MANAGEMENT and employees at Ryanair have been given options to buy shares under the flotation plan. Seven members of senior management at Ryanair were granted options to buy shares worth £1.4 million at the offer price, according to the flotation document:
The managers paid £1 each for their options and will pay 90 per cent of the offer price for each share they buy.
The managers involved are Mr Michael Cawley, Mr Howard Millar, Mr Conor McCarthy, Mr Tim Jeans, Mr Maurice O'Connor, Mr Brian Taylor and Mr Charles Clifton. Options cannot be exercised until May 2000 and must be exercised by May 2004.
Based on an offer price of 180p - the mid point in the 165p-195p target range for flotation - and a full take up of the options, some 864,197 shares would be issued under the management share option plan. The block of shares would represent 0.5 per cent of the enlarged share capital of the company.
The pathfinder document outlines a stock option plan for employees. Under this plan current or future full time employees who work at least 20 hours a week for the firm may be granted options to buy an aggregate of up to 5 per cent of the outstanding shares in Ryanair Holdings at the market price when the options are granted.
Options will be exercisable three years after the date of granting, if the company has achieved certain earnings performance criteria. The main criterion is that, between the financial year prior to the granting of the option and the financial year before that option is exercised, the cumulative compound increase in earnings per share must be 2 per cent more than the cumulative compound increase in the consumer price index.
Options must be exercised within 10 years and there are provisions that the company can make loans to employees to help them to participate in the scheme.
Executive directors must work at least 25 hours a week to qualify. The remuneration committee will nominate the employees and executive directors who will be invited to take part in the scheme.
Consultancy agreements between Ryanair and some of its directors are also set out in the flotation documents. Under a three year contract from April 1st, 1997, Mr Ray MacSharry will be paid £50,000 a year plus travel and expenses for advisory and consultancy services.
The amount of payment is subject to review if Mr MacSharry has to spend more time on Ryanair work than was anticipated at the time the contract was agreed.
A former Minister for Finance (in 1982 and in 1987 to 1988), Mr MacSharry was EU Commissioner for Agriculture from 1989 to 1993 and is a director of the Bank of Ireland, Jefferson Smurfit Group and Green Property and nonexecutive chairman of London City Airport. He was a consultant to Ryanair from 1993 to 1996.
Director Mr James Osborne has a three year consultancy contract from August 23rd 1996 providing annual compensation of £24,000 plus travel and other expenses. He has agreed to provide assistance on corporate finance negotiations and reviewing and assessing strategic options.
Under another agreement dated February 7th 1997, Mr Osborne acquired 625,000 shares at a total cost of £25,000. At the mid price in the flotation target range this block of shares would be worth £1.13 million.
Mr Osborne joined the Ryanair board in April, 1995. He is a former managing partner of law firm A & L Goodbody and is now a consultant to the firm. He is a director of Golden Vale and Town and County Investments.
Letters of agreement, dated May 1997, with directors Mr David Bonderman, Mr Richard Schifier, Mr Jeremy Shaw, Mr Declan Ryan, Mr Cathal Ryan and Mr Tony Ryan, show that the directors have waived their entitlement to annual fees of £25,000 each for the years to end March 1997 and 1988.
Letters dated May 1997 executed by Mr Declan Ryan, Mr Cathal Ryan and Mr Michael O'Leary confirm cancellation of the executive directors' performance incentive bonus scheme, under which £24 million was paid out over three years.
The flotation document shows that Mr Cathal Ryan is no longer an executive director of Ryanair but remains on the company board.
