6.0-6.2 of the explanatory statement (Page 10 of AGM notice)
6. RESOLUTION 5 – ISSUE OF EQUITY AWARDS TO DIRECTORS
6.1 Introduction
Resolution 5 seeks Shareholder approval for the granting of
(a) 1,456,033 Service Rights to the Managing Director, Mr Humberto Alfonso, under the YOW Employee Incentive Plan (“EIP”);
(b) 936,698 Performance Rights to the Managing Director, Mr Humberto Alfonso under the EIP;
(c) 815,217 Service Rights to the Non-Executive Chairman, Mr Louis Carroll, under the EIP; and
(d) 375,000 Service Rights to Non-Executive Director, Mr Trevor Allen, under the EIP,
as well as Shareholder approval for the pro rata vesting of the Performance Rights granted to Mr Alfonso in the event that Mr Alfonso ceases employment in certain circumstances.
6.2 Why Shareholder approval is being sought
ASX Listing Rule 10.14 states that a listed company must not permit a Director to acquire securities under an employee incentive scheme without Shareholder approval, by ordinary resolution. The purpose of Resolutions 5.1 to 5.4 is to have Shareholders approve the proposed grant of Service Rights and Performance Rights to the Company’s Managing Director, Mr Humberto Alfonso, the Non-Executive Chairman, Mr Louis Carroll and Non-Executive Director, Mr Trevor Allen pursuant to the Company’s employee share scheme, the EIP, which was approved by shareholders in general meeting on 23 November 2015. In addition, the Company seeks Shareholder approval pursuant to section 200E of the Corporations Act for the pro rata vesting of the Performance Rights granted to Mr Alfonso in the event that Mr Alfonso ceases to be employed by the Company in limited circumstances, as specified in the terms of their invitations.
11 These circumstances include redundancy and death.
Under section 200B of the Corporations Act, a company may only give a person a benefit in connection with their ceasing to hold a managerial or executive office in the company if it is approved by shareholders under section 200E of the Corporations Act or an exemption applies. The term “benefit” may include the pro rata vesting of Performance Rights (EIP Interests) in the limited circumstances outlined above, where Mr Alfonso ceases to be employed by the Company. This pro rata vesting of Mr Alfonso’s EIP interests, in those circumstances, may amount to the giving of a termination benefit requiring Shareholder approval, and as such, approval is sought for these purposes.
The number of EIP Interests that may vest on cessation of Mr Alfonso’s employment can be calculated by:
(Date of Grant – Date of termination)(in days)
X
No. of EIP Interests held on cessation
(Date of Grant – Intended Vesting Date)(in days)
The value of the EIP Interests may be affected by:
the market price of Company Shares at the time the employment ceases;
the exercise price (if any) applicable to the EIP Interests;
the performance against the performance hurdles at the time the employment ceases;
the part of the service period has elapsed at the time the employment ceases; and
the number of EIP Interests that lapse on cessation of employment.
(20min delay)
