23rd Oct 2009 07:39
NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS THURSDAY 26 NOVEMBER 2009 AT 1:30PM 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 OilexLtd ABN 50 078 652 632 (Company) will be held at First Floor, The Celtic Club,48 Ord Street, West Perth, Western Australia on Thursday 26 November 2009 at 1:30 pm, 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 2009.
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 allother purposes, the remuneration report for the period ended 30 June 2009 beadopted."
2. To Re-elect Mr Max Cozijn as a Director
To consider and, if thought fit, to pass the following resolution as an ordinary resolution:
"That Mr Max Cozijn, who retires by rotation as a Director of the Company inaccordance with the Company's Constitution and, being eligible, offers himselffor re-election, be and is hereby re-appointed as a Director of the Company."
3. To Re-elect Mr Ronald Miller as a Director
To consider and, if thought fit, to pass the following resolution as an ordinary resolution:
"That Mr Ronald Miller, who was appointed as a Director of the Company on 1 July 2009 and who, pursuant to Rule 8.2 of the Company's Constitution, retires at the conclusion of this meeting, being eligible, offers himself for re-election, be and is hereby re-appointed as a Director of the Company."
4. To Re-elect Mr Benedict Clube as a Director
To consider and, if thought fit, to pass the following resolution as an ordinary resolution:
"That Mr Benedict Clube, who was appointed as a Director of the Company on 1July 2009 and who pursuant to Rule 8.2 of the Company's Constitution, retiresat the conclusion of this meeting, being eligible, offers himself forre-election, be and is hereby re-appointed as a Director of the Company."
5. 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 Rule10.11 and for all other purposes, Shareholders approve and authorise theallotment and issue of a total of 750,000 Options, for no consideration, to MrRonald Miller or his nominee, following his re-election as a director of theCompany, in accordance with the terms and conditions set out in the attachedExplanatory Memorandum."Voting exclusion statement:
The Company will disregard any votes cast on Resolution 5 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 Resolutions 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 isentitled to vote, in accordance with a direction on the proxy form to vote asthe proxy decides.
6. 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 Rule10.11 and for all other purposes, Shareholders approve and authorise theallotment and issue of a total of 1,500,000 Options, for no consideration, toMr Benedict Clube or his nominee, following his re-election as a director ofthe Company, in accordance with the terms and conditions set out in theattached Explanatory Memorandum."
Voting exclusion statement: The Company will disregard any votes cast on Resolution 6 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 Resolutions 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 isentitled to vote, in accordance with a direction on the proxy form to vote asthe proxy decides.
7. Renewal of Employee Performance Rights Plan
To consider and, if thought fit, to pass the following resolution as an ordinary resolution:
"That for the purpose of ASX Listing Rule 7.2 Exception 9(b) and for all other purposes, the Plan, the principal terms of which are summarised in the Explanatory Materials and the issue of securities under that Plan, be approved."
Voting exclusion statement: The Company will disregard any votes cast on Resolution 7 by any Director of the Company or any associate of that Director (except a Director who is ineligible to participate in the Plan).
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 isentitled to vote, in accordance with a direction on the proxy form to vote asthe proxy decides.
All members are invited to attend.
An Explanatory Memorandum to Shareholders accompanies this notice as Annexure A.
By Order of the BoardM.D.J. CozijnChairman22 October 2009
PROXIES The Notice of General Meeting can be viewed in hardcopy format(including the Proxy Form) on the Company's website www.oilex.com.au
1. A Proxy Form is enclosed with this Notice of Meeting.
2. Each member 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 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 particular
meeting or adjourned 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 meeting will
be the entitlement of that person set out in the Company's register as at
1.30 pm (Perth time) on 24 November 2009. Accordingly, transactions
registered after this time will be disregarded in determining entitlements
to attend and vote at the meeting.
OTHER
Words which are defined in the Explanatory Memorandum have the same meaningwhen used in this Notice of Meeting unless the context requires otherwise. Forassistance in considering the Notice of Meeting the following words are definedhere:
"Annual General Meeting" means the annual general meeting of the Company convened under the Notice of Meeting.
"ASX" means ASX Limited 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 set out in Annexure A to the Notice of Meeting.
"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.
"Plan" means the Company's Employee Performance Rights Plan.
