Document:

Telecom Restricted Share Scheme - 2007

 “Exhibit 4.3” 
  

 TELECOM RESTRICTED SHARE SCHEME – 2007

  

 TELECOM RESTRICTED SHARE SCHEME 
  

 TABLE OF CONTENTS 
  

					
	 PART I - PRELIMINARY AND INTERPRETATION
	  	1
			
		    	 1       Preliminary
	  	1
		    	 2       Interpretation
	  	1
		
	PART II - OPERATION OF THE SCHEME	  	5
			
		    	 3       Offers
	  	5
		    	 4       Loan
	  	5
		    	 5       Acceptance
	  	5
		    	 6       Transfer Date
	  	6
		    	 7       KiwiSaver Scheme
	  	7
		    	 8       Obligations of Nominee
	  	9
		
	PART III - TERMINATION OF EMPLOYMENT	  	10
			
		    	 9       Sale and Repayment
	  	10
		
	PART IV - CORPORATE EVENTS	  	12
			
		    	 10     Complete Acquisition, Fundamental Change, Business Sale
	  	12
		    	 11     Early Transfer
	  	12
		    	 12     Capital Changes
	  	13
		    	 13     Capital Return
	  	14
		    	 14     Other Adjustment
	  	15
		
	PART V - GENERAL	  	16
			
		    	 15     No divestment
	  	16
		    	 16     Administration of Scheme
	  	16
		    	 17     Rights attaching to Shares
	  	16
		    	 18     Amendment
	  	16
		    	 19     Miscellaneous
	  	17

 Date: 2 August 2007 
 PART I - PRELIMINARY AND INTERPRETATION 
  

	1	Preliminary 

  

	1.1	This is the Telecom Restricted Share Scheme 2007. 

  

	1.2	This document applies to allocations to Executives made after 2 August 2007. 

  

	2	Interpretation 

  

	2.1	In this document unless the context otherwise requires: 

 Allocation Date means the date on which Shares are, or are to be, allocated to an Executive (specified in the offer document) 
 Allocation Price means the volume weighted average market price of Shares on the Exchange for the 20 Business Days immediately preceding the date of issue 
 Board means the board of directors of Telecom from time to time 
 Bonus means a cash bonus from a Subsidiary for an Executive which, after first deducting tax at the highest marginal tax rate applying to
the Executive, is equal to the Loan 
 Bonus Issue means any distribution or allocation of securities or other benefits (other
than cash) to Shareholders for which Shareholders are not to provide consideration 
 Breach means a breach of Telecom’s
Constitution, the listing and/or other rules governing the Exchange or any other stock exchange on which Shares are quoted, and/or any statute, regulation or Telecom’s internal procedures for insiders 
 Business Day means a day on which the Exchange is open for trading 
 Business Sale means, in respect of an Executive: 
  

	 	(a)	the Subsidiary by which that Executive is employed is disposed of to a person not a member of the Group; or 

  

	 	(b)	the business in which that Executive is employed is disposed of to a person not a member of the Group and the Executive, as a result of that disposal, becomes an employee of that
person or of an associate of that person 

 Capital Change means a Rights Offer, Bonus Issue, Capital Return, or
any other reconstruction of, or adjustment to, the capital or capital structure of Telecom of any nature 
 Capital Return means
any payment of cash to Shareholders which is, or is to be, accompanied by a reduction in the number of Shares, or the proportion of economic interest in Telecom, held by Shareholders to which the Capital Return applies 
 Complete Acquisition means any transaction or arrangement which has one of the following results: 
  

	 	(a)	all of the Shares held by the Nominee are compulsorily acquired by any person; or 

  

 1 

 TELECOM RESTRICTED SHARE SCHEME 
  

	 	(b)	all of the Shares are acquired by a person, or by a person and that person’s associates; or 

  

	 	(c)	all of the Shares are cancelled, cease to exist, or are transferred or exchanged, and in substitution for Shares the Nominee receives or is to receive cash, securities, or other
benefits 

 Dividend means a payment of cash in respect of Shares which is not a Capital Return 
 Early Termination means: 
  

	 	(a)	cessation of an Executive’s Employment (unless the Executive immediately assumes further Employment or is on non-permanent leave of absence with employer approval);

  

	 	(b)	an Executive purporting to act in breach of clause 15.1; and/or 

  

	 	(c)	Telecom being put into liquidation (or suffering a similar event), 

 before the Transfer Date 
 Employee Contribution means a contribution to a KiwiSaver Scheme required to be deducted
from a Bonus or part Bonus 
 Employer Contribution means a contribution to be made to a KiwiSaver Scheme by an employer of an
Executive as a result of a Bonus or part Bonus being paid 
 Employment means employment by Telecom or a Subsidiary 

Event has the meaning in clause 14 
 Exchange means New Zealand Exchange Limited’s NZSX 
 Excluded Shares means (subject to clause 11.4)
at any date Executive’s Shares: 
  

	 	(a)	the Allocation Date of which was less than one year before that date; and 

  

	 	(b)	the Transfer Date of which is more than one year after that date. 

 Executive means an executive who is Employed 
 Executive’s Shares in respect of an Executive means
the Shares held by the Nominee for that Executive 
 Fundamental Change means the occurrence of one of the following events:

  

	 	(i)	control of 50% or more of the voting rights in Telecom is held by one person or by one person and that person’s associates; or 

  

	 	(ii)	all or a material part of the business of the Group is disposed of to a person not a member of the Group by one transaction or a series of related transactions, or any
reconstruction or merger affecting Telecom occurs (not being a Complete Acquisition), and as a result of that disposal, reconstruction, or merger there is in the opinion of the Board a change in the essential nature of the business of the Group,

 if (but only if) the Board determines that as a result of the occurrence of that event Shares held by the Nominee for
Executives should be transferred to Executives 

 TELECOM RESTRICTED SHARE SCHEME 
  

 Group means Telecom and its subsidiaries 
 KiwiSaver Scheme means a ‘KiwiSaver’ scheme under the KiwiSaver Act 2006 
 Lender means the Subsidiary providing the Loan 
 Loan means an interest-free loan to an Executive equal to the Total Price, reduced if applicable pursuant to clause 13.1(b)(iv) 
 Nominee means the person appointed from time to time by Telecom to hold Shares on behalf of an Executive 
 Redundancy means the termination of Employment of an Executive by reason of that Executive’s position becoming surplus to the
Group’s requirements, or any other involuntary termination of an Executive’s Employment which the Board in its discretion determines constitutes redundancy, but does not include termination of Employment in the course of a Business Sale

 Rights Offer means any offer of securities or benefits to Shareholders for which Shareholders are to provide consideration

 Scheme means the Telecom Restricted Share Scheme 2007 
 Share means an ordinary share in Telecom 
 Shareholder means a holder of a Share 
 Shortfall has the meaning in clause
7.3(b) 
 Subsidiary means a subsidiary of Telecom 
 Telecom means Telecom Corporation of New Zealand Limited 
 Total Price means the
aggregate value of Shares allocated, or to be allocated, to an Executive (specified in the offer document) 
 Transfer Date
means the date on which Shares are, or are to be, transferred to an Executive and released from the Scheme (specified in the offer document). 
  

