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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Ferrum Crescent | LSE:FCR | London | Ordinary Share | AU000000FCR2 | ORD NPV (DI) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.0725 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMFCR
RNS Number : 8954B
Ferrum Crescent Ltd
07 April 2017
7 April 2017
Ferrum Crescent Limited
("Ferrum Crescent", the "Company" or the "Group")(ASX, AIM, JSE: FCR)
Notice of General Meeting
Ferrum Crescent, the ASX, AIM and JSE quoted metals project developer, announces that a formal notice (the "Notice") and proxy form in respect of a general meeting of shareholders of Ferrum Crescent to be held at 11.00 a.m. (Perth time) on 11 May 2017 at The Hovia Room, Metro Hotel Perth, 61 Canning Highway, South Perth, Western Australia 6151, have today been released to the Australian Securities Exchange and dispatched to shareholders.
The resolutions set out in the Notice seek shareholder approval for: (i) the ratification of the 275,218,025 shares issued in connection with the Company's fundraising announced on 12 December 2016 and (ii) the adoption of a new equity incentive plan, the Ferrum Crescent Limited Director and Employee Incentive Plan, in place of the existing equity incentive arrangements and issue of securities under the terms of such plan from time to time.
Copies of the Notice and the proxy form are available on the Company's website at www.ferrumcrescent.com and the full text of the Notice and accompanying explanatory statement is also set out below.
For further information on the Company, please visit www.ferrumcrescent.com or contact:
Ferrum Crescent Limited
Justin Tooth, Executive Chairman
Grant Button, Director and Company Secretary T: +61 8 9474 2995
UK enquiries:
Laurence Read (UK representative) T: +44 7557 672 432
Strand Hanson Limited (Nominated Adviser)
Rory Murphy/Matthew Chandler T: +44 (0)20 7409 3494
Beaufort Securities Limited (Broker)
Elliot Hance T: +44 (0)20 7382 8300
Bravura Capital (Pty) Ltd (JSE Sponsor)
Doné Hattingh T (direct): +27 11 459 5037
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014.
Ferrum Crescent Limited
ACN 097 532 137
NOTICE OF GENERAL MEETING
AND
EXPLANATORY STATEMENT
TO SHAREHOLDERS
FOR A GENERAL MEETING OF SHAREHOLDERS TO BE HELD ON Thursday 11 May 2017 at The Hovia Room, Metro Hotel Perth, 61 Canning Highway, South Perth, Western Australia 6151 at 11:00 am (Perth time).
You are encouraged to attend the meeting but, if you cannot, you are requested to complete and return the enclosed Proxy Form without delay (and no later than 48 hours before the meeting) to Computershare Investor Services Pty Limited at GPO Box 242, Melbourne, Victoria 3001, Australia, or by facsimile on facsimile number 1800 783 447 (within Australia) or +61 3 9473 2555 (outside Australia).
NOTICE IS HEREBY GIVEN that a General Meeting of the members of FERRUM CRESCENT LIMITED (Ferrum or the Company) will be held on the date and at the location and time specified below:
DATE: Thursday 11 May 2017
LOCATION: The Hovia Room, Metro Hotel Perth, 61 Canning Highway, South Perth, Western Australia 6151
TIME: 11:00 am (Perth time)
BUSINESS: The business to be transacted at the General Meeting is the proposal of the Resolutions set out below.
TIME AND PLACE OF MEETING AND HOW TO VOTE
VENUE
A General Meeting of Shareholders of Ferrum Crescent Limited will be held at The Hovia Room, Metro Hotel Perth, 61 Canning Highway, South Perth, Western Australia 6151 on Thursday 11 May 2017 at 11:00 am (Perth time).
YOUR VOTE IS IMPORTANT
The business of the General Meeting affects your shareholding and your vote is important.
VOTING IN PERSON
Shareholders may attend the General Meeting on the date and at the place set out above and vote in person.
Holders of Depositary Interests (DI Holders) may attend the General Meeting but will not be permitted to vote at the Meeting. For their votes to be counted, DI Holders must submit their CREST Voting Instruction to the Company's agent by the required cut-off time set out below. Alternatively, DI Holders can vote using the enclosed Form of Instruction as per the instructions set out below.
VOTING BY PROXY
Please note that:
a. a Shareholder entitled to attend and vote at the General Meeting is entitled to appoint a proxy;
b. a proxy need not be a member of the Company; c. a Shareholder may appoint a body corporate or an individual as its proxy;
d. a body corporate appointed as a Shareholder's proxy may appoint an individual as its representative to exercise any of the powers that the body may exercise as the Shareholder's proxy; and
e. a Shareholder entitled to cast two or more votes may appoint two proxies and may specify the proportion or number of votes each proxy is appointed to exercise, but where the proportion or number is not specified, each proxy may exercise half of the total votes.
Australia (Proxy Forms)
The enclosed Proxy Form provides further details on voting entitlement, appointing proxies and lodging Proxy Forms. If a Shareholder appoints a body corporate as its proxy and the body corporate wishes to appoint an individual as its representative, the body corporate should provide that person with a certificate or letter executed in accordance with the Corporations Act authorising him or her to act as that company's representative. The authority may be sent to the Company or its share registry in advance of the General Meeting or handed in at the General Meeting when registering as a corporate representative.
To vote by proxy, please complete and sign the Proxy Form enclosed and either:
a. deliver the Proxy Form by post to Computershare Investor Services Pty Limited, GPO Box 242, Melbourne Victoria 3001, Australia; or
b. fax the form to Computershare Investor Services Pty Limited on facsimile number 1800 783 447 (within Australia) or +61 3 9473 2555 (outside Australia),
so that it is received not later than 11:00 am (Perth time) on Tuesday 9 May 2017. Proxy forms received later than this time will be invalid.
South Africa (Proxy Forms)
The enclosed Proxy Form provides further details on voting entitlement, appointing proxies and lodging Proxy Forms. If a Shareholder appoints a body corporate as its proxy and the body corporate wishes to appoint an individual as its representative, the body corporate should provide that person with a certificate or letter executed in accordance with the Corporations Act authorising him or her to act as that company's representative. The authority may be sent to the Company or its share registry in advance of the General Meeting or handed in at the General Meeting when registering as a corporate representative.
To vote by proxy, please complete and sign the Proxy Form enclosed and deliver the proxy form to:
Computershare Investor Services (Proprietary) Ltd, Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196 South Africa (PO Box 61051, Marshalltown, 2107) to reach them by no later than 5:00 am (SA time) on Tuesday 9 May 2017.
United Kingdom (CREST Voting Instruction)
Holders of Depositary Interests in CREST may transmit voting instructions by utilising the CREST voting service in accordance with the procedures described in the CREST Manual. CREST personal members or other CREST sponsored members, and those CREST members who have appointed a voting service provider, should refer to their CREST sponsor or voting service provider, who will be able to take appropriate action on their behalf.
In order for instructions made using the CREST voting service to be valid, the appropriate CREST message (a "CREST Voting Instruction") must be properly authenticated in accordance with Euroclear's specifications and must contain the information required for such instructions, as described in the CREST Manual (available via www.euroclear.com/CREST).
To be effective, the CREST Voting Instruction must be transmitted so as to be received by the Company's agent (3RA50) no later than 4:00 pm (UK time) on Friday 5 May 2017. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the CREST Voting Instruction by the CREST applications host) from which the Company's agent is able to retrieve the CREST Voting Instruction by enquiry to CREST in the manner prescribed by CREST. Holders of depositary interests in CREST and, where applicable, their CREST sponsors or voting service providers should note that Euroclear does not make available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply in relation to the transmission of CREST Voting Instructions. It is the responsibility of the DI Holder concerned to take (or, if the Depositary Interest holder is a CREST personal member or sponsored member or has appointed a voting service provider, to procure that the CREST sponsor or voting service provider takes) such action as shall be necessary to ensure that a CREST Voting Instruction is transmitted by means of the CREST voting service by any particular time. In this connection, DI Holders and, where applicable, their CREST sponsors or voting service providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings.
United Kingdom (Form of Instruction)
Alternatively, DI Holders can vote by completing, signing and returning the enclosed Form of Instruction to the Company's agent (3RA50) no later than 4:00 pm (UK time) on Friday 5 May 2017.
CUSTODIAN VOTING
For Intermediary Online subscribers only (custodians), please visit www.intermediaryonline.com to submit your voting intentions.
