Draft Model Articles Of Association For Public Companies - Legal Draft

PART 1: DEFINITIONS

AND INTERPRETATION1. Defined terms1. The special meanings

given to certain words and phrases in the articles are set out in the index of

defined terms.2. Where a word or

phrase is defined in the index of defined terms, other grammatical forms of

that word or phrase used in the articles shall have a meaning which corresponds

to that definition.PART 2: DIRECTORSDIRECTORS POWERS AND

RESPONSIBILITIES2.

1. 2. Directors general

authoritySubject to the

Companies Acts and the articles, the directors:a. shall manage the

companys business; andb. may exercise all the

powers of the company for any purpose connected with the companys business.c.

1. d.
2. e.
3. f.
4. 3. Members reserve

power1. The members may, by

special resolution, order the directors to act, or refrain from acting, in a

particular way2. No such special

resolution shall invalidate anything which the directors have already done.DELEGATION OF

DIRECTORS POWERS AND RESPONSIBILITIES1.

1. 2.
2. 3.
3. 4. Directors may

delegate1. Subject to the

articles, the directors may delegate any of their powers and responsibilities:a. to such persons;b. by such means;c. to such an extent;d. in relation to such

matters or territories; ande. on such conditions or

subject to such restrictions, as they think fit.DRAFT: JUNE 20062. Unless the directors

specify otherwise, any such delegation authorises further delegation of the

directors powers and responsibilities by any person to whom they are

delegated, whether expressly or by virtue of this paragraph.3. The directors must

not delegate to any person who is not a director any decision connected with:a. how the directors (or

a committee of directors) take decisions;b. a directors

appointment or the termination of a directors appointment; orc. the payment or

declaration of a dividend.d.

1. e.
2. f.
3. 4. The directors may at

any time withdraw or revoke any delegation in whole or part, or alter its

terms.5.

1. 6.
2. 7.
3. 8.
4. 5. Committees of

directors1. If the directors:a. delegate powers or

responsibilities to two or more persons, at least one of whom is a director;

andb. indicate that they

should act together in respect of those powers or responsibilities, those

persons are a committee for the purposes of the articles.c.

1. 1.2. The provisions of the

articles about how the directors take decisions shall apply, as far as

possible, to the taking of decisions by committees, but the directors may make

rules of procedure which are binding on a committee.DECISION-MAKING BY

DIRECTORS3.

1. 4.
2. 5.
3. 6.
4. 7.
5. 6. Directors to take

decisions collectively1. This article applies

to any matter in respect of which the directors have not delegated their powers

and responsibilities to a single director.2. Subject to the

articles, the directors must not act in relation to any such matter unless they

have taken a decision about it:a. at a directors

meeting, orb. in the form of a

directors written resolution, in accordance with the articles.c.

1. d.
2. e.
3. f.
4. g.
5. h.
6. 7. Calling directors

meetings1. Any director may call

a directors meeting.2. The company secretary

shall call a directors meeting if a director so requests.3. A meeting is not

called unless reasonable notice of it has been given, indicating its proposed

date, time, place and subject matter.4. Notice must be given

to all the directors, except those:DRAFT: JUNE 2006a. to whom it is not

possible to give reasonable notice; orb. who waive their

entitlement to notice, prospectively or retrospectively.c.

1. d.
2. e.
3. f.
4. 5. Notice of a

directors meeting need not be given in writing.6. The reasonableness of

any notice period shall be determined by reference to:a. The urgency and

importance of the meetings subject matter; andb. Individual directors

ability to receive notice of or participate in the meeting.1.

1. 2.

1. 3.
2. 4.
3. 5.

1. 6.
2. 7.
3. 8. Participation in

directors meetings1. Subject to the

articles, directors participate in a directors meeting, or part of a

directors meeting, when:a. the meeting has been

called and takes place in accordance with the articles;b. they are engaged,

together, exclusively in the business of the meeting, or of that part of the

meeting;c. no other directors

are engaged on that business separately from them; andd. they can each

communicate to the others any information or opinions they have on any

particular item of that business.e.