	2.2	In the definitions of “Complete Acquisition” and “Fundamental Change “ the expressions “associate”, “control” and “voting right”
have the meaning in the Takeovers Code 2001. 

  

	2.3	In this document: 

  

	 	(a)	the singular includes the plural and vice versa, and words importing any gender include the other genders; 

  

	 	(b)	a reference to a person includes any individual, partnership, committee and incorporated or unincorporated body (whether or not having a separate legal personality);

  

	 	(c)	a reference to amend includes modify, delete, add and vary; 

 TELECOM RESTRICTED SHARE SCHEME 
  

	 	(d)	a reference to apply includes apply under assignment or set off; 

  

	 	(e)	where a word or expression is defined, other parts of speech and grammatical forms of that word or expression have a corresponding meaning; 

  

	 	(f)	a reference to the Scheme means the Scheme as amended from time to time; 

  

	 	(g)	a reference to a person includes its successors and permitted assigns; and 

  

	 	(h)	headings are inserted for convenience only and shall be ignored in interpretation. 

 TELECOM RESTRICTED SHARE SCHEME 
  

 PART II - OPERATION OF THE SCHEME 
  

	3	Offers 

  

	3.1	Telecom may offer under the Scheme Shares to an Executive. 

  

	3.2	An Executive will not (subject to clause 7) be required to pay any amount under the Scheme to Telecom or a Subsidiary from the Executive’s own funds. 

 

	3.3	Each offer (acceptance of which will be conditional on approval by Telecom) will be made in an offer document, and will: 

  

	 	(a)	specify the Total Price; 

  

	 	(b)	have attached a copy of the Scheme (unless the Executive has previously participated in the Scheme); 

  

	 	(c)	have attached a copy of an investment statement for the offer (if made in New Zealand); 

  

	 	(d)	specify the Allocation Date; 

  

	 	(e)	specify the Transfer Date; 

  

	 	(f)	have attached a loan agreement; 

  

	 	(g)	refer to Telecom’s internal procedures for insiders; 

  

	 	(h)	have attached a form requesting consent to acquire the Shares, in terms of those procedures; and 

  

	 	(i)	specify the period during which the offer may be accepted. 

  

	4	Loan 

  

	4.1	The Lender will lend to the Executive (interest-free) the Total Price if Shares are to be allocated to the Executive. 

  

	5	Acceptance 

  

	5.1	An Executive who wishes to accept an offer of Shares must return to Telecom, within the time specified, and completed by the Executive: 

  

	 	(a)	the acceptance part of the offer document, confirming the Executive’s acceptance; 

  

	 	(b)	the form requesting consent to acquire the Shares, in terms of Telecom’s internal procedures for insiders (if applicable); and 

 TELECOM RESTRICTED SHARE SCHEME 
  

	 	(c)	the agreement for the Loan. 

  

	5.2	In accepting an offer of Shares, an Executive: 

  

	 	(a)	will be deemed to have directed the Lender to apply the Loan in payment to Telecom of the Total Price as payment for the Shares (this deemed direction discharging fully the
Executive’s obligation to pay for the Shares); 

  

	 	(b)	will be deemed to have directed Telecom that the Shares be held under the Scheme on behalf of the Executive by the Nominee; 

  

	 	(c)	acknowledges that acceptance is conditional on approval by Telecom, and the Executive is bound by the Scheme; and 

  

	 	(d)	acknowledges that participation in the Scheme does not affect the terms of the Executive’s Employment. In no event will Telecom or a Subsidiary be deemed by making an offer or
a Loan (as the case may be) or otherwise to have represented that an Executive’s Employment will continue until and/or beyond the Transfer Date. 

  

	5.3	An acceptance will be invalid and of no effect if it would give rise to a Breach. If an acceptance does not give rise to a Breach, Telecom will if Telecom approves that acceptance:

  

	 	(a)	determine the number of Shares (existing and/or new) to be allocated to the Executive by dividing the Total Price by the Allocation Price; 

  

	 	(b)	allocate the Shares to the Executive; and 

  

	 	(c)	send the Executive confirmation of the allocation and the Allocation Price. 

  

	6	Transfer Date 

  

	6.1	On the Transfer Date: 

  

	 	(a)	an Executive will be entitled to the Bonus; 

  

	 	(b)	the Executive will be deemed to have directed the Subsidiary (with effect from the Allocation Date) that the Bonus be applied in repayment of the Loan (this deemed direction
discharging fully the Executive’s obligation to repay the Loan); and 

  

	 	(c)	the Nominee will (subject to clause 7) transfer to the Executive the Executive’s Shares. 

 TELECOM RESTRICTED SHARE SCHEME 
  

	7	KiwiSaver Scheme 

 Employee Contribution 
  

	7.1	If an Employee Contribution is required to be deducted from a Bonus or part Bonus, Telecom shall notify the Executive to that effect and the Executive shall, within such time as
Telecom specifies, elect either: 

  

	 	(a)	that the number of Shares to be transferred to the Executive be reduced to a number determined in accordance with the following formula: 

  

			
	N  =	 	B - K
	 	  AP
	  
 Where

  

					
	N	  	=	  	the reduced number of shares to be transferred to the Executive
	B	  	=	  	the Bonus or part Bonus after deducting tax at the highest marginal tax rate applying to the Executive
	K	  	=	  	the Employee Contribution
	AP	  	=	  	the Allocation Price; or

  

	 	(b)	that the Executive pay from the Executive’s own funds (which may be effected by way of deduction from the Executive’s salary) an amount equal to the Employee Contribution,
in which case the number of Shares to be transferred to the Executive shall not be reduced. 

 If the Executive does not make an
election within the time specified by Telecom, the Executive shall be deemed to have elected the alternative in clause 7.1(a). 
 Employee Contribution -
Deemed Share Sale 
  

	7.2	If the Executive elects, or is deemed to elect, the alternative in clause 7.1(a), the Executive will be deemed, immediately before payment of the Bonus or part Bonus, to have:

  

	 	(a)	sold to the Nominee, at a price equal to the Allocation Price, beneficial ownership of a number of Shares equal to the difference between the number actually transferred to the
Executive and the number which would have been transferred but for the application of clause 7.1(a); and 

  

	 	(b)	directed the Nominee (with effect from the Allocation Date) to apply the amount due to the Executive under 7.2(a) in payment of the Employee Contribution. If, by reason of rounding
of a number of Shares pursuant to clause 19.3, the amount due to the Executive is less than the Employee Contribution, Telecom shall pay the balance of the Employee Contribution. 

