TIDMCZA
RNS Number : 9961D
Coal of Africa Limited
24 May 2012
Coal of Africa Limited
ABN 98 008 905 388
Notice is hereby given that a General Meeting of Shareholders of
Coal of Africa Limited ABN 98 008 905 388 (Company) will be held at
Tavistock Communication, 8th Floor, 131 Finsbury Pavement, London
EC2A 1NT on 22 June 2012 at 11.00am (London Time) for the purpose
of transacting the following business referred to in this Notice of
General Meeting.
AGENDA
ITEMS OF BUSINESS
1. Resolution 1 - Proposed issue of Shares to Mr John Wallington
To consider and, if thought fit, to pass the following
resolution as an ordinary resolution:
"That, for the purpose of Listing Rule 10.11 and for all other
purposes, the Directors be and are hereby authorised to allot and
issue 250,000 Shares for no consideration to John Wallington or his
nominee(s) on the terms and conditions set out in the Explanatory
Memorandum accompanying this Notice of Meeting."
The Company will disregard any votes cast on Resolution 1 by
John Wallington and/or any associate of John Wallington. However,
the Company need not disregard a vote if the vote is cast by a
person as proxy for a person who is entitled to vote, in accordance
with the directions on the proxy form or the vote is cast by the
person chairing the meeting as proxy for a person who is entitled
to vote, in accordance with a direction on the proxy form to vote
as the proxy decides.
Further, a Restricted Voter(1) who is appointed as a proxy will
not vote on Resolution 1 unless:
(a) the appointment specifies the way the proxy is to vote on Resolution 1; or
(b) the proxy is the Chair of the Meeting and the appointment
expressly authorises the Chair to exercise the proxy even though
the Resolution is connected directly or indirectly with the
remuneration of a member of the Key Management Personnel.
Shareholders should note that the Chair intends to vote any
undirected proxies in favour of Resolution 1. Shareholders may also
choose to direct the Chair to vote against Resolution 1 or to
abstain from voting.
2. Resolution 2 - Proposed issue of Shares to Mr Wayne Koonin
To consider and, if thought fit, to pass the following
resolution as an ordinary resolution:
"That, for the purpose of Listing Rule 10.11 and for all other
purposes, the Directors be and are hereby authorised to allot and
issue 175,000 Shares for no consideration to Wayne Koonin or his
nominee(s) on the terms and conditions set out in the Explanatory
Memorandum accompanying this Notice of Meeting."
The Company will disregard any votes cast on Resolution 2 by
Wayne Koonin and/or any associate of Wayne Koonin. However, the
Company need not disregard a vote if the vote is cast by a person
as proxy for a person who is entitled to vote, in accordance with
the directions on the proxy form or the vote is cast by the person
chairing the meeting as proxy for a person who is entitled to vote,
in accordance with a direction on the proxy form to vote as the
proxy decides.
Further, a Restricted Voter who is appointed as a proxy will not
vote on Resolution 2 unless:
(a) the appointment specifies the way the proxy is to vote on Resolution 2; or
(b) the proxy is the Chair of the Meeting and the appointment
expressly authorises the Chair to exercise the proxy even though
the Resolution is connected directly or indirectly with the
remuneration of a member of the Key Management Personnel.
Shareholders should note that the Chair intends to vote any
undirected proxies in favour of Resolution 2. Shareholders may also
choose to direct the Chair to vote against Resolution 2 or to
abstain from voting.
3. Resolution 3 - Special Resolution: Approval of Financial
Assistance to any Related or Inter-Related Company
To consider and, if thought fit, to pass the following
resolution as a special resolution:
"That, as a general approval, the Company may, in terms of
section 45(3)(a)(ii) of the Companies Act and subject to compliance
with the remainder of section 45 of the Companies Act, provide any
direct or indirect financial assistance (as such term is defined in
section 45(1) of the Companies Act) that the Board may deem fit to
any related or inter-related company (as such terms are defined in
section 2 of the Companies Act) on the terms and conditions, in the
form, nature and extent and for the amounts that the Board may
determine from time to time. The Board is granted all authority
that may be required in respect of the execution and implementation
of this resolution."
4. Resolution 4 - Proposed issue of Shares to Mr Simon Farrell
To consider and, if thought fit, to pass the following
resolution as an ordinary resolution:
"That, pursuant to and in accordance with section 208 of the
Corporations Act and Listing Rule 10.11 and for all other purposes,
the Directors be and are hereby authorised to allot and issue
1,833,150 Shares for no consideration to Simon Farrell or his
nominee(s) on the terms and conditions set out in the Explanatory
Memorandum accompanying this Notice of Meeting."
The Company will disregard any votes cast on Resolution 4 by
Simon Farrell and/or any associate of Simon Farrell. However, the
Company need not disregard a vote if:
(a) it is cast by a person as a proxy appointed by writing that
specifies how the proxy is to vote on the proposed resolution;
and
(b) it is not cast on behalf of Simon Farrell or an associate of Simon Farrell.
Further, a Restricted Voter who is appointed as a proxy will not
vote on Resolution 4 unless:
(a) the appointment specifies the way the proxy is to vote on Resolution 4; or
(b) the proxy is the Chair of the Meeting and the appointment
expressly authorises the Chair to exercise the proxy even though
the Resolution is connected directly or indirectly with the
remuneration of a member of the Key Management Personnel.
Shareholders should note that the Chair intends to vote any
undirected proxies in favour of Resolution 4. Shareholders may also
choose to direct the Chair to vote against Resolution 4 or to
abstain from voting.
5. Resolution 5 - Proposed issue of Shares to Mr Richard Linnell
To consider and, if thought fit, to pass the following
resolution as an ordinary resolution:
"That, pursuant to and in accordance with section 208 of the
Corporations Act and Listing Rule 10.11 and for all other purposes,
the Directors be and are hereby authorised to allot and issue
916,575 Shares for no consideration to Richard Linnell or his
nominee(s) on the terms and conditions set out in the Explanatory
Memorandum accompanying this Notice of Meeting."
The Company will disregard any votes cast on Resolution 5 by
Richard Linnell and/or any associate of Richard Linnell. However,
the Company need not disregard a vote if:
(a) it is cast by a person as a proxy appointed by writing that
specifies how the proxy is to vote on the proposed resolution;
and
(b) it is not cast on behalf of Richard Linnell or an associate of Richard Linnell.
Further, a Restricted Voter who is appointed as a proxy will not
vote on Resolution 5 unless:
(a) the appointment specifies the way the proxy is to vote on Resolution 5; or
(b) the proxy is the Chair of the Meeting and the appointment
expressly authorises the Chair to exercise the proxy even though
the Resolution is connected directly or indirectly with the
remuneration of a member of the Key Management Personnel.
Shareholders should note that the Chair intends to vote any
undirected proxies in favour of Resolution 5. Shareholders may also
choose to direct the Chair to vote against Resolution 5 or to
abstain from voting.
6. Resolution 6 - Proposed issue of Shares to Mr Peter Cordin
To consider and, if thought fit, to pass the following
resolution as an ordinary resolution:
"That, pursuant to and in accordance with section 208 of the
Corporations Act and Listing Rule 10.11 and for all other purposes,
the Directors be and are hereby authorised to allot and issue
458,300 Shares for no consideration to Peter Cordin or his
nominee(s) on the terms and conditions set out in the Explanatory
Memorandum accompanying this Notice of Meeting."
The Company will disregard any votes cast on Resolution 6 by
Peter Cordin and/or any associate of Peter Cordin. However, the
Company need not disregard a vote if:
(a) it is cast by a person as a proxy appointed by writing that
specifies how the proxy is to vote on the proposed resolution;
and
(b) it is not cast on behalf of Peter Cordin or an associate of Peter Cordin.
Further, a Restricted Voter who is appointed as a proxy will not
vote on Resolution 6 unless:
(a) the appointment specifies the way the proxy is to vote on Resolution 6; or
(b) the proxy is the Chair of the Meeting and the appointment
expressly authorises the Chair to exercise the proxy even though
the Resolution is connected directly or indirectly with the
remuneration of a member of the Key Management Personnel.
Shareholders should note that the Chair intends to vote any
undirected proxies in favour of Resolution 6. Shareholders may also
choose to direct the Chair to vote against Resolution 6 or to
abstain from voting.
