Bos Glb Hldgs Regulatory News (BOS)

15 Mar 2005 07:17

Murchison United NL15 March 2005 Dear Sir or Madam: Attached is the Notice of General Meeting to shareholders of Murchison United NLto be held on the 20th April, 2005. Also enclosed is a copy of the Proxy Formand Explanatory Statement accompanying the Notice. The documents are now on display and available for collection from: Evolution Securities Ltd 100 Wood Street LONDON EC2V 7AN Please call Mark Reilly or Joe Schiavi on +61 8 93814711 with any queries Joe SchiaviCompany Secretary UNITED N.L ACN 009 087 852 NOTICE OF GENERAL MEETING Shareholders are advised that a General Meeting of Murchison United NL (theCompany) will be held on Wednesday 20th April 2005 at Ground Floor, 2 CentroAvenue, Subiaco, Western Australia. Commencing at 10.30 am (Perth Time). Information on each resolution set out below is contained in the ExplanatoryStatement, which accompanies and forms part of this Notice of Meeting. 1. RATIFICATION OF ISSUE OF SHARES To consider and, if thought fit, pass the following resolution as an ordinaryresolution: "That approval is given under Rule 7.4 of the ASX Listing Rules and for allother purposes for the issue on 9th February 2005 of 29,700,000 fully paidordinary shares in the Company at an issue price of A$0.045 to sophisticatedinvestor clients of Hartleys Limited." Voting Exclusion statement For the purposes of the ASX Listing Rule 7.5.6, the Company will disregard anyvotes cast on this resolution by any person who has participated in the issueand any associates of those persons, if the resolution is passed. However, theCompany need not disregard a vote if: • it is cast by a person as proxy for a person who is entitled to vote,in accordance with the directions on the proxy form; or • it is cast by a person chairing the Meeting as proxy for a person whois entitled to vote, in accordance with a direction on the proxy form to vote asthe proxy decides. 2. APPROVAL FOR THE ISSUE OF 20,911,111 SHARES AT A$0.045 To consider and, if thought fit, pass the following resolution as an ordinaryresolution: "That approval is given under Rule 7.1 of the ASX Listing Rules for the issueand allotment of up to 20,911,111 fully paid ordinary shares in the Company atan issue price of A$0.045 to sophisticated investor clients of HartleysLimited." Voting Exclusion statement For the purposes of the ASX Listing Rule 7.3.8, the Company will disregard anyvotes cast on this resolution by any person who may participate in the proposedissue and any other person who may obtain a benefit, except a benefit solely inthe capacity of a holder of ordinary securities, if the resolution is passed,and any associates of those persons. However, the Company need not disregard avote if: • it is cast by a person as proxy for a person who is entitled to vote,in accordance with the directions on the proxy form; or • it is cast by a person chairing the Meeting as proxy for a person whois entitled to vote, in accordance with a direction on the proxy form to vote asthe proxy decides. 3. APPROVAL FOR THE ISSUE OF 3,333,333 SHARES TO GLENN ROBERTFEATHERBY To consider and, if thought fit, pass the following resolution as an ordinaryresolution: "That, for the purposes of Chapter 2E of the Corporations Act and Rule 10.11 ofthe ASX Listing Rules, the shareholders approve the issue of up to 3,333,333fully paid ordinary shares to Glenn Robert Featherby on the terms and conditionsset out in the Explanatory Statement attached to and forming part of the Noticeof Meeting." Voting Exclusion statement For the purposes of ASX Listing Rule 10.13.6 and section 224 of the CorporationsAct, the Company will disregard any votes cast on this resolution by GlennRobert Featherby, Mark David Reilly and David Hutchins, and any other person whomay obtain a benefit, except a benefit solely in the capacity of a holder ofordinary securities, if the resolution is passed, and any associates of thosepersons. However, the Company need not disregard a vote if: • it is cast by a person as proxy for a person who is entitled to vote,in accordance with the directions on the proxy form; or • it is cast by a person chairing the Meeting as proxy for a person whois entitled to vote, in accordance with a direction on the proxy form to vote asthe proxy decides. 4. APPROVAL FOR ISSUE OF 3,333,333 SHARES TO MARK DAVID REILLY To consider and, if thought fit, pass the following resolution as an ordinaryresolution: "That, for the purposes of Chapter 2E of the Corporations Act and Rule 10.11 ofthe ASX Listing Rules, the shareholders approve the issue of up to 3,333,333fully paid ordinary shares to Mark David Reilly on the terms and conditions setout in the Explanatory Statement attached to and forming part of the Notice ofMeeting." Voting Exclusion statement For the purposes of ASX Listing Rule 10.13.6 and section 224 of the CorporationsAct, the Company will disregard any votes cast on this resolution by GlennRobert Featherby, Mark David Reilly and David Hutchins, and any other person whomay obtain a benefit, except a benefit solely in the capacity of a holder ofordinary securities, if the resolution is passed, and any associates of thosepersons. However, the Company need not disregard a vote if: • it is cast by a person as proxy for a person who is entitled to vote,in accordance with the directions on the proxy form; or • it is cast by a person chairing the Meeting as proxy for a person whois entitled to vote, in accordance with a direction on the proxy form to vote asthe proxy decides. 5. APPROVAL FOR ISSUE OF 500,000 SHARES TO DAVID HUTCHINS To consider and, if thought fit, pass the following resolution as an ordinaryresolution: "That, for the purposes of Chapter 2E of the Corporations Act and Rule 10.11 ofthe ASX Listing Rules, the shareholders approve the issue of up to 500,000 fullypaid ordinary shares to David Hutchins on the terms and conditions set out inthe Explanatory Statement attached to and forming part of the Notice of Meeting." Voting Exclusion statement For the purposes of ASX Listing Rule 10.13.6 and section 224 of theCorporations Act, the Company will disregard any votes cast on this resolutionby Glenn Robert Featherby, Mark David Reilly and David Hutchins, and any otherperson who may obtain a benefit, except a benefit solely in the capacity of aholder of ordinary securities, if the resolution is passed, and any associatesof those persons. However, the Company need not disregard a vote if: • it is cast by a person as proxy for a person who is entitled to vote,in accordance with the directions on the proxy form; or • it is cast by a person chairing the Meeting as proxy for a person whois entitled to vote, in accordance with a direction on the proxy form to vote asthe proxy decides. 