AWB Limited - 2004 Annual Report

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2004
24. DIRECTOR AND EXECUTIVE DISCLOSURES (continued)
(a) Remuneration of specified directors and specified executives by the consolidated entity (continued)
The fair value of the performance rights is calculated at the date of grant using a Black–Scholes model and allocated to each reporting period evenly
over the period from grant date to vesting date. The value disclosed above is the portion of the fair value of all the performance rights that have been
granted.
The following factors and assumptions were used in determining the fair value of performance rights on grant date:
Fair value per Exercise Price of shares Estimated Risk free Dividend
Grant date Expiry date performance right price (i) on grant date volatility interest rate yield
1 October 2001 1 October 2005 $2.61 $1.00 $3.39 14% 5.5% 6.5%
1 October 2002 1 October 2006 $2.59 $1.00 $3.47 14% 5.3% 7.2%
1 October 2003 1 October 2007 $3.01 $1.00 $3.90 13% 5.3% 6.4%
(i) The total consideration payable on the exercise of any performance rights on a particular day will be one dollar in total (irrespective of the number
of rights exercised on that day).
Estimated volatility approximates historic volatility. The estimated life of all performance rights granted is four years. Each performance right entitles
the holder to purchase one ordinary B class share in the company.
Each performance right is over one unissued B class share in AWB Limited. The performance rights are issued at no cost and become exercisable
depending on the performance of the company (based on total shareholder return) relative to the performance of the S&P/ASX200. The number of
performance rights which become exercisable depends on the company’s ranking relative to companies comprised in the S&P/ASX200 on total
shareholder return in the performance period. This ranking is calculated at the end of each quarter and expressed as a percentile. The rights may
become exercisable on a progressive basis once the company’s ranking for the quarter reaches 50. Fifty percent of the rights become exercisable when
the company’s ranking reaches 50. All the rights become exercisable if the company’s ranking for the quarter exceeds 75. The percentage of rights
which become exercisable increases proportionately if the company ranks between 50 and 75 for the quarter.
The expiry date disclosed is one year after vesting date, given that while the performance rights expire 10 years after the grant date, the expected
expiry of the performance rights is at this time.
(b) Performance rights over equity instruments granted as remuneration
During the reporting period, the following rights over ordinary shares were granted during the current year under the Performance Rights plan:
Right holdings
Specified executives
Richard Fuller
Peter Geary
Jill Gillingham
Paul Ingleby
Marcus Kennedy
John Maher
Sarah Scales
Charles Stott
Michael Thomas
Held at
Held at Granted as 30 September
1 October 2003 remuneration 2004
33,747
60,486
60,486
101,124
38,043
–
51,649
48,717
13,587
21,319
34,886
34,886
63,053
43,930
25,195
32,948
31,010
27,133
55,066
95,372
95,372
164,177
81,973
25,195
84,597
79,727
40,720
No rights vested during the current year. No performance rights held by specified executives are vested but not exercisable.
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