nex-ar2015-full

Financial Statements
Notes to the Consolidated Accounts continued
For the year ended 31 December 2015
7 Employee benefit costs continued
(b) Share schemes continued
(i) Long-Term Incentive Plan (‘LTIP’) continued
Since 2011, HMRC approved share option plans were added as an appendix to the LTIP (‘Approved Plan’). A participant can only hold
an option under the Approved Plan over shares with a market value of up to £30,000 at the grant date. Options under the Approved
Plan are granted in tandem with the usual options under the LTIP. The options are structured such that on exercise, the proportion of
the gain in respect of the first £30,000 worth of shares (as measured at the date of grant) will be delivered under the Approved Option
and the LTIP option shall be scaled back to deliver the remaining gross gain that would have been delivered had the option been
granted alone. The excess shares under the LTIP will be forfeited such that both awards will never become fully vested.
From 2012 to 2014, a supplementary five-year long-term incentive award was granted to the Chief Executive subject to targets linked
to the Group’s five-year plan. This comprised a Performance Award (with no matching element). If performance conditions are met,
the Performance award will vest on the fifth anniversary of the grant date and remain exercisable for a period of up to 12 months
following the vesting date. There are no cash settlement alternatives at present.
(ii) Share Matching Plan (the ‘Plan’)
The Share Matching Plan was introduced in 2005 as part of the new LTIP arrangements described in (i). Under the Plan, a Matching
Award to acquire a specified number of shares for free may be made if the employee pledges a number of shares as investment shares
which are then matched by the Company on up to a 4:1 basis with the number of shares that could have been purchased with the
gross-tax equivalent of the amount invested. The Matching Awards vest on the third anniversary of the grant date and remain
exercisable for a period of up to six months following the vesting date. There are no cash settlement alternatives at present.
(iii) Deferred Annual Share Bonus Plan
The Deferred Annual Share Bonus Plan is a discretionary scheme which forms part of the bonus arrangements for certain senior
employees. Under the scheme, part of any bonus may be received in cash whilst the remainder is used to make an award of nil cost
options which vest three years after the award date. There are no cash settlement alternatives at present.
(iv) West Midlands Travel Ltd (‘WMT’) Long Service Option Scheme
The WMT Long Service Option Scheme utilises a fixed amount of shares set aside for this purpose following the acquisition of WMT in
1995 and is open to all WMT employees who have been in service for more than 25 years. The options are exercisable between three
and ten years following the grant date. There are no cash settlement alternatives.
(v) TWM Share Incentive Plan (the ‘SIP’)
The TWM SIP exists for the benefit of WMT employees. At the end of the year, 1,079 (2014: 1,079) National Express Group PLC shares
were held for the benefit of the Trustee. Dividends on shares held in the SIP forfeited shares account are waived. There are no cash
settlement alternatives.
(vi) Executive Deferred Bonus Plan
As detailed in the Directors’ Remuneration Report, the Committee considered it appropriate for bonuses awarded in respect of the
calendar year to be deferred for a period of one year and that these would vest, subject to the terms of the award and the relevant
Director’s continuing employment. The deferred forfeitable ordinary shares are awarded under the terms of The National Express Group
Executive Deferred Bonus Plan which was adopted by the Board of the Company on 10 March 2009.
The principal terms of awards under the Executive Deferred Bonus Plan are summarised below:
• awards under the Plan may be cash awards, conditional awards or forfeitable shares awards;
• awards normally vest one year from the date of grant, subject to the relevant Director’s continued employment with the Company;
• the Committee may decide that participants shall be entitled to receive a benefit determined by reference to the value of the dividends
that would have been paid on the vested shares in respect of dividend record dates occurring during the period between the grant
date and the date of vesting; and
• the awards will normally lapse on cessation of employment save in certain compassionate ‘good leaver’ circumstances
(eg death or disability).
In the event of a variation of the share capital of the Company, the Committee may make such adjustments to the awards
as it considers appropriate.
126 National Express Group PLC Annual Report and Accounts 2015
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