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Amendments to Articles


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Former Director David Moran is currently attempting to find the support of 100 shareholders or of 5% of the company holding to requisition the attached amendments to the Company Articles of Association. He highlighted these concerns to me after he resigned from his position but held back from making this move because he felt he had to give the new board time. Recent events have lead him to think that the time is right to make a change in the articles. He is not a legal expert and is happy to take feedback on the proposal in order to gain the support required. I'm no legal expert either so would appreciate the views of anyone who is!

 

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I would like to make the proposed underlined changes to the Articles of Association adopted on the 14th March 2014.

 

12. Quorum for directors' meetings

 

CURRENT

12.1 Subject to the provisions of Article 12.3, the quorum for directors’ meetings may be fixed from time to time by a decision of the directors and unless otherwise fixed it is 2.

12.3 For so long as there is a sole director in office, such director shall be entitled to exercise all powers and authority as a director of the company.

 

PROPOSED

12.1 Subject to the provisions of Article 12.3, the quorum for directors’ meetings may be fixed from time to time by a decision of the directors and unless otherwise fixed it shall be equal to or greater than half of the total number of board directors and a minimum of 2.

12.3 If the total number of directors for the time being is less than 2, the director must not take any decision other than a decision -
(a) to appoint further directors, or
(b) to call a general meeting so as to enable the shareholders to appoint further directors.

 

REASON

2 directors seems inordinately few to be making decisions

 

 

 

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18. Directors' interests in transactions or arrangements with the company

 

CURRENT

18.1 If he has declared his interest in accordance with the Companies Acts, a director may:

18.1.1 be a party to, or in any way interested, whether directly or indirectly, in any contract, arrangement or transaction to which the company is a party, or in which the company is in any way interested, whether directly or indirectly;

18.1.1 not be a party to, or in any way interested, whether directly or indirectly, in any contract, arrangement or transaction to which the company is a party, or in which the company is in any way interested, whether directly or indirectly;

18.1.2 hold and be remunerated in respect of any office (other than the office of auditor of the company) or employment under the company or any other undertaking in which the company is in any way interested;

18.1.3 may (or any firm of which he is a member, partner or employee may) act in a professional capacity (other than the office of auditor) for the company or any such other undertaking and be remunerated for so acting; and/or

18.1.4 may act as a director or other officer of, or be otherwise interested in, any undertaking promoted by the company.

18.2 A director shall not, save as otherwise agreed by him, be accountable to the company for any interest, remuneration, profit or other benefit which he (or a person connected with him) derives from any matter permitted by this Article and no such contract, transaction  or arrangement relating thereto is liable to be avoided on the grounds of any such interest or benefit.

 

PROPOSED

18.1 If a proposed decision of the directors is concerned with an actual or proposed transaction or arrangement with the company in which a director is interested, that director is not to be counted as participating in the decision-making process for quorum or voting purposes.

18.2 But if paragraph 18.3 applies, a director who is interested in an actual or proposed transaction or arrangement with the company is to be counted as participating in the decision-making process for quorum and voting purposes.

18.3 This paragraph applies when -

18.3.1 the company by ordinary resolution disapplies the provision of the articles which would otherwise prevent a director from being counted as participating in the decision-making process;

18.3.2 the director’s interest cannot reasonably be regarded as likely to give rise to a conflict of interest; or

18.3.3 the director’s conflict of interest arises from a permitted cause.

18.4 For the purposes of this article, the following are permitted causes -

18.4.1 a guarantee given, or to be given, by or to a director in respect of an obligation incurred by or on behalf of the company or any of its subsidiaries;

18.4.2 subscription, or an agreement to subscribe, for shares or other securities of the company or any of its subsidiaries, or to underwrite, sub-underwrite, or guarantee subscription for any such shares or securities; and

18.4.3 arrangements pursuant to which benefits are made available to employees and directors or former employees and directors of the company or any of its subsidiaries which do not provide special benefits for directors or former directors.

18.5 For the purposes of this article, references to proposed decisions and decision-making processes include any directors’ meeting or part of a directors’ meeting.

18.6 Subject to paragraph (7), if a question arises at a meeting of directors or of a committee of directors as to the right of a director to participate in the meeting (or part of the meeting) for voting or quorum purposes, the question may, before the conclusion of the meeting, be referred to the chairman whose ruling in relation to any director other than the chairman is to be final and conclusive.

18.7 If any question as to the right to participate in the meeting (or part of the meeting) should arise in respect of the chairman, the question is to be decided by a decision of the directors at that meeting, for which purpose the chairman is not to be counted as participating in the meeting (or that part of the meeting) for voting or quorum purposes.

 

REASON

Clause 18 in its current form is poorly drafted with a number of errors and more importantly conflicts with clause 19 which is redundant as a result of the current wording.

Clause 18 is about what a conflicted director cannot do. Clause 19 is about the authorisation of a conflict by the directors therefore making clause 18 redundant.

 

 

 

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20. No restrictions on quorum and voting where a director has an interest

 

CURRENT

20.1 Save as provided in this Article or Article 19.3, provided that a director has declared his interest in accordance with the Companies Acts, he shall be entitled to vote on any resolution in respect of any contract, transaction or arrangement, or any other proposal, in which he (or a person connected with him) is interested.

20.2 A director shall not be counted in a quorum at a meeting of the directors in relation to any resolution on which he is not entitled to vote.

20.3 Proposals concerning any matters relating to the appointment of 2 or more directors to offices or employments with the company or any undertaking in which the company is interested may be divided and considered in relation to each director separately.  In such case each of the directors concerned (provided he is not otherwise barred from voting) is entitled to vote and be counted in the quorum in respect of each resolution, except that concerning his own appointment.

20.4 If any question arises at any meeting as to the entitlement of any director to vote, and such question is not resolved by his voluntarily agreeing to abstain from voting, such question shall be referred to the chairman of the meeting and his ruling (in relation to any director other than himself) is final and conclusive unless the interest has not been fairly disclosed.  If any such question arises in respect of the chairman, it shall be decided by the directors (other than the chairman) and their ruling is final and conclusive unless the interest has not been fairly disclosed.

 

PROPOSED

Delete this clause

 

REASON

With the amendment to clause 18 this clause if now redundant.

 

 

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1 hour ago, Al#1 said:

is it possible to list a very quick summary of the above . which as i read means that we must always have at least 2 directors? directors can not vote on  matters where their interest is conflicted?

That would be the case if I was successful. It is not the case at the moment. We only need one director and 2 directors can hold a board meeting on their own and vote things like the current articles through without the other directors voting because they were unable to attend the meeting. 

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5 minutes ago, CardinalSpin said:

The fact that the amendments reduce the power of the two largest shareholders, who will inevitably vote this down, doesn't put you off? You need 75% of shareholders to vote for it, then they can put it to a share vote where there will be only one outcome

If nothing else, it'll make BB have to give a reason for voting against it. 

If, as suggested by the guys at the Trust that there is  way of getting BB onside, then surely this would be the first step. I'd love to hear his reasoning if he voted against it. We all know why MJ would. He wrote the articles of association after all. 

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27 minutes ago, Squirrelhumper said:

If nothing else, it'll make BB have to give a reason for voting against it. 

If, as suggested by the guys at the Trust that there is  way of getting BB onside, then surely this would be the first step. I'd love to hear his reasoning if he voted against it. We all know why MJ would. He wrote the articles of association after all. 

He wouldn't need to SH, MJ has enough shares to block it. This is part of the beauty of it from their point of view. MJ can continue to be the bad guy and BB can quietly support him

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