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| | QUALIFICATION OF DIRECTORS |
| (42) | A director need not be a member of the Commonhold Association. |
| (43) | The maximum number of directors of the Commonhold Association shall be as determined by ordinary resolution of the Commonhold Association, and if not so determined, shall be six. The minimum number of directors shall be two. |
| | APPOINTMENT AND REMOVAL OF DIRECTORS |
| (44) | This article shall apply if the Commonhold Community Statement confers upon the developer the right to appoint and remove directors of the Commonhold Association. In such event, |
| (a) | during the transitional period the developer shall be entitled to appoint a maximum of two directors in addition to any directors appointed by the subscriber or subscribers to the Memorandum of Association of the Commonhold Association, and shall be entitled to remove or replace any director so appointed; |
| (b) | after the end of the transitional period and for so long as the developer is the unit-holder of more than one quarter of the total number of units in the Commonhold, he shall be entitled to appoint a total of one quarter (or the nearest whole number exceeding one quarter) of the maximum number of directors of the Commonhold Association, and shall be entitled to remove or replace any director so appointed; |
| (c) | references hereinafter to a "developer's director" are references to a director appointed under article 44.1 or 44.2 above; |
| (d) | every such appointment and removal of a developer's director shall be effected by notice in writing signed by or on behalf of the developer and shall take effect immediately upon receipt of such notice at the registered office of the Commonhold Association or by the Secretary or as and from any date thereafter as may be specified in such notice; |
| (e) | if at any time the Commonhold Association resolves to reduce the maximum number of directors, and as a consequence the number of developer's directors in office exceeds the number permitted under article 44.2 above, the developer shall immediately reduce the number of developer's directors accordingly. If such reduction has not been effected by the commencement of the next directors' meeting, the longest in office of the developer's directors shall cease to hold office immediately as to achieve the required reduction in numbers; |
| (f) | if the developer ceases to be the unit-holder of more than one quarter of the total number of units in the Commonhold, he shall thereupon cease to be entitled to appoint, remove or replace any director of the Commonhold Association, and any developer's directors previously appointed by him under this article shall cease to hold office immediately; and |
| (g) | a developer's director who is removed from office or who ceases to hold office under this article shall not have any claim against the Commonhold Association in respect thereof. |
| (45) | At the first annual general meeting after the end of the transitional period, all of the directors other than any developer's directors shall retire from office, and at every subsequent annual general meeting one-third of the directors who are subject to retirement by rotation or, if their number is not three or a multiple of three, the number nearest to one-third shall retire from office; but if there is only one director who is subject to retirement by rotation, he shall retire. |
| (46) | A developer's director shall not be subject to retirement by rotation. Subject to the provisions of the Companies Act, the directors to retire by rotation shall be those who have been longest in office since their last appointment or reappointment, but as between persons who became or who were last reappointed directors on the same day those to retire shall (unless they otherwise agree among themselves) be determined by lot. |
| (47) | If the Commonhold Association, at the meeting at which a director retires by rotation, does not fill the vacancy, the retiring director shall, if willing to act, be deemed to have been reappointed unless at the meeting it is resolved not to fill the vacancy or unless a resolution for the reappointment of the director is put to the meeting and lost. |
| (48) | No person other than a director retiring by rotation shall be appointed or reappointed as a director at any general meeting unless: |
| 48.1 | he is recommended by the directors; or |
| 48.2 | not less than fourteen nor more than thirty-five clear days before the date appointed for the meeting, notice executed by a member qualified to vote at the meeting has been given to the Commonhold Association of the intention to propose that person for appointment or reappointment stating the particulars which would, if he were so appointed or reappointed, be required to be included in the Commonhold Association's register of directors together with notice executed by that person of his willingness to be appointed or reappointed. |
| (49) | Not less than seven nor more than twenty-eight clear days before the date appointed for holding a general meeting notice shall be given to all who are entitled to receive notice of the meeting of any person who is recommended by the directors for appointment or reappointment as a director at the meeting or in respect of whom notice has been duly given to the Commonhold Association of the intention to propose him at the meeting for appointment or reappointment as a director. The notice shall give the particulars of that person which would, if he were so appointed or reappointed be required to be included in the Commonhold Association's register of directors. |
