Republic of South Africa. Companies Act, 2008 MEMORANDUM OF INCORPORATION FOR A NON-PROFIT COMPANY

Transcription

1 Republic of South Africa Companies Act, 2008 MEMORANDUM OF INCORPORATION FOR A NON-PROFIT COMPANY Name of company: SAVINGS AND INVESTMENT ASSOCIATION SOUTH AFRICA NPC The shortened name of the Company is: ASISA Registration No.: 2008/017776/08 This MOI was adopted by Special Resolution passed on 16 May 2012 in substitution for the existing memorandum of incorporation of the Company. 1

2 1. INTERPRETATION In this MOI: 1.1. words which are not otherwise defined in clause 1.2 below shall, if capitalised in the MOI, bear the same meaning in this MOI as in the Companies Act; 1.2. unless the context otherwise requires: Applicable Legislation means: the Financial Advisory and Intermediary Services Act, 2002 (Act 37 of 2002); the Collective Investment Schemes Control Act, 2002 (Act 43 of 2002); the Long-Term Insurance Act, 1998 (Act 52 of 1998); and/or such other legislation, including the regulations, determinations and notices issued or prescribed thereunder, which regulate and control the conduct of any part of the business of a Member Company from time to time; Board means the board of directors of the Company as constituted from time to time in terms of this MOI; Companies Act means the Companies Act, 2008, as amended or any legislation which replaces it; Company means the Association for Savings and Investment South Africa NPC or by whatever other name it may be known from time to time; Conglomerate Group means a group of companies or other enterprises, which are Subsidiaries or subject to the control of the same holding or controlling company/ies, or which are otherwise associated as providers of complementary financial products and services, including any juristic or other Connected Person in relation thereto, as defined in terms of the Income Tax Act 58 of 1962, as amended; 2

3 Deliver or Delivery means deliver in the manner in which the Company is entitled to give notice or deliver documents in accordance with clause 30 and the Companies Act; Electronic Address means in regard to Electronic Communication, any address furnished to the Company by any Member Company; Executive Committee means the committee to be appointed in accordance with clause 17 below, having the powers, duties and responsibilities with respect to the implementation of organisational decisions as may be delegated to it by the Board from time to time; Financial Services Board means the statutory body established in terms of section 2 of the Financial Services Board Act No 97 of 1990, as amended; Founding Document means the document entitled Guiding Principles and Governance Structure adopted by the Company and its Member Companies on 12 March 2006 in relation to the governance structures of the Company, as amended, supplemented or replaced from time to time; General Meeting means any ordinary or extraordinary meeting of the Member Companies (i.e. any meeting other than the annual general meeting); Ineligible or Disqualified means, in respect of any Director, members of a Board Committee and/or Prescribed Officers, ineligible or disqualified as contemplated in the Companies Act and/or clause 18.12; Member Companies means registered members of the Company, and includes Voting Member Companies and Non-Voting Member Companies, and Member Company shall mean any one of them, as the context may indicate; Membership means membership of the Company; MOI means this Memorandum of Incorporation; Nominations Committee means the committee to be appointed in accordance with clause 16 below, having the powers, duties and responsibilities with respect to appointments of Directors to the Board, the admission of potential Member Companies and termination of Membership as set out in this MOI; 3

4 Non-Voting Member Companies means Member Companies who qualified for and were accepted as non-voting Member Companies pursuant to clause below, and being entitled to those Rights, privileges and obligations provided for in respect of Non-Voting Member Companies by this MOI, and Non-Voting Member Company shall mean any one of them, as the context may indicate; Prime Interest Rate means the prime overdraft rate of interest charged from time to time by the Company s bankers from time to time (currently being First National Bank Limited), in respect of unsecured overdraft facilities, calculated and compounded monthly in arrear; as certified by the manager of any branch of that bank, whose appointment, designation, and authority need not be proved; Regulations means regulations published pursuant to the Companies Act; Rights means those rights granted to a particular category of Member Companies pursuant to clause 12 below and/or any additional rights granted to such category of Member Companies in terms of Applicable Legislation; Round Robin Resolution means: in respect of Member Companies, a resolution passed other than at a General Meeting, which: was submitted for consideration to the Voting Member Companies; and was voted on by the requisite percentage of the Voting Member Companies (as contemplated in clause 13.27) by signing a resolution in counterparts within 20 (twenty) Business Days after the resolution was submitted to them, and includes Written polling of Voting Member Companies regarding the election of the Board; in respect of the Board, a resolution passed other than at a meeting of the Board, which: 4

