THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. you are in any doubt 2s to the course of action to be taken, you should consult your stockbroker, bank manager, solicitor, accountant oF other professional adviser immediately ‘The Notice of Extraordinary General Meeting (‘EGM) of Dialog Group Berhad to be held atthe Baloo 2, LG Level, Eastin Hotel, 13 Jalan 16/11, Pusat Dagang Seksyen 16, 46350 Petalng Jaya, Selangor Darul Ehsan on Wednesday, 25 July 2007 at 410.30 aim together with the Proxy Form are enclosed, ‘You are entitled to attend and vote at the EGM orto appoint a proxy or proxies to attend and vote on your behalf. You should complete and depost the Porm of Proxy at our Registered Office at 109, Block G, Pico Damansara 1, NOS, Jalan 10/11, Pusat Dagang Seksyen 16, 46350 Petaling Jaya, Selangor Darul Ehsan not later than 48 hours before the ime and date set for the meeting or at any adjournment thereof. You may sil attend and vote in person af the meeting if you wish to, even after you have lodged the Form of Proxy, Bursa Secures is not responsible for the contents of this Ctcular, does not represent that this Circular is accurate or ‘complete, and expressly disclaims ary labilly for any oss arising from yout reliance upon the whole of any part ofthis Cular. DIALOG DIALOG GROUP BERHAD (Company no: 178694-1) {Incorporated in Malaysia under the Companies Act, 1965) CIRCULAR TO SHAREHOLDERS IN RELATION TO THE PROPOSED ESTABLISHMENT OF AN EMPLOYEES’ SHARE OPTION SCHEME FOR THE ELIGIBLE EMPLOYEES AND EXECUTIVE DIRECTORS OF DIALOG GROUP BERHAD AND ITS SUBSIDIARIES AND NOTICE OF EXTRAORDINARY GENERAL MEETING Adviser for by CIMB CIMB Investment Bank Berhad (18817-m) (formerly known as Commerce International Merchant Bankers Barhad) (A Participating Organisation of Bursa Malaysia Securities Berhad) Last date and time for lodging the Form of Proxy Monday, 23 July 2007 at 10.30 a.m, Date and tne forthe EGM Wednesday, 25 July 2007 at 10:30 am. or at any adjournment thereof This Circular is dated 5 July 2007DEFINITIONS Unless the context otherwise requires, the following cefintions shall apply throughout this Circular: Act Board Bursa Securities By-Law(s) cIMB Date of Offer Dialog or Company Dialog Group or Group Dialog Shares Effective Date EGM Eligible Employee(s) EPS ESOS ESOS Committee Executive Director Listing Requirements Market Day Maximum Allowable Allotment Offer(s) Ontian(s) ‘Companies Act, 1985 as amended from time to time Board of Directors of the Company for the time being Bursa Malaysia Securities Berhad The terms and conditions of the Scheme as set out in Appendix | CIMB Investment Bank Berhad (formerly known as Commerce Intemational Merchant Bankers Berhad) The date when an Offer is made to any Eligible Employee Dialog Group Berhad Dialog and its subsidiaries as defined in the Act (excluding any subsidiaries which are dormant) Ordinary shares of RM0.10 each in Dialog ‘The date on which the Scheme comes into force as provided in By-Laws 3.1 and 32 Cxtraordinary General Meeting ‘An employee or Executive Director who is eligible to be granted an ‘Option under the Scheme pursuant to By-Laws §.1 and 5.2 Earnings per share Employees’ share option scheme ‘The committee appointed by our Board to administer the Scheme Pursuant to By-Law 19 Director of the Company who is involved in the day-to-day management of Dialoy Group Listing Requiremerts of Bursa Securities including any amendments thereto that may be made from time to time ‘A day on which Bursa Securities is open for official trading in securities The maximum number of new Dialog Shares in respect of which Offers may be made to any Eligible Empioyee as determined by the ESOS Committee under the By-Law 6.1 and subject to the limits referred to in By-law62 ‘Awritten offer(s) frm our ESOS Committee to any Eligible Employee in accordance with the provisions of By-Law 6 A right af an Option Haider tn euiherrihe for naw Dialog Shares pursuant to the contract constituted by acceptance, in the manner indicated in By- Law7DEFINITIONS (CONT'D) Option Holder ‘An Eligible Employee who has accepted an Offer in acoordance with the terms of the Scheme ‘Option Price The price at which the Option Holder shall be entitled to subscribe for new Dialog Shares by exercising the Option as determined in accordance with By-Law 9 Proposed ESOS or The employees’ share option scheme for the grant of Options to Eligible Scheme Employees to subscribe for new Dialog Shares upon the terms set out in the By-Laws, such scheme to be known as the “Dialog Group Employees’ Share Option Scheme” RM Ringgit Malaysia sc ‘Sewutilies Comission WAMP Weighted average market price Words importing the singular only shall include the plural and vice versa and words importing the masculine gender shall, where applicable include the feminine and neuter genders and vice versa. Reference to Persons shall include corporations. All references to the time of the day in this Circular are references to Malaysian time. All references to “our Company” and ‘Dialog’ in this Circular are to Dialog Group Berhed, references to “our Group” and the ‘Dialog Group" are to our Company end our subsidiaries and references to ‘we’, “us", “our” and "ourselves" are to our Company, and save where the context otherwise requires, shall include our subsidiaries, All references to "you" in this Circular are to the shareholders of our Company.CONTENTS LETTER TO OUR SHAREHOLDERS CONTAINING: SECTION 1. INTRODUCTION 2. DETAILS OF THE PROPOSED ESOS 3. RATIONALE FOR THE PROPOSED ESOS 4, EFFECTS OF THE PROPOSED ESOS 5. FACTORS FOR CONSIDERATION ©. APPROVALS REQUIRED 7. DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTERESTS 8 DIRECTORS' RECOMMENDATION 9 EGM 10. FURTHER INFORMATION «00 APPENDICES. APPENDIX 1 DRAFT BY-LAWS OF THE SCHEME... APPENDIX II ADDITIONAL INFORMATION 00 NOTICE OF EGM FORM OF PROXY PAGE 10 40 10 " 33 ENCLOSED ENCLOSEDDIALOG GROUP BERHAD (Company No. 178694-V) (Incorporated in Malaysia under the Companies Act, 1965) Registered Offici 109, Block G Phileo Damansara 1 No. 9, Jalan 16/14 Pusat Dagang Seksyen 16 48350 Petaling Jaya Selangor Darut Ehsan 5 July 2007 Board of Directors: Ngau Boon Keat (Chairman and Group Managing Director) Chan Yew Kai (Deputy Group Managing Director) Dato’ Mohamed Zakri bin Abdul Rashid (Independent Non-Executive Lirector) Dr. Junid bin Abu Saham (Independent Non-Executive Director) Dato’ Seri Megat Najmuddin bin Datuk Seri Dr. Haji Megat Khas (Independent Non-Executive Director) (Chew Eng Kar (Executive Director) Siti Khairon binti Shariff (Non-Independent Non-Executive Director) Zainab binti Mohd Salleh (Executive Director) Ho Kam Yong (Executive Director) To: Our Shareholders Dear Sir/Madam PROPOSED ESTABLISHMENT OF AN EMPLOYEES’ SHARE OPTION SCHEME FOR THE ELIGIBLE EMPLOYEES AND EXECUTIVE DIRECTORS OF DIALOG GROUP BERHAD AND ITS SURSINIARIFS, 1. INTRODUCTION On 15 May 2007, CIMB on behalf of our Board, announced that we propose to establish an ESOS for the Eligible Employees and Executive Directors of our Group. (On 28 June 2007, Bursa Securities granted its approval-in-principle for the additional listing of ‘and quotation for such number of new Dialog Shares, representing up to 10% of our issued and paid-up share capital at any one time during the tenure of the Scheme, to be issued pursuant to the exercise of the Options granted under the Proposed ESOS. Other than the Proposed ESOS, we do not have any other intended corporate exercise/scheme which have been announced but not yet completed as at 29 June 2007 (being the latest practicable date prior to the printing of this Circular). The issuance of new Dialog Shares under the Proposed ESOS is not conditional upon any other corporate exercises. We set out the details of the Proposed ESOS in this Circular for your consideration and we wish to seek your approval for the ordinary resolutions pertaining to the Proposed ESOS to be tabled at our forthcoming EGM. We have enciosed the Notice of the EGM together with this Circuler.YOU ARE ADVISED TO READ AND CAREFULLY CONSIDER THE CONTENTS OF THIS CIRCULAR BEFORE VOTING ON THE RESOLUTIONS RELATING TO THE PROPOSED ESOS AT OUR FORTHCOMING EGM. DETAILS OF THE PROPOSED ESOS ‘We propose to implement a Proposed ESOS which will involve the granting of Options to all the Eligible Employees of our Group (excluding subsidiaries which are dormant) as set out in the By- Laws. The Options so granted shall entitle the Eligible Employees to subscribe for new Dialog Shares at a specified price. ‘The Scheme will be administered by our ESOS Committee to be duly authorised by our Board. The salient terms of the Proposed ESOS, which will be governed by the By-Laws are as follows: 2.4 Maximum Number of Dialog Shares ‘The maximum number of new Dialog Shares to be Issued pursuant to the exercise of the Options which may be granted under the Proposed ESOS shall not exceed 10% of our ‘Company's issued and paid-up share capital at any point of time (and in any case shall not exceed such percentage as may be permitted by the relevant regulatory authorities at any point of time) throughout the duration of the Scheme. ‘The new shares to be issued pursuent to the exercise of the Options to be granted under the Proposed ESOS will be listed on the Main Board of Bursa Securities. 2.2 Eligibility ‘An employee of our Group shall be eligible to participate in the Proposed ESOS, provided that: () our Company or one of our subsidiaries (which are not dormant), as the case may be, is the principal employer of the employee; and (ii) the employee is a confirmed employee (whether Malaysian or foreigner), with ‘our Company and/or its subsidiaries (which are not dormant) on or before the Date of Offer. In determining eligibility, our ESOS Committee will take into account the years of service, performance, and past and future contributions ot such employees to our Group. Employees who are eligible to participate in this Proposed ESOS shall not be eligible to participate in any other share option schemes implemented by cur Group provided that this clause shall not affect any entitlements that may have accrued to an employee prior to the creation of the Proposed ESOS. ‘An Executive Director of our Company shall be eligible to participate in the Proposed ESOS if his entitlement under the Proposed ESOS has first been approved by our shareholders in general meeting 2.3 Basis of Allocation and Maximum Allowable Allotment ‘Subject to the limits below and any adjustment which may be made under the By-Laws, the number of new Dialog Shares that may be offered under the Options and allotted to an Eligible Employee shall be at the discretion of our ESOS Committee: () not more than 50% of the new Dialog Shares available under the Proposed ESOS shall be allocated, in aggregate, to the Executive Directors and senior management of our Group; and24 25 26 (il) not more than 10% of the new Dialog Shares available under the Proposed ESOS shall be allocated to any individual Eligible Employee who, either singly or collectively through persons connected with that Eligible Employee, holds 20% or more of the issued and paid-up share capital of our Company. provided always that it is in accordance with any prevailing guidelines issued by Bursa Securities, the Listing Requirements or any other relevant authorities as amended from time to time. Option Price ‘The Option Price shall be fixed based on the higher of the following () the 5-day WAMP of our Dialog Shares, as quoted on Bursa Securities, immediately before the Date of Offer of the Options with a discount of not more. than 10% or in accordance with any prevailing guidelines issued by Bursa ‘Securities or any other relevant authorities as amended from time to time; or (i) the par value of the Dialog Shares. ‘The Option Price is, however, subject to adjustments under the provisions of the By- Laws. Duration of the Proposed ESOS ‘The Proposed ESOS shall be in force for a period of 10 years from the Effective Date. The Effective Date of the Proposec ESOS shall be at the date of compliance with the relevant requirements of the Listing Requirements including the following: () submission of the final copy of the By-Laws to Bursa Securities together with a letter of compliance pursuant to paragraph 2.11 of the Listing Requirements and a