POWERSPEED Electrical Limited (PEL) will seek to adopt a share option scheme involving 10% of the company’s shares for the purpose of employees and directors at its annual general meeting next month.
BY BUSINESS REPORTER
In a notice issued yesterday announcing the AGM slated for March 5, 2020, the company said that 38 million shares would be put up for the share option scheme.
“That 10% of the issued share capital, amounting to 38 000 000 shares of the company be placed under the control of the directors, who shall have the authority to issue them to employees and directors for the purpose of a staff share option scheme,” PEL said.
“The ZSE [Zimbabwe Stock Exchange] approved share option scheme rules will be made available for inspection at least 14 days prior to the date of AGM.”
Typically, under a share option scheme, an employer grants to an employee an option to buy a specified number of shares at some future time at a price fixed on the date on which the option is granted.
PEL will seek to approve with or without amendments, the authorisation in advance, in terms of section 79 of the Companies Act (Chapter 24:03) and Article 52 of the company’s Articles of Association, the purchase of the company’s own ordinary shares, which: “In aggregate in any one financial year, shall not exceed 10% (ten percent) of the company’s issued ordinary share capital, for the company cancelling them, subject to the availability of sufficient revenue reserves to undertake the transfer to a capital Redemption Reserve Fund as required by the Companies Act (Chapter 24:03); value of such purchased ordinary shares shall not exceed the net asset value of the company.”
And: “The maximum price at which such ordinary shares may be acquired will be not more than 5% above the weighted average of the market price at which such ordinary shares are traded on the Zimbabwe Stock Exchange, as determined over the five business days immediately preceding the date of purchase of such ordinary shares by the company.”
A Press announcement will also be published as soon as the company has acquired ordinary shares constituting, on cumulative basis in the period between annual general meetings, 3% of the ordinary shares prior to acquisition.
PEL will also seek authority to pay the transaction costs for shareholders who, in terms of the share buyback scheme, hold less than 1 000 shares.
“It will be recorded that in terms of the Companies Act and the regulations of the Zimbabwe Stock Exchange, it is the intention of the directors of the company to utilise this authority at a future date provided the cash resources of the company are in excess of its requirements and the transaction is considered to be in the best interest of shareholders generally,” PEL said.
“In considering cash availability, the directors will take account of inter alia, the long-term cash needs of the company, and will ensure the company will remain solvent after the re-purchase.”