Download Administration of Member General Meetings - CS Isaac Nduru

ADMINISTRATION OF MEMBERS
GENERAL MEETINGS
10th March, 2017
1
Titre de la présentation
TYPES OF GENERAL MEETINGS
2
1.
Annual general Meetings : meeting held by members of an
organisation every year as required in law or the constitutive documents
2.
Extraordinary General Meetings: meeting of members/shareholders
convened to discuss important/urgent matters that requires their in put
and can not wait until the next AGM.
Titre de la présentation
Date
WHAT DETERMINES SUCCESS OF
GENERAL MEETING ?
3
Titre de la présentation
PREPARATION FOR A GENERAL
MEETING
4
1.
Convening of a general meeting: This could be through (i) Board on
is motion (ii) requisition of members (as per law or constitutive
documents (iii) registrar (iv) court order.
2.
Circulation /dispatch of notice: Notice may be dispatched by post,
delivered by hand, by electronic means or where the constitutive
documents so permit display on the Company’s website/circulating
newspaper
3.
Length of notice: governance standards on general meetings 001
require that we give 21 clear day notice before the AGM. The notice
should be circulated in good time
4.
Frequency of meetings
Titre de la présentation
Date
PREPARATION FOR A GENERAL
MEETING
5
1.
Quorum: quorum is defined by the constitutive documents i.e Articles of
association shareholders agreement bylaws e.t.c. quorum must be met at
the beginning of the meeting and should be maintained throughout the
meeting. Proxy forms should be provided to the shareholders.
2.
Ballot papers: Company Secretary should be ready to conduct a poll
should a shareholder make a demand.
3.
Chairperson: the main role of the Chairman is to provide leadership
and guidance during the meeting., encourage participation and guide the
members through the agenda. The Company Secretary must always
ensure that the Chairman is properly prepared for the meeting.
Titre de la présentation
Date
ROLE OF SECRETARY IN GENERAL
MEETINGS
6
•
Preparation of notice and agenda and circulation of the notice to
members after obtaining the relevant approval from the Chairman.
•
Preparation of the venue where the General Meeting is to be held and
making all relevant reservations and approvals from the local authorities.
•
Monitoring and ensuring compliance with relevant laws, statutory
regulations, codes of governance and global best practices in corporate
governance and advising the Chairman accordingly.
•
Facilitating effective communication with shareholders i.e.
coordinating publication and distribution of the annual report.
•
•
Ensuring due regard is made to shareholders interest
Ensuring shareholders are treated equally
Titre de la présentation
Date
ROLE OF SECRETARY IN GENERAL
MEETINGS
7
•
At all meetings, the Company secretary should ensure that he has a copy
of register of members, constitutive documents (eg. Articles of association
Shareholders agreement, by laws.
•
Preparation of ballot papers should a member/shareholder demand for a
poll and ensure that voting process is carried out correctly.
•
•
•
Ensuring proxy forms are properly recorded
Arrange payment of dividends to shareholders
Ensuring that general meeting is conducted in accordance with the
statutory documents
Titre de la présentation
Date
QUESTIONS & COMMENTS
8
Titre de la présentation
Date
OVER THE COUNTER SHARE TRANSFER (OTC)
What is 'Over-The-Counter – OTC?'
Over-the-counter (OTC) is a security traded in
some context other than on a formal exchange such
as Nairobi Securities Exchange
The phrase "over-the-counter" can be used to
refer to stocks that trade via a broker/dealer network
as opposed to on a centralized exchange.
On Securities exchange, every party is exposed to
offers by every other counterparty, which may not be
the case in OTC.

There is less transparency and less stringent
regulation on OTC,"
9
Titre de la présentation
Date
SECURITIES ON OTC
Stocks are usually traded OTC because the
company is small and cannot meet exchange listing
requirements.
Examples of Companies whose shares are trading
over the Counter in Kenya. Jamii Bora Bank Ltd,
Familly Bank Ltd, Trans-century Limited (previously
before listing) ………..
Also known as unlisted stock, these securities are
traded by broker-dealers who negotiate directly with
one another over computer networks and by phone/
email.
10
Titre de la présentation
Date
HOW TO BUY AN OVER THE COUNTER STOCK
The first step an investor must make before they
can trade in OTC securities is to open an account
with a brokerage firm/ Investment Bank
All orders of OTC securities must be made
through brokers/market makers who, instead of
just matching orders (pairing buy orders with sell
orders), actually carry an inventory of securities to
facilitate trading.
