Notices of Meetings and Explanatory Notes

Transcription

1 Notices of Meetings and Explanatory Notes E

2 E Notices of Meeting and Explanatory Notes NOTICE OF COURT ORDERED SCHEME MEETING BORAL LIMITED ACN NOTICE IS GIVEN that by an Order of the Supreme Court of New South Wales (the Court ), made on 15 December 1999 pursuant to Section 411(1) of the Corporations Law, a meeting of ordinary shareholders in Boral Limited (the Company ) will be held in the Grand Ballroom, 3rd Floor, The Wentworth Hotel, 61 Phillip Street, Sydney, New South Wales on 17 February 2000 at 10.30am. BUSINESS The purpose of the Scheme Meeting is to consider and, if thought fit, to agree to a Scheme of Arrangement (with or without modification) to be made between the Company and the holders of its ordinary shares. A copy of the Scheme of Arrangement and a copy of the Explanatory Statement required by Section 412 of the Corporations Law in relation to the Scheme of Arrangement are contained in the Booklet of which this notice forms part. The Court has directed that Mr Peter Cottrell or, failing him, Mr Rod Halstead, is to act as Chairman of the Scheme Meeting. Terms used in this notice, including in the resolution set out below, have the meanings ascribed to those terms in the Glossary which is contained in the Booklet of which this notice forms part. Resolution The Scheme Meeting will be asked to consider and, if thought fit, to pass the following resolution: That, pursuant to and in accordance with Section 411 of the Corporations Law, the Scheme of Arrangement proposed to be entered into between the Company and its ordinary shareholders as more particularly described in the Scheme of Arrangement which is contained in the booklet of which the notice convening this meeting forms part, is agreed to (with or without modification as approved by the Supreme Court of New South Wales). Voting and required majority The resolution to approve the Scheme of Arrangement must be passed by a majority in number of the holders of ordinary shares of the Company present and voting (either in person or by proxy) and by 75% of the votes cast on the resolution. The vote will be conducted by poll. Entitlement to vote Pursuant to Section 411 of the Corporations Law and all other powers enabling, the Court has determined that for the purposes of the meeting, all ordinary shares in the Company shall be taken to be held by the persons who held them as registered shareholders at 10.30am on 15 February 2000 ( Entitlement Time ). All holders of ordinary shares in the Company as at the Entitlement Time are entitled to attend and vote at the meeting. A member of the Company who is entitled to attend and cast a vote at the meeting has a right to appoint a proxy. The appointment may specify the proportion or number of votes that the proxy may exercise. A member who is entitled to cast two or more votes at the meeting may appoint two proxies and may specify the proportion or number of votes each proxy is appointed to exercise. If the member appoints two proxies and the appointment does not specify the proportion or number of the member s votes each proxy may exercise, each proxy may exercise half of the votes. A proxy need not be a member of the Company. 116 Boral Limited Scheme of Arrangement

3 The Company specifies the following place and facsimile number for the purposes of receipt of proxy appointments: Boral Limited OR C/- Perpetual Registrars Limited By Facsimile transmission to: 580 George Street Within Australia: (02) Sydney NSW 2000 International: OR Locked Bag A14 Sydney South NSW 1232 The yellow Proxy Form sent to you with this notice should be used for the Scheme Meeting. If you wish to appoint a proxy, you should sign the yellow proxy form and return it to the above address or facsimile number not less than forty-eight (48) hours before the time for holding the meeting, that is by 10.30am on 15 February A reply paid envelope has been provided. Court approval The Scheme of Arrangement (with or without modification) is subject to subsequent approval by the Court. If the resolution put to this meeting is approved by the requisite majority and the other conditions precedent to the Scheme of Arrangement are satisfied (other than conditions relating to Court approval of the Scheme of Arrangement), the Company intends to apply to the Court for orders to give effect to the Scheme of Arrangement. Michael B Scobie SECRETARY 15 DECEMBER

