30th Apr 2007 07:00
Albidon Limited30 April 2007 ALBIDON LIMITED ARBN 107 288 755 __________________________________________________________________ NOTICE OF ANNUAL GENERAL MEETING EXPLANATORY MEMORANDUM ____________________________________________________________________ Date of Meeting 24 May 2007 Time of Meeting 11:30 am Place of Meeting King Street Room Rydges Perth Hotel Cnr King & Hay St Perth, Western Australia ALBIDON LIMITED ARBN 107 288 755 NOTICE IS HEREBY GIVEN that the Annual General Meeting of the shareholders ofAlbidon Limited ("Company") will be held at King Street Room, Rydges PerthHotel, Cnr King & Hay St, Perth, Western Australia on Thursday 24th May 2007 at11:30 am Western Australian Standard Time, for the purpose of transacting thefollowing business referred to in this Notice of Annual General Meeting. An Explanatory Memorandum containing information in relation to the followingResolutions accompanies this Notice of Meeting. AGENDA ORDINARY BUSINESS 2006 Accounts To receive, consider and adopt the financial report of the Company for the yearended 31 December 2006, and the reports by the Directors and IndependentAuditors. Resolution 1 - Re-election of Mr Richard Potts as a Director To consider and, if thought fit, to pass, with or without amendment thefollowing resolution as an ordinary resolution: "That Mr Richard Potts, who retires by rotation in accordance with article 12.2of the Company's Articles of Association and who offers himself for re-election,be elected a director of the Company." Resolution 2 - Re-election of Mr Alasdair Cooke as a Director To consider and, if thought fit, to pass, with or without amendment, thefollowing resolution as an ordinary resolution: "That Mr Alasdair Cooke, who retires by rotation in accordance with article 12.2of the Company's Articles of Association and who offers himself for re-election,be elected a director of the Company." Resolution 3 - Re-election of Mr Valentine Chitalu as a Director To consider and, if thought fit, to pass, with or without amendment, thefollowing resolution as an ordinary resolution: "That Mr Valentine Chitalu, who retires by rotation in accordance with article12.5 of the Company's Articles of Association and who offers himself forre-election, be elected a director of the Company." Resolution 4 - Re-election of Mr Paul Chapman as a Director To consider and, if thought fit, to pass, with or without amendment, thefollowing resolution as an ordinary resolution: "That Mr Paul Chapman, who retires by rotation in accordance with article 12.5of the Company's Articles of Association and who offers himself for re-election,be elected a director of the Company." Resolution 5 - Ratifying the Issue of 4,190,992 Shares That shareholders consider and, if thought fit, to pass, with or withoutamendment, the following resolution as an ordinary resolution: "That pursuant to Listing Rule 7.4 of the Listing Rules of ASX Limited, theCompany approves and ratifies the allotment and issue of 4,190,992 Shares in thecapital of the Company at a price of AUD$1.55 per Share to the Jinchuan GroupLtd as specified in, and on such terms and conditions referred to in theExplanatory Memorandum accompanying this Notice." Voting Exclusion - The Company will disregard any votes cast on this Resolutionby Jinchuan Group Ltd and any person associated with Jinchuan Group. However,the Company need not disregard a vote if it is cast by a person as proxy for aperson who is entitled to vote, in accordance with the directions on the proxyform or it is cast by the person chairing the meeting as proxy for a person whois entitled to vote, in accordance with a direction on the proxy form to vote asthe proxy decides. Resolution 6 - Approving the Issue of Options to Key Personnel That shareholders consider and if thought fit, to pass, with or withoutamendment, the following resolution as an ordinary resolution: "That for the purposes of Listing Rule 7.1 of the Listing Rules of ASX Limitedand for all relevant purposes, the Directors are authorised to allot and issueup to 150,000 Unlisted Options to key personnel exercisable at AUD$1.70 eachexpiring on or before 1 December 2009 and otherwise on the terms and conditionsset out in the Explanatory Memorandum accompanying this Notice." Voting Exclusion - The Company will disregard any votes cast on this Resolutionby a person who may participate in the proposed issue and a person who mightobtain a benefit (except a benefit solely in the capacity of a security holder)if the resolution is passed and an associate of that person. However, theCompany need not disregard a vote if it is cast by a person as proxy for aperson who is entitled to vote, in accordance with the directions on the proxyform or it is cast by the person chairing the meeting as proxy for a person whois entitled to vote, in accordance with a direction on the proxy form to vote asthe proxy decides. Resolution 7 - Issue of Shares to Managing Director This resolution was passed by Shareholders on 31 May 2006. The resolution isrequired to be pass again by Shareholders as the shares the subject of theoriginal resolution were not issued within the one month time limit under theASX Listing Rules of the passing of the original resolution. To consider and if thought fit, to pass, with or without amendment, thefollowing resolution as an ordinary resolution: "That, for the purposes of Listing Rule 10.11 of the Listing Rules of ASXLimited and for all relevant purposes, approval is given for the Company toissue to Mr Dale Clark Rogers up to 400,000 shares at an issue price of AUD$0.75each ." Voting Exclusion - The Company will disregard any votes cast on this Resolutionby Mr Rogers and any person associated with Mr Rogers. However, the Company neednot disregard a vote if it is cast by a person as proxy for a person who isentitled to vote, in accordance with the directions on the proxy form or it iscast by the person chairing the meeting as proxy for a person who is entitled tovote, in accordance with a direction on the proxy form to vote as the proxydecides. Resolution 8 - Grant of options to Managing Director To consider and if thought fit, to pass, with or without amendment, thefollowing resolution as an ordinary resolution: "That, for the purposes of Listing Rule 10.11 of the Listing Rules of ASXLimited and for all relevant purposes, approval is given for the Company togrant 1,200,000 options to Mr Dale Clark Rogers (or his nominee) eachexercisable at AUD$2.10 and expiring on or before 27 February 2010 and otherwiseon the terms and conditions set out in the Explanatory Memorandum accompanyingthis Notice." Voting Exclusion - The Company will disregard any votes cast on this Resolutionby Mr Rogers and any person associated with Mr Rogers. However, the Company neednot disregard a vote if it is cast by a person as proxy for a person who isentitled to vote, in accordance with the directions on the proxy form or it