IFG GROUP PLC (Registered in Ireland No )

Transcription

1 THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the action you should take, you are recommended to immediately consult your stockbroker, solicitor, bank manager, accountant or other independent financial adviser (being in the case of Shareholders in Ireland, an organisation or firm authorised or exempted pursuant to the Investment Intermediaries Act 1995 or the European Communities (Markets in Financial Instruments) Regulations 2007 (as amended) or, in the case of Shareholders in the United Kingdom, an organisation or firm authorised or exempted pursuant to the Financial Services and Markets Act 2000 of the United Kingdom) or, if you are not so resident, from another appropriately authorised independent financial adviser. If you have sold or otherwise transferred all your registered holding of Ordinary Shares in IFG Group plc ( IFG ) or (the Company ), please send this document and the accompanying form of proxy, as soon as possible, to the purchaser or transferee or to the stockbroker, bank or other agent through whom or to whom the sale or transfer was effected, for transmission to the purchaser or transferee. Capitalised terms in this document shall have the meaning attributed to them in the Definitions section annexed to this document, unless otherwise defined herein. Directors John Gallagher (Chairman) (Non-Executive Director) Paul McNamara (Group Chief Executive) David Paige (British) (Senior Independent Director) Colm Barrington (Non-Executive Director) Evelyn Bourke (Non-Executive Director) John Cotter (Group Finance Director) Robin Phipps (British) (Non-Executive Director) Peter Priestley (British) (Non-Executive Director) Cara Ryan (Non-Executive Director) IFG GROUP PLC (Registered in Ireland No ) Registered Office: The Oval Shelbourne Road Ballsbridge Dublin 4 TO THE HOLDERS OF ORDINARY SHARES Dear Shareholder, 17 April 2015 Extraordinary General Meeting Proposal to establish 2015 Share Option Plan and appointment of new Auditors INTRODUCTION The purpose of this circular is to ask you to approve the Resolutions at an Extraordinary General Meeting ( EGM ) of the Company which will take place on Tuesday 12 May 2015 in the Herbert Park Hotel, Ballsbridge, Dublin 4 immediately after the Annual General Meeting to be held at 12 noon. Resolutions relating to the establishment of the 2015 Plan and the appointment of new Auditors are outlined in the Notice of Meeting contained at the end of this document. 1. PROPOSAL TO ESTABLISH 2015 SHARE OPTION PLAN BACKGROUND As the previous long term incentive plan has now expired the Company is proposing the implementation of a new share option plan to incentivise, motivate and retain key management personnel.

