Enclosure 1 Capital Increase Report Form Advanced Info Service Public Company Limited November 13, 2001 __________________________ We, Advanced Info Service Public Company Limited (the "Company"), hereby report on the resolution of the Board of Directors No. 8/2001, held on November 13, 2001 from 10.00 a.m. to 12.00 p.m. in respect of a share allotment as follows: 1. Capital increase The Board of Directors has approved the allotment of 14,000,000 unissued ordinary shares, at the par value of 1 Baht each, totaling 14,000,000 Baht, to support the exercise of warrants, to be issued to the Company's directors, employees and advisors, resulting in increase of the Company's paid-up capital from 2,935,000,000 Baht to 2,949,000,000 Baht. 2. Allotment of new shares The Board of Directors has resolved to allot 14,000,000 unissued ordinary shares, at the par value of 1 Baht each, totaling 14,000,000 Baht, to support the exercise of warrants to be issued to the Company's directors, employees and advisors. Such allotment will be proposed to the shareholder for consideration and approval, details as follows: 2.1 The details of the allotment Allotted to Number Ratio Sale price Subscription Note per share and payment period (shares) (old : new) (Baht) Existing Shareholders - - - - - General public - - - - - Other persons (specify) - - - - - For supporting the 14,000,000 1:1 Exercise price is closing conversion price of shares traded in the /exercise of the Stock Exchange of warrant issued to Thailand as of the business directors, day prior to the date of employees and issuance and offer warrants advisors for sale - - Note The details of the ESOP is shown in Attachment 1. The Executive Committee or the person(s) assigned by the Board of Directors are authorized to consider and prescribe other details relevant to the issuance of the warrants, including seeking approvals from the competent authorized authorities and performing any other necessary actions related to the issuance of the warrants. 2.2 The Company's plan in case there is a fraction of shares remaining -None- 2.3 The remaining unissued shares is 2,051,000,0000 shares with par value of 1 Baht each, totaling 2,051,000,000 Baht. 3. Schedule for Shareholders Meeting to approve the capital increase/ allotment The Extraordinary General Meeting of Shareholders No. 4/2001 will be held on December 19, 2001, at 10.30 a.m. at the Auditorium Room, 19th Floor, Shinnawatra 1 Tower, Paholyothin Road, Samsennai, Payathai, Bangkok 10400. The Company will close the share register book on November 29, 2001 at 12.00 p.m. in order to determine the rights of shareholders to attend and vote, until adjournment of the meeting. 4. Approval of the capital increase/ share allotment by relevant governmental agency and conditions thereto (if any) The Company will register the increase of paid-up capital at the Ministry of Commerce when the warrants to ordinary shares are exercised and seek approvals from the Stock Exchange of Thailand to list such newly issued ordinary shares as listed securities and trading in the Stock Exchange of Thailand. 5. Objectives of the capital increase and plans for utilizing proceeds received from the capital increase The Company will use the proceeds from exercise of warrants as its working capital. 6. Benefit to the Company from the capital increase/ share allotment: The objective of the ESOP is to compensate and motivate the directors, employees, and advisors to perform their duties in the best interests of the Company. This should in turn bring about long-term benefit to the Company, as well as retain them with the Company. 7. Benefit to the shareholders from the capital increase/share allotment: The objective of the ESOP is to compensate and motivate the directors, employees, and advisors to perform their duties in the best interests of the Company. This should in turn bring about long-term benefit to the Company, as well as retain them with the Company, resulting in improvement of the Company's performance. The newly issued shares from exercise of warrants will have the same rights as that of the increased shares, previously issued, and be entitled to receive dividends from the date that their name are listed in the share register book submitted to the Ministry of Commerce. 