Team Regulatory News (TEAM)

12 May 2022

TEAM PLC

Changes to Management Incentive Plan

TEAM plc ("TEAM"), the wealth, asset management and complementary financial services group, further to the announcement made earlier this morning regarding the proposed acquisition of Concentric and Subscription to raise £2.65 million before expenses, the Company announces that it has made changes to the Management Incentive Plan ("MIP") as set out in the admission document of the Company, dated 2 March 2021 (the "Admission Document").

The Company set up the TEAM plc MIP in order to ensure employees of the Company are well motivated and identify closely with the success of the Group. The Company's remuneration committee (the "Remuneration Committee") committed to make decisions about participation, size and timing of awards following the IPO of the Company.

Following consultation with major shareholders, the Remuneration Committee has agreed to proceed with grants under the MIP, but with amended participation, size and timing from that set out at the IPO. In summary the grants will be as follows:

- The performance criteria under the MIP, as set out in the Admission Document, were based around the share price performance of the Company being at least 100 per cent. above the IPO price of the Company, being the base price. The Remuneration Committee have re-set the base price to the Subscription Price

- The maximum dilution under the MIP has been reduced from 12.5 per cent to 8.5 per cent., as Mark Clubb, Executive Chairman, is no longer a participant of the MIP. Previously, it had been proposed Mark Clubb would be granted 4.0 per cent. of the proposed 12.5 per cent. set aside under the MIP

- One-third of the MIP will be set with reference to the TEAM plc share price, with full pay out where the share price is twice the Subscription Price

- Two-thirds of the scheme will be set with reference to the TEAM plc market capitalisation, with full pay out where the market capitalisation is equal to or exceeds £40m

- A hold period of 12 months is required for any Ordinary Shares issued under the MIP. Previously, there were no hold periods under the MIP.

Provided below are the details of who is participating in the MIP and the grants to be made by the Remuneration Committee.

1. Overview

The TEAM plc Management Incentive Plan (the "Management Incentive Plan") involves the issue to 3 selected participants (Matthew Moore, Jason Jones and Anthony Wilshin (the "Participants")) of a new class of shares, namely the A Ordinary Shares (the "A Ords") in TEAM Midco Limited ("Midco"), a Jersey incorporated intermediary holding company interposed between the Company and its trading subsidiaries. The rights and obligations of the A Ords holders are substantially set out in the articles of association of Midco (the "Midco Articles"). The Management Incentive Plan has been structured on the basis that the value of Midco will at all material times be the same as the value of the Company.

The A Ords, as a class, will give the Participants the opportunity to share in up to 8.5% of the value of the Company. Once an Exercise Notice (as defined below) has been served on Midco by a Participant, the A Ords of that Participant will be acquired by the Company and in consideration, the Company will acquire the A Ords from, and issue to, the Participant new listed TEAM Shares equal to the Accrued Value (as defined at para 3.5 below), pursuant to share purchase provisions in the Midco Articles.

The Midco Articles specify that each Participant will be entitled at any time during the "Exercise Period" (the period between the second and fourth anniversary of the Issue Date) to serve an "Exercise Notice" on Midco, specifying the number of A Ords that the Participant wants to sell and the "Calculation Date" by reference to which the Accrued Value will be calculated.

Following the service of an Exercise Notice, the Accrued Value of the A Ords will be calculated as at the specified Calculation Date, and the Participant will sell his A Ords to the Company as consideration for the issue of the number of TEAM Shares as is equal to the Accrued Value.

If an Exercise Notice is not served by the Participant within the Performance Period (being, the period expiring on the fourth anniversary of the Issue Date), the A Ords will convert into deferred shares at the end of the Performance Period. Deferred shares have virtually no rights and are effectively worthless, economically.

2. Administration, eligibility and grant procedure

The Management Incentive Plan will be administered by the board of directors of Midco, acting on the direction and recommendation of the Board (or the remuneration committee), which has made decisions as to the participation, size and timing of awards.

The award of A Ords to the Participants will be made pursuant to a resolution of the Board. The award of A Ords will be completed on the Issue Date.

