Brambles 2006 Annual Report - Alle jaarverslagen

73
Brambles
2006 Annual Report
• The TSR base (against which the subsequent
performance of Brambles Limited and its S&P/ASX 100
comparators will be measured to determine the level
of vesting) will be calculated as the average over all
the trading days from 2 January 2007 to 20 February
2007 inclusive.
• The share price used to determine the number of
shares subject to the award, will be calculated as the
average price during the five trading days up to and
including 19 January 2007.
7.2.2 Participation in 2006 Award
As in previous years, the Group’s most senior managers
will be eligible to participate in all three elements of the
equity plan, being the STI Share Award, the Enhanced STI
Share Award and the LTI Award; and management will
nominate a number of individuals below the executive level
to receive a one-off selective equity award. These selective
awards will normally take the form of an STI Share
Award over approximately 5,000 shares. The purpose of
the selective awards is to recognise superior individual
performance over the preceding year, and/or to retain
individuals who are of particular value to the Group due
to their potential and/or their skills and knowledge.
7.3 REMUNERATION ARRANGEMENTS
BEYOND 2007
Once the DLC unification process has been completed,
Brambles will consider its reward strategy, with the aim
of ensuring that it continues to support both the Group’s
business objectives and the interests of shareholders.
Any changes are likely to be evolutionary in nature, building
on the strengths of Brambles’ existing arrangements,
which received widespread shareholder support in 2004.
Shareholder approval will be sought as appropriate.
7.4 NON-EXECUTIVE DIRECTORS’
RETIREMENT BENEFITS
Prior to formation of the DLC, BIL had a policy of entering
into retirement benefit contracts with its non-executive
directors. Under Australian law, the entry into such
contracts was then and remains permissible, subject to
certain financial limits. On formation of the DLC, a decision
was taken not to enter into any further retirement benefit
contracts, although the existing contracts needed to be
honoured. There are now only two Non-executive Directors
who are party to such contracts, being Mr D R Argus and
Mr M D I Burrows.
On Unification, BIL and BIP will become wholly owned
subsidiaries of Brambles Limited. The Non-executive
Directors of BIL and BIP will, at that point, retire as
Directors of BIL and BIP and, thereafter, will be Directors
solely of Brambles Limited as the publicly listed entity in
the Brambles Group. Under the terms of the retirement
benefit contracts, retirement from the Board of BIL in
these circumstances will entitle Messrs Argus and Burrows
to payment of their respective retirement benefits. The
amounts payable, assuming that Unification is completed
on 4 December 2006, are as follows: D R Argus AO –
A$892,829; M D I Burrows – A$616,374. In the case
of Mr Argus, the payment will be made to a complying
superannuation fund, in which Brambles has no interest,
which provides superannuation and retirement benefits
to Mr Argus.
8. Appendices
8.1 BASIS OF VALUATION OF EQUITY
BASED AWARDS
Unless otherwise specified, the fair value of the options
and share rights included in the tables in this report, has
been estimated using a pricing model independently
developed by Ernst & Young Transaction Advisory Services
Limited on behalf of Brambles.
The following assumptions have been used in the
valuation of awards made during the Year. Awards of
share rights have been valued at their date of grant being
21 October 2005. Those awards which are cash settled
(i.e. phantom) awards have been valued instead at
30 June 2006.
Assumption 21 Oct 05 30 Jun 06
Volatility 25% 22%
Risk free interest rate AUS 5.23%-5.26%
UK 4.27%-4.28%
AUS 5.65%
UK 4.63%
Dividend yield 2.5% 2.4%
It should be noted that as part of Brambles’ transition
to IFRS/AIFRS, certain changes have been made to the
calculation of equity based remuneration in accordance
with the transitional provisions of IFRS2/AASB2:
Share-based Payments. As a result of these changes,
comparative disclosures for 2005 have been restated
to ensure consistency and comparability in this report.
See page 129 for further details of the valuation
methodology used.
8.2 DILUTION AND OTHER OVERALL LIMITS
Details of the dilution and other overall limits (Overall
Limits) which apply to awards granted under the 2004
Share Plans are detailed in the rules of that plan a copy
of which can found on Brambles’ website at
www.brambles.com.
The table below shows the position of BIL and BIP as at
30 June 2006 against these Overall Limits. The aim of the
Overall Limits applicable to BIP shares, which arise under
UK law, is to limit the dilution of BIP shareholders which
would otherwise arise from the issue of shares under
employee share schemes. The same is not true, however,
of the Overall Limit applicable to BIL shares, which arises
under Australian law, the aim of which is to regulate the
circumstances when a prospectus is required for a capital
raising. In order to provide a complete picture of the impact
on dilution of equity awards, therefore, the table below also
shows the position of BIL as at 30 June 2006 against the
Overall Limits applicable to BIP.
Overall Limits* BIL BIP
BIL 5% limit 3.01% N/A
BIL (BIP 5% limit) 3.28% N/A
BIL (BIP 10% limit) 7.16% N/A
BIP 5% limit N/A 2.44%
BIP 10% limit N/A 2.44%
* See above for description of limits.