6th Oct 2010 07:09
OILEX LTD ABN 50 078 652 632 NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS 10 NOVEMBER 2010 AT 4pm AT THE CELTIC CLUB, 48 ORD STREET, WEST PERTH WESTERN AUSTRALIA NOTICE OF ANNUAL GENERAL MEETING Annexure A "Explanatory Memorandum" (attached) should be read in conjunction with this Notice of Meeting.
NOTICE IS HEREBY GIVEN that the Annual General Meeting of Shareholders of Oilex Ltd ABN 50 078 652 632 (Company) will be held at First Floor, The Celtic Club, 48 Ord Street, West Perth, Western Australia on 10 November 2010 at 4pm, to conduct the following business:
BUSINESS OF THE MEETING
Financial and other reports
To receive and consider the financial report, together with the directors' report (including the remuneration report) and the auditor's report for the financial year ended 30 June 2010.
RESOLUTIONS
1. Adoption of Remuneration Report
To consider and, if thought fit, to pass the following resolution as an ordinary resolution:
"That for the purpose of section 250R(2) of the Corporations Act and for all other purposes, the remuneration report for the period ended 30 June 2010 be adopted."
Note: The vote on Resolution 1 will be advisory only and will not bind the Directors or the Company.
2. To Re-elect Mr Raymond Barnes as a Director
To consider and, if thought fit, to pass the following resolution as an ordinary resolution:
"That Mr Raymond Barnes, who retires by rotation as a Director in accordance with the Constitution and, being eligible, offers himself for re-election, be and is hereby re-appointed as a director of the Company."
3. To Re-elect Mr Laxmi Bhandari as a Director
To consider and, if thought fit, to pass the following resolution as an ordinary resolution:
"That Mr Laxmi Bhandari, who retires by rotation as a Director in accordance with the Constitution and, being eligible, offers himself for re-election, be and is hereby re-appointed as a director of the Company."
4. Issue of Options to Director - Mr Max Cozijn or nominee
To consider and, if thought fit, to pass the following resolution as an ordinary resolution:
"That for the purposes of Chapter 2E of the Corporations Act, ASX Listing Rule 10.11 and for all other purposes, Shareholders approve and authorise the allotment and issue of a total of 1,000,000 Options to Mr Max Cozijn or his nominee in accordance with the terms and conditions set out in the Explanatory Memorandum."
Voting exclusion statement: The Company will disregard any votes cast on Resolution 4 by Mr Cozijn or his nominee and by any associate of Mr Cozijn or his nominee.
However, the Company need not disregard a vote on Resolution 4, if:
(a) it 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
(b) it 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.
5. Issue of Options to Director - Dr Bruce McCarthy or nominee
To consider and, if thought fit, to pass the following resolution as an ordinary resolution:
"That for the purposes of Chapter 2E of the Corporations Act, ASX Listing Rule 10.11 and for all other purposes, Shareholders approve and authorise the allotment and issue of a total of 5,000,000 Options to Dr Bruce McCarthy or his nominee in accordance with the terms and conditions set out in the Explanatory Memorandum."
Voting exclusion statement: The Company will disregard any votes cast on Resolution 5 by Dr McCarthy or his nominee and by any associate of Dr McCarthy or his nominee.
However, the Company need not disregard a vote on Resolution 5, if:
(a) it 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
(b) it 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.
6. Issue of Options to Director - Mr Raymond Barnes or nominee
To consider and, if thought fit, to pass the following resolution as an ordinary resolution:
"That, subject to Resolution 2 being passed, for the purposes of Chapter 2E of the Corporations Act, ASX Listing Rule 10.11 and for all other purposes, Shareholders approve and authorise the allotment and issue of a total of 4,000,000 Options to Mr Raymond Barnes or his nominee in accordance with the terms and conditions set out in the Explanatory Memorandum."
Voting exclusion statement: The Company will disregard any votes cast on Resolution 6 by Mr Barnes or his nominee and by any associate of Mr Barnes or his nominee.
However, the Company need not disregard a vote on Resolution 6, if:
(a) it 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
(b) it 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.
7. Issue of Options to Director - Mr Laxmi Bhandari or nominee
To consider and, if thought fit, to pass the following resolution as an ordinary resolution:
"That, subject to Resolution 3 being passed, for the purposes of Chapter 2E of the Corporations Act, ASX Listing Rule 10.11 and for all other purposes, Shareholders approve and authorise the allotment and issue of a total of 750,000 Options to Mr Laxmi Bhandari or his nominee in accordance with the terms and conditions set out in the Explanatory Memorandum."
Voting exclusion statement: The Company will disregard any votes cast on Resolution 7 by Mr Bhandari or his nominee and by any associate of Mr Bhandari or his nominee.
However, the Company need not disregard a vote on Resolution 7, if:
(a) it 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
(b) it 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.
8. Issue of Options to Director - Mr Ronald Miller or nominee
To consider and, if thought fit, to pass the following resolution as an ordinary resolution:
"That for the purposes of Chapter 2E of the Corporations Act, ASX Listing Rule 10.11 and for all other purposes, Shareholders approve and authorise the allotment and issue of a total of 1,500,000 Options to Mr Ronald Miller or his nominee in accordance with the terms and conditions set out in the Explanatory Memorandum."
Voting exclusion statement: The Company will disregard any votes cast on Resolution 8 by Mr Miller or his nominee and by any associate of Mr Miller or his nominee.
However, the Company need not disregard a vote on Resolution 8, if:
(a) it 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
(b) it 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.