8. Other details necessary for shareholders to approve the capital increase/share allotment: -None- 9. Action plan after the Board of Directors of the Company passed a resolution approving the capital increase or allotment of new shares: -See Attachment 2- The Company hereby certifies that the information contained in this report form is true and complete in all respects. (To be signed by the authorized directors who are authorized to sign on behalf of the Company with the Company's seal affixed) Signed authorized director ( ) Director Signed authorized director ( ) Director Attachment 1 Advanced Info Service Public Company Limited Details of the program regarding the issuance and offering of warrants to purchase ordinary shares to directors, employees and advisors of the Company (Employee Stock Option Plan ESOP) 1. Objectives and necessities of offering securities to directors, employees and advisors of the Company The objective of the ESOP is to compensate and motivate the directors, employees, and advisors to perform their duties in the best interests of the Company. This should in turn bring about long-term benefit to the Company, as well as retain them with the Company. The overall program consists of 5 plans during a period of 5 years. The Company will issue and offer warrants to directors, employees, and advisors of the Company once a year, for 5 consecutive years. The terms of warrants issued each year will not exceed 5 years from the date of issuance, while other details of warrants will be similar for all five issuance. The warrant issuance and allocation each year are subject to approvals in the Board of Directors and Shareholders' meetings. Total amount of warrants to be issued and offered during the 5-year period is approximately 51,400,000 units, implying that about 51,400,000 ordinary shares (at THB1 par value) are to be reserved for the exercise of rights pursuant to the warrants. These common shares account for about 1.75% of the total paid-up shares. However, the issuance and offering of warrants to directors, employees and advisors of the Company shall be approved by the shareholders' meeting and shall be undertaken in accordance with laws governing securities and exchange and relevant regulations. Currently, the Securities and Exchange Commission ("the SEC") has issued the Notification No. KorJor. 36/2544 Re: Offering of Newly Issued Securities to Directors or Employees dated October 19, 2001 ("Notification of the SEC") to govern such offering. The material condition in the Notification of the SEC is that the issuance and offering of warrants to directors or employees shall be completed within one year from the date of SEC's approval. Accordingly, the Company shall propose the program in the shareholders' meeting for approval each year during the 5-year period and the Company shall obtain a prior approval from the SEC for each offering. Details of warrants particular to the program in the first year, which is to be proposed to the shareholders' meeting appear below. Meanwhile, the Company expects to use the proceeds from the exercise of rights pursuant to warrants as working capital. 2. Preliminary Details of Warrants Type of Warrants Warrants to purchase the Company's ordinary shares, in registered form and non-transferable unless from the subrogated securities purchaser or by hereditary transfer Total Number of Warrants to be Offered 14,000,000 units Offering Price per Unit Baht 0 (zero Baht) Offering Period The offering shall be completed within one year from the date on which the program is approved by the SEC. Terms Not exceeding 5 years from the issue and offer date. Reserved Shares 14,000,000 shares (at the par value of Baht 1), or 0.48 percent of the total issued shares. Warrant Allocation Method Allocation of warrants to the Company's directors, employees and advisors, or allocation of warrants to the subrogated securities purchaser for further allocation to the Company's directors, employees and advisors, which shall be determined by the Board of Directors, are subject to the following conditions: 1. The Board of Directors shall determine the names and the number of warrants to be allocated to each of the Company's directors, employees, and advisors who are entitled to receive such warrants. However, the number of warrants to be allocated to those directors, employees, and advisors shall not exceed the number of warrants approved by the Shareholders Meeting's resolution. 2. The Board of Directors shall submit the names and the number of warrants to be allocated to the Company's directors, employees, and advisors to the subrogated securities purchaser for further allocation. 