BREADTALK GROUP LIMITED (Company Registration No. 200302045G) (Incorporated in Singapore) NOTICE OF ANNUAL GENERAL MEETING NOTICE IS HEREBY GIVEN that the Annual General Meeting of BreadTalk Group Limited ( the Company ) will be held at 171 Kampong Ampat #05-05, KA FoodLink, Singapore 368330 on Monday, 27 April 2009 at 9.30 a.m. for the following purposes: AS ORDINARY BUSINESS 1. To receive and adopt the Directors Report and the Audited Financial Statements of the Company for the year ended 31 December 2008 together with the Auditors Report thereon. (Resolution 1) 2. To declare a first and final exempt (one-tier) dividend of 1.0 cent per share for the financial year ended 31 December 2008 (2007: 0.55 cent). (Resolution 2) 3. To re-elect the following Directors retiring pursuant to Article 104 of the Company s Articles of Association: Mr Chen Kuo Hua (Resolution 3) Ms Katherine Lee Lih Leng (Resolution 4) Mr Chen Kuo Hua will, upon re-election as a Director of the Company, remain as a member of the Remuneration Committee, Audit Committee and Nominating Committee. Mr Chen will be considered non-independent. 4. To approve the payment of Directors fees of S$105,000 for the year ended 31 December 2008 (2007: S$96,250). (Resolution 5) 5. To re-appoint Messrs Ernst & Young LLP as the Company s Auditors and to authorise the Directors to fix their remuneration. (Resolution 6) 6. To transact any other ordinary business which may properly be transacted at an Annual General Meeting. AS SPECIAL BUSINESS To consider and if thought fit, to pass the following resolutions as Ordinary Resolutions, with or without any modifications: 7. Authority to issue shares That pursuant to Section 161 of the Companies Act, Cap. 50 and Rule 806 of the Listing Manual of the Singapore Exchange Securities Trading Limited, the Directors of the Company be authorised and empowered to:
(a) (i) issue shares in the Company ( shares ) whether by way of rights, bonus or otherwise; and/or (ii) make or grant offers, agreements or options (collectively, Instruments ) that might or would require shares to be issued, including but not limited to the creation and issue of (as well as adjustments to) options, warrants, debentures or other instruments convertible into shares, at any time and upon such terms and conditions and for such purposes and to such persons as the Directors of the Company may in their absolute discretion deem fit; and (b) (notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue shares in pursuance of any Instrument made or granted by the Directors of the Company while this Resolution was in force, provided that: (1) the aggregate number of shares (including shares to be issued in pursuance of the Instruments, made or granted pursuant to this Resolution) to be issued pursuant to this Resolution shall not exceed fifty per cent. (50%) of the total number of issued shares (excluding treasury shares) in the capital of the Company (as calculated in accordance with sub-paragraph (2) below), of which the aggregate number of shares and Instruments to be issued other than on a pro rata basis to existing shareholders of the Company shall not exceed twenty per cent. (20%) of the total number of issued shares (excluding treasury shares) in the capital of the Company (as calculated in accordance with sub-paragraph (2) below); (2) (subject to such calculation as may be prescribed by the Singapore Exchange Securities Trading Limited) for the purpose of determining the aggregate number of shares that may be issued under sub-paragraph (1) above, the total number of issued shares (excluding treasury shares) shall be based on the total number of issued shares (excluding treasury shares) in the capital of the Company at the time of the passing of this Resolution, after adjusting for: (a) (b) (c) new shares arising from the conversion or exercise of any convertible securities; new shares arising from exercising share options or vesting of share awards which are outstanding or subsisting at the time of the passing of this Resolution; and any subsequent bonus issue, consolidation or subdivision of shares; (3) the 50% limit in sub-paragraph (1) above may be increased to 100% for the Company to undertake pro-rata renounceable rights issues; (4) in exercising the authority conferred by this Resolution, the Company shall comply with the provisions of the Listing Manual of the Singapore Exchange Securities Trading Limited for the time being in force (unless such compliance has been waived by the Singapore Exchange Securities Trading Limited) and the Articles of Association of the Company; and (5) unless revoked or varied by the Company in a general meeting, such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is earlier. [See Explanatory Note (i)] (Resolution 7)
