BP 2007 Annual Report Download - page 89

Memorandum and Articles of Association
The following summarizes certain provisions of the company’s
Memorandum and Articles of Association and applicable English law.
This summary is qualified in its entirety by reference to the UK
Companies Act and the company’s Memorandum and Articles of
Association. Information on where investors can obtain copies of the
Memorandum and Articles of Association is described under the heading
‘Documents on display’ on page 90.
On 24 April 2003, the shareholders of BP voted at the AGM to adopt
new Articles of Association to consolidate amendments that had been
necessary to implement legislative changes since the previous Articles of
Association were adopted in 1983.
At the AGM held on 15 April 2004, shareholders approved an
amendment to the Articles of Association such that, at each AGM held
after 31 December 2004, all directors shall retire from office and may
offer themselves for re-election. There have been no further
amendments to the Articles of Association.
At the upcoming annual general meeting of the company, it will be
proposed that the company adopts new articles of association, largely to
take account of changes in UK company law brought about by the
Companies Act 2006.
Objects and purposes
BP is incorporated under the name BP p.l.c. and is registered in
England and Wales with registered number 102498. Clause 4 of
BP’s Memorandum of Association provides that its objects include the
acquisition of petroleum-bearing lands; the carrying on of refining and
dealing businesses in the petroleum, manufacturing, metallurgical or
chemicals businesses; the purchase and operation of ships and all
other vehicles and other conveyances; and the carrying on of any other
businesses calculated to benefit BP. The memorandum grants BP a
range of corporate capabilities to effect these objects.
Directors
The business and affairs of BP shall be managed by the directors.
The Articles of Association place a general prohibition on a director
voting in respect of any contract or arrangement in which he has a
material interest other than by virtue of his interest in shares in the
company. However, in the absence of some other material interest not
indicated below, a director is entitled to vote and to be counted in a
quorum for the purpose of any vote relating to a resolution concerning
the following matters:
– The giving of security or indemnity with respect to any money lent or
obligation taken by the director at the request or benefit of the
company.
– Any proposal in which he is interested concerning the underwriting of
company securities or debentures.
– Any proposal concerning any other company in which he is interested,
directly or indirectly (whether as an officer or shareholder or
otherwise) provided that he and persons connected with him are not
the holder or holders of 1% or more of the voting interest in the
shares of such company.
– Proposals concerning the modification of certain retirement benefits
schemes under which he may benefit and that have been approved by
either the UK Board of Inland Revenue or by the shareholders.
– Any proposal concerning the purchase or maintenance of any
insurance policy under which he may benefit.
The UK Companies Act requires a director of a company who is in any
way interested in a contract or proposed contract with the company to
declare the nature of his interest at a meeting of the directors of the
company. The definition of ‘interest’ now includes the interests of
spouses, children, companies and trusts. The directors may exercise all
the powers of the company to borrow money, except that the amount
remaining undischarged of all moneys borrowed by the company shall
not, without approval of the shareholders, exceed the amount paid up on
the share capital plus the aggregate of the amount of the capital and
revenue reserves of the company. Variation of the borrowing power of
the board may only be effected by amending the Articles of Association.
Remuneration of non-executive directors shall be determined in the
aggregate by resolution of the shareholders. Remuneration of executive
directors is determined by the remuneration committee. This committee
is made up of non-executive directors only. Any director attaining the age
of 70 shall retire at the next AGM. There is no requirement of share
ownership for a director’s qualification.
Dividend rights; other rights to share in company profits;
capital calls
If recommended by the directors of BP, BP shareholders may, by
resolution, declare dividends but no such dividend may be declared in
excess of the amount recommended by the directors. The directors may
also pay interim dividends without obtaining shareholder approval. No
dividend may be paid other than out of profits available for distribution, as
determined under IFRS and the UK Companies Act. Dividends on
ordinary shares are payable only after payment of dividends on BP
preference shares. Any dividend unclaimed after a period of 12 years
from the date of declaration of such dividend shall be forfeited and
reverts to BP.
The directors have the power to declare and pay dividends in any
currency provided that a sterling equivalent is announced. It is not the
company’s intention to change its current policy of paying dividends in
US dollars.
Apart from shareholders’ rights to share in BP’s profits by dividend (if
any is declared), the Articles of Association provide that the directors
may set aside:
– A special reserve fund out of the balance of profits each year to make
up any deficit of cumulative dividend on the BP preference shares.
– A general reserve out of the balance of profits each year, which shall
be applicable for any purpose to which the profits of the company
may properly be applied. This may include capitalization of such sum,
pursuant to an ordinary shareholders’ resolution, and distribution to
shareholders as if it were distributed by way of a dividend on the
ordinary shares or in paying up in full unissued ordinary shares for
allotment and distribution as bonus shares.
Any such sums so deposited may be distributed in accordance with the
manner of distribution of dividends as described above.
Holders of shares are not subject to calls on capital by the company,
provided that the amounts required to be paid on issue have been paid
off. All shares are fully paid.
Voting rights
The Articles of Association of the company provide that voting on
resolutions at a shareholders’ meeting will be decided on a poll other
than resolutions of a procedural nature, which may be decided on a show
of hands. If voting is on a poll, every shareholder who is present in
person or by proxy has one vote for every ordinary share held and two
votes for every £5 in nominal amount of BP preference shares held. If
voting is on a show of hands, each shareholder who is present at the
meeting in person or whose duly appointed proxy is present in person
will have one vote, regardless of the number of shares held, unless a poll
is requested. Shareholders do not have cumulative voting rights.
Holders of record of ordinary shares may appoint a proxy, including a
beneficial owner of those shares, to attend, speak and vote on their
behalf at any shareholders’ meeting.
Record holders of BP ADSs are also entitled to attend, speak and vote
at any shareholders’ meeting of BP by the appointment by the approved
depositary, JPMorgan Chase Bank, of them as proxies in respect of the
ordinary shares represented by their ADSs. Each such proxy may also
appoint a proxy. Alternatively, holders of BP ADSs are entitled to vote by
supplying their voting instructions to the depositary, who will vote the
ordinary shares represented by their ADSs in accordance with their
instructions.
Proxies may be delivered electronically.
Matters are transacted at shareholders’ meetings by the proposing
and passing of resolutions, of which there are three types: ordinary,
special or extraordinary.
BP ANNUAL REPORT AND ACCOUNTS 2007 87