iscast by the person chairing the meeting as proxy for a person who is entitled tovote, in accordance with a direction on the proxy form to vote as the proxydecides. Resolution 9 - Grant of options to Director - Mr Valentine Chitalu To consider and if thought fit, to pass, with or without amendment, thefollowing resolution as an ordinary resolution: "That, for the purposes of Listing Rule 10.11 of the Listing Rules of ASXLimited and for all relevant purposes, approval is given for the Company togrant 200,000 options to Mr Valentine Chitalu (or his nominee) each exercisableat AUD$2.60 and expiring on or before 20 May 2010 and otherwise on the terms andconditions set out in the Explanatory Memorandum accompanying this Notice." Voting Exclusion - The Company will disregard any votes cast on this Resolutionby Mr Chitalu and any person associated with them. However, the Company need notdisregard a vote if it is cast by a person as proxy for a person who is entitledto vote, in accordance with the directions on the proxy form or it is cast bythe 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. Resolution 10 - Grant of options to Director - Mr Paul Chapman To consider and if thought fit, to pass, with or without amendment, thefollowing resolution as an ordinary resolution: "That, for the purposes of Listing Rule 10.11 of the Listing Rules of ASXLimited and for all relevant purposes, approval is given for the Company togrant 200,000 options to Mr Paul Chapman (or his nominee) each exercisable atAUD$2.60 and expiring on or before 20 May 2010 and otherwise on the terms andconditions set out in the Explanatory Memorandum accompanying this Notice." Voting Exclusion - The Company will disregard any votes cast on this Resolutionby Mr Chapman and any person associated with them. However, the Company need notdisregard a vote if it is cast by a person as proxy for a person who is entitledto vote, in accordance with the directions on the proxy form or it is cast bythe 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. Resolution 11 - Approve Directors' Remuneration To consider and if thought fit, to pass, with or without amendment, thefollowing resolution as an ordinary resolution: "That in accordance with article 12.5 of the Company's Articles of Associationthe aggregate remuneration of the non-executive directors be payable beincreased from AUD$250,000 up to $350,000 per annum in total to be dividedamongst the non-executive directors in such proportion and manner as thedirectors may determine." Voting Exclusion - The Company will disregard any votes cast on this Resolutionby any Directors and any person associated with them if the resolution is passedand an associate of that person. However, the Company need not disregard a voteif it is cast by a person as proxy for a person who is entitled to vote, inaccordance with the directions on the proxy form or it is cast by the personchairing the meeting as proxy for a person who is entitled to vote, inaccordance with a direction on the proxy form to vote as the proxy decides. Other business To deal with any other business which may be brought forward in accordance withthe Company's Articles of Association and any relevant legislation. BY ORDER OF THE BOARD Nicholas Day Company Secretary and Chief Financial Officer Proxies Registered Shareholders for the Company only can vote at the meeting eitherpersonally or by proxy, attorney or representative. A Shareholder entitled toattend and vote at the above meeting may appoint not more than two proxies toattend and vote at this meeting. Where more than one proxy is appointed, eachproxy must be appointed to represent a specified proportion of the Shareholder'svoting rights. A proxy may but need not be a shareholder of the Company. Theinstrument appointing of a proxy must be in writing, executed by the appointoror his/her attorney duly authorised in writing or, if such appointer is acorporation, either under seal or under hand of an officer or his/her attorneyduly authorised. The instrument of proxy (and the power of attorney or otherauthority, if any, under which it is signed) must be lodged by person, post,courier or facsimile and reach the Registered office of the Company not laterthan 11:30 am Western Australian Standard Time on 22 May 2007. For theconvenience of shareholders a Proxy Form is enclosed with notices sent toShareholders. A shareholder that is a corporation may elect to appoint a representative inaccordance with the Articles of Association in which case the Company willrequire written proof of the representative's appointment which must be lodgedwith, or presented to the Company not later than 11:30am Western AustralianStandard Time on 22 May 2007. CHESS Depositary Interests Holders of CHESS Depositary Interests ("CDI") are invited to attend the meetingbut are not entitled to vote at the meeting. In order to have votes cast at theMeeting on their behalf, CDI holders must complete, sign and return the CDINotice of Direction enclosed with the Notice sent to them to ComputershareInvestor Services Pty Limited, Level 2, 45 St Georges Terrace, Perth, WA 6000,Australia or GPO Box D182, Perth WA 6840, Australia so that CDI holders candirect CHESS Depositary Nominees Pty Ltd ("CDN") to vote the underlying shareson their behalf. The CDI Notice of Direction needs to be received at the addressshown on the form by not later than 11:30am Western Australian Standard Time on22 May 2007. CREST Depositary Interests Holders of CREST Depositary Interests ("CRDI") are invited to attend the meetingbut are not entitled to vote at the meeting. In order to have votes cast at theMeeting on their behalf, CRDI holders must complete, sign and return theinstruction form enclosed with the Notice sent to them to Computershare InvestorServices PLC, PO BOX 82, The Pavilions, Bridgewater Road, Bristol BS99 7NH sothat CRDI holders can direct Computershare Company Nominees Limited ("CCN") tovote the underlying shares on their behalf. The Instruction Form needs to bereceived at the address shown on the form by not later than 11:30am WesternAustralian Standard Time (being 4:30 am London Time) on 22 May 2007. ALBIDON LIMITED ARBN 107 288 755 EXPLANATORY MEMORANDUM This Explanatory Memorandum has been prepared for the Shareholders of AlbidonLimited ("Albidon" or "Company") in connection with the business to be conductedat the Annual General Meeting of the Company to be held at King Street Room,Rydges Perth Hotel, Cnr King & Hay St, Perth, Western Australia on Thursday, 24May 2007 commencing at 11:30am (WST). This Explanatory Memorandum should be read in conjunction with the accompanyingNotice of Annual General Meeting. The Directors recommend that Shareholders read this Explanatory Memorandumbefore determining whether or not to support the Resolutions. THE RESOLUTIONS RESOLUTION 1 - RE-ELECTION OF MR RICHARD POTTS AS A DIRECTOR Resolution 1 seeks approval for the re-election of Mr Richard