| (50) | Subject as aforesaid, the Commonhold Association may by ordinary resolution appoint a person who is willing to act to be a director either to fill a vacancy (other than a vacancy in respect of a developer's director), or as an additional director and may also determine the rotation in which any additional directors are to retire. |
| (51) | The directors may appoint a person who is willing to act to be a director, either to fill a vacancy (other than a vacancy in respect of a developer's director) or as an additional director, provided that the appointment does not cause the number of directors to exceed any number fixed by or in accordance with the articles as the maximum number of directors. A director so appointed shall hold office only until the next following annual general meeting. If not reappointed at such annual general meeting, he shall vacate office at the conclusion thereof. |
| (52) | Subject as aforesaid, a director who retires at an annual general meeting may, if willing to act, be reappointed. If he is not reappointed, he shall retain office until the meeting appoints someone in his place, or if it does not do so, until the end of the meeting. |
| (53) | Any director (other than an alternate director) may appoint any other director, or any other person approved by resolution of the directors and willing to act, to be an alternate director to attend meetings of directors in the event that the director is unable to do so. If the director is a member of the Commonhold Association, his alternate must also be a member of the Commonhold Association. The director may remove from office an alternate director so appointed by him. |
| (54) | An alternate director shall be entitled to receive notice of all meetings of directors and of all meetings of committees of directors of which his appointor is a member, to attend and vote at any such meeting at which the director appointing him is not personally present and generally to perform all the functions of his appointor as a director in his absence but shall not be entitled to receive any remuneration from the Commonhold Association for his service as an alternate director. But it shall not be necessary to give notice of such a meeting to an alternate director who is absent from the United Kingdom. |
| (55) | An alternate director shall cease to be an alternate director if his appointor ceases to be a director. If a director retires but is reappointed or deemed to have been reappointed at the meeting at which he retires, any appointment of an alternate director made by him which was in force immediately prior to his retirement shall continue after his reappointment. |
| (56) | Any appointment or removal of an alternate director shall be by notice to the Commonhold Association signed by the director making or revoking the appointment or in any other manner approved by the directors. |
| (57) | Save as otherwise provided in the articles, an alternate director shall be deemed for all purposes to be a director and shall alone by responsible for his own acts and defaults and he shall not be deemed to be the agent of the director appointing him. |
| | DISQUALIFICATION AND VACATION<QCOF OFFICE OF DIRECTORS |
| (58) | The office of a director shall be vacated if:— |
| (a) | having been a member of the Commonhold Association when appointed a director, he ceases to be a member of the Commonhold Association; |
| (b) | he ceases to be a director by virtue of any provision of the Companies Act or he becomes prohibited by law from being a director; or |
| (c) | he becomes bankrupt or makes any arrangement or composition with his creditors generally; or |
| (d) | he is, or may be, suffering from mental disorder and either— |
| (i) | he is admitted to hospital in pursuance of an application for admission for treatment under the Mental Health Act 1983 or, in Scotland, an application for admission under the Mental Health (Scotland) Act 1960, or |
| (ii) | an order is made by a court having jurisdiction (whether in the United Kingdom or elsewhere) in matters concerning mental disorder for his detention or for the appointment of a receiver, curator bonis or other person to exercise powers with respect to his property or affairs; or |
| (e) | he resigns his office by notice to the Commonhold Association; or |
| (f) | he shall for more than six consecutive months have been absent without permission of the directors from meetings of directors held during that period and the directors resolve that his office be vacated. |
| (59) | Subject to the provisions of the Companies Act, the memorandum and the articles, and to any directions given by special resolution, the business of the Commonhold Association shall be managed by the directors who may exercise all the powers of the Commonhold Association. No alteration of the memorandum or articles and no such direction shall invalidate any prior act of the directors which would have been valid if that alteration had not been made or that direction had not been given. The powers given by this article shall not be limited by any special power given to the directors by the articles and a meeting of directors at which a quorum is present may exercise all powers exercisable by the directors. |