4 E Notices of Meeting and Explanatory Notes continued NOTICE OF GENERAL MEETING BORAL LIMITED ACN NOTICE IS GIVEN that a general meeting of ordinary shareholders of Boral Limited (the Company ) will be held in the Grand Ballroom, 3rd Floor, The Wentworth Hotel, 61 Phillip Street, Sydney, New South Wales on 17 February 2000 at 11.00am or so soon thereafter as the Court ordered meeting of members of the Company, to consider the Scheme of Arrangement, is concluded or has been adjourned. BUSINESS The resolutions set out below are proposed in connection with the Demerger. Resolutions 1 to 4 below are conditions precedent to the Demerger, so that the Demerger, even if the Scheme is approved by Boral Shareholders will only take effect if resolutions 1 to 4 are also approved by Boral Shareholders (and the Scheme is approved by the Court). The Demerger is not conditional upon the approval of the Boral Shareholders to resolutions 5 and 6 below. Terms used in this notice, including in the resolutions set out below, have the meanings ascribed to those terms in the Glossary which is contained in the Booklet of which this notice forms part. Explanatory Notes concerning the resolutions appear after this notice of meeting. 1. Consolidation of Share Capital To consider and, if thought fit, to pass the following resolution as an ordinary resolution: That, with effect from 7:00 pm (AEST) on the Effective Date: (a) the share capital of the Company be consolidated by converting every two Boral Shares on issue at that time into one Boral Share; and (b) where the consolidation of the Company s share capital results in a shareholder having a fractional entitlement to a Boral Share, the Company shall round up any such fractional entitlement to the next whole number. 2. Reduction of Capital To consider and, if thought fit, to pass the following resolution as an ordinary resolution: That, the reduction of the share capital of the Company by an amount of $3.16 for each Boral Share on issue as at the Close of Registers on the Record Date following the Boral Share Consolidation, which is to take effect on the Demerger Date and is to be applied by the Scheme of Arrangement in consideration for the transfer to each Scheme Shareholder of one New Boral Share for every Boral Share held by that Scheme Shareholder as at the Close of Registers on the Record Date following the Boral Share Consolidation, in accordance with and subject to the terms of the Scheme of Arrangement, be and is hereby authorised and approved. 3. Change to Activities To consider and, if thought fit, to pass the following resolution as an ordinary resolution: That, for the purpose of ASX Listing Rules 11.1 and 11.2, the change in the nature and scale of activities of the Company and the disposal of the main undertaking of the Company as a result of the demerger of the Company s building and construction materials businesses pursuant to the implementation of the Scheme, be and is hereby authorised and approved. 4. Change of Name of Company To consider and, if thought fit, to pass the following resolution as a special resolution: That the name of the Company be changed to Origin Energy Limited on the Effective Date. 5. Grant of New Boral Options to Mr Rod Pearse To consider and, if thought fit, to pass the following resolution as a special resolution: That the grant by New Boral to Mr Rod Pearse of options to subscribe for up to 750,000 fully paid ordinary shares in New Boral at an exercise price equal to the New Boral Initial Market Price and otherwise on the terms described in the explanatory note to this resolution and the allotment to Mr Rod Pearse of up to 750,000 New Boral Shares pursuant to the exercise of those options is hereby approved. 118 Boral Limited Scheme of Arrangement

5 6. Grant of Origin Energy Options to Mr Grant King To consider and, if thought fit, to pass the following resolution as a special resolution: That the grant by Boral to Mr Grant King of options to subscribe for up to 750,000 fully paid ordinary shares in Origin Energy at an exercise price equal to the Origin Energy Initial Market Price and otherwise on the terms described in the explanatory note to this resolution and the allotment to Mr Grant King of up to 750,000 Origin Energy Shares pursuant to the exercise of those options is hereby approved. Entitlement to vote Pursuant to Section 1109N of the Corporations Law, the Company has determined that for the purposes of the meeting all shares in the Company shall be taken to be held by the persons who held them as registered shareholders at 11.00am (AEST) on 15 February 2000 ( Entitlement Time ). All holders of ordinary shares in the Company as at the Entitlement Time are entitled to attend and vote at the meeting. A member of the Company who is entitled to attend and cast a vote at the meeting has a right to appoint a proxy. The appointment may specify the proportion or number of votes that the proxy may exercise. A member who is entitled to cast two or more votes at the meeting may appoint two proxies and may specify the proportion or number of votes each proxy is appointed to exercise. If the member appoints two proxies and the appointment does not specify the proportion or number of the member s votes each proxy may exercise, each proxy may exercise half of the votes. A proxy need not be a member of the Company. Proxies in favour of any director, the secretary or any officer which do not contain a direction or which contain more than one direction will be used in support of the relevant resolution. The Company specifies the following place and facsimile number for the purposes of receipt of proxy appointments: Boral Limited OR C/- Perpetual Registrars Limited By Facsimile transmission to: 580 George Street Within Australia: (02) Sydney NSW 2000 International: OR Locked Bag A14 Sydney South NSW 1232 The green Proxy Form sent to you with this notice should be used for the General Meeting. If you wish to appoint a proxy you should sign the green proxy form and return it to the above address or facsimile number not less than forty-eight (48) hours before the time for holding the meeting, that is, by 11.00am on 15 February A reply paid envelope has been provided. Voting Exclusion The Company will disregard any votes cast on: Resolution 3, by a person who might obtain a benefit, except a benefit solely in the capacity of a securityholder if the resolution is passed; Resolution 5, by Mr Rod Pearse and any associate of Mr Rod Pearse and any Boral Director; Resolution 6, by Mr Grant King and any associate of Mr Grant King and any Boral Director. However, the Company need not disregard a vote if: 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 it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides. By Order of the Board Michael B Scobie SECRETARY 15 DECEMBER