2 PROPOSED 2015 SHARE OPTION PLAN The proposed plan provides for annual awards of market value options which, unless the Board of Directors decide otherwise, will be subject to performance conditions with the overall proviso that awards cannot be granted over new issue shares representing over 5% of the issued ordinary share capital of the Company over 10 years. The performance period proposed for an initial set of awards under the plan is three years. If those options vest at the end of the performance period they then become exercisable in annual tranches of one third beginning at the end of the performance period. The performance measures for Executive Directors and senior management within Group under the plan shall be EPS growth (50% of any award) and free cash flow in IFG Group (remaining 50% of any award). For other senior management within the James Hay Partnership it will be based on the free cash flow within that business. The maximum award level under the plan will be 150% of salary. The current intention is that awards made in 2015 to the initial participants in the plan will be over shares with a market value of no more than 100% of salary (at grant). The initial awards to the Group Chief Executive and the Group Financial Director will be over shares worth 100% of salary. These initial awards will be subject to a three-year performance period, and in line with emerging best practice will also be subject to an additional holding period of two years. Subject to the extent performance conditions are met, the awards will become exercisable in equal tranches on the third, fourth and fifth anniversaries of the grant date. Awards will also be subject to an inherent share price performance condition, as the exercise price for awards is set at the market value on the date of grant. The performance conditions for awards granted under the plan will be aligned to the Group s long-term strategic objective to be a leading independent financial services group, with a focus on advisory, multi-class investment administration as well as providing holistic financial and investment planning. The Remuneration Committee is currently agreeing the performance targets to be attached to 2015 awards under the plan. When setting the targets for awards, the Committee takes into account a range of factors to ensure that the targets are appropriately stretching, including internal forecasts of performance, external forecasts of performance, the economic environment and market conditions. The implementation of the plan is proposed through the Remuneration Committee of the Board who have taken the advice of Deloitte LLP in relation to market practice for the structure of and performance conditions in the proposed plan. Deloitte LLP has given and has not withdrawn its written consent to the inclusion of the reference to the adviser s name in the form and context in which it is included in this document. 2. PROPOSAL TO APPOINT NEW AUDITORS During 2015 the Company engaged in a competitive tendering process for the appointment of Auditors. This followed a Board decision that the position of Auditors should be subject to regular competitive tendering. This tendering process was overseen by the Audit Committee of the Board working with the Executive management. Arising from this tender process the Board is recommending to members that Deloitte & Touche be appointed as Auditors of the Company with effect from the conclusion of the EGM. PricewaterhouseCoopers are resigning as Auditors with effect from the conclusion of the EGM and have confirmed in accordance with section 185(2)(a) of the Companies Act 1990 that there are no circumstances connected with their resignation which they consider should be brought to the notice of the members or creditors of the Company. EXTRAORDINARY GENERAL MEETING The introduction of the 2015 Share Option Plan and the appointment of Auditors is conditional upon the approval of Shareholders by the passing of the respective Resolutions set out on page 9 of this document. The EGM in this regard is set to be held on Tuesday 12 May 2015 in the Herbert Park Hotel, Ballsbridge, Dublin 4 immediately after the Annual General Meeting to be held at 12 noon. DOCUMENTS AVAILABLE FOR INSPECTION A copy of the rules of the 2015 Plan ( Rules ) will be available for inspection at the registered office of the Company during normal business hours from the date of notification of this EGM, immediately prior to the EGM and at the EGM itself for 15 minutes prior to and during the meeting. ACTION TO BE TAKEN Shareholders will find enclosed with this circular a form of proxy for use at the EGM. Whether or not you intend to be present at the meeting you are requested to complete and return the appropriate form of proxy in accordance with the instructions printed thereon as soon as possible and, in any event, so as to arrive no later than 48 hours before the meeting. The form of proxy should be returned to the Company s Registrar, Computershare Investor Services (Ireland) 2

3 Limited, P.O. Box 954, Heron House, Corrig Road, Sandyford Industrial Estate, Dublin 18. The completion and return of a form of a proxy will not preclude you from attending and voting in person. RECOMMENDATION In the opinion of your Directors the proposals and Resolutions referred to in this circular are in the best interests of the Company and its Shareholders as a whole and, accordingly, your Board recommends that you vote in favour of the Resolutions relating thereto to be proposed at the EGM. Your Directors propose to vote in favour of the Resolutions in respect of their own holdings amounting to 11,636,508 Ordinary Shares which represent approximately 11.06% of the Issued Share Capital of the Company. Yours faithfully John Gallagher Chairman The Directors of IFG accept responsibility for the information contained in this Circular. To the best of the knowledge and belief of the directors of IFG (who have taken all reasonable steps to ensure that such is the case) the information contained in this Circular for which they have accepted responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information. 3

