The Scheme will be administered in accordance with the By-Laws by a committee to be duly appointed and authorised by the Board ("ESOS Committee").

Transcription

1 SKP RESOURCES BERHAD ("SKP" OR THE "COMPANY") PROPOSED ESTABLISHMENT OF NEW EMPLOYEES SHARE OPTION SCHEME ( ESOS ) OF UP TO 15% OF THE TOTAL NUMBER OF ISSUED SHARES OF SKP TO ELIGIBLE EXECUTIVE DIRECTORS AND EMPLOYEES OF SKP AND ITS SUBSIDIARIES 1. INTRODUCTION On behalf of the Board of Directors of SKP ("Board"), RHB Investment Bank Berhad ("RHBIB") wishes to announce that the Company proposes to establish a new employees' share option scheme ( Scheme ) of up to 15% of the total number of issued shares of the Company (excluding treasury shares) at any one time over the duration of the Scheme for the eligible executive Directors and employees of SKP, and its subsidiary companies ( SKP Group or Group ) (excluding subsidiaries which are dormant) ("Proposed ESOS"). 2. DETAILS OF THE SCHEME 2.1 Scheme The Proposed ESOS involves the granting of options to subscribe for new ordinary shares in SKP ( Share(s) ) ( ESOS Option(s) or Option(s) ) to the eligible executive Directors and employees of SKP and its subsidiary companies (excluding subsidiaries which are dormant), who meet the criteria of eligibility for participation in the Scheme as set out in Section 2.2(ii) of this Announcement ( Eligible Person(s) ), in accordance with the by-laws governing the Scheme ( By-Laws ). The Scheme will be administered in accordance with the By-Laws by a committee to be duly appointed and authorised by the Board ("ESOS Committee"). 2.2 Salient terms of the By-Laws (i) Maximum number of new Shares available under the Scheme The maximum number of new Shares which may be made available under the Scheme shall not exceed in aggregate 15% of the total number of issued shares of the Company (excluding treasury shares) at any point of time when a written offer is made by the ESOS Committee to an Eligible Person or such other limit prescribed by any guidelines, rules and regulations of the relevant authorities during the duration of the Scheme, in the manner provided under the By-Laws ( Offer ). (ii) Eligibility An employee or executive Director who meets the following criteria as at the date on which an Offer is made ( Date of Offer ) shall be eligible to participate in the Scheme: (a) (b) (c) if he is a Malaysian citizen who has attained the age of 18 years; is not an undischarged bankrupt nor subject to any bankruptcy proceedings; if he has been confirmed in service and has served at least 6 months in the employment of the SKP Group (excluding subsidiaries which are dormant) (unless the ESOS Committee under certain circumstances and at its sole discretion reduces the period of 6 months to a lesser period as it deems fit); 1

2 (d) (e) where the executive Director or employee is under an employment contract, the contract is for a duration of at least 1 year and shall have not expired within 3 months from the Date of Offer, and the executive Director or employee must have been in service with SKP Group (excluding subsidiaries which are dormant) for at least 1 year; and must have complied with any other criteria imposed by the ESOS Committee from time to time. The selection of any Eligible Person for participation in the Scheme shall be at the discretion of the ESOS Committee and the decision of the ESOS Committee shall be final and binding. Other eligibility and allocation criteria shall be determined by the Board after recommendation from the ESOS Committee. (iii) Basis of allotment and maximum allowable allocation of Options Subject to any adjustments which may be made under the By-Laws, the aggregate number of new Shares that may be offered and allotted to an Eligible Person, to whom the ESOS Committee has made an Offer to participate in the Scheme ( Selected Employee ), under the Scheme shall be at the absolute discretion of the ESOS Committee after taking into consideration the Eligible Person s position, ranking, performance, contribution, seniority, length of service, fulfilment of the eligibility criteria under the By-Laws or such other matters which the ESOS Committee may in its sole and absolute discretion deem fit. The Proposed ESOS shall be in accordance with the Main Market Listing Requirements of Bursa Malaysia Securities Berhad ( Bursa Securities ) ( Listing Requirements ), any prevailing guidelines, rules, regulations or requirements issued by Bursa Securities or any relevant authority, and subject to the following: (a) (b) (c) the Directors and senior management of the Group shall not be allowed to participate in the deliberation or discussion of their own allocations of Options under the Scheme; any Offer, allocation of Options under the Scheme and the related allotment of Shares to any person who is a Director, major shareholder or chief executive officer of SKP or holding company of SKP or persons connected (as defined in the Listing Requirements, Persons Connected ) to such Director, major shareholder or chief executive officer shall require the prior approval of the shareholders of SKP in a general meeting. The foregoing persons and Persons Connected to them shall not vote on the resolution approving the said Offer, allocation and allotment; that the aggregate number of Shares comprised in the Options made available under the Scheme shall not exceed the amount stipulated in Section 2.2(i) above, but the ESOS Committee shall not be obliged in any way to offer a Selected Employee an Option for all the specified maximum number of Shares; 2