5 was submitted to each Director for consideration; and was approved in writing by such number of Directors as may at the time be present in South Africa being not less than a quorum of Directors, signing such resolution in counterparts, within 20 (twenty) Business Days after the resolution was submitted to them; Voting Member Companies means Member Companies: being subscribers to the MOI; or who qualified for and were accepted as Voting Member Companies pursuant to clause below, having the Rights, privileges and obligations provided for in respect of Voting Member Companies by this MOI, and Voting Member Company shall mean any one of them, as the context may indicate; Writing includes Electronic Communication but as regards any Voting Member Companies, only to the extent that such Voting Member Companies have notified the Company of an Electronic Address; 1.3. references to Voting Member Companies represented by proxy shall include Member Companies entitled to vote and represented by an agent appointed under a general or special power of attorney; 1.4. references to Present at the General Meeting shall include juristic persons represented by a duly authorised representative or acting in the manner prescribed in the Companies Act; 1.5. all references to section(s) in this MOI refer to the sections of the Companies Act unless the context indicates otherwise; 1.6. the headings are for reference purposes only and shall not affect the interpretation of this MOI; 1.7. words in the singular number shall include the plural, and words in the plural number shall include the singular, words importing the masculine gender shall include the female gender, and words importing persons shall include created entities (corporate or not); 5

6 1.8. if any term is defined within the context of any particular clause in the MOI, the term so defined, unless it is clear from the clause in question that the term so defined has limited application to the relevant clause, shall bear the meaning ascribed to it for all purposes in terms of this MOI, notwithstanding that that term has not been defined in this interpretation provision; 1.9. to the extent that item 4(4) of Schedule 5 to the Companies Act may permit this MOI to prevail if the provisions of this MOI are in any way inconsistent with the provisions of the Companies Act, the provisions of the Companies Act shall prevail, and this MOI shall be read in all respects subject to the Companies Act; and the rule of construction that a contract shall be interpreted against the party responsible for the drafting or preparation of the contract, shall not apply to this MOI. 2. CALCULATION OF BUSINESS DAYS When a particular number of Business Days is provided for between the happening of one event and another, the number of days must be calculated by: 2.1. excluding the day on which the first such event occurs; 2.2. including the day on or by which the second event is to occur; and 2.3. excluding any public holiday, Saturday or Sunday that falls on or between the days contemplated in clauses 2.1 and 2.2 respectively. 3. NON-PROFIT COMPANY The Company is a Non-Profit Company and the provisions of Schedule 1 to the Companies Act shall apply to the Company. 4. INCORPORATION CLAUSE The Incorporators of the Company for purposes of Item 3(b) to Schedule 1 of the Companies Act shall be its first Member Companies, namely: (i) Allan Gray Limited; (ii) Coronation Fund Managers Limited; (iii) Investec Asset Management (Proprietary) Limited; (iv) Liberty Group Limited; (v) Lion of Africa Fund Managers (Proprietary) Limited; (vi) Momentum Group Limited; (vii) Oasis Group Holdings (Proprietary) Limited; (viii) Old Mutual (South Africa) Limited; (ix) Prudential Portfolio Managers (South Africa) (Proprietary) Limited; (x) Renaissance Specialist Fund Managers (Proprietary) Limited; and (xi) Sanlam Limited, or such other names by which these Member Companies have subsequently become known. 6

7 5. MAIN PURPOSE AND OBJECTS OF THE COMPANY 5.1. The main purpose of the Company is to establish a single combined industry association for purposes of serving, supporting, and representing the various savings and investment institutions in South Africa, as may be admitted to Membership in accordance with this MOI, including such institutions as are authorised and registered as Financial Services Providers in terms of Applicable Legislation The main objects of the Company are as follows: to serve, support, and represent the long-term savings and investment industry in South Africa ( the Industry ); to promote the Industry s development, growth, public standing, and the general society's confidence therein, by such means as may be deemed appropriate from time to time; including the establishment, provision, and rationalization of services and shared Industry resources; to provide broad support to its Member Companies by facilitating the Member Companies coordinated representation, supporting the efforts of Member Companies to comply with all statutory obligations and by establishing an industry code of conduct to affirm and promote the highest standards of integrity, professionalism, and good governance in the Industry by incorporating mechanisms for self-regulation without detracting from the over-riding authority of the Financial Services Board and other relevant statutory bodies; to actively consider and encourage transformation and social development throughout the Industry, by developing and participating in transformative projects and initiatives and pursuing the objectives of applicable black economic empowerment legislation; and to generally encourage a broad culture of responsible savings and investments within the context of a transformed, vibrant, and globally competitive economy In promoting the main objects as referred to above and implementing its mandate on behalf of the Member Companies, the Company shall itself observe and promote (and seek to ensure that all Member Companies likewise observe and promote) the following guiding principles with respect to its operations, having regard to the best interests of the Industry and the general public: 7

