The following is the announcement made to KLSE,
regarding MALAYSIAN PACIFIC
AND THEREAFTER ADOPTION OF THE AMENDED AND RESTATED BYE-LAWS OF THE EMPLOYEE
SHARE OPTION SCHEME AND PROPOSED EXTENSION OF THE DURATION OF THE EMPLOYEE SHARE
OPTION SCHEME FOR AN ADDITIONAL PERIOD OF 5 YEARS
On behalf of the Board of Directors of MPI, Commerce International Merchant
Bankers Berhad ("CIMB") is pleased to announce that the Company
proposes to amend the existing Bye-Laws of the Executive Share Option Scheme and
thereafter to adopt the amended and restated Bye-Laws of the Employee Share
Option Scheme of MPI ("ESOS" or "Scheme")("Proposed
Adoption") and to extend the duration of the Scheme for an additional
period of five years ("Proposed Extension").
The Proposed Adoption and Proposed Extension shall collectively be referred
to as "Proposals".
2. DETAILS AND RATIONALE FOR THE
On 14 October 1999, MPI obtained the approval of the Securities Commission
("SC") to establish an Executive Share Option Scheme for the benefit
of the Eligible Executives (as defined in the Executive Share Option Scheme
Bye-Laws of MPI established on 24 December 1999). The total number of
ordinary shares of RM0.50 each in MPI ("MPI Shares") to be offered
under the Executive Share Option Scheme was up to 10% of the issued and paid-up
share capital of the Company. The final approval required for the implementation
of the Executive Share Option Scheme was obtained on 24 December 1999 from the
Registrar of Companies leading to the commencement of the Executive Share Option
Scheme for a period of 5 years from the said date and expiring on 23 December
As at 31 December 2001, MPI has offered to the Eligible Executives, Executive
Share Option Scheme options ("Options") to subscribe for a total of
5,138,500 MPI Shares of which Options to subscribe for 269,800 MPI Shares were
exercised, Options to subscribe for 341,000 MPI Shares have lapsed due to
cessation of employment of certain Eligible Executives and Options to subscribe
for 4,527,700 MPI Shares remained unexercised. Based on the issued share capital
of the Company of 198.9 million MPI Shares as at 31 December 2001, additional
options to subscribe for 15.1 million MPI Shares may be offered under the ESOS.
The Executive Share Option Scheme will expire on 23 December 2004 after 5.00
p.m. unless extended.
The Proposed Adoption is implemented to incorporate inter-alia the revisions to
the Policies and Guidelines on Issue/Offer of Securities of the SC ("SC
Guidelines") in relation to employees' share option scheme and to introduce
new performance criteria as a basis for offer of prime value MPI Shares option
contract ("PVO") to Key Employees. The amended and restated Bye-Laws
of the Scheme is also intended to improve the clarity of the existing Bye-Laws
of the Executive Share Option Scheme and to facilitate the administration of the
In view of the competitive and demanding business environment, the Company
recognises the need to incorporate a significant equity component in the total
compensation package to key members of the management team ("Key
Employees"). Thus, the Company proposes to offer a PVO in order to achieve
the following objectives:
(i) align the long term interests of Key
Employees with those of the shareholders of the Company and encourage Key
Employees to assume greater responsibility for the performance of the businesses
that they manage;
(ii) motivate Key Employees to strategic
(iii) reward Key Employees with an equity
stake in the success of the MPI Group; and
(iv) make the total compensation package
more competitive in order to attract, retain and motivate high calibre
Pursuant to the SC Guidelines which allows an employees' share option scheme to
have a tenure of up to 10 years, MPI proposes to extend the duration of the
Scheme for an additional period of 5 years from 23 December 2004 up to and
including 23 December 2009. The Proposed Extension will facilitate the
implementation of the PVO to reward Key Employees for achievement of prescribed
performance targets and contribution criteria over a set performance period.
Currently, the Company expects that the performance period relating to the offer
of PVO will be between 3 to 5 years.
The committee appointed by the Board to administer the Scheme may determine the
option price for the PVO at any price provided that the option price so fixed
shall not be at a discount of more than 10% (or such discount as the relevant
authorities shall permit) from the 5-day weighted average market price of the
MPI Shares preceding the date of the offer for a PVO and shall in no event be
less than the par value of the MPI Shares.
