8.1 All disclosures required by paragraphs 8.2 to 8.6 refer to equity instruments issued or issuable by the disclosing entity and any of its subsidiaries and must be separated into each class of equity instrument identifying each class by:
(a) the name of the issuing entity;
(b) the class of equity instrument; and
(c) if the instrument is an option or right, the class and number of equity instruments for which it may be exercised.
8.1.1 An equity instrument such as a performance right, that may entitle the holder to receive a share without further payment, is classified separately from options that incorporate exercise prices. Options over fully-paid ordinary shares in the same entity comprise a class separate from performance rights. Options over fully-paid ordinary shares are not treated as separate classes based on different exercise prices or expiry dates. Options over different numbers of underlying equity instruments are treated as separate classes based on the number per option: for example, an option exercisable for one share is treated as a class separate from an option that may be exercised for two shares. Similar classification based on the number of underlying equity instruments is also applicable to rights. Restricted shares, where the full beneficial entitlement will pass to the employee only if specified performance or service criteria are satisfied at some date in the future, are classified separately from vested ordinary shares.
8.1.2 Appendix 4 provides illustrations of numeric disclosures required by Section 8.
Options and Rights Provided as Remuneration
8.2 The following details of options and rights over equity instruments provided as remuneration to each specified director and specified executive must be disclosed:
(a) the number of options and the number of rights that, during the reporting period, have;
(i) been granted; and
(ii) vested;
(b) particulars of the terms and conditions of each grant made during the reporting period, including:
(i) the value per option or right at grant date;
(ii) the exercise price per share or unit;
(iii) the amount, if any, paid or payable by the recipient;
(iv) the expiry date;
(v) the date or dates when the options or rights may be exercised; and
(vi) a summary of the service and performance criteria that must be met before the beneficial interest vests in the individual.
8.2.1 In addition to the requirements of paragraph 8.2, disclosure of the details of options granted as remuneration during or since the end of the reporting period to any of the directors or any of the five most highly remunerated officers is required by the Corporations Act, subsection 300(1)(d), to be included in either the annual directors’ report or in the financial report of each company, disclosing entity and registered scheme. Apart from the fact that this Standard permits more than five executives to be specified, the specified executives may not be the same as the five most highly remunerated officers because this Standard bases selection on managerial authority and not remuneration. This Standard applies to both options and rights granted as remuneration to specified persons during the reporting period, unlike the Corporations Act which includes grants made since the end of the reporting period and does not refer to rights.
8.2.2 If an entity has disclosed the information required by paragraph 8.2(b) when providing details specified in paragraph 7.5(d) in respect of all grants of equity compensation, it is not necessary to repeat those details.
Equity Instruments Provided on Exercise of Remuneration Options and Rights
8.3 The following details of the equity instruments provided as a result of the exercise during the reporting period of options and rights granted as remuneration to each specified director and specified executive must be disclosed:
(a) the number of equity instruments;
(b) when the number of options or rights exercised differs from the number of equity instruments disclosed under (a), the number of options or rights exercised;
(c) the amount paid per instrument; and
(d) the amount unpaid per instrument.
8.3.1 Paragraph 8.3 requires disclosure of the number of equity instruments provided as a result of the exercise of options or rights originally granted as remuneration to specified individuals. Paragraph 8.3 does not apply to the exercise of options or rights otherwise acquired by the individual, for example, through a rights issue by a company to all shareholders.
8.3.2 Paragraph 8.3 applies to those persons who are specified directors or specified executives for the current reporting period, whether or not they were specified at the vesting date or grant date. It does not apply to a person who is not included as a specified person for the current reporting period but was so included in the reporting period in which the grant or vesting occurred.
8.3.3 All shares or units provided as a result of the exercise of options or rights originally granted as remuneration are included in the disclosures required by paragraph 8.3, irrespective of any arrangement whereby the equity instruments are issued, on exercise, in the name of a party other than the original recipient.
Options and Rights Holdings
8.4 In respect of options and rights held, whether directly, indirectly or beneficially, by each specified director and specified executive, including their personally-related entities, disclosure must be made of the number:
(a) held at the start of the reporting period;
(b) granted during the reporting period as remuneration;
(c) exercised during the reporting period;
(d) resulting from any other change during the reporting period;
(e) held at the reporting date;
(f) vested at the reporting date;
(g) vested and exercisable at the reporting date; and
(h) vested and unexercisable at the reporting date.
