19
February 2024
Cavendish Financial
PLC
("Cavendish", the "Company" or the "Group")
Aligning our employees and
shareholders
Launch of SIP and
Co-investment Plan
Cavendish announces, today, the
establishment of a company-wide Share Incentive Plan and a
discretionary Co-investment Plan as part of a structured plan to
ensure that its people are aligned with shareholders and
incentivised to create shareholder value over the medium-term
through the consistent delivery of our strategy.
A summary of the principal features
of each plan is set out below for information purposes
only.
Company-wide Share Incentive Plan
Under an HMRC tax-advantaged Share
Incentive Plan ("SIP"), all employees of Cavendish (including its
executive directors) have been offered the opportunity to acquire
up to £1,800 worth of new ordinary shares in the capital of the
Company (known as "Partnership Shares"), and be awarded up to
£3,600 worth of free ordinary shares in the capital of the Company
on a buy 1 get 2 free basis (known as "Matching Shares"). The
initial acquisition will be funded through a one-off bonus of
£1,800 to each eligible employee which will not be paid unless the
employee elects to participate in the SIP. Formal invitations under
the SIP were made to employees on 19th February.
The SIP is expected to close on or around 19 March 2024.
Based on the closing price of Cavendish ordinary share on 16
February 2024 of 10.75p per share, the maximum shares that could be
issued under the SIP is c.9.3m representing c.2.6% of the current
issued share capital.
The Partnership and Matching Shares
will rank for voting rights and dividends alongside other ordinary
shares and shares held in the SIP for more than 5 years will
receive beneficial tax treatment in accordance with the HMRC rules
governing SIPs.
The SIP is operated through a
special purpose trust which is administered by an independent
trustee. Participants are being offered the opportunity
to acquire their shares on a one-off, lump sum basis. They
will immediately become beneficial owners of both the Partnership
and the Matching Shares they acquire, but the Matching Shares must
be held for 3 years and will be forfeited if the participant sells
their Partnership Shares and/or ceases to be an employee of
Cavendish or another member of the Group in those 3 years, except
in certain good leaver circumstances.
Co-investment Plan
Alongside the company-wide SIP, the
Group has launched a discretionary Co-investment Plan (the "CiP")
to all employees at director level and above or equivalent in the
operations leadership team.
Under the CiP, eligible employees
(including executive directors) have been offered the opportunity
to acquire, out of their own post-tax funds, ordinary shares in
Cavendish at the prevailing market price, either through a one-off,
lump sum subscription or monthly payroll deductions for 12 months
(the "CiP Shares").
The CiP Shares will be held by the
trustee of the Company's employee benefit trust, as nominee for the
participants, subject to a 3-year lock up, but will rank for
dividends and voting rights alongside other ordinary shares during
this time.
In order to create a retention tool
and align the senior team with our investors, as long as a
participant remains an employee of the Group at the end of the
3-year lock up period (except in certain good leaver
circumstances), additional shares ("Additional Shares") will be
awarded to the participants based on the number of CiP Shares they
acquired and the satisfaction of the following share price
targets. The Target Base Price was 10.5p per share being the
closing share price on 9 February 2024, the business day
immediately before formal offers to participate were issued to
employees:
|
Premium to Target Base
Price
|
Corresponding target share
price
|
Additional Shares awarded for
each CiP Share acquired
|
|
<75%
|
Less than
18.4p
|
0.5
|
|
>=75%
|
18.4p
|
2
|
|
>=125%
|
23.6p
|
3
|
|
>=175%
|
28.9p
|
4
|
The target share prices include
dividends paid over the duration of the CiP and will be assessed on
a 20-day VWAP basis, in the 20 dealing days prior to the end of the
3-year lock up period.
Shares will also be awarded if any
of the above hurdles are met on a 90-day VWAP basis at any time during the 3-year lock up
period, but will only be received by employees at the end of that
period and subject, inter alia, to continued employment (other than
in certain good leaver circumstances). Where both the 20-day VWAP
and 90-day VWAP targets are met, participants will receive the
highest number of shares payable of the two. Only one grant
of additional shares can be awarded.
Non-binding indications of interest
to invest were received from eligible employees representing
c.£1.5m in aggregate which have been scaled back to £1.3m. In
the event that formal applications to invest are received at the
same level when the formal invitation period closes, and based on
the closing share price of 10.75p on 16 February 2024, this would
result in the issue of up to c.12.4m new ordinary shares
(representing c.3.4% of Cavendish's issued share capital) and the
maximum additional shares that could be issued if the highest share
price hurdle is achieved would be c.49.5m new ordinary shares
(representing c.13.7% of Cavendish's issued share
capital).
It is expected that a similar plan
(with targets adjusted based on the share price at the time) will
be made under the CiP to new joiners and employees newly promoted
to Director following the issue of the full year results to 31
March 2024, subject to an overall cap on issuance for initial,
upfront investment of 5% of Cavendish's issued share capital
including the CiP Shares expected to be issued under the current
plan.
Cavendish intends to manage the
overall shareholder dilution of the CiP through funding its EBT to
make market purchases over time with the intention of limiting the
ultimate overall dilution from share option and employee incentive
plans to less than c.15% of the total issued share
capital.
Julian Morse and John Farrugia, co-CEOs of Cavendish
said:
"In September we completed our
merger creating Cavendish, a leading strategic financial adviser
for the mid-market, with over 200 retained corporate clients and
wide product expertise across ECM, public and private M&A, debt
advisory and private capital.
Since that day our people - our key
asset - have focused on delivering high quality advice, service and
execution to our clients and on retaining and growing our client
base and transaction pipeline.
We are delighted by the response
from our teams to the plans we have announced today, which will
help us retain our talent and ensure our entire team is
incentivised to grow Cavendish over the medium-term, building
shareholder value and aligning them with our
shareholders."
CONTACTS
Cavendish
(Management)
Tel: +44 (0) 20 7220 0500
Julian Morse, Co-Chief Executive
Officer
investor.relations@cavendish.com
John Farrugia, Co-Chief Executive
Officer
Ben Procter, Chief Financial
Officer
Grant Thornton (Nominated
Adviser)
Tel: +44 (0) 20
7383 5100
Philip Secrett/Samantha
Harrison/Ciara Donnelly
END