AGM Information • Apr 1, 2019
AGM Information
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If you are in any doubt as to the action you should take, you should immediately consult your stockbroker, solicitor or accountant or other independent adviser authorised under the Financial Services and Markets Act 2000.
If you have sold or transferred all of your ordinary shares in Tyman plc, please forward this document, together with any accompanying documents, as soon as possible to the purchaser or transferee, or to the bank, stockbroker 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 with registered number 02806007)
Martin Towers (Chairman) 29 Queen Anne's Gate Pamela Bingham London SW1H 9BU James Brotherton Helen Clatworthy Jo Hallas Mark Rollins
1 April 2019
To the holders of ordinary shares in Tyman plc (the "Company")
Dear Shareholder
I am pleased to write to you with details of the Annual General Meeting (the "AGM")of the Company which is to be held at the offices of Pinsent Masons LLP, 30 Crown Place, Earl Street, London EC2A 4ES on Thursday 9 May 2019 at 10.30 am. The formal notice convening the AGM (the "Notice") is set out on pages 5 to 9 of this letter. In this letter, I will provide you with a detailed explanation of the resolutions to be proposed at the AGM.
At the AGM, we will be proposing a number of resolutions, as set out below. Resolutions 1 to 13 will be proposed as ordinary resolutions and Resolutions 14 to 20 will be proposed as special resolutions. The proposed ordinary resolutions will be passed if more than 50% of the votes cast are in favour and the proposed special resolutions will be passed if at least 75% of the votes cast are in favour.
This resolution deals with the delivery by the Directors of the Company (the "Directors") to the Shareholders of the Company (the "Shareholders") of the accounts for its financial year ended 31 December 2018 (including the Directors' and auditors' reports on those accounts) (the "Annual Report") and the adoption thereof by the Company.
Final dividends are approved by the Shareholders but cannot be more than the amount recommended by the Directors. The Directors are recommending a final dividend for the year ended 31 December 2018 of 8.25 pence per ordinary share, due and payable on 24 May 2019 to the Shareholders on the register of members of the Company at close of business on 23 April 2019. This resolution seeks Shareholders' approval of the proposed dividend.
The Remuneration Committee of the Board (the "Committee") is seeking Shareholders' approval of the Directors' remuneration report (other than the part containing the Directors' remuneration policy set out on pages 94 to 99 of the Annual Report) for the year ended 31 December 2018, which is set out on pages 80 to 93 of the Annual Report (the "Directors' remuneration report").
The Directors are required to prepare the Directors' remuneration report, comprising an annual report detailing the remuneration of the Directors and a statement by the Chairman of the Committee. The Company is required to seek Shareholders' approval in respect of the contents of the Directors' remuneration report on an annual basis (excluding the part containing the Directors' remuneration policy, which was approved by shareholders at the AGM of the Company held on 12 May 2017). As this is an advisory vote, no entitlement of a Director to remuneration is conditional on it.
Directors: Registered office:
The Company has adopted the requirement of the UK Corporate Governance Code that all Directors should be subject to annual re-election by Shareholders. Accordingly, Martin Towers, Pamela Bingham, James Brotherton, Helen Clatworthy and Mark Rollins shall seek re-election by Shareholders at the AGM.
Jo Hallas, who was appointed to the Board as Chief Executive Officer with effect from 1 April 2019, will offer herself for election.
As announced on 20 November 2018 Louis Eperjesi retired as Chief Executive Officer on 1 April 2019 and therefore is not offering himself for re-election.
Biographical details for each of the Directors may be found on pages 56 to 57 of the Annual Report. The Board of Directors (the "Board") considers that each of the Directors brings valuable skills and experience to the Board. Performance evaluations have taken place and, following those evaluations, the Board considers that the performance of each Director continues to be effective and that each demonstrates the commitment required to continue in his or her present role. Further details of the performance evaluations may be found on pages 63 and 76 of the Annual Report.