8. Authority to issue shares other than on a pro-rata basis pursuant to the aforesaid share issue mandate at discounts not exceeding twenty per cent. (20%) of the weighted average price for trades done on the SGX-ST. That subject to and pursuant to the aforesaid share issue mandate being obtained, the Directors of the Company be hereby authorised and empowered to issue shares other than on a pro-rata basis at a discount not exceeding twenty per cent. (20%) to the weighted average price for trades done on the SGX-ST for the full market day on which the placement or subscription agreement in relation to such shares is executed (or if not available for a full market day, the weighted average price must be based on the trades done on the preceding market day up to the time the placement or subscription agreement is executed), provided that :- (a) in exercising the authority conferred by this Resolution, the Company complies with the provisions of the Listing Manual of the SGX-ST for the time being in force (unless such compliance has been waived by the SGX-ST); and (b) unless revoked or varied by the Company in general meeting, such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is earlier. [See Explanatory Note (ii)] (Resolution 8) 9. Authority to issue shares under the BreadTalk Group Limited Employees Share Option Scheme That pursuant to Section 161 of the Companies Act, Cap. 50, the Directors of the Company be authorised and empowered to offer and grant options under the BreadTalk Group Limited Employees Share Option Scheme ( the Scheme ) and to issue from time to time such number of shares in the capital of the Company as may be required to be issued pursuant to the exercise of options granted by the Company under the Scheme, whether granted during the subsistence of this authority or otherwise, provided always that the aggregate number of new ordinary shares to be issued pursuant to the Scheme, the Plan (defined below) and any other share based schemes (if applicable) shall not exceed fifteen per cent. (15%) of the total number of issued shares excluding treasury shares in the capital of the Company from time to time and that such authority shall, unless revoked or varied by the Company in a general meeting, continue in force until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is earlier. [See Explanatory Note (iii)] (Resolution 9) 10. Authority to issue shares under the BreadTalk Group Limited Restricted Share Grant Plan That pursuant to Section 161 of the Companies Act, Cap. 50, the Directors of the Company be authorised and empowered to offer and grant awards in accordance with the provisions of the BreadTalk Group Limited Restricted Share Grant Plan (the Plan ) and to issue from time to time such number of fully-paid shares as may be required to be issued pursuant to the vesting of the awards under the Plan, provided always that the aggregate number of new ordinary shares to be issued pursuant to the Scheme, the Plan and any other share based schemes (if applicable), which the Company may have in place, shall not exceed fifteen per cent. (15%) of the total issued share capital excluding treasury shares in the capital of the Company from time to time and that such authority shall, unless revoked or varied by the Company in a general meeting, continue in force until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is earlier. [See Explanatory Note (iv)] (Resolution 10)
11. Authority to grant awards to Participants pursuant to the Rules of, and issue shares under, the Plan That, contingent upon the passing of Resolution 10, in order to reward, retain and motivate employees who had met specific performance objectives set by the Company, the Directors of the Company be authorised and empowered to grant awards in accordance with the provisions of the Plan to the following participants of the Plan ( the Participants ) and to issue shares in the Company to the Participants of awards granted by the Company under the Plan, provided always that the aggregate number of shares available to Controlling Shareholders and their associates under the Plan shall not exceed twenty five per cent. (25%) of all the shares available under the Plan and that the number of shares available to each Controlling Shareholder or his associate shall not exceed ten per cent. (10%) of all the shares available under the Plan. Such authority shall, unless revoked or varied by the Company in a general meeting, continue in force until the conclusion of the Company s next Annual General Meeting or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is earlier. Name of Participants No. of shares to be awarded Controlling Shareholders Mr. George Quek Meng Tong 82,000 (Resolution 11) Ms. Katherine Lee Lih Leng 55,000 (Resolution 12) Associates of Controlling Shareholders Mr. Frankie Quek Swee Heng 55,000 (Resolution 13) [See Explanatory Note (v)] 12. Renewal of Share Purchase Mandate That for the purposes of Sections 76C and 76E of the Companies Act, Cap. 50, the Directors of the Company be and are hereby authorised to make purchases or otherwise acquire issued shares in the capital of the Company from time to time (whether by way of market purchases or off-market purchases on an equal access scheme) of up to ten per cent. (10%) of the total issued shares (excluding treasury shares) in the capital of the Company (as ascertained as at the date of Annual General Meeting of the Company) at the price of up to but not exceeding the Maximum Price as defined in paragraph 3.4 of the Appendix to the Annual Report to Shareholder dated 10 April 2009, in accordance with the terms of the Share Purchase Mandate set out in the Appendix, and this mandate shall, unless revoked or varied by the Company in general meeting, continue in force until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is earlier. [See Explanatory Note (vi)] (Resolution 14) By Order of the Board Tan Cher Liang Company Secretary Singapore 10 April 2009
