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## REMUNERATION REPORT (AUDITED) (CONTINUED) 

## 5. Executive remuneration arrangements (continued) 

## Variable remuneration - long term incentive (LTI) (continued) 

A change of control event occurs when any person, either alone or together with any “associate” (as defined in the Australian Corporations Act) who does not hold a relevant interest in more than 50% of the issued shares of the Company acquires a relevant interest in more than 50% of the issued shares, or the Board concludes that there has been a change in control of the Company then one of the following will occur in respect of all unvested Performance Rights or Deferred Equity Awards. The Performance Rights or Deferred Equity Awards will vest on a pro-rata basis or at the discretion of the Board in certain circumstances. 

## Executive Option Plan – LTI plan used by AACo up to 30 June 2009 

The Company previously utilised an Executive Option Plan (EOP) for the granting of non-transferable options to executives and middle management with more than twelve months’ service at the grant date. 

The existing options under the EOP have all vested. 

There were no options granted in the three months to 31 March 2013 under the EOP and the Board does not intend to make further grants under this scheme (twelve months to 31 December 2012: Nil). 

## Tax exempt share plan 

All Company and Group employees paid under $50,000 are eligible to be issued fully paid shares to the value of $1,000 p.a. under the Tax-exempt Employee Share Plan (TESP). An employee must have been employed by the Group for 12 months to be eligible in the following year. 

There were no shares issued under the TESP in the three months to 31 March 2013 and the twelve months to 31 December 2012. 

## Hedging of equity rewards 

The Company prohibits employees from entering into arrangements to protect the value of unvested LTI awards. The prohibition includes entering into any scheme, arrangement or agreement (including options and derivatives) under which the employee may alter the economic benefit/risk derived from security holdings in the Company under unvested entitlements (e.g. unvested equity-based incentive or award grant). 

No Director or officer or employee may deal in Company shares at any time for short term gain, including buying and selling shares in a three month period or using forward contracts, without approval of the Chairman, or in the case of the Chairman, a Director chosen by the Board for that purpose. 

## 6. Company performance and link to remuneration 

## Company performance and its link to long term incentives 

CEO LTI Performance Testing: 

<img src='content_image/239262.jpg'>

The financial performance measure driving LTI payment outcomes is total shareholder return (TSR). TSR for the Company is defined as share price growth plus dividends, assuming the dividends are reinvested into the Company’s ordinary shares. 

As a guide to TSR, the graph below demonstrates the shareholder wealth created since December 2002, as compared with the benchmark ASX small ordinaries. 

