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Whitehaven Coal Limited : Annual Report 2013
91 Whitehaven Coal Limited Annual Report 2013 8.5.4 Short-term incentive for FY2013 The following table summarises the terms of the STI that applied during FY2013. Who participated? All salaried employees. Mr Flynn did not participate in the FY2013 STI as he did not commence his role as CEO until 25 March 2013. Consequently, his FY2014 STI grant will operate over an extended 15-month period from 25 March 2013 to 30 June 2014, with subsequent annual performance periods commencing on 1 July. What was the performance period? The STI for FY2013 operated over a 14 month performance period from 1 May 2012 to 30 June 2013, in recognition of the fact that the senior executives' previous STI crystallised on the date of the Merger. From FY2014 the STI performance period will be 12 months, aligned with the 1 July -- 30 June nancial year. What was the target STI award? Senior executives' target STI was 50% of xed remuneration pro-rated over extended 14 month performance period. The maximum STI amount actually paid for FY2013 was 25% of this target. What were the performance conditions and how were they assessed? The STI for the senior executives was assessed by the CEO and approved by the Board having regard to Group nancial performance and as well as non- nancial measures. Group nancial considerations included production, cost per saleable tonne, and NPAT. Individual performance objectives included safety, project management and leadership measures. Why were these performance conditions chosen? These performance conditions were chosen as they were directly linked to the operational priorities of the Company following the merger with Aston Resources, including bringing the Narrabri Longwall project safely into production and achieving our merger synergies. What performance level was achieved? The Company surpassed the threshold production target of 8.9 million ROM tonnes for the year. However, other nancial targets of NPAT and cost per saleable tonne were not met. Whilst the safety target was not met, there will continue to be a strong emphasis on demanding safety targets for the FY2014 STI award. Some individuals also met personal milestone based performance objectives, such as securing the $1.2 billion nance facility, the successful installation and ramp up of the longwall at Narrabri, implementation of cost cutting initiatives, extensive engagement in planning approval processes and putting long-term infrastructure in place. How was the STI delivered? 70% of the STI award (for those senior executives who received an STI) will be paid to the executives in cash in September 2013. The remaining 30% of the award will be delivered in the form of fully paid Whitehaven Coal shares (Deferred Shares). The Deferred Shares vest in two equal tranches 12 months and 24 months following allocation, unless the executive resigns or is terminated for cause. Senior executives are required to comply with the Company's securities trading policy in respect of their Deferred Shares, which includes a prohibition on hedging or otherwise protecting the value of their unvested securities. As the Deferred Shares form part of remuneration already earned, dividends accrue on the Deferred Shares but will only be paid to the senior executive at the end of the deferral period in relation to those Deferred Shares that vest. In the event of a takeover or any proposed transaction that, in the Board's opinion, is likely to result in a change of control, the Deferred Shares will vest. Directors' Report
Annual Report 2012