4 APPENDIX Summary of the principal features of the 2015 Share Option Plan The principal terms of the IFG 2015 Share Option Plan (the Plan ) to be implemented by IFG Group plc (the Company ) are summarised below. The Rules of the Plan will be available for inspection at the registered office of the Company from the date of notification of this EGM up to the date of the EGM and at the meeting itself for 15 minutes prior to and during the meeting. 1. ELIGIBILITY Any employee (including an Executive Director) of the Company or any of its subsidiaries will be eligible to participate in the Plan at the discretion of the Board (or any duly authorised committee of the Board). The Remuneration Committee s proposal is that the initial grant of awards under the Plan in 2015 will be made to the Group Chief Executive, the Group Financial Director and initially four other members of the senior management within the Group including the James Hay Partnership (the Senior Management Group ). 2. FORM OF AWARD Awards under the Plan may be in the form of an option granted to the participant to acquire Ordinary Shares with an exercise price equal to the market value (as determined by the Board) of those Shares at the time the Option is granted (an Option ). Alternatively the Board may grant participants a right to receive a cash amount which relates to the value of a certain number of notional Shares (a Cash Option ). References in this summary to (a) Options include Cash Options and (b) Shares include notional Shares to which a Cash Option relates, where appropriate. 3. PERFORMANCE CONDITIONS Unless the Board determines otherwise, Options will be subject to the satisfaction of a performance condition which will determine the proportion (if any) of the Option which will vest at the end of a performance period of at least three years. Options granted to the Senior Management Group will always be subject to performance conditions. Performance conditions will not be capable of retesting. It is intended that 50% of the Shares over which the initial grant of Options will be made to the Executive Directors will be subject to a performance condition relating to the growth of the Company s Earnings Per Share ( EPS ) measured over a period of three financial years with the other 50% being subject to a performance condition relating to the free cash flow within the IFG Group. Performance conditions applicable to the initial grant of options for others in the Senior Management Group will be based on EPS and free cash flow but in the case of James Hay senior management will only relate to free cash flow within that business. Any performance condition may be amended or substituted if one or more events occur which cause the Board to consider that an amended or substituted performance condition would be more appropriate. Any amended or substituted performance condition would not be materially less difficult to satisfy. 4. INDIVIDUAL LIMITS Options will not be granted to a participant under the Plan over Shares with a market value (as determined by the Board) in excess of 150 per cent of salary in respect of any financial year. It is the Board s intention that the Options granted to participants who are members of the Senior Management Group in 2015 will be over Shares with a market value of no more than 100 per cent of salary. 5. GRANT OF OPTIONS Options may be granted within the six week period following the approval of the Plan by the Company s shareholders, the announcement of the Company s results for any period, any day on which a restriction on the grant of Options is lifted, or on any day on which the Board determines that exceptional circumstances exist subject to any applicable dealing restrictions. 6. TERMS OF OPTIONS Options may be granted over newly issued Shares, treasury Shares or Shares purchased in the market. Options are not transferable (other than on death). No payment will be required for the grant of an Option. 4

5 7. PENSION IMPLICATIONS Options will not form part of pensionable earnings. 8. OVERALL LIMITS The Plan is subject to the following overall limits: 8.1 in any ten year period, the number of Shares which may be issued under the Plan adopted by the Company may not exceed five per cent of the issued ordinary share capital of the Company from time to time; and 8.2 in any ten year period, the number of Shares which may be issued under the Plan and under any other employees share plan adopted by the Company may not exceed ten per cent of the issued ordinary share capital of the Company from time to time. Treasury Shares will be treated as newly issued for the purpose of these limits until such time as guidelines published by institutional investor representative bodies determine otherwise. 9. REDUCTION FOR MALUS The Board may, in its discretion, determine at any time prior to the earlier of the exercise of an Option and the fifth anniversary of the grant date to: 9.1 reduce the number of Shares to which an Option relates; 9.2 cancel an Option; or 9.3 impose further conditions on an Option; if any of the following or equivalent events arise within a period commencing on the date the Option is granted (or, for an Option which is subject to a performance condition, the start of the performance period) or such earlier date as the Board determines and ending on the fifth anniversary of the grant date: (a) a material misstatement of the Company s audited financial results; (b) (c) (d) (e) a material failure of risk management by the Company, any member of the Company s group ( Group ) or a relevant business unit; serious reputational damage to the Company, any member of the Group or a relevant business unit; serious misconduct on the part of the participant; or any other circumstances which the Board in its discretion considers to be similar in their nature or effect. 10. VESTING AND EXERCISE Options that are subject to a performance condition will normally vest as soon as practicable after the end of any performance period (or on such later date as the Board determines) and then only to the extent that any performance condition has been satisfied. In addition, the Board may determine that a vested Option is also subject to a holding period, during which an Option may not be exercised (a Holding Period ). The Board intends that the initial award of Options to the Senior Management Group will be granted with a Holding Period so that an Option (to the extent it has vested) may be exercised (in respect of one third of the Shares subject to it) on or after each of the third, fourth and fifth anniversaries of the grant date. To the extent an Option may be exercised, it will normally be exercisable until the tenth anniversary of the grant date. At any time before the point at which an Option has been exercised, the Board may decide to pay a participant an amount (in cash or Shares) equal to the value of the Shares he would otherwise have received less the exercise price payable in respect of those Shares. 11. CESSATION OF EMPLOYMENT Except as summarised below, if a participant ceases to be an officer or employee of the Group, his unvested Options will lapse on the date on which the participant ceases to hold that office or employment. 5