Explanatory Notes: (i) Resolution 7 in item 7 above, if passed, will empower the Directors of the Company, effective until the conclusion of the next Annual General Meeting of the Company, or the date by which the next Annual General Meeting of the Company is required by law to be held or such authority is varied or revoked by the Company in a general meeting, whichever is the earlier, to issue shares, make or grant instruments convertible into shares and to issue shares pursuant to such instruments, up to a number not exceeding, in total, 50% of the total number of issued shares (excluding treasury shares) in the capital of the Company, of which up to 20% may be issued other than on a pro-rata basis to shareholders. The 50% limit referred to in the preceding sentence may be increased to 100% for the Company to undertake pro-rata renounceable rights issues. For determining the aggregate number of shares that may be issued, the total number of issued shares (excluding treasury shares) will be calculated based on the total number of issued shares (excluding treasury shares) in the capital of the Company at the time Resolution 7 is passed after adjusting for new shares arising from the conversion or exercise of any convertible securities or share options or vesting of share awards which are outstanding or subsisting at the time when Resolution 7 is passed and any subsequent bonus issue, consolidation or subdivision of shares. The 100% renounceable pro-rata rights issue limit is one of the new measures implemented by the SGX-ST as stated in a press release entitled SGX introduces further measures to facilitate fund raising dated 19 February 2009 and which became effective on 20 February 2009. It will provide the Directors with an opportunity to raise funds and avoid prolonged market exposure by reducing the time taken for shareholders approval, in the event the need arises. Minority shareholders interests are mitigated as all shareholders have equal opportunities to participate and can dispose their entitlements through trading of nil-paid rights if they do not wish to subscribe for their rights shares. It is subject to the condition that the Company makes periodic announcements on the use of the proceeds as and when the funds are materially disbursed and provides a status report on the use of proceeds in the annual report. (ii) Resolution 8 in item 8 above is pursuant to measures implemented by the SGX-ST as stated in a press release entitled SGX introduces further measures to facilitate fund raising dated 19 February 2009 and which became effective on 20 February 2009. Under the measures implemented by the SGX-ST, issuers will be allowed to undertake non pro-rata placements of new shares priced at discounts of up to 20% to the weighted average price for trades done on the SGX-ST for a full market day on which the placement or subscription agreement in relation to such shares is executed, subject to the conditions that (a) shareholders approval be obtained in a separate resolution at a general meeting to issue new shares on a non prorata basis at discount exceeding 10% but not more than 20%; and (b) that the resolution seeking a general mandate from shareholders for issuance of new shares on a non pro-rata basis is not conditional upon such resolution. It should be noted that under the Listing Manual of the SGX-ST, shareholders approval is not required for placements of new shares, on a non pro-rata basis pursuant to a general mandate, at a discount of up to 10% to the weighted average price for trades done on the SGX-ST for a full market day on which the placement or subscription agreement in relation to such shares is executed. (iii) Resolution 9 in item 9 above, if passed, will empower the Directors of the Company, from the date of this Meeting until the next Annual General Meeting of the Company, or the date by which the next Annual General Meeting of the Company is required by law to be held or such authority is varied or revoked by the Company in a general meeting, whichever is the earlier, to issue shares in the Company pursuant to the exercise of options granted or to be granted under the Scheme up to a number not exceeding in total (for the entire duration of the Scheme) 15% of the total number of issued shares excluding treasury shares in the capital of the Company from time to time, and the aggregate number of ordinary shares which may be issued pursuant to the Scheme, the Plan and any other share based schemes (if applicable) is limited to 15% of the total issued share capital of the Company excluding treasury shares from time to time. Resolution 9 is independent from Resolution 10 and the passing of Resolution 9 is not contingent on the passing of Resolution 10.