checkilst snowing Compliance with Appendix OF of the Listing Requirements; (ii) receipt of the approval-in-principle from Bursa Securities for the listing of and ‘quotation for the new Dialog Shares to be issued under the Proposed ESOS; (ii) receipt of the approval of our shareholders in a general meeting for the Proposed ESOS; (iv) receipt of the approval of any other relevant authorities (where applicable); and (Vv) fufflment of all conditions attached to the above approvals (if any). Rights Attaching to New Dialog Shares ‘The new Dialog Shares to be allotted and issued upon any exercise of the Options will, upon allotment and issuance, rank equally in all reapeota with the then existing isoued and paid-up Dialog Shares, except that the new Dialog Shares so allotted and issued will not be entitled to any dividends, rights, allotments or other distributions, where the entitlement date (namely the date as at the close of business on which shareholders of our Company must be entered in the Record of Depositors with Bursa Malaysia Depository Sdn Bhd in order to be entitled to any dividends, rights, allotments or other distributions) is before the date of allotment of the new Dialog Shares. The new Dialog Shares will be subject to all the previsions of our Articles of Association relating to the transfer, transmission or otherwise of Dialog Shares.27 28 Restriction in Dealings ‘An Executive Director who, during the tenure of the Proposed ESOS becomes a non- executive Director, must not sell, transfer or assign the Dialog Shares obtained through the exercise of the Options offered to him except after 1 year of the Offer. Save as set out above, the new Dialog Shares to be allotted and issued to an Eligible Employee pursuant to the exercise of the Options under the Proposed ESOS will not be subject to any retention period or restiction on transfer. However, we encourage the Eligible Employees to hold the Dialog Shares as a long-term investment and not for any ‘speculative purpose andior for the realisation of any immediate gain. Utilisation of Proceeds The proceeds to be raised from the Proposed ESOS would depend on the number of Options granted and exercised at any point of time as well as the price payable upon the exercise of the Options. The proceeds from the Proposed ESOS will be utilised for the ‘working capital of our Group. RATIONALE FOR THE PROPOSED ESOS ‘The Proposed ESOS is: @ (ii) i in line with our expansion pian to capitalise on the business opportunities existing in the oll, gas and petrochemical industry, both locally and overseas. We intend to attract, recruit and retain talented, experienced and knowledgeable personnel who are specialised in their respective fielcs to join and to be part of our expanding Group whereby talented human capital with good managerial and problem solving skils are appreciated and highly prized in a service-oriented and technology-based industry; beneficial to both our Company and our employees whereby the ownership of our Company's shares by our employees is expected to provide the necessary incentive to encourage employees to adopt a positive working attitude and corporate culture and to have ownership and responsibility of tasks entrusted to them based on the ‘reward equals contribution concept’ which should add value to our Company and also to enhance sharehokiers' value, intended as a form of reward which will be based on and will commensurate with the achievements of the designated key performance indicators assigned to such employees, which in turn io expected to encourage the devolopment of competent, mature and responsible middle and senior management employees. The Proposed ESOS is in addition to the existing rewards and benefits accorded to employees in the form of annual salary increments and bonuses; and an attractive and useful human resource tool to attract and retain qualified and experienced employees in view of the present tight labour market conditions.EFFECTS OF THE PROPOSED ESOS 44 Issued and Paid-up Share Capital The Proposed ESOS will not have an immediate effect on the existing issued and paid- up share capital of our Company. However, the total issued and paid-up share capital of ‘our Company will Increase progressively depending on the number of Options exercised ‘and hence, the number of new Dialog Shares issued pursuant thereto, On the assumption that all the Options available under the Proposed ESOS are granted and exercised, the proforma effects of the Proposed ESOS on our issued and paid-up share capital are set out in Table 1 below. Table 1 — Issued and paid-up share capital Existing issued and paid-up share capital as at 20 June 2007 1,413,210 141,321 ‘Assuming full exercise of all Options"? 141321 14,132 Enlarged ieeved and paid-up ehare capital 1.554.531 155,453, Note: (1) Assuming ful exercise of the Ostions to be granted. representing up to 10% of the existing ‘Issued and paid-up share capttalof the Company. 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Ul yno J9s ave Z00z auNP Oz Ye Se SiOYSOdaq Jo poDay sNO UO peseq SrepIoYa/eUS eNUEIEGNS No Jo SBulpjoyaveUs o,f No.of Dialog Dialog Directors Shares % Shares % Ngau Boon Keat 22,657,524 1.62 °1386,203,176 25.46 Chan Yew Kai 2241209018 - {ato onarmeo Zar bn Aod Rass oresor 8.00 oot 1c Juni bin Ab Sahm 2ige27s 08 - : Dato! Seri Megat Najnudin bin Datuk Se Dr. Hat : : Megat Khas ‘Chew Eng Kar 150,000 0.01 2,528,722 0.18 ‘ti Khoon bint Shasit, - : : - Zaina bint Mohd Saleh eto 0s : - Ho Kam Yona esrg9 007 "5000000 06 Notes: (8) xnluting total of 14.379 599 Dialog Shares bouaht back by the Company and retained as treasury Shares a8 at 20 June 2007, (2) Shares are held in own name andor nominee accounts). (3) Deemed inersied by viv of his interest in Wide Synergy Sdn Ble, Azan Ulam Sn Bie end Dilog Holdings Pie Ltd and interest held by his spouse and children, (4) Deemed interested by virtue of his spouse's interest (5) Deemed interested by virtue of his interestin Cekinvst Sdn Bhd. (6) Deemed imerested by virtue Of fer interes in Origireal Creations Suh Bi ‘The Executive Directors have declared their interests in the Proposed ESOS and have abstained and will continue to abstain from all deliberations and voting on their respective entitlements under the Proposed EBOE at the relevant Board mootinge, Accordingly, the Executive Directors will also abstain from voting in respect of their, direct and indirect, shareholdings in us, if any, on the ordinary resolutions pertaining to the Proposed ESOS as well as their entitlements under the Proposed ESOS to be tabled at the fortncoming EGM. ‘They will also ensure that persons connected to them, if any, will abstain from voting on the relevant ordinary resolutions to be tabled at the forthcoming EGM. ‘Wide Syneray Sdn Bhd and Azam Utama Sdn Bhd. our major shareholders, Dialog Holdings Pte Ltd and Mr Ngau Boon Keat's spouse and children are persons connected to Mr Ngau Boon Keat. Accordingly, they will abstain from voting in respect of their, direct and indirect, shareholdings in us, if any, on the ordinary resolutions pertaining to the Proposed ESOS to be tabled at the forthcoming EGM. They will aso ensure that persons connected to them, if any, will abstain from voting on the relevant ordinary resolutions to be tabled at the forthcoming EGM.10. Save for the aforesaid interested Directors and major shareholders, none of the other Directors and major shareholders or person(s) connected to them as defined in the Listing Requirements have any interests, direct or indirect, in the Proposed ESOS, DIRECTORS’ RECOMMENDATION ‘Other than our Executive Directors, Mr Ngau Boon Keat, Mr Chan Yew Kai, Mr Chew Eng Kar, Puan Zainab binti Mohd Salleh and Ms Ho Kam Yong who are interested in the Proposed ESOS, ‘our Board, after having considered all aspects of the Proposed ESOS, is of the opinion that the Proposed ESOS is in the best interest of our Group. Our Board, save for our Executive Directors, Mr Ngau Boon Keat, Mr Chan Yew Kai, Mr Chew Eng Kar, Puan Zainab binti Mohd Salleh and Ms Ho Kam Yong, recommends that you vote in favour of the resolutions pertaining to the Proposed ESOS. Fam We will hold our EGM at the Ballroom 2, LG Level, Eastin Hotel, 13 Jalan 16/11, Pusat Dagang ‘Seksyen 16, 46350 Petaling Jaya, Selangor Darul Ensan on Wednesday, 25 July 200/ at 10.30 ‘a.m., for the purpose of considering and, if thought fit, passing the respective resolutions to give effect to the Proposed ESOS. The Notice of EGM is enclosed in this Circular. If you are unable to attend and vote in person at our EGM, please complete, sign and retum the enclosed Form of Proxy in accordance with the instructions printed on it, so as to arrive at our Registered Office at 109, Block G, Phileo Damansara 1, No. 9 Jalan’ 16/11, Pusat Dagang ‘Seksyen 16, 46350 Petaling Jaya, Selangor Darul Ehsan no later than 48 hours before the time set for convening our EGM or at any adjcumment thereof. You may still attend and vote in person at the meeting if you wish to, even after you have lodged the Form of Proxy. FURTHER INFORMATION We advise you to refer to the attached appendices for additional information. Yours faithfully for and on behalf of the Board of DIALOG GROUP BERHAD Ngau Boon Keat Chairman and Group Managing Director -10-APPENDIX DRAFT BY-LAWS OF THE SCHEME 1 DEFINITIONS In these By-Laws, except where the context otherwise requires, the following words shall have the following meanings:- Act The Companies Act, 1965, as amended from time to time, and any re-enactment thereof Adviser : An investment bank, merchant bank or a Participating Organisation as defined in Rules of Bursa Securities, as amended from time to time that may act as principal adviser under the Securities Commission's Policies and Guidelines on Issue/Offer of Securities Approved Bank + An investment bank that is licensed both as a dealer under Section 12 of the Securities Industry Act, 1983 and a merchant bank under Section 6 of the Banking and Financial Institutions Act, 1989 or a merchant bank licensed under the Banking and Financial Institutions Act, 1989 appointed from time to time by the Board for the purposes of these By-Laws. Auditors : The auditors for the time being of the Company or, in the event of they being unable or unwilling to carry out any action requested of them pursuant to the provisions of these By- Laws, such other auditors as may be nominated by the Board for that purpose. Board The Board of Directors of the Company forthe time being Bursa Securities Bursa Malaysia Securities Berhad (635998-W) Bursa Depository Bursa Malaysia Depository Sdn. Bhd. (165570-W), the company exercising the function of a central depository (as. defined by the provisions of the Central Depositories Act) in relation to the Shares CDS Account : The account established by the Bursa Depository for the recording ct deposit and withdrawal of securities and for dealing in such securities by the depositor. Cental Depositories Act. Securities Industry (Cental Depositories) Act, 1981 Date of Offer : The date when an Offer is made to any Eligible Employee Depositary Rules + Rules af Bursa Repository, as amended from time to time Dialog or Company Dialog Group Berhad (178694-V) Dialog Group : The Company and its subsidiary companies as defined in the Act (excluding any subsidiaries which are dormant) Effective Date ‘The date on which the Scheme comes into force as provided in By-Laws 3.1 and 3.2 hereof Eligible Employee : A person who is eligible to be granted an Option under the Scheme pursuant to By-Laws 5.1 and 5.2 hereof ateESOS Committee Executive Director Listing Requirements Market Day Maximum Allowable Allotment Number of Options Granted Offer(s) Option Option Exercise Period Option Holder Option Period Option Price RM Scheme Shares ‘The Committee appointed by the Board to administer the ‘Scheme pursuant to By-Law 19 hereof Director of the Company who is involved in the day-to-day management of the Dialog Group Listing Requirements of Bursa Securities including any ‘amendments thereto that may be made from time to time ‘A day on which Bursa Securities is open for official trading in securities The maximum number of new Shares in respect of which Offers may be made to any Eligible Employee as determined by the ESOS Committee under By-Law 6.1 and subject to the