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Whitehaven Coal Limited : Annual Report 2013
93 Whitehaven Coal Limited Annual Report 2013 What is the performance condition? The performance rights are subject to a relative TSR hurdle. The TSR of the Company is measured as a percentile ranking compared to a comparator group of listed entities over the relevant performance period for the tranche. The comparator group for the 2012 grant is the entities in the ASX 100 Resources Index as at 24 September 2012 (Grant Date). A TSR hurdle was considered an appropriate benchmark in light of the Company's focus on long- term developments and capital expenditure, which is intended to generate real long-term shareholder value. The level of vesting was determined based on the ranking against the comparator group companies in accordance with the following schedule: • in the 75th percentile (i.e. top quartile) or above -- 100% of performance rights vest; • between the 50th and 75th percentile -- 50% of the performance rights vest at the 50th percentile, and thereafter the percentage vesting increases by 2% for each percentile above the 50th percentile; and • below the 50th percentile -- no performance rights vest. How will the performance condition be calculated? Unless the Remuneration Committee determines otherwise, the TSR of a Company for a performance period will be calculated adopting the following determination of the relevant opening and closing share prices: • the volume weighted average share price over the 20 trading day period commencing 10 trading days before the Grant Date (opening share price); and • the volume weighted average share price over the corresponding 20 trading day period at the conclusion of the relevant Performance Period (closing share price). There is no re-testing of awards that do not vest. Do the performance rights attract dividend and voting rights? Performance rights do not carry voting or dividend rights. Shares allocated on vesting of performance rights rank equally with other ordinary shares on issue, including in relation to dividend and voting rights. Participants are required to comply with the Company's securities trading policy in respect of their performance rights and any shares they receive upon vesting. They are prohibited from hedging or otherwise protecting the value of their performance rights. What happens in the event of a change in control? In the event of a takeover bid or other transaction, event or state of a airs that in the Board's opinion is likely to result in a change in control of the Company, the Board has a discretion to determine that vesting of some or all of any unvested performance rights should be accelerated. What happens if an executive ceases employment during the performance period? In general, unless the Board determines otherwise, where an executive's employment is terminated: • for cause: all unvested performance rights will lapse. • due to resignation or by mutual agreement with the Company: unvested performance rights will remain on foot and subject to the original performance hurdle. However, the Board may at its discretion determine to lapse any or all of the unvested performance rights and ordinarily, in the case of a resignation, would be expected to do so; • for any other reason: unvested performance rights will remain on foot and subject to the original performance hurdle, with a Board discretion to determine that some of the performance rights (up to a pro rata portion based on how much of the performance period remains) will lapse. The performance rights that remain on foot will be tested in the normal course following the end of the relevant performance period. Directors' Report
Annual Report 2012