 TELECOM RESTRICTED SHARE SCHEME 
  

 Employer Contribution 
  

	7.3	If an Employer Contribution will be required to be made as a result of a Bonus or part Bonus being paid then: 

  

	 	(a)	the amount of the Bonus or part Bonus shall be reduced by the amount of the Employer Contribution; 

  

	 	(b)	the Executive shall be required to repay the Loan by an amount equal to the shortfall in repayment of the Loan (as against the amount which would have been repaid if the reduction
referred to in clause 7.3(a) had not been made (the “Shortfall”)), which repayment shall be funded in accordance with clause 7.3(c) or 7.3(d); 

  

	 	(c)	if the Executive elects, or is deemed to elect, the alternative in clause 7.1(a), the Executive will be deemed, immediately before payment of the Bonus or part Bonus, to have:

  

	 	(i)	sold to the Nominee beneficial ownership of a number of Shares the Allocation Price of which is equal to the Shortfall; and 

  

	 	(ii)	directed the Nominee to apply the amount due to the Executive under clause 7.3(c)(i) in reduction of the Loan. If, by reason of rounding of a number of Shares pursuant to clause
19.3, the amount due to the Executive is less than the Shortfall, Telecom shall pay the balance of the Shortfall; 

  

	 	(d)	if the Executive elects the alternative in clause 7.1(b), the Executive shall repay the Shortfall from the Executive’s own funds (which may be effected by way of deduction from
the Executive’s salary). 

 Complete Acquisition 
  

	7.4	If a Complete Acquisition occurs, and the Executive elects, or is deemed to elect, the alternative in clause 7.1(a), then: 

  

	 	(a)	the number of Shares in respect of which the Executive is, pursuant to clause 11.1(b)(ii), to receive the consideration shall be a number calculated in accordance with clause
7.1(a), less (if an Employer Contribution is required to be made) a number calculated in accordance with clause 7.3(c)(i); and 

  

	 	(b)	if any Employer Contribution is required to be made, the Nominee will repay the Shortfall from the consideration received for the Executive’s Shares. 

Capital Return 
  

	7.5	If a part Bonus is to be paid under clause 13.1(b)(iii) then the Executive shall not be required to make an election under clause 7.1, and: 

  

	 	(a)	the Nominee shall deduct from the amount payable to the Executive under clause 13.1(b)(ii): 

  

	 	(i)	any Employee Contribution; and 

 TELECOM RESTRICTED SHARE SCHEME 
  

	 	(ii)	any Shortfall; and 

  

	 	(b)	the Nominee shall repay the Shortfall. 

 Clause 7 Paramount

  

	7.6	This clause 7 shall prevail over any other provision of this document. For the avoidance of doubt, this clause 7.6 does not prevent any amendment or alteration being made pursuant
to clause 14 or clause 18. 

  

	8	Obligations of Nominee 

  

	8.1	The Nominee will: 

  

	 	(a)	hold in its name on trust for an Executive under the Scheme legal ownership of Shares allocated to the Executive; 

  

	 	(b)	pay to the Executive all Dividends received by the Nominee in respect of the Executive’s Shares (less all relevant withholdings); and 

  

	 	(c)	not exercise any voting rights attaching to those Shares. 

 TELECOM RESTRICTED SHARE SCHEME 
  

 PART III - TERMINATION OF EMPLOYMENT 
  

	9	Sale and Repayment 

  

	9.1	Where: 

  

	 	(a)	an Executive ceases to be Employed (unless the Executive immediately assumes further Employment or is on non-permanent leave of absence with employer approval);

  

	 	(b)	an Executive purports to act in breach of clause 15.1; and/or 

  

	 	(c)	Telecom is put into liquidation (or suffers a similar event), 

 before the Transfer Date, the Executive will be deemed (subject to clause 9.3) immediately before Early Termination to have: 
  

	 	(d)	sold to the Nominee for the Total Price beneficial ownership of the Executive’s Shares; and 

  

	 	(e)	directed the Nominee (with effect from the Allocation Date) to apply the amount due to the Executive for the Shares in repayment of the Loan (this deemed direction discharging fully
the Executive’s obligation to repay the Loan). 

  

	9.2	For the purpose of clause 9.1(d), Telecom and the Executive acknowledge that the Total Price is: 

  

	 	(a)	the value of the Shares; and 

  

	 	(b)	the lowest price they would have agreed for the Shares if payment had been required on the Allocation Date (in terms of the rules in the Income Tax Act 2004 concerning the accrual
treatment of income and expenditure). 

  

	9.3	Where Early Termination: 

  

	 	(a)	is caused by the Executive’s death or Redundancy; and 

  

	 	(b)	occurs on or after the date half-way through the period from the Allocation Date to the Transfer Date, 

 Telecom may (but has no obligation whatever to) arrange for the Executive an early entitlement to part of the Bonus based on this formula: 
  

			
	part Bonus = Bonus x	 	 N
 T

	 

 where 
 N is the number of days from the Allocation Date to the date of Early Termination (both inclusive) 

 TELECOM RESTRICTED SHARE SCHEME 
  

 T is the number of days from the Allocation Date to the Transfer Date (both inclusive). 

Where Telecom does so, the Executive will be deemed to have directed (with effect from the Allocation Date) that the part Bonus be applied in part
repayment of the Loan (this deemed direction discharging the Executive’s obligation to repay the Loan to the extent of the after tax amount of the part Bonus), and the Nominee will (subject to clause 7) transfer to the Executive the
corresponding number of Shares it holds for the Executive (determined by dividing the part Bonus (after deducting tax at the highest marginal tax rate applying to the Executive) by the Allocation Price). 
 Clause 9.1 will otherwise apply to the balance of the Shares held by the Nominee for the Executive and the balance of the Loan. 

 TELECOM RESTRICTED SHARE SCHEME 
  

 PART IV - CORPORATE EVENTS 
  

	10	Complete Acquisition, Fundamental Change, Business Sale 

  

	10.1	If: 

  

	 	(a)	a Complete Acquisition or Fundamental Change occurs, clause 7.3 shall (subject to clause 11.2) apply in respect of all Executives and in respect of all Shares held by the Nominee
for all Executives; or 

  

	 	(b)	a Business Sale occurs, clause 7.3 shall (subject to clause 11.2) apply in respect of Executives to which the definition of that term refers, and in respect of all Shares held by
the Nominee for those Executives. 