Resolution 10 proposes the reappointment of PricewaterhouseCoopers LLP as the Auditors of the Company. It is normal practice for the Directors to be authorised to fix the Auditors' remuneration and this is dealt with in Resolution 11.
It is the policy of the Company not to make donations to political parties or incur political expenditure and it has no present intention of making any political donation or incurring any political expenditure in respect of any political party, political organisation or independent election candidate. However, the Companies Act 2006 (the "Act") contains wide definitions of "political donation", "political organisation" and "political party" and, as a result, it is possible that the Company and its subsidiaries may be prohibited from supporting bodies which is in the Shareholders' interest for the Company to support, for example, bodies concerned with policy review or law reform, with the representation of the business community (or sections of it) or special interest groups. Sponsorship, subscriptions, payment of expenses and paid leave for employees fulfilling public duties may even fall under the definitions. If this resolution is passed, the Company and its subsidiaries will be authorised to make donations and incur expenditure which might otherwise be prohibited by legislation up to a limit of, in aggregate, £50,000. The Directors consider that the authority is necessary to provide the Company with comfort that it will not, because of uncertainties as to the scope and interpretation of the legislation, unintentionally commit a technical breach of it. In common with other listed companies, the Directors are therefore seeking Shareholders' approval in the terms outlined in this resolution. This authority remains unused since inception.
The Act provides that the Directors may not allot ordinary shares unless authorised to do so by the Company in general meeting or by its Articles. This resolution seeks renewal, for a further period expiring at the earlier of the close of the next AGM or 9 August 2020, of the authority previously granted to the Directors at last year's AGM.
The authority relates to a total of 65,345,547 ordinary shares, being one-third of the issued share capital (excluding treasury shares) of the Company as at 28 March 2019 (being the latest practicable date prior to publication of the Notice). In addition, in accordance with the guidelines issued by the Investment Association, the resolution also contains an authority for the Directors to allot a further 65,345,547 ordinary shares in connection with a pre-emptive offer by way of rights issue.
The Directors have no present intention of allotting, or agreeing to allot, any shares otherwise than in connection with the Company's employee share schemes, to the extent permitted by such schemes. However, the Directors continue to consider potential transactions and, in the event of one of these potential transactions proceeding, this may require the allotment of shares pursuant to this authority.
The Act gives holders of ordinary shares, with limited but important exceptions, certain rights of pre-emption on the issue for cash of new ordinary shares or on the sale of any shares which the Company may hold in treasury following a purchase of its own shares. The Directors believe that it is in the best interests of the Company that, as in previous years, the Board should have limited authority to allot some shares for cash or sell treasury shares without first having to offer such shares to existing Shareholders. The Directors are seeking to renew these authorities at the forthcoming AGM as they believe it gives the Company important flexibility to fund (or partially fund) acquisitions without relying entirely on the debt markets. In seeking this renewal the Directors remain mindful of the Pre-Emption Group's Statement of Principles (including the Company's intention not to issue more than 7.5% of the Company's share capital on a non-pre-emptive basis in any rolling three-year period without prior consultation with the relevant investor groups (except in connection with an acquisition or specified capital investment). Accordingly, these resolutions seek to renew the authorities on similar terms for a further period, expiring at the earlier of the close of the next AGM or 9 August 2020.
The authority in Resolution 14, if granted, will relate to the allotment of new ordinary shares or the sale of treasury shares in respect of (i) rights issues and similar offerings, where difficulties arise in offering shares to certain overseas Shareholders, and in relation to fractional entitlements and certain other technical matters and (ii) generally to allotments (other than in respect of pre-emptive offerings) of ordinary shares or the sale of treasury shares having an aggregate nominal value not exceeding £490,582 (being approximately 5% of the issued ordinary share capital (excluding treasury shares) of the Company as at 28 March 2019 (being the latest practicable date prior to the publication of the Notice)). The Directors do not have any present intention of exercising the authority conferred by Resolution 14 and do not intend to issue more than 7.5% of the issued share capital (excluding treasury shares) of the Company on a non-pre-emptive basis in any rolling three-year period without prior consultation with the relevant investor groups (except in connection with an acquisition or specified capital investment as contemplated by the Pre-Emption Group's Statement of Principles).
