Financial performance

Appointment and replacement of directors

The Company may by ordinary resolution appoint any person to be a director. The Board may also appoint directors, either to fill casual vacancies or as an addition to the Board, but any director so appointed shall hold office only until the next following AGM and shall then be eligible for re-appointment, but shall not be taken into account in determining the number of directors who are to retire by rotation at such meeting. These provisions will apply to John Cuthbert’s successor if the appointee is not an existing director. A director retiring by rotation at an AGM shall be eligible for re-appointment. Details of the directors retiring by rotation at this year’s AGM are set out in the Notice of Meeting.

The main duty of the Nomination Committee is to identify and nominate candidates to fill Board vacancies for approval by the Board. The work of the Nomination Committee is described in the corporate governance report.

The Company may by special resolution, or by ordinary resolution of which special notice has been given in accordance with the provisions of the Companies Acts, remove any director before the expiration of his period of office and may by ordinary resolution appoint another person in his place. Any person so appointed shall be subject to retirement at the same time as if he had become a director on the day on which the director in whose place he is appointed was last appointed a director. The Company will be proposing a Special Resolution at this year’s AGM to amend its Articles of Association to provide for the annual re-election of all directors.

Amendments to the Company’s Articles

The Company may amend its Articles by passing a special resolution of its members. The Company will be proposing a Special Resolution at this year’s AGM to amend its Articles, as mentioned above. The proposed changes are explained in the Notice of Meeting.

Powers of the Board

The Articles provide that the business of the Company shall be managed by the Board, which may exercise all such powers of the Company as are not required (by the Companies Acts or the Articles) to be exercised by the Company in general meeting. Subject to the Companies Acts, the Memorandum of Association, the Articles and any directions given by special resolution, the Board may, inter alia:

• establish local or divisional boards or agencies to manage any of the Company’s affairs and appoint any persons to be members of such local or divisional boards, or agents, and fix their remuneration;
• appoint attorney(s) for such purposes and with such powers, authorities and discretions and for such period and subject to such terms and conditions as it may think fit;
• delegate its powers to any director;
• sign, draw, accept, endorse or otherwise execute all cheques, promissory notes, drafts, bills of exchange and other instruments and all receipts for moneys paid to the Company in such manner as the Board shall from time to time determine;
• exercise all of the powers of the Company to grant and pay pensions, annuities, gratuities, superannuation or other allowances and benefits in favour of any person; and
• exercise all the powers of the Company to borrow money and to mortgage or charge all or any part of the undertaking, property and assets and uncalled capital of the Company and to issue debentures and other securities for any debt, liability or obligation of the Company or of any third party.

Allotment of shares

Subject to the provision of the Companies Acts, the Articles and any authorising resolutions passed in general meeting, the unissued shares of the Company shall be at the disposal of the Board, which may offer, allot, grant options over or otherwise dispose of them to such persons, at such times, for such consideration and upon such terms and conditions as the Board may determine. The directors are not currently authorised to allot shares but the Company will be seeking authority from shareholders at this year’s AGM for the directors to allot shares during the ensuing year, although, at present, the Company has no intention of doing so.

Purchase of own shares

Subject to the provisions of the Companies Acts and the Articles and to any confirmation or consent required by law, the Company may from time to time purchase its own shares. The Company is not currently authorised to purchase its own shares but will be seeking authority from shareholders at this year’s AGM to purchase its own shares during the ensuing year, although, at present, the Company has no intention of doing so.

Significant agreements

As at 31 March 2009, NWL had £381.5 million of loans provided by the EIB and the applicable terms include change of control clauses. If, after consultation with NWL, the EIB is of the opinion that a change of control has had or is likely to have a material adverse effect, then the EIB could seek early repayment of the loans plus, in certain circumstances, a premium.