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Fulcrum Utility Services - Implementation of Long Term Incentive Plan

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Fulcrum Utility Services Limited

("Fulcrum" or the "Company")

Implementation of Long Term Incentive Plan

The Company announces the implementation of a new Long Term Incentive Plan ("LTIP") for certain of the executive management team to ensure the appropriate ongoing incentivisation of the new executive management team.

Participants in the scheme have been issued growth shares ("Growth Shares") in a subsidiary company, Fulcrum Group Holdings Limited, which may be exchanged for new ordinary shares in Fulcrum ("New Ordinary Shares") in future, subject to meeting certain conditions and performance criteria as set out below. The Growth Shares do not carry any voting rights nor entitlement to any dividend. The Growth Shares have a vesting period that will end on the date of the announcement of the Group's results for the financial year ending 31 March 2025. A total of 95,000 Growth Shares have been awarded under the Scheme, as follows:

Name

Job Title

Number of Growth Shares issued

Terry Dugdale

Chief Executive Officer

40,000

Jenny Cutler

Chief Financial Officer

18,000

Andy Hirst

Group Business Development Director

12,000

Tim Houtby

Smart Metering Director

10,000

Mark Bayliss

Operations Director

10,000

Jo Thompson

Director of People & Culture

5,000

Total

 

95,000

 

Performance criteria and vesting criteria

The key performance hurdle requires a base share price achievement of at least 52.5 pence per share (calculated as an average of the 40 preceding trading days), immediately prior to the vesting date. Participants will realise no value from the scheme unless the total shareholder return ("TSR"), calculated as share price appreciation adjusted for dividend payments per share, exceeds this level at the end of the vesting period.

Above this TSR level participants will share a percentage of the TSR gain from a baseline of 26.25 pence per share, representing the tender price offered to Shareholders in early 2020.

The percentage of total TSR gain above 26.25 pence to be distributed amongst participants will be 2.75% at a TSR of 52.5 pence per share, rising to 6.25% at a TSR of 105 pence per share. This would result in a potential issue of between 3,054,122 New Ordinary Shares up to a maximum of 10,411,779 New Ordinary Shares. In the event that the New Ordinary Shares are issued to participants, following conversion of Growth Shares the total value of these shares would be between £1.6 million (from a minimum TSR gain of £58.3 million) to £10.9 million (from a maximum TSR gain of £174.9 million). The maximum number of 10,411,779 New Ordinary Shares which could be issued following vesting represents approximately 4.69% of the Company's issued share capital.

In the event that the Company's share price reaches 105 pence per share during the vesting period (based on an average of the 40 preceding trading days) then the scheme will vest immediately and the participants will realise value for their growth shares at the maximum level.

Upon exchange of Growth Shares for New Ordinary Shares, participants will be subject to a one-year lock in period, subject to the limited exceptions of a) selling sufficient shares to meet any tax liability and b) up to 10% of their New Ordinary Shares without restrictions.

The scheme contains appropriate provisions for good and bad leavers.

The implementation of the LTIP comprises a related party transaction under Rule 13 of the AIM Rules for Companies.  The independent directors of Fulcrum, which for the purposes of this related party transaction comprise all board members other than Terry Dugdale, consider, having consulted with Fulcrum's nominated adviser, that the terms of the transaction are fair and reasonable insofar as Fulcrum's shareholders are concerned.