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Whitehaven Coal Limited : Annual Report 2008
NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2008 36. SHARE-BASED PAYMENTS Option issuances In the current year, the Company issued share options to the CEO/Managing Director. In the prior year the Company issued share options to two key management personnel and entities related to two directors. The terms and conditions of the grants are as follows: Option grant to CEO/Managing Director on 5 September 2007 The Company issued share options to the Managing Director when he was appointed as Chief Executive Officer in October 2007. The terms and conditions of the grant are as follows. Option Exercise price Tranche 1 Tranche 2 Tranche 3 $2.50 $2.50 $2.50 Number of instruments 1,000,000 1,000,000 1,000,000 3,000,000 Vesting conditions 1st anniversary of employment 2nd anniversary of employment 3rd anniversary of employment Expiration date 22 October 2012 22 October 2012 22 October 2012 If employment is terminated within three years of commencement, any options that have not been vested will be forfeited. Option grant to director related entities on 3 May 2007 Percentage of Option Option 1 Option 2 Option 3 Option 4 Option 5 Option 6 Exercise price $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 Maximum potential shares each 2,505,000 4,575,150 3,769,924 3,844,317 3,623,277 3,702,989 22,020,657 Grant percentage ? 0.835 1.5 1.2 1.195 1.1 1.1 Vesting conditions $2.50/share $3.00/share $3.50/share $4.00/share $4.50/share $5.00/share Tranche 2 shares released from escrow to be held 100 90 80 70 60 50 In the year ended 30 June 2007, the related entities of directors Andy Plummer and Tony Haggarty were granted six options each to acquire additional shares in the Company under the terms of the Equity Participation and Option Deed (the Deed). The number of potential shares under the options is the “grant percentage” (set out in the table above) of a deemed amount of issued shares. For the purposes of the Deed, the deemed number of shares is 300 million shares plus any shares issued under previous exercised options. Each option is exercisable when the share price reaches a certain level (as set out in the table above). All share prices will be considered attained when volume weighted average price of ordinary shares on the ASX measured over ten consecutive trading days reaches the required amount. Options 1 and 2 were exercised during the year ended 30 June 2008. Option 3 reached the target share price during the year ended 30 June 2008 and was exercised subsequent to year end. Option 4 also reached the target share price during the year ended 30 June 2008 and the director related entities have applied to exercise the option on 25 September 2008 with shares to be issued subsequent to the date of this financial report. All options have an exercise price of $1 and must be exercised by the related entities within 90 days of being notified the Company’s share price has reached the target share price. The maximum number of potential shares will be reduced if the relevant percentage shown in the table above of the Tranche 2 shares released from escrow are not held at the time of exercising the option on a pro rata basis. Refer below for further discussion on the Tranche 2 shares. The options have no expiry date. Upon resignation by the director, any options that have not been vested will be forfeited. 80
Annual Report 2009