2017 Australian Employee Share Purchase Scheme

Transcription

1 2017 Australian Employee Share Purchase Scheme KEY DATES 24 May June July 2017 Invitation letters sent Application forms must be completed and submitted Shares to be allocated Employee Share Scheme

2 A MESSAGE FROM OUR CEO Fisher & Paykel Healthcare first listed on the New Zealand and Australian stock exchanges in Since then, we have grown from a company with 716 people and annual operating revenue of $215 million into a company with over 4,000 people and a target of $1 billion in operating revenue. CONTENTS We are one of the 10 largest companies on the NZX, and are one of the few companies based in New Zealand with a true global outlook. We currently have over 23,000 shareholders who invest in our company purpose and growth prospects, with 48% ownership from those based in New Zealand, 30% from Australia, 14% from North America and the remainder from Europe, Asia and rest of world. In my role, I spend many hours talking to investors about what makes our company attractive. A lot of the time that means I am talking about our people about the company values that drive our purpose, the skill and expertise of our teams, and the care that frames the way we work. Our people create our success, so this share offer scheme is designed to enable you to share in our success as a part-owner of our company. This scheme invites you to buy shares in our company at a discounted price. Please take the time to read through this information and decide if participating is right for you. The opportunities in front of us as a company are varied and exciting, and this offer is another way for you to share in that future. Introducing the Employee Share Purchase Scheme 6 The scheme at a glance 7 Introduction to shares 9 The offer 11 What it costs 17 Ownership 19 Dividends 21 Tax & fees information 23 General matters and contact information 25 Glossary 27 Kind regards, Lewis Gradon Managing Director & Chief Executive Officer 3

3 INTRODUCING THE 2017 AUSTRALIAN EMPLOYEE SHARE PURCHASE SCHEME This document contains a general overview of Fisher & Paykel Healthcare s 2017 Employee Share Purchase Scheme. Before accepting an offer under the scheme you should carefully read this information. Full details are given in the Trust Deed*, which you can access on this website Alternatively, you can request a copy by contacting Link Market Services by phone on or at fphemployees@linkmarketservices.co.nz What is the Employee Share Purchase Scheme? The scheme is our employee share plan that allows eligible employees to purchase FPH shares at a 20% discount to market value. The scheme has been designed to offer the same benefits to all eligible employees. *See glossary for definitions 5

4 THE SCHEME AT A GLANCE THE OFFER WHAT IT COSTS OWNERSHIP DIVIDENDS TAXES & FEES Employees can purchase shares in FPH at a 20% discount You can participate to a level you feel comfortable with, within these minimum and maximum amounts: - Minimum $624* worth of shares - Maximum $2,340 worth of shares Application forms must be completed by 9 June 2017 Shares will be allocated on/ around 12 July 2017 Shares will be offered at 80% of the NZX market price on the allocation date The AUD/NZD foreign exchange rate will be applied on the allocation date FPH will provide you with an interest free loan Pay the loan back through equal salary or wage deductions over the next three years Your shares will be held in trust for a three year holding period They will be transferred to you at the end of the holding period, if you are still employed with FPH and have paid off your loan in full You can t sell or trade your shares during the holding period You will receive any dividends paid even while your shares are held in trust and the loan hasn t been repaid You can join the company s Dividend Reinvestment Plan* if you want to It s likely that franking credits* will be attached to the dividends The value of the discount may be taxable in the year shares are allocated to you A tax concession applies to the first $1,000 of discount provided if you have a taxable income of $180,000 or less Where the tax concession does not apply you will need to include the discount amount in your tax return. A summary statement of the discount received will be provided by 14 July of the following tax year You will be taxed on any capital gain when you sell your shares You won t need to pay fees for the set-up or management of the scheme If you sell your shares at the end of the holding period, you ll need to pay fees 7

5 INTRODUCTION TO SHARES What are shares? When people buy shares in a company it means they re buying a small part of the company and may participate in any profit the company makes. If you join this scheme, you will become a shareholder in Fisher & Paykel Healthcare Corporation Limited. PARTICIPATING IN THE SCHEME How do shares work? When companies make money (known as profit) they sometimes pay shareholders a dividend, which is a share of the profits. Shareholders can also make money from shares through capital gains, where they sell a share for more than they paid for it. However, shareholders can also lose money from shares where they sell a share for less than they paid for it. In this scheme, eligible employees will be able to receive shares in FPH at a 20% discount. This discounted rate is not available to the general public. Who can participate? Permanent employees, full and part-time (15+ hours per week) Employed by FPH in Australia Employed during offer period Have worked for FPH for three months or more (joining before 24 February 2017) Permanent employees on work visas Employees who have participated in a plan in the last three years and purchased less than $2,340 worth of shares Who can t participate? Employees who joined FPH after 24 February 2017 (although should be eligible for any future offers) Casual and seasonal employees Directors of FPH Corporation Ltd Contractors Anyone who ceases employment with FPH before the allocation date of 12 July 2017 Employees who have participated in a plan in the last three years and purchased $2,340 worth of shares 9

