Item 5. Interests of Named Experts and Counsel
Item 6. Indemnification of Directors and Officers
Article 173 of the Registrant’s Articles of Association provides:
“
Subject
to the provisions of the Act, but without prejudice to any indemnity to which he may be otherwise entitled, every person who is
or was at any time a Director, alternate Director, Secretary or other officer of the Company shall be entitled to be indemnified
out of the assets of the Company against all costs, charges, losses, damages and liabilities
incurred by him for negligence,
default, breach of duty, breach of trust or otherwise in relation to the affairs of the Company or an associated company, or in
connection with the activities of the Company, or of an associated company, as a trustee of an occupational pension scheme, provided
that this Article 173.1 shall be deemed not to provide for, or entitle any such person to, indemnification to the extent that it
would cause this Article 173.1, or any element of it, to be treated as void under the Act.
Subject
to the provisions of the Act, the Company may at the discretion of the Board provide any person who is or was at any time a Director,
alternate Director, Secretary or other officer
of the Company with funds to meet expenditure
incurred or to be incurred by him (or to enable such person to avoid incurring such expenditure) in defending any criminal or civil
proceedings or defending himself in any investigation by, or against action proposed to be taken by, a regulatory authority in
each case in connection with any alleged negligence, default, breach of duty or breach of trust by that person in relation to the
Company or an associated company or in connection with any application under the provisions referred to in section 205(5) of the
Act.
”
The relevant provisions of the Companies Act 2006 (the “Companies
Act,” referred to as the “Act” in Article 173 of the Registrant’s Articles of Association) are sections
205, 206, 232, 233, 234, 235, 236, 237, 238 and 1157. Section 205 of the Companies Act provides:
“(1) Approval is not required under section 197, 198, 200
or 201 (requirement of members’ approval for loans etc) for anything done by a company—(a) to provide a director of
the company or of its holding company with funds to meet expenditure incurred or to be incurred by him—(i) in defending any
criminal or civil proceedings in connection with any alleged negligence, default, breach of duty or breach of trust by him in relation
to the company or an associated company, or (ii) in connection with an application for relief (see subsection (5)), or (b) to enable
any such director to avoid incurring such expenditure, if it is done on the following terms.
(2) The terms are—(a) that the loan is to be repaid, or (as
the case may be) any liability of the company incurred under any transaction connected with the thing done is to be discharged,
in the event of— (i) the director being convicted in the proceedings, (ii) judgment being given against him in the proceedings,
or (iii) the court refusing to grant him relief on the application; and (b) that it is to be so repaid or discharged not later
than—(i) the date when the conviction becomes final, (ii) the date when the judgment becomes final, or (iii) the date when
the refusal of relief becomes final.
(3) For this purpose a conviction, judgment or refusal of relief
becomes final—(a) if not appealed against, at the end of the period for bringing an appeal; (b) if appealed against, when
the appeal (or any further appeal) is disposed of.
(4) An appeal is disposed of—(a) if it is determined and the
period for bringing any further appeal has ended, or (b) if it is abandoned or otherwise ceases to have effect.
(5) The reference in subsection (1)(a)(ii) to an application for
relief is to an application for relief under—section 661(3) or (4) (power of court to grant relief in case of acquisition
of shares by innocent nominee), or section 1157 (general power of court to grant relief in case of honest and reasonable conduct).”
Section 206 of the Companies Act provides:
“Approval is not required under section 197, 198, 200 or 201
(requirement of members’ approval for loans etc) for anything done by a company—(a) to provide a director of the company
or of its holding company with funds to meet expenditure incurred or to be incurred by him in defending himself—(i) in an
investigation by a regulatory authority, or (ii) against action proposed to be taken by a regulatory authority, in connection with
any alleged negligence, default, breach of duty or breach of trust by him in relation to the company or an associated company,
or (b) to enable any such director to avoid incurring such expenditure.”
Section 232 of the Companies Act provides:
“(1) Any provision that purports to exempt a director of a
company (to any extent) from any liability that would otherwise attach to him in connection with any negligence, default, breach
of duty or breach of trust in relation to the company is void.
(2) Any provision by which a company directly or indirectly provides
an indemnity (to any extent) for a director of the company, or of an associated company, against any liability attaching to him
in connection with any negligence, default, breach of duty or breach of trust in relation to the company of which he is a director
is void, except as
permitted by— (a) section 233 (provision of insurance), (b)
section 234 (qualifying third party indemnity provision), or (c) section 235 (qualifying pension scheme indemnity provision).
