Reach Plc Regulatory News (RCH)

Reach plc

12 March 2019

Reach plc (the "Company")

Grant of Awards under the Company's Long Term Incentive Plan 2012

Long Term Incentive Plan 2012 (the "LTIP")

The independent trustee (the "Trustee") of the Company's Employees' Benefit Trust based in Jersey (the "Trust") notified the Company that on 11 March 2019 it granted awards under the LTIP to acquire ordinary shares in the capital of the Company in the form of nil-cost options to Persons Discharging Managerial Responsibility ("PDMR") within the Company, in the amounts set out below. Under the terms of the LTIP, Awards would normally vest on the third anniversary of their date of grant subject to the satisfaction of conditions relating to the performance of the Company over the three financial years to which an award relates (the "Performance Period").

Upon vesting, awards are subject to a holding period of a further two years. During the holding period restrictions will apply to the sale or other disposal of the shares.

During the holding period, the Awards will be subject to the malus provisions of the LTIP rules (the "Rules") which would allow for forfeiture of all of the shares or a reduction in the number released in circumstances as set out in the Rules.

The awards will be exercisable based on two performance measures. 60% of the shares under award depend on the satisfaction of an Absolute TSR Condition. 40% of the shares under award depend on the satisfaction of a Net Cash Flow performance condition.

Under the Absolute TSR condition:

· An Award will be exercisable over 0% of the Absolute TSR shares if the Company's share price is below 115p.

· An Award will be exercisable over 20% of the Absolute TSR shares if the Company's share price is 115p.

· An Award will be exercisable over 100% of the Absolute TSR shares if the Company's share price is 165p or above.

If the Company's share price is between 115p and 165p, the number of shares over which the award will be exercisable will be determined by straight-line interpolation between 20% and 100%.

Whether a target share price has been achieved will be determined by reference to the Company's volume-weighted average share price over the final quarter of the Performance Period. The share price for these purposes includes dividends reinvested over the performance period.

In addition, for an award to become exercisable over the TSR award shares, the Remuneration Committee ("Committee") must be satisfied that the Company's share price performance is a genuine reflection of the underlying business performance of the Company over the Performance Period. When assessing whether they are satisfied that the Company's share price performance is a genuine reflection of the Company's business performance the Committee will take into account factors including revenues, free cash flow, change in net debt over the period (each based on the audited results), as well as the Company's 3-year TSR relative to the TSR of relevant listed indices. The Committee will consider both a quantitative and qualitative analysis of the performance and will take account of any relevant internal and external factors to help ensure that unexpected events during the period are considered properly.

Under the Net Cash Flow Condition:

· An Award will be exercisable over 0% of the Net Cash Flow shares if the cumulative adjusted Net Cash Flow for the whole of the Performance Period is below £300 million.

·  An Award will be exercisable over 20% of the Net Cash Flow Shares if the cumulative adjusted Net Cash Flow for the whole of the Performance Period is £300 million.

· An Award will be exercisable over 100% of the Net Cash Flow Shares if the cumulative adjusted Net Cash Flow for the whole of the Performance Period reaches or exceeds £340 million. 

If the Company's cumulative Adjusted Net Cash Flow for the whole of the Performance Period is between £300 million and £340 million then the number of Net Cash Flow Shares will be determined by straight-line interpolation between 20% and 100%. 

Adjusted Net Cash Flow is defined as the net cash flows generated by the business before the payment of dividends, before pension deficit funding payments, and before any cash outflows in relation to items that have been treated as non-recurring in the financial statements. Other than the exclusion of pension deficit funding payments, which can fluctuate over the Performance Period, this performance condition is consistent with prior years. In assessing the Adjusted Net Cash Flow, the Committee may, if appropriate in exceptional circumstances, include or exclude other payments to better reflect underlying business performance.

The Committee may adjust the Net Cash Flow Condition as it considers appropriate including but not limited to where the Company or Group has bought or sold businesses or companies to maintain the same level of difficulty and the Committee may adjust for unbudgeted items which are wholly outside management control.

The total exercise price payable on any exercise of an LTIP award is £1. Nothing is paid for the grant of the Award.

The base price for calculating the level of award was 64.6p, the average market closing price between 6 March 2019 and 8 March 2019.

The awards to Simon Fuller represent his normal annual LTIP award (in repect of awards over shares worth 120% of his salary) and the balance (a further 30% of salary) represents a partial buy-out of awards with a prior employer that were forfeited on his joining the Company.

Details of the transactions are set out below:

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