Resolution 15 is an additional authority for the Directors to issue ordinary shares, or sell treasury shares, for cash in connection with an acquisition or capital investment of a kind contemplated by the Pre-Emption Group's Statement of Principles up to an additional aggregate nominal amount of £490,582 (being approximately 5% of the issued ordinary share capital (excluding treasury shares) of the Company as at 28 March 2019 (being the latest practicable date prior to the publication of the Notice)). The Directors confirm that they will only allot shares pursuant to this authority where the allotment is in connection with an acquisition or specified capital investment (as defined in the Pre-Emption Group's Statement of Principles) which is announced contemporaneously with the allotment or sale, or which has taken place in the preceding six-month period and is disclosed in the announcement of the allotment or sale.
This resolution is to renew the Company's authority to make market purchases of its own shares. The authority should not be taken to imply that shares will be purchased at any particular price or, indeed, at all, and the Board has no present intention of exercising this power but would wish to retain the flexibility to do so in the future. The authority will expire at the earlier of the conclusion of the next AGM or 9 August 2020. The Board intends to seek renewal of this power at subsequent AGMs.
The resolution specifies the maximum number of shares which may be purchased (representing approximately 14.99% of the Company's issued ordinary share capital (excluding treasury shares) as at 28 March 2019) and the maximum and minimum prices at which they may be bought, reflecting legal and regulatory requirements. Any purchases would only be made on the London Stock Exchange. The Directors have not yet decided whether such shares, if repurchased, would be cancelled or taken into treasury, and such a decision would be taken in light of prevailing circumstances at the time of the purchase. The Board will only exercise the power to make purchases of the Company's shares after consideration of the effects on earnings per share and the benefits for Shareholders generally. As at 28 March 2019 (being the latest practicable date prior to publication of the Notice) there were options outstanding over 3,158,475 ordinary shares, representing 1.61% of the issued ordinary share capital (excluding treasury shares) of the Company. If the authority given by Resolution 16 was to be fully used, the options currently in issue would then represent 1.89% of the issued ordinary share capital (excluding treasury shares) of the Company.
The Company may only make a distribution to Shareholders from its distributable reserves. The Company currently has distributable reserves of £90,358,818, which are sufficient to pay its current level of dividends. The cost of the final dividend proposed at Resolution 2 is £16,067,310, bringing the cost of total dividends for the financial year ended 31 December 2018 to £23,369,988.
During the year the Company carried out a review of its distributable reserves position. This review considered interpretation guidance issued by The Institute of Chartered Accountants in England and Wales ("ICAEW"), which clarified that reserves arising on 'cash box' placing transactions used to fund acquisitions were not realised profits. Consequently, it was determined that the portion of the Company's reserves which arose on such transactions was not distributable. As a consequence, the Company is proposing to create additional distributable reserves by way of a bonus issue (the "Bonus Issue") of new B shares in the capital of the Company and a reduction of capital and share premium (the "Capital Reduction") on the terms set out in Appendix 1 to the Notice. In order to create the additional distributable reserves the following steps are proposed:
This will create approximately £298,167,397 of additional distributable reserves.
Further details of the proposed Bonus Issue and Capital Reduction are set out in Appendix 1 to the Notice.
