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Alliance Merchant Bank Berhad (Alliance), for and on behalf of the Board of Directors of PMB (Board), is pleased to announce that the Company proposes to undertake an employees share option scheme (ESOS or Scheme) for the benefit of the Executive Directors and eligible employees (Eligible Employees) of PMB and its subsidiaries (PMB Group or Group).

PMB had previously established an ESOS on 26 June 1996 which involved the granting of options to Executive Directors and eligible employees of the PMB Group to subscribe for new ordinary shares of RM1.00 each in PMB (Earlier Scheme). The Earlier Scheme, which had a tenure of five years had expired on 25 June 2001.

The principal features of the Proposed ESOS are as follows:

(i) Number of shares offered

The total number of new ordinary shares of RM1.00 each (PMB Shares or Shares) which may be available under the Scheme shall not exceed ten per cent (10%) of the total issued and paid-up share capital of PMB at the date of offer.

(ii) Maximum allowable allotment and basis of allocation

The number of new PMB Shares that may be offered and allotted to any of the Eligible Employees of the Group who are entitled to participate in the Scheme shall be at the discretion of the Option Committee after taking into consideration the performance, seniority and length of service of the Eligible Employee in the Group subject to the following:-

(a) the number of PMB Shares allocated, in aggregate, to the directors and senior management of the Group shall not exceed fifty per cent (50%) of the total PMB Shares available under the Scheme; and

(b) the number of PMB Shares allocated to any individual director or employee who, either singly or collectively through his/her associates, hold twenty per cent (20%) or more in the issued and paid-up share capital of the Company, shall not exceed ten per cent (10%) of the total PMB Shares available under the Scheme.

(iii) Subscription price

The price payable upon exercise of the ESOS shall be based on the weighted average market price of the PMB Shares for the five (5) market days immediately preceding the date of offer subject to a discount of not more than ten per cent (10%), or at the par value of the Shares, whichever is higher.

(iv) Eligibility

Any employee (including Executive Directors) of the Group shall be eligible to participate in the Scheme, if, as at the date of offer, the person:-

(b) is employed full-time by and is on the payroll of a company within the PMB Group (other than a company which is dormant); and

(c) is under such categories and of such criteria that the Option Committee may from time to time decide.

Any allocation of ESOS options (Options) under the Scheme to an Executive Director of PMB shall require prior approval from the shareholders of PMB in a general meeting.

(v) Duration of the Scheme

The duration of the Proposed Scheme is for five (5) years, commencing from the date of the confirmation letter by the adviser to the Securities Commission (SC) stating that the Company:

(b) has obtained other relevant approvals for the Proposed ESOS and has fulfilled any conditions imposed therein.

(vi) Termination of the Scheme

The Scheme may be terminated by the Company during the continuance of the five (5) years period provided always that prior to the termination of the Scheme, the following conditions must have been satisfied by the Company:

(a) that the approval from the SC for the termination of the Scheme has been obtained;

(b) that the consent from the Companys shareholders at a general meeting has been obtained wherein at least a majority of the shareholders present must have voted in favour of the termination; and

(c) that the written consent from all option-holders who have yet to exercise their options, either in part or in whole has been obtained.

(vii) Acceptance of offer

The offer to participate in the Scheme shall be valid for a period of thirty (30) calendar days from the date of offer or such longer period as may be determined by the Option Committee on a case to case basis at its discretion. The acceptance of an offer shall be made by way of a written notice from Eligible Employees to the Option Committee in the form prescribed by the Option Committee.

(viii) Ranking of new PMB Shares

The new PMB Shares to be allotted upon any exercise of the Options shall, upon allotment and issue, rank pari passu in all respects with the then existing PMB Shares save and except that they shall not be entitled to any dividends, rights, allotments and/or other distributions, the entitlement date of which is prior to the date of allotment of the said PMB Shares. For the purpose hereof, entitlement date means the date as at the close of business on which shareholders must be registered in order to participate in any dividends, rights, allotments and/or other distributions.

The rationale of the Proposed ESOS is as follows:-

(i) to recognise past contribution of the Eligible Employees as well as to encourage continuous superior performance from the Eligible Employees;

(ii) to enable the Eligible Employees to participate in the future growth of the PMB Group and, upon becoming shareholders, to participate in the Groups profits and development;

(iii) to give Eligible Employees a greater sense of ownership and belonging towards the Group, increasing their level of dedication, loyalty, motivation and productivity;

The effects of the Proposed ESOS on the issued and paid-up share capital, net tangible assets (NTA), earnings and substantial shareholders of PMB are set out below:-

The effects of the Proposed ESOS on the issued and paid-up share capital of PMB as at 31 December 2001 are set out in Table 1 herein.

The Proposed ESOS is not expected to have any immediate effect on the earnings until such time the Options are exercised. Any potential effect of the Proposed ESOS on the earnings of the Group in the future would depend on the number of Options granted and exercised at any point in time, the price payable upon the exercise as well as the utilisation of the proceeds raised from the Options exercised.

The Proposed ESOS is not expected to have any material effect on the substantial shareholdings of PMB.

The Proposed ESOS is conditional upon the approvals of the following:

(i) the SC;

(ii) the Kuala Lumpur Stock Exchange (KLSE) for the listing and quotation of the new PMB Shares arising from the exercise of options under the Options granted under the Proposed ESOS;

(iii) the shareholders at an extraordinary general meeting to be convened; and

(iv) any other relevant authorities.

Alliance has been appointed as adviser to PMB for the Proposed ESOS.

The following are the Directors of PMB who are Executive Directors of either the Company or its subsidiary companies:-

Therefore, they are deemed interested in the Proposed ESOS and have accordingly abstained and will continue to abstain from all deliberations on their respective entitlements under the Proposed ESOS at the relevant meetings of the Board.

Save as disclosed above and as far as the Directors are aware, none of the other Directors and substantial shareholders nor persons connected to them has any interest, direct or indirect, in the Proposed ESOS.

With the exception of Dato Koon Poh Keong, Koon Poh Ming, Koon Poh Tat, Koon Poh Weng and Koon Poh Kong, who are interested in the Proposed ESOS, the Board, having considered all aspects of the Proposed ESOS, is of the opinion that the Proposed ESOS is in the best interests of PMB and the terms and conditions are fair and reasonable.

The application to the relevant authorities will be made within three (3) months from the date of this announcement.

MM-020429-36658.pdf

MM-020429-36658 (7).pdf

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