Spritzer-Circular 2011 2

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.
If you are in any doubt as to the course of action to take, you should consult your stockbroker, solicitor, accountant, bank manager or other professional adviser immediately. Bursa Malaysia Securities Berhad takes no responsibility for the contents of this Circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Circular.
(Incorporated in Malaysia under the Companies Act, 1965)
(Company No. 265348-V)
SPRITZER BHD
CIRCULAR TO SHAREHOLDERS IN RELATION TO THE I. PROPOSED BONUS ISSUE OF UP TO 32,664,667 WARRANTS IN SPRITZER BHD ("SPRITZER") ("WARRANT(S)") ON THE BASIS OF ONE (1) FREE WARRANT FOR EVERY FOUR (4) EXISTING ORDINARY SHARES OF RM0.50 EACH IN SPRITZER HELD ON AN ENTITLEMENT DATE TO BE DETERMINED LATER ("PROPOSED BONUS ISSUE OF WARRANTS"); AND PROPOSED ESTABLISHMENT OF AN EMPLOYEES' SHARE OPTION SCHEME OF UP TO 15% OF THE ISSUED AND PAID-UP SHARE CAPITAL OF SPRITZER AT ANY POINT IN TIME AFTER THE PROPOSED BONUS ISSUE OF WARRANTS ("PROPOSED ESOS") AND NOTICE OF EXTRAORDINARY GENERAL MEETING Adviser
II.
The Notice of the Extraordinary General Meeting ("EGM") of Spritzer Bhd ("Company") which is scheduled to be held at Crystal 2, Impiana Hotel Ipoh, 18 Jalan Raja Dr. Nazrin Shah, 30250 Ipoh, Perak Darul Ridzuan on Thursday, 24 November 2011 at 11.30 a.m. or immediately following the conclusion or adjournment of the Eighteenth Annual General Meeting ("AGM") of the Company scheduled to be held at the same venue and on the same date at 11.00 a.m., whichever is later, together with the Form of Proxy are enclosed herein. A member entitled to attend and vote at the EGM is entitled to appoint a proxy or proxies to attend and vote on his/ her behalf. In such event, the Form of Proxy should be lodged at the Registered Office of the Company at Lot 85, Jalan Portland, Tasek Industrial Estate, 31400 Ipoh, Perak Darul Ridzuan, not less than 48 hours before the time stipulated for holding the EGM or at any adjournment thereof, as indicated below. The lodging of the Form of Proxy shall not preclude you from attending and voting in person at the EGM should you subsequently wish to do so. Last date and time for lodging the Form of Proxy . : Tuesday, 22 November 2011 at 11.30 a.m. Date and time of the EGM .................................................. : Thursday, 24 November 2011 at 11.30 a.m. or immediately following the conclusion or adjournment of the Eighteenth AGM, whichever is later
This Circular is dated 2 November 2011
DEFINITIONS Except where the context otherwise requires, the following definitions shall apply throughout this Circular:"Act" "AGM" "Board" "Bursa Depository" or "Depository" "Bursa Securities" "By-Laws" "Date of Offer" "Deed Poll" "Director(s)" "Effective Date" "EGM" "Eligible Person(s)" : : : : : : : : : : : : The Companies Act, 1965 Annual General Meeting The Board of Directors of Spritzer Bursa Malaysia Depository Sdn Bhd Bursa Malaysia Securities Berhad The terms and conditions of the Proposed ESOS as amended, from time to time The date on which an Offer is made by the ESOS Committee to an Eligible Person in the manner as indicated in By-Law 8.0 The deed poll to be executed by Spritzer, constituting the Warrants The director(s) of Spritzer Group and shall have the meaning given in Section 4 of the Act The effective date for the implementation of the Proposed ESOS in the manner as indicated in By-Law 11.1 Extraordinary General Meeting Employees, executive Directors and non-executive Directors of Spritzer and its subsidiaries, which are not dormant, who meet the criteria of eligibility in the manner as indicated in By-Law 3.0 The date as at the close of business (to be determined and announced later by the Board) on which shareholders of Spritzer must be registered as a member and whose names appear in the Record of Depositors in order to participate in the Proposed Bonus Issue of Warrants Earnings per Share Employees' share option scheme, being the scheme for the granting of ESOS Options to Eligible Persons to subscribe for new Spritzer Shares upon the terms and conditions in the manner as indicated in the ByLaws The committee appointed and duly authorised by the Board to administer the Proposed ESOS in the manner as indicated in By-Law 18.0 The right of a Grantee which may be conditional or unconditional to subscribe for new Spritzer Shares pursuant to the contract constituted by the acceptance of an Offer by an Eligible Person in the manner as indicated in By-Law 8.0
"Entitlement Date"
"EPS" "ESOS"
: :
"ESOS Committee"
"ESOS Option(s)" "Option(s)"
or
DEFINITIONS (CONT'D) "ESOS Option Period" : In respect of each ESOS Option, a period commencing on the Date of Offer relevant to such ESOS Option and expiring at the expiry of the Proposed ESOS as may be determined in the manner as indicated in By-Law 11.0, whichever is the earlier Financial period ended Financial year ended/ ending An Eligible Person who has accepted an Offer in the manner as indicated in By-Law 8.2 Main Market Listing Requirements of Bursa Securities 7 October 2011, being the latest practicable date prior to the printing and despatch of this Circular Any day between Monday to Friday (inclusive), excluding public holidays, and a day on which Bursa Securities is open for trading of securities Net assets A written offer made by the ESOS Committee to an Eligible Person in the manner as indicated in By-Law 8.0 OSK Investment Bank Berhad The Proposed Bonus Issue of Warrants and the Proposed ESOS, collectively The proposed bonus issue of up to 32,664,667 Warrants on the basis of one (1) free Warrant for every four (4) existing Spritzer Shares held on the Entitlement Date The proposed establishment of an ESOS of up to 15% of the issued and paid-up share capital of the Company at any point in time after the Proposed Bonus Issue of Warrants A record of depositors established by Bursa Depository under the Rules of Depository Ringgit Malaysia and sen, respectively Spritzer Bhd Spritzer and its subsidiaries Ordinary share(s) of RM0.50 each in Spritzer The price at which the Grantee shall be entitled to subscribe for one (1) new Spritzer Share pursuant to the exercise of an ESOS Option in the manner as indicated in By-Law 7.0
"FPE" "FYE" "Grantee(s)" "Listing Requirements" "LPD" "Market Day(s)"
: : : : : :
"NA" "Offer(s)" "OSK" or the "Adviser" "Proposals" "Proposed Bonus Issue of Warrants" "Proposed ESOS"
: : : : :
"Record of Depositors" "RM" and "sen" "Spritzer" or the "Company" "Spritzer Group" or the "Group" "Spritzer Share(s)" or "Share(s)" "Subscription Price"
: : : : : :
ii
DEFINITIONS (CONT'D) "WAMP" "Warrant(s)" : : Weighted average market price Up to 32,664,667 warrants in Spritzer to be issued pursuant to the Proposed Bonus Issue of Warrants
Words incorporating the singular shall, where applicable, include the plural and vice versa. Words incorporating the masculine gender shall, where applicable, include the feminine and neuter genders and vice versa. Any reference to persons shall include a corporation, unless otherwise specified. Any reference in this Circular to any enactment is a reference to that enactment as for the time being amended or re-enacted. Any reference to a time of day in this Circular shall be a reference to Malaysian time, unless otherwise specified.
THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK
iii
TABLE OF CONTENTS PAGE 1 2 10 10 11 13 23 23 SHAREHOLDERS AND/ OR 24 27 27 27 28 28
LETTER TO THE SHAREHOLDERS OF SPRITZER CONTAINING:1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. INTRODUCTION DETAILS OF THE PROPOSALS UTILISATION OF PROCEEDS RATIONALE AND JUSTIFICATION FOR THE PROPOSALS INDUSTRY OUTLOOK AND FUTURE PROSPECTS EFFECTS OF THE PROPOSALS HISTORICAL SHARE PRICES APPROVALS REQUIRED/ OBTAINED INTERESTS OF DIRECTORS, MAJOR PERSONS CONNECTED TO THEM
ESTIMATED TIMEFRAME FOR COMPLETION AND TENTATIVE TIMETABLE FOR IMPLEMENTATION PROPOSALS ANNOUNCED BUT PENDING COMPLETION DIRECTORS' RECOMMENDATION EGM FURTHER INFORMATION
APPENDICES I. REPORTING ACCOUNTANTS' LETTER ON THE PROFORMA CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AS AT 31 MAY 2011 OF SPRITZER GROUP IN RELATION TO THE PROPOSALS DRAFT BY-LAWS OF THE PROPOSED ESOS FURTHER INFORMATION 29
II. III.
40 76 ENCLOSED ENCLOSED
NOTICE OF EGM FORM OF PROXY
iv
SPRITZER BHD
Registered Office Lot 85, Jalan Portland Tasek Industrial Estate 31400 Ipoh Perak Darul Ridzuan 2 November 2011 Board of Directors Dato' Lim A Heng @ Lim Kok Cheong, JSM, DPMP, JP (Non-Independent Non-Executive Chairman) Lim Kok Boon (Managing Director) Dr. Chuah Chaw Teo (Executive Director) Lam Sang (Executive Director) Chok Hooa @ Chok Yin Fatt, PMP (Non-Independent Non-Executive Director) Dato' Ir. Nik Mohamad Pena bin Nik Mustapha, DIMP (Independent Non-Executive Director) Y.B. Mohd Adhan bin Kechik (Independent Non-Executive Director) Kuan Khian Leng (Independent Non-Executive Director) To: The Shareholders of Spritzer Bhd Dear Sir/ Madam, I. PROPOSED BONUS ISSUE OF UP TO 32,664,667 WARRANTS IN SPRITZER BHD ("SPRITZER") ("WARRANT(S)") ON THE BASIS OF ONE (1) FREE WARRANT FOR EVERY FOUR (4) EXISTING ORDINARY SHARES OF RM0.50 EACH IN SPRITZER HELD ON AN ENTITLEMENT DATE TO BE DETERMINED LATER ("PROPOSED BONUS ISSUE OF WARRANTS"); AND PROPOSED ESTABLISHMENT OF AN EMPLOYEES' SHARE OPTION SCHEME OF UP TO 15% OF THE ISSUED AND PAID-UP SHARE CAPITAL OF SPRITZER AT ANY POINT IN TIME AFTER THE PROPOSED BONUS ISSUE OF WARRANTS ("PROPOSED ESOS") INTRODUCTION On 30 September 2011, OSK had, on behalf of the Board, announced that the Company proposes to undertake the following:i. A bonus issue of up to 32,664,667 warrants in Spritzer on the basis of one (1) free Warrant for every four (4) existing Spritzer Shares held on an entitlement date to be determined later; and An establishment of an ESOS of up to 15% of the issued and paid-up share capital of the Company at any point in time after the Proposed Bonus Issue of Warrants.
II.
1.
ii.
On 27 October 2011, OSK also had, on behalf of the Board, announced that Bursa Securities had, vide its letter dated 25 October 2011, resolved to approve-in-principle the admission of the Warrants to the official list of Bursa Securities as well as for the listing of and quotation for the Warrants and the new Spritzer Shares to be issued arising from the exercise of the Warrants and ESOS Options on the Main Market of Bursa Securities. The purpose of this Circular is to provide the shareholders of Spritzer with the relevant information on the Proposals as well as to seek the approval from the shareholders of Spritzer for the ordinary resolutions pertaining to the Proposals to be tabled at the forthcoming EGM of the Company. The notice of the forthcoming EGM and the Form of Proxy are enclosed together with this Circular. SHAREHOLDERS OF SPRITZER ARE ADVISED TO READ AND CONSIDER CAREFULLY THE CONTENTS OF THIS CIRCULAR TOGETHER WITH THE APPENDICES CONTAINED HEREIN BEFORE VOTING ON THE ORDINARY RESOLUTIONS TO GIVE EFFECT TO THE PROPOSALS TO BE TABLED AT THE FORTHCOMING EGM. 2. DETAILS OF THE PROPOSALS 2.1 Proposed Bonus Issue of Warrants 2.1.1 Basis and number of Warrants to be issued The Proposed Bonus Issue of Warrants involves an issuance of up to 32,664,667 Warrants on the basis of one (1) free Warrant for every four (4) existing Spritzer Shares held by the shareholders of Spritzer whose names appear in the Record of Depositors on the Entitlement Date. The actual number of Warrants to be issued pursuant to the Proposed Bonus Issue of Warrants will depend on the issued and paid-up share capital of the Company on the Entitlement Date, after taking into consideration the number of Spritzer Shares held as treasury shares. The Spritzer Shares held as treasury shares will not be entitled to the Warrants to be issued pursuant to the Proposed Bonus Issue of Warrants. Based on the issued and paid-up share capital of Spritzer as at the LPD of RM65,329,333 comprising 130,658,666 Spritzer Shares and assuming all existing 24,000 treasury shares are resold on the open market, a total of 32,664,667 free Warrants will be issued pursuant to the Proposed Bonus Issue of Warrants. Fractions of entitlements arising from the Proposed Bonus Issue of Warrants, if any, shall be dealt with by the Board in such manner at their absolute discretion as they may deem fit and expedient and in the best interest of the Company. The Proposed Bonus Issue of Warrants will not be implemented in stages over a period of time.
2.1.2
Ranking of the Warrants and new Spritzer Shares arising from the exercise of the Warrants The holders of the Warrants will not be entitled to any voting right or participation in any form of distribution and/ or offer of further securities in Spritzer until and unless such holders of the Warrants exercise their Warrants into new Spritzer Shares. The new Spritzer Shares to be issued arising from the exercise of the Warrants will, upon allotment and issuance, rank pari passu in all aspects with the then existing Spritzer Shares, save and except that the new Spritzer Shares will not be entitled to any dividends, rights, allotment and/ or other forms of distribution ("Distribution") that may be declared, made or paid for which the entitlement date for the Distribution precedes the date of allotment and issuance of the new Spritzer Shares arising from the exercise of the Warrants. The new Spritzer Shares will be subject to all provisions of the Memorandum and Articles of Association of Spritzer and such amendments thereafter, if any.
2.1.3
Listing of and quotation for the Warrants and the new Spritzer Shares arising from the exercise of the Warrants The approval-in-principle has been obtained from Bursa Securities vide its letter dated 25 October 2011 for the admission of the Warrants to the official list of Bursa Securities as well as for the listing of and quotation for the Warrants and the new Spritzer Shares to be issued arising from the exercise of the Warrants on the Main Market of Bursa Securities.
2.1.4
Basis of determining the issue price and exercise price of the Warrants The Warrants will be issued at no cost to the shareholders of Spritzer. The exercise price of the Warrants shall be determined and fixed by the Board at a later date after receipt of all relevant approvals but before the Entitlement Date. For illustrative purposes only, as disclosed in the announcement dated 30 September 2011 ("Announcement"), the indicative exercise price of the Warrants is assumed at RM0.97 per Warrant, which represents a premium of approximately 20% to the five (5)-day WAMP of Spritzer Shares up to and including 23 September 2011, being the latest practicable date of the Announcement, of RM0.81 per Spritzer Share. The final exercise price of the Warrants shall be determined and fixed by the Board, after taking into consideration, amongst others, the following:i. ii. iii. The historical price movement of Spritzer Shares; The potential future earnings of Spritzer Group; and That the Warrants will be issued at no cost to the entitled shareholders of the Company.
2.1.5
Indicative salient terms of the Warrants The indicative salient terms of the Warrants are set out below:Issue size Form : : Up to 32,664,667 Warrants to subscribe for up to 32,664,667 new Spritzer Shares The Warrants will be issued in registered form and constituted by a deed poll to be executed by the Company The Warrants may be exercised at any time within five (5) years commencing on and including the date of issuance of the Warrants. Warrants not exercised during the exercise period will thereafter lapse and cease to be valid The exercise price of the Warrants shall be determined and fixed by the Board at a later date after receipt of all relevant approvals but before the Entitlement Date Each Warrant carries the entitlement, at any time during the exercise period, to subscribe for one (1) new Spritzer Share at the exercise price, subject to adjustments in accordance with the provisions of the Deed Poll The registered holder of a Warrant is required to lodge a subscription form, as set out in the Deed Poll, with the Company's registrar, duly completed, signed and stamped together with payment of the exercise price by bankers' draft or cashier's order drawn on a bank operating in Malaysia or a money order or postal order issued by a post office in Malaysia The Warrants are transferable by an instrument of transfer in the usual or common form or such other form as the Board, Bursa Securities and/ or any other relevant authorities may approve For the purpose of trading on Bursa Securities, one (1) board lot of Warrants shall comprise 100 Warrants carrying the right to subscribe for 100 new Spritzer Shares at any time during the exercise period, or such other denomination as determined by Bursa Securities The exercise price and/ or number of unexercised Warrants shall be adjusted in the event of alteration to the share capital of the Company, capital distribution or issue of shares in accordance with the provisions of the Deed Poll
Exercise period
Exercise price
Exercise rights
Mode of exercise
Mode of transfer
Board lot
Adjustments in the exercise price and/ or number of Warrants
Rights in the event of winding-up, liquidation, compromise and/ or arrangement
Where a resolution has been passed for a members' voluntary winding up of the Company or where there is a compromise or arrangement, whether or not for the purpose of or in connection with a scheme for the reconstruction of the Company or the amalgamation of the Company with one or more companies, then every warrantholder shall be entitled upon and subject to the provisions of the Deed Poll at any time within six (6) weeks after the passing of such resolution for a members' voluntary winding-up of the Company or six (6) weeks after the granting of the court order approving the compromise or arrangement, by the irrevocable surrender of his/ her Warrants to the Company, elect to be treated as if he/ she had immediately prior to the commencement of such winding-up, compromise or arrangement exercised the exercise rights represented by his/ her Warrants to the extent specified in the relevant exercise forms and be entitled to receive out of the assets of the Company which would be available in liquidation as if he/ she had on such date been the holder of the new Spritzer Shares to which he/ she would have been entitled to pursuant to such exercise Save for manifest error, any modification, amendment, deletion or addition to the Deed Poll shall require the approval of the warrantholders sanctioned by ordinary resolution and may be effected only by the Deed Poll, executed by the Company and expressed to be supplemental hereto and subject to the approval of the relevant authorities, if necessary Laws and regulations of Malaysia
Modification
Governing law 2.2 Proposed ESOS 2.2.1
Details of the Proposed ESOS The Proposed ESOS involves the granting of ESOS Options to the Eligible Persons as set out in the By-Laws to subscribe for new Spritzer Shares at specified prices to be determined in the manner set out in Section 2.2.2(v) of this Circular. The Proposed ESOS will be administered by the ESOS Committee and governed by a set of by-laws, a copy of which is attached as Appendix II of this Circular.
2.2.2
Salient features of the Proposed ESOS The salient features of the Proposed ESOS are set out below:i. Maximum number of Spritzer Shares available under the Proposed ESOS The total number of new Spritzer Shares, which may be allotted pursuant to the Proposed ESOS shall not exceed in aggregate 15% of the total issued and paid-up share capital of the Company (excluding treasury shares) at any point in time during the existence of the Proposed ESOS. ii. Basis of allotment and maximum allowable allotment The maximum number of new Spritzer Shares that may be offered to an Eligible Person shall be determined at the discretion of the ESOS Committee after taking into consideration, amongst others and where relevant, the performance, contribution, employment grade, seniority and length of service of the Eligible Persons, subject to the following:(a) The aggregate allocation to Directors and senior management of Spritzer Group must not exceed 50% of the new Spritzer Shares available under the Proposed ESOS; and The allocation to an Eligible Person, who either singly or collectively, through persons connected to the Eligible Person, holds 20% or more of the issued and paid-up share capital of Spritzer, must not exceed 10% of the new Spritzer Shares available under the Proposed ESOS.
(b)
iii.
Eligibility Only employees, executive Directors and non-executive Directors of Spritzer and its subsidiaries, which are not dormant, who meet the following conditions as at the Date of Offer are eligible to participate in the Proposed ESOS:(a) Employees i. ii. iii. iv. be at least 18 years of age; confirmed in service in the Group; is employed for a continuous period of at least one (1) year in the Group; and be under such categories and complies with such criteria that the ESOS Committee may decide at its absolute discretion from time to time.
(b)
Executive Director An executive Director who has held office for at least one (1) year in the Group, whose entitlement under the Proposed ESOS has been approved by shareholders of the Company in a general meeting, and who is not prohibited or disallowed by the relevant authorities from participating in the Proposed ESOS.
(c)
Non-executive Director A non-executive Director who has held office for at least one (1) year in the Group, whose entitlement under the Proposed ESOS has been approved by shareholders of the Company in a general meeting, and who is not prohibited or disallowed by the relevant authorities from participating in the Proposed ESOS.
The selection of any Eligible Person to participate in the Proposed ESOS shall be at the absolute discretion of the ESOS Committee and the decision of the ESOS Committee shall be binding and final. Save for the aforesaid eligibility conditions and in accordance with the By-Laws, an Eligible Person is not subject to any other conditions and/ or performance targets to be eligible for participation in the Proposed ESOS. iv. Duration The Proposed ESOS, when implemented, shall be in force for a period of five (5) years from the Effective Date. The Proposed ESOS may be extended for a further period of up to five (5) years at the discretion of the Board upon recommendation of the ESOS Committee, subject always that the duration or tenure of the Proposed ESOS shall be not more than ten (10) years from the Effective Date. v. Basis of determining the Subscription Price Subject to any adjustments made under the By-Laws and pursuant to the Listing Requirements, the Subscription Price shall be the higher of:(a) The five (5)-day WAMP of Spritzer Shares immediately preceding the Date of Offer, with a discount of not more than 10% at the ESOS Committee's discretion; or The par value of Spritzer Shares.
(b) vi.
Acceptance An Offer made by the ESOS Committee to an Eligible Person under the Proposed ESOS shall be in writing. The Offer shall be open for acceptance by the Eligible Person to whom it is made for at least 14 calendar days from the Date of Offer. The acceptance of the Offer shall be by a notice in writing addressed to the ESOS Committee in such form as prescribed by the ESOS Committee accompanied by a non-refundable payment to the Company of a sum of RM1.00 only as consideration for the acceptance of such Offer. Upon acceptance of the Offer, the Company may at its discretion, issue to the Grantee an option certificate, which confirms the grant of the ESOS Option, the number of new Spritzer Shares comprised in the ESOS Option, ESOS Option Period and Subscription Price.
If the Offer is not accepted in the aforesaid manner, the Offer shall automatically lapse upon the expiry of the prescribed offer period and shall no longer be capable of acceptance. In the event an Offer is accepted as to part of the Spritzer Shares comprised therein, the Offer as regards to the balance of the Spritzer Shares not accepted shall lapse forthwith. vii. Amendments and/ or modifications Subject to the compliance with the requirements of Bursa Securities and any other relevant authorities, the ESOS Committee may, at any time and from time to time, recommend to the Board any additions and amendments to or deletions of the By-Laws as it shall in its discretion think fit and the Board shall have the power by resolution to add to, amend or delete all of any of the By-Laws upon such recommendation provided that no additions or amendments to or deletion of the By-Laws shall be made which will:(a) Prejudice any rights of the shareholders of the Company without the prior approval of the shareholders of the Company in a general meeting; or Alter to the advantage of any Eligible Person in respect of any matters which are required to be contained in the ByLaws (or any amendments subsequent thereto) by virtue of the Listing Requirements, without the prior approval of the shareholders of the Company in a general meeting unless otherwise allowed by the provisions of the Listing Requirements.
(b)