The Company's Articles of Association were last amended in 2012. This resolution proposes to adopt a new set of Articles of Association in order to bring them up to date. The new articles of association as proposed to be adopted will take effect from the conclusion of the AGM. The principal differences between the new and the existing Articles of Association are summarised in Appendix 2 to the Notice of AGM. Other changes, which are of minor, technical or clarifying nature, have not been noted. A copy of the Company's existing Articles of Association, and a copy marked to show the differences between those and the new Articles of Association as proposed to be adopted pursuant to this resolution, will be available for inspection from the date of this letter and up to the time of the AGM at the registered office of the Company during usual business hours and at the place of the AGM from the date of this letter until the close of the Meeting. Both sets of Articles may also be found on the Corporate Governance section of the Company's website, www.tymanplc.com.
This is a resolution to authorise the Company to hold 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 be less than 14 clear days. AGMs must always be held on at least 21 clear days' notice. 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 and a resolution approving the reduction of the notice period for general meetings to 14 clear days must be passed. The Directors believe that obtaining this authority is desirable as it gives the Company an additional degree of flexibility. The approval of this resolution will be effective until the conclusion of the AGM of the Company in 2020 when it is intended that the approval will be renewed.
Whether or not you are able to attend the Meeting, you are asked to register your proxy vote as soon as possible, but, in any event, by no later than 10.30 am on 7 May 2019 by logging on to www.signalshares.com and following the instructions. Further to letters sent to Shareholders dated 1 February 2019, confirming the move to paperless proxy voting, you are recommended to use the signal shares online method of voting. Alternatively, you may obtain a hard copy form of proxy directly from our registrars, Link Asset Services. Further details are given in the notes to this document on pages 8 to 9. Completion and submission of a form of proxy will not preclude you from attending and voting in person at the AGM should you wish to do so.
If you are a member of CREST, you may register your appointment of a proxy through the CREST electronic appointment service using CREST ID RA10. For further details refer to the CREST Manual. Appointment of a proxy electronically will not stop you attending the AGM and voting in person should you so wish.
A "vote withheld" option is available which enables you to withhold your vote on any particular resolution. It should be noted that a vote withheld is not a vote in law and will not be counted in the calculation of the proportion of votes "for" or "against" a resolution.
If you are unable to attend the 2019 AGM, you may vote:
In order for a proxy appointment to be valid please ensure that you have recorded proxy details with Link Asset Services at 34 Beckenham Road, Beckenham, Kent BR3 4ZF by 10.30 am on 7 May 2019. This must be registered on www.signalshares.com.
Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, the Company specifies that only those Shareholders registered in the register of members of the Company as at close of business on 7 May 2019 shall be entitled to attend or vote at the AGM in respect of the number of shares registered in their name at that time. Changes to entries on the register of members of the Company after that time will be disregarded in determining the rights of any person to attend or vote at the AGM.
Copies of the Directors' service contracts, the letters of appointment for the Non-executive Directors and the proposed and existing Articles of Association will be available for inspection during business hours on any weekday from the date of this letter until the conclusion of the AGM at the Company's registered office. These documents will also be available for inspection at the place of the AGM for at least 15 minutes prior to, and during, the AGM. The proposed and existing Articles of Association will also be available for inspection at the place of the AGM during business hours on any weekday from the date of this letter until the conclusion of the AGM.
The Directors believe that all the resolutions referred to above which are to be proposed at the AGM are in the best interests of the Company and of the Shareholders as a whole and recommend Shareholders to vote in favour of them, as each of the Directors intends to do in respect of his or her own beneficial holding.
Yours faithfully
Martin Towers Chairman
(incorporated and registered in England and Wales with registered number 02806007)
Notice is hereby given that the Annual General Meeting of Tyman plc (the "Company") will be held at the offices of Pinsent Masons LLP, 30 Crown Place, Earl Street, London EC2A 4ES, on 9 May 2019 at 10.30 am, for the following purposes listed below.
Whether or not you propose to attend the AGM, if you would like to vote on the resolutions you may vote:
In order for a proxy appointment to be valid please ensure that you have recorded proxy details with Link Asset Services at 34 Beckenham Road, Beckenham, Kent BR3 4ZF by 10.30 am on 7 May 2019. This must be registered on www.signalshares.com.
