A vesting condition that requires:
- the counterparty to complete a specified period of service (ie a service condition); the service requirement can be explicit or implicit; and
- specified performance target(s) to be met while the counterparty is rendering the service required in (a).
The period of achieving the performance target(s):
- shall not extend beyond the end of the service period; and
- may start before the service period on the condition that the commencement date of the performance target is not substantially before the commencement of the service period.
A performance target is defined by reference to:
- the entity’s own operations (or activities) or the operations or activities of another entity in the same group (ie a non-market condition); or
- the price (or value) of the entity’s equity instruments or the equity instruments of another entity in the same group (including shares and share options) (ie a market condition).
A performance target might relate either to the performance of the entity as a whole or to some part of the entity (or part of the group), such as a division or an individual employee.
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