AGM Information • Feb 28, 2011
AGM Information
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(Incorporated and registered in England and Wales with registered number 03853545)
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about its contents or as to the action which you should take, you are recommended to seek your own independent financial advice from your stockbroker, accountant or other professional adviser authorised under the Financial Services and Markets Act 2000 (as amended).
If you have sold or transferred any or all of your shares in Domino's Pizza UK & IRL plc please pass this document together with the accompanying Annual Report and Accounts for the 52 weeks ended 26 December 2010 (the "Report and Accounts") and Proxy Form as soon as possible to the purchaser or transferee or to the stockbroker, bank or other agent through whom the sale or transfer was effected for onward transmission to the purchaser or transferee.
This document should be read as a whole together with the accompanying Report and Accounts and the Proxy Form and the Notice of AGM set out at the end of this document. Shareholders are requested to complete and return the enclosed Proxy Form to the Company's Registrars, Capita Registrars Limited, at The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU by no later than 1pm on 28 March 2011, being 48 hours before the time appointed for holding the meeting (excluding non-working days). The return of a form of proxy will not preclude a member from attending and voting at the Annual General Meeting in person should he/she subsequently decide to do so.
The Training Centre Unit B Kingston Centre Winchester Circle Kingston Milton Keynes MK10 0BA
30 March 2011 at 1pm
Incorporated and registered in England & Wales with registered number 03853545
Domino's House Lasborough Road Kingston Milton Keynes MK10 0AB
Stephen Hemsley (Non-Executive Chairman) Colin Halpern (Non-Executive Vice Chairman) Christopher Moore (Chief Executive Officer) Lee Ginsberg (Chief Financial Officer) Nigel Wray (Non-Executive Director) John Hodson (Non-Executive Director) Michael Shallow (Non-Executive Director) Peter Klauber (Non-Executive Director) Lance Batchelor (Non-Executive Director)
28 February 2011
To: Shareholders of Domino's Pizza UK & IRL plc
Dear Shareholder,
I have pleasure in inviting you to the 2011 Annual General Meeting (the "Meeting" or "AGM") of Domino's Pizza UK & IRL plc which will be held at The Training Centre, Unit B, Kingston Centre, Winchester Circle, Kingston, Milton Keynes MK10 0BA at 1pm on 30 March 2011. This document includes the Notice of AGM which sets out the resolutions that shareholders are being asked to consider and vote on. These resolutions are a very important part of the governance of the Company and all shareholders are urged to vote, whether they are able to attend the meeting or not.
If you are unable to attend the AGM, but have any questions on the business to be discussed at the Meeting, the Company would like to hear from you ahead of the AGM and ask that you contact the Company Secretary directly via post to the Company's registered office.
In addition to the ordinary business of the AGM, there are items of special business to be transacted at the AGM and these are explained and summarised below (Resolutions 15 to 19).
The Notice of Meeting contains certain items of business which are of a technical nature and are therefore explained in detail below.
The ordinary business to be considered at the AGM includes the receipt by the shareholders of the Company's Accounts and the Reports of the Directors and the Auditors, including the Directors' Remuneration Report, for the 52 week period ended 26 December 2010, the re-appointment of Ernst & Young LLP as auditors of the Company, the determination of the auditors' remuneration, and the declaration of a final dividend of 5.70 pence per ordinary share in the capital of the Company ("Ordinary Share").
The ordinary business of the AGM also includes the re-election (or election in the case of Lance Batchelor) of all directors of the Company (each a "Director" and together the "Directors"). The Company's Articles of Association adopted on 30 March 2010 (as amended) by special resolution (the "Company's Articles") require all Directors to submit themselves for re-election at least every three years. However, the UK Corporate Governance Code issued by the Financial Reporting Council ("FRC") in May 2010 (the "New Code"), which will apply for financial periods commencing on or after 29 June 2010, provides that all directors in FTSE 350 companies should be put forward for reelection every year, therefore the Directors resolved to comply with the requirement straight away and adopt annual re-elections of Directors with effect from the AGM. The Directors are therefore acting in accordance with the Company's Articles and in anticipation of the New Code and, being eligible, will retire voluntarily and submit themselves for election.
The Company's Articles permit the Company, by ordinary resolution, to appoint any person permitted by the Companies Act 2006 (the "2006 Act") to be a Director either to fill a casual vacancy or as an addition to the existing board of Directors (the "Board") or to replace a Director. Following the retirement of Dianne Thompson at the last annual general meeting, the Directors appointed Lance Batchelor as a Non-Executive Director of the Company with effect from 13 July 2010. The Company's Articles provide that any Director so appointed by the Board shall hold office until the following annual general meeting (this AGM) and shall then be eligible for reappointment. The Director who has been appointed since the last annual general meeting is Lance Batchelor and he is therefore standing for re-election.
