2.1.1 Proposed Employee Share Option Scheme ( Proposed ESOS )

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1 CORPORATION BERHAD ( ) PROPOSED ESTABLISHMENT OF A LONG TERM INCENTIVE PLAN FOR THE ELIGIBLE EMPLOYEES AND DIRECTORS OF AND ITS SUBSIDIARIES ( GROUP ) ( PROPOSED LTIP ) 1. INTRODUCTION On behalf of the Board of Directors of ( Board ), CIMB Investment Bank Berhad ( CIMB ) wishes to announce that proposes to establish a long term incentive plan of up to 10% of the issued and paid-up ordinary share capital of (excluding treasury shares) at any time during the duration of the Proposed LTIP, for the employees and directors of the Group who fulfil the eligibility criteria set out in Section below ( Eligible Persons ). The Proposed LTIP serves to attract, retain, motivate and reward valuable employees and directors of the Group through the award of ordinary shares of RM1.00 each in ( ) or the rights to subscribe for as determined by a committee to be established to administer the Proposed LTIP ( Committee ) in accordance to the by-laws governing the Proposed LTIP ( By-Laws ). 2. DETAILS OF THE PROPOSED LTIP 2.1 The Proposed LTIP shall comprise the following: Proposed Employee Share Option Scheme ( Proposed ESOS ) The Proposed ESOS is intended to allow to award employees and Non-Executive Directors of the Group the right to subscribe for new ( ESOS ) at a prescribed subscription price ( Option ), subject to the terms and conditions of the By- Laws. The award of Options ( ESOS Awards ), once accepted by the Eligible Persons (hereinafter referred to as ESOS Participants ), will be vested to the ESOS Participants in tranches over a period of up to 3 years, as determined by the Committee. The subscription price payable for each ESOS Share upon exercise of the Option ( Option Price ) shall be determined based on the 5-day volume-weighted average market price of the immediately preceding the date of the ESOS Award, subject to a discount of not more than 10% but shall not be less than the par value of the. The ESOS Participants (excluding the Non-Executive Directors) can elect to fund the exercise of the Options themselves or through an ESOS trust funding mechanism ( ETF ) as detailed in Section below. Such election is to be made simultaneously with the acceptance of the first ESOS Award and shall be binding for all future ESOS Awards under the Proposed ESOS. The Proposed ESOS is intended to reward and retain the ESOS Participants for their commitment, dedication and loyalty to the Group and incentivise the ESOS Participants to participate more actively in the operations and future growth of the Group. The ESOS Participants who are Non-Executive Directors of the Group must not sell, transfer or assign new obtained through the exercise of the Options awarded to them, if any, within 1 year from the date of the ESOS Award

2 2.1.2 Proposed Employee Share Grant Plan ( Proposed ESGP ) The Proposed ESGP is intended to allow to award, in the form of a retention share plan ( RSP ) and a performance share plan ( PSP ), to the middle to senior management and Executive Directors of the Group. Under the Proposed ESGP, will be awarded at no consideration to the Eligible Persons ( ESGP Awards ) on an annual basis. Once the ESGP Awards are accepted by the Eligible Persons (hereinafter referred to as ESGP Participants ), they will be vested to the ESGP Participants over a period of up to 3 years, subject to the ESGP Participants fulfilment of certain vesting conditions as determined by the Committee in accordance to the terms of the By-Laws. The details of the RSP and PSP are set out below: RSP The RSP is a share plan for selected middle to senior management employees and Executive Directors of the Group holding job grades 1 to 8 or such rank or position as may be designated by the Committee from time to time, in recognition of their loyalty and individual contribution toward the development, growth and success of the Group. The RSP is put in place to promote loyalty and the attainment of higher performance achievements by the relevant employees of the Group. PSP The PSP is a performance share plan for selected senior management employees of the Group holding job grades 1 to 3 or such rank or position as may be designated by the Committee from time to time and Executive Directors of the Group in recognition of their performance as drivers of the growth and performance of Group. The PSP is put in place to promote alignment in the strategic achievements of the Group and its senior management employees and Executive Directors to drive long term shareholder value enhancement of Group. In implementing the Proposed ESGP, the Committee may in its absolute discretion decide that the ESGP Awards be satisfied by the following: (a) (b) (c) (d) issuance of new ; the acquisition of existing from the market; cash settlement; or a combination of any of the above. In considering whether to issue new, acquire existing or pay cash for the purpose of settlement of the ESGP Awards, the Committee will take into consideration, amongst others, factors such as the prevailing market price of the, funding considerations and dilutive effects on s capital base, future returns and cash requirements of the Group

