Document:

Telecom Share Option Scheme

 “Exhibit 4.1” 
  

 TELECOM SHARE OPTION SCHEME 

 TELECOM SHARE OPTION SCHEME 
 TABLE OF CONTENTS 
  

							
	1	  	NAME	  	1
			
	2	  	GROUNDING	  	1
		  	 2.1
	  	Alignment	  	1
		  	 2.2
	  	Corporate Objective	  	1
			
	3	  	KEY TERMS	  	1
			
	4	  	COMMITTEE	  	3
		  	 4.1
	  	Administration	  	3
		  	 4.2
	  	Delegation	  	3
			
	5	  	GRANTS	  	3
			
	6	  	REJECTION OF GRANT	  	3
		  	 6.1
	  	Opportunity	  	3
		  	 6.2
	  	Acknowledgement	  	4
			
	7	  	EXERCISE OF OPTIONS	  	4
		  	 7.1
	  	Qualifying Date notice	  	4
		  	 7.2
	  	Subsequent notice	  	4
		  	 7.3
	  	No further notice	  	4
		  	 7.4
	  	Date on which Options may be exercised	  	4
			
	8	  	PROCEDURE FOR EXERCISE	  	4
		  	 8.1
	  	Exercise Notice	  	4
		  	 8.2
	  	Payment	  	4
		  	 8.3
	  	Issue	  	4
		  	 8.4
	  	Committee’s Notice	  	5
		  	 8.5
	  	Effective Exercise	  	5
		  	 8.6
	  	Continued Breach	  	5
			
	9	  	RIGHTS ON EXERCISE	  	5
			
	10	  	ADJUSTMENTS	  	5
		  	 10.1
	  	Rights Issue	  	5
		  	 10.2
	  	Bonus Issue	  	5
		  	 10.3
	  	Reconstruction	  	5
		  	 10.4
	  	Qualifying Date acceleration	  	6
		  	 10.5
	  	Continuation of Employment	  	6
		  	 10.6
	  	Other Adjustment	  	7
			
	11	  	LAPSE OF OPTIONS	  	7
		  	 11.1
	  	Rejection of Grant	  	7
		  	 11.2
	  	Leave Prior to Qualifying Date	  	7
		  	 11.3
	  	Lapse on Performance Expiry Date	  	7
		  	 11.4
	  	Leave After Qualifying Date: Involuntary Event	  	7
		  	 11.5
	  	Leave After Qualifying Date: Dismissal	  	8
		  	 11.6
	  	Leave After Qualifying Date: Other Reason	  	8
		  	 11.7
	  	Option Lapse Date	  	8
		  	 11.8
	  	Breach	  	8
		  	 11.9
	  	Variation or Waiver	  	8
			
	12	  	NO DIVESTMENT	  	8
			
	13	  	AMENDMENT AND TERMINATION	  	8
		  	 13.1
	  	Committee’s Discretion	  	8
		  	 13.2
	  	Termination	  	9
		  	 13.3
	  	Breach	  	9
		  	 13.4
	  	Notice to Participants	  	9
			
	14	  	QUOTATION	  	9

 TELECOM SHARE OPTION SCHEME 

							
			
	15	  	MISCELLANEOUS	  	9
		  	 15.1
	  	Spirit of the Scheme	  	9
		  	 15.2
	  	Fractions	  	9
		  	 15.3
	  	Entire Agreement	  	9
		  	 15.4
	  	Delay	  	9
		  	 15.5
	  	Disputes	  	9
		  	 15.6
	  	Notice	  	9
		  	 15.7
	  	Governing Law	  	10
		  	 15.8
	  	Construction	  	10

 Date: 15 May 2006 (amended 2 August 2007) 
  

	1	NAME 

 The name of this scheme is the Telecom
Share Option 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)	by encouraging employees to continue into the future the same high levels of performance that they have demonstrated. 