7. Resolution 7 - Proposed issue of Shares to Mr Geoffrey Linnell
To consider and, if thought fit, to pass the following
resolution as an ordinary resolution:
"That, pursuant to and in accordance with section 208 of the
Corporations Act and Listing Rule 10.11 and for all other purposes,
the Directors be and are hereby authorised to allot and issue
114,570 Shares for no consideration to Geoffrey Linnell or his
nominee(s) on the terms and conditions set out in the Explanatory
Memorandum accompanying this Notice of Meeting."
The Company will disregard any votes cast on Resolution 7 by
Geoffrey Linnell and/or any associate of Geoffrey Linnell. However,
the Company need not disregard a vote if:
(a) it is cast by a person as a proxy appointed by writing that
specifies how the proxy is to vote on the proposed resolution;
and
(b) it is not cast on behalf of Geoffrey Linnell or an associate of Geoffrey Linnell.
Further, a Restricted Voter who is appointed as a proxy will not
vote on Resolution 7 unless:
(a) the appointment specifies the way the proxy is to vote on Resolution 7; or
(b) the proxy is the Chair of the Meeting and the appointment
expressly authorises the Chair to exercise the proxy even though
the Resolution is connected directly or indirectly with the
remuneration of a member of the Key Management Personnel.
Shareholders should note that the Chair intends to vote any
undirected proxies in favour of Resolution 7. Shareholders may also
choose to direct the Chair to vote against Resolution 7 or to
abstain from voting.
8. Resolution 8 - Proposed issue of Shares to Mr Stephen Rowse
To consider and, if thought fit, to pass the following
resolution as an ordinary resolution:
"That, for the purpose of Listing Rule 7.1 and for all other
purposes, the Company approves the allotment and issue of 91,660
Shares for no consideration to Stephen Rowse or his nominee(s) on
the terms and conditions set out in the Explanatory Memorandum
accompanying this Notice of Meeting."
The Company will disregard any votes cast on Resolution 8 by
Stephen Rowse and/or any associate of Stephen Rowse. However, the
Company need not disregard a vote if the vote is cast by a person
as proxy for a person who is entitled to vote, in accordance with
the directions on the proxy form or the vote is cast by the person
chairing the meeting as proxy for a person who is entitled to vote,
in accordance with a direction on the proxy form to vote as the
proxy decides.
Further, a Restricted Voter who is appointed as a proxy will not
vote on Resolution 8 unless:
(a) the appointment specifies the way the proxy is to vote on Resolution 8; or
(b) the proxy is the Chair of the Meeting and the appointment
expressly authorises the Chair to exercise the proxy even though
the Resolution is connected directly or indirectly with the
remuneration of a member of the Key Management Personnel.
Shareholders should note that the Chair intends to vote any
undirected proxies in favour of Resolution 8. Shareholders may also
choose to direct the Chair to vote against Resolution 8 or to
abstain from voting.
9. Resolution 9 - Proposed approval of termination benefits for Mr John Wallington
To consider and, if thought fit, to pass the following
resolution as an ordinary resolution:
"That, for the purposes of Listing Rules 10.11 and 10.19 and
sections 200B, 200E and 208 of the Corporations Act and for all
other purposes, approval is given for the Company to provide
benefits that might become payable to John Wallington under and in
accordance with his employment agreement in connection with the
termination of his employment with the Company, details of which
are set out in the Explanatory Memorandum accompanying this Notice
of Meeting."
The Company will disregard any votes cast on Resolution 9 by
John Wallington and/or any associate of John Wallington. However,
the Company need not disregard a vote if:
(a) it is cast by a person as a proxy appointed by writing that
specifies how the proxy is to vote on the proposed resolution;
and
(b) it is not cast on behalf of John Wallington or an associate of John Wallington.
Further, a Restricted Voter who is appointed as a proxy will not
vote on Resolution 9 unless:
(a) the appointment specifies the way the proxy is to vote on Resolution 9; or
(b) the proxy is the Chair of the Meeting and the appointment
expressly authorises the Chair to exercise the proxy even though
the Resolution is connected directly or indirectly with the
remuneration of a member of the Key Management Personnel.
Shareholders should note that the Chair intends to vote any
undirected proxies in favour of Resolution 9. Shareholders may also
choose to direct the Chair to vote against Resolution 9 or to
abstain from voting.
10. Resolution 10 - Proposed approval of termination benefits for Mr Wayne Koonin
To consider and, if thought fit, to pass the following
resolution as an ordinary resolution:
"That, for the purposes of Listing Rules 10.11 and 10.19 and
sections 200B, 200E and 208 of the Corporations Act and for all
other purposes, approval is given for the Company to provide
benefits that might become payable to Wayne Koonin under and in
accordance with his employment agreement in connection with the
termination of his employment with the Company, details of which
are set out in the Explanatory Memorandum accompanying this Notice
of Meeting."
The Company will disregard any votes cast on Resolution 10 by
Wayne Koonin and/or any associate of Wayne Koonin. However, the
Company need not disregard a vote if:
(a) it is cast by a person as a proxy appointed by writing that
specifies how the proxy is to vote on the proposed resolution;
and
(b) it is not cast on behalf of Wayne Koonin or an associate of Wayne Koonin.
Further, a Restricted Voter who is appointed as a proxy will not
vote on Resolution 10 unless:
(a) the appointment specifies the way the proxy is to vote on Resolution 10; or
(b) the proxy is the Chair of the Meeting and the appointment
expressly authorises the Chair to exercise the proxy even though
the Resolution is connected directly or indirectly with the
remuneration of a member of the Key Management Personnel.
Shareholders should note that the Chair intends to vote any
undirected proxies in favour of Resolution 10. Shareholders may
also choose to direct the Chair to vote against Resolution 10 or to
abstain from voting.
OTHER BUSINESS
To deal with any other business which may be brought forward in
accordance with the Constitution and the Corporations Act.
For the purposes of these resolutions, the following definitions
apply:
Accounting Standardshas the meaning given to that term in the
Corporations Act.
ASX means ASX Limited ABN 98 008 624 691 and, where the context
permits, the Australian Securities Exchange operated by ASX
Limited.
Board means the board of Directors of the Company.
Closely Related Party has the meaning given to that term in the
Corporations Act.
Companies Actmeans the South African Companies Act, 71 of 2008,
as amended.
Company means Coal of Africa Limited ABN 98 008 905 388.
Constitution means the Company's constitution, as amended from
time to time.
Corporations Actmeans Corporations Act 2001 (Cth).
Director means a director of the Company from time to time.
Explanatory Memorandummeans the explanatory memorandum
accompanying this Notice.
Key Management Personnel has the meaning given to that term in
the Accounting Standards.
Listing Rules means the Listing Rules of the ASX.
Meeting means the general meeting the subject of the Notice.
Notice or Notice of Meeting means this notice of meeting.
Resolution means a resolution contained in this Notice.
Restricted Votermeans Key Management Personnel and their Closely
Related Parties.
Shares means fully paid ordinary shares in the capital of the
Company.
By order of the Board
Shannon Coates
Company Secretary
Dated: 26 April 2012
How to vote
Shareholders can vote by either:
-- attending the meeting and voting in person or by attorney or,
in the case of corporate shareholders, by appointing a corporate
representative to attend and vote; or
-- appointing a proxy to attend and vote on their behalf using
the proxy form accompanying this Notice and by submitting their
proxy appointment and voting instructions in person, by post or by
facsimile.
Voting in person (or by attorney)
Shareholders, or their attorneys, who plan to attend the meeting
are asked to arrive at the venue 15 minutes prior to the time
designated for the meeting, if possible, so that their holding may
be checked against the Company's share register and attendance
recorded. Attorneys should bring with them an original or certified
copy of the power of attorney under which they have been authorised
to attend and vote at the meeting.
Voting by a Corporation
A shareholder that is a corporation may appoint an individual to
act as its representative and vote in person at the meeting. The
appointment must comply with the requirements of section 250D of
the Corporations Act. The representative should bring to the
meeting evidence of his or her appointment, including any authority
under which it is signed.
Voting by proxy
-- A shareholder entitled to attend and vote is entitled to
appoint not more than two proxies. Each proxy will have the right
to vote on a poll and also to speak at the meeting.
