Lfeaccetfusd Regulatory News (FEP)

18 Sep 2006 13:08

Forum Energy Plc18 September 2006 18 September 2006 Forum Energy Plc ('Forum' or 'the Company') Long Term Incentive Plan Following the announcement on 30 May 2006 relating to the granting of shareoptions to Russell Harvey, the Chief Executive of Forum, the Board reports theimplementation of the Long Term Incentive Plan ("LTIP") that was announced inthe Notice of AGM dated 25 May 2006 with which to offer further incentives toRussell Harvey. On 14 September 2006, the Company granted options to acquire ordinary shares of10p each for nil consideration to the trustees of the Forum Energy plc EmployeeBenefit Trust ("EBT") with an exercise price of 10p per share ('the A Options').At the same time, options to acquire ordinary shares were granted for nilconsideration by the trustees of the EBT to Russell Harvey with an exerciseprice of 10p per share ('the B Options'). The A and B Options are exercisablebetween 14 September 2006 and 15 May 2011. The A and B Options are matched and are exercisable together in eight separatetranches, provided that certain performance criteria, applicable individually toeach tranche, are met. These performance criteria relate to the share priceperformance or the achievement of market capitalisation targets and to theCompany's coal revenue targets for the combined years of 2006 and 2007 and for2008, The total number of A and B Options outstanding for each tranche are such numberthat will deliver the inherent value of the tranche as at the date of grant, andthis will be determined by dividing the inherent value of each tranche by thehigher of the market value of an ordinary share at the date of exercise and theaverage market value (measured over 2 days) of an ordinary share at the datethat a tranche becomes exercisable. The options became exercisable on 14September, subject to the performance criteria being met, and the inherent valueat the date of grant was 69.5 pence per share. The conditions and the inherent value for each tranche are set out below. Tranche Performance Criteria and Inherent Value per Tranche Tranche Event and Performance Hurdle Inherent Value (i) Forum share price or market capitalisation target surpassed prior to 15 May 2011: 1 £1.25 £139,000 2 £1.75 or £60m market capitalisation £139,000 3 £2.25 £139,000 4 £2.75 or £90m market capitalisation £139,000 5 £3.25 £139,000 6 £3.75 £139,000 7 (ii) Coal revenues for 2006 and 2007 achieve or exceed coal budget, £104,250 as approved by the Board on 27 June 2006 8 (iii) Coal revenues for 2008 achieve or exceed coal budget, as £104,250 approved by the Board on 27 June 2006 In addition, the Company announces that on 14 September 2006, a series ofoptions to acquire ordinary shares of 10p each were granted for nilconsideration to the trustees of the EBT with an exercise price of 10p per share('the C Options'). The C Options are exercisable between 14 September 2006 and15 May 2011. The C Options are exercisable in tranches provided the certainperformance criteria referred to above applicable to each tranche, are met. The total number of C Options outstanding for each tranche are such number thatwill deliver to the EBT the increase over the inherent value of the shares underthe C Options from the date of grant, and this will be determined by referenceto the formula (A-B) * (C/A) where: A = the market value of the shares under option at the date of exerciseB = 69.5pC = 200,000 (for Tranches 1-6) and 150,000 (for Tranches 7-8) Further, in conjunction with the granting of the C Options, the trustees of theEBT awarded to Russell Harvey reversionary interests currently represented bythe C Options under the company's LTIP. These interests will only vest if allthe performance criteria referred to above are met. The only participant under the LTIP is to be Russell Harvey, although the Boardwill consider other suitable instances where the LTIP can be used to incentiviseother employees in the future. The terms of the LTIP are in place until 15 May2011. For further information please contact: Alan Henderson, Forum Energy Plc: +44 (0) 19 3244 5344 Mark Froggatt, Noble & Company Limited: +44 (0) 20 7763 2200 James Henderson, Pelham Public Relations: +44 (0) 20 7743 6673 +44 (0) 77 7444 4163 Charles Vivian, Pelham Public Relations: +44 (0) 20 7743 6672 +44 (0) 79 7729 7903 Or visit the Company's website: www.forumenergyplc.com This information is provided by RNS The company news service from the London Stock Exchange