Potts as aDirector with effect from the end of the meeting. Article 12.2 of the Company's Articles of Association provides that at eachAnnual General Meeting one-third of the Directors (or if their number is not amultiple of three, then such number as is appropriate to ensure that no Directorother than alternate Directors and the Managing Director holds office for morethan three years) shall retire from office. Mr Potts retires from office in accordance with this requirement and submitshimself for re-election. Mr Potts has served as a non-executive Director of theCompany and will continue to do so up to the date of the Meeting. On hisre-election to the Board under Resolution 1, he will continue as a non-executiveDirector. Directors' Recommendation Mr Potts declined to make a recommendation about the proposed resolution becausehe has an interest in its outcome. Michael Brook, Dale Rogers, Donal Windrim,Alasdair Cooke, Christopher de Guingand, Valentine Chitalu, Paul Chapman andCraig Burton recommend that Mr Potts be re-elected to the Board. RESOLUTION 2 - RE-ELECTION OF MR ALASDAIR COOKE AS A DIRECTOR Resolution 2 seeks approval for the re-election of Mr Alasdair Cooke as aDirector with effect from the end of the meeting. Mr Cooke retires from office in accordance with Article 12.2 of the Company'sArticles of Association (outlined in the explanation of Resolution 1 above) andsubmits himself for re-election. Mr Cooke has served as an executive Director ofthe Company and will continue to do so up to the date of the Meeting. Witheffect from his re-election to the Board under Resolution 2, he will continue asan executive Director. Directors' Recommendation Mr Cooke declined to make a recommendation about the proposed resolution becausehe has an interest in its outcome. Richard Potts, Dale Rogers, Donal Windrim,Craig Burton, Christopher De Guingand, Valentine Chitalu, Paul Chapman andMichael Brook recommend that Mr Cooke be re-elected to the Board. RESOLUTION 3 - RE-ELECTION OF MR VALENTINE CHITALU AS A DIRECTOR Resolution 3 seeks approval for the re-election of Mr Valentine Chitalu as aDirector with effect from the end of the meeting. Valentine Chitalu (42 yrs old) MPhil, BAcc, FACCA Mr Chitalu is a Zambian with a 17-year career in the fields of private equity,privatisation, merchant banking, corporate finance, accounting, auditing,development economics, capital markets and business development in transitionaleconomies. He has previously held positions with CDC Capital Partners, ZambiaPrivatisation Agency and KPMG Peat Marwick. Mr Chitalu has a significant interest in private sector development in Zambiaand is extensively networked in the region. He has been Chairman of Albidon'swholly owned subsidiary Albidon Zambia Limited since 2005. Mr Chitalu takes onthe position of non-executive director. Mr Chitalu was appointed a director of the Company on 17 April 2007 and retiresfrom office and submits himself for re-election in accordance with Article 12.5of the Company's Articles of Association which requires newly appointeddirectors to seek re-election at the next AGM following their appointment. MrChitalu has served as a non-executive Director of the Company and will continueto do so up to the date of the Meeting. With effect from his re-election to theBoard under Resolution 3, he will continue as a non-executive Director. Directors' Recommendation Mr Chitalu declined to make a recommendation about the proposed resolutionbecause he has an interest in its outcome. Richard Potts, Dale Rogers, DonalWindrim, Craig Burton, Christopher De Guingand, Alasdair Cooke, Paul Chapman andMichael Brook recommend that Mr Chitalu be re-elected to the Board. RESOLUTION 4 - RE-ELECTION OF MR PAUL CHAPMAN AS A DIRECTOR Resolution 4 seeks approval for the re-election of Mr Paul Chapman as a Directorwith effect from the end of the meeting. Paul Chapman (48 yrs old) BCom, CA Mr Chapman is a chartered accountant and has over twenty years resource industryexperience gained in Australia and the US. He has worked in a number ofcommodity businesses including gold, nickel, manganese, bauxite/alumina and oil/gas. Mr Chapman has held senior management roles in public companies of various sizesand is Chairman of ASX listed uranium explorer Encounter Resources Ltd. Hismain focus will be on commercial management and business development. Mr Chapman was appointed a director of the Company on 17 April 2007 and retiresfrom office and submits himself for re-election in accordance with Article 12.5of the Company's Articles of Association (outlined in the discussion ofResolution 3 above). Mr Chapman has served as an executive Director of theCompany and will continue to do so up to the date of the Meeting. With effectfrom his re-election to the Board under Resolution 4, he will continue as anexecutive Director. Directors' Recommendation Mr Chapman declined to make a recommendation about the proposed resolutionbecause he has an interest in its outcome. Richard Potts, Dale Rogers, DonalWindrim, Craig Burton, Christopher De Guingand, Alasdair Cooke, ValentineChitalu and Mike Brook recommend that Mr Chapman be re-elected to the Board. RESOLUTION 5 - RATIFYING THE ISSUE OF 4,190,992 SHARES The Company previously announced on 12 April 2007 the placement of 4,190,992Shares at an issue price of AUD$1.55 to the Jinchuan Group Limited ("Jinchuan")to raise US$5 million. This placement was part of the offtake agreement between Jinchuan and theCompany for nickel, copper, cobalt and PGM concentrates from the Munali Projectbeing constructed in Zambia. The placement price reflects the 45 day volumeweighted average price leading up to the execution of the offtake agreement withJinchuan in December, 2006. Approvals Required Under Chapter 7 of the ASX Listing Rules, there are limitations on the capacityof the Company to enlarge its capital by the issue of equity securities. ASX Listing Rule 7.1 provides generally that a company may not issue shares oroptions to subscribe for shares equal to more than 15% of the company's issuedshare capital in any 12 months without obtaining shareholder approval. Listing Rule 7.4 enables shareholders to ratify previous issues by the Companyin order to refresh the Company's ability to issue 15% of its issued capitalunder Listing Rule 7.1. This will leave the Company with the flexibility toissue equity securities in the future up to the 15% threshold. Under this resolution, the Company seeks from Shareholders approval for, andratification of, the issues of securities set out below so as to limit therestrictive effect of ASX Listing Rule 7.1 on any further issues of securitiesin the next 12 months. All Shares were issued on 12 April 2007 at an issue price of $1.55 each to theJinchuan Group Limited. The issued Shares are fully paid ordinary shares in the Company and rank equallywith the existing Shares in the Company. The funds raised will be used to assistin the purchase