Ferrum Crescent Limited
ACN 097 532 137
NOTICE OF GENERAL MEETING
Notice is given that a General Meeting of Shareholders of Ferrum Crescent Limited will be held at 11:00 am (Perth time) on Thursday 11 May 2017 at The Hovia Room, Metro Hotel Perth, 61 Canning Highway, South Perth, Western Australia 6151.
The Explanatory Statement to this Notice of Meeting provides additional information on the matters to be considered at the General Meeting and a glossary of defined terms not defined in full in this Notice. The Explanatory Statement and the enclosed Proxy Form, or Form of Instruction if you are a DI Holder, form part of this Notice of Meeting. Terms and abbreviations used in this Notice of Meeting and Explanatory Statement are defined in the Glossary.
The Directors have determined, pursuant to Regulations 7.11.37 and 7.11.38 of the Corporations Regulations, that the persons eligible to vote at the General Meeting are those who are registered Shareholders of the Company at 5:00 pm (Perth time) on 9 May 2017. Accordingly, transactions registered after that time will be disregarded in determining entitlements to attend and vote at the General Meeting.
AGA
RESOLUTIONS
1. Ratification of prior issue of Shares
To consider and, if thought fit, to pass, with or without amendment, the following as an Ordinary Resolution:
"That, pursuant to and in accordance with ASX Listing Rule 7.4 and for all other purposes, Shareholders ratify the issue of 275,218,025 Shares at an issue price of 0.2 pence per Share on the terms and conditions set out in the Explanatory Statement".
Voting Exclusion: The Company will disregard any votes cast on this Resolution by a person who participated in the issue and any associates of those persons. However, the Company need not disregard a vote if it is cast by:
-- a person identified as proxy for a person who is entitled to vote on the Resolution and the vote is cast in accordance with the directions on the proxy form; or
-- the person chairing the meeting as proxy for a person who is entitled to vote on the Resolution and the vote is cast in accordance with the directions on the proxy form to vote as the proxy decides.
The Chairman intends to exercise all undirected proxies IN FAVOUR of Resolution 1.
2. Approval of the Director and Employee Incentive Plan
To consider and, if thought fit, to pass, with or without amendment, the following as an Ordinary Resolution:
"That, for the purposes of ASX Listing Rule 7.2 (Exception 9(b)) and for all other purposes, Shareholders approve the Ferrum Crescent Limited Director and Employee Incentive Plan (the Incentive Plan), the terms of which are summarised in the Explanatory Statement, and authorise the issue of securities under the Incentive Plan from time to time (including the grant of Awards and issue of Shares pursuant to the terms of those Awards)".
Voting Prohibition and Exclusion: The Company will disregard any votes cast on this Resolution by, or on behalf of, the Directors and any associate of the Directors. However, the Company need not disregard a vote on this Resolution if it is cast by:
-- a person identified as proxy for a person who is entitled to vote on the Resolution and the vote is cast in accordance with the directions on the proxy form; or
-- the person chairing the meeting as proxy for a person who is entitled to vote on the Resolution and the vote is cast in accordance with the directions on the proxy form to vote as the proxy decides.
Further, a vote on this Resolution must not be cast by a person appointed as a proxy if:
-- the proxy is either: o a member of Key Management Personnel; or o a Closely Related Party of a member of Key Management Personnel; and -- the appointment does not specify the way the proxy is to vote on this Resolution.
However, the Company need not disregard a vote on this Resolution if it is cast by the Chairman (who may be a member of Key Management Personnel) as proxy for a person who is entitled to vote and the proxy appointment expressly authorises the Chairman to exercise the proxy even though the Resolution is connected, directly or indirectly, with the remuneration of a member of Key Management Personnel.
The Chairman intends to exercise all undirected proxies IN FAVOUR of Resolution 2.
3. Grant of Performance Rights to Justin Tooth under the Incentive Plan
To consider and, if thought fit, to pass, with or without amendment, the following as an Ordinary Resolution:
"That, subject to the passing of Resolution 2, for the purposes of Chapter 2E of the Corporations Act, ASX Listing Rule 10.14 and for all other purposes, Shareholders approve and authorise the grant of up to 28,000,000 Performance Rights to Mr Justin Tooth, the Company's Executive Chairman (or his nominee) under the Incentive Plan and the issue of Shares on the vesting of those Performance Rights, on the terms and conditions set out in the Explanatory Statement".
Voting Prohibition and Exclusion: The Company will disregard any votes cast on this Resolution by, or on behalf of, the Directors and any associate of the Directors. However, the Company will not disregard a vote on this Resolution if it is cast by:
-- a person identified as proxy for a person who is entitled to vote on the Resolution and the vote is cast in accordance with the directions on the proxy form; or
-- the person chairing the meeting as proxy for a person who is entitled to vote on the Resolution and the vote is cast in accordance with the directions on the proxy form to vote as the proxy decides.
Further, a vote on this Resolution must not be cast by a person appointed as a proxy if:
-- the proxy is either: o a member of Key Management Personnel; or o a Closely Related Party of a member of Key Management Personnel; and -- the appointment does not specify the way the proxy is to vote on this Resolution.
However, the Company need not disregard a vote on this Resolution if it is cast by the Chairman (who may be a member of Key Management Personnel) as proxy for a person who is entitled to vote and the proxy appointment expressly authorises the Chairman to exercise the proxy even though the Resolution is connected, directly or indirectly, with the remuneration of a member of Key Management Personnel.
The Chairman intends to exercise all undirected proxies IN FAVOUR of Resolution 3.
4. Grant of Performance Rights to Evan Kirby under the Incentive Plan
To consider and, if thought fit, with or without amendment, to pass the following resolution as an Ordinary Resolution:
"That, subject to the passing of Resolution 2, for the purposes of Chapter 2E of the Corporations Act, ASX Listing Rule 10.14 and for all other purposes, Shareholders approve and authorise the grant of up to 5,600,000 Performance Rights to Dr Evan Kirby (or his nominee) and the issue of Shares on the valid exercise of those Performance Rights in accordance with the terms of the Performance Rights and otherwise on the terms and conditions set out in the Explanatory Statement".
Voting Prohibition and Exclusion: The Company will disregard any votes cast on this Resolution by, or on behalf of, the Directors and any associate of the Directors. However, the Company will not disregard a vote on this Resolution if it is cast by:
-- a person identified as proxy for a person who is entitled to vote on the Resolution and the vote is cast in accordance with the directions on the proxy form; or
-- the person chairing the meeting as proxy for a person who is entitled to vote on the Resolution and the vote is cast in accordance with the directions on the proxy form to vote as the proxy decides.
Further, a vote on this Resolution must not be cast by a person appointed as a proxy if:
-- the proxy is either: o a member of Key Management Personnel; or o a Closely Related Party of a member of Key Management Personnel; and -- the appointment does not specify the way the proxy is to vote on this Resolution.
However, the Company need not disregard a vote on this Resolution if it is cast by the Chairman (who may be a member of Key Management Personnel) as proxy for a person who is entitled to vote and the proxy appointment expressly authorises the Chairman to exercise the proxy even though the Resolution is connected, directly or indirectly, with the remuneration of a member of Key Management Personnel.
The Chairman intends to exercise all undirected proxies IN FAVOUR of Resolution 4.
5. Grant of Performance Rights to Laurence Read under the Incentive Plan
To consider and, if thought fit, with or without amendment, to pass the following resolution as an Ordinary Resolution:
"That, subject to the passing of Resolution 2, for the purposes of Chapter 2E of the Corporations Act, ASX Listing Rule 10.14 and for all other purposes, Shareholders approve and authorise the grant of up to 5,600,000 Performance Rights to Mr Laurence Read (or his nominee) and the issue of Shares on the valid exercise of those Performance Rights in accordance with the terms of the Performance Rights and otherwise on the terms and conditions set out in the Explanatory Statement".
Voting Prohibition and Exclusion: The Company will disregard any votes cast on this Resolution by, or on behalf of, the Directors and any associate of the Directors. However, the Company will not disregard a vote on this Resolution if it is cast by:
-- a person identified as proxy for a person who is entitled to vote on the Resolution and the vote is cast in accordance with the directions on the proxy form; or
-- the person chairing the meeting as proxy for a person who is entitled to vote on the Resolution and the vote is cast in accordance with the directions on the proxy form to vote as the proxy decides.
Further, a vote on this Resolution must not be cast by a person appointed as a proxy if:
-- the proxy is either: o a member of Key Management Personnel; or o a Closely Related Party of a member of Key Management Personnel; and -- the appointment does not specify the way the proxy is to vote on this Resolution.
