61 AGL Energy Limited Annual Report 2012 The CEO  Terms of appointment Termination conditions Details of Mr Fraser’s appointment and the terms of his Service  Agreement are set out below. Mr Fraser was appointed Managing Director and CEO of AGL on  22 October 2007. His Service Agreement is open ended, with his  appointment as Managing Director and CEO continuing until it is  terminated. AGL may terminate Mr Fraser’s appointment: Mr Fraser may terminate his appointment: If Mr Fraser’s appointment is terminated by either party giving a  period of notice, AGL may at any time before the end of that period  of notice pay Mr Fraser an amount equal to that proportion of his  TFR at the time which corresponds to the period of notice which  has been forgone. If Mr Fraser’s appointment is terminated by AGL with 12 months’  notice before the date on which AGL pays STIs in respect of a  financial year, Mr Fraser is eligible to be paid a STI in respect of that  financial year as follows: All unvested SPRs under the old LTIP or banked SPRs under the new  LTIP will lapse if Mr Fraser ceases employment with AGL for any  other reason. The circumstances in which all unvested SPRs granted to Mr Fraser  under the old LTIP will vest (subject to the relevant performance  conditions being met at the time of cessation of employment or  waived by the Board under exceptional circumstances), and the  positive balances of SPRs banked to Mr Fraser’s notional SPR bank  accounts under the new LTIP will vest, are as follows: If Mr Fraser terminates his employment with AGL due to retirement  or a Fundamental Change, a pro rata STI payment will be made  based on 100% of his STI opportunity. > by giving him 12 months’ notice in writing at any time or > without notice in the event of any act which detrimentally affects  AGL (such as dishonesty, fraud or serious or wilful misconduct  in the discharge of his duties or unremedied, persistent, wilful or  material breaches of the terms of his Service Agreement). > by giving AGL 12 months’ notice in writing at any time or > by giving AGL three months’ notice in writing if he ceases to hold  the most senior management role within AGL or ceases to report  directly to the Board, or if the scope of his responsibilities or  authorities is materially diminished (Fundamental Change). This  right of termination must be exercised within six months after  the Fundamental Change occurs. (a) death; (b) total and permanent disablement; (c) termination of his employment by AGL without cause (either  with or without notice) (however Mr Fraser has advised AGL  that he will not assert his entitlement for any unvested SPRs  to vest if his employment terminates in this circumstance); (d) termination of his employment with AGL by Mr Fraser giving  three months’ notice after the occurrence of a fundamental  change (on the basis provided for in Mr Fraser’s employment  contract); (e) redundancy; (f) retirement; or (g) cessation of his employment with AGL in such other  circumstances as the Board in its absolute discretion  may determine. > if he is terminated as a result of unsatisfactory performance, a  pro rata STI based on 50% of his STI opportunity (however Mr  Fraser has advised AGL that he will not assert his entitlement  to any payment of a short-term incentive if his employment is  terminated in this circumstance); > if he is terminated as a result of redundancy or total or permanent  disablement, a pro rata STI based on 100% of his STI opportunity.