General Announcement

Reference No MB-090605-59745

 

Submitting Merchant Bank	:	AMINVESTMENT BANK BERHAD
Company Name	:	YNH PROPERTY BERHAD
Stock Name	:	YNHPROP
Date Announced	:	05/06/2009

Type	:	Announcement
Subject	:	YNH PROPERTY BHD (“YNH” OR THE “COMPANY”)
Contents	:	PROPOSED EMPLOYEES’ SHARE OPTION SCHEME OF UP TO TEN PERCENT (10%) OF THE ISSUED AND PAID-UP SHARE CAPITAL OF THE COMPANY (“PROPOSED ESOS”)

Announcement Details :

1. INTRODUCTION

 

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  On behalf of the Board of Directors of YNH (“Board”), AmInvestment Bank Berhad (a member of the AmInvestment Bank Group) (“AmInvestment Bank”) wishes to announce that the Company proposes to establish an employees’ share option scheme (“ESOS”) of up to ten percent (10%) of the issued and paid-up share capital of the Company for the eligible employees and Directors of YNH. For information purposes, the Proposed ESOS is intended to replace the Company’s existing ESOS scheme which will expire on 22 June 2009 (“Expiring ESOS”).

2. INFORMATION ON THE PROPOSED ESOS

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  YNH’s current Expiring ESOS commenced on June 2004 and grants eligible employees of the YNH Group, options to subscribe for new Shares in the Company of up to ten percent (10%) of the issued and paid-up share capital of the Company at any point in time during the duration of the Expiring ESOS. Given that the Expiring ESOS will expire on 22 June 2009, the Company is now undertaking the Proposed ESOS in place of the Expiring ESOS. As at 15 May 2009, there are currently 19,527,000 options which was granted and exercisable under the Expiring ESOS but remained unexercised. For avoidance of doubt, the options which was granted under the Expiring ESOS, should it remain unexercised at the expiry date of the Expiring ESOS will be cancelled in entirety. The Company proposes to establish and implement the Proposed ESOS which involves granting of ESOS options to all eligible employees and Directors of the Company, who meet the criteria of eligibility for participation in the Proposed ESOS (“Eligible Employees”) as set out in the bye-laws of the Proposed ESOS (“Bye-Laws”). The ESOS options granted shall entitle the Eligible Employees to subscribe for new ordinary shares of RM1.00 each in YNH (“Shares”) at a specified price (“Options”).
  
  The maximum number of new Shares which may be issued and allotted pursuant to the exercise of Options granted under the Proposed ESOS shall not in aggregate exceed ten percent (10%) of the issued and paid-up share capital of the Company at any point in time during the duration of the Proposed ESOS. Employees (including Directors) of YNH and its subsidiaries (“YNH Group”) will be eligible to participate in the Proposed ESOS provided they meet the conditions for eligibility stipulated in the Bye-Laws. The Proposed ESOS will be administered by the ESOS committee to be duly appointed and authorized by the Board (“Option Committee”).
  
  The principal features of the Proposed ESOS, which will be governed by the Bye-Laws are as follows:-

2.1 Quantum

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      The maximum number of new Shares which may be issued and allotted pursuant to the exercise of Options under the Proposed ESOS shall not exceed ten percent (10%) of the issued and paid-up share capital of the Company at any point in time during the duration of the Proposed ESOS or such additional number that may be permitted by Bursa Malaysia Securities Berhad (“Bursa Malaysia”) from time to time during the duration of the Proposed ESOS. In the event where the Company purchases its own Shares resulting in the total number of Shares to be issued under the Proposed ESOS to exceed ten percent (10%) of the issued and paid-up share capital of the Company, no further Options shall be offered until the total number of shares to be issued under the Proposed ESOS falls below ten percent (10%) of the issued and paid-up share capital of the Company.
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      The Company will keep available sufficient unissued Shares in its authorised share capital to satisfy all outstanding Options throughout the duration of the Proposed ESOS.

2.2 Eligibility

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      The selection of any employee or Directors for participation in the ESOS shall be at the discretion of the Option Committee and the decision of the Option Committee shall be final and binding.
      
      The criteria of eligibility for participation in the Proposed ESOS shall be set out in the Bye-Laws.

