PRIORITY DIVIDEND SHARES
LexInter | September 3, 2003 | 0 Comments

PRIORITY DIVIDEND SHARES

Priority dividend shares without voting rights may be created by capital increase or by conversion of ordinary shares already issued. They can be converted into ordinary shares.

Priority dividend shares without voting rights may not represent more than a quarter of the amount of the share capital. Their par value is equal to that of ordinary shares or, where applicable, ordinary shares of one of the categories previously issued by the company.

Holders of priority dividend shares without voting rights benefit from the rights recognized to other shareholders, with the exception of the right to participate and vote, for these shares, at general meetings of the company’s shareholders.

In the event of the creation of priority dividend shares without voting rights by conversion of ordinary shares already issued or in the case of conversion of priority dividend shares without voting rights into ordinary shares, the extraordinary general meeting determines the maximum amount. of shares to be converted and sets the conditions for conversion based on a special report from the statutory auditor. Its decision is only final after approval by the special meeting of holders of priority dividend shares without voting rights and by the extraordinary general meeting of holders of bonds with warrants, convertible or exchangeable bonds. against actions.

The conversion offer is made at the same time and in proportion to their share in the share capital to all shareholders, with the exception of the persons mentioned in article L. 228-17. The extraordinary general meeting fixes the period during which the shareholders can accept the conversion offer.

Priority dividend

Priority dividend shares without voting rights give the right to a priority dividend taken from the distributable profit for the year before any other allocation. If it appears that the priority dividend cannot be paid in full due to insufficient distributable profit, the latter must be distributed accordingly among the holders of priority dividend shares without voting rights. The right to payment of the priority dividend which has not been paid in full due to insufficient distributable profit is carried forward to the following financial year and, if applicable, to the two subsequent financial years or, if the articles of association provide for it in subsequent years. This right is exercised in priority over the payment of the priority dividend due under the
The priority dividend may not be less than the first dividend referred to in Article L. 232-16 or an amount equal to 7.5% of the paid-up amount of the capital represented by the priority dividend shares without voting rights. These shares cannot give right to the first dividend.
After deduction of the priority dividend as well as the first dividend, if the articles of association so provide, or a dividend of 5% in favor of all ordinary shares calculated under the conditions provided for in Article L. 232-16, the shares to be priority dividends without voting rights have, in proportion to their nominal amount, the same rights as ordinary shares.
In the event that the ordinary shares are divided into categories giving unequal rights to the first dividend, the amount of the first dividend provided for in the second paragraph of this article means the highest first dividend.

When the priority dividends due for three financial years have not been paid in full, the holders of the corresponding shares acquire, in proportion to the portion of the capital represented by these shares, a voting right equal to that of the other shareholders.
The voting rights provided for in the preceding paragraph remain until the end of the fiscal year during which the priority dividend has been paid in full, including the dividend due for previous fiscal years.

Special assemblies

The holders of priority dividend shares without voting rights meet in a special meeting under conditions set by decree of the Council of State.
Any shareholder with priority dividend shares without voting rights can attend the special meeting. Any contrary clause is deemed unwritten.
The special meeting of shareholders with priority dividends without voting rights may issue an opinion before any decision of the general meeting. It then decides by a majority of the votes cast by the shareholders present or represented. In the event that a ballot is taken, blank ballots are not taken into account. The notice is sent to the company. It is brought to the attention of the general meeting and recorded in its minutes.
The special meeting may appoint one or, if the articles of association so provide, several representatives responsible for representing the shareholders with priority dividends without voting rights at the general meeting of shareholders and, if necessary, to present their opinion there before any vote of the latter. This opinion is recorded in the minutes of the general meeting.
Subject to Article L. 228-16, any decision modifying the rights of holders of priority dividend shares without voting rights is final only after approval by the special meeting referred to in the first paragraph of this article, acting in accordance with the quorum and majority conditions provided for in Article L. 225-99.

In the event of a capital increase by cash contributions, holders of priority dividend shares without voting rights benefit, under the same conditions as ordinary shareholders, from a preferential subscription right. However, the extraordinary general meeting may decide, after notice of the special meeting provided for in article L. 228-15, that they will have a preferential right to subscribe, under the same conditions, for new shares with priority dividends without voting rights that will be issued in the same proportion.
The free allocation of new shares, following a capital increase by incorporation of reserves, profits or share premiums, applies to holders of priority dividend shares without voting rights. However, the extraordinary general meeting may decide, after notice of the special meeting provided for in article L. 228-15, that holders of priority dividend shares without voting rights will receive, instead of ordinary shares. , shares with priority dividends without voting rights which will be issued in the same proportion.
Any increase in the nominal amount of existing shares following a capital increase by incorporation of reserves, profits or issue premiums applies to shares with priority dividends without voting rights. The priority dividend provided for in Article L. 228-13 is then calculated, from the completion of the capital increase, on the new nominal amount increased, if applicable, by the issue premium paid. when subscribing to old shares.

The chairman and members of the board of directors, general managers, members of the management board and of the supervisory board of a public limited company, managers of a limited partnership with shares and their not separated spouse as well as their unemancipated minor children may not hold, in any form whatsoever, shares with priority dividends without voting rights issued by this company.

Il est interdit à la société qui a émis des actions à dividende prioritaire sans droit de vote d’amortir son capital.
En cas de réduction du capital non motivée par des pertes, les actions à dividende prioritaire sans droit de vote sont, avant les actions ordinaires, achetées dans les conditions prévues aux deux derniers alinéas de l’article L. 228-19 et annulées.
Toutefois, ces dispositions ne sont pas applicables aux réductions de capital réalisées dans le cadre de l’article L. 225-209. Dans ce cas, les dispositions de l’article L. 225-99 ne sont pas applicables si les actions ont été acquises sur un marché réglementé.
Les actions à dividende prioritaire sans droit de vote ont, proportionnellement à leur montant nominal, les mêmes droits que les autres actions sur les réserves distribuées au cours de l’existence de la société.

The articles of association may give the company the option of requiring the repurchase, either of all of its own shares with priority dividends without voting rights, or of certain categories of them, each category being determined by the date of its issue. . The repurchase of a category of shares with priority dividends without voting rights must relate to all the shares of this category. The buyback is decided by the general meeting ruling under the conditions set out in article L. 225-204. The provisions of Article L. 225-205 are applicable. The repurchased shares are canceled in accordance with article L. 225-207 and the capital reduced by right.
The repurchase of shares with priority dividends without voting rights can only be required by the company if a specific stipulation has been inserted to this effect in the articles of association before the issuance of these shares.
The value of the shares with priority dividends without voting rights is determined on the day of the redemption by mutual agreement between the company and a special meeting of the selling shareholders, ruling according to the quorum and majority conditions provided for in Article L. 225 -99. In the event of disagreement, article 1843-4 of the Civil Code is applied.
The repurchase of shares with priority dividends without voting rights can only take place if the priority dividend due for previous financial years and for the current financial year has been paid in full.

Priority dividend shares without voting rights are not taken into account when determining the percentage provided for in Article L. 233-1 or in Article L. 233-2.

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