AGM Information • May 27, 2015
AGM Information
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THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about the contents of this document or the action you should take, you are recommended to seek immediately your own personal financial advice from your independent financial adviser, stockbroker, bank manager, solicitor, accountant, or from another appropriately qualified and duly authorised independent adviser.
If you have sold or otherwise transferred all of your shares in BH Macro Limited please send this document and the accompanying documents at once to the purchaser or transferee or to the stockbroker, banker or other agent through whom the sale or transfer was effected for onward transmission to the purchaser or transferee.
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(an authorised closed-ended collective investment scheme established as a company with limited liability under the laws of Guernsey with registration number 46235)
Notice of the Annual General Meeting to be held at 1.30 p.m. on 25 June 2015 at the offices of Northern Trust International Fund Administration Services (Guernsey) Limited, Trafalgar Court, Les Banques, St Peter Port, Guernsey GY1 3QL is set out at the end of this document.
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Shareholders are requested to return the Form(s) of Proxy accompanying this document for use at the Annual General Meeting. To be valid, the Form(s) of Proxy must be completed and returned in accordance with the instructions printed thereon so as to be received by Computershare Investor Services (Jersey) Ltd, c/o The Pavilions, Bridgwater Road, Bristol, BS99 6ZY as soon as possible and, in any event, not later than 1.30 p.m. on 23 June 2015. The Form(s) of Proxy may also be sent to Computershare Investor Services (Jersey) Ltd either by fax at +44(0)870 703 6322 or by email at [email protected]. If you own more than one class of shares, you will need to complete and return a Form of Proxy for the Annual General Meeting in respect of each class of shares that you own.
Investors owning US dollar shares through an account on Nasdaq Dubai who wish to attend the Annual General Meeting or to exercise the voting rights attached to interests in the US dollar shares held by them through an account on Nasdaq Dubai at the Annual General Meeting should inform their Dubai broker, bank or custodian that is a business partner in the Nasdaq Dubai CSD at least 10 days before the Annual General Meeting, after which they will receive an attendance ticket and proxy card.
Your attention is drawn to the letter from the Chairman of BH Macro Limited which is set out in Part I of this document and which recommends that you vote in favour of the Resolutions to be proposed at the Annual General Meeting. Your attention is also drawn to the section entitled "Action to be Taken" on page 5 of this document.
(an authorised closed-ended collective investment scheme established as a company with limited liability under the laws of Guernsey with registration number 46235)
Directors:
Registered office:
Ian Plenderleith (Chairman) David Barton Huw Evans Christopher Legge Talmai Morgan Claire Whittet
PO Box 255 Trafalgar Court, Les Banques, St Peter Port, Guernsey GY1 3QL Channel Islands
27 May 2015
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Dear Shareholder,
Introduction The eighth Annual General Meeting of the Company will be held at the offices of Northern Trust International Fund Administration Services (Guernsey) Limited, Trafalgar Court, Les Banques, St Peter Port, Guernsey GY1 3QL on 25 June 2015 at 1.30 p.m. The business to be considered at the Annual General Meeting is contained in the notice convening the Annual General Meeting on pages 8 to 10 of this document. A brief explanation of each of the Resolutions to be considered is set out below.
This letter explains the business to be considered at the Annual General Meeting and includes a recommendation that you vote in favour of the resolutions set out in the notice of the Annual General Meeting.
The Annual General Meeting Ordinary Resolutions Resolution 1: The Directors must lay the annual audited financial statements for the financial period ending 31 December 2014 and the reports of the Directors and Auditors before the Shareholders and the Shareholders will be asked to receive and consider the financial statements and the reports.
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Resolutions 2 and 3: Shareholders will be asked to confirm the re-appointment of KPMG Channel Islands Limited as Auditors until the conclusion of the next annual general meeting due to be held in 2016 and to grant authority to the Board to determine their remuneration.
Resolutions 4 to 9 (inclusive): Shareholders will be asked to vote on the re-election of each of the Directors (other than Talmai Morgan), all of whom are retiring at the Annual General Meeting and are being submitted for re-election in accordance with corporate governance best practice for FTSE 350 companies as set out in the UK Corporate Governance Code. In addition, Shareholders will be asked to vote on the re-election of Colin Maltby, who is proposed to be appointed as a Director prior to the Annual General Meeting.