"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.
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 26 November 2009.
This Explanatory Memorandum should be read in conjunction with the accompanying Notice of Meeting.
BUSINESS OF THE MEETINGFinancial and other reportsSection 317 of the Corporations Act requires the Directors of the Company toput before the Annual General Meeting the financial report, directors' report(including the remuneration report) and the auditor's report for the lastfinancial year that ended before the Annual General Meeting.In accordance with section 250S of the Corporations Act, Shareholders will beprovided with a reasonable opportunity to ask questions or make statements inrelation to those reports but no formal resolution to adopt the reports will beput to Shareholders at the Annual General Meeting (save for Resolution 1 inrespect of the adoption of the remuneration report).Shareholders will also be given a reasonable opportunity to ask the auditorquestions about the conduct of the audit and the preparation and content of theauditor's report. In addition to taking questions at the Annual GeneralMeeting, 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 the Annual Report 2009 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 theremuneration report must be put to the vote at the Annual General Meeting. Thevote on this Resolution is advisory only and does not bind the Directors or theCompany.The remuneration report is set out on pages 32 to 39 of the Company's AnnualReport, which is available on the Investor Information section of the Company'swebsite 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 Max Cozijn as a Director
In accordance with rule 5 of the Company's Constitution and ASX Listing Rule14.4, a Director cannot hold office for more than 3 years without retiring byrotation. Having been last re-appointed as a Director on 23 November 2006, MrMax Cozijn is to retire by rotation at the Annual General Meeting, and beingeligible, offers himself for re-election as a Director.Mr Cozijn was appointed as a director of Oilex Ltd on 6 June 1997 and is basedin Perth, Western Australia. He has held the position of Chairman since theCompany listed on the ASX in 2003. Mr Cozijn has over 30 years experience inthe administration of listed mining and industrial companies. He is a Directorof Carbon Energy Limited, Director of Magma Metals Limited and Chairman ofMalagasy Minerals Limited and is a Director of various private companies,having also previously been a Non-Executive Director of Kagara Zinc Ltd for 20years and a director of Elkedra Diamonds NL until November 2007.
Full Name: Max Dirk Jan Cozijn
Qualifications: Bachelor of Commerce, ASA
Professional Membership: MAICD
The Board, with the exception of Mr Cozijn, unanimously recommends that members vote in favour of Mr Cozijn's re-election as a Director.
3. Resolution 3 - Re-election of Mr Ronald Miller as a Director
In accordance with Rule 8.1 of the Company's Constitution, the Board appointedMr Miller as an additional non-executive Director on 1 July 2009. Pursuant toRule 8.2 of the Constitution, Mr Miller automatically retires at the conclusionof the Annual General Meeting and is eligible for re-election at that meeting.Mr Miller, being eligible, offers himself for re-election as a Director.
Mr Miller is based in Perth, Western Australia and has provided the following information in relation to his qualifications and experience:
Full Name: Ronald Lawrence Miller
Qualifications: B Sc (Ocean Engineering), M Sc (Engineering) Florida USA
Professional Memberships: Chartered Engineer, MEIA; MAICD
Mr Miller is a leading consultant to the petroleum and marine industry and hasrecently been a Strategic Advisor to companies including Inpex Alpha Limited,Chevron Australia and Oil Search. A Chartered Engineer, Mr Miller brings morethan 30 years of experience in the petroleum industry including corporategovernance and international government relations, extensive experience inleading multi-disciplinary organisations, project development and the designand construction of oil and gas projects.
Mr Miller has held a range of senior positions including with Mobil Exploration and Producing Australia, Ampolex, UC Engineers Pty Ltd, Seapole Systems Pty Ltd, Clough Engineering, Wholohan, Grill & Partners and Hyundai Heavy Industries.
During the last three years Mr Miller has been and is currently a non-executivedirector of Salinas Energy Limited (an ASX listed company). Mr Miller is also adirector of Ematvil Pty Ltd which provides consultancy services to companieswithin the Oilex group of companies. Mr Miller directly or indirectly holds2,424,436 fully paid Shares.
The Board, with the exception of Mr Miller, unanimously recommends that members vote in favour of Mr Miller's re-election as a Director.
