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Consolidated Financial Report |
DIRECTORS’ REPORT
2014 Annual Report
Prysmian Group
118
INCENTIVE PLANS
Long-term incentive plan 2011-2013
On 14 April 2011, the Ordinary Shareholders' Meeting of
Prysmian S.p.A. had approved, pursuant to art. 114-bis of Leg-
islative Decree 58/98, a long-term incentive plan for the period
2011-2013 for employees of the Prysmian Group, including
certain members of the Board of Directors of Prysmian S.p.A.,
and granted the Board of Directors the necessary authority
to establish and execute the plan. The plan's purpose was to
incentivise the process of integration following Prysmian's
acquisition of the Draka Group.
The plan involved 268 employees of Group companies and es-
tablished that the number of options granted would depend
on the achievement of common business and financial per-
formance objectives for all the participants.
The plan was dependent upon achievement of a minimum
performance objective of at least Euro 1.75 billion in aggregate
Adj. EBITDA for the Group in the period 2011-2013 (the Target),
as well as upon continuation of a professional relationship
with the Group up until 31 December 2013. The plan also set
an upper limit for Adj. EBITDA as the Target plus 20% (i.e.
Euro 2.1 billion), that would determine the maximum number
of exercisable options granted to each participant.
Access to the plan was conditional upon each participant's
acceptance that part of their annual bonus would be co-in-
vested, if achieved and payable in relation to financial years
2011 and 2012.
The allotted options carried the right to receive or subscribe
to ordinary shares in Prysmian S.p.A., the Parent Company.
These shares partly comprised treasury shares and partly new
shares, obtained through a capital increase that excluded
pre-emptive rights under art. 2441, par. 8 of the Italian Civil
Code. Such a capital increase involved the issue in 2014 of
2,120,687 new ordinary shares of nominal value Euro 0.10
each, for a total nominal value of Euro 212,069, as approved
by the shareholders in the extraordinary session of their
meeting on 14 April 2011. The shares obtained from the
Company's holding of treasury shares were allotted for zero
consideration, while the shares obtained from the above
capital increase were allotted to participants upon payment
of an exercise price corresponding to the nominal value of the
Company's shares.
In accordance with IFRS 2, the options allotted in respect of
both new and treasury shares were measured at their grant
date fair value.
The number of options was determined according to the
actual aggregate Adj. EBITDA achieved, which lay between
the Target and the Adj. EBITDA upper limit.
Long-term incentive plan 2014-2016
The Shareholders' Meeting held on 16 April 2014 approved an
incentive plan for the Group's employees, including members
of the Board of Directors of Prysmian S.p.A., and granted
the Board of Directors the necessary powers to establish and
implement this plan.
As a result of the effects of the Western HVDC Link contract
(UK), the Board of Directors has decided not to execute the
mandate received from the shareholders allowing implemen-
tation of this plan.
Additional information about the incentive plans can be
found in Note 21 to the Consolidated Financial Statements.