way) On a poll, every Shareholder who is entitled to vote on the resolution and who is present in person or by a duly appointed proxy shall have one vote for every Share he holds. A Shareholder entitled to more than one vote need not, if he votes on the poll (whether in person or by proxy), use all his votes or cast all the votes he uses in the same way. 12. APPOINTMENT AND TERMINATION OF PROXY 12.1 In order for the appointment of a proxy to be valid: (in the case of an appointment of a proxy by hard copy) the appointment of a proxy, together with the relevant documents, if any, must be: received, left at or sent by post to the office (or such other place within the United Kingdom as may be specified in the notice convening the meeting and/or in any form of proxy or other accompanying document sent out by the Company in relation to the meeting) by the relevant time; or duly delivered in accordance with Article 12.4; 12.2 (in the case of an appointment of proxy by electronic means) the communication appointing the proxy by electronic means together with the relevant documents must be received at the address by the relevant time For the purposes of Articles 12.1 and 12.2 : address, for the appointment of proxies by electronic means, means the number or address which has been specified by the Company for the purpose of receiving communications appointing proxies by electronic means; 21

24 relevant documents means either (i) the power of attorney or other authority relied on to sign the form of proxy, or (ii) a copy of such document certified as a true copy of the original by a notary or solicitor or certified in some other way approved by the directors; relevant time means: hours before the time appointed for the commencement of the meeting or adjourned meeting to which the proxy appointment relates; and in the case of a poll taken more than 48 hours after it is demanded, 24 hours before the time appointed for the taking of the poll. In calculating the relevant time or any other period of time referred to in this Article , any part of a day that is not a Business Day shall be excluded If a meeting is adjourned for less than 48 hours, or if a poll is not taken immediately but is taken not more than 48 hours after it was demanded, a form of proxy may also be delivered in hard copy form at the adjourned meeting or at the meeting at which the poll was demanded to any Director or the Secretary of the Company. In calculating the periods referred to in this Article 12.4, any part of a day that is not a Business Day shall be excluded A vote given or poll demanded by proxy or by a duly authorised representative of a corporation shall be valid even though the authority of the person voting or demanding a poll has previously terminated, unless notice of the termination was received by the Company: in the case of a duly authorised representative of a corporation, at the registered office of the Company; where the proxy was appointed by a form of proxy in hard copy form, at the registered office of the Company or such other place as is specified for depositing such form of proxy; or 22

25 where the proxy was appointed by electronic means, at the address specified in Article ; in each case either (i) at least 48 hours (excluding any part of a day which is not a Business Day) before the time appointed for the commencement of the meeting or adjourned meeting at which such vote is given or (ii) in the case of a poll taken otherwise than at or on the same day as the meeting or adjourned meeting, at least 24 hours (excluding any part of a day which is not a Business Day) before the time appointed for the taking of the poll at which the vote is cast. 13. DIRECTORS No person shall be appointed a Director: 13.1 who has not given his consent (in writing or otherwise) to the Board for such appointment; and 13.2 unless he is appointed: as an Executive Director by the Board to fill a vacancy amongst the Executive Directors Board in accordance with Article 14.1; or as an independent Non-Executive Director by the Board to fill a vacancy amongst the independent Non-Executive Directors Board in accordance with Article 14.2; or as a Nisa Retail Member Director by the Board to fill a vacancy amongst the Nisa Retail Member Directors Board in accordance with Article 14.3; or as a Director by the Shareholders at an Annual General Meeting in accordance with Article 17 and subject further to the provisions of Article 16.3 below; and 13.3 if in the case of a proposed Nisa Retail Member Directors there are circumstances pertaining to such person at the time of their nomination or at any time up to the date of the resolution for their appointment whereby they 23