However, the Company need not disregard a vote on this Resolution if it is cast by the Chairman (who may be a member of Key Management Personnel) as proxy for a person who is entitled to vote and the proxy appointment expressly authorises the Chairman to exercise the proxy even though the Resolution is connected, directly or indirectly, with the remuneration of a member of Key Management Personnel.
The Chairman intends to exercise all undirected proxies IN FAVOUR of Resolution 5.
6. Grant of Performance Rights to Grant Button under the Incentive Plan
To consider and, if thought fit, with or without amendment, to pass the following resolution as an Ordinary Resolution:
"That, subject to the passing of Resolution 2, for the purposes of Chapter 2E of the Corporations Act, ASX Listing Rule 10.14 and for all other purposes, Shareholders approve and authorise the grant of up to 10,000,000 Performance Rights to Mr Grant Button (or his nominee) and the issue of Shares on the valid exercise of those Performance Rights in accordance with the terms of the Performance Rights and otherwise on the terms and conditions set out in the Explanatory Statement".
Voting Prohibition and Exclusion: The Company will disregard any votes cast on this Resolution by, or on behalf of, the Directors and any associate of the Directors. However, the Company will not disregard a vote on this Resolution if it is cast by:
-- a person identified as proxy for a person who is entitled to vote on the Resolution and the vote is cast in accordance with the directions on the proxy form; or
-- the person chairing the meeting as proxy for a person who is entitled to vote on the Resolution and the vote is cast in accordance with the directions on the proxy form to vote as the proxy decides.
Further, a vote on this Resolution must not be cast by a person appointed as a proxy if:
-- the proxy is either: o a member of Key Management Personnel; or o a Closely Related Party of a member of Key Management Personnel; and -- the appointment does not specify the way the proxy is to vote on this Resolution.
However, the Company need not disregard a vote on this Resolution if it is cast by the Chairman (who may be a member of Key Management Personnel) as proxy for a person who is entitled to vote and the proxy appointment expressly authorises the Chairman to exercise the proxy even though the Resolution is connected, directly or indirectly, with the remuneration of a member of Key Management Personnel.
The Chairman intends to exercise all undirected proxies IN FAVOUR of Resolution 6.
BY ORDER OF THE BOARD
Grant Button
Director/Company Secretary
DATED 28 March 2017
Ferrum Crescent Limited
ACN 097 532 137
EXPLANATORY STATEMENT TO SHAREHOLDERS
INTRODUCTION
This Explanatory Statement has been prepared for the information of Shareholders of the Company in connection with Resolutions to be considered at the General Meeting to be held at The Hovia Room, Metro Hotel Perth, 61 Canning Highway, South Perth, Western Australia 6151 at 11:00 am (Perth time) on Thursday 11 May 2017.
This Explanatory Statement should be read in conjunction with the accompanying Notice of Meeting.
The purpose of this Explanatory Statement is to provide information which the Directors believe to be material to Shareholders in deciding whether or not to pass the Resolutions set out in the Notice of Meeting.
1. RESOLUTION 1 - RATIFICATION OF PRIOR ISSUE OF SHARES
1.1 Background
On 12 December 2016, the Company announced that it had conditionally raised approximately GBP550,000 before expenses through the issue of 275,218,025 Shares, each at an issue price of 0.2 pence per Share (the Placement Shares), placed via Beaufort Securities Limited.
The Placement Shares were issued on 22 December 2016, pursuant to the Company's 15% placement capacity under ASX Listing Rule 7.1. Resolution 1 seeks Shareholder ratification, pursuant to ASX Listing Rule 7.4, of the issue of the Placement Shares.
ASX Listing Rule 7.4 provides that, where a company in a general meeting ratifies previous issues of securities made pursuant to ASX Listing Rules 7.1 and/or 7.1A, the issue of those securities will be deemed to have been made with shareholder approval for the purpose of ASX Listing Rule 7.1.
The effect of Shareholders passing Resolution 1 and ratifying the issue of the Placement Shares will be to replenish the Company's 15% placement capacity to the extent of the Placement Shares.
Resolution 1 is an Ordinary Resolution.
1.2 Technical Information required by ASX Listing Rule 7.4
In accordance with ASX Listing Rule 7.5, the following information is provided in relation to the issue of the Placement Shares:
(a) 275,218,025 Shares were issued. (b) The Placement Shares were issued at a price of 0.2 pence per Share.
(c) The Placement Shares are all fully-paid ordinary shares issued on the same terms and conditions as the Company's existing Shares.
(d) The Placement Shares were issued to professional and sophisticated investors. None of the subscribers are related parties or associates of the Company.
(e) The Company intends to use the proceeds from the issue of the Placement Shares for the Group's general working capital purposes and expenditure on its two principal metals projects, as follows:
(i) Moonlight iron ore project, South Africa - satisfying licence obligations and progressing development pathways; and
(ii) Toral lead-zinc project, Spain - continuing field work, phase 1 drill programme and petrographic studies of mineralisation.
(f) A voting exclusion statement for Resolution 1 is included in the Notice of Meeting.
The Board unanimously recommends that Shareholders vote IN FAVOUR of Resolution 1.
The Chairman intends to exercise all undirected proxies IN FAVOUR of Resolution 1.
2. RESOLUTION 2 - APPROVAL OF THE INCENTIVE PLAN
2.1 Background
As the Company's existing incentive plans, the Employee Share Plan (ESP) and the Employee Option Plan (EOP) were approved by Shareholders in 2013 for a period of three years, the Company is no longer able to issue securities under the ESP or EOP as an exception to ASX Listing Rule 7.1. Accordingly, and in light of the recent acquisition and developments within the Company, the Board has decided to take this opportunity to adopt a new equity incentive plan, the Ferrum Crescent Limited Director and Employee Incentive Plan (the Incentive Plan), in place of the ESP and EOP.
The Incentive Plan aims to:
-- reward employees, contractors and directors of the Group for their past performance;
-- provide a long-term incentive for directors, employees and contractors to participate in the Group's future growth by providing them with an opportunity to receive an ownership interest in the Company; and
-- align the interests of the Group's employees and Shareholders by connecting the remuneration of employees to the long-term success of the Company.
The Board considers that the implementation of the Incentive Plan will assist in the retention and motivation of employees, contractors and directors of the Group and will form an important part of the comprehensive remuneration strategy for the Group's employees and directors.
The Corporate Governance Council Guidelines recommend that executive remuneration packages include an appropriate balance of fixed and performance-based remuneration reflecting short and long-term objectives appropriate to the company's circumstances, aims and risk appetite.
A summary of the terms and conditions of the Incentive Plan is set out in Schedule 1 of this Explanatory Statement. A copy of the Incentive Plan may be obtained by contacting the Company Secretary by telephone on +61 8 9474 2995.
2.2 Approval for the purposes of the ASX Listing Rules
As noted above, ASX Listing Rule 7.1 broadly provides, subject to certain exceptions, that a company may not issue, or agree to issue, equity securities in any 12-month period that exceed 15% of the number of securities that the company has on issue, except with the prior approval of shareholders of the company in a general meeting of the terms and conditions of the proposed issue.
ASX Listing Rule 7.2 (Exception 9(b)) provides that ASX Listing Rule 7.1 does not apply to an issue of securities under an employee incentive scheme if, within three years before the date of issue, shareholders have approved the issue of securities under the employee incentive scheme as an exception to ASX Listing Rule 7.1.
Accordingly, although the Company is not required to obtain shareholder approval for the introduction of the Incentive Plan, if the Incentive Plan is approved by Shareholders, securities issued within three years of the date of approval will fall within an exception to ASX Listing Rule 7.1. Additional Shareholder approval will be required before any Director or related party of the Company can participate in the Incentive Plan.
2.3 Technical information required by ASX Listing Rule 7.2
In accordance with ASX Listing Rule 7.2 (Exception 9(b)), the following information is provided to Shareholders in respect of the Incentive Plan:
-- a summary of the terms of the Incentive Plan is set out in Schedule 1 of this Explanatory Statement;
-- no securities have previously been issued under the Incentive Plan; and -- a voting exclusion statement is included in the Notice.
2.4 Directors' Recommendation
All of the Directors are eligible to participate in the Incentive Plan and therefore have an interest in Resolution 2. Accordingly, all of the Directors refrain from making any recommendation as to how Shareholders should vote on Resolution 2.
The Chairman intends to exercise all undirected proxies IN FAVOUR of Resolution 2.
