29th Dec 2006 07:06
PartyGaming Plc29 December 2006 29 December 2006 PartyGaming Plc New Management Incentive Arrangements The signing into law of the Unlawful Internet Gambling Enforcement Act on 13October 2006 and the consequent cessation by PartyGaming of offering real moneygames online to customers in the United States have severely impacted the valueof incentive arrangements for the executive directors and other key employees ofthe Group. The Company has implemented a one-off adjustment to existing incentive awardsand also granted new incentive awards by using shares gifted to its employeebenefit trust - the PartyGaming Plc Shares Trust (the "Trust") - before lastyear's IPO and a further gift today of 40 million shares to the Trust byfounders of the Company.These arrangements will partially mitigate the loss ofvalue on the existing awards and help to retain the Group's executive directorsand other key employees in these special circumstances. There will be no issue of new shares in the Company as a result of the changesto the existing awards or the grant of the new awards. Against this background, the Company's Remuneration Committee is satisfied thatthese arrangements are in the best interest of the Company. Adjustments to existing incentive awards • The Company has waived the total shareholder return performancetargets that were applicable to 20 million out of the 27 million shares overwhich an option was granted to Mitch Garber, Chief Executive Officer, on 19April 2006 under the PartyGaming Plc Share Option Plan (the "Plan"). The vestingschedule has also been accelerated so that these 20 million shares will now vestin eight monthly tranches of 1.25 million shares from 19 May 2007 to 19 December2007 with the remainder vesting on 19 April 2008. • The Company has accelerated the vesting of the option granted toMartin Weigold, Group Finance Director, on 6 April 2005 under the Plan. Hiscurrent balance of 8,897,776 shares under this option will vest on the sametimetable and in the same instalments as the new option granted to Mr Weigolddescribed below. Grant of new incentive awards Mitch Garber, Chief Executive Officer • Mr Garber has today been granted by the Trust an option over 15million shares under the Plan. This option will be exercisable, subject to theCompany's dealing code and his ongoing employment, until the 10th anniversary ofthe grant date and will vest in 30 equal monthly tranches until 1 May 2009. • Provided he remains in employment until 1 May 2009, Mr Garber willalso be awarded 2 million shares from the Trust. No consideration is payablefor this award. • Mr Garber will be entitled to £3 million payable by the Trust in 30equal monthly instalments until 1 May 2009 provided he remains in employment oneach payment date. The £3 million will be realised from the net proceeds of saleof shares from the Trust. • Mr Garber will receive a minimum bonus of £2 million for 2007 providedhe remains in employment on 1 December 2007. Martin Weigold, Group Finance Director • Mr Weigold has today been granted an option over 8,897,776 sharesunder the Plan. The option will be exercisable, subject to the Company'sdealing code and his ongoing employment, until the 10th anniversary of the grantdate and will vest in 9 equal quarterly tranches until 31 December 2008. Other Key Employees Further nil cost options over approximately 50 million shares have been grantedto other key employees of the Group. Options granted under the Plan to executive directors and other key employeesare nil-cost options, the exercise of which will be satisfied from existingshares held by the Trust. No consideration has been paid for the grant of theseoptions and they are not subject to performance targets. Commenting on these changes, Michael Jackson, Chairman of PartyGaming, said: "PartyGaming has the leading executive team in online gaming. Whilst the passingof the Unlawful Internet Gambling Enforcement Act changed the businessenvironment, the online gaming sector has remained no less competitive bothcommercially and in terms of attracting and retaining talented individuals. Thesupport and generosity of founder shareholders has enabled us to partly mitigatethe financial impact on employee incentive arrangements that resulted from thelegislative changes in the US." The PartyGaming Plc Shares Trust The Trust has today acquired 40 million shares by way of the gift by founders ofthe Company, which, together with the existing balance of 143,570,630 sharesheld by the Trust, will be utilised in satisfying the above arrangements. TheTrust's total shareholding of 183,570,630 shares represents 4.59% of theCompany's issued share capital. Contacts PartyGaming Plc +44 (0) 20 7337 0100Peter Reynolds, Director of Investor RelationsJohn Shepherd, Director of Corporate Communications Financial Dynamics +44 (0) 20 7831 3113Edward Bridges / Juliet Clarke This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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