3. Warrants held by the subrogated securities purchaser will be expired one year after the date on which the program is approved by the SEC. Exercise Ratio One warrant per one ordinary share Exercise Price Closing price of the Company's shares traded on the Stock Exchange of Thailand on the business day prior to the date of the issuing and offering the warrants Issuing and Offering Date The Company's Executive Committee will determine the date of issuing and offering of warrants Exercise Period The Company's directors, employees and advisors could exercise the rights of the warrants to purchase the Company's ordinary shares as shown in the following details: First Year Directors, employees and advisors are entitled to exercise one-third of their allocated warrants to purchase ordinary shares one year after the warrants are issued to them, until the warrants are expired. In case the exercise of rights pursuant to warrants creates a fraction of share(s) less than the board lot determined by the Stock Exchange of Thailand, such fraction will be exercisable at the last exercise of rights. Second Year Directors, employees and advisors are entitled to exercise one-third of their allocated warrants to purchase ordinary shares two-year after the warrants are issued to them, until the warrants are expired. In case the exercise of rights pursuant to warrants creates a fraction of share(s) less than the board lot determined by the Stock Exchange of Thailand, such fraction will be exercisable at the last exercise of rights. Third Year Directors, employees and advisors are entitled to exercise the remaining of their allocated warrants to purchase ordinary shares three-year after the warrants are issued to them, until the warrants are expired. In case the exercise of rights pursuant to warrants creates a fraction of share(s) less than the board lot determined by the Stock Exchange of Thailand, such fraction will be exercisable at the last exercise of rights. Assistance from the Company in Respect of Sources of Funds for Directors, Employees and Advisors -None- Rights and Interests Other than those Normal Rights and Interests from Ordinary Shares -None- 3. Other Principle and Conditions for Exercise of Warrants 3.1 Exercise Period of Warrants Directors, employees and advisors of the company may intend to exercise their rights on the date of exercise and during the exercise hours, provided that for the Last Exercise Period, the intention will be made 15 days prior to the Last Exercise Period and can be made until the last day of the time period for the Last Exercise Period. Ordinary shares purchased in every exercise of warrants will be in whole number of a trading unit on the main board of the Stock Exchange of Thailand, except for the exercise of rights for the Last Exercise Period. The exercise date pursuant to warrants shall be made onto the last five Business Days of every month as shall be determined by the Executive Committee. 3.2 Exercise Date and Time Between 09.00 a.m. to 4.00 p.m. of any Business Day of the Company in every exercise period ("Exercise Date") 3.3 Qualifications of Directors, Employees and Advisors Eligible for Warrant Allocation 3.3.1 Any director, employee or advisor of the Company with a minimum of one year of service, and not an employee who is sent from a joint venture on a temporary term-basis operation; 3.3.2 Any selected director, employee or advisor who is beneficial to the Company (as the case may be); 3.3.3 In the case of any exception not pursuant to Clauses 3.3.1 and 3.3.2, it will be propose to the meeting of Executive Committee for special consideration. 3.3.4 The number of warrants as determined by the Company allocated to the respective directors, employees and/or advisors of the Company will not necessarily be in the same amount, but will be varied based on the position, work experience, years of service, performance and potential, as well as benefits providing to the Company. 3.4 Warrant Allocation Obligations between the Company and Directors, Employees and Advisors of he Company 3.4.1 If any director or advisor of the Company vacate of office or any employee retire from the Company pursuant to the Company's work rules, prior to exercising the rights under the warrants, such vacated directors or advisors, retired employee are entitled to exercise their warrants until the term of warrants. 