 The Scheme: 
  

	 	2.1	Alignment 

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

	 	2.2	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, or the provision of personal services (otherwise
than as an employee) principally to, a company in the Group; 
 “Event” has the meaning in clause 10.6; 
  

 1 

 TELECOM SHARE OPTION SCHEME 
  

 “Exchange” means New Zealand Exchange Limited’s NZSX; 
 “Exercise Date” means: 
  

	 	(i)	the later of the Qualifying Date and the Performance Date; or 

  

	 	(ii)	the Qualifying Date, if there are no Performance Criteria or the Qualifying Date and the Performance Date are the same, 

 subject to clauses 10.4, 10.5 and 11.3; 
 “Exercise Notice” means notice of the exercise of an Option; 
 “Exercise Price” means (subject to
clause 10) the average end of day market price of Shares on the Exchange for the Business Days in the month immediately preceding the Commencement Date; 
 “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 Qualifying Date has crystallised and which has not lapsed pursuant to clause 11; 
 “Option” means (subject to clause 10) an option to subscribe for 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; 
 “Performance Criteria” means the performance criteria (if any) specified in a Grant; 
 “Performance Date” means the date on which the Committee notifies a Participant under clause 7 that the Performance Criteria are
satisfied; 
 “Performance Expiry Date” means the date, specified in a Grant, for the purpose of clause 7.3; 
 “Qualifying Date” means the first Business Day after the expiration of the period, specified in a Grant, from and including the
Commencement Date; 
 “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; 

 TELECOM SHARE OPTION SCHEME 
  

 “Redundancy” means the termination of Employment of a Participant by reason of that
Participant’s position becoming surplus to the Group’s requirements, or any other involuntary termination of a Participant’s Employment which the Committee in its discretion determines constitutes redundancy, but does not include
termination of Employment in the context of a sale of a business as a result of which the Participant is offered employment on substantially the same terms by the purchaser of the business; 
 “Scheme” means the Telecom Share Option Scheme recorded in this document as amended from time to time; 
 “Share” means an ordinary share in Telecom; 
 “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. 
  

	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 

 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 (unless the Employee has previously received a copy); 

  

	 	(iii)	enclose a copy of an investment statement for the offer of Shares made under the Grant (if made in New Zealand); 

  

	 	(iv)	specify the Commencement Date, the Exercise Price, the Performance Criteria (if any), the Performance Expiry Date (if any) and the periods after which the Qualifying Date and the
Option Lapse Date fall; 

  

	 	(v)	enclose an Options certificate; and 

  

	 	(vi)	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. 

 TELECOM SHARE OPTION SCHEME 
  

	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 Qualifying Date or the Exercise Date. 

  

	7	EXERCISE OF OPTIONS 

  

	7.1	Qualifying Date notice 

 On or prior to the
Qualifying Date, the Committee will notify a Participant whether or not the Performance Criteria are satisfied (where applicable). 
  

	7.2	Subsequent notice 

 If the Committee gives notice
under clause 7.1 that the Performance Criteria are not satisfied, the Committee will notify the Participant of satisfaction, on the next monthly anniversary of the Qualifying Date on which the Performance Criteria are satisfied (or, if that day is
not a Business Day, on the next Business Day), subject to clause 7.3. 
  

	7.3	No further notice 

 The Committee will only give
notice under clause 7.2 (if any) prior to the Performance Expiry Date. 
  

	7.4	Date on which Options may be exercised 

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

	 	(i)	Breach 

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

	 	(ii)	Lapse 

 the Option has lapsed pursuant to clause
11. 
  

	8	PROCEDURE FOR EXERCISE 

  

	8.1	Exercise Notice 

 A Participant may, as the
Participant sees fit from time to time (subject to clause 7.4), 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. 
  

	8.2	Payment 

 Any Exercise Notice must be accompanied
by: 
  

	 	(i)	payment of the aggregate Exercise Price; 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)	payment; and 

 TELECOM SHARE OPTION SCHEME 
  

	 	(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 7.4 precludes the exercise of Options (if so, the Committee
will give notice to the Participant accordingly and refund the Exercise Price (without interest)). 
  

	8.4	Committee’s Notice 

 The Committee will give a
further notice to a Participant who has been precluded (pursuant to clause 7.4(i)) 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 11.4 to
11.7, but subject to clause 8.6, the Exercise Notice of a Participant precluded (pursuant to clause 7.4(i)) 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)	pays the aggregate Exercise Price; 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. 
  

	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), the Committee may adjust the Exercise Price so that Participants receive a benefit which reflects the value of the rights to holders of Shares.
A Participant will not otherwise benefit from the rights and, in particular, may not acquire Shares (or other benefits or assets) under the rights, except to the extent the Participant becomes a holder of Shares (on the exercise of Options) before
the record date for the rights. 
  