6. TO APPROVE THE GRANTING OF OPTIONS TO GLENN ROBERT FEATHERBY To consider and, if thought fit, pass the following resolution as an ordinaryresolution: "That for the purposes of Chapter 2E of the Corporations Act and ASX ListingRule 10.11, the Shareholders approve the issue to Glenn Robert Featherby (or hisnominees) of 2,000,000 options to subscribe for fully paid ordinary shares inthe Company on the terms and conditions set out in the Explanatory Statementattached to and forming part of the Notice of Meeting." Voting Exclusion Statement For the purposes of ASX Listing Rules 10.13.6 and section 224 of theCorporations Act, the Company will disregard any votes cast on this resolutionby directors of the Company and any associates of those persons. However theCompany need not disregard a vote if: • it is cast by a person as proxy for a person who is entitled to vote,in accordance with the directions on the proxy form; or • it is cast by a person chairing the Meeting as proxy for a person whois entitled to vote, in accordance with a direction on the proxy form to vote asthe proxy decides. 7. TO APPROVE THE GRANTING OF OPTIONS TO MARK DAVID REILLY To consider and, if thought fit, pass the following resolution as an ordinaryresolution: "That for the purposes of Chapter 2E of the Corporations Act and ASX ListingRule 10.11, the Shareholders approve the issue to Mark David Reilly (or hisnominees) of 3,500,000 options to subscribe for fully paid ordinary shares inthe Company on the terms and conditions set out in the Explanatory Statementattached to and forming part of the Notice of Meeting." Voting Exclusion Statement For the purposes of ASX Listing Rules 10.13.6 and section 224 of theCorporations Act, the Company will disregard any votes cast on this resolutionby directors of the Company and any associates of those persons. However theCompany need not disregard a vote if: • it is cast by a person as proxy, for a person who is entitled to vote,in accordance with the directions on the proxy form; or • it is cast by a person chairing the Meeting as proxy for a person whois entitled to vote, in accordance with a direction on the proxy form to vote asthe proxy decides. 8. AMENDMENT OF CONSTITUTION TO ALLOW THE COMPANY THE OPTION TO SELLUNMARKETABLE PARCELS OF SHARES To consider and, if thought fit, to pass the following special resolution: "That the Constitution of the Company be altered by inserting new rules 6.5, 6.6and 6.7 in the form of the words set out in Part 1 of Annexure B to theExplanatory Statement attached to and forming part of the Notice of Meeting, andby inserting into rule 1.1(a) of the Constitution the words set out in Part 2 ofAnnexure B to the Explanatory Statement attached to and forming part of theNotice of Meeting." EXPLANATORY STATEMENT Shareholders should read the Explanatory Statement accompanying this Notice forfurther information regarding the above resolutions. PROXIES A shareholder who is entitled to vote at the meeting has a right to appoint aproxy and should use the proxy form enclosed with this notice. The proxy neednot be a shareholder of the Company. A shareholder who is entitled to cast 2 or more votes may appoint two proxiesand may specify the proportion or number of votes each proxy is appointed toexercise. If two proxies are appointed and the appointment does not specify theproportion or number of votes that the proxy may exercise, section 249X of theCorporations Act 2001 takes effect so that each proxy may exercise half of thevotes (ignoring fractions). A proxy's authority to speak and vote for a member at the meeting is suspendedif the member is present at the meeting. The proxy form must be signed and dated by the member or the member's attorney.Joint members must each sign. Proxy forms and the original or a certified copy of the power of attorney (ifthe proxy form is signed by an attorney) must be received by Murchison UnitedNL: • At P O Box 129, Subiaco, Western Australia 6904 or Ground Floor, 2 Centro Avenue, Subiaco, Western Australia 6008 or • On fax number +618 9381 4722, No later than 10.30 am (Perth time) on Monday 18 April 2005. BODIES CORPORATE A body corporate may appoint an individual as its representative to exercise anyof the powers the body may exercise at meetings of the Company's shareholders.The appointment may be a standing one. Unless the appointment states otherwise,the representative may exercise all of the powers that the appointing body couldexercise or in voting on a resolution. POINT AT WHICH VOTING RIGHTS ARE DETERMINED It has been determined that under the Corporations Regulations 7.11.37, for thepurposes of the annual general meeting, shares will be taken to be held by thepersons who are the registered holders at 5pm (Perth time) on Monday 18 April2005. Accordingly, share transfers registered after that time will bedisregarded in determining entitlements to attend and vote at the meeting. By order of the Board J SchiaviCompany Secretary15 March 2005 UNITED N.L ACN 009 087 852 PROXY FORM To: The Company Secretary Address: P O Box 129 Murchison United NL Subiaco WA 6904 Facsimile: +618 9381 4722 I/We (name of shareholder) ............................................................................................. Of (address)................................................................................................................ Being a member/members of Murchison United NL hereby appoint: (name)....................................................................................................................... of (address)................................................................................................................. or failing that person then the Chairman of the General Meeting as my/our proxyto attend and vote for me/us on my/our behalf at the General Meeting ofMurchison United NL to be held at Ground Floor, 2 Centro Avenue, Subiaco, WA on20 April 2005 at 10.30 am (Perth time), and at any adjournment of that meeting. This form is to be used in accordance with the directions below. Unless theproxy is directed, he or she may vote or abstain as he or she thinks fit. If the Chairman of the Meeting is your nominated proxy, or may be appointed bydefault, and you have not directed your proxy how to vote on a resolution below,please place a