Pre-Annual General Meeting Information • Nov 4, 2016
Pre-Annual General Meeting Information
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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 seek your own advice from your stockbroker, solicitor, accountant or other appropriate adviser.
If you have sold or transferred your entire holding of ordinary shares in MJ Gleeson plc please send this document (together with the Proxy Form) as soon as possible to the purchaser or transferee, or to the stockbroker, bank or other agent through whom the sale or transfer was effected, for transmission to the purchaser or transferee.
(incorporated in England and Wales under the Companies Act 2006 with registered number 09268016)
As you have agreed to accept receipt of accounts electronically, accounts for the year ended 30 June 2016 are available for download from:
http://mj.gleeson-homes.co.uk/investor-relations/annual-interim-results
This document should be read as a whole and in conjunction with the accompanying Proxy Form. Your attention is drawn to the letter from the Chairman of MJ Gleeson plc which is set out on pages 3 to 5 of this document recommending, on behalf of the Directors, that you vote in favour of the resolutions to be proposed at the Annual General Meeting referred to below.
Notice of the Annual General Meeting, to be held at The Royal Automobile Club, 89 Pall Mall, London, SW1Y 5HS at 11:30 a.m. on Thursday 08 December 2016, is set out on pages 6 to 19 of this document. Enclosed with this document is a Proxy Form for use in respect of the Annual General Meeting. Whether or not you intend to be present at the Annual General Meeting you are requested to either complete, sign and return the hard copy Proxy Form as soon as possible, and in any event, so as to be received by Capita Asset Services PXS 1, 34 Beckenham Road, Beckenham, BR3 4ZF not later than 11:30 a.m. on 6 December 2016 or complete an electronic Proxy Form (by logging onto www.capitashareportal. com) and submit it not later than 11:30 a.m. on 6 December 2016. If you hold shares in CREST you may appoint a proxy by completing and transmitting a CREST Proxy Instruction to Capita Registrars (CREST Participant ID RA10) so that it is received no later than 11:30 a.m. on 6 December 2016. Completion and return of a Proxy Form (either in hard copy or electronic form) or CREST Proxy Instruction will not prevent shareholders from attending and voting in person at the Annual General Meeting should they so wish.
| Letter from the Chairman of MJ Gleeson plc | 3 | |
|---|---|---|
| Notice of Annual General Meeting | 6 | |
| Notes to the Notice of Annual General Meeting | 8 | |
| Part A: Letter from the Chairman of the Remuneration Committee of the Board of Directors of MJ Gleeson plc | 10 | |
| Part B: Summary of the Principal Terms of the MJ Gleeson plc Annual and Deferred Bonus Plan (the 'Bonus Plan') | ||
| Part C: Summary of the Principal Terms of the MJ Gleeson plc Long-Term Incentive Plan (the 'LTIP') | 16 | |
| Part D: Statement of Circumstances – Letter from KPMG | 19 |
(Registered in England and Wales under the Companies Act 2006 with registered number 09268016) Registered Office: 6 Europa Court, Sheffield Business Park, Sheffield, S9 1XE.
| Directors | |
|---|---|
| Dermot Gleeson | (Chairman) |
| Jolyon Harrison | (Chief Executive Officer) |
| Stefan Allanson | (Chief Financial Officer) |
| Colin Dearlove | (Non-Executive Director and Senior Independent Director) |
| Ross Ancell | (Non-Executive Director) |
| Christopher Mills (Non-Executive Director) |
4 November 2016
The Annual General Meeting (the "AGM") of MJ Gleeson plc (the "Company") is to be held at The Royal Automobile Club, 89 Pall Mall, London SW1Y 5HS on Thursday, 8 December 2016 at 11:30a.m. The formal notice of the AGM of the Company (the "Notice") and the resolutions to be proposed at the AGM (the "Resolutions") are set out on pages 6 to 19 of this document. In addition to the ordinary business of an AGM there are a number of items of special business to be transacted at the meeting.
Resolutions 1 to 12 will be proposed as ordinary resolutions.
Resolution 1 deals with the receipt and adoption of the annual financial statements of the Company and the reports of the Directors and Auditor for the year ended 30 June 2016.
The Board recognises the importance of both capital growth and dividend income to our existing and potential shareholders. Resolution 2 deals with the recommendation of the Directors that a final dividend of 10.0p per ordinary share be paid to ordinary shareholders on 15 December 2016 that were on the register at the close of business on 18 November 2016.
Resolutions 3 to 8 deal with the re-appointment of all of the Directors who offer themselves for re-appointment in accordance with the articles of association of the Company. Full biographical information on all the Directors is set out on pages 30 and 31 of the Annual Report and Accounts for the year ended 30 June 2016 dispatched with this circular.
