1st Dec 2006 12:20
Dwyka Diamonds Limited01 December 2006 DWYKA DIAMONDS LIMITED ACN 060 938 552 NOTICE OF GENERAL MEETING and EXPLANATORY MEMORANDUM Date of Meeting: 5 January 2007 Time of Meeting: 10.00 am Place of Meeting: 98 Colin Street West Perth, Western AustraliaThis Notice of General Meeting and Explanatory Memorandum should be read intheir entirety. If shareholders are in doubt as to how they should vote, theyshould seek advice from their accountant, solicitor or other professionaladviser prior to voting. Notice is hereby given that a general meeting of shareholders of Dwyka DiamondsLimited ACN 060 938 552 ("Company") will be held at the 98 Colin Street, WestPerth, Western Australia at 10.00 am on 5 January 2007. The Explanatory Memorandum which accompanies and forms part of this Notice ofMeeting describes the various matters to be considered and contains a glossaryof defined terms for terms that are not defined in full in this Notice ofMeeting. RESOLUTIONS 1. Cancellation of Options under the 2003 Option Plan and grant of Options toemployees of the Company To consider and, if thought fit, to pass, the following as an ordinaryresolution: "That, for the purposes of Listing Rule 7.1, Listing Rule 6.23 and for all otherpurposes, Shareholders approve and authorise the cancellation of 700,000 Optionsgranted under the 2003 Dwyka Diamonds Option Plan (which was approved byshareholders on 28 November 2003) on the terms and conditions set out in theExplanatory Memorandum and approve and authorise the grant to employees of theCompany of up to 700,000 Options, each exercisable on or before 30 June 2010, ata price determined by the Board, but which will not be less than the weightedaverage of the prices at which the Shares were trading on the Relevant StockMarket during the five day trading period immediately before the date on whichthe Options will be granted, upon the terms and conditions specified in theExplanatory Memorandum and to allot and issue up to 700,000 shares in thecapital of the Company on the valid exercise of those Options." The Company will disregard any votes cast on this resolution by a person whoholds an Option that is the subject of this resolution, a person who mayparticipate in the proposed grant and a person who might obtain a benefit if theresolution is passed and any associate of such persons. However, the Companyneed not disregard a vote if it is cast by that person as a proxy for a personwho is entitled to vote, in accordance with the directions on the proxy form, orit is cast by a person chairing the meeting as a proxy for a person who isentitled to vote, in accordance with a direction on the proxy form to vote asthe proxy decides. 2. Cancellation of Options under the 2003 Option Plan and grant of Options toCedric Bredenkamp To consider and, if thought fit, to pass, the following as an ordinaryresolution: "That, for the purposes of subsection 208(1) of the Corporations Act, ListingRule 6.23, Listing Rule 10.11 and for all other purposes, Shareholders approveand authorise the cancellation of 250,000 Options granted to Cedric Bredenkampunder the 2003 Dwyka Diamonds Option Plan (which was approved by shareholders on28 November 2003) on the term and conditions set out in the ExplanatoryMemorandum and approve and authorise the grant of up to 250,000 Options, eachexercisable on or before 30 June 2010 at a price determined by the Board, butwhich will not be less than the weighted average of the prices at which theShares were trading on the Relevant Stock Market during the five day tradingperiod immediately before the date on which the Options will be granted, toCedric Bredenkamp (or his Nominee) on the terms and conditions set out in theExplanatory Memorandum and to allot and issue up to up to 250,000 shares in thecapital of the Company on the valid exercise of those Options." The Company will disregard any votes cast on this resolution by any person whoholds an Option that is the subject of this resolution and a person who isentitled to receive securities in accordance with this resolution and anyassociate of such persons. However, the Company need not disregard a vote if itis cast by a director as a proxy for a person who is entitled to vote, inaccordance with the directions on the proxy form, or it is cast by a personchairing the meeting as a proxy for a person who is entitled to vote, inaccordance with a direction on the proxy form to vote as the proxy decides. BY ORDER