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Companies (Acquisition of Own Shares) (Treasury Shares) Regulations (Northern Ireland) 2004

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Regulation 4

SCHEDULEAmendment of Article 16 of the 1986 Order

1.  In Article 16 of the 1986 Order (procedure for objecting to alteration of company’s objects) after paragraph (7) insert –

(7A) For the purposes of paragraph (2)(a), any of the company’s issued share capital held as treasury shares must be disregarded..

Amendment of Article 34 of the 1986 Order

2.  In Article 34 of the 1986 Order (minimum membership for carrying on business)(1), the existing provision becomes paragraph (1) of that Article, and at the end insert –

(2) For the purposes of this Article references to a member of a company do not include the company itself where it is such a member only by virtue of its holding shares as treasury shares..

Amendment of Article 64 of the 1986 Order

3.  In Article 64 of the 1986 Order (litigation objection to resolution under Article 63) after paragraph (2) insert –

(2A) For the purposes of paragraph (2)(a), any of the company’s issued share capital held as treasury shares must be disregarded..

Amendment and operation of Article 99 of the 1986 Order

4.—(1) In Article 99 of the 1986 Order (offers to shareholders to be on a pre-emptive basis) after paragraph (5) insert –

(6) Where a company holds relevant shares as treasury shares –

(a)for the purposes of paragraphs (1) and (2), the company is not a “person who holds relevant shares”; and

(b)for the purposes of paragraph (1), the shares held as treasury shares do not form part of “the aggregate of relevant shares and relevant employee shares”..

(2) Where –

(a)a company holds relevant shares as treasury shares, and

(b)immediately before these Regulations came into operation, its memorandum or articles included a provision that met the requirements of paragraph (2) of Article 99 of the 1986 Order,

that provision shall have effect as if it had been modified so as to comply with the requirements of that paragraph as it has effect after these Regulations came into operation.

Amendment of Article 104 of the 1986 Order

5.—(1) Amend Article 104 of the 1986 Order (interpretation for Articles 99 to 106) as follows.

(2) After paragraph (3) insert –

(3A) A reference to the allotment of equity securities or of equity securities consisting of relevant shares of a particular class also includes the sale of any relevant shares in the company or (as the case may be) relevant shares of a particular class if, immediately before the sale, the shares were held by the company as treasury shares..

(3) At the end of paragraph (5)(b) insert “or, in the case of shares held by the company as treasury shares, are to be transferred in pursuance of such a scheme”.

Amendment of Article 105 of the 1986 Order

6.  In Article 105 of the 1986 Order (disapplication of pre-emption rights) after paragraph (2) insert –

(2A) Paragraphs (1) and (2) apply in relation to a sale of shares which is an allotment of equity securities by virtue of Article 104(3A) as if –

(a)in paragraph (1) for “Where the directors of a company are generally authorised for the purposes of Article 90, they” there were substituted “The directors of a company” and the words “pursuant to that authority” were omitted, and

(b)in paragraph (2), the words from “Where” to “otherwise), the” there were substituted “The” and, in sub-paragraph (a), the words “to be made pursuant to that authority” were omitted..

Amendment of Article 113 of the 1986 Order

7.  In Article 113(4) of the 1986 Order (non-cash consideration to be valued before allotment) –

(a)in the first sentence –

(i)after “question” insert “(“the relevant company”)”, and

(ii)for “that other company” substitute “the relevant company”, and

(b)for the second sentence substitute –

  • In determining whether that is the case, the following shall be disregarded –

    (a)

    shares held by or by a nominee of the company proposing to allot the shares in connection with the arrangement (“the allotting company”);

    (b)

    shares held by or by a nominee of a company which is –

    (i)

    the holding company or a subsidiary of the allotting company, or

    (ii)

    a subsidiary of that holding company; and

    (c)

    shares held as treasury shares by the relevant company..

Amendment of Article 135 of the 1986 Order

8.—(1) Amend Article 135 of the 1986 Order (variation of class rights) as follows.

(2) In paragraph (2)(a) after the word “class” insert the words “(excluding any shares of that class held as treasury shares)”.

(3) In paragraph (5) after the word “company” insert the words “(excluding any member holding shares as treasury shares)”.

(4) In paragraph (6)(a) after the word “question” where it first appears insert the words “(excluding any shares of that class held as treasury shares)”.