8 advance the principle of consumer sovereignty and freedom of choice for clients; promote the operation of free markets and encourage fair competition in the provision of products and services; require full and effective disclosure of all fees, commissions, rebates and charges, and other material terms of contracts with clients; avoid conflicts of interest with their clients; act with integrity and the highest standards of ethics and good governance in its operations and industry associations; neither claim, nor accept, fees or the reimbursement of costs without a service having been delivered, or a cost incurred, of appropriate value to the client; promote the inherent value and benefit of savings and investments, and ensure access to its products and services for all South Africans; ensure that any proposals submitted to regulatory authorities for legal, regulatory or process changes, will encourage and promote fairness, balance, transparency and best Industry practice; practise and promote ethical and equitable behaviour by Member Companies through its observance of and compliance with appropriate codes of ethics and Industry standards; seek to contribute to the development of a strong national economy by encouraging savings and improving opportunities for achieving personal security and financial independence; and seek to resolve any differences or disputes with between Member Companies or within a Member Company s organisation, by acting at all times: in absolute good faith and integrity, adhering to these principles; in the best interests of clients; and in support of practices that encourage good governance. 8

9 5.4. Notwithstanding anything to the contrary herein contained the Company shall, in exercising any of its powers herein, be deemed to be acting in the furtherance of its objects as set forth herein. 6. POWERS AND CAPACITY OF THE COMPANY 6.1. The Company has the powers and capacity of an Individual, save for the following limitations and/or specific powers, which the Member Companies may rely upon against the Board, namely: the Company may not distribute in specie or in kind any of its assets among the Member Companies; the Company must apply all its assets and income, however derived, to advance the main objects of the Company; subject to clause 6.1.2, the Company may: acquire and hold securities issued by a profit company; directly or indirectly, alone or with any other person, carry on any business, trade or undertaking consistent with or ancillary to its stated objects; and the Company shall be entitled to: form and have an interest in any other company or companies having the same or similar objects to the Company, for the purpose: of acquiring the undertaking, or all or any of the assets or liabilities of such other company or companies, or for any other purpose which may seem directly or indirectly calculated to benefit the company and/or to promote and advance the main objects of the Company; and to transfer to any such other company or companies the undertaking of the Company, comprising all or any of its assets or liabilities; 9

10 amalgamate, liaise, and co-operate with any other companies, trusts or other legal entities ( Entities ) having the same or similar objects to the Company take part in the management, supervision and control of the business or operations of any other Entities having the same or similar objects to the Company; enter into joint ventures or partnerships with any other Entities having the same or similar objects to the Company; remunerate any person or persons in cash, or in kind, for services rendered in its formation or in the development or conduct of its activities, including payment of reasonable fees and charges for professional services rendered as aforesaid; make grants and donations in pursuance of its main objects, provided that no such grants or donations may be made to Member Companies or the Board; and pay staff salaries, pensions, and other benefits, and to establish pension and incentive schemes, in respect of its employees In addition to the powers and capacities of the Company as set out in clause 6.1 above, the following special conditions shall apply to the Company: the Company must not, directly or indirectly, pay any portion of its income or transfer any of its assets, regardless of how the income or asset was derived, to any Incorporator or any Person who is a Member Company or Director, or person appointing a Director, except: as reasonable: remuneration for goods delivered or services rendered to, or at the direction of, the Company; or payment of, or reimbursement for, expenses incurred to advance the main objects of the Company; 10

11 as a payment of an amount due and payable by the Company in terms of a bona fide agreement between the Company and that person or another; as a payment in respect of any rights of that person, to the extent that such rights are administered by the Company in order to advance the main object of the Company; or in respect of any binding legal obligation on the Company; despite any provision in any law or agreement to the contrary, upon the winding-up or dissolution of the Company: no past or present Member Company or Director, or person appointing a Director, is entitled to any part of the net value of the Company after its obligations and liabilities have been satisfied; and the entire net value of the Company must be distributed to one or more non-profit companies, registered external non-profit companies carrying on activities within the Republic of South Africa, voluntary associations or non-profit trusts: having objects similar to the Company s main objects; and as determined: in terms of the MOI; by the Member Companies or the Board, at or immediately before the time of the Company s dissolution; or by the court, if the MOI, the Member Companies or the Board fail to make such a determination; the Commission may apply to the court, on behalf of the Company, for a determination contemplated in clause if the Company has: 11

