Sondrel (Holdings) plc Posting of AR, Notice of AGM, Share Option Plans (3376B)

TIDMSND

RNS Number : 3376B

Sondrel (Holdings) plc

01 June 2023

01 June 2023

Sondrel (Holdings) plc

("Sondrel", the "Company" and together with its subsidiaries the "Group")

Posting of Annual Report, Notice of AGM and Proposed Share Option Plans

Sondrel (AIM: SND), the fabless semiconductor business providing turnkey services in the design and delivery of 'application specific integrated circuits' ("ASICs") and 'system on chips' ("SoCs") for leading global technology brands, announces that the Company's annual report and accounts for the year ended 31 December 2022 ("2022 Annual Report") and notice of the Company's 2023 Annual General Meeting ("Notice of AGM"), which will be held at 1.00p.m. on 27 June 2023 at the offices of Cenkos Securities, 6-8 Tokenhouse Yard, London EC2R 7AS, have been sent to shareholders and are now available to view on the Company's website at https://ir.sondrel.com/investors.

As stated in the Company's admission document dated 13 October 2022, the Directors believe that the success of the Group will in part depend on the Group's ability to continue to attract and retain talent. With no further options capable of being issued under the Company's historical share option scheme, the Directors stated that they would consider the implementation of new incentive arrangements, suitable for a Company admitted to trading on AIM, in due course following admission.

Having received independent professional advice on the proposed arrangements, resolutions 10 to 12 to be proposed at the AGM deal with the Company's proposal to establish the Sondrel (Holdings) PLC Enterprise Management Incentive Plan (the "EMI Plan"), the Sondrel (Holdings) PLC Non-Tax Advantaged Plan (which is Part II of the EMI Plan) (the "Unapproved Plan"), the Sondrel (Holdings) PLC Restricted Stock Unit Plan (the "RSU Plan") and the Sondrel (Holdings) PLC 2023 Phantom Cash Plan (the "Phantom Plan") (together, the "Plans").

The Plans are being proposed to retain, reward and incentivise key employees ("Participants"). The Company considers the Plans essential in order to recruit, retain and reward key employees for the benefit of the Company and its members.

As at the date of this announcement, the Company has 3,120,000 options over new ordinary shares in the Company in issue representing 3.6 per cent. of the Company's issued share capital. Awards made under the Plans will be notified in due course.

The maximum number of Ordinary Shares in respect of which options may be granted under the Company's share incentive arrangements at any time operated by the Company shall not exceed 10 per cent. of the Company's issued share capital in any 10 year period.

Further details of the Plans are set out below and in the Notice of AGM.

 
 Sondrel (Holdings) plc                                Via Buchanan 
 Graham Curren, CEO                            Tel: [phone] 
                                                               5000 
 Joe Lopez, CFO 
 
 Cenkos Securities plc                          Tel: [phone] 
                                                               8900 
 Ben Jeynes / Katy Birkin / George Lawson 
  - Corporate Finance 
 Alex Pollen / Michael Johnson - Sales 
 
 Buchanan Communications                       Tel: [phone] 
                                                               5000 
 Chris Lane                                 [e-mail] 
  Stephanie Whitmore 
 Jack Devoy 
 Abby Gilchrist 
 

About Sondrel

Sondrel is a UK-based fabless semiconductor company specialising in high end, complex digital Application Specific Integrated Circuits (ASICs) and System on Chips (SOCs). It provides a full turnkey service in the design, prototyping, testing, packaging and production of ASICs and SoCs.

The Company is one of only a few companies capable of designing and supplying the higher-spec chips built on the most advanced semiconductor technologies, selling into a range of hyper growth end markets such as high-performance computing, automotive, artificial intelligence, VR/AR, video analytics, image processing, mobile networking and data centres. Sondrel designs have enabled products by leading technology brands including Apple (iPhone), Sony (PlayStation), Meta's (Oculus), Samsung, Google and Sony smartphones, JVC (prosumer camcorders), Tesla and Mercedes-Benz cars.

Sondrel is well-established, with a 20-year track record of successful delivery, supported by long standing ecosystem partnerships including Arm, TSMC and Samsung. Headquartered in the UK, Sondrel has a global presence with offices in UK, USA, China, India and Morocco.

For more information please visit: www.ir.sondrel.com .

Details of the Plans

Resolutions 10 to 12 - Approval of Share Plans (Ordinary Resolutions)

Background

These resolutions deal with the Company's proposal to establish the Sondrel (Holdings) plc Enterprise Management Incentive Plan (EMI Plan), the Sondrel (Holdings) plc Non-Tax Advantaged Plan (which is Part II of the EMI Plan) (Unapproved Plan), the Sondrel (Holdings) plc Restricted Stock Unit Plan (RSU Plan) and the Sondrel (Holdings) plc 2023 Phantom Cash Plan (Phantom Plan, together with the EMI Plan, Unapproved Plan and RSU Plan, the Plans). The Plans have been proposed to retain, reward and incentivise key employees (Participants). The Company considers the Plans essential in order to recruit, retain and reward key employees for the benefit of the Company and its members.