of equipment, construction of the Munali Nickel Project anddevelopment of the mine. The Board believes that the ratification of this issueis beneficial for the Company. Directors' Recommendation The Board recommends Shareholders vote in favour of this resolution as it allowsthe Company to ratify the above issue of Shares and retain the flexibility toissue further equity securities representing up to 15% of the Company's sharecapital during the next 12 months. RESOLUTION 6 - ISSUE OF OPTIONS TO KEY PERSONNEL On 1 December 2006 the Board resolved subject to Shareholder Approval to issueincentive options to the following key personnel in accordance with servicesagreements: Shaun Vokes Commercial Manager Australia 50,000Davies Simbaya Financial Controller Zambia 50,000Eamon Byrne Financial Controller 50,000 The options are exercisable at AUD$1.70 on or before 1 December 2009 andotherwise on the terms set out in Appendix A to this Explanatory Memorandum.Each option entitles the holder to subscribe for one Share on payment of theexercise price. Approvals Required Under this resolution, the Company seeks from Shareholders approval for, theissues of securities set out below so as to limit the restrictive effect of ASXListing Rule 7.1 on any further issues of securities in the next 12 months. For the purposes of Listing Rule 7.1, the following information is provided toshareholders: a) The maximum number of options to be granted is 150,000; b) the options will be granted for nil consideration and therefore no funds will be raised from the grant of the options; c) The options will be issued within 3 months of the date of shareholder approval, The options may be allotted progressively. The Company may not necessarily issue the full complement of options and may issue a lesser number. d) The options will be granted as part remuneration pursuant to services agreements; e) The terms and conditions of the options granted are set out in Appendix A to this Explanatory Memorandum; and f) The allottees will be Shaun Vokes (or his nominee) (50,000), Davies Simbaya (or his nominee) (50,000) and Eamon Byrne (or his nominee) (50,000). Directors' Recommendation The issue of these options is keeping with the principles of the Company'sremuneration policy and further preserves the cash resources of the Companyduring its forthcoming project development phase, and at the same time providesan added incentive for key personnel to provide dedicated and ongoing commitmentto the Company. The Board recommends Shareholders vote in favour of thisresolution as it allows the Company to retain the flexibility to issue furtherequity securities representing up to 15% of the Company's share capital duringthe next 12 months. RESOLUTION 7 - ISSUE OF SHARES TO MANAGING DIRECTOR This resolution was passed by Shareholders on 31 May 2006. The resolution isrequired to be passed again as the shares the subject of Resolution 7 were notissued within the one month time limit under the ASX Listing Rules of thepassing of the original resolution. Listing Rule 10.11 Listing Rule 10.11 requires a listed company to obtain shareholder approval byordinary resolution prior to the issue of securities to a related party of theCompany. If this Resolution is passed the Shares will be issued to Mr Rogers,who is a related party of the Company by virtue of him being a Director.Accordingly, approval for the issue of the Shares to Mr Rogers is requiredpursuant to Listing Rule 10.11. Approval pursuant to Listing Rule 7.1 is notrequired in order to issue the Shares to Mr Rogers as approval is being obtainedunder Listing Rule 10.11. Shareholders should note that the issue of the Sharesto Mr Rogers with approval under Listing Rule 10.11 will not be included in the15% calculation for the purposes of Listing Rule 7.1. Listing Rule 10.13 sets out a number of matters which must be included in anotice of meeting proposing an approval under Listing Rule 10.11. For thepurposes of Listing Rule 10.13, the following information is provided toshareholders: a) the number of Shares to be issued by the Company is 400,000; b) the Shares will be issued to Mr Rogers; c) the Shares will be issued for consideration of AUD$0.75 per share; d) the Shares will be issued within one month of the date of the meeting or at such time as approved by ASX by way of waiver from the ASX Listing Rules; e) the funds raised from the issue of the Shares will be used to assist in the purchase of equipment, construction of the Munali Nickel Project and development of the mine; and f) the shares will be fully paid ordinary shares, which will, from the date of their allotment, rank pari passu in all respects with all other fully paid ordinary shares in the Company on issue. Recommendation All Directors (excluding Mr Rogers) recommend that shareholders vote in favourof the Resolution as they are of the view that the grant of the Shares to MrRogers adds to and preserves the cash resources of the Company during itsforthcoming project development phase, and at the same time provides an addedincentive to create shareholder wealth. In connection with Mr Rogers'appointment as Managing Director it was agreed the Company would give him theopportunity, if he desired, to subscribe for 400,000 Shares. The Company'sshare price on the date of Mr Rogers' appointment (1 December 2005) wasAUD$0.65. The Remuneration Committee subsequently approved this sharesubscription at a price of AUD$0.75 each (the share price was then AUD$0.825)subject to Mr Rogers' commitment that he would personally subscribe for theshares and approval of shareholders being obtained at the Annual GeneralMeeting. Mr Rogers has confirmed he will personally subscribe for the shares ifshareholders approval is obtained. This share subscription represents asubstantial financial commitment by Mr Rogers to the Company which is consideredto be in the interests of the Company. Mr Rogers declined to make arecommendation in relation to the Resolution due to the fact that he has amaterial personal interest in its outcome. If shareholders approve the issue of Shares to Mr Rogers, the effect will be todilute the shareholding of existing shareholders by approximately 0.26% on anundiluted basis and based on the number of Shares on issue as at the date ofthis Notice. The potential effect that this Resolution could have on the capitalstructure of the Company is summarised below: Event Shares OptionsCurrent 153,708,992 4,215,000Post Issue of Shares to Mr Rogers * 154,108,992 5,815,000 * includes the effect of the passing of resolutions 6, 8, 9 & 10 RESOLUTION 8 - GRANT OF OPTIONS TO MANAGING DIRECTOR As announced on 27 February 2007, the Board proposes to grant 1,200,000 unlistedoptions to the Managing Director, Mr Dale Rogers. The options are exercisable atAUD$2.10 each on or before 27 February 2010 and are otherwise granted on theterms set out in Appendix B to this Explanatory Memorandum. This Resolutionseeks