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Dialight : Value Creation Plan 2024 - for approval at 2024 AGM
Dialight : Value Creation Plan 2024 - for approval at 2024
About this update from Dialight Plc
DIALIGHT PLC RULES OF THE DIALIGHT PLC 2024 VALUE CREATION PLAN Approved by shareholders of the Company in general meeting on [23 September] 2024 Adopted by the remuneration committee of the board of the Company on 22 July 2024 CONTENTS CLAUSE PAGE 1. DEFINITIONS AND INTERPRETATION 3 2. INVITATIONS 5 3. MEASUREMENT OF THE VCP 6 4. GRANT AND SATISFACTION OF AWARDS 7 5. EXERCISE AND LAPSE OF OPTIONS 8 6. CASH ALTERNATIVE 10 7. LEAVERS 11 8. TAKEOVERS AND OTHER CORPORATE EVENTS 13 9. ALTERATIONS 13 10. MISCELLANEOUS 14 SCHEDULE 1 17 MALUS AND CLAWBACK 17 SCHEDULE 2 19 HOLDING PERIODS 19 SCHEDULE 3 21 U.S. SUB-PLAN 21 1. DEFINITIONS AND INTERPRETATION 1.1 In the Plan, unless the context otherwise requires: "Admitted" means admitted to the premium segment of the official list maintained by the FCA and admitted to trading on the London Stock Exchange's market for listed securities; "Award" means an Issue of Shares or an Option (as determined by the Committee); "Award Certificate" means the certificate issued by the Company to a Participant in accordance with Rule 4.3 ( Award Certificates ); "Board" means the board of directors of the Company or a duly authorised committee of the Board or a duly authorised person; "Closing Share Price" means the average of the middle-market quotations of a Share calculated over a period of three months ending on the last day of each Performance Period; "Committee" means the remuneration committee of the Board or other duly authorised committee which fulfils the same function; "Company" means Dialight plc (registered in England and Wales with registered number 2486024); "Company's Code" means such code or codes for regulating dealings in Shares (or other securities of the Company) by directors or employees of any Group Member as may for the time being be in force; "Control" means control within the meaning of section 719 of the Income Tax (Earnings and Pensions) Act 2003; "Eligible Employee" means any employee (including an executive director) of any Group Member; "Exercise Period" means, in respect of an Option, the period between the Grant Date and the date provided for lapse of the Option in Rule 5.6 ( Lapse of Options ) during which an Option may be exercised; "FCA" means the Financial Conduct Authority acting in its capacity as the competent authority for the purpose of Part VI of the Financial Services and Markets Act 2000; "Grant Date" means the date on which an Award is granted under Rule 4.1 ( Determination of the number of Shares subject to Award ); "Group Member" means: a Participating Company or a body corporate which is the Company's holding company (within the meaning of section 1159 of the Companies Act 2006) or a Subsidiary of the Company's holding company; and a body corporate which is a subsidiary undertaking (within the meaning of section 1162 of that Act) of a body corporate within paragraph (a) above and has been designated by the Board for this purpose; "Holding Period" means the period specified by the Committee as referred to in schedule 2 ( Holding Periods ); "Hurdle Price" means 350p or as adjusted by the Committee in accordance with Rule 3.2 ( Adjustments ); 3 "Invitation Date" means the date of invitation to participate in the Plan referred to in Rule 2.2 ( Timing of Invitations ); "Issue of Shares" means the issue or transfer of Shares to a Participant for no consideration in satisfaction of their rights under the Plan; "ITEPA" means the Income Tax (Earning & Pensions) Act 2003; "Listing Rules" means the Listing Rules published by the FCA; "London Stock Exchange" means London Stock Exchange plc or any successor to that company; "Net Shares" means the Shares acquired or received by a Participant on a Issue of Shares or following the exercise of an Option, less: (a) a number of Shares that have an aggregate market value equal to the Participant's Tax Liability due and arising on the Issue of Shares or exercise of an Option, or (b) if the Shares are sold to satisfy the Participant's Tax Liability due, such number of Shares so sold; "Option" means a right to acquire Shares granted under the Plan which is designated as an option by the Committee under Rule 4.3 ( Award Certificates ); "Option Price" means the amount, if any, payable on the exercise of an Option; "Participant" means a person who has received a Unit or an Award including their personal representatives; "Participating Company" means the Company or any Subsidiary of the Company; "Performance Period" means each of the periods commencing on 01 April 2024 and ending on (but including) 31 March 2027 and commencing on 01 April 2024 and ending on (but including) 31 March 2028. "Plan" means the Dialight plc 2024 Value Creation Plan as amended from time to time; "Rule" means a rule of the Plan; "Shares" means fully paid ordinary shares in the capital of the Company; "Subsidiary" means a body corporate which is a subsidiary (within the meaning of section 1159 of the Companies Act 2006) or