Aer Lingus 2014 Annual Report Download - page 136

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134
Retranslation reserve
The retranslation reserve comprises the retranslation of the Group’s investment in a foreign denominated Joint Venture.
Outstanding options and awards
Options
LTIP Schemes
2014
2013
2014
2013
Awards outstanding at 1 January
1,500,000
1,500,000
11,752,553
12,674,629
Forfeitures during the year
-
-
(1,821,331)
(84,000)
Exercised/vested during the year
-
-
(1,513,613)
(3,948,076)
Lapsed or expired during the year
(500,000)
-
(3,018,165)
-
Grants during the year
-
-
4,204,963
3,110,000
Awards outstanding at 31 December
1,000,000
1,500,000
9,604,407
11,752,553
Exercisable at year end
1,000,000
1,000,000
NIL
NIL
Range of exercise price (€)
0.573 - 0.677
0.573 - 0.886
N/A
N/A
Remaining exercisable life of options
4.7 years
5.7 years
Remaining weighted average contractual life
of shares
2 years
2 years
Long Term Incentive Plan (“LTIP”)
The Group operates an LTIP in respect of certain Executive Directors and senior managers, which is designed 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 provides 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 companies of the ISEQ general index. The Business
Performance Measure is set by the Remuneration Committee, as described below. The maximum award under the LTIP is 150% of base
salary. Under the rules of the scheme the maximum number of shares that can vest is 125% of the initial award. However, the Committee
determined that for awards since 2012, the maximum number of shares that will be capable of vesting is 100% of the awards
Under the terms of the Group’s LTIP an early vesting of an award may occur at the discretion of the Remuneration Committee on a change
of control of the Company. As at the reporting date, 1,303,384 shares (2013: 2,029,606 shares) are held as Treasury Shares 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. ALG Trustee is consolidated in the Group
accounts and the shares are shown in the statement of financial position as a deduction from the Group’s equity.
In February 2014, following the vesting of the awards granted under the 2011 cycle of the Group’s LTIP, the vested awards of participants
were settled which resulted in 1,513,613 treasury shares being issued to LTIP participants.
For awards issued in 2014, the Remuneration Committee set the Business Performance Measure which must be achieved in addition to the
TSR measure before any award can vest as positive cumulative EBITDAR (before exceptional items) of, or in excess of €100 million during
the performance period and positive EBITDAR as shown in the Company’s consolidated financial accounts in the final year of the
performance period (before exceptional items). Conditional awards granted under the Company’s LTIP in the year ended 31 December 2014
amounted to 4,204,963 ordinary shares (2013: 3,110,000). The share price was €1.33 (2013: €1.53) at the date of the award and fair value
was determined to be €0.84 (2013: €0.98).
Shares awarded under the Group’s LTIP are equity settled share based payments as defined in IFRS 2, Share Based Payments. IFRS 2
requires that a recognised valuation methodology be employed to determine the fair value of shares awarded and stipulates that this
methodology should be consistent with methodologies used for pricing of financial instruments. The expense of €1.9 million (2013: €3.2
million) reported in the income statement has been arrived at through applying a Monte Carlo simulation technique to model the
combination of market and non-market based performance conditions of the plan.