Eligibility

Any employee (including an executive director) of the Company or any of its subsidiaries will be eligible to participate in the Plans at the discretion of the Board or the Remuneration and Nomination Committee as applicable.

Form of awards

The EMI Plan will enable the Company to grant tax-efficient enterprise management incentive options to employees, in order to allow the Participants to acquire Ordinary Shares (EMI Options) in the Company, which vest over a 48-month period from the date of grant.

The Unapproved Plan will enable the Company to grant non-tax advantaged share options to employees, in order to allow Participants to acquire Ordinary Shares (Unapproved Options) in the Company, which vest over a 48-month period from the date of grant.

The RSU Plan will enable the award of restricted stock units (RSUs) to Participants in the United States of America (US).

The Phantom Plan is intended to enable the award of cash bonuses to Participants not in the United Kingdom (UK) nor the US. This will broadly mirror the gain that would have been realised if an Option had been exercised on the day it vested (Phantom Shares).

Structure of the Plans

EMI Plan

EMI Options granted under the EMI Plan will typically be granted at market value (although the EMI Plan allows the EMI Options to be granted with a discounted or nil exercise price). The EMI Options shall, where possible, meet the requirements to qualify as Enterprise Management Incentive (EMI) under the provisions of Schedule 5 to the Income Tax (Earning and Pensions) Act 2003 (Schedule 5) and therefore qualify for the EMI tax reliefs available to UK taxpayers. The potential tax treatment for Participants of the EMI Plan is of a capital nature rather than being subject to Income tax and National Insurance Contributions (NICs) on the growth in value of the underlying Ordinary Shares from the date of grant. The exercise price payable in order to acquire shares under the EMI Plan will generally be based on the market value on the date of grant.

Unapproved Plan

Unapproved Options granted under the Unapproved Plan will be on broadly similar commercial terms to options granted under the EMI Plan, but they will not be granted under the provisions of Schedule 5 and as a result will be subject to income tax and NICs on the date of exercise on the amount by which the market value of the Ordinary Shares acquired exceeds the exercise price.

RSU Plan

The RSU Plan will allow for the grant of awards under the RSU Plan (RSU Awards) to employees based in the US and will deliver free shares on, or shortly after, the date that the RSU Awards vest.

The Company's intention is to set up and fund an Employee Benefit Trust (EBT) to acquire Ordinary Shares which will be used to satisfy RSU Awards on vesting.

Phantom Plan

Awards granted under the Phantom Plan (Phantom Awards) will be made to employees on terms which broadly mirror the terms of an Option granted under the Unapproved Plan. However, Participants will be entitled to receive a cash bonus equal to the amount by which the market value of the notional number of Ordinary Shares subject to the Phantom Award exceeds the exercise price on the date on which the Phantom Award vests.

On vesting of Phantom Shares the participant will receive a cash payment via payroll. The cash payment will depend on the value of Ordinary Shares on vesting. There shall be no exercise price or purchase price payable. The Phantom Plan will be initially available to Indian and Moroccan employees with the possibility of expanding this plan to other jurisdictions in the future.

Pensions

Gains and benefits received under the Plans will not be pensionable.

A copy of the EMI Plan rules (incorporating the Unapproved Plan rules) (EMI Rules), RSU Plan rules (RSU Rules) and Phantom Plan rules (Phantom Rules) are available for inspection at the place of the AGM for at least 15 minutes prior to, and during, the meeting. A copy of the EMI Rules, RSU Rules and Phantom Rules will be available for inspection at Sondrel (Holdings) plc, Sondrel House Theale Lakes Business Park, 9 Moulden Way, Sulhamstead, Reading, RG7 4GB (except Saturdays, Sundays and public holidays) from the date of this Notice up to and including the date of the AGM.

Grant of awards under the Plans

Awards under the Plans may only be granted to Participants within the six-week period following (a) the approval of the Plans by shareholders, (b) announcement of the Company's results for any period, (c) in relation to any person the day on which the person first joins the group, or (d) any day on which the Remuneration and Nomination Committee determines that exceptional circumstances exist. However, if the Company is restricted from granting in any such period, awards may be granted in the period of six weeks following the relevant restriction being lifted.

Vesting schedule and performance conditions

EMI Options, Unapproved Options, RSU Awards and Phantom Awards (all together, Awards) are all subject to the same vesting schedule. On the vesting date, EMI Options and Unapproved Options will be exercisable. On the vesting dates, RSU Awards and Phantom Awards will immediately be settled. The vesting schedule of the initial awards is as follows:

   --    24 months after the date of grant, 50% will vest. 
   --    36 months after the date of grant, 25% will vest. 
   --    48 months after the date of grant, 25% will vest. 