3. EFFECTS OF THE PROPOSALS
3.1 Issued and paid-up share capital
3.2 Earnings and Net Tangible Assets ("NTA")
The Proposals are not expected to have any immediate effect on the
issued and paid-up share capital of the Company. However, the issued and
paid-up share capital of the Company will increase depending on the
number of ESOS options and/or PVOs exercised into new MPI Shares.
The Proposals are not expected to have any material effect on the
earnings per share and the NTA of the MPI Group for the financial year
ending 30 June 2002. However, any potential effect on the earnings per
share and the NTA of the Group would depend on the number of MPI Shares
to be issued upon the exercise of ESOS options and/or PVOs as well as
the option price which is to be determined at the time an offer for ESOS
options and/or PVOs is granted.
3.4 Shareholdings of Substantial Shareholders
The Proposals are not expected to have any material effect on the
dividend to be recommended or declared by the Company for the financial
year ending 30 June 2002. However, the future dividend policy will
depend on the financial circumstances of the Company at the relevant
time taking into consideration the performance and cash resources of the
The Proposals will not have any effect on the shareholdings of the
substantial shareholders of MPI. Any potential effect on the
shareholdings of the substantial shareholders would depend on the number
of ESOS options and/or PVOs granted and exercised under the Scheme.
4. CONDITIONS OF THE PROPOSALS
5. DIRECTORS' AND SUBSTANTIAL SHAREHOLDERS' INTERESTS
The Proposals are subject to approvals being obtained from the following:
(i) the SC;
(ii) the shareholders of MPI at an
Extraordinary General Meeting to be convened; and
(iii) any other relevant authorities.
The Proposals are also subject to the approval of the grantees of the ESOS
options. The Proposed Extension and Proposed Adoption are inter-conditional.
Mr. Kwek Leng San, being the Executive Chairman of MPI, is entitled to
participate in the Scheme and is therefore deemed interested in respect of
his entitlement under the Proposals. Mr. Kwek Leng San has not been granted
any options to subscribe for MPI Shares under the existing Scheme.
Mr. David Edward Comley, being the Group Managing Director of MPI, is
entitled to participate in the Scheme in respect of his entitlement wherein
he has been granted the option to subscribe for 400,000 MPI Shares (none of
which have been exercised) and is therefore deemed interested in respect of
his entitlement under the Proposals.
Accordingly, Mr. Kwek Leng San and Mr. David Edward Comley have abstained
and will continue to abstain from all Board deliberations and voting on
their respective entitlements under the Proposals. The aforesaid interested
Directors will also abstain from voting in respect of their direct and
indirect shareholdings in MPI on the ordinary resolutions pertaining to
their respective entitlements under the Proposals at the forthcoming EGM.
The interested Directors shall also endeavour to ensure that persons
connected to them will also abstain from voting in respect of their direct
and indirect shareholdings in MPI on the ordinary resolutions pertaining to
their respective entitlements under the Proposals.
As at 31 December 2001, Mr. Kwek Leng San and Mr. David Edward Comley,
directly and indirectly, hold 339,000 and 262,000 MPI Shares respectively,
representing 0.17% and 0.13% equity interest in MPI.
Save as disclosed above, none of the other Directors and substantial
shareholders of MPI or persons connected to the Directors and substantial
shareholders of MPI have any interest, direct or indirect, in the Proposals.
6. DEPARTURES FROM THE SC GUIDELINES
7. STATEMENT BY BOARD OF DIRECTORS
Save as disclosed below, there are no departures from the SC Guidelines in
undertaking the Proposals:
Paragraph 2(b) of Chapter 16 of the SC Guidelines states that adjustments to
the share capital of the Company shall give the Option holder the same
proportion of the issued ordinary share capital of the Company as that to
which he was entitled prior to such adjustments. Such adjustments may not be
fair and reasonable to the shareholders of the Company, for example, in the
case of a rights issue whereby the rights shares are issued to shareholders
at a discount to the market price resulting in the proportion of capital
entitled before and after the rights issue to be unequal.
In view of the above and on behalf of MPI, CIMB will seek the approval of
the SC for the departure from paragraph 2(b) of Chapter 16 of the SC
Guidelines where it requires adjustments to be made giving a participant the
same proportion of the capital as that to which he was previously entitled
in the event of a rights issue.
The Board of Directors of the Company, having considered all aspects of the
Proposals, is of the opinion that the Proposals are in the best interest of
the MPI Group.
CIMB has been appointed as the adviser to MPI for the Proposals.
9. SUBMISSION TO THE SC
An application to the SC for the Proposals will be made within 2 months from
the date of this announcement.
This announcement is dated 25 March 2002.