Resolution 9 deals with the appointment of PricewaterhouseCoopers LLP as Auditor of the Company. The Audit Committee has undertaken a tender process for the audit of the Company and Group. KPMG LLP were unsuccessful in retaining the audit and PricewaterhouseCoopers LLP were selected for appointment. KPMG LLP will stand down as the Company's auditor at the conclusion of the AGM and pursuant to section 519(3) of the Companies Act 2006 has provided a statutory statement of circumstances upon ceasing to hold office; a copy of this statement is provided as an appendix to this notice (part D).
Resolution 10 gives the Directors the authority to determine the Auditor's remuneration.
Resolution 11 seeks shareholders' approval of the Directors' Remuneration Report as set out on pages 44 to 47 and pages 58 to 63 of the Annual Report and Accounts for the year ended 30 June 2016. The report contains information on the remuneration the Directors each received in the year under review. This is an advisory vote only.
Resolution 12 seeks shareholders' approval of the Directors' Remuneration Policy which is set out on pages 48 to 57 of the Annual Report and Accounts for the year ended 30 June 2016. The Directors' Remuneration Policy is subject to a binding shareholder vote by way of ordinary resolution at least once every three years. The current policy was approved by shareholders at the Company's 2014 AGM, so is not formally due for review until 2017. However, the Remuneration Committee have undertaken a review of the policy and concluded that a number of changes to the policy are required. A letter from the Chairman of the Remuneration Committee which details these changes and the reasons for them is set out in Part A of this circular.
Resolutions 13 to 15 will be proposed as ordinary resolutions.
Resolution 13 seeks shareholders' approval of a new Company Annual and Deferred Bonus Plan, the principal terms of which are summarised in Part B of this circular.
Resolution 14 seeks shareholders' approval of a new Company Long-Term Incentive Plan, the principal terms of which are summarised in Part C of this circular.
Resolution 15 seeks to confer on the Directors the authority to allot ordinary shares and other shares in the Company or grant rights to subscribe for, or convert any security into shares in the Company ("relevant securities") up to an aggregate nominal amount of £360,803 (representing approximately one third of the Company's issued ordinary share capital as at 23 September 2016). This authority will expire fifteen months from the date of the passing of the Resolution or at the conclusion of the next Annual General Meeting, if earlier, and will revoke the previous authorities to the extent that they have not already been utilised. Your Directors have no present intention of issuing any share capital of the Company, save in respect of employee share schemes, but the passing of the Resolution will enable your Directors to take advantage of any opportunities which may arise. As at 23 September 2016 the Company held none of its own shares as treasury shares.
The Directors will also seek shareholders' approval of four special resolutions, as follows:
Under section 561 of the Companies Act 2006 (the "2006 Act") all equity securities which a company proposes to issue for cash have to be offered to existing shareholders in proportion to their existing holdings. Your Directors believe that this would be too restrictive to enable the Company to take advantage of opportunities which may arise. Resolution 16 seeks to authorise the directors to allot equity securities (or sell shares held in treasury) for cash without complying with the statutory pre-emption procedure provided the allotment (or sale) is either (a) in connection with a rights issue, open offer or other pre-emptive issue or sale or (b) is a non-pre-emptive issue or sale for cash which is limited to securities of an aggregate nominal amount of £54,120, which is equivalent to approximately 5% of the Company's issued ordinary share capital (excluding treasury shares) as at 23 September 2016, in line with institutional investor guidelines.
This year, in accordance with the Pre-Emption Group's Principles, we are also seeking an additional approval, set out in Resolution 17, for disapplication of pre-emptive rights on shares issued for cash up to a further nominal amount of £54,120, which is equivalent to approximately 5% of the Company's issued ordinary share capital (excluding treasury shares) as at 23 September 2016. This authority can only be exercised for acquisitions or capital investments that the Directors determine fall within the Pre-Emption Group's Principles.
Resolution 18, if passed, will authorise the Company to make one or more market purchases of its own shares having a maximum aggregate nominal value of £108,240, being equivalent to approximately 10% of the issued share capital at 23 September 2016. The maximum and minimum prices which may be paid for each ordinary share pursuant to this authority are as specified in Resolution 18. Your Directors have no immediate plans to utilise this proposed authority but consider it desirable for it to be available to provide additional flexibility in the management of the Company's capital resources. The Directors would exercise this authority only if they believed that to do so would be in the interests of the shareholders generally and would be likely to result in an increase in earnings per share ("EPS"). Any EPS targets included in employee share incentive schemes would be adjusted to take account of any buyback. If any shares are purchased pursuant to this authority they will be cancelled by the Company.
