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

• Release Date: 07/08/12 19:17
• Summary: WAV/RULE: FPH: FPH - Waiver from NZSX Listing Rules 7.1.10, 7.1.16, 8.1.7
• Price Sensitive: No
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FPH
07/08/2012 17:17
WAV/RULE

REL: 1717 HRS Fisher & Paykel Healthcare Corporation Limited

WAV/RULE: FPH: FPH - Waiver from NZSX Listing Rules 7.1.10, 7.1.16, 8.1.7

NZX Market Supervision Decision
Fisher & Paykel Healthcare Corporation Limited
 Application for Waiver under NZSX Listing Rules 7.1.10, 7.1.16 and 8.1.7

Background

1. Fisher & Paykel Healthcare Corporation Limited ("FPH") is an NZSX Listed
Issuer. FPH intends to introduce the Fisher & Paykel Healthcare 2012
Performance Share Rights Plan (the "Plan") for the issue of performance share
rights ("Share Rights") to its executives.

2. Under the terms of the Plan selected executive employees of FPH ("Eligible
Executives") will be granted Share Rights which, when exercised may convert
on a one for one basis into fully paid ordinary shares in FPH. The Share
Rights and the shares issued on the exercise of those Share Rights will be
issued for a nil issue price.

3. Whether or not Share Rights issued under the Plan become exercisable, and
the number of Share Rights that may become exercisable, depends on FPH
meeting certain specified performance hurdles. Briefly, the performance
hurdles for the Share Rights proposed to be issued relate to the gross total
shareholder return ("TSR") achieved by FPH over the performance period
relative to the New Zealand gross returns of the Dow Jones US Select Medical
Equipment Index (the "Index").

4. The TSR of FPH will be calculated and compared against the Index return as
at certain determination dates. Performance will be determined for the period
running from the issue date of the Share Rights to the third anniversary of
the issue date (the "First Performance Period"); the fourth anniversary of
the issue date (the "Second performance period"); and the fifth anniversary
of the issue date (the "Third performance period"), (each a "Performance
Period").

5. Share Rights will be issued for no consideration. No consideration will be
payable on exercise of the Share Rights. One share will be issued for every
Share Right exercised (subject to adjustment to take into account the effect
of capital changes). Share Rights may be exercised during the 20 business
days from the date that the executive is notified that the Share Rights have
become exercisable following the end of the relevant Performance Period.

Application 1 - Listing Rule 7.1.10

6. FPH has approached NZX Market Supervision ("NZXMS") seeking a waiver from
the requirement in NZSX Listing Rule ("Rule") 7.1.10 that every Offering
Document, after stating that applications may be made to the Issuer, shall
state that they may be lodged with any Primary Market Participant, the
Organising Participant or any other channel approved by NZX (in that order)
in time to enable forwarding to the appropriate place prior to the
application closing date.

7. In support of its application for a waiver from Rule 7.1.10, FPH submits
that:

(a) The Share Rights and shares proposed to be offered pursuant to the Plan
will only be offered to Eligible Executives and will not be offered to the
general investing public. Consequently, it is FPH's intention to simplify the
process of subscribing for Share Rights for Eligible Executives by allowing
them to apply directly to FPH;

(b) Application to Primary Market Participants, Organising Participants and
other equivalent channels will not be necessary, because eligible executives
will more readily be able to lodge applications with FPH, than would
otherwise be the case for the general investing public in respect of a
general offer of securities;

(c) The inclusion of the statement required by Rule 7.1.10 in the Investment
Statement may cause confusion among Eligible Executives as to where the
applications should be lodged and may result in some eligible executives
wishing to participate, failing to lodge the applications appropriately;

(d) Any Eligible Executive who is in doubt as to how to deal with the
document will be able to seek advice from FPH. Additionally, the Securities
Act requirement that the Investment Statement include a statement that an
individual seek advice from a financial advisor will ensure that individuals
who are in doubt as to the document will be aware that there are avenues
available for further independent advice as to their investment decision; and

(e) Precedent for this application exists in NZXMS's decisions provided in
respect of GFN dated 11 August 2006, SCT dated 1 May 2009 and FPH dated 19
August 2011.
Rule 7.1.10

8. Rule 7.1.10 provides:

"Every Offering Document, after stating that applications may be made to the
Issuer, shall state that they may be lodged with any Primary Market
Participant, the Organising Participant or any other channel approved by NZX
(in that order) in time to enable forwarding to the appropriate place prior
to the application closing date."

