Summary of new Memorandum of Incorporation

Pick n Pay Holdings Limited

(the “Company”)

 

This schedule is intended only as a high level summary of the salient features of the proposed new Memorandum of Incorporation (MOI) which, in the Company’s view, might be thought to be material, to assist shareholders to make a considered assessment in deciding how to vote.

In preparing this summary, the Company has not considered which, if any, of the changes made by the proposed new MOI to the existing MOI might be considered by shareholders to be adverse as contemplated in Section 164 of the Companies Act. Shareholders should conduct their own detailed analysis and comparison of the Company’s existing MOI and the proposed new MOI.

The existing MOI and the proposed new MOI can be found on the Company’s website at www.picknpay-ir.co.za.

Capitalised terms in this schedule shall have the meanings assigned to them in the proposed new MOI.

SUMMARY OF SALIENT FEATURES OF THE PROPOSED NEW MOI

The proposed new MOI brings the Company’s incorporation documents into harmony with the provisions of the Companies Act and the Listings Requirements. The Company also used this opportunity to do a thorough review of the contents of the existing MOI and to update, amend or omit parts thereof as necessary, unrelated to the introduction of the Companies Act.

Clause numbers

 

Summary 

 

Clause 4 

 

The Company has the powers and capacity of an Individual provided that for so long as the Company controls Pick n Pay Stores Limited (“Pick n Pay“), the Company shall not undertake any business or activity other than investing in securities in Pick n Pay, but any amount of cash surplus to the Company’s requirements may be invested in money market or similar securities, or lent, at a fair market interest rate, to Pick n Pay for the purposes of its business. This proviso may only be altered by means of a resolution of the Company approved by the Holders of 90% (ninety percent) of the Voting Rights and a resolution of Pick n Pay approved by the holders of 90% (ninety percent) of the voting rights in Pick n Pay (other than the Company). The name of the Company has been followed by the expression “RF” as a result of this restriction.

Subject to the limitations set out above, the Company may do anything which the Companies Act empowers a company to do if so authorised by its MOI, notwithstanding any omission from this MOI to that effect. 

 
 

Clause 5 

 

All amendments of the MOI shall be effected by a Special Resolution, other than the correction of errors, which the Board is empowered to effect. 

 
 

Clause 7 

 

The share capital of the Company has not been amended by the MOI.

The Company is authorised to issue (which includes Shares already issued at any time) 800 000 000 (eight hundred million) ordinary Shares with a par value of 1.25 (one point two five) cents each, which shall have Voting Rights in respect of every matter that may be decided by voting and which shall rank after all other classes of Shares in the Company which do not rank pari passu with the ordinary Shares as regards Distributions, but save as aforesaid shall be entitled to receive the net assets of the Company upon its liquidation.

The Board shall not have the power to amend the authorisation and classification of shares as contemplated in Section 36(2)(b) or 36(3) of the Companies Act.

Any authorised but unissued par value Shares in the Company’s capital may be issued at par or at a premium or at a discount.

Notwithstanding any implication in the MOI to the contrary, the Board may not authorise any financial assistance by the Company in connection with the subscription for or purchase of its Securities or those of a related or inter-related company without complying with Section 44(3) of the Companies Act. 

 
 

Clause 8 

 

The Board shall not have the power to issue authorised Securities (other than capitalisation Shares) without the prior approval of the Holders by way of an Ordinary Resolution, or to the extent that the Companies Act requires, by way of a Special Resolution, and the approval of the JSE (where necessary).

No special privileges may be granted to secured and unsecured debt instruments.

The Board may issue capitalisation Shares or offer a cash payment in lieu of awarding a capitalisation Share in accordance with Section 47 of the Companies Act.

For so long as the Listings Requirements so require, no Shares which are listed may be issued other than as fully paid. 

 
 

Clause 9 

 

Equity Securities in the Company which are authorised but unissued and which are intended to be issued for cash, must be offered to the existing Holders of those equity Securities by way of a rights offer pro rata to the Voting Power of that Shareholder’s Voting Rights, unless:

  • the requisite approvals of the Holders, and the JSE (where necessary), has been obtained; or
  • a capitalisation issue, an issue for an acquisition of assets (including another company) or an issue for the purposes of an amalgamation or merger, is to be undertaken; or
  • the equity Securities are to be issued in terms of option or Conversion rights; or
  • the equity Securities are to be issued to an approved share incentive scheme.