Breadcrumbs

RNS: Amendment to performance criteria of Performance Share Plan

Wednesday, 11 May 2022

Director/PDMR dealings

Synectics plc (AIM: SNX), a leader in the design, integration and support of advanced security and surveillance systems, announces that on 10 May 2022 it altered the performance criteria of the previous awards of options made to the executive Directors of the Company in August 2020 (“Options”) over, in aggregate, 486,000 ordinary shares of 20p each in the Company (“Ordinary Shares”) details of which are set out below (“Revised Performance Criteria”).

The variation of the performance criteria was considered by the Remuneration Committee of the Board to be essential following the serious and prolonged impact of the COVID-19 pandemic on a substantial part of the Company’s customer base, and consequently on the Company’s results. This impact has made the achievement of the original performance criteria highly unrealistic, and therefore undermined the objectives behind the grant of the Options. The changes now implemented will, in the Remuneration Committee’s view, restore the function of the Options both in aiding retention of the Company’s executive Directors and incentivising them to achieve stretching financial targets in the interests of all Synectics’ shareholders.

The following awards were made to the executive Directors of the Company under its existing Performance Share Plan ("PSP") on 7 August 2020 (“Date of Grant”):

Options

Name Position Number of Options
Paul Webb Chief Executive 300,000
David Bedford Group Finance Director 186,000

The vesting period of the Options remains over an approximate five-and-a-half year period from the Date of Grant up to the announcement of the Company’s audited final results for the financial year ending 30 November 2025 and continues to be divided into three equal tranches, vesting after the Company’s next three, four and five full financial years respectively, depending on the achievement of the Revised Performance Criteria at each measurement date. The Options remain exercisable at nil cost and must be exercised within ten years of the Date of Grant.

Revised Performance Criteria

The performance criteria will now be measured according to the average of the Compound Annual Growth Rate (“CAGR”) of the Total Shareholder Return (“TSR”) and the CAGR of Adjusted Underlying Diluted Earnings Per Share (“EPS”) achieved by the end of each of the Company’s three relevant financial years, being respectively three, four and five financial years following the Date of Grant. The table below summarises the principal amendments made to the CAGR thresholds:

Original Threshold CAGR (August 2020) Proposed Threshold CAGR (May 2022)
0 – 14.99% pa = 0 vesting 0 – 9.99% pa = 0 vesting
25%+ pa = 100% vesting (straight line pro rata from 15 – 25%) 20%+ pa = 100% (straight line pro rata from 10 – 20%)

If this average is 20% (previously 25%) or more, 100% of that tranche of Options will vest. If this average is above 10% (previously 15%) and below, 20% (previously 25%), between 0% and 100% of the Options will vest (on a straight-line basis). 75% of any Options not vesting at the three-year and four-year vesting points may be carried forward to the following financial year. Any Options not vesting at the end of the five-year period will lapse.

The baseline for calculating the CAGR of TSR remains at £1.35 per share, and the baseline for calculating the CAGR of EPS remains at 11.87 pence per share (being the actual equivalent of the Company’s EPS in the financial year ended 30 November 2019). Although the total vesting periods for the Options remain unchanged, the periods over which the relevant CAGRs will be calculated will now commence from 30 November 2021, instead of from 7 August 2020 as provided in the original grants, to allow for the impact of the COVID-19 hiatus affecting a substantial part of the Company’s customer base.

The limit on the number of Ordinary Shares over which Options may be awarded, as set out above, remains unchanged.

Any entitlement under the PSP will lapse on cessation of employment prior to the end of the five-year vesting period, unless cessation of employment is by reason of redundancy, ill health or death.

Should the Revised Performance Criteria be met in full or in part, it is intended that the appropriate number of Options will be satisfied firstly from any unallocated Ordinary Shares already held within the Company's employee benefit trust with the balance to be satisfied from a new issue of Ordinary Shares.

Full details of the PSP were set out in the Company's Annual Report for the year ended 30 November 2021, copies of which are available on the Company’s website.

The executive Directors’ resulting interests in Ordinary Shares are as follows:

Name Number of Ordinary Shares Held Interest in Ordinary Shares in Share Schemes Resultant Total Interest % of Issued Share Capital
Paul Webb 57,115 512,357 569,472 3.20%
David Bedford 20,000 187,745 207,745 1.17%

The interests of the executive Directors in share schemes set out in the table above comprises:

PSP

Name Date of Award Number of Options Awarded First Vesting Date Maximum number of shares under option that can vest Second Vesting Date Maximum number of shares under option that can vest Third Vesting Date Maximum number of shares under option that can vest
Paul Webb 7 August 2020 300,000 7 August 2023 100,000 7 August 2024 100,000 7 August 2025 100,000
David Bedford 7 August 2020 186,000 7 August 2023 62,000 7 August 2024 62,000 7 August 2025 62,000

ExSop

Name Date of Award Number of Options Awarded Exercise Date
Paul Webb 7 July 2009 100,000 8 July 2012
Paul Webb 7 March 2011 100,000 8 March 2014

ESAP

Name Date of Purchase Number of Shares Purchased
Paul Webb 14 October 2010 338
Paul Webb 8 April 2011 422
Paul Webb 25 July 2011 7
Paul Webb 1 November 2011 405
Paul Webb 1 November 2011 9
Paul Webb 23 April 2012 375
Paul Webb 17 May 2012 19
Paul Webb 9 October 2012 275
Paul Webb 2 October 2012 14
Paul Webb 8 May 2013 21
Paul Webb 3 April 2013 266
Paul Webb 4 October 2013 13
Paul Webb 14 October 2013 190
Paul Webb 4 April 2014 186
Paul Webb 7 May 2014 30
Paul Webb 2 October 2014 214
Paul Webb 17 April 2015 492
Paul Webb 22 October 2015 607
Paul Webb 29 April 2016 463
Paul Webb 6 May 2016 26
Paul Webb 22 October 2016 552
Paul Webb 27 April 2017 423
Paul Webb 24 May 2017 44
Paul Webb 13 October 2017 19
Paul Webb 27 October 2017 429
Paul Webb 25 April 2018 486
Paul Webb 10 August 2018 85
Paul Webb 26 October 2018 474
Paul Webb 26 November 2018 39
Paul Webb 23 April 2019 448
Paul Webb 22 May 2019 126
Paul Webb 1 October 2019 588
Paul Webb 1 October 2019 64
Paul Webb 1 April 2020 760
Paul Webb 1 October 2020 761
Paul Webb 1 April 2021 800
Paul Webb 1 October 2021 857
Paul Webb 1 April 2022 865
Paul Webb 9 May 2022 165
David Bedford 1 October 2021 857
David Bedford 1 April 2022 865
David Bedford 9 May 2022 23


For further information, please contact:

Synectics plc
Claire Stewart, Company Secretary
Tel: +44 (0) 114 280 2828
www.synecticsplc.com
legalandsecretarial@synecticsplc.com

Shore Capital
Tom Griffiths / David Coaten
Tel: +44 (0) 207 408 4050

All the information you need to contact us

CONTACT INFORMATION

Details of Synectics Group offices

GLOBAL OFFICES

Auditor, registrar and stockbrokers

ADVISERS