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## Note 48 – Share-based payment plans (continued) 

Details of movements in SPRs in the AGL Long-Term Incentive Plan for executives are set out below: 

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The fair value of services received in return for SPRs granted are measured by reference to the fair value of SPRs granted. The estimate of the fair value of services received is measured based on the Black-Scholes and Monte Carlo simulation methods. The contractual life of the SPRs is used as an input into this model. Expectations of early vesting are incorporated into the Monte Carlo simulation method. Expected volatility is based on the historical share price volatility over the past two years. 

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The total expense recognised in the income statement as part of employee benefits expense during the year in relation to SPRs granted to executives in the AGL Long-Term Incentive Plan was: 

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## Managing Director 

Mr Fraser was appointed Managing Director and Chief Executive Officer on 22 October 2007. On appointment, Mr Fraser was granted 80,584 SPRs with a face value of $1,050,000, subject to the LTIP. This grant was made on 25 February 2008 after receiving a waiver from the Australian Securities Exchange requirements under the applicable ASX Listing Rules to grant SPRs without shareholder approval. On 1 September 2010, 80,584 SPRs vested and were exercised and converted to fully-paid ordinary shares in AGL. 

Mr Fraser was Group General Manager Merchant Energy prior to being appointed Managing Director and Chief Executive Officer and was then eligible for an allocation of SPRs. Mr Fraser was granted 23,331 SPRs on 25 February 2008 after receiving a waiver from the Australian Securities Exchange requirements under the applicable ASX Listing Rules to grant SPRs without shareholder approval. On 1 September 2010, 23,331 SPRs vested and were exercised and converted to fully-paid ordinary shares in AGL. 

At the 2008 Annual General Meeting, shareholder approval was obtained for the grant of SPRs under the LTIP to Mr Fraser in respect of the financial years ending 30 June 2009, 30 June 2010 and 30 June 2011. 

On 20 June 2011, Mr Fraser was notionally granted 137,175 SPRs in relation to the year ended 30 June 2011. The number of SPRs notionally granted was determined by dividing Mr Fraser’s TFR as at 1 September 2010 of $2,000,000 by $14.58 (being the volume weighted average price (VWAP) at which AGL’s shares traded on the ASX during the 30 calendar days up to and including 30 June 2010).$^{114}$ 