	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, the Exercise Price 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. 

 TELECOM SHARE OPTION SCHEME 
  

	10.4	Qualifying Date acceleration 

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

 the Committee may (but has no obligation whatever to) deem the Exercise Date to have occurred and may (but has no obligation whatever to), at the time of
such declaration or at any subsequent time, deem the Performance Criteria to have been met, 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 Qualifying 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 

  

	 	(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 Committee may (but has no obligation whatever to), at the time of such declaration or any subsequent time, determine that the Performance Criteria (if any) for any particular
Grant shall be deemed to have been satisfied on the date the Participant ceases to be in Employment (the (“Cessation Date”); 

  

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

  

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

  

	 	(b)	the date that is 12 months after the Cessation Date; or 

 TELECOM SHARE OPTION SCHEME 
  

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

  

	 	(v)	notwithstanding clause 11, all the Participant’s Live Options (irrespective of when the Qualifying 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	Other Adjustment 

 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, 

 the Committee may, notwithstanding anything else in the
Scheme, make such alterations to the rights, obligations, or benefits of Participants or 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. 
  

	11	LAPSE OF OPTIONS 

  

	11.1	Rejection of Grant 

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

	11.2	Leave Prior to Qualifying Date 

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

	11.3	Lapse on Performance Expiry Date 

 If the Exercise
Date does not precede the Performance Expiry Date (where applicable), the Participant’s Options will lapse immediately. 
  

	11.4	Leave After Qualifying 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. 

 TELECOM SHARE OPTION SCHEME 
  

	11.5	Leave After Qualifying Date: Dismissal 

 Subject to
clause 11.4, if a Participant Leaves due to dismissal, the Participant’s Live Options (if any) will lapse immediately. 
  

	11.6	Leave After Qualifying Date: Other Reason 

 If a
Participant Leaves due to a reason other than the reasons referred to in clauses 11.4 and 11.5, 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. 
  

	11.7	Option Lapse Date 

 A Live Option, which has not
lapsed pursuant to clauses 11.4 to 11.6 (which, for the avoidance of doubt, are subject to clause 8.5) or 11.8, lapses on the Option Lapse Date, subject to clauses 8.5 and 11.8. 
  

	11.8	Breach 

 Notwithstanding clauses 11.4 to 11.7, 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 representing the difference between the Exercise Price and 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 11.8(i) is a genuine pre-estimate of the damages the Participant is likely to suffer as a result of the default; and 

 

	 	(iii)	that on payment of the amount under clause 11.8(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. 

  

	11.9	Variation or Waiver 

 The Committee may vary or
waive the application of clauses 11.1 to 11.8 for any one or more of the Participants. 
  

	12	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. 
  

	13	AMENDMENT AND TERMINATION 

  

	13.1	Committee’s Discretion 

 Subject to clause
13.3, 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. 

 TELECOM SHARE OPTION SCHEME 
  

	13.2	Termination 

 Subject to clause 13.3, the Committee
may terminate the Scheme. 
  

	13.3	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. 

  

	13.4	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. 
  

	14	QUOTATION 

 Options will not be quoted on a stock
exchange. 
  

	15	MISCELLANEOUS 

  

	15.1	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. 
  

	15.2	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. 
  

	15.3	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. 
  

	15.4	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. 
  

	15.5	Disputes 

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

	15.6	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; 

 TELECOM SHARE OPTION SCHEME 
  

	 	(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. 

  

	15.7	Governing Law 

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

	15.8	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

  

	 	(vi)	a reference to a person includes its successors and permitted assigns.Telecom Restricted Share Scheme - 2005

 “Exhibit 4.2” 
  

 TELECOM RESTRICTED SHARE SCHEME – 2005

  

 TELECOM RESTRICTED SHARE SCHEME 
  

 TABLE OF CONTENTS 
  

					
	1 INTRODUCTION	  	1
		  	 Name
	  	1
		  	 Glossary
	  	1
		
	2 OFFERS	  	1
		  	 Invitation
	  	1
		  	 No cost
	  	1
		  	 Content
	  	1
		
	3 LOAN	  	2
		
	4 ACCEPTANCE	  	2
		  	 Return documents
	  	2
		  	 Direction and acknowledgements
	  	2
		  	 Processing of acceptance
	  	2
		