6 THE OFFER What s the offer? This scheme offers eligible employees the opportunity to buy shares in Fisher & Paykel Healthcare Corporation Limited. Is there a discount? Yes. The price of the shares acquired on your behalf will be 20% lower than the price at which shares were sold on the NZ stock exchange (NZX) on the allocation date*. You will also have the AUD/NZD foreign exchange rate applied on the allocation date. New fully paid ordinary shares* will be issued to the Trustees* on your behalf and any unallocated ordinary shares from prior plans may also be incorporated into this plan. How many shares will I receive? It depends on how much you wish to purchase (up to the maximum amount of $2,340). Shares will be issued to the Trustees on your behalf as close as possible in value to the amount you have chosen to pay. The Trustees won t purchase and allocate partial shares. The shares will be kept for a three year holding period by the Trustees. What is the holding period? The holding period is a time during which you cannot sell or trade your shares. It ends either three years after the allocation date or when your employment ends (whichever is earliest). Why is there a holding period? The scheme is about rewarding our people for their efforts and service to the company and encouraging people to stay and develop their careers at FPH. 11

7 What happens when the holding period ends? When the holding period ends, you can decide whether to: a) have the shares transferred to you, at which point the shares will become your legal property; or b) have the Trustees sell the shares, in which case the proceeds will be used first to repay any outstanding balance of your loan and the remaining amount will be paid to you. SCENARIO If you leave FPH before the three year holding period has passed (and you are not leaving due to any of the special circumstances ) The holding period can also end before the three year period if you finish your employment with FPH. In this case, the Trustees will apply certain rules which are described below and can be found in the Trust Deed. You can obtain a copy of the Trust Deed from Link Market Services. What happens if I leave FPH after shares are allocated to me and before the three year holding period has passed? If you retire at 55 years of age or older, are made redundant, or cease employment as a result of total or partial incapacity or death (leaving under special circumstances): A) You could pay any outstanding amounts on your loan and then your shares will be transferred to you or your estate, or You apply for $2,340 worth of shares and are allocated 260 FPH shares on 12 July 2017 (assuming the price per share after applying the exchange rate and less the 20% discount, is $9.00). You make $720 worth of repayments consistently from your salary over a year leaving an outstanding loan of $1,620. In July 2018 you leave employment with FPH for another job opportunity. B) You could request the Trustees to sell your shares. In this case, the Trustees will apply the proceeds from the sale to repay any outstanding loan balance and any remaining proceeds will be transferred to you or your estate. If your employment ends for other reasons, for example you decide to move to another company or your employment with FPH is terminated: You must sell your shares to the Trustees. The Trustees must purchase the shares at the market price on the date you leave FPH, or the amount originally paid for the shares, whichever is lowest, and subject to the repayment of any outstanding loan. The FPH share price (after applying the exchange rate) on the date you leave FPH is $ You will be reimbursed $720 of the repayments made from your salary. Calculation = (260 shares x $9.00) -$1,620 = $720 The FPH share price (after applying the exchange rate) on the date you leave FPH is $8.00. You will be reimbursed $460 as the market price ($8.00 per share) is lower than what you originally paid for the shares ($9.00 per share). Calculation = (260 shares x $8.00) -$1,620 = $460 13

8 How do I know when my shares have been allocated? Following the allocation date (12 July 2017), you will receive an or letter (depending on how you choose to be notified) from our share registrar* Link Market Services, with your allocation confirmation and details of how you can login and view your shares on their website. Can I join the scheme later if I don t want to accept now? We anticipate that a new offer will be made in 2018 or 2019, but this will be subject to Board approval and there s no guarantee future offers will be made. It is possible, due to changes in the relevant laws, that future offers may differ in regards to the amount of shares available to purchase or the discount available. Can the scheme be terminated? FPH intends to continue the offer in future years, but may cease doing so at any time. The Board will review the scheme from time to time and may amend, vary, suspend or terminate the scheme in accordance with the Trust Deed. When will I receive an invitation to participate in the Scheme? If you are eligible to participate you ll receive an invitation on or around 24 May What if I don t receive an invitation? If you haven t received an invitation and believe you are eligible to participate in the scheme, contact Link Market Services. If I want to accept this offer, when do I need to respond? If you wish to participate, you must submit your application form via this website no later than 5.00pm on Friday, 9 June