3.4.2 If any director, employee or advisor resign from the Company due to the Company's order of transfer, such director, employee or advisor shall be entitled to exercise their warrants to purchase ordinary shares of the Company only the allowed portion and are not entitled to exercise their warrants to purchase the remaining ordinary shares which are not due. 3.4.3 If any director, employee or advisor of the Company die or disappear, such warrants shall then pass on to the person named as executor or beneficiary of the deceased or disappeared director, employee or advisor, as the case may be. The person will be entitled to exercise their warrants to purchase ordinary shares of the Company only the allowed portion, and are not entitled to exercise their warrants to purchase the remaining ordinary shares which are not due. 3.4.4 If any director or advisor resign from the Company prior to expiration of the term of office or any employee resign from the Company for any reason other than as specified in Clauses 3.4.1, 3.4.2, or 3.4.3 above, such director, employee and advisor shall be entitled to exercise their warrants to purchase ordinary shares of the Company only the allowed portion within three months after such director, employee and advisor resigned from their offices. Remaining warrants which any director, employee or advisor is unable to exercise for any of the reasons as stipulated in Clauses 3.4.2, 3.4.3 or 3.4.4 shall be submitted to the Company for cancellation. 3.5 In Case of Un-Excercise of Warrants In case directors, employees or advisors of the Company do not exercise all or some of warrants and terms of warrants end, it is deemed that the directors, employees or advisors waive their rights on such un-excercised warrants. In this respect, such directors, employees or advisors shall not be entitled to claim any compensation from the Company. 4. Effects upon Shareholders from Issuance of Warrants and Offer for Sale to Directors, , Employees and Advisors of the Company on this Occasion 4.1 Effects upon Price Dilution due to the Exercise of Rights to Purchase Shares by Directors, Employees and Advisors The issuance and offering of warrants will not create any effect upon price dilution because the exercise price is determined as the closing price of the Company's shares, which are traded in the Stock Market of Thailand on the Business Day prior to the day determined by the Company as the issuance and offering date. 4.2 Effects upon Existing Shareholders due to Reduced Ownership Ratio or Control Dilution in case Warrants are Exercised by All Directors, Employees and Advisors as Calculated from the Presently Paid-up Capital: Number of the total issued shares = 2,935 million shares (at a par value of B1 each) Number of all shares from warrant exercise = 14 million shares (at a par value of B1 each) Total number of shares after exercise of right = 2,949 million shares (at a par value of B1 each) Ratio of the existing shareholders after exercise of warrants = 99.53 percent 4.3 The Amount of Reserved Shares for Exercise of Warrants Allocated to Directors, Employees and Advisors at the Rate not Exceeding 5 Percent of the Total Issued Shares on the Date of Applying for Approval of the Office Number of the total issued shares = 2,935 million shares (at a par value of B1 each) Number of reserved shares for the exercise of warrant = 14 million shares to be allocated to directors, employees and advisors (at a par value of B1 each) Ratio of reserved shares to total issued shares = 0.48 percent of the total issued shares 4.4 Ordinary Shares Issued under the Warrants Exercised Shall have the Same Rights and Status as Ordinary Shares Previously Issued by the Company in All Respects. 4.5 The List of All Directors to Be Allocated Warrants and Employees and Advisors who are eligible to be allocated Warrants at the Rate Exceeding 5 Percent of Warrant To Be Issued and Offered Name Number of Allocated Warrants (Unit) % of Total Allocated Warrants 1.Mr. Somprasong Boonyachai Director and Chairman of the Executive Committee Wireless Business not exceeding 1,600,000 not exceeding 11.43% 2.Mr. Vikrom Sriprataks Director and President of Digital Phone Ltd. (Subsidiaries) not exceeding 1,520,000 not exceeding 10.86% 3.Mr. Suvimol Kaewkoon Director of Advanced Paging and Managing Director of Advanced Wireless Market Ltd. (Subsidiaries) not exceeding 1,300,000 not exceeding 9.29% 4.Ms. Yingluck Shinawatra Senior Executive Vice President - Wireless Corporate Planing not exceeding 1,250,000 not exceeding 8.93% 5. Mr. Songsak Premsuk Executive Vice President Marketing not exceeding 1,320,000 not exceeding 9.43% Note: The amount of warrants to be issued and offered will not exceed 14 million units. 5. Description and Conditions of Warrants Warrants issued and offered to directors, employees and advisors of the Company shall be subject to rules and conditions pursuant to the Securities and Exchange Commission Notification No. KorJor. 