One-Stop HR Information Centre

Since Employee Share Option Scheme (ESOS) is categorised as a taxable income to the employee under Income Tax Act of Malaysia, in cases where a company offer its employees ESOS, the company will usually request its employees to sign a letter whereby the employees agree to declare the income earned from the ESOS on their own, in order to ease the tax administration of the company.

The sample of such letter is as follow:

<Employee Name and Address>

<Date>

<Company Name and Address>

Dear Sir

<Company Name ("the Company">

Employee Share Option Scheme ("ESOS")

Taxable Benefit

I refer to the Letter of Offer from the Company dated <date> granting me an option to subscribe for <number of unit> new ordinary shares in the Company at a subscription price of RMxx.xx per share. In relations to the above -mentioned matter, i have been informed of the Income Tax Act 1967, whereby the value of the benefit for each share option will be determined based on the difference between the market price on the sate the share option is exercised or exercisable, whichever is lower, and the said subscription price offered by the Company, and that the said benefit is liable to tax in the year the option is exercised.

I also refer to Public Ruling No. x/xxxx on Tax Treatment of Employee Share Option Scheme Benefit issued by Lembaga Hasil Dalam Negeri Malaysia which states that the employer must ensure the tax to be charged on the benefits that arises from the employee / executive share option scheme is deducted from the employee’s salary through the Monthly Tax Deductions. Alternatively, the employee may elect to pay by himself the income tax arising on the perquisite at the end of the year.

I hereby irrevocably confirm that I elect to pay by myself, the income tax chargeable on any perquisite / benefit that may arise from the above-mentioned ESOS.

Thank you.

Yours faithfully

<Signatory>

<Name>

<NRIC No. / Passport No.>

To: <Company Name>

Re: Acceptance of Option Offered

I have read the accompanying letter of offer and hereby accept the Option offered to me to subscribe for the number of ordinary shares of RMx.xx each in the Company at the Subscription Price of RMxx.xx. I agree to be bound by the terms and conditions of the Scheme as set out in the Bye-Laws.

I enclosed herewith *cheque <cheque No.> for / cash of RMx.xx, as consideration for the grant of the Option to me.

I understand and hereby agree to exercise the Option as set out in the Bye-Laws.

Name in full: <Employee Name>

No. of ordinary shares of RMx.xx each: <No. of Units>

Address: <Home Address of the Employee>

*NRIC No. / Passport No.: <xxxxx>

Nationality: <xxxxx>

Race: <xxxxx>

*Delete whichever not applicable.

<Signature>

<Date>

<Date>

<Name of Employee>

<Designation, Department>

Dear <Name>

<Company Name> (the "Company")

Executive Share Option Scheme ("ESOS)

Letter of Offer

We are pleased to inform you that you have been selected by the Board of Directors of the Company to participate in the Company ESOS ("the Scheme").

Based on the criteria set out in the bye-laws of the Scheme ("Bye-Laws"), the Option Committee is pleased to offer you an option ("the Option") to subscribe for up to the number of shares in the Company and at the Subscription Price set out below:

No. of ordinary shares of RMx.xx each: <number of share>

Subscription Price per ordinary share: RMxx.xx

Expiry Date of the Option: <Deadline>

The Option shall be subject to the terms and conditions of the Bye-Laws, a copy which is attached herewith. The Option is offered to you in your personal capacity as an Executive of the Company and its subsidiaries and, save as provided in the Bye-Laws, you shall not transfer, assign or dispose to any person, or create any charge, pledge, lien or other encumbrances whatsoever in respect of the Option or any part thereof.

In the event you resign from the Company or your employment or appointment with the Company is terminated for any reason whatsoever, the Option or the balance thereof remaining unexercised shall cease to have any effect.

You are also to note that the Option does not form part or constitute or shall in any way be construed as a term of your employment with the Company and its subsidiaries. Please note that under the Income Tax Act 1967, the value of the benefit for each share option will be determined based on the difference between the market price on the date the share option is exercised or exercisable, whichever is lower, and the subscription price offered by the employer, and that the said benefit is liable to tax in the year the option is exercised. For ease of administration, you are required to elect to pay by yourself any income tax arising on the said benefit.

