1086 AnnRep-Investment S04-3 - Pumpkin Patch investor relations

Pre-listing employee share scheme restructuringIn the period from 1999 to prior to listing in June 2004 the Company established a number of employee share schemes whichallowed employees (including Executive Directors) to purchase shares in the Company. Prior to listing and the allotment of sharesunder the share offer in June 2004 the Company restructured these schemes.The effect of the restructuring was:• All shares allocated under these schemes were fully paid, and the Company provided loans in the aggregate of $7,431,490 topay for any shares under the schemes not already purchased by the employee in cash.• In the case of the current Executive Directors the Company prior to listing paid grossed up bonuses to substantially dischargethe amount of the loans. In the case of other employees the Company is to pay grossed up bonuses over a three year periodto fully or substantially discharge the amount of the loans.• The total net tax cost of restructuring all of the pre-listing employee share schemes of $7,431,490 was fully provided for priorto listing.• A portion of each employee’s shares issued under the schemes are held by a trustee as security for the payment of the loansowing to the Company. In the case of Executive Directors as at 31 July 2004 the trustee holds security over shares relating toChrissy Conyngham (570,000 shares), Greg Muir (512,000 shares), and Maurice Prendergast (1,500,000 shares). These shares willbe released progressively over three years to the respective Executive Directors.• Should an Executive Director’s employment cease they are required to forfeit to the Company any remaining shares heldas security.• As part of this restructuring the Executive Directors have received a benefit resulting from the discharge of their loans. Thebenefits are received over the three year period that the shares held as security are progressively released from security. Thesebenefits over the three year period amount to in the case of Chrissy Conyngham $402,000, Greg Muir $768,000, MauricePrendergast $1,530,000 and Bruce Walkley $402,000.• As at 31 July 2004 a portion of the loans to Executive Directors remain outstanding. The outstanding balances amount to in thecase of Chrissy Conyngham $76,346, Greg Muir $68,776, and Maurice Prendergast $137,015. These loans are repayable over athree year period and are interest free.22