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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