Before the coming into force of the Companies (Shareholder Rights) Regulations 2009 on 3 August 2009, the Company was able to call general meetings, other than an Annual General Meeting, on 14 clear days' notice without obtaining shareholder approval. Changes made to the 2006 Act by these Regulations increase the notice period required for general meetings of the Company to 21 clear days unless shareholders approve a shorter notice period (which cannot however be less than 14 clear days) and provided that certain conditions are met. Annual General Meetings will continue to be held on at least 21 clear days' notice. One condition is that the Company offers a facility for shareholders to vote by electronic means. This condition is met if the Company offers a facility allowing shareholders to appoint a proxy by means of a website. The Company provides this facility (please see "Action to be taken" below and the notes to the Notice of the meeting below for the Company's arrangements for electronic proxy appointment). The other condition is that there is an annual resolution of shareholders approving the reduction of the minimum notice period from 21 clear days to 14 clear days. Therefore, in order to continue to be able to call general meetings on 14 clear days' notice, Resolution 19 seeks such approval. The approval will be effective until the Company's next Annual General Meeting, when it is intended that a similar resolution will be proposed.
Accompanying this document is a hard copy Proxy Form for use in relation to the Annual General Meeting. Proxy Forms should be completed and returned in accordance with the instructions printed thereon, so that they arrive at the Company's registrars, Capita Asset Services, PXS 1, 34 Beckenham Road, Beckenham, BR3 4ZF as soon as possible and in any event not later than 11:30 a.m. on Tuesday, 6 December 2016. Electronic proxy appointment is available for this year's Annual General Meeting. Electronic proxy appointment enables shareholders to lodge their proxy appointment by electronic means via the website provided by the Company's registrars, Capita Asset Services at www.capitashareportal.com. If you hold shares in CREST you may appoint a proxy by completing and transmitting a CREST Proxy Instruction to Capita Registrars (CREST Participant ID: RA10) so that it is received no later than 11:30 a.m. on 6 December 2016. Completion and return of a Proxy Form (in either hard copy or electronic form) or CREST Proxy Instruction will not prevent shareholders from attending and voting in person at the Annual General Meeting should they so wish. Please note that all Proxy Forms (in hard copy or electronic form) and CREST Proxy Instructions must be received by the Company's registrars, Capita Asset Services, no later than 11:30 a.m. on 6 December 2016.
Your Directors consider that each of the proposed Resolutions in the Notice are in the best interests of the Company and its shareholders as a whole. Accordingly, your Directors unanimously recommend that shareholders vote in favour of the Resolutions as they intend to do in relation to their beneficial holdings, where appropriate, amounting in aggregate to 12,889,945 shares (representing approximately 23.8% of the issued share capital of the Company).
Yours sincerely
Dermot Gleeson Chairman
Notice is hereby given that the Annual General Meeting of MJ Gleeson plc (the "Company") will be held at The Royal Automobile Club, 89 Pall Mall, London SW1Y 5HS at 11:30 a.m. on Thursday, 8 December 2016 for the following purposes:
To consider and, if thought fit, pass the following ordinary resolutions:
such authority to expire at the end of the next AGM of the Company (or, if earlier, at the close of business on 7 March 2018 but, in each case, prior to its expiry the Company may make offers, and enter into agreements, which would, or might, require equity securities to be allotted (and treasury shares to be sold) after the authority expires and the Board may allot equity securities (and sell treasury shares) under any such offer or agreement as if the authority had not expired.
That, if Resolution 15 is passed, the Board be authorised in addition to any authority granted under Resolution 16 to allot equity securities (as defined in the Companies Act 2006) for cash under the authority given by that resolution and/or to sell ordinary shares held by the Company as treasury shares for cash as if section 561 of the Companies Act 2006 did not apply to any such allotment or sale; such authority to be:
(A) limited to the allotment of equity securities or sale of treasury shares up to a nominal amount of £54,120; and
such authority to expire at the end of the next AGM of the Company (or, if earlier, at the close of business on 7 March 2018 but, in each case, prior to its expiry the Company may make offers, and enter into agreements, which would, or might, require equity securities to be allotted (and treasury shares to be sold) after the authority expires and the Board may allot equity securities (and sell treasury shares) under any such offer or agreement as if the authority had not expired.
(v) the Company may make a contract or contracts to purchase its own ordinary shares under the authority hereby conferred prior to the expiry of such authority which will or may be executed by the Directors wholly or partly after the expiry date of such authority, and may make a purchase of its own ordinary shares in pursuance of any such contract or contracts.