To consider and, if thought fit, to pass the following resolutions to be proposed as ordinary resolutions:
in each case during the period commencing on the date of this resolution and ending at the end of the next Annual General Meeting of the Company or, if earlier, on 9 August 2020 and provided that the aggregate amount of any such donations and expenditure shall not exceed £50,000 during such period. For the purpose of this resolution, the terms "political donations", "political parties", "independent election candidates", "political organisations" and "political expenditure" shall have the meanings set out in Sections 363 to 365 (inclusive) of the Act.
and this authority shall expire at the end of the next Annual General Meeting of the Company or, if earlier, on 9 August 2020 (unless previously revoked or varied by the Company in general meeting) save that the Company may before such expiry make an offer or agreement which would or might require shares to be allotted or Rights to be granted after the authority expires and the Directors may allot shares or grant Rights under any such offer or agreement as if this authority had not expired.
To consider and, if thought fit, to pass the following resolutions to be proposed as special resolutions:
and this power shall expire at the end of the next Annual General Meeting of the Company or, if earlier, 9 August 2020 (unless previously revoked or varied by the Company in general meeting) save that the Company may before such expiry make an offer or agreement which would or might require equity securities to be allotted or sold after the power expires and the Directors may allot or sell equity securities and/or treasury shares under any such offer or agreement as if this power had not expired.
and this authority shall expire at the end of the next Annual General Meeting of the Company or, if earlier, 9 August 2020 (unless previously revoked or varied by the Company in general meeting) save that the Company may before such expiry make an offer or agreement which would or might require equity securities to be allotted or sold after the power expires and the Directors may allot or sell equity securities under any such offer or agreement as if this power had not expired.
THAT:
a. £165,949,372, being the amount of non-distributable reserves included in the retained earnings of the Company shall be capitalised and applied in paying up in full at par such number of new B shares (the "Bonus Shares") as equals the number of ordinary shares of 5 pence each in the capital of the Company ("Ordinary Shares") in issue at the Bonus Issue and Capital Reduction Record Time as defined in Appendix 1 to the Notice of AGM to Shareholders dated 1 April 2019, such Bonus Shares having a nominal value equal to the sum that is calculated by dividing £165,949,372 by the number of Bonus Shares to be issued as set out above, as shall be required to effect such capitalisation, and the Directors be and they are hereby authorised for the purposes of Section 551 of the Companies Act 2006 (the "Act") to allot and issue all the Bonus Shares thereby created to such members of the Company including one of their number as they shall in their absolute discretion determine upon terms that they are paid up in full by such capitalisation, and such authority shall for the purposes of Section 551 of the Act expire on 31 December 2019;
THAT a general meeting of the Company, other than an Annual General Meeting, may be called on not less than 14 clear days' notice.
By order of the Board
Carolyn Gibson Registered office: Group Company Secretary 29 Queen Anne's Gate,
1 April 2019 London SW1H9BU
Notes
The following notes explain your general rights as a Shareholder and your right to attend and vote at this Meeting or to appoint someone else to vote on your behalf.
In order for a proxy appointment to be valid please ensure that you have recorded proxy details with Link Asset Services at 34 Beckenham Road, Beckenham, Kent BR3 4ZF by 10.30 am on 7 May 2019. This must be registered on www.signalshares.com.
You may not use any electronic address provided either:
to communicate with the Company for any purposes other than those expressly stated. A copy of this Notice, and other information required by Section 311A of the Companies Act 2006, can be found on the Company's website at www.tymanplc.com
Completion of a proxy election will not preclude a member from attending and voting in person. If you have appointed a proxy and attend the meeting in person, your proxy appointment will be automatically terminated.
