APEX HEALTHCARE BERHAD (Company No.: T) (Incorporated in Malaysia under the Companies Act, 1965)

Transcription

1 THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the course of action to be taken, 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. APEX HEALTHCARE BERHAD (Company No.: T) (Incorporated in Malaysia under the Companies Act, 1965) CIRCULAR TO SHAREHOLDERS IN RELATION TO THE PROPOSED ESTABLISHMENT OF AN EXECUTIVE SHARE OPTION SCHEME OF UP TO 10% OF THE ISSUED AND PAID-UP SHARE CAPITAL OF APEX HEALTHCARE BERHAD AND NOTICE OF EXTRAORDINARY GENERAL MEETING Adviser RHB Investment Bank Berhad (Company No P) (A Participating Organisation of Bursa Malaysia Securities Berhad) The Notice of the Extraordinary General Meeting ("EGM") of Apex Healthcare Berhad ("AHB" or the "Company"), to be held at Bunga Melati Room, 7th Floor, Ramada Plaza Melaka, Jalan Bendahara, Melaka on Wednesday, 18 May 2016 at a.m., together with the Proxy Form are enclosed herein. A member entitled to attend, speak and vote at the EGM is entitled to appoint a proxy or proxies to attend, speak and vote on his/ her behalf. In such event, the Proxy Form should be lodged at the Company's Registered Office at 1-5, Jalan TTC 1, Cheng Industrial Estate, Melaka, not less than 48 hours before the time stipulated for holding the EGM as indicated below. The lodging of the Proxy Form does not preclude you from attending, speaking and voting in person at the EGM, should you subsequently wish to do so. Last date and time for lodging the Proxy Form... : Date and time of the EGM... : Monday, 16 May 2016 at a.m. Wednesday, 18 May 2016 at a.m. This Circular is dated 25 April 2016

2 DEFINITIONS Except where the context otherwise requires, the following definitions shall apply throughout this Circular:- "Act" : The Companies Act, 1965 as may be amended, modified or re-enacted from time to time "AHB" or the "Company" : Apex Healthcare Berhad "AHB Group" "Group" or the : AHB and its subsidiaries, collectively "AHB Share(s)" or "Share(s)" : Ordinary share(s) of RM1.00 each in AHB "Board" : The Board of Directors of AHB "Bursa Securities" : Bursa Malaysia Securities Berhad "Bylaws" : The terms and conditions of the Proposed ESOS as set out therein and shall include any amendments or variations made thereto from time to time "Director(s)" : The director(s) of AHB and its subsidiaries, which are not dormant, and shall have the meaning given in Section 2(1) of the Capital Markets And Services Act, 2007 "Effective Date" : The date for the implementation of the Proposed ESOS being the date of full compliance with all relevant requirements of Chapter 6 of the Listing Requirements including the approvals and/ or conditions referred to in Bylaw 4.1 thereof having been obtained and/ or complied with "EGM" : Extraordinary General Meeting "Eligible Person(s)" : An executive employee(s) and/ or executive Director(s) of AHB and its subsidiaries, which are not dormant, who meet the criteria of eligibility for participation in the Proposed ESOS in the manner as indicated in Bylaw 6 "EPS" : Earnings per Share "ESOS" : Executive share option scheme, being the scheme for the granting of ESOS Options to Eligible Persons to subscribe for new AHB Shares upon the terms and conditions in the manner as indicated in the Bylaws "ESOS Committee" : The committee, from time to time, appointed and authorised by the Board to administer the Proposed ESOS in the manner as indicated in Bylaw 17 "ESOS Option(s)" or "Option(s)" : The right of a Grantee to subscribe for new AHB Shares pursuant to the contract constituted by the selected Eligible Person's acceptance of an Offer in the manner as indicated in Bylaw 8 "FYE" : Financial year ended/ ending i

3 DEFINITIONS (CONT'D) "Grantee(s)" : An Eligible Person(s) who has accepted the Offer by the Company in the manner as indicated in the Bylaws "Listing Requirements" : Main Market Listing Requirements of Bursa Securities "LPD" : 31 March 2016, being the latest practicable date prior to the printing and despatch of this Circular "Market Day(s)" : Any day from Mondays to Fridays (inclusive of both days) excluding a public holiday and on which Bursa Securities is open for trading of securities "MFRS" : Malaysian Financial Reporting Standards "NA" : Net assets "Offer" : An offer made in writing by the ESOS Committee to a selected Eligible Person in the manner as indicated in Bylaw 5 "Offer Date" : The date of the Offer letter from the ESOS Committee, on which an Offer is made to a selected Eligible Person to participate in the Proposed ESOS "Proposed ESOS" : The proposed establishment of an ESOS of up to 10% of the issued and paid-up share capital of AHB "RHBIB" or the "Adviser" : RHB Investment Bank Berhad "RM" and "sen" : Ringgit Malaysia and sen, respectively "Subscription Price" : The price at which the Grantee shall be entitled to subscribe for every new AHB Share by exercising his/ her ESOS Option as determined in the manner as indicated in Bylaw 9 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 ii

