Voting Form for 2019 WST AGM Resolutions

RESOLUTIONS

There are EIGHT (8) resolutions for members to vote on at this years WST AGM to be held at 7.30pm on Thursday 27th June 2019 at the Centenary Club, The Racecourse Ground, Wrexham LL11 2AH.

Please note, only your first submission will count towards the final total.

RESOLUTION A

Summary: To authorise the use of Trust funds to invest in Wrexham AFC and\or WST Assets Limited

Proposer: The Society Board

“The Society resolves that immediately following the 2019 Annual General Meeting, the Society Board be authorised to invest up to a further £150,000 in Wrexham AFC Limited (a 100% subsidiary of Wrexham Supporters Trust) and\or WST Assets Limited (a 100% subsidiary of Wrexham Supporters Trust), the Board having the power to determine how the investment is distributed between the two companies, during the period following the 2019 AGM up to the 2020 AGM”.

Proposer’s background information:

This is the annual resolution by which members authorise the Trust Board to invest funds in the football club and in WST Assets Limited, as they deem fit during the year up the maximum figure of £150,000.

RESOLUTION B

Summary: To authorise the reappointment of the Society auditors

Proposer: The Society Board

“The Society resolves that McLintocks Partnership Limited are reappointed as statutory auditors of the Society for the 2019 financial year.”

Proposer’s background information:

This is the annual resolution needed to reappoint the Society auditors for another year.

RESOLUTION C

Summary: To replace the current club mascot "Wrex the Dragon" with "Rockin' Robin"
Proposer: Mary Roberts and Louise S Roberts
“The Society resolves that the Society Board be directed to replace the current club mascot "Wrex the Dragon" with "Rockin' Robin”.

Proposer’s background information:


As a club since Rockin' Robin was replaced by Wrex The Dragon our club has had nothing but bad luck, we were the Robins before anyone else was the dragon hasn't anything to do with been welsh as Cardiff and Swansea both have a bird as mascot, when dragons are mentioned our club never 'springs to mind' only rugby and before cost is mentioned there is already a costume and nobody said anything when the badge was changed. Also, recently at games Wrex has ignored children and stood talking with a 'couldn't care less attitude

Society Board’s Background Information:


This resolution is a repeat of one that was brought last year and was not carried and again the Board advises members not to vote in favour of it. Everyone who witnessed his antics looks back on the heyday of Rockin Robin with affection and to the years when the team’s nickname was “the Robins”. However, 18 years have now elapsed since the Club decided to adopt “the Dragons” as its nickname and to introduce Wrex the Dragon as its mascot. A name which reflects our Welsh identity and distinguishes us from other clubs. A generation of younger fans have known nothing else and the Junior Dragons is an important and growing part of the fanbase. Thousands of schoolchildren were entertained by Wrex at the Wales squad training day at the Racecourse. To alter things now would involve time and expense to rebrand this part of the Club’s image. Time and expense which is better spent elsewhere. Those who run the Junior Dragons do not want this change and neither do their members.



As this resolution directs the Board to act it requires a two thirds majority of those voting to be carried.



RESOLUTION D

Summary: To introduce objectives for WST Board members

Proposer: Colin Williams

“The Society resolves to introduce a system of objectives for elected members of the WST board whereby each elected board member will, within 3 months of the annual general meeting, adopt and publish on the WST website a set of “SMART” annual objectives (Specific, Measurable, Achievable, Realistic and Timebound) relating to their work on the board and will report to members at the following year’s annual general meeting on the progress of those objectives”

Proposer’s background information:

The Trust Board is structured so that individuals or groups of individuals operate on functional lines e.g. membership, fundraising, community etc. The performance of each function plays an integral part on the overall performance of the club in keeping with its stated aims. WST Board Members, prior to election publish a document outlining their intentions and qualifications for Board Membership. Upon election Board Members are then allocated a function within which they are responsible for. At present whilst there is responsibility allocated there is no clear system of accountability e.g. what targets did Mr or Mrs A set for their tenure in “Membership” and how have they performed? The current system also means that when it comes to re-elections the basis
for evaluation of performance is more subjective than it might otherwise be.

