Long term incentive plan for CEO

11 October 2021
Company Announcement
NZX:NZA

NZ Automotive Investments Limited implements long-term incentive plan for CEO

New Zealand based integrated used automotive group NZ Automotive Investments Limited (NZX: NZA/the Company) has implemented a long-term incentive plan (‘Plan’) for its Chief Executive Officer, David Page.

NZA Chairman Karl Smith said “Our objective is to reward David for driving long term performance and to align his interests with those of our shareholders by executing on a strategy that will see growth in profitability, a material improvement in the share price and by broadening the liquidity in the stock. These were three of the key objectives of seeking and securing a listing on the NZX in early 2021 and it is appropriate that David’s incentives are consistent with those objectives, and that he shares fairly in the achievement of them.”

Under the terms of the Plan David has been issued with 419,230 options for no monetary consideration. Each option entitles him to subscribe for one ordinary share in the Company, for nil consideration, in the event that certain performance hurdles are met and he remains employed by the Company at the end of the performance period. There are three tranches of options:

- Tranche A – 175,000 options
- Tranche B – 150,000 options
- Tranche C – 94,230 options

The performance period for all of the tranches is the three-year period from1 October 2021 to 30 September 2024.

Performance hurdles

Tranche A – 175,000 options
Vesting of the 175,000 Tranche A options is related to the Company’s share price in the ten trading days prior to 30 September 2024 (‘VWAP’). If the VWAP is $2.00 or higher, then all of the options will vest. If the VWAP is less than $0.9338, none of these options will vest. If the VWAP is between $0.9338 and $2.00, the options will vest on a linear, pro rata basis.

Tranche B – 150,000 options
Vesting of the 150,000 Tranche B options is dependent on the VWAP being $2.25 or higher, in which case all of the Tranche B options will vest. None of the Tranche B options will vest if the VWAP is less than $2.25.

Tranche C
Vesting of the 94,230 Tranche C options depends upon the Company generating sufficient liquidity in the shareholder base by 30 September 2024. If at 30 September 2024 the Company has 100 or more non-affiliated shareholders holding:

(a) 30 per cent or more of the Company’s shares, then all of the Tranche C options will vest;
(b) Between 20 per cent and 30 per cent of the Company’s shares then the Tranche C options will vest on a linear pro rata basis.

If at 30 September 2024 the Company has less than 100 non-affiliated shareholders or less than 20 per cent of the Company’s shares are held by non-affiliated shareholders, then none of the Tranche C options will vest.

The options will not vest where the performance hurdles are not satisfied (but subject to a Board discretion to determine that options nonetheless vest in order to give effect to the intent and purpose of the Plan). The options will lapse where David leaves the Company’s employment before 30 September 2024 (subject to certain limited exceptions).

The attached capital change notice is provided under NZX listing rule 3.13.1.

ENDS

Karl Smith
Chairman
NZ Automotive Investments Limited

About NZ Automotive Investments Limited (NZAI)
NZAI is an integrated used automotive group operating throughout New Zealand via two subsidiaries: Automotive Retail and Vehicle Finance. NZAI’s mission is to deliver quality cars and financing solutions at the most affordable prices to the average New Zealander. Operating under the “2 Cheap Cars” brand, its Automotive Retail company is one of the largest used vehicle sellers in New Zealand with 12 dealerships across the country. Its Vehicle Finance company operates under the “NZ Motor Finance” brand. It was established in 2019 to diversify earnings and provide a further growth opportunity for NZAI. It originates loans entirely from cross-selling to Automotive Retail customers, which allows NZ Motor Finance to grow its finance book with minimal acquisition and administrative costs. www.nzautomotiveinvestments.co.nz