Where any amendments and/ or modifications are made to the ByLaws, the Company shall submit to Bursa Securities, the amendments and/ or modifications to the By-Laws and a confirmation letter that the amendments and/ or modifications complies with the provisions of the guidelines on ESOS stipulated under the Listing Requirements no later than five (5) Market Days from the effective date of the said amendments and/ or modifications. viii. Alteration of share capital In the event of any alteration in the capital structure of the Company during the ESOS Option Period, whether by way of capitalisation of profits or reserves, rights issue, bonus issue, reduction of capital, subdivision or consolidation of Spritzer Shares, or otherwise howsoever arising, corresponding adjustments, if any, shall be made either in the number of new Spritzer Shares comprised in the ESOS Options not exercised and/ or the Subscription Price in such manner as the ESOS Committee may decide provided that:(a) The adjustment other than arising from a bonus issue must be confirmed in writing by the external auditors for the time being of the Company to be in their opinion (acting as experts and not as arbitrators) fair and reasonable; and
(b)
No adjustment to the Subscription Price shall be made which would result in the new Spritzer Shares being issued at a discount to the par value of Spritzer Shares and if such an adjustment would but for this provision have so resulted, the Subscription Price payable for such new Spritzer Shares shall be the par value of Spritzer Shares.
The aforesaid adjustments shall be made in accordance with the formulas as set out in First Schedule attached to the By-Laws and on the day immediately following the books closure date for the event giving rise to the adjustments. ix. Ranking of the ESOS Options and new Spritzer Shares arising from the exercise of the ESOS Options The Grantees will not be entitled to any voting right or participation in any form of distribution and/ or offer of further securities in Spritzer until and unless such Grantees exercise their ESOS Options into new Spritzer Shares. The new Spritzer Shares arising from the exercise of the ESOS Options shall, upon allotment and issuance, rank pari passu in all aspects with the then existing issued and paid-up Spritzer Shares, except that the new Spritzer Shares will not be entitled to any Distribution declared, made or paid to shareholders, for which the entitlement date for the Distribution precedes the date of which the new Spritzer Shares are credited into the Central Depository System account with Bursa Depository of the Grantees. The new Spritzer Shares will be subject to all provisions of the Memorandum and Articles of Association of Spritzer and such amendments thereafter, if any. x. Holding of Spritzer Shares Pursuant to the Listing Requirements, an eligible Director who is a non-executive Director shall not sell, transfer or assign the Spritzer Shares obtained through the exercise of the ESOS Options offered to him/ her within one (1) year from the Date of Offer. Save for the non-executive Directors, the new Spritzer Shares allotted and issued to the Grantees pursuant to the exercise of the ESOS Options will not be subject to any holding period or restriction on transfer, disposal and/ or assignment. xi. Listing of and quotation for the new Spritzer Shares The approval-in-principle has been obtained from Bursa Securities vide its letter dated 25 October 2011 for the listing of and quotation for the new Spritzer Shares to be issued arising from the exercise of the ESOS Options on the Main Market of Bursa Securities.
3.
UTILISATION OF PROCEEDS The Proposed Bonus Issue of Warrants is not expected to raise any funds as the Warrants will be issued at no cost to the entitled shareholders of Spritzer. However, the exact quantum of proceeds that may be raised by Spritzer pursuant to the exercise of the Warrants would depend upon the actual number of Warrants issued and exercised during the tenure of the Warrants. Assuming full exercise of the Warrants, the maximum proceeds to be raised by the Company is approximately RM31.68 million based on the indicative exercise price of RM0.97 per Warrant. The actual amount of proceeds to be raised from the Proposed ESOS will depend on the number of ESOS Options granted and exercised at the relevant point of time and the Subscription Price payable upon the exercise of the ESOS Options. The proceeds arising from the exercise of the Warrants shall be utilised for the working capital requirements of Spritzer Group, as and when the Warrants are exercised, within the tenure of the Warrants. The proceeds arising from the exercise of the ESOS Options will be utilised for the working capital requirements of Spritzer Group, as and when received. As such, the exact timeframe for utilisation of the proceeds are not determinable at this juncture. The proceeds for working capital will be utilised to finance the Group's day to day operations. These expenses include, amongst others, purchase of raw materials, maintenance charges, salary, repayment of creditors and general expenses such as travelling, utilities, staff training and staff welfare. The proceeds raised is expected to improve the Group's cash flow and to fund its operating expenses. The estimated expenses for the Proposals amounts to approximately RM200,000.
4.
RATIONALE AND JUSTIFICATION FOR THE PROPOSALS 4.1 Proposed Bonus Issue of Warrants After due consideration, the Board is of the view that the Proposed Bonus Issue of Warrants is the most appropriate avenue for rewarding the existing shareholders of the Company while potentially enhancing the Company's capital base as the Proposed Bonus Issue of Warrants shall:i. Aim to reward the existing shareholders of the Company for their support by enabling them to participate in a derivative of the Company without incurring any cost; Allow the existing shareholders of the Company to further participate in the future growth of the Company and any potential capital appreciation arising thereof as and when the Warrants are exercised; and Help to strengthen the capital base and market capitalisation of the Company as and when the Warrants are exercised during the tenure of the Warrants, and potentially provide additional working capital to Spritzer Group as and when the Warrants are exercised.
ii.
iii.
The Proposed Bonus Issue of Warrants is preferred instead of a bonus issue of ordinary shares due to the following:i. ii. A bonus issue of ordinary shares will create an immediate dilution in the EPS of Spritzer Group; and The Proposed Bonus Issue of Warrants potentially provides additional working capital to Spritzer Group as and when the Warrants are exercised.
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4.2
Proposed ESOS The implementation of the Proposed ESOS primarily serves to align the interests of the Eligible Persons to the corporate goals of Spritzer Group. The Proposed ESOS will provide the Eligible Persons with an opportunity to have equity participation in the Company and help achieve the positive objectives as set out below:i. To recognise the contribution of the Eligible Persons whose services are valued and considered vital to the operations and continued growth of Spritzer Group; To motivate the Eligible Persons towards improved performance through greater productivity and loyalty; To inculcate a greater sense of belonging and dedication as the Eligible Persons are given the opportunity to participate directly in the equity of the Company; To retain the Eligible Persons, hence ensuring that the loss of key personnel is kept to a minimum level; and To reward the Eligible Persons by allowing them to participate in the Group's profitability and eventually realise any capital gains arising from appreciation in the value of the Company's shares.
ii. iii.
iv. v.
The Board is of the view that the non-executive Directors play a constructive role in contributing towards the growth and performance of the Group. Therefore, in recognition of their contribution to Spritzer Group, the Proposed ESOS is also extended to the non-executive Directors to allow them to participate in the equity of Spritzer as an incentive as they discharge important functions in providing strategic direction and guidance for the Group, and their experience, services and contributions are valued by the Group. 5. INDUSTRY OUTLOOK AND FUTURE PROSPECTS 5.1 Outlook on the bottled water industry Following the strong performance in 2010, the Malaysian economy is projected to grow at 5 - 6% in 2011, supported mainly by continued expansion in domestic demand. Domestic demand is projected to register a strong expansion of 6.7% in 2011, driven by robust private sector activity. In particular, private consumption is expected to continue to be a main contributor to growth supported mainly by the favourable labour market conditions, rising disposable income and sustained consumer confidence.
(Source: Outlook and Policy in 2011, Bank Negara Malaysia Annual Report 2010)
The Malaysian bottled water industry can be broadly divided into two segments, i.e. the mineral water segment and the drinking water segment. The mineral water segment has approximately ten (10) active producers with total number of brands exceeding 100. Whereas the drinking water segment is highly fragmented and has more than 100 producers with hundreds of brands. It is common for bottled water producers to have multiple brands for their products.
11
Presently, Spritzer, Cactus, Desa, Sunsui, Summer and No Name are the brands of bottled water produced by Spritzer Group. Based on the latest audited consolidated financial statements of Spritzer Group for the FYE 31 May 2011, the revenue and profit before taxation contributions from products of the Group are set out below:Revenue % Mineral water Drinking water Others 57.8 20.8 21.4 100.0 Profit before taxation % 61.1 10.0 28.9 100.0
Spritzers market share in both the mineral water and drinking water segments are not readily available, but to the best knowledge and belief of the management of Spritzer, the Group commanded approximately 33% of the market share in the bottled water industry in Malaysia. The key differentiating factor between mineral water and drinking water is the water source. Mineral water sources must be from an underground aquifer source approved by the Ministry of Health and the product must be packed at source. Drinking water sources can be drawn from the tap or from the ground which also have to be approved by the Ministry of Health. With many market participants in the industry, there are significant differences amongst these producers in terms of investment cost and the level of sophistication in the production processes. The smaller players have limited financial resources and use simple processes in the production of bottled water. Whilst the best-in-class companies use sophisticated, state-of-the-art equipment and stringent production processes to produce bottled water. It is estimated the total market size of bottled water was about 240.5 million litres in year 2010 (Source: Euromonitor). From a relatively small base, the bottled water industry has been experiencing double digit sales growth in the past years. It is also reported that Spritzer has over one third (1/3) of the market share in 2010 (Source: Frost & Sullivan). The bottled water industry is expected to sustain its growth momentum due mainly to factors such as affordability, availability, convenience, quality, hygiene, health, lifestyle changes and affluent populace.
(Source: Management)
5.2
Prospects of Spritzer Group Spritzer Group is principally involved in the production and sales of natural mineral water, carbonated mineral water, distilled drinking water, drinking water, carbonated flavoured water and non-carbonated flavoured water. Spritzer Group is also involved in the manufacture and sales of polyethylene terephthalate ("PET") pre-form, PET bottles, caps, toothbrushes and other plastic products. Spritzer Group has recorded a compounded annual growth rate of approximately 12.4% in its revenue for the past ten (10) years. The Group currently has three bottling plants located in Taiping, Shah Alam and Yong Peng. Over the past two (2) years, the Group has installed two (2) fully automated high-speed filling lines in its Shah Alam plant to cater for the large bottled water market in the Klang Valley and its surrounding areas. In early 2011, the Group has also added a high speed and fully automated PET Combi line in its natural mineral water plant in Taiping.
12
Premised on the growth of its bottled water products over the past years and with the continuous marketing and promotional efforts to nurture its key brands, Spritzer is cautiously optimistic that it will be able to sustain its revenue growth in the foreseeable future. The Board believes that the longer term prospect of the Group remains positive.
(Source: Management)
6.
EFFECTS OF THE PROPOSALS For illustrative purposes only, the effects of the Proposals shall be based on two (2) scenarios as follows:Minimum Scenario : Assuming that all the existing 24,000 treasury shares purchased by the Company are retained within the Company prior to the implementation of the Proposals Assuming that all the existing 24,000 treasury shares have been resold on the open market at the respective acquisition prices prior to the implementation of the Proposals
Maximum Scenario
6.1
Issued and paid-up share capital The proforma effects of the Proposals on the issued and paid-up share capital of Spritzer are set out below:Minimum Scenario No. of Shares RM '000 '000 Issued and paid-up share capital as at the LPD Less: Treasury shares, at par 130,659 (24) 130,635 Shares to be issued assuming full exercise of the Warrants 32,659 163,294 Shares to be issued assuming full exercise of the ESOS Options granted*1 Enlarged issued and paidup share capital
Note:*1
Maximum Scenario No. of Shares RM '000 '000 130,659 130,659 32,665 163,324 24,499 65,329 65,329 16,333 81,662 12,250
65,329 (12) 65,317 16,330 81,647 12,247
24,494
187,788
93,894
187,823
93,912
Assuming that the number of ESOS Options granted amounts to 15% of the issued and paid-up share capital of the Company
13
6.2
NA per Share and gearing Based on the audited consolidated statements of financial position of Spritzer Group as at 31 May 2011, the proforma effects of the Proposals on the NA per Share and gearing of Spritzer Group are set out below:Minimum Scenario
I After the Proposed Bonus Issue of Warrants RM'000 65,329 14,481*2 5,732 (14) 1,868*3 54,455 141,851 130,635 II After I and assuming full exercise of the Warrants RM'000 81,659 31,699*4 5,732 (14) 54,455 173,531 163,294 III After II and assuming full exercise of the ESOS Options granted RM'000 93,906 37,333*5 5,732 (14) 54,455 191,412 187,788
Audited as at 31 May 2011 RM'000 Share capital Share premium Revaluation reserve Treasury shares Warrants reserve Retained earnings Shareholders' funds/ NA Number of Shares outstanding (excluding treasury shares) ('000) NA per Share (RM) Total borrowings (RM'000) Gearing ratio (times)
Notes:*1 *2
65,329 16,549 5,732 (14) 54,455 142,051 130,635*1
1.09 93,590 0.66
1.09 93,590 0.66
1.06 93,590 0.54
1.02 93,590 0.49
Adjusted for the 24,000 treasury shares retained as at the LPD After deducting estimated expenses of RM200,000 incurred in relation to the Proposals and adjusting for the theoretical fair value of RM0.0572 per Warrant, which was arrived at using the Black Scholes option pricing model for the creation of a warrants reserve account for the Proposed Bonus Issue of Warrants pursuant to the applicable Financial Reporting Standards Computed based on the theoretical fair value of RM0.0572 per Warrant and based on 32,658,667 Warrants to be issued under the Minimum Scenario Consists of the transfer of approximately RM1.87 million from the Warrants reserve account to the share premium account and the increase in share premium of approximately RM15.35 million pursuant to the indicative exercise price of the Warrants at RM0.97 per Warrant Assuming that the number of ESOS Options granted amounts to 15% of the issued and paid-up share capital of the Company, and the Subscription Price is RM0.73 per Option, which represents a discount of approximately 10% to the five (5)-day WAMP of Spritzer Shares up to and including 23 September 2011, being the latest practicable date of the Announcement, of RM0.81 per Spritzer Share
*3
*4
*5
14
Maximum Scenario
I Assuming all the treasury shares are resold and after the Proposed Bonus Issue of Warrants RM'000 65,329 14,481*2 5,732 1,868*3 54,455 141,865 130,659 II After I and assuming full exercise of the Warrants RM'000 81,662 31,701*4 5,732 54,455 173,550 163,324 III After II and assuming full exercise of the ESOS Options granted RM'000 93,912 37,336*5 5,732 54,455 191,435 187,823
Audited as at 31 May 2011 RM'000 Share capital Share premium Capital reserve Treasury shares Warrants reserve Retained earnings Shareholders' funds/ NA Number of Shares outstanding (excluding treasury shares) ('000) NA per Share (RM) Total borrowings (RM'000) Gearing ratio (times)
Notes:*1 *2
65,329 16,549 5,732 (14) 54,455 142,051 130,635*1
1.09 93,590 0.66
1.09 93,590 0.66
1.06 93,590 0.54
1.02 93,590 0.49
Adjusted for the 24,000 treasury shares retained as at the LPD After deducting estimated expenses of RM200,000 incurred in relation to the Proposals and adjusting for the theoretical fair value of RM0.0572 per Warrant, which was arrived at using the Black Scholes option pricing model for the creation of a warrants reserve account for the Proposed Bonus Issue of Warrants pursuant to the applicable Financial Reporting Standards Computed based on the theoretical fair value of RM0.0572 per Warrant and based on 32,664,667 Warrants to be issued under the Maximum Scenario Consists of the transfer of approximately RM1.87 million from the Warrants reserve account to the share premium account and the increase in share premium of approximately RM15.35 million pursuant to the indicative exercise price of the Warrants at RM0.97 per Warrant Assuming that the number of ESOS Options granted amounts to 15% of the issued and paid-up share capital of the Company, and the Subscription Price is RM0.73 per Option, which represents a discount of approximately 10% to the five (5)-day WAMP of Spritzer Shares up to and including 23 September 2011, being the latest practicable date of the Announcement, of RM0.81 per Spritzer Share
*3
*4
*5
6.3
Earnings and EPS The Proposed Bonus Issue of Warrants is not expected to have any material effect on the earnings of Spritzer Group for the FYE 31 May 2012. However, as and when the Warrants are exercised into new Spritzer Shares, it will result in a dilution in the EPS of Spritzer Group due to the increase in the number of Spritzer Shares issued. The Proposed ESOS is not expected to have any material effect on the earnings of Spritzer Group for the FYE 31 May 2012 save for the possible impact of the Financial Reporting Standards 2 ("FRS 2") on share-based payment. However, any potential effect on the EPS of Spritzer Group in the future would depend on the number of ESOS Options granted and exercised, and the Subscription Price payable upon the exercise of the ESOS Options as well as the impact of the FRS 2 on share-based payment.
15
Under the FRS 2 on the share-based payment effective 1 January 2006, the cost arising from the issuance of the ESOS Options is measured by the fair value of the ESOS Options, which is expected to vest at each Date of Offer and is recognised in the income statement over the vesting period of the ESOS Options, thereby reducing the earnings of Spritzer Group. The fair value of the ESOS Options is determined after taking into consideration, amongst others, the historical volatility of Spritzer Shares, the risk free rate, the Subscription Price and time to maturity of the ESOS Options from the vesting date of the ESOS Options. Hence, the potential effect on the EPS of Spritzer Group, as a consequence of the recognition of the said cost, cannot be determined at this juncture. Nevertheless, the Company has taken note of the potential impact of the FRS 2 on Spritzer Group's future earnings and shall take into consideration such impact on the allocation and granting of ESOS Options to the Eligible Persons. 6.4 Substantial shareholding structure The Proposals will not have any effect on the shareholdings of the substantial shareholders of Spritzer. Any potential effect on the substantial shareholdings in Spritzer will depend on the number of new Spritzer Shares to be issued arising from the exercise of the Warrants as well as on the number of ESOS Options granted and new Spritzer Shares to be issued arising from the exercise of the ESOS Options at any point in time. Based on the assumption that the number of ESOS Options granted amounts to 15% of the issued and paid-up share capital of Spritzer, the proforma effects of the Proposals on the shareholdings of the substantial shareholders of the Company are set out in the ensuing pages.
16
Minimum Scenario
Substantial shareholders 42,254,844 18,352,000 0.53 6,750,000 5.17 18,352,000 14.05 6,750,000 5.17 14.05 697,332*1 32.35 42,254,844 32.35
I Shareholdings as at the LPD After the Proposed Bonus Issue of Warrants <------------Direct------------><-----------Indirect------------><------------Direct-------------><-----------Indirect------------> No. of Shares % No. of Shares % No. of Shares % No. of Shares % 697,332*1 0.53 -
Yee Lee Corporation Bhd ("Yee Lee Corporation")
Yee Lee Holdings Sdn Bhd ("Yee Lee Holdings")
AmanahRaya Trustees Berhad - Skim Amanah Saham Bumiputera ("AmanahRaya Trustees") 6,403,366 5,100,000 1,550,000 133,332 ("Yeleta 61,304,176*6 61,304,176
*7
Dato' Lim A Heng @ Lim Kok Cheong ("Dato' Lim") 3.90 1.19 0.10 9,869,666*5 72,777,140*4 55.71 7.56 46.93 46.93 61,304,176*7 61,304,176*8 61,304,176
*9
4.90 4,902,998*3 3.75
67,923,774
*2
52.00
6,403,366 5,100,000 1,550,000 133,332 -
4.90 3.90 1.19 0.10 -
67,923,774
*2
52.00 4,902,998*3 72,777,140*4 9,869,666*5 61,304,176*6 61,304,176*7 3.75 55.71 7.56 46.93 46.93
Lim Kok Boon
Datin Chua Shok Tim @ Chua Siok Hoon ("Datin Chua")
Lai Yin Leng
Yee Lee Organization Bhd ("Yee Lee Organization")
Unikampar Credit And Leasing Sdn Bhd ("Unikampar")
Uniyelee Sdn Bhd ("Uniyelee") Bhd
46.93 46.93 46.93
61,304,176*7 61,304,176*8 61,304,176*9
46.93 46.93 46.93
Yeleta Holdings Holdings")
Sdn
Young Wei Holdings Sdn Bhd ("Young Wei Holdings")
17
II
Substantial shareholders 52,818,555 22,940,000 0.53 52.00 3.75 55.71 7.56 46.93 46.93 46.93 46.93
*9
III After II and assuming full exercise of the ESOS Options granted After I and assuming full exercise of the Warrants <------------Direct------------><-----------Indirect------------><------------Direct-------------><-----------Indirect------------> No. of Shares % No. of Shares % No. of Shares % No. of Shares % 32.35 14.05 22,940,000 8,437,500 8,004,208 6,375,000 1,937,500 166,665 46.93 4.26 3.39 1.03 0.09 4.49 12.22 5.17 4.90 3.90 1.19 0.10 76,630,220 76,630,220
*8
Yee Lee Corporation 871,665*1 84,904,718 6,128,748 90,971,425 12,337,083 76,630,220 76,630,220 76,630,220
*7 *7 *6 *5 *4 *3 *2
52,818,555
28.13
871,665*1 84,904,718*2 6,128,748*3 90,971,425*4 12,337,083*5 76,630,220*6 76,630,220*7 76,630,220*7 76,630,220*8 76,630,220*9
0.46 45.21 3.26 48.44 6.57 40.81 40.81 40.81 40.81 40.81
Yee Lee Holdings 8,437,500 8,004,208 6,375,000 1,937,500 166,665 -
AmanahRaya Trustees
Dato' Lim
Lim Kok Boon
Datin Chua
Lai Yin Leng
Yee Lee Organization
Unikampar
Uniyelee
Yeleta Holdings
Young Wei Holdings
18
Notes:-
*1
Deemed interested by virtue of its shareholdings in Transworld Commodities (M) Sdn Bhd ("Transworld Commodities")
*2
Deemed interested by virtue of his shareholdings in Chuan Sin Resources Sdn Bhd ("Chuan Sin Resources") and Young Wei Holdings, and the shares held by his spouse, Datin Chua and his children, Lim Ee Young and Lim Ee Wai in the Company
*3
Deemed interested by virtue of his shareholdings in Chuan Sin Resources, and the shares held by his spouse, Lai Yin Leng and his child, Lim Seng Lee in the Company
*4
Deemed interested by virtue of her shareholdings in Young Wei Holdings and indirect shareholdings in Chuan Sin Resources, and the shares held by her spouse, Dato' Lim and her children, Lim Ee Young and Lim Ee Wai in the Company
*5
Deemed interested by virtue of her indirect shareholdings in Chuan Sin Resources, and the shares held by her spouse, Lim Kok Boon and her child, Lim Seng Lee in the Company
*6
Deemed interested by virtue of its shareholdings in Yee Lee Corporation and Yee Lee Holdings and indirect shareholdings in Transworld Commodities
*7
Deemed interested by virtue of its shareholdings in Yee Lee Organization
*8
Deemed interested by virtue of its shareholdings in Unikampar and Uniyelee
*9
Deemed interested by virtue of its shareholdings in Yeleta Holdings
19
Maximum Scenario
Substantial shareholders 32.35 14.05 0.53 52.00 3.75 55.71 7.56 46.93 46.93 46.93 46.93 46.93 - 61,304,176*6 - 61,304,176*7 - 61,304,176*7 - 61,304,176*8 - 61,304,176*9 133,332 0.10 9,869,666*5 1,550,000 1.19 72,777,140*4 55.70 7.55 46.92 46.92 46.92 46.92 46.92 5,100,000 3.90 4,902,998*3 3.75 6,403,366 4.90 67,923,774*2 51.99 6,750,000 5.17 6,750,000 6,403,366 5,100,000 1,550,000 133,332 18,352,000 14.05 0.53 18,352,000 5.17 4.90 67,923,774 3.90 1.19 72,777,140 0.10 - 61,304,176 - 61,304,176*7 - 61,304,176*7 - 61,304,176*8 - 61,304,176*9
*6 *4 *5 *2
I II Assuming all the treasury shares are After I and the Proposed Bonus Issue of Shareholdings as at the LPD resold Warrants <----------Direct---------><--------Indirect---------> <---------Direct-----------><--------Indirect---------> <----------Direct----------><--------Indirect---------> No. of No. of No. of No. of No. of No. of Shares % Shares % Shares % Shares % Shares % Shares % 697,332*1 697,332*1 14.05 5.17 42,254,844 32.34 42,254,844 32.34 697,332*1 4.90 67,923,774*2 3.90 4,902,998*3 1.19 72,777,140*4 0.10 9,869,666*5 - 61,304,176*6 - 61,304,176*7 - 61,304,176*7 - 61,304,176*8 - 61,304,176*9 0.53 51.99 3.75 55.70 7.55 46.92 46.92 46.92 46.92 46.92
Yee Lee Corporation
42,254,844
Yee Lee Holdings
18,352,000
AmanahRaya Trustees
6,750,000
Dato' Lim 4,902,998

