Share Appreciation Rights
03 April 2008
Jelf Group plc ("the Company") announces the following grants of share appreciation rights ("SARs") to three directors of the Group on 3 April 2008. This grant of SARs was conditional on the recipients surrendering their options held under the Jelf Group plc Long Term Incentive Plan ("Old LTIP").
The Notice of General Meeting issued to shareholders on 29 January 2008 stated that Jelf intended to develop new employee incentive arrangements, linked to the future growth in the value of the Group's business over the next three years. The Subscription and Placing document dated 25 February 2008 stated this growth in value would be calculated by reference to the recent Placing Price of 212.5p.
Today, the Board announces the adoption of the Jelf Group plc 2008 Long Term Incentive Plan ("2008 LTIP"), which will provide for awards of equity-settled SARs to certain directors and key employees. The economics, accounting and tax treatment of SARs are similar to share options, but SARs are more "share efficient" in terms of dilution.
The SARs awards will deliver to recipients a net gain equal to the increase in share price between the base price (212.5p) and the price prevailing at the end of the three-year performance period. This net gain is delivered in shares, by reference to the share price prevailing at the end of three years. The number of shares actually issued following exercise will therefore be less than the number of SARs issued.
Exercise of the SARs is subject to the achievement of specified performance conditions over a three-year period; if these conditions are met, the SARs vest and are exercisable at the end of years 3 (50%), 4 (25%) and 5 (25%). Hence the 2008 LTIP is both an incentive and retention device for key directors and employees.
SARs granted to the directors amount to 6.5% of the current issued share capital of the Company; additional SARs granted to other key employees amount to 2.5% of the current issued share capital. These SARs awards are partially offset by the surrender of Old LTIP options amounting to 740,000 options or 1.5% of current issued share capital (directors) and 120,000 options or 0.2% (other employees).
The SARs granted under the 2008 LTIP to each of the relevant directors are as follows:
| No of SARS granted under the 2008 LTIP scheme |
Existing share options held |
Total No. of share options and SARs held |
|
| Alex Alway | 2,000,000 | - | 2,000,000 |
| John Harding | 630,000 | 57,813 | 687,813 |
| Philip Barton | 545,000 | - | 545,000 |
Hence the total existing aggregate holdings of each of the relevant directors and their beneficial interest in the total voting rights is now as follows:
| No. of Ordinary shares held |
Total no. of shares options and SARs not yet vested |
No. of shares awarded by EBT not yet vested |
Total aggregate holding |
Total holding as a % of issued and to-be-issued capital* |
|
| Alex Alway | 1,084,800 | 2,000,000 | 3,084,800 | 5.6% | |
| John Harding | 248,690 | 687,813 | 11,925 | 948,428 | 1.7% |
| Philip Barton | 311,335 | 545,000 | 3,559 | 859,894 | 1.5% |
* Calculated by dividing each individual's total aggregate holding by the whole of the issued and to-be-issued share capital of the Company (which comprises 49,787,906 Ordinary Shares in issue, and 1,376,891 share options and 4,405,000 SARs). As noted above the conversion of SARs will not result in an equivalent issue of shares.
In addition, the Company announces two other awards. Firstly, the conditional
grant of 220,000 shares to David Walker, non-executive chairman, which will vest
at the end of three years. David Walker currently holds 460,000 ordinary shares,
his total aggregate holding will therefore be 680,000 (1.2% of issued and
to-be-issued capital). Secondly the introduction of an HMRC Approved Sharesave
Scheme open to all employees.
ENQUIRIES:
Jelf Group plc
Alex Alway, Group Chief Executive
01454 272713
Rose Clark, Director of Finance
01454 272853
Cenkos Securities plc
Ian Soanes/Max Hartley
020 7397 8900
Pelham PR
Polly Fergusson
020 7743 6362
Damian Beeley
020 3178 2253