26 would be capable of being disqualified as a director pursuant to any of the grounds set out in Article 19 below; or 13.4 if he is a Person Connected with a Nisa Retail Member and there is another Nisa Retail Member Director who is a Person Connected with a Nisa Retail Member, and they are both connected to the same Nisa Retail Member within the meaning of Person Connected with a Nisa Retail Member as set out in Article APPOINTMENT OF DIRECTORS 14.1 Subject to Article 14.4, the Board shall at all times have power to appoint Executive Directors, either to fill a vacancy or as an additional Director, on such terms and conditions as it may determine subject to their number not exceeding three Subject to Article 14.4, the Board shall at all times have power to appoint independent Non-Executive Directors, either to fill a vacancy or as an additional Director, on such terms and conditions as it may determine subject to their number not exceeding three Subject to Article 14.4, the Board shall at all times have power to appoint Nisa Retail Member Directors, either to fill a vacancy or as an additional Director, on such terms and conditions as it may determine subject to their number not exceeding nine A Director so appointed pursuant to Article 14.1, 14.2 or 14.3 shall not be taken into account in determining the Directors who are to retire by rotation in accordance with Article 16.1, but shall retire at the next Annual General Meeting of the Company following their reappointment and if not reappointed at such meeting he shall vacate office at the conclusion thereof. 24

27 15. BOARD COMPOSITION 15.1 The Board shall consist of: not more than three Executive Directors appointed by the Board in accordance with Article 14.1 or by the Shareholders in General Meeting in accordance with Article 17; not more than three independent Non-Executive Directors appointed by the Board in accordance with Article 14.2 or by the Shareholders in General Meeting in accordance with Article 17; and not more than nine Nisa Retail Member Directors appointed by the Board in accordance with Article 14.3 or by the Shareholders in General Meeting in accordance with Article RETIREMENT OF DIRECTORS 16.1 At every Annual General Meeting of the Company one third of the Directors, shall retire by rotation or, if their number is not a multiple of three, the number nearest to one third shall retire from office. The Directors to retire (in addition to those who are to retire in accordance with Article 14.4) shall only include those Directors who have served (as a minimum) a full term of three calendar years since the date of their first appointment as a director, (and the one third shall be varied accordingly). If there is only one Director who is subject to retirement he shall retire Subject to the provisions of the Companies Acts, the Directors to retire by rotation shall be those who have been longest in office since their last appointment or reappointment, but as between persons who became or were last reappointed as Directors on the same day those to retire shall (unless they otherwise agree among themselves) be determined by lot If the Company, at the Annual General Meeting at which a Director retires by rotation does not fill the vacancy, the retiring Director shall, if willing to act, be deemed to have been reappointed unless at that meeting it is resolved not to 25

28 fill the vacancy or unless a resolution for the re-appointment of the Director is put to the meeting and lost. 17. APPOINTMENT AND REAPPOINTMENT OF DIRECTORS AT ANNUAL GENERAL MEETINGS 17.1 No person other than a Director retiring by rotation shall be appointed or reappointed (pursuant to Article 16.3) as a Director at any Annual General Meeting unless: he is recommended by the Board; or in respect of Nisa Retail Member Directors only, not less than 35 nor more than 49 clear days before the date appointed for the Annual General Meeting, notice executed by not less than two Shareholders qualified to vote at the meeting has been given to the Company of the intention to propose that person for appointment or re-appointment stating the particulars which would, if he were so appointed or reappointed be required to be included in the Company's register of directors together with notice executed by that person of his willingness to be appointed or reappointed; and in the case of the appointment and/or re-appointment of Nisa Retail Member Directors only, such person being a Nisa Retail Member or a Person Connected with a Nisa Retail Member Not less than 14 clear days before the date appointed for holding an Annual General Meeting, notice shall be given to all Shareholders who are entitled to receive notice of the meeting of any person who is recommended by the Board for appointment or re-appointment as a Director at the General Meeting or in respect of whom notice has been duly given to the Company of the intention to propose him at the Meeting for appointment or re-appointment as a Director. The notice shall give the particulars of that person which would, if he was appointed or re-appointed, be required to be included in the Company s register of directors. 26