  

	11	Early Transfer 

  

	11.1	If this clause 11 applies then (subject to clause 11.2): 

  

	 	(a)	the Executive will be entitled to the Bonus; 

  

	 	(b)	if a Complete Acquisition occurs: 

  

	 	(i)	the Executive will be deemed immediately before the Complete Acquisition to have transferred beneficial ownership of the Executive’s Shares to the Nominee, and directed (with
effect from the Allocation Date) that the Bonus be applied in repayment of the Loan; 

  

	 	(ii)	the Nominee will (subject to clause 7.3) distribute as soon as practicable to the Executive all consideration received by the Nominee for the Executive’s Shares;

  

	 	(c)	if a Fundamental Change or Business Sale occurs: 

  

	 	(i)	the Executive will be deemed to have directed (with effect from the Allocation Date) that the Bonus be applied in repayment of the Loan; 

  

	 	(ii)	the Nominee will (subject to clause 7) transfer to the Executive the Executive’s Shares. 

 A deemed direction by the Executive referred to in clause 11.1(b)(i) or 11.1(c)(i) shall discharge fully the Executive’s obligation to repay the
Loan. 
 The Nominee will not, on any offer for Shares, exercise any right conferred on it under applicable takeover laws. 

 TELECOM RESTRICTED SHARE SCHEME 
  

 Excluded Shares 
  

	11.2	If on the occurrence of an event referred to in clause 7.2, the Nominee holds Excluded Shares for an Executive, clause 7.3 shall not apply in respect of those Excluded Shares, and

  

	 	(a)	the Bonus payable to that Executive shall be reduced by the amount referred to in clause 11.3(b); 

  

	 	(b)	the references to the Executive’s Shares in clause 7.3 shall be deemed to exclude the Excluded Shares; and 

  

	 	(c)	clause 11.3 shall apply in respect of the Excluded Shares. 

 Treatment of Excluded Shares 
  

	11.3	Upon the occurrence of an event referred to in clause 7.2, each relevant Executive will be deemed to have: 

  

	 	(a)	sold to the Nominee beneficial ownership of the Executive’s Excluded Shares for a price equal to the Allocation Price of those Excluded Shares; and 

  

	 	(b)	directed the Nominee (with effect from the Allocation Date) to apply the amount due to the Executive for the Excluded Shares toward repayment of the Loan (this deemed direction
discharging the Executive’s obligation to repay the Loan to the extent of that amount). 

 Board Discretion

  

	11.4	The Board may at any time in its discretion determine (either generally or in respect of specific Executives or specific categories of Shares) that Shares which would otherwise be
Excluded Shares in terms of the definition of that term, are not to be treated as Excluded Shares. 

  

	12	Capital Changes 

  

	12.1	If: 

  

	 	(a)	a Rights Offer occurs, the Nominee shall not accept that Rights Offer, but shall, if in the opinion of the Board it is practicable to do so, dispose of the Nominee’s rights
under that Rights Offer, and account to each Executive for the consideration received on that disposal attributable to that Executive’s Shares (less all expenses of that disposal); 

 TELECOM RESTRICTED SHARE SCHEME 
  

	 	(b)	a Bonus Issue occurs, the Nominee shall hold the securities or other benefits received by the Nominee in respect of an Executive’s Shares for that Executive, and those rights
or other benefits shall be deemed to form part of the Executive’s Shares; 

  

	 	(c)	a Capital Return occurs, clause 13 shall apply; or 

  

	 	(d)	any other Capital Change occurs, that Capital Change shall be dealt with in accordance with clause 14. 

  

	13	Capital Return 

  

	13.1	On the occurrence of a Capital Return: 

  

	 	(a)	if that Capital Return is on the basis that holders of Shares may elect whether or not to participate in it, the Nominee shall elect not to participate in it in respect of all
Executive’s Shares; 

  

	 	(b)	if that Capital Return is on the basis that it applies to all holders of Shares, without any election by holders of Shares; 

  

	 	(i)	the number of Shares held by the Nominee for each Executive shall be reduced by the same ratio as the total number of Shares is reduced on the Capital Return;

  

	 	(ii)	the Nominee shall (subject to clause 7.5) pay to each Executive the amount received by the Nominee on the Capital Return in respect of that Executive’s Shares;

  

	 	(iii)	the Executive will be paid part of the Bonus based on this formula: 

  

			
	part Bonus = Bonus x	 	 A
 B

	 

 Where 
  

	 	A	is the number of the Executive’s Shares which are cancelled on the Capital Return; 

  

	 	B	is the total number of the Executive’s Shares before the Capital Return; and 

  

	 	(iv)	the Executive will be deemed to have directed (with effect from the Allocation Date) that the part Bonus be applied in part repayment of the Loan (this deemed direction discharging
the Executive’s obligation to repay the Loan to the extent of the after tax amount of the part Bonus). 

 TELECOM RESTRICTED SHARE SCHEME 
  

	14	Other Adjustment 

  

	14.1	If: 

  

	 	(a)	there occurs any offer for or acquisition of securities of Telecom, reconstruction or amalgamation affecting Telecom, Capital Change, disposal of businesses or assets of the Group,
or other event of any nature which in the opinion of the Board affects or will affect the position or rights of, or benefits to, Executives, Telecom, the Nominee, or the Lender, in respect of the Scheme (collectively an “Event”);
and 

  

	 	(b)	either that Event is not provided for under Scheme, or in the opinion of the Board the manner in which the Scheme applies on the occurrence of that Event produces a result which is
inappropriate or unfair to Executives or to Telecom or to both, 

 the Board may make such alterations to the rights,
obligations, or benefits of Executives, Telecom, the Lender and/or the Nominee, and/or take or cause Telecom, the Lender, and/or the Nominee to take, such steps, as in the opinion of the Board are appropriate or desirable as a result of the
occurrence of that Event. In making any decision under this clause in respect of a Capital Return, if it is intended that that return of capital constitutes a pro rata cancellation for the purposes of the Income Tax Act 2004, the Board shall have
due regard to that requirement. 

 TELECOM RESTRICTED SHARE SCHEME 
  

 PART V - GENERAL 
  

	15	No divestment 

  

	15.1	An Executive may not (including by operation of law) transfer, assign, or otherwise dispose of or create any interest (including any security, or legal or equitable interest) in a
Share held by the Nominee for the Executive (except as required by the Scheme). 

  

	15.2	Clause 9.1 will apply on any purported transfer, assignment, other disposition or creation of interest in breach of clause 15.1 (and the purported transfer, assignment, disposition
or creation will be void). 

  

	16	Administration of Scheme 

  

	16.1	The Board will administer all aspects of the Scheme, including the offering of Shares. Any matter to be determined by Telecom will be determined as the Board sees fit in its sole
discretion. The decision of the Board as to: 

  

	 	(a)	the exercise of any discretion conferred on the Board or Telecom by the Scheme; 

  

	 	(b)	the interpretation of this document; 

  

	 	(c)	any other matter touching upon the Scheme, 

 shall be
conclusive and binding on Executives, Telecom, the Nominee and the Lender and shall not be capable of being challenged or appealed. 
  

