Holiday Inn 2013 Annual Report Download - page 149

Annual Performance Plan
The IHG Annual Performance Plan (APP), formerly the Annual
Bonus Plan (ABP) enables eligible employees (including Executive
Directors) to receive all or part of their bonus inthe form of
deferred shares. The deferred shares are released onthe third
anniversary of the award date. Under the terms of the current plan,
a fixed percentage of the bonus is awarded in the formof shares
with novoluntary deferral and no matching shares. Theawards in
all of the plans are conditional on the participants remaining in the
employment of a participating company or leaving for a qualifying
reason as per theplan rules. Participation in the APP is at the
discretion of the Remuneration Committee. Thenumber of shares
is calculated by dividing a specific percentageof the participant’s
annual performance-related bonus by the middle market quoted
prices on the three consecutive dealing days immediately
preceding the date of grant. A number of executives participated
inthe plan during the year and conditional rights over 318,911
(2012340,924, 2011 528,213) shares were awarded to participants.
Long Term Incentive Plan
The Long Term Incentive Plan (LTIP) allows Executive Directors
andeligible employees to receive share awards, subject to the
achievement of performance conditions, set by the Remuneration
Committee, whichare normally measured over a three-year period.
Awards are normally made annually and, except in exceptional
circumstances, will not exceed three times salary for Executive
Directors and four times salary in the case of other eligible
employees. During the year, conditional rights over 2,227,293
(2012 2,698,714, 2011 3,257,364) shares were awarded to employees
under the plan. The plan provides for the grant of ‘nil cost options’
to participants as an alternative to conditional share awards.
Executive Share Option Plan
For options granted, the option price is not less than the market value
of an ordinary share, or the nominal value if higher. Themarket value
is the quoted price on the business day preceding the date of grant,
or the average of the middle market quoted prices on the three
consecutive dealing days immediately preceding the date of grant.
Aperformance condition has to be met before options can be
exercised. The performance condition is set by the Remuneration
Committee. The plan was not operated during 2013 and no options
were granted in the year under the plan. The latest date that any
options may be exercised is 4 April 2015.
Sharesave Plan
The Sharesave Plan is a savings plan whereby employees contract
tosave a fixed amount each month with a savings institution for
three or five years. At the end of the savings term, employees are
given the option to purchase shares at a price set before savings
began. The Sharesave Plan, when operational, is available to
all UK employees (including Executive Directors) employed by
participating Group companies provided that they have been
employed for at least one year. The plan provides for the grant of
options to subscribe for ordinary shares at the higher of nominal
value and not less than 80% of the middle market quotations of the
ordinary shares on the three dealing days immediately preceding
the invitation date. Theplan was not operated during 2013 and no
options were granted in the year under theplan.
US Employee Stock Purchase Plan
The US Employee Stock Purchase Plan will allow eligible
employees resident in the US an opportunity to acquire Company
American Depositary Shares (ADSs) on advantageous terms.
Theoption to purchase ADSs may be offered only to employees
of designated subsidiary companies. The option price may not
be less than the lesser of either 85% of the fair market value
of an ADS on the date ofgrant or 85% of the fair market value
of an ADS on the date of exercise. Options granted under the
plan must generally be exercised within 27 months from the
date of grant. The plan was not operated during 2013 and at
31 December 2013 no options had been granted under the plan.
Former Six Continents Share Schemes
Under the terms of the separation of Six Continents PLC in 2003,
holders of options under the Six Continents Executive Share
OptionSchemes were given the opportunity to exchange their
SixContinents PLC options for equivalent value new options
over IHGshares. As a result of this exchange, 23,195,482 shares
were putunder option at prices ranging from 308.5p to 593.3p.
Theexchanged options were immediately exercisable and are
notsubject to performance conditions. During 2012, 352,115 such
options were exercised and 106,699 lapsed, leaving no such options
outstanding at 31 December 2012.
28. Share-based payments
Notes to the Group Financial Statements 147
OVERVIEW STRATEGIC REPORT GOVERNANCE
GROUP FINANCIAL STATEMENTS
PARENT COMPANY FINANCIAL STATEMENTS ADDITIONAL INFORMATION