4. Resolution 4 - Re-election of Mr Benedict Clube as a Director (Executive)
In accordance with Rule 8.1 of the Company's Constitution, the Board of theCompany appointed Mr Clube as an additional executive Director (FinanceDirector) on 1 July 2009. Pursuant to Rule 8.2 of the Constitution, Mr Clubeautomatically retires at the conclusion of the Annual General Meeting and iseligible for re-election at that meeting. Mr Clube being eligible, offershimself for re-election as a Director.
Mr Clube is based in Perth, Western Australia and has provided the following information in relation to his qualifications and experience:
Full Name: Benedict James Murray Clube
Qualifications: M Sc (Geology) Univ. Edinburgh; ACA (ICAEW)
Mr Clube was a senior executive with BHP Billiton Petroleum for 15 years duringwhich time he held a variety of senior management roles, including VicePresident of Finance and Planning in Houston, London and Perth. Mr Clube hasheld the position of Chief Finance and Commercial Officer with Oilex Ltd sinceJuly 2008.
Mr Clube is not currently and has not within the last three years been, a director of any other listed companies. Mr Clube is a director of subsidiary companies within the Oilex group of companies.
The Board, with the exception of Mr Clube, unanimously recommends that members vote in favour of Mr Clube's re-election as a Director.
5 Resolution 5 - Issue of Options to Director - Mr Miller or nominee
Resolution 5 seeks Shareholder approval for the Company to issue a total of 750,000 Options to Mr Ronald Miller or his nominee for no consideration.
Purpose and Key Terms of Options
The purpose of the proposed issue of Options, is in recognition of Mr Miller'sappointment as a non-executive Director on 1 July 2009, his contribution to theCompany's development to date, and to provide an added incentive to him tocontribute to increasing Shareholder value.Each Option proposed to be issued is exercisable into one Share upon payment ofthe exercise price of $0.30. The Options will only be exercisable afterreaching their vesting date (1 July 2010) but must be exercised before theirexpiry date (1 July 2014) . Unexercised Options will lapse on their expirydate. Details of the key terms of the Options are set out in Appendix 2 to thisExplanatory Memorandum.The Board has made the decision to issue the Options to Mr Miller on the basisof an assessment of Mr Miller's contribution to the Company and also consideredthat Mr Miller's continuing involvement and contribution to the Company, takinginto account the fact that the Company operates with a relatively small numberof Directors, will be significant in achieving sustainable growth inShareholder value. The Board also took into account Mr Miller's existingremuneration package (details of which are set out in paragraph (h) on page 12of this Explanatory Memorandum). The Board determined that it is appropriate toissue 750,000 Options to Mr Miller given these factors. The Options weredetermined to be issued subject to Shareholder approval as part of hisrecruitment to the Board from 1 July 2009 with the Options vesting on 1 July2010, exercisable at $0.30 per share, and expiring on 1 July 2014.
6 Resolution 6 - Issue of Options to Director -Mr Clube or nominee
Resolution 6 seeks Shareholder approval for the Company to issue a total of 1,500,000 Options to Mr Benedict Clube or his nominee for no consideration.
Purpose and Key Terms of Options
The purpose of the proposed issue of Options is in recognition of Mr Clube'sappointment as an Executive Director on 1 July 2009, his contribution to theCompany's development to date, and to provide an added incentive to him tocontribute to increasing Shareholder value.Each Option proposed to be issued is exercisable into one Share upon payment ofthe exercise price of $0.30. The Options will only be exercisable afterreaching their vesting date (1 July 2010) but must be exercised before theirexpiry date (1 July 2014). Unexercised Options will lapse on their expiry date.Details of the key terms of the Options are set out in Appendix 2 to thisExplanatory Memorandum.The Board has made the decision to issue the Options to Mr Clube on the basisof an assessment of Mr Clube's contribution to the Company and also consideredthat Mr Clube's continuing involvement and contribution to the Company, takinginto account the fact that the Company operates with a relatively small numberof Directors, will be significant in achieving sustainable growth inShareholder value. The Board also took into account Mr Clube's existingremuneration package (details of which are set out in paragraph (i) on page 12of this Explanatory Memorandum). The Board determined that it is appropriate toissue 1,500,000 Options to Mr Clube given these factors. The Options weredetermined to be issued subject to Shareholder approval as part of hisappointment to the Board as Finance Director and as part of the Remunerationreview effective from 1 July 2009, with the Options vesting on 1 July 2010,exercisable at $0.30 per Share and expiring on 1 July 2014.