	16.2	Without limiting clause 16.1, the Board may determine in its sole discretion: 

  

	 	(a)	whether a Fundamental Change has occurred; and 

  

	 	(b)	the date on which a Complete Acquisition or Fundamental Change occurred. 

  

	16.3	The Board may delegate (to the extent permitted by law) to any person (and revoke any delegation of) any or all of its powers, discretions, rights and obligations under the Scheme
from time to time as it sees fit, and references to “Telecom” and the “Board” will be construed accordingly. 

  

	17	Rights attaching to Shares 

  

	17.1	Shares allocated to an Executive will rank equally with all other Shares at the Allocation Date, except for any dividend or other benefit in respect of Shares with a record date
before the Allocation Date. 

  

	18	Amendment 

  

	18.1	Telecom may from time to time, subject to clause 18.2: 

  

	 	(a)	vary any term of an Executive’s participation in the Scheme, with the agreement of the Executive; or 

 TELECOM RESTRICTED SHARE SCHEME 
  

	 	(b)	amend the Scheme, if it considers that: 

  

	 	(i)	the interests of Executives are not materially prejudiced; or 

  

	 	(ii)	the amendment is fair and appropriate having regard to the proper interests of Executives, Telecom, and/or shareholders of Telecom; or 

  

	 	(c)	terminate the Scheme. 

  

	18.2	Telecom: 

  

	 	(a)	may not amend the Scheme (or vary any term of an Executive’s participation in the Scheme) if this would give rise to a Breach; but 

  

	 	(b)	may amend or terminate the Scheme if Telecom considers that this would avoid giving rise to a Breach. 

  

	18.3	Telecom will give notice of any amendment to or termination of the Scheme to all Executives affected. 

  

	19	Miscellaneous 

  

	19.1	References (direct or indirect) in the Scheme to actions or obligations of a Subsidiary (including the Lender) or the Nominee impose an obligation on (and enforceable against)
Telecom to procure performance of those actions or obligations. A Subsidiary, the Lender and the Nominee may be one or more persons. 

  

	19.2	All actions (including directions) and consequences deemed to occur under the Scheme will occur irrevocably and unconditionally (subject to clause 18). 

  

	19.3	If a calculation under the Scheme produces a fraction of a cent or Share, the product will be rounded to the nearest whole number favourable to the Executive.

  

	19.4	The Scheme represents all of the terms on which Shares are allocated under the Scheme, except those which Telecom implies to give effect to the Scheme. 

  

	19.5	No failure, delay or indulgence by Telecom in exercising any power or right conferred on it under the Scheme will operate as a waiver of that power or right; nor will a single
exercise of a power or right preclude further exercises, or the exercise of any other power or right under the Scheme. 

  

	19.6	Any dispute which arises under the Scheme will be determined by Telecom. Telecom’s decision will be final. 

 TELECOM RESTRICTED SHARE SCHEME 
  

	19.7	All notices and other communications under the Scheme will be in writing and addressed to the recipient at the address or facsimile number from time to time designated by the
recipient. Unless any other designations are given: 

  

	 	(a)	the addresses and facsimile numbers of Telecom and an Executive are those set out in the offer document; and 

  

	 	(b)	notices or communications to Telecom will be addressed and marked to the attention of Telecom’s Company Secretary. 

 Any notice or communication will be deemed to have been received: 
  

	 	(c)	at the time of delivery, if delivered by hand; 

  

	 	(d)	on the second Business Day after the date of mailing, if sent by post or airmail with postage prepaid; or 

  

	 	(e)	on the day on which confirmation of proper transmission is received (on transmission), if sent by facsimile. 

  

	19.8	The Scheme and the Loan will be governed by and construed in accordance with New Zealand law.Telecom Share Rights Scheme - 2006

 “Exhibit 4.4” 
  

 Telecom Share Rights Scheme – 2006 

  

 TELECOM SHARE RIGHTS SCHEME 
  

 TABLE OF CONTENTS 
  

							
	 1
	  	NAME	  	1
			
	 2
	  	GROUNDING	  	1
		  	2.2	  	Alignment	  	1
		  	2.3	  	Corporate Objective	  	1
			
	 3
	  	KEY TERMS	  	1
			
	 4
	  	COMMITTEE	  	2
		  	4.1	  	Administration	  	2
		  	4.2	  	Delegation	  	3
			
	 5
	  	GRANTS	  	3
		  	5.1	  	Grants	  	3
			
	 6
	  	REJECTION OF GRANT	  	3
		  	6.1	  	Opportunity	  	3
		  	6.2	  	Acknowledgement	  	3
			
	 7
	  	EXERCISE OF OPTIONS	  	3
		  	7.1	  	Breach	  	3
		  	7.2	  	Lapse	  	3
			
	 8
	  	PROCEDURE FOR EXERCISE	  	3
		  	8.1	  	Exercise Notice	  	3
		  	8.2	  	Payment	  	4
		  	8.3	  	Issue	  	4
		  	8.4	  	Committee’s Notice	  	4
		  	8.5	  	Effective Exercise	  	4
		  	8.6	  	Continued Breach	  	4
			
	 9
	  	RIGHTS ON EXERCISE	  	4
			
	 10
	  	ADJUSTMENTS	  	5
		  	10.1	  	Rights Issue	  	5
		  	10.2	  	Bonus Issue	  	5
		  	10.3	  	Reconstruction	  	5
		  	10.4	  	Exercise Date acceleration	  	5
		  	10.5	  	Continuation of Employment	  	5
		  	10.6	  	Share Cancellation	  	6
			
	 11
	  	OTHER ADJUSTMENT	  	6
		  	11.1	  	If:	  	6
			
	 12
	  	LAPSE OF OPTIONS	  	7
		  	12.1	  	Rejection of Grant	  	7
		  	12.2	  	Leave Prior to Exercise Date	  	7
		  	12.3	  	Leave After Exercise Date: Involuntary Event	  	7
		  	12.4	  	Leave After Exercise Date: Dismissal	  	7
		  	12.5	  	Leave After Exercise Date: Other Reason	  	7
		  	12.6	  	Option Lapse Date	  	7
		  	12.7	  	Breach	  	7
		  	12.8	  	Variation or Waiver	  	8
			
	 13
	  	NO DIVESTMENT	  	8
			
	 14
	  	AMENDMENT AND TERMINATION	  	8
		  	14.1	  	Committee’s Discretion	  	8
		  	14.2	  	Termination	  	8
		  	14.3	  	Breach	  	8
		  	14.4	  	Notice to Participants	  	8

 TELECOM SHARE RIGHTS SCHEME 

							
			
	15	  	QUOTATION	  	8
			
	16	  	MISCELLANEOUS	  	8
		  	16.1	  	Spirit of the Scheme	  	8
		  	16.2	  	Fractions	  	8
		  	16.3	  	Entire Agreement	  	9
		  	16.4	  	Delay	  	9
		  	16.5	  	Disputes	  	9
		  	16.6	  	Notice	  	9
		  	16.7	  	Governing Law	  	9
		  	16.8	  	Construction	  	9

 Date: 15 May 2006 (amended 2 August 2007) 
  

	1	NAME 

 The name of this scheme is the Telecom Share
Rights Scheme. 
  

