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Proposal To Change The GTFC Share Equity Part Two

By: Bill Osborne
Date: 16/11/2001

THE following notices have been sent out to shareholders and one should take particular note regarding the dispensation of rule 89 of the Companies Act.

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Grimsby Town Football Club plc

30th October 2001

Dear Shareholder,

Following my recent letter regarding the Board's proposals to unlock the company's unissued share capital I am enclosing a Notice convening an Extraordinary General Meeting of the company to be held on Monday, 20 November 2001.

There are three resolutions on the agenda for the meeting which are necessary for the two options as set out in my previous letter. The two options for consideration by the shareholders being as follows:

Option 1

Your Board of Directors be empowered to allot shares generally to whoever applies for shares by seeking authority to allot shares and seeking authority to disapply the preemption rights under Section 89 of the Companies Act 1985. (Vote for resolutions I and 2).

Option 2

Authority be sought from the shareholders for a rights issue on a 1 for 1 basis to include all of the relevant resolutions for underwriting the issue to account for any unallocated shares from shareholders who do not wish to take up their rights and untraceable shareholders.

These proposals would also include resolutions relevant to waiving obligations under Rule 9 of the City Code on Takeovers & Mergers. (Vote for resolutions 1, 2 and 3).

As I indicated in my previous letter we anticipate that the costs of the second option would be approximately £30,000. Resolution number 3 is drafted in such a manner that seeks the shareholders, approval to take whatever steps are necessary to place formal proposals before the shareholders in respect of a rights issue, which would be at a further Extraordinary General Meeting

We would estimate that the cost of option 1 would be approximately £1,000 as we would not be required to appoint Independent Reporting Accountants and Specialist Advisors to prepare the prospectus, and other relevant documentation, that would be required for the second option.

We therefore, feel that it is appropriate to seek the shareholders approval before committing the club to these costs.

For your information I would remind you that the majority for passing an Ordinary Resolution is a simple majority of the shareholders voting at the meeting either in person or by way of proxy. A Special Resolution requires a majority of at least 75% of the shareholders voting at the meeting either in person or by way of proxy.

In order that all shareholders can express their views on this matter, I am enclosing a proxy form for those shareholders who will not be attending the meeting. This form allows you to appoint the Chairman of the meeting as your proxy or such other person, as you wish. The proxy form enables you to indicate whether you wish to vote for or against the three resolutions and I would confirm that as Chairman of the meeting I will be bound to vote, as instructed by any shareholders who appoint me as their proxy for the purpose of this meeting.

Although proxy forms can be lodged at the registered office of the company up to 48 hours prior to the meeting, I would urge all shareholders wishing to appoint proxies who will not be attending the meeting to return their proxy forms to the company's registrars as soon as possible in the prepaid envelope enclosed in order to assist with the organisation of the meeting.

Unfortunately some of my previous letters did not include a brief summary of the relevant issues from both Section 89 of the Companies Act 1985 and Rule 9 of the City Code on Takeovers & Mergers. I am, therefore, enclosing a copy with this letter to ensure that all shareholders have been provided with this information.

As I stated before I hope that all shareholders will support their Board of Directors with these proposals and I look forward to seeing as many shareholders as possible at the meeting.

Yours sincerely





NOTICE IS HERBY GIVEN that an Extraordinary General Meeting of the company will be held at The Inn On The Park, Blundell Park, Cleethorpes on Monday, 26 November 2001 at 10.30 a.m. to consider and if thought fit pass the following resolutions which will be proposed as an ordinary Resolution and Special Resolutions:


1 .THAT the Directors be and are unconditionally authorised for the purpose of Section 80 of the Companies Act 1985 generally to allot at any time during the period of five years from the date of adoption of this resolution any relevant securities (as defined in Section 80(2) of the Companies Act 1985) of the company up to an amount equal to the amount of the authorised share capital of the company from time to time and unissued during the period of such authority.


2. THAT the Directors of the company be empowered to allot equity securities as defined pursuant to the existing authority free of any pre?emption rights as if Section 89 of the Companies Act 1985 did not apply.

3. THAT the Directors be hereby authorised to proceed with all arrangements reasonably necessary in their opinion for the issue of relevant equity securities free of restriction in connection with a rights issue hereby authorised in favour of ordinary shareholders in a proportion of one to one.


I. Fleming
Company Secretary

30th October 2001 Blundell Park Cleethorpes

A member ' entitled to attend, and vote at the Meeting may appoint a proxy to attend and vote on their behalf. Such proxy need not be a member of the company. To be valid, proxies must be lodged at the Registered Office of the company not later than 48 hours prior to the time appointed for the Meeting.



At present the Directors cannot issue shares or relevant securities unless authorised by the company at a General Meeting. Authority may be given for a particular issue of shares or for the issue of shares generally and may be made either unconditionally or subject to certain conditions. If the Directors are authorised to issue shares generally this power will expire 5 years from the date on which the resolution is passed, giving the Directors such authority. The authority to issue shares may be revoked or varied by the company during this 5 year period by an ordinary resolution.

By Section 89 of the Companies Act a company cannot allot any shares on any terms unless it has made an offer to all existing shareholders of the company to allot shares to them in proportion to the shares that they already hold and on the same or more favourable terms than it is proposing to offer shares to any other party who is interested in subscribing for shares. In order to issue shares to any applicant who is not already a shareholder and to avoid the necessity of making the offer to the existing shareholders first, the Board of Directors are required to seek exemption from Section 89. This exemption will require a special resolution, i.e. a majority of 75% of the shareholders attending and voting either personally or by way of proxy at the Extraordinary General Meeting.


Where a shareholder either individually or acting together with other shareholders who are connected acquires 30% or more of the voting rights of the company or where such people who already hold in excess of 30% of the voting rights of the company acquire additional shares which increases their percentage of the voting rights of the company, they must make an offer to all of the other shareholders of the company to acquire their shares at a price that is determined by the Takeover Panel. It is a requirement that a director who allots shares as a result of which a purchaser would be required to make an offer under this provision ensures that it is a condition of the allotment of the shares that the purchaser undertakes to comply with their obligations.

Whether or not a shareholder or shareholders are acting in concert or are connected with other shareholders for the purposes of this rule is a matter which can only be judged from time to time and it is also a matter which other interested shareholders may wish to have referred to the Takeover Panel for their consideration.

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