7 Disclosures required for Resolutions 5 & 6
Shareholder approval for the issue of the Options the subject of Resolutions 5 and 6 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 Resolution 5 and 6 pursuant toASX Listing Rule 10.11, , shareholder approval under Listing Rule 7.1 is notrequired, in accordance with Exception 14 of Listing Rule 7.2.
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 resolution 5 and 6 relate to the issue of securities to Directors, Shareholder approval must be obtained.
Listing Rule 10.13 requires the following information to be provided toShareholders for the purpose of obtaining Shareholder approval pursuant toListing Rule 10.11: Mr Miller Mr Clube
Options to be Mr Miller or his nominee(s). Mr Clube or his nominee(s).
issued to: Number of 750,000. 1,500,000. Options to be issued: Date of issue: As soon as practicable after the As soon as practicable after the date of the Annual General date of the Annual General Meeting, but in any event no Meeting, but in any event no later than 1 month after the later than 1 month after the date of the meeting. date of the meeting.
Consideration, The Options will be issued for The Options will be issued for exercise nil consideration.
nil consideration. price, vesting
and expiry The exercise price of each The exercise price of each dates: Option is $0.30. Option is $0.30. Each Option will vest on 1 July Each Option will vest on 1 July 2010 and expire on 1 July 2014. 2010 and expire on 1 July 2014. Terms and The Options will be issued on The Options will be issued on conditions: the terms and conditions set out the terms and conditions set out in Appendix 2 to this in Appendix 2 to this Explanatory Memorandum. All Explanatory Memorandum. All Shares issued upon exercise of Shares issued upon exercise of any Options will rank equally any Options will rank equally with all existing Shares. with all existing Shares. Funds: There will be no funds raised There will be no funds raised from the issue of the Options. from the issue of the Options. Any funds raised from the Any funds raised from the exercise of the Options will be exercise of the Options will be used for the working capital used for the working capital purposes of the Company. purposes of the Company.
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 (which includes a Director) 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 relatedparty of the Company. The proposed issue of Options to Mr Miller and Mr Clube,involves the provision of a financial benefit to a related party of the Companyand, therefore, requires prior Shareholder approval.In accordance with the requirements of Chapter 2E of the Corporations Act, thefollowing information is provided to Shareholders to allow them to assess theproposed issue of Options:
a. Mr Miller and Mr Clube are the related parties of the Company to whom the
financial benefit would be given if Shareholders approve resolution 5 and 6
(respectively).
b. The nature of the financial benefit to be given is the issue of 750,000
Options to Mr Miller and 1,500,000 Options to Mr Clube. 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 Mr Miller and Mr Clube at the
time the Options they each exercise Options.
c. Mr Miller declines to make a recommendation about Resolution 5 as he has a
material personal interest in the outcome of the Resolution. Mr Clube
declines to make a recommendation about Resolution 5 due to his interest in
Resolution 6.
d. Mr Clube declines to make a recommendation about Resolution 6 as he has a
material personal interest in the outcome of the Resolution. Mr Miller
declines to make a recommendation about Resolution 6 due to his interest in
Resolution 5.
e. The Board, with the exception of Mr Miller and Mr Clube, recommends that
members vote in favour of resolutions 5 and 6 as they consider that the issue of the Options is appropriate as recognition of Mr Miller and Mr Clube's appointment as Directors, their respective contributions to the Company to date and as an incentive for Mr Miller and Mr Clube to contribute to increasing Shareholder value.
f. Each Option will be issued for nil consideration. The exercise price of
each Option is $0.30, and the Options will vest on 1 July 2010 and expire
on 1 July 2014.
g. An estimate of the value of the Options proposed to be issued pursuant to
Resolutions 5 and 6 using the Black Scholes option pricing model has been
calculated as set out below:
Name of Related Party Number of Options Total Value using Black Scholes
Model based on grant date of 6 October 2009 Mr Ronald Miller 750,000 $141,152 Mr Benedict Clube 1,500,000 $282,303
This has been calculated with the following assumptions:
(i) risk free interest rate of 3.00%;
(ii) current Share price of $0.277, being the average closing price of the Company's Shares on ASX over the last 5 trading days prior to the finalisation of this Explanatory Memorandum on 6 October 2009;
(iii) dividend yield of 0%;
(iv) forecast volatility of 87%;
(v) Option exercise price of $0.30; and
(vi) Option term of 5 years from 1 July 2009 until 1 July 2014.