	5 TRANSFER DATE	  	3
		
	6 EARLY TERMINATION	  	3
		  	 Sale and repayment
	  	3
		  	 Confirmation
	  	4
		  	 Discretionary benefit
	  	4
		
	7 INCIDENTS OF OWNERSHIP	  	5
		  	 Obligations of Nominee
	  	5
		  	 Application of Clause 7.3
	  	5
		  	 Early Transfer
	  	5
		  	 Share Cancellation
	  	6
		  	 Rights issue
	  	6
		  	 Other Adjustment
	  	6
		
	8 KIWISAVER	  	7
		  	 Employee Contribution
	  	7
		  	 Employee Contribution - Deemed Share Sale
	  	8
		  	 Employer Contribution
	  	8
		  	 Complete Acquisition
	  	9
		  	 Share Cancellation
	  	9
		  	 Clause 8 Paramount
	  	9
		
	9 NO DIVESTMENT	  	9
		  	 Absolute prohibition
	  	9
		  	 No effect
	  	9
		
	10 OPERATION OF SCHEME	  	10
		  	 Administration
	  	10
		  	 Determination
	  	10
		  	 Delegation
	  	10
		
	11 RIGHTS ATTACHING TO SHARES	  	10
		
	12 AMENDMENT	  	10
		  	 Telecom’s discretion
	  	10
		  	 Breach
	  	10
		  	 Notice to Executives
	  	10
		
	13 MISCELLANEOUS	  	11
		  	 Telecom responsibility
	  	11
		  	 Deemed actions
	  	11
		  	 Fractions
	  	11
		  	 Entire agreement
	  	11

 TELECOM RESTRICTED SHARE SCHEME 

					
		 	 Delay
	  	11
		 	 Disputes
	  	11
		 	 Notice
	  	11
		 	 Governing law
	  	12
		 	 Construction
	  	12
	 GLOSSARY
	  	13

 Date: 26 August 2005 (amended 2 August 2007) 
  

	1	INTRODUCTION 

 Name 
  

	1.1	This is the Telecom Restricted Share Scheme (the Scheme). 

 Glossary 
  

	1.2	A glossary of defined terms is included on page 13. 

  

	2	OFFERS 

 Invitation 
  

	2.1	Telecom Corporation of New Zealand Limited (Telecom) may offer under the Scheme ordinary shares in Telecom (Shares) to an executive (an Executive) who is
employed by Telecom or a subsidiary (a Subsidiary) of Telecom (Employment). 

 No cost 
  

	2.2	An Executive will not (subject to clause 8) be required to pay any amount under the Scheme to Telecom or a Subsidiary from the Executive’s own funds. 

Content 
  

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

  

	 	(i)	specify the aggregate value of Shares to be allocated to the Executive (the Total Price); 

  

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

  

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

  

	 	(iv)	specify the date on which the Shares are to be allocated (the Allocation Date); 

  

	 	(v)	specify the date on which the Shares are to be transferred to the Executive and released from the Scheme (the Transfer Date); 

  

	 	(vi)	have attached a loan agreement (see clause 3); 

  

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

  

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

  

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

  

 1 

 TELECOM RESTRICTED SHARE SCHEME 
  

	3	LOAN 

  

	3.1	A Subsidiary (the Lender) will lend to the Executive (interest-free) the Total Price if Shares are to be allocated to the Executive (the Loan).

  

	4	ACCEPTANCE 

 Return documents 
  

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

  

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

  

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

  

	 	(iii)	the agreement for the Loan. 

 Direction and acknowledgements

  

	4.2	In accepting an offer of Shares, an Executive: 

  

	 	(i)	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); 

  

	 	(ii)	will be deemed to have directed Telecom that the Shares be held under the Scheme on behalf of the Executive by a person appointed from time to time by Telecom for that purpose
(the Nominee); 

  

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

  

	 	(iv)	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. 

 Processing of acceptance 
  

	4.3	An acceptance will be invalid and of no effect if it would give rise to a breach (a Breach) of: 

  

	 	(i)	Telecom’s Constitution; 

  

	 	(ii)	the listing and/or other rules governing New Zealand Exchange Limited’s NZSX (the Exchange) or any other stock exchange on which Shares are quoted; and/or

  

	 	(iii)	any statute, regulation or Telecom’s internal procedures for insiders. 