12 no remaining Member Companies or Board; and failed to: make a determination contemplated in clause ; or apply to the court for such a determination; no Member Company may directly or indirectly have any personal or private interest in the Company; and each Voting Member Company undertakes to contribute to the assets of the Company an amount determined by the Board (but not exceeding R100, (one hundred thousand rand)), in the event of the Company being wound up, either while it is a Member Company or within 1 (one) year thereafter, for the purpose of payment of the debts and liabilities of the Company contracted before it ceased to be a Member Company, and for the payment of the costs, charges and expenses of the winding-up, and for the adjustment of the rights of the contributories amongst themselves. No such contribution shall be payable by Non-Voting Member Companies Notwithstanding the omission from this MOI of any provision to that effect, the Company may do anything which the Companies Act empowers a company to do if so authorised by its MOI. 7. AMENDMENTS TO THE MOI 7.1. The Board is empowered to correct errors in this MOI substantiated as such from objective evidence or which are self evident errors (including, but without limitation eiusdem generis, spelling, punctuation, reference, grammar or similar defects) in accordance with section 17(1) of the Companies Act. All other amendments to the MOI shall be effected in accordance with section 16(1) of the Companies Act The Board shall publish a notice of any correction effected by the Board or amendment effected in accordance with section 16(1) of the Companies Act on the Company s web site or by any other method of publication as may be determined by the Board, and shall file the notice of amendment to the MOI with the Commission Any provision of the MOI, or an agreement is void to the extent that it is inconsistent with, or purports to limit, set aside or negate the effect of section 159 of the Companies Act. 12

13 8. THE MAKING OF RULES The Board shall not be entitled to make Rules. 9. FINANCIAL YEAR The financial year of the Company shall commence on 1 January and terminate on 31 December in each year. 10. ACCOUNTING RECORDS AND FINANCIAL STATEMENTS The Board shall cause to be kept such Accounting Records as are prescribed by the Companies Act, in order to fairly present the state of affairs and business of the Company and to explain the transactions and financial position of its trade or business. The Accounting Records shall be accessible from the Company s Registered Office or at such other place or places as the Board may deem fit The Company shall prepare its Financial Statements in accordance with the provisions prescribed by the Companies Act and the International Financial Reporting Standards or, if it qualifies, in accordance with the International Financial Reporting Standards for Small and Medium Enterprises, as adopted by the International Accounting Standards Board or its successor body, and shall have its annual Financial Statements audited The Board shall from time to time determine at what times and places (save in the case of Accounting Records which shall be accessible from the Registered Office) and under what conditions, subject to the requirements of the regulations published under the Companies Act, the documents which the Member Companies are entitled to inspect and take copies of (being the MOI, amendments to the MOI, records in respect of Directors, Accounting Records required to be maintained by the Company, reports to annual General Meetings, annual Financial Statements, notices and minutes of General Meetings, communications generally to Member Companies and the Member Companies Register), shall be open to inspection by Member Companies Apart from the Board or Member Companies, no other Person shall be entitled to inspect any of the documents of the Company unless expressly authorised by the Board or by Ordinary Resolution The Company shall notify the Member Companies of the publication of any annual Financial Statements of the Company, setting out the steps required to obtain a copy of those annual Financial Statements. If a Member Company demands a copy of the annual Financial 13

14 Statements, the Company shall make same available to such Member Company free of charge. 11. APPOINTMENT OF AUDITOR The Auditor shall be appointed by the Voting Member Companies in General Meeting and such Auditor may, if necessary, be removed, and replaced, in accordance with the relevant provisions of the Companies Act If an annual General Meeting does not appoint or re-appoint an Auditor, the Board must fill the vacancy in the office in terms of the procedure contemplated in section 91 of the Companies Act within 40 (forty) Business Days after the date of an annual General Meeting If a vacancy arises in the office of Auditor, the Board: must appoint a new Auditor within 40 (forty) Business Days, if there was only 1 (one) incumbent Auditor; and may appoint a new Auditor at any time, if there was more than 1 (one) incumbent, but while any such vacancy continues, the surviving or continuing Auditor may act as auditor of the Company. If, by comparison with the membership of a firm at the time of its latest appointment, less than ½ (one half) of the members remain after a change in the composition of the members, that change constitutes the resignation of the firm as Auditor of the Company, giving rise to a vacancy The provisions of clauses 27.4 and 27.5 apply mutatis mutandis to the Auditor. 12. MEMBERSHIP: GENERAL, CATEGORIES, QUALIFICATION, CONTRIBUTION, RIGHTS AND TERMINATION General The minimum number of Voting Member Companies shall be 3 (three) and the maximum number of Voting Member Companies shall be unlimited. There shall be no restriction of the minimum or maximum number of Non-Voting Members If, at any time, the number of Voting Member Companies remaining should fall below the minimum stipulated above, the remaining Member Companies shall determine whether or not it shall be in the best interest of the Company to be wound up, having due regard to 14

