Director/PDMR Shareholding

Director/PDMR Shareholding

Centrica PLC

7 April 2010

This announcement gives details of share awards and releases, and other transactions in Centrica shares, by Executive Directors and other Persons Discharging Managerial Responsibility (PDMRs). It covers the conversion into shares of the part of 2009 bonuses compulsorily deferred, and additional voluntary investment by Executive Directors and other PDMRs in Centrica shares. The announcement also details conditional awards of shares under the Company's long term incentive plans that, subject to performance, may vest in three years time. Finally the announcement covers the release of awards made three years ago and the exercise of some historic share options.

All Executive Directors and PDMRs have maximised their voluntary investment in the business and have increased their overall shareholding in the Company.

Centrica announces the following transactions in respect of its ordinary shares of

6 ^14/81 pence each by its Executive Directors and PDMRs.

1) Deferred and Matching Share Scheme (DMSS)

On 6 April 2010, the trustee of the DMSS purchased a total of 1,313,723 Centrica ordinary shares of 6 ^14/81 pence each at 297.36p and allocated matching shares to Executive Directors and PDMRs, as detailed below:

Executive Directors	Â	Total number of deferred shares acquired in DMSS (1)	Â	Total number investment of shares acquired in DMSS (2)	Â	Number of conditional matching shares allocated (3)
Phil Bentley		85,921		40,824		310,228
Mark Hanafin		70,185		37,459		267,349
Sam Laidlaw		203,579		43,280		553,869
Nick Luff		75,005		39,079		282,481
Chris Weston		-		42,014		252,216
PDMRs		Â		Â		Â
Grant Dawson		40,765		20,591		151,330
Catherine May		30,260		13,812		107,340
Anne Minto		40,631		18,051		142,451
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⁽¹⁾ A percentage of gross bonus (before the deduction of income tax and National Insurance contributions) was automatically deferred and, with the exception of the amount deducted for Chris Weston, invested in Centrica shares. Sam Laidlaw, the other Executive Directors and PDMRs were subject to 40% and 30% of deferral of gross bonus, respectively. For Chris Weston, who is based in Toronto, no deferred shares have been acquired as, for local tax reasons, only a notional entitlement of 54,898 shares has been allocated and this is not included above.

⁽²⁾ Participants had the opportunity to make a further voluntary investment, funded from net annual performance bonus, so that the maximum total investment (on a gross basis) was 50% of the individual’s maximum bonus entitlement for 2009. Each Executive Director and PDMR has made the maximum voluntary investment under the terms of the DMSS. For Sam Laidlaw, Mark Hanafin, Nick Luff, Catherine May and Anne Minto, investment shares included above were acquired in accordance with trading plans entered into on 25 March 2010, 15 December 2009, 25 March 2010, 18 December 2009 and 10 December 2009 respectively.

⁽³⁾ The allocations of conditional matching shares have been structured as nil cost options (except for Chris Weston whose matching shares have been allocated as conditional awards due to local tax reasons) and made on a gross basis. Investment shares are grossed up for the calculation of the matching shares so that the deferred and investment shares are matched on the same basis.

The number of matching shares that vest will be determined on a straight-line basis over a three-year period. The maximum two for one match will be achieved for Group Economic Profit (EP) growth of 25% or more with zero matching for no growth, measured on a point-to-point basis.

2) Long Term Incentive Scheme (LTIS) allocations

On 6 April 2010 conditional allocations of ordinary shares in the Company were made by the trustee of the LTIS to the following Executive Directors and other PDMRs:

Executive Directors	Â	EPS shares	Â	TSR shares	Â	Total number of shares in conditional allocation
Phil Bentley		215,064		215,065		430,129
Mark Hanafin		194,743		194,744		389,487
Sam Laidlaw		321,750		321,750		643,500
Nick Luff		206,597		206,598		413,195
Chris Weston		172,729		172,729		345,458
PDMRs		Â		Â		Â
Grant Dawson		100,335		100,335		200,670
Catherine May		58,423		58,423		116,846
Anne Minto		77,262		77,262		154,524
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The allocation price for calculating the number of shares was 295.26p, being the average closing share price over the five business days immediately preceding the allocation date of 6 April 2010.

The conditional allocations shown above have been structured as nil cost options (with the exception of Chris Weston who was allocated a conditional award due to local tax reasons) and represent the maximum potential award possible if all the performance criteria are met at the end of the three-year performance period. If and to the extent that the performance criteria are satisfied at the conclusion of the performance period, the relevant number of shares will be transferred to executives at the trustee’s discretion.

