Telstra 2013 Annual Report Download - page 178

NOTES TO THE
FINANCIAL STATEMENTS
(CONTINUED)
176 Telstra Annual Report 2013 Telstra Corporation Limited and controlled entities
Telstra Growthshare Trust (continued)
(b) Long term incentive (LTI) plans (continued)
(iii) Performance hurdles (continued)
Options (continued)
If Telstra achieves a rank of less than the 50th percentile for the
performance period, then none of the options allocated for that
performance period will vest and 25 per cent of the options will
lapse.
In addition, for the third performance period, if Telstra's rank meets
or exceeds:
• both the 50th percentile and the rank achieved in the first
performance period, the remaining unvested options from the
first performance period will vest; and/or
• both the 50th percentile and the rank achieved in the second
performance period, the remaining unvested options from the
second performance period will vest.
The number of additional unvested options which may vest is also
determined by using a linear scale.
If Telstra achieves a rank of less than the 50th percentile for the third
performance period, then no options will vest for the third
performance period. Furthermore, any remaining unvested options
will lapse following the end of the third performance period.
Return on Investment (ROI) options
The ROI hurdle for financial year 2008 has been measured over the
following three performance periods:
• First performance period - 1 July 2008 to 30 June 2009;
• Second performance period - 1 July 2009 to 30 June 2010; and
• Third performance period - 1 July 2010 to 30 June 2011.
For each of the performance periods, the number of options that will
vest is calculated as follows:
• if the threshold target is achieved in the applicable performance
period, then 50 per cent of the allocation of options will vest;
• if the result achieved is between the threshold and stretch
targets, then the number of vested options is scaled
proportionately between 50 per cent and 100 per cent; and
• if the stretch target is achieved, then 100 per cent of the options
will vest.
Any options which do not vest in their respective performance
period lapse.
Restricted shares
Details of the relevant performance hurdles in relation to restricted
shares are set out below:
GMD Telstra Wholesale restricted shares
As part of the financial year 2013 GMD Telstra Wholesale restricted
share plan, the GMD of Telstra Wholesale was provided restricted
shares. Performance hurdles were applied in determining the
number of restricted shares allocated and therefore the restricted
shares are not subject to any performance hurdles.
Employee Share Plan (ESP) restricted shares
As part of the financial year 2013 and 2012 ESP, certain eligible
employees were provided restricted shares. There are no
performance hurdles for these restricted shares.
27. EMPLOYEE SHARE PLANS (CONTINUED)