mark in this box. By marking this box, you acknowledge that the Chairman may exercise your proxyeven if he has an interest in the outcome of a resolution and votes cast by himother than, as proxy holder will be disregarded because of that interest. If youdo not mark this box, and you have not directed your proxy how to vote, theChairman of the Meeting will not cast your votes and your votes will not becounted in computing the required majority if a poll is called on this item. TheChairman of the Meeting intends to vote undirected proxies in favour of allresolutions. For Against Abstain Item 1 Approval of ratification of the issue of 29,700,000 sharesItem 2 Approval for issue of 20,911,111 sharesItem 3 Approval for issue of 3,333,3333 shares to G R FeatherbyItem 4 Approval for issue of 3,333,3333 shares to M D ReillyItem 5 Approval for issue of 500,000 shares to D HutchinsItem 6 Approve the granting of options to G R FeatherbyItem 7 Approve the granting of options to M D ReillyItem 8 Amend the Company's Constitution to allow the Company the option to sell unmarketable parcels of shares If two proxies are appointed, the proportion of voting rights this proxy isauthorised to exercise is.........................%. (An additional proxy form will be supplied by the Company on request). DATED this..................................................Day of.......,2005 If the shareholder is and individual: Signature: ................................................................................................................................................ Name: ................................................................................................................................................ If the shareholder is a company: Affix common seal (if required by Constitution) ................................................................. ............................................................ Director/Sole Director and SecretaryDirector/Secretary UNITED N.L ACN 009 087 852 Instructions for Appointment of Proxy A shareholder entitled to attend and vote is entitled to appoint no more thantwo proxies. If a shareholder appoints two proxies and the appointment does not specify theproportion or number of the shareholder's votes each proxy may exercise half ofthe votes. Every member present in person or by proxy shall on a show of hands have onevote. On a poll every member present in person or by proxy, attorney orrepresentative shall have one vote for each share held. The instrument in appointing a proxy shall be in writing under the hand of theappointer or of his or her attorney duly authorised in writing or, if theappointer is a corporation, either under seal or under hand of an officer orattorney duly authorised in writing. A proxy need not be a member of thecompany. The instrument appointing a proxy and the power of attorney or other authority(if any) under which it is signed or a notarially certified copy of that poweror authority must be received by the Company at the office of the Company,Ground Floor, 2 Centro Avenue, Subiaco, Western Australia, or by facsimile on+618 9381 4722 by no later than 10.30 am (Perth time) on 18 April 2005. UNITED N.L ACN 009 087 852 EXPLANATORY STATEMENT TO ACCOMPANY THE NOTICE OF GENERAL MEETING 1. Introduction This Explanatory Statement has been prepared for the shareholders of MurchisonUnited NL (Murchison or the Company) in connection with the General Meeting ofthe Company to be held at 10.30 am (Perth time) on Wednesday 20 April 2005 atthe Company offices at Ground Floor, 2 Centro Avenue, Subiaco, Perth, WesternAustralia. Murchison is continuing to investigate resource opportunities in Australia andinternationally to assess their appropriateness for the Company. To be able tofinance such investigations the Company must raise capital to fund the necessaryproject evaluations and review. The Company therefore announced to ASX and AIM on 20 January 2005 its intentionto raise $2,600,000 by the issue of 57,777,777 Shares at A$0.045. Of theseShares, 29,700,000 Shares have already been issued to sophisticated clients ofHartleys Limited and the Company is now seeking ratification of that issue underresolution 1. Subject to Shareholder approval of resolutions 2, 3, 4 and 5being first obtained, a further 20,911,111 Shares will be issued tosophisticated clients of Hartleys Limited and 7,166,666 Shares will be issued tothree directors of the Company. Information on each of the resolutions is setout below. 2. Resolution 1 - Ratification of Issue of Shares On the 9th February 2005 the Company successfully completed a placement of29,700,000 Shares at A$0.045 per Share to raise A$1,336,500 before costs. ASX Listing Rule 7.1 provides that the prior approval of the shareholders of acompany is required for an issue of equity securities if the securities will,when aggregated with the securities issued by the Company during the previous 12months, exceed 15% of the number on issue at the commencement of that 12 monthperiod. Under ASX Listing Rule 7.4, an issue of securities made without approval underASX Listing Rule 7.1 is treated as having been made with approval for thepurposes of ASX Listing Rule 7.1 if each of the following applies: (a) The issue did not breach ASX Listing Rule 7.1; and (b) Holders of the ordinary securities subsequently approve it. The issue of the 29,700,000 Shares did not breach ASX Listing Rule 7.1 becausethe Shares, when aggregated with the securities issued by the Company during theprevious 12 months (other than securities issued with shareholder approval) didnot exceed 15% of the number of securities on issue at the commencement of that12 month period as calculated under the formula set out in ASX Listing Rule 7.1. However, the Company now seeks Shareholder ratification of the issue of the29,700,000 Shares pursuant to ASX listing Rule 7.4 in order to reinstate theCompany's capacity to issue up to 15% of its issued capital, if required, in thenext 12 months without Shareholder approval. The information requirements of ASX Listing Rule 7.5 require the followinginformation to be provided to Shareholders: (a) Number of securities allotted: 29,700,000 Shares (b) Price at which the securities were issued: A$0.045 (c) Basis upon which the allottees were determined: The Shares were allotted to sophisticated clients of Hartleys Limited(Stockbrokers). None of the allottees are related parties of the Company. (d) Terms of the securities: The Shares rank equally in all respects with the existing Shares on issue. (e) Intended use of funds raised: The funds raised are to be used for working capital to review existing assetsand continue the Company's investigation of resource opportunities in Australiaand internationally to assess their appropriateness for the Company. 