Are you prepared for the Two Strikes?

Or will you be out?

© Copyright 2010. Boardroom Limited.

June 28th 2011

• What is changing

• Critical Dates for the changes

• What Boardroom has done to assist you in addressing

Agenda

2

• What Boardroom has done to assist you in addressing

the changes

• Matters to consider when preparing for your AGM

• Do you need further assistance

28 June 2011

• Three main areas of legislative change that have impact

are:

− Two Strikes and then ‘spill resolution’ (commences 1 July 2011)

− Key Management Personnel (and closely related persons) exclusion

Overview

3

− Key Management Personnel (and closely related persons) exclusion

from voting (commences 1 August 2011) and

− Removal of ‘cherry picking’ of proxies (commences 1 August 2011)

• But also be aware of the ‘No Vacancy’ resolution

requirement (commences 1 July 2011)

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• First Year - 25% or more of vote against the

Remuneration Report, the company’s subsequent report

must explain:− The company’s actions to address the issues raised; or

− The reasons the Board chose not to do anything

Two Strikes then Spill

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• Second Year - 25% or more of vote against the

Remuneration Report, ‘spill resolution’ is to be put to the

meeting.

• ‘Spill resolution’ is an ordinary resolution – therefore

needs 50% or more to pass

28 June 2011

• ‘Spill meeting’ has to be held within 90 (calendar) days of

the ‘spill resolution’ being passed

• Usual notice periods apply to the ‘spill meeting’. Also,

normal director nomination requirements apply

Two Strikes then Spill

6

• Managing Director does not have to stand for election at

the ‘spill meeting’

28 June 2011

• What is a vote - show of hands or poll:− Sec 250J – resolution must be decided on a show of hands unless a poll

is demanded. Should there be a count of hands for the purpose of the

minutes (even though the provision does not require this information to

be recorded)? and

− Should, in the interests of good corporate governance, the resolution be

put to a poll?

Matters to consider

7

• Second Year:

• Have to include the ‘spill resolution’ in the notice of meeting

• Have to put the remuneration resolution to a vote;

• If more than 25% vote against for second time, ‘spill resolution’ to

be put to a vote

• Suggest these resolutions be dealt with last so other resolutions

can be considered and (hopefully) passed

28 June 2011

8 28 June 2011

• Definition – Key Management Personnel:− Has the same meaning as in the accounting standards

• Definition – Closely Related Party− Spouse or child of the KMP

− Child of the KMP’s spouse

Key Management Personnel

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− Child of the KMP’s spouse

− Dependant of the KMP or the KMP’s spouse

− Anyone else that is a member of the KMP’s family and who may be

expected to influence the KMP or be influenced by the KMP

− A company the KMP controls

− A person prescribed by the regulations

28 June 2011

• KMP and Closely Related Parties prohibited from voting

their own shares and any undirected proxies on:− The Remuneration Report; and

− A spill motion if one is required

• Exception

Key Management Personnel

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• Exception− The KMP is the Chair of the Meeting; and

− The shareholder provides informed consent for the Chair/KMP to vote

• KMP to vote Directed proxies

• A vote cast by a KMP does not affect the validity of the

resolution – votes should not be counted in the poll

28 June 2011

• If the Chairman of the Meeting is appointed as your proxy or may be

appointed by default, and you do not wish to direct your proxy how to vote in

respect of resolution [n], please mark this box. By marking this box, you

acknowledge that the Chairman of the Meeting may vote as your proxy even

if he has an interest in the outcome of the resolution and votes cast by the

Chairman of the Meeting for those resolutions, other than as proxy holder,

Key Management Personnel

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Chairman of the Meeting for those resolutions, other than as proxy holder,

will be disregarded because of that interest. If you do not mark this box, and

you have not directed your proxy how to vote, the Chairman of the Meeting

will not cast your votes on the resolution and your votes will not be counted

in calculating the required majority if a poll is called. The Chair intends to

vote all undirected proxies in favour of the resolution.”

• [n] being the resolution(s) flagged as ‘remuneration’ or ‘spill

resolution’

28 June 2011

Key Management Personnel

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Key Management Personnel

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14 28 June 2011

• Currently the Chair is required to vote all directed proxies

held

• Currently non Chair proxies are not subject to similar

requirements

• New law will require that all proxy holders vote as

Ban on Proxy ‘Cherry Picking’

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• New law will require that all proxy holders vote as

directed

• If proxy holder does not attend or they attend but do not

vote, the proxies fail over to the Chair and are to be voted

by the Chair as directed

• BUT undirected proxies do not fail over where the proxy

holder attends but does not vote

28 June 2011

16 28 June 2011

Operating for greater than 40 years with a

unique footprint across China, Malaysia,

Singapore, Australia and Hong Kong.

One of Asia – Pacific's leading providers of:

Share registration

China

© Copyright 2010. Boardroom Limited.

Corporate Secretarial

accounting and payroll

investor relations

taxation services

Service over 4200 public- listed and

privately owned companies.

Australia

Corporate Secretarial Services

The problems

• Burden to a company’s management

• Distraction from core business activates

• Can cause unnecessary delays

• Complex environment

28 June 201118

• Remembering key dates

• So many forms/documents!

• The incurrence of fines and even

investigation by the regulators

Corporate Secretarial Services

Flexible Solutions, tailored to your needs

• Drafting and lodging documents and forms relating to changes to company & director details

• Subsidiary company management (ASIC changes & compliance).

A

• Option A plus:B

Free company Health check – No obligation

28 June 201119

• Option A plus:

• Board meeting management and minutingB• Options A & B including:

• Preparation and lodgment of announcements.

• Maintenance of registers and minute books.C

Senior Management

Tom Bloomfield - General Manager, Corporate Secretarial Services

• Chartered Company Secretary and Member of the Australian Institute of Company

Directors. Degree in Law, currently studying Masters Degree.

• Worked in the Sydney and London offices of international organisations, both 'in-house'

and for a corporate services provider.

• Acted as a Company Secretary and Assistant Company Secretary to various ASX listed

clients.

Martin Jones - General Manager, Operation Risk & Compliance

28 June 201120

Martin Jones - General Manager, Operation Risk & Compliance

• Member of the Chartered Secretaries Australia NSW Council and a past President of the

Securities Registrars Association.

• 11 years in Computershare and worked with the ASX on the development and

implementation of procedures and business rules applying to FAST, CHESS and warrant

issues.

• Degrees in Law and Economics from Monash University, a Graduate Diploma in

Company Secretarial Practice

Thank You

© Copyright 2010. Boardroom Limited.