4 TABLE OF CONTENTS LETTER TO THE SHAREHOLDERS OF AHB IN RELATION TO THE PROPOSED ESOS CONTAINING:- PAGE 1. INTRODUCTION 1 2. DETAILS OF THE PROPOSED ESOS 2 3. UTILISATION OF PROCEEDS 5 4. RATIONALE AND JUSTIFICATIONS FOR THE PROPOSED ESOS 5 5. EFFECTS OF THE PROPOSED ESOS 5 6. HISTORICAL SHARE PRICES 9 7. APPROVALS REQUIRED/ OBTAINED 9 8. ESTIMATED TIME FRAME FOR COMPLETION INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/ OR PERSONS CONNECTED TO THEM CORPORATE PROPOSALS ANNOUNCED BUT PENDING COMPLETION DIRECTORS' RECOMMENDATION EGM FURTHER INFORMATION 12 APPENDICES I. DRAFT BYLAWS OF THE PROPOSED ESOS 13 II. FURTHER INFORMATION 44 NOTICE OF EGM PROXY FORM ENCLOSED ENCLOSED iii

5 APEX HEALTHCARE BERHAD (Company No.: T) (Incorporated in Malaysia under the Companies Act, 1965) Registered Office 1-5, Jalan TTC 1 Cheng Industrial Estate Melaka 25 April 2016 Board of Directors Dr. Kee Kirk Chin (Chairman and Chief Executive Officer) Kee Tah Hee Teck Peng (Non-Independent Non-Executive Director) Robert Dobson Millner (Non-Independent Non-Executive Director) Leong Khai Cheong (Senior Independent Non-Executive Director) Datuk Noharuddin Bin Harun (Independent Non-Executive Director) Heng Su-Ling Mae (Independent Non-Executive Director) Jackson Chevalier Yap-Kit-Siong (Independent Non-Executive Director) Tong Yew Sum (Independent Non-Executive Director) To: The Shareholders of Apex Healthcare Berhad Dear Sir/ Madam, PROPOSED ESTABLISHMENT OF AN EXECUTIVE SHARE OPTION SCHEME OF UP TO 10% OF THE ISSUED AND PAID-UP SHARE CAPITAL OF APEX HEALTHCARE BERHAD 1. INTRODUCTION On 15 March 2016, RHBIB had, on behalf of the Board, announced that AHB proposes to undertake an establishment of an ESOS of up to 10% of the issued and paid-up share capital of the Company at any point in time. On 6 April 2016, RHBIB had, on behalf on the Board, announced that Bursa Securities had, vide its letter dated 5 April 2016, resolved to approve the listing of and quotation for such number of additional new AHB Shares, representing up to 10% of the issued and paid-up share capital of AHB, to be issued arising from the exercise of the ESOS Options on the Main Market of Bursa Securities. The purpose of this Circular is to provide the shareholders of AHB with the relevant information on the Proposed ESOS, as well as to seek the approval from the shareholders of AHB for the resolutions pertaining to the Proposed ESOS to be tabled at the forthcoming EGM of the Company. The notice of the forthcoming EGM and the Proxy Form are enclosed together with this Circular. SHAREHOLDERS OF AHB ARE ADVISED TO READ AND CONSIDER CAREFULLY THE CONTENTS OF THIS CIRCULAR TOGETHER WITH THE APPENDICES CONTAINED HEREIN BEFORE VOTING ON THE RESOLUTIONS PERTAINING TO THE PROPOSED ESOS TO BE TABLED AT THE FORTHCOMING EGM. 1

6 2. DETAILS OF THE PROPOSED ESOS The Proposed ESOS involves the granting of ESOS Options to the eligible executive employees and/ or executive Directors of AHB and its subsidiaries, which are not dormant, who meet the criteria of eligibility for participation in the Proposed ESOS as set out in the Bylaws of the Proposed ESOS to subscribe for new AHB Shares at specified prices to be determined in the manner set out in Section 2.5 of this Circular. The Proposed ESOS will be administered by the ESOS Committee and shall be governed by the Bylaws, a draft of which is set out in Appendix I of this Circular. The salient features of the Proposed ESOS are set out below:- 2.1 Maximum number of AHB Shares available under the Proposed ESOS The maximum number of new AHB Shares, which may be allotted pursuant to the Proposed ESOS shall not exceed in aggregate 10% of the total issued and paid-up share capital of the Company (excluding treasury shares, if any) at any point in time during the existence of the Proposed ESOS. As at the LPD, the issued and paid-up share capital of AHB is RM117,146,093 comprising 117,146,093 AHB Shares. 2.2 Basis of allotment and maximum allowable allotment The maximum number of new AHB Shares that may be offered to an Eligible Person under the Proposed ESOS 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/ or length of service of the Eligible Person and shall subject to the following:- i. The Directors and senior management do not participate in the deliberation or discussion of their own allocation; ii. iii. The allocation to an Eligible Person, who either singly or collectively, through persons connected with the Eligible Person, holds 20% or more of the issued and paid-up share capital of AHB (excluding treasury shares, if any), must not exceed 10% of the total number of new AHB Shares to be issued under the Proposed ESOS; and Not more than 60% of the total number of new AHB Shares to be issued under the Proposed ESOS shall be allocated in aggregate to the Directors and senior management of AHB and its subsidiaries, which are not dormant, on the basis that they are crucial to the performance of AHB Group as determined by the ESOS Committee at their sole and absolute discretion ("60% Allocation Limit"). The 60% Allocation Limit is arrived at after taking into consideration the importance of the executive Directors of the Group (which includes the executive Directors of the key subsidiaries of the Company) and senior management of the Group who are key drivers to the continuous growth of the Group's pharmaceutical businesses. The executive Directors of the Group play a facilitative role in key business decisions, and their experience and network are crucial for the strategic direction of the Group. The senior management of the Group, which includes but not limited to chief executive officers, chief operating officers, senior vice presidents, financial controllers, general managers, possess the leadership skills and experience in the highly regulated pharmaceutical industry, which are critical competencies for the Group's operations. 2

