REG - Devolver Digital - LTIP Adoption, Grant of Awards and PDMR Dealing

Devolver DigitalAnnouncement

16/12/2022 07:00

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RNS Number : 9189J  Devolver Digital, Inc.  16 December 2022

16(th) December 2022

Devolver Digital, Inc.

("Devolver Digital", "Devolver" or the "Company", and the Company together
with all of its subsidiary undertakings "the Group")

LTIP Adoption, Grant of Awards and PDMR Dealing

Devolver Digital, an award-winning digital publisher and developer of
independent ("indie") video games, is pleased to announce the terms of a
long-term incentive plan for its senior leadership and group employees charged
with delivering on the Group's strategic objectives for the three years to end
2024 (the "2022 LTIP"). This follows the outcome of a Special Meeting held on
December 12, 2022 where shareholders voted in favour of the two resolutions
within the Shareholder Circular, which was distributed to all shareholders of
record. The resolutions approved the adoption of the LTIP plan and rules, as
well as grants to be made in 2022 under the plan.

The 2022 LTIP is designed to reward employees at all levels of the Company for
performance that delivers value for shareholders, through the award of
long-term incentive shares ("LTIP Shares"). The Remuneration Committee, made
up entirely of Independent Non-Executive Directors, worked with independent
consultants Alvarez and Marsal throughout the development of the LTIP.

All LTIP Shares awarded to management are subject to a three-year cliff
vesting period from the date of award, with a two-year cliff vesting period
for all other employees. The LTIP Shares are made up of Performance Stock
Units ("PSUs"), award of which are, amongst other things, subject to achieving
ambitious financial targets, and Restricted Stock Units ("RSUs"), award of
which are, amongst other things, subject to certain performance criteria for
management and senior employees. In addition to the above, a grant of shares
was recommended for the CEO and CFO, and a grant of RSUs was recommended to a
small employee cohort who have joined the company since IPO.

The Remuneration Committee recommended the following 2022 grants to the Board,
laid out in the tables below. These initial 2022 awards granted under the 2022
LTIP plan will amount to, in aggregate, 7,913,563 shares (on the assumption
that all vest), representing 1.8 per cent. of the issued and outstanding share
capital. Total dilution from the outstanding options (i.e. excluding options
previously exercised within the EBT) and these initial grants would therefore
amount to 10.5 per cent. of the issued and outstanding share capital.

The following awards have been made to Directors of the Company:

 Number of shares
 Director/PDMR      Position  RSUs        PSUs     Other Stock or Cash-Based Awards  Total
 Douglas Morin      CEO       154,454     308,908  338,893                           802,255
 Daniel Widdicombe  CFO       119,684     239,368  354,498                           713,550
 Total                        274,138     548,276  693,391                           1,515,805

 

The following awards have been made to other management and employees of the
Group:

 

 Number of shares
 Category                               RSUs       PSUs       Other Stock or Cash Based Awards  Total
 Other management and senior employees  1,609,304  2,757,417  -                                 4,366,721
 Other employees and contractors        2,031,036  -          -                                 2,031,036
 Total                                  3,640,340  2,757,417  -                                 6,397,757

 

For the majority of the grants, the effective date for the award of these LTIP
shares would be 1st January 2022, i.e. shares with a two-year cliff will vest
on 31st December 2023. In addition to the two-year and three-year cliffs for
vesting, the LTIP shares are subject to a range of further vesting conditions
specified at the time of award, and likewise will lapse if these conditions
are not met. For the PSUs, these include the following performance conditions:

(i)    the attainment of specified Group revenue targets at the end of a
three-year period, and;

(ii)   the attainment of specified Group EBITDA targets at the end of a
three-year period.

The Company has set challenging financial targets (based upon EBITDA and
revenue metrics) for the PSUs, based upon the Group's internal budgets.
Targets are based on organic growth only and exclude any potential M&A
uplift. The PSUs only begin to be earned once 90% of 2024 Revenue and EBITDA
targets are achieved, and management need to deliver 110% of the target to
realise the full award.