limits referred to in By-Law 6.2 hereof ‘The number of Shares comprised in all subsisting Options and unexpired Offers granted to an Eligible Employee, together with the number of Shares eubecribed for by an Eligible Employee under Options granted to hinvher ‘A written offer from the ESOS Committee to any Eligible Employee in accordance with the provisions of By-Law 6 hereof The right of an Option Holder to subscribe for new Shares pursuant to the contract constituted by acceptance, in the manner indicated in By-Law 7 hereof, of an Offer The period during the Option Period which Options granted pursuant to this Scheme can be exercised by the Option Holder, sich period shall be determined by the ESOS Committee in its absolute discretion ‘An Eligible Employee who has accepted an Offer in accordance with the terms of the Scheme A period commencing on the Date of Offer or such later date as determined by the ESOS Committee for each Eligible Employee and expiring at the end of ten (10) years from the Dete of Offer provided that no option period shall extend beyond the duration of the Scheme as provided under By-Law 3.1 hereof The price at which the Option Holder shall be entitled to subscribe for the new Shares by exercising his Option as determined in accordance with By-Law 9 hereof Ringgit Malaysia ‘The scheme for the grant of Options to Eligible Employee on the terms and subject to the conditions as herein set out and such scheme to be known as ‘Dialog Group Employees’ Share Opticn Scheme" Ordinary shares of Ten Sen (RMO.10) each in the Company or ‘such other par value as may be approved and adopted by the ‘Company from time to time <12-‘Any reference to a statutory provision shall include any subordinate legislation made from time to time under that provision and any Listing Requirements, policies andior guidelines of the relevant authorities (in each case, whether or not having the force of law but, if not having the force of law, the compliance with which is in accordance with the reasonable commercial practice of persons to whom such requirements, policies and/or guidelines are addressed to by Bursa Securities and/or the relevant authorities). ‘Any reference to a statutory provision shall include that provision as from time to time modified or re~ enacted whether before or affer the date of these By-Laws so far aS such modification or re- ‘enactment applies or is capable of applying to any Options offered and accepted within the duration of the Scheme and shall also include any past statutory provision (as from time to time modified or re- enacted) which such provision has directly or indirectly replaced. If'an event is to occur on a stipulated day which is not a Market Day, then the stipulated day will be taken to be the first Market Day after that day. 2 QUANTUM 2.41 The maximum number of new Sheres which may be allotted pursuant to the exercise ‘of Options granted under this Scheme, may not exceed ten percent (10%) of the issued and paid-up share capital cf the Company at any point of time throughout the duration of this Scheme as provided in By-Law 3. 2.2 Notwithstanding By-Law 2.1 or any other provision herein contained, in the event the maximum number of new Shares comprised in the Options granted under the ‘Scheme exceeds the aggregate of ten percent (10%) ofthe issued and paid-up share capital of the Company as a result of the Company purchasing its own shares in accordance with Section 67A of the Act or undertaking any other corporate proposal and thereby diminishing its issued and paid-up share capital, then, (2) such Options granted prior to the adjustment of the issued and paid-up share capital of the Company shall remain valid and exercieable in accardance with the provisions of the By-Laws; and (8) no further Options shall be offered until the total number of new Shares comprised in the Options granted or to be granted under the Scheme falls below 10% of the issued and paid-up share capital of the Company. 3. DURATION 3.1. This Scheme shall continue to be in force for a period of ten (10) years from the Effective Date. 3.2 The Effective Date of the Scheme shall be at the date of compliance with the relevant requirements of the Listing Requirements including the following (Submission of the tinal copy of ine By-Laws to Bursa Secunties togetner witn a letter of compliance pursuant to paragraph 2.11 of the Listing Requirements and a checklist showing compliance with Appendix 6F of the Listing Requirements; (ii) receipt of the approvatin-principle from Bursa Securities for the listing of and ‘quotation for the new Dialog Shares to be issued under the Scheme; (ii) obtain the approval of eharcholdore of tho Company in a general meeting for the Scheme; (iv) receipt of the approval of any other relevant authorities (where applicable); and (¥) fulfilment of all conditions ettached to the above approvals (if any) -13-33 34 ‘The Adviser of the Company shall submit a confirmation letter to Bursa Securities of full compliance with the relevant requirements of the Listing Requirements stating the effective date of implementation of the Scheme together with a certified true copy of a resolution passed by the shareholders of the Company in general meeting. The ‘confirmation letter shall be submited to the Bursa Securities no later than five (5) Market Days after the Effective Date or such other period as may be prescribed by Bursa Securities. Notwithstanding the provision of Ciause 3.1 above, the Scheme may be terminated by the Company upon the recommendation of the ESOS Committee at any time during the continuance of the Scheme PROVIDED ALWAYS THAT prior to the termination of the Scheme, the folowing conditions must have been satisfied by the ‘Company: (a) the approval of the shareholders of the Company in @ general meeting, wherein at least a majority of the shareholders of the Company present vote in favour of the termination; and (b) the written consent of all Option Holders who have yet to exercise their Options cither in part or in whole have becn obtained: whereupon such termination, the Options unexercised or partially exercised shall be deemed to have been terminated and be null and void on the date on which the last of the abovementioned conditions is fulfilled. COMPANY TO KEEP SUFFICIENT AUTHORISED AND UNISSUED SHARES ‘The Company will during the Option Period keep available sufficient authorised and unissued ‘Shares to satisfy all Options which may be exercisable from time to time. ELIGIBILITY 5.1 52 53 54 55 All confirmed employees of the Dialog Group and Executive Directors of Dialog (whether Malaysian or foreigner) are eligible to be granted Options under the ‘Scheme, PROVIDED ALWAYS that the selection of any Eligible Employee shall be at the discretion of the ESOS Committee and the decision of the ESOS Committee shall be final and binding. No Eligible Employee shall participate at any time in any other employees’ share gption scheme implemented oF to be implemented by any vther wompany wii Ure Dialog Group unless otherwise approved by the ESOS Committee. Eligibility under the Scheme does not confer on an Eligible Employee a claim or right to participate in or any rights whatsoever under the Scheme and an Eligible Employee does not acquire or have any rights over or in connection with the Options. or the new Dialog Shares comprised therein unless an Offer has been made in writing by the ESOS Committee fo the Eligible Employee under By-Law 6 and the Eligible Employee has accepted the Offer in accordance with the terms of the Offer and the Scheme, A set of criteria for allocation of Options shall be determined by the Board to be implemented by the ESOS Committee. The allocation of the Options pursuant to the ‘Scheme shall be verified by the audit committee and an audit committee statement on the verification of the allocation shall be included in the annual report of the Company. ‘The maximum entitlement of each Executive Director under the Scheme must be set by the shareholders of the Company in a general meeting subject to the Maximum Allowable Allotment during the duration of the Scheme. -14-7. OFFER 64 62 63 The ESOS Committee may at its discretion at any time and from time to time as it shall deem fit select and make an offer in writing to any Eligible Employee to subscribe for the new Shares in accordance with the terms of this Scheme based on the criteria for allotment set by the ESOS Committee from time to time. The actual ‘number of new Shares which may be offered to the Eligible Employee shall subject to By-Law 6.2, be at the discretion of the ESOS Committee and shall not be less than one hundred (100) new Shares and shall always be in iultiples of one hundred (100) new Shares. The criteria upon which the ESOS Committee will exercise its discretion to determine the number of new Shares which may be offered shall without limitation include performance, length of service and such other direct or indirect contributions by the Eligible Employee to the Dialog Group as the ESOS Committee deems appropriate ‘Subject to By-Law 2 and any adjustment which may be made under By-Law 13, the Maximum Allowable Allotment shall be determined at the discretion of the ESOS Committee, as provided in By-Law6.1, provided always that 6.2.1 not more than 50% of the Sharee to be iesued under the Scheme are to be allocated in aggregate to Executive Directors and senior management of the Dialog Group; 6.2.2 not more than 10% of the Shares to be issued under the Scheme are to be allocated to any individual Executive Director or Eligible Employee who, either singly or collectively through persons connected with that Executive Director or Eligible Employee, holds 20% or more in the issued and paid up capital of the Company and the term "person connected with” shall have the same meaning as that assigned under paragraph 1.01 of the Listing Requirements; and 6.2.3 itis in compliance with any prevailing guidelines issued by Bursa Securities, the Listing Requirements, ar any other relevant authorities Nothing herein shall prevent the ESOS Committee from making more than one (1) Offer to each Eligible Employee provided always that the total number of new Shares to be so offered to each Eligible Employee, together with the Number of Options Granted to that Eligible Employee, shall not exceed the criteria set out in By-Law 6.2. ACCEPTANCE OF OFFER 7A 72 73 74 ‘An Offer shall be valid for a period of thirty (30) calendar days from the Date of Offer. Acceptance must be made by written notice to the ESOS Committee within the prescribed period. The Offer shall be deemed to expire and lapse on the date of expiry of the thirty (30) calendar days if not so accepted. In the event the Offer is accepted, the Eligible Employee shall pay to the Company a humiefurdable sui Of Rinyyil Malaysia One (RM1.00) as consideration for the acceptance of the Offer. The date of receipt of the Acceptance Form from Eligible Employee shall constitute the date of acceptance of the Offer Within thirty (30) calendar days after the due acceptance of the Offer in accordance with the provisions of this By-Law, the ESOS Committee shall issue to the Eligible Employee an Option certificate in such form as may be determined by the ESOS Committee. ‘The Offer shall automatically lapse and be null and void in the event of death of the Eligible Employee or ceasing to be employed for any reason whatsoever by the Dialog Group prior to the acceptance of the Offer by the Eligible Employee. -15-10. ‘TRANSFERABILITY An Option shall be personal and cannot be assigned, transferred or otherwise disposed of in any manner whatsoever save as provided for in By-Law 21.3, OPTION PRICE a4 92 ‘The price at which the Option Holder is entitied to subscribe for a new Share under an Option shall be based on: (the five (5) day weighted average market price of the underlying Shares, as quoted on Bursa Securities, immediately preceding the Date of Offer with a discount of not more than 10% or in accordance with any prevailing guidelines issued by Bursa Securities or any other relevant authorities; or (i) atthe par value of the Shares; whichever is higher. ‘The Option Price shall be stipulated in each Offer. EXERCISE OF OPTION 40.4 102 10.3 Subject to the provisions of By-Law 10.2 and By-Law 21 hereof, an Option is only ‘exercisable