IGAS Energy : 25/07/2014 Notification of Transactions of Directors

25 July 2014

IGas Energy Plc

("IGas" or the "Company")

Notification of Transactions of Directors/Persons Discharging Managerial Responsibility and Connected Persons

The Board of IGas believes that the incentive arrangements for the Executive Directors should be focussed on significant long-term value creation through the delivery of shareholder returns in order to closely align the interests of Executive Directors with those of shareholders.

As a result, the Company announces the grant of nil cost options under the Company's Long Term Incentive Plan adopted in 2011 ("LTIP") and the grant of performance units under the Company's 2014 Value Creation Plan adopted by the Board of Directors on 24 July 2014 ("VCP") to Executive Directors.

LTIP nil cost option awards under 2011 LTIP

Pursuant to the LTIP Annual Awards have been made and the following number of nil cost options granted to each of the Executive Directors on 25 July 2014:

The above awards will normally vest at the end of a three year performance period provided the Company's share price return (adjusted for any corporate activity including dividends) over the period from 1 April 2014 to 31 March 2017 is in excess of 10% compounded per annum, equating to the company's internal weighted average cost of capital ("WACC"), and provided that the relevant Executive Director remains in employment of the Company until 31 March 2017. The nil cost options will be exercisable until the tenth anniversary of grant.

VCP performance unit awards

To recognise the changing requirements of the business and to support the achievement of IGas' growth objectives over the medium to long term, a new long-term incentive structure was introduced for Executive Directors in the form of the VCP. The structure of the VCP has been designed by the Remuneration Committee in conjunction with external remuneration advisors, such that participants will only benefit if significant value is delivered to shareholders. Its implementation serves to ensure that:

·      Executive Directors, who are critical to executing the business strategy and driving value for shareholders, are appropriately attracted, retained and motivated;

·      The reward structure supports the Company's strategy over its next phase of development and is heavily weighted towards shareholder value creation over the longer term;

·      The interests of Executive Directors are closely aligned with those of shareholders; and

·      Executive Directors are provided with an appropriate opportunity to earn levels of reward provided significant returns are delivered to shareholders.

On 25 July 2014, the Executive Directors were granted the following awards over performance units under the VCP:

No payment has been made for the grant of these awards and the Performance Units have no value at grant.

Performance Units will convert into a number of ordinary shares (in the form of nil cost options) at the "Measurement Date" (31 March 2017 or earlier in the event of a change in control). Provided that the Company's share price achieved at the Measurement Date ("Measurement Price") is above a "Threshold Price", participants will be entitled to share 12.5% of the value created for shareholders ("Value Created") at the Measurement Date. The number of nil cost options into which the Performance Units will convert will be determined by dividing the Value Created by the Measurement Price.

·      "Measurement Price" is defined as the average of the share price for the 30 calendar days prior to and ending on the day before the Measurement Date; or, in the event of a change in control, the value of the consideration offered by the person acquiring control.

·      "Threshold Price" translates to 10% compounded annualised share price growth from 31 March 2014.

·      "Value Created" is the difference between the Measurement Price and the Threshold Price multiplied by the number of shares in issue at the grant date of the Performance Units, adjusted to reflect new shares issued in association with the proposed acquisition of Dart Energy Limited or such other corporate events which might arise prior to the Measurement Date.

Provided that the Executive Director is in employment of the Company at each of the following vesting dates, 50% of the nil cost options earned at the Measurement Date will vest on the Measurement Date and 25% will vest on each of the first and second anniversaries of the Measurement Date. In the event of a change in control all unvested nil cost options will vest on the date of the change in control. All outstanding nil cost options have to be exercised by 31 March 2022.

Furthermore, as part of the plan Executive Directors are required to build up a shareholding equal to 300% of base salary in the case of the Chief Executive Officer and 200% of base salary in the case of all other participants. Any vested options or shares will be counted towards the shareholding requirement on a post-tax basis. The Executive Directors will be required not to dispose of any shares acquired through the exercise of their nil cost options if it would result in the preceding shareholding requirements not being met.