1. INTRODUCTION

The Board of Directors of Sunway wishes to announce that Sunway Medical Centre Sdn Bhd (“SMC”), a subsidiary of Sunway, has on 30 November 2016 established an executive share option scheme (“ESOS”) to its executive directors (“Eligible Persons”).

2. INFORMATION ON SMC

SMC is a company incorporated in Malaysia and having its registered office at Level 16, Menara Sunway, Jalan Lagoon Timur, Bandar Sunway, 47500 Subang Jaya, Selangor Darul Ehsan. The authorised and paid-up capital of SMC are RM220,000,000.00 and RM131,121,845.00 respectively. The principal activity of SMC is operation of medical centre.

3. DETAILS OF THE ESOS

SMC has established the ESOS to grant option(s) (“ESOS Option(s)”) to the Eligible Persons who fulfil the eligibility criteria, to subscribe for new ordinary share(s) in SMC (“SMC Share(s)”) subject to the terms and conditions of the by-laws governing the ESOS (“By-Laws”).

Under the ESOS, an Eligible Person may, at the discretion of the Board of SMC (“SMC Board”), be offered a certain number of ESOS Options (“Offer”), based on the criteria mentioned in Section 3.1 below.

The salient features of the ESOS which will be governed by the By-Laws, are as follows:

3.1 Eligibility

Subject to the discretion of the SMC Board, the executive director(s) are eligible to participate in the ESOS if, at the date of offer, that person:

a) has attained the age of at least 18 years old;

b) not be an undischarged bankrupt nor subject to any bankruptcy proceedings; and

c) be an executive director confirmed in service and served at least three (3) continuous years with SMC.

Notwithstanding the above, the eligibility for consideration under the ESOS does not confer an Eligible Person with any claim or right to participate in the ESOS unless the SMC Board has made an Offer and the Eligible Person has accepted the Offer in accordance with the terms of the Offer and the ESOS.

3.2 Maximum number of new SMC Shares available under the ESOS

The maximum number of new SMC Shares that may be made available under the ESOS shall not in aggregate exceed 10% of the issued and paid-up share capital of SMC at any point in time during the duration of the ESOS.

3.3 Basis of allotment and maximum allowable allotment

The allocation of ESOS Options to be made available under the ESOS shall be determined by the SMC Board from time to time during the duration of the ESOS.  

The total number of ESOS Options allocated to any one Eligible Person shall be determined by the SMC Board, after taking into consideration, amongst others, the Eligible Person’s work performance, years of service and such other criteria as the SMC Board deems fit. The total number of SMC Shares made available under the ESOS shall not exceed the amount stipulated in Section 3.2 above.

3.4 Duration of the ESOS

The ESOS shall be in force for a period of three (3) years commencing from its commencement date. SMC may terminate the ESOS at any time.

3.5 ESOS Option price

Subject to any adjustments in accordance with the By-Laws, the exercise price of the ESOS Option (“Option Price”) at which the Eligible Person(s) are entitled to subscribe for new SMC Shares shall be based on the higher of:

a) Net tangible asset based on the latest audited financial statements of SMC as at the date of the Offer; or

b) Par value of the SMC Shares.

The Option Price as determined by the SMC Board shall be conclusive and binding on the grantee and shall be subject to any adjustments made in accordance with the By-Laws.

3.6 Ranking of the new SMC Shares

The new SMC Shares to be allotted upon exercise of any ESOS Options vested, shall upon allotment and issue, rank pari passu in all respects with the existing SMC Shares except that the SMC Shares so allotted will not be entitled to any rights, dividends, allotments and/or other forms of distributions or other rights which may be declared, made or paid to the shareholders of SMC, for which the book closure date is prior to the date of allotment of the new SMC Shares.

3.7 Utilisation of proceeds

The actual proceeds to be received pursuant to the exercise of the ESOS Options will depend on, amongst others, the actual number of ESOS Options granted, vested and exercised, and the Option Price payable upon the exercise of the ESOS Options.

Therefore, the amount of proceeds from the exercise of the ESOS Options is not determinable at this juncture. However, SMC intends to utilise the gross proceeds arising from the exercise of the ESOS Options, if any, for its working capital requirements.

4. RATIONALE FOR THE ESOS

The SMC Board believes the implementation of the ESOS would align the interests of the Eligible Persons with SMC’s effort to enhance its shareholders’ value. In addition, the ESOS is intended to achieve the following objectives:

(i) to motivate, reward and retain the Eligible Persons who, upon exercising their vested ESOS Options, would be given the opportunity to participate in the equity of SMC and thereby relate their contribution directly to the performance of SMC;

(ii) to provide an incentive for the Eligible Persons to participate more actively in the operations of SMC and encourage them to contribute to the future growth of SMC; and

(iii) to make employees’ remuneration scheme more competitive to attract more skilled and experienced individuals to join SMC and contribute to its continued growth and profitability.

5. EFFECTS OF THE ESOS

5.1  On Share Capital and Substantial Shareholders’ Shareholding

The ESOS will not have any effect on the share capital and substantial shareholders' shareholding of Sunway as they do not involve any allotment or issuance of new shares by Sunway.

5.2  On Earnings Per Share, Net Assets Per Share and Gearing

The ESOS will not have any material effect on the earnings per share, net assets per share and gearing of Sunway for the financial year ending 31 December 2016.

6. APPROVALS REQUIRED FOR THE ESOS

The ESOS does not require approval from the shareholders of Sunway or any relevant authorities. SMC had obtained its shareholders’ approval for the ESOS at an extraordinary general meeting held on 30 November 2016.

7. DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTERESTS

Tan Sri Dato' Seri Dr Jeffrey Cheah Fook Ling and Tan Sri Datuk Seri Razman M Hashim are executive directors of Sunway and non-executive directors of SMC.

None of the directors and/or major shareholders of Sunway and persons connected to them have any interest, either direct or indirect in the ESOS.

8. DIRECTORS’ STATEMENT

The Board, having considered all aspects of the ESOS (including but not limited to the rationale of the ESOS), is of the opinion that the ESOS is in the best interest of Sunway.

9. ESTIMATED TIME FRAME FOR COMPLETION

Barring any unforeseen circumstances, the ESOS is expected to be implemented by December 2017 unless otherwise determined by the SMC Board.

This announcement is dated 30 November 2016.