29th Jul 2005 11:07
Next PLC29 July 2005 NEXT PLC RISK/REWARD ANNOUNCEMENT Risk/reward investment plan The Board of Next plc (Next) announces that, pursuant to the approval given byshareholders at its Extraordinary General Meeting (EGM) on 15 July 2005 to theCompany's risk/reward investment plan (the Plan), its executive directorstogether with nineteen other senior employees have each made a personalinvestment in a financial contract, the success of which is based on the marketprice of Next's ordinary shares in four years time. The return on this financial contract will vary between a minimum of zero (ifNext's share price is then £20.50 or less) and a maximum of approximately fivetimes the initial investment. The maximum value will only be achieved if thefinal share price is at or above £25.00 in four years time. The final pricewill be determined by an averaging mechanism over the last three months of thefour year term. At the close of business on 28 July 2005, the official closingprice of a Next ordinary share was £15.71. These financial contracts have been entered into with Cantor Index, anindependent third party regulated by the Financial Services Authority, and arenot subsidised, supported or underwritten by Next, nor is there any otherpresent or future liability for Next in respect of these contracts. No interestin the Company's securities is being acquired under these contracts by thedirectors or employees. In accordance with the terms of the Plan, and following approval by theCompany's Remuneration Committee, Next also made a special contribution of£1,198,500 to the Next Employee Share Ownership Trust (Next ESOT) on 27 July2005. This contribution was applied by the Next ESOT to acquire 1,346,629listed warrants issued by Goldman Sachs Jersey Limited (GS) at a price of 89.0pence, inclusive of all costs, on 28 July 2005. These warrants are held on revocable trusts for the directors and senioremployees as set out below. In the event that any participant leaves theCompany's employment before 28 July 2009 (other than in 'good leaver'circumstances such as death, disability, redundancy or retirement at age 60 orthrough ill-health if earlier), any entitlement to a return on the listedwarrants held by the Next ESOT will be forfeited in full. In 'good leaver'circumstances, any such entitlement will be restricted pro-rata to the time theparticipant was employed by Next during the four year period to 28 July 2009. In addition, Next also acquired 172,368 warrants direct from GS at a cost of£153,408 in order to hedge its potential employers' national insurancecontributions liability in respect of the Plan. Details of the amounts invested by directors and senior employees in theirfinancial contracts and of the listed warrants held by the Next ESOT are asfollows: +----------------+------------------------------+------------------------------+|Name/Position |Investment in financial |Number of listed warrants || |contract from own resources |issued by GS held by Next || |(£'s) |ESOT |+----------------+------------------------------+------------------------------+|Simon Wolfson, | 100,000 | Nil ||Director | | |+----------------+------------------------------+------------------------------+|Christos | 66,000 | 222,472 ||Angelides, | | ||Director | | |+----------------+------------------------------+------------------------------+|David Keens, | 50,000 | 168,539 ||Director | | |+----------------+------------------------------+------------------------------+|Andrew Varley, | 50,000 | 168,539 ||Director | | |+----------------+------------------------------+------------------------------+|Senior | 233,500 | 787,079 ||employees | | |+----------------+------------------------------+------------------------------+|TOTALS | 499,500 | 1,346,629 |+----------------+------------------------------+------------------------------+ The Next share price must average more than £20.50 over the three months to 28July 2009 for there to be any return on the financial contracts or the listedwarrants. This compares with an average share price of £14.93 over the threemonths to 28 July 2005 and equates to an annual compound growth rate of 8.3%prior to dividends payable. Based on the number of ordinary shares in issue,currently 256.5 million, this would require an increase in market capitalisationof £1.2 billion. In order to achieve maximum value at the share price of £25.00, the annualcompound growth rate would be 13.8% and the increase in market capitalisationwould be £2.3 billion. Details of the Plan, including a description of the nature of the financialcontracts invested in by directors and employees, are set out in the Notice ofMeeting of the EGM held on 15 July 2005, a copy of which can be located on theCompany's web-site, www.next.co.uk under 'Corporate information'. Details ofthe warrant issued by GS are available from the London Stock Exchange underproduct code GA86.L or ISIN GB00B0F9V751. Executive directors of Next who participate in the Plan are deemed to bediscretionary beneficiaries in the Next ESOT and consequently are considered tobe interested in all of the ordinary shares in Next held by the Next ESOT,currently 8,501,449 such shares. This transaction notification disclosure is made in accordance withDR 3.1.4(R)(1)(a) of the UKLA Disclosure Rules. Contacts: Andrew McKinlay, Company Secretary Seonna Anderson, Deputy Company Secretary NEXT PLC Tel: 08454 567777 Alistair Mackinnon-Musson Philip Dennis Hudson Sandler Tel: 020 7796 4133 Email: [email protected] This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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