BP 2008 Annual Report Download - page 96

BP Annual Report and Accounts 2008
Additional information for shareholders
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 98.
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.
At the AGM held on 17 April 2008, shareholders voted to adopt
new Articles of Association, largely to take account of changes in UK
company law brought about by the Companies Act 2006. Further
amendments to the Articles of Association are likely to be required at
our AGM in 2010, to reflect the full implementation of 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’ includes the interests of spouses,
children, companies and trusts. The UK Companies Act also requires that
a director must avoid a situation where a director has, or could have, a
direct or indirect interest that conflicts, or possibly may conflict, with the
company’s interests. The Act allows directors of public companies to
authorize such conflicts where appropriate, if a company’s Articles
of Association so permit. BP’s Articles of Association permit the
authorization of such conflicts. 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. 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.
Additional information for shareholders
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