content_image/143323.jpg content_image/143324.jpg content_image/143335.jpg
## 18 CONTRIBUTED EQUITY - ORDINARY SHARES 

<img src='content_image/143323.jpg'>

<img src='content_image/143324.jpg'>

## Ordinary shares 

As at 31 July 2013 there were 200,215,894 ordinary issued shares in Kathmandu Holdings Limited and these are classified as equity. 49,954 shares were issued under the “Executive and Senior Management Long Term Incentive Plan 24 November 2010” during the year ending 31 July 2013 (2012:165,940). 

All ordinary shares carry equal rights in respect of voting and the receipt of dividends. Ordinary shares do not have a par value. 

## 19 EMPLOYEE SHARE BASED REMUNERATION 

## Executive Share Option Plan 16 October 2009: 

On 16 October 2009 the Board approved an Executive Share Option Plan to issue options to selected senior executives and to Executive Directors. Options will vest annually in part or in full with the holder, in three tranches commencing 1 October 2010. All options not vested expire on 1 October 2013, and all options vested must be exercised within five years from date of grant. Entitlement to exercise is conditional on the Company achieving in relation to each tranche a compound total shareholder return of 15% per annum over the period of trading that is measured in relation to that tranche. Each option entitles the holder to one ordinary share in the capital of the Company. The exercise price is determined by the Board but is generally $2.1333 for New Zealand based employees and A$1.70 for Australian based employees. 

During the financial year the Company issued nil options (2012: nil) to Executive Directors and senior executives. The fair value 

of options issued during the financial year is $0 (2012: $0). The options issued during 2010 were valued under a Monte Carlo simulation approach factoring in the total shareholder return condition using the following assumptions: 

<img src='content_image/143335.jpg'>

A 50% Net Profit after Tax dividend pay-out ratio was factored into the valuation of the options based on management budgets. The expected volatility was estimated based on the historical volatility of comparable listed retail businesses. 

The estimated fair value for each tranche of options issued is amortised over the vesting period from the grant date. The Company has recognised a compensatory expense in the income statement of $6,515 (2012: $21,911) which represents this amortisation. 

