Air New Zealand 2008 Annual Report Download - page 39

AIR NEW ZEALAND
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
AS AT 30 JUNE 2008
20. ISSUED CAPITAL (CONTINUED)
SHARE ISSUE DETAILS AND RIGHTS
Ordinary Shares
At 30 June 2008, there were 1,057,224,822 fully paid Ordinary Shares on issue (30 June 2007: 1,051,682,560). At close of business on 23 August
2004, every five existing Ordinary Shares consolidated into one Ordinary Share (the Consolidation Ratio). Fractional entitlements to Ordinary Shares
arising as a result of the consolidation were rounded to the nearest whole dollar.
On 26 September 2007, 487,040 Ordinary Shares were issued to executives under the Mandatory Shareholding section of the Long Term Incentive
Plan (29 September 2006: 407,050 Ordinary Shares). The issue price of $1.616 per Ordinary Share represented a discounted price determined on the
basis of an independent valuation, reflecting restrictions placed on the transfer of the shares under the terms of the Long Term Incentive Plan Rules (29
September 2006: $0.866 per Ordinary Share).
During the year ended 30 June 2008, 5,055,222 Ordinary Shares were issued under the dividend reinvestment plan (30 June 2007: 3,644,987
Ordinary Shares). Further details are provided in note 18. On 14 February 2007, 220,763,477 Redeemable Convertible Notes were converted into
44,152,695 new Ordinary Shares.
During the year ended 30 June 2007, the Staff Share Scheme disposed of 775,500 unallocated ordinary shares in Air New Zealand. The shares
amounted to $9 million of treasury stock. Proceeds of $1.7 million were received for the shares which was reflected as an increase in share capital for
the Group.
Non New Zealand nationals are restricted from holding or having an interest in 10 percent or more of voting shares unless the prior written consent of
the Kiwi Shareholder is obtained. In addition, any person that owns or operates an airline business is restricted from holding any shares in the Company
without the Kiwi Shareholder’s prior written consent.
EQUITY-SETTLED SHARE-BASED PAYMENTS
Options over Ordinary Shares
Share options are granted to a number of senior executives on attainment of predetermined performance objectives. At 30 June 2008, there are
20,679,001 options outstanding (30 June 2007: 14,643,820), which may convert to approximately 20.2 million Ordinary Shares (30 June 2007:
13.7 million Ordinary Shares).
The total expense recognised in the year ended 30 June 2008 in respect of equity-settled share-based transactions was $2 million (30 June 2007:
$1 million).
GROUP AND COMPANY
2008
LONG TERM
INCENTIVE PLAN
2008
2001 SHARE
OPTION PLAN*
2007
LONG TERM
INCENTIVE PLAN
2007
2001 SHARE
OPTION PLAN*
Number of options outstanding
Outstanding at the beginning of the year 13,443,820 1,200,000 6,790,718 1,800,000
Granted during the year 6,585,181 - 8,032,499 -
Expired during the year - (550,000) (1,379,397) (600,000)
Outstanding at the end of the year** 20,029,001 650,000 13,443,820 1,200,000
Number of options exercisable as at the end of the year 1,580,314 650,000 - 1,200,000
Exercise price for those options exercisable as at the end of the year ($) 2.38 5.69 N/A 5.69
Weighted average remaining contractual life (years) 1.52 0.75 1.49 1.48
* The number of Ordinary Shares to be issued upon the exercise of any outstanding options under the 2001 Share Option Plan, which were granted
prior to 23 August 2004 (date of the share consolidation), will be proportionately decreased in line with the Consolidation Ratio and the exercise price
will be adjusted in inverse proportion to the Consolidation Ratio.
** The People Development and Remuneration Committee of the Board will adjust option terms, if necessary, to ensure that the impact of share issues,
share offers or share structure changes is value neutral as between participants and shareholders.
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