3. RESOLUTION 3 - GRANT OF PERFORMANCE RIGHTS TO JUSTIN TOOTH UNDER INCENTIVE PLAN
3.1 Details of the proposed grant to Justin Tooth
Subject to obtaining Shareholder approval in respect of Resolution 2 and this Resolution 3, the Company proposes to grant Performance Rights to Justin Tooth (or his nominee) in accordance with the terms of the Incentive Plan.
As set out above, the Incentive Plan will be used as part of the remuneration planning for directors, employees and contractors of the Group. For further information in respect of the Incentive Plan, please refer to section 2.1 above and to Schedule 1 of this Explanatory Statement.
Having regard to the significant role that Mr Tooth has in respect of the development of the Company, the Board considers that the grant of Performance Rights to Mr Tooth under the Incentive Plan is an appropriate form of long-term incentive-based remuneration.
3.2 Approval for the purposes of the ASX Listing Rules and Corporations Act
Resolution 3 seeks Shareholder approval for the grant of Performance Rights (and the subsequent issue of Shares on vesting of those Performance Rights) to Justin Tooth for the purposes of:
(a) ASX Listing Rule 10.14, which broadly provides that Shareholder approval is required before a director, or an associate of a director, may acquire securities under an employee incentive scheme; and
(b) Chapter 2E of the Corporations Act, which prohibits a public company from giving a financial benefit to a related party of a public company unless the giving of the financial benefit falls within one of the nominated exceptions or shareholder approval is obtained prior to the giving of the financial benefit.
Shareholder approval under ASX Listing Rule 7.1 is not required for the issue of securities that have been approved under ASX Listing Rule 10.14. Accordingly, provided that both Resolutions 2 and this Resolution 3 are approved by Shareholders, the grant of Performance Rights to Justin Tooth (and any subsequent acquisition of Shares upon vesting of those Performance Rights) will not be included in the calculation of the Company's 15% annual placement capacity for the purposes of ASX Listing Rule 7.1.
3.3 Information required by ASX Listing Rules
For the purpose of the approval sought under ASX Listing Rule 10.14, and in accordance with the requirements of ASX Listing Rule 10.15, the following information is provided in relation to the proposed grant of Performance Rights to Justin Tooth:
(a) The Performance Rights are proposed to be issued to Justin Tooth, Executive Chairman of the Company.
(b) The maximum number of Performance Rights that may be granted to Justin Tooth pursuant to Resolution 3 is 28,000,000 Performance Rights.
(c) The Performance Rights will be granted under the Incentive Plan, on the general terms and conditions set out in Schedule 1 of this Explanatory Statement, and on the specific terms and conditions set out in Schedule 2 of this Explanatory Statement. The performance hurdles attaching to the Performance Rights along with the applicable performance hurdle satisfaction date and vesting date are set out in Schedule 2 and in the table in section 3.4(c) below.
(d) No price is payable for the grant of the Performance Rights, or on vesting of the Performance Rights, as the Performance Rights are issued as an incentive and reward following satisfaction of specified performance hurdles by a prescribed date.
(e) No securities have previously been issued under the Incentive Plan nor has the Incentive Plan been previously adopted by Shareholders.
(f) The Directors, in addition to employees and contractors of the Company, are entitled to participate in the Incentive Plan.
(g) A voting exclusion statement is included in the Notice.
(h) No loans are being provided by the Company for the acquisition of securities under the Incentive Plan.
(i) It is anticipated that the Performance Rights will be granted to Justin Tooth no later than 12 months after the date of the Meeting (or such later date as permitted by an ASX waiver or modification of the ASX Listing Rules) in one tranche. The Company contemplates that Shares issued upon vesting of the Performance Rights may be issued in more than one tranche, following vesting of the Performance Rights.
3.4 Information required by the Corporations Act
Chapter 2E of the Corporations Act prohibits a public company from giving a financial benefit to a related party of a public company unless the benefit falls within one of the various exceptions to the general prohibition. A "related party" for the purposes of the Corporations Act is defined broadly and includes a director of the Company. "Financial Benefit" has a wide meaning and includes the issue of securities by a public company.
The proposed offer of Performance Rights to Mr Tooth will form part of Mr Tooth's remuneration package. Given the circumstances of the Company, the Non-Executive Directors consider that the proposed grant of Performance Rights would constitute reasonable remuneration and, accordingly, may fall within an exception to the related party provisions in Chapter 2E of the Corporations Act. In reaching this conclusion, the Board has had regard to a variety of factors including market practice and the remuneration offered to persons in comparable positions at similar companies. Notwithstanding this conclusion, the Board has resolved that the Company should also seek shareholder approval pursuant to Chapter 2E of the Corporations Act as a matter of good corporate governance.
Pursuant to, and in accordance with the requirements of Chapter 2E, and in particular section 219 of the Corporations Act, the following information is provided for the purposes of obtaining Shareholder approval for Resolution 3:
(a) The related party to whom a financial benefit will be given is Justin Tooth (or his nominee), who is the Executive Chairman of the Company.
(b) The nature of the financial benefit proposed to be given to Justin Tooth is the grant of 28,000,000 Performance Rights.
(c) The Performance Rights will be granted under the Incentive Plan, on the general terms and conditions set out in Schedule 1 of this Explanatory Statement, and the specific terms and conditions set out in Schedule 2 of this Explanatory Statement. The performance hurdles attaching to the Performance Rights along with the applicable performance hurdle satisfaction date and vesting date are set out in the table below:
Hot Features
Premium
Tranche Number Performance Performance Vesting Date
of Performance Hurdle Hurdle
Rights Satisfaction
Date
-------- ---------------- --------------------- -------------- ----------------
A 3,500,000 AIM Price is 1 year 3 years after
0.35 pence or satisfaction
more of performance
hurdle
-------- ---------------- --------------------- -------------- ----------------
B 3,500,000 AIM Price is 18 months 3 years after
0.5 pence or satisfaction
more of hurdle
-------- ---------------- --------------------- -------------- ----------------
C 3,500,000 AIM Price is 2 years 2 years after
0.75 pence or satisfaction
more of performance
hurdle
-------- ---------------- --------------------- -------------- ----------------
D 3,500,000 AIM Price is 3 years 2 years after
1.1 pence or satisfaction
more of performance
hurdle
-------- ---------------- --------------------- -------------- ----------------
E 3,500,000 AIM Price is 3 years 18 months after
1.5 pence or satisfaction
more of performance
hurdle
-------- ---------------- --------------------- -------------- ----------------
F 3,500,000 AIM Price is 3.5 years 1 year after
2.0 pence or satisfaction
more of performance
hurdle
-------- ---------------- --------------------- -------------- ----------------
G 7,000,000 First commercial 5 years 6 months after
production at satisfaction
any project of performance
controlled by hurdle
the Company
at the time
of first production
-------- ---------------- --------------------- -------------- ----------------
Where:
AIM Price means the volume-weighted average price of Ferrum Shares on AIM over 10 consecutive trading days;
Performance Hurdle Satisfaction Date means the date by which the relevant performance hurdle must be satisfied; and
Vesting Date means the date on which a participant under the Incentive Plan becomes entitled to be issued the number of Shares in respect of which an Award has vested in accordance with Rule 7 of the Incentive Plan.
(d) The Performance Rights will be granted for no cash consideration and, accordingly, no funds will be raised from the grant of the Performance Rights or from the issue of Shares upon vesting of the Performance Rights.
(e) Mr Tooth is the proposed recipient of Performance Rights and has an interest in the outcome of the Resolution. No other directors have any interest in the outcome of this Resolution.
(f) Director's remuneration package:
Director 2015/2016 Financial 2016/2017 Financial
Year Year
-------------- -------------------- --------------------
Justin Tooth $46,858(1) $186,306(2)
-------------- -------------------- --------------------
1. Justin Tooth was appointed Non-Executive Chairman on 16 December 2015 and Executive Chairman on 31 March 2016.
2. Justin Tooth and the Company entered into an Executive Employment contract on 7 January 2017 under which Justin is paid GBP125,000 per annum from 1 October 2016 onwards.
(g) The securities currently held by Justin Tooth and those that may be issued subject to Shareholder approval at this meeting are set out in the table below:
Performance Rights
(subject to shareholder
Existing approval under Resolutions
Director Shares Options 2 and 3)
---------- -------- --------- ----------------------------
Justin
Tooth 326,650 Nil 28,000,000
---------- -------- --------- ----------------------------
(h) The dilution effect on Shareholders, if all Performance Rights the subject of Resolution 3 vest (and the Performance Rights proposed to be granted to the Non-Executive Directors under Resolutions 4 to 6 are exercised), and no other options are exercised and no Shares are issued, will be 2.24% as set out below.
