7.9.1 Introduction
The rights and liabilities attaching to ownership of Shares are:
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detailed in the Constitution which may be inspected during normal business hours at the registered office of NEC; and•
in certain circumstances, regulated by the Corporations Act, the ASX Listing Rules, the ASX Settlement Operating Rules and the general law.A summary of the significant rights, liabilities and obligations attaching to the Shares and a description of other material provisions of the Constitution are set out below. This summary is not intended to be exhaustive and is qualified by the fuller terms of the Constitution. This summary does not constitute a definitive statement of the rights and liabilities of Shareholders. Upon Listing, NEC’s constitution will be amended with automatic effect so as to contain provisions consistent with NEC being an ASX listed company. Accordingly, the summary assumes that NEC is admitted to the official list of the ASX.
7.9.2 Voting at a general meeting
At a general meeting of NEC, every shareholder present in person or by proxy, representative or attorney has one vote on a show of hands and, on a poll, one vote for each share held.
On a poll, every member (or his or her proxy, attorney or representative) is entitled to vote for each fully paid share held and in respect of each partly paid share, entitled to a fraction of a vote equivalent to the proportion which the amount paid up (excluding any amount credited as paid up) on that partly paid share bears to the total issue price of that share. Amounts paid in advance of a call are ignored when calculating the proportion.
7.9.3 Meetings of members
Each Shareholder is entitled to receive written notice of, and except in certain circumstances to attend and vote at, general meetings of NEC and to receive all notices, accounts and other documents required to be sent to Shareholders under the Constitution, the Corporations Act and the ASX Listing Rules.
7.9.4 Dividends
Subject to the Constitution, the Corporations Act and the terms of issue of shares, the Board may:
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resolve to pay any interim, final or bonus dividend it thinks appropriate;•
fix the time and method of payment of the dividends; and•
determine that a dividend is payable to the holders of one class of shares to the exclusion of any other class. A dividend may only be paid in accordance with the Corporations Act.7.9.5 Transfer of shares
Subject to the Constitution, shares may be transferred by:
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a written instrument of transfer which complies with the Constitution;•
a proper ASTC transfer, which is in the form required or permitted by the Corporations Act or the ASX Settlement Rules; or•
any other electronic system established or recognised by the Listing Rules in which NEC participates in accordance with the rules of that system.The Board may refuse to register a transfer of shares:
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if permitted to do so under the Constitution or under the Listing Rules; or•
on which NEC has a lien or which are subject to forfeiture.The Board must refuse to register any transfer of shares if the registration of the transfer would result in a breach of, or failure to observe, the provisions of any applicable law, the Listing Rules or a restriction agreement.
7.9.6 Issue of further shares
Subject to the Constitution, the Corporations Act, the ASX Listing Rules and the ASX Settlement Operating Rules and any rights and restrictions attached to a class of shares, the Board has full discretion to issue additional shares or other equity securities and determine the terms of such issue.
7.9.7 Winding up
If NEC is wound up, the liquidator may, with the sanction of a special resolution of the Company or with the written consent of all shareholders entitled to vote on the matter:
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divide the surplus assets of the Company remaining after payment of its debts among NEC’s shareholders in proportion to the number of shares held by them (with partly paid shares counted as fractions of fully paid shares);•
for that purpose, fix the value of assets and determine how the division is to be carried out between the shareholders and different classes of shareholders; and•
vest assets of the Company in trustees on any trusts determined by the liquidator for the benefit of the contributories.7.9.8 Sale of non-marketable parcels
Subject to the Corporations Act, the ASX Listing Rules and the ASX Settlement Operating Rules, the Board may sell the Shares of a Shareholder who holds less than a marketable parcel of Shares.
7.9.9 Share buy-backs
NEC may in accordance with the Corporations Act buy back its own shares.
7.9.10 Variation of class rights
At present, NEC’s only class of shares on issue is ordinary shares. Subject to the Corporations Act and the terms of issue of a class of shares, wherever the capital of NEC is divided into different classes of shares, the rights attaching to any class of shares may be varied or cancelled:
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with the written consent of the holders of not less than 75% of the issued shares of that class; or•
the sanction of a special resolution passed at a separate general meeting of the holders of the shares of that class.In either case, in accordance with the Corporations Act, the holders of not less than 10% of the votes in the class of shares, the rights of which have been varied or cancelled, may apply to a court of competent jurisdiction to exercise its discretion to set aside such a variation or cancellation.
7.9.11 Conversion or reduction of share capital
Subject to the Corporations Act, NEC may convert all or any of its shares into a larger or smaller number of shares by resolution passed at a general meeting or with the written consent of all members entitled to vote on the matter.