That a General Meeting other than an Annual General Meeting may be called on not less than 14 clear days' notice.
By order of the Board
S P Allanson Company Secretary
4 November 2016
4 November 2016
As you will be aware, the current Remuneration Policy ("Policy") was formally approved by shareholders at the Company's 2014 AGM on 12 December 2014 and received a 96.5% vote in favour. The Policy became effective for a period of up to three years from the date of approval, which would suggest a normal review date of 2017.
The Company, under Jolyon Harrison's (CEO) leadership, has delivered exceptional performance, growth and associated returns to its shareholders. Since Mr. Harrison's appointment in July 2012, the Group has seen year on year continued growth in its key performance metric of Profit before tax, from £5.8 million in 2013 (Mr Harrison's first year in office) up to £28.2 million in the most recent financial year, 2016, an increase of 386% (equivalent to 69% per annum compound growth). Over the same period the increase in share price (and dividends paid) has resulted in an increase in total shareholder returns of 313% (this compares to an increase of 187% in our peer group and a 68% increase in the FTSE Small Cap Index). The development and growth of the business, along with a desire to ensure that future performance is sustained and rewarded has led the Committee to conclude that a review of the Policy should be conducted, and an amended Policy brought forward in 2016.
The Committee's objective is to amend the new Policy to provide continued alignment with business requirements and shareholder expectations.
In undertaking the review, the Committee believes it is important that the future Remuneration Policy is tailored to MJ Gleeson's circumstances, such that it:
As a result of this review, the Committee concluded that a number of changes to the Policy are required. These changes, if approved, will mean that MJ Gleeson has in place a Policy which is appropriate for the next three-year period of the Company's development.
The principal terms of the new Policy, Bonus Plan and long-term incentive arrangement, to be known as the MJ Gleeson plc Long-Term Incentive Plan (the 'LTIP'), are set out in this letter and in Parts B and C.
As noted above, MJ Gleeson has continued to deliver strong growth and associated returns to investors. The key strategic objectives of the Company are:
The Committee's aim is to ensure that the remuneration of the Company's management provides appropriate incentives and remains directly aligned with these strategic objectives. The Committee has considered these strategic objectives in order to formulate the proposed Policy, metrics and associated targets for the short and long-term incentive plans.
The key proposed changes to the Policy are set out below:
A number of minor adjustments to the previous Policy wording will be included as part of the binding Policy vote at the 2016 AGM. These changes are intended to reflect best practice which has developed since the Policy was approved in 2014 and are intended to enable the effective operation of the existing arrangements.
The Committee considered a number of approaches on how to motivate and incentivise the CEO to deliver against challenging strategic objectives.
The Committee recognise that a one-off award does not conform to standard market practice. However, the Committee believes that the proposed award provides the CEO with a meaningful incentive for delivering against our challenging strategic objectives over the next 3 years and creating significant additional value for our shareholders.
It is the Committee's opinion that the proposed approaches are better aligned with the Group's remuneration objectives and the Company's strategy and will enable us to ensure Executives continue to remain fully aligned with business performance.
The table below summarises the key elements of the new Policy to be operated for the Executive Directors.
| Element | Summary of new Policy and any changes | ||||
|---|---|---|---|---|---|
| Base salary | The Committee sets salary levels to reflect the scope of the roles and the performance and experience of the relevant Executive Director. It should be noted that the Committee only uses comparator information to sense check the decisions based on these factors to ensure it maintains compliance with the Policy. When considering comparator companies, the Committee looks for companies that are broadly in line with MJ Gleeson's size, structure and complexity (with companies in the FTSE all-share index and specifically those in the home or construction sectors currently acting as the primary reference). |
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| In accordance with our current approved Policy, with effect from 1 July 2016, the Committee has made the following salary increases:- • Increase CEO salary to £400,000 from £396,900 (0.8%) • Increase CFO salary to £250,000 from £180,000 (38.9%) |
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| The material increase in the salary of Stefan Allanson, the CFO, reflects the fact that he was employed initially as CFO and Company Secretary designate and only subsequently appointed to the Board as CFO during 2015. On his appointment his salary was set below-market and substantially below that of his predecessor. The Committee has determined that the increase proposed is appropriate and reflects Stefan's performance and contribution since his Board appointment. It is the Company's intention to potentially increase the salary to £300,000 at the next review date subject to the CFO's continued performance and development in the role. |
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| Benefits and pension |
Maximum company pension contribution and/or salary supplement of up to 25% of salary (currently 15% for both the CEO and CFO) and competitive benefits package provided. |