*3
6,403,366
Lim Kok Boon
5,100,000
Datin Chua 9,869,666
1,550,000
Lai Yin Leng -
133,332
Unikampar
Uniyelee
Yeleta Holdings
Young Wei Holdings
20
Substantial shareholders 32.34 14.05 5.17 4.90 84,904,718*2 51.99 3.75 55.70 7.55 46.92 46.92 46.92 46.92 46.92 - 76,630,220*7 - 76,630,220*7 - 76,630,220*8 - 76,630,220*9 - 76,630,220*6 166,665 0.09 12,337,083*5 6.57 40.80 40.80 40.80 40.80 40.80 1,937,500 1.03 90,971,425*4 48.43 6,375,000 3.39 6,128,748*3 3.26 8,004,208 45.20 3.90 1.19 90,971,425*4 0.10 12,337,083*5 - 76,630,220*6 - 76,630,220*7 - 76,630,220*7 - 76,630,220*8 - 76,630,220*9 6,128,748*3 4.26 84,904,718*2 8,437,500 4.49 871,665
*1
III IV After III and assuming full exercise of the After II and assuming full exercise of the ESOS Options granted Warrants <----------Direct---------><--------Indirect---------> <---------Direct-----------><--------Indirect---------> No. of No. of No. of No. of Shares % Shares % Shares % Shares % 0.53 22,940,000 12.21 871,665*1 0.46 52,818,555 28.12 -
Yee Lee Corporation
52,818,555
Yee Lee Holdings
22,940,000
AmanahRaya Trustees
8,437,500
Dato' Lim
8,004,208
Lim Kok Boon
6,375,000
Datin Chua
1,937,500
Lai Yin Leng -
166,665
Unikampar
Uniyelee
Yeleta Holdings
Young Wei Holdings
21
Notes:-
*1
Deemed interested by virtue of its shareholdings in Transworld Commodities
*2
Deemed interested by virtue of his shareholdings in Chuan Sin Resources and Young Wei Holdings, and the shares held by his spouse, Datin Chua and his children, Lim Ee Young and Lim Ee Wai in the Company
*3
Deemed interested by virtue of his shareholdings in Chuan Sin Resources, and the shares held by his spouse, Lai Yin Leng and his child, Lim Seng Lee in the Company
*4
Deemed interested by virtue of her shareholdings in Young Wei Holdings and indirect shareholdings in Chuan Sin Resources, and the shares held by her spouse, Dato' Lim and her children, Lim Ee Young and Lim Ee Wai in the Company
*5
Deemed interested by virtue of her indirect shareholdings in Chuan Sin Resources, and the shares held by her spouse, Lim Kok Boon and her child, Lim Seng Lee in the Company
*6
Deemed interested by virtue of its shareholdings in Yee Lee Corporation and Yee Lee Holdings and indirect shareholdings in Transworld Commodities
*7
Deemed interested by virtue of its shareholdings in Yee Lee Organization
*8
Deemed interested by virtue of its shareholdings in Unikampar and Uniyelee
*9
Deemed interested by virtue of its shareholdings in Yeleta Holdings
6.5
Convertible securities
As at the LPD, the Company does not have any existing convertible securities.
22
7.
HISTORICAL SHARE PRICES The monthly highest and lowest closing market prices of Spritzer Shares as traded on Bursa Securities for the past 12 months from October 2010 to September 2011 are set out below:High RM 1.10 0.99 0.97 0.95 0.96 0.97 1.10 1.00 0.97 0.94 0.98 0.86 Low RM 0.98 0.91 0.86 0.88 0.88 0.80 0.92 0.91 0.75 0.83 0.83 0.79 RM0.80 RM0.82
2010 October November December 2011 January February March April May June July August September Last transacted market price on 29 September 2011 (being the date prior to the Announcement) Last transacted market price on 7 October 2011 (being the latest practicable date prior to the printing of this Circular)
(Source: Bloomberg)
8.
APPROVALS REQUIRED/ OBTAINED The Proposals are subject to the following approvals:i. Bursa Securities, for which the approval-in-principle for the admission of the Warrants to the official list of Bursa Securities, as well as for the listing of and quotation for the Warrants and the new Spritzer Shares to be issued arising from the exercise of the Warrants and ESOS Options on the Main Market of Bursa Securities, was obtained vide its letter dated 25 October 2011, subject to the following conditions:(a) Proposed Bonus Issue of Warrants
Conditions 1) Spritzer and OSK must fully comply with the relevant provisions under the Listing Requirements pertaining to the implementation of the Proposed Bonus Issue of Warrants; Spritzer and OSK to inform Bursa Securities upon the completion of the Proposed Bonus Issue of Warrants; Spritzer to furnish Bursa Securities with a written confirmation of its compliance with the terms and conditions of Bursa Securities' approval once the Proposed Bonus Issue of Warrants is completed; and Spritzer to furnish Bursa Securities on a quarterly basis a summary of the total number of shares listed pursuant to the exercise of Warrants as at the end of each quarter together with a detailed computation of listing fees payable. Status of compliance Noted
2) 3)
To be complied To be complied
4)
To be complied
23
(b)
Proposed ESOS
Conditions 1) OSK to submit a confirmation to Bursa Securities of full compliance of the ESOS pursuant to Paragraph 6.43(1) of the Listing Requirements and stating the effective date of implementation, together with the following:i. ii. A certified true copy of the resolution passed by the shareholders in a general meeting; and Letter of compliance in relation to the ESOS By-Laws pursuant to Paragraph 2.12 of the Listing Requirements together with a copy of the final ESOS By-Laws. To be complied To be complied Status of compliance
2)
Spritzer to furnish Bursa Securities on a quarterly basis a summary of the total number of shares listed pursuant to the exercise of the ESOS Options as at the end of each quarter together with a detailed computation of listing fees payable.
To be complied
ii.
Controller of Foreign Exchange (via Bank Negara Malaysia) for the allotment and issuance of the Warrants to the non-resident shareholders of Spritzer, if any, was obtained vide its letter dated 20 October 2011; The shareholders of Spritzer, for the Proposals at the forthcoming EGM of the Company; and Any other relevant authority, if required.
iii. iv.
The Proposed Bonus Issue of Warrants and Proposed ESOS are inter-conditional upon each other. However, the Proposals are not conditional upon any other proposals undertaken or to be undertaken by the Company. 9. INTERESTS OF DIRECTORS, CONNECTED TO THEM MAJOR SHAREHOLDERS AND/ OR PERSONS
None of the Directors of Spritzer, major shareholders and/ or persons connected to them have any interest, either direct or indirect, in the Proposed Bonus Issue of Warrants beyond their respective entitlements, if any, as shareholders of Spritzer under the Proposed Bonus Issue of Warrants, the rights of which are also available to all other existing shareholders of the Company as at the Entitlement Date. All the Directors of Spritzer are eligible to participate in the Proposed ESOS, and are therefore deemed interested to the extent of their respective allocations under the Proposed ESOS. Notwithstanding this, all Directors have deliberated on the Proposed ESOS, and have agreed to present the Proposed ESOS to the shareholders of the Company for their consideration and approval. The Directors of Spritzer shall abstain from voting in respect of their direct and/ or indirect shareholdings, if any, at the forthcoming EGM of the Company in respect of the ordinary resolutions to be tabled for their respective proposed allocation, if any, as well as the proposed allocations to the persons connected to them, if any. The Directors of Spritzer will undertake to ensure that persons connected to them, if any, will abstain from voting in respect of their direct and/ or indirect shareholdings, if any, in the Company on the ordinary resolutions pertaining to their respective proposed allocation and the proposed allocations to the persons connected to them to be tabled at the forthcoming EGM.
24
Yee Lee Corporation, Yee Lee Holdings, Yee Lee Organization, Unikampar, Uniyelee, Yeleta Holdings and Young Wei Holdings are major shareholders of the Company ("Interested Major Shareholders"), who are deemed persons connected to a Director of Spritzer, namely Dato' Lim, are deemed to be interested in the proposed allocations to him. The Interested Major Shareholders will abstain from voting in respect of their direct and/ or indirect shareholdings in the Company on the ordinary resolutions pertaining to the proposed allocations to Dato' Lim, as well as the proposed allocations to the persons connected to him, if any, to be tabled at the forthcoming EGM. The Interested Major Shareholders and Dato' Lim will also undertake to ensure that persons connected to them, if any, will abstain from voting on the ordinary resolution pertaining to the proposed allocations to Dato' Lim to be tabled at the forthcoming EGM. The shareholdings of the Directors of Spritzer, Interested Major Shareholders and persons connected to them as at the LPD are set out below:Shareholdings as at the LPD <------------Direct------------> <-----------Indirect-----------> No. of Shares % No. of Shares % 6,403,366 5,100,000 138,666 2,418,866 146,000 1,350,000 3,661,332 4.90 3.90 0.11 1.85 0.11 1.03 2.80 4,800,000 67,923,774*1 4,902,998
*2
Directors of Spritzer Dato' Lim Lim Kok Boon Dr. Chuah Chaw Teo Lam Sang Chok Hooa @ Chok Yin Fatt Dato' Ir. Nik Mohamad Pena bin Nik Mustapha Y.B. Mohd Adhan bin Kechik Kuan Khian Leng Interested Major Shareholders Yee Lee Corporation Yee Lee Holdings Yee Lee Organization Unikampar Uniyelee Yeleta Holdings Young Wei Holdings Persons connected to the Directors of Spritzer and/ or Interested Major Shareholders Datin Chua Chuan Sin Resources Unique Bay*11 Lai Yin Leng Lim Ee Wai
*13 *10
52.00 3.75 3.67
*3
42,254,844 18,352,000 -
32.35 14.05 697,332
*4
0.53 46.93 46.93 46.93 46.93 46.93
61,304,176*5 61,304,176*6 61,304,176*6 61,304,176*7 61,304,176*8
1,550,000 4,664,000 4,800,000 133,332 242,398
1.19 3.57 3.67 0.10 0.19
72,777,140*9 9,869,666
*12
55.71 7.56 -
25
Shareholdings as at the LPD Persons connected to the Directors of <------------Direct------------> <-----------Indirect-----------> Spritzer and/ or Interested Major Shareholders No. of Shares % No. of Shares % Lim Ee Young Lim Seng Lee Lim Siew Ai
*16
163,200 105,666 38,000 21,332 *20 *21
0.12 0.08 0.03 0.02 -
21,332*14 4,664,000
*15
0.02 3.57 0.12 3.57 3.57 -
163,200
*17 *18 *19
Ooi Guat Ee Lim Kok Keong Lim Hock Lai Beh Swee See
4,664,000 4,664,000
Huang Yu Ying
Notes:*1
Deemed interested by virtue of his shareholdings in Chuan Sin Resources and Young Wei Holdings, and the shares held by his spouse, Datin Chua and his children, Lim Ee Young and Lim Ee Wai in the Company Deemed interested by virtue of his shareholdings in Chuan Sin Resources, and the shares held by his spouse, Lai Yin Leng and his child, Lim Seng Lee in the Company Deemed interested by virtue of his shareholdings in Unique Bay Deemed interested by virtue of its shareholdings in Transworld Commodities Deemed interested by virtue of its shareholdings in Yee Lee Corporation and Yee Lee Holdings and indirect shareholdings in Transworld Commodities Deemed interested by virtue of its shareholdings in Yee Lee Organization Deemed interested by virtue of its shareholdings in Unikampar and Uniyelee Deemed interested by virtue of its shareholdings in Yeleta Holdings Deemed interested by virtue of her shareholdings in Young Wei Holdings and indirect shareholdings in Chuan Sin Resources, and the shares held by her spouse, Dato' Lim and her children, Lim Ee Young and Lim Ee Wai in the Company. She is an Eligible Person pursuant to her being the non-executive Director of Chuan Sin Sdn Bhd and Chuan Sin Cactus Sdn Bhd, subsidiaries of Spritzer A person connected to the Directors of Spritzer by virtue of the shareholdings held by Dato' Lim and Lim Kok Boon A person connected to the Director of Spritzer by virtue of the shareholdings held by Kuan Khian Leng Deemed interested by virtue of her indirect shareholdings in Chuan Sin Resources, and the shares held by her spouse, Lim Kok Boon and her child, Lim Seng Lee in the Company A person connected to the Director of Spritzer by virtue of him being the son of Dato' Lim Deemed interested by virtue of the shares held by his spouse, Ooi Guat Ee in the Company. He is a person connected to the Director of Spritzer by virtue of him being the son of Dato' Lim Deemed interested by virtue of his shareholdings in Chuan Sin Resources. He is a person connected to the Director of Spritzer by virtue of him being the son of Lim Kok Boon. He is an Eligible Person pursuant to him being the Deputy General Manager of Chuan Sin Sdn Bhd, a subsidiary of Spritzer A person connected to the Directors of Spritzer by virtue of her being the sister of Dato' Lim and Lim Kok Boon. She is an Eligible Person pursuant to her being the Administrative Executive of Chuan Sin Cactus Sdn Bhd, a subsidiary of Spritzer
*2
*3 *4 *5
*6 *7 *8 *9
*10
*11 *12
*13 *14
*15
*16
26
*17
Deemed interested by virtue of the shares held by her spouse, Lim Ee Young in the Company. She is a person connected to the Director of Spritzer by virtue of her being the daughter-in-law of Dato' Lim Deemed interested by virtue of his shareholdings in Chuan Sin Resources. He is a person connected to the Directors of Spritzer by virtue of him being the brother of Dato' Lim and Lim Kok Boon Deemed interested by virtue of his shareholdings in Chuan Sin Resources. He is a person connected to the Director of Spritzer by virtue of him being the son of Lim Kok Boon. He is an Eligible Person pursuant to him being the Head of Sales and Marketing of Chuan Sin Sdn Bhd, a subsidiary of Spritzer A person connected to the Directors of Spritzer by virtue of her being the sister-in-law of Dato' Lim and Lim Kok Boon. She is an Eligible Person pursuant to her being the Business Development Manager of Chuan Sin Sdn Bhd, a subsidiary of Spritzer A person connected to the Director of Spritzer by virtue of her being the daughter-in-law of Lim Kok Boon. She is an Eligible Person pursuant to her being the Human Resource/ Administrative Manager of Chuan Sin Sdn Bhd, a subsidiary of Spritzer
*18
*19
*20
*21
Save as disclosed above, none of the Directors of Spritzer and major shareholders of the Company and/ or persons connected to the Directors of Spritzer and/ or major shareholders of the Company has any other interest, either direct or indirect, in the Proposed ESOS and proposed allocation of Options to the respective Directors of Spritzer. 10. ESTIMATED TIMEFRAME FOR COMPLETION AND TENTATIVE TIMETABLE FOR IMPLEMENTATION Barring any unforeseen circumstances and subject to all required approvals being obtained, the Board expects the Proposals to be completed by the first quarter of 2012. The tentative timetable in relation to the Proposed Bonus Issue of Warrants is set out below:Month 24 November 2011 End November 2011 Mid December 2011 End December 2011 Events Convening of EGM to obtain the approval of shareholders of Spritzer Announcement of the price-fixing date and the Entitlement Date Entitlement Date Listing of Warrants
11.
PROPOSALS ANNOUNCED BUT PENDING COMPLETION Save for the Proposals, the Board is not aware of any other corporate exercise that has been announced but not yet completed as at the date of this Circular.
12.
DIRECTORS' RECOMMENDATION The Board, having considered all aspects of the Proposals, is of the opinion that the Proposals are in the best interest of the Company after taking into consideration the rationale and justification for the Proposals and effects of the Proposals as set out in Sections 4 and 6 of this Circular, respectively. Accordingly, the Board recommends that you vote in favour of the ordinary resolution pertaining to the Proposed Bonus Issue of Warrants to be tabled at the forthcoming EGM of the Company. However, the Board has abstained from giving any opinion on the respective proposed allocation to each of them and/ or persons connected to them. In addition, the Board has abstained from making any recommendation for voting in respect of the resolutions pertaining to the Proposed ESOS and the proposed allocation to each of them and/ or persons connected to them, given that they are interested in the respective proposed allocation to them and/ or persons connected to them under the Proposed ESOS.
27
13.
EGM The EGM, the notice of which is enclosed in this Circular, is scheduled to be held at Crystal 2, Impiana Hotel Ipoh, 18 Jalan Raja Dr. Nazrin Shah, 30250 Ipoh, Perak Darul Ridzuan on Thursday, 24 November 2011 at 11.30 a.m. or immediately following the conclusion or adjournment of the Eighteenth AGM of the Company scheduled to be held at the same venue and on the same date at 11.00 a.m., whichever is later, for the purpose of considering and if thought fit, passing with or without modification, the resolutions to give effect to the Proposals. If you are unable to attend and vote in person at the EGM, you are requested to complete, sign and return the enclosed Form of Proxy in accordance with the instructions contained therein, to be deposited at the Registered Office of the Company at Lot 85, Jalan Portland, Tasek Industrial Estate, 31400 Ipoh, Perak Darul Ridzuan, not less than 48 hours before the time stipulated for holding the EGM or at any adjournment thereof. The lodging of the Form of Proxy shall not preclude you from attending and voting in person at the EGM should you subsequently wish to do so.
14.
FURTHER INFORMATION Shareholders are advised to refer to the attached appendices for further information.
Yours faithfully, For and on behalf of the Board of SPRITZER BHD
DR. CHUAH CHAW TEO Executive Director
28
APPENDIX I REPORTING ACCOUNTANTS' LETTER ON THE PROFORMA CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AS AT 31 MAY 2011 OF SPRITZER GROUP IN RELATION TO THE PROPOSALS
29
30
31
32
33
34
35
36
37 35
38 36
39 35
APPENDIX II DRAFT BY-LAWS OF THE PROPOSED ESOS
Name of Scheme : Spritzer Bhd Employees Share Option Scheme (Scheme) Part A RATIONALE AND OBJECTIVES OF THE SCHEME The implementation of the Scheme primarily serves to align the interests of the Eligible Persons to the corporate goals of Spritzer Group. The Scheme will provide the Eligible Persons with an opportunity to have equity participation in the Company and help achieve the positive objectives as set out below: i. To recognise the contribution of the Eligible Persons whose services are valued and considered vital to the operations and continued growth of Spritzer Group; To motivate the Eligible Persons towards improved performance through greater productivity and loyalty; To inculcate a greater sense of belonging and dedication as the Eligible Persons are given the opportunity to participate directly in the equity of the Company; To retain the Eligible Persons, hence ensuring that the loss of key personnel is kept to a minimum level; and To reward the Eligible Persons by allowing them to participate in the Group's profitability and eventually realise any capital gains arising from appreciation in the value of the Company's shares.
ii.
iii.
iv.
v.
The Scheme is also extended to the Non Executive Director(s) of the Group, eligible for participation in the Scheme as set out in By Laws, as they discharge important functions and their services and contributions are valued by the Group.
ESOS By Laws SPRITZER BHD
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Part B 1.0 1.1 DEFINITIONS In these By Laws, except where the context otherwise requires, the following definitions shall have the following meanings: Act The Companies Act, 1965, or any statutory modification, amendment, re enactment thereof. The Board of Directors for the time being of the Company Bursa Malaysia Securities Berhad (Company No. 635998 W) Terms and conditions of the Scheme as amended, from time to time Central Depository System CDS account established by Bursa Malaysia Depository Sdn Bhd (Company No. 165570 W) for the recording of deposits and withdrawal of securities and for dealings in such securities by a depositor Spritzer Bhd (Company No. 265348 V), a public listed company incorporated in Malaysia with limited liability and having its registered office at Lot 85, Jalan Portland, Tasek Industrial Estate, 31400 Ipoh, Perak Darul Ridzuan The date on which an Offer is made by the ESOS Committee to an Eligible Person
Board
Bursa Securities
By Law or By Laws
CDS CDS Account
Company
Date of Offer
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Director(s)