The percentage of the allocation eventually to vest is dependent on the satisfaction of performance criteria over a three-year performance period commencing on 6 April 2010:

50 % on EPS growth against RPI growth	Â	Full vesting for Earnings Per Share (EPS) growth exceeding RPI growth by 30%. Zero vesting if EPS growth fails to exceed RPI growth by 9%. Vesting will increase on a straight-line basis between 25% and 100% if EPS growth exceeds RPI growth by between 9% and 30%.
50 % on TSR percentage out- performance of the FTSE 100 index		Full vesting if Total Shareholder Return (TSR) out performs the TSR of the FTSE 100 index by 7% or more per year. Zero vesting if the TSR out performance is less than 0.1%. Vesting will increase on a straight-line basis between 25% and 100% for out performance of the TSR of the FTSE 100 index of between 0.1% and 7% per annum.
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3) Grant of Sharesave Options

On 6 April 2010, options were granted at an option price of 228.16p per share to Phil Bentley, Sam Laidlaw and Catherine May under the terms of the Centrica Sharesave Scheme. Each was granted an option over 3,977 shares which will be exercisable between 1 June 2013 and 30 November 2013.

4) Share Incentive Plan (SIP)

The SIP trustee, Equiniti Share Plan Trustees Limited (the “Trustee”), notified the Company on 6 April 2010 that:

(a) The following Executive Directors and other PDMRs for the Company acquired Shares under the SIP on 1 April 2010 held through the Trustee:

	Number of shares acquired*
Executive Directors
Phil Bentley	64
Sam Laidlaw	63
Nick Luff	64
Chris Weston	64
Mark Hanafin	63
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PDMRs
Grant Dawson	63
Catherine May	64
Anne Minto	63

* The ‘Number of shares acquired’ includes 42 Partnership shares acquired at 295.00p per share (43 Partnership shares for Phil Bentley, Nick Luff, Chris Weston and Catherine May with a higher residual balance) and 21 Matching shares acquired at 295.00p per share. Both Partnership and Matching elements are registered in the name of the Trustee.

(b) The Trustee had transferred 15,000 Shares from Equiniti Corporate Nominees Limited AESOP1 (Allocated shares) to Equiniti Corporate Nominees Limited AESOP2 (Unallocated shares). The transfer was made following the forfeiture of shares, under the rules of the SIP, by participants who have left the Group since the last purchase and the shares had been used towards the April allocation of Matching shares.

The SIP is made available to all UK employees and operates as follows:

• Each month the Trustee uses participants' contributions (which may not exceed £125 per participant per month) to purchase shares in the market. These shares are called ‘Partnership Shares'.
• At the same time the Company allots to participants via the Trustee one ‘Matching Share' for every two Partnership Shares purchased that month (up to a maximum of 22 Matching Shares per month).
• Participants may change their monthly savings rate whenever they wish. However, Directors and others bound by the Company's Securities Dealing Code (the "Code") may not make such a change during a close period or when otherwise prohibited from dealing by the Code.

5) Release and sale of shares from the Deferred and Matching Share Scheme (DMSS)

On 4 April 2010, a total of 3,852,264 Centrica ordinary shares of 6 ^14/81 in respect of shares acquired and conditional matching shares held under the terms of the DMSS were transferred to participants including four Executive Directors and three other PDMRs. The conditional matching shares were subject to an EP performance condition ⁽⁴⁾ and achieved 100% vesting. In accordance with the terms of the DMSS the number of shares released was increased to reflect the dividends that would have been paid on the matching shares during the three-year performance period and were released by the trustee of the DMSS on 4 April 2010. This is the first release of shares under the DMSS since the scheme began operating in 2007.

On release sufficient shares were withheld for each participant to meet their income tax and National Insurance liabilities. In accordance with trading plans entered into on 25 March 2010, 25 March 2010 and 23 March 2010 respectively, Nick Luff, Grant Dawson and Anne Minto sold additional shares released to them. All the shares were sold on 6 April 2010 at 296.94p.

The specific details of the release and disposals relating to the Executive Directors and other PDMRs are as follows:

Executive Directors	Â	Total number of shares released	Â	No of shares sold for tax/NI	Â	No of shares sold (5)	Â	Net number of shares transferred to participant
Phil Bentley		302,400		106,990		-		195,410
Sam Laidlaw		462,377		149,841		-		312,536
Nick Luff		284,896		88,724		127,268		68,904
Chris Weston		114,040		46,451		-		67,589
PDMRs		Â		Â		Â		Â
Grant Dawson		148,985		52,934		96,051		-
Catherine May		27,563		9,405		-		18,158
Anne Minto		146,159		50,485		95,674		-
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⁽⁴⁾ As at 31 December 2009, Centrica’s cumulative EP growth over the three-year performance period was 44% and as a result the conditional matching shares vested in full on a two for one basis.

⁽⁵⁾ As explained above, further share sales were affected in accordance with trading plans.

6) Release and sale of shares from the Long Term Incentive Scheme (LTIS)

On 4 April 2010, a total of 3,168,149 Centrica ordinary shares of 6 ^14/81 pence each in respect of awards made under the terms of the LTIS in April 2007 were transferred to participants, including four Executive Directors and three other PDMRs. These awards were subject to EPS and TSR performance conditions ⁽⁶⁾ and achieved an overall vesting of 49.5% for Phil Bentley, Sam Laidlaw and Nick Luff and 50% for Chris Weston, Grant Dawson, Catherine May and Anne Minto. In accordance with the terms of the LTIS the number of shares released was increased to reflect the dividends that would have been paid during the three-year performance period and were released by the trustee of the LTIS on 4 April 2010.

