Ann: WAV/RULE: THL: THL - Waiver from NZSX Listin

• Release Date: 26/04/13 18:26
• Summary: WAV/RULE: THL: THL - Waiver from NZSX Listing Rule 7.6.1
• Price Sensitive: No
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THL
26/04/2013 16:26
WAV/RULE

REL: 1626 HRS Tourism Holdings Limited

WAV/RULE: THL: THL - Waiver from NZSX Listing Rule 7.6.1

26 April 2013

NZX Regulation Decision
Tourism Holdings Limited
 Application for Ruling and Waivers from NZSX Listing Rule 7.6.1

Background

1. Tourism Holdings Limited ("THL") is a Listed Issuer with ordinary shares
Quoted on the NZX Main Board.

2. In September 2006, THL established the Tourism Holdings Long Term
Incentive Scheme ("2006 Scheme") and in June 2009, THL replaced the 2006
Scheme with the 2009 Tourism Holdings Long Term Incentive Scheme ("2009
Scheme").

3. In July 2009, THL was granted a waiver ("2009 Waiver") from Listing Rule
7.6.1 ("Rule") by NZX Regulation ("NZXR") to allow it to redeem:

"(a) The 1,200,000 redeemable ordinary shares held by the Trustee now; and

(b) Any further redeemable ordinary shares issued for the purpose of the
Scheme which may no longer be required for the purposes of the Scheme because
an executive has ceased to be employed by the THL group before requiring a
transfer of those shares, or because an executive does not call for a
transfer of shares within the time allowed by the Scheme. "

The wording of the 2009 Waiver only applies to the 2006 Scheme and does not
extend to the 2009 Scheme. Accordingly, THL has applied for an amendment to
the terms of the 2009 Waiver, to cover the 2009 Scheme.

4. The terms of the 2006 Scheme and the 2009 Scheme are similar in the
following respects:

(a) Under both the 2006 Scheme and the 2009 Scheme, THL issues redeemable
ordinary shares ("Redeemable Shares") to THL Corporate Trustee Limited
("Trustee"), which is a wholly owned subsidiary of THL. Those shares are held
by the Trustee on trust for certain executives of THL;

(b) The Redeemable Shares are not quoted on the NZX Main Board, but may be
converted, in accordance with the terms of the 2006 Scheme or the 2009
Scheme, into THL ordinary shares, upon their transfer from the Trustee to the
relevant executive;

(c) Each executive is entitled to call for a transfer of the shares held for
that executive, in installments after certain time periods have passed; and

(d) Each executive is entitled to call for a transfer only if the executive
is still employed by the THL group at the date on which the transfer is
called.

5. The main differences between the 2006 Scheme and the 2009 Scheme concern
the time periods for the transfer of the Redeemable Shares and the way the
issue price is calculated:

(a) Under the 2006 Scheme:

i. the relevant executives are entitled to request a transfer of Redeemable
Shares three, four and five years after their issue date, with the final date
to request an transfer being seven years after issue; and

ii. the issue price is calculated by reference to the volume weighted average
sale price of ordinary shares trading on the NZX Main Board on the last
trading day before the offer.

(b) Under the 2009 Scheme:

i. the relevant executives are entitled to request a transfer of Redeemable
Shares two, three and four years after their issue date, with the final date
to request an transfer being six years after issue; and

ii. the issue price is calculated by reference to the mean middle price of
ordinary shares trading on the NZX Main Board over the 10 days preceding the
offer.

Application

6. THL seeks an extension to the 2009 Waiver from Rule 7.6.1, so that the
2009 Waiver will also apply to the 2009 Scheme. THL also seeks an amendment
to the waiver in respect of both the 2006 Scheme and the 2009 Scheme, to
allow an executive employed by THL to voluntarily surrender the Redeemable
Shares held by the Trustee on his or her behalf prior to their expiration.