15 Industry best practice and the remaining members of the Industry which the Company represents The Company shall from time to time keep a Register of Member Companies at its Registered Office No Member Company shall be entitled to transfer his Membership to any other person, or to alienate or exercise any Rights vested in or controlled by such Member Company (as required to be so vested or controlled) without the prior written authorisation of the Board. Categories Membership of the Company shall be restricted to companies and other enterprises forming part of the Industry, including such as may be involved and/or associated with the provision of products and services to the Industry and shall be constituted as follows: Voting Member Companies Voting Membership shall be granted to those Member Companies who have subscribed to this MOI in their capacity as Incorporators as well as to those Member Companies who were or may from time to time be admitted as Voting Member Companies by the Nominations Committee. A Member Company shall be admitted as a Voting Member Company by the Nominations Committee at its discretion, and on condition that each such potential Voting Member Company satisfies the following eligibility criteria: such Member Company must be an institution duly established, registered, and authorised in terms of the Applicable Legislation, as a provider within the Republic of one or more of the following Industry related financial services and products: investment management, involving the selection of securities and portfolio construction in respect of primary securities (including stocks, bonds, money market instruments and derivatives); management of Collective Investment Schemes; Long-term insurers and/or re-insurers; Linked Investment Service Providers; 15

16 Multi-managers; and/or such other financial products or services as may from time to time be determined for this purpose by the Nominations Committee, at its sole discretion; such Member Company must be duly licensed to conduct its business and activities by the Financial Services Board, or by such other regulatory body established in terms of the Applicable Legislation, as may be appropriate in respect of the Member Company concerned; such Member Company shall have a substantial size and scale of savings, investment, long-term insurance or other business and accordingly each such Member Company must satisfy the minimum eligibility threshold as may be determined by the Nominations Committee from time to time in respect of the type of business concerned. By way of example only, it may be required in respect of any prospective Member Company that such Member Company s assets under management should be in excess of R5 billion; and notwithstanding anything to the contrary contained herein, the holding company of a Conglomerate Group may, at its request, be permitted by the Nominations Committee to apply for Voting Membership, notwithstanding that such holding company may not itself be an authorised provider of financial products and services, and subject thereto that only one company within a Conglomerate Group shall be permitted to apply for Voting Membership Non-Voting Member Companies Non-Voting Membership shall comprise of such companies (or other enterprises, if any) as the Nominations Committee may from time to time resolve to admit as Non-Voting Member Companies, on condition that such Non-Voting Member Companies must be institutions which (subject to clause ) are duly established in the Republic, and which carry on business as registered and authorised providers of one or more of the financial products and services referred to under clauses to above. 16

17 Non-Voting Member Companies shall be subject to the same eligibility criteria mutatis mutandis as are set out in clause above, save and except that the size, scale and nature of the business of a Non-Voting Member Company may be less substantial than that applicable to a Voting Member Company, and consequently subject to a lower eligibility threshold in relation to the type of business concerned, as may be determined by the Nominations Committee from time to time, at its sole discretion Non-Voting Member Companies may include (but shall not be restricted to): foreign-based institutions duly registered with and licensed by the Financial Services Board, and which carry on business in the Republic as Foreign Collective Investment Schemes and/or as the duly registered and authorised providers of one or more of the other financial products and services as are referred to under clause above; and such companies (and other enterprises, if any) as the Nominations Committee may from time to time resolve to admit to Non-Voting Membership, provided that each potential Non-Voting Member Company must be an institution, partnership; individual or juristic person, or other entity, involved in a business activity which is complementary and ancillary to one or more of the services and products referred to under clause above. By way of example only, potential Non-Voting Member Companies may include (but not be limited to) actuarial and investment consultants; accountants, lawyers, information providers, Industry service providers, Industry switches, and software firms Eligibility for Non-Voting Membership may also be subject to such further eligibility criteria, including a minimum financial threshold in relation to the type of business concerned, as may be determined 17

18 by the Nominations Committee from time to time at its sole discretion A Non-Voting Member Company shall have such Rights and privileges, and be subject to such obligations, as are determined by the Nominations Committee from time to time, and shall be eligible (without further application) for election to Voting Membership by the Nominations Committee at its discretion Notwithstanding clause the Rights attaching to each category of Membership may be amended from time to time by Ordinary Resolution of the Voting Member Companies, passed at a duly convened and quorate General Meeting. Any such Ordinary Resolution shall confer upon the Member Companies such rights, and impose such duties, as may be stipulated from time to time with reference thereto by Ordinary Resolution. Qualification Every application for Membership shall be made to the company secretary of the Company or any other Prescribed Officer who may be appointed by the Board from time to time to fulfil such function (which shall include the evaluation and acceptance of applications for Membership, as contemplated in this clause 12.6 and clause 12.7 and 12.8 below) ( the Designated Appointee ). Such application shall be in writing in such form as the Designated Appointee may prescribe from time to time. On such application being accepted by the Designated Appointee, it shall advise the applicant in writing that its Membership has been approved, in a form signed by the Designated Appointee and countersigned by a member of the Nominations Committee or any other duly authorised officer. Should any application be approved as aforesaid at any time other than at a duly constituted Nominations Committee meeting, the application shall be duly ratified by the Nominations Committee at their next meeting The Nominations Committee may from time to time stipulate any further qualifications or admission requirements as it may deem appropriate in respect of admission to Membership in all or any particular category, including the requirement of a written undertaking to submit to a code of conduct and to this MOI (including, for the avoidance of doubt, the provisions contained in clauses 12.9 to below with respect to the financial obligations of Member Companies). 18