On release sufficient shares were withheld for each participant to meet their income tax and National Insurance liabilities. In accordance with trading plans entered into on 25 March 2010, 25 March 2010, 25 March 2010 and 23 March 2010 respectively, Nick Luff, Chris Weston, Grant Dawson and Anne Minto sold the remaining shares released to them. All the shares were sold on 6 April at 296.94p.

The specific details of the release and disposals relating to the Executive Director and other PDMRs are as follows:

Executive Directors	Â	Total number of shares released	Â	No of shares sold for tax/NI	Â	No of shares sold (7)	Â	Net number of shares transferred to participant
Phil Bentley		186,395		76,567		-		109,828
Sam Laidlaw		289,489		118,915		-		170,574
Nick Luff		174,232		71,570		102,662		-
Chris Weston		73,601		30,234		43,367		-
PDMRs		Â		Â		Â		Â
Grant Dawson		75,156		30,873		44,283		-
Catherine May		53,281		21,887		-		31,394
Anne Minto		70,697		29,041		41,656		-
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⁽⁶⁾ As at 31 December 2009 Centrica’s EPS growth had exceeded RPI growth by 39% and as a result 99.1% and 100% respectively of the EPS shares allocated vested. On 3 April 2010, Centrica was ranked 52^nd in the LTIS comparator group and as a result zero TSR shares allocated vested.

In respect of three quarters of the EPS shares allocated to the Executive Directors in post at the date of allocation, and all of the EPS shares allocated to the other participants at the time of allocation, the maximum allocation of such EPS shares only vests if the Company’s growth in EPS exceeds RPI growth by 30% or more. A more stretching EPS target was set in respect of the balance of one quarter of EPS shares allocated to the Executive Directors. This required the Company’s growth in EPS to exceed RPI growth by 40% or more for full vesting.

The maximum allocation of TSR shares only vests if the Company’s TSR over the performance period is ranked in the upper quintile of the FTSE 100 comparator group. No shares vest if the TSR over the performance period is ranked below median. If Centrica’s ranking is median 25% of the allocation vests. Between upper quintile and median, shares vest on a straight-line basis between 25% and 100%.

⁽⁷⁾ As explained above, further share sales were affected in accordance with trading plans.

7) Exercise of Executive Share Options (ESOS) and sale of shares

The Company was notified on 6 April 2010 that:

(a) In accordance with his trading plan entered into on 25 March 2010, on 1 April 2010 Phil Bentley exercised a total of 2,749,588 options that had been awarded to him in May 2001, April 2002, March 2003, March 2004, March 2005 and April 2006 under the terms of the ESOS. After shares were sold to satisfy the payment of the exercise prices of 213.70p, 200.12p, 130.50p, 199.36p, 203.55p and 253.80p respectively, and income tax and National Insurance liabilities, the balance of 541,403 shares was retained by Mr Bentley. All of these transactions were carried out on 1 April at a price of 292.50p.

(b) In accordance with his trading plan entered into on 25 March 2010, on 1 April 2010 Grant Dawson exercised a total of 233,970 options that had been awarded to him in May 2001. After shares were sold to satisfy the payment of the exercise price of 213.70p and income tax and National Insurance liabilities, the balance of 38,350 shares were sold on behalf of Mr Dawson. All of these transactions were carried out on 1 April at a price of 292.50p.

8) Current Share Interests

Following the share transactions set out above, the Executive Directors and other PDMRs retain an interest in the share capital of the Company as follows:

Executive Directors’ and PDMRs’ interests in shares

Â	Â	Aggregate number of ordinary shares of 6 14/81p held including those acquired under DMSS and SIP	Â	LTIS – total conditional allocations	Â	DMSS – total matching shares allocated
Executive Directors		Â		Â		Â
Phil Bentley		2,181,400		1,408,432		588,285
Mark Hanafin		318,761		1,229,137		599,594
Sam Laidlaw		1,824,690		2,129,974		1,707,182
Nick Luff		623,952		1,322,949		865,804
Chris Weston*		497,355		1,043,752		652,367
PDMRs		Â		Â		Â
Grant Dawson		418,142		678,471		395,057
Catherine May		202,890		426,450		274,818
Anne Minto		454,379		565,391		462,788
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*As explained above, Chris Weston holds a notional allocation of 54,898 deferred shares which are not included in the above table.

Executive Directors’ and PDMRs’ interests in options

Â	Â	ESOS – options vested but not exercised	Â	Sharesave options
Executive Directors		Â		Â
Phil Bentley		-		7,620
Mark Hanafin*		-		4,727
Sam Laidlaw		-		7,620
Nick Luff		-		7,392
Chris Weston		630,816		4,727
PDMRs		Â		Â
Grant Dawson		275,800		7,392
Catherine May		-		3,977
Anne Minto		283,815		4,727

* Mark Hanafin holds a vested option over 336,012 shares under the terms of the Special Executive Share Option Scheme (SESOS).

Further information on the operation of the schemes including details on performance conditions are provided in the 2009 Annual Report and Accounts of the Company.