6 E Notices of Meeting and Explanatory Notes continued EXPLANATORY NOTES RESOLUTION 1 BORAL SHARE CONSOLIDATION RESOLUTION The Boral Share Consolidation Resolution is being put to Boral Shareholders to obtain approval to a consolidation of Boral s share capital, by converting every two Boral Shares into one Boral Share with effect on and from 7.00pm on the Effective Date, in accordance with Section 254H of the Corporations Law. If this resolution is passed by the requisite majority and the consolidation becomes effective, it will result in each Boral Shareholder holding one Boral Share for every two Boral Shares previously held. The Boral Share Consolidation Resolution is being proposed as part of the implementation of the Demerger and implementation of the Demerger is dependent upon the passing of the Boral Share Consolidation Resolution. If the Boral Share Consolidation Resolution is passed by the requisite majority of Boral Shareholders present and voting at the meeting (whether in person or by proxy), it will not become effective until 7.00 pm on the Effective Date and therefore will not occur unless the Scheme is approved by the requisite majority of Boral Shareholders and the Court and all other conditions precedent to the Scheme are satisfied. All of the Boral Directors recommend that you vote in favour of the Boral Share Consolidation Resolution. RESOLUTION 2 CAPITAL REDUCTION RESOLUTION The Capital Reduction Resolution is being put to Boral Shareholders to obtain approval under section 256C of the Corporations Law to an equal reduction in Boral s share capital under section 256B of the Corporations Law, of an amount of $3.16 per Boral Share on issue at the Close of Registers on the Record Date, following the Boral Share Consolidation. The reduction in Boral s share capital is being proposed as part of the implementation of the Demerger and implementation of the Demerger is dependent upon the passing of the Capital Reduction Resolution. If the Capital Reduction Resolution is passed by the requisite majority of Boral Shareholders present and voting at the meeting (whether in person or by proxy), it will not take effect until the Demerger Date under the Scheme and therefore will not occur unless the Scheme is approved by the requisite majority of Boral Shareholders and the Court and all other conditions precedent to the Scheme are satisfied. All of the Boral Directors recommend that you vote in favour of the Capital Reduction Resolution. RESOLUTION 3 CHANGE IN ACTIVITIES RESOLUTION The Change in Activities Resolution is being put to Boral Shareholders to obtain approval to the change in the nature and scale of activities carried on by Boral and the disposal by Boral of its main undertaking as a result of the demerger of Boral s building and construction materials businesses pursuant to implementation of the Scheme. This shareholder approval is required for the purposes of ASX Listing Rules 11.1 and The transfer by Boral to the Scheme Shareholders of all of the New Boral Shares will result in Boral carrying on its energy businesses only and ceasing to carry on its building and construction material businesses. This is a significant change in the nature and scale of Boral s activities and requires shareholder approval under ASX Listing Rule The disposal by Boral of all of the New Boral Shares to the Scheme Shareholders may also constitute the disposal by Boral of its main undertaking, which requires shareholder approval under ASX Listing Rule The passing of the Change in Activities Resolution is a condition precedent to the implementation of the Demerger. All of the Boral Directors recommend that you vote in favour of the Change in Activities Resolution. 120 Boral Limited Scheme of Arrangement

