Telstra 2009 Annual Report Download - page 213

Telstra Corporation Limited and controlled entities
198
Notes to the Financial Statements (continued)
Telstra Growthshare Trust (continued)
(a) Short term incentive plans (STI) plans (continued)
(i) Description of equity instruments (continued)
Once the vested incentive shares are exercised, Telstra shares will be
transferred to the executive. Until this time, the executive cannot use
the incentive shares (or vested incentive shares) to vote or receive
dividends. Any dividends paid by the Company prior to exercise will
increase the number of incentive shares allocated to the executive.
(ii) Summary of movements and other information
Allocations of Telstra’s shares have been made in the form of incentive
and deferred incentive shares under our STI plans and are detailed in
the following table:
(^) Incentive shares includes both incentive shares and deferred
incentive shares. The incentive shares “exercisable” includes
incentive shares held by those executives who have been made
redundant and are then consequently entitled to the incentive shares.
The weighted average share price for incentive shares exercised
during the financial year was $4.35 (2008: $4.27).
(*) The fair value of incentive shares granted in fiscal 2009 is based on
the market value of Telstra shares on allocation date.
(#) The incentive shares granted during the year relate to incentive
shares allocated under the fiscal 2008 STI plan and incentive shares
granted under the dividend reinvestment plan for the fiscal 2005 STI
plan.
(^^) The number outstanding includes incentives shares that are
subject to a restriction period. These amount to 2,742,153 as at 30
June 2009.
(b) Long term incentive (LTI) plans
The purpose of the long term incentive (LTI) plans is to align key
executives’ rewards with shareholders’ interests, and reward
performance improvement whilst supporting business plans and
corporate strategies. The Telstra Growthshare Trust Board
administers the plans and determines who is invited to participate in
these plans.
Performance of the LTI plans is measured with respect to the relevant
performance period and subject to subsequent verification,
ratification and sign off by the Remuneration Committee and
approval by the Board.
27. Employee share plans (continued)
Incentive shares (^)
Number
Weighted
average fair
value (*)
Outstanding as at 30 June 2007 . . . . . . 1,524,761 $4.77
Granted . . . . . . . . . . . . . . . . . . 1,361,870 $4.36
Forfeited. . . . . . . . . . . . . . . . . . (133,260) $4.77
Exercised . . . . . . . . . . . . . . . . . (647,881) $4.77
Outstanding as at 30 June 2008 . . . . . . 2,105,490 $4.50
Granted (#) . . . . . . . . . . . . . . . . 1,437,525 $4.31
Exercised . . . . . . . . . . . . . . . . . (672,511) $4.77
Outstanding as at 30 June 2009 (^^) . . . 2,870,504 $4.34
Exercisable as at 30 June 2009. . . . . . . 128,351 $4.77