Note 33  Employee equity participation  continued  Employee Share Plan  Historical Share Plans  Other plans  Options granted vest in three equal tranches after the second,  third and fourth anniversaries of the date of allocation of the  options. Subject to the MGESOP rules and the Company’s  personal dealing policy, options can be exercised after the  vesting period during an options exercise period up to expiry.  In individual cases, such as where an employee leaves with the  Company’s agreement towards the end of a vesting period,  the Company’s Executive Committee has the power to waive  the remainder of any vesting period and allow exercise of some  or all of the relevant options.  For options granted to the members of MBL and MGL’s  Executive Committees, Executive Voting Directors and other  Executive Directors where the invitation to apply for the options  was sent to the Executive on or after 30 June 2006, in respect  of each tranche of vested options, options will only be  exercisable if the Company’s average annual return on ordinary  equity for the three previous financial years is above the 65th  (Executive Committee and Executive Voting Directors) and  50th (other Executive Directors) percentiles, of the  corresponding figures for all companies in the then S&P/ASX  100 Index, with the conditions to be examined only upon  vesting. During the year ended 31 March 2013 the final  tranches of these options failed to meet the performance  hurdles and consequently did not vest. If fully paid ordinary shares issued on the exercise of options  rank pari passu with all other fully paid MGL ordinary shares  than on issue.  The options do not confer any right to directly participate in  any share issue or interest issue by MGL or any other body  corporate or scheme and carry no dividend or voting rights.  The options include terms that provide for the adjustment of  the number options, the exercise price and/or the number of  shares to be issued on the exercise of options, in the following  circumstances:  intended to ensure that these types of transactions do not  result in either a dilution of option holders’ interests or an  advantage to option holders of ordinary shares do not receive.  For the year ended 31 March 2014, compensation expense  relating to exchangeable shares, retention securities and  option plans totalled $0.1 million (2013: credit of $15 million).  Following shareholder approval at the 1997 Annual General  Meeting, MBL introduced the Macquarie Bank Employee  Share Plan whereby each financial year, eligible employees  were offered up to $1,000 worth of fully paid ordinary MBL  shares for no cash payment. The Company has since  introduced the Macquarie Group Employee Share Plan (ESP)  on the same terms.  Shares allocated under the ESP cannot be sold until the earlier  of three years after allocation or the time when the participant  is no longer employed by the Company or a subsidiary of the  Company. In all other respects, shares allocated rank equally  with all other fully paid ordinary shares then on issue.  The latest offer under the ESP was made during November  2013. A total of 966 (2013: 826) staff participated in this offer.  On 6 December 2013, the participants were each allocated 18  (2013: 30) fully paid ordinary shares based on the offer amount  of $1,000 and the then calculated average market share price  of $53.70 (2013: $32.85); a total of 17,388 (2013: 24,780)  shares were allocated. The shares were allocated to staff for  no cash consideration. The aggregate value of the shares  allocated was deducted from staff profit share and  commissions.  Shares are no longer being issued under the Staff Share  Acquisition Plan nor the Non-Executive Director Share  Acquisition plan. However employees and Non-Executive  Directors still hold shares issued in previous years.  The Consolidated Entity operates other local share-based  compensation plans, none of which, individually or in  aggregate are material.  These terms are consistent with the ASX Listing Rules for the  adjustment of options in these circumstances, which are  – an issue of new shares by way of capitalisation of profits  or reserves;  – an issue to holders or shares of rights (pro-rata with  existing shareholdings) to subscribe for further shares;  – a pro-rata bonus issue;  – a subdivision, consolidation, cancellation or return of  capital; and  – other reorganisations. 169 