Telkom AR front.qxp

30. EMPLOYEE BENEFITS (continued)
Telephone rebates (continued)
Principal actuarial assumptions were as follows:
Telkom Annual Report 2009 211
Notes to the consolidated annual financial statements (continued)
for the three years ended March 31, 2009
2007 2008 2009
Discount rate (%) 7.5 9.0 8.7
Rebate inflation rate (%) 0.0 4.0 4.0
Contractual retirement age 65 65 65
Average retirement age 60 60 60
The assumed rates of mortality are determined by reference
to the PA(90) Ultimate table, minus one year age rating as
published by the Institute and Faculty of Actuaries
in London and Scotland.
Number of members 19,515 18,766 17,034
Number of pensioners 10,918 10,680 10,499
Telkom Conditional Share Plan
Telkom’s shareholders approved the Telkom Conditional Share Plan at the January 2004 Annual General Meeting. The scheme covers both
operational and management employees and is aimed at giving shares to Telkom employees, at a RNil exercise price, at the end of the
vesting period. The vesting period for the operational employees shares awarded in 2004 and 2005 is 0% in year one, 33% in each of
the three years thereafter, while the shares allocated in 2006 and 2007 together with management shares vest fully after three years.
Although the number of shares awarded to employees will be communicated at the grant date, the ultimate number of shares that vest may
differ based on certain performance conditions being met (refer to note 24).
The Telkom Board approved the fourth enhanced allocation of shares to employees as at September 24, 2007, with a grant date of
September 27, 2007, the day that the employees and Telkom shared a common understanding of the terms and conditions of the grant.
A total number of 6,089,810 shares were granted.
The Board has also approved an enhanced allocation for the November 2006 grant on September 4, 2007 with a grant date of
September 27, 2007. The number of additional shares granted with regard to the 2006 allocation is 4,966,860 shares.
The weighted average remaining vesting period for the shares outstanding as at March 31, 2009 is 0.71 years (2008: 1.25 years;
2007: 1.75 years).
2007 2008 2009
The following table illustrates the movement of the maximum number of
shares that will vest to employees for the August 2004 grant:
Outstanding at beginning of the year 2,414,207 1,883,991 420,590
Granted during the year 1,212 252 –
Forfeited during the year (80,923) (43,790) (3,985)
Vested during the year (450,505) (1,419,863) (416,605)
Outstanding at end of the year 1,883,991 420,590 –
The following table illustrates the movement of the maximum number of
shares that will vest to employees for the June 2005 grant:
Outstanding at beginning of the year 1,930,687 1,864,041 1,435,387
Granted during the year 1,005 3,469 52,954
Forfeited during the year (67,651) (108,177) (45,188)
Vested during the year – (323,946) (1,135,424)
Outstanding at end of the year 1,864,041 1,435,387 307,729