1. 2. In determining whether

directors are participating in a directors meeting, it is irrelevant where any

director is or how they communicate with each other.3.

1. 4.
2. 5.
3. 6.
4. 7.
5. 8.
6. 9.
7. 10.
8. 9. Quorum for directors

meetings1. At a directors

meeting, unless a quorum is participating, no proposal shall be voted on,

except a proposal to call another meeting.2. The quorum for

directors meetings may be fixed from time to time by:a. a decision of the

directors, orb. an ordinary

resolution, but it shall never be less than two, and unless otherwise fixed it

shall be two.c.

1. d.
2. 3. Subject to the

articles, a director who is interested in an actual or proposed transaction or

arrangement with the company shall not be counted as participating in any

directors meeting, or part of a directors meeting, relating to that

transaction or arrangement.4. A person who is an

alternate director but not a director shall be counted as participating for the

purposes of determining whether a quorum is participating, but only if that

persons appoint tor is not participating. No alternate shall be counted as

more than one director for such purposes.5.

1. 6.
2. 7.
3. 8.
4. 9.
5. 10.
6. 11.
7. 12.
8. 13.
9. 10. Total number of

directors less than quorumIf the total number

of directors for the time being is less than the quorum for directors

meetings, then:a. all the directors, orDRAFT: JUNE 2006b. as many of them as

are not incapable of doing so by reason of illness or accident, may agree in

writing either to appoint sufficient new directors to make up a quorum or to

call a general meeting of the company to vote on a resolution that will appoint

further directors or alter the quorum.c.

1. d.

1. e.
2. f.
3. g.

1. h.
2. i.
3. j.

1. k.
2. l.
3. 11. Chairing of

directors meetings1. The directors shall

appoint a director to chair their meetings.2. The person so

appointed for the time being shall be known as the chairman.3. The directors may

terminate the chairmans appointment at any time.4. If the chairman is

not participating in a meeting within ten minutes of the time at which it is to

start, the participating directors shall appoint one of themselves to chair it.5.

1. 6.
2. 7.
3. 8.
4. 9.
5. 10.
6. 11.
7. 12.
8. 13.
9. 14.
10. 15.
11. 12. Voting at directors meetings:

general rules1. A decision is taken

at a directors meeting when a majority of the participating directors vote in

favour of a proposal.2. Subject to the

articles:a. each director

participating in such a decision shall have one vote; butb. if a director has an

interest in an actual or proposed transaction or arrangement with the company,

that director and that directors alternate may not vote on any proposal

relating to it.1.

1. 2.
2. 3.
3. 4.
4. 5.
5. 6.
6. 7.
7. 8.
8. 9.
9. 10.
10. 11.
11. 12.
12. 13. Chairmans casting

vote at directors meetingsIf the numbers of

votes for and against a proposal are equal, the chairman or other director

chairing the meeting shall have a casting vote.14. Alternates voting at

directors meetingsDirectors who are also

alternate directors each have an additional vote on behalf of each of their

appointers when their appointers are:a. not participating,

andb. would have been

entitled to vote if they were participating.15. Conflict of

interests: relaxation of restrictions1. In any of the

circumstances specified for the purposes of this article, a director who is

interested in an actual or proposed transaction or arrangement with the

company:a. shall be counted as

participating in a decision at a directors meeting, or part of a directors

meeting, relating to it; andb. is entitled to vote

on a proposal relating to it.1.2. The circumstances

specified for the purposes of this article are when:DRAFT: JUNE 20063. the company by

ordinary resolution disapplies the provision of the articles which would

otherwise prevent a director from being counted as participating in, or voting

at, a directors meeting;4. the directors

interest cannot reasonably be regarded as likely to give rise to a conflict of

interest; or5. the directors

conflict of interest arises from a permitted cause.1.2.3. For the purposes of

this article, the following are permitted causes:a. a guarantee given, or

to be given, by or to a director in respect of an obligation incurred by or on

behalf of the company or any of its subsidiaries;b. subscription, or an

agreement to subscribe, for shares or other securities of the company or its

subsidiaries, or to underwrite, sub-underwrite, or guarantee subscription for

any such shares or securities; andc. a contract about

benefits for employees and directors or former employees and directors of the

company or its subsidiaries generally which does not provide special benefits

for directors or former directors.4.

