Ann: WAV/RULE: GEO: GEO - Application for Waiver

• Release Date: 31/10/13 10:51
• Summary: WAV/RULE: GEO: GEO - Application for Waiver from NZAX Listing Rule 7.6.1
• Price Sensitive: No
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					GEO
31/10/2013 08:51
WAV/RULE

REL: 0851 HRS GeoOP Limited

WAV/RULE: GEO: GEO - Application for Waiver from NZAX Listing Rule 7.6.1

NZX Regulation Decision
GeoOP Limited
Application for waiver from NZAX Listing Rule 7.6.1(f)(i)

31 October 2013

Background

1. GeoOP Limited ("GEO") is a Listed Issuer with ordinary shares Quoted on
the NZX Alternative Market ("NZAX").
2. In July 2013 GEO issued 14,346 restricted shares (now 1,150,126 shares
following the share split on 26 September 2013) ("Shares") to two of its key
executives (Leanne Graham and Stewart Reynolds) in accordance with its Key
Executive Employee Share Scheme ("Scheme"). Leanne Graham is also a Director
of GEO.
3. The Shares were issued subject to performance criteria and other
restrictions, as set by the board of GEO. A portion of the Shares becomes
unrestricted on each of the first, second and third anniversaries of the
completion date under the Scheme, provided GEO's board determines that the
relevant executive has achieved their applicable performance criteria. The
Scheme also provides that where Shares do not become unrestricted they may be
acquired by GEO for an aggregate purchase price of $1.00. If GEO was to
acquire any of the Shares they would be cancelled and not held as treasury
stock.
4. NZAX Listing Rule ("Rule") 7.6.1 prohibits the acquisition of Equity
Securities by an Issuer, except in accordance with one of the exceptions in
Rule 7.6.1(a)-(j). The terms of the acquisition contained in the Scheme do
not fit within the exceptions in Rules 7.6.1(a)-(c), (e) and (g)-(j). Rule
7.6.1(d) requires GEO to obtain shareholder approval under Rule 7.6.5 for the
acquisition by GEO of the Shares. Rule 7.6.1(f) allows GEO to acquire Shares
if that acquisition is effected in compliance with section 60(1)(b)(ii) of
the Companies Act 1993 and is made from any person who is not a Director or
an Associated Person of a Director of GEO.
5. As a Director of GEO is a participant in the Scheme, the acquisition of
Shares pursuant to the terms of the Scheme would require Shareholder approval
under Rule 7.6.5.

Application

6. GEO seeks a waiver from Rule 7.6.1(f)(i) in order to allow GEO to acquire
Shares from Leanne Graham in accordance with the terms of the Scheme.
7. In support of its application, GEO submitted that:
a) any acquisition of Leanne Graham's Shares under the Scheme is, in effect,
a termination mechanism to allow GEO to acquire shares issued to Leanne
Graham that have not become unrestricted under the terms of the Scheme. It is
not designed to confer a benefit on Leanne Graham. Rather it is a mechanism
to protect GEO and its shareholders;
b) an acquisition of Leane Graham's Shares pursuant to Rule 7.6.1(f) will be
more cost effective than obtaining the approval of shareholders to an
acquisition under Rule 7.6.1(d), as no shareholders' meeting will be
required. In this regard, the total cost to GEO of acquiring Shares from
Leanne Graham will be one dollar;
c) details of the Scheme have been disclosed to shareholders in the
disclosure document relating to GEO's listing on the NZAX ("Disclosure
Document"), and will be fully disclosed to shareholders in the course of
GEO's compliance with section 61 of the Companies Act 1993. Shareholders will
therefore be aware of the broad terms of the Scheme together with Leanne
Graham's participation;
d) the waiver is consistent with the reasons stated by NZX Regulation
("NZXR") in previous waiver decisions in respect of NZSX Listing Rule
7.6.1(f) including:
i) Tourism Holdings Limited (26 April 2013);
ii) AWF Group Limited (2 November 2012);
iii) Freightways Limited (30 April 2012);
iv) Abano Healthcare Group Limited (7 October 2011); and
v) Wellington Drive Technologies Limited (24 March 2011).

Rule 7.6.1(f)(i)

8. Rule 7.6.1(f)(i) provides that:
"An NZAX Issuer shall not acquire or redeem Equity Securities of that NZAX
Issuer other than by way of:
...
(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"

Decision

9. On the basis that the information provided to NZXR is full and accurate in
all material respects and subject to the condition in paragraph 10, NZXR
grants GEO a waiver from Rule 7.6.1(f)(i) to allow GEO to acquire Shares
issued to Leanne Graham in accordance with the terms of the Scheme.
10. The waiver in paragraph 9 is granted on the condition that the waiver and
its conditions are disclosed in the Disclosure Document.

Reasons

11. In granting a waiver from Rule 7.6.1(f)(i), NZXR has considered the
following matters:
a) The policy objective of Rule 7.6.1(f)(i) is to ensure that acquisitions
are not conducted on terms that are unfairly preferential or advantageous to
certain shareholders at the expense of remaining shareholders. GEO submits
and NZXR accepts, with particular regard to paragraph 7(a) above, that this
concern does not arise in the particular circumstances;
b) Requiring GEO to call a meeting of shareholders to consider a resolution
to acquire back Shares issued in accordance with the terms of the Scheme
would impose an unnecessary cost on GEO and, in effect, its shareholders;
c) Under the terms of the Scheme, the ability to acquire Shares functions
solely as a mechanism for unwinding participation in the Scheme. Accordingly
there is no financial advantage or detriment to any party; and
d) There is precedent for this waiver, including those listed in paragraph
7(d).
End CA:00243113 For:GEO    Type:WAV/RULE   Time:2013-10-31 08:51:42