3 2.2 Trust Arrangement To facilitate the implementation of the Proposed LTIP, will establish trusts to be administered by a trustee ( Trustee ), which will be appointed to administer the trusts in accordance with the trust deeds. shall have the power to appoint or rescind the appointment of any Trustee as it deems fit in accordance with the provisions of the said trust deeds. The Trustee will be responsible for the administration of the LTIP as follows: ETF under the Proposed ESOS shall provide funding to the Trustee to subscribe for new in a pool ( ETF Pool ), which will be in trust ( ESOS Trust ) and managed by the Trustee. The shares of the ETF Pool will be placed into a CDS Account of the Trustee or its authorised nominee. The number of new that the Trustee will subscribe for shall be as determined by the Committee. An ESOS Participant (excluding the Non-Executive Directors) who elects to exercise the Options under the ETF shall serve an exercise notice, subject to there being sufficient number of in the ETF Pool. By virtue of the exercise, the Trustee or its authorised nominee shall be irrevocably authorised and instructed to assist with the sale and transfer of such number of ESOS in respect of which the exercise notice is given, at a price stipulated by such ESOS Participant that shall be equal to or not less than the aggregate of Option Price and the related transaction costs. Such ESOS Participant would not be required to make any payment in respect of the Option exercised as the funding of the Option Price is provided by (via the Trustee) to the ESOS Trust. The net gains from the successful sale of the said ESOS (after deducting the Option Price and the related transaction costs) will be released to such ESOS Participant. The balance of the proceeds, which is the Option Price will then be transferred to the Trustee or its authorised nominee, and remitted to for the subscription of new to be replenished into the ETF Pool or if so directed by the Committee, as repayment of monies funded by. Upon the allotment and issuance of new pursuant to the exercise of Options by such ESOS Participant, such new shall ultimately be credited into the CDS Account of the Trustee or its authorised nominee to replenish the ETF Pool Proposed ESGP The Trustee shall, at such times as the Committee shall direct, subscribe for and/or purchase the necessary number of existing to accommodate any transfer of to the CDS Accounts of the ESGP Participants. For this purpose, the Trustee will be entitled from time to time to the extent permitted by law and as set out under the By-Laws to accept funding and/or assistance, financial or otherwise from, its subsidiaries and/or third parties. 2.3 Other salient terms and conditions of the Proposed LTIP Size of the Proposed LTIP The total number of which may be awarded under the Proposed LTIP ( LTIP ) and/or any other scheme involving new issuance of which may be implemented from time to time by, on any date shall not exceed 10% of the issued and paid-up ordinary share capital of (excluding treasury shares) ("Maximum ") at any time during the duration of the Proposed LTIP. It should be noted that even if the Maximum is allocated to the Eligible Persons, the actual number of LTIP to be issued may be lesser in view that only Eligible Persons who meet the vesting conditions would be entitled to the full vesting of their LTIP allocations