If you wish to accept this offer, you must sign and return to the Company Secretary of the Company, the duplicate of this letter of offer together with a non-refundable sum of RMx.xx within xx days from the date of this letter, failing which this offer shall lapse.

Also enclosed together with this letter of offer is a form for exercise of option to subscribe for ordinary shares ("Subscription Form") to enable you to exercise the Option which may be exercised in whole or in part, on any business day before the Expiry Date of the Option. Further copies of Subscription Form may be obtained from the Company Secretarial Department.

Yours faithfully

On behalf of the Option Committee

<Name>

<Date>

<Name>

<Designation, Department>

Dear <Name>

Re: Voluntary Retrenchment

We refer to your voluntary retrenchment application form dated <date> and wish to inform you that the Management has accepted your application. As such, your service with the Company will terminate with effect from <date>.

To facilate you to find alternative employment, the Company is releasing you immediately. Nevertheless, you will be paid full salary in lieu of notice period including your unutilised annual leave in accordance with the provisions stated in the Letter of Employment. In addition, the Company will further compensate you Retrenchment Benefits and will be paid to you by cheque. Details of compensation is attached in Appendix I.

You are to collect your personal belongings and to return all company properties to <Name, Designation, Department> before leaving your working place.

Lastly, the Management would like to thank you for your service rendered to the Company in the past and wish you well in your future undertakings.

Your sincerely

<Name>

<Designation>

<Department>

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

Acknowledgement & Acceptance

I <Name, NRIC No.> accept and receive RMxxxxx (Cheque No.) as final payment for vountary retrenchment and hereby has no further claims against the Company on this matter.

<Date>

Witness by

<Name>

<Date>

Abuse of sick leave could be in different forms, such as pretending sick in order to obtain medical certificate, "buying" medical certificates from non-medical pratitioner or unethical medical practitioner, etc. No matter what is the actual intention of abusing of sick leave, it is a misconduct and disciplinary action could be taken against the employee, whether by serving the employee a warning letter, or dismissal of the employee, depending the seriousness of the abuse. If the employer, after investigation, has decided that the abuse does not justify dismissal, a warning letter as follow could be served to the employee:

<Date>

<Name>

<Address>

Re: Warning Letter - Abuse of Sick Leave

This letter serves an an official written reprimand on your abuse of sick leave.

On <date> at <time>, you called the office and informed that you were sick and unable to report to work for your schedule shift. Upon return to work on <date>, you submitted your medical certificate issued by <name of clinic / hospital>.

However, after clarifying with the personnel from <name of clinic / hospital>, it is proven that the medical certificate was not issued by such clinic / hospital. During a later discussion with you on this issue, you have also admitted in written that your friend has "sold" the medical certificate to you. Your acts above clearly indidated that you have abused your sick leave. The Company has therefore decided to reject your medical certificate dated <date> issued by <name of clinic / hospital>, and your unauthorised absence on <date> will be treated as unpaid leave, which will be reflected in your coming salary payout.

In the future, you are expected to be responsible with your use of sick leave. Failure to do so will result in further disciplinary action, which include termination.

Yours sincerely

<Name>

<Position>

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

Acknowledgement and Acceptance

I <Name>, <NRIC No.> understand and accept the content of the above.

<Signatory>

<Date>

According to Malaysia’s Employment Act 1955, each employee will be granted a maximum of 22 days’ sick leave per annum. The sick certificate must be certified by the registered medical practitioner. Generally, the employer will accept the medical certificate as long as it is issued by the registered medical practitioner. However, some employers will only accept the medical certificate issued by the employer’s appointed panel clinics. The employer has the right to clarify such sick certificate with the issuance clinics / hospital / medical practitioner if the medical certificate is suspected to be not genuine.