any other company which is directly or indirectly a subsidiary of a company which itself is a Subsidiary; "Tax Liability" means any amount of income tax or other taxes (including social security contributions) for which a Participant would or may be liable and for which any Group Member or former Group Member would or may be obliged to (or would or may suffer a disadvantage if it were not to) account to any relevant authority; "UK MAR" means the retained EU law version of the Market Abuse Regulation (596/2014) which applies in the UK following the end of the Brexit transition period . "Unit Certificate" means the certificate issued by the Company to an Eligible Employee in accordance with Rule 2.4 ( Award of Units ). "Units" means the representation of a Participant's right to participate in the VCP at the end of each Performance Period; and "VCP" means the value creation pool calculated in accordance with Rule 3.1 ( Determination ). 4 Any reference in the Plan to any enactment includes a reference to that enactment as from time to time modified, extended or re-enacted. Expressions in italics and headings are for guidance only and do not form part of the Plan. 2. INVITATIONS Terms of invitation Subject to Rule 2.2 ( Timing of invitations ) and Rule 2.3 ( Dealing restrictions ), the Committee may resolve to invite any Eligible Employee to participate in the Plan, subject to: the terms set out in the Plan; and the Directors' Remuneration Policy as approved by shareholders from time to time (where applicable). Timing of invitations Subject to Rule 2.3 ( Dealing restrictions ), an invitation under the Plan may only be made: within 42 days beginning with: the date on which the Plan is approved by the shareholders of the Company; or the dealing day after the date on which the Company announces its results for any period; or at any other time when the Committee considers that circumstances are sufficiently exceptional to justify its invitation, but an invitation may not be made on or after 1 April 2028. Dealing restrictions No invitation to participate in the Plan (including, without limitation, an award of Units under Rule 2.4 ( Award of Units )) and no grant of an Award shall be made at any time when dealings in Shares are prohibited by the Listing Rules, the Company's Code, the City Code on Takeovers and Mergers, UK MAR or any other relevant UK or overseas regulation or enactment. Award of Units Subject to Rule 2.5 ( Maximum number of Units available under the Plan ) and Rule 2.6 ( Maximum individual limit on participation under the Plan ), as soon as practicable after the Committee has resolved to make invitations under the Plan, the Company shall issue, or procure the issue of, a Unit Certificate to be signed and returned by the Participant within 14 days (or such longer period as the Committee may determine) of being sent such Unit Certificate. To the extent it is not signed or returned within such period, the Participant shall forfeit all rights to participate in the Plan. The Unit Certificate shall contain such terms and conditions as the Committee shall determine (provided they are not inconsistent with the terms of the Plan) and shall specify: the number of Units awarded to the Participant; 5 the Performance Periods; how and when the VCP will be calculated; and what type of Award will be granted in connection with the Participant's Units. Maximum number of Units available under the Plan The maximum number of Units which may be granted under the Plan is 1,000. For the avoidance of doubt, any Units which are the subject of an award of Units pursuant to Rule 2.4 ( Award of Units ) which lapse in accordance with the Plan shall not be included in the calculation of the 1,000 Units. Maximum individual limit on participation under the Plan No Participant may be granted more than 350 Units in total under the Plan. Non-transferability and bankruptcy Any Unit granted to any person: shall not be transferred, assigned, charged or otherwise disposed of except on their death to their personal representatives and shall lapse immediately on any attempt to do so; and shall lapse immediately if they are declared bankrupt. 3. MEASUREMENT OF THE VCP 3.1 Determination Subject to Rule 3.2 ( Adjustments ), as soon as practical after the end of each Performance Period, the Committee shall determine the VCP in accordance with the following formula: X = A x ((( B - C) + D) x E ) Where: equals 7.5% (expressed as a decimal); equals the Closing Share Price (expressed in pounds sterling); equals the Hurdle Price (expressed in pounds sterling); equals the amount of dividends declared on a Share from the Invitation Date to the end of the relevant Performance Period (expressed in pound sterling); equals the total number of Shares in issue as at the end of the relevant Performance Period; and equals the total value of the VCP (expressed in pounds sterling). 3.2 Adjustments If a demerger, special dividend or other similar event which affects the market price of 6 Shares to a material extent occurs (as determined by the Committee), or where the Committee, acting fairly and reasonably, considers that the outcome of the Plan is not a fair measure of performance, they may adjust the VCP, the Hurdle Price or the number of Awards to be made under the Plan. In such cases all Participants shall be notified in writing accordingly. 