Amendment of Article 137 of the 1986 Order

9.  In Article 137 of the 1986 Order (shareholders' right to object to variation) after paragraph (2) insert –

(2A) For the purposes of paragraph (2), any of the company’s issued share capital held as treasury shares must be disregarded..

Amendment of Article 141 of the 1986 Order

10.  In Article 141 of the 1986 Order (merger relief)(2) at the end of paragraph (4) insert “(excluding any shares in that company held as treasury shares)”.

Amendment of Article 153 of the 1986 Order

11.  In Article 153 of the 1986 Order (general rule against company acquiring own shares) –

(a)in paragraph (2), after the second “and” insert “, subject to paragraph (2A),”, and

(b)after that paragraph insert –

(2A) Where a company purchases qualifying shares out of distributable profits under Article 172, any contravention by the company of any provision of Article 172B(1) or (2) shall not render the acquisition void under paragraph (2)..

Amendment of Article 179 of the 1986 Order

12.—(1) Amend Article 179 of the 1986 Order (disclosure by company of purchase of own shares)(3) as follows.

(2) After paragraph (1) insert the following paragraphs –

(1A) But in the case of a company which has purchased its own shares in circumstances in which Article 172A applies, the requirement to deliver a return under paragraph (1) shall apply only where some or all of the shares have been cancelled forthwith after the date of their delivery in accordance with Article 172D(1) and in those circumstances the particulars required by that paragraph to be stated with respect to the shares purchased shall apply only to such of the shares as have been so cancelled.

(1B) Where a company has purchased its own shares in circumstances in which Article 172A applies, the company shall within the period of 28 days beginning with the date on which such shares are delivered to it (except where all of the shares have been cancelled forthwith after the date of their delivery in the circumstances referred to in paragraph (1A)) deliver to the registrar for registration a return in the prescribed form stating with respect to shares of each class purchased (other than any shares which have been cancelled in the circumstances referred to in paragraph (1A)) the number and nominal value of each of those shares which are held as treasury shares and the date on which they were delivered to the company..

(3) In paragraph (2) for “the return” substitute “any return under paragraph (1) or (1B)”.

(4) In paragraph (3) after “single return” insert “under either paragraph (1) or (1B)”.

Insertion of Article 179A of the 1986 Order

13.  After Article 179 of the 1986 Order insert the following Article –

Disclosure by company of cancellation or disposal of treasury shares

179A.(1) Paragraph (2) applies in relation to any shares held by a company as treasury shares if –

(a)the company is or was required to make a return under Article 179(1B) in relation to the shares, and

(b)the shares have –

(i)been cancelled in accordance with Article 172D(1), or

(ii)been sold or transferred for the purposes of or pursuant to an employees' share scheme under Article 172D(1).

(2) Within the period of 28 days beginning with the date on which such shares are cancelled or disposed of, the company shall deliver to the registrar for registration a return in the prescribed form stating with respect to shares of each class cancelled or disposed of –

(a)the number and nominal value of those shares, and

(b)the date on which they were cancelled or disposed of.

(3) Particulars of shares cancelled or disposed of on different dates may be included in a single return to the registrar.

(4) If default is made in delivering to the registrar any return required by this Article, every officer of the company who is in default is liable to a fine and, for continued contravention, to a daily default fine..

Amendment of Article 180 of the 1986 Order

14.  In Article 180(1) of the 1986 Order (the capital redemption reserve) before the words “shall be transferred” insert “, or in accordance with Article 172D(4) on cancellation of shares held as treasury shares,”.

Amendment of Article 206 of the 1986 Order

15.  In Article 206(2) of the 1986 Order (obligation of disclosure: the cases in which it may arise and “the relevant time”) –

(a)after “general meetings of the company” insert “(excluding any shares in the company held as treasury shares)”, and

(b)in sub-paragraph (a) after “separately” insert “(excluding any shares of each class held as treasury shares)”.

Amendment of Article 222 of the 1986 Order

16.  In Article 222 of the 1986 Order (company investigation on requisition by members) at the end of paragraph (1) insert “(excluding any shares in the company held as treasury shares)”.

Amendment of Article 331 of the 1986 Order

17.  In Article 331 of the 1986 Order (prohibition on directors dealing in share options) after paragraph (5) insert –

(6) This Article is not to be taken as penalising a director of a company who buys a right to call for delivery at a specified price within a specified time of a specified number of shares held as treasury shares by the company or by a relevant company which is that company’s subsidiary or holding company or a subsidiary of that company’s holding company.