The maximum number of 22 days’ sick leave entitlement within one calendar year as stipulated in the Employment Act is to prevent the employees to abuse their medical leave entitlement. In the case if an employee obtains genuine medical leave but in excess of his entitlement, the Act grants the employer the right to issue a written reprimand for such excessive use of sick leave to the employee. The sample of such letter is as follow:

<Date>

<Name>

<Address>

Dear <Name>

Re: Excessive Use of Sick Leave

This is a written reprimand for excessive use of sick leave. The record indicates that you have been absent from work for 22 days so far this year (from date to date). The dates that you were absent are as follows:

<List dates absent>

Regular attendance is an essential functions of your job. Please notify the Company if you do have a serious health condition which is affecting your ability to report to work. If you fail to do so, and your attendance not improve, you will be subject to further disciplinary action up to and including discharge.

Yours sincerely

<Name>

<Position>

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

I <Name>, <NRIC No.> understand and accept the content of this letter.

The outbreak of H1N1 nationally and globally, and the increase of death toll has created worries among the people. Respective parties in response to this, have done the necessary prevention measurements such as having educational and awareness programs broadcast on TV / radio / newspaper or other media, encouraging people to wear masks at public area, and to wash hands more frequently. Some companies and schools even provide masks and sanitiser. The Government also provides the most efficient treatment to the suspended infected or infected group, by ensuring sufficient number of medical practitioner and medicine.

However, if unfortunately, despite the above prevention measurements, the staff / their dependents are still infected by H1N1, what should the Company does?

If the staff is infected by H1N1, and being hospitalised, no doubt he / she will be on medical leave. Even if the staff is not hospitalised due to whatsoever reason, but being granted medical leave by the medical practitioner, he / she will still be considered on medical leave.

How about if the staff’s family member is infected by H1N1, but the staff is not required to be self-quarantined based on the doctor’s jurisdiction? There might be risk to the Company and other staffs if the said staff is allowed to report to work as usual. If he / she is asked not to report to work for a period of time as determined by the Company, by deducting his annual leave entitlement, is it fair to him / her? In this case, the Company can consider to grant the staff compassionate leave or unrecorded leave of 3 days. By granting such leave to the staff, it would, firstly, shows sympathy of the Company to the staff, and secondly, as a step of self-quarantine for the staff whom family member is infected, at the same time to minimise the risk to the Company. Of course, the terms of granting this leave need to be spelt out by the Company in order to minimise abuse, for example, definition of family member, whether they stay under one roof, etc.

The Chairman’s role in a domestic inquiry is to chair the inquiry, and to make a decision of whether the accused is found guilty, together with the panel members, at the end of the inquiry.

The Chairman’s role / statement in chairing the inquiry are as follow:

The Chairman may start the inquiry with the following statement:

"The purpose of today’s inquiry is to allow the accused, in this case, <name>, an opportunity to state your case against the allegation leveled at you."

Thereafter, the Chairman shall proceed to introduce himself, the Panel Members, the Prosecutor (and perhaps, the Secretary).

The Chairman will then ask the accused whether he is accompanied by anyone for this hearing or will he be calling any witness (followed by answer).

The Prosecutor will then also be asked whether he will be calling any witness (followed by answer).

After that, the Chairman will lay out some ground rules for the inquiry, example are as follow:

• There will be no questions which are indecent or scandalous in nature.
• Any question intended to insult or which appear offensive shall not be allowed.
• Only relevant and material statements from witness are allowed.
• Exhibits and other documentary evidence which are relevant will be accepted.
• Only questions which are relevant to the charge are allowed by both parties.

After laid out the ground rules, the Chairman shall read the charge against the accused, as follow:

"The charge against you, <name of the accused>, that you <state the misconduct>. This allegation is very serious in nature and could lead to dismissal from employment. Do you, <name of the accused>, understand the charge and the consequences relating to this incident?" (followed by answer).