6 If a participant ceases to be an officer or employee of the Group for any reason determined at the Board s discretion (except where a participant is summarily dismissed), a participant s unvested Option will continue until the normal vesting date unless the Board determines that the Option will vest as soon as reasonably practicable following the date on which the participant ceases to be an officer or employee of the Group (or on such other date as the Board determines). Where Options vest in these circumstances, Options will be exercisable for six months (or such other period as the Board may determine) after vesting (or where the Option is subject to a Holding Period, the end of the Holding Period unless the Board has determined that Options should be exercisable following the participant s cessation of office of employment). The Board will decide the extent to which an unvested Option vests in these circumstances, taking account of the extent to which any performance condition is satisfied at the end of any performance period or, as appropriate, at the date on which the participant ceases to be an officer or employee of the Group. Unless the Board in its discretion determines otherwise, the proportion of the performance period that has elapsed when the participant ceases to be an officer or employee of the Group (for Options subject to performance conditions) or the period of time which has elapsed between the grant date and the date on which the participant ceases to be an officer or employee of the Group (for Options not subject to performance conditions) will also be taken into account. If a participant ceases to be an officer or employee of the Group during a Holding Period, he will have six months (or such other period as the Board may determine) from the end of the Holding Period to exercise his Option, unless the Board determines that he should have a period of six months (or such other period as the Board may determine) from his cessation of office or employment to exercise his Option. However, if a participant is summarily dismissed during a Holding Period, his Option will lapse immediately. If a participant ceases to be an officer or employee of the Group whilst holding a vested Option which is not subject to a Holding Period, he will normally have six months from his cessation of office or employment to exercise that Option. 12. CORPORATE EVENTS The extent to which unvested Options will vest, in the event of a change of control of the Company, will be determined by the Board taking into account the extent that any performance condition has been satisfied and, unless the Board determines otherwise, the proportion of the performance period that has elapsed (for Options subject to performance conditions) or the period of time which has elapsed between the grant date and the relevant event (for Options not subject to performance conditions). Options which have vested (whether or not they are subject to a Holding Period) may be exercised to the extent previously determined by the Board. All Options will then be exercisable for a period of one month. Alternatively, the Board may permit participants to exchange Options for equivalent awards which relate to shares in a different company. If the change of control is an internal reorganisation of the Group or if the Board so decides, participants will be required to exchange their Options (rather than Options vesting/being exercised). If other corporate events occur such as a winding-up of the Company, demerger, delisting, special dividend or other event which, in the opinion of the Board, may affect the current or future value of Shares, the Board may determine that all Options may be exercised and unvested Options will vest taking into account the satisfaction of any relevant performance condition and, unless the Board determines otherwise, the proportion of the performance period that has elapsed (for Options subject to performance conditions) and the period of time which has elapsed between the grant date and the relevant event (for Options not subject to performance conditions). The Board will determine in these circumstances the length of time during which Options can then be exercised. 13. ADJUSTMENTS In the event of a variation of the Company s share capital or a demerger, delisting, special dividend, rights issue or other event, which may, in the Board s opinion, affect the current or future value of Shares, the number of Shares subject to an Option and/or any performance condition and/or the exercise price applicable to an Option may be adjusted. 14. AMENDMENT AND TERMINATION The Board may amend the Plan or the terms of any Option at any time, provided that prior approval of the Company s shareholders in a general meeting will be required for amendments to the advantage of eligible employees or participants relating to eligibility, limits, the basis for determining a participant s entitlement to, and the terms of, the Shares or cash comprised in an Option and the impact of any variation of capital. However, any minor amendment to benefit the administration of the Plan, to take into account legislative changes, or to obtain or maintain favourable tax treatment, exchange control or regulatory treatment may be made by the Board without shareholder approval. 6