Each Participant will enter into a share subscription agreement with Midco with regard to the issue and allotment of A Ords to him. Participants will be invited to subscribe for A Ords at the market value of the A Ords at the Issue Date (being the date of subscription), as the Board determines. The subscription price for each A Ord is 580p.

Executive directors and the senior members of the management team of the Group (Company and its subsidiaries) may participate in the Management Incentive Plan. The Participants who will on the Issue Date be granted A Ords are:

Matthew Moore as to 6.5%;

Jason Jones as to 1%;

Anthony Wilshin as to 1%.

A Ords

The A Ords will not be quoted on AIM or any other exchange. They will not have any voting rights or rights to receive dividends.

The Board has the power to create and issue A Ords, from time to time, although all of the A Ords will be issued on the Issue Date.

The maximum amount of A Ords that can be issued cannot exceed 8.5 per cent of the issued ordinary shares of Midco.

If the share capital of Midco or the Company is varied and such variation affects the value of the A Ords, the Board has the discretion to adjust the provisions of the Midco Articles as to the A Ords, so that the value of the relevant A Ords is not increased or decreased as a result of that variation.

Calculation of Accrued Value

For this purpose, the Accrued Value in respect of each A Ord means an amount equal to the aggregate of the MC (Market Cap) Accrued Value and the SP (Share Price) Accrued Value on the relevant Calculation Date.

The MC Accrued Value shall be calculated on each Calculation Date in accordance with the following formula:

MC = PDM x (I + PDM)

I

where:

I = the number of Parent Ordinary Shares in issue on the relevant Calculation Date; and

PDM shall be calculated in accordance with the following formula:

PDM = [1/10,000 x 2/3 x I x (CM - SM)]

TM - SM

where:

I = the number of TEAM Shares in issue on the relevant Calculation Date;

CM = the Conversion Market Capitalisation (being the lower of £40,000,000 and the Market Capitalisation of the Parent on the relevant Calculation Date);

SM = the Subscription Market Capitalisation (being £10,535,686); and

TM = the Target Market Capitalisation (being £40,000,000).

The SP Accrued Value shall be calculated on each Calculation Date in accordance with the following formula:

SP = PDS x (I + PDS)

I

where:

I = the number of Parent Ordinary Shares in issue on the relevant Calculation Date; and

PDS shall be calculated in accordance with the following formula:

PDS = [1/10,000 x 1/3 x I x (CS - SS)]

TS - SS

where:

I = the number of TEAM Shares in issue on the relevant Calculation Date;

CS = the Conversion Share Price (being the TEAM share price on the relevant Calculation Date);

SS = the Subscription Share Price (being 60p); and

TS = the Target Share Price (being 120p).

3. Accrual of value and exchange

Once the calculations of the MC Accrued Value and the SP Accrued Value have been determined, that will produce the Accrued Value, which will equate to the number of TEAM Shares which are required to be issued by the Parent in order to satisfy the Accrued Value (and acquire the A Ords from the relevant Participant).

Following the service of an Exercise Notice during the Performance Period when, the A Ords will be acquired by the Company and in exchange, the Company will issue a number of Ordinary Shares equal to the aggregate Accrued Value pursuant to the share purchase provision in the Midco Articles.

If no Exercise Notice has been served by a Participant by the end of the Performance Period, all of the A Ords under the award will be converted to deferred shares. Midco will have the right to redeem/repurchase all of the deferred shares from the holders of such shares for £1 in aggregate.

Cessation of employment

The award of A Ords will be subject to leaver provisions.

All of the A Ords of a Bad Leaver and the forfeited A Ords of a Good Leaver ("Forfeiture Shares") will be subject to the compulsory transfer provisions (see below).

A portion of the shares held by a Good Leaver will be treated as Forfeiture Shares in accordance with the schedule, below:

A "Good Leaver" is an employee who ceases to be employed by reason of death, redundancy, injury or permanent disability, retirement or the transfer or sale of the subsidiary company or part of the business or undertaking in which the employee was employed. A "Bad Leaver" is an employee who ceases to be employed in circumstances where he is not a Good Leaver.