9. Issue of Options to Director - Mr Benedict Clube or nominee
To consider and, if thought fit, to pass the following resolution as an ordinary resolution:
"That for the purposes of Chapter 2E of the Corporations Act, ASX Listing Rule 10.11 and for all other purposes, Shareholders approve and authorise the allotment and issue of a total of 2,000,000 Options to Mr Benedict Clube or his nominee in accordance with the terms and conditions set out in the Explanatory Memorandum."
Voting exclusion statement: The Company will disregard any votes cast on Resolution 9 by Mr Clube or his nominee and by any associate of Mr Clube or his nominee.
However, the Company need not disregard a vote on Resolution 9, if:
(a) it 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
(b) it 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.
10. Issue of Options to Director - Dr Bruce McCarthy or nominee (India
expatriate allowance)
To consider and, if thought fit, to pass the following resolution as an ordinary resolution:
"That for the purposes of Chapter 2E of the Corporations Act, ASX Listing Rule 10.11 and for all other purposes, Shareholders approve and authorise the allotment and issue of a total of 2,500,000 Options to Dr Bruce McCarthy or his nominee in accordance with the terms and conditions set out in the Explanatory Memorandum."
Voting exclusion statement: The Company will disregard any votes cast on Resolution 10 by Dr McCarthy or his nominee and by any associate of Dr McCarthy or his nominee.
However, the Company need not disregard a vote on Resolution 10, if:
(a) it 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
(b) it 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.
All members are invited to attend.
An Explanatory Memorandum to Shareholders (Annexure A) accompanies this Notice of Meeting.
By Order of the BoardJ.W.R. LaurieCompany Secretary4 October 2010
PROXIES - The Notice of Annual General Meeting can be viewed in hardcopy form (including proxy form) on the Company's website
1. A Proxy Form is enclosed with this Notice of Meeting.
2. Each member who is entitled to attend and cast a vote at the Annual General
Meeting may appoint a proxy. A proxy need not be a member.
3. A member who is entitled to cast 2 or more votes at the Annual General
Meeting may appoint either 1 or 2 proxies. If you wish to appoint 2 proxies you must use a separate proxy form for each proxy and indicate the percentage of your voting rights or the number of shares that each proxy is appointed in respect of on the proxy forms. If you wish to appoint more than 1 proxy you should photocopy the enclosed proxy form or request an additional proxy form to be sent to you. Where a member appoints 2 proxies and does not specify the proportion or number of the member's votes, each proxy may exercise half of the member's rights.
4. An instrument appointing a proxy may not be treated as valid unless the
instrument, and the power of attorney or other authority (if any) under
which the instrument is signed or proof of the power or authority to the
satisfaction of the Directors, is or are:
* deposited at the Company's registered office at Level 2, 50 Kings Park
Road, West Perth, Western Australia;
* sent by facsimile to the Company at fax number (08) 9485 3290; or
* deposited at the Company's share registry, Security Transfer Registrars Pty
Ltd, 770 Canning Highway, Applecross, Western Australia, 6153;
not less than 48 hours before the time for the holding of the Annual General Meeting (or any adjournment of that meeting), as the case may be, at which the person named in the instrument proposes to vote.
5. An instrument appointing a proxy must be in writing under the hand of the
appointer or of the appointer's attorney duly authorised in writing or, if the appointer is a body corporate, either under its common seal if it has a common seal, or under the hand of an officer or duly authorised attorney or duly authorised representative.
6. A body corporate which is a Shareholder, or which has been appointed as a
proxy, may appoint an individual to act as its representative at the Annual General Meeting. The appointment must comply with section 250D of the Corporations Act. The representative should bring evidence of their appointment to the Annual General Meeting, including authority under which their appointment is signed, unless previously given to the Company.
7. In accordance with regulation 7.11.37 of the Corporations Regulations 2001,
the Company has determined that the shareholding of each person for the purposes of determining entitlements to attend and vote at the Annual General Meeting will be the entitlement of that person set out in the Company's register as at 7.00pm (Sydney time) on 8 November 2010. Accordingly, transactions registered after this time will be disregarded in determining entitlements to attend and vote at the Annual General Meeting.
GLOSSARY
Words which are defined in the Explanatory Memorandum have the same meaning when used in this Notice of Meeting unless the context requires otherwise. For assistance in considering the Notice of Meeting the following words are defined here:
"Annual General Meeting" means the annual general meeting of the Company convened under the Notice of Meeting.
"ASX" means ASX Limited ACN 008 624 691 and where the context requires, the financial market operated by ASX Limited trading as the Australian Securities Exchange.
"Board" means the board of Directors of the Company.
"Company" means Oilex Ltd ABN 50 078 652 632.
"Constitution" means the constitution of the Company.
"Corporations Act" means the Corporations Act 2001 (Cth).
"Director" means a director of the Company from time to time.
"Explanatory Memorandum" means the explanatory memorandum accompanying this Notice of Meeting at Annexure A.
"Listing Rules" means the listing rules of ASX.
"Notice of Meeting" means this notice of annual general meeting.
"Option" means an option to subscribe for a Share.
"Proxy Form" means the proxy form accompanying the Notice of Meeting.
"Resolution" means a resolution set out in the Notice of Meeting.
"Share" means a fully paid ordinary share in the capital of the Company.
"Shareholder" means a holder of Shares.
"Tranche 1 Option" has the meaning given in the Explanatory Memorandum on page 8.
"Tranche 2 Option" has the meaning given in the Explanatory Memorandum on page8. ANNEXURE A OILEX LTD EXPLANATORY MEMORANDUM
This Explanatory Memorandum has been prepared for the information of Shareholders in connection with the business to be conducted at the Annual General Meeting to be held on 10 November 2010.