4 2.3.2 Basis of allocation and maximum allowable allotment The allocation of to be made available for ESOS Awards and ESGP Awards (collectively, LTIP Awards ) under the Proposed LTIP shall be determined by the Committee annually. The total number of awarded to any one Eligible Person under the Proposed LTIP shall be determined at the absolute discretion of the Committee, after taking into consideration, amongst others, the performance and seniority (denoted by employee job grade), years of service of the Eligible Person, his/her potential for future development and contribution to the success and development of the Group and such other criteria as the Committee may deem relevant. The total LTIP Awards under the Proposed LTIP shall be staggered over the duration of the Proposed LTIP subject to the size restrictions of the Proposed LTIP as set out under Section to encourage the employees of Group to remain in the Group and to foster a greater sense of involvement, dedication and loyalty to the Group. Notwithstanding the foregoing, the total number of LTIP is subject to the following: not more than 50% of the LTIP available under the Proposed LTIP on any date shall be allocated in aggregate to directors and senior management of the Group; and the allocation to an employee of the Group who, either singly or collectively through persons connected with the employee of the Group holds 20% or more of s issued and paid-up share capital (excluding treasury shares), does not exceed 10% of the total number of to be issued and awarded under the Proposed LTIP or any other share grant schemes implemented or to be implemented by Eligibility Any employee (including Executive Directors) and Non-Executive Director of the Group (other than s subsidiaries which are dormant or incorporated outside Malaysia) who fulfils the following as at the date of the LTIP Awards under the Proposed LTIP shall be eligible to participate in the Proposed LTIP: (iii) (iv) (v) has attained the age of 18 years and is not an undischarged bankrupt nor subject to any bankruptcy proceedings; with the exception of the Non-Executive Directors of the Group, has entered into a full-time or fixed-term contract with, and is on the payroll of, the Group (other than s subsidiaries which are dormant or incorporated outside Malaysia) and whose service has been confirmed; has fulfilled any other eligibility criteria as may be set by the Committee at any time and from time to time at its absolute discretion; if he is an Executive Director or a Non-Executive Director, the specific allocation of or Options awarded by to him in his capacity as an Executive Director or a Non-Executive Director under the Proposed LTIP has been approved by the shareholders of at a general meeting; for the Proposed ESOS, all employees and Non-Executive directors of Group (other than s subsidiaries which are dormant or incorporated outside Malaysia) who fulfil the criteria listed under to (iv) and the following: (a) for an employee of Group who is a Malaysian citizen, he/she has been in employment with the Group for a period of at least 3 years prior to and up to the date of the ESOS Award; - 4 -

5 (b) for an employee of Group who is a non-malaysian citizen, he/she has been in employment with the Group on a full-time contract for a period of at least 4 years prior to and up to the date of the ESOS Award; (vi) (vii) for the RSP, selected middle to senior management employees i.e. holding job grades 1 to 8, or such rank/position as may be designated by the Committee from time to time and Executive Directors of Group who fulfil the criteria listed under to (iv) and have been in employment with the Group for a period of at least 1 year prior to and up to the date of the ESGP Award; and for the PSP, selected senior management i.e. holding job grades 1 to 3 or such rank or position that may be designated by the Committee from time to time or Executive Directors of the Group who fulfil the criteria listed under to (iv) and have been in employment with the Group for a period of at least 1 year prior to and up to the date of the ESGP Award Duration of the Proposed LTIP The Proposed ESGP and Proposed ESOS shall continue to be in force for a period of 10 and 5 years, respectively, commencing from the effective date of implementation of the Proposed LTIP ( Effective Date ), being the date after full compliance with the relevant requirements of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad ( Bursa Securities ) in relation to the Proposed LTIP. The Proposed ESOS may be extended by the Board at its absolute discretion for up to another 5 years immediately from the expiry of the first 5 years, and shall not in aggregate exceed 10 years from the Effective Date or such longer period as may be allowed by the relevant authorities. On expiry of the Proposed LTIP, any LTIP Award or Options which have yet to be vested or exercised (as the case may be and whether fully or partially) shall be deemed cancelled and be null and void Ranking of the LTIP Any new LTIP to be allotted and issued shall, upon issuance and allotment, rank equally in all respects with the existing and together with the LTIP procured by the Company, via the Trustee, for transfer, pursuant to the vesting of any ESGP Award or exercise of Option shall: be subject to all the provisions of the memorandum and articles of association of ; and rank in full for all entitlements, including dividends or other distributions declared or recommended in respect of the then existing, the record date for which is on or after the date on which the are transferred to the central depository system account of the ESOS Participant or ESGP Participant (collectively, LTIP Participants ) and shall in all other respects rank pari passu with other existing then in issue. Notwithstanding any provision in the By-Laws, the LTIP Participants shall not be entitled to any rights, dividends or other distributions attached to the LTIP prior to the date on which the LTIP are credited into their respective CDS Accounts