shareholder approval for the grant of these options. The ASX Listing Rulesset out a number of regulatory requirements which must be satisfied in relationto this resolution. These are summarised below. Listing Rule 10.11 Listing Rule 10.11 requires a listed company to obtain shareholder approval byordinary resolution prior to the issue of securities (including the grant ofoptions) to a related party of the Company. If this Resolution is passed theoptions will be granted to Mr Rogers, who is a related party of the Company byvirtue of him being a Director. Accordingly, approval for the grant of theoptions to Mr Rogers is required pursuant to Listing Rule 10.11. Approvalpursuant to Listing Rule 7.1 is not required in order to grant the options to MrRogers as approval is being obtained under Listing Rule 10.11. Shareholdersshould note that the grant of the options to Mr Rogers with approval underListing Rule 10.11 will not be included in the 15% calculation for the purposesof Listing Rule 7.1. Listing Rule 10.13 sets out a number of matters which must be included in anotice of meeting proposing an approval under Listing Rule 10.11. For thepurposes of Listing Rule 10.13, the following information is provided toshareholders: a) the number of options to be granted by the Company is 1,200,000 to Mr Rogers (or his nominee); b) the options will be granted for nil consideration and therefore no funds will be raised from the grant of the options; c) the options will be granted within one month of the date of the meeting or at such later time approved by ASX by way of waiver to the ASX Listing Rules; d) the purpose of the grant of the options is to give Mr Rogers an incentive to provide dedicated and ongoing commitment to the Company and to preserve the Company's cash funds; e) the options are exercisable at AUD$2.10 each on or before 27 February 2010 (provided that unless the Company agrees otherwise the unvested options will lapse after Mr Rogers ceases to be an employee of the Company) and otherwise on the terms and conditions set out in Appendix B of this Explanatory Memorandum; and f) The options are only exercisable and vest upon and subject to the following milestones being achieved: 1. 200,000 to vest on continued employment up to 31 December 2007; 2. 200,000 to vest on continued employment up to 31 December 2008; 3. 200,000 to vest on continued employment up to 31 December 2009; 4. 200,000 to vest on the Mechanical Completion where it occurs on orprior to 31 July 2008; 5. 200,000 to vest on the occurrence of Mechanical Completion where it ison budget (within 5% of budgeted development costs for the 2007 and 2008 AnnualBudgets); and 6. 200,000 to vest on the occurrence of Economic Completion where itoccurs on or prior to by 30 June 2009. The Board may waive a milestone or extend the timeline in the event of forcemajeure or at the discretion of the Board if considered reasonable in thecircumstances. "Mechanical Completion" means the passing of the Mechanical Completion test forthe Munali Project as verified by the Company's senior lenders. "Economic Completion" means the passing of the Economic Completion test for theMunali Project as verified by the Company's senior lenders. Recommendation All Directors (excluding Mr Rogers) recommend that shareholders vote in favourof the Resolution as they are of the view that the grant of the options to MrRogers preserves the cash resources of the Company during its forthcomingproject development phase, and at the same time provides an added incentive tocreate shareholder wealth. Mr Rogers declined to make a recommendation inrelation to the Resolution due to the fact that he has a material personalinterest in its outcome. If shareholders approve the grant of options to Mr Rogers, and all of theoptions are exercised, the effect will be to dilute the shareholding of existingshareholders by approximately 0.77% on an undiluted basis and based on thenumber of Shares on issue as at the date of this Notice. The market price forShares during the term of the options would normally determine whether or not MrRogers exercises the options. If, at the time any of the options are exercised,the Shares are trading on ASX or AIM at a price that is higher than the exerciseprice of the options, there may be a perceived cost to the Company. In the 6months before the date of this Notice, the highest, lowest and last tradingprice of Shares on ASX are as set out below: Date Price AUD$Highest 29 March 2007 2.77Lowest 16 October 2006 1.24Last 26 April 2007 2.53 a) The value of the options has been calculated internally by the Companyusing the Binomial pricing model and is set out below; and b) The existing direct holdings of Mr Rogers in the Company are as follows: Shares OptionsMr Rogers 450,000 * 1,200,000 *Assumes Resolution 7 is approved c) Under IFRS, the Company is required to expense the value of the optionsin its statement of financial performance for the current financial year. Otherthan as set out in this Notice and Explanatory Memorandum the Company considersthat from an economic and commercial point of view there are not any costs ordetriments, including opportunity costs or taxation consequences, for theCompany or benefits foregone by the Company resulting from the grant of theoptions pursuant to this Resolution. Valuation of options The options have been valued using the Binomial pricing model and based upon thefollowing assumptions: (a) the options expire 27 February 2010 and are all exercisable at AUD$2.10per Share; (b) the market trading price of the Shares at the time the Company agreed toissue the options, being 26 February 2007, was AUD$2.16; (c) a common volatility factor of 50%; (d) an interest rate of 6.22% (3yr Government bond rate); (e) the valuation ascribed to the options may not necessarily represent themarket price of the options at the date of the valuation; and (f) the valuation date for the options is 19 April 2007. Based on the above, the options have been valued at AUD$0.778 each. Thisequates to a total value of $933,600 for the options proposed to be granted toMr Rogers. Potential Effect of this Resolution on Capital Structure The potential effect that this Resolution could have on the capital structure ofthe Company is summarised below: Event Shares OptionsCurrent 153,708,992 4,215,000* Post Issue of options to Mr Rogers 154,108,992 5,815,000 * includes the effect of the passing of resolutions 6, 7, 9 and 10 RESOLUTIONS 9 AND 10 - ISSUE OF OPTIONS TO DIRECTORS As announced to the market on 23 April 2007 subject to obtaining shareholderapproval, the Board has resolved to grant Mr Valentine Chitalu (or his nominee)200,000 options and Mr Paul Chapman (or his nominee) 200,000 options, eachexercisable at AUD$2.60 and otherwise on the terms set out in Appendix C to thisExplanatory Memorandum. Each option entitles the holder to subscribe for oneShare on payment of the exercise price before 20 May 2010. These