AGM Information • Mar 1, 2019
AGM Information
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If you are in any doubt about the action you should take, you are recommended to seek your own financial advice from your stockbroker, bank manager, auditor, accountant, solicitor or other independent financial advisor duly authorised under the Financial Services and Markets Act 2000.
If you have sold or otherwise transferred all of your ordinary shares in RM plc, please send this document, 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 transmission to the purchaser or transferee.
(Incorporated and registered in England and Wales under the Companies Act 1948 with company number 01749877)
140 Eastern Avenue Milton Park Milton Abingdon Oxfordshire, OX14 4SB
1 March 2019
Dear Shareholder,
Set out in this letter, on pages 4 to 8, is a formal notice of the annual general meeting (the "AGM") of RM plc ("RM" or the "Company") to be held on Wednesday, 27 March 2019 at 11.30am at 140 Eastern Avenue, Milton Park, Abingdon, Oxfordshire, OX14 4SB. The purpose of this letter is to explain the resolutions numbered 3 to 8 which are proposed in the notice of AGM (the "Notice") as ordinary business, as well as resolutions 11 to 17 which are proposed in the Notice as special business.
The Board has decided that all of the directors of the Company ("Directors") will stand for re-election in accordance with the UK Corporate Governance Code. As such, all six Directors (John Poulter, Andy Blundell, David Brooks, Patrick Martell, Neil Martin and Deena Mattar) are retiring and offering themselves for re-election. Biographical details for each of these Directors are contained in the Company's 2018 Annual Report and Financial Statements.
Andy Blundell was appointed as a Non-Executive Director on 25 May 2017 and was elected by shareholders in March 2018. Patrick Martell was appointed as a Non-Executive Director on 1 January 2014 and was elected by shareholders in March 2014. Deena Mattar was appointed as a Non-Executive Director on 1 June 2011 and was elected by shareholders in March 2012. Each of these Directors' appointment is governed by a fixed-term letter of appointment.
The Board believes that the contribution and commitment of each of Andy Blundell, Patrick Martell and Deena Mattar as Non-Executive Directors is beneficial to the Company. As Chairman, I confirm that their performances are effective and demonstrate their commitment to their roles.
David Brooks is an Executive Director and was appointed Chief Executive Officer on 1 March 2013. Neil Martin is an Executive Director and was appointed Chief Financial Officer on 28 September 2015.
Resolution 11 is to seek the approval of the Directors' Remuneration Report (other than the part containing the Directors' Remuneration Policy) for the financial year ended 30 November 2018. The report is set out in the 2018 Annual Report and Financial Statements. The resolution is advisory in nature and no individual Director's remuneration is dependent on it.
The Notice includes an ordinary resolution renewing the Directors' authority to allot shares, two special resolutions dis-applying shareholders' pre-emption rights to a limited extent and a special resolution authorising the Company to make market purchases of its shares.
Resolution 12 renews the authority granted to the Directors to allot new ordinary shares in accordance with section 551 of the Companies Act 2006 (the "Act") up to a nominal amount of £639,047, being one-third of the issued ordinary share capital of the Company as at 27 February 2019 (being the latest practicable date prior to the publication of this document).
Resolution 13 renews the Directors' authority in accordance with section 561 of the Act to allot further ordinary shares for cash without first being required to offer such shares to existing shareholders. If approved, the resolution will authorise the Directors to issue ordinary shares for cash in connection with a rights issue or open offer and otherwise to issue ordinary shares for cash, including the sale on a non pre-emptive basis of treasury shares for cash, up to a maximum nominal amount of £95,857, being equal to 5 per cent of the nominal value of the Company's issued ordinary share capital as at 27 February 2019 (being the latest practicable date prior to the publication of this document). The Directors do not intend to issue more than 7.5 per cent of the issued ordinary share capital of the Company for cash on a non pre-emptive basis in any rolling three year period without prior consultation with the shareholders, the Investment Association and the Pensions and Lifetime Savings Association.
Resolution 14 authorises the Directors to allot further ordinary shares for cash in connection with acquisitions or other specified capital investments which are announced contemporaneously with the allotment, or which have taken place in the preceding six month period and are disclosed in the announcement of the allotment. This authority, which is being sought in accordance with the Pre–Emption Group's Statement of Principles, is limited to a maximum nominal amount of £95,857, being equal to 5 per cent of the nominal value of the Company's issued ordinary share capital as at 27 February 2019 (being the latest practicable date prior to the publication of this document).
Resolution 15 renews the Directors' authority to make market purchases of up to 10 per cent of the Company's issued ordinary shares. The Board believes that it would be appropriate to have the option to use a proportion of the Company's cash resources to make market repurchases of ordinary shares. The minimum price which may be paid for each share is the nominal value and the maximum price which may be paid for each share is an amount equal to the higher of 5 per cent above the average of the middle market quotations of the Company's ordinary shares as derived from the London Stock Exchange Daily Official List for the five business days immediately preceding the day on which such share is contracted to be purchased and the amount stipulated by Article 5(6) of the Market Abuse Regulation (596/2014/EU).
