Share Option Surrender and Cash Bonus Retention Plan

Clarissa Elsner

Surrender of share options

GVC Holdings plc announces that on 26 March 2015 three of its directors surrendered the following fully vested share options which were granted in May 2010 and January 2012 pursuant to a Long Term Incentive Plan (previously disclosed on page 347 of the Company’s prospectus published in January 2013):

Kenneth Alexander
Chief Executive Officer:
800,000 options granted at an exercise price of £2.13 on 21 May 2010
800,000 options granted at an exercise price of £1.5479 on 28 January 2012

Richard Cooper
Chief Financial Officer:
400,000 options granted at an exercise price of £2.13 on 21 May 2010
400,000 options granted at an exercise price of £1.5479 on 28 January 2012

Lee Feldman
Chairman:
400,000 options granted at an exercise price of £2.13 on 21 May 2010
400,000 options granted at an exercise price of £1.5479 on 28 January 2012

These directors continue to hold share options which vest in full (and become exercisable) on the share price being equal to or exceeding £6.00 per share for a continuous period of 90 calendar days (as disclosed in the RNS dated 2 June 2014). They also continue to be incentivised by bonus arrangements which are dependent on the size of the dividend paid by the Company.

The surrender of these share options by the directors means that they may no longer be exercised, thus avoiding the dilutive effect of 3,200,000 new shares being issued.

Retention Plan

In light of the surrender of share options described above by Kenneth Alexander, Richard Cooper and Lee Feldman (the “Senior Team”), the Company has implemented a new retention plan for the Senior Team (the “Retention Plan”).

The Retention Plan is focused on ensuring that the Senior Team are compensated for the surrender of their fully vested share options and remain committed to and incentivised by the Company over the next two years. Accordingly, each member of the Senior Team will receive cash payments which in total equal the “in-the-money” value of their surrendered share options. This is calculated by multiplying the number of shares over which options have been surrendered by the average of the middle market closing prices of the Company’s shares for the thirty dealing days up to and including the date of surrender, being £4.64067, less the average of the price at which their surrendered share options were granted, being £1.83895.

Under the Retention Plan:

  • Total cash payment due to each director shall be divided by eight and that sum paid quarterly over a period of two years
  • In the event a director’s service is terminated by the Company for cause (as defined in their service agreement or letter of appointment) or he resigns during the two year period (other than due to serious illness or repudiatory breach by the Company of his service agreement), he will not be entitled to receive any further Retention Plan payments
  • All payments will become payable on a change of control of the Company
  • Total sum received by each director shall flex to reflect any government imposed change (up or down) in the amount of tax payable by each director on his Retention Plan payments such that he is left in the same position as would have been the case had the change not occurred and had the options been exercised in full today in the 2014/2015 tax year.

Prior to the surrender of their vested share options, the Senior Team participated in a dividend credit scheme which provided them with a cash bonus equal to the dividends that would have been paid to them had they exercised those share options and instead held shares. To compensate the Senior Team members for the loss of this dividend credit, they shall continue to receive a cash payment at the time the dividends are paid, equal to what they would have received had they exercised their share options and held the related shares. However, these notional shareholdings shall be treated as reducing by one eighth quarterly over the same two year period as the Retention Plan such that following the date of the last Retention Plan payment no further payments are due to the Senor Team in lieu of the dividend credit.

 

For further information:

GVC Holdings PLC
Kenneth Alexander, Chief ExecutiveTel: 020 7398 7702
Richard Cooper, Group Finance Directorwww.gvc-plc.com
Cenkos Securities plc (Nominated Adviser & Broker)Tel: 020 7397 8900
Mark Connelly, Stephen Keys, Callum Davidson

Media enquiries:

Bell PottingerTel: 020 3772 2500
David Rydell, James Newman

 

About GVC Holdings PLC

GVC Holdings PLC is a leading e-gaming operator in both b2c and b2b markets. Its core brands are CasinoClub, Betboo and Sportingbet. The Group has over 700 employees/consultants and is headquartered in the Isle of Man and has licenses in Malta, Germany, Denmark, UK, South Africa, Italy, Alderney and the Dutch Caribbean.

Further information on the Group is available at www.gvc-plc.com