42Forfeiture of options and shares

42 Forfeiture of options and shares

42 Forfeiture of options and shares

(1) If at any time the holder of:

(a) an option to acquire loan entitlement shares in a loan fund company,

(b) qualifying shares in a loan fund company, or

(c) loan entitlement shares in a loan fund company, not being shares in respect of which the company has made a loan for which any liability to the company is outstanding,

is in arrears with the payment of calls or instalments due with respect to the option or shares and the amount of those arrears, together with any penalties that may have been imposed on the holder by the company in respect of the option or shares, exceeds an amount calculated as prescribed, the directors of the company may, at any time during which those arrears and any such penalties exceed the amount so calculated, serve a notice on the holder requiring payment of so much of those calls or instalments as is unpaid, together with any penalties which may have accrued in respect thereof.

(2) The notice referred to in subsection (1) shall, in addition to specifying the amount due and required to be paid with respect to the option or shares, specify:

(a) a date, not earlier than the expiration of 2 months from the date of service of the notice, on or before which the payment required by the notice is to be made, and

(b) that, in the event of non-payment of the amount at or before that date, the option or shares will be liable to be forfeited to the loan fund company.

(3) If the requirements of the notice referred to in subsection (1) are not complied with within the period specified in the notice, the loan fund company may, by resolution of its directors at any time thereafter and before the payment required by the notice has been made, declare the option or shares to which the notice relates to be forfeited to the company and thereupon the option or shares shall be so forfeited.

(4) A forfeiture of shares under subsection (3) in respect of which any dividend has been declared but not actually paid before the forfeiture shall include that dividend.

(5) A person whose option has, or whose shares have, been forfeited under this section shall cease to be the holder of that option or, as the case may be, to be a member with respect to those shares, but the person shall remain liable to pay to the loan fund company all money (including the amount of any penalty lawfully imposed by the company with respect to the option or shares) which, at the date of forfeiture, was payable by the person to the company in respect of the option or shares.