I mentioned 7.8c in the post above and just been looking at the PLAN again and thought it might be helpful to provide a summary, I hope I have got this right:
1. 7.8c was the price selected by the board to determine the maximum number of long term incentive shares that could be issued under the plan relative to salary (capped an initial notional value equal to about half of salary). The lower the share price selected, the greater the number of shares issued relative to salary. No short term incentive shares are to be issued.
2. The start date price from which performance and vesting criteria are to be measured is 1st Feb 2016 and the price was around 7.5c on that date.
3. For half of the rights issued all of them vest on achieving a 25% compound annual growth rate tested at the end of a three year period from the start date. That equals about 14.5c a share at the end of that period (note that except under change of control they can’t vest in between). 50% of them vest on achieving a 15% compound growth rate and that equals about 11.5c a share at the end of the period. Current price 9.7c.
5. For the other half or the rights issued the vesting performance measure relates to measuring performance against the ASX300. 75% above the ASX 300 in three years from the same start date for full vesting or 50% for half vesting and pro rata in between. This measure already looks to have achieved 25% in two months, but again they can’t vest in between the start and finish date.
6. In the event of change of control the end date reverts to the time of change of control, the ASX measure is dumped and all the rights will vest according to the conditions set for half the rights in 3 above.
7. The exercise price is NIL. Vesting means they are gifted shares upon the vesting criteria being reached.
8. Therefore, until vesting occurs there is no “skin in the game”at all. If criteria not achieved, rights don’t vest.
Oh dear, as I say, I do hope I have got this right. Please correct me if wrong. DYOR.
(20min delay)