This Explanatory Memorandum should be read in conjunction with the accompanying Notice of Meeting.
BUSINESS OF THE MEETINGFinancial and other reports
Section 317 of the Corporations Act requires the Directors of the Company to put before the Annual General Meeting the financial report, directors' report (including the remuneration report) and the auditor's report for the last financial year that ended before the Annual General Meeting.
In accordance with section 250S of the Corporations Act, Shareholders will be provided with a reasonable opportunity to ask questions or make statements in relation to those reports but no formal resolution to adopt the reports will be put to Shareholders at the Annual General Meeting (save for Resolution 1 in respect of the adoption of the remuneration report).
Shareholders will also be given a reasonable opportunity to ask the auditor questions about the conduct of the audit and the preparation and content of the auditor's report. In addition to taking questions at the Annual General Meeting, written questions to the Chairman about the management of the Company, or the Company's auditor about:
* the preparation and content of the auditor's report; * the conduct of the audit; * accounting policies adopted by the Company in relation to the preparation of the financial statements; and * the independence of the auditor in relation to the conduct of the audit,
may be submitted no later than 5 business days before the Annual General Meeting to the registered office of the Company.
A copy of Oilex Ltd's Annual Report 2010 is available in the Investor Information section of the Company's website at: www.oilex.com.au.
RESOLUTIONS
1. Resolution 1 - Adoption of Remuneration Report
Section 250R of the Corporations Act requires that a resolution to adopt the remuneration report must be put to the vote at the Annual General Meeting. The vote on this Resolution is advisory only and does not bind the Directors or the Company.
The remuneration report is set out in pages 33 to 41 of the Company's Annual Report 2010, which is available on the Investor Information section of the Company's website at www.oilex.com.au.
In accordance with section 250SA of the Corporations Act, Shareholders will be provided with a reasonable opportunity to ask questions concerning, or make comments on, the remuneration report at the Annual General Meeting.
2. Resolution 2 - Re-election of Mr Raymond Barnes as a Director
In accordance with Rule 5 of the Company's Constitution and ASX Listing Rule 14.4, a Director cannot hold office for more than 3 years without retiring by rotation. Having been last re-appointed as a Director on 22 November 2007, Mr Barnes is to retire by rotation at the Annual General Meeting, and being eligible, offers himself for re-election as a Director.
Mr Barnes was appointed as an executive director of Oilex Ltd in September 2005 and is based in Perth, Western Australia. He has held the position of Technical Director since being appointed to the Company. Mr Barnes has over 37 years experience in the petroleum industry. He is not a director of any other public company.
Full Name: Raymond George Barnes
Qualifications: BSc (Hons) Geology
Professional Membership: AICD. EAGE
The Board, with the exception of Mr Barnes, unanimously recommends that members vote in favour of Mr Barnes' re-election as a Director.
3. Resolution 3 - Re-election of Mr Laxmi Bhandari as a Director
In accordance with Rule 5 of the Company's Constitution, one third of the directors on the Board are required to retire each year. Having been last re-appointed as a Director on 20 November 2008, Mr Bhandari is to retire by rotation at the Annual General Meeting, and being eligible, offers himself for re-election as a Director.
Mr Bhandari was appointed as a non-executive director of Oilex Ltd in November 2006 and is based in Delhi, India. Mr Bhandari has over 50 years experience in the petroleum industry. He is not a director of any other public or private company.
Full Name: Laxmi Bhandari
Qualifications: BSc Geology and MSc Geology
Professional Memberships: Geological Society of India, India Energy Forum. Geoscientists Association of Rajasthan, Governing Council of University of Petroleum Studies
The Board, with the exception of Mr Bhandari, unanimously recommends that members vote in favour of Mr Bhandari's re-election as a Director.
4. Resolution 4 - Issue of Options to Director - Mr Cozijn or nominee
Resolution 4 seeks Shareholder approval for the Company to issue a total of 1,000,000 Options to Mr Max Cozijn or his nominee.
Details as to the purpose of the proposed issue of Options and the key terms of the Options, together with the other information required to be provided by regulation (including the ASX Listing Rules and the Corporations Act) are set out below at numbered paragraph 10 of this Explanatory Memorandum.
5 Resolution 5 - Issue of Options to Director - Dr McCarthy or nominee
Resolution 5 seeks Shareholder approval for the Company to issue a total of 5,000,000 Options to Dr Bruce McCarthy or his nominee.
Details as to the purpose of the proposed issue of Options and the key terms of the Options, together with the other information required to be provided by regulation (including the ASX Listing Rules and the Corporations Act) are set out below at numbered paragraph 11 of this Explanatory Memorandum.
6 Resolution 6 - Issue of Options to Director - Mr Raymond Barnes or nominee
Resolution 6 seeks Shareholder approval for the Company to issue a total of 4,000,000 Options to Mr Ray Barnes or his nominee.
Details as to the purpose of the proposed issue of Options and the key terms of the Options, together with the other information required to be provided by regulation (including the ASX Listing Rules and the Corporations Act) are set out below at numbered paragraph 11 of this Explanatory Memorandum.
Resolution 6 is subject to and dependent on Resolution 2 being passed. That is, Resolution 6 will not be effective unless Resolution 2 is passed and Mr Raymond Barnes is re-elected to the Board.
7 Resolution 7 - Issue of Options to Director - Mr Laxmi Bhandari or nominee
Resolution 7 seeks Shareholder approval for the Company to issue a total of 750,000 Options to Mr Laxmi Bhandari or his nominee.
