LARK DISTILLING CO. LTD — Governance Information 2003

Nov 10, 2003

MONTEC INTERNATIONAL LIMITED ACN 104 600 544

EXECUTIVE OPTION SCHEME

TERMS AND CONDITIONS OF MONTEC INTERNATIONAL LIMITED EXECUTIVE OPTION SCHEME

NZD/Docs_syd_1491636_1.DOC

The terms and conditions of MONTEC INTERNATIONAL Limited Executive Option scheme are as follows:

$1.$ Definitions

• $(1)$ "Board" means the board of directors of the Company or, for the purposes of the Option Scheme, a committee of the Board appointed for that purpose;
• $(2)$ "Bonus Date" means any date after the Issue Date and before exercise or expiry of the Outstanding Options, on which entitlements are ascertained for holders of Shares to participate in any bonus issue by way of capitalisation of profits, reserves or share premium account:
• $(3)$ "Business Day" has the meaning given to that term in the Listing Rules of the Exchange;
• "Company" means MONTEC INTERNATIONAL LIMITED ACN 104 600 544; $(4)$
• $(5)$ "Exchange" means the Australian Stock Exchange Limited;
• $(6)$ "Executive" means any person who is employed by the Company or a Related Body Corporate, or a director of the Company or a Related Body Corporate and whom the Board determines is eligible to participate in the Option Scheme:
• "Exercise Notice", means a notice substantially in the form of Schedule One; $(7)$
• $(8)$ "Exercise Price" means:
• $(a)$ in relation to the Initial Options, \$0.50; and
• $(b)$ in relation to all Options other than the Initial Options the greater of \$0.50 and the average closing market price of the Shares on the Exchange over the five trading days prior to the Issue Date subject to clause 9;
• $(9)$ "Expiry Date" means the earlier of:
• $(a)$ 3 years from the Issue Date; or
• $(b)$ the date on which the Optionholder ceases to be an employee of the Company or a Related Body Corporate.

or such later day as the Board in its absolute discretion determines;

• $(10)$ "Initial Options" means Options granted to Executives on or before the date on which the Company is admitted to the official list of the Exchange;
• $(11)$ "Issue Date" means the date upon which the Option Certificate is issued to the Optionholder as set out in the Option Certificate:

• $(12)$ "Listing Rules" means the official listing rules of the Exchange;

• "Option Certificate" means the certificate issued by the Company to the $(13)$ Optionholder setting out the number of Options issued to the Optionholder, the Issue Date, the Exercise Price and the Expiry Date relating to those Options:

• "Optionholder" means the person registered in the Company's register of $(14)$ options as the holder of the Options;
• "Options" means the options over Shares contemplated in this Option $(15)$ Scheme and referred to in the Option Certificate;
• "Option Scheme" means the MONTEC INTERNATIONAL LIMITED $(16)$ Executive Option Scheme constituted by these terms and conditions;
• "Outstanding Options" means, in relation to an Optionholder, Options which $(17)$ remain unexercised from time to time;
• "Related Body Corporate" has the meaning ascribed to that term in the $(18)$ Corporations Law;
• "SCH Business Rules" has the meaning given to that term in the $(19)$ Corporations Law:
• "Shares" means fully paid ordinary shares in the capital of the Company, or $(20)$ the ordinary shares into which fully paid ordinary shares are consolidated or subdivided or otherwise reconstructed from time to time;and
• "Takeover Bid" means an off-market bid or market bid made under Chapter $(21)$ 6 of the Corporations Act.

$2.$ Interpretation

In these terms and conditions, unless the context otherwise requires:

• headings and underlinings are for convenience only and do not affect the $(1)$ interpretation of these terms and conditions;
• $(2)$ the singular includes the plural and vice versa;
• $(3)$ the word person includes a firm, a body corporate, an unincorporated association or an authority;
• a reference to any statute, ordinance, code or other law includes regulations $(4)$ and other instruments under it and consolidations, amendments, reenactments or replacements of any of them;
• a reference to a document includes an amendment or supplement to, or $(5)$ replacement or novation of, that document;

• a reference to a person includes a reference to the person's executors, $(6)$ administrators, successors, substitutes (including, without limitation, persons taking by novation) and assigns;

