Incentive programs

Share based performance plans

The Group operates a number of share-based payment schemes.

All employee long term incentive plan (LTIP)

Last year the Kindred Group Board approved a change to the all-employee 100 per cent cash settled incentive plan. The change enabled all Group employees at 26 May 2015 to elect to receive a fixed long-term incentive bonus in shares instead of cash, in order to meet demand for wider employee share ownership. The grants are subject to achieving business performance targets in the 2016 financial year and continued employment. The assessment of the actual business performance against the target conditions demonstrated that these have been achieved at greater than 100 per cent. This plan will vest in March 2017.

In September 2016, the Kindred Group Board approved a long-term incentive plan for all employees and the executive management team. Awards under this plan are are subject to achieving business performance targets in the 2020 financial year and continued employment. The targets have been set and approved by the Remuneration Committee and the Board of Directors in December 2016.

Performance Share Plan (PSP)

The introduction of the Group Performance Share Plan was approved at the 2013 AGM under which future share-based payments to senior management and key employees will be made. The PSP performance measures are non-market based conditions providing participants with a high degree of alignment to Company performance. Grants of performance share rights are subject to achieving business performance targets over three financial years and continued employment. These targets are: Gross Contribution (Gross winnings revenue, less Cost of sales, less marketing costs), Free Cash Flow per Share and EBITDA. Grants made in each year will have targets measured on an aggregate basis between the full year of grant and the two successive years so that performance in each financial year will be important. Aggregated performance against the targets and the resulting allocation of PSP awards are disclosed after the full year of vesting.

Dilution effects: 143,775 shares awards lapsed or were cancelled during 2016. If all share-based programmes are fully exercised, the nominal share capital of the Company will increase by a total maximum of GBP 1,460.05 by the issue of a total maximum of 2,336,082 ordinary shares, corresponding to 1 per cent of the capital and votes in the Company.