by the Option Holder during his/her lifetime and while helshe is employed by the Dialog Group. ‘An Option Holder may exercise any Option upon the terms and subject to the conditions as the ESOS Committee may, in its absolute discretion, set out in the Offer. An Option Holder may, in any year, during the Option Exercise Period, exercise his Option in relation to such maximum number of Shares comprised in the Option for that year as may be determined at the absolute discretion of the ESOS Committee. ‘Subject always to the terms of the Offer(s) and the provisions of these By-Laws, any Options for which the Option Holder is entitled to exercise but is not exercised may be exercised in any subsequent period until and including the last year of the Scheme, All Options not exercisable as aforesaid shall on the date the Scheme is due to expire under By-Law 3, become fully exercisable to the extent unexercised. Tor en Ciigible Emplyce wie > serving ume: an employment contract, any remaining unexercised Options can be exercised after expiry of the employment contract in accordance with the Option Exercise Period subject to the approval and at the discretion of the ESOS Committee. ‘The Option Holder shall notify the Company in writing of his/her intention to exercise the Option. The Option may be exercised in respect of such number of new Shares 4s the Option Holder may decide provided that tne number shall be in muluples ot and not less than one hundred (100) Shares or such other multiples as may be permitted by legislation or regulation. Such partial exercise of the Option shall not preclude the Option Holder from exercising the Option as to the balance of the new Shares to which he/she is entitled under the Scheme. In the event that an Option Holder's balance of Shares exercisable are not in multiples of or are less than one hundred (100), the Option may only be exercised upon the approval of the ESOS Committee who shall grant such approval at their sole discretion and the said balance shall, if exercised, must be exercised in a single tranche. -16-We 10.4 10.5 106 10.7 108 Every notice to exercise the Option shall be accompanied by the relevant Option certficate and a remittance of the full amount of the subscription money in relation to the number of Shares subscribed. The Company shall within 8 Market Days of the receipt of such notice and remittance from the Option Holder or such period es may be prescribed by the Listing Requirements, allot and issue the relevant number of new Shares to the Option Holder in accordance with the provisions of the Company's Arlicles of Association, the Central Depositories Act and the Rules of Bursa Depository, despatch a notice of allotment to the Option Holder, make an application for the listing of and quotation for such new Shares and issue an Option certificate for the remaining Option not exercisec. ‘The Option Holder who exercises his Option shall provide the ESOS Committee with his CDS Account number in the netice referred to in By-Law 10.4. The new Shares to be issued pursuant to the notice to exercise of an Option will be credited directly into the CDS Account of the Option Holder and a notice of allotment stating the number of shares credited into the CDS Account will be issued to the Option Holder and no physical shares certificate will be issued. Notwithstanding anything to the cntrary herein, the ESOS Committee shall have the right at its discretion to suspend the right of any Option Holder who is subjected to any disciplinary actions or proceedings (whether or not such disciplinary proceeding may give rise to a dismissal or termination of service of such Option Holder) or to any investigation which is in contemplation of any disciplinary actions or proceedings, including but not limited to, suspension of service, and notice to thet effect has been duly served on him/her from exercising his/her Option pending the outcome of such disciplinary proceeding. The right of suspension as stated in this By-Law, may be exercised by the ESOS Committee with such terms and conditions as the ESOS Comimittee shall deem appropriate having regard to the nature of charges made or brought against such Option Holder and shall have Immediate effect upon delivery of the notice to such Option Holder, provided always, that if such Option Holder is subsequently not found to be guilty of the charges which gave tise to such disciplinary proceeding, the ESOS Committee shall reinstate the rights of such Option Holder to exercice thie Option. ‘Any Option not exercised during the Option Period shall become null and void, The ESOS Committee may at any time refuse to allow the exercise of any Option if such exercise or the issuance of Shares upon the exercise of the Option does not comply with or isin contravention of the laws of a jurisdiction other than Malaysia. ‘TRANSFERS FROM OTHER COMPANIES TO THE DIALOG GROUP In the case of: “ 0) ‘an employee who was employed in a company or an Executive Director of a company which is related to the Dialog Group pursuant to Section 6 of the Act (but rot a subsidiary of Dialog and hereinafter referred to as “Previous Company’) and is subsequently tansterred from a Previous Company to any company within the Dialog Group; or an employee who is in the employment of a Previous Company or an Executive Director of a Previous Company which subsequently becomes a member of the Dialog Group as a result of a restructuring or other exercise involving the Dialog Group andlor any company within the Dialog Group “17-12. 13. ‘such an employee of the Previous Company or an Executive Director of a Previous Company (hereinafter referred to as “Affected Employee") wil, if the Affected Employee satisfied all the conditions hereunder, be eligible to participate in the Scheme provided that the Affected Employee: 0} (il) (iy shall be entitled to continue to exercise all such unexercised Option(s) which were granted to him under the employee share option scheme (if any) which he was Participating (hereinafter referred to as “Previous ESOS") whilst the Affected Employee was in the employment of the Previous Company in accordance with the by-laws of such Previous ESOS but he shall not, upon such transfer or restructuring of other exercise as the case may be, be eligible to participate for further options of such Previous ESOS; will only be eligible to participate in the Scheme for its remaining duration; and if the Affected Employee has participated in a Previous ESOS, the number of Shares to be offered to such Affected Employee under the Scheme shall be that the number ot shares as shall be equivalent to the aitterence between the Affected Employee's total entitlement under the Scheme and the total number of shares which were offered to the Affected Employee under the Previous ESOS. DIVESTMENT FROM THE DIALOG GROUP If an employee who is in the employment of @ company in the Dialog Group which was subsequently divested, then: 0 (ii) such employee will, notwithstanding such divestment and subject to the provisions of By-Law 10 hereof, be entitled to continue to exercise all such unexercised vested Option(s) which were granted to tim under the Scheme within a period of three (3) months from the date of such divestment or such longer period as the ESOS Committee may deem appropriate, failing which the right of such employee to exercise all or part of the Options granted to him shall automatically lapse and be null and void and of no further force and effect; and such employee shall not be eligible to participate for further Options under the Scheme, ALTERATION OF SHARE CAPITAL 434 In the event of any altcration in the capital structure of the Company during the tenure of the Option Period, whether by way of capitalisation of profit or reserves, rights issue, bonus issue, reduction, subdivision or consolidation of capital or any other variations of capital or howsoever otherwise taking place, the Board shall have the discretion and accordingly assess the practicality of complying with the requirement to cause such corresponding adjustment (if any) to be made to: () the Option Price; and/or (i) the number of new Shares comprised in the Option or any portion thereof which have not been exercised; and/or (ii) the number of new Shares and/or Option Price comprised in an Offer which is ‘open for acceptance (if such Offer is subsequently accepted in accordance with the terms of the Offer and the Scheme), -18-and shall be adjusted in accordance with the following formula: fa) (b) If and whenever @ Share by reason of any consolidation or subdivision or conversion shall have a different par value, the Option Price shall be adiusted by multiplying it by the revsed par value and dividing the result by the former par value and the additional number of Options which an Option Holder may be entitled to be issued with, shall be calculated as follows’ ‘Additional number of Options Tx | Former Par Value | - T Revised Par Value where T = existing number of Options held. Each such adjustment willbe effective from the close of business of the next Market Day following the date on which the consolidation or subdivision or conversion becomes effecive (being the date on which the Shares are traded on Bursa Securities at the new par value) or such other date as may be prescribed by Bursa Securities. If and whenever the Company shall make any issue of new Shares to ordinary shareholders credited as fully paid, by way of capitalisation of profits or reserves (whether of a capital or income nature and including any share premium account and capital redemption reserve fund), the Option Price shall be adjusted by multiplying it by the following fraction: —A_ A and the additional number of Options which a Option Holder may be entitled to be issued with, shall be calculated as follows: Additional number of Options = | T x (“| -T A where: A = the aggregate number of issued and fully paid-up Shares immediately before such capitalisation issue; B = the aggregate number of Shares to be issued pursuant to any allotment to vidinary sharehviders credited a fully paid up by way of capitalisation of profits or reserves (whether of a capital or income nature and including any share premium, account and capital redemption reserve fund); and T = TinBy-Law 13.1(@). Each such adjustment will be effective (if appropriate, retroactively) from the commencement of the next Market Day following the entitlement date for such issue. -19-If and whenever the Company shall make: () a Capital Distribution (es defined below) to ordinary shareholders whether on a reduction of capital or otherwise (but excluding any cancellation of capital which is lost or unrepresented by available assets); oF (i) any offer or invitation to its ordinary shareholders whereunder they may acquire or subscribe for Shares by way of rights; or (ii) any offer or invitation to its ordinary shareholders by way of rights whereunder they may acquire or subscribe for securities convertible into Shares or securities with rights to acquire or subscribe for Shares, then and in respect of each such case, the Option Price shalll be adjusted by multiplying it by the following fraction cD Cc and in respect of the cese referred to in By-Law 13.1(c)i) hereof, the additional number of Options which an Option Holder may be entitled to be issued with, shall be calculated as follows: Additional number of Options = Tin By-Law 13.1(a); ° 0 the Current Market Price (as defined in By-Law 13.1(h)) of each Share on the Market Day immediately preceding the date on whict the Capital Distibulivn, ura the vase may be, Une offer u invitation is publicly announced to Bursa Securities or (falling any such announcement) immediately preceding the date of the Capital Distribution or, as the case may be, of the offer or invitation; and D = (@a)_ in the case of an offer or invitation to acquire or subsctive for Shares under By-Law 13. (c){ll) above or for securities convertible into Shares or securities with rights to acquire or subscribe for Shares under By-Law 43.4(a\(i) above, the value of rights attributable to 1 Share (as defined below}; or (bb) _ in the case of any other transaction falling within By-Law 13.1(¢), the fair market value, as determined (with the ‘concurrence of the Auditors and/or the Approved Bank), Of that portion of