1. 5.
2. 6.
3. 7.
4. 8.
5. 9.
6. 10.
7. 11.
8. 12.
9. 13.
10. 14.
11. 15.
12. 16.
13. 17.
14. 18.
15. 16. Directors discretion

to make further rules1. Subject to the

articles, the directors may make any rule which they think fit about how they

take decisions.2. The directors must

ensure that any such rule is communicated to all persons who are directors

while it remains in force.19.

1. 20.
2. 21.
3. 22.
4. 23.
5. 24.
6. 25.
7. 26.
8. 27.
9. 28.
10. 29.
11. 30.
12. 31.
13. 32.
14. 33.
15. 34.
16. 17. Directors written

resolutions1. A directors written

resolution is adopted when all the directors (or their alternates) sign a

document setting out a decision.2. A directors written

resolution is also adopted when:a. fewer than all of the

directors sign a document setting out a decision;b. it is impracticable

to have the document signed by those who have not signed it; andc. the document records

the names of the directors who have not signed it and the reasons why they have

not signed it.d.

1. e.
2. 3. The practicability of

a director signing such a document shall be determined by reference to:a. the urgency and

importance of the decision to which it relates; andb. the directors

ability to receive and sign the document and send it to the company by the time

when it is necessary or expedient for the directors to take that decision.c.

1. d.
2. e.
3. 4. References to a

document in this article include copies of that document.5. The directors are

responsible for ensuring that the company keeps a written record of all

directors written resolutions for at least ten years from the date of their

adoption.DRAFT: JUNE 2006APPOINTMENT OF

DIRECTORS18. Minimum and

maximum number of directorsSubject to the

Companies Acts, the company may by ordinary resolution decide that it is to

have:a. not more than, orb. not less than,a specified number of

directors.19.

1. 20.
2. 21.

1. 22.
2. 23.
3. 24.

1. 25.
2. 26.
3. 27.

1. 28.
2. 29.
3. 30.

1. 31.
2. 32.
3. 33.

1. 34.
2. 35.
3. 36.

1. 18.19. Methods of appointing

directorsAny person who is

willing to act as a director, and is permitted by law to do so, may be

appointed to be a director:a. by ordinary

resolution; orb. by a decision of the

directors.c.

1. d.
2. e.
3. f.
4. g.
5. h.
6. i.
7. j.
8. k.
9. l.
10. m.
11. n.
12. o.
13. p.
14. q.
15. r.
16. s.
17. t.
18. u.
19. 1.2.3.4.5.6.7.8.9.10.11.12.13.14.15.16.17.18.19.20. Appointments by

directors to be confirmed by members1. Directors appointed

by a decision of the directors must be confirmed in office by an ordinary

resolution at the next annual general meeting following their appointment by

the directors.2. Subject to the articles,

the appointment of directors whose appointment is not so confirmed terminates

at the end of that annual general meeting.3.

1. 4.
2. 5.
3. 6.
4. 7.
5. 8.
6. 9.
7. 10.
8. 11.
9. 12.
10. 13.
11. 14.
12. 15.
13. 16.
14. 17.
15. 18.
16. 19.
17. 20.
18. 21.
19. 22.
20. 21. Retirement of

directors by rotation1. At the first annual

general meeting all the directors shall retire from office.2. At every subsequent

annual general meeting half of the directors (rounded up to the nearest whole

number if there is an odd number of directors) shall retire from office and

offer themselves for reappointment by the members.3. The directors to

retire by rotation shall be those who have been longest in office since their

last appointment or reappointment by a general meeting, but as between persons

who were last appointed or reappointed on the same day those to retire shall be

decided by lot.4. For the purposes of

calculating which directors are required to retire by rotation, the following

shall be disregarded:a. any directors whose

appointment is required to be confirmed because they were appointed by the

directors; andb. any directors who

wish to retire and not be re-elected.c.