(7) For the purposes of paragraph (6) –

(a)“relevant company” means a company listed in Article 1 of Council Directive 77/91/EEC(4), and

(b)shares of a relevant company (other than a company within the meaning of Article 3(1)) are held as treasury shares if –

(i)they fall within Article 172(4)(a) to (d) (qualifying shares), and

(ii)they are held by the relevant company in accordance with provisions of the law of a member State implementing Articles 19 to 22 of that Directive..

Amendment of Article 354 of the 1986 Order

18.  In Article 354 of the 1986 Order (“connected persons”, etc) –

(a)in paragraph (4)(a) after the second “capital” insert “(excluding any shares in the company held as treasury shares)”,

(b)at the end of paragraph (4)(b) insert “(excluding any voting rights attached to any shares in the company held as treasury shares)”, and

(c)in paragraph (5)(b) –

(i)after “that share capital” insert “(excluding any shares in the company held as treasury shares)”, and

(ii)after “voting power” insert “(excluding any voting rights attached to any shares in the company held as treasury shares)”.

Amendment of Article 360 of the 1986 Order

19.  In Article 360 of the 1986 Order (obligation to keep and enter up register) after paragraph (3) insert –

(3A) Where a company purchases one or more of its own shares in circumstances in which Article 172A applies –

(a)the requirements of paragraphs (2) and (3) must be complied with unless the company cancels all of the shares forthwith after the purchase in accordance with Article 172D(1), but

(b)any share which is so cancelled must be disregarded for the purposes of paragraph (3)..

Amendment of Article 376 of the 1986 Order

20.  In Article 376 of the 1986 Order (extraordinary general meeting on members' requisition) after paragraph (2) insert –

(2A) For the purposes of paragraph (2)(a) any of the company’s paid up capital held as treasury shares must be disregarded..

Amendment of Article 377 of the 1986 Order

21.  In Article 377 of the 1986 Order (length of notice for calling meetings) in paragraph (4)(a) after “meeting” insert “(excluding any shares in the company held as treasury shares)”.

Amendment of Article 378 of the 1986 Order

22.  In Article 378 of the 1986 Order (general provisions as to meetings and votes) in paragraph (3) after the first “capital” insert “(excluding any shares in the company held as treasury shares)”.

Amendment of Article 381 of the 1986 Order

23.  In Article 381 of the 1986 Order (right to demand a poll) –

(a)in paragraph (1)(b)(ii) after “meeting” insert “(excluding any voting rights attached to any shares in the company held as treasury shares)”, and

(b)at the end of paragraph (1)(b)(iii) insert “(excluding any shares in the company conferring a right to vote at the meeting which are held as treasury shares)”.

Amendment of Article 384 of the 1986 Order

24.  In Article 384 of the 1986 Order (circulation of members' resolutions) in paragraph (2)(a) after “relates” insert “(excluding any voting rights attached to any shares in the company held as treasury shares)”.

Amendment of Article 386 of the 1986 Order

25.  In Article 386 of the 1986 Order (extraordinary and special resolutions) in paragraph (3)(a) after “right” insert “(excluding any shares in the company held as treasury shares)”.

Amendment of Article 388 of the 1986 Order

26.  In Article 388 of the 1986 Order (registration etc. of resolutions and agreements)(5) after paragraph (4) insert –

(4A) For the purposes of this Article, references to a member of a company do not include the company itself where it is such a member by virtue only of its holding shares as treasury shares, and accordingly, in such circumstances, the company is not, for those purposes, to be treated as a member of any class of the company’s shareholders..

Amendment of Article 421 of the 1986 Order

27.  For Article 421(2) of the 1986 Order (takeover offers)(6) substitute –

(2) In paragraph (1) “shares” means shares (other than relevant treasury shares) which have been allotted on the date of the offer, but a takeover offer may include among the shares to which it relates –

(a)all or any shares that are allotted after the date of the offer but before a specified date;

(b)all or any relevant treasury shares that cease to be held as treasury shares before a specified date;

(c)all or any other relevant treasury shares.

(2A) In this Article –

“relevant treasury shares” means shares which –

(a)

are held by the company as treasury shares on the date of the offer; or

(b)

become shares held by the company as treasury shares after that date but before a specified date;

“specified date” means a date specified in or determined in accordance with the terms of the offer..

