Whilst we wait..., page-1825

The following resolutions from a couple of years ago were approved. Res 10 relates to proportional takeovers. As there are advantages and disadvantages of it. everyone needs to make their own mind up on it. It certainly makes a takeover bid a little more difficult. Resolution 10 describes it.

Resolution 9 – Adoption of New Constitution
A company may modify or repeal its constitution or a provision of its constitution by special
resolution of Shareholders.
Resolution 9 is a special resolution which will enable the Company to repeal its existing
Constitution and adopt a new constitution which is of the type required for a listed public
company limited by shares and updated to ensure it reflects the current provisions of the
Corporations Act and the Listing Rules.
This will incorporate amendments to the Corporations Act and the Listing Rules since the
current Constitution was adopted in 2010.
The Directors believe that it is preferable in the circumstances to replace the existing
Constitution with the proposed constitution in its entirety rather than to amend a multitude of
specific provisions in the existing Constitution.
It is not practicable to list all of the changes to the Constitution in this Explanatory Statement
and Shareholders are invited to contact the Company if they have any queries or concerns. For
this purpose, Shareholders wishing to obtain a copy of the proposed constitution should
contact the Company.
Resolution 9 is a special resolution and therefore requires approval of 75% of the votes cast by
Shareholders present and eligible to vote (in person, by proxy, by attorney or, in the case of a
corporate shareholder, by a corporate representative).

Resolution 10 – Approval of Proportional Takeover Provisions in
New Constitution
The new constitution, the subject of Resolution 9, contains proportional takeover provisions
which are set out in schedule 5 of the new constitution.
Resolution 10 seeks Shareholder approval for the proportional takeover provisions to be
included in the new constitution with effect from the close of the Meeting, and is a special
resolution, requiring approval of 75% of the votes cast by Shareholders entitled to vote on the
resolution in order to be passed. Resolution 10 is subject to Shareholders approving the
adoption of the new constitution under Resolution 9.
If Resolution 10 is passed, then schedule 5 of the new constitution will have effect as and from
the close of the Meeting for a period of three years. After a period of three years, schedule 5
would cease to apply unless renewed by a further special resolution of Shareholders.
31
Section 648G(5) of the Corporations Act requires certain information to be included in a notice
of meeting where a company seeks the approval of its members to adopt proportional
takeover provisions. This information is set out below.
13.1 Proportional takeover bid
A proportional takeover bid is a takeover offer sent to all shareholders of a company, offering
to purchase only a specified proportion of each shareholder’s shares. If a shareholder accepts,
the shareholder disposes of that specified portion of shares and retains the balance.
13.2 Effects of the proposed proportional takeover provisions
The effects of the proposed proportional takeover provisions in the Company’s new
constitution are that:
(a) if a bidder makes a proportional takeover bid for any class of shares in the Company,
the Directors must ensure that a general meeting of members of that class is
convened where a resolution to approve the bid is voted upon. The vote is decided
on a simple majority. The bidder and its associates are excluded from voting on that
approving resolution;
(b) the resolution will be required to be passed in a general meeting before the time
stated in section 648D of the Corporations Act, being the 14th day before the last day
of the bid period (approving resolution deadline); and
(c) if the approving resolution is:
(i) not voted on at the end of the day before the approving resolution
deadline, the bid will be taken to have been approved;
(ii) put to members and rejected before the approving resolution deadline, the
bid cannot proceed and the offer will be taken to have been withdrawn.
Any transfers giving effect to takeover contracts for the bid will not be
registered and all offers under the takeover bid are taken to be withdrawn
and all takeover contracts must be rescinded; or
(iii) passed (or taken to have been approved), the transfers must be registered
(subject to other provisions of the Corporations Act and the Company's
Constitution).
The proportional takeover provisions do not apply to full takeover bids.
13.3 Reasons for proportional takeover provisions
A proportional takeover bid may result in control of the Company changing without
Shareholders having the opportunity to dispose of all of their Shares. By making a proportional
bid, a bidder can obtain practical control of the Company by acquiring less than a majority
interest. Shareholders are exposed to the risk of not being able to exit their investment in the
Company by selling their entire shareholding and consequently being left as a minority
shareholder in the Company. The bidder may be able to acquire control of the Company
without payment of an adequate control premium.
The proportional takeover provisions allow Shareholders to decide if a proportional takeover
bid is acceptable in principle and may assist in ensuring that any proportional takeover bid is
32
appropriately priced. To assess the merits of the proportional takeover provisions,
Shareholders should make a judgement as to what events are likely to occur in relation to the
Company during the three year life of the proposed provisions.
13.4 Advantages and disadvantages
The Corporations Act requires this Explanatory Statement to discuss the advantages and
disadvantages for Directors and Shareholders of the proportional takeover provisions which
are proposed to be inserted in the new constitution.
The potential advantages for Shareholders of the proportional takeover provisions include the
following:
(a) Shareholders have the right to decide, by majority vote, whether an offer under a
proportional takeover bid should proceed. The proposal would enable Shareholders
to act in a cohesive manner and thereby avoid the coercion of Shareholders that
arises where they believe the offer to be inadequate, but nevertheless accept
through fear that other Shareholders will accept;
(b) the provisions may assist Shareholders and protect them from being locked in as a
minority;
(c) the existence of the approval machinery in the Company's new constitution may
make it more probable that any takeover bid will be a full bid for the whole
shareholding of each Shareholder, so that Shareholders may have the opportunity of
disposing of all their shares rather than of a proportion only;
(d) the provisions may increase the bargaining power of Shareholders and may assist in
ensuring that any proportional takeover bid is adequately priced; and
(e) each individual Shareholder may better assess the likely outcome of the proportional
takeover bid by knowing the view of the majority of Shareholders and assist in
deciding whether to accept or reject an offer under a proportional takeover bid.
The potential disadvantages for Shareholders include the following:
(a) proportional takeover bids for Shares in the Company may be discouraged;
(b) Shareholders may lose an opportunity to sell some of their Shares at a premium;
(c) it is possible that the existence of the provisions might have an adverse effect on the
market value of the Company’s shares by making a proportional takeover bid less
likely and thereby reducing any takeover speculation element in the Share price;
(d) individual Shareholders may consider that the proportional takeover provisions
would restrict their ability to deal with their shares as they see fit; and
(e) the likelihood of a proportional takeover bid succeeding may be reduced.
13.5 Knowledge of any acquisition proposal
At the date of this Notice of Meeting, no Director is aware of any proposal by any person to
acquire, or to increase the extent of a substantial interest in the Company.