Notice of Annual General Meeting
Notice is hereby given that the Sixty First Annual General Meeting of Members of Qudos Mutual Limited will be held at 5pm on Wednesday 25 November 2020 as a virtual AGM. Members can participate, vote and ask questions in the meeting by joining at the time via www.web.lumiagm.com/376506481. You don't need to pre-register. Members can vote prior to the meeting by using a unique link that will be sent to them via email prior to the meeting, or by entering their Member number and postcode at www.investorvote.com.au/qudos.
- Notice of AGM & Explanatory Statement - updated to correct an error and align with the correct version published in the Australian on 1st October 2020
- Director Profiles
- Proxy Form
- Constitution (Version 1) - will take effect if Resolution 1 is passed
- Constitution (Version 2) - will take effect if Resolution 1 & Resolution 2 are passed
All Qudos Bank Members over 18 years old, with a shareholding Membership and who joined prior to the day before the closing date for nomination for the Directors’ election ( i.e. on or before 6th August 2020) are eligible to vote. We have engaged Computershare and Lumi Global to administer our Annual General Meeting and associated communications for 2020.
Some Members have elected to receive a paper AGM pack in the mail, these will be sent in early October. Please vote using one of the methods noted above or by completing and returning the proxy form included in the AGM pack.
Special Business & Resolutions
(a) Resolution 1 - Amendments to Qudos Bank’s Constitution to enable Qudos Bank to meet the definition of “mutual entity” under the Corporations Act
To consider, and if thought fit, pass the following special resolution:THAT in accordance with section 136(2) of the Corporation Act, Qudos Bank’s Constitution be modified to enable Qudos Bank to satisfy the definition of “mutual entity” under the Corporations Act, by making the amendments to articles 10.14(a)(ii)(A), 10.14(a)(ii)(B), 10.14(a)(ii)(C), 10.18(b), 10.18(b)(i)(A) and 10.18(b)(i)(B) contained in a copy of Qudos Bank’s Constitution marked to show the proposed changes which has been tabled at the Annual General Meeting and signed by the Chairman for the purposes of identification.
(b) Resolution 2 (Contingent Resolution) – Amendments to Qudos Bank’s Constitution to permit issuance of mutual capital instruments (MCIs)
To consider, and if thought fit, pass the following special resolution:
THAT Qudos Bank’s Constitution be modified to allow Qudos Bank to issue mutual capital instruments (MCIs) in accordance with the Corporations Act, by making the amendments, other than the amendments noted in Item 5(a), contained in the copy of Qudos Bank’s Constitution marked to show the proposed changes which has been tabled at the Annual General Meeting and signed by the Chairman for the purposes of identification.
Copies of Qudos Bank’s Constitution marked to show the proposed changes are available above under AGM resources.
Resolution 2 (Contingent Resolution) is subject to and contingent on Resolution 1 being passed by the required 75% of votes cast by Members. If Resolution 1 is not passed, the Contingent Resolution will not be put to the meeting
The resolutions being sought to update our constitution will enable Qudos Bank to meet the definition of “mutual entity” under the Corporations Act and allow Qudos Bank to issue mutual capital instruments (MCIs). Many other mutual organisations have already implemented these changes following government reforms last year. These organisations include Credit Union Australia, RACQ Bank, Australian Military Bank and Australian Unity, with more seeking such changes this year.
Copies of Qudos Bank’s Constitution marked to show the proposed changes to it under Resolution 1 and Resolution 2 are available above under AGM resources.
|What is a mutual entity?|
A mutual entity is an organisation based on the principle of mutuality: people organising together to meet their shared needs. The owners (members) of a mutual are its customers. The mutual sector is very diverse with mutual entities operating in almost every sector of the Australian economy. At Qudos Bank, we are a customer-owned, responsible bank, in the business to create mutual prosperity — for customers and the communities they live in.
Until recently, there was no legal definition of “mutual entity”. As of last year, the Corporations Act now includes a definition of “mutual entity” for the first time in Australia’s history. Essentially, a “mutual entity” is a company where no member has more than one vote in a general meeting.
It’s great to have official recognition at last, and this definition of “mutual entity” is also important because only mutual entities can issue mutual capital instruments (MCIs) (see below for further details). By amending our Constitution to enable Qudos Bank to satisfy the definition of “mutual entity”, Qudos Bank will have the flexibility to raise capital through the issue of MCIs in the future, if the Board decides it is necessary or desirable to do so, while retaining our mutual status. The proposed amendments do not affect Qudos Bank’s status as a mutual and is not a move towards a demutualisation or public listing, but rather positively affirms Qudos Bank’s status as a mutual entity in light of the recent developments in legislation.
|What are mutual capital instruments (MCIs)?|
MCIs are a new type of share in a mutual entity, being bespoke capital instruments for issuance by mutual entities. MCIs allow mutual entities to raise capital while retaining their status as mutuals.
Enabled by the Mutual Reforms last year, MCIs are fully paid shares with non-cumulative dividends, meaning Qudos Bank is not required to pay any unpaid dividends. Qudos Bank will have full discretion over whether to pay dividends and the conditions around any financial returns.
MCI Holders will have an entitlement to claim surplus assets and profits in the unlikely event of a winding up of Qudos Bank. However, MCI Holders can’t receive any more than the amount they invested and they can’t be paid until after senior creditors have been paid. Senior creditors include Qudos Bank Members in relation to any subscription monies they may have paid. After MCI Holders have been paid their capped amount, any remaining surplus would be shared between Qudos Bank Members.
Qudos Bank’s Board will have discretion to decide the entitlements, requirements and obligations which attach to MCIs. This gives Qudos Bank the flexibility to issue MCIs which meet APRA’s requirements for regulatory capital, if it is necessary or desirable to do so, without needing to update the Constitution again in future to align with evolving APRA prudential standards.
|What are the proposed changes to Qudos Bank’s Constitution?|
As noted above, the proposed changes under Resolution 1 will allow Qudos Bank to meet the definition of “mutual entity” under the Corporations Act.
The proposed changes under Resolution 2 (Contingent Resolution) will allow Qudos Bank to issue MCIs in future, if the Board decides it is necessary or desirable to do so. MCIs will give Qudos Bank access to capital that will better equip us to invest, grow, innovate and compete, while remaining committed to our future as a mutual. The proposed changes do not affect Qudos Bank’s status as a mutual and is not a move towards a demutualisation or public listing.
|Why is Qudos Bank proposing these changes to Qudos Bank’s Constitution?|
The Mutual Reforms herald a new era for mutual entities in Australia and, with better access to capital, Qudos Bank will be able to continue to invest, innovate, grow and compete, while maintaining our mutuality. Our Board and Qudos Bank management have given careful consideration to the proposed changes. We believe the changes are an important step which will give Qudos Bank more flexibility in future to raise capital as a modern mutual, and to continue to put the interests of our Members first.
|Is Qudos Bank planning to issue MCIs?|
Qudos Bank has no current plans to issue MCIs but the Board and Qudos Bank management consider it is important to take advantage of the Mutual Reforms now to update Qudos Bank’s Constitution. This will give Qudos Bank the flexibility to issue MCIs should it be necessary or desirable to do so in future — for example, to seize business opportunities. Any decision to issue MCIs would need to be approved by the Board of Qudos Bank who would need to determine that this decision was in the best interests of Qudos Bank and our Members.
|Will holders of MCIs be Members of Qudos Bank?|
Under the Constitution, a person may be a Member of Qudos Bank who is entered in the Register of Members as a holder of Member Shares in the capital of Qudos Bank (Member). The MCI amendments would introduce MCI Holders as a category of shareholder. These MCI Holders are not “Members” under Qudos Bank’s Constitution, but they will nonetheless be considered “members” of Qudos Bank for the technical purposes of the Corporations Act. As MCI Holders are not considered a “Member” under Qudos Bank’s Constitution they will not be entitled to the benefits that Members are entitled to (unless an MCI is issued to an existing Member or an MCI Holder separately becomes a Member by being admitted to membership under the Constitution).