2.3 Maximum Allowable Allotment and Basis of Allotment

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      The maximum number of new Shares that may be offered and allotted to an Eligible Employee shall be determined at the discretion of the Option Committee after taking into consideration the position, seniority, performance and length of service of the Eligible Employee, subject always to and the provisions of Bursa Malaysia Listing Requirements on employee share option scheme relating to allocations to directors and employees.

2.4 Subscription Price

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      The subscription price shall be the higher of the following:-
      
      (a) a discount of not more than ten percent (10%) on the 5-day weighted average market price of the Company’s shares preceding the date which an offer is made by the Option Committee to an Eligible Employee (“Date of Offer”) of the options under the Proposed ESOS; or
      
      (b) the par value of the Shares.

2.5 Duration of the Proposed ESOS

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      The Proposed ESOS shall be in force for a duration of five (5) years from the effective date and may, if the Board deems fit and upon the recommendation of the Option Committee, be extended for a further five (5) years. The total duration of the Proposed ESOS shall not exceed ten (10) years from the effective date.

2.6 Rights Attaching to New Shares

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      The new Shares to be allotted and issued upon any exercise of Option will upon such allotment and issuance rank pari passu in all respects with the then existing issued and fully paid-up Shares except that the Shares so issued will not be entitled to any dividends, rights, allotments and/or any other distributions which may be declared, made or paid to shareholders prior to the date of allotment of the new Shares. The new Shares will be subject to all the provisions of the Articles of Association of the Company.

3. RATIONALE OF THE PROPOSED ESOS

The rationale for the Proposed ESOS are as follows:-

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  (a) to be a replacement to the Company’s Expiring ESOS which will expire on 22 June 2009;
  
  (b) to motivate Eligible Employees and Directors of the YNH Group towards better performance through greater productivity and loyalty; (c) to stimulate a greater sense of belonging and dedication since Eligible Employees and Directors are given the opportunity to participate directly in the equity of the Company; (d) to encourage Eligible Employees to remain with the YNH Group thus ensuring that the loss of key personnel is kept to a minimum; (e) to reward Eligible Employees and Directors by allowing them to participate in the Company’s profitability and eventually realise capital gains arising from any appreciation in the value of the Company’s Shares; and
  
  (f) to recognise the contribution of Eligible Employees and Directors whose services are valued and considered vital to the operations and continued growth of the YNH Group. The rationale for the allocation of options pursuant to the Proposed ESOS to independent non-executive directors is to recognise the contribution of independent non-executive directors who have been diligent in ensuring that the corporate governance is being adhered to by YNH Group.

4. UTILISATION OF PROCEEDS

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  The proceeds raised from the exercise of any options under the Proposed ESOS, if any, will be utilised as working capital for YNH Group.
  
  
  

5. FINANCIAL EFFECTS OF THE PROPOSED ESOS

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      The effects of the Proposed ESOS on the issued and paid-up share capital of YNH are set out in Table 1.
      
  For purposes of this Section 5, it is assumed that none of the existing 23,968,890 treasury shares held as at 15 May 2009 are cancelled.
  
  5.1 Share Capital

5.2 Substantial Shareholders

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      Based on the Register of Substantial Shareholders (those holding 5% or more) of YNH as at 15 May 2009, the effects of the Proposed ESOS on the shareholding of the substantial shareholders are set out in Table 3.

5.3 Net Assets (“NA”)

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      Based on the latest audited consolidated balance sheet of the YNH Group as at 31 December 2008, the effects of the Proposed ESOS on the Group’s NA is set out in Table 2.

5.4 Earnings

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      The Proposed ESOS is not expected to have any immediate effect on the earnings and earnings per share of the YNH Group. Any effect on the earnings and earnings per share of the YNH Group in the future would also depend on the number of Options granted and exercised at any point in time, exercise price of the Options and the utilisation of the proceeds from the exercise of the new Options.

5.5 Dividends

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      The Board has recommended a final share dividend on the basis of one (1) treasury share for every thirty (30) Shares held, to be approved by shareholders at the forthcoming annual general meeting of YNH. The actual treasury shares to be distributed will depend on the issued and paid-up share capital of the Company at the entitlement date.
      