Resolutionsseek shareholder approval for the grant of these options. The ASX Listing Rules set out a number of regulatory requirements which must besatisfied in relation to this Resolution. These are summarised below. ASX Listing Rule 10.11 Listing Rule 10.11 requires a listed company to obtain shareholder approval byordinary resolution prior to the issue of securities (including the grant ofoptions) to a related party of the Company. If this Resolution is passed theoptions will be granted to Messrs Chitalu and Chapman, who are related partiesof the Company by virtue of them being Directors. Accordingly, approval for thegrant of the options to Messrs Chitalu and Chapman is required pursuant toListing Rule 10.11. Approval pursuant to Listing Rule 7.1 is not required inorder to grant the options Messrs Chitalu and Chapman as approval is beingobtained under Listing Rule 10.11. Shareholders should note that the grant ofthe options to Messrs Chitalu and Chapman with approval under Listing Rule 10.11will not be included in the 15% calculation for the purposes of Listing Rule7.1. Listing Rule 10.13 sets out a number of matters which must be included in anotice of meeting proposing an approval under Listing Rule 10.11. For thepurposes of Listing Rule 10.13, the following information is provided toshareholders: a) the number of options to be granted by the Company is 200,000 to MrChitalu (Resolution 9) and 200,000 to Mr Chapman (Resolution 10) (or theirnominees); b) the options will be granted for nil consideration and therefore no fundswill be raised from the grant of the options; c) the options will be granted within one month of the date of the meetingor at such later time approved by ASX by way of waiver to the ASX Listing Rules; d) the purpose of the grant of the options is to give Messrs Chitalu andChapman an incentive to provide dedicated and ongoing commitment to the Companyand to preserve the Company's cash funds; and e) the options are exercisable at AUD$2.60 each on or before 20 May 2010(provided that unless the Company agrees otherwise the unvested options willlapse after Messrs Chitalu or Chapman cease to be employees of the Company) andotherwise on the terms and conditions set out in Appendix C of this ExplanatoryMemorandum; and f) The options are only exercisable and vest upon and subject to thefollowing milestones being achieved: (i) 66,666 to vest on continued employment up to 20 February 2008; (ii) 66,667 to vest on continued employment up to 20 February 2009; and (iii) 66,667 to vest on continued employment up to 20 February 2010. Recommendation All Directors (excluding Messrs Chitalu and Chapman) recommend that shareholdersvote in favour of the Resolutions as they are of the view that the grant of theoptions to Messrs Chitalu and Chapman preserves the cash resources of theCompany during its forthcoming project development phase, and at the same timeprovides an added incentive to create shareholder wealth. Messrs Chitalu andChapman declined to make a recommendation in relation to the Resolutions due tothe fact that they have a material personal interest in their outcome. If shareholders approve the grant of options to Messrs Chitalu and Chapman, andall of the options are exercised, the effect will be to dilute the shareholdingof existing shareholders by approximately 0.26% on an undiluted basis and basedon the number of Shares on issue as at the date of this Notice. The market pricefor Shares during the term of the options would normally determine whether ornot Messrs Chitalu and Chapman exercise the options. If, at the time any of theoptions are exercised, the Shares are trading on ASX or AIM at a price that ishigher than the exercise price of the options, there may be a perceived cost tothe Company. In the 6 months before the date of this Notice, the highest, lowestand last trading price of Shares on ASX are as set out below: Date Price AUD$Highest 29 March 2007 2.77Lowest 16 October 2006 1.24Last 26 April 2007 2.53 (a) The value of the options has been calculated internally by the Companyusing the Binomial pricing model and is set out below; and (b) The existing direct holdings of Messrs Chitalu and Chapman in the Companyare as follows: Shares OptionsMr Chitalu nil 250,000Mr Chapman nil nil (c) Under IFRS, the Company is required to expense the value of the optionsin its statement of financial performance for the current financial year. Otherthan as set out in this Notice and Explanatory Memorandum the Company considersthat from an economic and commercial point of view there are not any costs ordetriments, including opportunity costs or taxation consequences, for theCompany or benefits foregone by the Company resulting from the grant of theoptions pursuant to this Resolution. Valuation of options The options have been valued using the Binomial pricing model and based upon thefollowing assumptions: a) the options expire 20 May 2010 and are all exercisable at AUD$2.60 perShare; b) the market trading price of the Shares at the time the Company agreed toissue the options, being 19 April 2007, was AUD$2.41; c) a common volatility factor of 50%; d) an interest rate of 6.22% (3yr Government bond rate); e) the valuation ascribed to the options may not necessarily represent themarket price of the options at the date of the valuation; and f) the valuation date for the options is 19 April 2007. Based on the above, the options have been valued at AUD$0.662 each. Thisequates to a total value of $132,400 each for the options proposed to be grantedto Messrs Chitalu and Chapman. Potential Effect of this Resolution on Capital Structure The potential effect that this Resolution could have on the capital structure ofthe Company is summarised below: Event Shares OptionsCurrent 153,708,992 4,215,000Post Issue of options to Messrs Chitalu and 154,108,992 5,815,000Chapman * includes the effect of the passing of resolutions 6, 7 & 8. GLOSSARY OF TERMS In this Explanatory Memorandum the following expressions have the followingmeanings: "Albidon" or "Company" means Albidon Limited. "Board" means the board of Directors. "Directors" means the directors of Albidon from time to time. "Explanatory Memorandum" means this Explanatory Memorandum. "Meeting" means the general meeting of shareholders of Albidon convened by this Notice. "Notice" or "Notice of Meeting" means the notice of annual general meeting that accompanies this Explanatory Memorandum. "Resolution" means a resolution referred to in the Notice of Meeting. "Share" means a fully paid ordinary share in the capital of Albidon. "Shareholder" means the holder of a Share. "WST" means Western Australian Standard Time. Appendix A - Terms of Key Personnel Options The material terms and conditions of the options are as follows: (i) Each option entitles the holder to subscribe for one Share in Albidon Limited.