Each of these authorities will expire on the date of the next annual general meeting of the Company or on 31 May 2020, whichever is the earlier.
The Company will only exercise the authority granted by the proposed resolution 15 where the Board reasonably believes that repurchasing its ordinary shares will increase earnings per share of the ordinary shares in issue after the purchase and, accordingly, is in the best interests of shareholders generally. Any ordinary shares purchased by the Company pursuant to the authority conferred by resolution 15 will either be cancelled and the number of shares reduced accordingly or, if the Directors think fit, they may be held as treasury shares.
As at 27 February 2019 (being the latest practicable date prior to the publication of this document), there are no warrants, or outstanding options, to subscribe for shares in the capital of the Company outstanding and no treasury shares in issue.
Resolution 16 seeks approval, subject to the Company's Articles of Association, for the Company to call general meetings (other than annual general meetings) on 14 clear days' notice. The notice period required by the Act for general meetings of the Company is 21 days unless shareholders approve a shorter notice period, which cannot, however, be less than 14 clear days. Annual general meetings will continue to be held on at least 21 clear days' notice. Resolution 16 seeks the approval required by the Act, which will be effective until the Company's next annual general meeting, when it is intended that a similar resolution will be proposed. 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. The flexibility offered by resolution 16 will be used when, taking into account the circumstances, the Directors consider this appropriate in relation to the business of the meeting and in the interests of the Company and the shareholders as a whole.
Resolution 17 is to authorise the adoption of the RM plc Performance Share Plan 2019 (the "2019 PSP").
The 2019 PSP replaces the Company's existing performance share plan that will lapse in January 2020 (the "Old PSP"). Shareholder approval is being sought for the 2019 PSP at the AGM to ensure that the Company has the
appropriate share incentives and that they operate consistently with the revised remuneration policy. No new awards will be made under the Old PSP after the date of the AGM, provided shareholder approval is obtained for the 2019 PSP.
The 2019 PSP reflects the Directors' remuneration policy as set out in the Directors' remuneration report. The principal terms of the 2019 PSP are set out in the Appendix to this document on pages 9 to 11.
The rules of the 2019 PSP will be available for inspection during normal business hours on Monday to Friday (excluding bank holidays) at the Company's registered office and at the offices of Osborne Clarke LLP at One London Wall, London, EC2Y 5EB from the date of this document until the close of the AGM and at the place of the AGM for at least 15 minutes before the AGM and during the AGM.
You will not receive a hard copy form of proxy for the 2019 AGM in the post. Instead, you will be able to vote electronically using the link www.signalshares.com. You will need to log into your Signal Shares account, or register if you have not previously done so. To register you will need your Investor Code, which is detailed on your share certificate or available from the Company's Registrar, Link Asset Services (previously called Capita).
Voting by proxy prior to the AGM does not affect your right to attend the AGM and vote in person should you so wish. Proxy votes must be received no later than 11.30am on Monday 25 March 2019
You may request a hard copy form of proxy directly from the Company's Registrar, Link Asset Services (telephone: 0371 664 0391). Calls cost 12p per minute plus your phone company's access charge. Calls outside the United Kingdom will be charged at the applicable international rate. Lines are open between 9.00am – 5.30pm, Monday to Friday excluding public holidays in England and Wales.
The Directors believe that the adoption of all the resolutions to be put to the AGM are in the best interests of the Company and its shareholders as a whole. The Directors unanimously recommend that you vote in favour of all the resolutions to be proposed at the AGM, as they themselves intend to do in respect of their own beneficial shareholdings which in aggregate, as at 27 February 2019 (being the latest practicable date prior to the publication of this document), amount to a total of 673,039 ordinary shares, representing approximately 0.80 per cent of the existing issued ordinary share capital of the Company.
Yours faithfully
John Poulter Chairman
Notice is hereby given that the annual general meeting of RM plc (the "Company") will be held at 140 Eastern Avenue, Milton Park, Abingdon, Oxfordshire, OX14 4SB on Wednesday, 27 March 2019 at 11.30am (or at any adjournment thereof) to consider and, if thought fit, pass resolutions 1 to 12, which will be proposed as ordinary resolutions of the Company, and resolutions 13 to 17, which will be proposed as special resolutions of the Company:
in either case as if section 561 of the Act did not apply to the allotment but this power shall be limited:
and so that the Directors may make such exclusions or other arrangements as they consider expedient in relation to treasury shares, fractional entitlements, record dates, shares represented by depositary receipts, legal or practical problems under the laws in any territory or the requirements of any relevant regulatory body or stock exchange or any other matter; and
in either case as if section 561 of the Act did not apply to the allotment but this power shall be:
(c) all previous unutilised authorities under sections 570 and 573 of the Act shall cease to have effect; and
(d) the Company may, before this power expires, make an offer or agreement which would or might require equity securities to be allotted after it expires and the Directors may allot equity securities in pursuance of such offer or agreement as if this power had not expired.