	2	GROUNDING 

 The ultimate corporate objective is to
create shareholder value (as measured by the sum of share price appreciation and dividend paid to shareholders). To do this, employees must develop and implement successful corporate and business-unit strategies. Employee incentivisation is critical
to this process in two ways: 
  

	 	(i)	by supporting the strategies, management processes, organisation approaches and culture critical to creating shareholder value; and 

  

	 	(ii)	encouraging employees to continue into the future the same high levels of performance that they have demonstrated. 

 The Scheme: 
  

	 	2.2	Alignment 

 is intended to align the incentives for
senior employees with the interests of Telecom’s shareholders; and 
  

	 	2.3	Corporate Objective 

 forms part of a Telecom
corporate objective which seeks to build morale, retain good employees and promote decisions that will benefit Telecom shareholders by conferring on a selected group of employees a right to participate in the equity of Telecom. 
  

	3	KEY TERMS 

 Unless the context requires otherwise:

 Breach means a breach of: 
  

	 	(i)	Telecom’s Constitution; 

  

	 	(ii)	the listing and/or other rules governing the Exchange or any other stock exchange on which Shares are quoted; and/or 

  

	 	(iii)	the Securities Amendment Act 1988, any other statute or regulation, or Telecom’s internal procedures for insiders; 

 Business Day means a day on which the Exchange is open for trading; 
 Commencement Date means the date from and including which a Participant is entitled to participate in the Scheme, specified in the Grant; 
 Committee means Telecom’s Human Resources/Compensation Committee or any other committee or person nominated by the board of directors of
Telecom; 
 Employment means employment with a company in the Group; 
 Exchange means New Zealand Exchange Limited’s NZSX; 
  

 1 

 TELECOM SHARE RIGHTS SCHEME 
  

 Exercise Date means the first Business Day after the expiration of the period, specified in a
Grant, from and including the Commencement Date, subject to clauses 10.4 and 10.5; 
 Exercise Notice means notice of the exercise of
an Option; 
 Exercise Price means nil; 
 Group means Telecom and its subsidiaries; 
 Grant means the grant of an Option; 
 Involuntary Event means death, redundancy, unjustified dismissal, retirement at or after attaining normal retirement age, illness, accident, mental
infirmity or physical infirmity; 
 Leave means to suffer termination of Employment by any means and for any reason, excluding:

  

	 	(i)	termination primarily for the purpose of assuming further Employment; and 

  

	 	(ii)	non-permanent leave of absence with employer approval; 

 Live Option means an Option which has not been exercised, for which the Exercise Date has crystallised and which has not lapsed pursuant to clause 12; 
 Option means (subject to clause 10) an option to acquire a Share pursuant to this Scheme; 
 Option
Lapse Date means the first day after the expiration of the period, specified in a Grant, from and including the Commencement Date; 
 Participant means an Employee to whom Options are granted; 
 Reconstruction means any consolidation,
subdivision, cancellation, redemption, acquisition by Telecom or other rearrangement or reconstruction whatever of shares in Telecom which changes the proportionate interest in Telecom represented by a Share; 
 Scheme means the Telecom Share Rights Scheme recorded in this document as amended from time to time; 
 Share means an ordinary share in Telecom; 
 Share Cancellation means an arrangement to be effected by Telecom as a result of which: 
  

	 	(i)	one in nine Shares will be cancelled; and 

  

	 	(ii)	each holder of Shares will receive $4.88 for each cancelled Share. 

 Takeover means the acquisition by any means by any person (excluding Telecom) or group of associated persons of a legal or beneficial interest in 20% or more of all Shares; and 
 Telecom means Telecom Corporation of New Zealand Limited. 
  

	4	COMMITTEE 

  

	4.1	Administration 

 The Committee will administer all
aspects of the Scheme, including the making of Grants. Any matter to be determined by the Committee will be determined as it sees fit in its sole discretion. 

 TELECOM SHARE RIGHTS SCHEME 
  

	4.2	Delegation 

 The Committee may delegate to any
person (and revoke any delegation of) all or any of its powers, discretions, rights and obligations under the Scheme from time to time as it sees fit, and reference to the “Committee” will be construed accordingly. 
  

	5	GRANTS 

  

	5.1	Grants 

 The Committee may make a Grant to an
Employee. Each Grant will: 
  

	 	(i)	specify the number of Options granted to the Employee; 

  

	 	(ii)	enclose a copy of the Scheme; 

  

	 	(iii)	specify the Commencement Date, the Exercise Price and the periods of years after which the Exercise Date and the Option Lapse Date fall; 

  

	 	(iv)	enclose an Options certificate; and 

  

	 	(v)	specify the period during which the Employee may reject the Grant. 

  

	6	REJECTION OF GRANT 

  

	6.1	Opportunity 

 A Participant may reject a Grant by
giving the Committee notice, and returning to the Committee the Options certificate, within 40 Business Days after the Grant. 
  

	6.2	Acknowledgement 

 In retaining a Grant (and electing
not to reject the Grant pursuant to clause 6.1), a Participant acknowledges that: 
  

	 	(i)	the terms of the Scheme are binding; and 

  

	 	(ii)	participation in the Scheme does not affect the terms of the Participant’s Employment. In no event will Telecom be deemed, by making a Grant or otherwise, to have represented
that a Participant’s Employment will continue until and/or beyond the Exercise Date. 

  

	7	EXERCISE OF OPTIONS 

 Options may be exercised on
the Exercise Date or any Business Day after the Exercise Date, unless: 
  

	 	7.1	Breach 

 the Committee considers that the exercise
would give rise to a Breach; or 
  

	 	7.2	Lapse 

 the Option has lapsed pursuant to clause
12. 
  

	8	PROCEDURE FOR EXERCISE 

  

	8.1	Exercise Notice 

 A Participant may, as the
Participant sees fit from time to time (subject to clause 7), exercise part or all of that Participant’s Options (subject to any minimum number or multiple of a number of Options prescribed by the Committee from time to time), by giving the
Committee an Exercise Notice. 

 TELECOM SHARE RIGHTS SCHEME 
  

	8.2	Payment 

 Any Exercise Notice must be accompanied
by: 
  

	 	(i)	the Options certificate; and 

  

	 	(ii)	(if applicable) a form requesting consent to acquire Shares, in terms of Telecom’s internal procedures for insiders. 

