20645_Scapa_AR_160504

CORPORATE GOVERNANCE
The performance criteria for awards currently in issue but not vested are as follows:
Adjusted 2013 EPS
(p)
Award 2014*
vesting
Adjusted 2014 EPS*
(p)
Award 2015*
vesting
Adjusted 2015 EPS*
(p)
Award 2016*
vesting
3 year RPI +25% 25% 3 year RPI +25% 25% 3 year RPI +25% 25%
3 year RPI +40% 100% 3 year RPI +40% 100% 3 year RPI +40% 100%
Adjusted EPS at 31 March 2016 31 March 2017 31 March 2018
* Straight line vesting occurs between these points.
The value of the PSP awards, based on the market price of the Company’s shares on the day prior to the date of grant, does not exceed
100% of the base salary of the participant to whom the award has been made.
Value Creation Plan
The Group Chief Executive and Group Finance Director, together with the Executive Team, participate in the Scapa Group plc 2015 Value
Creation Plan which was approved by shareholders in General Meeting on 16 November 2015 (the ‘VCP’). The VCP is intended to directly align
Senior Executives’ interests with those of shareholders by connecting remuneration specifically with shareholder value. Entitlements under the
VCP were awarded in February 2016 and are set out below. The VCP includes an overall cap on the value of Company shares that can be
delivered, as well as an ‘off-set’ mechanism whereby any shares that may be delivered under the VCP are reduced by the value of any shares
that vest pursuant to awards made under the PSP in the financial years ending 31 March 2016, 2017 and 2018.
The VCP will reward participants for creating value through growth in the Company’s share price in excess of £1.95 and up to £5.00 per share,
measured on 31 March 2018 and 31 March 2020 (each a ‘Measurement Date’) and subject to gateway share price targets of £3.00 on the first
Measurement Date and £4.00 on the second Measurement Date. If the gateway target is not met on the first Measurement Date, none of the
awards will vest unless and until the gateway target of £4.00 is achieved on the second Measurement Date. For the purposes of the VCP,
the share price on each Measurement Date will be the average closing price of the Company’s shares over the 30-day period commencing
on the Measurement Date. Awards vesting in respect of the first Measurement Date are subject to a 24-month holding period.
The maximum pool available to participants is 5% of the value created above a share price of £1.95 up to a share price of £5.00. Assuming
there are no changes to the number of shares in issue during the life of the VCP (currently 150,033,428), if the share price increases to £5.00
or above, the VCP would pay out a maximum of approximately £22.9m ((150 million shares x 5%) x (£5.00 - £1.95)). The aggregate number of
shares in respect of which awards would crystallise at that time would therefore be 4.6 million shares. The Group Chief Executive, who has
been granted a 40% participation, would hold an option to acquire 1.8 million shares and the Group Finance Director, who has been granted
a 20% participation, would hold an option to acquire 0.9 million shares. These options would be reduced by the value of awards made under
the PSP, as described above.
Awards granted in the year to 31 March 2016
Director
Proportion of Plan
Awarded
Latest
Vesting date
H R Chae 40% 30 April 2020
G S Hardcastle 20% 30 April 2020
Dilution limits
The Company’s share plans are subject to dilution limits approved by shareholders at the Company’s 2009 AGM, that overall dilution under all
plans should not exceed 10% over a 10-year period in relation to the Company’s issued share capital. On the assumption that all outstanding
awards vest and will be exercised, and including all exercised awards as at 31 March 2016, the Company will have utilised 7.1% of the 10%
in the 10 years.
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ANNUAL REPORT AND ACCOUNTS 2016 SCAPA GROUP PLC