19 12.8. For the avoidance of doubt, it is further stipulated that the Designated Appointee (after consultation with the Nominations Committee) shall be entitled to decline to admit a particular applicant for Membership, notwithstanding such applicant s ability and/or willingness to fulfil the usual qualifications and requirements defining eligibility in respect of the relevant Membership category. The Designated Appointee and the Nominations Committee shall therefore have a complete and unfettered discretion with respect to the admission of potential Member Companies, and shall be under no obligation to furnish reasons for, or to otherwise motivate its decisions with respect to the admission or refusal of Membership, as aforesaid. Contributions The Board shall be entitled to determine, and to require the payment by Member Companies of, such annual or other periodic levy or contribution ( Contribution ) as the Board may deem necessary and desirable from time to time, in order to make due provision for the anticipated operational costs and other budgeted financial commitments of the Company (including its need to establish reasonable and prudent reserves and provisions) In determining such Contribution, the Board shall distinguish between Voting Member Companies and Non-Voting Member Companies, as well as between Member Companies of the same category, either on the basis of size or turnover, or on such other basis as the Board may deem fair and equitable, including but not limited to the Member Companies assets under management, governance structures and Industry participation (as well as such additional criteria as set out in clauses and above). The Board shall also be entitled to impose penalty interest not exceeding 2% above the applicable Prime Interest Rate from time to time, reckoned on the amount unpaid on due date throughout the period of any default Should any Member Company fail or refuse to remit full payment of its Contribution within the time period stipulated by the Board, and remain in default for a period of more than 60 (sixty) days following the receipt of a written notice requiring the payment of such Contribution, the Board shall be entitled to suspend or terminate the Membership of such defaulting Member Company (as it may deem appropriate) in accordance with clause 12.14, provided that the Board shall also be entitled at its discretion to condone or compromise any such default and to reinstate the Membership of the Member Company concerned The termination or suspension of Membership for any reason, including resignation, shall not ipso facto release a Member Company from liability for payment of any arrear Contributions which became due for payment prior to the date of such termination or suspension, unless 19

20 the Member Company submitted notice of its resignation as a Member Company in Writing to the Company not more than 60 (sixty) days after the date upon which such Contribution became due. Rights In addition to rights conferred on it by the Companies Act, Membership of the Company shall confer upon each Member Company: the right to inspect, and to receive copies of, the annual Financial Statements of the Company, in accordance with clause 10.3 above; and the right to receive notice of and to attend General Meetings in accordance with the provisions of this MOI, provided that the right to speak and vote at any such Meetings (otherwise than by invitation) shall be restricted to Voting Member Companies. Termination Notwithstanding anything to the contrary herein contained or implied, Membership of the Company may be suspended or terminated at any time by the Nominations Committee, in the event of: a Member Company ceasing to actively carry on the business which rendered such Member Company eligible to become a Member Company in the category concerned; or failing and/or refusing, upon written request therefor, to provide proof to the satisfaction of the Nominations Committee as to such Member Company s continued compliance with the other eligibility criteria applicable to its Membership; or a Member Company: being convicted of any criminal offence involving dishonesty; or having been found guilty of committing any other material contravention of the Applicable Legislation; or being guilty of any other conduct which in the opinion of the Nominations Committee might be seen to reflect adversely upon the Industry or upon such Member Company s continued fitness and suitability to be a Member Company; or 20

21 failing and/or refusing to remit payment of its Contribution, within the time and in the manner contemplated by clause above; or the Nominations Committee, in its sole and absolute discretion, considering that such suspension or termination of Membership is, for any other reason, in the best interests of the Company and its Member Companies Before adopting any Resolution to suspend or terminate Membership as aforesaid, the Nominations Committee shall afford the Member Company concerned an opportunity to make representations (either verbally or in writing, as the Nominations Committee may deem appropriate) with regard to the issues affecting the continuance of its Membership Should the Nominations Committee in its sole discretion deem it appropriate, the Nominations Committee may furnish reasons for its decisions with respect to the termination or suspension of Membership, but shall be under no express or implied obligation to furnish such reasons or to motivate its decisions with respect to the suspension or termination of Membership Membership of the Company shall be terminated immediately: upon the voluntary dissolution or final liquidation of any Member Company which is a company or other juristic person or corporate body; or upon receipt by the Company of the resignation in Writing of the Member Company concerned, which resignation shall take effect at the end of the calendar month succeeding the month in which such notice is received by the Company Unless the matters in issue have been otherwise finally disposed of in accordance with the procedures prescribed by the Company s code of conduct, the Nominations Committee may at its sole discretion permit a Member Company whose Membership has been suspended or terminated to appeal the Nominations Committee s decision, in which event such appeal shall be considered and finally determined by a Senior Counsel agreed between the Nominations Committee and the relevant Member Company, or failing such agreement being reached within 7 (seven) days of either party calling for such agreement, by a Senior Counsel nominated for this purpose by the Chairperson of the Cape Bar Council, or its legal successor, at the request of either party. The procedure to be adopted in any such appeal shall be at the discretion of the Senior Counsel appointed as aforesaid, whose findings and decisions (both substantively and procedurally) shall be final and binding on the parties concerned. 21