(ii) Application will not be made for Official Quotation or AIM Admission of the options. (iii) The options are issued in accordance with the vesting terms in (v) below and are exercisable on or before 5pm (Australian WST) on 1 December 2009 ("Expiry Date") by completing an option exercise form and delivering it to Albidon's registered office with the exercise monies. (iv) The option exercise price is AUD$1.70 per Share. (v) Subject to paragraph (xi), the Options are only exercisable and vest upon and subject to the following milestones being achieved: a) 50% to vest on continued employment up to 1 December 2007; and b) balance to vest on continued employment up to 1 December 2008. (vi) The options are not transferable, without prior approval of the Board. (vii) If the option holder ceases to be either an employee or consultant of the Company for any reason then any unexercised options will automatically lapse on the date that is 21 days after that occurring. Any unvested options lapse immediately following termination of employment of by the option holder. (viii) All Shares issued upon exercise of the options will rank equally in all respects with Albidon then issued Shares. If applicable, Albidon will apply for quotation of the Shares on a Stock Exchange within 3 business days of all Shares issued upon exercise of the options. (ix) There are no participating rights or entitlements inherent in the options and holders will not be entitled to participate in new issues of capital offered to shareholders during the currency of the options. However, Albidon will ensure that for the purposes of determining entitlements to any such issue option holders will be given reasonable opportunity to exercise their options prior to the date for determining entitlements to participate in any such issue. (x) There will be no change to the exercise price of the options or the number of Shares over which the options are exercisable in the event of Albidon making a pro-rata issue of Shares or other securities to the holders of Shares in Albidon (other than a Bonus Issue as defined in paragraph (xi) below). (xi) If there is a bonus issue ("Bonus Issue") to the holders of Shares in Albidon, the number of Shares over which the options are exercisable will be increased by the number of Shares which the holder would have received if the options had been exercised before the record date for the Bonus Issue ("Bonus Shares"). The Bonus Shares must be paid up by Albidon out of profits or reserves (as the case may be) in the same manner as was applied in the Bonus Issue and upon issue rank equally in all respects with the other shares of the class on issue as at the date of issue of the Bonus Shares. (xii) In the event of a reconstruction (including consolidation, subdivision, return, reduction or pro rata cancellation) of the issued capital of Albidon prior to the Expiry Date, the number of options to which each holder is entitled or the exercise price of the options or both shall be reconstructed (as appropriate) in accordance with the requirements of the ASX Listing Rules which apply at that time. (xiii) The Company will at least 20 Business Days before the Expiry Date of the options send notices to the option holders stating the name of the option holder, the number of options held and the number of Shares to be issued on exercise of the options, the exercise price, the due date for payment and the consequences of non-payment. (xiv) All Options will vest and may be exercised: (i) within two months after a Change of Control Event has occurred; or (ii)following the triggering of a Mandatory Offer or receipt of a Voluntary Offer. For the purposes of this clause: "Change of Control Event" means a shareholder, or a group of associatedshareholders, becoming entitled to sufficient shares in the Company to give itor them the ability, and that ability is successfully exercised, in generalmeeting, to replace all or a majority of the Board. "Mandatory Offer" as defined by the Clause 11.7 (c)(i) of the Company's Articlesof Association. "Voluntary Offer" as defined by the Clause 11.7 (c)(ii) of the Company'sArticles of Association. Appendix B - Terms of Managing Director Options The material terms and conditions of the options are as follows: (i) Each option entitles the holder to subscribe for one Share in Albidon Limited. (ii) Application will not be made for Official Quotation or AIM Admission of the options. (iii) The options are issued in accordance with the vesting terms in (v) below and are exercisable on or before 5pm (Australian WST) on 27 February 2010 ("Expiry Date") by completing an option exercise form and delivering it to Albidon's registered office with the exercise monies. (iv) The option exercise price is AUD$2.10 per Share. (v) Subject to paragraph (xiv), the Options are only exercisable and vest upon and subject to the following milestones being achieved: a) 200,000 to vest on continued employment by Mr Dale Clark Rogers up to 31 December 2007; b) 200,000 to vest on continued employment by Mr Dale Clark Rogers up to 31 December 2008; c) 200,000 to vest on continued employment by Mr Dale Clark Rogers up to 31 December 2009; d) 200,000 to vest on the Mechanical Completion where it occurs on or prior to 31 July 2008; e) 200,000 to vest on the occurrence of Mechanical Completion where it is on budget (within 5% of budgeted development costs for the 2007 and 2008 Annual Budgets); and f) 200,000 to vest on the occurrence of Economic Completion where it occurs on or prior to by 30 June 2009. The Board may waive a milestone or extend the timeline in the event of forcemajeure or at the discretion of the Board if considered reasonable in thecircumstances. "Mechanical Completion" means the passing of the Mechanical Completion test forthe Munali Project as verified by the Company's senior lenders. "Economic Completion" means the passing of the Economic Completion test for theMunali Project as verified by the Company's senior lenders. (vi) The options are not transferable, without prior approval of the Board. (vii) If the Mr Dale Clark Rogers ceases to be either an employee or consultant of the Company for any reason then any unexercised options will automatically lapse on the date that is 21 days after that occurring. Any unvested options lapse immediately following termination of employment of by Mr Dale Clark Rogers. (viii) All Shares issued upon exercise of the options will rank equally in all respects with Albidon then issued Shares. If applicable, Albidon will apply for quotation of the Shares on a Stock Exchange within 3 business days of all Shares issued upon exercise of the options. (ix) There are no participating rights or entitlements inherent in the options and holders will not be entitled to participate in new issues of capital offered to shareholders during the currency of the options. However, Albidon will ensure that for the purposes of determining entitlements to any such issue, option holders will be given reasonable the opportunity to exercise their