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ANNUAL REPORT AND FINANCIAL STATEMENTS 2011 | 95


26. Share-based payments continued


(e) Thames River Capital Management Retention Plan (TRC MRP) The TRC MRP was one of the two new share plans established at the date of the TRC acquisition to retain and incentivise key professionals within the TRC Group. Awards of deferred shares vest three years after completion of the acquisition, subject to continued employment within the F&C Group or membership of one of the two TRC LLPs. The TRC MRP awards are not subject to any performance criteria. The TRC MRP includes good and bad leaver provisions.


The number of TRC MRP awards is as follows:


2011 No.


Outstanding at 1 January Granted during the year


Outstanding at 31 December


No awards were exercisable at either 31 December 2011 or 31 December 2010. At 31 December 2011 the following TRC MRP awards were outstanding:


Grant date 1 September 2010


No. of awards outstanding


21,312,209 Earliest exercise date 1 September 2013 The awards outstanding at 31 December 2011 have a weighted average outstanding term of 1.7 years (31 December 2010: 2.7 years).


(f) Thames River Capital Management Incentive Plan (TRC MIP) The TRC MIP is the second of two plans established at the date of the TRC acquisition to further incentivise TRC employees and members of the two TRC LLPs in the six-year period from the date of acquisition (Completion) on 1 September 2010.


Awards under the TRC MIP will vest upon achievements of specified financial targets as follows:


• 12.5% of the shares subject to awards will vest on the date falling 30 months following Completion provided that the Run-rate EBITDA of the TRC Group as at 31 December 2011 is £15.0m or more. If the Run-rate EBITDA is £12.5m or less, none of this tranche of shares will vest and the number of the shares that vest will increase on a linear basis if the Run-rate EBITDA falls between the two thresholds;


• 12.5% of the shares subject to awards will vest on the third anniversary of Completion provided that the Run-rate EBITDA of the TRC Group as at 30 June 2012 is £17.0m or more. If the Run-rate EBITDA is £15.0m or less, none of this tranche of shares will vest and the number of the shares that vest will increase on a linear basis if the Run-rate EBITDA falls between the two thresholds; and


• the remaining 75.0% of the shares subject to awards will vest in two equal instalments on each of the fifth and sixth anniversaries of Completion provided that the cumulative EBITDA of the TRC Group for the four-year period to 31 March 2014 is equal to £100.0m or more. If the cumulative EBITDA is equal to £60.0m or less, none of this tranche of shares will vest and the number of the shares that vest will increase on a linear basis if the Run-rate EBITDA falls between these two thresholds.


Vesting is subject in each case to continued employment within the F&C Group or membership of the relevant LLP (as the case may be). The terms of the TRC MIP includes good and bad leaver provisions, change of control provisions and a cash-settled element. In addition, participants in the TRC MIP will receive an additional cash payment (up to a maximum aggregate amount of £3.0m), payable at the time that shares are delivered and in proportion to the number of shares which vest.


The 31 December 2011 Run-rate EBITDA target was not met. The Directors also believe that none of the other financial targets are expected to be achieved and the cumulative charge has been reversed at 31 December 2011, but will be reinstated should the performance criteria be met. The number of TRC MIP awards is as follows:


2011 No.


Outstanding at 1 January Granted during the year


Outstanding at 31 December


No awards were exercisable at 31 December 2011 or 31 December 2010. At 31 December 2011 the following TRC MIP awards were outstanding:


Grant date


1 September 2010 1 September 2010 1 September 2010 1 September 2010


No. of awards outstanding


1,776,018 1,776,018 5,328,052 5,328,052


Earliest


exercise date* 1 March 2013


1 September 2013 1 September 2015 1 September 2016


* Assuming performance criteria satisfied. The awards outstanding at 31 December 2011 have a weighted average outstanding term of 3.5 years (31 December 2010: 4.5 years).


Exercise price


0.0p 0.0p 0.0p 0.0p


14,208,140


2010 No.


– – 14,208,140 14,208,140 14,208,140


Exercise price


0.0p 21,312,209


2010 No.


– – 21,312,209 21,312,209 21,312,209


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