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Financial Statements Aer Lingus Group Plc – Annual Report 2009
27 Share premium, capital conversion reserve fund and other reserves [continued]
2009 2008
€’000 €’000
Other reserves
Cash flow hedging reserve
At 1 January (63,594) (261)
Movement in the period 86,055 (72,381)
Deferred tax on movement in the period (10,756) 9,048
At 31 December 11,705 (63,594)
Available-for-sale reserve
At 1 January 3,242 3,953
Movement in the period (2,060) (1,080)
Deferred tax on movement in the period 41 369
At 31 December 1,223 3,242
Treasury shares
At 1 January (9,137) (4,275)
Purchase of shares (4,159) (4,862)
Cancellation of shares 6,970 –
At 31 December (6,326) (9,137)
Share-based payment reserve
At 1 January 1,081 439
Movement in the period (1,189) 735
Deferred tax on movement in the period 149 (93)
At 31 December 41 1,081
Total other reserves 6,643 (68,408)
Long-Term Incentive Plan (“LTIP”)
In July 2007, arising from the review of the Group’s compensation arrangements for executive directors and senior managers, the
Company’s shareholders approved the introduction of a LTIP in order to further align the interests of such executives and senior managers
with those of shareholders. The LTIP is a share-based performance award scheme, which will provide for the vesting of shares subject
to the achievement of minimum performance objectives measured over a three year period. The LTIP is tied to achievement of both
a targeted Business Performance Measure (selected by the Remuneration Committee) and to Total Shareholder Return (“TSR”). The
TSR element is assessed against a peer group of European airlines and the Business Performance Measure set by the Remuneration
Committee. The maximum award under the LTIP is 150% of base salary. The maximum number of shares that can vest is set at 125% of
the maximum salary multiple. Awards under the LTIP can be made on an annual basis at the discretion of the Remuneration Committee.
Under the terms of the Group’s LTIP an early vesting of an award may occur at the discretion of the Remuneration Committee if there
were to be a change of control of the Company. 4,446,658 shares have been issued in respect of the LTIP and are registered in the name
of ALG Trustee Limited. Any voting rights attaching to the shares are exercised in the absolute discretion of the ALG Trustee Limited
having regard to the interests of the LTIP participants.
For awards issued in 2009, the Remuneration Committee set the minimum performance under the Business Performance Measure
as 10% compound growth in EBITDAR over the 3 year performance period. Conditional awards granted under the Company’s LTIP
in the year ended 31 December 2009 amounted to 4,552,775 ordinary shares (2008: 1,917,567). The share price was €0.71 (2008: €2.03)
at the date of the award and fair value was determined to be €Nil (2008: €1.55).