By order of the Board
Greg Davidson Company Secretary 1 March 2019
Registered Office: 140 Eastern Avenue
Milton Park Milton Abingdon Oxfordshire OX14 4SB
The following notes explain your general rights as a shareholder and your right to attend and vote at the AGM or to appoint someone else to vote on your behalf.
In order for a proxy appointment to be valid, a form of proxy must be completed. In each case the form of proxy must be received by Link Asset Services at 34 Beckenham Road, Beckenham, Kent, BR3 4ZF by 11.30am on 25 March 2019.
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 a voting service provider(s), to procure that his CREST sponsor or voting service provider(s) take(s)) 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 system 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.
The 2019 PSP will be operated and administered by the remuneration committee of the board of directors of the Company ("Remuneration Committee"). The Remuneration Committee will determine who may participate in the 2019 PSP and this will extend to any employee (including an executive director) of the Company or any of the Company's subsidiaries (together the "Group").
Awards under the 2019 PSP may be in the form of:
Awards in the form of an option will normally lapse on the date immediately before the tenth anniversary of the date of grant if they remain unexercised at that date.
Awards for executive directors of the Company will be subject to the satisfaction of a performance condition measured over a performance period of at least three years, which will determine the proportion (if any) of the Award which will be capable of vesting. The Remuneration Committee may also set and test performance conditions which may attach to Awards not granted to executive directors of the Company.
Performance conditions may be amended or substituted if one or more events occur which cause the Remuneration Committee to consider that an amended or substituted performance condition would be more appropriate. Any amended or substituted performance condition that relates to Awards granted to executive directors of the Company would not be materially less difficult to satisfy than the original condition was intended to be.
The performance conditions applicable to Awards granted to executive directors in any one year will be fully disclosed in the Company's annual report and financial statements for that year.
In relation to the testing of the performance condition and the ultimate number of Shares subject to an Award that vest, the Remuneration Committee will have the right, in its absolute discretion, to reduce (down to zero, if appropriate) the number of Shares that would vest, taking account of the performance of the Company and the contribution of the participant over the performance period.
Awards will not be granted to a participant under the 2019 PSP over Shares (or notional Shares in the case of cash awards) with a market value (as determined by the Remuneration Committee) in excess of 150 per cent. of salary in respect of any financial year. In practice the size of Awards may be further limited by the Directors' remuneration policy.
Awards may only be granted within the period of 42 days following the approval of the 2019 PSP by the Company's shareholders, the announcement of the Company's results for any period (whether full year results or interim results), from the date on which an individual becomes an eligible employee under the rules of the 2019 PSP or any day on which the Remuneration Committee determines that exceptional circumstances exist. If, during any such period, the Company is restricted from granting Awards, Awards may be made immediately following such restrictions ceasing to apply.
Awards may be granted over newly issued Shares, treasury Shares or Shares purchased in the market. Awards are not transferable (other than on death). No payment will be required from participants for the grant of any Awards.
The Remuneration Committee may determine that on the vesting of an Award in the form of a conditional Share award, or on the exercise of an Award in the form of a nil-cost option, a participant shall receive an amount in cash and/or Shares equivalent to the value of some or all of the dividends (and special dividends at the discretion of the Remuneration Committee) that would have been paid on the vested Shares between the date of grant and the date of vesting.
The 2019 PSP is subject to the following overall limits:
Treasury Shares will be treated as newly issued for the purpose of these limits until such time as guidelines published by leading institutional investor representative bodies determine otherwise.
The above limits may be varied by the Remuneration Committee or Board, as appropriate, to take into account any variation in the Company's share capital from time to time.
The extent to which the performance conditions have been achieved and the level at which an Award consequently vests will normally be determined as soon as practicable after the end of any performance period (or on such later date as the Remuneration Committee determines).
In the case of executive directors, the vesting period will be a minimum period of three years.
At any time before or after the point at which an Award (which is not restricted Shares or a cash Award) has vested, but the underlying Shares have yet to be issued or transferred to the participant, the Remuneration Committee may decide to pay a participant a cash amount equal to the value of the Shares he/she would otherwise have received.
Any Shares or cash that are to be issued, transferred or paid (as appropriate) to a participant in respect of a vested Award (including a cash Award) will be issued, transferred or paid (as appropriate) within thirty days of the date of vesting or, in the case of an option, within thirty days of exercise.