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| Bonus Plan | There will be no changes to the maximum annual opportunity (i.e. it will remain 150% of base salary). | ||||
| In line with the approved Policy, the maximum annual opportunity proposed for FY17 is as follows: • CEO: 100% of salary (no change). • CFO: 100% of salary (increased from 75% of salary). |
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| Annual bonuses will continue to be paid in cash unless the Executive voluntarily defers a portion into shares. | |||||
| The Committee will continue to review performance targets annually. | |||||
| A minimum of two-thirds of the maximum bonus opportunity will be based on financial measures and up to one-third can be based on non-financial measures. |
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| The FY17 annual bonus award will be based on the following: • CEO: Group PBT (2/3rd) and personal performance targets including strategic milestones (1/3rd). • CFO: Group PBT (100% weighting). |
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| LTIP | There will be no changes to the maximum annual LTIP opportunity. In line with the approved Policy, the maximum annual opportunity proposed for FY17 is as follows: • CEO: 300% of salary (no change). • CFO: 150% of salary (increased from 75% of salary). |
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| In line with the award made in FY16, the LTIP award for the CEO will be 300% p.a. in respect of awards due to be made in FY17 and FY18. No award will be made in FY19 and beyond reflecting the adoption of the one-off CEO award. |
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| The LTIP will continue to vest based on TSR performance measured over a period of three financial years. | |||||
| The rules of the LTIP will contain standard clauses giving the Committee discretion to adjust the number of shares subject to the award and the absolute TSR target in the case of any capital reorganisation. |
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| Introduction of a two year holding period post-vesting, during which participants cannot sell their vested LTIP awards (other than to cover Income Tax and NIC). |
New LTIP Rules will be put to shareholders for approval alongside the new Policy.
| Element | Summary of new Policy and any changes |
|---|---|
| One off CEO award |
The Committee is proposing to introduce a one-off cash award equal to £3 million for the CEO which will be payable subject to the earlier of the following: • Achieving a Total Shareholder Return (TSR) of £10 (i.e. average share price measured over an average 180 days at the end of the performance period plus dividends paid over the period) at the end of a 3 year performance period, or cessation if earlier; or |
| • A change of control / substantial exit for shareholders within 3 years, provided the event was deemed by the Committee at the time or shortly after the event to have delivered value to shareholders. |
The directors consider the new Policy as well as the Bonus Plan and LTIP to be in the best interests of the Company and shareholders as a whole. They therefore recommend that you vote in favour of Resolutions 11, 12, 13 and 14 set out in the Notice convening the Annual General Meeting as they intend to do in respect of their own beneficial holdings.
Yours sincerely,
Ross Ancell Chairman of the Remuneration Committee MJ Gleeson plc
The operation of the Bonus Plan in respect of the Executive Directors and other key executives of the Company will be overseen by the Remuneration Committee of the Board of Directors of the Company.
The Bonus Plan is both a cash bonus plan and a discretionary executive share plan under which a proportion of a participant's bonus may be deferred into an award over ordinary shares of the Company (together, a 'Bonus Plan Award'). Under the Bonus Plan, the Board may, within certain limits, grant to eligible employees deferred awards over ordinary shares taking the form of Options, Conditional Share Awards or Restricted Shares (known for the purpose of this summary as 'Bonus Plan Deferred Awards'). No payment is required for the grant of a Bonus Plan Deferred Award. Where the participant becomes entitled to acquire the ordinary shares, the Bonus Plan Deferred Award is said to have vested.
The Bonus Plan has been established for the Executive Directors although, at the discretion of the Board, other employees may participate in this plan. Non-Executive Directors are not eligible to participate.
The maximum Bonus Plan Award level will be 150% of salary for Executive Directors. Bonus Plan Awards will normally be paid out in cash following an assessment of performance against targets for the financial year unless the Executive Director voluntarily defers all or a portion into shares. Any amount deferred into Bonus Plan Deferred Awards over ordinary shares of the Company will vest after three years subject to continued employment.
In respect of the Bonus Plan Deferred Awards, the Bonus Plan may operate over new issue shares, treasury shares or shares purchased in the market. The Company may issue no more than 10% of its shares within a 10 year period to satisfy awards to participants in the Bonus Plan and any other employees' share scheme operated by the Company under which shares are issued. In addition, no more than 5% of shares may be issued under the Bonus Plan and any other discretionary employees' share scheme adopted by the Company. Shares issued out of treasury for the Bonus Plan Deferred Awards count towards these limits for so long as this is required by institutional shareholder guidelines. Bonus Plan Deferred Awards which are renounced or lapse shall be disregarded for the purposes of these limits.