9 WHAT IT COSTS How much does it cost? If you choose to participate in the scheme, you can contribute a maximum of $2,340 or a minimum of $624. How will it impact my salary or wages? You ll be given an interest free loan from the company equivalent to the amount of shares you choose to purchase. This will be repaid by equal deductions from your after-tax earnings in your normal pay over the three year holding period. For example, if you decide to purchase the maximum value of $2,340, your repayments would be $65.00 a month or $15.00 a week for three years. The deductions would start from the first pay date following the allocation date. Do I have to take a loan? Can I pay upfront? Can I repay the loan earlier? You are able to repay the loan earlier or upfront in full, but you will still only receive the shares at the end of the three year holding period. If I m absent for a long period of time, how will that affect my repayments? If you have unpaid absences (up to a period of 12 months) during the holding period, such as parental leave, leave without pay or other unpaid leave, you can either withdraw from the scheme by giving three months written notice to the Trustees, or suspend your loan repayments until you start paid work again with FPH. If you withdraw: The Trustees will purchase the shares at the market price at the date of withdrawal or the original allocation price (whichever is lowest), deduct the remainder of the loan, and refund the balance (if any). If you suspend your repayments: You can pay the outstanding amount by increased deductions from your salary or wages, paying a lump sum or extending the repayment period. What if I can t afford to keep up my payments? During the holding period, if you experience serious hardship in relation to your ability to repay the loan the Trustees have discretion to ask FPH Pty Limited to vary the terms of repayment. Any such variation must not extend the time for payment beyond the holding period. 17

10 OWNERSHIP How often will shares be allocated? Shares will be issued to the Trustees in one single transaction on or around 12 July Does participating in the scheme affect my employment arrangements? No, participating in the scheme doesn t form part of any contract of employment or services between you and FPH, nor does it provide you with any rights to continue as an employee. Can I allocate the shares to someone else? No, the shares can only be applied for and allocated to you, and you can t transfer the offer to another person. After the holding period has expired, if you choose to have the shares transferred into your name, you can deal with the shares as you see fit. Who actually owns the shares? You will be the beneficial owner of the shares, which will be held by the Trustees on your behalf. At the end of the three year holding period, when the loan has been fully repaid, they will be transferred to your personal ownership. Can I withdraw from the scheme early? You may withdraw from the scheme by giving at least three months prior written notice to the Trustees. In these circumstances, the Trustees will treat you on the same terms as if you had ceased to be an employee for other reasons as outlined previously in this document. Can I vote at shareholder meetings? During the holding period, your shares remain registered in the Trustees names. This means that the Trustees will receive notice of matters upon which votes may be cast. The Trustees will decide how those votes are cast. However, you are able to give the Trustees written directions on how you wish voting rights in relation to your shares to be exercised. If you don t give any directions, the Trustees may vote for the benefit of participants in the scheme instead. After the holding period ends and the shares are transferred into your name, you will be entitled to vote like other shareholders. Can I sell or trade my shares immediately? No, you cannot sell or trade your shares until the holding period ends. Your shares will be held on trust for you by the Trustees during the holding period. When can I sell my shares? Once the holding period ends and the shares are transferred into your name, you are free to sell your shares at any time (subject to the conditions described in this document in relation to ceasing employment, complying with all insider trading laws and complying with our Securities Trading Policy and Guidelines). The Securities Trading Policy and Guidelines can be found here or you can request a copy from Link Market Services. 19

11 DIVIDENDS Will I receive dividends? If FPH pays any dividends with a record date* after the allocation date, you re eligible to receive those dividends on your shares. These will be paid to you either in cash or in additional shares if you join the dividend reinvestment plan* (DRP). Dividend payments are not guaranteed and will depend on a number of factors including FPH s profitability and dividend policy. What s a dividend reinvestment plan? FPH s DRP is a plan which means you can choose to reinvest your cash dividends in additional shares. Please find a copy of the offer document here: You can choose to join the DRP or subsequently withdraw at any time during the holding period and the amount of shares you receive will be calculated in accordance with the DRP offer document. Can dividends be used to offset or reduce the loan balance? No, you can t use the dividends to help repay your loan. 21