3. Resolution 2 - Approval for the issue of 20,911,111 shares at A$0.045 ASX Listing Rule 7.1 provides that the prior approval of the shareholders of acompany is required for an issue of equity securities if the securities will,when aggregated with the securities issued by the Company during the previous 12months, exceed 15% of the number on issue at the commencement of that 12 monthperiod. Shareholder approval under Listing Rule 7.1 is sought to ensure that theproposed issue of Shares by the Company pursuant to resolution 2 does not resultin the Company being in breach of ASX Listing Rule 7.1, and to provide theCompany with flexibility to make future issues of securities during the next 12months without first having to obtain approval of its shareholders. The information requirements of ASX Listing Rule 7.3 require the followinginformation to be provided to shareholders: (a) Number of securities to be allotted: 20,911,111 Shares (b) Price at which the securities are to be issued: A$0.045 (c) Basis upon which the allottees will be determined: The securities will be allotted to sophisticated clients of Hartleys Limited(Stockbrokers). None of the allottees will be related parties of the Company. (d) Terms of the securities: The Shares will rank equally in all respects with the existing Shares on issue. (e) Intended use of funds raised: The funds raised will be used for working capital to review existing assets andcontinue the Company's investigation of resource opportunities in Australia andinternationally to assess their appropriateness for the Company. A breakdown ofthe use of the total funds to be raised (subject to shareholder approval ofresolutions 2, 3, 4 and 5) is as follows: Broker, legal, accounting and consultant fees 456,000Project evaluation and revue, due diligence and potential scoping 1,000,000salaries 320,815Other overheads (including share registry costs, listing fees and office 377,515expenses)Additional working capital 445,670Total $2,600,000 (f) Dates by which the Shares will be issued The Shares will be issued and allotted by not later than 3 months after the dateof the Meeting or such later date as permitted by a waiver of the ASX ListingRules. 4. Resolutions 3,4 and 5 - Issue of Shares to Glenn Robert Featherby, Mark David Reilly and David Hutchins Under resolutions 3, 4 and 5, the Company is seeking shareholder approval forthe issue of up to 7,166,666 Shares to Glenn Robert Featherby , Mark DavidReilly and David Hutchins. Chapter 2E of the Corporations Act Chapter 2E (i.e. sections 207 - 230) of the Corporations Act prohibits a publiccompany from giving a financial benefit to related parties of the publiccompany. The exceptions to this prohibition include where: (a) the public company first obtains the approval of itsshareholders in general meeting; (b) the terms and conditions upon which the financial benefit isbeing given are no more favourable to the related parties than those on which itis reasonable to expect that the public company would give the benefit directlyif dealing with the related parties at arm's length in the same circumstances;or (c) the transaction falls within one of the other nominatedexceptions to the provisions. A "related party" for the purposes of the Corporations Act is defined widely andincludes a director of the public company. A "financial benefit" for the purposes of the Corporations Act is also widelydefined. It includes the public company issuing securities to the related party. The issue of the 7,166,666 Shares to Messrs Featherby, Reilly and Hutchinswill be a financial benefit as the Shares are being issued at $0.045 per Sharerepresenting a discount of 28% to the market price of Shares on ASX immediatelyprior to the announcement of the issue on 20 January 2005 and a discount of 49%to the average market price of Shares traded on ASX in the five trading daysprior to the date of the Notice of Meeting. Messrs Featherby, Reilly and Hutchins, being directors, are related parties ofthe Company and would receive a financial benefit if resolutions 3, 4 or 5 arepassed. As noted earlier, the Company intends to raise $2,600,000 by issuing a total of57,777,777 Shares to investors at $0.045 each. As at the date of this Notice ofMeeting, a total of 29,700,000 Shares already have been issued and, subject toShareholder approval being obtained in accordance with resolutions 2, 3, 4 and5, the Company will be issuing the balance of 28,077,777 Shares. MessrsFeatherby, Reilly and Hutchins have indicated to the Company that they willsubscribe for a combined total of 7,166,666 of the Shares still to be issued,and in doing so, they are providing the Company with a degree of certainty thatit will be able to locate subscribers for at least some of the 28,077,777 Sharesstill to be issued. The Company will not incur fringe benefits tax liability as a consequence ofissuing Shares to Messrs Featherby, Reilly and Hutchins under resolutions 4, 5and 6. The issue of Shares to Messrs Featherby, Reilly and Hutchins will,however, have the effect of diluting the Share capital of the Company. ASX Listing Rule 10.11 ASX Listing Rule 10.11 requires that an entity must not issue or agree to issueequity securities to a related party without the approval of shareholders. Asdiscussed above, Messrs Featherby, Reilly and Hutchins are related parties ofthe Company and will receive Shares if resolutions 3, 4 and 5 are approved.Consequently, Shareholder approval under Listing Rule 10.11 is required. ASX Listing Rule 7.1 ASX Listing Rule 7.1 provides that, subject to certain exceptions, the priorapproval of the shareholders of a company is required for an issue of equitysecurities if the securities will, when aggregated with the securities issued bythe Company during the previous 12 months, exceed 15% of the number on issue atthe commencement of that 12 month period. An issue of securities made with shareholders approval under ASX Listing Rule10.11 is an exception to ASX Listing Rule 7.1. Accordingly, as approval of theissue of Shares to Messrs Featherby, Reilly and Hutchins is being sought underASX Listing Rule 10.11, approval is not required under ASX Listing Rule 7.1. Regulatory information required As outlined above, the issue of Shares to Messrs Featherby, Reilly and Hutchinsunder