Jackpotjoy plc long-term incentive plan

In May 2017 Jackpotjoy plc began granting awards over ordinary shares under the Group’s long term incentive plan (“LTIP”) for key management personnel. The awards will vest on the date on which the Board of Directors determines the extent to which the performance condition (described below) has been satisfied, and are subject to a holding period of two years beginning on the vesting date, following the end of which they will be released so that the shares can be acquired.

Eligibility

Awards may be granted to selected employees of the Group (including Executive Directors) at the discretion of the Remuneration Committee.

Overall plan limits

In any 10-year period, not more than five per cent of the issued share capital of the Company may be issued under the Jackpotjoy LTIP and any other discretionary employees’ share plans operated by the Company.

In any 10-year period, not more than 10 per cent of the issued share capital of the Company may be issued under the Jackpotjoy LTIP and all other employees’ share plans operated by the Company.

These limits do not include awards or options granted before admission or awards or options which have lapsed but will include awards or options satisfied with treasury shares as if they were newly issued Shares for so long as this is required by UK institutional investor guidelines.

Source of shares

Awards under the Jackpotjoy LTIP may be granted over newly issued shares, shares held in treasury or shares purchased in the market.

Timing of awards

Awards may normally only be granted within the six-week period beginning with the Company’s announcement of its results for any period or on a day on which the Remuneration Committee determines that exceptional circumstances exist justifying the grant of awards. If a grant cannot be made at these times due to dealing restrictions, awards may be granted within the six-week period beginning on the date the restrictions are lifted. No awards may be granted more than 10 years after the Jackpotjoy LTIP is adopted.

Performance condition

The performance condition as it applies to 50% of each award is based on the Group's total shareholder return compared with the total shareholder return of the companies constituting the FTSE 250 index (excluding investment trusts and financial services companies) over three years commencing on 25 January 2017 (“TSR Tranche”). The performance condition as it applies to the remaining 50% of the award is based on the Group's earnings per share (“EPS”) in the last financial year of that performance period (“EPS Tranche”) and vests as to 25% if final year EPS is 133.5 pence, between 25% and 100% (on a straight-line basis) if final year EPS is more than 133.5 pence but less than 160 pence, and 100% if final year EPS is 160 pence or more.

Each award under the LTIP is equity-settled and LTIP compensation expense is based on the award’s estimated fair value. The fair value has been estimated using the Black-Scholes model for the EPS Tranche and the Monte Carlo model for the TSR Tranche.

During the three and six months ended 30 June 2017, the Group recorded £0.01 million (2016 – £nil) in LTIP compensation expense with a corresponding increase in share-based payment reserve.

Vesting of awards

In normal circumstances, awards will vest after the performance period to the extent the performance conditions have been met.

Awards without performance conditions will usually vest on the third anniversary of grant.

Holding period

Awards may be granted subject to a holding period of up to two years from vesting. During the holding period, the award will be subject to malus and clawback (see below) but not to the leaver provisions. Instead, a participant will only lose the award where he is summarily dismissed.

An award that is subject to a holding period will normally be released following the end of the holding period. An award that is not subject to a holding period will ordinarily be released on the date of vesting.

Additional information on the Jackpotjoy plc LTIP is in the Jackpotjoy plc Prospectus dated 20 January 2017.