As part of the process of the rotation of the board, Talmai Morgan will retire from the board at the Annual General Meeting. Talmai has been a highly valued member of the board since the Company's listing, and we are very grateful for his expert advice and guidance. The board has undertaken an extensive process to identify an appropriate new director for the Company and I am very pleased that, following this process, Colin Maltby has agreed to join the board.
Further, since David Barton is an employee of Brevan Howard Capital Management LP, he is not considered to be independent for the purposes of Listing Rule 15.2.13A and accordingly is required to stand for annual re-election pursuant to that Listing Rule.
Following an evaluation of the Directors conducted during the year, the Board believes that each current Director continues to make an effective and valuable contribution and demonstrates commitment to the role.
All of the retiring Directors (other than Talmai Morgan), being eligible, will stand for re-election as Directors. Each Director re-elected will hold office until he retires or ceases to be a Director in accordance with the Articles, by operation of law or until he resigns.
The biographies of each of the Directors standing for re-election, all of whom are nonexecutive, are set out below.
Ian Plenderleith retired at the end of 2005 after a three-year term as Deputy Governor of the South African Reserve Bank. He served on the Bank's Monetary Policy Committee and was responsible for money, capital and foreign exchange market operations and for international banking relationships. He previously worked for over 36 years at the Bank of England in London, where he was most recently Executive Director responsible for the Bank's financial market operations and a member of the Bank's Monetary Policy Committee. He has also worked at the International Monetary Fund in Washington DC and served on the Board of the European Investment Bank and on various international committees at the Bank for International Settlements. Mr Plenderleith holds an MA from Christ Church, Oxford University, and an MBA from Columbia Business School, New York. Mr Plenderleith is a non-executive director of Morgan Stanley International and BMCE Bank International in London. He is also Chairman of the Governors of Reed's School in Surrey. Mr Plenderleith has held the role of Chairman of the Board since 2007.
Huw Evans is Guernsey resident and qualified as a Chartered Accountant with KPMG (then Peat Marwick Mitchell) in 1983. He subsequently worked for three years in the Corporate Finance department of Schroders before joining Phoenix Securities Limited in 1986. Over the next twelve years he advised a wide range of companies in financial services and other sectors on mergers and acquisitions and more general corporate strategy. Since moving to Guernsey in 2005, he has acted as a professional non-executive Director of a number of Guernsey-based companies and funds. He holds an MA in Biochemistry from Cambridge University. Mr Evans was appointed to the Board in 2010.
David Barton is Jersey resident and joined Brevan Howard in July 2007. He is currently the Head of Legal at Brevan Howard Capital Management LP, the Company's manager, and a director of a number of the group's global entities. Prior to joining Brevan Howard, David worked as a transactional lawyer in the Corporate group of Freshfields Bruckhaus Deringer in London (2005 - 2007), advising on the structuring and launch of listed and unlisted hedge, private equity and other investment funds. Prior to Freshfields, David worked as a solicitor in the Corporate and Finance groups of Freehills in Sydney (2002-2005) advising on a wide range of M&A, ECM/DCM and investment fund transactions. David holds a Bachelor of Commerce (Economics and Finance) and Bachelor of Laws (Hons) from Macquarie University in Sydney and is admitted to practice as a solicitor in England and Wales and a solicitor and barrister in New South Wales, Australia. David is Series 3 (Commodities and Futures) qualified with the United States, National Association of Securities Dealers (NASD).
Christopher Legge is Guernsey resident and has over 25 years experience in the financial services industry. He qualified in London in 1980 with Pannell Kerr Forster and subsequently moved to Guernsey in 1983 to work for Ernst & Young, progressing from audit manager to Managing Partner in the Channel Islands. Mr Legge retired from Ernst & Young in 2003 and currently holds a number of directorships in the financial sector. Mr Legge is an FCA and holds a BA (Hons) in Economics from the University of Manchester. Mr Legge was appointed to the Board in 2007.
Claire Whittet is Guernsey resident and has over 37 years' experience in the financial services industry. After obtaining a MA (Hons) in Geography from the University of Edinburgh, she joined the Bank of Scotland for 19 years and undertook a wide variety of roles including running two city centre offices. She moved to Guernsey in 1996 and was Global Head of Private Client Credit for Bank of Bermuda before joining Rothschild Bank International Limited where she is now Managing Director and Co-Head. Mrs Whittet is an ACIB member of the Chartered Institute of Bankers in Scotland, a member of the Chartered Insurance Institute and holds an IoD Director's Diploma in Company Direction. She is a Non-Executive Director of other listed investment funds. Mrs Whittet was appointed to the Board in June 2014.