(h) Mr Miller did not receive any remuneration from the Company during the yearended 30 June 2009. However the Company and its subsidiaries used the servicesof Ematvil Pty Ltd, a company associated with Mr Miller. Rates charged byEmatvil Pty Ltd were at market rate and Mr Miller received indirectremuneration of $114,891 from the Company for consultancy services provided byEmatvil Pty Ltd for the year ended 30 June 2009. These services are notconnected with his duties as a Director and the Company continues to use theseconsultancy services. As at the date of this Notice of Meeting the totalremuneration package for Mr Miller in his capacity as a Director is $34,880 perannum. Any Options issued to Mr Miller or his nominee in accordance withResolution 5 will be in addition to the remuneration package of Mr Miller.(i) Mr Clube received a remuneration package totaling $291,017 from the Companyduring the year ended 30 June 2009 for his role as Chief Finance and CommercialOfficer in addition to $290,121 in Share based payments. As at the date of thisNotice of Meeting, the total remuneration package for Mr Clube is $411,122 perannum. This package consists of a remuneration package of $289,940 and $121,182share based payments relating to Options previously issued at the exerciseprices of $2.25 and $2.75 Any Options issued in accordance with Resolution 6will be an addition to that remuneration package.(j) Neither the Directors nor the Company are aware of any other informationthat would be reasonably required by Shareholders to make a decision whether itis in the best interests of the Company to pass Resolution 5 other than asfollows:
i. following the passage of Resolution 5, the direct and indirect interest of
Mr Miller in Shares and Options will be as follows:
Director Shares Options Issue date Vesting Exercise Expiry date Price Mr Miller 2,424,436 750,000 Not later than 1 month 1 July $0.30 1 July(or his (indirect) after the Annual General 2010 2014 nominee) Meeting
ii. if the 750,000 Options are issued and are exercised, the Company's Share
capital will be diluted by approximately 0.34%. (This calculation;
i. is based on the number of Shares on issue at the date of the Notice of
Meeting (which is 176,074,885);
ii. assumes completion of the issue of an additional 44,000,000 Shares for
which approval is to be sought by the Company at an Extraordinary
General Meeting to be held on or around 16 November 2009, as detailed
in the Notice of Extraordinary General Meeting provided to Shareholders
prior to this Notice of Meeting); and
iii. assumes that no other existing options are exercised; and
iii. the primary purpose of the issue of the Options is to recognise Mr
Miller's contribution to the Company's development to date and to provide
an added incentive to Mr Miller to contribute to increasing Shareholder
value.
(k) Neither the Directors nor the Company are aware of any other informationthat would be reasonably required by Shareholders to make a decision whether itis in the best interests of the Company to pass Resolution 6 other than asfollows:
(i) following the passage of Resolution 6 the direct and indirect interest of Mr Clube in Shares and Options in the Company will be as follows:
Director Shares Options Issue date Vesting Exercise Expiry Date Price Mr Clube 52,174 500,000 18 July 2008 30 $1.75 30(or his (direct) April Junenominee) 2009. 2011 500,000 18 July 2008 30 $2.25 30 April June 2010 2011 500,000 18 July 2008 30 $2.75 30 April June 2011 2012 1,500,000 Not later than 1 month 1 July $0.30. 1 July after the Annual General 2010 2014. Meeting.
ii. if the 1,500,000 Options are issued and are exercised, the Company's Share
capital will be diluted by approximately 0.68%. (This calculation:
i. is based on the number of Shares on issue at the date of the Notice of
Meeting (which is 176,074,885);
ii. assumes completion of the issue of an additional 44,000,000 Shares for
which approval is to be sought by the Company at an Extraordinary General
Meeting to be held on or around 16 November 2009, as detailed in the Notice
of Extraordinary General Meeting provided to Shareholders prior to this Notice of Meeting); and iii. assumes that no other existing options are exercised; and
(iii) the primary purpose of the issue of the Options is to recognise Mr Clube's contribution to the Company's development to date and to provide an added incentive to Mr Clube to contribute to increasing Shareholder value.