Biographical details of all Directors standing for election or re-election can be found on pages 7 and 8 of this document and pages 32 and 33 of the Annual Report.
Following a full performance evaluation during the year, which included an assessment of the performance of each individual Director, the Nomination Committee has confirmed to the Board that each Director continues to make an effective and valuable contribution and that they demonstrate excellent commitment to their respective roles. The Board therefore supports each Board members' re-election (or election in the case of Lance Batchelor) for re-appointment.
The 2006 Act requires quoted companies, at each general meeting at which statutory accounts are to be laid, to propose an ordinary resolution approving the Directors' Remuneration Report for the year. This vote will be in respect of the content of the Directors' Remuneration Report and not specific to any Director's level or terms of remuneration. Resolution 14 will be proposed as an ordinary resolution for this purpose and a copy of the Directors' Remuneration Report is included in the Annual Report.
The 2006 Act provides that Directors shall only allot unissued shares with the prior authority of shareholders in general meeting. The existing authority granted to the Directors at the last annual general meeting to allot unissued Ordinary Shares expires at the conclusion of the AGM.
Accordingly, an ordinary resolution will be proposed to renew the Directors' authority pursuant to section 551 of the 2006 Act to allot Ordinary Shares (and other relevant securities, as defined within section 551 of the 2006 Act) with a nominal value of up to £837,580.72 which represents approximately one third (33.3 per cent.) of the total current issued Ordinary Share capital as at 23 February 2011 (being the last practicable date prior to the publication of this notice). In accordance with institutional guidelines issued by the Association of British Insurers, paragraph (ii) of Resolution 15 will be proposed to allow the Directors to allot, including the Ordinary Shares referred to in paragraph (i) of Resolution 15, further Ordinary Shares (and other relevant securities, as defined within Section 551 of the 2006 Act) in connection with a pre-emptive offer by way of a rights issue to ordinary shareholders up to a maximum nominal amount of £1,676,922.12, representing approximately two thirds (66.67 per cent.) of the Company's existing share capital as at 23 February 2011 and in accordance with section 570 of the 2006 Act. Although the Directors have no present intention to exercise this authority other than in connection with the exercise of options granted pursuant to the Company's employee share schemes, it will give the Directors flexibility to allot shares as may be necessary in the interests of the Company as a whole.
This authority will, if granted, expire on the conclusion of the annual general meeting of the Company to be held in 2012 or, if earlier, 15 months from the date of the passing of the resolution, unless such authority is renewed prior to this time. The Directors intend to renew such power at successive annual general meetings in accordance with current best practice.
The Company currently holds no shares in treasury as at 23 February 2011, being the last practicable date prior to publication of this document.
The 2006 Act also provides that any allotment of new shares for cash must be made pro rata to individual shareholders' holdings, unless such provisions are disapplied under sections 570 and section 573 of the 2006 Act. The existing authority granted to the Directors at the last annual general meeting to allot shares for cash pursuant to sections 570 and 573 of the 2006 Act expires at the conclusion of the AGM.
Accordingly, a special resolution will be proposed to renew the Directors' powers to allot Ordinary Shares for cash without offering them to shareholders pro rata to their existing holdings. This resolution authorises issues by way of rights to shareholders which are not strictly in accordance with section 561 of the 2006 Act and authorises other allotments of up to an aggregate nominal amount of £125,762.87, (representing approximately 5 per cent. of the current issued Ordinary Share capital as at 23 February 2011). The special resolution will, inter alia, enable the Company, in the event of a rights issue or open offer, to meet certain practical difficulties which may arise in connection with fractional entitlements or in respect of overseas shareholders as a result of local laws and which prevent shares being issued strictly pro rata. Again, although the Directors have no present intention to exercise this authority other than in connection with the exercise of options granted pursuant to the Company's employee share schemes, it will give the Directors flexibility to allot shares as may be necessary in the interests of the Company as a whole.
This authority, if granted, will expire on the conclusion of the annual general meeting of the Company to be held in 2012 or, if earlier, 15 months from the date of the passing of the resolution, unless such authority is renewed prior to this time. The Directors intend to renew such power at subsequent annual general meetings in accordance with current best practice.
The current authority given at the annual general meeting of the Company held on 30 March 2010 to purchase its own Ordinary Shares will expire at the conclusion of the AGM.