  

	8.3	Issue 

 Within five Business Days after the date on
which the Committee receives: 
  

	 	(i)	an Exercise Notice; 

  

	 	(ii)	an Options certificate; and 

  

	 	(iii)	(if applicable) a form requesting consent to acquire Shares, in terms of Telecom’s internal procedures for insiders, 

 in accordance with this clause, Telecom will issue to the Participant Shares, unless clause 7 precludes the exercise of Options (if so, the Committee will
give notice to the Participant accordingly and return the Options certificate). 
  

	8.4	Committee’s Notice 

 The Committee will give a
further notice to a Participant who has been precluded (pursuant to clause 7.1) from exercising an Option, as soon as it considers that the exercise would no longer give rise to a Breach. 
  

	8.5	Effective Exercise 

 Notwithstanding clauses 12.3 to
12.6, but subject to clause 8.6, the Exercise Notice of a Participant precluded (pursuant to clause 7.1) from exercising an Option will take effect 10 Business Days after the date on which the Committee gives its notice pursuant to clause 8.4, if
the Participant: 
  

	 	(i)	surrenders the Options certificate; and 

  

	 	(ii)	(if applicable) delivers a form requesting consent to acquire Shares, in terms of Telecom’s internal procedures for insiders, 

 during that period. If the Participant fails to do so, the Exercise Notice will be deemed to have been revoked. 
  

	8.6	Continued Breach 

 If the exercise of Options
pursuant to clause 8.5 would give rise to a Breach, the Committee will proceed as if an Exercise Notice had been given pursuant to clause 8.1. 
  

	9	RIGHTS ON EXERCISE 

 Shares issued to Participants
will be credited as fully paid and will rank pari passu in all respects with all Shares at the date of issue, except for any dividend declared on Shares where the record date occurs prior to issue. 

 TELECOM SHARE RIGHTS SCHEME 
  

	10	ADJUSTMENTS 

  

	10.1	Rights Issue 

 If, prior to the exercise of an
Option, Telecom confers on the holders of Shares rights to acquire Shares (or other benefits or assets), and holders of Shares are able to sell those rights for consideration, Telecom shall pay to each Participant an amount (less any deductions or
withholdings required by law) equal to the amount which that Participant would have received (after any expenses of sale) if the Participant had exercised all of the Participant’s Options before the record date for the offer of those rights,
and had sold all of the rights relating to the Shares arising from the exercise of those Options on the first day on which it was possible to do so. 
  

	10.2	Bonus Issue 

 If, prior to the exercise of Options,
Telecom issues Shares to the holders of Shares in a manner that maintains the existing relative voting and distribution rights of all holders of Shares, a Participant will be entitled on exercising the Options to receive additional Shares as if the
Shares under the Grant received on exercising the Options had participated in the bonus issue. 
  

	10.3	Reconstruction 

 If, prior to the exercise of an
Option, there is a Reconstruction, the Committee will adjust the number of Shares to be received on the exercise of Options and/or any other rights under the Options, to the extent required at the time of the Reconstruction under the applicable
listing and/or other rules governing the Exchange or any other stock exchange on which Shares are quoted. 
  

	10.4	Exercise Date acceleration 

 Notwithstanding any
other provision of the Scheme, if a Participant Leaves prior to the Exercise Date: 
  

	 	(i)	due to death or redundancy; and 

  

	 	(ii)	on or after the date half-way through the period from the Commencement Date to the Exercise Date, 

 the Committee may (but has no obligation whatever to) deem the Exercise Date to have occurred, on the day immediately prior to the date on which the
Participant Leaves, for a number of the Participant’s Options based on this formula: 
  

			
	number of Options = number of all of the Participant’s Options x	 	 n
 t

	 

 where 
 n is the number of days from the Commencement Date to the date on which the Participant Leaves (both inclusive) 
 t is the number of days from the Commencement Date to the (original) Exercise Date (both inclusive). 
 Where the Committee does so, those Options will lapse on the first day after the expiration of 12 months from and including the date on which the Participant Leaves. 
  

	10.5	Continuation of Employment 

 Where a Participant
ceases to be in Employment for the purposes of the Scheme, but continues in employment with either: 
  

	 	(i)	a company that was but has ceased to be a Group company; or 

 TELECOM SHARE RIGHTS SCHEME 
  

	 	(ii)	an entity that has acquired that Group company or all or part of the business of Telecom or a Group company, 

 (each an Entity) the Committee may (but has no obligation whatever to) declare that the Participant shall be deemed to remain in Employment for the
purposes of the Scheme for so long as the Participant is employed by that Entity. Where the Committee does so declare: 
  

	 	(iii)	the Exercise Date for such Participant’s Options as is determined by the Committee shall be either the earlier of: 

  

	 	(a)	the Exercise Date specified in the Grant; or 

  

	 	(b)	the date that is 12 months after the date the Participant ceases to be in Employment (the Cessation Date); or 

  

	 	(c)	another date determined by the Committee not being more than the date that is 12 months after the Cessation Date; and 

  

	 	(iv)	notwithstanding clause 12, all the Participant’s Live Options (irrespective of when the Exercise Date for the relevant Live Options occurred) will lapse on the earlier of the
date the Participant Leaves employment with the Entity, the relevant Option Lapse Date(s) and the date that is 12 months after the Cessation Date, 

 provided that no Participant that is declared to be deemed to remain in Employment under this clause shall be entitled to any further Grant following the Cessation Date unless that Participant actually enters
Employment. 
  

	10.6	Share Cancellation 

 On the occurrence of the Share
Cancellation: 
  

	 	(i)	clause 10.3 shall not apply; 

  

	 	(ii)	one in nine of each Participant’s Options will be cancelled; and 

  

	 	(iii)	Telecom shall pay to each Participant the amount (less any deductions or withholdings required by law) which that Participant would have received if that Participant had exercised
all of that Participant’s Options, and the Shares resulting from that exercise had participated in the Share Cancellation. 

  

	11	OTHER ADJUSTMENT 

  

	11.1	If: 

  

	 	(i)	there occurs any offer for or acquisition of securities of Telecom, reconstruction or amalgamation affecting Telecom, change in the capital structure of Telecom, disposal of
businesses or assets of the Group, or other event of any nature which in the opinion of the Committee affects or will affect the position or rights of, or benefits to, Participants or Telecom, in respect of the Scheme (collectively an Event);
and 

  

	 	(ii)	 either that Event is not provided for under Scheme, or in the opinion of the Committee the manner in which the Scheme applies on the occurrence of that Event
produces a result which is inappropriate or unfair to Participants or to Telecom or to both, 

 TELECOM SHARE RIGHTS SCHEME 
  

	 	 
the Committee may, notwithstanding anything else in the Scheme, make such alterations to the rights, obligations, or benefits of Participants, Telecom,
(including without limitation adjusting the number of Options or Exercise Date), and/or take or cause Telecom to take, such steps, as in the opinion of the Committee are appropriate or desirable as a result of the occurrence of that Event.