the Capital Distribution attributable to 1 Share -20-For the purpose of definition (aa) of D above, the “value of rights attributable to 1 Share" shall be calculated in accordance with the formula: C-E Ft where: C= Cin By-Law 13.1(c); E = the subscription price for 1 additional Share under the terms of such offer or invitation or 1 additional security convertible into Shares or 1 additional security with rights to acquite or subscribe for Shares; F = the number of Shares which itis necessary to hold in order to be cffered or invited to acquire or subscribe for 1 ‘additional Share or security convertible into Shares or with right to acquire or subscribe for Shares; and D* = the value of the rights attributable to 1 Share (as defined below). For the purpose of D* above, the “value of the rights attributable to 1 Share” shall be caculated in accordance with the formula: Prat where: C= Cin By-Law 13.1(0); E* = the subscription price for 1 additional Share under the terms of such offer or invitation to acquire or subscribe for Shares; and F* = the number of Shares which it is necessary to hold in order to be cffered or invited to acquire or subscribe for 1 cauulllurral Stave, For the purpose of By-Law 13.1(c) hereof. "Capital Distribution” shall ‘mean (i) a capital reduction pursuant to section 64 of the Act, and (i) distributions of dividend in cash or specie or by way of issue of ‘Shares (other than an issue falling within By-Law 13.1(b)) or other ‘securities credited as fully or partly paid-up by way of capitalisation of rots or reserves (whether of a caplial or Income nature and including any share premium account or capital redemption reserve fund) the quantum of which exceeds 10% of the consolidated net asset value of the Dialog Group as shown in the latest consolidated audited accounts of the Company. Each such adjustment will be effective (if appropriate, retroactively) from the commencement of the next Market Day following the entitlement date for such issue. <2.@) If and whenever the Company makes any allotment to its ordinary shareholders as provided in By-Law 13.1(b) above and also makes any offer F invitation to its ordinary shareholders as provided in By-Law 13.1(c)(i) or By-Law 13.1(cM{i) above and the entitlement date for the purpose of the allotment is also the entitlement date for the purpose of the offer or invitation, the Option Price shall be adjusted by multiplying it by the following fraction: (GB xC) + (Hx!) (G+H#B)xC and where the Company makes any allotment to its ordinary shareholders as provided in By-Law 13.1(b) above and also makes any offer or invitation to its ordinary shareholders as provided in By-Law 13.1(c\i) above and the entitlement date for the purpose of the allotment is also the entitlement date for the purpose of the offer or invitation, the additional number of Options. which an Option Holder may be entitled to be issued with, shall be calculated as follows: Additional number of Options =| Tx(G+H*+B)xc_ |-T (Gx) +(x) where: B= BinBy-Law 13.1(b); C= Cin By-Law 13.1(¢); =the aggregate number of iesued and fully paid-up Shares on the entitlement date; H = the aggregate number of new Shares under an offer or invitation to acquire or subscribe for Shares by way of rights or under an offer or invitation by way of rights to acquire or subscribe for securities convertible into Shares or rights to acquire or subsoribe for Shares, as the case may be: He = Ure aggregate nuniber of new Shares under Une offer ur invitation to acquire or subscribe for Shares by way of rights; |= the subscription price of one (1) additional Share under the offer or invitation to acquire or subscribe for Shares or the exercise price on conversion of such securities or exercise of such rights to acquire or subscribe for one additional Share, as the case may be; I = the subscription price of one (1) additional Share under the offer oF invitation to acquire or subscribe for Shares; and T = Tin By-Law 13.1(a) Such adjustment will be effective (if appropriate, retroactively) from the ‘commencement of the next Market Day following the entitlement date for such issue. -22-fe) If and whenever the Company makes any offer or invitation to its ordinary shareholders to acquire or subscribe for Shares as provided in By-Law 43.4(¢)(i) together with an offer or invitation to acquire or subscribe for securities convertible into Shares or securities with riahts to acauire or subscribe for Shares as orovided in By-Law 13.1(c)(ii) above, the Option Price shall be adjusted by multiplying it by the following fraction: (G xC) + (Hx) +x. (GrH+d)xe and the additional number of Options which an Option Holder may be entitled to be issued with, shall be calculated as follows: Additional number of Options = | Tx(G+H)xc | -T (Sx C) + (HXI) where: © = CinBy-Law 13.1(0); G = Gin By-Law 13.1); H = Hin By-Law 13.1(d); Ho = Hin Bylaw 13.1(@); 1 = Lin By-Law 13 1(d); = Min By-Law 13.44; J = the aggregate number of Shares to be issued to its ordinary shareholders upon conversion of such securities or exercise of such rights to subscribe for Shares by the ordinary shareholders; K = _ the exercise price on conversion of such securities or exercise of such rights to acque or subeerbe for one (1) eddtonal Share T = Tin By-Law 13.1(a). Such adjustment will be effective (if appropriate, retroactively) from the ‘commencement of the next Market Day following the entitlement date for the above transaction. If and whenever the Company makes an allotment to its ordinary shareholders as provided in By-Law 13.1(b) and also makes an offer or invitation to acquire or subscribe for Shares to its ordinary shareholders as provided in By-Law 13.1(c)(i) above together with rights to acquire or subscribe for securities convertible into or with rights to acquire or subscribe for Shares as provided in By-Law 13.1(c)(ii) above and the entitlement date for the purpose of the allotment is also the entitlement date for the purpose of offer or invitation, the Option Price shall be adjusted by multiplying it by the following fraction: GxC) + (HxI) + (xk) (GtH+J+8)xC -23-(9) and the additional number of Options which an Option Holder may be entitled to be issued with, shall be calculated as follows: Additional number of Options. = |_Tx(G+H"+B)xC | - T (GxC)+(HFxI") where: B= Bin By-Law 13.4(b); = Cin By-Law 13.110); G = Gin By-Law 13.114); Ho = Hin By-Law 13.144); HY = Htin By-Law 13.4(d); 1 = Lin By-Law 13.1(¢); = Min By-Law 13.4(d); J = Jin By-Law 13.1(8); K = Kin By-Law 13.4(e); and T = Tin By-Law 13.1(@). Such adjustment will be effective (if appropriate, retroactively) from the commencement of the next Market Day following the entitlement date for the above transaction. If and whenever (otherwise than pursuant to a rights issue available to all ordinary shareholders and requiring an adjustment under By-Laws 13.1(c)(i), 13.1(cM{li), 13.1(¢), 13.1(@) oF 13.1(N) above, the Company shall issue either any Shares or any securites convertible into Shares or with rights to acquire ‘or subscribe for Shares, and in any such case, the Total Effective Consideration per Share (as defined below) is less than ninety percent (80%) of the Average Price for one (1) Share (as defined below) or, ae the case may be, the price at which the Shares will be issued upon conversion of such securities or exercise of such rights is determined, the Option Price shall be adjusted by multiplying it by the following fraction: L+M LAN where: L = the number of Shares in issue at the close of business on the Market Day immediately preceding the date on which the relevant adjustment becomes effective; M = _ the number o' Shares which the Total Effective Consideration (@s defined below) would have purchased at the Average Price (a8 defined below) (exclusive of expenses); and <4(hy N = the aggregate number of Shares so issued or, in the case of securities convertible into Shares or with rights to acquire or subscribe for Shares, the maximum number (assuming no adiustment of such rights) of Shares issuable upon full Conversion of such securities or the exercise in full of such rights For the purposes of By-Law 13.1(g). the “Total Effective Consideration” shall be as determined by the Board with the concurrence of the Auditor and/or the ‘Approved Bank and shall be: 0 in the case of the issue of Shares, the aggregate consideration recelvable by the Company on payment in full for such Shares; or wy in the case of the issue by the Company of securities wholly or partly convertible into Shares, the aggregate consideration receivable by the Company on payment in full for such securities oF such part of the secunties as is convertible together with the total ‘amount receivable by the Company upon full conversion of such securities (if any); or (i) Inthe case of the issue by the Company of securities with rights to acquire or subscribe for Shares, the aggregate consideration attributable to the issue of such’ rights together with the total amount receivable by the Company upon full exercise of such rights, in each case without any deduction of any commissions. discounts or expenses paid, allowed or incurred in connection with the issue thereof, and the “Total Effective Consideration per Share” shall be the Total Effective Consideration divided by tre number of Shares issued as aforesaid or, in the case of securities convertible into Shares or securities with rights to acquire of supseribe for Shares, by he maximum number of Snares issuable on Tull conversion of such securities or on exercise in full of such rights. For the purpose of By-Law 13.1(g), the “Average Price” of a Share shall be the average price of one (1) Share as derived from the last dealt prices for one (1) of more board lots of the Shares as quoted on Bursa Securities on the Market Days comprised in the period used as a basis upon which the issue price of such Shares is determined. Each such adjustment wil be calculated (if appropriate, retroactively) from the close of business on Bursa Securities on the next Market Day following the date on which the isouc is announced, or (feiling any such announcement) on the next Market Day following the date on which the Company determines the Option Price of such Shares. Each such adiustment will be effective (if appropriate, retroactively) from the ‘commencement of the next Market Day following the completion of the above transaction, For the purposes of By-Laws 13.4(c), (d), (e) and (f) above, the “Current Market Price” In relation to one (1) Share for any relevant day shall be the average of the last dealt prices for the five (5) conseoutive Market Days before such date or during such other period as may be determined in accordance with any guidelines issued, from time to time, by Bursa Securities. = 25-13.2 133 Such adjustments must be confirmed in writing by the Auditors for the time being (acting as experts and not as arbitrators), upon reference to them by the ESOS Committee, to te in their opinion, fair and reasonable, PROVIDED ALWAYS THAT: (@) Any adjustment to the Option Price shall be rounded up to the nearest 1 sen and no adjustment to the Option Price shall be made which would result in the Shares to be issued on the exercise of the Option being issued al a discount lo the par value, and if such an adjustment would but for this provision have so resulted, the Option Price payable shal be the par value of the new Shares; (b) In the event that a fraction of a new Share arising from the adjustment referred to in this By-Law would otherwise be required to be issued upon the exercise of an Option by the Option Holder, the ‘Option Holder's entitlement shall be rounded down to the nearest whole number; (©) Upon any adjustment being made pursuant to this By-Law, the ESOS ‘Committee chal, within 30 calendar daye of the effective dato of the alteration in the capital structure of the Company, notify the Option Holder (or his legal representatives where applicable) in writing informing him of the adjusted Option Price thereafter in effect and/or the revised number of new Shares thereafter to be issued on the exercise of the Option; and (4) Any adjustments made must be in compliance with the provisions for adjustment as provided in this By-Law. Nevertheless, any adjustments to the Option Price and/or the number of new Shares ‘comprise in the