Details as to the purpose of the proposed issue of Options and the key terms of the Options, together with the other information required to be provided by regulation (including the ASX Listing Rules and the Corporations Act) are set out below at numbered paragraph 11 of this Explanatory Memorandum.
Resolution 7 is subject to and dependent on Resolution 3 being passed. That is, Resolution 7 will not be effective unless Resolution 3 is passed and Mr Laxmi Bhandari is re-elected to the Board.
8 Resolution 8 - Issue of Options to Director - Mr Ronald Miller or nominee
Resolution 8 seeks Shareholder approval for the Company to issue a total of 1,500,000 Options to Mr Ronald Miller or his nominee.
Details as to the purpose of the proposed issue of Options and the key terms of the Options, together with the other information required to be provided by regulation (including the ASX Listing Rules and the Corporations Act) are set out below at numbered paragraph 11 of this Explanatory Memorandum.
9 Resolution 9 - Issue of Options to Director - Mr Benedict Clube or nominee
Resolution 9 seeks Shareholder approval for the Company to issue a total of 2,000,000 Options to Mr Benedict Clube or his nominee.
Details as to the purpose of the proposed issue of Options and the key terms of the Options, together with the other information required to be provided by regulation (including the ASX Listing Rules and the Corporations Act) are set out below at numbered paragraph 11 of this Explanatory Memorandum.
10 Resolution 10 - Issue of Options to Director - Dr McCarthy or nominee (India expatriate allowance)
Resolution 10 seeks Shareholder approval for the Company to issue a total of 2,500,000 Options to Dr Bruce McCarthy or his nominee.
Details as to the purpose of the proposed issue of Options and the key terms of the Options, together with the other information required to be provided by regulation (including the ASX Listing Rules and the Corporations Act) are set out below at numbered paragraph 11 of this Explanatory Memorandum.
The Board, with the exception of Dr McCarthy, unanimously recommends that members vote in favour of Resolution 10.
11 Disclosures required for Resolutions 4 to 10
Shareholder approval for the issue of the Options the subject of Resolutions 4 to 10 is sought for the purposes of:
a. Chapter 2E of the Corporations Act - which governs the giving of financial
benefits to "related parties" which include directors of a public company;
and
b. ASX Listing Rule 10.11 - which generally provides that except in certain
circumstances (which do not apply in the present case), a company listed on
ASX cannot issue or grant securities to a related party without prior
shareholder approval.
As approval of Shareholders is being sought for Resolutions 4 to 10 pursuant to ASX Listing Rule 10.11, shareholder approval under Listing Rule 7.1 is not required, in accordance with Exception 14 of Listing Rule 7.2.
The following information is provided to assist Shareholders in assessing Resolutions 4 to 10. This information has been provided in an aggregated form for ease of understanding as the information in respect of each Resolution is materially similar and to avoid the Notice being unnecessarily long. However, each of Resolutions 4 to 10 is independent of the other Resolutions and will be voted on separately.
Purpose of Issue of Options and Key Terms
The purpose of the issue of Options to each Director proposed in Resolutions 4 to 9 is in recognition of each Director's contribution to the Company's development to date, and to provide an added incentive to the Directors to contribute to increasing Shareholder value.
The purpose of the issue of the further 2,500,000 Options to Dr McCarthy proposed in Resolution 10 is in lieu of an annual expatriate hardship monetary allowance for Dr McCarthy living in India for the year commencing 31 March 2010.
Subject to adjustments in accordance with their terms, each Option proposed to be issued is exercisable into one Share upon payment of the applicable exercise price which is: (a) for Tranche 1 Options the amount equal to 135% of the 5 day volume weighted average Share price for the 5 business days immediately prior to the date of the Annual General Meeting; and (b) for Tranche 2 Options the amount equal to 170% of the 5 day volume weighted average Share price for the 5 business days immediately prior to the date of the Annual General Meeting. The Options will vest and be exercisable on the date of grant. but must be exercised before their expiry date which is: (a) for Tranche 1 Options - 2 years after the date of grant and (b) for Tranche 2 Options - 4 years after the date of grant. Unexercised Options will lapse on their expiry date. Details of the key terms of the Tranche 1 Options and the Tranche 2 Options are set out in Appendix 1 to this Explanatory Memorandum. Both the Tranche 1 Options and the Tranche 2 Options will be issued on the same terms (as set out in Appendix 1 to this Explanatory Memorandum) other than with respect to the exercise price and the exercise period of the Options.
The Company will inform Shareholders of the actual exercise price for Tranche 1 and Tranche 2 Options, calculated by reference to the formulae set out in the preceding paragraph, by both publishing that information on its website at www.oilex.com.au and announcing the exercise price to the market on the ASX electronic announcements platform prior to the Annual General Meeting.
The Board (excluding the relevant recipient Director) has made the decision to issue the Options to each Director on the basis of an assessment of the individual Director's contribution to the Company and also considered that each Director's continuing involvement and contribution to the Company, taking into account the fact that the Company operates with a relatively small number of Directors, will be significant in achieving sustainable growth in Shareholder value. The Board also took into account each Director's existing remuneration package (details of which are set out in paragraph (f) on page 10 & 11 of this Explanatory Memorandum).