(l) 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 $0.70 05/11/2008 Low $0.14 16/07/2008 Last $0.28 16/10/2009
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 pricingcalculations set out above in this Explanatory Memorandum. The impact of theissue of Options on the Company's income statement for the financial year ended30 June 2010 under each of Resolution 5 and 6 would be as follows:Resolution number Director name Assumed value of 30 June 2010 Income Options Statement Resolution 5 Mr Miller $141,152 $141,152 Resolution 6 Mr Clube $282,303 $282,303 It should be noted that the actual expense amounts may differ from those setout above if the assumptions underlying the Black Scholes pricing model at thedate of issue of the Options vary from those set out above.
8. Renewal of Employee Performance Rights Plan
Status of Plan
ASX Listing Rule 7.1 provides that an ASX listed company may not issue equitysecurities comprising more than 15% of its issued shares in any 12 month periodwithout obtaining shareholder approval unless the issue comes within any of thespecified exceptions set out in ASX Listing Rule 7.2. ASX Listing Rule 7.2Exception 9(b) provides that securities issued under an employee incentivescheme are excluded from this restriction if, within 3 years before the date ofissue, shareholders have approved the issue of securities under the scheme asan exception.The Directors sought and obtained Shareholder approval to the issue ofsecurities under the Plan for this purpose at the 2006 annual general meetingon 23 November 2006.At that time the notice of meeting for the meeting set outdetails of the reasons for the implementation of the Plan and a summary of theterms and conditions of the Plan.At the date of the Annual General Meeting, 3 years will have passed sinceShareholders approved the Plan, and accordingly, the Company seeks Shareholderapproval of the issue of securities under the Plan once again. In accordancewith Exception 9(b) to ASX Listing Rule 7.2 the Company:
* has provided a summary of the terms of the Plan (below), noting that the
terms of the Plan for which approval is sought are revised from that
approved in 2006, and Shareholders should therefore consider this summary
closely;
* advises that the number of securities issued under the Plan since it was
last approved is 10,796,000; and
* advises that a voting exclusion statement is included within the Notice of
Meeting.
Summary of the Terms of the Plan
The following is a summary of the terms on which the Board intends to make offers under the Plan. Participation in the Plan will also be subject to the Plan Rules, a summary of which are set out in Appendix 1.
The Plan is a long-term incentive plan designed to allow the Company to competefor, and retain talented employees in a highly competitive international marketplace. The Plan aims to closely align the interests of senior executives andemployees with those of Shareholders and create a strong link betweenincreasing Shareholder value and employee reward.
A copy of the Plan Rules is available at no cost on request to the Company Secretary.
This section gives a brief outline of how the Board intends to implementparticipation under the Rules of the Plan. Where participation is offered tostaff who reside outside Australia there may have to be modifications to theterms of grant in order to comply with the requirements of applicable locallaws or practice.The Plan permits the Board to grant "rights to acquire shares" in the Company.Rights granted under the Plan may be in the form of traditional options with amarket based exercise price, or "Performance Rights" (that is, zero exerciseprice options (ZEPOs)), or a combination of these depending on the Company'sobjectives in making the grant, market practice in the jurisdiction in whichthe recipient is based (in consideration of legal, tax and regulatory issues)and the position within the Company held by the recipient.
The Plan will operate in two tiers:
i. The Executive Performance Rights Plan (Executive Plan) under which the
Board presently intends to offer Performance Rights to executives and
members of management who, in the opinion of the Board, are able by virtue
of their position, experience and skill, to create value for Shareholders.
Performance Rights will be subject to the performance conditions determined
by the Board.
ii. The Employee Share Option Plan (ESOP) under which the Board intends to
offer share options to employees who have met pre-determined performance
standards. The ESOP is intended to reward performance of Oilex employees by
providing them with opportunity to build an equity stake in the Company and
participate in the performance to which they contribute.
The Plan Rules will apply to both tiers of the Plan.
A Performance Right (which delivers the whole share) has a significantly higherpresent value than a market priced option (which delivers only the growth inthe share price over the performance period). Consequently, fewer PerformanceRights are required to deliver the same present value. With new issues (whichare presently intended as the source of Shares for the Plan), this controlsdilution of ownership and reduces future dividend payments.