OF THE BOARD Michael Langoulant Company Secretary DATED: 17 November 2006 PROXY AND VOTING ENTITLEMENT INSTRUCTIONS PROXY INSTRUCTIONS Shareholders are entitled to appoint up to two individuals or bodies corporateto act as proxies to attend and vote on their behalf. Where more than one proxyis appointed each proxy may be appointed to represent a specific proportion ofthe shareholder's voting rights. If the appointment does not specify theproportion or number of votes each proxy may exercise, each proxy may exercisehalf of the votes. The proxy form (and the power of attorney or other authority, if any, underwhich the proxy form is signed) or a copy or facsimile which appears on its faceto be an authentic copy of the proxy form (and the power of attorney or otherauthority) must be deposited at or sent by facsimile transmission to theCompany's office, 98 Colin Street, West Perth WA 6005, +61 8 9324 2977, not lessthan 48 hours before the time for holding the Meeting, or adjourned meeting asthe case may be, at which the individual or body corporate named in the proxyform proposes to vote. The proxy form must be signed by the shareholder or his/her attorney dulyauthorised in writing or, if the shareholder is a corporation, in a mannerpermitted by the Corporations Act. The proxy may, but need not, be a shareholder of the Company. In the case of shares jointly held by two or more persons, all joint holdersmust sign the proxy form. A proxy form is attached to this Notice. VOTING ENTITLEMENT For the purposes of determining voting entitlements at the Meeting, shares willbe taken to be held by the persons who are registered as holding the shares at10.00 am on 3 January 2007. Accordingly, transactions registered after thattime will be disregarded in determining entitlements to attend and vote at theMeeting. EXPLANATORY MEMORANDUM This Explanatory Memorandum has been prepared for the information ofShareholders in connection with the business to be considered at the generalmeeting of Shareholders to be held at 98 Colin Street, West Perth, WesternAustralia at 10.00 am on 5 January 2007. The Explanatory Memorandum should be read in conjunction with the accompanyingNotice of Meeting. For the assistance of Shareholders, a glossary of definedterms is included at the end of the Explanatory Memorandum. Full details of the business to be considered at this General Meeting are setout below. 1. Background to Resolutions 1 and 2 The Company has established share and option plans ("Incentive Plans") to ensurethat it has appropriate mechanisms to continue to attract and retain theservices of directors and employees of a high calibre. The Company acknowledgesthat its directors, employees and consultants have been, and will continue tobe, instrumental in its growth. The Incentive Plans have been used by the Company as part of the remunerationplanning for executive directors and employees. The Corporate GovernanceCouncil Guidelines recommend that executive remuneration packages involve abalance between fixed and incentive pay reflecting short and long-termperformance objectives appropriate to the company's circumstances and goals. The 2003 Option Plan was approved by Shareholders on 28 November 2003. Asummary of the 2003 Option Plan is in Schedule 1. Since the establishment of the 2003 Option Plan and the offer of Options underthat plan, the Company's financial position and circumstances have changedmaterially and the Company has undergone considerable change. As a result ofthese changes, the Options offered and granted under the 2003 Option Plan havenot proved to be a valuable reward for services provided to the Company. Some employees and Directors of the Company were granted Options under the 2003Option Plan with an exercise price of $0.52. These Options granted under the2003 Option Plan expire on 30 June 2007 ("2003 Options"). The exercise price ofthe 2003 Options is similar to the price at which the Shares are currentlytrading. Accordingly, the Company wishes to cancel the 2003 Options and grantnew Options to the previous optionholders on the terms and conditions as set outin Schedule 2. The holders of the 2003 Options have been, and will continue to be, instrumentalin the growth of the Company. The purpose of Resolutions 1 and 2 is to ensurethat the Company can: (a) reward the holders of 2003 Options for their past performance; (b) provide long term incentives for participation in the Company's futuregrowth; (c) motivate and generate loyalty from the holders of 2003 Options; and (d) assist to retain the services of the holders of 2003 Options. 