On vesting, Awards may be subject to an additional post-vesting holding period. In the case of executive directors, all Awards will be subject to a post-vesting holding period of at least two years.
The Remuneration Committee may, in its absolute discretion, determine at any time prior to the later of the first anniversary of the vesting of an Award and the completion of the next audit of the Company's accounts after the vesting of an Award to:
in circumstances where there has been a deliberate act of fraud which resulted in the financial statements or results for the Company being materially restated (other than restatement due to a change in accounting policy or to rectify a minor error) and such fraud resulted either directly or indirectly in that Award vesting to a greater degree than would otherwise have been the case had that fraud not occurred.
Prior to the vesting of Award, then the Committee may apply malus provisions to:
in the circumstances justifying clawback above or any other matters that the Remuneration Committee considers appropriate.
Where the participant ceases to be employed by any member of the Group prior to the vesting of an Award by reason of death, ill health, injury, disability, a sale of the entity that employs the participant out of the Group, redundancy or for any other reason at the Remuneration Committee's discretion (a "Good Leaver"), a participant's unvested Award will usually continue and the Award will vest on the normal vesting date, unless the Committee determines that the Award shall Vest on such other date as the Committee may specify at the date of cessation.
The extent to which an unvested Award will vest for a Good Leaver will be determined by: (i) the extent to which any performance condition is satisfied at the end of any performance period or, as appropriate, at the date on which the participant ceases to be employed by a Group company; and (ii) unless the Remuneration Committee decide otherwise, pro-rating to reflect the period from the start of the performance period until the date of cessation of employment.
For vested Awards subject to the holding period, a participant's Award will usually continue and be released at the end of the holding period, unless the Committee determines that the Award shall be released on such other date as the Committee may specify at the date of cessation.
Awards, whether vested or not, will lapse immediately where the participant is lawfully dismissed without notice and in all other circumstances to the extent that the Awards do not vest.
In the case of Good Leavers, Awards in the form of nil-cost options will normally be exercisable from the date the option may be exercised until the first anniversary of such date.
On a change of control of the Company, the number of Shares in respect of which Awards vest shall be determined by the Committee, to the extent to which any performance condition has been satisfied at the date of change of control and, unless the Remuneration Committee determines otherwise, pro-rating to reflect the period from the start of the performance period to the date of the relevant event (or such other relevant period). Where an Award is in the form of an option, this will then be exercisable for a period of one month and will then lapse.
Alternatively, the Remuneration Committee may permit or, in the case of an internal reorganisation or, if the Remuneration Committee determines, any other event, require Awards to be exchanged for equivalent awards which relate to Shares in a different company.
If other corporate events occur such as a demerger, special dividend or other event which, in the opinion of the Remuneration Committee, may affect the value of Shares to a material extent, the Remuneration Committee may determine that Awards will vest conditional on the event occurring. The number of Shares in respect of which Awards vest shall be determined by the Committee, having regard to the extent to which any performance condition has been satisfied and, unless the Remuneration Committee determines otherwise, pro-rating to reflect the period from the start of the performance period to the date of the relevant event (or such other relevant period). If the event does not occur, Awards will continue.
All Shares issued or transferred under the 2019 PSP will rank pari passu with all other Shares of the Company for the time being in issue (save as regards any rights attaching to such Shares by reference to a record date prior to the date of issue or transfer to the participant).
In the event of any rights of capitalisation issue, sub-division, consolidation, reduction or other variation of the ordinary share capital, the Remuneration Committee or the Board, as appropriate, may make such adjustments as it considers appropriate to the number of Shares subject to Awards and/or, in the case of options, the price payable on the exercise of options.
The Remuneration Committee or the Board, as appropriate, may amend the 2019 PSP at any time, provided that prior approval of the Company's shareholders in a general meeting will be required for amendments to the advantage of employees relating to eligibility, limits, the basis for determining a participant's entitlement to, and the terms of, the Shares comprised in an Award and the impact of any variation of capital.
However, any minor amendment to benefit administration, or any amendment to take account of legislative changes, or to obtain or maintain favourable tax, exchange control or regulatory treatment in any jurisdiction, may be made by the Remuneration Committee or the Board, as appropriate, without shareholder approval.
No further Awards may be made under the 2019 PSP on or after the tenth anniversary of the approval by shareholders of the 2019 PSP but the rights of existing participants will not be affected by any termination.
The Remuneration Committee or the Board, as appropriate, may establish such sub-plans or schedules to the 2019 PSP, modified to take account of local tax, exchange controls or securities laws if required to do so or if it is beneficial to do so in any overseas jurisdiction, provided that any Shares made available under such plans are treated as counting against the limits on individual and overall participation in the 2019 PSP.
Benefits under the New Share Plans are non-pensionable.
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