| (60) | The directors shall have the power on behalf of the Commonhold Association to appoint and enter into contracts with managing agents of the Commonhold on such terms as they shall think fit, but shall not exercise such power unless the terms of such appointment or contract (including those as to remuneration) shall first have been approved by the Commonhold Association in general meeting. |
| (61) | Subject to the preceding article, the directors may, by power of attorney or otherwise, appoint any person to be the agent of the Commonhold Association for such purposes and on such conditions as they determine, including authority for the agent to delegate all or any of his powers. |
| | DELEGATION OF DIRECTORS' POWERS |
| (62) | The directors may delegate any of their powers to any committee consisting of two or more directors, members of the Commonhold Association and others as they shall think fit, provided that the majority of the members of any such committee from time to time shall be members of the Commonhold Association. They may also delegate to any managing director or any director holding any other executive office or any managing agent such of their powers as they consider desirable to be exercised by him. Any such delegation shall be made subject to any provisions of the Commonhold Community Statement, may be made subject to any conditions the directors may impose, may be made either collaterally with or to the exclusion of their own powers, and may be revoked or altered. Subject to any such conditions, the proceedings of a committee with two or more members shall be governed by the articles regulating the proceedings of directors so far as they are capable of applying. |
| | REMUNERATION OF DIRECTORS |
| (63) | The developer's directors shall not be entitled to any remuneration from the Commonhold Association. Save with the consent of the Commonhold Association in general meeting, the directors other than the developer's director shall not be entitled to any remuneration. Any resolution giving such consent shall specify the amount of remuneration to be paid to the directors, and unless the resolution provides otherwise, the remuneration shall be deemed to accrue from day to day. |
| (64) | The directors may be paid all travelling, hotel, and other expenses properly incurred by them in connection with their attendance at meetings of directors or committees of directors or general meetings or separate meetings of the members of the Commonhold Association or otherwise in connection with the discharge of their duties. |
| | DIRECTORS' APPOINTMENTS AND INTERESTS |
| (65) | Subject to the provisions of the Companies Act, and provided that the terms of any such appointment, agreement or arrangement have been approved in advance by the Commonhold Association in general meeting, the directors may appoint one or more of their number to the office of managing director or to any other executive office under the Commonhold Association and may enter into an agreement or arrangement with any director for his employment by the Commonhold Association or for the provision by him of any services outside the scope of the ordinary duties of a director. Any appointment of a director to an executive office shall terminate if he ceases to be a director but without prejudice to any claim to damages for breach of the contract of service between the director and the Commonhold Association. |
| (66) | Subject to the provisions of the Companies Act, and provided that he has disclosed to the directors the nature and extent of any material interest of his, a director notwithstanding his office:— |
| (a) | may be a party to, or otherwise interested in, any transaction or arrangement with the Commonhold Association or in which the Commonhold Association is otherwise interested; and |
| (b) | may be a director or other officer of, or employed by, or a party to any transaction or arrangement with, or otherwise interested in, any body corporate promoted by the Commonhold Association or in which the Commonhold Association is otherwise interested; and |
| (c) | shall not, by reason of his office, be accountable to the Commonhold Association for any benefit which he derives from any such office or employment or from any such transaction or arrangement or from any interest in any such body corporate and no such transaction or arrangement shall be liable to be avoided on the ground of any such interest or benefit. |
| (67) | For the purposes of the foregoing article— |
| (a) | a general notice given to the directors that a director is to be regarded as having an interest of the nature and extent specified in the notice in any transaction or arrangement in which a specified person or class of persons is interested shall be deemed to be a disclosure that the director has an interest in any such transaction of the nature and extent so specified; and |
| (b) | an interest of which a director has no knowledge and of which it is unreasonable to expect him to have knowledge shall not be treated as an interest of his. |
| (68) | A developer's director may provide to the developer any information which he receives by virtue of his being a director. |