Decision - Application 1

9. On the basis that the information provided to NZXMS is full and accurate
in all material respects, NZXMS grants FPH a waiver from Rule 7.1.10.
Reasons - Application 1

10. In coming to the decision to grant a waiver from Rule 7.1.10, NZXMS has
considered that:

(a) The notification of the ability to lodge applications in respect of the
Offer with Primary Market Participants, Organising Participants and other
equivalent channels approved by NZX is not necessary in this case. The Offer
is only being made to Eligible Executives who will more readily be able to
lodge applications with the Issuer than members of the public would be able
to in respect of a general offer of securities;

(b) As employees of FPH, any Eligible Executive who is in doubt as to how to
deal with the Investment Statement will be able to seek advice from FPH.
Additionally, the requirement of the Securities Regulations 2009 that an
Investment Statement include a statement that an individual seek investment
advice before committing oneself will ensure that Eligible Executives are
aware that there are avenues available for further independent advice as to
the investment decision; and

(c) There is Precedent for this decision in NZXMS's decisions provided in
respect of GFN dated 11 August 2006, SCT dated 1 May 2009 and FPH dated 19
August 2011.

Application 2 - Listing Rule 7.1.16

11. FPH has approached NZXMS seeking a waiver from the requirement in NZSX
Listing Rule 7.1.16 that every Offering Document for Equity Securities shall
specify the Directors' intentions and expectations as to an issuer's future
dividend policy.

12. In support of its application for a waiver from Rule 7.1.16, FPH submits
that:

(a) Rule 7.1.16 is generally only appropriate in the context of an initial
public offering;

(b) FPH's dividend policy will be most relevant when an Eligible Executive is
considering exercising Share Rights. It is not possible to identify the dates
when each Eligible Executive will be considering exercising Share Rights
because it will depend on the grant date for each Eligible Executive.
However, for each Eligible Executive the earliest the Share Rights could be
exercised will be 3 years from the grant date and the latest will be 5 years
from the grant date. FPH's current dividend policy may not be relevant to,
and may be misleading for, some or all Eligible Executives' decisions by that
time;

(c) It is intended that the Prospectus and Investment Statement for the Plan
are prepared pursuant to the Securities Act (Employee Share Purchase Schemes
- Listed Companies) Exemption Notice 2011 ("Exemption Notice"), which permits
the Prospectus and Investment Statement to be "evergreen", with the effect
that Share Rights may be offered to participants in the Plan from time to
time over an indefinite period. In order to comply with Rule 7.1.16, FPH
would incur unnecessary cost in having to continually update the Investment
Statement to reflect changes to its dividend policy. This would frustrate the
"evergreen" purpose of the Exemption Notice; and

(d) Precedent for this application exists in the NZXMS decision provided in
respect of CNZ dated 17 February 2005 and FPH dated 19 August 2011.
Rule 7.1.16

13. Rule 7.1.16 provides:

"Every Offering Document for Equity Securities shall specify the Directors'
intentions and expectations as to the Issuer's future dividend policy."

Decision - Application 2

14. On the basis that the information provided to NZXMS is full and accurate
in all material respects, NZXMS grants FPH a waiver from Rule 7.1.16, on the
condition that the Investment Statement in respect of the Plan contain a
statement as to where FPH's current dividend policy is located on its
website.

Reasons - Application 2

15. In coming to the decision to grant a waiver from Rule 7.1.16, NZXMS has
considered that:

(a) The policy objective behind Rule 7.1.16 is to ensure that investors are
provided with up-to-date information about an Issuer's dividend policy;

(b) Under the Plan, Eligible Executives will not be considering whether to
exercise their Share Rights for at least 3, 4 or 5 years from the date of the
Investment Statement. Therefore, FPH's current dividend policy may no longer
be accurate, and may be misleading for Eligible Executives when making at the
time of exercise, a decision as to whether or not to exercise their Share
Rights; and

(c) Requiring FPH to include a reference in its Investment Statement stating
where Eligible Executives are able to find the current dividend policy will
ensure that:

(i) Eligible Executives have access to up-to-date information about FPH's
dividend policy; and

(ii) FPH will not have to bear the compliance costs of continually updating
its Investment Statement to ensure the dividend policy remains current.