Expected timetable of principal events Publication of this Notice of AGM 1 April 2019 Latest time and date for receipt of proxy votes 10.30 am on 7 May 2019 Annual General Meeting 10.30 am on 9 May 2019 Bonus Issue and Capital Reduction Record Time 6.00 pm on 3 June 2019* Court hearing to confirm the Capital Reduction 10.30 am on 4 June 2019* Registration of Court Order and effective date of the Capital Reduction 5 June 2019* * This date is subject to change, and any change will be notified via a regulatory information service.
Definitions
In this Appendix 1 defined terms shall have the following meanings:
"Bonus Issue" means the bonus issue of one Bonus Share for every one Ordinary Share held by each Shareholder on the register of members of the Company at the Bonus Issue and Capital Reduction Record Time in order to facilitate the Capital Reduction as described in this document
"Bonus Issue and Capital Reduction Record Time" means 6.00 pm on the date immediately preceding the date of the Court Hearing
"Bonus Shares" means the B shares in the capital of the Company to be created by the Bonus Issue, whereby the nominal value of such B shares is equal to the sum that is obtained by dividing £132,218,025 (being the amount standing to the credit of the Company's retained earnings) by the number of its shares to be issued
"Capital Reduction" means the proposed cancellation of the Bonus Shares and the Company's share premium account pursuant to Resolutions 17 and 18 as set out in the Notice of Annual General Meeting
"CGT" means UK taxation of chargeable gains
"Court" means the High Court of Justice in England and Wales
"Court Hearing" means the hearing by the Court to confirm the Capital Reduction
"Court Order" means the order of the Court confirming the Capital Reduction
"Effective Date" means the effective date of the Capital Reduction
"SDRT" means Stamp Duty Reserve Tax
Bonus Issue and Capital Reduction (Resolutions 17 and 18)
The Company is proposing first to capitalise the sum of £165,949,372 of the Company's non-distributable reserves included within the Company's retained earnings by applying that sum in paying up in full new Bonus Shares prior to the Court Hearing (such capitalisation to take effect at the Bonus Issue and Capital Reduction Record Time), and allotting and issuing such shares by way of a bonus issue to the persons at that point holding Ordinary Shares on the basis of one Bonus Share for every one Ordinary Share held at the Bonus Issue and Capital Reduction Record Time.
The Bonus Shares will not be admitted to trading on the Main Market of the London Stock Exchange or on any other market. No share certificates will be issued in respect of the Bonus Shares. The Bonus Shares (for the limited time they are expected to be in existence) will have extremely limited rights. In particular, the Bonus Shares will carry no rights to participate in the profits of the Company and no rights to participate in the Company's assets, save on a winding-up. The Bonus Shares will be transferable, but no market will exist in them and it is anticipated that the Court will confirm their cancellation at the Court Hearing on the day immediately after they have been issued.
The capitalisation of these non-distributable reserves is needed as an additional step since the Court only has the power to reduce share capital and other statutory reserves, including share premium and capital redemption reserves. Therefore in order to utilise the reserves in the Capital Reduction, it is necessary to convert that reserve into share capital (the new Bonus Shares) and then to cancel the Bonus Shares. By contrast, capitalisation of the Company's share premium account into share capital is not required as part of the process to cancel that share premium account as it is a reserve which the Court has the power to reduce.
As the Bonus Shares are issued in proportion to Shareholders' interests, there will be no dilution and Shareholders will hold the same proportion of Ordinary Shares both prior to and following the Bonus Issue (subject to any acquisitions or disposals by that shareholder of Ordinary Shares during the intervening period).
Share premium arises where a company issues shares at a premium to their nominal value. The premium (less any directly attributable transaction costs) is credited to the company's share premium account. A company's share premium account is a non-distributable reserve and is part of its permanent capital. As at 28 March 2019 (being the last practicable date before the date of this Notice), the amount of the Company's share premium account was £132,218,025.