The Board will monitor the issue of shares during the 10 year period.
Benefits received under the Bonus Plan are not pensionable.
Bonus Plan Deferred Awards will normally be granted within a 42 day period following (i) the date of approval of the Bonus Plan by the shareholders of the Company, (ii) the day after the publication of the results of the Company for any period, (iii) any other time at which the Board determines there are exceptional circumstances which justify the grant of the award or (iv) the day after the lifting of any Dealing Restrictions which prevented the grant of Bonus Plan Deferred Awards.
No Bonus Plan Deferred Awards may be granted more than 10 years after the date the Bonus Plan is approved by shareholders of the Company.
Bonus Plan Deferred Awards will normally vest 3 years after grant subject only to continued employment within the Group.
The vesting or exercise of Bonus Plan Deferred Awards is conditional upon the participant paying any relevant taxes due.
The circumstances in which malus and clawback could apply are as follows:
The malus period would be up to the date of the bonus determination for the cash bonus and for the Bonus Plan Deferred Awards, for three years after that up to vesting.
The clawback period will be three years from the date of the bonus determination for any cash payments under the Bonus Plan.
Where a participant's employment is terminated after the end of a performance year but before the payment is made, the participant may remain eligible for a Bonus Plan Award for that performance year subject to an assessment of the performance targets over the period. Where a Bonus Plan Award is made it shall be delivered in the same way and at the same time as if the participant had not ceased to be in Relevant Employment.
If the participant is a good leaver during the relevant performance year, a bonus will normally be paid in the same way and at the same time as if the participant had not ceased to be in Relevant Employment, pro-rated for length of service and the achievement of performance targets measured over the full performance year. Any unvested Bonus Plan Deferred Awards will also vest on the normal vesting date pro-rated for length of service.
The Board has the discretion to determine that a Bonus Plan Award may be paid fully in cash at the date of cessation, and/or that Bonus Plan Deferred Awards will vest early on cessation, and/or to not pro rate the award for time served as an employee.
A 'good leaver' is defined as a participant ceasing to be in employment with the Group by reason of death, ill-health, injury, disability, redundancy, retirement, the company employing the participant ceasing to a member of the Group, the participant's employing business being sold out of the Group or at the Board's discretion.
Anyone who is not a good leaver will be a bad leaver. For a bad leaver, there will be no cash bonus pay-out for the year in which they leave and any unvested Bonus Plan Deferred Awards will lapse.
The participant will receive the annual bonus in cash immediately prior to the date of the change of control. The level of cash payment will be determined by the Board at its discretion by reference to the time elapsed from the start of the performance year to the change of control date and the performance levels achieved as at the date of the change of control (where applicable).
The Board has discretion to determine, in exceptional circumstances, whether to pro rate the award for time served as an employee.
Any unvested Bonus Plan Deferred Awards will also vest immediately prior to a change of control.
In the event of an internal corporate reorganisation, the Board may decide (with the consent of the acquiring company) to replace unvested Bonus Plan Deferred Awards with equivalent new awards over shares in the acquiring company.
In the event of a demerger, distribution or any other corporate event, the Board may determine that Bonus Plan Award may be paid. The proportion of the Bonus Plan Award which may be paid will be determined by the Board taking into account, among other factors, the period of the performance year elapsed and the extent to which any applicable performance conditions have been satisfied at that time.
The Board may decide that participants will receive a payment (in cash and/or additional shares) equal in value to any dividends that would have been paid on the shares which vest under their Bonus Plan Deferred Awards by reference to the period between the time when the relevant award was granted and the time when the relevant award vested. This amount may assume the reinvestment of dividends and exclude or include special dividends or dividends in specie.
Bonus Plan Deferred Awards are not transferable other than to the participant's personal representatives.
Any shares allotted or transferred under the Bonus Plan will rank equally with shares then in issue (except for rights arising in reference to a record date prior to their allotment or transfer).
Applications will be made to both the UK Listing Authority and the London Stock Exchange in order to obtain the relevant approvals for admission and to trading for new shares that are issued pursuant to the Bonus Plan.
At its discretion, the Board may decide to satisfy Bonus Plan Deferred Awards with a payment in cash or shares equal to any gain that a participant would have made had the relevant award been satisfied with shares.
On a variation of the capital of the Company or in the event of a demerger or other distribution, the number of shares subject to a Bonus Plan Deferred Award may be adjusted in such manner as the Board determines.