A natural person who holds a directorship, whether an executive or non executive capacity, in the Group. The duration of the Scheme as defined in By Law 11.0 A natural person who holds directorship on a full time executive capacity in the Group and is on the payroll of such company in the Group Employees, Executive Directors and Non Executive Directors of Spritzer and its subsidiaries, which said subsidiaries are not dormant, who meet the criteria of eligibility as stipulated in By Law 3.0 Employees share option scheme The committee appointed and duly authorised by the Board to administer the Scheme pursuant to By Law 18.0 An Eligible Person who has accepted an Offer in the manner specified in By Law 8.2 At any point of time in the Duration of the Scheme, comprised the Company and its subsidiaries as defined in the Act at that point of time (excluding dormant companies) Main Market Listing Requirements of Bursa Securities, as amended and supplemented from time to time Any day on which Bursa Securities is open for the trading of securities
Duration of the Scheme
Executive Director(s)
Eligible Person(s)
ESOS ESOS Committee
Grantee
Group
MMLRs
Market Day
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Maximum Allowable Allotment
The basis of allotment and maximum number of new Share Units comprised in an Offer, which made to the Eligible Person, if any, as provided in By Law 4.0 A natural person who holds a directorship in the Group, in a non executive capacity and is not an employee on the payroll of such company in the Group A written offer made by the ESOS Committee to an Eligible Person in the manner specified in By Law 8.0 The right of a Grantee, which may be conditional or unconditional, to subscribe for new Share Units pursuant to the contract constituted by the acceptance of an Offer by an Eligible Person in the manner specified in By Law 8.0 A certificate issued by the Company pursuant to By Law 8.2 (if any) In respect of each Option, a period commencing on the Date of Offer relevant to such Option and expiring at the expiry of the Scheme as may be determined in the manner specified in By Law 11.0, whichever is the earlier Ringgit Malaysia and sen respectively The scheme for the grant of Options to Eligible Persons which entitle them to subscribe for new Share Units in the Company in accordance with the provisions of these By Laws and such scheme shall be known as SPRITZER BHD EMPLOYEES SHARE OPTION SCHEME
Non Executive Director
Offer
Option(s)
Option Certificate
Option Period
RM and Sen Scheme
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Share Units
Ordinary share units of Spritzer shares to be allotted and issued pursuant to the exercise of the Option(s) The price at which the Grantee shall be entitled to subscribe for one (1) new Share Unit pursuant to the exercise of an Option in the manner indicated under By Law 7.0 Spritzer Shares purchased and retained by the Company pursuant to Section 67A of the Act Weighted average market price
Subscription Price
Treasury Shares
WAMP
1.2
Headings are for ease of reference only and do not affect the meaning of a By Law. Any reference to a statute or statutory provision shall include any subordinate legislation made from time to time under that statute or provision and the applicable listing requirements, policies, guidelines, practice notes and/or directions of the relevant regulatory authorizes )in each case, whether or not having the force of law but, if not having the force of law, the compliance with which is in accordance with the reasonable commercial practice of persons to whom such requirements, policies, guidelines, practice notes and/or directions are addressed to by the relevant regulatory authorities). Words importing the singular meaning where the context so admits include the plural meaning and vice versa. Words of the masculine gender include the feminine and neuter genders and vice versa. Any liberty or power or discretion which may be exercised or any decision or determination which may be made hereunder by the ESOS Committee may be exercised in the ESOS Committees absolute.
1.3
1.4
1.5
1.6
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1.7 2.0 2.1
If an event is to occur on a stipulated day, which is not a Market Day, then the stipulated day will be taken to be the next Market Day. MAXIMUM NUMBER OF NEW SHARE UNITS AVAILABLE UNDER THE SCHEME At any one time in the Duration of the Scheme as determined in accordance with By Law 11.0, the number of new Share Units which may be offered under the Scheme (which includes the number of new Share Units which may arise from the circumstances below) shall not in aggregate exceed 15.0% (or such other percentage as may be permitted by Bursa Securities from time to time) of the issued and paid up share capital of the Company at any point in time in the Duration of the Scheme. By Law 2.1 shall not apply where the total number of new Share Units which may be made available under the Scheme exceeds 15.0% (or such other percentage as may be permitted by Bursa Securities from time to time) of the issued and paid up share capital of the Company in the Duration of the Scheme resulting from the cancellation of the Companys own shares purchased by the Company in accordance with the provisions of Section 67A of the Act or from any other corporate proposal. In such event, the provisions of By Law 16.4 shall apply. The Company will, for the Duration of the Scheme, make available sufficient number of new Share Units in the unissued share capital of the Company to satisfy all outstanding Offers and Options, which may be accepted or exercisable from time to time. ELIGIBILITY To qualify as an Eligible Person for participation in the Scheme, a person must as at the Date of Offer: 3.1.1 Employees of the Group i. ii. iii be at least eighteen (18) years of age; confirmed in service in the Group; is employed for a continuous period of at least one (1) year in the Group; and
2.2
2.3
3.0 3.1
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iv.
be under such categories and complies with such criteria that the ESOS Committee may decide at its absolute discretion from time to time.
3.1.2 Executive Director An Executive Director who has held office for at least one (1) year in the Group, whose entitlement under the Scheme has been approved by shareholders of the Company in a general meeting, and who is not prohibited or disallowed by the relevant authorities from participating in the Scheme. 3.1.3 Non Executive Director A Non Executive Director who has held office for at least one (1) year in the Group, whose entitlement under the Scheme has been approved by shareholders of the Company in a general meeting, and who is not prohibited or disallowed by the relevant authorities from participating in the Scheme. 3.2 The selection of any Eligible Person to participate in the Scheme shall be at the absolute discretion of the ESOS Committee and the decision of the ESOS Committee shall be binding and final. No Eligible Person shall participate at any time in more than one share option scheme implemented by any company within the Group unless otherwise provided or approved by the ESOS Committee. Notwithstanding By Law 3.1, an Eligible Person who represents the Government or Government institution/agencies and Government employees who are serving in the public service scheme as defined under Article 132 of the Federal Constitution are not eligible to participate in the Scheme. An employee, Executive Director or Non Executive Director who in the Duration of the Scheme becomes an Eligible Person may at the discretion of the ESOS Committee, be eligible to participate in the Scheme, subject to the Maximum Allowable Allotment. Eligibility to participate in the Scheme does not confer on an Eligible Person a claim or right to participate in the Scheme unless the ESOS Committee has made
3.3
3.4
3.5
3.6
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an Offer and the Eligible Person has accepted the Offer in accordance with the terms of the Offer and the Scheme. 4.0 MAXIMUM NUMBER OF SHARE UNITS TO ELIGIBLE PERSONS The maximum number of new Share Units that, may be, offered to an Eligible Person under the Scheme shall be determined at the discretion of the ESOS Committee but shall in no event exceed the criteria set out in By Law 5.3. 5.0 5.1 OFFER Upon the implementation of the Scheme, the ESOS Committee shall have the discretion in the Duration of the Scheme to make an Offer to any Eligible Person. The ESOS Committee may make more than one Offer to an Eligible Person PROVIDED THAT the total number of new Share Units so offered to such Eligible Person (inclusive of new Share Units comprise in Options granted to such Eligible Person and the Offers made to such Eligible Person which remain capable of a acceptance, if any) shall not exceed the criteria set out in By Law 5.3 below. The audit committee of the Company shall verify the allocation of Share Units comprised in Options as being compliant with the criteria set in By Law 5.3 at the end of each financial year and include a statement in the annual report verifying such allocation. In the determination of Offers to be made under the Scheme and the number of new Share Units comprised in Options to be offered, the ESOS Committee may, in addition to any other circumstances the ESOS Committee deems relevant, consider circumstance such as the number of years of service the Eligible Person has rendered, the job grade, performance, contribution, dedication and loyalty of the Eligible Person in his/her service within the Group and the potential worth of the Eligible Person in his/her service within the Group in terms of further contribution to the continued success of the Group. Subject to By Law 2.0 and any adjustment which may be made under By Law 16.0, the Maximum Allowable Allotment shall be determined at the discretion of the ESOS Committee as provided in By Law 5.1 PROVIDED THAT: 5.3.1 shall be subject to a criteria determined at the discretion of the ESOS Committee from time to time; 5.3.2 the aggregation allocation to Directors and senior management of Spritzer Group must not more than 50.0% (or such other percentage as
5.2
5.3
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may be permitted by Bursa Securities or any other relevant regulatory authorities from time to time) of the Share Units; 5.3.3 not more than 10.0% (or such other percentage as may be permitted by Bursa Securities or any other relevant regulatory authorities from time to time) of the Share Units made available under the Scheme shall be allocated to an Eligible Person, who either singly or collectively through persons connected with him or her (where persons connected shall have the same meaning given in relation to persons connected with a director or major shareholder as defined in paragraph 1.01 of the MMLRs), hold(s) 20.0% (or such other percentage as may be permitted by Bursa Securities or any other relevant regulatory authorities from time to time) or more of the issued and paid up capital of the Company; and 5.3.4 it is in compliance with the MMLRs and all prevailing guidelines issued by Bursa Securities and the other relevant authorities. 6.0 OFFER TO DIRECTORS No Offer shall be made to a Director or a person connected to such Director unless such Offer and the consequent allotment of new Share Units (if any) to such Director or person connected shall, if required by the relevant authorities, have first been approved by the Shareholders of the Company in general meeting. 7.0 7.1 SUBSCRIPTION PRICE Subject to any adjustments made under the By Laws and pursuant to the MMLRs, the Subscription Price shall be the higher of: 7.1.1 the 5D WAMP immediately preceding the Date of Offer, with a discount of not more than ten percent (10%) at the ESOS Committees discretion or is allowed or such other pricing mechanism as may permitted from time to time by Bursa Securities or any other relevant regulatory authority; or 7.1.2 at the par value of the Share Units, The Subscription Price shall be stipulated in the Offer and subject to adjustments in accordance with By Law 16.0
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8.0 8.1
MAKING AND ACCEPTANCE OF OFFER An Offer made by the ESOS Committee to an Eligible Person under the Scheme shall be in writing. The Offer shall be open for acceptance by the Eligible Person to whom it is made for at least fourteen (14) calendar days from the Date of Offer. The acceptance of the Offer shall be by a notice in writing addressed to the ESOS Committee in such form as prescribed by the ESOS Committee accompanied by a non refundable payment to the Company of a sum of Ringgit Malaysia One (RM1.00) only as consideration for the acceptance of such Offer. Upon acceptance of the Offer, the Company may at its discretion, issue to the Grantee an Option Certificate, which confirms the grant of the Option, the number of new Share Units comprised in the Option, the Option Period and the Subscription Price. If the Offer is not accepted in the aforesaid manner, the Offer shall automatically lapse upon the expiry of the prescribed offer period and shall no longer be capable of acceptance. In the event an Offer is accepted as to part of the Share Units comprised therein, the Offer as regards to the balance of the Share Units not accepted shall lapse forthwith. Notwithstanding By Law 8.3, in the event of the demise of an Eligible Person or in the event the Eligible Person shall cease to be employed within the Group or shall cease to be a Director as the case may be, or become a bankrupt, prior to the acceptance of an Offer made to the Eligible Person, such Offer shall automatically lapse and shall not be capable of acceptance. EXERCISE OF OPTION AND PAYMENT Subject to By Law 10.0, an Option may be exercised at any time or times during the Option Period in relation to such maximum number of Share Units comprised in the Option as may be determined at the discretion of the ESOS Committee. Subject to By Laws 10.0, 14.0, 19.0, 20.0 and 25.0 hereof and all other provisions relevant to the exercise of an Option, the Option granted to an Eligible Person are exercisable in the following manner:
8.2
8.3
8.4
9.0 9.1
9.2
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Year Options Granted Year 1 Cumulative percentage of Options exercisable during the Duration of the Scheme Year 1 Year 2 Year 3 Year 4 Year 5 Note: For calculation of number of Options exercisable in a particular year, the number of shares are rounded up to the nearest of 1,000 shares. 9.3 The Option may be exercised subject to the terms imposed by the Offer and these By Laws, either in respect of the entire number of new Share Units for each relevant period or partially from time to time within the relevant periods as the Grantee may decide PROVIDED THAT the number shall be in respect of one hundred (100) new Share Units or multiples thereof or such other Board lot as may be permitted by legislation or regulation. A partial exercise of the Option shall not preclude the Grantee from exercising the Option as regards to the remaining new Share Units. PROVIDED THAT in the event that a Grantees balance of new Share Units comprised in the Option which is capable of being exercised is less than one hundred (100) or such other Board lot as may be permitted by legislation or regulation, the Option may only be exercised upon approval of the ESOS Committee (who shall grant such approval at its sole discretion) and the said balance shall, if exercised, be exercised in a single tranche. An Option shall be exercised by a notice in writing to the ESOS Committee in such form and manner as prescribed by the ESOS Committee from time to time (Notice of Exercise) and every such Notice of Exercise shall state the Grantees CDS Account number and shall be accompanied by the relevant Option Certificate (if any) and a remittance for the full amount of the Subscription Price for the number of new Share Units in respect of which the Notice of Exercise is given. 20 40 60 80 100 25 50 75 100 33 66 100 50 50 100 Year 2 Year 3 Year 4 Year 5
9.4
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9.5
Within eight (8) Market Days from receipt of the Notice of Exercise (or such period as may be prescribed or permitted by Bursa Securities or any other legislation or regulation from time to time), exercising an Option or part thereof and the requisite remittance, the Company shall allot and issue the relevant number of new Share Units specified in the Notice of Exercise, dispatch or cause to be dispatched the notice of allotment to the Grantee and make an application for the quotation of such new Share Units subject to the provisions of the Articles of Association of the Company and MMLRs and, if applicable, return the Option Certificate to the Grantee with an endorsement thereon stating the balance new Share Units comprised therein. The Company shall deposit the new Share Units directly into the Grantees CDS Account accordingly but subject to the provisions of the Articles of Association of the Company. No physical share certificate will be issued. Notwithstanding anything to the contrary contained in these By Laws, if a Grantee is subject to disciplinary proceedings (whether or not the disciplinary proceedings may give rise to a dismissal or termination of service of such Grantee or may be found to have had no basis or justification) and notice to that effect has been duly served on him/her, the ESOS Committee shall have the outcome of such disciplinary proceedings. The right of suspension as stated in this By Law may be exercised at the discretion of the ESOS Committee on such terms and conditions as the ESOS Committee shall deem appropriate having regard to the nature of charges made or brought against such Grantee PROVIDED THAT: 9.6.1 if such Grantee is found to be not guilty of the charges made against him/her in such disciplinary proceeding, the ESOS Committee shall reinstate the rights of such Grantee to exercise his/her Option; 9.6.2 in the event such Grantee is found guilty resulting in the disciplinary committee recommending the dismissal or termination of service of such Grantee, the Option shall immediately without notice lapse and be null and void and of no further force and effect upon pronouncement of the dismissal or termination of service of such Grantee notwithstanding that such recommendation may be subsequently challenged by the Grantee in any other forum; 9.6.3 in the event such Grantee is found guilty but no dismissal or termination of service is recommended, the ESOS Committee shall have the right independent of the findings, to determine at its discretion whether or not the Grantee may continue to exercise his/her Option and if the Grantee is
9.6
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so allowed, the ESOS Committee shall be entitled to impose such terms and conditions as it deems appropriate (including to reduce the number of Share Units comprised in his/her Option) on such future exercise of his/her Option; or 9.6.4 in the event that no decision is made and/or disciplinary proceedings are not concluded prior to the expiry of the Option Period or any other shorter period available to the Grantee to exercise the Grantees Option (as the case may be), the Option of such grantee shall immediately lapse on the expiry of the Option Period or such shorter period available to the Grantee to exercise the Grantees Option, without notice; PROVIDED ALWAYS THAT nothing herein shall impose any obligation on the ESOS Committee to enquire into or investigate the substantiveness and/or validity of such disciplinary proceeding(s) and the ESOS Committee shall not under any circumstances be held liable for any costs, losses, expenses, damages or liabilities, gains or profits forgone, howsoever arising from the ESOS Committees exercise of or failure to exercise any of its rights or discretion under this By Law. 9.7 The ESOS Committee shall have the discretion to reject any incomplete or inaccurate Notice of Exercise. The ESOS Committee must inform the Grantee of the rejection of the Notice of Exercise by notice in writing within seven (7) days from the date of rejection and the Grantee shall then be deemed not to have exercised his/her Option. NON TRANSFERABILITY AND TERMINATION OF OPTION An Option shall be personal to the Grantee and shall be incapable of being assigned, transferred, encumbered or otherwise disposed of in any manner whatsoever. Notwithstanding By Law 10.1, in the event of the death of a Grantee before the expiry of the Option Period, all unexercised or partially exercised Option(s) of such deceased Grantee may at the absolute discretion of the ESOS Committee be exercisable by the legal personal representatives of the Grantee within such period as determined by the ESOS committee. In the event a Grantee ceases to be a Director or an employee of the Group for whatsoever reason, all unexercised or partially exercised Option(s) of the Grantee shall forthwith lapse on the date of such cessation and be of no further effect and the Grantee shall have no claim against the Company. PROVIDED