7 The Group intends to reward and encourage the executive Directors and senior management of the Group for their loyalty, contribution and attainment of higher performance achievements towards the development and growth of the Group which are drivers for the enhancement of shareholders' value in the long-run. The ESOS Committee shall have the discretion in determining whether or not the allocation available shall be staggered over the duration of the Proposed ESOS. The ESOS Committee also has the discretion to determine whether the ESOS Options are subject to any vesting period and if so the vesting conditions and whether such vesting conditions are subject to performance target. As at the date of this Circular, the Company has yet to determine any specific performance targets which are required to be achieved before the ESOS Options can be exercised by an Eligible Person. For the avoidance of doubt, the ESOS Committee may from time to time take into consideration the specific performance targets for each Eligible Person such as, among others, sales and profit targets, number of new products developed and/ or number of new customers/ contracts secured, where relevant. The ESOS Committee has the discretion to determine whether the Eligible Person is required to achieve any specific performance target(s) before he/ she may exercise the ESOS Options granted to him/ her. Any such performance target(s) if set, shall be stated in the Offer letter to the Eligible Person. 2.3 Eligibility Only Eligible Persons who meet the following conditions as at the Offer Date are eligible to participate in the Proposed ESOS:- i. he/ she has attained the age of at least 18 years and is not an undischarged bankrupt; ii. iii. iv. if an executive employee, he/ she is in the employment of any corporation within AHB and/ or its subsidiaries, which are not dormant, who has been confirmed in service and has not served a notice to resign nor received a notice of termination; If an executive Director, he/ she is appointed and remains appointed as an executive Director of AHB and/ or its subsidiaries, which are not dormant; and/ or is under such categories and criteria that the ESOS Committee may from time to time decide at its discretion. In the case of an executive Director or a chief executive or a major shareholder of AHB and/ or persons connected to them, their specific allotments under the Proposed ESOS shall be approved by the shareholders of AHB at a general meeting of the Company. It is the intention of AHB that only the executive Director(s) of the Company shall be eligible to participate in the Proposed ESOS and all the non-executive Directors of the Company shall not be entitled to participate in the Proposed ESOS. For informative purpose, the only executive Director of AHB at this juncture is Dr. Kee Kirk Chin, being the Chairman and Chief Executive Officer of AHB. 3

8 Eligibility, however, does not confer an Eligible Person a claim or right to participate in or any rights whatsoever under the Proposed ESOS and an Eligible Person does not acquire or have any rights over or in connection with the ESOS Option(s) or the AHB Shares comprised in the Proposed ESOS unless the ESOS Committee has made an Offer to the Eligible Person in the manner as set out in the Bylaws and the Eligible Person has accepted the Offer in accordance with the terms of the Offer and the Proposed ESOS. 2.4 Duration The Proposed ESOS, when implemented, shall be in force for a period of five (5) years from the Effective Date. On or before the expiry of the above initial five (5)-year period, the Proposed ESOS may be extended by the Board at its absolute discretion, without having to obtain approval from the Company's shareholders, for a further period of up to five (5) years, but will not in aggregate exceed ten (10) years from the Effective Date or such longer period as may be allowed by the relevant authorities. 2.5 Basis of determining the Subscription Price Subject to any adjustments made under the Bylaws and pursuant to the Listing Requirements, the Subscription Price shall be:- i. The five (5)-day weighted average market price of AHB Shares immediately preceding the Offer Date with a discount of not more than 10% or such other percentage of discount as may be permitted by Bursa Securities and/ or any other relevant authorities from time to time; or ii. The par value of AHB Shares or at such minimum subscription price as may be permitted by the provisions of the Act and the Listing Requirements, whichever is higher, as determined by the Board upon recommendation of the ESOS Committee which shall be binding and conclusive. 2.6 Ranking of the ESOS Options and new AHB Shares to be issued 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 the Company until and unless such Grantees exercise their ESOS Options into new AHB Shares. The new AHB Shares to be allotted upon the exercise of the ESOS Options shall, upon allotment, issuance and full payment, rank pari passu in all respects with the existing issued and paid-up AHB Shares, save and except that the new AHB Shares will not be entitled to any dividends, rights, allotment and/ or other forms of distribution ("Distribution") that may be declared, made or paid to shareholders, for which the entitlement date for the Distribution precedes the date of allotment of the new AHB Shares. The new AHB Shares will be subject to all provisions of the Memorandum and Articles of Association of AHB and such amendments thereafter, if any. 2.7 Holding of AHB Shares The new AHB Shares to be 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. 4

