Waiver from NZX Main Board Listing Rule 6.5.2

NZX Regulation Decision
Tourism Holdings Limited (“THL”)
Waiver from NZX Listing Rule 6.5.2









22 May 2019

NZX REGULATION DECISION – 22 May 2019
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Decision
1. On the basis that the information provided by THL

is complete and accurate in all material
respects, NZXR grants THL a waiver from Rule 6.5.2, to the extent that this Rule would
otherwise prevent THL from issuing Options under the 2017 Option Scheme that confer the
right to a change in exercise price.
2. The information on which this decision is based is set out in Appendix One to this decision.
This waiver will not apply if that information is not or ceases to be full and accurate in all
material respects.
3. The Rule to which this decision relates is set out in Appendix Two to this decision.
4. Capitalised terms which have not been defined in this decision have the meanings given to
them in the Rules.
Reasons

5. In coming to the decision to provide the waiver set out in paragraph 1 above, NZXR has
considered that:
a. the policy objective of Rule 6.5.2 is to ensure that Options may not be subsequently
amended by the Issuer in a manner that is detrimental to the interests of the holders of
the underlying Equity Securities. The policy will not be offended by the granting of this
waiver;
b. the 2017 Option Scheme establishes a formula for the exercise price of the Options.
While the formula will result in a fluctuating exercise price during the exercised period
of the Option, THL cannot arbitrarily determine the exercise price. The exercise price
may change, to the extent of THL’s average cost of capital annually offset by dividends
paid;
c. before the Options are issued, section 49 of the Companies Act requires that directors
of THL who vote in favour of the issue must certify that the consideration and terms of
issue of the Options, and shares on the exercise of those Options, are fair and
reasonable to the company and to all existing shareholders. This provides additional
comfort to shareholders as to the directors’ view of the fair and reasonableness of each
issue of Options;
d. any issues made under the 2017 Option Scheme will also be subject to the Rule 4.6.1,
so the total number of Options will be subject to the 3% limit as prescribed by that Rule;
and
e. there is precedent for this waiver.

NZX REGULATION DECISION – 22 May 2019
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Appendix One
1. Tourism Holdings Limited (
THL
) is a Listed Issuer with Equity Securities Quoted on the
NZX Main Board (
Main Board
).
2. THL established a long-term incentive share option scheme in 2017 (the
2017

Option
Scheme
) for selected employees (each a
Participant
). Under the 2017 Option Scheme
each Participant will be eligible to be granted Options to acquire Equity Securities in THL
(
Shares
). The Options will not be Listed and will not have voting rights. The Options, if
exercised will convert on a one for one basis into fully paid ordinary shares in THL.
3. Should a Participant receive Options under the 2017 Option Scheme THL will provide the
Participant with a notice setting out the number of Options the Participant is invited to
acquire and the market price that will be used to calculate the exercise price. The Options
will be granted to the Participant on the date specified in the grant notice (the
Grant Date
).
4. Options granted on a particular Grant Date will vest over time in tranches:
a. a third of the Options will vest two years after the Grant Date;
b. a third of the Options will vest three years after the Grant Date; and
c. a third of the Options will vest four years after the Grant Date.
5. Once Options have vested, subject to the terms of the 2017 Option Scheme, the Participant
will be able to exercise the Options and receive Shares by paying the exercise price
applicable to those Options.
6. The exercise price is determined by applying the formula set out in the terms of the 2017
Option Scheme (the
THL Formula
). Under the THL Formula the exercise price for an
Option will be the volume weighted average price over the preceding 20 Business Days the
Share had at the Grant Date of the option plus an uplift that reflects THL’s average annual
cost of capital for the first two years from the Grant Date less dividends paid in that two-
year period.
7. The maximum number of unexercised Options (together with any partly paid shares then on
issue under the Tourism Holdings Limited Long Term Incentive Scheme 2009) that may be
outstanding at any time may not exceed 10% of the Equity Securities then on issue.
8. THL anticipates that issues under the 2017 Option Scheme will be made pursuant to NZX
Listing Rule (
Rule
) 4.6.1, so the total number of Options issued in a 12-month period will be
subject to the 3% limit as prescribed in that Rule.
9. Rule 6.5.2 provides that an Option must not confer the right to change the exercise price or
number of underlying Securities, unless such a change is made in accordance with the
exceptions to that Rule. NZX Regulation (
NZXR
) granted THL a waiver from the Listing
Rules on 27 February 2017 as the exercise price of the Option is subject to fluctuation
pursuant to the THL Formula. This waiver decision re-documents the prior waiver decision
to reflect the updated Rule references and language.

NZX REGULATION DECISION – 22 May 2019
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Appendix Two
Rule 6.5.2
An Option must not confer the right to a change in the exercise price or number of underlying
Equity Securities if there is a Rights issue to the holders of those Equity Securities, unless:
(a) it was issued with the approval of Quoted Equity Securities, in which case changes can be
made in accordance with the formula or provision contained in the terms of the Option, or
(b) the effect of the change is to reduce the exercise price of the Option and the reduction is
calculated according to the following formula:



where,
O1 = the new exercise price of the Option.
O = the old exercise price of the Option.
E = the number of underlying Financial Products into which one Option is exercisable.
[Note: E is generally one unless the number has changed because of a bonus issue or
capital change.]
P = the volume weighted average market price of the underlying Financial Products during the 5
Business Days ending on the day before the Ex Date for the Rights.
S = the subscription price for a Financial Product under the Rights issue.
D = the dividend (in the case of a trust, distribution) due but not yet paid on the existing
underlying Financial Products (except those to be issued under the Rights Issue).
N = the number of Financial Products with Rights or entitlements that must be held to receive a
Right to one new Equity Security.
Nothing in this Rule applies to any Option which was issued before the Issuer was Listed.

01= 0 - E[P-(S+D)]
N + 1