| (69) | Subject to the provisions of the articles, the directors may regulate their proceedings as they think fit. A director may, and the secretary at the request of a director shall, call a meeting of the directors. It shall not be necessary to give notice of a meeting to a director who is absent from the United Kingdom unless he has given to the Commonhold Association an address to which notices may be sent using electronic communications. In such case the director shall be entitled to have notices given to him at that address. Questions arising at a meeting shall be decided by a majority of votes. In the case of an equality of votes, the chairman shall have a second or casting vote. A director who is also an alternate director shall be entitled in the absence of his appointor to a separate vote on behalf of his appointor in addition to his own vote. |
| (70) | The quorum for the transaction of the business of the directors may be fixed by the directors and unless so fixed at any other greater number, shall be the greater of 50% of the number of appointed directors for the time being, or two. At least one of the persons present at the meeting must be a director other than a developer's director. A person who holds office only as an alternate director shall, if his appointor is not present, be counted in the quorum. A person who holds office both as a director and as an alternate director shall only be counted once in the quorum. |
| (71) | The continuing directors or a sole continuing director may act notwithstanding any vacancies in their number, but, if the number of directors is less than the number fixed as the quorum, the continuing director may act only for the purpose of filling vacancies or of calling a general meeting. |
| (72) | The directors may appoint one of their number to be the chairman of the board of directors and may at any time remove him from that office. Unless he is unwilling to do so, the director so appointed shall preside at every meeting of directors at which he is present. But if there is no director holding that office, or if the director holding it is unwilling to preside or is not present within fifteen minutes after the time appointed for the meeting, the directors present may appoint one of their number to be chairman of the meeting. |
| (73) | All acts done by a meeting of directors, or of a committee, or by a person acting as a director shall, notwithstanding that it be afterwards discovered that there was a defect in the appointment of any director or that any of them were disqualified from holding office, or had vacated office, or were not entitled to vote, be as valid as if every such person had been duly appointed and was qualified and had continued to be a director and had been entitled to vote. |
| (74) | A resolution in writing signed by all the directors entitled to receive notice of a meeting of directors or of a committee of directors shall be as valid and effectual as if it had been passed at a meeting of directors or (as the case, may be) a committee of directors duly convened and held and may consist of several documents in the like form each signed by one or more directors; but a resolution signed by an alternate director need not also be signed by his appointor and, if it is signed by a director who has appointed an alternate director, it need not be signed by the alternate director in that capacity. |
| (75) | A director who is not a member of the Commonhold Association shall not vote at a meeting of directors or of a committee of directors on any resolution concerning a matter in which he has, directly or indirectly, an interest or duty which is material and which conflicts or may conflict with the interests of the Commonhold Association. For the purposes of this article, an interest of a person who is, for any purpose of the Companies Act (excluding any statutory modification thereof not in force when this regulation becomes binding on the Commonhold Association), connected with a director shall be treated as an interest of the director and, in relation to an alternate director, an interest of his appointor shall be treated as an interest of the alternate director without prejudice to any interest which the alternate director has otherwise. A director shall not be counted in the quorum present at a meeting in relation to a resolution on which he is not entitled to vote. |
| (76) | A director who is a member of the Commonhold Association may vote at any meeting of directors or of any committee of directors of which he is a member notwithstanding that it in any way concerns or relates to a matter in which he has any interest whatsoever, directly or indirectly, and if he votes on such a resolution, his vote shall be counted; and in relation to any such resolution, he shall (whether or not he votes on the same) be taken into account in calculating the quorum present at the meeting. |
| (77) | If a question arises at a meeting of directors or of a committee of directors as to the right of a director to vote, the question may, before the conclusion of the meeting, be referred to the chairman of the meeting and his ruling in relation to any director other than himself shall be final and conclusive. |
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