7.9.12 Dividend plans
The Constitution contains a provision allowing the Board to implement one or more dividend plans under which some or all Shareholders may elect, for a period and to the extent provided in the plan:
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that dividends paid in respect of some or all of the Shares from time to time held by the Shareholder will be satisfied by the issue of fully paid shares (dividend reinvestment plan);•
that dividends will not be declared or paid in respect of some or all of the Shares from time to time held by the Shareholder and that instead a payment or distribution other than a dividend (including bonus shares) be made to the Shareholder by NEC; or•
that cash dividends from NEC not be paid in respect of some or all of the Shares from time to time held by the Shareholder and that instead a cash dividend or payment or other distribution (including an issue or transfer of shares) be received by the Shareholder from NEC, a related body corporate or any other entity determined by the Board.It is not currently intended that a dividend plan will be in effect from Listing.
7.9.13 Employee Plans
The Board may establish and maintain one or more plans (each, an Employee Plan) under which some or all employees, directors or officers of NEC or any of its related bodies corporate may, for a period and to the extent as provided in the Employee Plan, receive, or receive the benefit of, NEC shares or shares of a related body corporate, whether by way of issue or transfer. Further details about the Company’s short term incentive arrangements and Performance Rights Plan are contained in Section 10.4.
7.9.14 Directors – appointment and removal
Under the Constitution, NEC will have at least three Directors, unless otherwise provided by the Corporations Act. There is no maximum number of Directors prescribed in the Constitution. Directors are elected at annual general meetings of NEC. Retirement will occur on a rotational basis so that any Director who has held office for three or more years or three or more annual general meetings (excluding any chief executive officer) faces re-election. The Directors may also appoint a Director to fill a casual vacancy on the Board or as an addition to the existing Directors, who will then hold office until the next annual general meeting of NEC and is then eligible for election at that meeting.
7.9.15 Directors – voting
Questions arising at a meeting of the Board will be decided by a majority of votes cast by Directors present and entitled to vote at a meeting at which a quorum is present. If an equal number of votes is cast for and against a resolution, the chairperson does not have a casting vote in addition to the chairperson’s vote as a Director and the resolution is not passed.
7.9.16 Directors – remuneration
See Section 6.3.2 for a description of the remuneration arrangements for Directors.
7.9.17 Indemnity and insurance
NEC, to the fullest extent permitted by the Corporations Act, must indemnify any current or former director, or officer, of NEC or its subsidiaries against any liability incurred by that person in that capacity, including legal costs.
NEC, to the fullest extent permitted by the Corporations Act, may enter into and pay premiums on a contract insuring any current or former director, or officer, of NEC or its subsidiaries against any liability incurred by that person in that capacity, including legal costs.
Under the Constitution, NEC must provide indemnification and may obtain insurance for each director, or officer, of NEC or its subsidiaries during their period of office and for a period of seven years after the person ceases to be a director, or officer, of NEC or its subsidiaries.
NEC has entered into deeds of access and indemnity with each Director and the Company Secretary. These are summarised above in Section 6.3.2.2.
7.9.18 Amendment
The Constitution can only be amended by special resolution passed by at least three-quarters of the votes cast by shareholders present (in person or by proxy) and entitled to vote on the resolution at a general meeting of NEC.
7.9.19 Compliance with the Broadcasting Services Act
The Constitution contains provisions which deal with compliance with the Broadcasting Services Act. The Broadcasting Services Act imposes a number of conditions and restrictions on the ownership and control of commercial FTA TV broadcasting licences issued under the Broadcasting Services Act, as described in Section 2.2.5.1. Compliance with those conditions and restrictions is essential, as a failure to comply may lead to severe penalties.
The purpose of these provisions in the Constitution is to provide a mechanism to ensure that a person restricted from holding shares as a result of the Broadcasting Services Act does not hold shares. Accordingly, the Constitution provides that:
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a person is not eligible to become or continue to be a holder of shares where, by reason of holding those shares and any other relevant circumstance, that person or some other person would contravene the Broadcasting Services Act;•
NEC has the power to require a person who is a shareholder, or seeking to become a shareholder, to provide NEC with a statutory declaration setting out certain information required under the Broadcasting Services Act in order to ensure compliance with the provisions of the Broadcasting Services Act; and•
the Board may in certain circumstances require the shareholder to dispose of their shares if a shareholder’s interests lead to a breach of the ownership and control restrictions in the Broadcasting Services Act or a shareholder refuses to provide a statutory declaration when requested to do so.The Constitution also provides that if any subsidiary of NEC that holds a licence under the Broadcasting Services Act or any intermediate holding company of a licensed subsidiary which is a subsidiary of NEC ceases to be a wholly-owned subsidiary of NEC, NEC must, prior to the subsidiary ceasing to be wholly owned by NEC, procure that the subsidiary amend its constitution by adopting provisions which regulate the holding of shares in and control of NEC to ensure compliance with the Broadcasting Services Act.