3 (d) (e) (f) not more than 10% of the Shares available under the Scheme at the point when the Offer is made shall be allocated to any individual Selected Employees who, either singly or collectively through Persons Connected with such Selected Employees holds 20% or more of SKP Shares (excluding treasury shares); at any point in time when an Offer is made, not more than 70% of the Options available under the Scheme shall be allocated, in aggregate, to the executive Director and senior management of the Group; and any performance target to be achieved before the Options can be granted and/or exercised by an Eligible Person shall be determined by the ESOS Committee. (iv) Duration of the Scheme The Scheme shall be in force for a period of 5 years commencing from the effective date of the implementation of the Scheme. The ESOS Committee shall have the sole and absolute discretion, without the Company s shareholders approval in general meeting, to extend the duration of the Scheme (as many times as the ESOS Committee may deem fit) for up to another 5 years or such shorter period on or before the expiry of the Scheme. The Scheme should not exceed a maximum period of 10 years in its entirety or such longer period as may be allowed by the relevant authorities. Subject to compliance with the requirements of Bursa Securities and any other relevant regulatory authorities, the Company may at any time before the date of expiry of the Scheme, at its sole discretion without obtaining the approvals or consents from the Selected Employee who have accepted the Offer ( Grantee ) and/or the shareholders, terminate the continuation of the Scheme by way of passing a board resolution and no further Offers shall be made by the ESOS Committee. (v) Option Price The price at which a Grantee is entitled to subscribe for each new Share under the Option ( Option Price ) shall be determined by the ESOS Committee based on the 5-day volume weighted average market price ( VWAP ) of the Shares, as quoted on Bursa Securities, immediately preceding the Date of Offer, subject to a discount of not more than 10%. The Option Price as determined by the ESOS Committee shall be conclusive and binding on the Grantees. (vi) Rights of a Grantee The Options shall not carry any right to vote at any general meeting of the Company. The new Shares, which are allotted and credited into the Grantee s Central Depository System account upon the exercise of the Options, would carry rights to vote at any general meeting of the Company, if the Grantee is registered on the Register of Depositors on the entitlement date as at the close of business to be entitled to attend and vote at the general meeting. A Grantee shall not be entitled to any dividends, rights or other entitlements on his unexercised Options. 3

4 (vii) Ranking of the new Shares The new Shares to be issued and allotted arising from the exercise of the Options shall, upon issuance and allotment, rank equally in all respects with the then existing Shares of the Company, save and except that the new Shares will not be entitled to any dividends, rights, allotments and/or other forms of distribution declared, made or paid to shareholders, for which the entitlement date is prior to the date of allotment of the new Shares. (viii) Listing and quotation of new Shares An application will be made to Bursa Securities for the listing and quotation of the new Shares to be issued arising from the exercise of the Options on the Main Market of Bursa Securities. 3. UTILISATION OF PROCEEDS The proceeds to be received by SKP arising from the exercise of the Options will depend on the number of Options granted and exercised at the relevant point in time and the Option Price. As such, the exact amount of proceeds to be received and timeframe for the utilisation of proceeds are not determinable at this juncture. Any proceeds from the exercise of the Options are intended to be utilised for SKP Group s working capital requirements, as and when received, within the duration of the Scheme. The proceeds for working capital will be utilised to finance the Group s day-to-day operations, which includes payment to trade creditors, administrative and operating expenses. 4. RATIONALE FOR THE PROPOSED ESOS The Proposed ESOS serves to align the interests of the Eligible Persons to the corporate goals of SKP Group. The Proposed ESOS will provide the Eligible Persons an opportunity to have equity participation in the Company and help achieve the positive objectives as set out below: (i) (ii) (iii) (iv) (v) to recognise the contributions and/or services of the Eligible Persons which are considered vital to the operations and continued growth of SKP Group; to motivate the Eligible Persons towards better performance through greater productivity and loyalty; stimulate a greater sense of belonging and dedication since Eligible Persons are given the opportunity to participate directly in the equity stake of the Company; encourage the Eligible Persons to remain with SKP Group, thus ensuring that the loss of key personnel is kept to a minimum; and reward Eligible Persons by allowing them to participate in the Company s profitability and eventually realise capital gains arising from any appreciation on the value of Shares. 4

