Code Word 2 (June 2001) explained the first class exemptions from the Code and Code Word 4 (December 2001) summarised the first five individual exemptions granted by the Panel. Since December 2001 the Panel has granted two class exemptions and six individual exemptions which are summarised below.

CLASS EXEMPTIONS

Trustee Corporations (2001/397)

The Panel granted a class exemption for trustee corporations and their associates from compliance in certain circumstances with rule 6(1) of the Code. The exemption recognises the special circumstances of trustee corporations who may hold voting securities on behalf of totally unrelated trusts. Consequently, in principle, the exemption allows unrelated trust holdings to be treated as separate entities. There are consequential exemptions for associates.

Offers Unconditional As To Level Of Acceptances (2002/87)

The Panel granted a class exemption for full offers unconditional as to the level of acceptances from rule 29(1) in respect of variations extending the offer period. Rule 29(1) requires 14 days’ notice of any variation of an offer. The exemption waives that notice period for variations extending the offer period. The exemption applies to full offers where

• the offeror controls over 50% of the target company’s voting securities and does not impose a minimum acceptance condition; or

• the offer has become unconditional as to the level of acceptances during the offer period (i.e. the minimum level of acceptances, as set out in the offer, has been reached).

The exemption should promote speedier completion of the offers to the benefit of offerors, offerees, target companies and the market generally.

The exemption is consistent with the Code’s objectives because the Code already recognises that, in some circumstances, offers that are unconditional as to the level of acceptances may be extended without notice. This exemption provides for consistent treatment of these offers, regardless of when they become unconditional in that respect.

E-cademy Holdings Limited was seeking to issue options to Beconwood Securities Pty Limited and Beconwood Superannuation Pty Limited.

The Code does not affect the issuing of options as options themselves do not carry voting rights. However when the options are exercised, voting rights are created. Increases in the holding or controlling of voting rights are subject to rule 6 of the Code. This rule does not permit Beconwood to increase its control of E-cademy above 20% unless it complies with one of the exceptions provided in rule 7.

E-cademy and Beconwood sought to obtain shareholder approval under rule 7(d) of the Code to enable Beconwood to exercise all the options in full. However rule 16 required E-cademy to state, in the shareholders’ meeting notice, the specific percentage of voting rights to be allotted to Beconwood on exercise of the options and the specific percentage of voting rights in E-cademy that Beconwood would hold after the allotment. E-cademy could not state these percentages as they depended on the number of options exercised and movements in E-cademy’s capital structure before the options were exercised.

E-cademy was granted an exemption from the requirements of rule 16(b) and (d) in respect of the notice of meeting and Beconwood was exempted from rule 7(d) to the extent that it required compliance with rule 16(b) and (d).

The exemption was granted subject to the conditions that: