Articles of Association Amendment?

[thecrazykevy]

 Anyone know what this amendment is about that is being voted on during the shareholders meeting?

THAT the Company’s Articles of Association be amended by deleting Article 6(d)(iii) in its entirety and substituting therewith the following new Article 6(d)(iii) (the “Amendment to Articles of Association&rdquo:

‘Upon any sale, pledge, transfer, assignment or disposition of Class B Common Shares by a holder thereof to any person or entity which is not an Affiliate of such holder or a Founder or an Affiliate of one or more Founders, each such Class B Common Share shall be automatically and immediately converted into one Class A Common Share; provided that (a) except as set forth in Article 6(d)(iv) below, a change in the beneficial ownership of Class B Common Shares from a holder of Class B Common Shares to an Affiliate of such holder or to a Founder or an Affiliate of one or more Founders shall not cause a conversion under this Article 6(d)(iii) and (b) any sale, pledge, transfer, assignment or disposition of Class B Common Shares by a holder thereof effected as part of the creation of any security interest or other encumbrance over such Class B Common Shares (including, without limitation, any transfer of legal title to such Class B Common Shares effected as part of the creation of any security interest or other encumbrance over such Class B Common Shares) shall be exempt from, and shall not trigger, the automatic conversion contemplated under this Article 6(d)(iii) unless and until the legal title to such Class B Common Shares is transferred to any person or entity which is not an Affiliate of such holder (or a Founder or an Affiliate of one or more Founders) as a result of the enforcement of such security interest or other encumbrance. In addition, if at any time more than fifty percent (50%) of the ultimate beneficial ownership of any holder of Class B Common Shares (other than a Founder or an Affiliate of one or more Founders) changes, each such Class B Common Share shall be automatically and immediately converted into one Class A Common Share. For the avoidance of doubt, the sale, pledge, transfer, assignment or disposition of Class B Common Shares by a holder thereof to any of the following shall be exempt from, and shall not trigger, the automatic conversion contemplated under this Article 6(d)(iii): (i) a Founder or an Affiliate of one or more Founders or (ii) an Affiliate of such holder. For the purposes of these Articles, “Founders” means each of Dr. Henry Yu Lin, Dr. Vincent Wenyong Shi and Mr. Xu Zhou and “Founder” means any one thereof.’

[tradestar2012]

It looks like its just a convention to make sure that if any "founders" ever transfer stock to an unrelated party, the class b shares convert to class a. Its just to make sure that control of the company stays with the founders of the company and not with some outside party. class b shares have preferential voting rights.

[kevinh]

It looks like its just a convention to make sure that if any "founders" ever transfer stock to an unrelated party, the class b shares convert to class a. Its just to make sure that control of the company stays with the founders of the company and not with some outside party. class b shares have preferential voting rights.

Aren't founders shares locked up? I don't quite understand what's going on here. I'm beginning to buy the premise that the insiders might be pledging the shares out for a loan and should they be unable to pay back the loan, the shares lose voting power so the founders still retain control of the company.

[roxron9]

It looks like its just a convention to make sure that if any "founders" ever transfer stock to an unrelated party, the class b shares convert to class a. Its just to make sure that control of the company stays with the founders of the company and not with some outside party. class b shares have preferential voting rights.

Aren't founders shares locked up? I don't quite understand what's going on here. I'm beginning to buy the premise that the insiders might be pledging the shares out for a loan and should they be unable to pay back the loan, the shares lose voting power so the founders still retain control of the company.

From my understanding, this is for post lock up period and is being done in normal course of business. Else they will have to call a special AGM for this issue alone next year ?

[AlphaMine]

I agree with Roxron and believe most companies here handle this conversion issue at the time of the IPO. Therefore I see this as simple house cleaning, something that normally would have already been done. I don't believe it speaks to or implies any imminent intent of the founders to divest.

Would you guys agree if I said this is something akin to having a first right of refusal against your partner's share (and controling power ie votes) of the business. So if your partner died and his stock Xferred you wouldn't wake up with a new partner unless you approve of it.

[tacitusk]

This thread was cited in a new article.

http://www.valuewalk.com/2013/12/nq-mobiles-bylaw-proposal/

[Mountainbiker]

This thread was cited in a new article.

http://www.valuewalk.com/2013/12/nq-mobiles-bylaw-proposal/

That is transparency! Nothing to worry too much.

[AlphaMine]

[quote='tacitusk' pid='32847' dateline='1386175781']

This thread was cited in a new article.

http://www.valuewalk.com/2013/12/nq-mobiles-bylaw-proposal/

That is transparency! Nothing to worry too much.

[/quote

 It is good to see this forum's thoughts posed as the educated view on this subject as I feel they are!  I hope the national notoriety brings many more people to this fine resource you have created ADMIN.  I appreciate very much the input from all who post here and maybe numerous others will be made aware of it as well.

[roxron9]

I wish I could have said same for Value walk: i.e they write educated articles !

They have asked a pointed question to the professors who possibly did not know the whole story. Did valuewalk tell them the whole story that the management's shares will go out of the lock up period in Sept 2014, rather does valuewalk author even know about it ?

Valuewalk are the same guys who kept on running the article that Toro investment has around $100 million invested in NQ without even knowing 1:5 ADS conversion ratio. To my surprise they didn't remove the article even after noting that their article was completely false with no basis !

I rather not get quoted by irresponsible and sensation creating authors like these. Authors like these go by dozen in spam market!

[kevinh]

I wish I could have said same for Value walk: i.e they write educated articles !

They have asked a pointed question to the professors who possibly did not know the whole story. Did valuewalk tell them the whole story that the management's shares will go out of the lock up period in Sept 2014, rather does valuewalk author even know about it ?

Valuewalk are the same guys who kept on running the article that Toro investment has around $100 million invested in NQ without even knowing 1:5 ADS conversion ratio. To my surprise they didn't remove the article even after noting that their article was completely false with no basis !

I rather not get quoted by irresponsible and sensation creating authors like these. Authors like these go by dozen in spam market!

I actually think this article is pretty balanced and straight forward. Just because the shares are locked up doesn't mean they cannot be pledged for a loan.