Amendment of Article 423A of the 1986 Order

28.—(1) In Article 423A of the 1986 Order (right of minority shareholder to be bought out by offeror)(7) after paragraph (1) insert –

(1A) For the purposes of paragraph (1), a takeover offer relates to all the shares in a company if it is an offer to acquire all the shares in the company within the meaning of Article 421..

(2) Insert after paragraph (2) –

(2A) For the purposes of paragraphs (1) and (2), in calculating nine-tenths of the value of all the shares in the company, or all the shares of any class or classes of shares of the company, any shares held by the company as treasury shares shall be treated as having been acquired by the offeror..

Amendment of Article 424 of the 1986 Order

29.  In Article 424 of the 1986 Order (investigation of a company on its own application or that of its members) at the end of paragraph (2)(a) insert “(excluding any shares held as treasury shares)”.

Amendment of paragraph 38, Schedule 4 to the 1986 Order

30.  In paragraph 38 of Schedule 4 to the 1986 Order (form and content of company accounts)(8) –

(a)omit “and” at the end of sub-paragraph (1)(a), and

(b)at the end of sub-paragraph (6)(b) insert –

  • ; and

    (c)

    where shares are held as treasury shares, the number and aggregate nominal value of the treasury shares and, where shares of more than one class have been allotted, the number and aggregate nominal value of the shares of each class held as treasury shares..

Amendment of paragraph 10, Schedule 4A to the 1986 Order

31.  In Schedule 4A to the 1986 Order (form and content of group accounts)(9) in paragraph 10(1)(a) after “acquired” insert “(excluding any shares in the undertaking held as treasury shares)”.

Amendment of paragraphs 10 and 12, Schedule 15B to the 1986 Order

32.  In Schedule 15B to the 1986 Order (provisions subject to which Articles 418 to 420 have effect in their application to mergers and divisions of public companies)(10) –

(a)in paragraph 10(2)(c) after “general meetings of the company” insert “(excluding any shares in the company held as treasury shares)”, and

(b)in paragraph 12(5)(c) after “general meetings of the company” insert “(excluding any shares in the company held as treasury shares)”.

Amendment of Schedule 23 to the 1986 Order

33.  In Schedule 23 to the 1986 Order (punishment of offences under the 1986 Order) at the appropriate place in the Table insert –

172GContravention of any provision of Articles 172A to 172F (dealings by company in treasury shares, etc.)

1.  On indictment

2.  Summary

A fine

The statutory maximum

179A(4)Default by company’s officer in delivering to registrar the return required by Article 179A (disclosure by company of cancellation or disposal of treasury shares)

1.  On indictment

2.  Summary

A fine

The statutory maximum

One-tenth of the statutory maximum..

Repeal of Article 68(4) of the Companies (No. 2) (Northern Ireland) Order 1990

34.  Article 68(4) of the Companies (No. 2) (Northern Ireland) Order 1990(11), which substituted a new Article 172(2) of the 1986 Order as from a day to be appointed, is repealed.

(1)

Article 34 was amended by paragraph 2 of the Schedule to S.R. 1992 No. 405

(2)

Article 141 was amended by paragraph 6 of Part I of Schedule 9 to the Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19))

(3)

Article 179 was amended by Article 113 of, and Schedule 6 to, the Companies (No. 2) (Northern Ireland) Order 1990 (S.I. 1990/1504 (N.I. 10))

(4)

O.J. No. L26/77 with amendments 291/79, 345/80, 302/85, 347/92

(5)

Article 388 was amended by Part I of Schedule 10 to the Companies (Northern Ireland) Order 1990 (S.I. 1990/593 (N.I. 5)), Part II of Schedule 4 to the Companies (Northern Ireland) Order 1989, Part I of Schedule 9 to the Insolvency (Northern Ireland) Order 1989, S.I. 1995/3272 and S.I. 2001/3755

(6)

Article 421 was substituted by Article 26 of the Companies (Northern Ireland) Order 1989

(7)

Article 423A was inserted by Article 26 of the Companies (Northern Ireland) Order 1989

(8)

Schedule 4 was amended by Article 6(2) of, and Schedule 1 to, the Companies (Northern Ireland) Order 1990

(9)

Schedule 4A was substituted by Article 7(2) of, and Schedule 2 to, the Companies (Northern Ireland) Order 1990 and amended by S.R. 1992 No. 436 and S.R. 1997 No. 314

(10)

Schedule 15B was inserted by Regulation 3(c) of S.R. 1987 No. 442 and was renumbered 15B by Article 49(2) of the Companies (No. 2) (Northern Ireland) Order 1990

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