9 2.8 Listing of and quotation for the new AHB Shares to be issued arising from the exercise of the ESOS Options The approval has been obtained from Bursa Securities vide its letter dated 5 April 2016 for the listing of and quotation for the new AHB Shares to be issued arising from the exercise of the ESOS Options on the Main Market of Bursa Securities. 3. UTILISATION OF PROCEEDS 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 ESOS Options will be utilised for the working capital requirements of AHB Group, as and when received, within the tenure of the ESOS. As such, the exact time frame for utilisation of the proceeds is 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, payment to suppliers and general expenses such as travelling, utilities, staff training and staff welfare. The estimated expenses for the Proposed ESOS amounts to RM110, RATIONALE AND JUSTIFICATIONS FOR THE PROPOSED ESOS The implementation of the Proposed ESOS primarily serves to align the interests of the Eligible Persons to the corporate goals of AHB 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 AHB Group; ii. iii. iv. 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; and To reward the Eligible Persons by allowing them to participate in the Group's profitability and eventually realise any potential capital gains arising from possible appreciation in the value of AHB Shares, upon exercising of the ESOS Options. 5. EFFECTS OF THE PROPOSED ESOS 5.1 Issued and paid-up share capital The Proposed ESOS is not expected to have an immediate effect on the existing issued and paid-up share capital of the Company until such time when the ESOS Options to be granted under the Proposed ESOS are exercised. The issued and paidup share capital of the Company will increase progressively depending on the number of new AHB Shares to be issued arising from the exercise of the ESOS Options that may be granted under the Proposed ESOS. 5

10 For illustrative purpose, the proforma effects of the Proposed ESOS on the issued and paid-up share capital of the Company, based on the assumption that the number of ESOS Options granted amounts to 10% of the issued and paid-up share capital of AHB, are set out below:- No. of Shares RM Issued and paid-up share capital as at the LPD 117,146, ,146,093 Shares to be issued assuming full exercise of the ESOS Options granted 11,714,609 11,714,609 Enlarged issued and paid-up share capital 128,860, ,860, NA per Share and gearing The Proposed ESOS is not expected to have an immediate effect on the NA per Share and gearing of the Group until such time when the ESOS Options to be granted under the Proposed ESOS are exercised. The effects on the NA per Share and gearing of the Group will depend on, amongst others, the Subscription Price of the ESOS Options, the number of new AHB Shares to be issued upon the exercise of the ESOS Options and the potential effect on the future earnings of the Group arising from the adoption of the MFRS 2 on share-based payment. Nevertheless, the Company has taken note of the potential impact of the MFRS 2 on the Group's future NA per Share and shall take into consideration such impact on the allocation and granting of ESOS Options to the Eligible Persons. 5.3 Earnings and EPS The Proposed ESOS may have an effect on the earnings of AHB Group for the financial year ending 31 December 2016 and up to 10 years due to the possible impact of the MFRS 2 on share-based payment. However, any potential effect on the EPS of AHB 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 MFRS 2 on share-based payment. Under the MFRS 2 on share-based payment, 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 Offer Date and is recognised in the statement of comprehensive income, thereby reducing the earnings of AHB Group. The fair value of the ESOS Options is determined after taking into consideration, amongst others, the historical volatility of AHB Shares, the risk-free rate, the Subscription Price of the ESOS Options and time to maturity of the ESOS Options from the vesting date of the ESOS Options. Hence, the potential effect on the EPS of AHB 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 MFRS 2 on AHB Group's future earnings and shall take into consideration such impact on the allocation and granting of ESOS Options to the Eligible Persons. 6

11 5.4 Substantial shareholders' shareholding The Proposed ESOS is not expected to have an immediate effect on the substantial shareholders' shareholdings in AHB until such time when the ESOS Options to be granted under the Proposed ESOS are exercised. Any potential effect on the substantial shareholdings in AHB will depend on the number of ESOS Options granted and new AHB Shares to be issued arising from the exercise of the ESOS Options at any point in time. For illustrative purpose, the proforma effects of the Proposed ESOS on the shareholdings of the substantial shareholders of the Company, based on the assumption that the number of ESOS Options granted amounts to 10% of the issued and paid-up share capital of AHB, are set out below:- Substantial shareholders Shareholdings as at the LPD < Direct >< Indirect >< Direct >< Indirect > No. of Shares % No. of Shares % I Assuming full exercise of the ESOS Options granted No. of Shares % No. of Shares % Apex Pharmacy Holdings Sdn Bhd 47,554, ,554, Washington H Soul Pattinson and Company Limited 35,462, ,462, Xepa Holdings Sdn Bhd 462, ,554,956 * , ,554,956 * Apex Holdings (Pte) Ltd 318, ,017,206 * , ,017,206 * Kee Tah Hee Teck Peng 320, ,382,831 * , ,382,831 * Dr. Kee Kirk Chin 950,000 * ,335,956 * ,121,460 * ,335,956 * Xepa Holdings Pte Ltd ,335,956 * ,335,956 * Yang Liew Fang ,335,956 * ,335,956 * Kee Kirk Chuen 46,875 * ,335,956 * ,875 * ,335,956 * Dr. Kee Loo ,335,956 * ,335,956 * United Engineers Limited ,554,956 * ,554,956 * UE UMC Pte Ltd ,554,956 * ,554,956 *