-- The appointment of the proxy may specify the proportion or
the number of votes that the proxy may exercise. Where more than
one proxy is appointed and the appointment does not specify the
proportion or number of the shareholder's votes each proxy may
exercise, the votes will be divided equally among the proxies (i.e.
where there are two proxies, each proxy may exercise half of the
votes).
-- A proxy need not be a shareholder.
-- The proxy can be either an individual or a body corporate.
-- If a proxy is not directed how to vote on an item of
business, the proxy may generally vote, or abstain from voting, as
they think fit. However, where a Restricted Voter is appointed as a
proxy, the proxy may only vote on Resolutions 1, 2, 4, 5, 6, 7, 8,
9 and 10, if the proxy is the Chair of the Meeting and the
appointment expressly authorises the Chair to exercise the proxy
even if the Resolution is connected directly or indirectly with the
remuneration of a member of the Key Management Personnel.
-- Should any resolution, other than those specified in this
Notice, be proposed at the meeting, a proxy may vote on that
resolution as they think fit.
-- If a proxy is instructed to abstain from voting on an item of
business, they are directed not to vote on the shareholder's behalf
either on a show of hands or on the poll and the shares that are
the subject of the proxy appointment will not be counted in
calculating the required majority.
-- Shareholders who return their proxy forms with a direction
how to vote but do not nominate the identity of their proxy will be
taken to have appointed the Chairman of the meeting as their proxy
to vote on their behalf. If a proxy form is returned but the
nominated proxy does not attend the meeting, the Chairman of the
meeting will act in place of the nominated proxy and vote in
accordance with any instructions. Proxy appointments in favour of
the Chairman of the meeting, the secretary or any Director that do
not contain a direction how to vote will be used where possible to
support each of the resolutions proposed in this Notice, provided
they are entitled to cast votes as a proxy under the voting
exclusion rules which apply to some of the proposed resolutions.
These rules are explained in this Notice.
-- To be effective, proxies must be lodged by 11.00am (London
time) on 20 June 2012. Proxies lodged after this time will be
invalid.
-- Proxies may be lodged using any of the following methods:
- by returning a completed proxy form in person or by delivery
or post using the pre-addressed envelope provided with this Notice
to:
Coal of Africa Limited
Level 1, 173 Mounts Bay Road
Perth WA 6000
- by faxing a completed proxy form to +61 8 9322 6778.
The proxy form must be signed by the shareholder or the
shareholder's attorney. Proxies given by corporations must be
executed in accordance with the Corporations Act. Where the
appointment of a proxy is signed by the appointer's attorney, a
certified copy of the power of attorney, or the power itself, must
be received by the Company at the above address, or by facsimile,
and by 11.00am (London time) on 20 June 2012. If facsimile
transmission is used, the power of attorney must be certified.
Shareholders who are entitled to vote
In accordance with Regulations 7.11.37 and 7.11.38 of the
Corporations Regulations 2001, the Board has determined that a
person's entitlement to vote at the General Meeting will be the
entitlement of that person set out in the Register of Shareholders
as at 5.00pm (London time) on 20 June 2012. Changes in the register
of shareholders after this time will be disregarded in determining
the rights of any person to attend and vote at the meeting.
Coal of Africa Limited
ABN 98 008 905 388
EXPLANATORY MEMORANDUM
This Explanatory Memorandum is intended to provide shareholders
with sufficient information to assess the merits of the Resolutions
contained in the accompanying Notice of General Meeting of Coal of
Africa Limited ("CoAL" or the "Company").
Certain abbreviations and other defined terms are used
throughout this Explanatory Memorandum. Defined terms are generally
identifiable by the use of an upper case first letter. Details of
the definitions and abbreviations are set out in the Glossary to
the Explanatory Memorandum.
Background to Resolutions 1 and 2 - approval of Issue of shares
to John Wallington and Wayne Koonin
Pursuant to their employment agreements:
-- Mr Wallington is entitled to be issued 250,000 Shares on
completion of 12 months service, which occurred on 15 June 2011;
and
-- Mr Koonin is entitled to be issued 175,000 Shares on
completion of 12 months service, which occurred on 31 March
2012.
Under the terms of the employment agreements, the issue of
250,000 Shares to Mr Wallington and 175,000 Shares to Mr Koonin is
subject to shareholder approval. Accordingly, Resolutions 1 and 2
seek shareholder approval for the issue of 250,000 Shares to Mr
Wallington and 175,000 Shares to Mr Koonin.
Mr Wallington's employment agreement also specified certain
criteria relating to the market price of the Shares. Based on an
assessment of Mr Wallington's performance over the 12 month period
and the subsequent resolution of operational matters relating to
the Vele Colliery in a manner satisfactory to the Board, the Board
has elected to waive those Share performance criteria.
The issue of Shares to Mr Koonin pursuant to his employment
agreement is not subject to any criteria relating to the market
price of the Shares or otherwise.
Listing Rule 10.11
Listing Rule 10.11 requires shareholder approval by ordinary
resolution for any issue of securities by a listed company to a
related party. Accordingly, Listing Rule 10.11 requires
shareholders to approve the grant of Shares to the Mr Wallington
and Mr Koonin.
Additional Information
The following information in relation to the Shares to be
granted pursuant to Resolutions 1 and 2 is provided to shareholders
for the purposes of Listing Rule 10.13:
(a) the Shares will be granted to Mr Wallington and Mr Koonin,
or their nominees, as noted above;
(b) the maximum number of Shares to be granted is 425,000 (being
the 250,000 Shares the subject of Resolution 1 and the 175,000
shares the subject of Resolution 2);
(c) the Shares will be allotted and granted on a date which will
be no later than 1 month after the date of this Meeting, unless
otherwise extended by way of ASX granting a waiver to the Listing
Rules;
(d) the Shares will be granted for no consideration;
(e) no funds will be raised by the grant of the Shares; and
(f) the rights attaching to the Shares are set out in the Company's Constitution.
If approval is given for the grant of the Shares the subject of
Resolutions 1 and 2 under Listing Rule 10.11, approval is not
required under Listing Rule 7.1.
Voting
Note that a voting exclusion applies to Resolutions 1 and 2 in
the terms set out in the Notice of Meeting. In particular, the
directors and other Restricted Voters may not vote on this
Resolution and may not cast a vote as proxy, unless the appointment
gives a direction on how to vote or the proxy is given to the Chair
and expressly authorises the Chair to exercise your proxy even if
the Resolution is connected directly or indirectly with the
remuneration of a member of the Key Management Personnel. The Chair
will use any such proxies to vote in favour of the Resolutions.
Shareholders are urged to carefully read the proxy form and
provide a direction to the proxy on how to vote on these
Resolutions.
BACKGROUND TO RESOLUTION 3 - SPECIAL RESOLUTION TO APPROVE
FINANCIAL ASSISTANCE
Resolution 3 is a precaution, based on legal advice, to ensure
compliance with the South African companies legislation with regard
to provision of financial assistance by the Company to any related
company or inter-related company (for instance, in relation to an
intragroup loan). The authority given pursuant to this Resolution
will be valid for a period of two years from its passing. Any
financial assistance provided by the Company to a related or
inter-related company would still be subject to liquidity and
solvency tests and would be required to be on fair and reasonable
terms.
BACKGROUND TO RESOLUTIONS 4, 5, 6, AND 7 - APPROVAL OF ISSUE OF
SHARES to Simon Farrell, Richard Linnell, Peter Cordin and GEoffrey
Linnell
Simon Farrell, Richard Linnell, Peter Cordin and Geoffrey
Linnell (together, the Optionholders) previously held certain Class
A Options as set out in the table below. The Class A Options each
carried the right to be issued one Share and had an exercise price
of A$0.50 per Share. The Class A Options were issued on 1 October
2006 and were exercisable for a five year period expiring on 30
September 2011.
