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Steel & Tube staffer pays 97% premium to fully paid for shares held under 24-year old scheme

Wednesday 18th January 2017

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A Steel & Tube Holdings worker paid a 97 percent premium to cover the rest of what had been partially paid shares issued under the steel product maker's old executive share scheme. 

On Dec. 6, a Steel & Tube employee paid $43,200, or $4.32 a share, for 10,000 shares, the company said in a disclosure to the NZX yesterday. At the time, the shares were trading at $2.19, and they were recently at $2.40, up 0.4 percent today. The board made a call for payment on Oct. 25 at the employee's request, the notice said. 

The staffer had previously paid 1 cent per share under the scheme, which a Steel & Tube spokeswoman said is in the process of being disestablished. 

"The 'executive' is an existing employee who at the time of issue of these shares was an employee who had achieved a level of status in their employment equal to or above that of 'Senior Executive' as determined by the directors at that time," the spokeswoman said. "He is not a member of the current executive team."

There are still 45,000 shares partly paid to 1 cent apiece under the scheme. In 1993, when the scheme was set up, Steel & Tube's stock price started the year at $2.60, soaring to $6.45 by the end of December. They've since come back from those heady heights, and last year sank to a 15-year low.

Steel & Tube's new executive share plan was introduced in 2003, offering key management the opportunity to subscribe for rights to shares. Those rights vest provided certain total shareholder return targets are met. 

During the 2016 financial year, 493,441 shares were granted or purchased for the executive share plan at a fair value issue price of $2.66 a share, with 110,599 forfeited, and 256,232 shares exercised at an average price of $2.67. 

At the June 30, 2016 balance date, almost 1.1 million rights to shares were outstanding with an average remaining life of 3.1 years. 

Steel & Tube's executive team received $841,000 in share-based benefits in 2016, up from $498,000 a year earlier.

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