10.0 10.1
10.2
10.3
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THAT subject to the written approval of the ESOS Committee in its absolute discretion, if the cessation of the directorship or employment occurs by reason of: 10.3.1 retirement upon attaining the normal retirement age; or 10.3.2 retirement before attaining the normal retirement age but with the consent of the Company; or 10.3.3 ill health, injury or disability; or 10.3.4 redundancy; or 10.3.5 any other circumstances which are acceptable to the ESOS Committee; then the ESOS Committee may at its absolute discretion allow such unexercised or partially exercised Option(s); or any part thereof specified by the ESOS Committee, to be exercised by the Grantee or such other person or persons as specified by the ESOS Committee within such period from the date of such cessation and subject to such terms and conditions as may be specified at the absolute discretion of the ESOS Committee. 10.4 In the event of the liquidation or winding up of the Company, all unexercised or partially exercised Option(s) shall on the date of liquidation or winding up lapse and be of no effect and the Grantees shall have no claim against the Company, that date being: 10.4.1 in the case of voluntary winding up, the earlier of: (a) (b) Or 10.4.2 in the case of an involuntary winding up, the date on which a petition for winding up is served on the Company. 10.5 A Grantees unexercised or partially exercised Option(s) shall immediately become void and of no effect on the bankruptcy of the Grantee, that being on the date a receiving order is made against the Grantee by a court of competent jurisdiction. the date on which a provisional liquidator is appointed by the Company; or the date on which the shareholders of the Company passed a resolution to voluntarily wind up the Company;
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10.6
In any of the extraneous circumstances specified in By Law 10.2 or 10.3, the unexercised or partially exercised Options therein mentioned shall lapse and be of no further effect upon a single exercise of such Options (whether in respect of all new Share Units comprised therein or part thereof) or upon the expiration of the period specified therein, whichever is the earlier, and thereafter no claim shall be made against the Company. An Option shall lapse and be of no further effect upon the expiry of the Option Period applicable thereto. DURATION OF SCHEME The Scheme shall continue in force for a period of five (5) years from the date of full compliance with all relevant requirements governing share option schemes (Effective Date) including the following: 11.1.1 submission of a final copy of these By Laws to Bursa Securities in compliance with paragraph 6.42(2) of the MMLRs together with a letter of compliance pursuant to paragraph 2.12 of the MMLRs and a checklist showing compliance with Appendix 6E of the MMLRs, and/or such other documents as may be determined by Bursa Securities from time to time; 11.1.2 receipt of approval in principle from Bursa Securities for the listing of the new Share Units to be issued under the Scheme; 11.1.3 procurement of approval of the shareholders of the Company in a general meeting for the Scheme; 11.1.4 receipt of approval of any other relevant authorities, where applicable; 11.1.5 fulfillment of all other conditions attached to the approvals for the Scheme; if any; and 11.1.6 submission to Bursa Securities of a confirmation of full compliance with By Laws 11.1.1 to 11.1.5 above stating the effective date of implementation of the Scheme together with a certified true copy of the said resolution approving the Scheme passed by the shareholders of the Company in a general meeting.
10.7 11.0 11.1
11.2
Notwithstanding the provisions of By Law 11.1, an extension to the Scheme may be effected at the sole and absolute discretion of the Board upon the recommendation of the ESOS Committee, subject to an aggregate duration of ten (10) years from the Effective Date (or any other duration that is allowed by
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the relevant authorities). In the event the Scheme is extended and implemented in accordance with the terms of these By Laws, the ESOS Committee shall inform the relevant parties of such extension, prior to the proposed extension of the Scheme. 12.0 12.1 TERMINATION OF SCHEME Notwithstanding the provisions of By Laws 11.1 and 11.2 and subject to the rules and regulations governing the Scheme as promulgated by the relevant authorities from time to time and subject further to the provisions of By Law 12.2, the Company may terminate the continuation of this Scheme at any time. Prior to the termination of the Scheme, the Company must obtain all the following: 12.2.1 the consent of its shareholders in general meeting, wherein at least a majority of the shareholders present should vote in favour of the termination (resolution); and 12.2.2 the written consent of all Grantees who have yet to exercise their Options, whether in part or in whole. 12.3 In such event, no further Offers will be made by the ESOS Committee from the date of such resolution and all outstanding Offers and unexercised or partially exercised Options shall automatically lapse and shall be deemed to be terminated at the date of such resolution. For the purpose of By Law 12.2.1, the circular sent to shareholders to obtain the consent of the shareholders must include the information set out in Appendix 8B of the MMLRs and the draft circular must be submitted to Bursa Securities together with a checklist showing compliance with Appendix 8B of the MMLRs or must include such other information as determined by Bursa Securities from time to time. For the purpose of By Law 12.2.2, the notice sent to the Grantees to obtain their written consent must include information set out in Appendix 8B of the MMLRs. RIGHTS ATTACHED TO SHARE UNITS The new Share Units to be allotted upon an exercise of any Option shall upon allotment and issuance rank pari passu in all respects with the then existing Share Units (including such rights arising upon liquidation of the Company) except that the new Share Units so issued shall not be entitled to any dividends,
12.2
12.4
12.5 13.0 13.1
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rights, allotments or any other distributions declared, made or paid to shareholders, the Entitlement Date for which precedes the date of allotment of the new Share Units. For the purpose hereof, Entitlement Date means the date as at the close of business on which any person(s) for the time being holding Share Units and whose names appear in the record provided by Bursa Malaysia Depository Sdn Bhd to the Company, in order to participate in any dividends, rights, allotments or any other distributions. 13.2 All new Share Units issued and allotted upon exercise of an Option shall be subject to all the provisions of the Articles of Association of the Company and the MMLRs relating to transfer, transmission and otherwise. TRANSFER FROM OTHER COMPANIES TO THE GROUP In the case of: 14.1.1 an employee who is employed in a company related to the Group pursuant to Section 6 of the Act (but not a subsidiary of the Company and hereinafter referred to as the Previous Company) and is subsequently transferred from the Previous Company to any company within the Group; or 14.1.2 a director or an employee who is serving or in the employment of a Previous Company which subsequently becomes a member of the Group as a result of a restructuring or acquisition or otherwise involving the Company and/or any company within the Group; such an employee or director of the Previous Company (Affected Person) will, if the Affected Person satisfies all the conditions of these By Laws, be eligible to participate in the Scheme PROVIDED THAT the Affected Person: (a) shall also be entitled to continue to exercise all such unexercised option(s) which were granted to him/her under the share option scheme (if any) in which he was participating (Previous ESOS) in accordance with the by laws of such Previous ESOS but he/she shall not, upon such transfer or restructuring or acquisition as the case may be, be eligible to participate for further options of such Previous ESOS;
14.0 14.1
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(b) will only be eligible to participate in the Scheme for the remaining Duration of the Scheme; and (c) if the Affected Person has participated in a Previous ESOS, the number of new Share Units to be offered to such Affected Person under the Scheme shall as far as practicable be equivalent to the difference between the Affected Persons total entitlement under the Scheme and the total number of shares which were offered to the Affected Person under the Previous ESOS. 15.0 15.1 DIVESTMENT FROM THE GROUP If a Grantee who is a Director or employee of a company within the Group which was subsequently divested wholly, or in part, from the Group which resulted in a subsequent holding of 50.0% or less by the Company, all unexercised or partially exercised Option(s) of the Grantee shall lapse within a period specified by the ESOS Committee at its absolute discretion and be of no further effect and the Grantee shall have no claim against the Company PROVIDED THAT subject to the written approval of the ESOS Committee in its discretion, such Grantee: 15.1.1 may be allowed to continue to exercise all such unexercised or partially exercised Option(s), or any part thereof specified by the ESOS Committee, within such period and subject to such terms and conditions as may be specified at the absolute discretion of the ESOS Committee; and 15.1.2 shall not be eligible to participate for further Options under the Scheme. 16.0 16.1 ALTERATION OF SHARE CAPITAL In the event of any alteration in the capital structure of the Company during the Option Period, whether by way of capitalization of profits or reserves, rights issue, bonus issue, reduction of capital, subdivision or consolidation of Share Units, or otherwise howsoever arising, corresponding adjustments (if any) shall be made either in the number of new Share Units comprised in the Option so far as unexercised and/or the Subscription Price in such manner as the ESOS Committee may decide PROVIDED THAT: 16.1.1 the adjustment other than arising from a bonus issue must be confirmed in writing by the external auditors for the time being of the Company to be in their opinion (acting as experts and not as arbitrators) fair and reasonable; and
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16.1.2 no adjustment to the Subscription Price shall be made which would result in the new Share Units being issued at a discount to the par value of the Share Units and if such an adjustment would but for this provision have so resulted, the Subscription Price payable for such new Share Units shall be the par value of the Share Units. The adjustment pursuant to this Clause shall be made in accordance with the formulas as set out in First Schedule attached to these By Laws and on the day immediately following the books closure date for the event giving rise to the adjustment. 16.2 Notwithstanding By Law 16.1, no adjustment shall be made pursuant to the alteration in the capital structure of the Company which arises from: 16.2.1 an issue of securities in consideration or part consideration of an acquisition of securities, asset or business by the Company; 16.2.2 a private placement or restricted issue of new Share Units by the Company; 16.2.3 a special issue of new Share Units to Bumiputra investor(s) approved by the relevant government authority; 16.2.4 any issue of new Share Units arising from the exercise of any conversion rights attached to warrants, convertible loan Shares or other instruments of the Company that gives a right of conversion into new Share Units; 16.2.5 implementation of a share buy back arrangement by the Company under Section 67A of the Act; or 16.2.6 an issue of new Share Units arising from the exercise of Options under the Scheme. 16.3 The ESOS Committee shall within fourteen (14) calendar days notify the Grantee (or his/her legal personal representatives where applicable) in writing of any adjustments made pursuant to this By Law. In the event of a share buy back arrangement by the Company pursuant to Section 67A of the Act or the undertaking by the Company of any other corporate exercise, resulting in the reduction in the share capital of the Company, the following provisions shall apply: 16.4.1 if the number of Share Units comprised in the Offers and Options granted by the Company as at the date of such reduction is greater than 15.0% of
16.4
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the total issued and paid up share capital of the Company, after such reduction all the Offers and Options granted prior to the reduction shall remain valid and exercisable in accordance with the terms and conditions of these By Laws, but the ESOS Committee shall not make any further Offers; and 16.4.2 if the number of Share Units comprised in the Offers and Options granted by the Company as at the date of such reduction is less than 15.0% of the total issued and paid up share capital of the Company, after such reduction, the ESOS Committee may make further Offers only until the total number of Share Units comprised in the Offers and Options granted by the Company is equivalent to 15.0% of the total issued and paid up share capital of the Company after such reduction. 16.5 In the event that a fraction of a new Share Unit arising from the adjustments referred to in By Law 16.1 would otherwise be required to be issued upon the exercise of an Option by the Grantee, the Grantees entitlement shall be rounded down to the nearest whole number of new Share Units. Notwithstanding the provisions in this By Law 16.0, in any circumstances where the Board considers that adjustments to the Subscription Price and/or the number of new Share Units comprised in the Options so far as unexercised as provided for hereunder should not be made or should be calculated on a different basis or different date, the Company may appoint an external auditors to consider whether for any reason whatsoever (to the extent permissible by the MMLRs or any other relevant regulations) the adjustment calculation or determination to be made (or the absence of an adjustment calculation or determination) is appropriate or inappropriate as the case may be. If such external auditor shall consider the adjustment calculation or determination to be inappropriate, the adjustment shall be modified or nullified (or an adjustment calculation or determination made even though not required to be made) in such manner as may be considered by such external auditor to be appropriate. If the Board and the external auditor are unable to agree upon any adjustment required under these provisions, the Board shall refer the adjustment to the decision of another external auditor acting as expert and not arbitrator and whose decision as to such adjustment shall be final and conclusive. In making any adjustment hereunder, the external auditor shall be deemed to be acting as experts and not as arbitrators and, in the absence of manifest error, their decision shall be conclusive and binding on all persons having an interest in the Options.
16.6
16.7
16.8
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17.0
QUOTATION OF SHARE UNITS Within eight (8) Market Days of the receipt by the Company of such Notice of Exercise and payment, or such other period as may be prescribed by Bursa Securities, the Company shall allot the relevant number of Share Units to the Grantee. The Company shall make application to Bursa Securities for permission to deal in and for quotation of the new Share Units resulting from the exercise of the Options. The said Share Units will be credited directly into the Grantees individual/nominee CDS Account as stipulated by the Grantee in the Notice of Exercise and a notice of allotment stating the number of Share Units so credited will be issued to the Grantee or its nominee within four (4) Market Days after the date of listing an quotation of the Share Units.
18.0 18.1
ADMINISTRATION OF THE SCHEME The Scheme shall be administered by the ESOS Committee comprising such person as shall be appointed and duly authorised by the Board from time to time. The Board shall have the power from time to time to rescind the appointment of any person in the ESOS Committee and appoint his/her replacement where the Board deems fit. The ESOS Committee shall administer the Scheme in such manner as it shall in its discretion deem fit. In addition, the ESOS Committee may for the purpose of administering the Scheme do all acts and things and enter into any transaction, agreement, deeds, documents or arrangements, make rules, regulations or impose terms and conditions or delegate part of its power relating to the Scheme which the ESOS Committee may in its discretion consider to be necessary or desirable for giving full effect to the Scheme. AMENDMENTS AND/OR MODIFICATION TO SCHEME Subject to the compliance with the requirements of Bursa Securities and any other relevant authorities, the ESOS Committee may at any time and from time to time recommend to the Board any additions and amendments to or deletions of these By Laws as it shall in its discretion think fit and the Board shall have the power by resolution to add to, amend or delete all of any of these By Laws upon such recommendation provided that no additions or amendments to or deletion of these By Laws shall be made which will: 19.1.1 prejudice any rights of the shareholders of the Company without the prior approval of the shareholders of the Company in a general meeting; or
18.2
19.0 19.1
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19.1.2 alter to the advantage of any Eligible Person in respect of any matters which are required to be contained in these By Laws (or any amendments subsequent thereto) by virtue of the MMLRs, without the prior approval of the shareholders of the Company in a general meeting unless otherwise allowed by the provisions of the MMLRs. 19.2 Where any amendments and/or modifications is/are made to these By Laws, the Company shall submit to Bursa Securities, the amendments and/or modifications to these By Laws and a confirmation letter that the amendments and/or modifications complies with the provisions of the guidelines on employees share option scheme stipulated under the MMLRs no later than five (5) Market Days from the effective date of the said amendments and/or modifications. INSPECTION OF AUDITED ACCOUNTS A Grantee shall be entitled to inspect the latest audited financial statements of the Company during normal office hours at the registered office of the Company. 21.0 COST AND EXPENSES OF THE SCHEME All costs and expenses incurred in relation to the Scheme including but not limited to the costs and expenses relating to the issue of new Share Units upon the Exercise of any Option shall be borne by the Company. 22.0 DISPUTE Any dispute arising hereunder (whether as to the number of Share Units comprised in the Option, the amount of Subscription Price or otherwise) shall be referred to and received by the ESOS Committee in the Duration of the Scheme (after which the Eligible Person or Grantee shall be deemed to have waived the Grantees rights (if any). The ESOS Committee shall determine such dispute and such decision of the ESOS Committee shall be final and binding in all respects on the parties thereto. Notwithstanding anything herein to the contrary, any cost and expense incurred in relation to any dispute brought by any party to the ESOS Committee shall be borne by such party. Under no circumstances shall a dispute be brought to a court of law. 23.0 23.1 COMPENSATION No Eligible Person, Grantee or his/her legal personal representative shall bring any claim against the Company or the ESOS Committee or any other party for compensation or damages arising from the suspension of his/her right to Exercise his/her Option or his/her Option ceasing to be valid pursuant to the