In the ordinary course the Optionholders would have been able to
exercise their Class A Options following publication of the
Company's financial statements for the 2011 financial year on 19
September 2011. Prior to the Class A Option expiry date of 5.00pm
Australian Western Standard Time on 30 September 2011, in
accordance with the Terms and Conditions of the Class A Options,
each of Simon Farrell, Richard Linnell, Peter Cordin and Geoffrey
Linnell provided the Company Secretary of the Company with a
validly completed Notice of Exercise of Options purporting to
exercise the full number of Class A Options held by the respective
Optionholder, together with payment in full for those respective
Class A Options. However, as a result of the Company's intention to
imminently proceed with the recently completed placing of new
Shares, the Optionholders were in an extended close period and were
unable to exercise their Class A Options prior to their expiry on
30 September 2011. After due consideration of the circumstances and
in recognition of the long and valued service which Simon Farrell,
Richard Linnell and Peter Cordin have provided to the Company, the
Board (other than Simon Farrell, Richard Linnell and Peter Cordin,
who were not involved in the decision) resolved to ask Shareholders
to approve the issue of new Shares, for no consideration, to the
Optionholders as compensation for their being unable to exercise
the Class A Options.
Simon Farrell, Richard Linnell and Peter Cordin are all
Directors of the Company. Geoffrey Linnell is the son of Richard
Linnell and the Class A Options granted to him were part of the
overall option package offered to Richard Linnell at the time of
grant.
The number of new Shares proposed to be issued to each of the
Optionholders is set out below.
Number of Class A Options Number of Shares proposed
held to be issued
------------------ -------------------------- --------------------------
Simon Farrell 4,000,000 1,833,150
------------------ -------------------------- --------------------------
Richard Linnell 2,000,000 916,575
------------------ -------------------------- --------------------------
Peter Cordin 1,000,000 458,300
------------------ -------------------------- --------------------------
Geoffrey Linnell 250,000 114,570
------------------ -------------------------- --------------------------
The number of shares has been calculated as the number of shares
(with rounding in each case) which the Optionholders could have
acquired on 20 September 2011 (being the day after the publication
of the Company's annual financial statements for the 2011 financial
year and the day on which the Optionholders informed the Company of
their intention to exercise the Class A Options), based on the
difference between the exercise price of A$0.50 and the average
Share price on the Australian Securities Exchange of A$0.923 on
that date.
Related Party Transactions Generally
Chapter 2E of the Corporations Act prohibits a public company
from giving a financial benefit to a related party of the public
company unless either:
1. the giving of the financial benefits falls within one of the
nominated exceptions to the provision; or
2. shareholder approval is obtained prior to the giving of the
financial benefit and the benefit is given within 15 months after
obtaining such approval.
For the purposes of Chapter 2E of the Corporations Act, the
Directors are deemed related parties under section 228(2) of the
Corporations Act. As a child of a Director, Geoffrey Linnell is a
related party of the Company pursuant to section 228(3)(b) of the
Corporations Act.
Resolutions 4, 5, 6, and 7 provide for the grant of Shares to
the Optionholders which is a financial benefit which requires
shareholder approval.
Current Holdings
Set out below are details of each of the Optionholders' relevant
interest in Shares of the Company as at the date of this
Notice:
Optionholder Number of Shares
---------------------------------------- -----------------
Mr Simon Farrell, or his nominee(s) 2,871,791
---------------------------------------- -----------------
Mr Richard Linnell, or his nominee(s) 787,550
---------------------------------------- -----------------
Mr Peter Cordin, or his nominee(s) 412,759
---------------------------------------- -----------------
Mr Geoffrey Linnell, or his nominee(s) 751,550
---------------------------------------- -----------------
Total 4,823,650
---------------------------------------- -----------------
Set out below are details of each of the Optionholders' relevant
interest in Options of the Company as at the date of this
Notice:
Optionholder Number of Options
---------------------------------------- ------------------
Mr Simon Farrell, or his nominee(s) 8,000,000
---------------------------------------- ------------------
Mr Richard Linnell, or his nominee(s) 2,000,000
---------------------------------------- ------------------
Mr Peter Cordin, or his nominee(s) -
---------------------------------------- ------------------
Mr Geoffrey Linnell, or his nominee(s) -
---------------------------------------- ------------------
Total 10,000,000
---------------------------------------- ------------------
INFORMATION REQUIREMENTS
For the purposes of Chapter 2E of the Corporations Act the
following information is provided.
The related parties to whom the proposed resolutions would
permit the financial benefit to be given:
Subject to shareholder approval, the following maximum number of
Shares will be granted to the following related parties, or their
respective nominees:
Optionholder Number of Shares
--------------------------------------- -----------------
Mr Simon Farrell, or his nominee(s) 1,833,150
--------------------------------------- -----------------
Mr Richard Linnell, or his nominee(s) 916,575
--------------------------------------- -----------------
Mr Peter Cordin, or his nominee(s) 458,300
--------------------------------------- -----------------
Mr Geoffrey Linnell 114,570
--------------------------------------- -----------------
Total 3,322,595
--------------------------------------- -----------------
The nature of the financial benefit
The proposed financial benefit to be given is the issue of
Shares for no consideration to the Optionholders as noted
above.
Directors' recommendation
All the Directors were available to make a recommendation. For
the reasons noted above:
Messrs Linnell, Wallington, Nevhutanda, Bywater, Cordin,
Mosehla, Torlage, Xayiya, Murray and Koonin (who have no interest
in the outcome of Resolution 4) recommend that Shareholders vote in
favour of Resolution 4 as they believe the granting of the
1,833,150 Shares to Mr Farrell will align his rewards with the
long-term creation of value for shareholders.
Mr Farrell declines to make a recommendation about Resolution 4
as he has a material personal interest in the outcome of that
particular Resolution as it relates to the issue of Shares to
him.
Messrs Koonin, Farrell, Nevhutanda, Bywater, Cordin, Mosehla,
Torlage, Xayiya, Murray and Wallington (who have no interest in the
outcome of Resolution 5) recommend that Shareholders vote in favour
of Resolution 5 as they believe the granting of the 916,575 Shares
to Mr Richard Linnell will align his rewards with the long-term
creation of value for shareholders.
Mr Richard Linnell declines to make a recommendation about
Resolution 5 as he has a material personal interest in the outcome
of that particular Resolution as it relates to the issue of Shares
to him.
Messrs Koonin, Farrell, Nevhutanda, Bywater, Linnell, Mosehla,
Torlage, Xayiya, Murray and Wallington (who have no interest in the
outcome of Resolution 6) recommend that Shareholders vote in favour
of Resolution 6 as they believe the granting of the 458,300 Shares
to Mr Cordin will align his rewards with the long-term creation of
value for shareholders.
Mr Cordin declines to make a recommendation about Resolution 6
as he has a material personal interest in the outcome of that
particular Resolution as it relates to the issue of Shares to
him.
Messrs Koonin, Farrell, Nevhutanda, Bywater, Cordin, Mosehla,
Torlage, Xayiya, Murray and Wallington (who have no interest in the
outcome of Resolution 7) recommend that Shareholders vote in favour
of Resolution 7 as they believe the granting of the 114,570 Shares
to Mr Geoffrey Linnell will align Mr Richard Linnell's rewards with
the long-term creation of value for shareholders.
Mr Richard Linnell declines to make a recommendation about
Resolution 7 as he has a material personal interest in the outcome
of that particular Resolution as it relates to the issue of Shares
to his son.
Other information that is reasonably required by members to make
a decision and that is known to the Company or any of its
Directors.
The proposed ordinary Resolutions 4, 5, 6 and 7 would have the
effect of giving power to the Directors to grant a total of
3,322,595 Shares on the terms and conditions as set out in this
Explanatory Memorandum and as otherwise mentioned above.
The Company currently has 662,484,573 listed Shares and the
following unlisted Options on issue:
Number Exercise Price Expiry Date
---------- --------------- ------------------
250,000 A$2.05 1 May 2012
---------- --------------- ------------------
7,000,000 A$1.25 30 September 2012
---------- --------------- ------------------
1,000,000 A$1.90 30 September 2012
---------- --------------- ------------------
600,000 A$1.25 1 May 2012
---------- --------------- ------------------
1,650,000 A$3.25 31 July 2012
---------- --------------- ------------------
5,000,000 A$2.74 30 November 2014
---------- --------------- ------------------
818,500 A$1.90 30 June 2014
---------- --------------- ------------------
2,500,000 A$1.20 9 November 2015
---------- --------------- ------------------
1,441,061 A$1.40 30 September 2015
---------- --------------- ------------------
2 60 pence 1 November 2014
---------- --------------- ------------------
1. The two options have been granted over a total of 50 million Shares.
If all Shares are granted as proposed above, assuming all
existing Options on issue have been exercised, the effect would be
to dilute the share holding of existing shareholders by
10.605%.