8.4.1 The aggregate in each of the above categories for each specified individual includes the total of that class of equity instrument held by parties related to that individual. In accordance with paragraph 8.1, separate aggregates are disclosed for each class of option or right. Separate disclosure of lapsed or forfeited options and rights is not required. Except for paragraph 8.4(b), the number disclosed will include all options or rights whether or not received by the individual as remuneration. An illustration of the disclosures required by paragraph 8.4 is provided in Table 4C, Appendix 4.
8.4.2 The number of options or rights disclosed under paragraph 8.4(b) is the same as required by paragraph 8.2(a)(i) and is repeated in this context for convenience, to provide a complete statement for the reporting period.
8.4.3 A reduction in the number of instruments held because of lapse or forfeit is included, together with any other increases and decreases, in the number disclosed under paragraph 8.4(d).
8.4.4 Options or rights may be exercisable immediately following vesting and frequently the exercise period extends for some years. Some options have fixed terms, being exercisable (or expiring) only on maturity. In other cases, the exercise period or date may not begin or occur until some years after vesting but during the intervening time the recipient is beneficially entitled to the options or rights. An option or right, whether or not “in-the-money”, is exercisable even if there exist restrictions on its transfer or if exercise is limited to specific times in relation to the entity’s reporting cycle.
Equity Holdings and Transactions
8.5 In respect of equity instruments (other than options and rights) held directly, indirectly or beneficially by each specified director and specified executive, including their personally-related entities, disclosure must be made of the number:
(a) held at the start of the reporting period;
(b) granted during the reporting period as remuneration;
(c) received during the reporting period on exercise of options or rights;
(d) resulting from any other change during the reporting period;
(e) held at the reporting date; and
(f) if any such are included in the number disclosed under paragraph 8.5(e), held nominally at the reporting date.
8.5.1 Paragraph 8.5 requires disclosure of details of all classes of shares or other equity instruments excluding options and rights held by specified persons, such as ordinary shares, preference shares, restricted stock awards, share grants or any convertible instruments not classified as liabilities. Paragraph 8.1 requires separate disclosure for each class. With the exception of the number disclosed in accordance with paragraph 8.5(b), it is unnecessary to distinguish the numbers of equity instruments acquired as remuneration.
8.5.2 The number of equity instruments disclosed in accordance with paragraph 8.5(b) includes only those instruments granted in this reporting period to a specified person as remuneration. It includes equity instruments held by a trustee on behalf of the specified person and those to which the beneficial entitlement will not pass until satisfaction of the qualifying service or performance criteria. The value of equity instruments required by paragraph 5.2(c) to be shown in the components of remuneration is unlikely to relate to the number of instruments granted in the same period.
8.5.3 The number of shares or other equity instruments referred to in paragraph 8.5(c) includes all those issued (or otherwise provided) during the reporting period on the exercise of options or rights by individuals, irrespective of whether the options or rights were received as remuneration or acquired through transactions or entitlements not related to remuneration.
8.5.4 A reduction in the number of shares or other equity instruments held because of sales is included, together with any other increases and decreases (including forfeiture), in the number disclosed in accordance with paragraph 8.5(d).
8.6 If transactions involving equity instruments, other than equity compensation, have occurred between a specified individual (including personally-related entities) and the issuing entity during the reporting period, the nature of each different type of transaction must be disclosed where the terms or conditions were more favourable than those which it is reasonable to expect the entity would have adopted if dealing at arm’s length with an unrelated individual. For each such transaction, the details of the terms and conditions must be disclosed.
8.6.1 Disclosure of details is required only in respect of equity transactions other than equity compensation undertaken by the disclosing entity (or any subsidiary) that are with and favourable to specified individuals of the disclosing entity and their personally-related entities. Such transactions include dividend reinvestment, share issues, unit issues, sales and purchases of shares or units, share buy-backs and selective capital reductions, where the terms are more favourable than those available to other shareholders or investors.
8.6.2 The details of equity instrument transactions between directors or executives and entities other than the disclosing entity (or any of its subsidiaries), whether on-market or otherwise, are not required to be disclosed. Disclosure of the net effect of increases and decreases in the number of equity instruments held by each specified person is required by paragraph 8.5(d).