4. GRANT AND SATISFACTION OF AWARDS 4.1 Determination of the number of Shares subject to Award As soon as practical following the determination of the VCP in accordance with Rule 3 ( Measurement of the VCP ), but subject to Rule 2.3 ( Dealing restrictions ) and Rule 4.2 ( Limit on Awards ), the Committee shall grant to each Participant an Award over such number of Shares calculated as follows: X = A x (((B/C) x D) / E) Where: 50% (expressed as a decimal); equals the total number of Units held by the relevant Participant; equals the maximum number of Units which may be granted under the Plan (being 1,000); equals the total value of the VCP determined in accordance with Rule 3 ( Measurement of the VCP ) (expressed in pounds sterling); the Closing Share Price as at the end of the relevant Performance Period; and the number of Shares subject to an Award (rounded to the nearest whole Share and where the calculation results in half a Share it shall be rounded up to the nearest whole Share). Limit on Awards No Award shall be made in respect of any Performance Period if the aggregate value of all Shares under Awards under the Plan (measured at the Grant Date) exceeds 3% of the issued share capital on the Company on the last day of the relevant Performance Period. If this would be the case, the number of Shares subject to Awards to be granted will be scaled back pro-rata. For the avoidance of doubt this limit applies whether the Awards are satisfied by new or existing Shares or cash. Award Certificates As soon as practical after making an Award, the Company shall issue, or procure the issue of, an Award Certificate to be signed and returned by the Participant within 14 days (or such longer period as the Committee may determine) of being sent such Award Certificate. Failure to sign or return such Award Certificate will cause it to lapse and the Participant will have no right to acquire the Shares subject to such Award. The Award Certificate shall contain such terms and conditions as the Committee shall determine (provided that they are not inconsistent with the terms of this Plan) and shall specify: the Grant Date; 7 the number of Shares in respect of which the Award is made; whether the Award is an Option or an Issue of Shares; in the case of an Option, the Option Price (if any); in the case of an Issue of Shares, that the Award is conditional upon the Participant entering into, a valid election under Part 7 of ITEPA (Employment income: elections to disapply tax charge on restricted securities) or any similar arrangement (as determined by the Committee) in any overseas jurisdiction which shall be attached to the Award Certificate and agreeing to arrangements to satisfy the Tax Liability; any Holding Period which may apply to the Award as specified under Schedule 2 ( Holding Periods ); and the malus and clawback provisions which shall apply to the Award, as specified under Schedule 1 ( Malus and clawback ). Method of satisfying Awards Unless specified to the contrary by the Committee on the Grant Date, an Award may be satisfied: by the issue of new Shares; and/or by the transfer of treasury Shares; by the transfer of Shares (other than the transfer of treasury Shares); and/or cash. Non-transferability and bankruptcy An Award granted to any person: shall not be transferred, assigned, charged or otherwise disposed of except on their death to their personal representatives and shall lapse immediately on any attempt to do so; and shall lapse immediately if they are declared bankrupt. Receipt of Award Certificate for Issue of Shares On receipt by the Company of the relevant signed Award Certificate in connection with an Issue of Shares, the Company shall, subject to Rule 2.3 ( Dealing restrictions ), satisfy the Award in accordance with Rule 5.5 ( Transfer or allotment timetable ) and deal with any Tax Liability in accordance with Rule 5.1(c), 5.1(d) and Rule 5.4 ( Payment of Tax Liability ) and the relevant Rules shall be construed as if the applicable to the Issue of Shares. Indemnity from Participants By accepting an Award, a Participant agrees to indemnify any Group Member, former Group Member and any other person against any Tax Liability. 5. EXERCISE AND LAPSE OF OPTIONS 5.1 Restrictions on the exercise of an Option: regulatory and tax issues 8 An Option may not be exercised unless the following conditions are satisfied: the exercise of the Option and the issue or transfer of Shares after such exercise would be lawful in all relevant jurisdictions and in compliance with the Listing Rules, any relevant share dealing code of the Company, UK MAR, the City Code on Takeovers and Mergers and any other relevant UK or overseas regulation or enactment; if, on the exercise of the Option, a Tax Liability would arise by virtue of such exercise and the Board decides that such Tax Liability shall not be satisfied by the sale of Shares pursuant to Rule 5.4 ( Payment of Tax Liability ) then the Participant must have