20.0
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provisions of these By Laws, as the same may be amended from time to time in accordance with By Law 19.0 23.2 Notwithstanding any provisions of these By Laws: 23.2.1 this Scheme shall not form part of any contract of employment or service contract or terms of appointment between any company of the Group and any employee or Director of the Group and the rights of any Grantee under the terms of his/her office and employment with the Company or any company of the Group shall not be affected by his/her participation in the Scheme or afford such Grantee any additional rights to compensation or damages in consequence of the termination of such office or employment for any reason; 23.2.2 this Scheme shall not confer on any person any legal or equitable rights (other than those constituting the Option themselves) against the Company or any company of the Group or any members of the ESOS Committee directly or indirectly or give rise to any cause of action at law or in equity against the Company, the Group or the members of the ESOS Committee; and 23.2.3 a Grantee who ceases to hold office or employment shall not be entitled to any compensation for the loss of any right or benefit or prospective right or benefit under the Scheme which he or she might otherwise have enjoyed whether such compensation is claimed by way of damages for wrongful or unfair dismissal or other breach of contracts or by way of compensation for loss of opportunity. 24.0 NOT A TERM OF EMPLOYMENT The Scheme does not form part, nor shall it in any way be construed as part, of the terms and conditions of employment, service or appointment of any Eligible Person. 25.0 25.1 RETENTION PERIOD Subject to By Law 25.2, there is no retention period imposed on the new Share Units arising from the Exercise of Options and a Grantee is at liberty to deal with the new Share Units allotted and issued to him/her. The Company however encourages the Grantees to hold the Share Units subscribed by them as long term investment rather than for realization to yield immediate profits.
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25.2
A Non Executive Director must not sell, transfer or assign Share Units issued and allotted to him pursuant to the Exercise of the Options under the Scheme within one (1) year from the Date of Offer ARTICLES OF ASSOCIATION OF THE COMPANY Notwithstanding the terms and conditions contained herein, if a situation of conflict should arise between the Scheme and the Articles of Association of the Company, the provisions of the latter shall at all times prevail.
26.0
27.0
SUBSEQUENT EMPLOYEES SHARE OPTION SCHEMES Subject to the approval of the relevant authorities and compliance with the requirements of the relevant authorities, the Company may establish a new share option scheme after the expiry of the Duration of the Scheme (including any extension to the Scheme in accordance with the terms set out in By Law 11.2 where applicable) or termination of the Scheme in accordance with By Law 12.0.
28.0
TAXES Each Grantee shall be solely responsible for any income or other taxes which may be levied on him/her arising out of or as a result of the Grantees exercise of any Option.
29.0 29.1
NOTICE Any notice under the Scheme required to be given to or served upon the ESOS Committee by an Eligible Person or Grantee or any correspondence to be made between an Eligible Person or Grantee or any correspondence to be made between an Eligible Person or Grantee to the ESOS Committee shall be given or made in writing and sent to the registered office of the Company or such other office which the ESOS Committee may have stipulated for a particular purpose by hand (with acknowledgement of receipt) or registered letter. Any notice which under the Scheme is required to be given to or served upon an Eligible Person or Grantee or personal representative or any correspondence to be made with an Eligible Person or Grantee or personal representative shall be deemed to be sufficiently given, served or made if it is given, served or made by hand, facsimile or registered letter addressed to the Eligible Person or Grantee or personal representative at the place of employment or at the last facsimile number or address known to the Company as being his/her facsimile number or address. Any notice at the time when such notice if by hand is received and duly
29.2
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acknowledged, if by facsimile is transmitted with a confirmed log print out for the transmission indicating the date, time and transmission of all pages and if by registered letter would in the ordinary course of post be delivered. 30.0 SEVERABILITY Any term, condition, stipulation, provision in these By Laws which is illegal, void, prohibited or unenforceable shall be ineffective to the extent of such illegality, voidness, prohibition or unenforceability without invalidating the remainder thereof, and any such illegality, voidness, prohibition or unenforceability shall not invalidate or render illegal, void or unenforceable any other term, condition, stipulation, provision herein contained. 31.0 SCHEDULE The schedule to these By Laws form and shall be read as an integral part of these By Laws.
[THE REST OF THIS SPACE IS INTENTIONALLY LEFT BLANK]
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DRAFT BY LAWS OF THE PROPOSED ESOS (CONTD) FIRST SCHEDULE (By Law 16.1 Adjustment Formulas)
1. Subject to the By Laws and as hereinafter provided, the Subscription Price, the number of new Share Units which a Grantee shall be entitled to subscribe for upon the Exercise of each Option (excluding the Options already exercised) and the par value of the Share Units which a grantee is entitled to subscribe for shall from time to time be adjusted by the Board in consultation with the external auditors (where applicable) to be in accordance with the following relevant provisions: (i) If and whenever a Share Unit by reason of any consolidation or subdivision or conversion shall have a different par value, then: (a) the Subscription Price shall be adjusted by multiplying it by the revised par value and dividing the result by the former par value; and (b) the number of Share Units shall be adjusted by multiplying the existing number of Share Units by the former par value and dividing the result by the revised par value. Each such adjustment will be effective from when the consolidation or subdivision or conversion becomes effective. (ii) If and whenever the Company shall make any issue of Share Units to shareholders credited as fully paid, by way of capitalization of profits or reserves (including any share premium account and capital redemption reserve fund), the Subscription Price shall be adjusted by multiplying it by the following fraction: ___A___ A + B and the number of Share Units shall be adjusted by multiplying the existing number of Share Units, by the following fraction: __A + B_ A
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Where A the aggregate number of issued and fully paid up Share Units on Market Day immediately before the Entitlement Day for such capitalization issue; and the aggregate number of Share Units to be issued pursuant to any allotment to Shareholders credited as fully paid by way of capitalization of profits or reserves (including share premium account and capital redemption reserve fund).
Each such adjustment will be effective (if appropriate, retroactively) from the commencement of the day next following the Entitlement Date for such issue. (iii) If and whenever the Company shall make: (a) a Capital Distribution (as defined below) to shareholders whether on a reduction of capital or otherwise (but excluding any cancellation of capital which is lost or unrepresented by available assets) or (b) any offer or invitation to shareholders whereunder they may acquire or subscribe for Share Units by way of rights; or (c) any offer or invitation to shareholders by way of rights whereunder they may acquire or subscribe for securities convertible into shares or rights to acquire or subscribe for Share Units; and in respect of each case referred to in this paragraph (iii)(b), the Subscription Price shall be adjusted by multiplying it by the following fraction: _C_ D__ C and in respect of each case referred to in this paragraph (iii)(b), the number of Share Units shall be adjusted by multiplying the existing number of Share Units, by the following fraction: __C___ C D*
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Where: C the current market price (as defined in paragraph 2 below) of each Share Unit on the Market Day immediately preceding the date on which the capital distribution or, as the case may be, the offer or invitation is publicly announced to Bursa Securities or (failing any such announcement), immediately preceding the Entitlement Date for the capital distribution or, as the case may be, of the offer or invitation; and (aa) in the case of an offer or invitation to acquire or subscribe for Share Units by way of rights under sub paragraph (iii)(b) of paragraph 1 above, or for securities convertible into or with rights to acquire or subscribe for Share Units under sub paragraph (iii)(c) of paragraph 1 above, the value of rights attributable to one Share Unit (as defined below); or in the case of any other transaction falling within this sub paragraph (iii) of paragraph 1 in this Schedule, the fair market value, as determined (with the concurrence of the external auditors), of that portion of the Capital Distribution attributable to one (1) Share Unit.
(bb)
For the purpose of sub paragraph (aa) of D above the value of the rights attributable to one (1) Share Unit shall be calculated in accordance with the formula: _C E_ F + 1 Where: C E as C above; the subscription consideration for one (1) additional Share Unit under the terms of such offer or invitation or one (1) additional security convertible into Share Units or one (1) additional security with rights to acquire or subscribe for Share Unit under the invitation, as the case may be; the number of Share Units which it is necessary to hold in order to be offered or invited to acquire or subscribe for one (1) additional
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Share Unit or security convertible into Share Units or rights to acquire or subscribe for Share Unit, as the case may be; and D* the value of rights attributable to one (1) Share Unit (as defined below):
For the purpose of definition D* above, the value of the rights attributable to one (1) Share Unit shall be calculated in accordance with the formula: _C E*_ F* + 1 Where: C E* F* as C above; the subscription consideration for one (1) additional Share Unit under the terms of offer or invitation; the number of Share Units which it is necessary to hold in order to be offered or invited to acquire or subscribe for one (1) additional Share Unit.
For the purpose of the sub paragraph (iii) of paragraph 1 in this Schedule, Capital Distribution shall (without prejudice to the generality of that expression) include distributions in cash or specie or by way of issue (not falling under sub paragraph (ii) of paragraph 1 in this Schedule) of shares or other securities credited as fully or partly paid up by way of capitalization of profits or reserves (including any share premium account or capital redemption reserve fund). Any dividend charged or provided for in the accounts of any period shall (whenever paid and howsoever described) be deemed to be a Capital Distribution unless it is paid out of the aggregate of the net profits attributable to the Shareholders for any period as shown in the audited consolidated income statements of the Company. Each such adjustment will be effective (if appropriate retroactively) from the commencement of the Market Day next following the Entitlement Date for such issue. (iv) If and whenever the Company makes any allotment to its Shareholders as provided in paragraph 1(ii) above and also makes any offer or invitation to its Shareholders as provided in sub paragraph (b) or (c) of paragraph 1(iii) and the Entitlement Date for the purpose of the offer or invitation,
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the Subscription Price shall be adjusted by multiplying it by the following fraction: _(G x C) + (H x I)_ (G + H + B) x C And in respect of each case referred to in these paragraph 1(ii) and 1(iii)(b), the number of Share Units shall be adjusted by multiplying the existing number of Share Units, by the following fraction: _(G + H* + B) x C_ (G x C) + (H* x I*) Where: G C H the aggregate number of issued and fully paid up Share Units on the Entitlement Date; as C above; the aggregate number of new Share Units under an offer or invitation to acquire or subscribe for Share Units by way of rights or under an offer or invitation by way of rights to acquire or subscribe for securities for convertible into Share Units or with rights to acquire or subscribe for Share Units, as the case may be; the aggregate number of Share Units under an offer or invitation to acquire or subscribe for Share Units by way of rights; the subcription consideration of one (1) additional Share Unit under the offer or invitation to acquire or subscribe for Share Units or the Subscription Price on conversion of such securities or Exercise of such rights to acquire or subscribe for one (1) additional Share Unit, as the case may be; the subscription consideration of one (1) additional Share Unit under the offer or invitation to acquire or subscribe for Share Units; and as B above.
H* I
I* B
Each such adjustment will be effective (if appropriate retroactively) from the commencement of the date next following the Entitlement Date for such issue.
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(v)
If and whenever the Company makes any offer or invitation to its Shareholders to acquire or subscribe for Share Units as provided in paragraph 1(iii)(b) above together with an offer or invitation to acquire or subscribe for securities convertible into or with rights to acquire or subscribe for Share Units as provided in paragraph 1(iii)(c) and the Entitlement Date for the offer or invitation under paragraph 1(iii)(b) is also the Entitlement Date for the offer and the invitation under paragraph 1(iii)(c), the Subscription Price shall be adjusted by multiplying it by the following fraction: _(G x C) + (H x I) + (J x K)_ (G + H + J) x C and the number of Share Units shall be adjusted by multiplying the existing number of Share Units, by the following fraction: _(G x H*) x C_ (G x C) + (H* x I*) Where: G C H H* I I* J as G above; as C above; as H above; as H* above; as I above; as I* above; the aggregate number of Share Units to be issued to its Shareholders upon conversion of such securities or Exercise of such rights to acquire or subscribe for Share Units under the offer or invitation by the Shareholders; and the Subscription Price on conversion of such securities or Exercise of such rights to acquire or subscribe for one (1) additional Share Unit.
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Each such adjustment will be effective (if appropriate, retroactively) from the commencement of the date next following the Entitlement Date for such issue. (vi) If and whenever the Company makes an allotment to its Shareholders as provided in paragraph 1(ii) above and also makes an offer or invitation to acquire or subscribe for Share Units to its Shareholders as provided in paragraph 1(iii)(b) together with rights to acquire or subscribe for securities convertible into or with rights to acquire or subscribe for Share Units as provided in paragraph 1(iii)(c), and the Entitlement Date for the purpose of the allotment is also the Entitlement Date for the purpose of the allotment is also the Entitlement Date for the purpose of the offer or invitation, the Subscription Price shall be adjusted by multiplying it by the following fraction: (G x C) + (H x I) + (J x K)_ (G + H + J + B) x C and the number of Share Units shall be adjusted by multiplying the existing number of Share Units, by the following fraction: _(G + H* + B) x C_ (G x C) + (H* x I*) Where: G C H H* I I* J K B as G above; as C above; as H above; as H* above; as I above; as I* above; as J above; as K above; and as B above
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Such adjustment will be effective (if appropriate, retroactively) from the commencement of the Market Day next following the Entitlement Date for such issue. (vii) If and whenever (otherwise than pursuant to an offer or invitation by way of rights issue available to all Shareholders and requiring an adjustment under sub paragraphs (iii)(b), (iii)(c), (iv), (v) or (vi) of paragraph 1) the Company shall issue either any Share Units or any securities convertible into Share Units or with rights to acquire or subscribe for Share Units, and in any such case the Total Effective Consideration per Share Unit (as defined below) is less than ninety per centum (90%) of the average of the Last Transacted Prices on the Market Days comprised in the period used as a basis upon which the issue price of such shares is determined (hereinafter referred to as the Average Price) or, as the case may be, the price at which the Share Units shall be issued upon conversion of such rights is determined, the Subscription Price shall be adjusted by multiplying it by the following fraction: L + M_ L + N Where: L the aggregate number of Share Units in issue at the close of business on Bursa Securities on the Market Day immediately preceding the date on which the relevant adjustment becomes effective; the aggregate number of Share Units which the Total Effective Consideration (as defined below) would have been purchased at the Average Price (exclusive of expenses); and the aggregate number of Share Units to be issued or, in the case of securities convertible into Share Units or securities with rights to acquire or subscribe for Share Units, the maximum number (assuming no adjustments of such rights) of Share Units issuable upon full conversion of such securities or the Exercise in full of such rights.
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For the purpose of this sub paragraph (Vii) of paragraph 1 in this Schedule the Total Effective Consideration shall be as determined by the Board with the concurrence of the external auditors and shall be: (a) in the case of the issue of Share Units, the aggregate consideration receivable by the Company on payment in full for such Share Units; or (b) in the case of the issue by the Company of securities wholly or partly convertible into Share Units, the aggregate consideration receivable by the Company on payment in full for such securities or such part of the securities as is convertible together with the total amount receivable by the Company upon full conversion of such securities, if any; or (c) in the case of the issue by the Company of securities with rights to acquire or subscribe for Share Units, the aggregate consideration attributable to the issue of such rights together with the total amount receivable by the Company upon full Exercise of such rights. in each case without any deduction of any commissions, discounts or expenses paid, allowed or incurred in connection with the issue thereof, and the Total Effective Consideration per Share Unit shall be the Total Effective Consideration divided by the number of Share Units issued as aforesaid or, in the case of securities convertible into Share Units or rights to acquire or subscribe for Share Units, by the maximum number of Share Units issuable on full conversion of such securities or Exercise in full of such rights. Each of such adjustment will be calculated (if appropriate, retroactively) from the close of business of Bursa Securities on the Market Day next following the date on which the issue is announced, or (failing any such announcement) on the Market Day next following the date on which the Company determines the offering price of such shares. Each of such adjustment will be effective ((if appropriate, retroactively) from the commencement of the Market Day next following the completion of the above transaction. 2. For the purpose of paragraphs 1(iii), (iv), (v) and (vi), the current market price in relation to each Share Unit for any relevant day shall be the weighted average price for each Share Unit on Bursa Securities for the five (5) consecutive Market Days before such date.