12 Substantial shareholders Assuming full exercise of the ESOS Options granted Shareholdings as at the LPD < Direct >< Indirect >< Direct >< Indirect > No. of Shares % No. of Shares % No. of Shares % No. of Shares % Oversea-Chinese Banking Corporation Limited ,554,956 * ,554,956 * Great Eastern Holdings Limited ,554,956 * ,554,956 * Notes:- *1 Deemed interest by virtue of Section 6A of the Act *2 Held through nominee company *3 Partly held through nominee company *4 Deemed interest by virtue of Section 6A and Section 134(12)(c) of the Act *5 For illustrative purpose only, assuming 1,171,460 ESOS Options are granted to Dr. Kee Kirk Chin, as 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 AHB, must not exceed 10% of the total number of new AHB Shares to be issued arising from the exercise of the ESOS Options THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK 8 I

13 5.5 Convertible securities As at the date of this Circular, the Company does not have any existing convertible securities. 6. HISTORICAL SHARE PRICES The monthly highest and lowest market prices of AHB Shares as traded on Bursa Securities for the past 12 months from April 2015 to March 2016 are set out below:- High Low RM RM 2015 April May June July August September October November December January February March Last transacted market price on 14 March (being the date prior to the announcement on the Proposed ESOS) Last transacted market price on the LPD 3.73 (Source: Bloomberg) 7. APPROVALS REQUIRED/ OBTAINED The Proposed ESOS is subject to the following approvals being obtained:- i. Bursa Securities, for the listing of and quotation for the new AHB Shares to be issued arising from the exercise of the ESOS Options on the Main Market of Bursa Securities, which was obtained vide its letter dated 5 April 2016, subject to the following conditions:- (a) (b) Conditions RHBIB is required to submit a confirmation to Bursa Securities of full compliance of the Proposed ESOS pursuant to Paragraph 6.43(1) of the Listing Requirements and stating the effective date of implementation together with a certified true copy of the resolution passed by the shareholders in general meeting approving the Proposed ESOS; and AHB is required to furnish Bursa Securities on a quarterly basis a summary of the total number of shares listed pursuant to the exercise of options under the Proposed ESOS as at the end of each quarter together with a detailed computation of listing fees payable. Status of compliance To be complied To be complied ii. the shareholders of AHB for the Proposed ESOS to be tabled at the forthcoming EGM of the Company. 9

14 The Proposed ESOS is not conditional upon any other proposals undertaken or to be undertaken by the Company. 8. ESTIMATED TIME FRAME FOR COMPLETION Barring any unforeseen circumstances and subject to all required approvals being obtained, the Proposed ESOS is expected to be implemented by the third quarter of INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/ OR PERSONS CONNECTED TO THEM Dr. Kee Kirk Chin, being the only executive Director of AHB, is eligible to participate in the Proposed ESOS, and is therefore deemed interested to the extent of his proposed allocation under the Proposed ESOS. Kee Tah Hee Teck Peng, being the Non-Independent Non-Executive Director of AHB, is the father of Dr. Kee Kirk Chin and is deemed interested in the proposed allocation to Dr. Kee Kirk Chin under the Proposed ESOS. Notwithstanding this, all the Directors of AHB 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. Dr. Kee Kirk Chin and Kee Tah Hee Teck Peng (collectively referred to as the "Interested Directors") have and will continue to abstain from all Board deliberations and voting in respect of the proposed allocation to Dr. Kee Kirk Chin under the Proposed ESOS at the relevant Board meetings. The Interested Directors will abstain from voting in respect of their direct and/ or indirect shareholdings at the forthcoming EGM of the Company in respect of the ordinary resolution to be tabled for the proposed granting of ESOS Options to Dr. Kee Kirk Chin under the Proposed ESOS to be tabled at the forthcoming EGM. The Interested Directors will undertake to ensure that persons connected to them will abstain from voting in respect of their direct and/ or indirect shareholdings, if any, on the ordinary resolution pertaining to the proposed granting of ESOS Options to Dr. Kee Kirk Chin to be tabled at the forthcoming EGM of the Company. Apex Pharmacy Holdings Sdn Bhd, Xepa Holdings Sdn Bhd, Apex Holdings (Pte) Ltd, Kee Tah Hee Teck Peng, Xepa Holdings Pte Ltd, Yang Liew Fang, Kee Kirk Chuen and Dr. Kee Loo are major shareholders of AHB, who are deemed persons connected to Dr. Kee Kirk Chin (collectively referred to as the "Interested Major Shareholders"), are deemed interested in the proposed allocation to Dr. Kee Kirk Chin under the Proposed ESOS. The Interested Major Shareholders will abstain from voting in respect of their direct and/ or indirect shareholdings in the Company on the ordinary resolution pertaining to the proposed granting of ESOS Options to Dr. Kee Kirk Chin under the Proposed ESOS to be tabled at the forthcoming EGM of the Company. The Interested Major Shareholders will also undertake to ensure that persons connected to them, if any, will abstain from voting in respect of their direct and/ or indirect shareholdings in the Company on the ordinary resolution pertaining to the proposed granting of ESOS Options to Dr. Kee Kirk Chin under the Proposed ESOS to be tabled at the forthcoming EGM of the Company. The shareholdings of the Interested Directors and the Interested Major Shareholders as at the LPD are set out below:- Interested Directors Shareholdings as at the LPD < Direct > < Indirect > No. of Shares % No. of Shares % Dr. Kee Kirk Chin 950,000 * ,335,956 * Kee Tah Hee Teck Peng 320, ,382,831 *