      The Company’s current dividend policy is to distribute at least 30% of its profit after tax. Notwithstanding the above, the final level of dividend to be declared in the future would be determined by the Board after taking into consideration the performance, cash flow position and financial requirements of the Company and the situation of the economic condition.

6. APPROVALS REQUIRED

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  The Proposed ESOS are subject to the approvals of the following:-
  
  (i) the shareholders of YNH at an EGM to be convened;
  
  (ii) Bursa Malaysia for the listing of and quotation for the new Shares to be issued upon the exercise of Options under the Proposed ESOS; and
  
  (iii) any other relevant authorities.

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  The Proposed ESOS is not conditional upon any other corporate exercise undertaken or to be undertaken by the Company but will be implemented after the expiration of the Expiring ESOS on 22 June 2009.

7. DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTERESTS

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  In relation to the Proposed ESOS, Dato’ Yu Kuan Huat and Dato’ Dr Yu Kuan Chon are the Managing Director and Chairman/Executive Director in the Company, respectively. They are also major shareholders of YNH. Accordingly, Dato’ Yu Kuan Huat and Dato’ Dr Yu Kuan Chon are deemed interested in the Proposed ESOS by virtue of their eligibility for the options to be granted to them under the Proposed ESOS.
  
  Dato' Robert Lim @ Lim Git Hooi, Ching Nye Mi @ Chieng Ngie Chay and Ding Ming Hea, being independent non-executive directors are deemed interested in the Proposed ESOS by virtue of their eligibility for the options to be granted to them under the Proposed ESOS.
  
  The direct and indirect interests of the aforementioned directors in the Company as at 15 May 2009 are set out in Table 4.
  
  The Board can and has deliberated and voted on the Proposed ESOS at all board meetings of the Company. However, the Board has abstained and will abstain from all deliberations and voting in respect of the specific allocations to them under the Proposed ESOS at all board meetings of the Company.
  
  They will also abstain from all deliberations and voting in respect of their direct and/or indirect shareholdings in YNH on the resolutions pertaining to the Proposed ESOS and proposed allocation of options to them and also allocation of options to persons connected to them under the Proposed ESOS to be tabled at the EGM to be convened.
  
  The persons and/or employees (as set out under Table 5), who are connected to the interested directors and major shareholders of YNH, namely, Dato’ Yu Kuan Huat and Dato’ Dr. Yu Kuan Chon (“Interested Directors”) by virtue of Section 122A of the Companies Act, 1965 (“Persons Connected”) will abstain from voting at the forthcoming EGM in respect of their direct and indirect shareholdings interest in YNH (if any) on the resolutions pertaining to the Proposed ESOS and proposed allocation of options to them and also to the allocation of options to the Interested Directors under the Proposed ESOS to be tabled at the EGM to be convened.
  
  The directors (namely Dato’ Yu Kuan Huat, Dato’ Dr. Yu Kuan Chon, Dato' Robert Lim @ Lim Git Hooi, Ching Nye Mi @ Chieng Ngie Chay and Ding Ming Hea) and the major shareholders have undertaken that they shall ensure that persons connected to the Interested Directors and any other persons connected to them, will abstain from voting in respect of their direct and indirect shareholdings interest in YNH (if any) on the resolutions pertaining to the Proposed ESOS and proposed allocation of options to the directors and also the allocation of options to person connected to the Interested Directors under the Proposed ESOS to be tabled at the EGM to be convened.
  
  Save as disclosed above, none of the major shareholders of YNH and persons connected with the directors and/or major shareholders of YNH have any interest either direct or indirect, in the Proposed ESOS.
  
  

8. DIRECTORS’ RECOMMENDATION

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  The Board have abstained from making any recommendation on their respective allocation as all the directors are deemed as interested parties by virtue of their entitlements under the Proposed ESOS. Notwithstanding the above, the Board after having considered all aspects of the Proposed ESOS, is of the opinion that the Proposed ESOS is in the best interest of the Company.

9. ADVISER

AmInvestment Bank has been appointed as adviser to YNH for the Proposed ESOS.


10. SUBMISSION TO BURSA MALAYSIA

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  The application to Bursa Malaysia for the listing of and quotation for the new Shares to be issued pursuant to the Proposed ESOS is expected to be made within one (1) month from the date of this announcement.

This announcement is dated 5 June 2009.