Driver Grp Regulatory News (DRV)

AIM: DRV

24 January 2011

Driver Group plc

("Driver" or the "Group")

Grant of Share Options

Driver, the global construction consultancy, announces that, following conclusion of a comprehensive review of executive and senior management incentivisation arrangements, it has implemented the following recommendations of the Remuneration Committee:

·; new options over 2,902,500 shares ("Shares") ("New Share Options") have been granted to executive and senior management. The grant of a number of the New Share Options is conditional on the surrender of existing options over 1,935,000 Shares (the "Old Share Options");

·; Dave Webster, Group Chief Executive, has been granted 500,000 New Share Options. In addition, Dave has been granted options over 750,000 Shares under a long term incentive plan (the "LTIP Options"); and

·; 2,402,500 of the New Share Options have been granted to 26 senior managers including 100,000 New Share Options to Damien McDonald, Group Finance Director.

The Old Share Options, which are exercisable at prices of between 62p and 118.5p per Share were granted between 28 June 2006 and 8 October 2009 when the general economic environment and outlook for the construction industry in particular was wholly different. The Remuneration Committee took the view that, far from incentivising key management, the Old Share Options no longer serve to incentivise management and are now poor for morale. The Directors consider that implementing the recommendations of the Remuneration Committee is a vital part of the Company's planned return to recovery and growth in a trading environment which remains difficult.

The five managing directors of individual business units have each been granted 200,000 New Share Options. These New Share Options, together with the remaining 1,402,500 New Share Options being granted to senior managers, may not be exercised prior to 1 October 2014, and such exercise is subject to the relevant option holders being employed by the Group at that time.

As Chief Executive, Dave Webster is charged with the responsibility of delivering the Group's business plan for returning the Group to profitability and growth.

The New Share Options and LTIP Options which have been granted to Dave Webster are conditional on (i) the Company achieving underlying earnings per Share of 6.2p which is equivalent to the peak earnings per Share achieved by the Company in the year ended 30 September 2008; and (ii) Dave Webster being employed by the Group on 1 October 2014. 

In addition these Options will vest automatically in the event of a takeover of the Company being completed before 1 October 2014.

The Remuneration Committee believes that, following the award of the LTIP Options, the overall remuneration of Dave Webster will be commensurate with the role of Group Chief Executive responsible for implementing the Group's return to profitability and growth.

The New Share Options have been granted at an exercise price of 21.5p per Share, equivalent to the mid-market closing price at close of business on 21 January 2011. The LTIP Options granted to Dave Webster are exercisable for nil consideration.

The Company has an Employee Benefit Trust ("EBT") which currently holds 1,700,645 Shares which are intended to be issued on exercise of share options. No such exercise has taken place to date and all the Shares held by the EBT are therefore available to satisfy the exercise of New Share Options and/or LTIP Options. It is intended that any additional Shares to which the Company becomes entitled, for example on a purchase of own Shares, will also be used to satisfy New Share Options and/or LTIP Options.

The Directors, having consulted WH Ireland, the Company's nominated adviser, are of the view that the LTIP Options awarded to Dave Webster and the grant of the New Share Options to Damien McDonald, each being related parties under the AIM Rules, are fair and reasonable and in the interests of shareholders as a whole.

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