15 Shareholdings as at the LPD < Direct > < Indirect > No. of Shares % No. of Shares % Interested Major Shareholders Apex Pharmacy Holdings Sdn Bhd 47,554, Xepa Holdings Sdn Bhd 462, ,554,956 * Apex Holdings (Pte) Ltd 318, ,017,206 * Kee Tah Hee Teck Peng 320, ,382,831 * Dr. Kee Kirk Chin 950,000 * ,335,956 * Xepa Holdings Pte Ltd ,335,956 * Yang Liew Fang ,335,956 * Kee Kirk Chuen 46,875 * ,335,956 * Dr. Kee Loo ,335,956 * Notes:- *1 *2 *3 *4 Held through nominee company Deemed interest by virtue of Section 6A of the Act Deemed interest by virtue of Section 6A and Section 134(12)(c) of the Act Partly held through nominee company Save as disclosed above, none of the Directors and major shareholders of the Company and/ or persons connected to the Directors and/ or major shareholders of the Company has any other interest, either direct or indirect, in the Proposed ESOS and the proposed allocation to Dr. Kee Kirk Chin under the Proposed ESOS. 10. CORPORATE PROPOSALS ANNOUNCED BUT PENDING COMPLETION Save for the Proposed ESOS (which is the subject matter of this Circular), the Board is not aware of any other corporate proposals announced by the Company but not yet completed as at the date of this Circular. 11. DIRECTORS' RECOMMENDATION The Board (save for the Interested Directors), having considered all aspects of the Proposed ESOS, including the rationale and justifications for the Proposed ESOS as well as the effects of the Proposed ESOS as set out in Sections 4 and 5 of this Circular, respectively, is of the opinion that the Proposed ESOS is in the best interest of the Company. The Interested Directors have and will continue to abstain from giving any opinion and making any recommendation for voting pertaining to the resolution on the proposed granting of ESOS Options to Dr. Kee Kirk Chin under the Proposed ESOS to be tabled at the forthcoming EGM of the Company. Accordingly, the Board (save for the Interested Directors) recommends that the shareholders of AHB vote in favour of the resolutions pertaining to the Proposed ESOS and the proposed granting of ESOS Options to Dr. Kee Kirk Chin under the Proposed ESOS to be tabled at the forthcoming EGM of the Company. 11

16 12. EGM The EGM, the notice of which is enclosed in this Circular, is scheduled to be held at Bunga Melati Room, 7th Floor, Ramada Plaza Melaka, Jalan Bendahara, Melaka on Wednesday, 18 May 2016 at a.m. for the purpose of considering and if thought fit, passing with or without modification, the resolutions to give effect to the Proposed ESOS and the proposed granting of ESOS Options to Dr. Kee Kirk Chin under the Proposed ESOS. If the shareholders of AHB are unable to attend, speak and vote in person at the EGM, the shareholders of AHB are requested to complete, sign and return the enclosed Proxy Form in accordance with the instruction provided there to be deposited at the Registered Office of the Company at 1-5, Jalan TTC 1, Cheng Industrial Estate, Melaka, not less than 48 hours before the time stipulated for holding the EGM or any adjournment thereof. The lodging of the Proxy Form shall not preclude the shareholders of AHB from attending, speaking and voting in person at the EGM should the shareholders subsequently wish to do so. 13. FURTHER INFORMATION Shareholders are advised to refer to the attached appendices set out in this Circular for further information. Yours faithfully, For and on behalf of the Board APEX HEALTHCARE BERHAD ROBERT DOBSON MILLNER Non-Independent Non-Executive Director 12

17 APPENDIX I DRAFT BYLAWS OF THE PROPOSED ESOS BYLAWS OF APEX HEALTHCARE BERHAD S EXECUTIVE SHARE OPTION SCHEME DEFINITIONS AND INTERPRETATIONS 1.1 Except where the context otherwise requires, the following expression in these Bylaws shall have the following meanings: Act : The Companies Act, 1965, as amended from time to time and all regulations made thereunder and any re-enactment thereof; Adviser : A person who is permitted to carry on the regulated activity of advising corporate finance under the Capital Markets and Services Act 2007, which includes a Principal Adviser as defined in the Securities Commission Malaysia s Principal Adviser s Guidelines; AHB or Company : APEX HEALTHCARE BERHAD (Company No T); AHB Group or Group : AHB and its Subsidiaries, collectively; AHB Shares : Ordinary shares in AHB which currently has a par value of RM1.00 each; Authorised Nominee : A person who is authorised to act as a nominee as specified in accordance with the schedule prescribed under Part VIII of the Rules of Bursa Depository; Available Balance : The unissued share capital of the Company which is available for Offer of Options subject to the maximum limit as set out in Bylaw 3.1 and after deducting all AHB Shares under Options which have been granted; Board : Board of Directors of AHB, as may be constituted from time to time; Bursa Depository : Bursa Malaysia Depository Sdn Bhd ( W); Bursa Securities : Bursa Malaysia Securities Berhad ( W); Bylaws : The terms and conditions of the Scheme as set out herein, and shall include any amendments or variations made thereto from time to time; CDS : Central Depository System; CDS Account : The account established by Bursa Depository for a Depositor for the recording of deposits of securities and dealings in such securities by the Depositors; Central Depositories Act : The Securities Industry (Central Depositories) Act 1991 including any amendments made thereto from time to time; Date of Expiry : The last day of the duration of this Scheme pursuant to Bylaw 4.1 hereof unless earlier terminated pursuant to Bylaw 4.3; 13