Application 3 - Listing Rule 8.1.7

16. FPH has approached NZXMS seeking a waiver from the requirement in NZSX
Listing Rule 8.1.7, which determines how an option's exercise price or number
of underlying securities may be adjusted to take account of the Rights
issues, to allow the terms of the Plan to confer on the Board of FPH the
power to adjust the number of shares to which an Eligible Executive is
entitled under the Plan, to take account of Rights issues.

17. In support of its application for a waiver from Rule 8.1.7, FPH submits
that:

(a) Rule 8.1.7 does not easily apply to the Plan as no exercise price is
payable should Eligible Executives be in a position to exercise their Share
Rights;

(b) The terms of the Plan permit the Board of FPH to make an appropriate
(discretionary) adjustment or variation to the terms of the Plan (e.g. an
adjustment to the number of shares issued in the exercise of Share Rights
issued under the Plan) so as to ensure, to the extent reasonably possible,
that holders of Share Rights receive the same benefit as shareholders receive
under the Rights issue (and vice versa). This adjustment or variation may not
be made if it would not be permitted by, or would otherwise be in breach, of
the Rules;

(c) The granting of a waiver will not have any material adverse effect on the

FPH shareholders as the purpose and effect of the waiver is consistent with
the purpose and effect of Rule 8.1.7, which is to enable the holders of share
rights to receive the same benefit as shareholders receive under a Rights
issue; and

(d) Precedent for this application exists in the NZXMS decision provided in
respect of SKC dated 3 October 2008.
Rule 8.1.7

18. Rule 8.1.7 provides:

"An Option must not confer the right to a change in the exercise price or
number of underlying Securities, except if that Option:

(a) was issued with the approval of holders of Quoted Equity Securities, then
the exercise price or number of underlying Securities may change in
accordance with the formula or provision contained in the terms of the Option
if there is a Rights issue to the holders of the underlying Securities; or

(b) was not issued with the approval of holders of Quoted Securities and
there is a Rights issue to the holders of the underlying Securities, then the
exercise price of that Option may be reduced according to the formula set out
as follows:

......
Provided that nothing in this Rule shall apply to any Option which was issued
prior to the coming into force of this Rule or Listing of an Issuer."

Decision - Application 3

19. On the basis that the information provided to NZXMS is full and accurate
in all material respects, NZXMS grants FPH a waiver from Rule 8.1.7 on the
condition that if it is necessary to make an adjustment to the terms of Share
Rights to take into account a Rights issue by FPH, then FPH will seek NZXMS's
approval of the amendment and provide NZXMS with at least 10 Business Days'
notice prior to the adjustment that sets out:

(a) a description of the Rights issue undertaken or to be undertaken;

(b) the proposed adjustment to the Share Rights; and

(c) confirmation from Directors of FPH that they are satisfied that the
effect of the amendment to the terms of the Share Rights is to ensure that
holders of the Share Rights receive the same benefit as that conferred on
shareholders who are entitled to participate in the Rights issue (and vice
versa).

Reasons - Application 3

20. In coming to the decision to grant a waiver from Rule 8.1.7 on the
condition specified in paragraph 19, NZXMS has considered that:

(a) The policy objective of Rule 8.1.7 is to ensure that the terms of Share
Rights are adjusted so that on the occurrence of Rights issues the relative
rights and benefits of shareholders and Share Rights holders are maintained;

(b) Because of the terms of the Plan (i.e. that no exercise price is
payable), Rule 8.1.7 is not well suited to act as a means of adjustment to
Share Rights issued under the Plan. However, the Plan provides for the
exercise of a discretion designed to have a similar effect to the
requirements of Rule 8.1.7 and is subject to Board approval; and

(c) The condition that has been imposed in paragraph 19 will allow NZXMS to
have oversight over any proposed adjustment to ensure that the policy behind
Rule 8.1.7 is not offended.

Confidentiality

21. FPH has requested that this application and any decision be kept
confidential until after the Board has considered and approved the Plan and
the notice of meeting has been dispatched in respect of the annual general
meeting.

22. In accordance with footnote 1 to Rule 1.11.2, NZXMS grants FPH's request.

ENDS.
End CA:00225714 For:FPH    Type:WAV/RULE   Time:2012-08-07 17:17:04