Amendments to the Bonus Plan rules may be made at the discretion of the Board. However, the basis for determining a participant's entitlement to be made an award and/or acquire shares, the persons to whom an award may be made, the limitations on the total number of shares over which an award can be made, individual participation limits and the adjustments that may be made following a variation of capital cannot be altered to the advantage of participants without prior shareholder approval, except for minor amendments to benefit the administration of the Bonus Plan, to take account of a change in legislation or to obtain or maintain favourable tax, exchange control or regulatory treatment for participants or for the Group.
The Board may add to, vary or amend the Bonus Plan rules by way of a separate schedule in order that the Bonus Plan may operate to take account of local legislative and regulatory treatment for participants or the relevant Group company, provided that the parameters of these arrangements will provide no greater benefits than the Bonus Plan rules as summarised above.
Note: This Part B summarises the main features of the rules of the Bonus Plan, but does not form part of them, and should not be taken as affecting the interpretation of the detailed terms and conditions constituting the rules. Copies of the rules will be available for inspection at 6 Europa Court, Sheffield Business Park, Sheffield, S9 1XE or by writing to the Company Secretary at [email protected] during usual office hours (Saturdays, Sundays and public holidays excepted) from the date of dispatch of this document up to and including the date of the Meeting, and at the Meeting itself. The Directors reserve the right, up to the time of the Annual General Meeting, to make such amendments and additions to the rules of the Bonus Plan as they consider necessary or desirable, provided that such amendments and additions do not conflict in any material respect with the summary set out in this Part B.
The operation of the LTIP in respect of the Executive Directors and other key executives of the Company will be overseen by the Remuneration Committee of the Board of Directors of the Company.
The LTIP is a discretionary executive share plan. Under the LTIP, the Board may, within certain limits and subject to any applicable performance conditions, grant to eligible employees Options, Conditional Share Awards, Restricted Shares or Cash Awards (known for the purpose of this summary as 'Awards'). Where the participant becomes entitled to acquire the ordinary shares or be made the cash payment, the Award is said to have vested.
The LTIP has been established for the Executive Directors although, at the discretion of the Board, other employees may participate in this plan. Non-Executive Directors are not eligible to participate.
The market value of ordinary shares of the Company (measured at the time of grant) that may be awarded to a participant in any financial year will not exceed in aggregate 300% of the relevant participant's annual base salary.
In the case of the Chief Executive Officer, the one-off Cash Award described in the Chairman of the Remuneration Committee's letter will not count towards this limit.
The LTIP may operate over new issue shares, treasury shares or shares purchased in the market. The Company may issue no more than 10% of its shares within a 10 year period to satisfy awards to participants in the LTIP and any other employees' share scheme operated by the Company under which shares are issued. In addition, no more than 5% of Shares may be issued under the LTIP and any discretionary employees' share scheme adopted by the Company. Shares issued out of treasury for the LTIP count towards this limit for so long as this is required by institutional shareholder guidelines. Awards which are renounced or lapse shall be disregarded for the purposes of these limits.
The Board will monitor the issue of shares during the 10 year period.
Benefits received under the LTIP are not pensionable.
Awards will normally be granted within a 42 day period following (i) the date of approval of the LTIP by the shareholders of the Company, (ii) the day after the publication of the results of the Company for any period, (iii) any other time at which the Board determines there are exceptional circumstances which justify the grant of the award or (iv) the day after the lifting of any Dealing Restrictions which prevented the grant of awards.
No Awards may be granted more than 10 years after the date the LTIP is approved by shareholders of the Company.
Awards may be subject to the achievement of pre-determined performance targets or other conditions set by the Board at the date of grant. Awards will normally vest, subject to the achievement of these conditions, three years following the date of grant or other period as determined by the Board.
Any performance conditions applying to Awards may be varied, substituted or waived if the Board considers it appropriate, provided that the Board considers that the new performance conditions are not materially less difficult to satisfy than the original conditions.
Awards once vested will normally be subject to a holding period set at the date of grant. The normal holding period will be two years. The holding period will only apply to the net number of Shares acquired if a participant chooses to settle their tax liability by selling Shares. During the holding period the only restriction on the participant will be that they cannot sell the Shares.
Awards may, at the discretion of the Board, be the subject of early release from the performance period or the holding period.
The vesting or exercise of Awards is conditional upon the participant paying any relevant taxes due.
The circumstances in which malus and clawback could apply are as follows:
The malus period will be up to the date of vesting. The clawback period will be two years from the date of vesting.
For good leavers, unvested Awards will vest on the normal vesting date subject to (i) the extent any applicable performance target has been satisfied at the end of the normal performance period and (ii) pro-rating to reflect the period of time elapsed between grant and cessation of employment as a proportion of the normal vesting period.
