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FLEXIGROUP LIMITED FINANCIAL REPORT 2011
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.
Retention date
1 September 2011 at 5.00pm (Sydney time)
Distributions/Dividends Participants are entitled to receive distributions/dividends made in respect of the deferred shares.
Performance period
Tranche 1 – Performance period 1 (being 1 July 2008 to 30 June 2009)
Tranche 2 – Performance period 2 (being 1 July 2009 to 30 June 2010)
Tranche 3 – Performance period 3 (being 1 July 2010 to 30 June 2011)
Disposal restriction
Deferred shares that vest in accordance with the applicable vesting conditions will be subject
to a restriction on disposal until the retention date of 1 September 2011.
Details of the performance rights issued in September 2010
The details of the performance rights issued to G McLennan, N Roberts, P Laughton and D Klotz 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.
The measure used to determine FlexiGroup’s fnancial performance is Earnings Per Share growth
targets (“EPS hurdle”) and Total Shareholder Return (“TSR hurdle”).
66.66% of each tranche of performance rights will be subject to the EPS hurdle, while the
remaining 33.34% will be subject to the TSR hurdle.
EPS performance target The basic EPS (“Basic EPS”) for the year ending 30 June 2011 is 19.55 cents per share and for
30 June 2012 is 21.99 cents per share.
Performance testing (“testing date”) against the EPS hurdle will take place on the date of
announcement of the relevant annual fnancial results of FlexiGroup. There will be no retesting
of performance rights under the EPS target. Performance rights that do not vest will be taken
to have lapsed.
The Board has the discretion to vary at any time the EPS hurdle applicable to all or part of the
performance rights.
TSR performance target The performance hurdle set by the Board in relation to each Tranche is based on TSR growth
of the Company measured against other companies in the S&P/ASX 300 Index (not including
resources companies) TSR growth for the relevant performance period.
The TSR for FlexiGroup will be determined by calculating the amount by which the sum of:
• the 30 day volume weighted average price (“
VWAP
”) for FlexiGroup shares in the period
up to and including 30 June at the end of the relevant Performance Period; and
• the dividends paid on a FlexiGroup share during the relevant performance period,
exceeds the 30 day VWAP for FlexiGroup shares in the period up to and including 1 July at
the beginning of the relevant performance period, expressed as a percentage.
Nil
– if the Company’s TSR ranked in the 4th quartile (i.e. 76th to 100th ranking) of companies
in S&P/ASX 300 Index (excluding resources companies).
25%
– if the Company’s TSR equals performance of the 75th ranking company in S&P/ASX 300
Index (excluding resources companies).
Pro-rata between 25% and 50%
– if the Company’s TSR ranked in the 3rd quartile (i.e. 51st
to 75th ranking) of companies in S&P/ASX 300 Index (excluding resources companies).
Pro-rata between 50% and 100%
– if the Company’s TSR ranked in the 2nd quartile (i.e. 26th
to 50th ranking) of companies in S&P/ASX 300 Index (excluding resources companies).
100%
– if the Company’s TSR ranked in the 1st quartile (i.e. 1st to 25th ranking) of companies
in S&P/ASX 300 Index (excluding resources companies).