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Annual Report & Accounts 2016 - Notes
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97 24. SHARE OPTION SCHEMES At 31 December 2016, the Group had the following share options schemes for which options remained outstanding at the year-end: i. Options were granted to Directors and employees under the existing and already approved LTIP on 2 June 2014. Under this scheme, 2,450,000 options held by Directors were cancelled under the arrangements for the acquisition of bwin.party during the year and as at 31 December 2016, 75,000 employee share options remained outstanding. ii. Options were granted to Directors under the terms of the 2015 LTIP, as set out in the 13 November 2015 prospectus pages 325 to 329. iii. Options were granted under a Management Incentive Plan under the same terms of the 2015 LTIP. Under the terms of the share option plan, the Group can allocate up to 10% of the issued share capital although it must take allowance of the shares issued or issuable, post the acquisition of bwin.party, as a consequence of rights to subscribe for shares under the 2015 LTIP or any other employees' share scheme. The following options to purchase €0.01 ordinary shares in the Company were granted, exercised, forfeited or existing at the year-end: Date of grant Exercise price Existing at 1 January 2016 Granted in the year Cancelled in the year Exercised in the year Existing at 31 December 2016 Exercisable at 31 December 2016 Vesting criteria 28 February 2013 233.5p 156,947 - - (156,947) - - Note a 2 June 2014 1p 3,325,000 - (2,450,000) (800,000) 75,000 75,000 Note b 2 February 2016 422p - 13,197,111 (2,932,691) - 10,264,420 - Note c 2 February 2016 467p - 4,399,037 (977,564) - 3,421,473 - Note d 2 February 2016 422p - 200,000 - - 200,000 - Note e 16 December 2016 422p - 8,825,000 - (166,666) 8,658,334 1,794,445 Note f TOTAL ALL SCHEMES 3,481,947 26,621,148 (6,360,255) (1,123,613) 22,619,227 1,869,445 The existing share options at 31 December 2016 are held by the following employees and consultants: Option price 1p 422p 467p 422p Grant date 2 June 2014 2 February 2016 2 February 2016 16 December 2016 Total Kenneth Alexander - 6,842,947 - - 6,842,947 Richard Cooper - 3,421,473 - - 3,421,473 Lee Feldman (note d) - - 3,421,473 - 3,421,473 Norbert Teufelberger (note e) - 200,000 - - 200,000 Employees 75,000 - - 6,963,334 7,038,334 Consultants - - - 1,695,000 1,695,000 75,000 10,464,420 3,421,473 8,658,334 22,619,227 Note a: These equity-settled options were granted to third parties as part of the Sportingbet PLC acquisition following underwriting commitments made at the time. The awards vested on the grant date and the options have the exercise price reduced by the value of any dividends declared up to the point of exercise. These options were fully exercised on 12 February 2016 at a weighted average price of £1.263. Note b: These equity-settled options were granted to certain Directors and employees. The awards will vest in full (and become exercisable) on the share price being equal to or exceeding £6.00 per share for a continuous period of 90 calendar days at any time from the date of grant. If there is a change of control, the awards will vest in full immediately unless the share price is less than £5.00 per share, in which case the Awards will lapse in full. The awards have been treated as vesting over a three year period. The Directors' options under this scheme were cash cancelled during the year on the acquisition of bwin.party, and the after-tax proceeds of £5.4m (£10.3m gross) re-invested in new GVC shares. The remaining fair value of these options was transferred to equity and the additional cost has been recognised as an exceptional item in the year, see note 3.2.2. Note c: These equity-settled awards were issued on completion of the acquisition of bwin.party. The options vest and become exercisable, subject to the satisfaction of a performance condition, over 30 months, with one ninth vesting six months after the date of grant and a further ninth vesting at each subsequent quarter. The options lapse, if not exercised, on 2 February 2026. The performance condition is comparator total shareholder return ("TSR") of the Group against the FTSE 250. Each ninth of the shares will have its TSR condition reviewed from the date of grant until the relevant testing date. To the extent the TSR is not met at that time, it is tested again the following quarter and, if necessary, at the end of the 30 month vesting period. In order to vest, the TSR of the Group must rank at median or above against the FTSE 250. In the year two-ninths of the options had vested. Having received the Directors notice to exercise, the Remuneration Committee exercised its discretion to make a cash alternative payment to the Directors in respect of that portion of shares. The cash alternative payment was calculated by deducting the option price from the market value of a share on the day prior to the date the Company received the exercise note.