7 No amendment may be made to the material disadvantage of participants in the Plan unless consent is sought from the affected participants and given by a majority of them. The Plan will terminate on the tenth anniversary of its approval by shareholders (or at any earlier time by the passing of a shareholder or board resolution) but the rights of existing participants will not be affected by any termination. IFG GROUP PLC The Oval Shelbourne Road Ballsbridge Dublin 4 Ireland 17 April

8 DEFINITIONS Cash Option the Directors or the Board Earnings Per Share or EPS Executive Directors Extraordinary General Meeting or EGM Free Cash Flow Group or IFG Group Holding Period IFG or the Company Issued Share Capital Option Ordinary Shares or Shares Plan or 2015 Plan Remuneration Committee Resolutions in relation to an Option, an equivalent right to receive a cash amount which relates to the value of a certain number of notional Shares. the directors for the time being of the Company or the directors present at a duly convened meeting of the directors or a duly appointed committee of the board of directors at which a quorum is present. earnings per share is the profit for the year in question divided by the weighted average issued shares outstanding in that year. means the executive directors for the time being of the Company. the Extraordinary General Meeting of the Company to be held on 12 May 2015 notice of which is set out in this document. The operating cash flow less capital expenditures. the Company and any member of the Company s group. a holding period (such period to be determined by the Board) during which a vested Option may not be exercised. IFG Group plc the existing issued 105,194,665 Ordinary Shares in IFG. an option granted to the participant to acquire Ordinary Shares with an exercise price equal to the market value (as determined by the Board) of those Shares at the time the option is granted. existing ordinary shares of 0.12 each in the share capital of IFG. the IFG 2015 Share Option Plan. the remuneration committee of the Board as constituted from time to time. the resolutions to be proposed at the EGM: (a) to authorise the Directors to establish and administer the Plan and to exercise on behalf of the Company all powers of the Company to issue and allot Ordinary Shares in the Company in accordance with its terms and to establish further schemes based on the Plan modified to take account of local tax, exchange control or securities laws in overseas territories; and (b) to appoint Deloitte & Touche as Auditors of the Company to hold office with effect from the conclusion of the EGM until the conclusion of the next Annual General Meeting at which the accounts are laid before the Company. Rules Shareholders rules of the 2015 Plan. holders of Ordinary Shares. 8

9 IFG GROUP PLC Notice of Extraordinary General Meeting Notice is hereby given that an Extraordinary General Meeting of IFG Group plc will be held on Tuesday 12 May 2015 in the Herbert Park Hotel, Ballsbridge, Dublin 4 immediately after the Annual General Meeting to be held at 12 noon for the purpose of considering, and if thought fit, passing the following as an Ordinary Resolution: That: 1. the Directors be and are generally and unconditionally authorised to establish the IFG 2015 Share Option Plan (the Plan ) substantially in the form described in the circular to Shareholders dated 17 April 2015 accompanying this notice of meeting and as made available for inspection as described therein, as an employee share scheme of the Company and the Plan be and it is hereby approved and that the Directors be and are hereby authorised to administer the Plan and to exercise on behalf of the Company all powers of the Company to issue and allot Ordinary Shares in the Company in accordance with its terms and (a) to do all acts and things necessary to carry the Plan into effect; and (b) to establish further schemes based on the Plan, modified to take account of any local tax, exchange control, or securities laws in overseas territories provided that any shares made available under such further schemes are treated as counting against any limits on individual or overall participation in the Plan. 2 To appoint Deloitte & Touche as Auditors of the Company, to hold office with effect from the conclusion of this Extraordinary General Meeting until the conclusion of the next Annual General Meeting at which the accounts are laid before the Company. By Order of the Board Conleth O Reilly Company Secretary The Oval Shelbourne Road Ballsbridge Dublin 4 Ireland 17 April 2015 Note: 1. A member entitled to attend and vote at the above meeting may appoint a proxy to attend, speak and vote on his or her behalf. A form of proxy accompanies this Notice. A proxy need not be a member of the Company. Forms of proxy to be valid, must be lodged with the Company s Registrar, Computershare Investor Services (Ireland) Limited, P.O. Box 954, Heron House, Corrig Road, Sandyford Industrial Estate, Dublin 18 not less than 48 hours before the time appointed for the Meeting. Completing and returning a form of proxy will not preclude a member from attending and voting at the meeting should he/she so wish. 9