5 5. EFFECTS OF THE PROPOSED ESOS The proforma effects of the Proposed ESOS on the share capital of SKP are set out in the ensuing paragraphs. 5.1 Share capital The Proposed ESOS is not expected to have any immediate effect on the share capital of the Company until such a time when the Options granted under the Proposed ESOS are exercised. The share capital of the Company will increase progressively depending on the quantum of Options granted and exercised and the number of new Shares issued pursuant thereto. For illustration purposes, assuming the maximum number of Options are granted and vested under the Scheme and are fully exercised into new Shares, the proforma effects of the Proposed ESOS on the share capital of SKP as at 30 June 2017, being the latest practicable date ( LPD ), are set out below: No. of Shares RM (2) Share capital as at the LPD 1,250,188, ,126, To be issued pursuant to the full exercise of the 187,528,282 Options to be granted under the Scheme (1) (3) 219,408, Enlarged share capital 1,437,716, ,534, Notes: (1) Assuming that the aggregate Shares to be issued arising from the exercise of the Options amount to 15% of the total number of issued shares of the Company. (2) Excluding all amount standing to the credit of the Company s share premium account and capital redemption reserve, which shall become part of the share capital of the Company pursuant to Section 618 of the Act. (3) Based on an assumed Option Price of RM1.17, representing approximately 10% discount to the 5-day VWAP of Shares, up to and including the LPD of RM1.29 per Share. 5.2 Net asset ( NA ) per Share and gearing Save for the potential impact of the Malaysian Financial Reporting Standards 2 Share Based Payment ( MFRS 2 ) as elaborated in Section 5.3 below, the Proposed ESOS will not have an immediate effect on the NA, NA per Share and the gearing of SKP Group until such time the Options are exercised. The proforma effects will depend on, among others, the number of new Shares to be issued arising from the exercise of the Options and the Option Price. 5.3 Earnings and earnings per share ( EPS ) The Proposed ESOS will not have an effect on the earnings of SKP Group for the financial year ending 31 March The EPS of SKP Group in the future may be diluted, depending on the number and timing of Options granted and exercised. MFRS 2 requires the potential cost arising from the granting of the Options to be measured at the grant date and be recognised as an expense in the consolidated statements of comprehensive income of the Company over the vesting period of the Options. 5

6 The potential cost is measured by the fair value of the Options, calculated after taking into consideration factors such as: (i) (ii) the actual number of Options granted and vested; and the Option Price. Therefore, the potential cost may reduce the future earnings of the Group, the quantum of which can only be determined at the grant date. The potential effects of the Proposed ESOS on the earnings of the Group in the future, as a consequence of the recognition of the expense at each grant date, cannot be determined now. We wish to highlight that such potential cost of granting the Options does not represent a cash outflow but is an accounting treatment to be deducted from the Group s earnings. The Company has taken note of the potential impact of MFRS 2 on SKP Group's earnings and will take into consideration such impact in the granting and vesting of the Options under the Proposed ESOS. In the event the Options granted to the Grantee are not exercised by the expiry date of the duration of the Scheme, the reserves with respect to the unexercised Options will be transferred to the retained earnings of the Company. THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK 6

7 5.4 Substantial shareholders' shareholdings The Proposed ESOS is not expected to have any immediate effect on the substantial shareholders shareholdings until such a time when the Options granted under the Proposed ESOS are exercised. For illustration purposes, the effects of the Proposed ESOS on the shareholdings of the substantial shareholders, assuming full exercise of the Scheme (up to 15% of the total number of issued shares of SKP), are as follows: Shareholders Proforma I As at the LPD After the full exercise of the Options Direct Indirect Direct Indirect No. of Shares % No. of Shares % No. of Shares % No. of Shares Beyond Imagination Sdn Bhd 180,242, ,242, Renown Million Sdn Bhd 118,246, ,246, Dato Gan Kim Huat 143,801, ,171,555 (1) ,801,218 (3) ,171,555 (1) Graceful Assessment Sdn Bhd 75,469, ,469, Gan Poh San ,455,580 (2) (3) ,455,580 (2) Employees Provident Fund Board 66,078, ,078, Notes: (1) By virtue of his deemed interest through Renown Million Sdn Bhd, Beyond Imagination Sdn Bhd, Graceful Assessment Sdn Bhd and Zenith Highlight Sdn Bhd, in accordance with Section 8 of the Act. (2) By virtue of his deemed interest through Beyond Imagination Sdn Bhd and Zenith Highlight Sdn Bhd, in accordance with Section 8 of the Act (3) Assuming full exercise of the Scheme (up to 15% of the total number of issued shares of SKP) during the duration of the Scheme. Dato Gan Kim Huat and Gan Poh San are the executive Directors of SKP who are eligible to participate in the Scheme. As the exact quantum of Options to be allocated to each Eligible Person has not been determined as at the LPD, for the purpose of Proforma I, no provision has been made for the allocation of Options to them. % THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK 7