(iv) (v) Resolution 10 in item 10 above, if passed, will empower the Directors of the Company from the date of the above Meeting until the next Annual General Meeting, to offer and grant awards under the BreadTalk Group Limited Restricted Share Grant Plan (the Plan ) in accordance with the provisions of the Plan and to issue from time to time such number of fully-paid shares as may be required to be issued pursuant to the vesting of the awards under the Plan subject to the maximum number of shares prescribed under the terms and conditions of the Plan. The aggregate number of ordinary shares which may be issued pursuant to the Scheme, the Plan and any other share based schemes (if applicable) is limited to 15% of the total issued share capital of the Company excluding treasury shares from time to time. Resolution 10 is independent from Resolution 9 and the passing of Resolution 10 is not contingent on the passing of Resolution 9. Resolutions 11, 12 and 13, in item 11 above, if passed, will empower the Directors of the Company to issue shares in the Company to the Controlling Shareholders and their associates, granted by the Company under the Plan. The resolutions in item 11 are independent from each other and the passing of each such resolution is not contingent on the passing of any of the other resolutions in item 11. Resolution 12 is contingent on the passing of Resolution 4. Shareholders who are eligible to participate in the Plan shall abstain from voting on Resolutions 11, 12 and 13. The rationale for Resolution 11 Mr. George Quek Meng Tong (George Quek) is the Chairman of the Group and he holds an aggregate of 52.42% of the shareholding (directly and indirectly). He is one of the co-founders of the Group and has been instrumental in the Group s development over the years. He is responsible for overseeing the overall management of the Group and is pivotal in charting the direction and growth of the Group. George Quek has been with the Company since the start in 2000 and has played a pivotal role in steering the growth of the Group in their operations locally and in this region and building up a good track record and reputation for the Group. His knowledge and contacts in the food and beverage industry, of which he has more than 3 decades of experience, are key factors to the success of the Group. His invaluable experience has not only been instrumental in establishing the BreadTalk brand name, but also in setting new F&B trends and redefining the Asian food scene. He also played a significant role in the Company s foray into the food court business in Shanghai and Beijing, People s Republic of China. George Quek continues to play an instrumental role in charting our Group s expansion and business development plans. As the Chairman of the Company, he has in-depth knowledge of the needs of the business as it evolved over the years. His ability to anticipate business trend and demand has enabled the Company to grow the business rapidly. The Company believes that George Quek will continue to play a key role in the growth and future development of the Group and there are further potential contributions that he can make. The Company intends to have the flexibility to structure his remuneration package to include such Awards in future if it is in the interest of the Company to do so. By extending the Plan to George Quek, the Company will have an additional tool to craft a more balanced and innovative remuneration package that will link his total remuneration to the performance of the Group. The Directors are of the view that the remuneration package of George Quek is fair given his contributions to the Group. The extension of the Plan to George Quek is consistent with the Company s objectives to motivate its employees to achieve and maintain a high level of performance and contribution which is vital to the success of the Company. Although George Quek already has a shareholding interest in the Company, the extension of the Plan to him will ensure that he is equally entitled, with the other employees who are not Controlling Shareholders, to take part in and benefit from this system of remuneration, thereby enhancing his long term commitment to the Group.