The Directors consider that it would be beneficial if, in certain circumstances, the Company had the power to purchase its own Ordinary Shares. In particular, the Company in 2010 repurchased a number of its own shares pursuant to a share buyback programme, for the purposes of returning surplus funds to shareholders and providing a return on investments. The Directors therefore consider that it would be beneficial for the shareholders of the Company as a whole if the Company was to be granted the flexibility to repurchase further Ordinary Shares.
Accordingly, they recommend that the existing power to purchase Ordinary Shares (in defined circumstances) up to a maximum prescribed limit be renewed for a further limited period.
The Company will only make such purchases if the Directors are satisfied, after careful consideration, that these are in the best interests of the Company and shareholders generally and could be reasonably expected to result in an increase in expected earnings per share. Furthermore, account will be taken of the overall financial implications for the Company.
If such purchases were made, the Company would be able to do either, or a combination of, the following:
(i) cancel the purchased Ordinary Shares so reducing the total number of Ordinary Shares in issue; or
(ii) where the Ordinary Shares were purchased out of distributable profits, subject to certain limitations, hold them as treasury shares.
Treasury shares themselves may be cancelled, sold for cash or transferred for the purposes of the Company's share schemes. The statutory pre-emption rights apply to a sale of treasury shares for cash and the disapplication of the statutory pre-emption rights in Resolution 16 includes, within the authorised amount, any sales of treasury shares for cash which may occur. Finally, if such purchases were made, to the extent the purchased shares are held as treasury shares, any increase in earnings per share would only be temporary, until the shares in question were either cancelled, or sold, or transferred out of treasury.
The number of Ordinary Shares in respect of which options have been granted is 2,931,071 (constituting approximately 1.8 per cent. of the current issued Ordinary Share capital of the Company as at 23 February 2011). If the authority to purchase own shares is exercised in full by the Company and all the purchased shares were cancelled rather than being held as treasury shares, this percentage will increase to approximately 2.0 per cent. of the reduced issued share capital.
Resolution 17 authorises the Directors to purchase up to a maximum of 16,097,647 Ordinary Shares, being approximately 10 per cent. of the current issued Ordinary Share capital of the Company as at 23 February 2011, and provides that the maximum price per Ordinary Share payable on any exercise of the authority shall be the higher of (i) an amount equal to 105 per cent. of the average of the market value for an Ordinary Share as derived from the Daily Official List of the London Stock Exchange plc for the five business days prior to making any purchase and (ii) the higher of the price of the last independent trade and the highest current bid on the London Stock Exchange plc at the time the purchase is carried out. The minimum price payable shall be 1.5625 pence per Ordinary Share, being the nominal value of an Ordinary Share. For this purpose both the maximum and minimum prices permitted to be paid are exclusive of expenses.
This authority, if granted, will expire at the conclusion of the annual general meeting of the Company to be held in 2012 or, if earlier, 15 months from the date of the passing of the resolution, unless such authority is renewed prior to this time. The Board intends to seek renewal of this power at subsequent annual general meetings in accordance with current best practice.
Resolution 18 is a resolution to allow the Company to hold general meetings (other than annual general meetings) on 14 clear days' notice. Changes made to the 2006 Act by the Companies (Shareholders' Rights) Regulations 2009 increase the notice period required for general meetings of the Company to 21 days unless shareholders approve a shorter notice period, which cannot, however, be less than 14 clear days. Such approval will not affect annual general meetings, which will continue to be held on at least 21 clear days' notice.
Following shareholder approval at the last annual general meeting, the Company is currently able to call general meetings (other than annual general meetings) on 14 clear days' notice and the Directors believe it is in the best interests of the shareholders of the Company to preserve the shorter notice period and accordingly are putting this resolution to the Meeting. The Directors intend that this shorter notice period would not be used as a matter of routine for such meetings but only where the flexibility is merited by the business of the meeting and is thought to be to the advantage of shareholders as a whole. The approval will be effective until the Company's next annual general meeting when it is expected that a similar resolution will be proposed.
It should also be noted that, in order to be able to call a general meeting on less than 21 clear days' notice, the Company must make a means of electronic voting available to all shareholders for that meeting.
Enclosed with this letter is a Proxy Form for use at the AGM.
Forms of proxy should be completed and returned in accordance with the instructions printed thereon so that they arrive at the Company's Registrars, Capita Registrars Limited, as soon as possible and in any event not later than 48 hours before the time fixed for the AGM (excluding non-working days), that is to say no later than 1pm on 28 March 2011. Completion and return of a form of proxy will not prevent shareholders from attending and voting at the AGM should they wish to do so.