29 17.3 Subject to the provisions of Article 14 and the preceding provisions of this Article 17, the Shareholders at an Annual General Meeting may by ordinary resolution appoint a person who is willing to be a Director either to fill a vacancy or as an additional Director subject to the number of Nisa Retail Member Directors not exceeding nine, the number of Executive Directors not exceeding three and the number of Non-Executive Directors not exceeding three and may also determine the rotation in which any additional Director may retire Subject to the provisions of Article 14 and the preceding provisions of this Article 17, a Director who retires at an Annual General Meeting may, if willing to act, be re-appointed. If he is not re-appointed, he shall retain office until the Meeting appoints someone in his place, or if it does not do so, until the end of the Meeting Any resolution put to the vote at an Annual General Meeting to either appoint or re-appoint a Director, whether pursuant to Article 14, this Article 17 or otherwise, shall be decided by way of a secret ballot; subject to Article 18 below, such ballot to be taken as the chairman of the meeting directs and he may appoint scrutineers (who need not be Shareholders) and fix a time and place for declaring the result of the ballot. The result of the ballot shall be deemed to be the resolution of the General Meeting. 18. DIRECTORS - EXCESS NOMINATIONS 18.1 In the event that there are more nominations than vacancies for the appointment or re-appointment of Directors pursuant to Articles 17.1, 17.4 and 17.5 respectively, the following procedure shall be used: the General Meeting shall be adjourned to allow the ordinary resolutions set out in Article to be put to the Shareholders to be voted on by way of a poll; there will be a separate ordinary resolution put to the vote for each candidate for appointment or re-appointment; 27

30 to be passed, an ordinary resolution must be voted for by a majority in favour of it; upon conclusion of the vote in respect of all candidates, the Chairman shall reconvene the General Meeting to declare the result of the vote in accordance with Articles and ; in the event that the number of candidates attracting more votes in favour than against is less than the number of vacancies, such candidates shall be appointed Directors with effect from close of the General Meeting; in the event that the number of candidates attracting more votes in favour than against exceeds the number of vacancies, then: the Chairman shall list the candidates in descending order of votes for, so that the first-named candidate has the highest number; the Chairman shall read such list to the General Meeting; the Chairman shall declare appointed as Directors with effect from the close of the General Meeting: firstly the candidate with the highest number of votes to fill the first vacancy; secondly the candidate with the second highest number of votes to fill the second vacancy; and so on until all of the vacancies are filled; in the event that, in filling the final vacancy, two candidates have polled an identical number of votes then there will be a further poll vote to determine which candidate will fill the final vacancy; and for the purposes of Article only, in determining the number of votes polled only votes in favour of a candidate will be counted and votes against will not be counted. 28

31 19. DISQUALIFICATION AND REMOVAL OF DIRECTORS The office of a Director shall be vacated with immediate effect if: 19.1 he ceases to be a Director by virtue of any provisions of the Acts or he becomes prohibited by law from being a director; or 19.2 if being an Executive Director he shall cease to hold office as such or ceases to be an executive of the Company (when he shall also vacate office as a Director); or 19.3 he resigns his office by notice in writing to the Company; or 19.4 he becomes bankrupt or makes any composition with his creditors generally; or 19.5 he becomes in the opinion of the Board incapable by reason of mental disorder of discharging his duties as a director; or 19.6 he shall for more than six consecutive months have been absent without permission of the Board from meetings of the Board held during that period and the Board resolves that his office be vacated; or 19.7 he shall be removed from office as a Director before the expiration of his period of office (notwithstanding any agreement between the Company and him) by ordinary resolution of the Company passed at a General Meeting of the Company convened by a Shareholders on at least 21 clear days' notice provided that: the Director concerned shall be given at least fourteen days' notice of the matters giving rise to the proposed resolution and shall be given a reasonable opportunity to make and have circulated to the Company written representations and to be heard and represented at the meeting of the Company called to consider the resolution and at any adjournment thereof; a vacancy created by the removal of a Director under this subparagraph may be filled as a casual vacancy by the Board or by the 29