Shares (ASX:FCR)
---------------------------- -----------------
Shares currently on
issue 2,147,825,266
---------------------------- -----------------
Resolution 3 - Performance
Rights to be granted
to Justin Tooth 28,000,000
---------------------------- -----------------
Resolutions 4 to 6
- Performance Rights
to be granted to the
Non-Executive Directors 21,200,000
---------------------------- -----------------
Expanded Capital if
all Performance Rights
proposed in this Notice
to be granted to all
Directors vest or
are exercised (as
applicable) 2,197,025,266
---------------------------- -----------------
Dilutionary effect 2.24%
---------------------------- -----------------
(i) In the 12 months before the date of this Notice, the highest, lowest and latest trading price (as at 14 March 2017) of the Shares on ASX are as set out below:
Shares (ASX:FCR)
------------------------ -----------------
Highest (16 May 2016) 0.007
------------------------ -----------------
Lowest (22 April 2016
and 9 May 2016) 0.002
------------------------ -----------------
Latest (14 March 2017) 0.003
------------------------ -----------------
(j) The value of the financial benefit to be provided to Justin Tooth under each of Tranches A - G is set out in the table below.
Tranche A B C D E F G Total
-------------------- ---------- ---------- ---------- ---------- ---------- ---------- ----------- -----------
# of Rights 3,500,000 3,500,000 3,500,000 3,500,000 3,500,000 3,500,000 7,000,000 28,000,000
-------------------- ---------- ---------- ---------- ---------- ---------- ---------- ----------- -----------
Valuation per right 0.1090p 0.1012p 0.0921p 0.0998p 0.0846p 0.0843p 0.1700p N/A
0.17c 0.16c 0.15c 0.16c 0.14c 0.13c 0.27c
-------------------- ---------- ---------- ---------- ---------- ---------- ---------- ----------- -----------
Valuation of GBP3,815 GBP3,542 GBP3,224 GBP3,493 GBP2,961 GBP2,951 GBP11,900 GBP31,886
Tranche AUD6,132 AUD5,694 AUD5,182 AUD5,615 AUD4,760 AUD4,744 AUD19,129 AUD51,255
-------------------- ---------- ---------- ---------- ---------- ---------- ---------- ----------- -----------
Note: These values have been calculated by BDO in GBP and converted to AUD by the Company
using the rate of GBP1 = AUD1.607458607, being the inverse of the AUD/GBP foreign exchange
rate published by the Reserve Bank of Australia on 8 March 2017.
----------------------------------------------------------------------------------------------------------------------
These values have been calculated by BDO using an up and in single barrier share option pricing model for the Tranches A - F Performance Rights and a binomial pricing model (validated by the Black Scholes option pricing model) for the Tranche G Performance Rights.
The up and in single barrier share pricing model takes into consideration that market based rights can vest at any time during the period from grant date to the Performance Hurdle Satisfaction Date of each respective tranche, provided the 10-day VWAP of the AIM Price exceeds the determined barrier price. The model incorporates a trinomial valuation.
BDO made the following assumptions under the models:
-- the Performance Rights under Tranches A-F have market-based vesting conditions attached;
-- for Performance Rights under Tranche G (which don't have market vesting conditions attached), the exercise of the Performance Right does not affect the value of the underlying asset;
-- a grant date of 8 March 2017, which was also adopted as the valuation date;
-- it used the 10 day VWAP of Shares on AIM as at the valuation date, 0.17 pence, which was input into the pricing model;
-- as there is no consideration required for exercising the Performance Rights, a nil exercise price was used in the option pricing model;
-- the performance period represents the period over which the Performance Rights will be assessed for vesting, from the grant date until the Performance Hurdle Satisfaction Date based on the Performance Rights' respective performance hurdles;
-- the performance hurdle of each tranche is to be measured over the respective performance period of each tranche;
-- for Performance Rights under Tranche G, it used a share price volatility of 150% based on the historical volatility of Ferrum's AIM listed share price;
-- for Performance Rights under Tranche A-F, it used a 10-day VWAP volatility of 100% based on the historical volatility of the 10-day VWAP of Ferrum's AIM listed share price;
-- the risk free rate of interest used is the United Kingdom Government Bond Rate that most closely corresponds to the vesting period of each tranche of Performance Rights as at the valuation date:
o for Performance Rights under Tranches A-C, E and F, a rate of 0.314% was used, being the four year United Kingdom Government Bond closing rate as at the valuation date; and
o for Performance Rights under Tranches D and G, a rate of 0.589% was used, being the five year United Kingdom Government Bond closing rate as at the valuation date.
-- a dividend yield of 0%; and
-- the performance hurdle for each tranche is identical to the hurdle outlined in section 3.4(c) above.
(k) Directors' recommendation and basis of recommendation:
Justin Tooth has a material personal interest in Resolution 3 and abstains from making a recommendation in respect of Resolution 3. The Non-Executive Directors have carefully considered the proposed grant of Performance Rights to Mr Tooth, as well as his remuneration package generally. The Non-Executive Directors consider the grant to be an important component of Mr Tooth's remuneration package and all recommend that Shareholders vote in favour of Resolution 3.
The Chairman intends to exercise all undirected proxies IN FAVOUR of Resolution 3.
3.5 Other information
There are no material opportunity costs to the Company, no taxation consequences to the Company and no material benefits foregone by the Company in granting the Performance Rights to Mr Tooth.
The Directors are not aware of any information, other than the information set out in this Explanatory Statement that would reasonably be required by Shareholders in order to decide whether or not it is in the Company's interests to pass Resolution 3.
4. RESOLUTIONS 4 TO 6 - GRANT OF PERFORMANCE RIGHTS TO THE NON-EXECUTIVE DIRECTORS UNDER THE INCENTIVE PLAN
4.1 Details of the proposed grant to the Non-Executive Directors
Subject to obtaining Shareholder approval in respect of Resolution 2 and Resolutions 4 to 6, the Company proposes to grant Performance Rights to each of Evan Kirby, Laurence Read and Grant Button (the Non-Executive Directors) (or their nominees) in accordance with the terms of the Incentive Plan.
The grant of Performance Rights will form part of the remuneration planning for Non-Executive Directors. The Board acknowledges that this is not in accordance with Recommendation 8.2 of the Corporate Governance Principles and Recommendations (3rd edition) as published by the ASX Corporate Governance Council. However, the Board considers that it is reasonable in the circumstances for the Non-Executive Directors to be offered the Performance Rights as part of their remuneration, given the primary purpose of the grant of the Performance Rights to the Non-Executive Directors is to motivate and reward their performance in their respective roles as Non-Executive Directors.
4.2 Approval for the purposes of the ASX Listing Rules and Corporations Act
Resolutions 4 to 6 seek Shareholder approval for the grant of Performance Rights (and the subsequent issue of Shares on the valid exercise of those Performance Rights) to the Non-Executive Directors for the purposes of:
(a) ASX Listing Rule 10.14, which broadly provides that Shareholder approval is required before a director, or an associate of a director, may acquire securities under an employee incentive scheme; and
(b) Chapter 2E of the Corporations Act, which prohibits a public company from giving a financial benefit to a related party of a public company unless the giving of the financial benefit falls within one of the nominated exceptions, or shareholder approval is obtained prior to the giving of the financial benefit.
Shareholder approval under ASX Listing Rule 7.1 is not required for issues that have been approved under ASX Listing Rule 10.14. Accordingly, provided Resolutions 2 and 4 to 6 are approved by Shareholders, the grant of Performance Rights to the Non-Executive Directors (and any subsequent acquisition of Shares on the valid exercise of those Performance Rights) will not be included in the calculation of the Company's 15% annual placement capacity for the purposes of ASX Listing Rule 7.1.
4.3 Information required by ASX Listing Rules
For the purpose of the approval sought under ASX Listing Rule 10.14, and in accordance with the requirements of ASX Listing Rule 10.15, the following information is provided in relation to the proposed grant of Performance Rights to the Non-Executive Directors:
(a) The Performance Rights are proposed to be issued to the Non-Executive Directors, Evan Kirby, Laurence Read and Grant Button, each a Director and, as such, a related party of the Company.