Compulsory transfer provisions

In respect of the A Ords of a Bad Leaver or the forfeited A Ords of a Good Leaver, the Participant shall be deemed to have given a transfer notice to Midco for the transfer of such shares to Midco (or such person nominated by Midco) on the day the Participant ceases to be an employee for a price per share that is the lower of (a) the Cost per A Ord, and (b) the Market Value per A Ord on the date the Participant ceases to be an employee of any member of its group.

"Cost" means the amount paid (by way of purchase or subscription price) and/or any income tax (and national insurance contributions or social security contributions liabilities) paid which arose on the acquisition of each of the A Ords.

"Market Value" means the value of the shares determined by the Board, in accordance with Part VIII of the UK Taxation of Capital Gains Act 1992.

4. Corporate events

Except in the case of a reorganisation, in the event of a (i) change of control of the Company, or (ii) sale of the entire shareholding in Midco by the Company, or (iii) sale of the entire shareholding by the Company of all the trading subsidiaries, or (iv) sale of substantially the whole or substantially the whole of the business, assets and undertaking of the Group (together, a "Change of Control Event"), at any time between the Issue Date and the second anniversary of the Issue Date, the Participant will be able to serve an Exercise Notice (even though the period in which he can do so has not arisen).

If no Exercise Notice is served, all of the A Ords will be converted to deferred shares.

If an Exercise Notice is served, all of the A Ords will be acquired by the Company (treating the date of the Change of Control Event as the Calculation Date) and in exchange, it will issue TEAM Shares equal to the aggregate Accrued Value.

On the winding up of Midco, the holders of the A Ords will be entitled to receive their Cost for the A Shares, but there would be no entitlement to any distribution beyond this out of the Surplus Assets.

5. Transfer Restrictions

A Ords may not be assigned or transferred except in certain circumstances such as transfer to certain permitted transferees (spouse, children, grandchildren, the trustees of a family trust or such other person as the Board deems to be a permitted transferee) or on death, compulsory transfer provisions, or conversion following the reaching of the Hurdle.

6. Taxation

A participant will be responsible for all tax liabilities arising as a result of the acquisition, holding, or disposal of the A Ords. The participant will be required to indemnify Midco and any relevant Group member who is his/her employer against all tax that Midco or the relevant Group member may be required to bear but which are the primary liabilities of the participant.

A Participant who is employed in the UK (but not in Jersey) together with his/her employer will be required to enter into a valid election under section 431 of the UK Income Tax (Earnings and Pensions) Act 2003.

7. Malus and Clawback

The terms on which the A Ords will be issued will include malus and clawback provisions that may reduce or withhold some or all of the value that would otherwise accrue prior to exchange or after exchange in certain circumstances including material misstatement of the Group's results or fraud or gross misconduct of the participant.

8. Contractual obligations

An award of the A Ords will not form part of the Participant's employment contract.

The Participant has no rights to compensation or damages on account of any loss in respect of the A Ords where such loss arises from termination of office or employment.

The A Ords shall not (except as may be required by taxation law) form part of the earnings of individual or count as wages or remuneration for pension or other purposes.

Midco or a relevant Group member may process and transfer a participant's personal data in accordance with its policies on data protection.

9. Governing law

The Management Incentive Plan will be governed by the laws of the Island of Jersey and Jersey courts will have exclusive jurisdiction.

Enquiries

TEAM plc

Mark Clubb / Matthew Moore

Telephone: +44 (0) 1534 877210

Hannam & Partners

(Financial Adviser to TEAM)

Giles Fitzpatrick / Richard Clarke / Ernest Bell

Telephone: +44 20 7907 8500

Canaccord Genuity Limited

(Nominated Adviser and Broker to TEAM)

Bobbie Hilliam / Alex Aylen 

Telephone: +44 20 7523 8000

Novella Communications

(Financial Public Relations)

Tim Robertson / Fergus Young

Telephone: +44 20 3151 7008

Information on TEAM

TEAM plc is building a new wealth, asset management and complementary financial services group. With a focus on the UK, Crown Dependencies and International Finance Centres, the strategy is to build local businesses of scale around TEAM plc's core skill of providing investment management services. Growth will be achieved via targeted and opportunistic acquisitions, through team and individual hires, through collaboration with suitable partners, and organic growth and expansion.

www.teamplc.co.uk

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