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Whitehaven Coal Limited : Annual Report 2009
Whitehaven Coal Limited -- Annual Report 2009 31 D. Equity Participation and Option Deed The fair value for options issued under the Equity Participation and Option Deed is based on the fair value of options granted, measured using a Black Scholes model. The following factors and assumptions were used in determining the fair value of options on grant date: Grant date Expected option life/ Expiry date Fair value per option Exercise price Price of shares on grant date Expected volatility Risk free interest rate Dividend yield 3/5/07 10 years 7. 2 cents $1.00 $1.00 30% 5.88% 10% During the year ended 30 June 2007, the consolidated entity entered into an Equity Participation and Option Deed (the Deed) with entities related to Directors Andy Plummer and Tony Haggarty. In accordance with the Deed, the related entities of Andy Plummer and Tony Haggarty were granted six options each to acquire additional shares in the Company. The number of option shares is the percentage (the Grant percentage' set out in the table below) 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 below). All share prices will be considered attained when the volume weighted average price of ordinary shares on the ASX measured over 10 consecutive trading days reaches the required amount. Options 1 and 2 were exercised during the year ended 30 June 2008. Options 3 and 4 were exercised during the year ended 30 June 2009. 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 number of option shares to be received will be reduced if a specified percentage of the Tranche 2 shares formerly held in escrow are not held at the time of the Company's share price reaching the target share price specified in the option. For example if for option 5, only 50% of the Tranche 2 shares are held, then the number of option shares will be reduced to 50%/60% of the relevant grant percentage in the table below. Option No. Grant percentage Maximum number of potential shares each Share price Percentage of the Tranche 2 shares released from escrow to be held 1 0.835% 2,505,000 $2.50 100% 2 1.5% 4,575,150 $3.00 90% 3 1.2% 3,769,924 $3.50 80% 4 1.195% 3,844,317 $4.00 70% 5 1.1% 3,623,277 $4.50 60% 6 1.1% 3,702,989 $5.00 50% 22,020,657 The options were granted for nil consideration. The fair value of the options at grant date was 7. 2 cents per option share. For accounting purposes the fair value of these options attributable to the period ended 30 June 2009 of $115,000 (2008: $2,619,228) has been recognised in the profit and loss.
Annual Report 2008
Annual Report 2010