21 Jul 2014 07:01

Allocate Software PLC
Â
("Allocate" or "the Company")
Â
Allocate Share Options Schemes & Long Term Retention Plan
Â
Change in Performance Conditions
Â
Share Option Schemes
Â
The Board reviewed in January 2014 the performance conditions with respect to share options granted under the Company's share options schemes since 1 January 2011. Since the performance targets were originally set, there has been a significant change in the Group's business model, with a greater proportion of revenues being recurring rather than perpetual or term license. This has had a corresponding impact on the Earnings per Share growth (which forms the basis of the share option performance conditions).
Â
In view of this change in the business model, the Remuneration Committee recommended and the Board decided to amend the performance conditions for options granted since 1 January 2011. The principal changes are as follows:
Â
- EPS Targets have been reduced, and are based on more realistic levels of growth given the increase in recurring revenue;
-
- Each annual EPS target is to have two thresholds - a lower threshold, at which point 70% of the options in relation to that year will vest, and a higher threshold at which point 100% of the options in relation to that year will vest.Â
Â
- There is no longer any cumulative assessment of performance over the 3 year period, nor is there the potential to catch up performance in a subsequent year if a target is missed in a prior year.
Â
 Long Term Retention Plan
Â
Additionally, as part of the same review, the Board decided to amend the performance conditions of the Long Term Remuneration Plan ("LTRP") awarded to Ian Bowles in December 2011.
Â
Under this plan, Ian Bowles was awarded in December 2011, 1,000,000 nil-price options over ordinary shares in the Company which would vest between September 2014 and September 2016 subject to (a) the Company's earnings per share increasing at or above a 15% annual compound growth rate; and (b) a demanding absolute total shareholder return ("TSR") against which options would vest on a sliding scale. 20% of the options will vest at a 15% annual compound TSR and the options would vest in full at or above a 25% annual compound TSR.
Three principal changes have been made to the LTRP. Firstly, the targets for TSR have been changed from a range of 15% - 25% to a range of 7.5% - 15%. Secondly, instead of 20% of the shares vesting at the minimum level of TSR achievement, the proportion that vests at this level is now 70%. Finally the earnings per share target have been changed to an annual compound growth rate of 5%.
 Â
Enquiries:
Â
Allocate Software Ian Bowles - Chief Executive Officer Chris Gale - Chief Financial Officer  | Tel: +44 (0) 20 7355 5555 |
Numis Securities Limited Nominated adviser - Simon Willis / Richard Thomas Corporate Broking - James Black  | Tel: +44 (0) 20 7260 1000 |
FTI Consulting Matt Dixon / Chris Lane  | Tel: +44 (0) 20 3727 1000 |
Â
Â
Â
Â