For these reasons, the Board has determined that in normal circumstances, Performance Rights will be offered to executives and senior management who would be expected to receive the greatest value under the Plan.
The flexibility of the Plan Rules will enable the Board to design grants thatbest meet the particular circumstances. In particular (but without limiting theBoard's discretion in the future), it is possible that options may be offeredto executives where market conditions require their grant in order to becompetitive.
The Board may determine that Rights are to be subject to performance conditions. In this circumstance, an Eligible Person will only be entitled to exercise the Rights and receive Shares where the applicable performance conditions are satisfied.
The exercise period for a Right commences on the date that the performance condition applicable to that Right (if any) is achieved and exercise is permitted to the extent they are achieved, whether at the initial or Final Performance Date. Exercisable Rights may be exercised at any time thereafter until the Expiry Date (the fifth anniversary of the Grant Date of the Tranches).
APPENDIX 1 TO ANNEXURE A
EMPLOYEE PERFORMANCE RIGHTS PLAN RULES
A summary of the Plan Rules is set out below. These Rules apply to both Tiersof the Plan (the Executive Plan and the ESOP). The specific terms of aparticular grant, including any performance conditions will be contained in theinvitation and associated documentation provided to the relevant participant.Capitalised terms used in this summary have the meaning given to those terms inthe Plant Rules.
a. Eligible Persons - the Plan applies to employees of the Company and of any
subsidiary company approved by the Board, who are declared by the Board to
be eligible persons (Eligible Persons).
b. Rights to Acquire Shares - grants under the Plan will be of Rights to
acquire Shares in the Company. Rights include both options with an exercise
price and ZEPOs.
c. Invitation to Participate - in accordance with the Plan Rules, the Board
may, from time to time, issue an invitation to selected Eligible Persons to
apply for Rights to acquire Shares in the Company (Invitation). The
specific terms of a particular grant of Rights, including any performance
conditions the exercise price (if any), the vesting date and expiry date,
(or the method for determining each of them) will be contained in the
Invitation documentation sent to the Eligible Person.
At the request of an Eligible Person and with the approval of the Board, to the
extent the Eligible Person does not personally apply for the full number of
Rights referred to in an Invitation, some or all of the balance of the Rights
may be granted to an Associate of the Eligible Person.
"Associate" for this purpose has the meaning given in section 139GE of the Tax
Act. Broadly, this term includes a relative of the Eligible Person, a partner
of the Eligible Person or a partnership in which the Eligible Person is a
partner, a spouse or child of the partner, a trust under which the Eligible
Person or an Associate can benefit and a company over which the Eligible Person
or an Associate has control, or in which the Eligible Person directly or
indirectly holds a Share or a Right to acquire a Share.
d. Rights are non-transferable - a Right granted to a Participant (including
an Associate) is not transferable and may not otherwise be dealt with,
except with the Board's approval, or by force of law on death or legal
incapacity.
e. Exercise Price - the exercise price for a Right (Exercise Price) other than
a ZEPO, which does not have an exercise price, will be an amount determined
by the Board from time to time, fixed at the date of grant or determined by
application of a methodology approved by the Board.
Rights may be issued by the Board with or without an exercise price being
applicable.
f. Performance Condition - the Board may determine that Rights are to be
subject to performance conditions. In this circumstance, an Eligible Person
will only be entitled to exercise the Rights and receive Shares where the
applicable performance condition is attained.
g. Timing for Exercise of Rights - Rights (both Performance Rights and
Options) may be exercised after the date on which they vest and prior to
their Expiry Date.
The Board may prescribe the date or the method of calculating the date on which
Rights vest and thereby become exercisable (Exercise Date) and the expiry date
for the Rights (Expiry Date). On or after the Exercise Date (but before the
Expiry Date) and provided any performance condition prescribed by the Board has
been achieved, the Eligible Person may then acquire Shares by exercising the
Rights.
