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APN
annual report
2011
notes to the financial statements
APN News & Media Limited and Controlled Entities
18. CONTRIBUTED EQUITY
2011
$’000
2010
$’000
Issued and paid up share capital
1,074,115
1,045,999
(a) Movements in contributed equity during the financial year
2011
number
2010
number
2011
$’000
2010
$’000
Balance at beginning of the year
606,084,019
595,311,925
1,045,999
1,024,815
Dividend reinvestment plan
24,127,396
10,772,094
28,116
21,184
Balance at end of the year
630,211,415
606,084,019
1,074,115
1,045,999
(b) Executive and Director Option Plan (EDOP)
An option plan is operated by the Company to allow selected employees and Directors to participate in the growth of the Company through
the issue of options over ordinary shares in the Company. Eligibility for participation is at the discretion of the Board.
The options are granted for no consideration and carry no dividend or voting rights. The options are generally exercisable between three and
five years from the date of grant at the exercise price, subject to the satisfaction of performance hurdles. The options expire five years from
the date of grant. Each option issued is convertible into one ordinary share.
The exercise price of the options is the weighted average market price of the Company’s shares sold on the ASX during the week immediately
prior to and including the grant date. The exercise price is payable at the time of exercise of the options. The options must not be transferred,
encumbered or otherwise disposed of without the prior consent of the Board.
Options normally lapse if the option holder ceases to be an employee of the Company or any of its subsidiaries and in the case of a Director,
ceases to hold office, otherwise than by death, permanent incapacity, redundancy or retirement. In these events, options are normally
exercisable within 12 months of the occurrence of the event.
The maximum number of ordinary shares in respect of which options may be granted under the EDOP may not exceed 10% of the total issued
share capital of the Company from time to time without shareholder approval.
In addition to their standard terms, all of the current options of the Company have performance criteria that must be satisfied before an
option or tranche of options may be exercised. The performance hurdles for an option or tranche of options involve a comparison of the
Company’s EPS performance over a period of time with a specified rate of growth.
(c) Options issued under EDOP
Grant date
Exercise
price
$
Balance
at start of
the year
number
Issued
number
Exercised
number
Lapsed
number
Balance
at end of
the year
number
2 May 2006
4.99 4,800,000
–
– (4,800,000)
–
2 June 2008
3.93 6,325,000
–
– (1,200,000)
5,125,000
11,125,000
–
– (6,000,000)
5,125,000
The 2006 awards were tested on 31 December 2010, and it was determined that the minimum performance hurdles had not been satisfied.
Consequently all 2006 awards lapsed in May 2011. In respect of the 2008 awards, the minimum performance hurdles have not been satisfied
as at 31 December 2011 and they are not likely to be achieved during the remaining life of the options.
(d) Dividend reinvestment plan (DRP)
Under the DRP, the holders of ordinary shares may elect to have all or part of their dividend entitlements satisfied by the issue of new
ordinary shares rather than being paid in cash. Shares may be issued under the DRP at a discount to the market price. The Directors have
set the current rate of discount applicable to the DRP at 2.5%.
(e) Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the number
of and amounts paid on the shares held.
On a show of hands, every holder of ordinary shares present at a meeting in person or by proxy, representative or attorney is entitled to one
vote, and upon a poll each share is entitled to one vote.