IQE plc : Director/PDMR Shareholding

IQE plc

Further details re Director Dealing

13^th November 2014

Following the announcement on14 October 2014 regarding the Executive Directors' share purchases and funding facility, IQE plc ("IQE" or the "Company") and the Executive Directors wish to provide the following further information.

Dr Drew Nelson entered into a share sale and repurchase agreement with Equities First Holdings (EFH) on 10^th October 2014 for a total of 18 million existing shares, raising a total of £1.865 million before commissions of £55,944.  He is obligated to repurchase all these shares at the end of a three year term, ending on 10^th October 2017.  The price at which he is required to repurchase the shares is 11.4 pence per share. The agreement provides that he has transferred all title and waives his voting rights in these shares. However, as previously stated, under the terms of the agreement, EFH is prohibited from short selling or voting the shares during the term of the agreement. Furthermore, EFH will pay Dr Nelson income that reflects any dividends as they arise from all of these shares during the entire period as if Dr Nelson had continued owning all the shares himself.

As part of this overall arrangement, Phillip Rasmussen and Dr Howard Williams have agreed to enter into separate loan agreements with Dr Nelson by pledging 2.72 million  shares each to Dr Drew Nelson as security for loans provided by him of £274,000 to each of them.

In line with the announcement made on 14^th October approximately 52% of the monies raised by the Executive Directors have already been used to fund the purchase of the shares and to satisfy income tax and NI obligations following the exercise of share options announced on 10^th October. Under HMRC rules, income tax and National Insurance becomes payable directly upon the exercise of options. Consequently, Directors often needto immediately sell at least half of theexercised shares to cover this tax and NI liability.  In the case of the IQE Directors, they have elected to raise the tax and NI monies through these arrangements in order to retain all of the exercised share options, thereby increasing their respective holdings in the company, in addition to purchasing additional shares. The remainder of the monies raised is intended to be used to fund further tax liabilities and NI due on the exercise of share options which are due to vest in early 2015, as well as fund further share purchases and cover any potential margin calls under the share sale and repurchase agreement.  The share option exercises were part of IQE's LTIP, and the Directors were under no time obligation to exercise such share options, but chose to do so at this time in order to maximise their respective shareholdings in the Company.

Following the purchases announced on 14^th October 2014, the Executive Directors have the following interests in the equity of the company

Name	No. of Ordinary Shares prior to option exercise	Option Exercise	No. of Ordinary Shares purchased	No. of Ordinary Shares after exercise and purchase	Ordinary Shares as a % of ISC
Dr. Drew Nelson, CEO	28,658,465	4,800,753	1,800,000	35,259,218 *	5.34%
Phillip Rasmussen, CFO	852,822	1,870,535	750,000	3,473,357	0.53%
Dr. Howard Williams, COO	1,672,430	1,870,535	750,000	4,292,965	0.65%
Totals**	31,183,717	8,541,823	3,300,000	43,025,540	6.54%

                  *These include the 18 million shares that Dr Drew Nelson sold but retains the obligation to repurchase
                  ** In aggregate, using the share and repurchase agreement and associated inter-Director loans, the Directors have increased their interests in the Companys shares by a total of 11,841,823 shares or 38%.

The total number of ordinary shares in issue is 659,865,117

Contacts:
IQE plc: [phone]
Drew Nelson
Phil Rasmussen
Chris Meadows

Canaccord Genuity: [phone]
Simon Bridges
Cameron Duncan

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This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: IQE plc via Globenewswire

HUG#1871142