For many years I have thought we should try and eliminate the very small shareholdings. This is for no other reason than to avoid the expense of sending notices of meetings, annual accounts etc. to people who only hold one or two shares.

When shares were first issued in the1940's a ten shilling share was equivalent to approximately £15 In today's money. Many very small shareholders are still on the share register even though they may no longer be alive or there may be no known address. Because the shareholding may be of so little value it is often forgotten or no transfer takes place on death. We have numerous such shareholders and I think a share consolidation would concentrate people's minds to ensure they are registered with their correct address.

We would have to ensure that any unidentified shares were held in a secure account if they were to be purchased by the company. The proceeds would also be held in a secure account so that the money was always available should the holder of the shares reappear.

If shareholders agree that this is a sensible course of action, it is then a question of how great should be the consolidation. There is no magic figure but after much thought, I am suggesting 40, 50p shares are consolidated into one twenty pound share. The Authorised Share Capital is £1,000,000 and this would be made up of 50,000 £20 shares. For any new issue of shares I would like to see a minimum issue of 5 shares i.e. £100

Because I want to be directed by the small shareholders, I will not be using my votes or those of my family, to influence this decision.

It might be worth reminding shareholders that I have no desire to have a controlling interest in Scunthorpe United and my only concern is that the club is successful and financially sound. It has been suggested that my family has controlled Scunthorpe United for a very long time. This is a long way from the truth. On my father's death in 1969 the Wharton family held a very small percentage of the issued share capital of Scunthorpe United. It was only in 1993 that this increased to just over 10% and increased again to 23% when the issued share capital was increased by way of a Rights Issue in 2002. The Wharton family took up all their allocated shares but very few other shareholders took up their Rights Issue. If you remember, this fresh injection of capital helped us through the difficult times following the collapse of ITV Digital.

I then, with shareholders approval, converted my company's loan into shares when I retired from the Board in 2004 and it was at this point that the Wharton family had effective control of the company as they held over 50% of the Issued Shares.

Any investment in Scunthorpe United can only be looked upon as 'support for the football team' as no dividend is ever likely to be paid. The only gain is likely to be on the sale of the company and I hope you share my view that the club belongs to all of us and any one person is only a temporary custodian. I hope no one will ever be able to say that I or my family have profited from Scunthorpe United. I will do my utmost to ensure any transfer of my shares is only done in the best interests of our football club.

For the share consolidation to take place we may need a Special Resolution to amend our Articles of Association and then once the Articles have been amended, a further Special Resolution authorising the Share Consolidation. In both cases a 75% majority of those attending would be necessary for the motions to be carried. This of course would be at a future AGM or at an Extraordinary Meeting of the shareholders.

There will be sufficient shares available for anyone to round up to 20 at 50p per share prior to consolidation. If there were not enough shares still unissued, I would make some of mine available but I think we have sufficient unissued.

This brief summary is my own personal thoughts and in no way can be taken as being a proposal from the Board of Directors. I will not be offended if it finds no support or is amended in any way. It is purely intended to stimulate a discussion and hopefully we will arrive at a sensible conclusion that is acceptable to small shareholders.

Steve Wharton

Chairman
Scunthorpe United Football Club. Ltd.
25 October 2008

Email your suggestions to the chairman via ironworld@scunthorpe-united.co.uk.