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Section 184 of The Companies Act No. 17 of 2015: Members’ approval required for payment in connection with share transfer

    

(1) A person may not make a payment for loss of office to a director of a company in connection with a transfer of shares in the company, or in a subsidiary of the company, resulting from a takeover bid, unless the payment has been approved by a resolution of the relevant shareholders.
(2) The relevant shareholders are the holders of the shares to which the bid relates and any holders of shares of the same class as any of those shares.
(3) A resolution approving a payment to which this section applies can be passed only if a memorandum setting out particulars of the proposed payment (including its amount) is made available to the members of the company whose approval is sought-—
(a) in the case of a written resolution—by being sent or submitted to every eligible member at or before the time at which the proposed resolution is sent or submitted to the director;
(b) in the case of a resolution at a meeting —by being made available for inspection by the members both—
(i) at the company's registered office for not less than fourteen days ending with the day before the date of the meeting; and (ii) at the meeting itself.
(4) Neither the person making the offer, nor any associate of that person, is entitled to vote on the resolution, but—
(a) if the resolution is proposed as a written resolution, they are entitled (if they would otherwise be so entitled) to be sent a copy of it; and
(b) at any meeting to consider the resolution they are entitled, if they would otherwise be so entitled, to be given notice of the meeting, to attend and speak and if present, either in person or by proxy, to count towards the quorum.
(5) If at a meeting to consider the resolution a quorum is not present, and after the meeting has been adjourned to a later date a quorum is again not present, the payment is, for the purposes of this section, taken to have been approved.
(6) An approval is not required to be obtained under this section from shareholders in a body corporate that—
(a) is not a company registered under this Act; or
(b) is a wholly-owned subsidiary of another body corporate.
(7) A payment made in accordance with an arrangement—
(a) entered into as part of the agreement for the relevant transfer and within one year before or two years after the date that agreement is entered into; and
(b) to which the company whose shares are the subject of the bid, or any person to whom the transfer is made, is privy, is presumed, except in so far as the contrary is shown, to be a payment to which this section applies

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Disclaimer: This document is not to be taken as legal advise.

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