36/2544 Re: Offering of Newly Issued Securities to Directors or Employees dated October 19, 2001 Warrant holders are liable to pay taxes and duties pursuant to the Revenue Code and relevant laws in exercising their rights to purchase ordinary shares. After the Last Exercise Period, remaining warrants shall be deemed invalid and cannot be further exercised in any case. 6. Rights of Shareholders in Opposition of Offering for Sales of Warrants to Directors, Employees pursuant to Notification of the SEC No. KorJor. 36/2544 dated October 19, 2001 Pursuant to Clause 14 of the Notification of the SEC No. KorJor. 36/2544 dated October 19, 2001, the issuance and offering of warrants to directors or employees shall to be approved by the Shareholders' Meeting with votes of not less than three quarters of all votes of shareholders attending the meeting and having the right to vote and must not be opposed by shareholders with an aggregate number of shares exceeding 10 percent of all votes of shareholders attending the meeting. In case of issuance and offering warrants to any director, or employee at the rate exceeding five percent of all warrants offered pursuant to Clause 15 (2) of the Notification of the SEC above, the Shareholders' Meeting will consider the offer for sale with approval on an individual basis and the resolution must have not less than three quarters of all votes of shareholders attending the meeting and having the right to vote and must not be opposed by shareholders with an aggregate number of shares exceeding 5 percent of all votes of shareholders attending the meeting. 7. List of Directors and Employees Eligible to be Allocated Warrants at the Rate Exceeding Five Percent of All Warrants 7.1 Mr. Somprasong Boonyachai, the Director and Chairman of the Executive Committee Wireless Business, is eligible to be allocated warrants not exceeding 1,600,000 units, or not exceeding 11.43% of total ESOP program Opinion of the Board of Directors and the Remuneration Committee Detail of Opinion of the Remuneration Committee for ESOP program as presented in the attachment. The number of times attending the meetings and not attending the meetings of the director during the past year. Number of meetings 10, Attending 10 Times, Not attending - Times 7.2 Mr. Vikrom Sriprataks, the Director and President of Digital Phone Ltd. (Subsidiaries), is eligible to be allocated warrants not exceeding 1,520,000 units, or not exceeding 10.86% of total ESOP program Opinion of the Board of Directors and the Remuneration Committee Detail of Opinion of the Remuneration Committee for ESOP program as presented in the attachment. 7.3 Ms. Suvimol Kaewkoon, the Director of Advanced Paging and Managing Director of Advanced Wireless Market Ltd. (Subsidiaries) is eligible to be allocated warrants not exceeding 1,300,000 units, or not exceeding 9.29% of total ESOP program Opinion of the Board of Directors and the Remuneration Committee Detail of Opinion of the Remuneration Committee for ESOP program as presented in the attachment. 7.4 Ms. Yingluck Shinawatra, the Senior Executive Vice President Wireless Corporate Planning, is eligible to be allocated warrants not exceeding 1,250,000 units, or not exceeding 8.93% of total ESOP program Opinion of the Board of Directors and the Remuneration Committee Detail of Opinion of the Remuneration Committee for ESOP program as presented in the attachment. 7.5 Mr. Songsak Premsuk, the Executive Vice President Marketing, is eligible to be allocated warrants not exceeding 1,320,000 units, or not exceeding 9.43% of total ESOP program Opinion of the Board of Directors and the Remuneration Committee Detail of Opinion of the Remuneration Committee for ESOP program as presented in the attachment. Attachment 2 Schedule of Actions Date Actions November 13, 2001 Board of Director's Meeting for resolution to issue warrants to the directors, employees and advisers of the Company as well as allotment of new shares for supporting the exercise of the warrants to purchase the ordinary shares. November 14, 2001 Notify the Stock Exchange of Thailand of the resolution of the Board of Directors Meeting. November 29, 2001 Close the shareholder register book for suspension of share transfer for the right to attend the Extraordinary General Meeting of Shareholders No. 4/2001 December 19, 2001 The holding of the Extraordinary General Meeting of Shareholder No. 4/2001 within December 2001 Filling the Application for issuance and offer of the warrants, with the (more)