The Board has the discretion to determine that the end of the performance period is the date of cessation and that awards may vest early. The Board also has discretion regarding whether to pro-rate the Awards for time served. The Board's normal policy is that it will pro-rate awards for time.
A 'good leaver' is defined as a participant ceasing to be in employment with the Group by reason of death, ill-health, injury, disability, redundancy, retirement, the company employing the participant ceasing to be a member of the Group, the participant's employing business being sold out of the Group or at the Board's discretion.
Anyone who is not a good leaver will be a bad leaver. Bad leavers will forfeit all unvested and vested but unexercised Awards.
Unvested Awards will vest early on a change of control subject to (i) the extent that any applicable performance measures have been satisfied at that time and (ii) pro-rating to reflect the reduced period of time between grant and early vesting as a proportion of the vesting period that has then elapsed.
The Board has discretion regarding whether to pro-rate the Awards for time served. The Board's normal policy is that it will pro-rate awards for time.
In the event of an internal corporate reorganisation, the Board may decide (with the consent of the acquiring company) to replace unvested Awards with equivalent new awards over shares in the acquiring company.
In the event of a demerger, distribution or any other corporate event, the Remuneration may determine that Awards will vest. The proportion of the Awards which vest will be determined by the Board taking into account, among other factors, the period of time the award has been held by the participant and the extent to which any applicable performance conditions have been satisfied at that time.
The Board may decide that participants will receive a payment (in cash and/or additional shares) equal in value to any dividends that would have been paid on the shares which vest under their Awards by reference to the period between the time when the relevant award was granted and the time when the relevant award vested. This amount may assume the reinvestment of dividends and exclude or include special dividends or dividends in specie.
Awards are not transferable other than to the participant's personal representatives.
Any shares allotted or transferred under the LTIP will rank equally with shares then in issue (except for rights arising in reference to a record date prior to their allotment or transfer).
Applications will be made to both the UK Listing Authority and the London Stock Exchange in order to obtain the relevant approvals for admission and to trading for new shares that are issued pursuant to the LTIP.
At its discretion, the Board may decide to satisfy Awards with a payment in cash or shares equal to any gain that a participant would have made had the relevant award been satisfied with shares.
On a variation of the capital of the Company or in the event of a demerger or other distribution, the number of shares subject to an Award may be adjusted in such manner as the Board determines.
Amendments to the LTIP rules may be made at the discretion of the Board. However, the basis for determining a participant's entitlement to be made an Award and/or acquire shares, the persons to whom an Award may be made, the limitations on the total number of shares over which an Award can be made, individual participation limits and the adjustments that may be made following a variation of capital cannot be altered to the advantage of participants without prior shareholder approval, except for minor amendments to benefit the administration of the LTIP, to take account of a change in legislation or to obtain or maintain favourable tax, exchange control or regulatory treatment for participants or for the Company.
The Board may add to, vary or amend the LTIP rules by way of a separate schedule in order that the LTIP may operate to take account of local legislative and regulatory treatment for participants or the relevant Group company, provided that the parameters of these arrangements will provide no greater benefits than the LTIP rules as summarised above.
Note: This Part C summarises the main features of the rules of the LTIP, but does not form part of them, and should not be taken as affecting the interpretation of the detailed terms and conditions constituting the rules. Copies of the rules will be available for inspection at 6 Europa Court, Sheffield Business Park, Sheffield, S9 1XE or by writing to the Company Secretary at [email protected] during usual office hours (Saturdays, Sundays and public holidays excepted) from the date of dispatch of this document up to and including the date of the Meeting, and at the Meeting itself. The Directors reserve the right, up to the time of the Annual General Meeting, to make such amendments and additions to the rules of the LTIP as they consider necessary or desirable, provided that such amendments and additions do not conflict in any material respect with the summary set out in this Part C.
| KPMG | KPMG LLP Audit 1 Sovereign Square Sovereign Street Leeds LS1 4DA United Kingdom |
Tel +44 (0) 113 231 3000 Fax +44 (0) 113 231 3200 |
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| S91XE | MJ Gleeson plc 6 Europa Court Sheffield Business Park Sheffield |
Our ref Contact |
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| 31 October 2016 | ||||
| Dear Sirs | ||||
| Statement to MJ Gleeson plc (no. 09268016) on ceasing to hold office as auditors pursuant to section 519 of the Companies Act 2006 |
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| The reason connected with our ceasing to hold office is the holding of a competitive tender for the audit, in which we were unsuccessful in retaining the audit. |
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| Yours faithfully, | ||||
| wha ul | ||||
| KPMG LLP Audit registration number: 9188307 |
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