Simply stated, the bar has been raised for the issuance of the 2011 & 2012 incentive shares - this does increase or decrease the number of shares to be issued, only raises the income target ... The lock-up effectively keeps 60% of the 2010 incentive shares (approx 7.2mil) from being sold for one year ... The $60 mil founders note is now convertable into 3 mil shares.
The message is positive as it re-aligns the incentive shares with recent guidance, provides a stock conversion vs cash payment on the founders loan and because it enhances shareholder communication.
1. The board of directors has approved: converting the $60 mln loan from Lam and Vong, to a three-year, zero-coupon term loan, convertible into ordinary shares at $20 per share;
2. lock-up agreements relating to 60% of the total 2010 incentive shares to be issued to management for a period of one year;
3. and raising the 2011 incentive share target from net income of $49.5 mln to net income of $65 mln while raising the bonus share awards net income target for 2011 to $78 mln from $75 mln, and increasing the 2012 target from net income of $58 mln to $78 mln, while raising the bonus share awards net income target for 2012 to $94 mln from $82.5 mln.