Option so far as unexercised arising from bonus issues, need not be ‘confirmed in writing by the Auditor. The adjustment pursuant to this By-Law shall be effective on the Market Day immediately following the entitlement date for the event giving rise to the adjustment. No adjustments shall be made to the Option Price and/or the number of Shares ‘comprised in the Option or any portion thereof that is unexercised when the alteration in the capital structure of the Company arises from: @ (b) ©) @ ) an issue of new Shares or other securities convertible into Shares or with rights to acquire or subscribe for Shares in consideration or part consideration for an acquisition of any other securities, assets or business; or fa special issue of new Shares or other securities to Bumiputera investors nominated by the Ministry of International Trade and Industry andlor any other government authority to comply with Malaysian Government's policy on Buminutara capital participation: or implementation of a share buy-back arrangement by the Company under ‘Section 67A of the Act; or an issue of new Shares upon the exercise of Options granted under the ‘Scheme; or an issue of new Shares cr other securities pursuant to a private placement and/or restricted issue, or as a result of or upon conversion of convertible securities or warrants; or = 26-13.4 13.5 136 (distributions of dividend in cash or specie (including but not limited to dividends paid out of the aggregate of the net profits attributable to the ordinary shareholders as shown in the audited consolidated profit and loss arcouints af the Crmpany) ar hy way af issite of Shara (athar than an issiie faling within By-Law 13.1(b)) or other securities credited as fully or partly paid up by way of capitalisation of profits or reserves (whether of a capital or income nature and including any share premium account or capital redemption reserve fund or a Capital Distribution falling within By-Law 13.1(c)) the quantum of which is equivalent to or below ten per cent (10 %) of the consolidated net asset value of the Dialog Group as shown in the latest consolidated audited accounts of the Company. Notwithstanding the provision referred to in this By-Law 13, in any circumstances where the Board consider that any adjustment to the Option Price and/or the number of ‘Shares comprised in the Option or any portion thereof that is unexercised under the said provision should be adjusted or calculated on a different basis or date or should take effect on a different date oF thal an adjustment to the Option Price: andor the number of Shares comprised in the Option or any portion thereof should be made notwithstanding that no such adjustment is required under the said provisions, the ‘Company shall appoint an Approved Bank andlor the Auditors to consider for any reason whatsoever the adjustment io be made (or the absence of an adjustment) or the adjustment to be made in accordance with the provisions of this By-Law 13 is appropriate or inappropriate, as the case may be and if such Approved Bank and/or the Auditors shall consider the adjustment to be inappropriate, that adjustment shall be modified or nullfed (or an adjustment made even though not required to be made) in such manner as shall be considered by such Approved Bank and/or the Auditors to be in its opinion appropriate. ‘The decision of the Board as to whether any adjustment shall be made or not made to the Option Price and and/or the number of Shares comprised in the Option or any portion thereof pursuant to this By-Law 13 shall be binding, final and conclusive. In the event of any alteration in the capital structure of the Company during the tenure of the Option Period for which the formula has not already been set out in this By-Law 13, the Board shall have the discrefon to decide and accordingly assess the practicality of complying with the requirement to cause such corresponding adjustment (if any) to be made to: () the Option Price; and/or (i) the number of new Shares comprised in the Option or any portion thereof which have not been exercised; and/or the number of new Shares and/or Option Price comprised in an Offer which is ‘open for acceptance (if such Offer is subsequently accepted in accordance with the terms of the Offer and the Scheme); and/or (iv) the formula for adjustment which shall be generally acceptable, in compliance with the Listing Requirerrents (if any), and not detrimental to the Option Holders, <27-14, TAKEOVER OFFER, COMPULSORY ACQUISITION AND SCHEME OF COMPROMISE OR ARRANGEMENT 144 142 14.3 In the event:- () of a take-over offer being made for the Company by a general offer or otherwise and such offer becoming or being deciared unconditional, each Option Holder who is holding outstanding exercisable Option(s) shall be entitied, within three (3) months from the date on which such otfer becomes or is declared unconditional to exercise in whole or in part any Option(s) to which he/she is then entitled; (i) any person becomes entitled or bound to exercise rights of compulsory acquisition of the Shares under the provisions of the Act and/or the Securities. Commission Act 1993 and gives notice to each Option Holder that it intends. to exercise such right on a specific date, each Option Holder who is holding outstanding exercisable Ostion(s) shall immediately become entitled until the expiry of such specified date, to exercise in whole or in part any Option that helshe is then entitled to the same under By-Law 10.2; (ii) the court sanctions a compromise or arrangement between the Company and its members proposed for the purposes of, or in connection with, a scheme for reconstruction of the Company or its amalgamation with any other ‘company or companies under the provisions of the Act, any outstanding Options shall remain exercisable by the Option Holder at any time and from time to time in the period up to but excluding the date upon which it becomes effective. In the event of a take-over offer being made for the Company by a general offer or otherwise (including any compulsory acquisition), the ESOS Committee shalt be entitied, at any time and at its absolute discretion, decide to waive all or any vesting conditions imposed in the Options granted to all the Option Holders and the ESOS Committee shall bo ontitied to declara that all suich Options which hitherto have not been vested with the Option Holders shall become vested and immediately exercisable by such Option Holders and the provisions of Clause 14.1 shall apply mutatis mutandis. In the case of a take-over offer becoming or declared unconditional as set out in Clause 14.1()) above, and the Option Holder has not during the three (3) month Period described in Clause 14.1(i) above exercised the whole of the Option to which helshe is entitied, the Option Holder may nevertheless after the expiry of the said three (9) month period, exercise hissher unexervised oF partially exeivised Option ur ‘Options within the relevant Option Period or Periods. In the case of compulsory acquisition and compromise or atrangement as set out in Clause 14.1(ii) and (il) above, upon the expiry of the specified date or upon the compromise or arrangement becoming effective, as the case rray be, all Options, to the extent unexercised shall automatically lapse and shall become null and void. 15. _ RIGHTS ATTACHED TO SHARES 15.4 All new Shares allotted upon any exercise of an Option will, upon allotment and issuance, rank pari passu in all respects with the then existing issued and paid-up ‘Shares except that the new Shares so allotted and issued will not be entitled to any dividends, rights, allotments or other distributions declared, made or paid to shareholders preceding the date of exercise of the Option and will be subject to all the provisions of the Articles of Association of the Company relating to transfer, transmission and otherwise, = 28-16. 47. 18, 19, 15.2 _ In no circumstances whatsoever shall any Eligible Employee ceasing to hold the office or employment by virtue of which he/she is or may be eligible to participate in the Scheme be entitled to any compensation for any loss of any right or benefit or prospective right or benefit under the Scheme he/she might otherwise have enjoyed whether such compensation is claimed by way of damages for termination of, employment for any reason whatsoever, wrongful dismissal or other breach of contract or by way of compensation for loss of office or otherwise howsoever. No Eligible Employee shall have any right to sue or claim for any such damages whether direct, indirect, special or consequential (including but not limited to loss of profits due to non-exercise of the Option) or compensation whatsoever against the Company or the ESOS Committee or the Board RETENTION PERIOD 16.1 Subject to Clause 16.2, there is no retention period imposed on the new Shares arising from the exercise of the Options. An Option Holder may deal with new Shares allocated and issued to him/her in any way ne/she pleases. Option Holders should note that new Shares are intended for them to hold as long-term investment and not for any speculative purpose and/or for the realisation to yield immediate profit. 16.2 _ In the event of an Option Holder who is an Executive Director becoming, during the term of the Option Period, a non-executive Director, the Option Holder shall not sell, transfer or assign the Shares obtained through the exercise of the Options, until after the expiry of one (1) year from the Date of Offer. EXTENT OF OPTION No Option shall be granted for less than one hundred (100) new Shares or more than the Maximum Allowable Allotment. QUOTATION OF SHARES The new Shares referred to in By-Law 2 hereof and the new Shares (if any) to be allotted to the Option Holder will not be listed or quoted on the Bursa Securities and any other relevant stock exchange until the Option is exercised in accordance with By-Law 10 hereof whereupon the Company will apply to Bursa Securities for the listing of and quotation for such new Shares and will use its best endeavours to obtain permission for such listing and quotation. ADMINISTRATION This Scheme shall be administered by the ESOS Committee comprising of not less than two (2) persons as shall be appointed by the Board of the Company from time to time. The Board shall have power ftom time to time to rescind the appointment of any person as the Board deems fit -20-20. 21. AMENDMENTS AND / OR MODIFICATION TO THE SCHEME 20.1 The ESOS Committee shall at any time and from time to time, subject to all applicable laws. reaulations, directives. auidelines and approvals (if reauired) by the Companies Commission of Malaysia, Bursa Securities and any other applicable authority and, amend or modify all or any of the provisions of the Scheme by resolution of the Board, provided that no such amendment or modification shall be made which would: () prejudice the subsisting rights of any Option Holder without his/her prior consent; and (i) make the terms on which the Options may be granted materially more favourable without the prior approval of the Company in a general meeting. In addition, any amendment or modification to By-Laws 2, 3.1, 5.1, 6.2, 7.2, 9, 13.4, 13.2, 13.3, 15.1, 16.2, 21.2 and this By-Law 20.1 which is to the advantage of Option Holders requires the prior approval of the shareholders of the Company. The ESOS Committee shall give written notice within fourtecn (14) days of any ‘amendment to this Scheme to all the Option Holders, ‘Any amendments and/or modifications of any of the provisions of these By-Laws shall not contravene any of the provisions of the guidelines on employee share option schemes as stipulated under the Listing Requirements and/or any other relevant regulatory authority in relation to employee share option schemes. ‘TERMINATION OF THE OPTION 244 242 In the event of the cessation or termination of employment of an Option Holder with Dialog Group prior to the exercise of an Option, such Option or the balance thereof Shall forthwith lapse and cease ta ha valid without any claim whether diract, indirect, special or consequential (including but not limited to loss of profits due to the non- ‘exercise of the Option) whatsoever against the Company, the Board, and the ESOS Committee PROVIDED ALWAYS THAT subject to the written approval of the ESOS Committee in its absolute discretion, if such cessation occurs by reason of: ().