22 For the avoidance of doubt, nothing herein contained or implied shall preclude the Nominations Committee, in its sole discretion, from extending any period of grace to allow for the mitigation or rectification of the matter constituting the grounds for suspension or termination of Membership, to such extent, and for such reasons and upon such conditions, as the Nominations Committee may deem appropriate in the circumstances A Member Company whose Membership has terminated shall, with effect from the date of such termination, have no further recourse or claims whatsoever against the Company in respect of any exploitation or non-exploitation of its Rights taking place after such termination. 13. GENERAL MEETINGS AND ROUND ROBIN RESOLUTIONS The Company shall convene an annual General Meeting once in every calendar year, but no more than 15 (fifteen) months after the date of the previous annual General Meeting, or within an extended time allowed by the Companies Tribunal, on good cause shown, which must, at a minimum, provide for the following business to be transacted: presentation of: the Annual report; Audited Financial Statements for the immediately preceding financial year; election of the Nominations Committee, to the extent required by the Companies Act or the MOI; confirmation of the appointment of the Board by the Nominations Committee, to the extent required by the Companies Act or the MOI; appointment of an Auditor for the ensuing year; any matters raised for discussion by Member Companies, with or without advance notice to the Company The Company shall, as determined by the Board, either: hold a General Meeting in order to consider one or more resolutions; or 22

23 as regards such resolution/s that could be voted on at a General Meeting, other than an annual General Meeting, instead require them to be dealt with by Round Robin Resolution. Within 10 (ten) Business Days after a Round Robin Resolution is adopted, the Company must Deliver a statement describing the results of the vote, consent process, or election to every Member Company who was entitled to vote on or consent to the Round Robin Resolution The Company must hold a General Meeting or put the proposed resolution by way of a Round Robin Resolution: at any time that the Board is required by the Companies Act or the MOI to refer a matter to Voting Member Companies for decision; or whenever required in terms of section 70(3) to fill a vacancy on the Board, where such vacancy gives rise to the number of Directors falling below the minimum number of directors stipulated in clause Each resolution shall be expressed with sufficient clarity and specificity and accompanied by sufficient information and/or explanatory material to enable a Voting Member Company to determine whether to participate in the General Meeting, if applicable, and to seek to influence the outcome of the vote on the resolution. Once a resolution has been approved, it may not be challenged or impugned on the ground that it did not comply with the aforegoing The Board or any Voting Member Company, may, whenever he/she/it thinks fit, convene a General Meeting or put the proposed resolution by way of a Round Robin Resolution. A General Meeting must be convened or the Board must put the proposed resolution by way of a Round Robin Resolution if one or more Written and signed demands for such a General Meeting or Round Robin Resolution is/are delivered to the Company, and: each such demand describes the specific purpose for which the General Meeting is proposed; and in aggregate, demands for substantially the same purpose are made and signed by the Voting Member Companies who, at the earliest time specified in any of those demands, hold at least 10% (ten percent) of the Voting Rights entitled to be exercised in relation to the matter proposed to be considered at the General Meeting. 23

24 13.6. A Round Robin Resolution, will be passed if signed by the Voting Member Companies entitled to exercise sufficient voting rights for it to have been adopted as an Ordinary or Special Resolution, as the case may be, at a properly constituted General Meeting A General Meeting shall be called by at least 15 (fifteen) Business Days notice Delivered by the Company (and for this purpose clause 30.3 shall not apply) to all Voting Member Companies or Member Companies otherwise entitled to receive notice The Company may call a General Meeting with less notice than required by clause 13.7, but such General Meeting may proceed only if every Person who is entitled to exercise Voting Rights in respect of any item on the meeting agenda: is Present at the General Meeting; and votes to waive the required minimum notice of the General Meeting A Voting Member Company, who is Present at a General Meeting: is regarded as having received or waived notice of the General Meeting; has a right to: allege a Material defect in the form of notice for a particular item on the agenda for the General Meeting; and participate in the determination whether to waive the requirements for notice, if at least the required minimum notice was given, or to ratify a defective notice; and except to the extent set out in clause is regarded to have waived any right based on an actual or alleged Material defect in the notice of the General Meeting A notice of a General Meeting must be in writing, in plain language and must include: the date, time and place for the Meeting, and the Record Date for the Meeting; the general purpose of the Meeting, and any specific purpose contemplated in clause 13.1, if applicable; 24