Following the Bonus Issue, the Company proposes to undertake a reduction of capital approved by the Court to create distributable reserves and to provide the Company with flexibility to make distributions to Shareholders in the future. It is proposed to achieve this by cancelling the Bonus Shares, as well as cancelling the whole of the balance of £132,218,025 standing to the credit of the share premium account of the Company. It is anticipated that the Capital Reduction, if approved by Shareholders and confirmed by the Court, will create additional distributable reserves of approximately £298,167,397. These distributable reserves will be available to form part of distributions to Shareholders, as the Directors consider appropriate.
If Resolutions 17 and 18 are duly passed at the AGM, the Company intends to apply to the Court for confirmation of the Capital Reduction. It is anticipated that the Capital Reduction will only become effective if Resolutions 17 and 18 are passed by Shareholders at the AGM, the Court confirms the Capital Reduction, and the order of the Court confirming the Capital Reduction is delivered to, and registered by, the Registrar of Companies in England and Wales.
In order to confirm the Capital Reduction, the Court will need to be satisfied that the interests of the Company's creditors at the 'Effective Date' will not be prejudiced as a result of the Capital Reduction. It is for the Court to determine whether any protection is required for the creditors and, if so, what form it should take.
If the Capital Reduction becomes effective, the amount resulting from the cancellation of the Bonus Shares and the Company's share premium account will be credited to the Company's retained earnings to create additional distributable reserves (subject to the Court's confirmation and any protection which the Court requires the Company to take for creditors, as referred to above). The Capital Reduction does not involve any distribution or repayment to Shareholders. The principal effect of the Capital Reduction will be to enable the Company to be put in a position where it can lawfully purchase its own shares and/or pay dividends out of distributable reserves to a greater extent than it would otherwise be able to do.
The Capital Reduction will not change the number of Ordinary Shares in issue or the paid up share capital of the Company or change any rights attaching to the Ordinary Shares.
It is anticipated that the Capital Reduction will become effective on or about 5 June 2019, following the necessary registration of the Court Order at Companies House.
The Company will notify Shareholders when the Capital Reduction has become effective by issuing an announcement through a regulatory information service.
The Directors reserve the right (where necessary by application to the Court) to abandon, discontinue or adjourn any application to the Court for confirmation of the Capital Reduction if the Directors believe that the terms required to obtain confirmation are unsatisfactory to the Company or if, as the result of a material unforeseen event, the Directors consider that to continue with the Capital Reduction would be inappropriate or inadvisable.
The following comments are intended as a general guide only and relate only to certain UK tax consequences of receiving the Bonus Shares under the Bonus Issue. The comments are based on current legislation and HM Revenue & Customs practice, both of which are subject to change, possibly with retrospective effect. These comments deal only with Shareholders who are resident for taxation purposes in the UK, who are the absolute beneficial owners of Ordinary Shares and who hold them as an investment and not on trading account. They do not deal with the position of certain classes of Shareholders, such as dealers in securities, insurance companies, collective investment schemes or persons regarded as having obtained their Ordinary Shares by reason of employment.
The Bonus Issue should be treated as a "reorganisation" for the purposes of UK taxation of chargeable gains ("CGT"), so that a Shareholder should not be treated as making a disposal or part disposal of his Ordinary Shares for CGT purposes upon receipt of the Bonus Shares. Instead, the Bonus Shares will be treated as the same asset, acquired at the same time as that Shareholder's Ordinary Shares. On the basis that the Bonus Shares will be treated as being paid up for "new consideration" received by the Company, the issue of the Bonus Shares should not give rise to any liability to United Kingdom income tax (or corporation tax) in a Shareholder's hands. If, however, the Bonus Shares are not treated as being paid up for 'new consideration' received by the Company, the amount paid up on the Bonus Shares may, depending on the circumstances (including, in particular, where a repayment of capital has previously been made), be treated as a distribution made in respect of the Bonus Shares. In that event, a Shareholder would be subject to United Kingdom income tax or corporation tax (as applicable) in respect of such distribution.