12 TAX & FEES INFORMATION Below is some general information on your tax obligations if you choose to participate in the scheme. It s relevant if you are an Australian tax resident (excluding transitional residents), but if you are also subject to tax in another country it may not be applicable. Either way, we recommend you seek independent tax advice. Will I have to pay tax when I acquire the shares? You will not have to pay tax when you acquire the shares provided that: you earn equal to or less than $180,000 for the 2017/2018 income year; and the discount you receive on the price of the shares does not exceed $1,000 (it is not anticipated that this will be the case). If the above tax concession does not apply, the purchase price discount received is taxable in the year of acquisition (i.e. for the current offering, in the year ending 30 June 2018). You will be required to return the amount of the discount for tax purposes in your tax return for the year of acquisition and pay tax at your marginal tax rate. You will receive an annual summary statement that discloses the discount received. This report will be issued before 14 July of the following tax year. How are dividends taxed? Any dividends paid to you must be included in your tax return. The whole of the dividend paid to you, together with any New Zealand withholding tax and Australian franking credits (if attached) will be taxable at your marginal rate. You may be entitled to a foreign tax offset to the extent that any non-resident withholding tax is imposed by New Zealand on any distributions. What are franking credits? Will I be offered them? Franking credits are a means for a company to pass on credits for company income tax already paid. Please refer to the glossary for a full explanation. At this time, our policy is not to attach franking credits to dividends. If a franked dividend is paid, you may be entitled to claim a franking credit to offset tax payable on the distribution. Will I need to pay tax when/if I sell the shares? You will be taxed on any capital gain realized when you sell your shares at your marginal tax rate. Any capital gain will need to be returned in your tax return for the year of sale. A tax liability will not arise at the time the sale restriction period ends and the shares are transferred to you by the Trustees. The tax market value of the shares at the time you acquired them will be deemed the tax cost of the shares. You will make a capital gain to the extent that the sale proceeds exceed the tax cost (or a capital loss to the extent that the sales proceeds are less). The amount of your profit that is taxed may be reduced by 50% if you keep the shares for at least a year from when they were acquired. Are there any additional fees to pay? FPH will pay all administrative fees for the scheme. However, you will be responsible for the costs associated with selling or transferring your shares (including brokerage fees and any transfer fee). At the time this information was prepared, the typical brokerage fee was approximately NZ$35 to sell $2,340 worth of shares. 23

13 GENERAL MATTERS AND CONTACT INFORMATION The shares will be administered by Link Market Services, our share registrar. How will FPH, the Trustees and Link Market Services use my personal information? FPH, the Trustees and Link Market Services will exchange information to enable the shares to be effectively managed. By joining the scheme, you agree to allow FPH, the Trustees and Link Market Services to provide each other or any other regulatory body with your name, address and other information required. You have the right to request access to all personal information held about you by FPH, the Trustees or Link Market Services to request correction of that information. This request should be made to Link Market Services. If you have any privacy concerns or would like information relating to your privacy rights and how your personal information is handled, please contact FPH s General Counsel, Ed Timmins. Who do I contact if I have questions in relation to the scheme? If you have any queries or require any further information in relation to the scheme, please contact Link Market Services by phone on or at fphemployees@linkmarketservices.co.nz Disclaimer Before you make a decision on whether to participate in the scheme, it is important to remember that, as with any investment, there is an element of risk and that the share price can go down as well as up due to company specific reasons and/or stock market conditions. There is no guaranteed return under the scheme. This is general information only and does not constitute financial advice. Neither FPH nor the Trustees will be held responsible for employees who act solely on this information. As individual circumstances vary, you are encouraged to seek independent tax, financial or other professional advice before deciding whether to participate in the scheme. If there is any inconsistency between this information and the Trust Deed the Trust Deed will prevail. Annual report and audited financial statements You have the right to receive from FPH, free of charge, a copy of FPH s latest annual report and latest audited financial statements. These can be obtained by making a request to FPH s finance team. Alternatively, you can obtain a copy electronically by accessing them at You can find the company s current dividend policy on the company s website, 25

14 GLOSSARY $ All monetary amounts in this document are AUD unless otherwise specified. Allocation date The allocation date is the date that shares are allocated to employees who have chosen to take part in the scheme. The allocation date for this offer is likely to be 12 July Dividend Reinvestment Plan (DRP) The DRP is a plan that means you can choose to use any cash dividends you receive to purchase additional shares in FPH (rather than receiving the cash). You can choose to join the DRP at any time during the holding period. More information about the DRP can be found here dividend-reinvestment-plan/ Franking credits Franking credits reduce the amount of tax you need to pay on any dividends that you may receive. Franking is a way a company can pass on credits for Australian tax it has already paid on its profits when it pays dividends to shareholders. These franking credits can offset the amount of tax that Australian resident shareholders would otherwise be liable to pay on those dividends. Ordinary shares Ordinary shares are the most common form of shares that a company will issue. Ordinary shares give voting rights and an entitlement to dividends. Record date The record date is the cut-off date established by the company to determine which shareholders are eligible to receive a dividend. A record date is necessary as the shareholders of the company are continually changing. Share registrar Link Market Services Limited is the share registrar and administrator of the scheme. This means that Link maintains the records of FPH s shareholders and is who you can contact if you have any queries about your shares or to update your personal details. Trust Deed The Trust Deed is a document which contains the rules of the scheme and was completed on 20 December The scheme must comply with the Trust Deed and you can obtain a copy of it by contacting Link Market Services. Trustees The Trustees of the scheme are David Boyle and Victor Riitano. The Trustees are responsible for holding the shares on your behalf during the holding period. 27