News

ESOP-4 (Revised)

Detail of the Issuance and Offer of the Warrant No. 4

1) Details of the Issuance and Offer of the Warrants No. 4

Category of warrant:
Warrants to purchase the ordinary shares of SVI Public Company Limited
issued to the directors and employees of the Company, No. 4

Type :
Non transferable warrant certificate specifying name of holder

 

Reason and source of determination of the number and price of warrants:
The determination of the number and price of warrants is based on comparison with the allotment of warrants to executives in companies in the same industry, and also based on the result of encouragement in order to cause the executives to perform their work and cooperate with the Company efficiently.

The average market price of the shares of the Company applied on the Stock Exchange of Thailand (the SET) for the period of 30 (thirty) working days prior to the Meeting of the Board of Directors where the offer of warrants for sale to the directors and employees at this time was approved, is Baht 9.53 (Nine point fifty-three)  per share.

Necessity for issuance of warrants:
Since all the products of the Company are exported to various countries such as USA, Europe and Japan, the Company must develop its capability to compete in the global market. Thus it is necessary for the Company to recruit and retain executives with knowledge, ability and experience in the electronics business and to offer the remuneration which is equivalent to the companies in the same industry. The main purpose of issuance of warrants is to motivate and maximize efficient performance of executives.

Many listed companies on SET in electronics component sector also offer and issue warrants to their directors and employees in order to motivate efficient performance of directors and employees and to help retain key personnel.

In addition warrants No. 4 will be allotted to key executives from level of Senior Managers to Director who have demonstrated high knowledge, ability and excellent performance

Issuance Date	October 1, 2006
Exercising date as per the warrant:
1st Exercise date	15th October 2006
2nd Exercise date	15th  January 2007
3rd Exercise date	15th  April 2007
4th Exercise date	15th  July 2007
5th Exercise date	15th  October 2007
6th Exercise date	15th  January 2008
7th Exercise date	15th  April 2008
8th Exercise date	15th  July 2008
9th Exercise date	15th  October 2008

       
The warrant holder shall indicate his/her intention to exercise the right within fifteen days prior to the exercise date each time. In the case where any exercise date falls on a non-working day of the Stock Exchange of Thailand, the exercise date shall be one day earlier before such non-working day.

Exercise Condition

1st Exercise	1/3 of the total amount of warrants issued to him/her is exercisable
2nd Exercise	The balance of warrants issued to him/her released of 1/3 of the first time are exercisable..
3rd Exercise	The balance of warrants issued to him/her released of    1/3 of the first time are exercisable
4th Exercise	The balance of warrants issued to him/her released of 1/3  of the first time are exercisable
5th Exercise	Another 1/3 of the total amount of warrants issued to him/her and the balance of warrants issued to him/her released of 1/3 of the first time are exercisable
6th Exercise	The balance of warrants issued to him/her released of 2/3 of total warrants are exercisable
7th Exercise	The balance of warrants issued to him/her released of 2/3 of total warrants are exercisable
8th Exercise	The balance of warrants issued to him/her released of 2/3 of total warrants are exercisable
9th Exercise	Another 1/3 of the total amount of warrants issued to him/her and all the balance of the warrants released to him/her are exercisable

Number of ordinary shares reserved for exercising the of warrants :5,500,000 shares (Five million five hundred thousand shares)

Method and details of allotment:
- Offered to the directors and employees of the Company at one time. The offer shall be made promptly upon obtaining an approval from the shareholder meeting and permission from the Securities and Exchange Commission.

- Persons entitled to allotment shall be directors and/or employees of the Company as at the date of allotment and continue to be directors /or employees on the exercise date each time. If the warrant holder is not a director and/or employee of the Company for any reason, such as resigning, termination of employment or retiring, it shall be deemed that the warrants issued to such director and/or employee shall be revoked and the Company will cancel such warrant immediately.

The warrants offered to directors and employees this time, including the warrants issued to directors and employees prior of this warrant, are not over 35 people in 12 months.