Society Board’s Background Information:

The Board supports this resolution. Current board members, who have volunteered for the position, are happy to sign up to objectives and report back to the AGM on progress. The board intends to review the Trust strategic plan soon after the AGM (when a new board will be in place) and this will feed into the objectives of individual board members depending on their role.

RESOLUTION E

Summary: To amend the WST Election Policy

Proposer: Richard Ulrich

“The Society resolves to amend the WST Election policy at paragraph 6.1 to allow campaigning during the period of a board election to be conducted via any medium including social media.

Paragraph 6.1 currently reads:

6.1. Campaigning under the auspices of the Society will be restricted to the statements submitted by the candidates and to any hustings organised by the Society.

And should be amended to read: -

6.1. Campaigning under the auspices of the Society will not be restricted to the statements submitted by the candidates or to any hustings organised by the Society. Candidates can also use any medium available to promote their campaign but must not make threats, insults or derogatory, abusive, racist, sexist or homophobic statements. To prevent negative campaigning, candidates must refrain from mentioning, explicitly or implicitly, the names of other candidates when promoting their campaign. Any complaints about a candidate’s campaigning can be reported to the election management group and any decision they make about the matter (including warning a candidate and ultimately disqualifying them for being in breach of this policy) is final.

Proposer’s background information:

There are currently 3,565 members of the society but only approximately seven percent take part and vote in the annual society AGM. I think a key reason for this is that candidates are restricted to their candidate statement by the society rules when it comes to campaigning for election to the society board. We live in a world dominated by technology and social media; most people use or have access to the Internet these days. The annual society election also takes place in the close season when members are maybe taking a break from everything football related, they don't go to the pub with their mates as often and discuss club matters. 90 percent of the communications about the annual AGM and election are made via the official websites, social media and email. If you don't have an email address, then you receive a pack in the post. If the vast majority of communications about the annual AGM and election are via the Internet, then candidates should also be allowed to use these methods when it comes to campaigning for election to the board which would enable them to engage meaningfully with the members of the society.

Society Board’s Background Information:

The board understands the reasoning behind this resolution but has concerns about the effect of it in practice and opposes the amendment to the policy.

There is certainly a need for more engagement by the membership but allowing campaigning via social media would run the risk of disproportionately benefiting those candidates who already have a large social media presence. Not all members and prospective candidates do, and they would be unfairly disadvantaged. The policy already allows for hustings to be held although it’s some time since any were undertaken. There are other ways of engaging meaningfully with the membership and the board undertakes to introduce a live hustings event for candidates (possibly online depending on technological capability) during next year’s board elections which will help improve engagement.

RESOLUTION F

Summary: To introduce a “Business Continuity/Succession Planning Policy”

Proposer: Richard Ulrich

“The Society resolves to adopt a business continuity/succession planning policy to ensure that a smooth and seamless transition can take place if an elected society board member who is appointed to the football club board can no longer carry on in that role for whatever reason. Such a policy (to be drafted and agreed by the Society board and published on the WST website) will provide for all the elected society board members appointed to the football club board to have a “shadow” who will be an elected society board member (not currently appointed to the football club board) to learn the role and responsibilities of the person that they are shadowing.”

Proposer’s background information:

There's an old saying, "If you fail to plan, you are planning to fail". At the top levels of any organisation, succession planning by definition is critical to ensure that these key positions can be filled by way of a smooth and seamless transition process. The society rules say that the society will always hold a minimum of three positions on the football club board, what would happen if a director was to become ill, retire or not be re-elected at an annual AGM? Change happens fast in any industry, none more so than in football. We need to be prepared for any eventuality and make sure that we are looking to the future by ensuring that elected society board members are trained, coached and ready to step into the key positions on the football club board.