Resolution Director Number of Options 4 Mr Cozijn 1,000,000 (500,000 Tranche 1 & 500,000 Tranche 2 Options) 5 Dr McCarthy 5,000,000 (3,000,000 Tranche 1 & 2,000,000 Tranche 2 Options) 6 Mr Barnes 4,000,000 (2,500,000 Tranche 1 & 1,500,000 Tranche 2 Options) 7 Mr Bhandari 750,000 (375,000 Tranche 1 and 375,000 Tranche 2 Options) 8 Mr Miller 1,500,000 (Tranche 1 Options) 9 Mr Clube 2,000,000 (Tranche 1 Options) 10 Dr McCarthy 2,500,000 (Tranche 1 Options)
Information required by Listing Rule 10.13
Listing Rule 10.11 provides that a company must not issue or agree to issue securities to a related party without first obtaining the approval of shareholders by ordinary resolution. As Resolutions 4 to 10 relate to the issue of securities to Directors, Shareholder approval must be obtained.
Listing Rule 10.13 requires the following information to be provided to Shareholders for the purpose of obtaining Shareholder approval pursuant to Listing Rule 10.11.
References to Tranche 1 Options below means options which (Tranche 1 Options):
(a) vest on the date of grant;
(b) expire on the date which is 2 years after the date of grant; and
(c) have an exercise price in an amount equal to 135% of the 5 day volume weighted average Share price for the 5 business days immediately prior to the date of the Annual General Meeting.
References to Tranche 2 Options below means options which (Tranche 2 Options):
(a) vest on the date of grant;
(b) expire on the date which is 4 years after the date of grant; and
(c) have an exercise price in an amount equal to 170% of the 5 day volume weighted average Share price for the 5 business days immediately prior to the date of the Annual General Meeting.
Resolution: Recipient of Number, Other terms and Use of funds
Options and date Consideration, conditions: raised: of grant: exercise price, vesting and expiry dates: Resolution The Options will 1,000,000 The Options There will be 4 - Issue be issued to Mr Options will be issued no funds raisedof Options Cozijn or his comprising on the terms from the issue to Mr nominee(s) as 500,000 Tranche and conditions of the Options.Cozijn soon as 1 Options & set out in Any funds practicable after 500,000 Tranche Appendix 1 to raised from the the date of the 2 Options this exercise of the Annual General Explanatory Options will be Meeting, but in No cash Memorandum. All used for the any event no consideration Shares issued working capital later than 1 will be payable upon exercise purposes of the month after the on issue of the of any Options Company. date of the Options. will rank meeting equally with all existing Shares.
Resolution The Options will 5,000,000 As above. As above. 5 - Issue be issued to Dr Options
of Options McCarthy or his comprising to Dr nominee(s) as 3,000,000 McCarthy soon as Tranche 1 practicable after Options & the date of the 2,000,000 Annual General Tranche 2 Meeting, but in Options any event no later than 1 No cash month after the consideration date of the will be payable meeting on issue of the Options.
Resolution The Options will 4,000,000 As above As above 6 - Issue be issued to Mr Options
of Options Barnes or his comprising to Mr nominee(s) as 2,500,000 Barnes soon as Tranche 1 practicable after Options & the date of the 1,500,000 Annual General Tranche 2 Meeting, but in Options any event no later than 1 No cash month after the consideration date of the will be payable meeting on issue of the Options.
Resolution The Options will 750,000 Options As above As above 7 - Issue be issued to Mr comprising
of Options Bhandari or his 375,000 Tranche to Mr nominee(s) as 1 Options & Bhandari soon as 375,000 Tranche practicable after 2 Options the date of the Annual General No cash Meeting, but in consideration any event no will be payable later than 1 on issue of the month after the Options. date of the meeting.
Resolution The Options will 1,500,000 As above As above 8 - Issue be issued to Mr Options
of Options Miller or his comprising to Mr nominee(s) as 1,500,000 Miller soon as Tranche 1 practicable after Options the date of the Annual General No cash Meeting, but in consideration any event no will be payable later than 1 on issue of the month after the Options. date of the meeting
Resolution The Options will 2,000,000 As above As above 9 - Issue be issued to Mr Options
of Options Clube or his comprising to Mr Clube nominee(s) as 2,000,000 soon as Tranche 1 practicable after Options the date of the Annual General No cash Meeting, but in consideration any event no will be payable later than 1 on issue of the month after the Options. date of the meeting
Resolution The Options will 2,500,000 As above. As above. 10 - Issue be issued to Dr Tranche 1
of Options McCarthy or his Options to Dr nominee(s) as McCarthy soon as No cash practicable after consideration the date of the will be payable Annual General on issue of the Meeting, but in Options. any event no later than 1 month after the date of the meeting
Chapter 2E of the Corporations Act
Chapter 2E of the Corporations Act prohibits the Company from giving a financial benefit (which includes the issue of an Option) to a related party of the Company, unless either:
(a) the giving of the financial benefit falls within one of the nominated exemptions in Chapter 2E of the Corporations Act; or
(b) prior Shareholder approval is obtained for the giving of the financial benefit.
For the purposes of Chapter 2E, each Director is considered to be a related party of the Company. The proposed issue of Options to Directors involves the provision of a financial benefit to a related party of the Company and, therefore, requires prior Shareholder approval.
In accordance with the requirements of Chapter 2E of the Corporations Act, the following information is provided to Shareholders to allow them to assess the proposed issue of Options:
(a) The related parties of the Company to whom the financial benefit would be given if Shareholders approve Resolutions 4 to 10 are Mr Cozijn, Dr McCarthy, Mr Barnes, Mr Bhandari, Mr Miller and Mr Clube.
(b) The nature of the financial benefit to be given is the issue of Options to each Director. If the Company's Shares are trading on the ASX at a higher price than the exercise price of the Options at the time of the exercise of the Options, the effect will be to give an immediate financial benefit to each Director at the time they each exercise the Options.