The Remuneration and Nomination Committee or the Board (as applicable) can, in its absolute discretion, adjust the vesting schedules for future awards under the Plans as it sees fit.

The initial Awards will not be subject to any performance conditions. However, the Remuneration and Nomination Committee and/or the Board as applicable will determine whether future Awards are subject to performance conditions.

Corporate event

In the event of a change of control of the Company, Awards will vest and Options may be exercised to the extent vested. However, the Remuneration and Nomination Committee or the Board as applicable in their absolute discretion may determine that some or all of the unvested Awards shall vest. Options will then be exercisable for a short period following which they shall lapse.

In the event of an internal reorganisation, Participants will be permitted to exchange their Awards for equivalent awards which relate to shares in a different company.

If notice of a voluntary winding up of the Company is given, the Company shall notify all Participants as soon as practicable and any options shall be exercisable conditional on the resolution being passed.

Leaver provisions

Awards will be subject to good and bad leaver provisions.

A "Good Leaver" will be a participant who ceases to be an employee because of any of ill health, injury, disability, death or where the Board so determines in its discretion. Being a Good Leaver will mean the participant may keep and exercise a time pro-rated proportion of the Options. RSU Awards or Phantom Awards will also vest, based on the number of days which have elapsed between the date of grant and the date of cessation or death (as applicable) as compared to the number of days in the vesting schedule.

A "Bad Leaver" will be a participant who ceases to be an employee and is not classified as a Good Leaver. If a participant is a Bad Leaver their Awards shall lapse immediately.

Exercise & vesting

Once vested, options will then normally be exercisable until the 10th anniversary of the date of grant. Options will not vest and be exercised while disciplinary proceeds are underway against the Participant or their conduct is being investigated.

To exercise an option the Participant is required to provide a notice of exercise in a form prescribed by the Board and payment of the exercise price. A notice of exercise is available from the Board on request.

RSU Awards do not require a notice of exercise for Participants to receive their Ordinary Shares subject to the RSU Awards. Ordinary Shares will be issued shortly after vesting.

Any Ordinary Shares or cash that are to be issued, transferred or paid (as appropriate) to a participant in respect of a vested RSU Award or Phantom Award or an exercised option will be issued, transferred or paid (as appropriate) within 30 days of the date of vesting or exercise (as appropriate). A notice of exercise is not required for Participants to receive their cash bonus under the Phantom Plan. The cash bonus will be paid shortly after vesting.

Payroll

There should be no obligation to operate payroll on the exercise of qualifying, market value EMI Options. Gains on the Unapproved Plan, RSU Plan, and Phantom Plan will be subject to payroll and appropriate employers' social security.

Company Limits

The number of Ordinary Shares that may be issued pursuant to the grant awards under the EMI Plan and Unapproved Plan when aggregated with the number of Ordinary Shares issued or issuable pursuant to any other share option plan operated by the Company shall not exceed 10% of the Company's issued ordinary share capital at the relevant date of grant.

The number of Ordinary Shares that may be issued pursuant to the grant awards under the RSU Plan shall not exceed 5% of the Company's issued ordinary share capital at the relevant date of grant. For the avoidance of doubt, shares transferred out of treasury count towards this limit, as do shares issued or issuable to the trustee of an employees' trust. However, shares issued or issuable to the trustee of an employees' trust are not counted a second time if such shares are subsequently used to satisfy awards.

The overall limit for new awards under the EMI Plan, Unapproved Plan and RSU Plan is 15% of the Company's issued ordinary share capital at the relevant date of grant.

The limit for the Company on the value of its Ordinary Shares that can be subject to options granted under the EMI Plan in total based on the share price on the date of grant is GBP3 million.

Individual limits

EMI Plan and Unapproved Plan

The Company may not grant an option or options to any participant if that grant would result, in the aggregate market value of Ordinary Shares subject to the options made to that participant in that year exceeding 100% of the Participant's base salary (as determined at the proposed date of grant).

Schedule 5 includes the limit on the total value of Ordinary Shares under options granted under the EMI Plan that any Participant can receive is GBP250,000 based on the market value on the date of grant of the options.

RSU Plan

The Company may not grant an award to any Participant if that grant would result, in the aggregate market value of Ordinary Shares subject to the award made to that Participant in that year exceeding 200% of the Participant's base salary (as determined at the proposed date of grant).

Phantom Plan

The Company may not grant an award to any Participant if that grant would result in the aggregate market value of Ordinary Shares subject to the award made to that Participant in that year exceeding 100% of the Participant's base salary (as determined at the proposed date of grant).

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June 01, 2023 04:34 ET (08:34 GMT)