25 in the case of an annual General Meeting, a summarised form of the Financial Statements to be presented and directions for obtaining a copy of the complete annual Financial Statements for the preceding financial year; a copy of any proposed resolution of which the Company has received notice, and which is to be considered at the General Meeting, and a notice of the percentage of Voting Rights that will be required for that resolution to be adopted; a reasonably prominent statement that: a Voting Company shall be entitled to appoint a proxy to attend, participate in, speak and vote at the General Meeting in the place of the Voting Member Company, or give or withhold written consent on behalf of the Voting Member Company to a decision by Round Robin Resolution; a proxy need not be a Member Company; a Voting Member Company may not appoint more than 1 (one) proxy to exercise Voting Rights held by that Voting Member Company at any General Meeting; the proxy may not delegate the authority granted to him/her/it as proxy; each participant in a General Meeting is required to furnish satisfactory identification in terms of section 63(1) of the Companies Act in order to reasonably satisfy the Person presiding at the General Meeting that such participant is entitled to participate in and (if applicable) vote at such meeting; participation in the General Meeting by way of Electronic Communication is available, and: provide any necessary information to enable Voting Member Companies their proxies to access the available medium or means of Electronic Communication; and 25

26 advise that access to the medium or means of Electronic Communication is at the expense of the Voting Member Company or proxy, except to the extent that the Company determines otherwise A General Meeting may proceed notwithstanding a Material defect in the giving of the notice, subject to clause 13.12, only if every Person who is entitled to exercise Voting Rights in respect of each item on the agenda of the General Meeting is present at the General Meeting and votes to approve the ratification of the defective notice If a Material defect in the form or manner of giving notice of a General Meeting relates only to one or more particular matters on the agenda for the General Meeting: any such matter may be severed from the agenda, and the notice remains valid with respect to any remaining matters on the agenda; and the General Meeting may proceed to consider a severed matter, if the defective notice in respect of that matter has been ratified An immaterial defect in the form or manner of Delivering notice of a General Meeting, or an accidental or inadvertent failure in the Delivery of the notice to any particular Member Company to whom it was addressed if the Company elects to do so, does not invalidate any action taken at the General Meeting Business may be transacted at any General Meeting only while a quorum is present The quorum for the General Meeting shall be 7 (seven) Voting Member Companies, present in person or by proxy A matter to be decided at the General Meeting may not begin to be considered unless sufficient Persons are present at the General Meeting to exercise, in aggregate, at least 25% (twenty five percent) of all of the Voting Rights that are entitled to be exercised on that matter at the time the matter is called on the agenda for the General Meeting If within 60 (sixty) minutes from the time appointed for the General Meeting to commence, a quorum is not present: the chairperson shall be entitled, but not obliged, to postpone the time appointed for the General Meeting to commence by another 30 (thirty) minutes; or 26

27 subject to clause 13.20, the General Meeting shall be postponed, without motion, vote or further notice, for 1 (one) week to the same day in the next week or, if that day be a public holiday, to the next succeeding day which is not a public holiday, and if at such adjourned General Meeting a quorum is not present within 60 (sixty) minutes from the time appointed for the General Meeting then, the Person/s entitled to vote who are Present shall be deemed to be the requisite quorum A General Meeting, or the consideration of any matter being debated at the General Meeting, may be adjourned from time to time without further notice on a motion supported by Persons entitled to exercise, in aggregate, a majority of the Voting Rights: held by all of the Persons who are present at the General Meeting at the time; and that are entitled to be exercised on at least one matter remaining on the agenda of the General Meeting, or on the matter under debate, as the case may be. Such adjournment may be either to a fixed time and place or until further notice (in which latter case a further notice shall be Delivered to Member Companies) as agreed at the General Meeting A General Meeting may not be adjourned beyond the earlier of: the date that is 120 (one hundred and twenty) Business Days after the Record Date; or the date that is 60 (sixty) Business Days after the date on which the adjournment occurred No further notice is required to be Delivered by the Company of a General Meeting that is postponed or adjourned as contemplated in clause 13.17, unless the location for the General Meeting is different from: the location of the postponed or adjourned General Meeting; or a location announced at the time of adjournment, in the case of an adjourned General Meeting If a quorum has been established for a General Meeting or for a matter to be considered at a General Meeting, and such an amount of Member Companies subsequently departs from 27