8 5.5 Existing Convertible Securities SKP does not have any existing convertible securities as at the LPD. 6. APPROVALS REQUIRED The Proposed ESOS is conditional upon the approvals from the following parties being obtained: (i) (ii) (iii) Bursa Securities, for the listing of and quotation for the new Shares to be issued arising from the exercise of the Options granted under the Scheme on the Main Market of Bursa Securities; the shareholders of SKP at an EGM of the Company to be convened; and any other relevant authorities and/or parties, if required. 7. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED WITH THEM All executives Directors of SKP, by virtue of their eligibility to participate in the Proposed ESOS, are deemed interested in respect of their respective allocations, if any, ( Interested Directors ) as well as allocations to persons connected to them. The Interested Directors have abstained and will continue to abstain from deliberating and voting in respect of their direct and/or indirect shareholdings in SKP on the resolutions in respect of their respective allocation as well as the allocations to the persons connected to them, if any, at the Board meetings. In addition, the Interested Directors will also abstain from voting in respect of their direct and/or indirect shareholdings in SKP on the resolutions in respect of their respective proposed allocations as well as the proposed allocations to the persons connected to them, if any, to be tabled at an EGM to be convened. The Interested Directors of SKP have also undertaken to ensure that persons connected to them will abstain from voting, in respect of their direct and indirect shareholdings in SKP, on the resolutions pertaining to their respective proposed allocations as well as the proposed allocations to the persons connected to them, if any, to be tabled at an EGM to be convened. THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK 8

9 The direct and/or indirect shareholdings of the Directors, major shareholders and persons connected to them as at the LPD are as follows: Directors < Direct > < Indirect > No of Shares % No of Shares % Dato Gan Kim Huat 143,801, ,171,555 (1) Gan Poh San ,455,580 (2) Chia Choong Kim Koh Chin Koon Chew Teck Cheng Koh Song Heng Major shareholders Dato Gan Kim Huat 143,801, ,171,555 (1) Gan Poh San ,455,580 (2) Beyond Imagination Sdn Bhd 180,242, Renown Million Sdn Bhd 118,246, Graceful Assessment Sdn Bhd 75,469, Persons connected to Directors and major shareholders Zenith Highlight Sdn Bhd 24,213, Notes: (1) By virtue of his deemed interest through Renown Million Sdn Bhd, Beyond Imagination Sdn Bhd, Graceful Assessment Sdn Bhd and Zenith Highlight Sdn Bhd, in accordance with Section 8 of the Act. (2) By virtue of his deemed interest through Beyond Imagination Sdn Bhd and Zenith Highlight Sdn Bhd, in accordance with Section 8 of the Act. Save as disclosed above, none of the Directors, major shareholders of the Company and/or Persons Connected with them has any interest, directly or indirectly, in the Proposed ESOS. 8. DIRECTORS' STATEMENT The Board, having considered all aspect of the Proposed ESOS, is of the opinion that the Proposed ESOS is in the best interest of the Group. However, in view that the Interested Directors are eligible to participate in the Proposed ESOS, the Interested Directors have abstained from giving any opinion on their respective proposed allocations and the proposed allocations to persons connected to them, if any. 9. ESTIMATED TIMEFRAME FOR COMPLETION Barring any unforeseen circumstances and subject to all relevant approvals being obtained, the Proposed ESOS is expected to be implemented by the 4 th quarter of

10 10. APPLICATION TO THE AUTHORITIES An application for the listing of and quotation for the new Shares to be issued arising from the exercise of the Options granted under the Proposed ESOS on the Main Market of Bursa Securities and the circular in relation to the Proposed ESOS shall be submitted to Bursa Securities within 2 months from the date of this Announcement. 11. ADVISER RHBIB has been appointed as the Adviser for the Proposed ESOS. This announcement is dated 17 July