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3.
The foregoing provisions on adjustment to the Subscription Price shall be subject to the following: (a) On any such adjustment the resultant Subscription Price shall be rounded down to the nearest one (1) Sen and in no event shall any adjustment (otherwise than upon the consolidation of Share Units into Share Units of a larger par value) involve an increase in the Subscription Price or reduce the number of Share Units that a Grantee is already entitled to; (b) No adjustment shall be made to the Subscription Price in any case in which the amount by which the same would be reduced in accordance with the foregoing provisions of this paragraph 1 would be less than one (1) Sen and any adjustment that would otherwise be required then to be made will not be carried forward not would it be taken into account in any subsequent adjustment; (c) No adjustment shall be made in any event whereby the Subscription Price would be reduced to below the par value of a Share Unit, and in the event that any adjustment shall result in the Subscription Price being reduced to below the par value of a Share Unit then the adjustment shall be made to the par value of the Share Unit only; and (d) No adjustment in the Subscription Price shall be made unless it has been certified by the external auditors.
4.
Any adjustments to the number of Share Units held by each Grantee will be rounded down to the nearest whole Share Unit. No adjustment to the number of Share Units shall be made unless it has been certified by the external auditors and approval in principle has been granted by Bursa Securities for the listing and quotation of such additional new Share Units. If an event giving rise to any such adjustment shall be capable of falling within any two (2) or more of subparagraphs (i) to (vii) in this Appendix 1 (both inclusive) or if such event is capable of giving rise to more than one adjustment, the adjustment shall be made in such manner as the Directors and the external auditors or the Company may agree. If for any reason an event giving rise to an adjustment to the Subscription Price and/or the number of Share Units pursuant to the foregoing provisions of this paragraph 1 is cancelled, revoked or not completed, the adjustment shall not be
5.
6.
Page 35 of 36
74 36
required to be made and shall be reversed with effect from such date and in such manner as the Board and the external auditors may agree. [THE REST OF THIS SPACE IS INTENTIONALLY LEFT BLANK]
Page 36 of 36
75
APPENDIX III FURTHER INFORMATION 1. DIRECTORS' RESPONSIBILITY STATEMENT This Circular has been seen and approved by the Board, and the Directors collectively and individually accept full responsibility for the accuracy of the information contained herein and confirm that, after making all reasonable enquiries and to the best of their knowledge and belief, there are no other facts, the omission of which would make any statement herein misleading. 2. CONSENTS OSK, being the Adviser for the Proposals, has given and has not subsequently withdrawn its written consent to the inclusion in this Circular of its name and all references thereto in the form and context in which they appear in this Circular. Messrs LLTC, being the Reporting Accountants for the Proposals, has given and has not subsequently withdrawn its written consent to the inclusion in this Circular of its name, letter on the proforma consolidated statements of financial position as at 31 May 2011 of Spritzer Group in relation to the Proposals and all references thereto in the form and context in which they appear in this Circular. 3. DECLARATION OF CONFLICT OF INTERESTS OSK has given its written confirmation that as at the date of this Circular, there is no situation of conflict of interests that exists or is likely to exist in relation to its role as the Adviser to Spritzer for the Proposals. Messrs LLTC has given their written confirmation that as at the date of this Circular, there is no situation of conflict of interests that exists or is likely to exist in relation to its role as the Reporting Accountants to Spritzer for the Proposals. 4. MATERIAL LITIGATION, CLAIMS OR ARBITRATION As at the LPD, neither Spritzer nor any of its subsidiaries are engaged in any material litigation, claims or arbitration, either as plaintiff or defendant, and the Board is not aware and does not have any knowledge of any proceedings pending or threatened against Spritzer and/ or its subsidiaries, or of any facts likely to give rise to any proceedings, which might materially or adversely affect the financial position or business of Spritzer and/ or its subsidiaries. 5. MATERIAL COMMITMENTS Save as disclosed below, as at the LPD, the Board is not aware of any material commitments incurred or known to be incurred by the Company that has not been provided for which, upon becoming enforceable, may have a material impact on the financial results/ position of the Group:RM'000 Capital commitments Property, plant and equipment Approved and contracted for 2,376
76
6.
CONTINGENT LIABILITIES As at the LPD, the Board is not aware of any contingent liabilities incurred or known to be incurred by the Company which, upon becoming enforceable, may have a material impact on the financial results/ position of the Group.
7.
DOCUMENTS AVAILABLE FOR INSPECTION Copies of the following documents are available for inspection at the Registered Office of the Company at Lot 85, Jalan Portland, Tasek Industrial Estate, 31400 Ipoh, Perak Darul Ridzuan, during normal business hours (except public holidays) from the date of this Circular up to and including the date of the forthcoming EGM or at any adjournment thereof:i. ii. Memorandum and Articles of Association of Spritzer; Audited consolidated financial statements of Spritzer Group for the past two (2) FYE 31 May 2011 and the latest unaudited consolidated quarterly results of Spritzer Group for the FPE 31 August 2011; The Reporting Accountants' letter on the proforma consolidated statements of financial position as at 31 May 2011 of Spritzer Group in relation to the Proposals as set out in Appendix I of this Circular; The draft By-Laws of the Proposed ESOS as set out in Appendix II of this Circular; The letters of consent referred to in Section 2 above; The draft Deed Poll for the Warrants.
iii.
iv. v. vi.
77
SPRITZER BHD
NOTICE OF EXTRAORDINARY GENERAL MEETING NOTICE IS HEREBY GIVEN THAT an Extraordinary General Meeting of Spritzer Bhd ("Spritzer" or the "Company") is scheduled to be held at Crystal 2, Impiana Hotel Ipoh, 18 Jalan Raja Dr. Nazrin Shah, 30250 Ipoh, Perak Darul Ridzuan on Thursday, 24 November 2011 at 11.30 a.m. or immediately following the conclusion or adjournment of the Eighteenth Annual General Meeting of the Company scheduled to be held at the same venue and on the same date at 11.00 a.m., whichever is later, for the purpose of considering and if thought fit, passing with or without modifications the following resolutions:ORDINARY RESOLUTION 1 PROPOSED BONUS ISSUE OF UP TO 32,664,667 WARRANTS IN SPRITZER ("WARRANT(S)") ON THE BASIS OF ONE (1) FREE WARRANT FOR EVERY FOUR (4) EXISTING ORDINARY SHARES OF RM0.50 EACH IN SPRITZER HELD ON AN ENTITLEMENT DATE TO BE DETERMINED LATER ("PROPOSED BONUS ISSUE OF WARRANTS") "THAT, subject to the passing of Ordinary Resolution 2 and the approvals of all relevant authorities, the Board of Directors of Spritzer ("Board") be and is hereby authorised to issue up to 32,664,667 free warrants in Spritzer to the shareholders of the Company whose names appear on the Record of Depositors of the Company as at the close of business on an entitlement date to be determined later ("Entitlement Date") by the Board, on the basis of one (1) free Warrant for every four (4) existing ordinary shares of RM0.50 each in Spritzer ("Spritzer Share(s)") held; THAT, the Board be and is hereby authorised to issue such additional Warrants ("Additional Warrant(s)") as may be required or permitted to be issued as a consequence of the adjustments under the provisions in the deed poll to be executed, constituting the Warrants ("Deed Poll"); THAT, the Board be and is hereby authorised to issue and allot such appropriate number of new Spritzer Shares arising from the exercise of the Warrants by the holders of the Warrants of their rights in accordance with the provisions of the Deed Poll, including such appropriate number of new Spritzer Shares arising from the exercise of subscription rights represented by the Additional Warrants; THAT, the Board be and is hereby authorised to deal with any fractional entitlements of the Warrants that may arise from the Proposed Bonus Issue of Warrants, in such manner as the Board deems fit and expedient in the best interest of the Company; THAT, the new Spritzer Shares to be issued pursuant to the exercise of the Warrants or Additional Warrants shall upon allotment and issuance, rank pari passu in all aspects with the then existing Spritzer Shares, save and except that the new Spritzer Shares shall not be entitled to any dividends, rights, allotment and/ or other forms of distribution ("Distribution") that may be declared, made or paid for which the entitlement date for the Distribution precedes the date of allotment and issuance of the new Spritzer Shares arising from the exercise of the Warrants, and such new Spritzer Shares will be subject to all the provisions of the Memorandum and Articles of Association of the Company and such amendments thereafter, if any; THAT, the Board be and is hereby authorised to enter into and execute the Deed Poll with full powers to assent to any conditions, variations, modifications and/ or amendments in any manner as may be required by the relevant authorities or deemed necessary by the Board, and with full powers to implement and give effect to the terms and conditions of the Deed Poll;
AND THAT, the Board be and is hereby authorised to take all such necessary steps to give effect to the Proposed Bonus Issue of Warrants with full powers to assent to any conditions, variations, modifications and/ or amendments in any manner as may be required by the relevant authorities or deemed necessary by the Board, and to take all steps and to do all such acts and matters as they may consider necessary or expedient to implement, finalise and give full effect to the Proposed Bonus Issue of Warrants." ORDINARY RESOLUTION 2 PROPOSED ESTABLISHMENT OF AN EMPLOYEES' SHARE OPTION SCHEME ("ESOS") OF UP TO 15% OF THE ISSUED AND PAID-UP SHARE CAPITAL OF SPRITZER AT ANY POINT IN TIME AFTER THE PROPOSED BONUS ISSUE OF WARRANTS ("PROPOSED ESOS") "THAT, subject to the passing of Ordinary Resolution 1 and the approvals of all relevant authorities, the Board be and is hereby authorised to establish, implement and administer an ESOS for the benefit of eligible employees, executive Directors and non-executive Directors of Spritzer and its subsidiaries, which are not dormant, who meet the criteria of eligibility for participation in the Proposed ESOS ("Eligible Person(s)") under which options will be granted to the Eligible Persons to subscribe for new Spritzer Shares in accordance with the draft by-laws of the Proposed ESOS ("By-Laws") set out in Appendix II of the circular to shareholders of the Company dated 2 November 2011 ("Circular"), and to adopt and approve the draft By-Laws; THAT, the Board be and is hereby authorised to issue and allot and/ or procure the transfer from time to time such number of new Spritzer Shares as may be required pursuant to the exercise of the options under the Proposed ESOS provided that the aggregate number of new Spritzer Shares to be allotted and issued and/ or transferred shall not exceed 15% of the total issued and paid-up share capital of Spritzer at any point in time throughout the duration of the Proposed ESOS and that such new Spritzer Shares will upon allotment and issuance, rank pari passu in all aspects with the then existing Spritzer Shares, save and except that the new Spritzer Shares will not be entitled to any dividend, right, allotment and/ or other distribution that may be declared, made or paid for which the entitlement date for the Distribution precedes the date of which the new Spritzer Shares are credited into the Central Depository System account with Bursa Malaysia Depository Sdn Bhd of the Eligible Persons who have accepted the offer, and such new Spritzer Shares will be subject to all the provisions of the Memorandum and Articles of Association of the Company and such amendments thereafter, if any; THAT, the Board be and is hereby authorised to make the necessary applications to Bursa Malaysia Securities Berhad ("Bursa Securities") for the permission to deal in and for the listing of and quotation for the new Spritzer Shares that may hereafter from time to time be allotted and issued pursuant to the Proposed ESOS; AND THAT, the Board be and is hereby authorised to amend and/ or modify the Proposed ESOS from time to time as may be required/ permitted by the authorities or deemed to be necessary by the Board provided that such amendments and/ or modifications are effected in accordance with the provisions in the By-Laws relating to amendments and/ or modifications and to take all such acts and steps and to enter into such transactions, agreements, arrangements, undertakings, indemnities, transfers, assignments, deeds and/ or guarantees with any party or parties, to deliver and/ or cause to be delivered all such documents and to make such rules or regulations, or impose such terms and conditions or delegate part of its powers as may be necessary or expedient to implement, finalise and to give full effect to the Proposed ESOS."
ORDINARY RESOLUTIONS 3 to 16 PROPOSED GRANT OF OPTIONS "THAT, subject to the passing of Ordinary Resolutions 1 and 2, and the approvals of all relevant authorities, the Board be and is hereby authorised, at any time and from time to time throughout the duration of the Proposed ESOS, to offer and grant to the following persons, options to subscribe for new Spritzer Shares under the Proposed ESOS:Directors and/ or interested major shareholders of the Company i. ii. iii. iv. v. vi. vii. viii. Dato' Lim A Heng @ Lim Kok Cheong Lim Kok Boon Dr. Chuah Chaw Teo Lam Sang Chok Hooa @ Chok Yin Fatt Dato' Ir. Nik Mohamad Pena bin Nik Mustapha Y.B. Mohd Adhan bin Kechik Kuan Khian Leng Ordinary Resolution 3 Ordinary Resolution 4 Ordinary Resolution 5 Ordinary Resolution 6 Ordinary Resolution 7 Ordinary Resolution 8 Ordinary Resolution 9 Ordinary Resolution 10
Persons connected to Directors and/ or interested major shareholders of the Company ix. x. xi. xii. xiii. xiv. Datin Chua Shok Tim @ Chua Siok Hoon Lim Seng Lee Lim Hock Lai Huang Yu Ying Beh Swee See Lim Siew Ai Ordinary Resolution 11 Ordinary Resolution 12 Ordinary Resolution 13 Ordinary Resolution 14 Ordinary Resolution 15 Ordinary Resolution 16
Provided always that:i. The aggregate allocation to the Directors and senior management of Spritzer and its subsidiaries must not exceed 50% of the new Spritzer Shares available under the Proposed ESOS; and The allocation to an Eligible Person, who either singly or collectively, through persons connected to the Eligible Person, holds 20% or more of the issued and paid-up share capital of Spritzer, must not exceed 10% of the new Spritzer Shares available under the Proposed ESOS,
ii.
in accordance with the Main Market Listing Requirements of Bursa Securities, or any prevailing guidelines issued by Bursa Securities or any other relevant authority, as amended from time to time, and subject always to such terms and conditions and/ or any adjustments which may be made in accordance with the provisions of the By-Laws of the Proposed ESOS." By Order of the Board Sow Yeng Chong (MIA 4122) Tan Boon Ting (MAICSA 7056136) Company Secretaries Ipoh 2 November 2011
Notes:i. A member of the Company entitled to attend and vote at this meeting is entitled to appoint not more than two (2) proxies to attend and vote on his behalf. A proxy may but need not be a member of the Company and the provisions of Section 149 (1)(b) of the Companies Act, 1965 shall not apply to the Company. The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorised in writing or, if the appointor is a corporation, either under Seal or under the hand of an attorney. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportions of his shareholding to be represented by each proxy. Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint at least one (1) proxy in respect of each Securities Account it holds with ordinary shares of the Company standing to the credit of the said Securities Account. The instrument appointing a proxy must be deposited at the Registered Office of the Company at Lot 85, Jalan Portland, Tasek Industrial Estate, 31400 Ipoh, Perak Darul Ridzuan not less than forty-eight (48) hours before the time appointed for holding the meeting.
ii. iii. iv.
v.
SPRITZER BHD (265348-V)
Number of shares held
I/ We, of
(Full name in block letters, Identity Card number/ Company number) (Address)
being a Member of SPRITZER BHD, hereby appoint
(Full name in block letters , Identity Card number/ Company number)
of or failing whom, of
(Address) (Full name in block letters, Identity Card number/ Company number) (Address)
as my/ our proxy to vote for me/ us and on my/ our behalf at the Extraordinary General Meeting of the Company scheduled to be held at Crystal 2, Impiana Hotel Ipoh, 18 Jalan Raja Dr. Nazrin Shah, 30250 Ipoh, Perak Darul Ridzuan on Thursday, 24 November 2011 at 11.30 a.m. or immediately following the conclusion or adjournment of the Eighteenth Annual General Meeting of the Company scheduled to be held at the same venue and on the same date at 11.00 a.m., whichever is later, for/ against* the resolutions to be proposed thereat. NO. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. RESOLUTIONS PROPOSED BONUS ISSUE OF WARRANTS PROPOSED ESOS PROPOSED GRANT OF OPTIONS TO DATO' LIM A HENG @ LIM KOK CHEONG PROPOSED GRANT OF OPTIONS TO LIM KOK BOON PROPOSED GRANT OF OPTIONS TO DR. CHUAH CHAW TEO PROPOSED GRANT OF OPTIONS TO LAM SANG PROPOSED GRANT OF OPTIONS TO CHOK HOOA @ CHOK YIN FATT PROPOSED GRANT OF OPTIONS TO DATO' IR. NIK MOHAMAD PENA BIN NIK MUSTAPHA PROPOSED GRANT OF OPTIONS TO Y.B. MOHD ADHAN BIN KECHIK PROPOSED GRANT OF OPTIONS TO KUAN KHIAN LENG PROPOSED GRANT OF OPTIONS TO DATIN CHUA SHOK TIM @ CHUA SIOK HOON PROPOSED GRANT OF OPTIONS TO LIM SENG LEE PROPOSED GRANT OF OPTIONS TO LIM HOCK LAI PROPOSED GRANT OF OPTIONS TO HUANG YU YING PROPOSED GRANT OF OPTIONS TO BEH SWEE SEE PROPOSED GRANT OF OPTIONS TO LIM SIEW AI FOR AGAINST
Dated this _____________day of November 2011.
Signatures/ Common Seal of Members * Please indicate with an "X" in the space provided whether you wish your votes to be cast for or against the resolutions. If no specific direction as to voting is given, the proxy will vote or abstain from voting at his discretion.
Notes:i. A proxy may but need not be a member of the Company and Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company. ii. The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorised in writing or if such appointor is a corporation, under its Seal or the hand of its attorney. iii. A member may appoint up to two (2) proxies to attend and vote at the same meeting. Where a member appoints more than one (1) proxy and such appointment shall be invalid unless he specifies the proportion of his shareholding to be represented by each proxy. iv. Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account. v. This instrument duly completed must be deposited at the Registered Office of the Company at Lot 85, Jalan Portland, Tasek Industrial Estate, 31400 Ipoh, Perak Darul Ridzuan not less than forty-eight (48) hours before the time appointed for holding the meeting.
Fold here to seal
STAMP
THE COMPANY SECRETARIES SPRITZER BHD Lot 85, Jalan Portland Tasek Industrial Estate 31400 Ipoh Perak Darul Ridzuan
Fold here to seal