 TELECOM RESTRICTED SHARE SCHEME 
  

	 	Otherwise,	Telecom will (subject to clause 2.3): 

  

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

  

	 	(a)	the average end of day market price of Shares on the Exchange for the 20 days on which the Exchange is open for trading (Business Days) immediately preceding the date of
issue; less 

  

	 	(b)	a discount equal to the aggregate market consensus estimates (as determined by Telecom (in accordance with the conditions of any relevant approval given or waiver granted by New
Zealand Exchange Limited) as at a date as close as reasonably practicable to the date of issue) of the amounts of the dividends which under the terms of the Scheme will not be paid in respect of those Shares discounted from the expected payment
dates to the date of issue using a discount rate equal to Telecom’s then current assessment of its cost of equity (the Allocation Price); 

  

	 	(v)	allocate the Shares to the Executive; and 

  

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

  

	5	TRANSFER DATE 

  

	5.1	On the Transfer Date (subject to clauses 6 and 7): 

  

	 	(i)	an Executive will be entitled to a cash bonus from a Subsidiary which, after first deducting tax at the highest marginal tax rate applying to the Executive, is equal to the Loan
(the Bonus); 

  

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

  

	 	(iii)	the Nominee will (subject to clause 8) transfer to the Executive the Shares it holds for the Executive. 

  

	6	EARLY TERMINATION 

 Sale and repayment 
  

	6.1	Where: 

  

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

  

	 	(ii)	an Executive purports to act in breach of clause 9.1; and/or 

  

	 	(iii)	Telecom is put into liquidation (or suffers a similar event), before the Transfer Date (Early Termination), the Executive will be deemed (subject to clauses 6.3 and 7)
immediately before Early Termination to have: 

 TELECOM RESTRICTED SHARE SCHEME 
  

	 	(iv)	sold to the Nominee for the Total Price beneficial ownership of the Shares held by the Nominee for the Executive; and 

  

	 	(v)	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). 

 Confirmation 
  

	6.2	For the purpose of clause 6.1(iv), Telecom and the Executive acknowledge that the Total Price is: 

  

	 	(i)	the value of the Shares; and 

  

	 	(ii)	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 1994 concerning the accrual
treatment of income and expenditure). 

 Discretionary benefit 
  

	6.3	Where Early Termination: 

  

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

  

	 	(ii)	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) 
 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 the Subsidiary (with effect from the Allocation Date) to apply the part Bonus 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 8) 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 6.1 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 
  

	7	INCIDENTS OF OWNERSHIP 

 Obligations of Nominee

  

	7.1	The Nominee will: 

  

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

  

	 	(ii)	not pay to the Executive any dividends on those Shares, except to the extent (if any) specified in the offer document; 

  

	 	(iii)	not exercise any voting rights attaching to those Shares; 

  

	 	(iv)	hold for the Executive any and all Shares under a bonus issue or any other capital reorganisation whatever received by the Nominee as holder of those Shares. The additional Shares
will be treated in the same manner as the other Shares held for the Executive, and references to Shares will be construed accordingly; 

  

	 	(v)	not participate in any non-renounceable rights issue or dividend reinvestment plan concerning those Shares. 

 The Nominee will not exercise any right conferred on it under applicable takeover laws. 
 Application of Clause 7.3 
  

	7.2	If: 

  

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

  

	 	(ii)	a Business Sale occurs, clause 7.3 shall 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. 

 Early Transfer 
  

	7.3	If this clause 7.3 applies: 

  

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

  

	 	(ii)	if a Complete Acquisition occurs: 

  

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

  

	 	(b)	the Nominee will (subject to clause 8) distribute as soon as practicable to the Executive all consideration received by the Nominee for the Shares; 

  

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

 TELECOM RESTRICTED SHARE SCHEME 
  

	 	(a)	the Executive will be deemed to have directed the Subsidiary (with effect from the Allocation Date) to apply the Bonus in repayment of the Loan; 

  

	 	(b)	the Nominee will (subject to clause 8) transfer to the Executive the Shares it holds for the Executive. 