7. THL provided the following reasons in support of its application for the
2009 Waiver, which it submits apply equally to the present application:

(a) Rule 7.6.1 does not permit the redemption of the shares in question. The
position is:

i. Rule 7.6.1(f) allows THL to acquire equity securities up to 15% of the
total number of equity securities of the relevant class in any year. In this
case, by virtue of Rule 7.6.1(k), Redeemable Shares are deemed to be of the
same class as ordinary shares, because they may convert into ordinary shares
if they are transferred to executives. THL has 98 million THL ordinary shares
on issue , so that the number of shares involved was well under 15%;

ii. However, "acquire" and "redeem" are distinguished, and used differently,
in Rule 7.6.1. "Acquire" as used in Rule 7.6.1(f) does not include "redeem".
This is made clear by the reference to section 60(1)(b)(ii) of the Companies
Act in the opening words of Rule 7.6.1(f); and

iii. An acquisition under Rule 7.6.1(f) may not be made from a person who is
a director or Associated Person of a director of THL. The directors of the
Trustee are also directors of THL and, accordingly, the Trustee is an
Associated Person of a director of THL;

(b) Rule 7.6.1(f) was amended, in the amendments to the Rules introduced in
April 2009, to remove the restriction on buybacks of shares from employees.
The consultation paper released by NZX said:

Employee Share Schemes and Stock Issuances
NZX has received feedback that the operation of the provisions relating to
Employee share schemes generally is a cause of some frustration and excessive
expense for Listed Issuers, specifically in respect of buybacks of securities
under employee share schemes. NZX proposes to make the operation of buybacks
more efficient by amending Rule 7.6.1 to remove the restriction on the
buyback of shares from employees.

(c) With reference to the above extract, there is no difference in principle
between a buyback of shares, and a redemption of shares. In each case, the
purpose is to cancel shares which have been issued for the purpose of an
employee share scheme and which are no longer required for that purpose;

(d) The shares in question are of no material economic or other significance.
The total amount paid up is $12,000 . They carry votes, which are
proportionate to the amount paid up on them, as required by Rule 8.1.5. That
vote is exercisable by the Trustee, which is controlled by THL. Dividends
payable on the shares are also proportionate to the amount paid up on them;

(e) The fact that the shares are held by an Associated Person of a director
is irrelevant to the proposal to redeem them. The policy objective of Rule
7.6.1(f)(i) is to ensure that shares are not bought back from entities in
which a director has an economic interest without shareholder approval. Here
the directors have no economic interest in the Trustee (or of course in the
shares held by the Trustee as trustee for executives); they act as directors
of the Trustee in the course of their duties as directors of THL, and not
because of any personal interest; and

(f) The granting of the waiver would have no adverse effect on shareholders.
The shares in question are of no significance to shareholders or to the
market. It is in the interests of THL, and thus of shareholders, that the
position be "tidied" by the cancellation of shares in question. If THL were
to hold a shareholders meeting to consider a resolution to authorise
redemption of the shares, that would have involved expense, time and effort
in order to authorise something which can be of no interest or concern to
shareholders.

8. In support of the present application, THL submits that:

(a) When THL sought the 2009 Waiver, it expected that this would also apply
to the 2009 Scheme. However, the wording of the 2009 Waiver makes it
uncertain whether this does in fact apply to the 2009 Scheme;

(b) The 2006 Scheme and 2009 Scheme are materially the same (apart from the
differences described in paragraph 5 above), and the reasons relied on by
NZXR in respect of the 2009 Waiver apply equally to the 2009 Scheme;

(c) THL is considering amending the terms of the 2006 Scheme and 2009 Scheme
to allow executives to voluntarily surrender their rights to request a
transfer of any Redeemable Shares under the schemes and to receive back their
$0.01 per Redeemable Share; and

(d) Because the effect of an executive voluntarily surrending his or her
rights to seek a transfer of Redeemable Shares is the same as it would be if
the executive ceased to be employed by THL or failed to make a call on the
Reedemable Shares within the time periods allowed by the scheme, THL has
submitted that the reasons given by NZX Regulation in granting the 2009
Waiver are equally applicable to the current application.

