Marlowe Regulatory News (MRL)

10 May 2021

Marlowe plc

 Executive Incentive Plan and Notice of General Meeting

Marlowe plc ("Marlowe", the "Group" or the "Company"), the UK leader in business-critical services and software which assure safety and regulatory compliance, announces that it has, subject to shareholder approval, adopted the Marlowe plc Executive Incentive Plan (the "EIP").

Since the Group's readmission to AIM in 2016, Marlowe has delivered significant growth through a combination of organic and acquisition-led performance. Having delivered on its initial five-year strategy in building a UK market-leading platform providing business-critical services and software which assure safety and regulatory compliance, the Group has a clearly defined strategy for continued organic and acquisition-led growth, targeting Group revenues of c.£500 million and adjusted EBITDA of c.£100 million over the next three years. The recent successful placing to raise c.£100 million before expenses means that the Company is well positioned to capitalise on acquisition opportunities as part of its defined strategy.

With Marlowe's historical 2016 Incentive Scheme having concluded in February 2021, and no other meaningful long term incentive scheme currently in place, the Remuneration Committee has considered appropriate options for incentivising the Company's senior executive team in the next phase of Marlowe's growth and is now proposing the adoption of the EIP.

The EIP will form the cornerstone of the Company's remuneration structure to retain and motivate the senior management team, focusing them on long term value creation and aligning their interests directly with shareholders.

In structuring the EIP, the Remuneration Committee has been advised by PricewaterhouseCoopers, who considers the plan to be fair and reasonable, and has considered the findings of the Executive Remuneration Working Group and the latest Principles of Remuneration published by the Investment Association and the QCA, whilst also ensuring that the EIP takes the most appropriate form for the Company's strategy and business needs. The proposed EIP (together with other share plans) operates within a 10% in 10 years dilution limit in line with corporate governance best practice.

In addition, the Board has had consultations with its major shareholders and has so far received positive indications of support for the EIP from shareholders representing over 45% of the Company ordinary shares, inclusive of the Directors who all intend to vote in favour.

Notice of General Meeting and posting of Circular

Whilst the Company does not require shareholder approval for its remuneration policy, the EIP is being put to a vote at a general meeting of the Company which will take place at 9.00 a.m. on 25 May 2021 at 20 Grosvenor Place, London SW1X 7HN (the "General Meeting"). A circular describing the EIP and convening the General Meeting is today being posted to shareholders and will shortly be available from the Company's website at www.marloweplc.com.

The EIP

Pursuant to the EIP participants will be awarded with performance units that will convert into new ordinary shares in the Company in the form of nil-cost options ("EIP Performance Units") at the end of a five-year performance period ending on 31 March 2026 (the "Performance Period"), provided that the value created for Marlowe shareholders during the Performance Period is in excess of a hurdle calculated by reference to 10% annualised growth in the Company's share price from the start of the Performance Period on 1 April 2021 based on an opening share price of £6.90 per share ("Threshold Hurdle").

Providing the Threshold Hurdle has been achieved by the end of the Performance Period, the EIP participants will be entitled to receive, in aggregate, 10% of the value created for shareholders above the Threshold Hurdle. This value sharing percentage will apply only to the ordinary shares in issue on 1 April 2021 and is capped at a maximum aggregate award of 4,902,295 new ordinary shares, subject to the Remuneration Committee retaining discretion to scale back the formulaic vesting of the EIP in line with corporate governance best practice.

As part of the implementation of the EIP, the Chief Executive and Chief Finance Officer have agreed they will receive below market salaries, will forgo an annual bonus and will not receive further incentives for the duration of the EIP.

Awards under the EIP will be subject to customary malus provisions during the Performance Period and to clawback for a period of 2 years post vesting.

Subject to shareholder approval of the EIP, Alex Dacre, the Company's Chief Executive, will be allocated 56.5% of the EIP Performance Units. Marlowe's new Chief Financial Officer, Adam Councell, will participate in the EIP when he joins the Board in the second half of Marlowe's FY22 financial year, and will be awarded 20% of the EIP Performance Units (but pro-rated for the proportion of the Performance Period he is a member of the Board). The remaining EIP Performance Units will be allocated to other senior executives. Mark Adams, the Company's current Group Finance Director who recently announced his retirement, and the Company's Non-Executive Directors will not participate in the EIP.

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About Marlowe plc

Marlowe is a UK leader in business critical services and software which assure safety and regulatory compliance. The Group was formed to create sustainable shareholder value through the acquisition and development of businesses that provide regulated safety and compliance services. It is focused on health & safety, compliance software, employment law & HR compliance, fire safety, security, water treatment & air hygiene and occupational health services - all of which are vital to the wellbeing of its customers operations and are invariably governed by regulation. Marlowe currently provides services to over 15% of Britain's commercial premises and is increasingly attractive to customers who require a single outsourced, nationwide, provider of a comprehensive range of regulated compliance and safety services. Our customers can be found in most office complexes, high streets & leisure facilities, manufacturing plants and industrial estates, and include thousands of SMEs, local authorities, facilities management providers, multi-site NHS trusts and FTSE 100 companies.