7th Jan 2009 16:27
Notification of Transactions of Directors and Persons Discharging Managerial Responsibilities ("PDMRs")
Pursuant to DR 3.1.4 R, Lonmin Plc (the "Company") confirms that Mr Ian Farmer, a director of the Company was today granted an award of 15,000 shares under the Long Term Incentive Plan ("LTIP").
The LTIP award will normally vest on the third anniversary of the award date. The proportion of an award that vests will be dependent on satisfaction of a performance condition comprised of two objective tests, assessed independently of each other.
One half of the award is based on absolute share price as set out in the vesting schedule below:
|
Performance Level |
Company's share price at end of performance period |
Proportion of shares that will vest |
|
Maximum |
£25 or above |
100% |
|
Threshold |
£20 |
20% |
|
Below Threshold |
Below £20 |
Nil |
The other half of the LTIP award is based on Relative TSR, comparing the total return accruing to Lonmin shareholders with that of 20 companies selected from the mining and metals sector over a three-year period (assuming dividend reinvestment), with no provision for re-testing. None of the RTSR-based part of the LTIP award will vest for performance below the median of the group, the vesting schedule thereafter being as follows:
|
Performance Level |
Company's percentile ranking within the Comparator Group |
Proportion of shares that will vest |
|
Maximum |
90th percentile or above |
100% |
|
Target |
75th percentile |
70% |
|
Threshold |
Median |
20% |
|
Below Threshold |
Below median |
Nil |
Between these targets, a straight-line sliding scale operates.
In the event of a change of control taking place within 12 months of the date of grant, the Relative TSR test shall cease to apply and the whole of the LTIP award will be subject to the absolute share price test. In line with the discretions available to it under the Plan Rules, the Remuneration Committee has determined that time apportionment would also cease to apply.
The Remuneration Committee believes that this combination of performance measures and targets fully align Mr Farmer's interests with both the strategic objectives of the Company and the interests of its shareholders. It is believed that the targets set are stretching although achievable, and if both were attained would indicate that significant value had been delivered to shareholders, while mitigating the risk of "reward for failure".
End
Related Shares:
Lonmin