investment statement for - Pumpkin Patch investor relations

• Pumpkin Patch must pay grossed up bonuses to employees (in somecases over three years, and is some cases payable immediately) toenable the employees (including executive directors) to fully orsubstantially discharge the amount of these loans and the full costof this has been fully provided for in the 31 July 2004 forecastfinancial information.• Approximately one third of each employee's shares issued under theemployee share schemes will be held by a trustee as security for thepayment of the loans owing to the Company, and will typically bereleased progressively over three years to employees as their loansare progressively discharged. Different arrangements are in placefor the executive Directors, Maurice Prendergast, Greg Muir andChrissy Conyngham. Greg Muir will have 512,000 shares held inescrow and progressively released over three years. MauricePrendergast will procure the provision to the trustees of the schemeof 1,500,000 Shares which will be held (by way of security) andprogressively released over three years. Chrissy Conyngham willhave 570,000 Shares held in escrow and progressively released overthree years.DF7 share schemeThe Company has established an Employee Share Scheme undersection DF7 of the Income Tax Act 1994. Under this Scheme PumpkinPatch has issued 2,000,000 Shares to Pumpkin Patch Nominees Limited(the "Trustee") and intends to procure the Trustee to offer those Sharesto employees as soon as possible (taking into account certainpractical matters) after Pumpkin Patch is quoted on the NZX.It is intended that Shares will be offered to employees at a price 25%less than the Final Price for investors (other than institutional orprofessional investors) determined under the Share Offer. Allpermanent employees in New Zealand who have been with theCompany for at least six months and who work 30 hours or more perweek (including Directors) will be eligible to purchase $2,340 of Sharesat this discounted rate. All permanent employees in New Zealandwho have been with the Company for at least six months and whowork between 10 and 30 hours per week (including Directors) will beeligible to subscribe for up to $1,170 worth of Shares at thediscounted rate.Pumpkin Patch will, prior to listing, give the Trustee an interest free loanfor the aggregate purchase price to enable it to purchase the Sharesissued to it for this scheme. Pumpkin Patch has agreed that the Trusteeis, in turn, entitled to novate a portion of that loan to individualemployees to assist them to purchase Shares under the DF7Share Scheme.Pumpkin Patch intends to implement similar schemes for its employeesin the United Kingdom and in Australia within the next 12 to 24 monthsand to this end has issued the appropriate number of Shares (andmade the associated loan) to the Trustee and has made provision foradditional Shares which may be offered to these employees.Offers of Shares under the DF7 Share Scheme are not required tocomply with the Securities Act 1978 and are not part of either theShare Offer or the Option Offer.52