Notes to the consolidated financial statements 30 June 2022 (continued) 29 Share-based payments (continued) (b) LTI - Performance Rights (continued) Underlying EBITDA is a non-IFRS measure and comprises net profit or loss before finance costs, depreciation, amortisation and income tax, and after any earnings adjustment items, including, but not limited to, asset impairments, acquisition and transaction costs, and restructuring costs. Climate Change Response Progress The Climate Change Response progress will be assessed based on the achievement of Carbon Neutrality of the Nova Operation over the three-year measurement period. For the performance testing of this measure, 'Carbon Neutrality' will be defined as being able to demonstrate during the three-year measurement period that Scope 1 and 2 emissions at the Nova Operation have been (i) abated through emissions reduction programs, and/or (ii) offset through the Group's investments in sequestration and natural carbon removal programs, which are recognised by Australian Carbon Credit Units (ACCUs) issued by the Clean Energy Regulator. The vesting schedule for 10% of the performance rights subject to the achievement of Carbon Neutrality at the Nova Operation is as follows: Climate Change Response Progress Level of vesting Nova Operation Carbon Neutrality not achieved 0% Nova Operation Carbon Neutrality achieved 100% Relative People and Culture Performance The relative people and culture performance will be determined based on the Company's average percentile engagement score ranking amongst the companies surveyed by Feedback Works for the three-year measurement period. The vesting schedule for 10% of the performance rights subject to relative people and culture performance is as follows: Relative People & Culture Performance Level of vesting Less than 50th percentile 0% Between 50th and 75th percentile 50% plus straight-line pro-rata between 50% and 100% 75th percentile or better 100% (c) Service rights - STI scheme Under the Group's short-term incentive (STI) scheme, Executives and selected employees receive 50% of the annual STI achieved in cash and 50% in the form of rights to deferred shares in IGO Limited (referred to as service rights). The service rights are granted following the determination of the STI for the performance year and vest in two equal tranches. The first tranche of 50% vests on the 12 month anniversary of the STI award date, and the second tranche of 50% vests on the 24 month anniversary of the STI award date. The service rights automatically convert into one ordinary share each on vesting at an exercise price of nil. The Executives and employees do not receive any dividends and are not entitled to vote in relation to the service rights during the vesting period. If an Executive or employee ceases to be employed by the Group within the vesting period, the service rights will be forfeited, except in circumstances that are approved by the Board on a case-by-case basis. The number of rights to be granted is determined based on the 5 day VWAP of the Company's shares after the release of IGO Limited's financial statements. Notes to the consolidated financial statements 30 June 2022 (continued) 29 Share-based payments (continued) (c) Service rights - STI scheme (continued) Set out below are summaries of movements in service rights during the year: 2022 2021 Number of share rights Weighted average fair value Number of share rights Weighted average fair value Outstanding at the beginning of the year 649,272 4.79 476,088 5.36 Rights issued during the year 382,915 9.69 536,496 4.46 Rights vested during the year (410,615) 5.06 (305,157) 5.08 Rights lapsed during the year (47,626) 9.13 (58,155) 4.81 Outstanding at the end of the year 573,946 7.51 649,272 4.79 The share-based payments expense relating to service rights included in profit or loss for the year totalled $2,790,968 (2021: $1,989,887). (d) Employee Share Ownership Award In accordance with the terms of the EIP, the Employee Share Ownership Award (ESOA) provides for shares to be issued by the Company to employees for no cash consideration. All employees (excluding executive directors, senior management and other employees entitled to participate in the LTI scheme and non-executive directors) who have been continuously employed by the Group for a period of at least three months prior to 1 July are eligible to participate in the ESOA. Under the ESOA, eligible employees may be granted up to $1,000 worth of fully paid ordinary shares in IGO Limited annually for no cash consideration. The number of shares issued to participants in the scheme is the offer amount divided by the weighted average price at which the Company's shares are traded on the Australian Securities Exchange for the 20 days up to and including the date of grant. 2022 Number 2021 Number Number of shares issued under the plan to participating employees 25,594 39,800 Each participant was issued with shares worth $1,000 based on the weighted average market price of $8.30 (2021: $5.02). The share-based payments expense relating to ESOA included in profit or loss for the year totalled $212,302 (2021: $199,758). (e) Employee Salary Sacrifice Share Plan In accordance with the terms of the EIP, the Employee Salary Sacrifice Plan allows for employees, excluding KMP, to purchase up to $5,000 of shares in the Company via salary sacrifice. The Company will match any share purchased with one share, up to a maximum of $5,000. The number of shares acquired on-market by the Company during the year for the purposes of this plan were 140,304 shares with an average price per share of $10.66 (2021: 174,232 shares with an average price per share of $5.76). The share rights issued under the EIP will not be subject to any further escrow restrictions once they have vested to the employees. (f) Share trading policy The trading of shares issued to participants under the Company’s EIP is subject to, and conditional upon, compliance with the Company’s employee share trading policy. (g) Non-executive Directors The EIP permits non-executive directors to be eligible employees and therefore to participate in the plan. It is not currently intended that non-executive directors will be issued with performance rights under the EIP and any such issue would be subject to all necessary shareholder approvals. Notes to the consolidated financial statements 30 June 2022 Notes to the consolidated financial statements 30 June 2022 146 — IGO ANNUAL REPORT 2022 IGO ANNUAL REPORT 2022 — 147
RkJQdWJsaXNoZXIy MjE2NDg3