9 June 2014
Sports Direct International plc
2015 Bonus Share Scheme
Convening of General Meeting on Wednesday, 2 July 2014 at 10.00am
Sports Direct International plc ("Sports Direct" or the "Company"), the UK's leading sports retailer, announces that it has posted a circular to shareholders convening a general meeting for the purposes of seeking shareholder approval for the implementation of the 2015 Bonus Share Scheme. The General Meeting will be held at Unit A, Brook Park East, Shirebrook, NG20 8RY at 10.00am on Wednesday, 2 July 2014.
In December 2011, the Board stated its intention to seek shareholder approval for a share incentive scheme in which Mike Ashley, the Company's Executive Deputy Chairman, would be eligible to participate. This reflected the fact that Mike Ashley had received no remuneration for his substantial contribution to the Company since its initial public offering in February 2007, and that he is not a participant in the 2011 Executive Bonus Share Scheme (under which awards have been made to other executive directors).
In March 2014, the Board re-iterated this intention and a circular was posted to shareholders convening a general meeting on 4 April 2014 for the purposes of seeking approval for the implementation of a Supplemental Executive Bonus Share Scheme. In spite of securing support from some of its largest shareholders, Sports Direct announced on 2 April 2014: (i) its decision to withdraw the resolution to be voted on by shareholders on 4 April 2014; and (ii) its intention to seek shareholder approval for a 2015 Bonus Share Scheme (which would include a longer timeframe and more stretching performance targets).
Following feedback received from shareholders, the Board is proposing to implement the 2015 Bonus Share Scheme. All eligible employees (including executive directors) who meet the qualifying conditions and performance criteria as determined and agreed by the Remuneration Committee and the Board will be able to participate. The terms of the 2015 Bonus Share Scheme provide for the grant of nil-cost options over up to 25 million ordinary shares in the Company (amounting to approximately 4.2% of the issued share capital of the Company). The vesting of any options would be conditional upon the achievement by the Company of all the following EBITDA targets: (i) FY2016 of £480 million; (ii) FY2017 of £570 million; (iii) FY2018 of £650 million; and (iv) FY2019 of £750 million. If these performance targets are all met, 25% of any award would vest following the announcement of the Company's audited results for FY2019 in July 2019 and 75% of the award would vest following the announcement of the Company's audited results for FY2021 in July 2021.
Given their current eligibility to participate, the executive directors, including Mike Ashley, have informed the Board that they will not exercise their shareholder rights to vote on the resolution to approve the 2015 Bonus Share Scheme.
Separately, the Company has recently entered into a new four-year multi currency revolving credit facility, which includes a leverage covenant such that net debt to EBITDA shall not exceed 2.5 times during the term of the facility.
Commenting on the share scheme, Keith Hellawell, Sports Direct's Chairman said:
"Sports Direct's Employee Bonus Share Scheme is one of the most wide-reaching and successful employee reward schemes in the UK. The success of the scheme is demonstrated by the shareholder value created, with the share price reaching an all-time high in April this year and currently six times higher than when shareholders approved the 2009 Employee Bonus Share Scheme.
"The Board and the Remuneration Committee have responded to the feedback received from shareholders to develop a long-term share incentive scheme which not only will continue to motivate the Company's employees but which also recognises and rewards the substantial contribution made by Mike Ashley over many years. Based on the stretching performance targets established, this scheme has the potential to create a further substantial increase in shareholder value."
Further details of the 2015 Bonus Share Scheme, and of the General Meeting to be held on Wednesday, 2 July 2014 are contained in the Shareholder Circular which has been posted to shareholders and is available on the Company's website www.sportsdirectplc.com
The Group's Preliminary Results for FY2014 will be announced on 17 July 2014.
For further information, please contact:
Sports Direct International plc 0845 129 9229
Dave Forsey - Chief Executive
Jeff Blue - Director, Strategic Development
Powerscourt 020 7250 1446
Notes to Editors
Sports Direct is the UK's leading sports retailer by revenue and operating profit, with approximately 400 stores across the UK. The Group provides an unrivalled range of products, offering exceptional quality and unbeatable value, from a wide variety of third-party and Group-owned brands, both in-store and online. Sports Direct operates approximately 270 stores in 19 European countries, including Belgium, Austria, Slovenia, Portugal and France.
The Group has an extensive brand portfolio, comprising 28 internationally recognised sports, fashion and lifestyle brands including Dunlop, Slazenger, Everlast, Lonsdale and Karrimor.
Sports Direct was founded in 1982, listed on the London Stock Exchange in 2007 and is a constituent of the FTSE 100 index. For more information please visit www.sportsdirectplc.com.