resolutions 3, 4 and 5 is subject to the approval of Shareholders inaccordance with the requirements of the Corporations Act and the ASX ListingRules. The following information is provided for the benefit of Shareholders andin accordance with those requirements. (a) Identity of the persons acquiring the Shares, number ofShares and issue price Subject to the passing of resolutions 3, 4 and 5, Shares are to be issued to thefollowing related parties: • Mr Glenn Robert Featherby (or his related entity) - 3,333,333 fullypaid ordinary shares at $0.045 each raising $150,000; and • Mr Mark David Reilly (or his related entity) - 3,333,333 fully paidordinary shares at $0.045 each raising $150,000. • Mr David Hutchins (or his related entity) - 500,000 fully paidordinary shares at $0.045 each raising $22,500. (b) Rights attaching to the Shares to be issued The Shares to be issued under resolutions 3, 4 and 5 are fully paid ordinaryshares in the capital of the Company. (c) Timing for the issue of the Shares If resolutions 3, 4 and 5 are approved, the Company will issue the shares withinone month of the meeting or such later date as permitted by a waiver of the ASXListing Rules. (d) Intended use of funds raised The funds raised will be used for working capital to review existing assets andcontinue the Company's investigation of resource opportunities in Australia andinternationally to assess their appropriateness for the Company. A breakdown ofthe use of the total funds to be raised (subject to shareholder approval ofresolutions 2, 3, 4 and 5) is as follows: Broker, legal, accounting and consultant fees 456,000Project evaluation and revue, due diligence and potential scoping 1,000,000salaries 320,815Other overheads (including share registry costs, listing fees and office 377,515expenses)Additional working capital 445,670Total $2,600,000 (e) Financial benefit The nature of the financial benefit being obtained by Messrs Featherby andReilly and Hutchins is that by participating in the issue of Shares at a priceof $0.045 per Share, they are obtaining the benefit of acquiring Shares at thediscount to the current market price of Shares traded on ASX. (f) Directors' current security holding and dilution effect None of Messrs Featherby, Reilly or Hutchins currently own any Shares, optionsto acquire Shares or other securities of the Company. If Shareholders pass Resolutions 2, 3, 4 and 5 and shares are issued to MessrsFeatherby, Reilly and Hutchins in accordance with Resolutions 3, 4 and 5, MessrsFeatherby, Reilly and Hutchins will own the following percentages of the fullypaid ordinary shares in the Company. Name Shares to be issued Total Fully Paid % of Shares % dilution to Ordinary shares on existing issue after placement ShareholdersMr G R Featherby 3,333,333 271,132,594 1.23 1.23Mr M D Reilly 3,333,333 271,132,594 1.23 1.23Mr D Hutchins 500,000 271,132,594 0.18 0.18Total 7,166,666 271,132,594 2.64 2.64 Existing Shareholders will therefore be diluted by a total of 2.64% by theparticipation of the three directors in the currently proposed capital raising. (g) Directors' interests and recommendations Given that Messrs Featherby, Reilly and Hutchins have an interest in the outcomeof resolutions 3, 4 and 5, they decline to make a recommendation to shareholdersin this regard. Indeed, in order to comply with the requirements of section 195of the Corporations Act, the Directors have not considered the subject matter ofresolutions 3, 4 and 5 other than for the purposes of convening the meeting ofshareholders to consider the proposed share issue. 5. Resolution 6 and 7 - Grant of Options to Directors The grant of Options to Messrs. Featherby and Reilly (or their nominees) isdesigned to acknowledge each Director's respective contribution made and to bemade to the Company. Since being appointed officers of the Company on the 2ndAugust 2004, no payment for services rendered has been paid or accrued by theCompany up until the 31st December 2004. The number of Options to be granted toMr Featherby and Mr Reilly respectively is considered to be commerciallyappropriate to recognise the prior contribution made by each to the Company aswell as to incentivise them to grow the Company into the future for the benefitof all shareholders. The Options to be granted are in addition to, in the case of Mr Reilly, enteringinto an employment agreement with the Company effective from the 1st January2005, and in the case of Mr Featherby, Mr Featherby entering into an agreementwith the Company to act as Non-Executive Chairman effective from 1 January 2005.Under resolutions 6 and 7, it is proposed that Mr Featherby be granted 2,000,000Options and Mr Reilly 3,500,000 Options. All Options have an exercise price ofA$0.055. In the 12-month period before the date of the Notice to which thisExplanatory Statement is attached, the highest price of Shares on ASX wasA$0.105 on 1st February 2005 and the lowest price was $0.014 on the 26th May2004. The closing price on the day before the date of the Notice was $0.09. Importantly the terms and conditions of exercising the Options are incentivebased in that the right to exercise the Options is dependant on each officercompleting 6 months' continuous service with the Company (commencing from thedate the Options are issued) . All unexercised Options expire 5 years from thedate of the grant. If Messrs Featherby's and Reilly's employment or service withthe Company ceases, they may exercise any remaining unexercised Options within 6months of cessation. The Options will be issued as soon as practical after the date of this meetingand in any event within 1 month or such later date as permitted by a waiver ofthe ASX Listing Rules. Mr Featherby is a non-executive director of the Company. The Companyacknowledges that the issue of options to Mr Featherby will not be in accordancewith corporate governance guidelines set by the ASX Corporate GovernanceCouncil. ASX Listing Rule approval Shareholder approval is sought under Listing Rule 10.11, which provides that aCompany must not issue securities (including options) to a related party of thecompany, such as a director, without the company obtaining shareholder approval. As approval for the issue of Options to each of Messrs Featherby and Reilly issought under ASX Listing Rule 10.11, approval of the issue of Option is notrequired under ASX Listing Rule 7.1. The Options issued to Directors will notlimit the ability of the Company to issue securities under ASX Listing Rule 7.1. Corporations Act approval Chapter 2E of the