Commonwealth Numbered Acts

COMPANIES AND SECURITIES LEGISLATION AMENDMENT ACT 1986 No. 68 of 1986 - SECT 9

9. After section 31 of the Principal Act the following sections are inserted
in Part III: Constituent documents of a company may require a resolution
approving certain acquisitions of shares in the company

"31A. (1) In this section-
'relevant day', in relation to a take-over scheme, means the day that is 14
days before the end of the period during which the offers under the take-over
scheme remain open;
'take-over approval provisions', in relation to a company, means provisions of
the kind referred to in sub-section (2) that are contained in the constituent
documents of the company.

"(2) Subject to this section and section 31B, the constituent documents of a
company may contain provisions to the effect that, where offers have been made
under a take-over scheme in accordance with sub-paragraph 16 (2) (a) (ii) in
respect of shares included in a class of shares in the company (whether the
first offer under the take-over scheme was made before, at, or at any time
after, the commencement of Part II of the
Companies and Securities Legislation  Amendment Act 1986 )-

   (a)  the registration of a transfer giving effect to a contract resulting
        from the acceptance of an offer made under the take-over scheme is
        prohibited unless and until a resolution (in this sub-section referred
        to as a 'prescribed resolution') to approve the take-over scheme is
        passed in accordance with the provisions;

   (b)  a person (other than the offeror or a person associated with the
        offeror) who, as at the end of the day on which the first offer under
        the take-over scheme was made, held shares included in that class is
        entitled to vote on a prescribed resolution and, for the purposes of
        so voting, is entitled to one vote for each of the last-mentioned
        shares;

   (c)  a prescribed resolution shall be voted on in whichever of the
        following ways is specified in the provisions:

        (i)    at a meeting, convened and conducted by the company, of the
               persons entitled to vote on the resolution;

        (ii)   by means of a postal ballot conducted by the company in
               accordance with a procedure set out in the provisions,
or, if the provisions so provide, in whichever of those ways is determined by
the directors of the company; and

   (d)  a prescribed resolution, being a resolution that has been voted on,
        shall be taken to have been passed if the proportion that the number
        of votes in favour of the resolution bears to the total number of
        votes on the resolution is greater than such proportion (not exceeding
        one-half) as is specified in the provisions, and otherwise shall be
        taken to have been rejected.

"(3) Except in so far as the constituent documents of a company otherwise
provide, the provisions (whether of a law or of the constituent documents, or
any other provisions) that apply in relation to a general meeting of the
company shall, with such modifications as the circumstances require, apply in
relation to a meeting that is convened pursuant to take-over approval
provisions of the company and shall so apply as if the last-mentioned meeting
were a general meeting of the company.

"(4) Where-

   (a)  take-over offers have been made under a take-over scheme in accordance
        with sub-paragraph 16 (2) (a) (ii) (whether the first offer under the
        take-over scheme was made before, at, or at any time after, the
        commencement of Part II of the
        Companies and Securities Legislation Amendment Act 1986); and

   (b)  the constituent documents of the target company in relation to the
        take-over scheme contain take-over approval provisions, then-

   (c)  the directors of the company shall ensure that a resolution to approve
        the take-over scheme is voted on in accordance with those provisions
        before the relevant day in relation to the take-over scheme; and

   (d)  if the directors fail to ensure that such a resolution is so voted on,
        each of the directors contravenes this sub-section.

"(5) Where a resolution to approve a take-over scheme is voted on, in
accordance with take-over approval provisions of the target company in
relation to the take-over scheme, before the relevant day in relation to the
take-over scheme, the target company shall, on or before the relevant day-

   (a)  give to the offeror; and

   (b)  in a case where the target company is a listed company-serve on each
        notifiable securities exchange in relation to the target company, a
        notice in writing stating that a resolution to approve the take-over
        scheme has been so voted on and that the resolution has been passed,
        or has been rejected, as the case requires.

"(6) Where, as at the end of the day before the relevant day in relation to a
take-over scheme under which offers have been made in accordance with
sub-paragraph 16 (2) (a) (ii)-

   (a)  the constituent documents of the target company in relation to the
        take-over scheme contain take-over approval provisions; and

   (b)  no resolution to approve the take-over scheme has been voted on in
        accordance with those provisions, a resolution to approve the
        take-over scheme shall, for the purposes of those provisions, be
        deemed to have been passed in accordance with those provisions.

"(7) Where-

   (a)  the constituent documents of a company contain take-over approval
        provisions; and

   (b)  a resolution to approve a take-over scheme under which offers have
        been made in accordance with sub-paragraph 16 (2) (a) (ii) is voted
        on, in accordance with those provisions, before the relevant day in
        relation to the take-over scheme and is rejected, then-

   (c)  notwithstanding section 21, all offers under the take-over scheme that
        have not, as at the end of the relevant day, been accepted, and all
        offers (in this sub-section referred to as the 'accepted offers')
        under the take-over scheme that have been accepted and from whose
        acceptance binding contracts have not, as at the end of the relevant
        day, resulted, shall be deemed to be withdrawn at the end of the
        relevant day;

   (d)  the offeror shall, forthwith after the end of the relevant day, return
        to each person who has accepted any of the accepted offers any
        documents that were sent by the person to the offeror with the
        acceptance of the offer;

   (e)  the offeror is entitled to rescind, and shall, forthwith after the end
        of the relevant day, rescind, each contract resulting from the
        acceptance of an offer made under the take-over scheme; and

   (f)  a person who has accepted an offer made under the take-over scheme is
        entitled to rescind the contract (if any) resulting from that
        acceptance.

