ASX ANNOUNCEMENT Bega Cheese Limited ... - Open Briefing

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Directors’ Report (cont.) Year Ended 30 June 2011 Aidan Coleman held a service agreement with Tatura Milk up until 9 May 2011, the key terms of which were as follows: Term Ongoing, subject to termination rights set out in the service agreement. Termination by either Tatura Milk or Executive Termination by Tatura Milk Termination by Executive Payments on Termination Six months’ notice or, at the discretion of Tatura Milk, payment in lieu of such minimum notice. Forthwith in the event that the executive becomes incapacitated, bankrupt, of unsound mind, is guilty of serious misconduct or is convicted of a serious criminal or civil offence which affects his ability to perform his duties. Four weeks’ notice if given within 3 months of a change of control of Tatura Milk, in which case the executive is entitled to a payment equal to 3 months’ salary. Salary and statutory entitlements up to the date of termination and, if applicable, payment in lieu of the minimum notice period or payment on termination by the executive as a result of a change of control of Tatura Milk as per above. Aidan Coleman’s service agreement with Tatura Milk was terminated by mutual consent with effect from 9 May 2011, immediately following which Aidan Coleman assumed the role of CEO with the Company. Paul van Heerwaarden has a specific service agreement with Tatura Milk which took effect from his commencement as Executive General Manager on 10 May 2011, the key terms of which are as follows: Term Ongoing, subject to termination rights set out in the service agreement. Termination by Tatura Milk Termination by Executive Payments on Termination Three months’ written notice or forthwith in the event of incapacity or beach of the service agreement by the executive without remedy. Three months’ written notice. Salary and statutory entitlements up to the date of termination and, if applicable, payment in lieu of the minimum notice period as per above. In the event of redundancy, an additional amount equal to one month’s pay for each completed year of service to a maximum of 12 months’ severance payment. Bega Cheese Limited 2011 Annual Report 16
Directors’ Report (cont.) Year Ended 30 June 2011 Executive Chairman’s Leadership Team - Remuneration Structure and At Risk Payments Consistent with all senior executives in the Group, the remuneration of the Executive Chairman’s Leadership Team (Leadership Team) includes at risk payments, the structure of which is addressed below. Total Employment Cost The Group sets the remuneration of each member of the Leadership Team having regard to the total employment cost (TEC) of that employee to the Group. The Group and the relevant Leadership Team member have some latitude as to how the TEC can be structured so as to meet the needs of the particular executive, so long as all employment, income tax, fringe benefits tax and other relevant legislation is complied with and the TEC approved through the annual review process is not exceeded. Base Remuneration The Base Remuneration for each Leadership Team member is determined as part of the annual salary and performance review process and comprises: � A Base Salary, which is paid monthly. The Base Remuneration is not subject to specific performance or deliverables criteria and is generally considered fixed for the duration of the relevant annual review period. � Superannuation contributions, ranging from 10% to 15% depending on the salary package agreed with each Leadership Team member. The Company At Risk Performance-based Remuneration - 2011 Short Term Incentive Scheme (2011 STI) The at risk component for each of Barry Irvin, Maurice Van Ryn and Colin Griffin for the year ended 30 June 2011 was determined in accordance with the 2011 STI approved by the Board. Under the 2011 STI, qualifying for any part of the at risk component of the remuneration was subject to a number of conditions precedent, the Company achieving a pre-determined minimum profit performance and other prescribed performance hurdles, including safety, quality and environmental management. The 2011 STI also allowed for the at risk component for each participating executive to escalate as the profit performance of the Company exceeded certain predetermined targets. For Barry Irvin, Maurice Van Ryn and Colin Griffin, the remuneration at risk totalled 30% of their Base Salary (plus or minus the Company profit performance escalation factor). The actual financial performance of the Company for the year ended 30 June 2011 was such that the profit performance escalation factor was 1.0, meaning that each participating executive received 100% of their final individual at risk outcome. The final at risk outcome for each of Barry Irvin, Maurice Van Ryn and Colin Griffin was measured against predetermined at risk criteria across three specific areas of performance with the final outcome for the year ended 30 June 2011 being: Element of Business and Profit Performance At Risk Achieved At Risk Achieved At Risk Achieved Barry Irvin Maurice Van Ryn Colin Griffin Company 50% 50% 50% 50% 50% 50% Individual business units 25% 18.75% 25% 18.75% 25% 18.75% Divisional and individual targets 25% 25% 25% 12.5% 25% 23% Bega Cheese Limited 2011 Annual Report 17
Page 1 and 2: ASX ANNOUNCEMENT Bega Cheese Limite
Page 3 and 4: Corporate Directory Bega Cheese Lim
Page 5 and 6: Executive Chairman’s Review Year
Page 7 and 8: Chief Executive Officer’s Review
Page 9 and 10: Directors’ Report Year Ended 30 J
Page 11 and 12: Directors’ Report (cont.) Year En
Page 19: Directors’ Report (cont.) Year En
Page 25 and 26: Auditors Independence Declaration Y
Page 27 and 28: Corporate Governance Statement (con
Page 29 and 30: Corporate Governance Statement (con
Page 31 and 32: Financial Statements Year Ended 30
Page 71 and 72:
Directors’ Declaration Year Ended
Page 73 and 74:
Independent Auditor’s Report (con
Page 75 and 76:
Shareholder Information (cont.) Yea
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