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Spritzer-Circular 2011 2

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THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.

(Incorporated in Malaysia under the Companies Act, 1965)

(Company No. 265348-V)

This Circular is dated 2 November 2011

"ESOS Option(s)" "Option(s)"

"FPE" "FYE" "Grantee(s)" "Listing Requirements" "LPD" "Market Day(s)"

THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK

TABLE OF CONTENTS PAGE 1 2 10 10 11 13 23 23 SHAREHOLDERS AND/ OR 24 27 27 27 28 28

NOTICE OF EGM FORM OF PROXY

(Incorporated in Malaysia under the Companies Act, 1965)

(Company No. 265348-V)

Adjustments in the exercise price and/ or number of Warrants

Rights in the event of winding-up, liquidation, compromise and/ or arrangement

Governing law 2.2 Proposed ESOS 2.2.1

65,329 (12) 65,317 16,330 81,647 12,247

65,329 16,549 5,732 (14) 54,455 142,051 130,635*1

1.09 93,590 0.66

1.09 93,590 0.66

1.06 93,590 0.54

1.02 93,590 0.49

65,329 16,549 5,732 (14) 54,455 142,051 130,635*1

1.09 93,590 0.66

1.09 93,590 0.66

1.06 93,590 0.54

1.02 93,590 0.49

THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK

Yee Lee Corporation Bhd ("Yee Lee Corporation")

Yee Lee Holdings Sdn Bhd ("Yee Lee Holdings")

4.90 4,902,998*3 3.75

6,403,366 5,100,000 1,550,000 133,332 -

4.90 3.90 1.19 0.10 -

Lim Kok Boon

Datin Chua Shok Tim @ Chua Siok Hoon ("Datin Chua")

Lai Yin Leng

Yee Lee Organization Bhd ("Yee Lee Organization")

Unikampar Credit And Leasing Sdn Bhd ("Unikampar")

Uniyelee Sdn Bhd ("Uniyelee") Bhd

46.93 46.93 46.93

61,304,176*7 61,304,176*8 61,304,176*9

46.93 46.93 46.93

Yeleta Holdings Holdings")

Young Wei Holdings Sdn Bhd ("Young Wei Holdings")

Yee Lee Holdings 8,437,500 8,004,208 6,375,000 1,937,500 166,665 -

Lim Kok Boon

Lai Yin Leng

Yee Lee Organization

Young Wei Holdings

Deemed interested by virtue of its shareholdings in Yee Lee Organization

Deemed interested by virtue of its shareholdings in Unikampar and Uniyelee

Deemed interested by virtue of its shareholdings in Yeleta Holdings

THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK

Yee Lee Corporation

Yee Lee Holdings

Dato' Lim 4,902,998

Lim Kok Boon

Datin Chua 9,869,666

Lai Yin Leng -

Yee Lee Organization

Young Wei Holdings

Yee Lee Corporation

Yee Lee Holdings

Lim Kok Boon

61,304,1767 61,304,1768 61,304,176*9

61,304,1765 61,304,1766 61,304,1766 61,304,1767 61,304,176*8

163,200 105,666 38,000 21,332 20 21