Colin Maltby is a Director of BACIT Limited, Ocean Wilsons Holdings Limited and Abingworth BioEquities Fund Limited, and a member of the Supervisory Board of BBGI SICAV SA. He was Head of Investments at BP from August 2000 to June 2007 and was previously Chief Investment Officer of Equitas Limited from its formation in 1996. His career in investment management began in 1975 with NM Rothschild & Sons and included 15 years with the Kleinwort Benson Group, of which he was a Group Chief Executive at the time of its acquisition by Dresdner Bank AG in 1995. He was Chief Executive of Kleinwort Benson Investment Management from 1988 to 1995. Colin has served as a non-executive Director of various public companies and agencies, and as an adviser to numerous institutional investors, including pension funds and insurance companies, and to private equity and venture capital funds in both Europe and the United States. He is currently an Investment Advisor to Wolfson College, Oxford. Colin holds a Double First Class Honours degree in Physics from the University of Oxford and also studied at the Stanford University Graduate School of Business. Mr Maltby is a Fellow of Wolfson College, Oxford, a Fellow of the Royal Institution of Great Britain and of the Royal Society of Arts, and a member of the Institut National Genevois. Mr Maltby is a resident of Switzerland.
Resolution 10: Shareholders are being asked to approve the Directors' Remuneration Report contained in the Company's annual audited financial statements.
Resolution 11: The Directors are seeking the authority to allot and issue, grant rights to subscribe for, or to convert securities into, up to 1,667,628 Euro shares, 6,083,412 US dollar shares and 12,340,442 Sterling shares respectively (being 33.33 per cent. of the shares of each class in issue as at the latest practicable date prior to the date of publication of this document, excluding shares held in treasury). The authority expires on the date falling fifteen months after the date of passing of this Resolution 11 or the conclusion of the next annual general meeting of the Company, whichever is the earlier, save that the Company may before such expiry make an offer or agreement which would or might require shares to be allotted and issued after such expiry and the Directors may allot and issue shares in pursuance of such an offer or agreement as if the authority had not expired.
This authority supplements Article 4.4 of the Articles which, subject to any limitations imposed by the Shareholders (such as this Resolution 11), generally and unconditionally authorises the Directors to allot and issue, grant rights to subscribe for, or to convert securities into, up to 1 billion shares of each class in the Company, which authority expires on 18 June 2017, being 5 years after the date of adoption of the current Articles (unless previously renewed, revoked or varied by the Company in a general meeting).
As at the latest practicable date prior to the date of publication of this document, the Company held 6,402,739 shares in treasury which represents approximately 9.62 per cent. of the Company's issued shares (excluding treasury shares) at that time. The treasury shares in the Company consist of 448,666 Euro shares, 1,975,725 US Dollar shares and 3,978,348 Sterling shares.
The Directors have no present intention to exercise the authority conferred by this Resolution 11.
Resolution 12: As part of the Company's discount management arrangements, the Directors are seeking to renew the authority to purchase the Company's shares in the market up to 750,007 Euro shares, 2,735,984 US Dollar shares and 5,550,052 Sterling shares respectively (equivalent to 14.99 per cent. of the shares of each class in issue as at the latest practicable date prior to the date of publication of this document, excluding shares held in treasury) from time to time either for cancellation or to hold as treasury shares for future resale or transfer.
Purchases will only be made in the market at prices below the prevailing net asset value per share in the Company of the relevant class in circumstances in which the Directors believe such purchases will result in an increase in the net asset value per share of the remaining shares (or of a particular class) or as a means of addressing any imbalance between the supply of, and demand for, the shares (or of a particular class).
Resolution 13: Resolution 13 disapplies the pre-emption rights contained in the Articles so that the Board has authority to allot and issue (or sell from treasury) shares for cash on a non-preemptive basis in respect of 500,338 Euro shares, 1,825,206 US Dollar shares and 3,702,503 Sterling shares in the Company respectively (equivalent to 10 per cent. of the shares of each class in issue as at the latest practicable date prior to the date of publication of this document, excluding shares held in treasury). The disapplication expires on the date falling fifteen months after the date of passing of this Resolution 13 or the conclusion of the next annual general meeting of the Company, whichever is the earlier and permits the Board to allot and issue shares (or sell shares from treasury) after expiry of the disapplication if it has agreed to do so beforehand. Shares issued (or sold from treasury) pursuant to the disapplication would not be issued at a price that is less than the prevailing net asset value per share of the relevant class.
