The RULES of The Fair Shares Investment Club

1. THE AFFAIRS OF THE CLUB

The affairs of the club shall be conducted in accordance with the letter and spirit of the constitution laid down by the founder members. The constitution may only be changed by agreement of not less than 75% of current members of the club.

2. OFFICERS

The affairs of the club shall be managed by three officers; chairperson, honorary treasurer and honorary secretary who shall be elected by a simple majority of members attending the annual general meeting of the club. These officers shall resign at the following annual general meeting but shall be eligible for re-election. If an officer should leave the club, die or otherwise be unable to continue to carry out his/her duties, a replacement may be elected at a subsequent ordinary meeting of members. Other officers may be elected from time to time to assist the three main officers.

3. MEETINGS

a) In each year there shall be held 11 monthly meetings and one annual general meeting, at which all members shall be entitled to be present and to vote on all matters.

b) Dates and venues of meetings may be varied in accordance with a resolution supported by a simple majority of those attending a properly constituted meeting of the club; such resolutions and all others must be carried at a meeting where there is a quorum comprising of more than half of the current membership.

c) All members shall be given at least 5 days notice of dates and venues of meetings.

d) A special general meeting may be convened by not less than three members for the purposes of resolving special items of club business subject to a written request being submitted to the secretary who will without undue delay then give at least 21 days notice to all members

4. MEMBERSHIP

In accordance with the constitution the membership of the club shall not exceed 20 persons at any time.

5. ELECTION OF NEW MEMBERS

a) The election of a new member is conditional upon there being no objection from a member present at the meeting at which the application is considered.

b) A prospective member must be proposed and seconded by two existing members at a monthly meeting of the club. Subject to acceptance by all members attending that meeting the name, address and occupation will be included in the minutes which will be circulated to all members prior to the next monthly meeting. Providing no objection is raised at the subsequent meeting, the new member may then be elected.

c) The club reserves the right to refuse admission to any person without giving a reason.

d) On admission to the club, a new member shall pay the Entry Fee and the first months subscription. These sums will purchase for the new member a number of units calculated according to club rules and the unit value prevailing at the time of joining,

6. WITHDRAWAL OF MEMBERSHIP

a) A member shall cease to be a member of the club if he/she in contravention of Clause 15 of the constitution.

b) If a member should die or cease to be a member for any reason, the club shall pay to the member or to persons entitled by law an amount equal to the former member's share in the assets of the club as defined in Rule 11

7. JOINING FEE

a) All members will pay a joining fee of £200 which will rank on par with monthly subscriptions in that it will purchase for that member an appropriate number of units according to the unit value at the time of joining.

b) This fee may be varied at the club's annual general meeting or at a special general meeting.

8. SUBSCRIPTIONS

a) A subscription of £20 per calendar month shall be paid into the club's bank/building society account by all members on or before the 28th day of each month by means of a standing order from a bank, building society or similar source.

b) Each member's subscription will purchase for that member an appropriate number of units according to the unit value declared at the monthly meeting preceding the date when the subscription was paid, subject to club brokerage if such should be in force at that time.

c) The treasurer shall notify members at their monthly meeting if any member is in arrears.

d) The monthly subscription and the level of the club brokerage may be varied at the club's annual general meeting or at a special general meeting.

9. CAPITAL ACCOUNT

a) The club's assets shall be valued monthly by the treasurer as close to the monthly meeting as is reasonably practicable, and a report shall be presented at that meeting. The value of investments shall be based on "middle" closing prices recorded in the Financial Times or other reliable source of stock market information.

b) The treasurer's monthly report shall include: the current value of each of the club's investments together with a total value of such investments; a statement of unpaid accounts and cash in hand on the aforesaid day; the total value of the club's assets and the current unit value which shall be determined by dividing the total net asset value by the total number of units issued to members

10. MEMBER'S ACCOUNTS

An account shall be kept for each member of the club showing: the total investment made by each member by means of subscription, joining fee or additional purchases of units; the total of withdrawals made by each member who has sold back units to the club; the total number of units currently held by the member and the current value of his/her holding

11. MEMBER LEAVING THE CLUB

a) Resignations from membership must be submitted in writing to the chairperson, treasurer or secretary not less than seven days before the monthly meeting at which the resignation is to take effect.

b) Members leaving the club, whether by resignation or as the result of termination of membership under Rule 6, shall sell back to the club their entire holding of units.

c) The amount to be paid to a member leaving the club shall be calculated by multiplying the total number of units held by the member by the unit value declared by the Treasurer at the club meeting at which the resignation became effective, subject to deduction of club brokerage if such should be in force at that time and any fees incurred by the club in connection with the withdrawal of the member. Any surplus cash held to the member's credit will be added.

d) Payment to the member who has left the club shall be made as soon as reasonably practicable and in any case within 90 days of the resignation becoming effective.