For CGT purposes, due to the fact that the Bonus Shares:
the market value of the Bonus Shares is likely to be nil for the duration of their existence. The CGT base cost of the Bonus Shares and Ordinary Shares should be calculated by apportioning the base costs of the Ordinary Shares between the Bonus Shares and the Ordinary Shares based on their respective market values. Consequently, the issue of the Bonus Shares should not impact the base cost of the Ordinary Shares and there should be no tax charge (nor any allowable loss) on the cancellation of the Bonus Shares.
No Stamp Duty or SDRT will be payable on the issue of the Bonus Shares.
This section is not intended to be, and should not be construed to be, legal or taxation advice to any particular Shareholder. Any Shareholder who has any doubt about his own taxation position, whether regarding CGT or otherwise, or who is subject to taxation in any jurisdiction other than the UK, should consult his professional taxation adviser immediately.
Under Resolution 19, the Company is proposing to adopt new Articles of Association (the "New Articles") to replace its current Articles of Association (the "Current Articles"). Set out below is a summary of the principal changes (Article references are to the New Articles). The New Articles also include some other minor modernising and clarificatory amendments (including to take account of changes under the Mental Health (Discrimination) Act 2013) which are not detailed below.
The New Articles have been updated to better align their provisions to the Uncertificated Securities Regulations 2001 (the "Regulations"). Article 14 of the New Articles permits the Board of Directors of the Company to make additional regulations in respect of uncertificated shares, including to make provisions which are necessary to ensure compliance with the Regulations.
Under the Current Articles, shares can be forfeited in certain limited circumstances. Article 32 of the New Articles clarifies that where any such forfeiture occurs, it must be recorded on the register of members of the Company, but that any failure to record, or delay in recording, such forfeiture shall not invalidate the forfeiture.
The New Articles have been updated to clarify that the Directors' right to refuse to register the transfer of any share held in certificated form which is not fully paid shall not be exercised in a way as to prevent dealings in the shares of the relevant class from taking place on an open and proper basis. New Article 40 of the New Articles further provides that the Company is required to notify the transferee of any share which the Directors refuse to register within two months of the transfer being lodged with the Company, together with the Directors' reasons for refusal.
Amendments and additions have been made to the provisions relating to shareholder meetings to bring these in line with best practice. New Article 51(A) clarifies the notice periods for general meetings, with 21 days' notice being required for an annual general meeting and any other general meeting being capable of being called on 14 days' notice (subject to the provisions of the Companies Act 2006). As in previous years, Resolution 20 seeks Shareholder approval for general meetings of the Company to be called on 14 days' notice. New Article 51(B) sets out the minimum requirements for the contents of any notice of general meeting.
The New Articles further provide that accidental failure to provide notice of a meeting to a Shareholder or the non-receipt of a notice of a meeting by a Shareholder will not invalidate the meeting.
The New Articles remove the Chairman's right to a casting vote in general meeting, in line with the provisions of Section 282 of the Companies Act 2006.
New Article 78 provides for any corporate member to authorise, by resolution of its directors or other governing body, any person or persons as it sees fit to act as a representative(s) at any meeting of the Company.
The New Articles make clarificatory amendments with regard to the position and process on the appointment, and termination of appointment, of alternate directors.
The existing limit on the Company's borrowing (currently the greater of £2,000,000 and three times the Company's adjusted capital and reserves) has been removed and the New Articles provide for the Directors to exercise all powers of the Company to borrow money. The amendment is proposed in order to give the Company more flexibility in its borrowing arrangements; however, the Company does not plan to make a material change to its borrowings in the short term.
The New Articles clarify the matter of the delivery of accounts (including the delivery of summary information) to members in line with the Companies Act 2006.
Tyman plc 29 Queen Anne's Gate London SW1H 9BU
[email protected] www.tymanplc.com
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