The Resolution to approve disapplication of pre-emption rights is set at 10 per cent. of each class of shares. As the issue of shares (or sale from treasury) by the Company on a non-pre-emptive basis will only be made at a premium rate to the prevailing net asset value for the relevant class of shares, the Board believes that the existing authority to issue new shares equal to 10 per cent. of the existing shares in issue of each class (excluding treasury shares) is appropriate.
Resolution 14: Shareholders are being asked to approve certain amendments to the Articles, which are largely technical in nature and do not materially affect the existing rights of Shareholders. They are described below. If implemented, the Board Procedure Articles Amendments should permit the Company more flexibility in holding board and board committee meetings, as well as shareholder meetings, and potentially reduce the costs associated with those meetings. The Additional Articles Amendments cover changes to the Articles to remove references to address changes in Guernsey law regarding uncertificated securities and in relation to FATCA, as well as other technical changes.
The following amendments will be made to the Articles:
• The provisions contained in the Articles which require board and board committee meetings to be held outside the United Kingdom, for directors not to participate in board or committee meetings when physically in the United Kingdom and limiting the appointment of alternates who are resident in the United Kingdom will be removed.
• The Articles will be updated to allow general meetings of the Company to take place in the United Kingdom.
• The Articles will be updated to provide that the provisions of law that apply to the register of members of the Company shall also apply to the register of interested parties of the Company.
• The Articles will be updated to reflect the fact that CREST is now an "Authorised Operator" for the purposes of The Uncertificated Securities (Guernsey) Regulations, 2009 and the subsequent deletion of CREST Rule 8.
• The provisions in the Articles regarding notifiable interests in the Company's shares have been updated to reflect the requirements of Chapter 5 of the Disclosure Rules and Transparency Rules as they apply to non-UK issuers.
• The provisions in the Articles permitting the Company to require the compulsory transfer or forfeiture of shares held by persons who may cause the Company to have compliance obligations under, or to risk being in violation of, the US Hiring Incentive for Restoring Employment Act 2010 (which incorporates the anti-avoidance revenue provisions contained in the US Foreign Account Tax Compliance Act ("FATCA")) will be deleted and replaced by provisions that permit the Company to impose on a Shareholder any withholding or deduction required by FATCA, or similar laws, and all associated interest, penalties and other losses, liabilities or costs that may be imposed on the Company and that are attributable to that Shareholder (or, if different, any direct or indirect beneficial owner(s) of the Shares held by such Shareholder).
• Provisions will be inserted providing that the Company may require that Shareholders provide, and the Company (and any authorised third party agent or delegate of the Company) shall be entitled to use and disclose, any information or documentation in relation to the Shareholders and, if and to the extent required, the direct and indirect beneficial owner(s) (if any) of shares in the Company held by the Shareholders (if any), as may be necessary or desirable for the Company to comply with any reporting or other obligations and/or prevent or mitigate the withholding of tax under FATCA or other similar laws.
• Other general and typographical changes will also be made as required to ensure the consistency of the Articles and bring them up to date.
The full terms of the proposed amendments to the Articles are available from the date of this circular to the date of the Annual General Meeting at the offices of Freshfields Bruckhaus Deringer LLP, 65 Fleet Street London EC4Y 1HS and will be available at the place of the Annual General Meeting for at least 15 minutes before and during the meeting.
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Action to be taken Form(s) of Proxy
You will find enclosed the Form(s) of Proxy for use at the Annual General Meeting. Whether or not you intend to attend the Annual General Meeting, you are urged to complete and return the Form(s) of Proxy as soon as possible. To be valid, the Form(s) of Proxy must be completed in accordance with the instructions printed on it and lodged with Computershare Investor Services (Jersey) Ltd, c/o The Pavilions, Bridgwater Road, Bristol, BS99 6ZY as soon as possible and, in any event, not later than 1.30 p.m. on 23 June 2015 (or such later time as the Directors may determine). The Form(s) of Proxy may also be sent to Computershare Investor Services (Jersey) Ltd, c/o The Pavilions, Bridgwater Road, Bristol, BS99 6ZY, by fax to +44(0)870 703 6322 or by email to [email protected]. If you own more than one class of shares, you will need to complete and return a Form of Proxy for the Annual General Meeting in respect of each class of shares that you own.