12. SELLING BACK UNITS

a) A member may withdraw part of his/her investment in the club by selling back any number of the units purchased providing that this action does not reduce his/her holding to less than 220 units. [the original starting amount]

b) A member wishing to sell back units shall give notice at, or prior to, a monthly meeting of the club, specifying the number of units to be sold back. This notice may not be amended or withdrawn after the meeting except in accordance with Rule 12(g).

c) The amount to be paid back to the member shall be determined by multiplying the number of units which are being sold back by the unit value declared by the treasurer at the meeting at which notice was given by the member, subject to club brokerage if such should be in force at that time.

d) Payment to the member in respect of selling back units to the club shall be made within 90 days of the meeting at which notice of withdrawal was given by the member.

e) A member may not sell back units to the Club until he/she has accrued more than 700 units. [2 years from start]

Note :- In exceptional circumstances this rule may be waived if agreed by a majority of members at a general meeting.

f) Except with the leave of the Chairperson, Treasurer and Secretary a member may not sell back units to the club at any time other than in person at an ordinary general meeting of the club.

g) Where due to the vagaries of the investment markets payment to the member in respect to the sale of units back to the club would exceed the total net asset value of the club, then the club shall be wound up in accordance with Rule 22. Under such circumstances the chairperson may invite the member to reconsider his/her decision to sell.

h) Any member who holds a total number of units in excess of that permitted under

Rule 24 will be compelled to sell back to the club such number of units as will bring his/her holding back into compliance of the said Rule 24. Such sale will not be subject to club brokerage if such should be in force at that time.

13. PURCHASE OF ADDITIONAL UNITS

a) A member wishing to purchase additional units shall give notice of this intention at any monthly meeting of the club after all sales of units under Rules 11 and 12 have been concluded stating the cash amount he/she wishes to invest. Providing that the transaction is approved by a simple majority of members at the meeting, and that it does not infringe the upper limit of unit holding as defined by Rule 24, the member will be required to give to the treasurer at the meeting cash or a cheque for the full amount of the additional investment.

b) Once this payment has been made to the treasurer, the member may not rescind this decision or vary the amount.

c) The additional investment made by the member shall be treated in the same manner as subscriptions in that it will purchase the appropriate number of units based on the unit value declared by the treasurer at the meeting in which payment was received, subject to club brokerage if such was in force at that time.

d) Except with the leave of the Chairperson, Treasurer and Secretary a member may not purchase additional units from the club at any time other than in person at an ordinary general meeting of the club

14. RUNNING COSTS

No member of the club shall be compensated for providing services to the club. Expenses incurred in managing the club shall be recorded in the club's cash account which shall be funded from the club's subscription and other income. The treasurer shall maintain a full and accurate record of all expenditure to submit to the auditors annually.

15 BANKING

a) The club's bankers/building society shall be determined annually at the annual general meeting but may be changed by agreement of a majority of members at a special general meeting called in accordance with Rule 3.

b) All cheques drawn on the club's account shall require any two of three authorised signatures. In the event of an authorised signatory being unavailable for an extended period, the officers of the club may authorise a further signatory for the period involved. All income shall be paid direct to the club's bank/building society account(s) except where members have approved an arrangement whereby their stockbroker retains funds from the sale of one or more investments pending the purchase of other investments.

16. BROKERS

The club's brokers shall be instructed that :-

a) Only two named officers are authorised to buy or sell investments on behalf of the club.

b) No member is authorised to commit the club beyond the cash available in the club bank account(s).

c) All cheques due to the club's account(s) are to be made out to the club's name on non-transferrable cheques.

17. TRUSTEES

Trustees shall be appointed in accordance with the constitution.

18. COMMITMENTS

No club member shall make any commitment on behalf of the club or commit club funds without written authorisation to do so.

19. AMENDMENT OF RULES

The rules of the club may be amended or rescinded at a properly constituted general meeting of the club subject to agreement by at least 75% of the members present.

20. MINUTES

Minutes of club meetings shall be kept and shall be available for inspection by any member of the club at any reasonable time.

21. DISPUTES

a) Any disputes as to the interpretation of these rules shall be decided by the chairperson unless notice is properly served requesting that the matter should be resolved by a special general meeting of club members.

b) Any disputes relating to the valuation of a member's share in the assets of the club or his/her entitlement to that share shall be decided by a chartered accountant (to be appointed by the chairperson of the club) of at least seven years standing whose certificate of decision shall be final. Fees incurred in obtaining this decision shall be paid by the party to the dispute against whom the decision is made, or in the case of this not being clear the fees shall be shared between the club and the member or ex-member concerned.

22. WINDING UP

The club shall be wound up and all assets divided among members (after payment of club expenses) in accordance with the number of units held by each member if a resolution to that effect is passed by at least 75% of the members at a special general meeting of the club.

23. VOTING RIGHTS

In any voting issue each member has one vote. The chairperson will have a casting vote where necessary.

24. UPPER LIMIT OF UNIT HOLDING

The maximum number of units held by any one member shall not exceed one quarter of the total number of units issued to members as declared by the Treasurer at the monthly meeting at the conclusion of the selling period and before the purchasing period commences.

25. TAX LIABILITY

Membership of the club implies acceptance of proportional tax liability on trading profits made by the club in any tax year.

26. "SLUSH FUND"

Each member will contribute £1 per week to a fund [separate from club accounts] which will be used to buy the "Investors' Chronicle" and for other purposes which may be agreed from time to time by a majority of members at any general meeting. This contribution may be varied only at the club's annual general meeting