A Right will lapse if it is not exercised by its Expiry Date.
h. Early Cessation of Employment - The Plan makes provision for the status of
Rights granted to an Eligible Person who ceases employment, including in
the following circumstances:
(1) if an Eligible Person ceases employment prior to the Exercise Date as a
result of death, incapacity, redundancy or sale of the Company or business in
which the Eligible Person is employed, then subject to the satisfaction of any
applicable performance conditions, the Participant (or their legal personal
representative) may exercise their Rights before, on or after the date of
cessation until the expiry of the periods stated in the Rules.
(2) If the cessation of employment is a result of retirement or separation or
where otherwise permitted by the Board, subject to the satisfaction of any
applicable performance conditions, the Participant may exercise Rights on or
after the relevant vesting date until the expiry of the period stated in the
Rules or their Invitation documents.
i. Change of Control and other corporate events - subject to the satisfaction
of any applicable performance condition, the Board has the discretion to
permit Eligible Persons to exercise Rights, on the occurrence of a takeover
bid, change of control event, circumstances relating to a scheme of
arrangement or compromise, or demerger. In the event of such an occurrence,
any measure of against a performance condition will be undertaken as at the
date of the occurrence of the relevant corporate event.
In more advanced circumstances including a takeover, court sanctioned scheme of
arrangement or a winding up, an Eligible Person's Rights are deemed to have
vested and may be exercised within the period of time provided for in the Plan
Rules.
j. Restrictions on disposal - the Board may stipulate restrictions on the
disposal by a Plan participant of any Shares resulting from the exercise of
a Right. Eligible Persons will be informed of such restrictions (if any) in
their Invitation or accompanying documentation or in the Plan Rules.
k. Reconstructions, Bonus and Rights issues - the Exercise Price (if there is
one) of a Right will be adjusted in the manner contemplated by the Listing
Rules from time to time to take account of capital reconstructions and
bonus issues.
If there is a rights issue to all Shareholders before a Right under the Plan is
exercised, the Exercise Price (if there is one) for a Right will be
appropriately adjusted in accordance with the formula provided by the Listing
Rules. If there is no Exercise Price, the number of Shares subject to the Right
will be adjusted as the Board considers appropriate, subject to the
confirmation by the Company's auditors that it is fair and reasonable.
l. Amendments to Plan Rules - subject to the provisions of the Plan and the
Listing Rules, the Board may amend the Plan Rules, a performance condition
or the other terms of grant, including for the purpose of complying with
State or Commonwealth legislation, the Constitution or the Listing Rules,
or to address possible adverse tax implications for Participants generally
or the Company or any subsidiary or to correct errors. Generally, the Plan
Rules may not be amended if in the Board's opinion the amendment would
materially reduce the rights of a Participant in respect of Rights already
granted.
m. Status of Shares Issued - Shares issued under the Plan upon exercise of
Rights, will rank equally in all respects with other Shares on issue at
that time and the Company will apply for quotation of those Shares on ASX
and/or any other applicable securities exchange. APPENDIX 2 TO ANNEXURE A OILEX LTD ABN 58 078 652 632 DIRECTORS OPTIONS TERMS & CONDITIONS
1. The Options are exercisable at any time between the vesting date (1 July
2010) and 5.00 pm WST on the expiry date (1 July 2014) by notice in writing
to the Company accompanied by payment of the exercise price.
2. Should the Director resign after the vesting date, then the Director
retains the Options until their expiry or exercise.
3. An Option can only be exercised after its vesting date.
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 $0.30.
7. The Options can be transferred to a nominee of the Director 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 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.
10. The Option holder will be entitled to participate in any new pro-rata issue
of securities of the Company on prior exercise of the Options. For this
purpose the Option holder will be afforded a period of at least 10 business
days before the record date for determining entitlements to the issue, to
exercise his Options.
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.
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 DirectorsOilex LtdLevel 250 Kings Park RoadWEST PERTH WA 6005Share Registry:
Security Transfer Registrars Pty Ltd
Suite 1 770 Canning Highway
APPLECROSS WA 6153
Email: [email protected]
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 $0.30c per share. I/We enclose application moneyof $ .................. and authorise you to register me/us as the holder of the shares tobe allotted to me/us and I/we agree to accept such shares subject to the Rulesof the Constitution of the CompanyIndividual or Holder 1Security holder 2Security holder 3Date:Sole DirectorDirector/SecretaryDirector/SecretaryDay/Month/YearContact NameContact 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.
vendorRelated Shares:
OEX.L