7 RESOLUTION 4 CHANGE OF NAME OF COMPANY OF BORAL This resolution is being put to Boral Shareholders to obtain approval by special resolution to the change of Boral s name to Origin Energy Limited once the Scheme becomes Effective to reflect the change in activities of Boral and to allow New Boral to change its name to Boral. Section 157 of the Corporations Law requires that a company obtain the approval of its shareholders by special resolution to change the name of the company. The passing of the Change of Name Resolution is a condition precedent to the implementation of the Demerger. All of the Boral Directors recommend that you vote in favour of the Change of Name Resolution. RESOLUTION 5 GRANT OF NEW BORAL OPTIONS TO MR ROD PEARSE This resolution is being put to Boral Shareholders to obtain Boral Shareholder approval to the grant to Mr Rod Pearse, the Managing Director elect of New Boral, of options to subscribe for up to 750,000 New Boral Shares with an exercise price equal to the New Boral Initial Market Price and to the allotment to Mr Rod Pearse of up to 750,000 New Boral Shares on the exercise of these options. As New Boral has applied for admission to the official list of ASX and Mr Rod Pearse is a New Boral Director, ASX Listing Rule technically requires Boral, as the present holder of the New Boral Shares, to approve the grant of the New Boral Options to Mr Rod Pearse. Nevertheless, the Boral Directors consider it appropriate to also seek Boral Shareholder approval to the grant of the New Boral Options at this time. Summary of the Terms of the Options to be granted to Mr Rod Pearse The New Boral Options will be granted pursuant to the New Boral Senior Executive Option Plan, the terms of which are summarised in Section 12.4 of Chapter III of the Explanatory Statement. The exercise price of the options will be the New Boral Initial Market Price which will be determined by dividing the total of the sale values of New Boral Shares on the five trading days immediately following the commencement of trading of New Boral Shares on the stockmarket conducted by ASX (excluding sales reported as special crossings, New Zealand stock exchange purchases or sales, Recognised Stock Exchange (as referred to in the ASX Business Rules) purchases or sales, late or overnight purchases or sales or option exercises on those days under the ASX Business Rules) by the number of New Boral Shares the subject of sales on those days. The exercise hurdle will be measured by comparing the performance of New Boral with the performance of other companies in which shareholders may potentially invest. This is in line with the approach of other major Australian companies. Accordingly it is intended that the options are capable of exercise depending on the maximum Total Shareholder Return of New Boral relative to the Total Shareholder Return of a group of companies during the exercise period of the options. This group of companies (the Reference Group ) will consist of not less than 50 companies selected by the Boral Directors from the ASX Top 100, prior to the Demerger. Determination of Total Shareholder Return will be made on the basis of movements in the share price and dividends, calculated in a similar manner to the Accumulation Index of ASX. The period over which the Total Shareholder Return of New Boral is compared with the Total Shareholder Return of the Reference Group commences 3 years after the grant of the options. The percentage of options capable of exercise is based on a sliding scale as follows: If at any time during the exercise period The percentage of of the options the Total Shareholder options which Return of New Boral: become exercisable is: Does not reach the 25th percentile of the Reference Group 0% Reaches the 25th percentile of the Reference Group 25%* Reaches the 50th percentile of the Reference Group 50%* Reaches or exceeds the 75th percentile of the Reference Group 100% *The percentage of options which become exercisable increases proportionately from the 25th percentile up to the 50th percentile and proportionately from the 50th percentile up to the 75th percentile. 121

8 E Notices of Meeting and Explanatory Notes continued Subject to the satisfaction of the exercise hurdle and the terms of the New Boral Senior Executive Option Plan, the options may be exercised at any time after the third anniversary of the grant of the options and no later than the fifth anniversary. Directors Interests None of the Boral Directors has any interest in the outcome of the proposed resolution except to provide an appropriate incentive to Mr Rod Pearse as Managing Director of New Boral to maximise shareholder wealth. The Boral Directors note that it is expected that further options may be granted to Mr Rod Pearse in future years, although the granting of any further options would require New Boral shareholder approval at the relevant time. The passing of this resolution is not a condition precedent to the implementation of the Demerger. All of the Boral Directors recommend that you vote in favour of this resolution. RESOLUTION 6 GRANT OF ORIGIN ENERGY OPTIONS TO MR GRANT KING This resolution is being put to Boral Shareholders to obtain approval to the grant to Mr Grant King, the Managing Director elect of Origin Energy, of options to subscribe for up to 750,000 Origin Energy Shares with an exercise price equal to the Origin Energy Initial Market Price and to the allotment to Mr Grant King of up to 750,000 Origin Energy Shares on the exercise of these options. Rules and of the ASX Listing Rules provide that prior approval of shareholders by special resolution is required for an issue to a related party of ordinary shares or options in respect of ordinary shares of a listed entity. Shareholder approval is also required under Chapter 2E of the Corporations Law, because the granting of the options involves Boral entering into an agreement whereby a financial benefit may be given to Mr King, who is a related party of Boral. If the resolution is passed, the options will be granted within 28 days after the date of the General Meeting. Summary of the Terms of the Options to be granted to Mr Grant King The Origin Energy Options will be granted pursuant to the Boral Senior Executive Option Plan (which will be the Origin Energy Senior Executive Option Plan following implementation of the Demerger). The terms of the Origin Energy Options are summarised below. The exercise price of the options will be the Origin Energy Initial Market Price which will be determined by dividing the total of the sale values of Origin Energy Shares on the five trading days immediately following the commencement of trading of Origin Energy Shares on the stockmarket conducted by ASX (excluding sales reported as special crossings, New Zealand stock exchange purchases or sales, Recognised Stock Exchange (as referred to in the ASX Business Rules) purchases or sales, late or overnight purchases or sales or option exercises on those days under the ASX Business Rules) by the number of Origin Energy Shares the subject of sales on those days. The exercise hurdle will be measured by comparing the performance of Origin Energy with the performance of other companies in which shareholders may potentially invest. This is in line with the approach of other major Australian companies. 122 Boral Limited Scheme of Arrangement