6 3. RATIONALE OF THE PROPOSED LTIP The rationale of the Proposed LTIP are as follows: (iii) (iv) (v) to reward and retain the Eligible Employees whose talents are vital to the Group; to provide incentive for employees to participate more actively in the operations and future growth of the Group; to motivate each employee to optimise his/her performance standards and maintain high level contributions through greater levels of commitment, dedication and loyalty to the Group; to attract skilled and experienced individuals to join the Group and contribute to its continued growth and profitability and to align the interest of middle to senior management and Executive Directors through the Proposed ESGP to drive long term shareholder value enhancement of Group via direct participation in the equity of. The Proposed ESOS is also extended to the Non-Executive Directors of the Group in recognition of their contribution to the growth and performance of the Group. The Proposed ESOS is also expected to incentivise these Non-Executive Directors to continue providing strategic direction to the Group by allowing their equity participation in the growth and profits of Group. 4. UTILISATION OF PROCEEDS will not receive any proceeds pursuant to the Proposed ESGP, as the ESGP Participants will not be required to pay for the new to be issued and transferred to them pursuant to the ESGP Awards. will receive proceeds from the exercise of the Options by the Eligible Employees under the Proposed ESOS. However, the amount of proceeds to be received cannot be determined at this juncture as it will depend on, amongst others, the number of Options awarded and exercised at the relevant point in time and the Option Price. intends to utilise the net proceeds from the exercise of the Options for the working capital of the Group. 5. EFFECTS OF THE PROPOSED LTIP Where applicable, the proforma effects of the Proposed LTIP in this section are illustrated based on the following assumptions ( Assumptions ): The Maximum (as defined in Section 2.3.1) are fully awarded and vested under the Proposed LTIP and satisfied by the issuance of new to the LTIP Participants; and The Proposed LTIP is illustrated in the following scenarios: Minimum Scenario Assuming none of the 99.3 million outstanding Warrants 2009/2014 of ( Warrants ) as at 22 August 2012 are exercised prior to the Proposed LTIP Maximum Scenario Assuming all of the 99.3 million outstanding Warrants as at 22 August 2012 are exercised prior to the Proposed LTIP - 6 -

7 5.1 Issued and paid-up share capital The Proposed LTIP will not have an immediate effect on the existing issued and paid-up capital of. The issued and paid-up capital of may increase progressively depending on the number of LTIP Awards and whether new are issued and allotted to satisfy the LTIP Awards. Purely for illustration purposes, based on the Assumptions, the proforma effects of the Proposed LTIP on s issued and paid-up share capital as at 22 August 2012 are as follows: Minimum Scenario No. RM million million Issued and paid-up share capital as at 22 August , ,381.7 Less: Treasury shares * * 1, ,381.7 Maximum to be issued pursuant to the Proposed LTIP Enlarged issued and paid-up share capital 1, ,519.9 Maximum Scenario No. RM million million Issued and paid-up share capital as at 22 August , ,381.7 Less: Treasury shares * * 1, ,381.7 To be issued assuming full exercise of all outstanding Warrants , ,481.0 Maximum to be issued pursuant to the Proposed LTIP Enlarged issued and paid-up share capital 1, ,629.1 Note: * Less than 0.1 million or RM0.1 million, as the case may be. It should be noted that even if the Maximum stipulated above are allocated to the LTIP Participants, the actual number of LTIP to be issued may be lesser in view of the following: (iii) only LTIP Participants who meet the vesting conditions would be entitled to the full vesting of the Options or allocated under their LTIP Awards; the ESGP Awards to the ESGP Participants may be satisfied through cash settlement, and/or the delivery of existing which had been purchased by the Trustee, instead of through the issuance of new ; and not all ESOS Participants will exercise the Options vested to them

8 5.2 Substantial shareholders shareholdings The Proposed LTIP is not expected to have any immediate effect on the shareholdings of the substantial shareholders of until and unless new are issued in connection with the vesting and exercise of the Options and the vesting of the ESGP Awards. Any potential effect on the substantial shareholders shareholdings in would depend on the number of new issued at the relevant point in time. Purely for illustration purposes, based on the Assumptions, the proforma effects of the Proposed LTIP on the shareholdings of s substantial shareholders as at 22 August 2012 in are as follows: As at 22 August 2012 Minimum Scenario Maximum Scenario Direct Indirect Direct Indirect Direct Indirect million % million % million % million % million % million % Employees Provident Fund Board Kumpulan Wang Persaraan (Diperbadankan) Amanahraya Trustees Berhad - Skim Amanah Saham Bumiputera The dilution effect to the substantial shareholders shareholdings illustrated above will be reduced to the extent the ESGP Awards under the Proposed ESGP are satisfied through cash settlement and/or the delivery of existing which had been purchased by the Trustee (from non-substantial shareholders of ), instead of through the issuance of new to the ESGP Participants