Your Directors consider that the resolutions to be put to the Meeting are in the best interests of the Company and are most likely to promote the success of the Company for the benefit of members as a whole. Accordingly, the Directors unanimously recommend that you vote in favour of the resolutions to be proposed at the AGM, as they intend to do in respect of their own interests (both beneficial and non-beneficial), amounting in aggregate to 30,632,862 Ordinary Shares.
I look forward to your attendance at the AGM.
Yours faithfully,
Stephen Hemsley
Chairman
Stephen joined the Company as Finance Director in 1998. In 2001 he was appointed Chief Executive. Stephen was appointed Executive Chairman of the Group at the beginning of 2008 and became Non-Executive Chairman with effect from the close of the 2010 annual general meeting. Stephen is a chartered accountant by profession.
Colin acquired the Domino's Pizza Master Franchise Agreement for the UK and Republic of Ireland in 1993 through International Franchise Systems Inc.. In November 1999, with Colin as Chairman, the Company was taken public and listed on AIM. Colin is the Managing Director of HS Real Company LLC, Dayenn Limited and Non Executive Director of several other companies.
Chris was promoted to Chief Executive Officer in January 2008. He joined Domino's Pizza Inc. in 1990 to set up the Company's European Marketing Department and has concentrated on the UK and Ireland since 1993 when he joined Domino's Pizza Group Limited. Chris became a Director in 1999 and Chief Operating Officer in 2005.
Lee joined the Company in 2004 as Finance Director and Company Secretary. He previously held the post of Group Finance Director for Health Club Holdings Limited, formerly Holmes Place plc, where he also served for 18 months as Deputy Chief Executive. Lee is a chartered accountant by profession.
Nigel was appointed to the Board in 1999. He is the Non-Executive Chairman of Saracens Limited and Environ and a Non-Executive Director of Prestbury Investment Holdings Limited, Networkers International plc, English Wines Group plc and several other private companies.
John joined the Board in 2005 having previously been Chairman and Chief Executive Officer of Singer and Friedlander Group. He is currently Chairman of Strategic Equity Capital plc.
Michael was appointed to the Board in 2006. He is Chairman of the Audit Committee and Senior Independent Director of the Company. Michael is also a Non-Executive Director of Britvic plc and has worked in the food and drinks sector for the past 15 years. Michael was previously the Finance Director for Greene King plc.
Peter was appointed to the Board in September 2008. Peter is an FCA and has worked in private practice for 30 years, 10 years of which were at Ernst & Young LLP where he was a senior partner. Peter is involved in a number of businesses and ventures including being Chairman of the Hotel Chocolat Group, Non-Executive Director of Boparan Ventures , Trustee of the Pennies Foundation (a UK charity) and Chairman of the Finance Committee of World Ort (a global charity).
Lance Batchelor joined the Board as a Non-Executive Director on 13 July 2010 whilst the Chief Executive Officer of Tesco Telecoms and Mobile. It was announced on 21 January 2011 that Lance would take up the executive position of Deputy Chief Executive Officer of the Company with effect from 27 June 2011. Lance has previously held senior roles at Vodafone Group plc, Amazon.com and Procter & Gamble. He started his career with The Royal Navy where he served as a Submarine Warfare Officer, after which he completed his MBA at Harvard Business School. Lance is a trustee of The National Gallery.
Adam joined the Company in 2008 from leading pub company Mitchells & Butlers plc where he was the Director of Legal Affairs. He is a qualified solicitor and has previously held the position of Corporate Lawyer at Six Continents plc and Norton Rose LLP.
NOTICE IS HEREBY GIVEN that the annual general meeting ("AGM") of Domino's Pizza UK & IRL plc (the "Company") will be held at The Training Centre, Unit B, Kingston Centre, Winchester Circle, Kingston, Milton Keynes MK10 0BA on Wednesday, 30 March 2011 at 1pm, or any adjournment thereof, for the following purposes:
To consider, and if thought fit, to pass the following Resolutions of which numbers 1 to 15 will be proposed as ordinary resolutions and numbers 16 to 18 as special resolutions.
To receive and adopt the Company's audited accounts and financial statements for the year ended 26 December 2010 together with the Directors' Report and Auditors' Report.
To re-appoint Ernst & Young LLP as auditors of the Company until the conclusion of the next annual general meeting at which the accounts are to be laid before the Company.
To authorise the Audit Committee of the board of directors of the Company to agree the remuneration of the Company's auditors.
To declare payable the final dividend for the year ended 26 December 2010 of 5.70 pence per ordinary share on 31 March 2011 to ordinary shareholders whose names appear on the register of members at close of business on 25 February 2011.
To re-elect Stephen Hemsley as a director of the Company.
