Secondary Issues 1 Notes

Corporate Finance: SGS 5: Secondary Issues (I)

INDEX OF ABBREVIATIONS

- RIE – Recognised Investment Exchange

- IPO – Initial Public Offering

- PR – Prospectus Rules

- LR – Listing Rules

- DTR – Disclosure Guidance and Transparency Rules

- LP – Listing Principles

- PLP – Premium Listing Principles

- FSMA 2000 – Financial Services and Markets Act 2000

- RAO – Financial Services and Markets Act 2000 Regulated Activities Order 2001

- FPO – Financial Services and Markets Act 2000 Financial Promotions Order 2005

- MAR – Market Abuse Regulations

- CJA – Criminal Justice Act 2002

- FSA – Financial Services Act 2012

- UK CGC – UK Corporate Governance Code

- RCF – Revolving Credit Facility

- LSE – London Stock Exchange

- AIM – Alternative Investment Market

- FCA – Financial Conduct Authority

- MAC - Material Adverse Change

- EoD – Event of Default

ANNUAL GENERAL MEETINGS (AGM)

(1) Notice Periods for General Meetings & Information Rules

- Companies Act 2006 s.336(1): AGM – Every PUBLIC COMPANY must hold a general meeting as its AGM in each 6 MONTH PERIOD after its accounting reference date.

- Companies Act 2006 s.307A(1)(b)/s.360(1):AGM Notice Period – Notice period for an AGM of a TRADED COMPANY (company whose shares are admitted to trading on a regulated market) is at least 21 CLEAR DAYS.

- Companies Act 2006 s.307A (1)(a)/s.360(1): Other General Meetings Notice Period – Notice period for general meetings of a traded company is 21 CLEAR DAYS BUT may be reduced to 14 CLEAR DAYS if:

(a) general meeting is NOT the AGM;

(b) traded company allows shareholders to vote electronically where the meeting is held on reduced notice; and

(c) shareholders pass an ordinary resolution each year at the AGM approving the shorter notice period for non-AGM general meetings.

- CGC E2.4: Non-AGM General Meetings – Notice of non-AGM general meetings should be sent to shareholders at least 14 WORKING DAYS before the general meeting EXCEPT where there are circumstances of urgency (requirements for 14 working days’ notice and not just 14 clear days’ notice creates a longer notice period).

- Company must comply with or explain departure from the CGC in its annual report under LR 9.8.6R(5)-(6).

- Companies Act 2006 s.311(1)-(2): General Contents of Notice – Notice of a general meeting must always state the time/date/place of the meeting and the general nature of the business to be dealt with at that meeting.

- Companies Act 2006 s.311(3): Notice Information – Traded companies must include additional information in notice of general meetings, including address of website where s.311A Companies Act 2006 pre-meeting information can be found + details of members’ statutory rights to ask questions under s.319A(1)-(2) Companies Act 2006.

- Companies Act 2006 s.337(3): Long Notice Information – If notice of a traded company’s AGM is given MORE THAN 6 WEEKS before the AGM then the notice must include an explanation of shareholder’s right to requisition resolutions under s.338 Companies Act 2006 + to include a matter on the agenda for the general meeting under s.338A Companies Act 2006.

- Companies Act 2006 s.311A: Pre-Meeting Website Information – Prescribed information, including details of company’s share capital + matters set out in notice of meeting distributed to shareholders must be made available on company’s website on/before day of circulation of notice AND made available for 2 years thereafter.

- Companies Act 2006 s.341(1A): Post-Meeting Website Information – After meeting, traded companies must make available on their website additional information about results of polls held at the meeting (including number of votes cast + number of abstentions).

- Companies Act 2006 s.319A(1): Shareholder’s Right to Ask Questions – Shareholders of a traded company have a statutory right to ask questions at general meetings which company must ‘cause to be answered.’

- Companies often require shareholder’s questions to be REGISTERED in advance to allow for greater control at AGM.

- s.319A(2): Refusing Answer – Company may NOT give an answer to shareholder’s question at an AGM/general meeting if:
(a) answering question would be contrary to interests of company or undesirable in the interests of the good order of the meeting;

(b) answering question would unduly interfere with preparation for the meeting;

(c) answering question would involve disclosure of confidential information; or

(d) answer to question already available on company’s website.

- UK CGC E.2: Purpose of General Meetings – Board of public listed companies should use general meetings to communicate with investors/encourage participation of investors + listed companies should seek to pass as many necessary shareholder approval resolutions and deal with as many other issues as possible at AGM to avoid time/expense of having to call multiple general meetings.

- Business at AGM – Categorised into ORDINARY BUSINESS +SPECIAL BUSINESS with definitions of each usually contained in company’s articles.

- Explanatory circular must be sent to shareholders prior to AGM at which ‘special business’ to be considered BUT many public companies will voluntarily distribute explanatory circular + annual report + preceding year’s accounts with notice of AGM.

(2) Shareholder’s Requisition Rights

- Companies Act 2006 s.303(1)-(2): Right to Requisition Meetings – Individual shareholder/group of shareholders holding at least 5% of the voting rights in a private/public company can request a general meeting of that company be held – directors then required to call a general meeting once they receive such a request.

- s.303(3): Content of Request – Request for a general meeting must state the general nature of the business to be dealt with at the meeting + text of a resolution to be proposed at the meeting MAY be included in request.

- Companies Act 2006 s.303(4)-(5): Right to Requisition a Resolution – Shareholders can require resolutions to be put before the general meeting which they have...

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