The Optionholders' fees per annum (including superannuation) and
the total financial benefit to be received by them in this current
period as a result of the grant of the Shares the subject of
Resolutions 4, 5, 6 and 7 are as follows:
Salary p.a. (A$) Value of the Total Financial
Shares (A$) Benefit (A$)
------------------------ ----------------- ------------- ----------------
Mr Simon Farrell 550,000.00 1,604,006.25 2,154,006.25
------------------------ ----------------- ------------- ----------------
Mr Richard Linnell 120,000.00 802,003.13 922,003.13
------------------------ ----------------- ------------- ----------------
Mr Peter Cordin 118,809.60 401,012.50 519,822.10
------------------------ ----------------- ------------- ----------------
Mr Geoffrey Linnell(1) N/A 100,248.75 100,248.75
------------------------ ----------------- ------------- ----------------
1. Mr Geoffrey Linnell is not employed by the Company.
Valuation of Financial Benefit
The Shares are listed on ASX. The market value of the Shares may
increase or decrease in the future. The Company has valued the
Shares on the basis of the market price of A$0.875 per Share on the
date of this Notice.
The following table gives details of the highest, lowest and
latest closing prices of the Company's Shares trading on ASX over
the past 12 months ending on 24 April 2012:
Highest Price (A$) Lowest Price (A$) / Latest Price (A$) /
/ Date Date Date
----------------------- ---------------------- ---------------------
A$1.795 on 14 January A$0.705 on 7 October A$0.875 on 24 April
2011 2011 and 14 October 2012
2011
----------------------- ---------------------- ---------------------
Other Information
Under the Australian Equivalent of IFRS, the Company is required
to expense the value of the Shares in its statement of financial
performance for the current financial year. Other than as disclosed
in this Explanatory Memorandum, the Directors do not consider that
from an economic and commercial point of view, there are any costs
or detriments including opportunity costs or taxation consequences
for the Company or benefits foregone by the Company in granting the
Shares pursuant to Resolutions 4, 5, 6 and 7.
Neither the Directors nor the Company are aware of other
information that would be reasonably required by shareholders to
make a decision in relation to the financial benefits contemplated
by the proposed resolutions.
Listing Rule 10.11
Listing Rule 10.11 requires shareholder approval by ordinary
resolution for any issue of securities by a listed company to a
related party. Accordingly, Listing Rule 10.11 requires
shareholders to approve the grant of Shares to the
Optionholders.
If approval is given under Listing Rule 10.11, approval is not
required under Listing Rule 7.1.
Additional Information
The following information in relation to the Shares to be
granted pursuant to Resolutions 4, 5, 6 and 7 is provided to
shareholders for the purposes of Listing Rule 10.13:
(a) the Shares will be granted to the Optionholders, or their nominees, as noted above;
(b) the maximum number of Shares to be granted is 3,322,595
(divided between the Optionholders as set out in the table
above);
(c) the Shares will be allotted and granted on a date which will
be no later than 1 month after the date of this Meeting, unless
otherwise extended by way of ASX granting a waiver to the Listing
Rules;
(d) the Shares will be granted for no consideration;
(e) no funds will be raised by the grant of the Shares; and
(f) the rights attaching to the Shares are set out in the Company's Constitution.
Voting
Note that a voting exclusion applies to Resolutions 4, 5, 6 and
7 in the terms set out in the Notice of Meeting. In particular, the
directors and other Restricted Voters may not vote on this
Resolution and may not cast a vote as proxy, unless the appointment
gives a direction on how to vote or the proxy is given to the Chair
and expressly authorises the Chair to exercise your proxy even if
the Resolution is connected directly or indirectly with the
remuneration of a member of the Key Management Personnel. The Chair
will use any such proxies to vote in favour of the Resolutions.
Shareholders are urged to carefully read the proxy form and
provide a direction to the proxy on how to vote on these
Resolutions.
BACKGROUND TO RESOLUTION 8 - APPROVAL OF ISSUE OF SHARES to
Stephen Rowse
Resolution 8 seeks shareholder approval to the issue of a
maximum of 91,660 Shares for no consideration to Stephen Rowse. As
noted above, Stephen Rowse previously held 200,000 Class A Options
with an exercise price of A$0.50 each expiring on 30 September
2011. Mr Rowse's options were in an extended close period and,
accordingly, he was unable to exercise his options before they
expired. Resolution 8 seeks shareholder approval for the issue of
91,660 new Shares, for no consideration, to Mr Rowse as
compensation for his being unable to exercise his options. Stephen
Rowse is a long standing member of the Company's senior management
team but is not a related party of the Company.
Listing Rule 7.1 requires shareholder approval for the proposed
issue of securities in the Company. Listing Rule 7.1 broadly
provides, subject to certain exceptions, that shareholder approval
is required for any issue of securities by a listed company, where
the securities proposed to be issued represent more than 15% of the
Company's securities then on issue.
The following information in relation to the Shares to be issued
is provided to shareholders for the purposes of Listing Rule
7.3:
a) the maximum number of Shares the Company can issue is 91,660;
b) the Company will allot and issue the Shares no later than 3
months after the date of the Meeting, unless otherwise extended by
way of ASX granting a waiver to the Listing Rules;
c) the shares will be allotted and issued on one date;
d) the Shares will be issued for no consideration;
e) the Shares will be issued and allotted to Stephen Rowse who
is not a related party of the Company;
f) the Shares will be fully paid ordinary shares in the capital
of the Company and rank equally in all respects with the existing
fully paid ordinary shares on issue; and
g) the purpose of the issue is to compensate Mr Rowse for not
being able to exercise his options prior to their expiry date.
Voting
Note that a voting exclusion applies to Resolution 8 in the
terms set out in the Notice of Meeting. In particular, the
directors and other Restricted Voters may not vote on this
Resolution and may not cast a vote as proxy, unless the appointment
gives a direction on how to vote or the proxy is given to the Chair
and expressly authorises the Chair to exercise your proxy even if
the Resolution is connected directly or indirectly with the
remuneration of a member of the Key Management Personnel. The Chair
will use any such proxies to vote in favour of the Resolutions.
Shareholders are urged to carefully read the proxy form and
provide a direction to the proxy on how to vote on these
Resolutions.
BACKGROUND TO RESOLUTIONs 9 and 10 - APPROVAL OF NEW termination
benefits for john wallington and wayne koonin
Resolutions 9 and 10 are proposed to seek shareholder approval
for certain termination benefits to be provided to Mr Wallington
and Mr Koonin under proposed amendments to their employment
agreements, details of which are provided below. Unless otherwise
noted, these termination benefits are proposed to be provided in
addition to their existing statutory and contractual
entitlements.
Listing Rule 10.19
Listing Rule 10.19 provides that a listed company must ensure
that, unless shareholder approval is obtained, no officer of the
company may be entitled to termination benefits if the value of
those benefits and the termination benefits that are or may become
payable to all officers together exceed 5% of the equity interests
of the company as set out in the latest accounts given to ASX under
the listing rules.
The equity interests of the Company as set out in the latest
accounts given to ASX under the listing rules were US$442,317,000.
The total value of the termination benefits proposed to be approved
under Resolutions 9 and 10 cannot be ascertained in advance for the
reasons set out the section of this Explanatory Memorandum headed
'Information Required to be Disclosed Regarding the Termination
Benefits'. Based on the closing share price of the Company's Shares
and Mr Wallington's and Mr Koonin's base remuneration as at 24
April 2012 the maximum total value of the proposed termination
benefits is estimated to be GBP 3,178,548.74(2) (see table below
for further details).
The Directors are of the opinion that although the termination
benefits contemplated in Mr Wallington's and Mr Koonin's employment
agreements should, when aggregated with any other termination
benefits payable to officers of the Company, fall within 5% of the
Company's equity interests as required by Listing Rule 10.19, it
would be prudent to obtain shareholder approval to ensure that the
Company does not breach Listing Rule 10.19 if the employment
agreements are terminated in circumstances triggering the payment
of termination benefits. If shareholder approval is obtained
pursuant to Resolutions 9 and 10, it will enable the Company to
make any such termination payments without having to seek
shareholder approval at the time of any such termination.
