23.- LONG-TERM INCENTIVE PLAN

On 25 June 2013, the Company’s General Shareholders Meeting approved a long-term share-based incentive plan (“the plan”) for the NH Hotel Group S.A.’s executives and employees, as follows:

The plan will consist of the grant of ordinary shares of NH Hotel Group, S.A. to the beneficiaries calculated as a percentage of the fixed salary, according to their level of responsibility. The number of shares to be granted shall be subject to the degree of fulfilment of the following objectives:

• TSR (total shareholder return) at the end of each of the plan cycles, comparing the performance of NH Hotel Group, S.A. shares with the following indices:
  • IBEX Medium Cap
  • Dow Jones Euro Stoxx Travel & Leisure
• EB ITDA, discounting the amount corresponding to rentals compared annually with the forecasts of the Company’s strategic plan.

If the minimum degree of fulfilment established in the aforementioned objectives is not achieved, the plan beneficiaries shall not be entitled to shares under said plan.

The plan is aimed at a maximum of 100 beneficiaries. The Board of Directors, at the proposal of the CEO, may include new members in the plan.

The plan has a total duration of five years, divided into three three-year cycles:

• The first cycle began on 1/1/2014 with delivery of shares in 2017 (settled)
• The second cycle began on 1/1/2015 with delivery of shares in 2018 (in force)
• The third cycle began on 1/1/2016 with delivery of shares in 2019 (in force)

The first cycle of the Plan (1/1/2014 - 31/12/2016), was settled during the first quarter of 2017 with an achievement of 47.71%. Said compliance was approved by the Board of Directors, and the number of shares to be delivered to each beneficiary resulted from multiplying the number of shares promised by the degree of compliance with the objectives (47.71%). The maximum amount approved by the General Shareholders’ Meeting for the two current cycles of this plan amounts to 10,720 thousand euros.

The 2017 General Shareholders’ Meeting approved the launch of a new Long-Term Incentive Plan. The new plan has a duration of five years, divided into three three-year cycles:

• The first cycle began on 1/1/2017 with delivery of shares in 2020 (in force)
• The second cycle began on 1/1/2018 with delivery of shares in 2021 (awaiting approval)
• The third cycle will begin on 1/1/2019 with delivery of shares in 2022 (awaiting approval)

This second plan will have a very similar structure to the first; delivery of ordinary shares of NH Hotel Group, S.A. to the beneficiaries calculated as a percentage of fixed salary, according to their level of responsibility.

The number of shares to be delivered shall be subject to the degree of fulfilment of the following four objectives:

• TSR (total shareholder return) at the end of each of the plan cycles, comparing the performance of NH Hotel Group, S.A. shares with the STOXX® Europe 600 Travel & Leisure share index
• Revaluation of the Share/li>
• Recurring Net Profit/li>
• Recurring EBITDA

The beneficiaries must remain in the Group on each of the plan settlement dates, notwithstanding the exceptions deemed appropriate, as well as achieving the minimum thresholds for each of the objectives.

The Board of Directors will be authorised to decide, before the start of each of the cycles, the effective implementation thereof in accordance with the Group’s financial position at the time. At 31 December 2017, all the cycles had been approved by the Board of Directors.

The number of shares to be delivered to each beneficiary shall be that resulting from dividing the maximum amount destined to each beneficiary in each cycle by NH’s share price in the ten days prior to the grant date of each cycle (“reference value”).

The maximum amount approved by the General Shareholders’ Meeting for the three cycles of the second Plan is 16,200,000 euros.

The effect of this item on the consolidated comprehensive profit and loss statement for 2017 was 2,809 thousand euros (1,701 thousand euros in 2016).