Shares in Hereford United

Should you own shares in Hereford United or any other football club, the following is a guide to what rights your shareholding gives. The notes come from the "I want one of those website."

This is not a complete analysis of Shareholders' rights according to UK law, but does cover many of the most important ones. When you acquire a share in a company, you become a part owner of that company and this entitles you to certain rights. Some rights relate to the financial side of owning shares, and others relate to the communications between the company and the shareholder, including the ways you can make your views known on the company's performance and actions. The most important shareholders' rights that you need to know are described below.


Share Value as printed on the share certificate

On your share certificate you may notice that a very low amount (usually less than £1) is printed on it - this is called the share's Nominal value or Par value. This figure indicates the stated value of the share which is fixed, rather than the market value which fluctuates; and does not in any way represent the value of the share that you could obtain from its sale. The current market value of the share can be obtained from a variety of sources, such as financial websites or financial publications. However it must be remembered that it is quite possible that the dealing and associated charges will exceed the market value of your single share.


Dividends

You have a right to dividends - a share of the company's earnings. These are usually paid twice a year; if the Board of Directors decides to make a payment to shareholders. However where only one share is owned any dividend due is usually below £1 and so may not be issued. The first payment in a company's financial year is known as the "interim" dividend, and the second payment is known as the "final" dividend.


Rights Issues

You may be offered the chance to participate in a Rights Issue if your company wishes to raise more money, which may happen occasionally. This is where the company asks existing shareholders if they want to buy new, additional shares, usually at a discount to the current market price. It should be remembered that the issuing of new shares may well cause the price of your existing shares to fall.


Scrip Issues

A company will sometimes offer you "free" new shares. While this increases the number of shares you hold, the price of each share falls proportionately so the total value of your entire holding remains the same.


Company Documents

All shareholders are entitled to certain documents that the company issues from time to time, providing they have their name on the register of shareholders. These may include news about important events such as major acquisitions, disposals, or significant changes in the company?s structure.

The Company's Annual General Meeting

An Annual General Meeting will be held by the company once a year. As a shareholder you have the right to attend and speak at such meetings, and you will be given at least 21 days notice of the time and location. You will receive information about these meetings direct from the company in which you hold a share.


Voting

Shareholders are asked by the company to vote on important matters which affect the company. The company will provide proxy cards so that shareholders can vote by post, or shareholders can vote in person at the Annual General Meeting. The company must ask the shareholders' views on issues such as:

Anything which might dilute their shareholding through the issue of more of the company's shares such as a Rights Issue or Employee Share Scheme.
Appointing and dismissing the auditors. Auditors are external accountants used by the company to check their financial statements. Their role is important because they are supposed to safeguard the shareholders against financial irregularities.
Appointing and dismissing directors. Shareholders must approve the appointment of all directors. The shareholders, as owners of the company, elect the directors to run the business on their behalf, and hold them accountable for its performance.

Proposed Resolutions at the Annual General Meeting

Under company law shareholders can only put forward motions if they can muster 5% of the company's total voting rights, or 100 shareholders who each hold at least £100-worth of shares. Resolutions must be submitted no less than six weeks before the meeting and then a copy of the resolution must be sent to all shareholders. Companies are entitled to charge for the cost of circulating extra resolutions.


Extraordinary General Meeting

Extraordinary General Meetings are any meetings which are not Annual General Meetings. Directors often have to call them to transact special business. Shareholders have the right to force the Board to call an Extraordinary General Meeting if they have the support of 10% of the company's overall share capital. This is a very rare occurrence because it requires getting together a large number of shareholders and, almost certainly, a number of major institutions. If the Board of the company does not comply with the request for an EGM, the shareholders can meet anyway and claim back their expenses.

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