Corporations Act regulates the provision of financial benefitsto related parties by a public company. The granting of the Options ascontemplated by resolutions 6 and 7 may constitute the provision of a financialbenefit to a related party. Section 208 of the Corporations act prohibits acompany from giving a financial benefit to a related party without priorshareholder approval. A "related party" for the purposes of the Corporations Act is widely defined.It includes a director of a public company and specified members of theDirector's family. It also includes an entity over which a director maintainscontrol. A "financial benefit" for the purposes of the Corporations Act is given a broaddefinition. It includes a public company paying money to another entity. It alsoincludes the public company granting an option over its securities. Indetermining whether or not a financial benefit is being given, it is necessaryto look to the economic and commercial substance and the effect of thetransaction (rather than just the legal form) and to disregard any considerationwhich has been given, even if such consideration is full or adequate. The granting of Options to Messrs Featherby and Reilly (or their nominees) ascontemplated by resolutions 6 and 7 may constitute the giving of a financialbenefit to a related party of the Company, and accordingly Shareholder approvalis also sought for this purpose. Regulatory information required The following information is provided to Shareholders to enable them to assessthe merits of resolutions 6 and 7: (a) The Options will be granted to Messrs Featherby and Reilly,or their nominees; (b) The proposed financial benefit to be given is 2,000,000Options to Mr Featherby and 3,500,000 Options to Mr Reilly. There is noconsideration payable on the issue of these Options and the Options will begranted on the Terms and Conditions set out in Annexure A: and (c) The Options shall be granted to Messrs Featherby and Reilly(or their nominees) in recognition of their services and contribution to theCompany both previously and in the future. The Company will pay each Director the following annual remuneration from the1st January 2005. Director Total Remuneration ($) Mr G R Featherby $54,500 Mr M D Reilly $163,500 The following table sets out each Director's total holding of Shares and Optionsshould resolutions 2, 3, 4, 5, 6 and 7 be approved. Director Fully Paid Jan 2010 Shares Options G R Featherby 3,333,333 2,000,000 M D Reilly 3,333,333 3,500,000 D Hutchins 500,000 0 TOTAL 7,166,666 5,500,000 The Company currently has the following issued capital: 243,054,817 fully paid ordinary Shares; 2,250,000 partly paid shares of $0.20 paid to 1 cent and 550,000 unlisted options. On the assumption that the Shares subject of resolutions 2, 3, 4 and 5 in theNotice of Meeting are issued and that all of the outstanding unexercised optionsare exercised, the interests of the Directors in Shares in the Company and hencedilution effect on Shareholders is set out in the table below in Column 1. Onthese same assumptions and assuming that the Directors exercise the Options tobe issued under resolutions 6 and 7, the interests of the Directors in Shares inthe Company and hence dilution effect on Shareholders is set out in Column 2 ofthe table below: Column 1 Column 2 Director % of Shares if all current options % of Shares if all current options are exercised and the Shares the are exercised and the Shares the subject of Resolutions 2, 3, 4 and 5 subject of Resolutions 2, 3, 4 and 5 are issued are issued and the Options the subject of Resolutions 6 and 7 are issued and exercised G R Featherby 1.21% 1.91% M D Reilly 1.21% 2.44% D Hutchins 0.18% 0.17% TOTAL 2.6% 4.52% Therefore if: (a) all existing options to acquire Shares are exercised; (b) all Shares the subject of Resolutions 2, 3, 4 and 5 are issued; AND (c) all Options the subject of Resolutions 6 and 7 are issued and exercised, the total dilution effect of the issue of Shares to the three directors will be4.52%. The above table is compiled on the assumption that there are no more Sharesissued by the Company other than as contemplated by the Notice of Meeting. The Options to be granted pursuant to resolutions 6 and 7 shall be grantedwithout any conditions on exercise, other than those set out in the terms andconditions in Annexure A to this Explanatory Statement. It is a requirement of ASIC that a dollar value be placed on the Options to beissued. ASIC has indicated the Black-Scholes option price calculation method isan acceptable method for valuing options. This method is designed to valuelisted securities that are freely tradable and hence it is not entirelyappropriate or reliable in the current circumstances, where the options to beissued pursuant to resolutions 6 and 7 will be unlisted. Nevertheless, a rangeof values for the Options has been estimated using the Black-Scholes method. In determining these values, the following assumptions have been made: (a) the Share price at issue date will be between 5 and 10 cents; (b) the Options are to be exercisable at $0.055; (c) the Options are expected to mature within 5 years of their date of issue, assumed at 31 March 2010; (d) price volatility of the share is approximately 0.94916; (e) the average current risk-free interest rate is 5.45%; and (f) the valuation arrived at using the Black-Scholes method has beendiscounted by 15% reflecting the unlisted status of the Options, the limitedsecondary market and the requirement that the Options can only be exercisedfollowing the completion of 6 months' continuous service with the Company. On this basis, the Options are valued at between $0.0313 and $0.0698 per Option.Therefore, the implied "value" of the Options being granted to each Directoris as follows: Director Value ($) Value $ (based on $0.0313 per option) (based on $0.0698 per option) Mr G R Featherby 62,600 139,600 Mr M D Reilly 109,550 244,300 Directors' Recommendation Given that Messrs Featherby and Reilly have an interest in the outcome ofresolutions 6 and 7, they decline to make a recommendation to Shareholders inthis regard. Mr David Hutchins, considered an independent director, considersthat the issue of the options to Messrs Featherby and Reilly is in the bestinterests of the Company and recommends to shareholders that they pass theresolution as presented. 