2. Resolutions 1 and 2 - Cancellation of Options under 2003 Option Plan 2.1 Listing Rule 6.23.2 Listing Rule 6.23.2 provides that the Options can be cancelled for considerationprovided shareholder approval has been obtained. The Company considers that the agreement between the Company and theoptionholders to issue new Options after the cancellation of the originalOptions may be viewed as consideration for the purposes of the Listing Rules.Accordingly, the Company is seeking Shareholder approval for the cancellation ofthe 2003 Options granted under the 2003 Option Plan. 2.2 Listing Rule 6.23.3 Listing Rule 6.23.3 provides that a change to the terms of options which has theeffect of increasing the period for exercise cannot be made. Listing Rule6.23.5 allows ASX to consider separate transactions as part of the samecommercial transaction if those transactions have the effect of increasing theperiod of exercise of options. The cancellation of the Options and the grant of the new Options may, by virtueof Listing Rule 6.23.5, be considered part of the same transaction and thereforebe a change which has the effect of increasing the period of exercise of theOptions. The Company has sought and ASX has granted the Company a waiver from ListingRule 6.23.3. The waiver allows the Company to seek shareholder approval tocancel the Options and to grant the new Options in accordance with Resolutions 1and 2. 3. Resolution 1 - Grant of Options to employees 3.1 Listing Rule 7.1 With regard to the grant of 700,000 new Options, the shareholder approvalobtained for the 2003 Option Plan has expired in accordance with Listing Rule7.2, exception 9. Accordingly, shareholder approval in accordance with Listing Rule 7.1 is sought. Listing Rule 7.1 broadly provides, subject to certain exceptions, that a companymay not issue or agree to issue securities which represent more than 15% of thenominal value of the company's issued capital at the beginning of any 12 monthperiod without obtaining shareholder approval. Subject to the passing of Resolutions 1 and 2, the Company proposes to grant atotal of 950,000 Options on the terms and conditions set out in Schedule 2.Included in the 950,000 Options, the Company has issued a conditionalinvitation, subject to the passing of Resolution 2, to Cedric Bredenkamp (theCompany's Managing Director - South African operations) to accept the grant of250,000 Options. Resolution 1 seeks approval to grant up to 700,000 Options toemployees and Resolution 2 seeks approval to grant up to 250,000 Options to MrBredenkamp. 3.2 Listing Rule 7.3 In accordance with the requirements of Listing Rule 7.3, the followinginformation is provided to Shareholders to allow them to assess the proposedgrant of Options: (a) The maximum number of Options to be granted pursuant to Resolution 1 is700,000 Options; (b) The grant of the Options will occur no later than three months after thedate of the Meeting, or such later date approved by ASX; (c) The Board presently intend to grant the Options pursuant to Resolution 1 asone allotment. However, they reserve the right to grant the Optionsprogressively; (d) The Options will be granted for no consideration. The exercise price of theOptions will be determined by the Board, but will not be less than the weightedaverage of the prices at which the Shares were trading on the Relevant StockMarket during the five day trading period immediately before the date on whichthe Options are granted; (e) The allottees of the Options will be employees of the Company; (f) The terms of the Options are set out in Schedule 2; and (g) No funds will be raised by the granting of the Options pursuant toResolution 1. However, when the Options are exercised, the funds raised by theissue of those shares will be used for working capital purposes, as the Boardthinks fit. 4. Resolution 2 - Grant of Options to Cedric Bredenkamp 4.1 Details of proposed grant of Options to Cedric Bredenkamp The Company proposes to grant 250,000 Options to the Managing Director - SouthAfrican operations of the Company, Cedric Bredenkamp, on the terms andconditions set out in Schedule 2. Mr Bredenkamp may renounce the Optionsoffered to him in favour of his spouse, a body corporate in which Mr Bredenkampholds and beneficially owns not less than 50% of the issued voting share capitalor the trustee of