(c) Directors' abstentions:
(i) Mr Cozijn declines to make a recommendation about Resolution 4 as he has a material personal interest in the outcome of the Resolution. The remaining 5 Directors decline to make a recommendation about Resolution 4 due to their interest in Resolutions 5 to 10 respectively.
(ii) Dr McCarthy declines to make a recommendation about Resolutions 5 and 10 as he has a material personal interest in the outcome of the Resolutions. The remaining 5 Directors decline to make a recommendation about Resolution 5 due to their interest in Resolutions 4 and 6 to 9 respectively.
(iii) Mr Barnes declines to make a recommendation about Resolution 6 as he has a material personal interest in the outcome of the Resolution. The remaining 5 Directors decline to make a recommendation about Resolution 6 due to their interest in Resolutions 4, 5 and 7 to 10 respectively.
(iv) Mr Bhandari declines to make a recommendation about Resolution 7 as he has a material personal interest in the outcome of the Resolution. The remaining 5 Directors decline to make a recommendation about Resolution 7 due to their interest in Resolutions 4 to 6 and 8 and 10 respectively.
(v) Mr Miller declines to make a recommendation about Resolution 8 as he has a material personal interest in the outcome of the Resolution. The remaining 5 Directors decline to make a recommendation about Resolution 8 due to their interest in Resolutions 4 to 7 and 10 respectively.
(vi) Mr Clube declines to make a recommendation about Resolution 9 as he has a material personal interest in the outcome of the Resolution. The remaining 5 Directors decline to make a recommendation about Resolution 9 due to their interest in Resolutions 4 to 8 and Resolution 10 respectively.
(d) No cash consideration will be payable upon issue of the Options. The other key terms of the Options are:
(i) Tranche 1 Options:
* vest on the date of grant; * expire on the date which is 2 years after the date of grant; and * have an exercise price in an amount equal to 135% of the 5 day volume weighted average Share price for the 5 business days immediately prior to the date of the Annual General Meeting.
(ii) Tranche 2 Options:
* vest on the date of grant; * expire on the date which is 4 years after the date of grant; and * have an exercise price in an amount equal to 170% of the 5 day volume weighted average Share price for the 5 business days immediately prior to the date of the Annual General Meeting.
(e) An estimate of the value of the Options proposed to be issued pursuant to Resolutions 4 to 10 using the Black Scholes option pricing model has been calculated as set out below:
Resolution Name of Number of Total Value using Black Related Party Options Scholes Model based on grant date of 4 Oct 2010 4 Mr Cozijn 1,000,000 $98,889 5 Dr McCarthy 5,000,000 $480,652 6 Mr Barnes 4,000,000 $381,764 7 Mr Bhandari 750,000 $74,167 8 Mr Miller 1,500,000 $127,646 9 Mr Clube 2,000,000 $170,194 10 Dr McCarthy 2,500,000 $212,743
This has been calculated with the following assumptions:
(i) risk free interest rate of 4.5%;
(ii) current Share price of $0.19, being the average closing price of the Company's Shares on ASX over the last 5 trading days prior to 4 October 2010;
(iii) dividend yield of 0%;
(iv) forecast volatility of 95.2%;
(v) Option exercise price of: Tranche 1 Options $0.26; and Tranche 2 Options $0.32; and
(vi) Option term of: Tranche 1 Options - 2 years from 4 October 2010; and Tranche 2 Options - 4 years from 4 October 2010.
(f) Details of the remuneration received by each of the Directors during the year ended 30 June 2010 is as follows:
Director Remuneration in year ended 30 June 2010
Mr Cozijn Mr Cozijn received a remuneration package of $87,200
from the Company during the year ended 30 June 2010 for his role as Chairman and no direct or indirect share based payments. As at the date of this Notice of Meeting, the total remuneration package for Mr Cozijn is $87,200 per annum. This package consists of a remuneration package of $87,200 and no share based payments. The remuneration relating to his unexpired existing Options comprising 250,000 Options previously issued at the exercise price of $2.00 and 250,000 Options previously issued at the exercise price of $2.50 has been expensed in prior years. Any Options issued in accordance with Resolution 4 will be in addition to that remuneration package.
Dr McCarthy Dr McCarthy received a remuneration package of $399,996
from the Company during the year ended 30 June 2010 for his role as Managing Director (provided through his company Macuale Consultancy Pty Ltd), plus $50,637 in non-monetary benefits, and no direct or indirect share based payments. As at the date of this Notice of Meeting, the total remuneration package for Dr McCarthy is $400,000 per annum. This package consists of a remuneration package of $400,000 and no share based payments. The remuneration relating to his unexpired existing 2,000,000 Options previously issued at the exercise price of $2.00 and 2,000,000 Options previously issued at an exercise price of $2.50 has been expensed in prior years. Any Options issued in accordance with Resolution 5 and 10 will be in addition to that remuneration package. Mr Barnes Mr Barnes received a remuneration package of $348,000 from the Company during the year ended 30 June 2010 for his role as Technical Director (provided through his company Ad Valorem Resource Consultants Pty Ltd) and no direct or indirect share based payments. As at the date of this Notice of Meeting, the total remuneration package for Mr Barnes is $396,000 per annum. This package consists of a remuneration package of $396,000 and no share based payments. The remuneration relating to the unexpired existing 1,500,000 Options previously issued at the exercise price of $2.00 and 1,500,000 Options previously issued at an exercise price of $2.50 has been expensed in prior years. Any Options issued in accordance with Resolution 6 will be in addition to that remuneration package.