"(8) This section and section 31B have effect notwithstanding anything
contained in the business rules or listing rules of a securities exchange, in
the constituent documents of a company, or in any agreement. Provisions
relating to the inclusion, effect and renewal of take-over approval provisions

"31B. (1) In this section-
'renew', in relation to take-over approval provisions of a company, means
renew under sub-section (3);
'requirement', in relation to a company, includes a requirement of a law or of
the constituent documents of the company;
'take-over approval provisions', in relation to a company, means provisions of
the kind referred to in sub-section 31A (2) that are contained in the
constituent documents of the company.

"(2) Take-over approval provisions of a company, unless sooner omitted from
the constituent documents of the company, cease to have effect at the end of-

   (a)  unless paragraph (b) or (c) applies-3 years;

   (b)  if the constituent documents provide that the provisions have effect
        for a specified period of less than 3 years and the provisions have
        not been renewed-the specified period; or

   (c)  if the provisions have been renewed on at least one occasion and the
        resolution, or the later or last of the resolutions, as the case
        requires, renewing the provisions states that the provisions are
        renewed for a specified period of less than 3 years-the specified
        period, commencing-

   (d)  if the provisions were contained in the constituent documents at the
        time when the company was incorporated or formed and have not been
        renewed-at that time;

   (e)  if the provisions were inserted in the constituent documents and have
        not been renewed-at the time when the provisions were so inserted; or

   (f)  if the provisions have been renewed on at least one occasion-at the
        time when the provisions were renewed, or last renewed, as the case
        requires, and, upon the provisions ceasing to have effect, the
        constituent documents are, by force of this sub-section, altered by
        omitting the provisions.

"(3) A company may renew take-over approval provisions of the company in any
manner in which the company may alter its constituent documents by inserting
such provisions and shall, in relation to a renewal of such provisions, comply
with the requirements that apply in relation to such an alteration of its
constituent documents, being an alteration in the manner in which the renewal
is effected.

"(4) A company shall, with every notice that-

   (a)  specifies the intention to propose-

        (i)    a resolution for the alteration of the constituent documents of
               the company by inserting take-over approval provisions; or

        (ii)   a resolution to renew take-over approval provisions of the
               company; and

   (b)  is sent to a person who is entitled to vote on the proposed
        resolution, send a statement that-

   (c)  explains the effect of the proposed provisions, or of the provisions
        proposed to be renewed, as the case may be;

   (d)  explains the reasons for proposing the resolution and sets out the
        factual matters and principles underlying those reasons;

   (e)  states whether, as at the day on which the statement is prepared, any
        of the directors of the company is aware of a proposal by a person to
        acquire, or to increase the extent of, a substantial interest in the
        company and, if so, explains the extent (if any) to which such a
        proposal has influenced the decision to propose the resolution;

   (f)  in a case where sub-paragraph (a) (ii) applies-reviews both the
        advantages, and disadvantages, of the provisions proposed to be
        renewed for the directors, and the members, respectively, of the
        company during the period during which the provisions have been in
        effect; and

   (g)  discusses both the potential advantages, and the potential
        disadvantages, of the proposed provisions, or of the provisions
        proposed to be renewed, as the case may be, for the directors, and the
        members, respectively, of the company.

"(5) Where a company contravenes sub-section (4), the company and any officer
of the company who is in default are each guilty of an offence.

"(6) The penalty for an offence arising under sub-section (5) is a fine not
exceeding $5,000 or imprisonment for a period not exceeding 1 year, or both.

"(7) Where, on a particular day, a company purports to-

   (a)  alter its constituent documents by inserting take-over approval
        provisions; or

   (b)  renew take-over approval provisions of the company, then-

   (c)  the holders of not less in the aggregate than 10% of the issued shares
        included in a class of shares in the company may, within 21 days after
        that day, apply to the Court to have the purported alteration or
        renewal set aside; and

   (d)  unless and until an application made under paragraph (c) is finally
        determined by the making of an order setting aside the purported
        alteration or renewal, the company shall be deemed for all purposes
        (other than the purposes of such an application)-

        (i)    to have validly altered its constituent documents by inserting
               the provisions referred to in paragraph (a); or

        (ii)   to have validly renewed the provisions referred to in paragraph
               (b),
as the case may be.

"(8) An application under paragraph (7) (c) may be made, on behalf of the
shareholders entitled to make the application, by such one or more of their
number as they appoint in writing.

"(9) On an application under paragraph (7) (c), the Court may, if it is
satisfied that it is appropriate in all the circumstances to do so, make an
order setting aside the purported alteration or renewal, but otherwise shall
dismiss the application.

"(10) A company shall, within 14 days after the Court makes in relation to the
company an order of the kind referred to in sub-section (9), lodge an office
copy of the order with the Commission.

"(11) Where a company contravenes sub-section (10), the company and any
officer of the company who is in default are each guilty of an offence.

"(12) The penalty for an offence arising under sub-section (11) is a fine not
exceeding $2,500 or imprisonment for a period not exceeding 6 months, or
both.".