 A deemed direction by the Executive referred to in clause 7.3(ii)(a) or 7.3(iii)(a) 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. 
 Share Cancellation 
  

	7.4	On the occurrence of the Share Cancellation: 

  

	 	(i)	clause 7.3 shall not apply; 

  

	 	(ii)	the number of Shares held by the Nominee on trust for each Executive shall be reduced by the same ratio as the total number of Shares is reduced on the Share Cancellation;

  

	 	(iii)	the Nominee shall (subject to clause 8) pay to each Executive the amount received by the Nominee on the Share Cancellation in respect of the Shares held on trust for that Executive;

  

	 	(iv)	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 Shares held by the Nominee on trust for the Executive which are cancelled on the Share Cancellation; 

  

	 	B	is the total number of Shares which were held by the Nominee on trust for the Executive before the Share Cancellation; and 

  

	 	(v)	the Executive will be deemed to have directed the Subsidiary (with effect from the Allocation Date) to apply the part Bonus 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). 

 Rights issue

  

	7.5	On any issue by Telecom to its shareholders of renounceable rights to acquire Shares (or other benefits or assets), the Nominee will: 

  

	 	(i)	endeavour to sell the rights arising out of the Shares held by the Nominee for an Executive, if it considers that a market for them is readily available (in all respects as it sees
fit, and without any liability whatever for any act or failure to act whatever in this regard); and 

  

	 	(ii)	pay to the Executive as soon as practicable the amount received by the Nominee (less all expenses and liabilities whatever) for the rights arising out of the Shares.

 Other Adjustment 
  

	7.6	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 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 

 TELECOM RESTRICTED SHARE SCHEME 
  

	 	(ii)	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, notwithstanding anything else in the Scheme,
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 return of capital by Telecom to holders of Shares, 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. 
  

	8	KIWISAVER 

 Employee Contribution 
  

	8.1	If a contribution to a “KiwiSaver” scheme under the KiwiSaver Act 2006 is required to be deducted from a Bonus or part Bonus (an Employee Contribution), Telecom
shall notify the Executive to that effect and the Executive shall, within such time as Telecom specifies, elect either: 

  

	 	(i)	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

  

	 	(ii)	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 subclause (i). 

 TELECOM RESTRICTED SHARE SCHEME 
  

 Employee Contribution - Deemed Share Sale 
  

	8.2	If the Executive elects, or is deemed to elect, the alternative in clause 8.1(i), the Executive will be deemed, immediately before payment of the Bonus or part Bonus, to have:

  

	 	(i)	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 8.1(i); and 

  

	 	(ii)	directed the Nominee (with effect from the Allocation Date) to apply the amount due to the Executive under subclause (i) in payment of the Employee Contribution. If, by reason
of rounding of a number of Shares pursuant to clause 13.3, the amount due to the Executive is less than the Employee Contribution, Telecom shall pay the balance of the Employee Contribution. 

 Employer Contribution 
  

	8.3	If an employer contribution (Employer Contribution) will be required to be made to a KiwiSaver scheme as a result of a Bonus or part Bonus being paid then:

  

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

  

	 	(ii)	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 8.3(i) had not been made) (the Shortfall), which repayment shall be funded in accordance with clause 8.3(iii) or 8.3(iv); 

  

	 	(iii)	if the Executive elects, or is deemed to elect, the alternative in clause 8.1(i), the Executive will be deemed, immediately before payment of the Bonus or part Bonus, to have:

  

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

  

	 	(b)	directed the Nominee to apply the amount due to the Executive under clause 8.3(iii)(a) in reduction of the Loan. If, by reason of rounding of a number of Shares pursuant to clause
13.3, the amount due to the Executive is less than the Shortfall, Telecom shall pay the balance of the Shortfall; 

  

	 	(iv)	if the Executive elects the alternative in clause 8.1(ii), 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). 

 TELECOM RESTRICTED SHARE SCHEME 
  

 Complete Acquisition 
  

	8.4	If a Complete Acquisition occurs, and the Executive elects, or is deemed to elect, the alternative in clause 8.1(i), then: 

  

	 	(i)	the number of Shares in respect of which the Executive is, pursuant to clause 7.3(ii)(b), to receive the consideration shall be a number calculated in accordance with clause 8.1(i),
less (if an Employer Contribution is required to be made) a number calculated in accordance with clause 8.3(iii)(a); and 

  

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

Share Cancellation 
  

	8.5	If a part Bonus is to be paid under clause 7.4 then the Executive shall not be required to make an election under clause 8.1, and: 

  

	 	(i)	the Nominee shall deduct from the amount payable to the Executive under clause 7.4(iii): 

  

	 	(a)	any Employee Contribution; and 

  

	 	(b)	any Shortfall; and 

  

	 	(ii)	the Nominee shall repay the Shortfall. 