The metrics in the table below apply to actual 2024 Group performance versus
the prescribed targets for revenue and EBITDA in 2024:

 Metric   Weighting  0% Vesting (Below threshold)   12.5% Vesting   50% Vesting (Target)  100% Vesting (Maximum)
 Revenue  50%        <90% of target                90% of target    Target                110%+ of target
 EBITDA   50%        <90% of target                90% of target    Target                110%+ of target

 

The RSUs for senior management, including the CEO and CFO, require at least
60% of the 2024 EBITDA target to be achieved in order for any LTIP Shares
awarded under the 2022 grant to vest. 2024 EBITDA performance below this
target level will result in all the 2022 RSU grants for senior management
lapsing. For other management and senior employees, this only applies to 50%
of their RSU grant. These targets do not apply for all other employee grant
recipients.

Of the 3,640,341 RSUs awarded to other management and other employees,
1,130,566 RSUs relate to the grant to the cohort of employees who have joined
the company since IPO. These RSUs vest on a quarterly basis over 3 years with
an effective date for award between 31st December 2021 and 30th September
2022.

The RSU and PSU share grants for management and senior employees, including
Douglas Morin (CEO) and Daniel Widdicombe (CFO) are made up of PSUs (2/3)
and RSUs (1/3), with the number of shares to be awarded calculated using a
notional price of £1.20 (86% higher than the current share price of £0.65,
to reflect the currently depressed share price) and need to be held for three
years before vesting. The award for Douglas Morin (CEO) is 154,454 RSUs and
308,908 PSUs to a total of 463,362 LTIP Shares. The award for Daniel
Widdicombe (CFO) is 119,684 RSUs and 239,368 PSUs to a total of 359,052 LTIP
Shares.

The Remuneration Committee also recommended in the first half of 2022 that
Douglas Morin (CEO) and Daniel Widdicombe (CFO) should be awarded 338,893 and
354,498 common shares of $0.0001 each ("IPO Award Shares") respectively in
recognition of their contribution to the successful listing of the Company in
2021. These are included in the above table as Other Stock or Cash-Based
Awards. There are no performance, vesting or other conditions attached to
these shares. These shares will be issued on a net settlement basis, where
value of the shares received is equal to the post-tax (i.e. net) value that
would have been received on a sell-to-cover basis, had all the shares been
issued but some sold immediately to cover the income taxes and social security
taxes due. This reduces the number of shares issued and resulting dilution. On
a net-settled basis, Douglas Morin (CEO) will be awarded 267,174 common
shares, and Daniel Widdicombe (CFO) will be awarded 187,884 common shares.

The cohort of employees who have joined the company since IPO will also
receive net-settled shares for the already-vested first four or fewer
quarters, where applicable, of the 3-year vesting period. The total
net-settled share amount is 166,840 shares. Taken together with the CEO and
CFO net-settled IPO Award Shares, the total number of shares to be immediately
issued is 621,898 shares.

It should be noted that the co-founders of Devolver who are fully employed at
the company, including Executive Chairman Harry Miller, without exception,
declined to receive any share awards under the 2022 LTIP.

Further information regarding the LTIP Shares and the Group's remuneration
framework will be set out in the Group's annual report for the year ending 31
December 2022.

Devolver has made application to the London Stock Exchange for the issue of
securities in respect of 621,898 new common shares to be admitted to trading
on AIM in relation to the IPO Share Awards and it is expected that admission
will become effective on or around 21 December 2022. Following the admission
of the new common shares, the Company's issued share capital will comprise
444,384,250 common shares and may be used by shareholders in the Company as
the denominator for the calculations by which they will determine if they are
required to notify their interest in, or a change in their interest in, the
share capital of the Company under the FCA's Disclosure Guidance and
Transparency Rules.