To re-elect Colin Halpern as a director of the Company.
To re-elect Chris Moore as a director of the Company.
To re-elect Lee Ginsberg as a director of the Company.
To re-elect Nigel Wray as a director of the Company.
To re-elect John Hodson as a director of the Company.
To re-elect Michael Shallow as a director of the Company.
To re-elect Peter Klauber as a director of the Company.
To elect Lance Batchelor as a director of the Company.
To approve the Directors' Remuneration Report for the year ended 26 December 2010.
THAT the directors of the Company be and hereby are generally and unconditionally authorised pursuant to and in accordance with section 551 of the Companies Act 2006 to exercise all the powers of the Company to allot ordinary shares in the Company or grant rights to subscribe for, or convert any security into, ordinary shares in the Company:
to holders of ordinary shares in proportion (as nearly as may be practical) to their existing holdings and to holders of other equity securities if this is required by the rights of those securities or, if the directors of the Company consider it necessary, as permitted by the rights of those securities.
The authority hereby conferred shall expire at the conclusion of the annual general meeting of the Company to be held in 2012 or, if earlier, 15 months from the date of the passing of this resolution, unless such authority is renewed prior to such time. Under the authority hereby conferred the directors of the Company may before such expiry make agreements which would or might require relevant securities to be allotted after such expiry, and the directors of the Company may allot such relevant securities as if the authority hereby conferred had not expired.
THAT (subject to the passing of Resolution 15) the directors of the Company be and hereby are authorised pursuant to and in accordance with section 570 and section 573 of the 2006 Act to allot equity securities (as defined in section 560) of the 2006 Act wholly for cash pursuant to the authority conferred by Resolution 15 (set out in this Notice), as if section 561(1) of the 2006 Act did not apply to any such allotment provided that such power shall be limited to:
The authority hereby conferred shall expire at the conclusion of the annual general meeting of the Company to be held in 2012 or, if earlier, 15 months from the date of the passing of this resolution, unless such authority is renewed prior to such time. Under the authority hereby conferred the director of the Company may before such expiry make agreements which would or might require relevant securities to be allotted after such expiry, and the directors of the Company may allot such relevant securities as if the authority hereby conferred had not expired.
THAT pursuant to the authorities contained in its Articles the Company be generally and unconditionally authorised for the purposes of section 701 of the 2006 Act to make one or more market purchases (within the meaning of section 693(4) of the 2006 Act) of ordinary shares in the capital of the Company provided that:
independent trade and the highest current independent bid on the London Stock Exchange at the time the purchase is carried out, such maximum price being exclusive of any advance corporation tax and any expenses; and
(iv) this authority shall expire at the conclusion of the next annual general meeting of the Company to be held in 2012 or, if earlier, 15 months from the date of the passing of this resolution, unless such authority is renewed prior to such time.
Under the authority hereby conferred, the Company may before such expiry make an offer or agreement to purchase ordinary shares under this authority which would or might require to be executed wholly or partly after such expiry, and the Company may make a purchase of ordinary shares in pursuance of such an offer or agreement as if the power conferred hereby had not expired.
THAT a general meeting of the Company, other than an annual general meeting, may be called by notice of at least 14 clear days in accordance with the provisions of the Articles of the Company, provided that the authority of this resolution shall expire on the conclusion of the annual general meeting of the Company to be held in 2012.
By order of the Board
Adam Batty Company Secretary 28 February 2011
Registered Office: Domino's House Lasborough Road Kingston Milton Keynes MK10 0AB
The following notes explain your general rights as a shareholder and your rights to attend and vote at the AGM or to appoint someone else to vote on your behalf.
one vote each. The total level of voting rights in the Company as at this date was therefore 160,976,474.
For a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST message (a "CREST Proxy Instruction") must be properly authenticated in accordance with Euroclear UK & Ireland's specifications and must contain the information required for those instructions as described in the CREST Manual (available via www.euroclear.com/CREST). The message, regardless of whether it relates to the appointment of a proxy or to an amendment to the instruction given to the previously appointed proxy or to an amendment to the instruction given to the previously appointed proxy, must, to be valid, be transmitted so as to be received by the Company's agent (RA10) by the latest time for receipt of proxy appointments specified in the notice of meeting. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST Applications Host) from which the Company's agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time, any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means.
CREST members and, where applicable, their CREST sponsors or voting service providers should note that Euroclear UK & Ireland does not make available special procedures in CREST for any particular messages. Normal system timings and limitations will, therefore, apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST Personal Member or sponsored member or has appointed voting service providers, to procure that its CREST sponsors or voting service providers take) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting service providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings.
The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.
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