entered into arrangements acceptable to the Board that the relevant Group Member will receive the amount of such Tax Liability; the Participant has entered into such arrangements as the Committee requires (and where permitted in the relevant jurisdiction) to satisfy a Group Member's liability to social security contributions in respect of the exercise of the Option; and where the Committee requires, the Participant has entered into, or agreed to enter into, a valid election under Part 7 of ITEPA ( Employment income: elections to disapply tax charge on restricted securities ) or any similar arrangement in any overseas jurisdiction (as determined by the Committee). For the purposes of this Rule 5.1, references to Group Member include any former Group Member. Exercise in whole or part An Option must be exercised to the maximum extent possible at the time of exercise unless the Committee decides that a Participant may exercise the Option in respect of such fewer number of Shares as it decides. Method of exercise The exercise of any Option shall be effected in the form and manner prescribed by the Board. Unless the Board, acting fairly and reasonably determines otherwise, any notice of exercise shall, subject to Rule 5.1 ( Restrictions on the exercise of an Option: regulatory and tax issues ) , take effect only when the Company receives it, together with payment of any relevant Option Price (or, if the Board so permits, an undertaking to pay that amount). Payment of Tax Liability The Participant authorises the Company to sell or procure the sale of sufficient Shares on or following exercise of their Option or the satisfaction of an Issue of Shares Award on their behalf to ensure that any relevant Group Member (or former Group Member) receives the amount required to discharge the Tax Liability which arises on such exercise except to the extent that the Board decides that all or part of the Tax Liability shall be funded in a different manner. Transfer or allotment timetable As soon as reasonably practicable after an Option has been exercised or following receipt of an Award Certificate signed by the Participant in connection with an Issue of Shares, the Company shall, subject to Rule 5.4 ( Payment of Tax Liability ) and any arrangement made under Rules 5.1(b) and 5.1(c), transfer or procure the transfer to the Participant (or a nominee for them) or, if appropriate, allot to them (or a nominee for them) the number of Shares in respect of which the Option has been exercised or the number of Shares subject to the Issue of Shares Award (as applicable). 9 5.6 Lapse of Options An Option shall lapse on the earliest of: the tenth anniversary of the Grant Date; the date provided in Rule 4.5 ( Non-transferability and bankruptcy ), Rule 7 ( Leavers ) or Rule 8 ( Takeovers and other Corporate Events ); and the date the Committee invokes its powers under Schedule 1 (Malus and Clawback) If an Option is not exercised during the last 30 days of the Exercise Period because of any regulatory restrictions referred to in Rule 5.1(a), the Committee may extend the period during which the Option may be exercised so as to permit the Option to be exercised. 6. CASH ALTERNATIVE Board determination Where an Award is made in the form of an Issue of Shares or where an Option has been exercised and Shares have not yet been allotted or transferred to the Participant (or their nominee), the Board may determine that, in substitution for their right to acquire such number of Shares as the Committee may decide (but in full and final satisfaction of their right to acquire those Shares), they shall be paid by way of additional employment income a sum equal to the cash equivalent (as defined in Rule 6.3 ( Cash equivalent )) of that number of Shares in accordance with the following provisions of this Rule 6. Limitation on the application of Rule 6.1 Rule 6.1 shall not apply in relation to an Award made to a Participant in any jurisdiction where the presence of Rule 6.1 ( Board determination ) would cause: the grant of the Award to be unlawful or for it to fall outside any applicable securities law exclusion or exemption; or adverse tax, accounting or social security contributions consequences for the Participant or any Group Member (or former Group Member) as determined by the Board, provided that this Rule 6.2 shall apply only if its application would prevent the occurrence of a consequence referred to in (a) or (b) above. 6.3 Cash equivalent For the purpose of this Rule 6 ( Cash alternative ), the cash equivalent of a Share is: in the case of an Award in form of an Issue of Shares, the Market Value (as determined in accordance with Rule 6.3(b)) of a Share on the day when the Award was granted; or in the case of an Option, the Market Value (as determined in accordance with Rule 6.3(b)) of a Share on the day when the Option is exercised reduced by the Option Price (if any) in respect of that Share. Market Value on any day shall be determined as follows: if on the date of exercise, Shares are quoted in the London Stock Exchange 10 Attention : This is an excerpt of the original content. To continue reading it, access the original document here .