a trust in which Mr Bredenkamp is a beneficiary or object orthe trustee or a trust in which Mr Bredenkamp is a member ("Nominee"). If Shareholders approve Resolution 2, 250,000 Options granted to CedricBredenkamp under the 2003 Option Plan will be cancelled. The number of Options proposed to be granted to Cedric Bredenkamp, or hisNominee, reflects the level of commitment provided by Mr Bredenkamp, taking intoaccount his responsibilities and time commitments to the Company. The exercise price of the Options offered to Cedric Bredenkamp is to bedetermined by the Board, but will not be less than the weighted average of theprices at which the Shares were trading on the Relevant Stock Market during thefive day trading period immediately before the date on which the Options aregranted. The Options to be granted pursuant to Resolution 2 are in addition to the feeand remuneration package payable by the Company to Cedric Bredenkamp. Incalculating the fee and remuneration package provided to Cedric Bredenkamp asset out in section 4.2(g) of the Explanatory Memorandum, the Board has takeninto consideration the grant of Options proposed in Resolution 2. The Boardconsiders that the appropriate remuneration package for Cedric Bredenkampcomprises both the remuneration set out in section 4.2(g) of the ExplanatoryMemorandum and the Options to be granted if Resolution 2 is passed byshareholders. Given the size of the Company, the Board considers it appropriatefor part of the remuneration package to comprise non-cash, incentive-basedremuneration. 4.2 Chapter 2E of the Corporations Act Chapter 2E of the Corporations Act prohibits the Company from giving a financialbenefit to a related party of the Company unless either: the giving of the financial benefit falls within one of the nominated exceptionsto the provisions; or prior shareholder approval is obtained to the giving of the financial benefit. For the purposes of Chapter 2E, Cedric Bredenkamp is a related party and thegrant of Options to Cedric Bredenkamp, or his Nominee, constitutes the giving ofa financial benefit. While the grant of the Options forms part of the MrBredenkamp's remuneration package and may therefore fall within the reasonableremuneration exception, the Company is seeking Shareholder approval of the grantof the Options. In accordance with the requirements of Chapter 2E, and in particular withsection 219, of the Corporations Act, the following information is provided toShareholders to allow them to assess the proposed grant of Options to CedricBredenkamp: (a) Cedric Bredenkamp is a related party of the Company to whom proposedResolution 2 would permit a financial benefit to be given; (b) the nature of the financial benefit to be given to Cedric Bredenkamp is thegrant of 250,000 Options exercisable at a price determined by the Board, butwhich will not be less than the weighted average of the prices at which theShares were trading on the Relevant Stock Market during the five day tradingperiod immediately before the date on which the Options are granted, on orbefore 30 June 2010; (c) the terms of the Options which will be granted to Cedric Bredenkamp are setout in Schedule 2 to this Explanatory Memorandum; (d) the Options will be granted for no cash consideration and accordingly, nofunds will be raised by the grant of the Options to Cedric Bredenkamp. Thefunds raised from time to time due to purchase of Shares issued as a result ofthe exercise of the Options will be used for working capital purposes, as theBoard thinks fit; (e) as at the date of this Notice, the capital structure of the Company is asfollows:Capital NumberOrdinary shares 93,737,135Options (unquoted) ($0.52 exercisable on or before 30 950,000June 2007) Options (unquoted) ($1.00 exercisable on or before 30 1,000,000June 2009) Convertible Notes (unquoted) (each convertible into a 1,000 (convertible into 2,778,000 Shares)maximum of 2,778 shares at GBP0.36 per share on orbefore 22 June 2010)Total ordinary shares if all options and convertible 98,465,135notes on issue are exercised If Shareholders approve Resolutions 1 and 2 and all 950,000 Options in relationto Resolutions 1 and 2 are granted, as contemplated by this Notice, the issuedcapital of the Company would be as follows:Capital NumberOrdinary shares 93,737,135Options (unquoted) ($0.52 exercisable on or before 30 950,000June 2010) Options (unquoted) ($1.00 exercisable on or before 30 1,000,000June 2009) Convertible Notes (unquoted) (each convertible into a 1,000 (convertible into 2,778,000 Shares)maximum of 2,778 shares at GBP0.36 per share on orbefore 22 June 2010)Total ordinary shares if all options and convertible 98,465,135notes on issue are exercised (f) as at the date of this Notice, Cedric Bredenkamp holds the followingsecurities in the Company:Recipient Director Number of Shares Number of Shares Number of Options Number of held Directly held Indirectly held Directly Options held IndirectlyCedric Bredenkamp 12,660 nil 750,000 nil If Shareholders approve Resolution 2 and all Options are granted as contemplatedby this Notice, Cedric Bredenkamp will hold the following securities in theCompany, representing 0.81% of the issued capital of the Company based on theexisting number of Shares as at the date of this Notice, or 0.77% based on theexisting number of Shares as at the date of this Notice and assuming allexisting Options and convertible notes are exercised:Recipient Director Number of Shares Number of Shares Number of Options Number of held Directly held Indirectly held Directly Options held IndirectlyCedric Bredenkamp 12,660 nil 750,000 nil (g) details of Cedric Bredenkamp's remuneration for the year ended 30 June 2006(based on information extracted from the Company's 2006 Annual Report) are asfollows:Recipient Directors' Salary & Super Non-monetary Equity Total ($)Director Fees ($) consultancy -annuation ($) benefits ($) Options fees ($) ($)Cedric 35,000 149,641 nil nil 23,464 208,105Bredenkamp Details of the estimated remuneration payable to Cedric Bredenkamp for the yearbeginning 1 July 2006 are as follows:Recipient Directors' Salary & Super - Non-monetary Equity Total ($)Director Fees ($) Consultancy annuation ($) benefits ($) Options fees($) ($)Cedric 35,000 150,000 nil nil 59,134 244,134Bredenkamp (h) the Options are being granted for no consideration. The exercise price ofthe Options will be determined by the Board, but will not be less than theweighted average of the prices at which the Shares were trading on the RelevantStock Market during the five day trading period immediately before the date onwhich the options are granted; (i) during the last 12 months before the date of lodgement of this Notice withthe ASIC, the highest trading price of the Shares was $0.945 on 13 March 2006and the lowest trading price of the Shares was $0.48 on 14 November 2006. Thelast sale price of the Shares before this Notice of Meeting was lodged with theASIC, was $0.48 per Share on 14 November 2006; (j) the primary purpose of the grant of the Options to Cedric Bredenkamp is toprovide a reward and an incentive to Cedric Bredenkamp. Given this purpose, theDirectors do not consider that there is any opportunity cost or benefit foregoneto the Company in granting the Options proposed by Resolution 2; (k) the grant of Options to Cedric Bredenkamp is a more cost effective incentivefor the Company as opposed to the payment of cash compensation; (l) Cedric Bredenkamp has a material personal interest in the outcome ofResolution 2, as the recipient of the Options proposed to be granted; (m) Cedric Bredenkamp does not wish to make a recommendation to Shareholdersabout Resolution 2 because he has an interest in the outcome of that Resolution,as set out in paragraph (l) above; (n) all Directors, apart from Cedric Bredenkamp, recommend to Shareholders thatthey approve Resolution 2. These Directors do not have an interest in theoutcome of Resolution 2 except as Shareholders of the Company. (o) a valuation of the Options proposed to be granted to Cedric Bredenkamp underthe Share Plan has been calculated by HLB Mann Judd using the Black and ScholesOption Pricing Model and based upon the following assumptions: - the underlying value of each share in the Company is based on the closingshare price of $0.52 as at 9 November 2006; - Risk free rate of return - 5.88% (based on the 5 bond indicator rate as at 8November 2006); - share price volatility of 71.31%; - exercise price of the Options is yet to be determined but anticipated to be$0.52 per Option, being not less than the weighted average of the prices atwhich the shares were trading on the Relevant Stock Market during the five daytrading period immediately before 9 November 2006); and - Option expiry date: 30 June 2010. Based on the above factors, the Black and Scholes Option Pricing Modelattributes a theoretical value to each Option of $0.141. The Black and Scholes Option Pricing Model