Implementation of LTIP for senior management

RNS Number : 0888P

Inspired Energy PLC

24 May 2018

 

24 May 2018

Inspired Energy plc

("Inspired" or the "Company")

Implementation of Long Term Incentive Plan for senior management

Further to the announcement of the Group's final results on 22 March 2018, Inspired Energy (AIM: INSE), a leading UK energy procurement consultant to UK and Irish corporates and SMEs, announces a grant of awards under the Long Term Incentive Plan ("LTIP") to the senior management team ("SMT") which reports directly to the Executive Directors ("Executives"), Mark Dickinson (CEO) and Paul Connor (Finance Director). The SMT is comprised of 13 key senior directors of the Group.

Background

The LTIP was implemented by the Board in July 2017, to incentivise and retain the Executives and SMT, who previously had limited equity interests in the Group, to deliver long-term value creation for shareholders and ensure alignment with shareholder interests.

The structure of today's awards to the SMT, is designed as a program of awards over a six year period ending FY2023 ("Award Period"), which surpasses the award period of six years granted to the Executives in July 2017, ending FY2021.

Size of grant

The Company has today issued 23,400,000 ordinary shares to Inspired Energy EBT Limited as trustee of the Inspired Energy plc Employee Benefit Trust ("EBT"). These shares ("JSOP Award") will be held by the trustee for the joint benefit of itself and the SMT. The JSOP Award vests in four separate tranches which are individually governed by achievement of adjusted EPS performance targets over a three year period, as set out in the table below. Should there be a change in control of the Company, by way of an offer for the entire issued share capital of the Company, during the Award Period, the JSOP Award will automatically vest in full.

	EPS Target Set	FY18	FY19	FY20	FY21	FY22	FY23	Total
Tranche 1	Target for 3 years ended Dec 20, set at 1 January 2018	1,950,000	1,950,000	1,950,000				5,850,000
Tranche 2	Target for 3 years ended Dec 21, set at 1 Jan 2019		1,950,000	1,950,000	1,950,000				5,850,000
Tranche 3	Target for 3 years ended Dec 22, set at 1 Jan 2020			1,950,000	1,950,000	1,950,000		5,850,000
Tranche 4	Target for 3 years ended Dec 23, set at 1 Jan 2021				1,950,000	1,950,000	1,950,000	5,850,000
		1,950,000	3,900,000	5,850,000	5,850,000	3,900,000	1,950,000	23,400,000

Note:

The table above represents the maximum number of ordinary shares available for the SMT as a whole in each year under the LTIP, subject to achievement of adjusted EPS performance targets.

The SMT will benefit from the growth in value of their respective JSOP Award from the date of grant. The SMT also hold a nil cost option over the EBT's interest in the JSOP Award which may be exercised in certain circumstances. The subscription monies for these ordinary shares have been satisfied in cash advanced by the Company to the EBT.

Adjusted earnings per share ("Adjusted EPS")

The JSOP Award vests subject to the achievement of Adjusted EPS performance targets. Adjusted EPS will be calculated by taking the net attributable profit and adjusting by:

•              adding back acquisition related amortisation items;

•              adding back exceptional items;

•              adding back share based payments charge; and

•              removing any impact (positive or negative) of any deferred tax.

The resultant figure is then divided by the number of ordinary shares in issue on a fully diluted basis.

Vesting Performance Conditions

Tranche 1

The JSOP Award in respect of Tranche 1 will vest on the achievement of an Adjusted EPS of 1.55p, 1.69p and 1.75p for FY18, FY19 and FY20 respectively.  Should Adjusted EPS fall below these target levels in any of the financial years, the award for that financial year will be lost and not be capable of vesting by the SMT.

Tranches  2, 3 and 4

The remuneration committee will, on 1 January 2019, 1 January 2020 and 1 January 2021 respectively, determine the Adjusted EPS targets for Tranches 2 to 4 respectively. The Adjusted EPS targets will be set by the Remuneration Committee on 1 January each year, with tranche 2 covering the three financial years ending 31 December 2021, tranche 3 covering the three financial years ending 31 December 2022 and tranche 4 covering the three financial years ending 31 December 2023.  The targets set by the remuneration committee for all tranches represent a target below which none of the award will vest to the SMT for that financial period (the "Threshold Targets").

For all tranches, the criteria for full vesting of Awards will be set at 110% of the Threshold Targets (the "Maximum Targets") for each financial year within each tranche, with the amount vesting rising on a straight line basis between the Threshold Targets and the Maximum Targets.

Exercise and Hold Period

The SMT will only become fully entitled to the JSOP Award in respect of each tranche at the end of the three year period relating to that tranche. The SMT will be empowered to sell up to 50% of the JSOP Award at the end of the three year period with the balance being subject to an undertaking that they will not dispose of any further ordinary shares subject to that award for a period of 12 months, except in very limited circumstances.  Accordingly, 50% of tranche 1 awards could be sold in FY21 and a further 50% in FY22 or beyond.  Similarly, the earliest sale date of tranche 4 JSOP Award, would be in FY24 in respect of 50% of the award and FY25 or later in respect of the remaining 50% of the award.

Application for admission

Application has today been made to the London Stock Exchange for the admission of the 23,400,000 new Ordinary Shares ("New Shares"). The New Shares are expected to be admitted to trading on AIM on 31 May 2018. The New Shares will, on admission, represent 4.1% of the Company's issued share capital.

Following the admission, the Company will have 598,036,924 ordinary shares in issue. All dividend and voting rights comprised in the JSOP Award are waived whilst jointly held by the relevant SMT and the trustee of the EBT.

Enquiries:   

Inspired Energy plc Mark Dickinson, Chief Executive Paul Connor, Finance Director	[phone] www.inspiredenergy.co.uk
Shore Capital (Nominated Adviser and Joint Broker) Dru Danford Edward Mansfield James Thomas Peel Hunt LLP (Joint Broker) Mike Bell Sam Cann	[phone] [phone]
Gable Communications Justine James John Bick	[phone] [phone] [e-mail]

 

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