Society Board’s Background Information:

The board supports this resolution. Succession planning is vital in any organisation and having run a professional football club for eight years, individuals have acquired significant knowledge and experience of the football industry and the running of a multi-million-pound business. There needs to be a way of capturing that knowledge and, after the AGM, the new Trust board will consider how best this is done and draft a business continuity/succession planning policy which should include the skills desirable in candidates for those roles

RESOLUTION G

Summary: To amend the Gate Approval Process

Proposer: Bryn Law

“The Society resolves to amend the general direction and guidance document approved by members at the 2018 AGM setting out an investment approval gate process (“the Gate Approval Process”) and a set of criteria which the Society Board are to apply to properly consider any investment that would change the capital structure Wrexham AFC Limited so that step 8 of the process is removed.

The guidance currently reads:

1. That the Society Board may enter into non-binding discussions with investors who on the face of the approach merit further consideration.

2. That the Society Board propose that a formal review process is carried out and will make all reasonable endeavours in order to establish that the following set criteria is met:

  • WST member funds are not wasted on non-credible approaches
  • Our confidential information is protected
  • The proposed investment is in line with the objects of the society
  • The investment proposal is genuine and actually funded
  • The investment will not lead to an involuntary loss of the WST control of WAFC
  • All the funds promised are actually delivered
  • Any investment will be utilised for WAFC
  • The investment terms are commercially acceptable and are approved by the members
  • Any other relevant considerations

3. Prior to requiring the members of society to vote upon acceptance of the investment, the Society Board will carefully consider the investment proposal against the set criteria following the process set out in the Gate Approval Process:

The Gate Approval Process

1 Approach to Society Board

2 Signing of a Non-Disclosure Agreement (NDA)

All members of any consortium must be disclosed and sign NDA prior to any discussions taking place

Society board to formulate investor NDA which will include a significant ‘Material Loss’ Clause

3 Initial Meeting with investor(s)

If applicable the Society Board may nominate specialist individuals or a delegation of the Society Board to represent its interests in any stage of talks with potential investor(s)

The initial meeting objective is to generate the understanding of the investor(s) intentions & proposal including funding model & vehicle(s) to do it

The Society Board representatives will prepare a feedback report for the Society Board

4 Trust Board Review the investment proposal

Review and clarification of understanding of intention

Identify points of further clarification

5 Covering expenditure of the Society and its representatives

At this point to ensure that any investment approach is genuine, the Society Board is to require a deposit of £5,000 from the investor(s) -the amount subject to rpi inflation as of June each year as published by the Office for National Statistics - into a nominated client account to cover reasonable expenses incurred by the society or its representatives

6 Follow up meeting with investor(s)

Follow up points of clarification with investor(s)

Note: steps 4 and 6 may be an iterative process until the Society Board is satisfied that it understands the intention of the investor(s) and their funding model

7 Proof of funding & Business Plan

Submission of Business plan by investor(s)

Proof of funding required

8 Society Board Decision

Decision to proceed further with gate approval process Yes/No

9 Disclosure of names of investors to membership (if investment vehicle is a company then it will be all the shareholders in any chain of companies)

10 Heads of Terms Agreed

11 Due Diligence at investors cost

12 Society Board to call an extraordinary general meeting (EGM)

EGM costs to be covered by investor(s)

EGM would include:

a chronology of events produced by the Society Board

A risk analysis by Society Board and/or professional advisors

A Society Board recommendation to accept or reject the offer Yes/No

13 EGM with presentation by investor(s) & Society Board

14 Enact decision of EGM”

And should be amended so that stage 8 of the process, namely the decision of the society board, is removed from the process, meaning that once steps 1 to 7 are complete then the names of investors will be disclosed to the membership”.

Proposer’s background information:

It is my proposal that The Gate Approval Process be amended to better encourage credible investment approaches. It is my contention that, as it exists, the process is overly punitive and, as such, is discouraging all potential investors from taking the process anywhere beyond the requirement to sign an NDA, particularly as the onus to
maintain confidentiality only falls on the investor, not on the Society Board.


Furthermore, the fact the potential investor must then make a 5k payment to facilitate a second meeting and provide a business plan and proof of funding, but the Society board still has the right to end the process at this stage without disclosing the detail to the membership is unlikely to encourage credible investors to pursue the process to
this stage. There are good and bad investors out there, my contention is that whilst this process is rightly designed to discourage those whose intentions could be harmful, it’s actually too restrictive and is actually discouraging even those with positive intentions.