assumes that the equity instrumentsthe subject of the valuation can be sold on a secondary market. The terms andconditions of the Options states that no application will be made for the Sharesto be listed for official quotation on ASX or AIM, until certain milestones aremet. Accordingly a discount for lack of marketability is required to determinean indicative fair value of the options. In arriving at a discount factor of15%, HLB Mann Judd considered: - that discounts have traditionally been applied in the range of 10-30% toreflect the non-negotiability of unlisted equities; and - the fact that the securities will be unlisted. HLB Mann Judd has calculated the benefit of the cancellation of the Optionsgranted under the 2003 Option Plan and the grant of the new Options, based on adiscount factor of 15% applied to the theoretical valuation of the Options, tobe $0.14; (p) additional information in relation to Resolution 2 is set out throughoutthis Explanatory Memorandum. Shareholders should therefore read the ExplanatoryMemorandum in its entirety before making a decision on how to vote on Resolution2; (q) the Company will incur no liabilities or costs in respect of the proposedgrant of the Options other than the fees payable for quotation of the Sharesupon exercise of the Options; and (r) neither the Board nor the Company is aware of any other information thatwould reasonably be required by Shareholders in order to decide whether it is inthe best interests of the Company to pass Resolution 2, other than as stated inthis Explanatory Memorandum. 4.3 Listing Rule 10.11 Listing Rule 10.11 provides, in essence, that a listed company may not issuesecurities (including options to subscribe for shares) to any of the followingpersons without the approval of shareholders: (a) a related party; or (b) a person whose relationship with the company or a related party is, in ASX'sopinion, such that approval be obtained. For the purposes of Listing Rule 10.11, Cedric Bredenkamp is a related party ofthe Company. Accordingly, shareholder approval in accordance with Listing Rule10.11 is sought. The Company proposes to issue a total of 250,000 Options to Cedric Bredenkamp orhis Nominee. 4.4 Disclosure requirements In accordance with the requirements of Listing Rule 10.13, the followinginformation is provided to Shareholders to allow them to assess the proposedgrant of Options to Cedric Bredenkamp: (a) The maximum number of Options to be granted pursuant to Resolution 2 is250,000 Options; (b) The grant of the Options will occur no later than one month after the dateof the Meeting; (c) The Options will be granted for no consideration; (d) The exercise price of the Options will be determined by the Board, but willnot be less than the weighted average of the prices at which the Shares weretrading on the Relevant Stock Market during the five day trading periodimmediately before the date on which the Options are granted; (e) The allottee of the Options will be Cedric Bredenkamp or his Nominee; (f) A summary of the terms and conditions of the Options is set out in Schedule2; and (g) No funds will be raised by the granting of the Options pursuant toResolution 2. However, when the Options are exercised, the funds raised by theissue of those shares will be used for working capital purposes, as the Boardthinks fit. Approval pursuant to Listing Rule 7.1 is not required in order to issue theOptions to Cedric Bredenkamp if approval is obtained under Listing Rule 10.11.Shareholders should note that the issue of Options to Cedric Bredenkamp will notbe included in the 15% calculation for the purposes of Listing Rule 7.1. 5. Glossary of Terms The following terms and abbreviations used in the Notice of Meeting and thisExplanatory Memorandum have the following meanings: "2003 Option Plan" means the Dwyka Diamonds Limited Option Plan approved byshareholders on 28 November 2003. "$" means Australian dollars. "AIM" means the AIM Market of the LSE or if the Company is no longer listed onthe AIM Market of the LSE but is listed on the LSE, then the LSE. "AIM Rules" means the rules applicable to companies listed on the AIM or the LSE(as applicable). "ASIC" means the Australian Securities and Investments Commission. "ASX" means Australian Stock Exchange Limited. "Board" means the board of Directors. "Company" and "Dwyka" means Dwyka Diamonds Limited, ACN 060 938 552. "Corporations Act" means the Corporations Act 2001 (Commonwealth). "Directors" means