During the year in review George Quek identified the new businesses to diversify the revenue base of the Group. It resulted in the announced expansion of the Group's business that will contribute to the growth in the Group's top and bottom line in future. The participation of and grant of the Awards to George Quek under the Plan has been approved in principle by shareholders when they approved the Plan at the Extraordinary General Meeting held on 28 April 2008. Resolution 11 seeks for the above stated reasons, shareholders approval for the Directors decision to grant 82,000 shares to George Quek in accordance with the Plan. The rationale for Resolution 12 Ms. Katherine Lee Lih Leng (Katherine Lee), if re-elected, will remain as Deputy Chairman of the Company and she holds an aggregate of 52.42% of the Company s shareholding (directly or indirectly). She is one of the co-founders of the Group and has been assisting the Chairman, George Quek in the Group s development since its inception. She oversees the Research and Development Department where she is responsible for product development for local and overseas markets. She is also responsible for steering the Group s new concept developments for the various brands, pioneering new ideas and concepts. She has therefore contributed greatly in the increase and development of the range and quality of the Group s products, which is one of its unique strengths and factors for its success. In the areas of training, Katherine Lee has actively organized product training and technical skill upgrades to ensure systematic transfers of knowledge and skills to the franchisees and their operations teams to maintain their competitive edge. The Company believes that Katherine Lee will continue to contribute to the success of the Group. The Company intends to have the flexibility to structure her remuneration package to include such Awards in future if it is in the interests of the Company to do so. By allowing her to participate in the Plan, the Company will have an additional tool to craft a more balanced and innovative remuneration package that will link her total remuneration to the performance of the Group. The extension of the Plan to Katherine Lee is consistent with the Company s objectives to motivate its employees to achieve and maintain a high level of performance and contribution which is vital to the success of the Company. Although Katherine Lee already has a shareholding interest in the Company, the extension of the Plan to her will ensure that she is equally entitled, with the other employees who are not Controlling Shareholders, to take part in and benefit from this system of remuneration, thereby enhancing her continued commitment to the Group. The participation of and grant of Awards to Katherine Lee under the Plan has been approved in principle by shareholders when they approved the Plan at the Extraordinary General Meeting held on 28 April 2008. Resolution 12 seeks for the above stated reasons, shareholders approval for the Directors decision to grant 55,000 shares to Katherine Lee in accordance with the Plan. The rationale for Resolution 13 Mr. Frankie Quek Swee Heng (Frankie Quek), the Group s Chief Operating Officer, holds an aggregate of 0.45% of the Company s shareholding (directly or indirectly). He is involved in the formulation and implementation of the expansion plans of the Group. With his business acumen and extensive knowledge of the local food and beverage industry, he is assisting the Chairman, George Quek, in overseeing the growth and expansion as well as daily operations of the Group, focusing on the Group s expansion into the People s Republic of China. Frankie Quek has been based in Shanghai since 2005 where he has been overseeing the growing bakery and food court operations in Shanghai and Beijing. His expertise has further led to the successful export of the BreadTalk brand name in eleven (11) cities through a franchise model system managed by the in house franchise team. The Company therefore believes that he has the potential and ability to contribute to the further success of the Group.
By allowing him to participate in the Plan, the Company will have an additional tool to craft a more balanced and innovative remuneration package that will link his total remuneration to the performance of the Group. Frankie Quek will also be able to share in any future appreciation of the Company s share price that is commensurate with the Company s future growth through an increase in his shareholdings to a more significant level. The Directors are of the view that the remuneration package of Frankie Quek is fair given his contributions to the Group. The extension of the Plan to Frankie Quek is consistent with the Company s objectives to motivate its employees to achieve and maintain a high level of performance and contribution which is vital to the success of the Company. As the Plan serves as recognition of the past contributions of those eligible to participate in the Plan, as well as to secure future contributions for the Company and the Group from them, the Directors consider it important that Frankie Quek should be included in the Plan. The Directors consider it crucial for the Company to provide sufficient incentives which will instill a sense of commitment to the Group. The participation of and grant of Awards to Frankie Quek under the Plan has been approved in principle by shareholders when they approved the Plan at the Extraordinary General Meeting held on 28 April 2008. Resolution 13 seeks for the above stated reasons, shareholders approval for the Directors decision to grant 55,000 shares to Frankie Quek in accordance with the Plan. (vi) Resolution 14 proposed in item 12 above, if passed, will empower the Directors of the Company from the date of the above Meeting until the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is the earlier, to repurchase ordinary shares of the Company by way of market purchases or off-market purchases of up to 10% of the total number of issued shares (excluding treasury shares) in the capital of the Company at the Maximum Price as defined in Paragraph 3.4 to the Appendix. The rationale for, the authority and limitation on, the sources of funds to be used for the purchase or acquisition including the amount of financing and the financial effects of the purchase or acquisition of ordinary shares by the Company pursuant to the Share Purchase Mandate on the audited consolidated financial accounts of the Group for the financial year ended 31 December 2008 are set out in greater detail in the Appendix. Notes: 1. A Member entitled to attend and vote at the Annual General Meeting (the Meeting ) is entitled to appoint a proxy to attend and vote in his/her stead. A proxy need not be a Member of the Company. 2. The instrument appointing a proxy must be deposited at the Registered Office of the Company at 171 Kampong Ampat #05-05, KA FoodLink, Singapore 368330 not less than 48 hours before the time appointed for holding the Meeting.