Furthermore, I believe that, at the point where the party has fulfilled the obligations of the NDA and the 2nd meeting payment, and provided the required business plan and proof of funding, it is then the members’ right to be informed of their proposals and identity without the Football Board having the sole right of veto

Society Board’s Background Information:

Based on legal advice, including on the wording of this resolution, the Board opposes the resolution and advises members to vote against it.

The improvements made by the Society in the financial position of Wrexham AFC since 2011 and the acquisition of the business, trade and assets used in the operation of the Racecourse Ground make Wrexham AFC a much more attractive business than that which we inherited. The Gateway Approval Process was approved by members only last year to provide the board with general direction and guidance and a process to follow should an investment approach be made. The resolution introducing it in 2018 was a non-binding resolution to assist the Board in considering members’ views when considering approaches.

The acceptance of any investment into WAFC will ultimately be a matter to be decided upon by the members of Society, the gateway process does not authorise the Society Board to agree to or accept any investment into WAFC bearing in mind that one of the most important objectives of the Trust is upholding the mutual ownership of the Club.

Against that background, our legal advice has described removal of stage 8 as “making no sense”.

The board must have some qualitative judgement on an investor’s business plan and proof of funding before presenting the investor’s plans to the members otherwise that could lead to sound business plans to liquidate the club and distribute the assets, as an extreme example, being presented to the members. There is also the not inconsiderable time and resource required to present even the most speculative of approaches to the membership.

Board members are elected by the membership who thereby delegate considerable powers and responsibilities to those board members who can be voted off the board should the membership so wish. Part of that responsibility is to act in the interests of Trust and Club and, as set out in the gate approval process, to decide whether an investment approach meets the criteria so as to be presented to the membership.

It is not normal for companies to place speculative investment proposals to its members. The risk of loosening the process could lead to a repetition of the near farce which occurred when the previous owners were attempting to sell the club.

We strongly advise members to vote against this proposal.

RESOLUTION H

Summary: To amend the terms of a non-disclosure agreement (NDA) signed by potential investors as stipulated in the gate approval process for any investment that would change the capital structure of Wrexham AFC Limited.

Proposer: Bryn Law

“The Society directs the Society Board to amend the terms of a non-disclosure agreement signed by potential investors so that the confidentiality clause in such an agreement is altered whereby breach of confidentiality results in a penalty of £2000 rather than £50000.”

Proposer’s background information:

It is my contention that this figure has been set too high and that it actually discourages any approaches from those with serious investment intent as they regard such a figure as being excessive in comparison to other investment negotiations in which they have been involved.

Society Board’s Background Information:

Based on legal advice, including on the wording of this resolution, the Board opposes the resolution and advises members to vote against it.

The non-disclosure agreement (NDA) to be used when applying the gate approval process was drafted having received appropriate commercial legal advice. It is perhaps surprising that the proposer is aware of the content of the NDA adopted by the Trust but, putting that to one side, commercial NDAs often contain a liquidated damages clause to create an effective deterrent to breaches of the terms of an NDA. A party entering into an NDA in good faith will rarely have an issue as if they do not wrongfully disclose information, they will have no liability. A liquidated damages clause of £2,000 according to the advice we have received “simply has no teeth”. And of course, it would be the football club which would be disclosing particularly sensitive commercial information should the process proceed.

As to the unilateral nature of the liquidated damages clause this is entirely logical as it protects the disclosing party which in this instance is the Football Club. The board have a duty to protect commercially sensitive information which would include sensitive information relating to individuals. Without an effective NDA in place they would be failing in that duty and could not sign one with such a low damages clause based on the advice received.

The board have to apply the set criteria when considering an approach under the gateway process. One of which is that the investment proposal is genuine and actually funded and another is that the Trust’s confidential information is protected. By signing what has been described to us as an NDA “without teeth” we would be in breach of those criteria, and others, and therefore strongly recommend members to vote against the proposal.

As this resolution directs the Board to act it requires a two thirds majority of those voting to be carried.

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