18 Depositor : A holder of a CDS Account; Director : A natural person who holds a directorship in an executive capacity in any corporation in the AHB Group; Effective Date : The date for the implementation of the Scheme being the date of full compliance with all relevant requirements of Chapter 6 of the Main Market Listing Requirements including the approvals and/or conditions referred to in Bylaw 4.1 hereof have been obtained and/or complied with; Eligible Person(s) : An executive Employee(s) and/or executive Director(s) of the AHB Group, who meets the criteria of eligibility for participation in the Scheme as set out in Bylaw 6 hereof; Employee : A natural person who is employed by and on the payroll of any corporation in the AHB Group, including Director(s) and contract workers recruited under contracts of employment within the AHB Group; Entitlement Date : The date as at the close of business on which the names of the shareholders of AHB must appear on AHB s record of depositors in order to participate in any dividends, rights, allotments or other distributions; ESOS : Executive share option scheme; ESOS Committee : The committee, from time to time, appointed and authorised by the Board pursuant to Bylaw 17 to administer the Scheme; Exercise Period : The specific period or periods within an Option Period during which Options may be exercised by Grantees, as determined by the ESOS Committee subject to Bylaw 10 hereof; Government : The Government of Malaysia; Grantee : Any Eligible Person who has accepted the Offer by the Company in accordance with the terms and conditions of the Scheme; Main Market Listing Requirements : The Main Market Listing Requirements of Bursa Securities; Market Day(s) : Any day(s) from Mondays to Fridays (inclusive of both days) excluding a public holiday and on which Bursa Securities is open for trading in securities; Maximum Allowable Allotment : The maximum number of new AHB Shares that can be offered to an Eligible Person falling within a particular category of Eligible Person as stipulated in Bylaw 7 hereof; 14

19 Offer : An offer made in writing by the ESOS Committee to a selected Eligible Person in the manner indicated in Bylaw 5 hereof; Offer Date : The date of the Offer letter from the ESOS Committee, on which an Offer is made to a selected Eligible Person to participate in the Scheme; Option : The right of a Grantee to subscribe for new AHB Share(s) pursuant to the contract constituted by the selected Eligible Person s acceptance of an Offer in the manner indicated in Bylaw 8 hereof; Option Period : A period commencing from the date an Offer is accepted in accordance with Bylaw 8 and expiring on the Date of Expiry or such other date which the ESOS Committee may in its discretion decide, provided that no Option Period shall extend beyond the Date of Expiry; Person connected : Has the meaning given to person connected in Paragraph 1.01 of the Main Market Listing Requirements; Registered Office : The registered address of AHB being 1-5 Jalan TTC 1, Cheng Industrial Estate, Melaka, Malaysia; RM and sen : Ringgit Malaysia and sen, respectively Rules of Bursa Depository : The Rules of Bursa Depository as issued pursuant to the Central Depositories Act; Scheme : The ESOS for the grant of Options to selected Eligible Persons to subscribe for new AHB Shares on the terms and conditions as set out herein; Senior Management : An Employee of the AHB Group deemed to be in a senior position as may be determined by the ESOS Committee from time to time; Subscription Price : The price at which the Grantee shall be entitled to subscribe for every new AHB Share by exercising his/her Option as determined in accordance with Bylaw 9 hereof; Subsidiaries : Subsidiary corporations of AHB within the meaning of Section 5 of the Act which are not dormant and shall include subsidiary corporations which are existing as at the Effective Date and those which are incorporated or acquired at any time during the duration of the Scheme but exclude subsidiary corporations which have been divested in the manner provided for in Bylaw 25.2 and which is determined by the ESOS Committee at its absolute discretion from time to time to be a corporation participating under the Scheme in accordance with Bylaw 6. 15

20 1.2 In these Bylaws: (i) (ii) (iii) (iv) (v) (vi) Any reference to a statutory provision shall include any subordinate legislation made from time to time under the provision and any listing requirements, policies and/or guidelines of Bursa Securities and/or any other relevant regulatory authority (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 and/or guidelines are addressed to by Bursa Securities and/or any other relevant regulatory authority); Any reference to a statutory provision shall include that provision as from time to time modified or re-enacted whether before or after the date of these Bylaws so far as such modification or re-enactment applies or is capable of applying to any Option offered and accepted prior to the expiry of the Scheme and shall include also any past statutory provision (as from time to time modified or re-enacted) which such provision has directly or indirectly been replaced; Words denoting the singular shall include the plural and references to gender shall include both genders and the neuter; Any liberty or power which may be exercised or any determination which may be made hereunder by the ESOS Committee or the Board may be exercised at the ESOS Committee s or the Board s discretion; The heading in these Bylaws are for convenience only and shall not be taken into account in the interpretation of these Bylaws; and If an event occurs on a stipulated day which is not a Market Day, then the stipulated day will be taken to be the first Market Day after that day provided always that if such date shall fall beyond the duration of the Scheme, then the stipulated day shall be taken to be the preceding Market Day. 2. NAME OF SCHEME This ESOS will be called the Apex Healthcare Berhad s Executive Share Option Scheme A. THE OBJECTIVES OF THE SCHEME The establishment of this ESOS is to align the interests of the Eligible Persons to the corporate goals of AHB Group and 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) (ii) (iii) To recognise the contribution of the Eligible Persons whose services are valued and considered vital to the operations and continued growth of AHB 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; and 16