6. Resolution 8 - Approval of amendment of Constitution to allow theCompany the option to sell Unmarketable Parcels of Shares The Company has a large number of Shareholders holding Unmarketable Parcels ofShares. An Unmarketable Parcel is a distinct parcel of Shares in the Company held by aShareholder where the market value of the shares is less that $500. Unmarketable Parcels represent additional maintenance costs to the Companythrough registry fees, mail outs and annual report printing costs. In addition,Shareholders holding an Unmarketable Parcel may find that selling anUnmarketable Parcel results in costs to the Shareholder (including brokeragefees and commissions) that are proportionately high compared to the UnmarketableParcel's value. Approval is sought under resolution 8 to amend the Company's Constitution byinserting new rules 6.5 to 6.7, which will provide a mechanism under which theCompany can, if it desires, sell an Unmarketable Parcel on behalf of aShareholder. Under the proposed rules 6.5 to 6.7, the Company must send theproceeds of any such sale to the Shareholder. Section 136 of the Corporations Act permits a company to modify its constitutionprovided that it is done by special resolution. Such a resolution must bepassed by at least 75% of the votes cast by members entitled to vote on theresolution. Definitions and Interpretation Definition In this Explanatory Statement, the following terms have thefollowing meaning unless the context otherwise requires: "AIM" means the Alternative Investment Market of the London Stock Exchange. "Annexure" means an annexure to this Explanatory Statement. "ASIC" means the Australian Securities and Investments Commission. "ASX" means the Australian Stock Exchange operated by Australian Stock Exchange Limited (ABN 98 008 624 691). "ASX Listing Rules" means the Listing Rules of ASX and "Listing Rules" has an identical meaning. "Board" means the Board of Directors of the Company. "Business Day" means any day that is not Saturday, Sunday or a public holiday in Western Australia. "Company" means Murchison United NL ACN 009 087 862. "Constitution" means the constitution of the Company. "Corporations Act" means the Corporations Act 2001 (Cth) and all regulations made pursuant to such legislation, as amended from time to time. "Director" means a director of the Company. "Option" means an option to acquire one ordinary fully paid share in the Company on the terms and conditions set out in Annexure A. "Share" means a fully paid ordinary share in the capital of the Company. "Shareholder" means a member of the Company, as defined in the Constitution of the Company. Interpretation Terms used in this Explanatory Statement have the same meaning as in theCorporations Act unless the context otherwise requires. Annexure A Terms and Conditions of Options to be Granted to Directors pursuant to resolutions 6 and7 1. In consideration of the continued services of the Optionholder,the Company hereby grants to the Optionholder Options to each subscribe for oneordinary fully paid share in the capital of the Company ("Share") subject tothese terms and conditions ("Option"). 2. A certificate will be issued for the Options. 3. The Options shall expire on the earliest of the relevant datesset out below ("Expiry Date"): (a) 6 months from the date on which the Optionholder'semployment or service with the Company is terminated, for any reason; (b) 18 months (or such later date as the Company'sBoard determines in its sole discretion) after a person or corporation: (i) makes a takeover bid (as definedin the Corporations Act) to acquire any Shares and the takeover bid extends to Shares issued and allotted after the date of the takeover bid; and (ii) becomes entitled to proceed tocompulsory acquisition of the Shares pursuant to section 661 of the Corporations Act. In suchevent, the Company shall notify (in writing) the Optionholder of the Expiry Date as soon as possible after the Company becomes aware that the personor corporation has become entitled to proceed to compulsory acquisition; (c) 18 months (or such later date as the Company's Board determines inits sole discretion) after the Company convenes a meeting of shareholders inorder to enter into a Scheme of Arrangement (pursuant to the provisions of theCorporations Act) which, if implemented would result in a person or corporationbecoming entitled to not less than 90% of the Shares. In such an event, theCompany shall notify (in writing) the Optionholder of the Expiry Date as soon aspracticable after the Company convenes the aforementioned meeting; and (d) 5 years from the date of grant of the Options. 4. Each Option shall carry the right in favour of the Optionholderto subscribe for one Share. 5. Shares allotted to Optionholders on exercise of Options shall beissued at an exercise price of $0.055 cents per Share ("Exercise Price"). 6. The Exercise Price of Shares the subject of the Options shall bepayable in full on exercise of the Options. 7. Subject always to the Optionholder completing 6 months'continuous service with the Company from the date the Options are issued,Options shall only be exercisable after the expiry of 6 months from the date oftheir issue up to and including the Expiry Date by the delivery to theregistered office of the Company of a notice in writing stating the intention ofthe Optionholder to: (a) exercise all or a specified number of Options; and (b) pay the Exercise Price by way of subscriptionmonies in full for the exercise of each Option. The notice must be accompanied by the Option certificate and acheque made payable to the Company for the subscription monies for the Shares.An exercise of only some Options shall not affect the rights of the Optionholderto the balance of the Options held by them. 8. The Company shall allot the resultant Shares and deliver theshare certificates or uncertificated holding statement within 5 business days ofthe exercise of the Options. 9. Options shall not be listed for Official Quotation on AustralianStock Exchange Limited ("ASX"). 10. The Options shall not be transferable except to an Associate ofthe Participant. 11. Shares allotted pursuant to an exercise of Options shall rank fromthe date of allotment, equally with existing Shares in all respects. 12. The Company shall, in accordance with the Listing Rules of ASX,make application to have all Shares, allotted pursuant to an exercise ofOptions, listed for Official Quotation on ASX. 13. In the event of a reconstruction (including consolidation,subdivision, reduction or return) of the issued capital of the Company, allrights of the Optionholder shall be reconstructed in accordance with the ListingRules of ASX. 14. Subject to clauses 13 and 16, the Optionholder shall have no rightto a change in the Exercise Price of an Option or a change to the number ofShares over which an Option can be exercised. 