Summary
This 8-K filing from CRH Public Limited Company (CRH) primarily serves as a "Description of Ordinary Shares" for investors, detailing the rights and structure associated with its equity. The document clarifies the company's authorized share capital, including preference, ordinary, and income shares, and explains the historical purpose and current irrelevance of income shares due to changes in Irish tax legislation. It outlines dividend distribution procedures, noting that preference shares rank higher than ordinary and income shares. The filing also covers shareholder meeting mechanics, voting rights for different share classes, and disclosure requirements for significant shareholdings to ensure transparency.
Key Highlights
- 1CRH's authorized share capital includes preference, ordinary, and income shares, with a specific breakdown of their nominal values and quantities.
- 2Income Shares, once used for dividend tax planning, are now largely defunct due to legislative changes and are traded inseparably with Ordinary Shares, carrying no voting rights.
- 3Dividends are declared by ordinary resolution for final dividends and by directors for interim dividends, with preference shares having priority over ordinary and income shares.
- 4Ordinary shareholders are entitled to one vote per share, while preference shareholders only vote under specific circumstances (e.g., arrears in dividends).
- 5A quorum for general meetings requires at least five voting shareholders, with resolutions passed by a simple majority, except for special resolutions requiring a 75% affirmative vote.
- 6Shareholders must disclose their interest in shares upon company request, or risk losing voting rights.
- 7In liquidation, ordinary shareholders are entitled to a distribution of net assets after preference shareholders are satisfied and preference dividends are paid.
Frequently Asked Questions
Income Shares were created to give shareholders a choice in how they received dividends, linked to potential tax benefits. However, due to changes in Irish tax legislation, dividends no longer carry a tax credit, making the election to receive dividends on Income Shares irrelevant. They are now essentially tied to Ordinary Shares, traded together, and carry no voting rights.
Holders of Ordinary Shares are entitled to one vote per share. Holders of Preference Shares generally do not have voting rights unless dividends on their shares are in arrears for six months. Special resolutions require a 75% majority vote.
Final dividends can be declared by ordinary resolution, while interim dividends can be declared by the directors. A key point is that the 5% Cumulative Preference Shares and 7% 'A' Cumulative Preference Shares rank for fixed dividends in priority to the Ordinary and Income Shares.
Irish company law generally requires that new shares issued for cash be offered to existing shareholders pro rata. However, CRH's shareholders can authorize directors, via special resolution, to issue shares without this pre-emptive offer for limited periods (up to five years). This authority is renewed annually, as seen with the authorization expiring in August 2011.