the directors of the Company, from time to time. "Explanatory Memorandum" means this explanatory memorandum. "General Meeting" or "Meeting" means the general meeting of Shareholders to beheld at 98 Colin Street, West Perth, Western Australia at 10.00 am on 5 January2007, or any adjournment thereof. "Listing Rules" means the official listing rules of ASX. "LSE" means London Stock Exchange Plc. "Notice of Meeting" means the notice of the Meeting which accompanies theExplanatory Memorandum. "Option" means an option to apply for one fully paid ordinary share in thecapital of the Company. "Relevant Stock Market" means ASX if the Company is listed on ASX, or AIM if theCompany is listed on AIM and is not listed on ASX. "Resolution" means a resolution in the Notice of Meeting. "Section" means a section of this Explanatory Memorandum. "Shareholders" means registered holders of Shares. "Shares" means fully paid ordinary shares in the capital of the Company. Schedule 1 - Summary of 2003 Option Plan Set out below is a summary of the terms and conditions of the 2003 Option Plan. - Participants - Participants in the 2003 Option Plan may be directors, fulltime or part-time employees of, and consultants to, the Company or any of itssubsidiaries ("Participants"). - Board - The Board is responsible for the operation of the 2003 Option Plan. - Eligibility - The Board determines the eligibility of Participants, havingregard to: (a) the seniority of the Participant and the position the Participant occupieswith the relevant company; (b) the length of service of the Participant with the Company or any subsidiary; (c) the record of employment of the Participant with the relevant company; (d) the potential contribution of the Participant to the growth andprofitability of the relevant company; (e) the extent (if any) of the existing participation of the Participant in the2003 Option Plan; and (f) any other matters which the Board considers relevant. - Invitations - The Board may issue invitations to Participants for the numberof options specified in the invitation. Options may be renounced in favour ofthe spouse of the invitee, a body corporate in which the invitee holds andbeneficially owns not less than 50% of the issued voting share capital or thetrustee of a trust in which the invitee is a beneficiary or object or thetrustee or a trust in which the invitee is a member ("Nominee"). - Number of Options - The number of Options that may be offered to a Participantis entirely within the discretion of the Board. Each Option will entitle theholder to one Share, upon payment of the exercise price in full uponapplication, prior to the expiry date. - Issue Price - Options granted under the 2003 Option Plan will be granted freeof charge. - Exercise Price - The exercise price of Options granted under the 2003 OptionPlan will be determined by the Board, but must not be less than: (a) if there was at least one transaction in Shares on the Relevant Stock Marketduring the 5 trading day period immediately before the date on which the offeris made, the weighted average of the prices at which Shares were traded duringthat period; or (b) if there were no transactions in the Shares on the Relevant Stock Marketduring that 5 trading day period immediately before the date on which the offeris made, the last price at which an offer was made on the Relevant Stock Marketto purchase a Share. - Expiry Date - The expiry date of the Options will be determined by the Board.Options granted under the 2003 Option Plan will lapse if not exercised prior tothe expiry date, or on the first to occur of the following: (a) if the Participant (or the person by virtue of whom a participant holdsoptions) ceases to be a Director, employee or consultant for any reason otherthan set out in paragraph (b) below, one month thereafter; and (b) if the Participant (or the person by virtue of whom a participant holdsoptions) dies, retires, is retrenched, becomes bankrupt, wound up orderegistered, 12 months thereafter. - Restriction on Transfer - Options may not be transferred without the priorwritten approval of the Board. - Adjustment of Options - If, prior to the expiry of an Option granted under the2003 Option Plan, there is a reorganisation of the issued share capital of theCompany (including a consolidation, subdivision or reduction of capital orreturn of capital to shareholders), the number of Shares subject to the optionand/or the exercise price will be adjusted