27
FLEXIGROUP LIMITED FINANCIAL REPORT 2011
Details of the performance rights
The details of the performance rights issued to Key Management Personnel are set out below:
Instrument
Each performance right represents an entitlement to one ordinary share.
Exercise price
Nil
Vesting conditions
Performance rights will vest on, and become exercisable on or after, the Vesting Date to the
extent that certain performance conditions that are based on the fnancial performance of
FlexiGroup and the achievement of pre-determined Key Performance Indicators (“KPI Hurdle”)
have been satisfed over the performance measurement period.
The measure used to determine FlexiGroup’s fnancial performance is Earnings Per Share
growth targets (“EPS hurdle”).
Eighty percent (80%) of each tranche of performance rights will be subject to the EPS hurdle,
while the remaining twenty percent (20%) will be subject to the KPI hurdle.
EPS performance target The basic EPS (“Basic EPS”) for the purposes of the grant of performance rights under this
invitation is 13.0 cents per share. The applicable EPS hurdle for each test period is measured
on an annual compounding basis to the relevant performance test date, using the Basic EPS
as the base line number.
Performance testing (“testing date”) against the EPS hurdle will take place on the date of
announcement of the relevant annual fnancial results of FlexiGroup. For some but not all
tranches, retesting will occur at the retesting date in respect of the next fnancial year-end date
immediately following the relevant initial testing date. Performance rights that do not vest on
retesting will be taken to have lapsed.
The applicable EPS hurdle for each test period is measured on an annual compounding basis
to the relevant performance test date, using the basic EPS as the base line number. The Board
has the discretion to vary at any time the EPS hurdle applicable to all or part of the performance
rights.
Why vesting conditions
were chosen
The vesting conditions were chosen as performance conditions as they refect, at the date they
were granted, the generation of signifcant shareholder value.
KPI performance target The KPI hurdle may include any combination of operational, volume and product mix, cultural,
fnancial and other measures as determined and modifed by the Board from time to time.
The KPI hurdle will be performance tested against these measures over each relevant fnancial
year unless otherwise determined by the Board. The relevant KPI hurdle for each year will be
determined by the Board by 30 September of the relevant fnancial year.
The KPI hurdles will be performance tested against those measures over each relevant fnancial
year unless otherwise determined by the Board.
In determining whether the KPI performance hurdles have been satisfed, a report is prepared
for the Remuneration Committee detailing each KPI performance hurdle and the performance
of the executive against the hurdle. The Remuneration Committee approves that rating for all
KPI performance hurdles.
Vesting date
Tranches 1, 2 and 3 – 1 September 2010 at 5.00pm (Sydney time)
Tranche 4 – 1 September 2011 at 5.00pm (Sydney time)
Exercise period
Tranche 1 – From vesting date to expiry date
Tranche 2 – From vesting date to expiry date
Tranche 3 – From vesting date to expiry date
Tranche 4 – From vesting date to expiry date
Expiry date
Tranches 1, 2 and 3 – 31 December 2012 at 5.00pm (Sydney time)
Tranche 4 – 31 December 2013 at 5.00pm (Sydney time)
Disposal restriction
No disposal restriction imposed at the time of this grant.