|Will holders of MCIs have voting rights?|
The terms of issue for any MCIs will be decided by the Board when MCIs are issued, and the terms will spell out any voting rights. The Board may choose to issue MCIs which do, or do not, carry up to one vote in a general meeting of Qudos Bank or in an election of directors. In either case, MCI Holders will not count towards quorum at a general meeting and no MCI Holder will have more than one vote in respect of their MCIs no matter how many MCIs they hold. If an MCI Holder is already an existing Member or becomes a Member of Qudos Bank and they are entitled to vote at a general meeting, they may only be eligible to hold one vote (in respect of their voting rights as a Member) at general meetings.
|Do the proposed changes mean Qudos Bank is demutualising?|
No, Qudos Bank is committed to our future as a mutual and the proposed changes will clearly retain Qudos Bank’s status as a mutual now and into the future. Nothing in the proposed amendments or issuing of MCIs will mean that Qudos Bank ceases to be a “mutual entity” and the Mutual Reforms specifically provides for mutuals to issue MCIs as a new type of capital without losing their mutual status.
|Would MCI Holders get the same vote as Members if a demutualisation of Qudos Bank is proposed in future?|
Following the Mutual Reforms, “demutualisation” could mean two things: (i) passing a “Demutualisation Resolution”, under Schedule 3 to Qudos Bank’s Constitution, or (ii) a constitutional amendment which results in Qudos Bank ceasing to be a “mutual entity” as defined in the Mutual Reforms Act.
If a “Demutualisation Resolution” is proposed, Qudos Bank’s Constitution requires a general meeting to be convened at which the “Demutualisation Resolution” will be considered as a special resolution. The “Demutualisation Resolution” is only passed if at least 25% of all Members entitled to vote on the Demutualisation Resolution do vote on the Demutualisation Resolution and 75% of the votes cast by Members entitled to vote on the resolution, vote to approve at the general meeting.
In general, the terms of issue for any MCIs would be decided by the Board when MCIs are issued, and the terms would spell out any voting rights. The proposed amendments do not provide for MCI Holders to have a vote to approve a “Demutualisation Resolution” in the terms of issue of MCIs.
If a constitutional amendment which would result in Qudos Bank ceasing to be a “mutual entity” is proposed, the provisions of the Corporations Act which apply to protect Members in relation to the proposed demutualisation would apply, MCI Holders will not count towards quorum at a general meeting and no MCI Holder will have more than one vote in respect of their MCIs, no matter how many MCIs they hold.
If MCIs are on issue, no resolution that would result in Qudos Bank ceasing to be an “MCI mutual entity” under the Mutual Reforms Act can take effect unless the resolution provides for each MCI to be cancelled at or before the time the entity ceases to be an MCI mutual entity (whether or not the holders of the MCIs to be cancelled are to receive other securities in respect of those MCIs). Cancelling the rights attached to MCIs would require both a special resolution in a general meeting of the company and a special resolution of all affected MCI Holders.
|Would MCI Holders have priority over Members in a winding up of Qudos Bank?|
In the unlikely event that Qudos Bank is wound up, MCI Holders would rank below all senior claims (including our depositors). After all senior creditors in a winding-up are paid, MCI Holders would be entitled to a claim on surplus assets and profits. However, MCI Holders can’t receive any more than the amount that was initially paid to Qudos Bank for the MCIs. After MCI Holders have been paid their capped amount, any remaining surplus would be shared between Qudos Bank’s Members.
If you paid a subscription price for your Member Share, you would be a ‘senior creditor’ in relation to the payment of that subscription price. This wording follows the current requirements of the Australian Prudential Regulation Authority for MCIs to be eligible as regulatory capital.
|Will MCIs be listed on a securities exchange?|
Although there are no plans to list MCIs on a securities exchange, the proposed constitutional amendments give the Board some flexibility to consider this option if in the future this is advantageous to Qudos Bank.
|Who can I speak to for more information about the proposed changes?|
We are very happy to talk to you about the proposed changes, if you have any questions or comments on them.
If you have any questions or comments about the changes or attending or voting at the AGM, please contact us.
This year we have 2 vacancies to be filled and 3 candidates running for election. You will be required to select up to 2 candidates for election.
You can vote online electronically using the unique link that will be sent to you by our partner Computershare, at www.investorvote.com.au/qudos, or by postal ballot.
If you’d like to make a postal vote please contact us on 1300 747 747 so we can send you a voting pack in the mail.
