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## Old LTI plan 

AGL currently has two types of LTI for Executives. 

1. AGL’s ‘new’ LTI, which is described in the section above, covered grants of SPRs, which were determined in September for each year between 2009 and 2012, and is intended to cover future grants (subject to periodic review by the Board). 

2. Now purely as a legacy plan, AGL also has an ‘old’ LTI scheme under which SPRs were granted in October 2008. 

Apart from a balance of 4,048 SPRs, granted in October 2008, the old LTI plan is no longer in operation. This plan will cease to operate entirely from September 2012. 

The old LTI plan uses relative TSR as the performance hurdle. 

> Vesting is based on measurement of the performance hurdle, initially three years from the date of issue, or (to the extent that full vesting does not occur at this point) four years from the date of issue. 

> Any SPRs that do not vest, after year four, automatically lapse. 

> The performance hurdle is relative TSR measured against a comparator group of the ASX100 companies as at 1 October 2008. 

> The number of SPRs that vest is determined as follows: 

<img src='content_image/274839.jpg'>

Vesting of SPRs commences at the 40th percentile because independent analysis showed that the probability of vesting at the 50th percentile was quite low and in fact AGL had the lowest price volatility of ASX100 companies who used relative TSR as a performance hurdle. This low probability and higher risk presented limited incentive and retention benefit to Executives reducing the effectiveness of the LTI as a genuine performance incentive. 

Relative TSR performance is assessed by an independent third party provider for accuracy and independence of calculation. 

## CEO LTI allocation: 2012 – 2014 

AGL obtained shareholder approval in 2011 to issue an LTI allocation to Mr Fraser with a face value equivalent of up to a maximum of 100% of his TFR (total fixed remuneration) in respect of each of the financial years ending 30 June 2012, 30 June 2013 and 30 June 2014. 

## 4. Remuneration mix 

STI and LTI are together known as the ‘variable’ or ‘at risk’ element of an Executive’s remuneration. This increases with the level of responsibility and/or criticality of the role. 

The balance between fixed and variable remuneration is regularly reviewed for market relativity and competitiveness. 

In respect of the 2011/12 financial year, the maximum remuneration mix within the Executive roles in AGL was as follows: 

## Maximum percentage of total target remuneration 

<img src='content_image/274842.jpg'>

Note: 

1 This percentage may increase over time for sustained outperformance against specified hurdles over a number of years (due to the impact of the LTI multiplier). 