__tetirement on attaining the normal retiring age; (ii) retirement before attaining the normal retirement age but with the consent of the Company; (iil) il-health, injury or disabitt (iv) retrenchment or redundancy (including under a voluntary separation scheme); () a member of the Dialog Group becuniny ai associate Lompany of Ure Dialog Group; and (vi) any other circumstances acceptable to the ESOS Committee; such Option shall remain exercisable during the Option Period. All unexercised or partially exercised Options shall lapse in the event of the liquidation of the Company. =30-22. 23. 25. 21.3 Where an Option Holder dies before expiry of the Option Period and at the date of death held an Option or Options which are unexercised, such Option or Options may be exercised after the date of death by a person nominated by the Option Holder within the Option Period. An Ostion Holder will be required to nominate @ person for such a purpose when he accepts an Offer. DISPUTES Any dispute arising hereunder of whatsoever nature shall be referred to and decided upon by the Company's Auditors acting as experts and not as arbitrators, and their decision shall be final and binding on all parties and in all respects. COMPENSATION No Eligible Employee or Option Holder (or his her legal personal representative pursuant to By- Law 21.3) shall bring any claim against the Company or ESOS Committee or the Board or any ‘other party for compensation or damages arising from the Suspension of his/her right to exercise histher Option or his Option ceasing to be valid pursuant to the provisions of these By-Laws, a3 the same may be amended from time to time in accordance with By-Law 20. INSPECTION OF THE AUDITED ACCOUNTS All Option Holders are entiied to inspect the letest audited accounts of the Company during normal office hours, at the registered office of the Company for the time being. COSTS AND EXPENSES ‘The Company will bear all costs of and incidental to the setting up and administration of the Scheme. Notwithstanding this, the Option Holder shall hear all costs of and incidental to the acceptance and exercise of the Option thereof. TAXES Al taxes (including income tax) arising from exercising any Option under the Scheme shall be bome by the Option Holder. DISCLAIMER OF LIABILITY Notwithstanding any provisions contained herein and subject to the Act, the Company, the Board (including Directors of the Company who have resigned but were on the Board during the tenure of the Scheme) and the ESOS Committee stall not under any circumstances and in any event be held liable to any person for any cost, charges, losses, expenses, damages, liabilities, gains or profits foregone howsoever arising, Inciuging bu rot limited to (2) any delay on the part of the Company in allotting and issuing the new Shares or in procuring Bursa Securtties to list the new Shares subscribed for by an Option Holder, andlor () any other matter or dealing outside the controt of the Company. -31-28. 29. NOT A TERM OF EMPLOYMENT The Scheme does not form part, nor shall t in any way be construed as part, of the terms and conditions of employment of any employee of the Dialog Group. GOVERNING LAW AND JURISDICTION 29.1 This Scheme shall be governed by and construed in all respecis in accordance with the laws of Malaysia. 29.2. The Option Holder shall submit to the exclusive jurisdiction of the Courts of Malaysia in all matters connected with the obligations and liabilities of the parties hereto under or arising out of these By-Laws, 29.3 Any proceeding or action shall be instituted or taken in Malaysia and the Option Holder itevocably and unconditionally waives any objection on the ground of venue or forum non- convenience or any other grounds. The rest of this page is intentionally left blank -32-APPENDIX I ADDITIONAL INFORMATION cn Responsibility Statement Our Directors have seen and approved this Circular and they, collectively and individually, accept full responsibility for the accuracy of the information given and confirm that, after having made all reasonable enquiries and to the best of their knowledge end belief, there are 10 false or misleading information or other facts which, if omitted, would make any statement herein false or misleading. Consent CIMB has given and has not subsequently withdrawn its written consent to the inclusion in this Circular of its name and all references thereto, in the form and context in which it appears, Conflict of interest CIMB is not aware of any conflict of interest situation which exists or is likely to exist in its capacity as adviser to Dialog for the Proposed ESOS. Material Contracts Save as disclosed below, neither we nor our subsidiaries, have entered into any material contracts (not being contracts entered into in the ordinary course of business of our Group) during the past 2 years preceding 29 June 2007, being the latest practicable date prior to the printing of this Circular: () On 17 September 2005, Dialog (Labuan) Ltd (‘DLL’), @ wholly-owned subsidiary of Dialog, entered into a Shareholders Agreement with Ms Shen Yiping to establish a joint venture company under the ws of Hong Kong for the purpose of developing mutually agreed oil and gas services business andior related businesses serving the oll, gas and petrochemical market in China. Pursuant thereto, DLL has, on 25 May 2006, acquired the entire issued and paid-up share capital of GNT Intemational Limited ("GNT"), a limited liability company incorporated in Hong Kong compriting of 1 ordinary charo of USD1.00 each at par for cash. In July 2008, DLL subscribed for 570,000 ordinary shares of USD each in GNT at par and Ms Shen Yiping subscribed for 429,999 ordinary shares of USD1 in GNT at par, thereby reducing DLL's equity interest to 57%; (i) On 18 April 2006, Dialog Systems (Asia) Pte Ltd (‘DSAPL"), a wholly-owned subsidiary of Dialog entered into a Subscription Agreement and a Shareholders ‘Agreement with Star Epecialist Engineering Pto Ltd for the cotablishment of a joint venture company. The joint venture involved the subscription by DSAPL of 2,100,000 new ordinary shares of SGD1.00 each and 3,105,000 new redeemable non- convertible preference shares of SGD1.00 each in OTEC Holdings Pte Ltd representing 60% of the enlarged issued and paid-up share capital for 2 cash consideration of SGD5,205,000. This transaction has been completed: (ii) On 3 July 2006, Dialog Systems Sdn Bhd (‘DSSB"), a wholly-owned subsidiary of Dialog entered into a Shareholders Agreement with Johnson Matthey PLC and vonnson Matthey investment Limited for the estapiisnment ot 2 joint venture company incorporated in Malaysia -33-(iv) w) (vi) (vi DSSB has acquired 50% equity interest in the joint venture company Tracerco Asia Sdn Bhd ("TASB") by way of (@) purchasing 1 of the existing shares of TASB from the current shareholders for cash and at par; and (6) subscribing TASB newly issued 1,500,000 ordinary shares of RM1.00 each by RM1,500,000 in cash and RMS591,591 in kind: On 19 February 2007, Dialog Services Europe Limited, a wholly-owned subsidiary of Dialog entered into a Sale and Purchase Agreement with Mr Donald Thomas Gwilliam, Mr Patrick Gerrard Sheehan, Mr Vaughan Henry Gwilliam and Mrs Pamela Anne Gwilliam to acquire 100% equity interest in Technivac Limited, a limited liability ‘company incorporated in the United Kingdom for a cash consideration of GBP 1,250,000. This acquisition has been completed; On 2 April 2007, Dialog Properties Sdn Bhd (formerly known as Dialog Diagnostics Services Sin Bhd), a wholly-owned subsidiary of Dialog entered into a Sale and Purchase Agreement to acquire a piece of land measuring approximately 53,403 sq ff. in Mutiara Damansare, Sclangor Darul Ehsan for a purchase conskicration of RRM15,753,885 from Mutiara Rini Sdn Bhd. The acquisition is pending completion; On 12 April 2007, Dialog Equity Sdn Bhd (‘DESB") entered into the following agreements with Tanjung Langsat Port Sdn Bhd ("TLP") for the rights to develop an independent centralized tankage facilities and dedicated tank terminal within the Port of Tanjung Langsat (‘Port’) (2) A Concession Agreement for an exclusive concession granted by TLP to DESB for a term of 30 years over an area of approximately 10 acres (‘Parcel 1°) within the Port for the cevelopment of an independent centralized tankage facility on a build, own, operate and transfer basis (‘BOOT basis") by DESB; (5) A Concescion Agreement for an exclusive concession granted by TLP to DESB for a term of 30 years over an area of approximately 40 acres (‘Parcel 2") within the Port for the development of a dedicated Tank Terminal on BOOT basis by DESB; (0) AlLease Agreement in respect of a lease over Parcel 1 by TLP to DESB fora term of 30 years for a total lease rental of approximately RMT7.6 milion; and (d) A_Lease Agreement in respect of a lease over Parcel 2 by TLP to DESB fora ter UF 80 years (ur a tulal lease rental uf approximately RM90.9 mili, and On 12 April 2007. DESB, a wholly-owned subsidiary of Dialog, entered into Memorandum of Understanding ("MOU") with Trafigura Beheer B.V. (“Trafigura’) for the development of an independent centralised tankage facilies and a dedicated tank terminal (‘Tank Terminal’) at the Port through special purpose joint venture companies; and that the Tank Terminal shall be leased to Trafigura for its sole and exclusive use on a fixed monthly rental The parties are negotiating on the terms and conditions of the definitive agreement(s) including the shareholders’ agreement as contemplated under the MOU. The definitive agreements were subsequently signed on 21 June 2007.7. Material Litigation Neither we nor our subsidiaries, are engaged in any material litigation, claims and arbitration, either as plaintiff or defendant, which has a material effect on the financial position or business of our Group, and our Directors are not aware of any proceedings pending or threatened, or of any other facts likely to give rise to any proceedings which may materially and adversely affect the financial position or business of our Group. Historical Dialog Share Prices ‘The monthly high and low market prices of our Dialog Shares as traded on Bursa Securities for the past 12 months from July 2006 to June 2007 are as follows: High Low RM RM 2008 July 088 083 August 088 0.54 September 059 0.54 October os7 0.63 November 077 0.86 December 0.89 0.79 2007 January 1.16 ost February 4.45 1.07 March 155 1.01 April 2.09 1.55 May 1s 1a June 2.00 178 Last transacted price of our Dialog Shares on 15 May 2007, being the Market Day RM1.80 ‘before the date of announcement of the Proposed ESOS. Last transacted price of our Dialog Shares on 29 June 2007, being the latest RM1.88 practicable date before the printing ofthis Circular (Source: Bloomberg) Documents Available for Inspection Covies of the following documents may be inspected at our Registered Office at 109, Block G, Phileo Damansara 1, No. 9 Jalan 16/11, Pusat Dagang Seksyen 16, 46350 Petaling Jaya, Selangor Darul Ehsan during normal business hours on Mondays to Fridays (except public holidays) from the date of this Circular until the date of the EGM: () OurMemorandum and Antcies of Association; (i) Our audited consolidated financial statements for the past 2 financial years ended 30 June 2005 and 30 June 2006, and the unaudited consolidated financial results for the 9 ‘monthe period ended 31 March 2007; Draft By-Laws of the Proposed ESOS set out in Appendix of this Circular, Letter of consent referred to in Section 2 above; and (¥) Material contracts referred to in Section 4 above. = 35 -DIALOG GROUP BERHAD (Company No. 178694-V) (Incorporated in Malaysia under the Companies Act, 1965) NOTICE OF EXTRAORDINARY GENERAL MEETING NOTICE IS HEREBY GIVEN THAT an Extraordinary General Meeting of Dialog Group Berhad (‘Dialog” or “Company*) will be held at the Ballroom 2, LG Level, Eastin Hotel, 13 Jalan 16/11, Pusat Dagang Seksyen 16, 46350 Petaling Jaya, Selangor Darul Ehsan on Wednesday, 25 July 2007 at 10.30 a.m. or at any adjournment thereof for the purpose of considering and. if thought fit, passing the following resolutions: ORDINARY RESOLUTION 1 PROPOSED EMPLOYEES’ SHARE OPTION SCHEME (“PROPOSED ESOS”) “THAT, the Board of Directors of Dialog be