XYZ Ltd grants 500 shares to each of its 200 employees on 1 July 2012. The vesting conditions for these grants depend on performance targets shown below. The grants will lapse if employees fail to achieve the targets in the 3-year vesting period. Other relevant information regarding the grant is as follows.

The fair value of each share at grant date is $30. The fair values of each share at the end of each of the next three years are $31, $32 and $33 respectively.

Year-End	Vesting Conditions to vest on date shown
30/6/2013	Earnings must have increased by > 10%
30/6/2014	Earnings must have increased by > 14% averaged across the 2- year period
30/6/2015	Earnings must have increased by at least 12% averaged across the 3-year period

Year end	Actual increase in earnings	Anticipated increase in earnings next year	Actual employee departures	Anticipated employee departures
30 June 2013	8%	22%	16	14
30 June 2014	19%	12%	18	20
30 June 2015	14%	n/a	22	n/a

The remuneration expense recognized in years 2013 and 2014 will be:

Select one:

a.

2013	2014
zero	zero

b.

2013	2014
$990,000	$170,500

c.

2013	2014
$900,000	$310,000

d.

2013	2014
$1,275,000	$185,000

e.

2013	2014
$945,000	$162,750