Sections 200B and 200E of the Corporations Act
Sections 200B and 200E of the Corporations Act prohibit the
Company from giving a person who has held a managerial or executive
office in the Company a benefit in connection with that person's
retirement from office or position of employment that exceeds their
average annual base salary, unless shareholder approval is given or
the benefit is exempt from the need for shareholder approval.
The changes proposed to both Mr Wallington's and Mr Koonin's
employment agreements with the Company provide for termination
benefits that exceed their average annual base salary. Shareholder
approval is being sought pursuant to Resolutions 9 and 10 to enable
the Company to pay the proposed termination benefits (detailed in
the table below) to Mr Wallington and Mr Koonin without having to
seek shareholder approval at the time of any such termination of
their employment with the Company.
Section 200E requires that the following information be provided
to shareholders when seeking an approval for the purposes of
section 200B:
(a) if the proposed benefit consists of a monetary payment, the
amount of the payment or, if the amount cannot be ascertained at
the time of disclosure, the manner in which that amount is to be
calculated and any matter, event or circumstance that will or is
likely to affect the calculation; and
(b) if the proposed benefit is not a payment, the monetary value
of the proposed benefit or, if the value cannot be ascertained at
the time of disclosure, the manner in which that value is to be
calculated and any matter, event or circumstance that will or is
likely to affect the calculation.
The information required to be provided by section 200E is set
out below.
Related Party Transactions under the Corporations Act
For the purposes of Chapter 2E of the Corporations Act, the
Directors are related parties of the Company under section 228(2)
of the Corporations Act.
Chapter 2E of the Corporations Act prohibits a public company
from giving a financial benefit to a related party of the public
company unless either:
1. the giving of the financial benefits falls within one of the
nominated exceptions to the provision; or
2. shareholder approval is obtained prior to the giving of the
financial benefit and the benefit is given within 15 months after
obtaining such approval.
If:
(a) the giving of the financial benefit is required by contract; and
(b) the making of the contract was approved by shareholders; and
(c) the contract was made:
(i) within 15 months after that approval; or
(ii) before that approval, if the contract was conditional on approval being obtained,
member approval for the giving of the financial benefit is taken
to have been given and the benefit need not be given within the 15
months.
Resolutions 9 and 10 provide for the grant of additional
termination benefits to John Wallington and Wayne Koonin under
their employment agreements, which will be financial benefits
requiring shareholder approval under Chapter 2E. If shareholder
approval is obtained pursuant to Resolutions 9 and 10, it will
enable the Company to make any such termination payments without
having to seek shareholder approval at the time of any such
termination.
Section 219 requires that the following information be provided
to shareholders when seeking an approval for the purposes of
Chapter 2E:
(a) the related parties to whom the proposed resolutions would
permit financial benefits to be given;
(b) the nature of the financial benefits;
(c) each director's recommendations about the proposed
resolutions and reasons for such recommendations or, if no
recommendations are made or a director is unavailable, the reasons
why;
(d) whether each director has an interest in the outcome of the
proposed resolutions and if so, such interest; and
(e) all other information known to the company or any of its
directors that is reasonably required by shareholders to decide
whether the proposed resolutions are in the company's
interests.
The information required to be provided by section 219 is set
out below.
Listing Rule 10.11
Listing Rule 10.11 requires shareholder approval by ordinary
resolution for any issue of securities by a listed company to a
related party. Accordingly, Listing Rule 10.11 requires
shareholders to approve the grant to Mr Wallington and Mr Koonin
under their employment agreements of certain proposed long term
incentive entitlements which may be triggered on termination of
their employment agreements.
If approval is given under Listing Rule 10.11, approval is not
required under Listing Rule 7.1.
Information Required to be Disclosed Regarding the Termination
Benefits
Shareholder approval is being sought in respect of the benefits
set out in the table below. These benefits are in addition to the
statutory and contractual entitlements that may be provided to Mr
Wallington and Mr Koonin without the need for shareholder approval
under the Corporations Act and which may or may not be linked to
termination of their employment.
The termination benefits set out in the table below are proposed
to be provided to each of Mr Wallington and Mr Koonin under the
following circumstances (each, a Termination Event):
-- the Company terminating the employment of the relevant executive without cause;
-- the relevant executive or the Company terminating the
executive's employment following a change in circumstances under
which the relevant executive remains employed by the Company but
ceases to hold his current management role; or
-- the scope of his powers, duties or responsibilities is
materially diminished without his consent, which will be deemed to
be termination of the executive's employment by the Company without
cause.
The actual value of the total termination benefits that may
become payable to Mr Wallington and Mr Koonin on termination of
employment cannot be ascertained in advance as various events and
circumstances will or are likely to affect the calculation of the
value. In particular, the following factors may affect the value of
the termination benefits for which approval is sought:
-- the circumstances of cessation of employment;
-- the period of service at the time of cessation of employment;
-- his base remuneration at the time of termination;
-- the proportion of the relevant contractual year served by him
as at the date his employment ceases; and
-- the market price of the Company's Shares on ASX at the relevant time.
Component Details of Financial Benefit Value
------------- ----------------------------------------------------------------- -------------------------------------------
Base Entitlement under existing employment agreements: both Mr An amount equal to 1.75 times the annual
remuneration Wallington and Mr Koonin are currently base remuneration of the relevant
termination entitled under their existing employment agreements to three executive at the
payment months remuneration in lieu of time of the Termination Event.
notice.
The value of this payment based on the
Proposed new termination benefit: the Company will pay an amount current base remuneration is:
equal to 1.75 times the annual
base remuneration following a Termination Event. * Mr Wallington: GBP 763,000; and
This base remuneration termination payment is in addition to any
payment in lieu of notice
to which Mr Wallington or Mr Koonin may be entitled under their * Mr Koonin: GBP 525,000.
existing employment agreements.
The annual base remuneration under their respective existing
employment agreements is currently
GBP 436,000 for Mr Wallington and GBP 300,000 for Mr Koonin.
This base remuneration amount
is reviewed on an annual basis.
------------- ----------------------------------------------------------------- -------------------------------------------
Bonus Entitlement under existing employment agreements: Mr Wallington The maximum value of the bonus termination
termination is currently entitled under payment for each of Mr Wallington and Mr
payment his existing employment agreement at the end of each 12 month Koonin
period of service to such bonuses will be an amount equal to 0.75 times the
as the Board may decide in its absolute discretion, to a maximum annual base remuneration of the relevant
of 75% of his annual base executive
remuneration per annum. The amount of such bonuses is determined at the time of the Termination Event.
having regard to agreed key
performance indicators. This amount will depend on the date of the
termination of the relevant executive and
Mr Koonin is also currently entitled to such bonuses as the will
Board may decide from time to be reduced pro rata as described in the
time, to a maximum of 75% of his annual base remuneration per previous column.
annum. This maximum percentage
bonus may be renegotiated upwards should there be a material The current value of this payment based on
change in the Company's value the current base remuneration and assuming
and size. a bonus
termination payment for a full year is:
Proposed new termination benefit: following a Termination Event
the Company will pay an amount * Mr Wallington: GBP 327,000; and
equal to 75% of the annual base remuneration pro rated:
(i) In the case of Mr Wallington, for the period from the
beginning of the relevant 12 month * Mr Koonin: GBP 225,000.
period of service until the date on which he ceases to be
employed by the Company. For example,
if a Termination Event occurs, and Mr Wallington's last day of
service is at the end of three
months into a particular twelve month period of service, Mr
Wallington's bonus termination
payment will calculated as 3/12 x 75% x annual base
remuneration.
(ii) In the case of Mr Koonin, for the period from the beginning
of the relevant financial
year of the Company until the date on which he ceases to be
employed by the Company. For example,
if a Termination Event occurs, and Mr Koonin's last day of
service is at the end of four months
into a particular financial year, Mr Koonin's bonus termination
payment will calculated as
4/12 x 75% x annual base remuneration.
The bonus termination payment is not subject to meeting any key
performance indicators.