(b) The maximum number of Performance Rights that may be granted to each Non-Executive Director pursuant to Resolutions 4 to 6 are as follows:
Non-Executive Tranche Tranche Tranche Tranche Tranche Tranche Tranche Total
Director A B C D E F G
--------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -----------
Evan
Kirby 700,000 700,000 700,000 700,000 700,000 700,000 1,400,000 5,600,000
--------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -----------
Laurence
Read 700,000 700,000 700,000 700,000 700,000 700,000 1,400,000 5,600,000
--------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -----------
Grant
Button 1,250,000 1,250,000 1,250,000 1,250,000 1,250,000 1,250,000 2,500,000 10,000,000
--------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -----------
Total 2,650,000 2,650,000 2,650,000 2,650,000 2,650,000 2,650,000 5,300,000 21,200,000
--------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -----------
(c) The Performance Rights will be granted under the Incentive Plan, on the general terms and conditions set out in Schedule 1 of this Explanatory Statement, and the specific terms and conditions set out in Schedule 2 of this Explanatory Statement. The performance hurdles attaching to the Performance Rights along with the applicable performance hurdle satisfaction date and vesting date are set out in the table in section 4.4(c) below.
(d) No price is payable for the grant of the Performance Rights, or on the valid exercise of the Performance Rights, as the Performance Rights are issued as an incentive and reward following satisfaction of prescribed performance hurdles by a prescribed date.
(e) No securities have previously been issued under the Incentive Plan nor has the Incentive Plan been previously adopted by Shareholders.
(f) The Directors, together with employees and contractors of the Company, are entitled to participate in the Incentive Plan.
(g) A voting exclusion statement is included in the Notice.
(h) No loans are being provided by the Company for the acquisition of securities under the Incentive Plan.
(i) It is anticipated that the Performance Rights will be granted to the Non-Executive Directors no later than 12 months after the date of the Meeting (or such later date as permitted by an ASX waiver or modification of the ASX Listing Rules) in one tranche. The Company contemplates that Shares issued on the valid exercise of the Performance Rights may be issued in more than one tranche following vesting of the Performance Rights.
4.4 Information required by the Corporations Act
Pursuant to, and in accordance with the requirements of Chapter 2E, and in particular with section 219, of the Corporations Act, the following information is provided for the purposes of obtaining Shareholder approval for Resolutions 4 to 6:
(a) The related parties to whom a financial benefit will be given are Evan Kirby, Laurence Read and Grant Button (or their nominees), each of whom is a Non-Executive Director of the Company.
(b) The nature of the financial benefit proposed to be given to each Non-Executive Director is the grant of Performance Rights up to the maximum number set out in the table below:
Non-Executive Tranche Tranche Tranche Tranche Tranche Tranche Tranche Total
Director A B C D E F G
--------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -----------
Evan
Kirby 700,000 700,000 700,000 700,000 700,000 700,000 1,400,000 5,600,000
--------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -----------
Laurence
Read 700,000 700,000 700,000 700,000 700,000 700,000 1,400,000 5,600,000
--------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -----------
Grant
Button 1,250,000 1,250,000 1,250,000 1,250,000 1,250,000 1,250,000 2,500,000 10,000,000
--------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -----------
Total 2,650,000 2,650,000 2,650,000 2,650,000 2,650,000 2,650,000 5,300,000 21,200,000
--------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -----------
(c) The Performance Rights will be granted under the Incentive Plan, on the general terms and conditions set out in Schedule 1 of this Explanatory Statement, and the specific terms and conditions set out in Schedule 2 of this Explanatory Statement. The performance hurdles attaching to the Performance Rights along with the applicable performance hurdle satisfaction date and vesting date are set out in the table below:
Tranche Number Performance Hurdle Performance Vesting Date
of Performance Hurdle
Rights Satisfaction
Date
-------- ---------------- ------------------------ -------------- ---------------------
A 2,650,000 AIM Price is 0.35 1 year 3 years after
pence or more hurdle satisfaction
-------- ---------------- ------------------------ -------------- ---------------------
B 2,650,000 AIM Price is 0.5 18 months 3 years after
pence or more hurdle satisfaction
-------- ---------------- ------------------------ -------------- ---------------------
C 2,650,000 AIM Price is 0.75 2 years 2 years after
pence or more hurdle satisfaction
-------- ---------------- ------------------------ -------------- ---------------------
D 2,650,000 AIM Price is 1.1 3 years 2 years after
pence or more hurdle satisfaction
-------- ---------------- ------------------------ -------------- ---------------------
E 2,650,000 AIM Price is 1.5 3 years 18 months
pence or more after hurdle
satisfaction
-------- ---------------- ------------------------ -------------- ---------------------
F 2,650,000 AIM Price is 2.0 3.5 years 1 year after
pence or more hurdle satisfaction
-------- ---------------- ------------------------ -------------- ---------------------
G 5,300,000 First commercial 5 years 6 months after
production at hurdle satisfaction
any project controlled
by the Company
at the time of
first production
-------- ---------------- ------------------------ -------------- ---------------------
Where:
AIM Price means the volume-weighted average price of Ferrum Shares on AIM over 10 consecutive trading days;
Performance Hurdle Satisfaction Date means the date by which the relevant performance hurdle must be satisfied; and
Vesting Date means the date on which the relevant participant becomes entitled to be issued a Share in accordance with Rule 7 of the Incentive Plan.
(d) The Performance Rights will be granted for no cash consideration and, accordingly, no funds will be raised from the grant of the Performance Rights or from the issue of Shares upon vesting of the Performance Rights.
(e) Each Non-Executive Director is a proposed recipient of the Performance Rights and has an interest in the outcome of the Resolution relevant to him.
(f) Non-Executive Directors' fees:
Non-Executive 2015/2016 Financial 2016/2017 Financial
Director Year Year
--------------- -------------------- --------------------
Evan Kirby $7,500(1) $30,000
--------------- -------------------- --------------------
Laurence Read $0(2) $0(3)
--------------- -------------------- --------------------
Grant Button $36,850 $60,000(4)
--------------- -------------------- --------------------
1. Evan Kirby joined the Board as a Non-Executive Director on 31 March 2016.
2. Laurence Read was appointed as a Non-Executive Director of the Company on 25 January 2017, and so was not paid a fee in the 2015/2016 financial year. Mr Read was paid a consultancy fee of GBP52,500 for the 2015/2016 financial year.
3. While he is not being paid a Non-Executive Director fee, Laurence Read will be paid a consultancy fee of GBP52,500 for the 2016/2017 financial year.
4. Grant Button was appointed Company Secretary on 31 March 2016, at which time his fee was increased from $30,000 per annum to $60,000 per annum.
(g) The securities currently held by the Non-Executive Directors and those that may be issued subject to Shareholder approvals at this meeting are set out in the table below:
Director Existing Existing Performance Rights (subject
Shares Options to shareholder approval
under Resolutions 2 and
4 to 6), to be issued
in the tranches set out
in sections 4.3(b) and
4.4(b) above
---------- ---------- --------- ----------------------------
Evan
Kirby 10,900 Nil 5,600,000
---------- ---------- --------- ----------------------------
Laurence
Read Nil Nil 5,600,000
---------- ---------- --------- ----------------------------
Grant
Button 5,356,300 Nil 10,000,000
---------- ---------- --------- ----------------------------
(h) The dilution effect on Shareholders, if all Performance Rights the subject of Resolutions 4 to 6 are exercised (and the Performance Rights proposed to be granted to Mr Tooth under Resolution 3 vest, but no other Performance Rights are exercised) and no other Shares are issued, will be 2.24% as set out below.
Shares (ASX:FCR)
---------------------------- -----------------
Shares currently on
issue 2,147,825,266
---------------------------- -----------------
Resolution 3 - Performance
Rights to be granted
to J Tooth 28,000,000
---------------------------- -----------------
Resolutions 4 to 6
- Performance Rights
to be granted to the
Non-Executive Directors 21,200,000
---------------------------- -----------------
Expanded Capital if
all Performance Rights
proposed in this Notice
to be granted to all
Directors vest or are
exercised (as applicable) 2,197,025,266
---------------------------- -----------------
Dilutionary effect 2.24%
---------------------------- -----------------
(i) In the 12 months before the date of this Notice, the highest, lowest and latest trading price (as at 14 March 2017) of the Shares on ASX are as set out below:
Shares (ASX:FCR)
----------------------- -----------------
Highest (16 May 2016) 0.007
----------------------- -----------------
Lowest (22 April
2016 and 9 May 2016) 0.002
----------------------- -----------------
Latest (14 March
2017) 0.003
----------------------- -----------------
(j) The value of the financial benefit to be provided to the Non-Executive Directors is set out in the table below. These figures have been calculated based on BDO's valuation of the Performance Rights which are proposed to be issued to Mr Tooth. This is on the basis that, because the tranches of Performance Rights that are to be issued to the Non-Executive Directors are on the same terms as the tranches of Performance Rights to be issued to Mr Tooth, the valuation methodology used in respect of Mr Tooth can also be used for the Non-Executive Directors. Accordingly, the 'Valuation per right' figure in the table below is identical for Mr Tooth and the Non-Executive Directors.