Director Election voting closes at 12 noon on the 11th November 2020.
The 3 candidates are:Terry McGuirk BA(Hons), FAICD
In these unparalleled times, in-depth strategic experience of Customer Owned Banks is critical for our Board, if elected I would bring this. A Fellow of the Australian Institute of Company Directors, I hold a Bachelor of Arts with Honours from Adelaide University.
My previous experience as a long-term Director of one of Australia's largest Mutual Banks and former Deputy Chair of the Customer Owned Banking Association, will help me in representing the interests of all members. I am a finance industry specialist with a thorough understanding of financial, prudentiaI, risk and regulatory environments in which Qudos operates. Consulting to the finance industry for over 25 years, self-employed, advising many of Australia's largest 'profit to member' entities including Qantas Super, and continuing studies for a Masters of Applied Finance, places me in an excellent position to support Qudos with future challenges.
My diverse Board experience includes financial planning, youth at-risk, on-line education, disability services and the crucial leadership role of being a Chairman. After University I worked for BHP and Chartered Accounting firms including being a Director of Price Waterhouse.
My unique skills and experience will enable me to make a very solid contribution to our Board.
Andrew Leithhead, BCom, GAICD, FFin, JP*
Andrew joined Qudos (then QSCU) over 40 years ago and Qudos is still his family’s key financial services provider. He has been a Qudos Director since 2017 and is a member of the Risk Committee. He briefly served as Chairman during 2019. His career in financial services has included investment management, stockbroking, investment banking, capital markets and commercial banking (including digital transformation) in Australia and the U.S.A. He has held senior positions in large companies including ANZ Banking Group, KPMG and Barclays Bank and smaller businesses including Gilbert + Tobin Lawyers and Meares & Phillips. These roles required extensive interaction with corporate regulators, including APRA and ASX in Australia and the New York Federal Reserve, NASD and Securities & Exchange Commission in the USA.
Andrew has developed important governance knowledge and skills as a director of entities including ANZ Equities, LINWAR Securities, The Scots College and KPMG Corporate Finance (Australia). He is currently Chairman of the Australian Racing Drivers’ Club, and he is a Director of The Anglican Schools Corporation. Andrew understands the crucial governance demands of directors, including risk management, financial oversight, stakeholder communications, statutory and regulatory obligations, liquidity management and government interaction.Joe Dicks BCom GradDipAcct CA GAICD*
Joe spent most of his 33 year professional life advising businesses on how to improve performance. His career spans corporate advisory, business restructuring, profit improvement and risk & governance. In the latter years of his career, he specialised in forensic accounting and accounting expert court testimony. Joe is a Chartered Accountant and member of the Australian Institute of Company Directors.
Joe commenced as a non-executive director 16 years ago, becoming a founding director of Uniting AgeWell (Vic and Tasmania). Since than he has served on numerous boards and chaired most of their audit and risk committees. He is currently the Chairman of Campus Living Villages Limited, and a non-executive director for Think Childcare Limited and Melbourne Polytechnic. Joe recently became a director of Qudos Bank and serves on the audit committee.
Joe offers the Qudos board:
*Retiring Directors standing for re-election
Welcome to our 61st AGM
Our Sixty First Annual General Meeting will be held at 5pm on Wednesday 25 November 2020 as a virtual event. To support social distancing measures and maintain the health and safety of our Members and employees we’ll be broadcasting our AGM Online. Online broadcast also allows for greater participation from Members around Australia. Members can participate, vote and ask questions in the virtual meeting.
We have engaged Computershare and Lumi Global to administer our Annual General Meeting and associated communications for 2020.
Computershare are our returning officer and Lumi Global will host the voting portal and live stream virtual event. If you choose to participate in the meeting online you can join at the time via web.lumiagm.com/376506481. You don't need to pre-register. You can log in to the Qudos Bank AGM by entering:
Questions at the AGM
Please note, only eligible voting Members may ask questions online once they have been verified. We will endeavor to answer as many questions as possible towards the end of the meeting, however it may not be possible to respond to all questions at the meeting. Members are encouraged to submit questions prior to the AGM by emailing AGM@qudosbank.com.au