• an agreement, representation or warranty on the part of or in favour of two or $(7)$ more persons binds or is for the benefit of them jointly and severally;

• if a period of time is specified and dates from a given day or the day of an act $(8)$ or event, it is to be calculated exclusive of that day;
• a reference to a currency is a reference to Australian currency unless $(9)$ otherwise indicated: and
• a reference to time is a reference to the time in Sydney, Australia. $(10)$

No Effect on Contract of Employment $3.$

• This Option Scheme shall not form any part of any contract of employment between $3.1$ the Company and the Executive unless expressly incorporated in the contract of employment by reference or otherwise.
• Nothing in this Option Scheme: $3.2$
• confers on the Executive any right to continue as an Executive of the $(1)$ Company;
• affects the rights which the Company may have to terminate the employment $(2)$ of the Executive; or
• may be used to increase any compensation or damages in any action brought $(3)$ against the Company in relation to the termination of employment of the Executive.

4. Option Entitlement

• The Board may, from time to time, determine who is entitled to participate in the $4.1$ Option Scheme and may grant Options in accordance with these terms and conditions.
• Subject to clause 7, on grant and exercise each Option entitles the Optionholder to $4.2$ subscribe for one Share at the Exercise Price.
• Upon offer of Options to an Optionholder the Company will send the Optionholder an 4.3 Application for Options in the form of Schedule Two which must be signed by the Optionholder and returned to the Company within 5 Business Days. Upon the Company receiving the Application for Options in accordance with this clause the Company will grant the relevant number of Options to the Optionholder and issue the Optionholder with an Option Certificate.
• Options issued pursuant to the Option Scheme shall be issued for nil consideration. $4.4$

• The Board may, in its absolute discretion, impose performance hurdles on the $4.5$ exercise of Options by an Optionholder. Performance hurdles must be specified in the offer of Options made under clause 4.3 and state that the relevant Options cannot be exercised unless the performance hurdles are satisfied.

• 4.6 Options will only be issued under the Option Scheme to an Executive after the members of the Company have approved the proposed issue, if such approval is required by the Corporations Act or the Listing Rules.

• The Board must not make offers under the Option Scheme when the number of 4.7 Shares to be received on exercise of the Options offered, when aggregated with:
• $(1)$ the number of Shares which would be issued if each outstanding offer of Shares and options made under an employee or executive share or option scheme of the Company were accepted and in the case of options, the options exercised and each option issued under an employee or executive option scheme of the Company were exercised; and
• $(2)$ the number of Shares that have been issued pursuant to an employee or executive share or option scheme of the Company (including as a result of the exercise of options issued under such any such scheme) during the previous 5 years.

disregarding any offer made, or options acquired or Share issued by way of or as a result of an offer to a person outside Australia and offers that did not need disclosure to investors because of section 708 of the Corporations Act, would exceed 5% of the total number of Shares on issue from time to time.

5. Duration of Options

• $5.1$ The Options expire at 5.00pm on the Expiry Date.
• 52 Options not exercised on or before the Expiry Date automatically lapse.

$6.$ Exercise of Options

• $6.1$ An Optionholder whose exercise of the Options would not be in breach of clause 13 may at any time prior to the Expiry Date exercise Outstanding Options, in whole or in part, by lodging with the Company at its registered office:
• $(1)$ the Option Certificate;
• $(2)$ a duly completed and signed Exercise Notice; and
• $(3)$ the subscription monies for the relevant Shares being the number of Options specified in the Exercise Notice multiplied by the Exercise Price.

Allotment and Issue 7.

• $7.1$ The Company must allot the number of Shares which corresponds with the number of Options being exercised under clause 6 to the Optionholder on the date the Options are exercised and must:
• $(1)$ issue those Shares; and

$(2)$ issue a share certificate for those Shares or, if not contrary to the Listing Rules, elect not to issue a share certificate in accordance with the SCH Business Rules.

to the Optionholder within 12 Business Days of the date the Options are exercised provided that if there is a reconstruction of the Company's shares in accordance with clause 8 between the time of allotment and issue of the shares referred to in this clause 7 then the Shares referred to in this clause 7 will be similarly reconstructed.