in the manner required by the ListingRules. - Bonus issue and rights issues - A participant is required to exercise anOption in order to participate in a bonus or entitlement issue made by theCompany. Participants will be provided with written notice of the terms of theissue to shareholders and afforded that period as determined by the ListingRules to exercise their Options if they wish to participate in the bonus orentitlement issue. - Shares issued on Exercise of Options - Shares which are issued as a result ofthe exercise of options granted under the 2003 Option Plan will rank pari passuin all respects with all Shares on issue and the Company will apply forquotation of those Shares on ASX and AIM. South African employees may onexercise of options granted under the Option Plan and with the approval of theBoard, enter into a delivery deferred payment mechanism. Schedule 2 - Terms and Conditions The terms and conditions of the Options to be granted to the employees of theCompany entitled to receive Options under Resolution 1 and Cedric Bredenkamp (orhis Nominee) under Resolution 2 are as follows: 1. The Options will expire on 30 June 2010. 2. The exercise price of each Option is a price determined by the Board, butwill not be less than the weighted average of the prices at which the Shareswere trading on the Relevant Stock Market during the five day trading periodimmediately before the date on which the Options will be granted. 3. The exercise of each Option will entitle the holder to one fully paidordinary share in the capital of the Company. 4. The Options may only be exercised after the expiry of the following periods("Qualification Period") and in the following proportions: (a) after 12 months have lapsed from the acceptance date, in respect of not morethan one half of the total number of Options granted to the holder; and (b) after 24 months have lapsed from the acceptance date, in respect of thebalance of the Options granted, except that an optionholder may exercise all Options in the event of theannouncement by the Company of a takeover bid for Shares in the Company inaccordance with Chapter 6 of the Corporations Act or a merger by scheme ofarrangement in accordance with Part 5.1 of the Corporations Act. 5. Exercise of the Options is effected by completing the "Election Form toExercise Options" attached to the invitation to apply for the grant of Options,in each case following expiry of the Qualification Period, and delivering ittogether with the payment of the number of Shares in respect of which theOptions are exercised to the registered office of the Company. 6. An optionholder is required to exercise the Option in order to participate ina bonus or entitlement issue of shares made by the Company. Optionholders willbe provided with written notice of the terms of the issue to shareholders andafforded that period as determined by the Listing Rules to exercise their optionif they wish to participate in the bonus or entitlement issue. 7. If, prior to the expiry of an Option, there is a reorganisation (includingconsolidation, subdivision, reduction or return) of the issued capital of theCompany, the number of Shares subject to the Option and/or exercise price willbe adjusted in the manner required by the Listing Rules. 8. All shares issued upon exercise of the Options will, from the date they areissued, rank equally in all respects with the Company's then issued Shares. 9. Shares allotted and issued pursuant to the exercise of an Option will beallotted within the time prescribed by the Listing Rules. The Company willapply for official quotation of the Shares issued pursuant to the exercise ofthe Options in accordance with the Listing Rules. 10. The Options will lapse if not exercised prior to the expiry date, or on thefirst to occur of the following: (a) if the optionholder (or the person by virtue of whom an optionholder holdsoptions) ceases to be a Director, employee or consultant for any reason otherthan set out in paragraph (b) below, one month thereafter; and (b) if the optionholder (or the person by virtue of whom an optionholder holdsoptions) dies, retires, is retrenched, becomes bankrupt, wound up orderegistered, 12 months thereafter. 11. Application will not be made for official quotation of the Options on ASX orAIM. 12. Options are not transferable except with the prior written approval of theboard of Directors. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Nyota Minerals