1. d.
2. e.
3. f.
4. g.
5. h.
6. i.
7. j.
8. k.
9. l.
10. m.
11. n.
12. o.
13. p.
14. q.
15. r.
16. s.
17. t.
18. u.
19. v.
20. w.
21. 22. Appointment of

directors at general meetings1. A person is only

eligible to be appointed a director by a general meeting if that person:a. is a director

retiring by rotation at that meeting under the articles; orDRAFT: JUNE 2006i. a.ii. a.b. has been nominated

for appointment as a director at that meeting by the directors or by a member

qualified to vote at that meeting.c.

1. 2. Members wishing to

nominate a person for appointment as a director must do so by giving notice in

writing to the company not less than 14 or more than 35 days before the date of

the meeting.3. The company must

notify all those who are entitled to receive notice of the meeting of who is

eligible to be appointed a director at any general meeting not less than seven

or more than 28 days before the date of that meeting.4. Nominations or

notices about the proposed appointment of a person as a director at a general

meeting need not contain that persons address, but must otherwise include the

same information as an entry in the register of directors in respect of that

person would contain if that person were appointed a director.5. Nominations of a

person for appointment as a director at a general meeting must include a

statement signed by the person nominated indicating that persons willingness

to be appointed a director.6. If, at the end of a

general meeting, the company would otherwise have fewer than two directors, or

such higher minimum number of directors as has been fixed in accordance with

the articles, the persons who were directors at the start of the meeting shall

be deemed to have been reappointed as directors, but they shall only act for

the purposes of:a. calling general

meetings; andb. performing such

duties as are essential to maintain the company as a going concern.c.

1. d.
2. e.
3. f.

1. g.
2. h.
3. i.

1. j.
2. k.
3. l.

1. m.
2. n.
3. o.

1. p.
2. q.
3. r.

1. s.
2. t.
3. u.

1. v.
2. w.
3. x.

1. 23. Termination of

directors appointment1. A person ceases to be

a director as soon as:a. that person ceases to

be a director by virtue of any provision of the Companies Acts, or is

prohibited by law from being a director;b. that person becomes

subject to a receiving order or compounds with that persons creditors generally;c. in the opinion of all

the other directors, mental disorder makes that person incapable of discharging

the duties of a director;d. that person fails,

without the directors permission, to participate in directors meetings for

more than three months, and is not prevented from doing so by illness,

accident, or some other cause which the directors consider sufficient;e. a notification to the

company that that person is resigning or retiring from office as director takes

effect in accordance with its terms (but if a contract with the company

specifies a longer notice period, that persons appointment shall not terminate

until expiry of the contractual notice period);f. the directors decide

to accept that persons offer to resign from the office of director;g. an ordinary

resolution is passed removing that person from office;DRAFT: JUNE 20062.

a.3.

b.4.

c.5.

d.6.

e.7.

f.8.

g.h. a contract under

which that person was appointed as a director of the company or undertakes

personally to perform services for the company terminates, and the directors

decide that that person should cease to be a director; or9.

a.10.

b.11.

c.12.

d.13.

e.14.

f.15.

g.16.