As discussed above, BDO used an up and in single barrier share option pricing model for Performance Rights under Tranches A - F, and a binomial pricing model (validated by the Black Scholes option pricing model) for Tranche G Rights.
The up and in single barrier share pricing model takes into consideration that market based rights can vest at any time during the period from grant date to the performance hurdle satisfaction date of each respective tranche, provided the 10-day VWAP of the AIM Price exceeds the determined barrier price. The model incorporates a trinomial valuation.
Tranche A B C D E F G Total
--------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -----------
Evan Kirby
----------------------------------------------------------------------------------------------------------------------
# of Rights 700,000 700,000 700,000 700,000 700,000 700,000 1,400,000 5,600,000
--------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -----------
Valuation per right 0.1090p 0.1012p 0.0921p 0.0998p 0.0846p 0.0843p 0.1700p N/A
0.17c 0.16c 0.15c 0.16c 0.14c 0.13c 0.27c
--------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -----------
Valuation of Tranche GBP763 GBP708 GBP645 GBP699 GBP592 GBP590 GBP2380 GPB6,377
AUD1,226 AUD1,138 AUD1,037 AUD1,124 AUD952 AUD948 AUD3,826 AUD10,251
--------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -----------
Laurence Read
----------------------------------------------------------------------------------------------------------------------
# of Rights 700,000 700,000 700,000 700,000 700,000 700,000 1,400,000 5,600,000
--------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -----------
Valuation per right 0.1090p 0.1012p 0.0921p 0.0998p 0.0846p 0.0843p 0.1700p N/A
0.17c 0.16c 0.15c 0.16c 0.14c 0.13c 0.27c
--------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -----------
Valuation of Tranche GBP763 GBP708 GBP645 GBP699 GBP592 GBP590 GBP2380 GBP6,377
AUD1,226 AUD1,138 AUD1,037 AUD1,124 AUD952 AUD948 AUD3,826 AUD10,251
--------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -----------
Grant Button
----------------------------------------------------------------------------------------------------------------------
# of Rights 1,250,000 1,250,000 1,250,000 1,250,000 1,250,000 1,250,000 2,500,000 10,000
--------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -----------
Valuation per right 0.1090p 0.1012p 0.0921p 0.0998p 0.0846p 0.0843p 0.1700p N/A
0.17c 0.16c 0.15c 0.16c 0.14c 0.13c 0.27c
--------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -----------
Valuation of Tranche GBP1,362 GBP1,265 GBP1,151 GBP1,247 GBP1,058 GBP1,054 GBP4,250 GBP11,387
AUD2,189 AUD2,033 AUD1,850 AUD2,005 AUD1,701 AUD1,694 AUD6,832 AUD18,304
--------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -----------
Note: These values have been calculated by BDO in GBP and converted to AUD by the Company
using the rate of GBP1 = AUD1.607458607, being the inverse of the AUD/GBP foreign exchange rate published by the Reserve Bank of Australia on 8 March 2017. ----------------------------------------------------------------------------------------------------------------------
BDO made the following assumptions under the models:
-- the Performance Rights under Tranches A-F have market-based vesting conditions attached;
-- for Performance Rights under Tranche G (which don't have market vesting conditions attached), the exercise of the Performance Right does not affect the value of the underlying asset;
-- a grant date of 8 March 2017, which was also adopted as the valuation date;
-- it used the 10 day VWAP of the Shares on AIM as at the valuation date, 0.17 pence, which was input into the pricing model;
-- as there is no consideration required for exercising the Performance Rights, a nil exercise price was used in the option pricing model;
-- the performance period represents the period over which the Performance Rights will be assessed for vesting, from the grant date until the Performance Hurdle Satisfaction Date based on the Performance Rights' respective performance hurdles;
-- the performance hurdle of each tranche is to be measured over the respective performance period of each tranche;
-- for Performance Rights under Tranche G, it used a share price volatility of 150% based on the historical volatility of Ferrum's AIM listed share price;
-- for Performance Rights under Tranches A-F, it used a 10-day VWAP volatility of 100% based on the historical volatility of the 10-day VWAP of Ferrum's AIM listed share price;
-- the risk free rate of interest used is the United Kingdom Government Bond Rate that most closely corresponds to the vesting period of each tranche of Performance Rights as at the valuation date:
o for Performance Rights under Tranches A-C, E and F, a rate of 0.314% was used, being the four year United Kingdom Government Bond closing rate as at the valuation date; and
o for Performance Rights under Tranches D and G, a rate of 0.589% was used, being the five year United Kingdom Government Bond closing rate as at the valuation date;
-- a dividend yield of 0%; and
-- the performance hurdle for each tranche is identical to the hurdle outlined in section 4.4(c) above.
(k) Directors' recommendation and basis of recommendation
The Non-Executive Directors each have a material personal interest in their respective Resolution because it relates to the grant of Performance Rights to them. As a consequence, and given the potential perceived interest in relation to the other Resolutions in respect of the grant of Performance Rights, the Non-Executive Directors abstain from making a recommendation to Shareholders in relation to Resolutions 4 to 6. Mr Tooth recommends that Shareholders vote in favour of Resolutions 4 to 6.
The Chairman intends to exercise all undirected proxies IN FAVOUR of Resolutions 4 to 6.
4.5 Other information
There are no material opportunity costs to the Company, no taxation consequences to the Company and no material benefits foregone by the Company in granting the Performance Rights to the Non-Executive Directors.
The Directors are not aware of any information, other than the information set out in this Explanatory Statement, that would reasonably be required by Shareholders in order to decide whether or not it is in the Company's interests to pass Resolutions 4 to 6.
GLOSSARY
In the Notice and this Explanatory Statement:
$ or AUD means Australian dollars.
AIM means the AIM Board of the
London Stock Exchange.
AIM Price has the meaning given in section
3.4(c) of the Explanatory
Statement.
ASX means Australian Securities
Exchange.
ASX Listing Rules means the official listing
rules of ASX.
Award means a right to acquire Shares
under the Incentive Plan,
and includes an Option and
a Performance Right.
Board means the current board of
directors of the Company.
cents or c means Australian cents.
Chairman means the person appointed
to chair the Meeting of the
Company convened by this Notice.
Closely Related Party has the meaning given in section
9 of the Corporations Act.
Company or Ferrum means Ferrum Crescent Limited
ACN 097 532 137.
Corporations Act means the Corporations Act
2001 (Cth).
Corporations Regulations means the Corporations Regulations
2001 (Cth).
DI Holders means holders of depositary
interests in the Company.
Directors means the directors of the
Company, being, at the date
of this Notice, Messrs Justin
Tooth, Grant Button, Evan
Kirby and Laurence Read.
EOP means the Company's Employee
Option Plan.
ESP means the Company's Employee
Share Plan.
Explanatory Statement means the explanatory statement
GBP accompanying the Notice of
Meeting.
means Great British pounds
General Meeting or means the General Meeting
Meeting of Shareholders to be held
at the Hovia Room, Metro Hotel
Perth, 61 Canning Highway,
South Perth, Western Australia
on Thursday 11 May 2017 at
11:00 am (Perth time).
Group means the Company and a related
body corporate of the Company
as defined in section 50 of
the Corporations Act and any
company in respect of which
the Company has voting power
of not less than 20%.
Form of Instruction means, for DI Holders, the
form of instruction enclosed
with this Notice.
Incentive Plan means the Ferrum Crescent
Ltd Director and Employee
Incentive Plan, a summary
of which is set out in Schedule
1.
Key Management Personnel means a person having authority
and responsibility for planning,
directing and controlling
the activities of the Company,
directly or indirectly, including
any Director (whether executive
or otherwise) of the Company.
Non-Executive Director has the meaning given in section
4.1 of the Explanatory Statement.
Notice of Meeting means this notice of General
or Notice Meeting including the Explanatory
Statement.
Option means an option to acquire
a Share on the terms and conditions
set out in the Incentive Plan,
a summary of which is set
out in Schedule 1.
Ordinary Resolution means a Resolution to be passed
by a simple majority of Shareholders
entitled to vote on the Resolution
(in person, by proxy, by attorney
or, in the case of a corporate
Shareholder, by a corporate
representative).
pence or p means Great British pence.