21 (iv) To reward the Eligible Persons by allowing them to participate in the Group's profitability and eventually realise any potential capital gains arising from possible appreciation in the value of the AHB Shares, upon exercising of the Options. 3. MAXIMUM NUMBER OF AHB SHARES AVAILABLE UNDER THE SCHEME 3.1 The total number of new AHB Shares which may be made available and/or issued under the Scheme shall not be more than ten per centum (10%) of the total issued and paid-up share capital comprising ordinary shares of the Company (excluding treasury shares) at any one time as referred to in Bylaw 5 hereof. The ESOS Committee has the discretion in determining whether the total number of new AHB Shares which may be made available under the Scheme and/or allocation thereof shall be staggered over the duration of the Scheme. 3.2 Notwithstanding the provision of Bylaw 3.1 above or any other provisions contained herein, in the event the maximum number of new AHB Shares comprised in the Option granted under the Scheme exceeds the aggregate of ten per centum (10%) of the issued and paid-up share capital of AHB (excluding treasury shares) as a result of AHB purchasing its own shares or AHB undertaking any other corporate proposal, no further Options shall be offered until the total number of new AHB Shares to be issued under the Scheme falls below ten per centum (10%) of the Company s issued and paid-up share capital (excluding treasury shares). Any Option granted prior to the adjustment of the issued and paid-up share capital of AHB shall remain valid and exercisable in accordance with the provisions of this Scheme. 3.3 Notwithstanding the above, AHB may implement more than one (1) ESOS during the duration of this Scheme provided that the aggregate AHB Shares available under all the share issuance schemes implemented by AHB is not more than fifteen per centum (15%) of its issued and paid-up share capital (excluding treasury shares) at any one time or such lower or higher limit in accordance with any prevailing guidelines issued by Bursa Securities or any other relevant authorities as amended from time to time. 4. DURATION AND TERMINATION OF THE SCHEME 4.1 The Effective Date for the implementation of the Scheme shall be the date of full compliance with all relevant requirements of Chapter 6 of the Main Market Listing Requirements including the following approvals and/or conditions having been fully obtained and/or complied with: (a) (b) (c) (d) the submission to Bursa Securities of the final copy of the Bylaws together with a letter of compliance pursuant to paragraphs 2.12 and 6.42 of the Main Market Listing Requirements and a checklist showing compliance with Appendix 6E of the Main Market Listing Requirements; the approval-in-principle from Bursa Securities for the listing of and quotation for the new AHB Shares to be issued pursuant to the exercise of the Options granted under the Scheme; the shareholders approval for the Scheme at an extraordinary general meeting; the approval of any other relevant authorities for the Scheme (where applicable); and 17

22 (e) the fulfilment of all conditions attached to the above approvals, if any. Unless otherwise terminated in accordance with Bylaw 4.3 herein and subject to the compliance of the terms and conditions herein contained, the Scheme shall come in force on the Effective Date for a period of five (5) years commencing from the Effective Date PROVIDED ALWAYS THAT on or before the expiry thereof, the Board shall have the discretion whether or not, to extend in writing the duration of the Scheme for another five (5) years or such shorter period as it deems fit immediately from the expiry of the first five (5) years commencing from the Effective Date PROVIDED FURTHER THAT the total duration of the Scheme shall not be more than ten (10) years from the Effective Date or such longer period as may be allowed by the relevant authorities. In the event that the Scheme is extended in accordance with the terms and conditions herein, the ESOS Committee shall inform the extended duration of the Scheme to the relevant Grantees in such manner of communication as the ESOS Committee deems fit. Unless otherwise required by the relevant authorities, no further approvals shall be required for the extension of the Scheme provided that the Company shall serve appropriate notices to Grantees and make any announcements to Bursa Securities (if required) within thirty (30) days prior to the expiry of the original Scheme. 4.2 Offers can only be made during the duration of the Scheme before the Date of Expiry. 4.3 The Company may at any time during the duration of the Scheme through a resolution by the Board terminate the Scheme and shall immediately announce to Bursa Securities the:- (i) (ii) (iii) effective date of termination of the Scheme; number of Options exercised or AHB Shares vested (if any); and reasons for termination of the Scheme. 4.4 Notwithstanding anything to the contrary, all unexercised Options shall lapse on the Date of Expiry. 4.5 The Company shall through its Adviser submit no later than five (5) Market Days after the Effective Date of the implementation of these Bylaws, a confirmation to Bursa Securities of the full compliance of Bylaw 4.1 above stating the effective date of implementation of the Scheme, together with a certified true copy of the relevant resolutions passed by the shareholders of the Company in the general meeting approving the Scheme. 5. OFFER 5.1 The ESOS Committee may, at any time during the duration of the Scheme as defined in Bylaw 4 hereof, make Offer(s) in writing to any Eligible Person (based on the criteria of allocation as set out in Bylaw 7 herein) selected by the ESOS Committee which selection shall be at the absolute discretion of the ESOS Committee. 5.2 The actual number of new AHB Shares which may be offered to an Eligible Person shall be at the sole and absolute discretion of the ESOS Committee and, subject to any adjustments that may be made under Bylaw 14 hereof, shall not be less than one hundred (100) AHB Shares but not more than the Maximum Allowable Allotment and shall always be in multiples of one hundred (100) AHB Shares. 18