8. Reconstructions

• $8.1$ If at any time or times prior to the exercise by the Optionholder of any Outstanding Options:
• $(1)$ there is consolidation of the Share capital of the Company, the number of Outstanding Options must be consolidated in the same ratio as the Share capital and the Exercise Price must be amended in inverse proportion to that ratio:
• $(2)$ there is a sub-division of the Share capital of the Company, the number of Outstanding Options must be sub-divided in the same ratio as the Share capital and the Exercise Price must be amended in inverse proportion to that ratio:
• $(3)$ there is a reduction of Share Capital by return of Share capital, the number of Outstanding Options must remain the same and the Exercise Price of each Outstanding Option must be reduced by the same amount as the amount returned on each Share:
• $(4)$ there is a reduction by a cancellation of Share capital that is either lost or not represented by available assets, the number of Outstanding Options and the Exercise Price of each Outstanding Option must remain unaltered;
• $(5)$ there is a pro-rata cancellation of Shares, the number of Outstanding Options must be reduced in the same ratio as the Share capital and the Exercise Price of each Outstanding Option must be amended in inverse proportion to that ratio;
• $(6)$ there is any other reconstruction or reorganisation of the issued capital of the Company, the number of Outstanding Options or the Exercise Price of the Outstanding Options or both must be reconstructed or reorganised (as appropriate) in a manner which will not result in any benefits being conferred on Optionholders which are not conferred on holders of Shares provided that this does not prevent a rounding up of the number of shares to be received on exercise if the rounding up is approved at the meeting of the shareholders of the Company which approves the reconstruction or reorganisation; and
• $(7)$ (subject to the provisions with respect to rounding of entitlements as sanctioned by the meeting of the holders of Shares approving a reconstruction of capital) in all other respects the terms for the exercise of Outstanding Options remain unchanged.

$8.2$ Notwithstanding clause 8.1, the rights of an Optionholder must be changed to the extent necessary to comply with the Listing Rules applying to a reorganisation of capital at the time of the reorganisation.

9. Bonus Issues

On each Bonus Date, each Outstanding Option confers on the Optionholder the right:

• $(1)$ to receive on exercise of those Outstanding Options, not only an allotment of one Share for each of the Outstanding Options exercised but also an allotment of the additional Shares and/or other securities the Optionholder would have received had the Optionholder participated in that bonus issue as a holder of Shares of a number equal to the Shares that would have been allotted to the Optionholder had the Optionholder exercised those Outstanding Options immediately before that Bonus Date; and
• $(2)$ to have profits, reserves or share premium account, as the case may be, applied in paying up in full those additional Shares and/or other securities.

$10₁$ Rights Issues

Outstanding Options do not carry the right to participate in any new issues of securities by the Company.

$11.$ Pari Passu Ranking

• Subject to the provisions of clause 11.2, any Shares allotted pursuant to any $11.1$ exercise of the Options rank pari passu in all respects with other Shares of the Company on issue at the date of such allotment.
• $11.2$ Where any Shares are allotted during a period in respect of which a dividend is declared, the holder of those Shares is only entitled to receive a dividend where the Option pursuant to which such Shares were allotted was exercised on or before the relevant dividend entitlement date.

$12.$ Takeover Bid

$12.1$ If prior to the exercise of any Option a Takeover Bid is made to holders of Shares, within 10 business days of the Company receiving a bidder's statement in relation to the Takeover Bid, the Company shall forward a notice notifying each Optionholder of the Takeover Bid and from the date of such notification each Optionholder shall have 60 days to exercise the Options notwithstanding any other terms and conditions applicable to the Option, provided all the other provisions of the Option Scheme shall remain applicable except where inconsistent with the right of exercise. If the Options are not exercised within the period of 60 days of the date of notification of the Takeover Bid, the Options may be exercised at any other time according to their terms of issue.

