Employee share option programme explained

Press, Volume CXV, Issue 33741, 14 January 1975, Page 16

Employee share option programme explained

<t\'ew Zealand Prese Association

AUCKLAND

In a second instalment of its employee share option scheme. N.Z. Forest Products, Ltd, reported last week that it had granted options over 1,102,950 ordinary shares to 683 staff members.

The scheme was started ini 1966, when 244,193 options were granted 300 employees. The directors have the power to grant options, but the total number of shares

issued tinder options must never exceed 5 per cent of the ordinary capital. The exercise price of the 1966 options was 222 c and those options expire on April 1. Those who received options in 1966 may again receive options in the new allotment, and the new options must again be taken up wit}iin 10 years.

t| The scheme has been 5 slightly modified, and it now , allows extra options to be t granted every three years. > The exercise price of the

options is market price, at the time they were granted less 25 per cent. The options can be exercised to the extent of 10 per cent a year, but they need not be exercised until the day before the expiry date. This 1 explains why at March 31. 1974, 97.639 options, plus rights to cash and bonus issues made since

1966, had not yet been con-> verted into shares. Shares taken up under the scheme cannot be sold within eight years from the time of issue, unless there are extraordinary circumstances. When an option-holder leaves the company, his remaining options lapse. The company’s policy is to grant options to employees from a level comparable with that of a senior foreman upward. The number of options granted is governed by the individual’s salary’, or wage level.