9 5.3 Net assets ( NA ) per share and gearing The Proposed LTIP will not have an immediate effect on NA per share of until such time that new are issued in satisfaction of the ESGP Awards vested and Options exercised pursuant to the Proposed LTIP. Any potential effect on the NA per Share will depend on the number of to be issued which can only be determined at the point of: the exercise of Options and the Option Price; and/or the vesting of the ESGP Awards and the mode of settlement of the ESGP Award at the date of vesting. Upon the exercise of the Options and/or vesting of the ESGP Awards, the NA per share is expected to increase if the Option Price and/or the fair value of the ESGP Award is higher than the NA per share at such point of exercise and/or vesting, and decrease if the Option Price and/or the fair value of the ESGP Award is lower than the NA per share at such point of exercise and/or vesting. Nonetheless, the Proposed LTIP is not expected to have material impact on s consolidated NA and consolidated gearing for the financial year ending 31 March Earnings and earnings per share ( EPS ) With the adoption of Financial Reporting Standard 2 ( FRS 2 ) on Share Based Payment as issued by the Malaysian Accounting Standards Board, the potential cost of awarding the LTIP Awards under the Proposed LTIP will need to be measured at fair value on the date of the ESOS Awards and/or ESGP Awards and recognised as an expense in the income statement over the vesting period of such Options and ESGP Awards. The extent of the effect of the Proposed LTIP on s consolidated earnings and EPS cannot be determined at this juncture as it would depend on the fair value of the Options and/or as at the respective dates of ESOS Awards and/or ESGP Awards. However, it is important to note that the potential cost of the award of Options and under any LTIP Award does not represent a cash outflow and is only an accounting treatment. The Proposed LTIP will also have an effect on s EPS due to the increase in number of resulting from the issuance and allotment of new to satisfy any LTIP Awards pursuant to the Proposed LTIP. The Board has taken note of the potential impact of FRS 2 on the Group s future earnings and shall take into consideration of such impact in the allocation of LTIP Awards to the LTIP Participants. 5.5 Convertible securities Save for the Warrants, does not have any other convertible securities as at the date of this announcement. The Proposed LTIP will not have any effect on the terms and conditions of the Warrants. 6. APPROVALS REQUIRED The Proposed LTIP is subject to approvals being obtained from the following: Bursa Securities for the listing of and quotation for the new to be issued on the Main Market of Bursa Securities under the Proposed LTIP; s shareholders at an extraordinary general meeting ( EGM ) to be convened; For clarification, this approval will allow to award the LTIP Awards in accordance with the By-Laws throughout the existence of the Proposed LTIP; - 9 -

10 (iii) (iv) Bursa Malaysia Depository Sdn Bhd for the transfer of from the Trustee to the LTIP Participants pursuant to the Proposed LTIP at any point in time during the duration of the Proposed LTIP; and any other relevant authorities, if required. The application to Bursa Securities in relation to item above is expected to be submitted within 1 month from the date of this announcement. As at the date of this announcement, the Proposed LTIP is not conditional on any other corporate exercise which has been announced but pending completion. 7. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED TO THEM All the Executive and Non-Executive Directors of are entitled to participate in the Proposed LTIP and are therefore deemed interested in the Proposed LTIP to the extent of their respective allocations under the Proposed LTIP (collectively, the Interested Directors ). As such, the Interested Directors have abstained and will continue to abstain from deliberating on their respective entitlements under the Proposed LTIP at the relevant Board meetings. The Interested Directors will also abstain from voting in respect of their direct and/or indirect shareholdings in (if any) on the resolution pertaining to their respective entitlements under the Proposed LTIP at s EGM to be convened and have also undertaken to ensure that persons connected to them will abstain from voting in respect of their direct and/or indirect shareholdings in (if any) on the resolution pertaining to their respective entitlements under the Proposed LTIP to be tabled at s EGM to be convened. Save as disclosed above, none of s Directors, major shareholders and/or persons connected to them have any direct and/or indirect interest in the Proposed LTIP. 8. ADVISER CIMB has been appointed by as the Adviser in relation to Malaysian regulatory requirements for the Proposed LTIP. 9. ESTIMATED TIMEFRAME TO COMPLETION Barring any unforeseen circumstances, expects to establish the Proposed LTIP in the 4 th quarter of DIRECTORS STATEMENT The Board having considered all aspects is of the view that the Proposed LTIP is in the best interest of. This announcement is dated 28 August