9 Accordingly it is intended that the options are capable of exercise depending on the maximum Total Shareholder Return of Origin Energy relative to the Total Shareholder Return of a group of companies during the exercise period of the options. This group of companies (the Reference Group ) will consist of not less than 50 companies selected by the Boral Directors from the ASX Top 100, prior to the Demerger. Determination of Total Shareholder Return will be made on the basis of movements in the share price and dividends, calculated in a similar manner to the Accumulation Index of ASX. The period over which the Total Shareholder Return of Origin Energy is compared with the Total Shareholder Return of the Reference Group commences 3 years after the grant of the options. The percentage of options capable of exercise is based on a sliding scale as follows: If at any time during the exercise period The percentage of of the options the Total Shareholder options which Return of Origin Energy: become exercisable is: Does not reach the 25th percentile of the Reference Group 0% Reaches the 25th percentile of the Reference Group 25%* Reaches the 50th percentile of the Reference Group 50%* Reaches or exceeds the 75th percentile of the Reference Group 100% *The percentage of options which become exercisable increases proportionately from the 25th percentile up to the 50th percentile and proportionately from the 50th percentile up to the 75th percentile. Subject to the satisfaction of the exercise hurdle and the terms of the the Origin Energy Senior Executive Option Plan, the options may be exercised at any time after the third anniversary of the grant of the options and no later than the fifth anniversary. The options may also be exercisable prior to the third anniversary of the grant of the options, if an acquisition is made or notice is given of a proposal to make an acquisition of more than 20% of the shares in Origin Energy and on the termination of Mr Grant King s employment as a consequence of his death, permanent disablement or other circumstances in which the Origin Energy Board determines in its absolute discretion that the options should be exercisable. The options will lapse if not exercised within the period specified above or in the event that Mr Grant King s employment is terminated for cause. Each option will be an option to subscribe for one ordinary share in Origin Energy and the options will be issued pursuant to the terms of the Origin Energy Senior Executive Option Plan. Features of the options include: the options will be unlisted and will be issued for no consideration. the shares issued on exercise of the options will rank equally with other Origin Energy ordinary shares from their date of issue. Origin Energy will apply to ASX for official quotation of shares issued on exercise of the options. Other terms of the options relate to the manner of exercise of options and adjustment for a rights issue, a bonus issue or reconstruction of Origin Energy s share capital, in each such case in accordance with the Listing Rules. Directors Interests None of the Boral Directors has any interest in the outcome of the proposed resolution except to provide an appropriate incentive to Mr Grant King as Managing Director to maximise shareholder wealth. 123

10 E Notices of Meeting and Explanatory Notes continued Costs and Detriments of providing Financial Benefit The opportunity cost and benefit forgone by Boral issuing options to Mr Grant King is the obligation of Boral to issue shares in the future at potentially less than their market price at that time. The Boral Directors believe that the opportunity cost and benefit foregone is offset by the incentive given to Mr Grant King to improve Origin Energy s performance. Any benefit to Mr Grant King from the grant of the options will depend on the circumstances existing at the time when the options are eligible to be exercised. These factors include: whether the exercise hurdle is achieved; the share price of Origin Energy ordinary shares when the options are exercisable; any rights issues or capital reconstruction which may affect the exercise price and number of shares into which the options may be converted; the marginal tax rate applying to Mr Grant King at the time of exercise of the options; and circumstances which may allow the options to be exercised prior to the end of the third year. The Boral Directors note that it is expected that further options may be granted to Mr King in future years, although the granting of any further options would require shareholder approval at the relevant time. The passing of this resolution is not a condition precedent to the implementation of the Demerger. All of the Boral Directors recommend that you vote in favour of this resolution. 124 Boral Limited Scheme of Arrangement