 First Step an investor places the market order to
buy shares with his or her broker or directly with the
contracted broker. In certain instances, investor
deposits cash with the Broker and negotiates the
target price for the shares
 The Broker evaluates the sell orders against the
instructions.
The Broker writes to the registrar or the Company
secretary who must confirm in writing that the
shares are available.
11
Titre de la présentation
Date
HOW TO BUY AN OVER THE COUNTER STOCK……………
Once The registrar issues a confirmation, the
Broker issues an offer to the seller.
Once the offer is approved, Broker concludes the
sale agreement and ensures that both the buyer
and seller signs the share transfer form.
The seller must deposit with the broker original
copies of the share certificate and his /her personal
details such as Bank details PIN & ID copy.
Broker sends to the Secretary/registrar the fully
executed & witnessed share transfer form, stamp
duty cheque, copy of sell order/letter & buy order
and details of the buyer.
Registrar/Secretary prepared form D and send it
to the auditor for signing and stamping.
Secretary/registrar pays stamp duty after which
the share transfer form is stamped by collector of
stamp duty.
12
Titre de la présentation
Date
HOW TO BUY AN OVER THE COUNTER STOCK……………
Secretary/registrar updates the register of
members and issues new share certificate to the
buyer.
Secretary/registrar issues a share certificate to the
seller if there are shares remaining after completing
the sale in the share certificate deposited.
Broker/agent transfer the consideration to the
seller’s bank account less the agreed brokerage
fee.
NB the Registrar should write to the regulator e.g.
CBK/IRA when the amount of shares to be
transacted exceed the set limits for approval.
13
Titre de la présentation
Date
QUESTIONS & COMMENTS
14
Titre de la présentation
Date
MANAGEMENT OF EMPLOYEE STOCK OPTION/OWNERSHIP
PLAN
Definition of ESOP:
It can be defined as a long term incentive plan (LTIP) designed for key
employees or staff whose role is key to drive both financial and social
deliverables of the business and whose strategic input is key.
 Key staff may be defined to include CEO C- level roles (CEO reportees)
and a mixture of scarce/critical/high potential staff.
The Board has the responsibility of defining the staff who are eligible.
ESOPS are also used to align the interests of a company's employees with
those of the company's shareholders.
Since ESOP shares are part of employees' remuneration for their services,
to the company, ESOPs can be used to keep plan participants focused on
company performance and share price appreciation/growth in value.
15
Titre de la présentation
Date
EMPLOYEE SHARE OWNERSHIP PLAN (ESOP)
Employees are provided with such ownership often with no upfront costs.
The provided shares may be held in a trust for safety and growth until the
employee retires or resigns from the company or expiry of the vesting period
defined by the trust deed.
In certain instances, strategic investors set up ESOP trust and transfer fully
paid shares to the trust in favour of the key staff to drive the business growth
and value.
The shares are supposed to vest up on expiry of a certain duration or a
liquidity event when the shares are sold and proceeds distributed to the
beneficiaries.
The issuer of ESOP drafts a trust deed that sets out the trust rules and
defines terms such as good leaver and bad leaver.
The trust deed defines the staff eligible to the allocation and the vesting
period which is normally aligned to the achievement of the Companies
strategy.
16
Titre de la présentation
Date
EMPLOYEE STOCK OPTION PLAN
Many companies use employee stock options plans to compensate,
retain, and attract key employees.
These plans are contracts between a company and its employees that give
employees the right to buy a specific number of the company’s shares at a
fixed price within a certain period of time.
The fixed price is often called the grant or exercise price. Employees who
are granted stock options hope to profit by exercising their options to buy
shares at the exercise price when the shares are trading at a price that is
higher than the exercise price.
Companies sometimes revalue the price at which the options can be
exercised. This may happen, for example, when a company’s stock price has
fallen below the original exercise price. Companies revalue the exercise
price as a way to retain their employees
Currently, this form of restructuring is most prevalent in IT companies
where manpower is the main asset. ESOP help the company enjoy lower
employee turnover and retain its talent pool. (intellectual Capital)
17
Titre de la présentation
Date
QUESTIONS & COMMENTS
18
Titre de la présentation
Date
QUESTIONS & COMMENTS
Isaac Nduru | Company Secretary & CEO Emu
Registrars C.P.S (K)
The Green House, 3rd floor Suite 8,
Adams Arcade Ngong Road
Nairobi - Kenya
Tel : + 254 (020) 3861175/6/9
Mobile : + 254 726005233
https://twitter.com/isaacnduru
https://www.facebook.com/isaac.nduru
19
Titre de la présentation
Date