------------- ----------------------------------------------------------------- -------------------------------------------
Long Term Entitlement under existing employment agreements: Mr The value of Mr Wallington's and Mr
Incentive Wallington is currently entitled to the Koonin's Long Term Incentive Options
Options issue of the following tranches of securities under will depend on the
his existing employment agreement(3) subject number of Long Term Incentive Options
to meeting certain Share price performance conditions: ultimately exercisable and exercised
following a Termination
* up to 500,000 Shares following 24 months service Event and the price of each Share in
(Tranche 1 JW Shares); and the Company at the time the Long Term
Incentive Options
are exercised, or if the Company
* up to 500,000 Shares following 36 months service elects to pay cash in lieu of issuing
(Tranche 2 JW Shares). Shares under the Long
Term Incentive Options, the price
payable for each Share as calculated
in accordance with
Mr Koonin is currently entitled to the issue of the the terms of the Long Term Incentive
following tranches of securities under Options.
his existing employment agreement(4) subject to
meeting certain Share price performance conditions: Based on the closing Share price on
ASX of A$0.875 per Share as at 24
* up to 350,000 Shares following 24 months service April 2012 and assuming
(Tranche 1 WK Shares); all the Long Term Incentive Options
are validly exercised immediately
after their issue, the
* up to 350,000 Shares following 36 months service estimated current value of the Long
(Tranche 2 WK Shares); Term Incentive Options is:
* Mr Wallington: A$875,000; and
* up to 350,000 Shares following 48 months service
(Tranche 3 WK Shares); and * Mr Koonin: A$1,225,000.
* up to 350,000 Shares following 60 months service
(Tranche 4 WK Shares).
Proposed new termination benefit: the Company proposes
to issue 1,000,000 Long Term Incentive
Options to Mr Wallington and 1,400,000 Long Term
Incentive Options to Mr Koonin within one
month of the date of the Meeting for no consideration.
The Long Term Incentive Options are exercisable within
6 months of the occurrence of a Termination
Event and expire on different expiry dates. Each Long
Term Incentive Option will, on exercise,
entitle the holder to the issue of one fully paid
Share in the Company.
Upon exercise of any Long Term Incentive Option, the
Company may at its absolute discretion
elect to pay the holder cash in lieu of and in full
satisfaction of issuing Shares under the
Long Term Incentive Option.
The key terms of the Long Term Incentive Options are
set out below under the heading 'Long
Term Incentive Option Terms'.
------------- ----------------------------------------------------------------- -------------------------------------------
TOTAL
ESTIMATED * Mr Wallington: GBP 1,647,773.98; and
CURRENT
VALUE(5)
* Mr Koonin: GBP 1,530,774.76.
------------- ----------------------------------------------------------------- -------------------------------------------
The following additional information is provided in relation to
the Long Term Incentive Options to be granted in accordance with
Listing Rule 10.13:
(a) the persons to whom the Long Term Incentive Options will be
issued are Mr John Wallington and Mr Wayne Koonin;
(b) the maximum number of Long Term Incentive Options to be
granted is 2,400,000 (divided between Mr Wallington and Mr Koonin
as set out in the table above);
(c) the Long Term Incentive Options will be issued on a date
which will be no later than one month after the date of this
Meeting, unless otherwise extended by way of ASX granting a waiver
to the Listing Rules;
(d) the Long Term Incentive Options will be granted for no
consideration and the terms of the Long Term Incentive Options are
set out in the table below; and
(e) no funds will be raised by the grant of the Long Term
Incentive Options or any issue of Shares upon exercise of the Long
Term Incentive Options.
Long Term Incentive Option Terms
Term Description
----------------------- -----------------------------------------------------------------------
Long Term Incentive Each Long Term Incentive Option will, on
Options exercise, entitle the holder to the issue
of one fully paid Share in the Company. All
Shares allotted upon exercise of the Long
Term Incentive Options rank pari passu in
all respects with Shares previously issued
and, in particular, entitle the holders of
Shares to participate fully in:
(i) dividends declared by the Company after
the date of allotment; and
(ii) all issues of securities made or offered
pro rata to holders of Shares.
----------------------- -----------------------------------------------------------------------
Exercise period The Long Term Incentive Options may be exercised
by a Long Term Incentive Option holder at
any time during the six month period following
a Termination Event relating to that holder.
Long Term Incentive Options not validly exercised
during the Exercise Period will automatically
lapse.
----------------------- -----------------------------------------------------------------------
Expiry date All Long Term Incentive Options issued to
a holder lapse and are of no further force
or effect if a Termination Event has not
occurred by the expiry dates set out below.
In relation to Mr John Wallington's Long
Term Incentive Options:
* 500,000 Long Term Incentive Options will lapse if a
Termination Event has not occurred within 24 months
of service or upon the issue of any Tranche 1 JW
Shares, whichever is earlier; and
* 500,000 Long Term Incentive Options will lapse if a
Termination Event has not occurred within 36 months
of service or upon the issue of any Tranche 2 JW
Shares, whichever is earlier.
In relation to Mr Wayne Koonin's Long Term
Incentive Options:
* 350,000 Long Term Incentive Options will lapse if a
Termination Event has not occurred within 24 months
of service or upon the issue of any Tranche 1 WK
Shares, whichever is earlier;
* 350,000 shares Long Term Incentive Options will lapse
if a Termination Event has not occurred within 36
months service or upon the issue of any Tranche 2 WK
Shares, whichever is earlier;
* 350,000 Long Term Incentive Options will lapse if a
Termination Event has not occurred within 48 months
service or upon the issue of any Tranche 3 WK Shares,
whichever is earlier; and
* 350,000 Long Term Incentive Options will lapse if a
Termination Event has not occurred within 60 months
service or upon the issue of any Tranche 4 WK Shares,
whichever is earlier.
----------------------- -----------------------------------------------------------------------
Exercise price No amount is payable by a Long Term Incentive
Option holder on exercise of a Long Term
Incentive Option.
----------------------- -----------------------------------------------------------------------
Exercise of options The Long Term Incentive Options may be exercised
by notice in writing by the holder delivered
to the registered office of the Company.
Within 10 Business Days after the notice
of exercise is received, the Company must
allot and issue the number of Shares to be
issued in the respect of the Long Term Incentive
Options to be exercised, or if the Company
has elected to pay cash in lieu of the issue
of Shares, the Company must make this payment
to a bank account nominated by the holder.
----------------------- -----------------------------------------------------------------------
Transferability The Long Term Incentive Options are not transferable.
----------------------- -----------------------------------------------------------------------
Performance conditions There are no performance conditions attached
to the exercise of any Long Term Incentive
Option.
----------------------- -----------------------------------------------------------------------
New issues (a) Long Term Incentive Option holders are
not entitled to participate in any new issue
of securities to existing holders of Shares
in the Company unless:
(i) they have become entitled to exercise
their Long Term Incentive Options; and
(ii) they do so before the record date for
the determination of entitlements to the
new issue of securities and participate as
a result of being holders of Shares.
(b) The Company must give Long Term Incentive
Option holders, in accordance with the Listing
Rules, notice of any new issue of securities
before the record date for determining entitlements
to the new issue.
----------------------- -----------------------------------------------------------------------
Reorganisation of If, prior to the expiry of any Long Term
capital Incentive Options, there is a reorganisation
of the issued capital of the Company, then
the rights of a Long Term Incentive Option
holder (including the number of Long Term
Incentive Options to which each holder is
entitled and the exercise price) is changed
to the extent necessary to comply with the
Listing Rules applying to a reorganisation
of capital at the time of the reorganisation.
----------------------- -----------------------------------------------------------------------
Pro rata and bonus There will be no change to the number of
issues Shares over which the Long Term Incentive
Options are exercisable in the event of the
Company making a pro rata issue or a bonus
issue to holders of Shares.
----------------------- -----------------------------------------------------------------------
Cash payment in lieu Upon exercise of any Long Term Incentive
of Share issue Option, the Company may at its absolute discretion
elect to pay the holder cash in lieu of and
in full satisfaction of its obligation to
issue Shares under the Long Term Incentive
Option.
