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Whitehaven Coal Limited : Annual Report 2011
36 7. reMunerAtion rePort – AuDiteD (continueD) 7. 2 Directors’ and executive officers’ remuneration (company and consolidated) – audited (continued) If employment is terminated any options that have not vested will be forfeited. In regard to the options issued to Directors, the Board committed to issue these options on 19 February 2009. The grant of these options was subsequently approved by shareholders at the AGM on 17 November 2009. Accounting standard AASB 2 deems the issue date of these options to be the date shareholder approval was formally received. Accordingly the company is required to account for the issue based on the prevailing share price at the date of the AGM. D. Shares were issued to Dalara Investments Pty Ltd, a company controlled by Mr Allan Davies, as trustee for the AJ and LM Davies Family Trust. The Board committed to issue these shares on 19 February 2009. The grant of shares was subsequently approved by shareholders at the AGM on 17 November 2009. Accounting standard AASB 2 deems the issue date of these shares to be the date shareholder approval was formally received. Accordingly the company is required to account for the issue based on the prevailing share price at the date of the AGM. E. 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 03/05/07 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 was 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 was 300 million shares plus any shares issued under previous exercised options. Each option was exercisable when the share price reached a certain level (as set out in the table below). All share prices were considered attained when the volume weighted average price of ordinary shares on the ASX measured over 10 consecutive trading days reached 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. Options 5 and 6 were exercised during the year ended 30 June 2010. All options had an exercise price of $1 and had to be exercised by the related entities within 90 days of being notified the Company’s share price had reached the target share price. 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 2011 of $nil (2010: $390,000) has been recognised in the profit and loss. DIRECTORS’ REPORT
Annual Report 2010
Annual Report 2012