112 Consolidated  Notes to the  Financial  Statements Note 48 – Share-based payment plans (continued) AGL Long-Term Incentive Plan The AGL Energy Limited Board of Directors approved the AGL Long-Term Incentive Plan (LTIP) on 5 October 2006 and was amended by  the Board on 19 August 2009. The LTIP is designed to closely align the interests of shareholders and AGL executives, with the achievement  of AGL’s strategic goals and the generation of sustained shareholder value over the long term. The LTIP forms an integral component of  AGL’s remuneration strategy. Under the LTIP, executives are granted Share Performance Rights (SPRs), which vest over time if specific applicable hurdles are met. A SPR is  an entitlement to one fully-paid ordinary share in AGL. On vesting, SPRs are exercised and converted to fully-paid ordinary shares in AGL.  SPRs do not carry dividend or voting rights. SPRs participate in bonus issues, rights issues and reconstructions and reorganisations of the  capital of AGL in the same manner as AGL ordinary shares. The LTIP performance hurdles were selected on the basis that rewards correspond with returns that shareholders receive. For all grants, the SPRs will vest to the extent to which the performance condition is either satisfied or waived by the Board. LTIP allocations are determined based on market practice, so that AGL remains competitive in remuneration against its comparator group. Participants in the LTIP are restricted from entering into any derivative or other financial product in relation to the SPRs to protect against  an economic exposure to price movements in AGL shares. If a participant ceases employment before the expiry of the vesting period as a result of total and permanent disablement, redundancy,  retirement, death or any other exceptional circumstances determined by the Board from time to time, any positive balance of SPRs in a  participant’s bank account will vest or any negative balance is eliminated. If a participant ceases employment before the expiry of the vesting period in other circumstances any positive balance is forfeited or any  negative balance is eliminated. All SPRs will vest in the event that a change in control of AGL occurs, subject to the performance conditions applicable to those SPRs being  satisfied at that time unless the Board, in its absolute discretion, determines that it is appropriate to waive the satisfaction of the  performance conditions. Grants of SPRs to eligible executives are made on an annual basis or such other times as the Board in its discretion may determine. Eligible  executives are employees of any entity in the consolidated entity who are determined by the Board in its discretion to be eligible to  participate in the LTIP. AGL may issue shares or purchase shares in the ordinary course of trading on the ASX to satisfy SPRs which have vested. The Board has an absolute discretion to determine the number of SPRs issued to an LTIP participant, and the performance conditions which  must be satisfied before SPRs can vest and the period over which SPRs vest. On 20 June 2011, 161,090 SPRs were notionally granted to eligible executives in relation to the year ended 30 June 2011. The number of  SPRs notionally granted was determined by taking the participant’s Total Fixed Remuneration (TFR) as at 1 September 2010 multiplied by  their pre-agreed percentage LTI component, and divided by $14.58 (being the volume weighted average price (VWAP) at which AGL’s  shares traded on the ASX during the 30 calendar days up to and including 30 June 2010). TSR measures the total change in the value of AGL shares over the measurement period including dividends and other distributions.  TSR calculates what a dollar investment in AGL would return in percentage terms at the end of a specified period. EBIT/Funds Employed measures the return AGL is getting from its funds invested. Rewarding growth in EBIT/Funds Employed will assist in  ensuring that capital is used wisely. Participants will be awarded a number of SPRs in respect of each performance condition, determined by multiplying 50% of the number of  their initial grant of SPRs by the multiplier indicated in the tables below which corresponds with the TSR outcome and the growth in EBIT/ Funds Employed outcome for the financial year ending 30 June 2011. Annual TSR  Number of SPRs awarded Equal to or greater than 14%  2 times SPRs notionally granted Greater than 4% and less than 14%  Progressive on a straight-line basis from zero times to 2 times SPRs notionally granted Between 4% and minus 4%  Zero times SPRs notionally granted Less than minus 4% and greater than minus 14%   Progressive deduction on a straight-line basis from zero times to minus 2 times SPRs notionally  granted Equal to or less than minus 14%  Minus 2 times SPRs notionally granted Executives The SPRs notionally granted are subject to two performance hurdles based on annual: – Total Shareholder Return (TSR); and – Growth in Earnings before interest and tax (EBIT)/Funds Employed