The cash amount payable for each Long Term
Incentive Option will be calculated as follows:
(a) if the Company is listed on ASX, the
last closing price at which each Share traded
is on ASX prior to the exercise date; or
(b) if the Company has been removed from
the official list of ASX:
(i) in connection with a compromise or arrangement
under section 411 of the Corporations Act,
the consideration for each Share (or monetary
equivalent in the case of non cash consideration)
under the compromise or arrangement;
(ii) in connection with a takeover bid under
Chapter 6 of the Corporations Act, including
as a result of a compulsory acquisition or
a buyout of bid class securities under Part
6A.1 of the Corporations Act, the consideration
for each Share (or monetary equivalent in
the case of non cash consideration) under
the takeover bid;
(iii) in connection with a general compulsory
acquisition or buyout under Part 6A.2 of
the Corporations Act, the consideration paid
for each Share under Part 6A.2;
(c) as a result of any other event, or series
of events, the closing price of each Share
on the last day that the Shares traded on
ASX.
----------------------- -----------------------------------------------------------------------
Directors' recommendation and disclosure of interests
All the Directors were available to make a recommendation. For
the reasons noted above:
Messrs Linnell, Farrell, Nevhutanda, Bywater, Cordin, Mosehla,
Torlage, Xayiya, Murray and Koonin (who have no interest in the
outcome of Resolution 9) recommend that Shareholders vote in favour
of Resolution 9 as they believe that Mr Wallington's proposed
termination benefits are reasonable and fair in all the
circumstances.
Mr Wallington declines to make a recommendation about Resolution
9 as he has a material personal interest in the outcome of that
particular Resolution as it relates to the grant of termination
benefits to him.
Messrs Linnell, Farrell, Nevhutanda, Bywater, Cordin, Mosehla,
Torlage, Xayiya, Murray and Wallington (who have no interest in the
outcome of Resolution 10) recommend that Shareholders vote in
favour of Resolution 10 as they believe that Mr Koonin's proposed
termination benefits are reasonable and fair in all the
circumstances.
Mr Koonin declines to make a recommendation about Resolution 10
as he has a material personal interest in the outcome of that
particular Resolution as it relates to the grant of termination
benefits to him.
Other information known to the Company or any of its Directors
that is reasonably required by shareholders to make a decision
The proposed ordinary Resolutions 9 and 10 would have the effect
of giving power to the Directors to grant a maximum of 2,400,000
Long Term Incentive Options on the terms and conditions as set out
in this Explanatory Memorandum and as otherwise mentioned
above.
The Company currently has 662,484,573 listed Shares. If all Long
Term Incentive Options are granted as proposed above and exercised,
the effect would be to dilute the share holding of existing
shareholders by 0.362% (note this calculation does not take into
consideration any dilution that may occur as a result of the
proposed issue of Shares under Resolutions 1, 2, 4, 5, 6, 7 and
8).
Mr Wallington's and Mr Koonin's fees per annum (including
superannuation) and the total financial benefit to be received by
them in this current period as a result of the Termination Benefits
proposed to be granted which are the subject of Resolutions 9 and
10 are as follows:
Salary p.a. Value of the Total Financial
Termination Benefits Benefit (A$)
(A$)(6)
-------------------- --------------------------- ---------------------- ----------------
GBP 436,000 (A$683,967.06
Mr John Wallington ) 2,585,200.55 3,269,167.61
-------------------- --------------------------- ---------------------- ----------------
GBP 300,000 (A$470,579.36
Mr Wayne Koonin ) 2,401,597.59 2,872,176.95
-------------------- --------------------------- ---------------------- ----------------
Under the Australian Equivalent to IFRS, the Company is required
to expense the value of the Long Term Incentive Options in its
statement of financial performance for the current financial year.
Other than as disclosed in this Explanatory Memorandum, the
Directors do not consider that from an economic and commercial
point of view, there are any costs or detriments including
opportunity costs or taxation consequences for the Company or
benefits foregone by the Company in granting the Long Term
Incentive Options.
As Mr Wallington and Mr Koonin are both tax resident in South
Africa, the grant and subsequent exercise of the Long Term
Incentive Options may result in the creation of a tax event which
is subject to personal income tax and payable to the South African
Revenue Service. If such an event occurs, the Company will be
obliged to deduct and remit such taxes as employees' tax from the
gross proceeds arising out of the disposal of Long Term Incentive
Options.
Other than as disclosed in this Explanatory Memorandum, the
Directors do not consider that from an economic and commercial
point of view, there are any costs or detriments including
opportunity costs or taxation consequences for the Company or
benefits foregone by the Company in granting the Shares pursuant to
Resolutions 9 and 10.
Neither the Directors not the Company are aware of other
information that would be reasonably required by shareholders to
make a decision in relation to the financial benefits contemplated
by the proposed resolutions.
Voting
Note that a voting exclusion applies to Resolutions 9 and 10 in
the terms set out in the Notice of Meeting. In particular, the
directors and other Restricted Voters may not vote on this
Resolution and may not cast a vote as proxy, unless the appointment
gives a direction on how to vote or the proxy is given to the Chair
and expressly authorises the Chair to exercise your proxy even if
the Resolution is connected directly or indirectly with the
remuneration of a member of the Key Management Personnel. The Chair
will use any such proxies to vote in favour of the Resolutions.
Shareholders are urged to carefully read the proxy form and
provide a direction to the proxy on how to vote on these
Resolutions.
GLOSSARY
A$, $or AUD means Australian dollars.
Accounting Standardshas the meaning given to that term in the
Corporations Act.
ASX means ASX Limited ABN 98 008 624 691 and, where the context
permits, the Australian Securities Exchange operated by ASX
Limited.
Board means the board of Directors of the Company.
Class A Optionsmeans the class A options issued by the Company
on 1 October 2006.
Closely Related Party has the meaning given to that term in the
Corporations Act.
Companies Actmeans the South African Companies Act, 71 of 2008,
as amended.
Company means Coal of Africa Limited ABN 98 008 905 388.
Constitution means the Company's constitution, as amended from
time to time.
Corporations Actmeans Corporations Act 2001 (Cth).
Director means a director of the Company from time to time.
Explanatory Memorandummeans this explanatory memorandum
accompanying the Notice.
GBP means Great British pounds.
Key Management Personnel has the meaning given to that term in
the Accounting Standards.
Listing Rules means the Listing Rules of the ASX.
Long Term Incentive Optionsmeans the options proposed to be
issued to Mr John Wallington and Mr Wayne Koonin in Resolutions 9
and 10 the terms of which are described in the Explanatory
Memorandum under the heading 'Long Term Incentive Option
Terms'.
Meeting means the general meeting the subject of the Notice.
Notice or Notice of Meeting means the notice of meeting
accompanying this Explanatory Memorandum.
Optionholders means Simon Farrell, Richard Linnell, Peter Cordin
and Geoffrey Linnell.
Resolution means a resolution proposed by the Company in the
Notice accompanying this Explanatory Memorandum.
Restricted Votermeans Key Management Personnel and their Closely
Related Parties.
Shares means fully paid ordinary shares in the capital of the
Company.
Tranche 1 JW Shares and Tranche 2 JW Shares have the meaning set
out in the table under 'Information Required to be Disclosed
Regarding the Termination Benefits' in the 'Background to
Resolutions 9 and 10'.
Tranche 1 WK Shares, Tranche 2 WK Shares, Tranche 3 WK Shares
and Tranche 4 WK Shares have the meaning set out in the table under
'Information Required to be Disclosed Regarding the Termination
Benefits' in the 'Background to Resolutions 9 and 10'.
US$ means United States dollars.
(1) "Restricted Voter" means Key Management Personnel and their
Closely Related Parties as defined in the glossary.
(2) Based on an exchange rate of 1 AUD: 0.637012 GBP as at 24
April 2012.
(3) Note Mr Wallington's employment contract also provides for
the issue of 250,000 Shares on completion of 12 months service,
which occurred on 15 June 2011. Approval for the issue of these
shares is sought under Resolution 1.
(4) Note Mr Koonin's employment contract also provides for the
issue of 175,000 Shares on completion of 12 months service, which
occurred on 31 March 2012. Approval for the issue of these shares
is sought under Resolution 2.
(5) Based on an exchange rate of 1 AUD: 0.637012 GBP as at 24
April 2012.
(6) This calculation is subject to the assumptions set out in
the table on page 14 and assumes an exchange rate of 1 AUD:
0.637012 GBP as at 24 April 2012.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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