Rule
9. Rule 7.6.1 provides:
"An Issuer shall not acquire or redeem Equity Securities of that Issuer other
than by way of:

(a)  an acquisition effected by offers made by the Issuer through NZX's order
matching market, or through the order matching market of a Recognised Stock
Exchange; or

(b)  an acquisition effected in compliance with section 60(1)(a) (read
together with section 60(2)) of the Companies Act 1993; or

(c)  an acquisition of the nature referred to in section 61(7) of the
Companies Act 1993; or

(d)  an acquisition or redemption approved in accordance with Rule 7.6.5; or

(e)  an acquisition required by a shareholder of the Issuer pursuant to
sections 110 or 118 of the Companies Act 1993; or

(f)  an acquisition effected in compliance with section 60(1)(b)(ii) (read
together with section 61) of the Companies Act 1993 and:

(i)  is made from any person who is not a Director or an Associated Person of
a Director of the Issuer; and

(ii)  the total number of Equity Securities of the same Class acquired
together with all other Equity Securities of the same Class as those Equity
Securities that are to be acquired, pursuant to this Rule 7.6.1(f) during the
shorter of the period of 12 months preceding the date of the acquisition and
the period from the date on which the Issuer was listed to the date of the
acquisition, will not exceed 15% of the total number of Equity Securities of
that Class on issue at the commencement of that period; or

(g)  a redemption from a holder who holds less than a Minimum Holding; or

(h)  a redemption of Equity Securities issued:

(i)  before 1 September 1994; or

(ii)  in compliance with Rule 7.3.1(a) or Rule 7.3.4, where the Issuer is
bound or entitled to redeem those Equity Securities pursuant to their terms
of issue; or

(i)  a redemption in compliance with section 69(1)(a) of the Companies Act
1993; or

(j)  a redemption of Equity Securities that are Debt Securities which may be
Converted into shares in an Issuer which is a company, and, before that
Conversion, they are redeemed in cash;

Provided that for the purposes of Rule 7.6.1(f):

(k)  Securities which will, or may, convert to other Equity Securities shall
be deemed  to be of the same Class as, and to correspond in number to,
Securities into which they will, or may, convert; and

(l)  where the Conversion ratio is fixed by reference to the market price of
the
underlying Securities, the market price for the purposes of Rule 7.6.1(f)
shall be the volume weighted average market price over the 20 Business Days
before the earlier of the day the acquisition is entered into or announced to
the market."

Decision
10. On the basis that the information provided to NZXR is full and accurate
in all material respects, NZXR hereby revokes the 2009 Waiver and grants THL
a new waiver from Rule 7.6.1, to allow it to redeem:
Any Redeemable Shares issued for the purpose of the Tourism Holdings Long
Term Incentive Scheme 2006 or the Tourism Holdings Long Term Incentive Scheme
2009 ("Scheme"), and any further Redeemable Shares issued for the purposes of
the Scheme, which may no longer be required for the purposes of the Scheme
because:

i. an executive has ceased to be employed by the THL group before requiring a
transfer of those shares; or

ii. because an executive does not call for a transfer of shares within the
time allowed by the Scheme; or

iii. an executive otherwise surrenders or forfeits any rights under the
Scheme, including the right to call for a transfer.

Reasons
11. In coming to the decision to revoke the 2009 Waiver and grant THL a new
waiver from Rule 7.6.1, NZXR has considered the following matters:
(a) THL is prevented by Rule 7.6.1(f) from redeeming the shares because the
Trustee is an Associated Person of a director of THL. As was submitted by THL
in support of the 2009 Waiver, the policy behind Rule 7.6.1 is to ensure that
directors, or an entity in which a director has an economic interest in, do
not benefit from an acquisition or redemption of the company's shares without
shareholder approval;

(b) THL has shown that this concern does not arise in respect of the 2009
Waiver or the present application. No director of THL has an economic
interest in the Trustee. They are only interested so far as they are
directors appointed for the purpose of the Scheme;

(c) NZXR considers that the effect of an executive voluntarily surrending his
or her rights to seek a transfer of Redeemable Shares is the same as it would
be if the executive ceased to be employed by THL or failed to make a call on
the Reedemable Shares within the time periods allowed by the scheme.
Therefore, the reasons submitted by THL in support of its application for the
2009 Waiver are equally applicable to the current application;

(d) Accordingly, THL has shown that the policy behind Rule 7.6.1(f) will not
be impugned by the revocation of the 2009 Waiver and the granting of a new
waiver from Rule 7.6.1 applying to both the 2006 Scheme and the 2009 Scheme;
and

(e) As the policy of the Rule will not be impugned by the granting of such a
waiver, and to not grant such a waiver would impose an unnecessary cost on
the issuer, THL has satisfied NZXR that the circumstances are such that it is
appropriate to exercise its discretion under Rule 1.11.

ENDS.
End CA:00235568 For:THL    Type:WAV/RULE   Time:2013-04-26 16:26:52