Compliance with law and orders $13.$

• An Optionholder must not exercise any of its Options to have Shares issued to it and $13.1$ no purported exercise shall have any effect, if in doing so it would be in breach of, or would cause the Company or its affiliates to be in breach of:
• any provision of the Foreign Acquisitions and Takeovers Act 1975; $(1)$
• any undertaking given by the Company to the Foreign Investment Review $(2)$ Board at the request of the Foreign Investment Review Board from time to time:
• $(3)$ the Listing Rules or the SCH Business Rules; or
• $(4)$ any other applicable law.
• For the purposes of clause 13.1, references to the Foreign Acquisitions and $13.2$ Takeovers Act mean the relevant Act as it may be amended or modified or replaced by another act dealing with similar subject matter.

$14$ Calculations

• $14.1$ Any calculations or adjustments which are required to be made for the purpose of these Options will be made by the auditors of the Company for the time being and will, in the absence of manifest error, be final and conclusive and binding on the Optionholder.
• $14.2$ The Company must notify each Optionholder of any adjustments made to the Exercise Price or the number of Outstanding Options within 10 Business Days of the date of the adjustment. A reference to an adjustment to the Exercise Price of the outstanding Options does not include variations in the Exercise Price due to fluctuation of the prices for sales of the Shares on the Exchange.

$15.$ Replacement of Certificates

If any Option Certificate is lost, stolen, mutilated, defaced or destroyed, it may be replaced at the registered office of the Company on payment by the claimant of the expenses incurred in connection with the replacement and on such terms as to evidence, indemnity an security as the Company may reasonably require. Mutilated or defaced Option Certificates must be surrendered before replacements will be issued.

Amendment of Terms and Conditions 16.

The Option Scheme may be amended from time to time by resolution of the Board $16.1$ subject to the requirements from time to time of the Corporations Law and the Listing Rules including approval by the Company's shareholders of any such amendment to the Option Scheme. Any such amendment however shall not adversely affect the rights of Optionholders who are granted Options prior to such amendment without the consent of the Optionholder, unless such amendment is required by, or necessitated by amendments to, either the Corporations Act or the Listing Rules.

Notices $17₁$

Any notice regarding the Options will be sent to the registered address of the Optionholder as recorded in the register of options maintained by the Company.

Governing Laws $18.$

This Option Scheme is governed by and shall be construed in accordance with the laws of New South Wales.

Duties and Taxes 19.

The Company is not responsible for any duties or taxes which may become payable in connection with the issue and allotment of Shares pursuant to an exercise of the Options or any other dealing with the Options or Shares.

$20.$ No Assignment of Options

An Optionholder may not sell, transfer, mortgage, pledge, assign or otherwise encumber an Option.

Schedule One

Exercise Notice

I, .................................... the Options specified below, elect to exercise the Options as specified below in accordance with clause 6 of the Terms and Conditions of the Options.

Number of Options being exercised: ....................................

Name and address of the Shareholder to be entered into the Share register in respect of Shares issued:

1000 - 1000 - 1000 - 1000 - 1000 - 1000 - 1000 - 1000 - 1000 - 1000 - 1000 - 1000 - 1000 - 1000 - 1000 - 1000
1000 - 1000 - 1000 - 1000 - 1000 - 1000 - 1000 - 1000 - 1000 - 1000 - 1000 - 1000 - 1000 - 1000 - 1000 - 1000

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

......................................

Name and address to which certificates evidencing the Shares should be sent:

. . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . .

......................................

Enclosed with this notice is the certificate for the Options referred to above together with the relevant subscription monies being \$....................................

In exercising the Options in relation to the Shares, I agreed to be bound by the provisions of the constitution of MONTEC INTERNATIONAL LIMITED.

Date: ....................................

.......................................

Signed by the Optionholder

Schedule Two

Application for Options
The Secretary
MONTEC INTERNATIONAL Limited
Mr.
Mrs.
Miss. (PLEASE USE BLOCK LETTERS)
Full Address:
Tax File Number:
hereby apply for:
.	(Number in Words)
.	(Number in Figures)
options in the MONTEC INTERNATIONAL LIMITED Executive Option Scheme.
I request you to grant those options and I agree to accept them subject to the terms of the MONTEC INTERNATIONAL LIMITED Executive Option Scheme and the terms set out in the letter of offer of options dated [ -1.

Signature: ....................................

Date: ....................................

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