and is hereby authorised to 0 (i) (ii 7) establish, implement and administer an employees’ share option scheme for the beneftt of eligible employees of Dialog and its subsidiaries (excluding subsidiaries which are dormant) and Executive Directors of Dialog to be known as "Dialog Group Employees’ Share Option Scheme” under which options will be granted to such eligible employees and Executive Directors to subscribe for new ordinary shares of RM0.10 each (or such other par value as determined from time to time) in the Company ("Dialog Shares”) (‘Proposed ESOS” or “Scheme’) in accordance with the By-Laws set out in Appendix | of the Circular, allot and issue from time to time such number of new Dialog Shares as may be required to be issued pursuant to the exercise of the options granted under the Proposed ESOS provided that the aggregate number of new Dialog Shares to be allotted and issued shall not exceed 10% of the total issued and paid-up share capital of the Company at any point of time throughout the duration of the Proposed ESOS and that such new Dialog Shares shall, upon allotment and issue, rank equally in all respects with the then existing issued and paid-up Dialog Shares except that the new Dialog Shares so issued will not be entitled to any dividends, rights, allotments or other distibutions where the entitlement date is prior to the date of allotment of the new Dialog Shares. The term “entitlement date” shall mean the date as at the close of business on which air shareholders muist he entered in the Record of Depositors maintained with Bursa Malaysia Depository Sdn Bhd in order to be entitled to any dividends, rights, allotments or other distributions; modify andlor amend and/or vary the Proposed ESOS from time to time as may be required/permitted by the authorities or deemed necessary by the authorities or the Board of Directors of Dialog provided that such mocifications and/or amendments and/or variations are effected in accordance with the provisions af the Ry-l.aws of the Scheme and to da all sich acts including entering into all transactions, arrangements, agreements, indemnities, undertakings andor guarantees with any party or parties, to deliver and/or cause to be delivered all such documents and to make such rules of regulations, or impose such terms and conditions or delegate part of its powers as may be necessary or expedient in order to implement, finalise and to give full effect to the Proposed ESOS; make the necessary applications and do all things necessary to Bursa Malaysia Securities Berhad ("Bursa Securities’) and any other authorities for the permission for the quotation of and ty dealin any new Uiuinaly shicies uf the Gumpary Ural Mey lrereatter fiw tine Wo Gime be allotted and issued under the Proposed ESOS; and() give effect to the Proposed ESOS with full power to consent to and to adopt such conditions, Variations, modifications and/or amendments as may be deemed fit or expedient andfor be imposed by the relevant authorities in respect of the Proposed ESOS." ORDINARY RESOLUTION 2 PROPOSED ISSUE OF OPTIONS TO NGAU BOON KEAT “THAT, subject to Ue passing of Ordinary Resolution 1, the Board of Directors of the Company be and is hereby authorised at any time, and from time to time, to offer and to grant to Ngau Boon Keat, being the Executive Director of the Company, options to subscribe for up to 10% of the maximum number of new Dialog Shares to be issued under the Proposed ESOS, provided always that’ (not more than 50% of the new Dialog Shares available under the Proposed ESOS shall be allocated, in aggregate, to the Executive Directors and senior management of Dialog and its subsidiaries (excluding subsidiaries which are dormant); and (i) not more than 10% of the new Dialog Shares available under the Proposed ESOS shall be allocated to him, if he, either singly or collectively through persons connected with him, holds 20% or more of the ieeued and paid-up capital of Dialog, and subject always to such terms and conditions and/or any adjustments which may be made in accordance with the provisions of the By-Laws of the Proposed ESOS." ORDINARY RESOLUTION 3 PROPOSED ISSUE OF OPTIONS TO CHAN YEW KAI “THAT, subject to the passing of Ordinary Resolution 1, the Board of Directors of the Company be and is hereby authorised at any time, and from time to time, to offer and to grant to Chan Yew Kai, being the Executive Director of the Company, options to subscribe for up to §% of the maximum umber of the new Dialog Shares to be issued under the Proposed ESOS, provided always that: (not more than 50% of the new Dialog Shares available under the Proposed ESOS shall be allocated, in aggregate, to the Executive Directors and senior management of Dialog and its subsidiaries (excluding subsidiaries which are dormant); and (ii) not more than 10% of the new Dialog Shares available under the Proposed ESOS shall be allocated to him, if he, either singly or collectively through persons connected with him, holds 20% or more of the issued and paid-up capital of Dialog, and subject always to such terms and conditions and/or any adjustments which may be made in accordance with the provisions of the By-Laws of the Proposed ESOS." ORDINARY RESOLUTION 4 PROPOSED ISSUE OF OPTIONS TO CHEW ENG KAR “THAT, subject to the passing of Ordinary Resolution 1, the Board of Directors of the Company be and is hereby authorised at any time, and from time to time, to offer and to grant to Chew Eng Kar, being the Executive Director of the Company, options to subscribe for up to 5% of the maximum number of the new Dialog Shares to be issued under the Proposed ESOS, provided always that: (not more than 50% of the new Dialog Shares available under the Proposed ESOS shall be allocated, in aggregate, to the Executive Directors and senior management of Dialog and its ‘subsidiaries (excluding subsidiaries which are dormant); and(ii) not more than 10% of the new Dialog Shares available under the Proposed ESOS shall be allocated to him, if he, either singly or collectively through persons connected with him, holds 20% or more of the issued and paid-up capital of Dialog, and subject always to such terms and conditions and/or any adjustments which may be made in accordance with the provisions of the By-Laws of the Proposed ESOS.” ORDINARY RESOLUTION 5 PROPOSED ISSUE OF OPTIONS TO ZAINAB BINTI MOHD SALLEH ‘THAT, subject to the passing of Ordinary Resolution 1, the Board of Directors of the Company be and is hereby authorised at any time, and from time to time, to offer and to grant to Zainab binti Mohd Salleh, being the Executive Director of the Company, options to subscribe for up to 5% of the ‘maximum number of the new Dialog Shares to be ssued under the Proposed ESOS, provided always that! () not more than 50% of the new Dialog Shares available under the Proposed ESOS shall be allocated, in aggregate, to the Executive Directors and senior management of Dialog and its ‘cubeidiariee (excluding eubeidiaries which are dormant); and (i) not more than 10% of the new Dialog Shares available under the Proposed ESOS shall be allocated to her, if she, either singly or collectively through persons connected with her, holds 20% or more of the issued and paid-up capital of Dialog, and subject always to such terms and conditions and/or any adjustments which may be made in accordance with the provisions of the By-Laws of the Proposed ESOS." ‘ORDINARY RESOLUTION 6 PROPOSED ISSUE OF OPTIONS TO HO KAM YONG “THAT, cubjact to the passing of Ordinary Resolition 1. the Board of Directors af the Company be and is hereby authorised at any time, and from time to time, to offer and to grant to Ho Kam Yong, being the Executive Director of the Company, options to subscribe for up to 5% of the maximum ‘number of the new Dialog Shares to be issued under the Proposed ESOS, provided always that: (not more than 50% of the new Dialog Shares available under the Proposed ESOS shall be allocated, in aggregate, to the Executive Directors and senior management of Dialog and its subsidiaries (excluding subsidiaries which are dormant); and (ii) not more than 10% of the new Dialog Shares available under the Proposed [SOS shall be allocated to her, if she, either singly or collectively through persons connected with her, holds 20% of more of the issued and paid-up capital of Dialog, and subject always to such terms and conditions and/or any adjustments which may be made in accordance with the provisions of the By-Laws of the Proposed ESOS." By Order of the Board DIALOG GROUP BERHAD CHEW ENG KAR (MIA 4757) ZAINAB BINT! MOHD. SALLEH (MIA 7872) LIM HOG! MOO! (MAICSA 0799764) Joint Company Secretaries Petaling Jaya 5 July 2007Notes: ( Amember of the Company entitled to attend and vole at the meeting is entitled to appoint @ proxy to attend and vote for his stead. A member of the Company who is an authorised nominee as defined under the Secuntios Inductry (Central Depositorios) Act 1001, may appoint at least one (4) proxy in respect of each securities aecount it hoids with ordinary shares of the Company standing tothe credit ofthe said securities account. i) A proxy need not be member of the Company. (i) The instrument appointing a proxy shall be in writing under the hand of the appointer or of his attorney duly authorised in wnting or if the sppotnter is a corporation under its Common Seal or the hand of an officer is dy ‘authorised officer or attorney. (iv) The instrument eppointing a proxy shall be deemed fo confer authority to demand or jin in demanding @ pol, (An instrument appointing 2 proxy must be deposited at the Registered Office of the Company at 109, Block G, Phileo Damansara 1, No.9, Jalan 16/11, 46350 Petaling Jaya, Pusat Dagang Seksyen 16, Selangor Darul Ehsan, Malaysia not less than 48 hours before the time appointed for holding the meeting or any adjoumment thereof.wena eGo ane ee ee ne ee en eee een ne mene fe)P\melep DIALOG GROUP BERHAD (1726941) PROXY FORM (Incorporated in Malaysia) (.¢Passporvcompany Nop. Being a member of DIALOG GROUP BERHAD hereby appoint. |. ;Passport No. Ofose Or failing him, the Chatman of the Meeting as my/our proxy to vote for mefus on my/our behalf at the Extraordinary General Meeting of the Company to be held at the Ballroom 2, LG Level, Eastin Hotel, 13 Jalan 16/11, Pusat Dagang ‘Seksyen 16, 46350 Petalina Java, Selangor Darul Ehsan on Wednesday, 25 July 2007 at 10.30 am. Please indicate with "x" how you wish your vote to be cast. No. | ORDINARY RESOLUTIONS FOR AGAINST 1, | PROPOSED EMPLOYEES’ SHARE OPTION SCHEME 2. | PROPOSED ISSUE OF OPTIONS TO NGAU BOON KEAT 3. | PROPOSED ISSUE OF OPTIONS TO CHAN YEW KAI 4. | PROPOSED ISSUE OF OPTIONS TO CHEW ENG KAR 5. | PROPOSED ISSUE OF OPTIONS TO ZAINAB BINT! MOHD SALLEH 6._| PROPOSED ISSUE OF OPTIONS TO HO KAM YONG Dated ths .. oaday of. . 2007 No. of Ordinary Shares Held Signature/Gommon Seal of shareholders) Notes: @ A mombor of the Company entitied to attend and vote at the masting ie entitled to appoint a proxy to attond ‘and vote for his stead. A member of the Company who is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, may eppoint atleast one (1) proxy in respect of each securities account it ‘holds with ordinary shares of the Company standing io the credit ofthe said securtias account. (A pny nnad nathan mamhar of tha Company (ii) This instrument appointing @ proxy shall be in wrting under the hand of the appointer or of his attomey duly authorised in wring or if the appointer is a corporation under its Common Seal or the hand of an officer its duly authorised officer or attorney. (¥) This instrument appointing @ proxy shall be deemed to confer authority to demand or join in demanding a pol (Y) This instrument appointing @ proxy must be deposited at the Registered Office of the Company at 109, Block G, Phileo Damansara 1, No. 9, Jalan 16/11, 46350 Petaling Jaya, Pusat Dagang Seksyen 16, Selangor Darul Ehsan, Malaysia not less than 48 hours before the lime appointed for holding the meeting or any ‘adjournment thereof. (vi) Unless voting instructions are indicated in the spaces provided above, the proxy may vote as he thinks ft“Then fold have AFFIX ‘STAMP The Company Secretary Dialog Group Berhad (Company No. 178654-Y) 109, Block G, Phileo Damansara 1 No. 9, Jalan 16/11, 46350 Petaling Jaya Selangor Darul Ehsan Malaysia