Reach Plc Regulatory News (RCH)

Trinity Mirror plc

13 April 2018

Trinity Mirror plc (the "Company")

Grant of Awards under the Trinity Mirror Long Term Incentive Plan 2012

Long Term Incentive Plan 2012 (the "LTIP")

The independent trustee (the "Trustee") of the Trinity Mirror Employees' Benefit Trust based in Jersey (the "Trust") notified the Company that on 13 April 2018, 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 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 180p or above.

If the Company's share price is between 115p and 180p, 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 £345 million. 

If the Company's cumulative Adjusted Net Cash Flow for the whole of the Performance Period is between £300 million and £345 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. In assessing the Adjusted Net Cash Flow, the Remuneration Committee may, if appropriate in exceptional circumstances, include or exclude other payments to better reflect underlying business performance. The Remuneration 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 Remuneration Committee may adjust for unbudgeted items which are wholly outside management control.

Following the completion of the acquisition of the publishing assets of Northern & Shell (the "Acquisition"), the Remuneration Committee resolved to adjust the Net Cash Flow targets in respect of the 2016 and 2017 cycles of the LTIP as appropriate to maintain the same level of difficulty. In assessing the Adjusted Net Cash Flow, the Remuneration Committee has excluded pension deficit funding payments from the 2016 Award, applying a consistent methodology to 2016 and 2017 Awards.

In respect of the 2016 Award, 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 at or below £299 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 £345 million. 

In respect of the 2017 Award, 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 £284 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 £284 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 £328 million. 

There are no changes to the Absolute TSR Condition in relation to the 2016 or 2017 LTIP awards.

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

The base price for calculating the level of award was 84.1p, the average market closing price between 10 April 2018 and 12 April 2018.

Details of the transactions are set out below.

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