15. There are no participating rights or entitlements inherent in theOptions and Optionholders will not be entitled to participate in new issues ofsecurities offered to Shareholders of the Company during the currency of theOptions. However, the Company will ensure that for the purposes of determiningto any such issue, the record date will be at least 9 business days after theissue is announced so as to give holders the opportunity to exercise theirOptions before the date of determining entitlements to participate in any issue. 16. If, from time to time, before the expiry of the Options, theCompany makes a pro rate issue of Shares to the holders of ordinary Shares forno consideration ('bonus issue"), the number of Shares over which an Option isexercisable will be increased by the number of Shares which the holder wouldhave received if the Option had been exercised before the date for calculatingentitlements to the bonus issue. 17. There will be no transfer restrictions on Shares allotted pursuantto the exercise of any of the Options unless the sale by the Optionholder ofthose Shares would require the preparation of a disclosure document (as thatterm is defined in the Corporations Act). If a disclosure document is, or wouldbe, required the Optionholder must enter into such arrangements with the Companyas the Company considers appropriate to prevent the Optionholder from dealingwith those Shares for the period during which the disclosure document would berequired. Annexure B Part 1 "6.5 Unmarketable Parcels (a) Subject to rule 6.6, the company may give notice to all Odd LotShareholders that it intends to sell those shareholders' Unmarketable Parcels.The notice must be in writing and must nominate a date, which is at least 6weeks after the date the notice is given as the date for the sale (EffectiveDate). (b) If an Odd Lot Shareholder: (1) has not given notice to the company that it wishes to retain itsshares by the Effective Date; or (2) having given notice, revokes or withdraws the notice before theEffective Date, then from the day after the Effective Date, the company and each of thecompany's officers becomes the Odd Lot Shareholder's agent to sell thatshareholder's shares within a reasonable time through the ASX and deal with theproceeds of sale in accordance with rule 6.5(d). (c) An officer of the company may sign a transfer of, or otherwisefacilitate the sale of shares under rule 6.5(b) on behalf of the Odd LotShareholder. If the shares of two or more Odd Lot Shareholders are transferredat or about the same time to one person, the transfer may be made by one sharetransfer. (d) After the company receives the proceeds of sale of an Odd LotShareholder's shares: (1) it may enter the name of the transferee of those shares in thecompany's share register as the holder of the shares sold, remove the name ofthe transferor of those shares from the company's share register and cancelany share certificate for those shares; (2) if the Odd Lot Shareholder whose shareholding has been sold hadits Unmarketable Parcel held in a certificated form, the company is to givenotice to the Odd Lot Shareholder not later than 14 days after receiving theproceeds of sale stating that: (A) the shares have been sold, the price per share and the totalproceeds of sale received; and (B) the proceeds of sale will be retained by the company pending itsreceipt of the share certificate or other documentation sufficient to satisfythe company that the certificate has been lost or destroyed (replacementdocuments); (3) within 14 days after the later of the company receiving: (A) the proceeds of sale; or (B) a share certificate or replacement documents for the shares sold, the company must send the proceeds to the Odd Lot Shareholder by cheque postedto the address of the shareholder which is contained in the company's shareregister; and (4) if the proceeds are unclaimed or a share certificate orreplacement documents in respect of the shares sold are not given to thecompany, the company will apply the proceeds of sale in accordance with theapplicable law relating to unclaimed moneys. (e) The company may treat the Odd Lot Shareholder as the absoluteowner of the shares and solely entitled to receive the proceeds of sale. (f) The transferee of the shares is not required to see to theregularity of the sale or the application of the proceeds of sale. After thetransferee's name is entered in the company's share register as the holder ofthose shares, the validity of the transferee's title may not be questioned byany person. The remedy of any person aggrieved by the sale is in damages onlyand against the company exclusively. (g) The company will bear all the costs incurred if the buyer of anOdd Lot Shareholder's shares does not pay for them. 6.6 Restrictions on sale of Unmarketable Parcels (a) Rule 6.5(a) can only be invoked once in any 12 month period. (b) The power to sell Unmarketable Parcels under rule 6.5 lapsesimmediately on the announcement of a takeover bid. However, the power isreinstated after the close of the offers made under the takeover bid. 6.7 Unmarketable Parcels created by transfer (a) In addition to the powers contained in rule 6.5, the company maysell all the shares of an Odd Lot Shareholder without complying with theprocedure in rule 6.5 if that Odd Lot Shareholders' holding was created by thetransfer of an Unmarketable Parcel at the time a proper ASTC transfer wasinitiated or a paper based transfer was lodged. The proceeds of sale of thoseshares, less the costs of the sale, must be sent to the Odd Lot Shareholderwithin a reasonable time after the sale. (b) The company may remove or change the right of an Odd LotShareholder whose shares may be sold under rule 5.7(a) to vote or receivedividends for those shares, however any dividends that have been withheld mustbe sent to the Odd Lot Shareholder within a reasonable time after those shareshave been sold." Part 2 (To be inserted into rule 1.1 Definitions and interpretation) " Marketable Parcel means a marketable parcel as defined by the Listing Rulesor such other number of shares as the directors determine and the ASX approves; Odd Lot Shareholder means a member who holds an Unmarketable Parcel; Unmarketable Parcel means a number of shares which is less than that required toconstitute a Marketable Parcel." This information is provided by RNS The company news service from the London Stock Exchange