Performance Hurdle has the meaning given in section
Satisfaction Date 3.4(c) of the Explanatory
Statement.
Performance Right means a right to acquire a
Share on the general terms
and conditions set out in
the Incentive Plan (a summary
of the Incentive Plan is set
out in Schedule 1, and a summary
of the specific terms and
conditions of the Performance
Rights is contained in Schedule
2).
Placement Shares has the meaning given in section
1.1 of the Explanatory Statement.
Proxy Form means, for Shareholders, the
proxy form enclosed with this
Notice.
Resolution means a resolution set out
in this Notice of Meeting.
Share means an ordinary share in
the Company.
Shareholder means a holder of Shares in
the Company.
Vesting Date has the meaning given by section
3.4(c) of the Explanatory
Statement.
Schedule 1 - Summary of terms of the Incentive Plan
The terms and conditions of the Incentive Plan are summarised below:
1. Board
The Board, or a duly appointed committee of the Board, is responsible for the operation of the Incentive Plan.
2. Participants
Directors, full-time, part-time and casual employees, and contractors of the Group are all eligible to participate in the Incentive Plan.
3. Eligibility
The Board has an absolute discretion to determine the eligibility of participants. Some of the factors the Board will have regard to in determining eligibility include:
(a) the seniority of the participant and the position that the participant occupies within the Group;
(b) the length of service of the participant with the Group; (c) the record of employment of the participant with the Group;
(d) the potential contribution of the participant to the growth and profitability of the Group;
(e) the extent (if any) of the existing participation of the participant in the Incentive Plan; and
(f) any other matters the Board considers relevant. 4. Invitations and Awards
The Board may, in its absolute discretion, invite eligible participants to participate in the Incentive Plan. An invitation may be made on such terms and conditions as the Board decides from time to time, including as to the terms of the Award offered and whether the Award comprises Performance Rights and/or Options.
5. Number of Performance Rights and/or Options
(a) The Board has a discretion to determine the number of Performance Rights and/or Options granted to participants under an Award, however in accordance with applicable law, the Board will ensure that the number of Performance Rights and/or Options offered to eligible participants over a three-year period does not exceed 5% of the Company's issued capital.
(b) Further, in determining the number of Performance Rights and/or Options to be granted to participants, the Board will have regard to:
(i) current market practice; and (ii) the overall cost to the Company of grants under the Incentive Plan. 6. No payment on grant or vesting
Unless the Board determines otherwise, no payment is required for the grant, on the vesting, or the issue, transfer or allocation of shares following vesting of a Performance Right or Option.
7. Vesting conditions
Vesting of an Award may be conditional on the participant satisfying the pre-determined vesting conditions determined by the Board within the vesting period. The vesting period applicable to the Performance Rights or Options is the period determined by the Board.
8. Vesting of Award
The Award will only vest if the participant meets any specified vesting conditions within the vesting period. If the terms of grant require the Award to be exercised, the participant must exercise the Award in order for vesting to occur. Any Award which has not vested within the vesting period will lapse.
9. Entitlements under Awards
Prior to vesting and exercise (if required) of an Award, and the issue of Shares to the participant in accordance with the rules of the Incentive Plan, a participant is not entitled to exercise any votes in respect of the shares to which the Award relates, nor is the holder entitled to participate in any dividend or any new issue of securities by the Company in respect of that Award.
10. Issue, transfer or allocation of shares on vesting of Award
The Shares to be provided on vesting and exercise (if required) of the Award may be issued by the Company or acquired on market by the Company (or any trustee of the Incentive Plan) and transferred or allocated to the holder of the Performance Right. Any Shares issued under the Incentive Plan will rank equally with those traded on the ASX at the time of issue. The Board may impose restrictions on the transferability of a Share issued, transferred or allocated to a participant following vesting of a Performance Right, which shall be set out in the terms of invitation.
11. Cessation of eligibility
(a) Where a participant ceases to be eligible to participate in the Incentive Plan, the Board may determine that some or all of the participant's Award lapses, vests, is exercisable for a prescribed period (if applicable), or is no longer subject to some or all applicable restrictions.
(b) The Board may specify in an invitation how a participant's Award will be treated in the event that the participant ceases to be eligible to participate in the Incentive Plan which may vary depending upon the circumstances in which the participant ceases to be eligible.
12. Change of control
(a) On a change of control event (which includes a takeover, merger or any person acquiring a relevant interest in more than 50% of the issued share capital in the Company and other similar events) the Board may, in its discretion, determine the manner in which any or all of a participant's Awards may be dealt with including in a manner that allows the participant to participate in and/or benefit from any transaction arising from or in connection with the change of control event.
(b) The Board may specify in an invitation how a participant's Award will be treated on a change of control event which may vary depending upon the circumstances of the change of control event.
13. Capital reorganisation
In the event of any capital reorganisation prior to vesting and exercise (if required) of an Award, the Award may be adjusted having regard to the ASX Listing Rules.
14. Clawback provision
The Board may determine that any unvested Award and vested but unexercised Award (if exercise is required) will lapse if, in the Board's opinion, among other things:
(a) the participant has acted fraudulently or dishonestly, engaged in gross misconduct, breached his or her duties or obligations (including where the participant's Award vests as a result of such conduct and the Board forms the opinion that the Award would not have otherwise vested); or
(b) there is a material misstatement or omission in the financial statements of a group company.
Schedule 2 - Summary of terms of the Performance Rights
The key terms and conditions of the Performance Rights to be granted to Justin Tooth, Evan Kirby, Laurence Read and Grant Button under the Incentive Plan are summarised below:
1. No payment on grant or vesting
No payment is required for the grant or on the vesting (or the issue of shares following vesting) of a Performance Right.
2. Vesting of Performance Rights
Performance Rights will vest on the Vesting Date set out in the table below, subject to satisfaction of the performance hurdles. If the terms of grant require the Performance Rights to be exercised, the participant must exercise the Performance Rights in order for vesting to occur.
The performance hurdles attaching to the tranches of Performance Rights, along with the applicable Performance Hurdle Satisfaction Date and Vesting Date, are set out in the table below:
Tranche Performance Hurdle Performance Vesting
of Performance Hurdle Satisfaction Date
Rights Date
---------------- ------------------------ --------------------- --------------
A AIM Price is 0.35 1 year 3 years
pence or more after hurdle
satisfaction
---------------- ------------------------ --------------------- --------------
B AIM Price is 0.5 18 months 3 years
pence or more after hurdle
satisfaction
---------------- ------------------------ --------------------- --------------
C AIM Price is 0.75 2 years 2 years
pence or more after hurdle
satisfaction
---------------- ------------------------ --------------------- --------------
D AIM Price is 1.1 3 years 2 years
pence or more after hurdle
satisfaction
---------------- ------------------------ --------------------- --------------
E AIM Price is 1.5 3 years 18 months
pence or more after hurdle
satisfaction
---------------- ------------------------ --------------------- --------------
F AIM Price is 2.0 3.5 years 1 year
pence or more after hurdle
satisfaction
---------------- ------------------------ --------------------- --------------
G First commercial 5 years 6 months
production at after hurdle
any project controlled satisfaction
by the Company
at the time of
first production
---------------- ------------------------ --------------------- --------------
3. Performance Hurdle Satisfaction Date
If the performance hurdle in respect of any Performance Rights has not been satisfied by the relevant Performance Hurdle Satisfaction Date, those Performance Rights will lapse.
4. Entitlements under Performance Rights
The Performance Rights do not entitle the holder to exercise any votes in respect of the shares to which the Performance Rights relate, nor is the holder entitled to participate in any dividend or any new issue of securities by the Company in respect of that Performance Right.
5. Issue of shares on vesting of Performance Rights
All shares to be issued on vesting and exercise (if required) of the Performance Rights will rank equally with those traded on the ASX at the time of issue.
6. No transfer of Performance Rights
The Performance Rights may not be transferred.
7. Cessation of eligibility
Where a participant ceases to be eligible to participate in the Incentive Plan, the Board may determine that some or all of the participant's Award lapses, vests, is exercisable for a prescribed period (if applicable), or is no longer subject to some or all applicable restrictions.
8. Change of control
On a change of control event (which includes a takeover, merger, any person acquiring a relevant interest in more than 50% of the issued share capital in the Company and other similar events), the Board may, in its discretion, determine the manner in which any or all of a participant's securities will be dealt with.
9. Capital reorganisation
In the event of any capital reorganisation, Performance Rights may be adjusted having regard to the ASX Listing Rules.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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April 07, 2017 02:00 ET (06:00 GMT)
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