Powers of the directors
The directors’ authority to effect purchases of the Company’s shares on its behalf is conferred by resolution of shareholders and is renewed annually at the Company’s Annual general meeting. At the Annual general meeting in 2007, shareholders authorised the Company to purchase up to 49,220,947 of its own shares. This authority concluded at the Annual general meeting in 2008. A total of 23,546,961 shares were purchased between 19 December 2007 and 22 July 2008 for an average share price of 69.09 pence per share and representing 5.02% of the Company’s issued share capital as at 28 March 2009. The repurchased shares were placed in treasury. At the date of this report, no shares have been purchased under the authority granted at the Annual general meeting in 2008, to make market purchases up to a further 10% of the Company’s shares.
At the forthcoming Annual general meeting, the Company will be seeking authority again to purchase up to 10% of its ordinary shares, although at present the directors have no plans to buy back any further shares. It is, however, considered prudent to have the authority in place in order that the Company is able to act at short notice if circumstances warrant.
At the Annual general meeting held in July 2008, the directors were given the power to issue new shares up to an amount of £40,416,885. This power will expire at the conclusion of the Annual general meeting on 15 July 2009. Accordingly, a resolution will be proposed to renew the Company’s authority to issue further new shares. In accordance with the latest institutional guidelines issued by the Association of British Insurers (ABI), the proposed new authority will allow the directors to allot ordinary shares equal to an amount of up to one third of the Company’s existing issued ordinary share capital plus, in the case of a fully pre-emptive rights issue only, a further amount of up to an additional one third of the Company’s existing issued ordinary share capital.
The powers of the directors are conferred on them by UK legislation and the Articles. Changes to the Articles must be approved by shareholders passing a special resolution at a general meeting.
Northern Foods employee share ownership trust (the ‘ESOT’)
The ESOT holds ordinary shares in the Company (acquired in the market) in order to meet obligations under the Northern Foods plc Performance share plan or to provide similar employee benefits. A further one million shares were purchased on 10 March 2009. The trustees have waived their right to receive dividends in respect of the ordinary shares held by the trust.
At the end of the year, 7,682,843 shares were held in the ESOT, representing 1.64% of the issued ordinary share capital of the Company. The trustees of the ESOT may vote or abstain from voting shares held in the trust in any way they see fit.
Restrictions on voting deadlines
The Notice of general meeting will specify the deadline for exercising voting rights and appointing a proxy or proxies to vote in relation to resolutions to be proposed at a general meeting. The number of proxy votes for, against or withheld in respect of each resolution are announced via an RNS and published on the Company’s website after the meeting.
Change of control – significant agreements
The Company is party to significant agreements, including commercial contracts, financial and property agreements, and employees’ share plans, which contain certain termination and other rights for the counterparties upon a change of control of the Company. Should the counterparties choose to exercise their rights under the arrangements on a change of control, such arrangements would need to be renegotiated. None of these are considered to be significant in terms of their likely impact on the business of the Group as a whole. There are no agreements between any Group company and any of its employees or any director of the Company which provide for compensation to be paid to the employee or director for termination of employment or for loss of office as a consequence of a takeover of the Company, other than provisions that would apply on any termination of employment.