(3) This section applies to any provision, whether contained in
a company’s articles or in any contract with the company or otherwise.
(4) Nothing in this section prevents a company’s articles
from making such provision as has previously been lawful for dealing with conflicts of interest.”
Section 233 of the Companies Act provides:
“Section 232(2) (voidness of provisions for indemnifying directors)
does not prevent a company from purchasing and maintaining for a director of the company, or of an associated company, insurance
against any such liability as is mentioned in that subsection.”
Section 234 of the Companies Act provides:
“(1) Section 232(2) (voidness of provisions for indemnifying
directors) does not apply to qualifying third party indemnity provision.
(2) Third party indemnity provision means provision for indemnity
against liability incurred by the director to a person other than the company or an associated company. Such provision is qualifying
third party indemnity provision if the following requirements are met.
(3) The provision must not provide any indemnity against—(a)
any liability of the director to pay—(i) a fine imposed in criminal proceedings, or (ii) a sum payable to a regulatory authority
by way of a penalty in respect of non-compliance with any requirement of a regulatory nature (however arising); or (b) any liability
incurred by the director—(i) in defending criminal proceedings in which he is convicted, or (ii) in defending civil proceedings
brought by the company, or an associated company, in which judgment is given against him, or (iii) in connection with an application
for relief (see subsection (6)) in which the court refuses to grant him relief.
(4) The references in subsection (3)(b) to a conviction, judgment
or refusal of relief are to the final decision in the proceedings.
(5) For this purpose—(a) a conviction, judgment or refusal
of relief becomes final—(i) if not appealed against, at the end of the period for bringing an appeal, or (ii) if appealed
against, at the time when the appeal (or any further appeal) is disposed of; and (b) an appeal is disposed of—(i) if it is
determined and the period for bringing any further appeal has ended, or (ii) if it is abandoned or otherwise ceases to have effect.
(6) The reference in subsection (3)(b)(iii) to an application for
relief is to an application for relief under—section 661(3) or (4) (power of court to grant relief in case of acquisition
of shares by innocent nominee), or section 1157 (general power of court to grant relief in case of honest and reasonable conduct).”
Section 235 of the Companies Act provides:
“(1) Section 232(2) (voidness of provisions for indemnifying
directors) does not apply to qualifying pension scheme indemnity provision.
(2) Pension scheme indemnity provision means provision indemnifying
a director of a company that is a trustee of an occupational pension scheme against liability incurred in connection with the company’s
activities as trustee of the scheme. Such provision is qualifying pension scheme indemnity provision if the following requirements
are met.
(3) The provision must not provide any indemnity against—(a)
any liability of the director to pay—(i) a fine imposed in criminal proceedings, or (ii) a sum payable to a regulatory authority
by way of a penalty in respect of non-compliance with any requirement of a regulatory nature (however arising); or (b) any liability
incurred by the director in defending criminal proceedings in which he is convicted.
(4) The reference in subsection (3)(b) to a conviction is to the
final decision in the proceedings.
(5) For this purpose—(a) a conviction becomes final—(i)
if not appealed against, at the end of the period for bringing an appeal, or (ii) if appealed against, at the time when the appeal
(or any further appeal) is disposed of; and (b) an appeal is disposed of—(i) if it is determined and the period for bringing
any further appeal has ended, or (ii) if it is abandoned or otherwise ceases to have effect.
(6) In this section “occupational pension scheme” means
an occupational pension scheme as defined in section 150(5) of the Finance Act 2004 (c. 12) that is established under a trust.”
Section 236 of the Companies Act provides:
“(1) This section requires disclosure in the directors’
report of—(a) qualifying third party indemnity provision, and (b) qualifying pension scheme indemnity provision. Such provision
is referred to in this section as “qualifying indemnity provision.”
(2) If when a directors’ report is approved any qualifying
indemnity provision (whether made by the company or otherwise) is in force for the benefit of one or more directors of the company,
the report must state that such provision is in force.
(3) If at any time during the financial year to which a directors’
report relates any such provision was in force for the benefit of one or more persons who were then directors of the company, the
report must state that such provision was in force.
(4) If when a directors’ report is approved qualifying indemnity
provision made by the company is in force for the benefit of one or more directors of an associated company, the report must state
that such provision is in force.