The Chairman will then asked the accused whether he plead guilty or otherwise. If the answer is not guilty, the Chairman will allow the Prosecutor to start the inquiry, which the Prosecutor will start by calling the 1st witness, and examine the 1st witness. After the 1st witness has given his statement, the Chairman will ask whether the accused have anything to cross-examine the 1st witness. After the accused cross-examined with the 1st witness, the Chairman will ask whether there is any other question from the Prosecutor or Panel Members. If there is no, the Chairman is to release the 1st witness. The same procedures will be applied on the subsequent witness (if any).

After all witnesses have given their statements, the Chairman shall proceed with the submission from both the accused and the Prosecutor respectively. Both Chairman and Panel Members may ask questions during the submission.

The Chairman will then conclude the hearing and make a decision whether the accused is found guilty together with the Panel Members.

It is not a common practice of most companies to grant their employees personal loan, take into consideration of the risk that may be faced by the Company when the employees fail to make repayment, or absconded, and the tedious procedures and cost that may incur in order to recover the default of such loan. However, if any personal loan is granted to an employee, it is advised that the repayment shall be deducted from the employee’s monthly salary, in order to minimise such defaults. For this purpose, an agreement shall be obtained from the employee before the loan amount is disbursed, which the sample of such agreement is as follow:

<Ref. No.>

<Date>

<Name>

<Designation / Department>

Dear <Name>,

Personal Loan

Please be informed that your application for a personal loan of <amount> from the Company as been approved.

Please note that the loan is granted on your agreement on your agreement to the following terms and conditions:

• That you shall repay the total loan disbursed through deductions from your monthly salary at <amount> per month commencing from <month, year> salary. In this regard, you are to authorise the Company to make monthly deduction of <amount> per month over <number of> instalments until full repayment of the loan sum of <amount>.
• If you leave the Company’s service due to resignation or dismissal / termination or the loan is being recalled / withdrawn, you shall repay the Company immediately on outstanding loan sum. For this purpose, the Company is entitled to set off from the outstanding balance loan sum against whatsoever monies due and payable by the Company to you.
• It is also agreed that should the Company be forced to seek legal advice / commence legal proceedings to enforce its rights under this agreement, the Company shall also be entitled to claim its solicitor-client fees in addition to the sums due and owing to it from you.

If you agree to the above, please acknowledge receipt of cheque for <amount> and to authorise the Company to deduct <amount> per month from your monthly salary commencing <month, year> until the total loan sum is repaid.

Yours faithfully,

<Company Signatory>

*************************************************************

Acknowledgement

I fully understand the terms and conditions and hereby acknowledge receipt of the cheque for the sum of <amount>. I also authorise the Company to make monthly deductions from my salary towards repayment of the loan as per Appendix 1 (Repayment Schedule shall be attached) enclosed.

<Employee Signatory>

<Date>

If the Board of Inquiry found an employee guilty after a domestic inquiry, and the Management has decided to dismiss the employee’s service, the following sample of dismissal letter is to serve to the employee:

<Ref.>

<Date>

<Name>

<Designation / Department>

Dear <Name>,

Dismissal

We refer to the Domestic Inquiry held on <date> on the specific allegation(s) levelled against you as stated in our letter of charge to you dated <date>.

We have carefully gone through the records of the inquiry, the related documents and finding of the Board of Inquiry, and concur with its findings that on the evidence recorded at the inquiry the charges levelled against you have been sufficiently proved (if not all the charges proved, state those which are proved).

As the charges levelled against you and proved against you at the inquiry being grave and serious, the appropriate punishment is dismissal. We have looked into your past record of service with the Company with a view to finding any extenuating circumstances, however, we regret that there are none.

In this circumstances, it has been decided to dismiss you from service. Accordingly, you are hereby dismissed from your service with the Company with effect from the date of this letter. You are required to return all company property under your possession to the Company, otherwise, appropriate reimbursement will have to be made by you to meet the cost of company property that are not returned by you.

After you have returned all company property under your possession, you may collect all monies due to you at Human Resource Department during normal office hours.

Thank you.

Yours sincerely,

<Signatory>