  

	12	LAPSE OF OPTIONS 

  

	12.1	Rejection of Grant 

 If a Participant rejects a
Grant under clause 6.1, the Options under the Grant will lapse immediately. 
  

	12.2	Leave Prior to Exercise Date 

 If a Participant
Leaves prior to the Exercise Date, the Participant’s Options will lapse immediately, subject to clauses 10.4 and 10.5. 
  

	12.3	Leave After Exercise Date: Involuntary Event 

 If a
Participant Leaves due to an Involuntary Event or within six months from and including the date of a Takeover, the Participant’s Live Options (if any) will lapse on the first day after the expiration of one year from and including the date on
which the Participant Leaves or on the Option Lapse Date, whichever is the earlier. 
  

	12.4	Leave After Exercise Date: Dismissal 

 Subject to
clause 12.3, if a Participant Leaves due to dismissal, the Participant’s Live Options (if any) will lapse immediately. 
  

	12.5	Leave After Exercise Date: Other Reason 

 If a
Participant Leaves due to a reason other than the reasons referred to in clauses 12.3 and 12.4, the Participant’s Live Options (if any) will lapse on the first day after the expiration of three months from and including the date on which the
Participant Leaves or on the Option Lapse Date, whichever is the earlier. 
  

	12.6	Option Lapse Date 

 A Live Option, which has not
lapsed pursuant to clauses 12.3 to 12.5 (which, for the avoidance of doubt, are subject to clause 8.5) or 12.7, lapses on the Option Lapse Date, subject to clauses 8.5 and 12.7. 
  

	12.7	Breach 

 Notwithstanding clauses 12.3 to 12.6, if,
after the period of six months from the date on which it first gives notice pursuant to clause 8.3, the Committee considers that it is still unable to give notice in respect of an Option pursuant to clause 8.4 and/or the exercise of Options pursuant
to clause 8.5 would give rise to a Breach, then Telecom is in default under the Scheme. Where Telecom is in default under this clause, the Participant and Telecom acknowledge and agree the following: 
  

	 	(i)	Telecom must pay the Participant liquidated damages in the sum equal to the average end of day market price of Shares on the Exchange for the Business Days in the month immediately
preceding the date of the Exercise Notice given by the Participant pursuant to clause 8.1, within ten Business Days; and 

  

	 	(ii)	that the amount payable under clause 12.7(i) is a genuine pre-estimate of the damages the Participant is likely to suffer as a result of the default; 

  

	 	(iii)	that on payment of the amount under clause 12.7(i), all rights that Participant has to specific performance, compensation for breach, loss or damages, or any other remedy are waived
and/or extinguished and that the Live Option will lapse immediately. 

 TELECOM SHARE RIGHTS SCHEME 
  

	12.8	Variation or Waiver 

 The Committee may, in its
absolute discretion, vary or waive the application of clauses 12.1 to 12.7 both inclusive either generally or in relation to individual Participants. 
  

	13	NO DIVESTMENT 

 No Participant may transfer, assign,
or otherwise dispose of or create any interest (including any security, legal or equitable interest) in an Option, without the prior written consent of the Committee. 
  

	14	AMENDMENT AND TERMINATION 

  

	14.1	Committee’s Discretion 

 Subject to clause
14.3, the Committee may from time to time: 
  

	 	(i)	vary any term of a Participant’s participation in the Scheme, with the agreement of the Participant; or 

  

	 	(ii)	amend the Scheme, if the Committee considers that the interests of Participants affected are not materially prejudiced. 

  

	14.2	Termination 

 Subject to clause 14.3, the Committee
may terminate the Scheme. 
  

	14.3	Breach 

 The Committee: 
  

	 	(i)	may not amend (or vary any term of a Participant’s participation in), or terminate, the Scheme if this would give rise to a Breach; but 

  

	 	(ii)	may amend or terminate the Scheme if the Committee considers that this would avoid giving rise to a Breach. 

  

	14.4	Notice to Participants 

 The Committee will give
notice of any amendment to or termination of the Scheme to all Participants affected. Similarly, the Committee will give notice of any adjustment under clause 10 to all Participants affected. 
  

	15	QUOTATION 

 Options will not be quoted on a stock
exchange. 
  

	16	MISCELLANEOUS 

  

	16.1	Spirit of the Scheme 

 If any circumstance arises
which might result in the spirit and intent of the Scheme not being fulfilled, the Committee will use all reasonable endeavours to effect any modification to the Scheme required to preserve that spirit and intent. 
  

	16.2	Fractions 

 If a calculation or adjustment under the
Scheme produces a fraction of a cent or Share, the product will be rounded to the nearest whole number favourable to the Participant. 

 TELECOM SHARE RIGHTS SCHEME 
  

	16.3	Entire Agreement 

 The Scheme represents all of the
terms on which Options are issued and exercised and Shares issued under the Scheme, except those which the Committee reasonably implies to give effect to the Scheme. 
  

	16.4	Delay 

 No failure, delay or indulgence by the
Committee in exercising any power or right conferred on it under the Scheme will operate as a waiver of that power or right; nor will a single exercise of a power or right preclude further exercises, or the exercise of any other power or right under
the Scheme. 
  

	16.5	Disputes 

 Any dispute which arises under the Scheme
will be determined by the Committee. The Committee’s decision will be final. 
  

	16.6	Notice 

 All notices and communications required to
be given or made under the Scheme will be in writing and addressed to the recipient at the address or facsimile number from time to time designated by the recipient. Unless any other designations are given, the addresses and facsimile numbers of
Telecom and a Participant are those (if any) set out in the relevant Grant. Any notice or communication will be deemed to have been received: 
  

	 	(i)	at the time of delivery, if delivered by hand; 

  

	 	(ii)	on the second Business Day after the date of mailing, if sent by post or airmail with postage prepaid; or 

  

	 	(iii)	on the day on which confirmation of proper transmission is received (on transmission), if sent by facsimile. 

  

	16.7	Governing Law 

 The Scheme will be governed by and
construed in accordance with New South Wales law. 
  

	16.8	Construction 

 Unless the context requires
otherwise: 
  

	 	(i)	the singular includes the plural and vice versa, and words importing any gender include the other genders; 

  

	 	(ii)	a reference to a “person” includes any individual, partnership, committee and incorporated or unincorporated body (whether or not having a separate legal personality);

  

	 	(iii)	a reference to an “amendment” includes any deletion or addition; 

  

	 	(iv)	a reference to an enactment (statute or regulation) includes enactments in New Zealand and in any other jurisdiction affecting the Scheme, and is a reference to that enactment as
amended, or any enactment substituted for that enactment; 

  

	 	(v)	where a word or expression is defined in the Scheme, other parts of speech and grammatical forms of that word or expression have a corresponding meaning; and

 a reference to a person includes its successors and permitted assigns.

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