The lodging of the Form(s) of Proxy will not prevent you from attending the Annual General Meeting and voting in person if you so wish. If you have any queries relating to the completion of the Form(s) of Proxy, please contact the Company's administrator, Northern Trust International Fund Administration Services (Guernsey) Limited, Trafalgar Court, Les Banques, St Peter Port, Guernsey GY1 3QL at the following number +44(0)1481 745 001. Northern Trust International Fund Administration Services (Guernsey) Limited can only provide information regarding the completion of the Form(s) of Proxy and cannot provide you with investment or tax advice.
Investors owning US dollar shares through an account on Nasdaq Dubai who wish to attend the Annual General Meeting or to exercise the voting rights attached to interests in the US Dollar shares held by them through an account on Nasdaq Dubai at the Annual General Meeting should inform their Dubai broker, bank or custodian that is a business partner in the Nasdaq Dubai CSD at least 10 days before the Annual General Meeting, after which they will receive an attendance ticket and proxy card.
A quorum consisting of two Shareholders entitled to vote and attending in person or by proxy (or, in the case of a corporation, by a duly appointed representative) is required for the Annual General Meeting.
Resolutions 1 to 11 are proposed as ordinary resolutions, which require a simple majority of the Shareholders and duly appointed proxies attending the meeting and voting on a show of hands to vote in favour (excluding any votes that are withheld) or, if a poll is demanded, a simple majority of the total voting rights cast on the relevant resolution (excluding any votes that are withheld) to be in favour.
Resolutions 12 to 14 are proposed as special resolutions, which require not less than 75 per cent. of the Shareholders and duly appointed proxies attending the meeting and voting on a show of hands to vote in favour (excluding any votes that are withheld) or, if a poll is demanded, not less than 75 per cent. of the total voting rights cast on the relevant resolution (excluding any votes that are withheld) to be in favour.
The Board considers that the proposals and subjects of the Resolutions are in the best interests of Shareholders as a whole. Accordingly, the Board unanimously recommends Shareholders, as those Directors who own shares in the Company intend to do so in respect of their own beneficial holdings, to vote in favour of the Resolutions. You are requested to complete and return the enclosed Form(s) of Proxy without delay, whether or not you intend to attend the Annual General Meeting.
Yours faithfully
Chairman
"Additional Articles Amendments" means the amendments to the Articles set out at Resolution 14 above;
"Annual General Meeting" means the annual general meeting of the Company convened for 1.30 p.m. on 25 June 2015 (or any adjournment thereof), notice of which is set out at the end of this document;
''Articles" means the articles of incorporation of the Company in force from time to time;
"Auditors" means the statutory auditor of the Company from time to time (currently KPMG Channel Islands Limited);
"Board" or "Directors" (each a "Director") means the board of directors of the Company from time to time;
"Board Procedure Articles Amendments" means the amendments to the Articles set out at Resolution 14 above;
"Companies Law" means the Companies (Guernsey) Law, 2008 (as amended);
"Company" means BH Macro Limited;
"FATCA" means the US Foreign Account Tax Compliance Act;
"Form of Proxy" means the form of proxy for use at the Annual General Meeting;
"Listing Rules" means the Listing Rules of the UK Listing Authority;
"Nasdaq Dubai" means Nasdaq Dubai Limited;
"Resolutions" (each a "Resolution") means the resolutions to be proposed at the Annual General Meeting and contained in the notice of the Annual General Meeting; and
"Shareholders" (each a "Shareholder") means the shareholders of the Company from time to time.
NOTICE is hereby given that the eighth Annual General Meeting of BH Macro Limited (the "Company") will be held at Trafalgar Court, Les Banques, St Peter Port, Guernsey, GY1 3QL, Channel Islands on 25 June 2015 at 1.30 p.m. to consider and if thought fit, to pass the following resolutions which will be proposed as ordinary resolutions and special resolutions as set out below:
To be proposed as ordinary resolutions:
To be proposed as special resolutions:
a. the maximum number of shares authorised to be purchased shall be 750,007 shares designated as Euro shares, 2,735,984 shares designated as US Dollar shares and 5,550,052 shares designated as Sterling shares (being 14.99 per cent. of the shares of each class in issue as at the latest practicable date prior to the date of publication of this document, excluding shares held in treasury);
b. the minimum price (exclusive of expenses) which may be paid for a share shall be 1 cent for shares designated as Euro shares, 1 cent for shares designated as US Dollar shares and 1 pence for shares designated as Sterling shares;
PO Box 255 Trafalgar Court, Les Banques St Peter Port, Guernsey, GY1 3QL Channel Islands
Dated 27 May 2015
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