Mr Bhandari Mr Bhandari received a remuneration package of $34,880
from the Company during the year ended 30 June 2010 for his role as Non-executive Director and no direct or indirect share based payments. As at the date of this Notice of Meeting, the total remuneration package for Mr Bhandari is $43,600 per annum. This package consists of a remuneration package of $43,600 and no share based payments. The remuneration relating to the unexpired existing 150,000 Options previously issued at the exercise price of $2.00 and 150,000 Options previously issued at an exercise price of $2.50 has been expensed in prior years. Any Options issued in accordance with Resolution 7 will be in addition to that remuneration package. Mr Miller Mr Miller received $34,880 for his services as a Director of the Company during the year ended 30 June 2010 in addition to $164,552 in direct or indirect share based payments. The Company and its subsidiaries also used the services of Ematvil Pty Ltd, a company associated with Mr Miller. Rates charged by Ematvil Pty Ltd were at market rate and Mr Miller received indirect remuneration of $66,608 from the Company for consultancy services provided by Ematvil Pty Ltd for the year ended 30 June 2010. These services are not connected with his duties as a Director and the Company continues to use these consultancy services. As at the date of this Notice of Meeting the total remuneration package for Mr Miller in his capacity as a Director is $34,880 per annum inclusive of superannuation plus $762 share based payments relating to 750,000 Options previously issued at the exercise prices of $0.30. Any Options issued in accordance with Resolution 8 will be in addition to that remuneration package. Mr Clube Mr Clube received a remuneration package of $323,549 from the Company during the year ended 30 June 2010 for his role as Finance Director in addition to $450,287 in share based payments. As at the date of this Notice of Meeting, the total remuneration package for Mr Clube is $419,950 per annum. This package consists of a remuneration package of $370,600 and $49,350 share based payments relating to 500,000 Options previously issued at the exercise prices of $2.75 and 1,500,000 Options previously issued at an exercise price of $0.30. The remuneration relating to the unexpired existing 500,000 Options previously issued at an exercise price of $1.75 and 500,000 Options previously issued at an exercise price of $2.25 has been expensed in prior years. Any Options issued in accordance with Resolution 9 will be in addition to that remuneration package.
(g) Neither the Directors nor the Company are aware of any other information that would be reasonably required by Shareholders to make a decision whether it is in the best interests of the Company to pass Resolutions 4 to 10 other than as follows:
(i) Following the passage of Resolutions 4 to 10, the direct and indirect interest of each Director in Shares and Options will be as follows:
Director Shares Options Number Grant Vesting Exercise Expiry date date Price Mr Cozijn 1,500,000 250,000 22/11/07 30/11/07 $2.00 01/07/11 250,000 22/11/07 01/07/08 $2.50 01/07/11 500,000 Note 1 Note 1 Note 2 2 yrs from grant date 500,000 Note 1 Note 1 Note 3 4 yrs from grant date Dr 1,150,000 2,000,000 22/11/07 30/11/07 $2.00 01/07/11McCarthy 2,000,000 22/11/07 01/07/08 $2.50 01/07/11 5,500,000 Note 1 Note 1 Note 2 2 yrs from grant date 2,000,000 Note 1 Note 1 Note 3 4 yrs from grant date Mr Barnes 798,871 1,500,000 22/11/07 30/11/07 $2.00 01/07/11 1,500,000 22/11/07 01/07/08 $2.50 01/07/11 2,500,000 Note 1 Note 1 Note 2 2 yrs from grant date 1,500,000 Note 1 Note 1 Note 3 4 yrs from grant date Mr - 150,000 22/11/07 30/11/07 $2.00 01/07/11Bhandari 150,000 22/11/07 01/07/08 $2.50 01/07/11 375,000 Note 1 Note 1 Note 2 2 yrs from grant date 375,000 Note 1 Note 1 Note 3 4 yrs from grant date Mr Miller 2,524,436 750,000 26/11/09 01/07/10 $0.30 01/07/14 1,500,000 Note 1 Note 1 Note 2 2 yrs from grant date Mr Clube 52,174 500,000 01/05/08 30/04/09 $1.75 30/06/11 500,000 01/05/08 30/04/10 $2.25 30/06/11 500,000 01/05/08 30/04/11 $2.75 30/06/12 1,500,000 26/11/09 01/07/10 $0.30 01/07/14 2,000,000 Note 1 Note 1 Note 2 2 yrs from grant dateNotes:
Note 1: The grant date will be within 1 month of the date of obtaining Shareholder approval to issue the Options. The Options will vest on the same date.
Note 2: The exercise price will be an amount equal to 135% of the 5 day volume weighted average Share price for the 5 business days immediately prior to the date of the Annual General Meeting.
Note 3: The exercise price will be an amount equal to 170% of the 5 day volume weighted average Share price for the 5 business days immediately prior to the date of the Annual General Meeting.
(ii) Directors currently hold 11,550,000 Options as follows:
* 8,800,000 Options have exercise prices ranging from $1.75 to $2.50 and are due to expire between 30 June 2011 and 1 July 2011; * 500,000 Options have an exercise price of $2.25 and are due to expire on 30 June 2012; * 2,250,000 Options have an exercise price of $0.30 and are due to expire on 1 July 2014;
(iii) During the year ending 30 June 2010 4,500,000 Options held by Directors expired;
(iv) If all of the Options (which in aggregate amount to 16,750,000 Options) are issued and are exercised, the Company's Share capital will be diluted by approximately 7.07%. This calculation:
* is based on the number of Shares on issue at the date of the Notice of Meeting (which is 220,074,885); and * assumes that no other options are exercised;
(v) The primary purpose of the issue of the Options is to recognise each Director's contribution to the Company's development to date and to provide an added incentive to each Director to contribute to increasing Shareholder value; and
(vi) For information purposes, the Company intends to issue approximately 5,500,000 Options (comprising Tranche 1 and Tranche 2 Options) to employees under the Employee Performance Rights Plan Rules, following the Annual General Meeting.