 Clause 8 Paramount 

  

	8.6	This clause 8 shall prevail over any other provision of this document. For the avoidance of doubt, this clause 8.6 does not prevent any amendment or alteration being made pursuant
to clause 7.6 or clause 12. 

  

	9	NO DIVESTMENT 

 Absolute prohibition 
  

	9.1	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 (but subject to clauses 6.1 and 7.3). 

 No effect 
  

	9.2	Clause 6.1 will apply on any purported transfer, assignment, other disposition or creation of interest in breach of clause 9.1 (and the purported transfer, assignment, disposition
or creation will be void). 

 TELECOM RESTRICTED SHARE SCHEME 
  

	10	OPERATION OF SCHEME 

 Administration 
  

	10.1	The board of directors of Telecom from time to time (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, subject to the Scheme. 

 Determination 
  

	10.2	Without limiting clause 9.1, the Board may determine in its sole discretion: 

  

	 	(i)	whether a Fundamental Change has occurred; and 

  

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

 Delegation 
  

	10.3	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. 

  

	11	RIGHTS ATTACHING TO SHARES 

  

	11.1	Shares allocated to an Executive will rank equally with all other Shares at the Allocation Date, except for any dividend declared on Shares with a record date before the Allocation
Date. 

  

	12	AMENDMENT 

 Telecom’s discretion 
  

	12.1	Telecom may from time to time, subject to clause 12.2: 

  

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

  

	 	(ii)	amend the Scheme, if it considers that the interests of Executives are not materially prejudiced. 

 Breach 
  

	12.2	Telecom: 

  

	 	(i)	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 

  

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

 Notice to Executives 
  

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

 TELECOM RESTRICTED SHARE SCHEME 
  

	13	MISCELLANEOUS 

 Telecom responsibility 
  

	13.1	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. 

 Deemed actions 
  

	13.2	All actions (including directions) and consequences deemed to occur under the Scheme will occur irrevocably and unconditionally (subject to clause 12). 

 Fractions 
  

	13.3	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.

 Entire agreement 
  

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

 Delay 
  

	13.5	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. 

 Disputes

  

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

 Notice 
  

	13.7	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: 

  

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

  

	 	(ii)	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: 
  

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

 TELECOM RESTRICTED SHARE SCHEME 
  

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

  

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

 Governing law 
  

	13.8	The Scheme and the Loan will be governed by and construed in accordance with New Zealand law. 

 Construction 
  

	13.9	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 amend includes modify, delete, add and vary; 

  

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

  

	 	(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; 

 

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

  

	 	(vii)	a reference to a person includes its successors and permitted assigns. 

 TELECOM RESTRICTED SHARE SCHEME 
  

 GLOSSARY 
 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: 
  

	(a)	the average end of day market price of Shares on the Exchange for the 20 Business Days immediately preceding the date of issue; less 

  

	(b)	a discount equal to the aggregate of the market consensus estimates (as determined by Telecom (in accordance with the conditions of any relevant approval given or waiver granted by
New Zealand Exchange Limited) as at a date as close as reasonably practicable to the date of issue) of the amounts of the dividends which under the terms of the Scheme will not be paid in respect of those Shares discounted from the expected payment
dates to the date of issue using a discount rate equal to Telecom’s then current assessment of its cost of equity 

 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 
 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 

 Complete Acquisition means any transaction or arrangement which has one of the
following results: 
  

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

  

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

  

	(iii)	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 

 Early Termination means: 
  

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

  

	(ii)	an Executive purporting to act in breach of clause 9.1; and/or 

  

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

 before the Transfer Date 
 Employment means employment by Telecom or a Subsidiary 

 TELECOM RESTRICTED SHARE SCHEME 
  

 Exchange means New Zealand Exchange Limited’s NZSX 
 Executive means an executive who is Employed 
 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 
 Group means Telecom and its subsidiaries 
 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 7.4 
 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 
 Scheme means the Telecom Restricted Share Scheme 
 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 

 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).

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

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00129-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00129-of-00352.parquet"}]]