options prior to the date for determining entitlements to participate in any such issue. (x) There will be no change to the exercise price of the options or the number of Shares over which the options are exercisable in the event of Albidon making a pro-rata issue of Shares or other securities to the holders of Shares in Albidon (other than a Bonus Issue as defined in paragraph (xi) below). (xi) If there is a bonus issue ("Bonus Issue") to the holders of Shares in Albidon, the number of Shares over which the options are exercisable will be increased by the number of Shares which the holder would have received if the options had been exercised before the record date for the Bonus Issue ("Bonus Shares"). The Bonus Shares must be paid up by Albidon out of profits or reserves (as the case may be) in the same manner as was applied in the Bonus Issue and upon issue rank equally in all respects with the other shares of the class on issue as at the date of issue of the Bonus Shares. (xii) In the event of a reconstruction (including consolidation, subdivision, return, reduction or pro rata cancellation) of the issued capital of Albidon prior to the Expiry Date, the number of options to which each holder is entitled or the exercise price of the options or both shall be reconstructed (as appropriate) in accordance with the requirements of the ASX Listing Rules which apply at that time. (xiii) The Company will at least 20 Business Days before the Expiry Date of the options send notices to the option holders stating the name of the option holder, the number of options held and the number of Shares to be issued on exercise of the options, the exercise price, the due date for payment and the consequencs of non-payment. (xiv) All Options will vest and may be exercised: (i) within two months after a Change of Control Event has occurred; or (ii) following the triggering of a Mandatory Offer or receipt of a Voluntary Offer. For the purposes of this clause: "Change of Control Event" means a shareholder, or a group of associatedshareholders, becoming entitled to sufficient shares in the Company to give itor them the ability, and that ability is successfully exercised, in generalmeeting, to replace all or a majority of the Board. "Mandatory Offer" as defined by the Clause 11.7 (c)(i) of the Company's Articlesof Association. "Voluntary Offer" as defined by the Clause 11.7 (c)(ii) of the Company'sArticles of Association. Appendix C - Terms of Options The material terms and conditions of the options are as follows: (i) Each option entitles the holder to subscribe for one Share in Albidon Limited. (ii) Application will not be made for Official Quotation or AIM Admission of the options. (iii) The options are issued in accordance with the vesting terms in (v) below and are exercisable on or before 5pm (Australian WST) on 20 May 2010 ("Expiry Date") by completing an option exercise form and delivering it to Albidon's registered office with the exercise monies. (iv) The option exercise price is AUD$2.60 per Share. (v) Subject to paragraph (xiv), the Options are only exercisable and vest upon and subject to the following milestones being achieved: a) 66,666 to vest on continued employment up to 20 February 2008; b) 66,667 to vest on continued employment up to 20 February 2009; and c) 66,667 to vest on continued employment by up to 20 February 2010. (vi) The options are not transferable, without prior approval of the Board. (vii) If the option holder ceases to be either an employee or consultant of the Company for any reason then any unexercised options will automatically lapse on the date that is 21 days after that occurring. Any unvested options lapse immediately following termination of employment of by the option holder. (viii) All Shares issued upon exercise of the options will rank equally in all respects with Albidon then issued Shares. If applicable, Albidon will apply for quotation of the Shares on a Stock Exchange within 3 business days of all Shares issued upon exercise of the options. (ix) There are no participating rights or entitlements inherent in the options and holders will not be entitled to participate in new issues of capital offered to shareholders during the currency of the options. However, Albidon will ensure that for the purposes of determining entitlements to any such issue, option holders will be given reasonable the opportunity to exercise their options prior to the date for determining entitlements to participate in any such issue. (x) There will be no change to the exercise price of the options or the number of Shares over which the options are exercisable in the event of Albidon making a pro-rata issue of Shares or other securities to the holders of Shares in Albidon (other than a Bonus Issue as defined in paragraph (xi) below). (xi) If there is a bonus issue ("Bonus Issue") to the holders of Shares in Albidon, the number of Shares over which the options are exercisable will be increased by the number of Shares which the holder would have received if the options had been exercised before the record date for the Bonus Issue ("Bonus Shares"). The Bonus Shares must be paid up by Albidon out of profits or reserves (as the case may be) in the same manner as was applied in the Bonus Issue and upon issue rank equally in all respects with the other shares of the class on issue as at the date of issue of the Bonus Shares. (xii) In the event of a reconstruction (including consolidation, subdivision, return, reduction or pro rata cancellation) of the issued capital of Albidon prior to the Expiry Date, the number of options to which each holder is entitled or the exercise price of the options or both shall be reconstructed (as appropriate) in accordance with the requirements of the ASX Listing Rules which apply at that time. (xiii) The Company will at least 20 Business Days before the Expiry Date of the options send notices to the option holders stating the name of the option holder, the number of options held and the number of Shares to be issued on exercise of the options, the exercise price, the due date for payment and the consequences of non-payment. (xiv) All Options will vest and may be exercised: (i) within two months after a Change of Control Event has occurred; or (ii) following the triggering of a Mandatory Offer or receipt of a voluntary Offer. For the purposes of this clause: "Change of Control Event" means a shareholder, or a group of associatedshareholders, becoming entitled to sufficient shares in the Company to give itor them the ability, and that ability is successfully exercised, in generalmeeting, to replace all or a majority of the Board. "Mandatory Offer" as defined by the Clause 11.7 (c)(i) of the Company's Articlesof Association. "Voluntary Offer" as defined by the Clause 11.7 (c)(ii) of the Company'sArticles of Association. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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