Names of directors and employees who are eligible for warrants issued this time

Name/Title	No. of warrants	(%)
Mr. Pongsak Lothongkam Managing Director	4,075,000	74.09
Mr. Ruangpoj Phakdurong* Vice President Business Development	112,500	2.05
Mrs. Pissamai Saibua Chief Finance Officer	337,500	6.14
Mr. Carsten Bremerskov* Sales Director for Scandinavia	75,000	1.35
Mr. Dennis Teo Director of Materials Control	225,000	4.07
Mr. Pornyoot Chinmahavong Director of Quality	90,000	1.64
Mr. Virat Phugthai Assistant Director, Program Management	112,500	2.05
Mr. Suporn Limchunhanukul Assistant Director, Operations	112,500	2.05
Mr. Chalerm Charttrakull Senior Manager, Program Management	90,000	1.64
Mr. Chatchawan Wimukdakhum Assistant Director, Test Engineering	90,000	1.64
Mr. Martin E.Hass Customer Service Sr. Manager	90,000	1.64
Others	90,000	1.64

* Mr. Ruangpoj Phakduron and Mr. Carsten Bremerskov have received warrant No.1 for the amount of 350,000 and 300,000 units, respectively.

Secondary market for warrants:
The warrants shall not be listed on the Stock Exchange of Thailand.
Secondary market for ordinary shares,which are converted from the exercising of right of warrants: All ordinary shares arising from exercise of warrants shall be listed on the Stock Exchange of Thailand.

Financial assistance of the Company for the issuance of warrants for sale at this time: 
-None-

Impact on the shareholders from the offer of warrants for sale at this time:
The offer of warrants to the directors and employees of the Company at this time has no effect upon the shareholders, especially the impact concerning dilution of the shareholding proportion. The exercise of rights of the whole number of warrants of 5,500,000 (Five million five hundred thousand) units will however cause the proportion of shareholding by the existing shareholders to be reduced by approximately 3.83 (Three point eighty-three) percent of the paid-up capital of the Company at present.

The offer of warrants at this time may not affect the market price of the Company since the exercise price of the warrants is higher than the average market price of the shares traded on the Stock Exchange of Thailand during the period of 30 (thirty) working days prior to the date on which the Meeting of the Board of Directors resolved to approve the sale of warrants to the directors and employees on this occasion.

Objective and necessity of the issuance of securities for sale at this time: For the purpose of encouraging the directors and employees to cooperate with the Company and work well for the Company on a long-term basis.

Total ESOP warrants offered within the last 5 years (including proposed warrants No. 4)

No./Year	Total Issuance	Resignation	Cancellation	Outstanding
ESOP 1/2546	3,682,533	990,000	-	2,692,533
ESOP 2/2547	7,131,060	1,600,000	5,531,060	-
ESOP 3/2548	1,900,000	-	1,900,000	-
ESOP 4/2549	5,500,000	-	-	5,500,000
Total	18,213,593	2,590,000	7,431,060	8,192,533

Note: Note: ESOP 1 were exercised in 2004 and 2005 for 695,633 units and 453,133 units respectively.
The outstanding amount of ESOP warrants offered within the last 5 years (including proposed warrants No. 4) account for 0.57% of the paid-up capital

Resolution of the shareholders meeting and the right of objection of shareholders :
The resolution of the shareholders meeting to approve the offer of warrants for sale to each employee at this time shall consist of not less than three-fourths of the total number of votes of the shareholders attending the meeting and having the right to vote, and the objection votes must not exceed 5 (five) percent of the total number of votes of the shareholders attending the meeting and casting votes.

Name of the independent director who is entitled to be appointed as a proxy if any shareholder cannot attend and vote at the meeting in person.:
Mr. Threekwan Bunnag or Dr. Pruchya Piumsomboon who is not entitled to this allotment of the warrants.

Other related details:
The director or employee, who receives warrants exceeding five percent of the total number of warrants, must be approved by the Board of Directors and the Compensation Committee.


The employees mentioned above have not received benefits from the offer of warrants for sale at this time, since the exercise price is equal to the average market price of the shares of the Company applied on the Stock Exchange of Thailand (the SET) for the period of 30 (thirty) working days prior to the Meeting of the Board of Directors while the offer of warrants for sale to the directors and employees at this time was approved


Opinion of the Board of Directors:
In respect to the allocation of warrants to above employees, the Board of Directors had the opinion in consistence with the opinion of the Compensation Committee in all aspect.

Minutes of the Compensation Committee Meeting Opinion on the proposed Employee Stock Option Plan (ESOP) No.4 February 15, 2006; 8:30 hours Board Room, Pacific City Club, 142 Sukhumvit Road, Bangkok

Members of the Compensation Committee present:

1.	Mr. Virapan Pulges	Director
2.	Mr. Threekwan Bunnag	Director
3.	Mr. Pruchya Piumsomboon (Ph.D.)	Director

Mr. Virapan Pulges was elected as the Chairman of the meeting and declared that there were 3 members of the Compensation Committee attending the meeting. The purpose of the meeting was to consider cancellation the warrants issued under ESOP 2 and ESOP 3 of 5,531,060 units and 1,900,000 units at Baht 15.00 /share and Baht 12.10/share respectively, as the prices are higher than the current market price, thus it'snot serve the propose of the company on motivation directors and employees to high performance and retaining key personnel.

