FIF.L Regulatory News (FIF)

Finsbury Food Group plc

Executive LTIP

Finsbury Food Group plc (AIM: FIF) ("the Company"), a leading UK specialty bakery manufacturer of cake, bread and morning goods for both the retail and foodservice channels, announces that, further to its announcement on 23 March 2015, it has now adopted a new long term incentive plan ("LTIP") to strengthen its ability to attract and retain key senior executives through ensuring participants receive competitive incentives which align their interests with those of the Company's shareholders.

Participation in the LTIP will be at the discretion of the Remuneration Committee with awards being based on a percentage of the participant's base annual salary at the date the award is made. Awards will generally be made annually and capped at such number of shares as has a market value (determined by the Remuneration Committee) equal to 200% of a participant's base salary at the time of award.

Awards will give participants a right to receive up to a specified maximum number of shares in the Company subject to achievement of a performance target or targets to be determined by the Remuneration Committee. The awards can be made in the form of options to acquire ordinary shares in the Company at no cost, or in the form of conditional rights to acquire ordinary shares in the Company at no cost. The LTIP also includes a Company Share Option Plan ("CSOP") schedule, which allows for the grant of tax-favoured market value options.

The Plan includes provisions for the lapse of the awards where a participant ceases to be employed by the Company or its subsidiaries, except in certain circumstances or if the Remuneration Committee decides otherwise. In the event of a takeover offer for the Company, or a similar event, awards will generally vest, subject to any relevant performance targets having been met and generally subject to time-based pro-rating. The decision as to whether, and to what extent, performance targets have been met will be for the Remuneration Committee to decide.

Awards under the Plan will generally vest at the end of a performance period of three years, but will then typically be subject to a further two year holding period before shares will be delivered or nil-cost options will become capable of exercise. Awards will also be subject to reduction or forfeiture for malus at the discretion of the Remuneration Committee in certain circumstances.

Following adoption of the LTIP, the following awards were granted under the LTIP after close of business on Friday 26 June 2015 in the form of nil-cost options:

The value of the shares subject to these awards is 200% of the basic salaries of the executive directors, calculated using the price of the shares issued to fund the acquisition of the Fletchers Group on 30 October 2014. 

The Remuneration Committee has determined that in each case the vesting of these awards should be conditional upon the following performance conditions, to be satisfied over a period of 3 years (the "Performance Period") beginning with the start of the Company's 2015 Financial Year on 1 July 2014:

Mr Duffy and Mr Boyd hold, in addition to the LTIP awards set out above, 2,500,000 and 2,753,659 options over ordinary shares respectively.

Immediately prior to these awards the Company's issued share capital was 128,013,117 Ordinary Shares and there were outstanding awards (vested and unvested) under the SAYE scheme and previous LTIP scheme over 5,779,129 ordinary shares.

The Company has also adopted an updated share dealing policy, under which any sale of shares by executive directors is subject to the prior approval of the Remuneration Committee (such approval not to be unreasonable withheld or delayed). This new policy will apply both to shares already held by the executive team and to any issued or transferred to them in future, including under the newly-granted awards.

Raymond Duignan, Remuneration Committee chairman, commented:

"This is an important step in locking in the executive team who have driven the success of the company in recent years. The awards are subject to highly challenging performance targets and ensure that executives' interests are appropriately aligned with those of our shareholders in the long term."

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Notes to Editors:

▪ Finsbury Food Group Plc (AIM: FIF) is a leading UK manufacturer of cake and bread bakery goods, supplying a broad range of blue chip customers within both the Grocery retail and 'out of home eating' foodservice sectors including major multiples and leading foodservice providers.

▪ Following the acquisition of the Fletchers Group of bakeries, the Company is one of the largest speciality bakery groups in the UK with initial annualised sale of over £270m.

▪ The Company's bakery product range is comprehensive and includes:

- Large premium and celebration cakes;

- Small snacking cake formats such as cake slices and bites.

- Artisan, healthy lifestyle and organic breads through to rolls, muffins (sweet and savoury) and morning pastries, all of which are available both fresh and frozen dependent on customer channel requirements.

▪ The Company is now the second largest manufacturer of ambient packaged cake (excluding In Store Bakery) in the UK, a market valued at £926m (Source Symphony IRI 52 w/e 6th December 2014). The annual bread and morning goods market has a value in excess of £3.5 billion (source Kantar Worldpanel). The UK foodservice bakery sector is worth approximately £900 million per annum, 70 per cent of which is in morning goods.

▪ The Company comprises a UK Bakery division and an Overseas division:

- UK Bakery has manufacturing sites in Cardiff, Hamilton, East Kilbride, Salisbury, Sheffield, London and Manchester.

- The overseas sector comprise the Company's 50% owned Company Lightbody Stretz Ltd supplies and distributes the Group's UK manufactured products and third party products primarily to Europe.