h.i. the directors decide

that that person should be removed from office, after having given that person

a reasonable opportunity to be heard at a directors meeting called on at least

fourteen days notice.1.a.2. The termination of a

persons appointment as a director under the articles:a. terminates that

persons membership of any committee and any other employment which that person

may have with the company;b. is without prejudice

to any claim which that person may have for breach of contract.24 Directors terms

of service1. Directors may

undertake any services for the company that the directors decide (except

audit).2. Directors may

undertake such services either as part of, or in addition to, their work as

directors.3. Subject to the

Companies Acts:a. directors shall be

entitled to be remunerated for their services to the company as the directors

determine; andb. the directors may

decide any other terms of any contract relating to the services which a

director undertakes personally to perform for the company.2.3.1.2.3.4. Subject to the

articles, a directors remuneration may:a. take any form;b. be contingent on or

otherwise calculated by reference to any aspect of the companys performance,

however measured; andc. include any

arrangements in connection with the payment of a pension, allowance or

gratuity, or any death, sickness or disability benefits, to or in respect of

that director.1.2.3.4.5. Directors

remuneration which is determined by the directors must not include payments to

or for the benefit of directors or former directors in connection with the

cessation or the transfer to any person of the whole or part of the undertaking

of the company or any of its subsidiaries.6. Unless the directors

decide otherwise, directors remuneration shall accrue from day to day.7. Unless the directors

decide otherwise, directors shall not be accountable to the company for any

remuneration which they receive as directors of the companys subsidiaries.8.

1. 9.
2. 10.
3. 11.
4. 12.
5. 13.
6. 14.
7. 15.
8. 16.
9. 17.
10. 18.
11. 19.
12. 20.
13. 21.
14. 22.
15. 23.
16. 24.
17. 25.
18. 26.
19. 27.
20. 28.
21. 29.
22. 30.
23. 31.
24. 25. Directors expensesSubject to the

Companies Acts, the company shall meet any reasonable expenses which the

directors properly incur in connection with anything they do for the company.DRAFT: JUNE 2006ALTERNATE DIRECTORS26. Appointment and

removal of alternates1. An alternate director

(or alternate) is a person appointed by a director (the alternates

appointer) to:a. exercise that

directors powers; andb. carry out that

directors responsibilities, at directors meetings as requested by that

director.2. Alternate directors

must be:a. directors, orb. persons approved by

the directors and willing to act as their appointers alternates.c.

1. 3. Any director may

appoint an alternate by notice in writing to the company specifying the duration

of the alternates appointment.4.

1. 5.
2. 6.
3. 7.
4. 8.
5. 9.
6. 10.
7. 11.
8. 12.
9. 13.
10. 14.
11. 15.
12. 16.
13. 17.
14. 18.
15. 19.
16. 20.
17. 21.
18. 22.
19. 23.
20. 24.
21. 25.
22. 26.
23. 27.
24. 28.
25. 27. Rights and

responsibilities of alternate directors1. Except as the

articles specify otherwise, alternate directors shall, in relation to

directors meetings:a. have the same rights,

duties and liabilities under the articles as their appointers;b. be subject to the

same restrictions as their appointers; andc. be deemed for all

purposes to be directors.2. Alternate directors

shall not be entitled to receive any remuneration from the company for their

services as alternate directors except such part of their appointers

remuneration as their appointers may direct in writing.3. Alternate directors

are responsible for their own acts and omissions and shall not be deemed to be

agents of or for their appointers.4.

1. 5.
2. 6.
3. 7.
4. 8.
5. 9.
6. 10.
7. 11.
8. 12.
9. 13.
10. 14.
11. 15.
12. 16.
13. 17.
14. 18.
15. 19.
16. 20.
17. 21.
18. 22.
19. 23.
20. 24.
21. 25.
22. 26.
23. 27.
24. 28.
25. 29.
26. 28. Termination of

alternate directorshipAlternate directors

appointments as alternates terminate:a. when their appointers

revoke their appointments by notice to the company in writing specifying when

their appointments are to terminate;b. on the occurrence in

relation to them of any event which, if it occurred in relation to their

appointers, would result in the termination of their appointers appointments

as directors;c. when their appointers

die; ord. when their appointers

appointments as directors terminate, except that alternate directors

appointments as alternates do not terminate if their appointers retire by

rotation at a general meeting at which they are re-appointed as directors.