AS AT 30 JUNE 2011
32
Directors’ Report (continued)
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.
Vesting date
Tranche 1 – 1 September 2012
Tranche 2 – 1 September 2013
Exercise period
Tranches 1 & 2 – From vesting date to expiry date
Expiry date
Tranche 1 & 2 – 31 December 2014
Disposal restriction
No disposal restriction imposed at the time of this grant.
Retesting – performance rights – TSR
If the TSR vesting condition is not met for any Tranche 1 performance rights when measured on the testing date for
performance period 1 and those performance rights have not otherwise lapsed, those performance rights may be exercised
during the exercise period for Tranche 2 if the TSR hurdle is met on the testing date for performance period 2. For these
purposes, the performance period will be from 1 July 2010 (the beginning of performance period 1) to 30 June 2012
(the end of performance period 2).
If the TSR vesting condition is not met for any Tranche 2 performance rights when measured on the testing date for
performance period 2 and those performance rights have not otherwise lapsed, those performance rights may be
exercised during the exercise period for Tranche 2 if the TSR hurdle is met on the testing date for performance period 2
with the performance period measured for these purposes from 1 July 2010 (the beginning of performance period 1)
to 30 June 2012 (the end of performance period 2).
Details of the performance rights issued in June 2011
The details of the performance rights issued to G McLennan 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”).
Fifty percent (50%) of each tranche of performance rights will be subject to the EPS hurdle,
while the remaining ffty percent (50%) will be subject to the TSR hurdle.
EPS performance target The basic EPS (“Basic EPS”) for the year ending 30 June 2012 is 21.0 cents per share,
30 June 2013 is 24.3 cents per share and 30 June 2014 is 27.9 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. 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.