Enquiries:

 

 Devolver Digital, Inc.                                         ir@devolverdigital.com (mailto:ir@devolverdigital.com)

 Harry Miller, Executive Chairman

 Douglas Morin, Chief Executive Officer

 Daniel Widdicombe, Chief Financial Officer

 Zeus (Nominated Adviser and Sole Broker)                       +44 (0)20 3829 5000

 Nick Cowles, Jamie Peel, Matt Hogg (Investment Banking)

 Ben Robertson (Equity Capital Markets)

 FTI Consulting (Financial PR)                                  devolver@fticonsulting.com (mailto:devolver@fticonsulting.com)

 Jamie Ricketts / Dwight Burden / Valerija Cymbal / Usama Ali   +44 (0)20 3727 1000

 

Devolver Digital overview

 

Devolver Digital is an award-winning video games publisher in the indie games
space with a balanced portfolio of third-party and own-IP. The Company has an
emphasis on premium games and has a back catalogue of over 100 titles, with
more than 30 titles in the pipeline. Through recent acquisitions, Devolver now
has its own-IP franchises, in-house studios developing first-party IP and two
publishing brands. The Company is registered in Wilmington, Delaware, USA.

 

 

The notification set out below is provided in accordance with the requirements
of Article 19 of the UK Market Abuse Regulation.

 

Notification and public disclosure of transactions by persons discharging
managerial responsibilities and persons closely associated with them.

 

 1.    Details of the person discharging managerial responsibilities/person closely
       associated
 a)    Name                                                           Douglas Morin
 2.    Reason for the notification
 a)    Position/status                                                CEO
 b)    Initial notification/Amendment                                 Initial notification
 3     Details of the issuer, emission allowance market participant, auction
       platform, auctioneer or auction monitor
 a)    Name                                                           Devolver Digital, Inc.
 b)    LEI                                                            213800PRI1918XI2H813
 4     Details of the transaction(s): section to be repeated for (i) each type of
       instrument; (ii) each type of transaction; (iii) each date; and (iv) each
       place where transactions have been conducted
 a)    Description of the financial instrument, type of instrument    Common stock par value of $0.0001

       Identification code

                                                                      ISIN: USU0858L1036
 b)    Nature of the transaction                                      Grant of Stock and Stock Units
 c)    Price(s) and volume(s)                                          Price(s)                        Volume(s)

                                                                       Nil consideration        154,454 RSUs

                                                                       Nil consideration.        308,908 PSUs

                                                                       Nil consideration         267,174 IPO Award Shares

 d)    Aggregated information                                         Price                              Volume

                                                                       Nil consideration        730,536
 e)    Date of the transaction                                        12(th) December 2022
 f)    Place of the transaction                                       London Stock Exchange, AIM

 1.    Details of the person discharging managerial responsibilities/person closely
       associated
 a)    Name                                                           Daniel Widdicombe
 2.    Reason for the notification
 a)    Position/status                                                CFO
 b)    Initial notification/Amendment                                 Initial notification
 3     Details of the issuer, emission allowance market participant, auction
       platform, auctioneer or auction monitor
 a)    Name                                                           Devolver Digital, Inc.
 b)    LEI                                                            213800PRI1918XI2H813
 4     Details of the transaction(s): section to be repeated for (i) each type of
       instrument; (ii) each type of transaction; (iii) each date; and (iv) each
       place where transactions have been conducted
 a)    Description of the financial instrument, type of instrument    Common stock par value of $0.0001

       Identification code

                                                                      ISIN: USU0858L1036
 b)    Nature of the transaction                                      Grant of Stock and Stock Units
 c)    Price(s) and volume(s)                                          Price(s)                        Volume(s)

                                                                       Nil consideration        119,684 RSUs

                                                                       Nil consideration        239,368 PSUs

                                                                       Nil consideration        187,884 IPO Award Shares

 d)    Aggregated information                                         Price                              Volume

                                                                       Nil consideration        546,936
 e)    Date of the transaction                                        12(th) December 2022
 f)    Place of the transaction                                       London Stock Exchange, AIM

 

 

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