(h) Over the last 12 months prior to the date of this Notice of Meeting, the Company's Shares have traded as follows on the ASX:
Cents Date High $0.38 12 November 2009 Low $0.07 18 June 2010 Last $0.195 1 October 2010
Australian International Financial Reporting Standards
Under AASB 2 Share-based Payments, pursuant to the adoption of Australian International Financial Reporting Standards (AIFRS), the Company is required to recognise the fair value of Options granted to Directors, employees, consultants and other advisors as an expense on a pro-rata basis over the vesting period of each Option in the Company's income statement with a corresponding adjustment to equity on the Company's balance sheet.
Using the assumed Option value derived from the Black Scholes option pricing calculations set out above in this Explanatory Memorandum, the impact of the issue of Options on the Company's income statement for the financial year ended 30 June 2011 under each of Resolution 4 to 10 would be as follows:
Resolution number Director name Assumed value 30 June 2011 of Options Income Statement Resolution 4 Mr Cozijn $98,889 $98,889 Resolution 5 Dr McCarthy $480,652 $480,652 Resolution 6 Mr Barnes $381,764 $381,764 Resolution 7 Mr Bhandari $74,167 $74,167 Resolution 8 Mr Miller $127,646 $127,646 Resolution 9 Mr Clube $170,194 $170,194 Resolution 10 Dr McCarthy $212,743 $212,743
It should be noted that the actual expense amounts may differ from those set out above if the assumptions underlying the Black Scholes pricing model at the date of issue of the Options vary from those set out above.
APPENDIX 1 TO ANNEXURE A OILEX LTD ABN 58 078 652 632 OPTIONS TERMS & CONDITIONS
1. Subject to clause 12, each Option entitles the holder, when exercised, to
one (1) Share.
2. The Options are exercisable at any time between the vesting date (insert
grant date) (Vesting Date) and 5.00 pm WST on the expiry date (insert
expiry date) by notice in writing to the Company accompanied by payment of
the exercise price.
3. Should the Director resign after the Vesting Date, then the Director
retains the Options until the earlier of their expiry or exercise.
4. An Option will lapse if the Director has resigned or his employment ceased
prior to the Option's Vesting Date.
5. The Options can be exercised in whole or in part, and if exercised in part
multiples of 10,000 must be exercised on each occasion, except where the
number of Options held is less than 10,000, in which case all such Options
must be exercised at the same time.
6. The exercise price of each Option shall be $(insert price).
7. The Options can be transferred and will be unlisted.
8. All Shares issued upon exercise of the Options will rank pari passu in all
respects with the Company's then existing fully paid Shares. The Company
will apply for Official Quotation by the ASX of all Shares issued upon
exercise of the Options.
9. There are no participating rights or entitlements inherent in the Options
to participate in any new issue of securities (including any pro-rata issue) which may be offered to Shareholders of the Company from time to time prior to the Options expiry date. However at least 10 business days before the record date to determine entitlements to any such new issue of securities, the Company will notify the Option holder(s) of the proposed new issue. This will afford the Option holder(s) an opportunity to exercise all or some of the Options prior to the record date of any such new issue and then participate in that new issue (with respect to the Shares issued on exercise of the Options).
10. The Options do not confer on the Option holder any right to a change in the
exercise price, or a change to the number of Shares to be issued on
exercise of the Options for any new issue of securities (including any
pro-rata issues).
11. The Options do not confer on the Option holder any right to participate in
dividends until Shares are allotted pursuant to the exercise of the Options after which such Shares will qualify for any dividend paid on the fully paid ordinary shares in the Company with a record date after the date of allotment.
12. In the event of a reorganisation of the issued capital of the Company, the
Options will be reorganised in accordance with the Listing Rules of the ASX (if applicable) and in any case in a manner which will not result in any benefits being conferred on Option holders which are not conferred on Shareholders.
13. The number of Shares to be issued pursuant to the exercise of Options will
be adjusted for bonus issues made prior to exercise of the Options so that, upon exercise of the Options, the number of Shares received by the Option holder will include the number of bonus Shares that would have been issued if the Options had been exercised prior to the record date to determine entitlements for the bonus issues. The exercise price of the Options shall not change as a result of any such bonus issues.
NOTICE OF EXERCISE OF OPTIONS
To: The Directors Share Registry: Security Transfer Registrars Pty Ltd Oilex Ltd Suite 1, 770 Canning Highway Level 2 APPLECROSS WA 6153 50 Kings Park Road Email: [email protected] WEST PERTH WA 6005 Website: www.securitytransfer.com.au Ph: (618) 9315 2333 Fax: (618) 9315 2233 I/We Shareholder Number: Of
Being the registered holder of Options hereby exercise such Options to subscribe for Ordinary fully paid
shares at $(insert exercise price) per share. I/We enclose application money of $ and authorise you to register me/us as the holder of the shares to be allotted to me/us and I/we agree to accept such shares subject to the Rules of the Constitution of the Company
Security Security Holder Security Holder 3 Date: Holder 1 2 Director Director/ Sole Director/ Day / Month / Year Secretary Secretary Contact Name Contact Telephone Number
This application, with application money in Australian Currency, should be lodged at the Company's Share Registry on or before the Expiry Date. Cheques should be made payable to Oilex Ltd and forwarded to Security Transfer Registrars Pty Ltd.
vendorRelated Shares:
OEX.L