The Compensation Committee considered and approved the cancellation of ESOP 2 warrants of 5,531,060 units and ESOP 3 warrants of 1,900,000 units, and approved the issuance of non-transferable warrants to purchase the ordinary shares of the Company to the directors and employees of the Company, No. 4 warrants of 5,500,000 units, or 74% of warrants of ESOP 2 and 3, as a replacement.  The Compensation Committee considered and approved the offer of warrants to executive and employee who has the right to exercise the company's ordinary shares in exceeding 5 (five) percent of the Employee Stock Option Plan No.4 (ESOP-4), this was to comply with the notification of the Securities and Exchange Commission No. Gor.Jor. 36/2544 regarding the offering of the newly issued securities to directors and employees.  The resolution of shareholder meeting for approval the offering to the said directors and employees must be made on individual basis and must consist of not less than three-fourths of the votes and the objection votes must not exceed 5% of the votes.

Purpose of the issuance of ESOP
The Compensation Committee reviewed the proposed ESOP-4 based on the ultimate purposes of Company to create sense of ownership among the key directors and employees. In addition ESOP-4 is essential tool for the Company to motivate directors and employees to deliver their best
performance and to help retaining key personnel, which would result in enhancing the long-term mutual benefit of shareholders, management and employees. Many listed companies on SET in electronics component sector also offer and issue warrants to their directors and employees.

Opinion of the Compensation Committee
The Meeting reviewed and summarized the issuance of ESOP in the last 5 year as follows:

No./Year	Total Issuance	Resignation	Cancellation	Outstanding
ESOP 1/2546	3,682,533	990,000	-	2,692,533
ESOP 2/2547	7,131,060	1,600,000	5,531,060	-
ESOP 3/2548	1,900,000	-	1,900,000	-
ESOP 4/2549	5,500,000	-	-	5,500,000
Total	18,213,593	2,590,000	7,431,060	8,192,533

Note: ESOP 1 were exercised in 2004 and 2005 for 695,633 units and 453,133 units
respectively.

The total amount of ESOP warrants which have been issued for the last 5 years (include the proposed ESOP-4) are 18,213,593 units, after deduction the cancellation of 10,021,060 units of warrants. Thus the net amount of ESOP warrants which have been issued for the last 5 years are 8,192,533 units or 0.57% of the paid up capital. Since ESOP warrants can not be issued as continuous program, therefore the Company has to occasionally seek for the approval upon offering of ESOP warrants each time.

Listed below is the detail of the employees who are proposed to be eligible for warrants in exceeding five percent (5%) of the total number of warrants issued this time.

Name/Title	Starting Date (M/Y)	ESOP 1 Unit	ESOP 4  Unit%*	Total ESOP Unit%**
1. Mr. Pongsak Lothongkam Managing Director	4/2002	1,412,533	4,075,000 74.09	5,487,533 66.98
2. . Mrs. Pissamai Saibua Chief Finance Officer	1/2004	-	337,500 6.14	337,500 4.11

*Compared with the total amount of ESOP-4 of 5,500,000 units
** Compared with the total amount of ESOP issuance of 8,192,533 units

The Grounds, Necessity and Benefit of the Company
According to committee's opinion, these 2 employees who are eligible for warrants in exceeding five percent (5%) of the total number of warrants issued this time are at high level executives who have demonstrated high experiences, capability, and excellent performance. They are key executives who have substantial contribution to the Company's success, the details as listed below:

Mr. Pongsak Lothongkam has high knowledge, capability and excellent performance. He is a key executives who has substantial contribution to the Company's success and has more than 20-year experiences in EMS industry, used to work  with several leading companies in USA, Europe and Asia.

Mrs. Pissamai Saibau, Chief Finance Officer, who has joined the Company since early 2004, she has experiences in many electronics companies and contributed excellent performance in the previous year.

The Compensation Committee therefore approved the allocation of ESOP-4 to those two executives and recommended that it is crucial and beneficial to the Company. The proposed allocation of ESOP-4, will be able to motivate key executives to deliver their best performance, resulting in highest benefits to the Company and shareholder's wealth. The Compensation Committee will consequently propose its opinion to the company's Board of Directors and shareholder meeting for their consideration and approval.

There was no further business to consider, the Chairman adjourned the meeting at 09:00 hours

Approved by



(Mr. Virapan Pulges)
Chairman of the Compensation Committee