(5) If at any time during the financial year to which a directors’
report relates any such provision was in force for the benefit of one or more persons who were then directors of an associated
company, the report must state that such provision was in force.”
Section 237 of the Companies Act provides:
“(1) This section has effect where qualifying indemnity provision
is made for a director of a company, and applies—
(a) to the company of which he is a director (whether the provision
is made by that company or an associated company), and (b) where the provision is made by an associated company, to that company.
(2) That company or, as the case may be, each of them must keep
available for inspection—
(a) a copy of the qualifying indemnity provision, or (b) if the
provision is not in writing, a written memorandum setting out its terms.
(3) The copy or memorandum must be kept available for inspection
at—(a) the company’s registered office, or (b) a place specified in regulations under section 1136.
(4) The copy or memorandum must be retained by the company for at
least one year from the date of termination or expiry of the provision and must be kept available for inspection during that time.
(5) The company must give notice to the registrar—(a) of the
place at which the copy or memorandum is kept available for inspection, and (b) of any change in that place, unless it has at all
times been kept at the company’s registered office.
(6) If default is made in complying with subsection (2), (3) or
(4), or default is made for 14 days in complying with subsection (5), an offence is committed by every officer of the company who
is in default.
(7) A person guilty of an offence under this section is liable on
summary conviction to a fine not exceeding level 3 on the standard scale and, for continued contravention, a daily default fine
not exceeding one-tenth of level 3 on the standard scale.
(8) The provisions of this section apply to a variation of a qualifying
indemnity provision as they apply to the original provision.
(9) In this section “qualifying indemnity provision”
means— (a) qualifying third party indemnity provision, and (b) qualifying pension scheme indemnity provision.”
Section 238 of the Companies Act provides:
“(1) Every copy or memorandum required to be kept by a company
under section 237 must be open to inspection by any member of the company without charge.
(2) Any member of the company is entitled, on request and on payment
of such fee as may be prescribed, to be provided with a copy of any such copy or memorandum.
The copy must be provided within seven days after the request is
received by the company.
(3) If an inspection required under subsection (1) is refused, or
default is made in complying with subsection (2), an offence is committed by every officer of the company who is in default.
(4) A person guilty of an offence under this section is liable on
summary conviction to a fine not exceeding level 3 on the standard scale and, for continued contravention, a daily default fine
not exceeding one-tenth of level 3 on the standard scale.
(5) In the case of any such refusal or default the court may by
order compel an immediate inspection or, as the case may be, direct that the copy required be sent to the person requiring it.”
Section 1157 of the Companies Act provides:
(1) If in proceedings for negligence,
default, breach of duty or breach of trust against— (a) an officer of a company, or (b) a person employed by a company as
auditor (whether he is or is not an officer of the company), it appears to the court hearing the case that the officer or person
is or may be liable but that he acted honestly and reasonably, and that having regard to all the circumstances of the case (including
those connected with his appointment) he ought fairly to be excused, the court may relieve him, either wholly or in part, from
his liability on such terms as it thinks fit.
(2) If any such officer or person has reason to apprehend that a
claim will or might be made against him in respect of negligence, default, breach of duty or breach of trust— (a) he may
apply to the court for relief, and (b) the court has the same power to relieve him as it would have had if it had been a court
before which proceedings against him for negligence, default, breach of duty or breach of trust had been brought.
(3) Where a case to which subsection (1) applies is being tried
by a judge with a jury, the judge, after hearing the evidence, may, if he is satisfied that the defendant (in Scotland, the defender)
ought in pursuance of that subsection to be relieved either in whole or in part from the liability sought to be enforced against
him, withdraw the case from the jury and forthwith direct judgment to be entered for the defendant (in Scotland, grant decree of
absolvitor) on such terms as to costs (in Scotland, expenses) or otherwise as the judge may think proper.”
The Registrant has arranged appropriate insurance
cover in respect of legal action against directors and senior managers of the Registrant and its consolidated subsidiaries. The
Registrant also provides protections for its and its consolidated subsidiaries’ directors and senior managers against personal
financial exposure they may incur in their capacity as such. These include qualifying third party indemnity provisions for the
benefit of directors of the Registrant and other such persons, including, where applicable, in their capacity as directors of the
Registrant’s consolidated subsidiaries.