New LTIP, Award of Options and Issue of Equity

RNS Number : 1712K

Sound Energy PLC

03 May 2022

 

3 May 2022

Sound Energy plc

("Sound Energy" or the "Company")

New Long Term Incentive Plan

Award of Options, Issue of Equity and Director/PDMR Shareholding

Total Voting Rights

Sound Energy, the transition energy company, announces the adoption of a new long term incentive plan (the "LTIP"), designed to reward, incentivise and retain the Company's executives and senior management to deliver sustainable growth for shareholders. The Company has awarded options under the LTIP, together with options in respect of prior period employee annual bonus awards, over up to an aggregate of 69,112,143   new ordinary shares of 1 pence each in the Company ("Ordinary Shares").  

In addition, the Company also announces the issue of an aggregate of 16,094,723 new Ordinary Shares following the vesting of historically awarded restricted stock units ("RSU"s), the award of an exceptional share-based bonus to Mohammed Seghiri, Sound Energy's Chief Operating Officer, and the settlement of fees for services provided to the Company by third party service providers.

LTIP

The LTIP has been designed to reward, incentivise and retain the Company's executives and senior management to deliver sustainable growth for shareholders. The maximum number of awards which may be issued under the LTIP from time to time will be limited to 3% of the Company's issued share capital on the date of grant of awards, and together with all other options issued by the Company under any employee share scheme from time to time will not exceed an aggregate of 15% of the Company's issued ordinary share capital in a rolling ten year period. Awards granted under the LTIP will generally be subject to a 3 year vesting period from the date of grant, the number of awards ultimately vesting dependent on the grantee's continued service and on additional performance conditions set by the Remuneration Committee.

Under the LTIP, the Company has today issued a total of 48,875,515 options to subscribe for new Ordinary Shares (the "LTIP Options") to certain of the Company's senior executives, of which 12,218,879 LTIP Options have been awarded to Graham Lyon, the Company's Executive Chairman, and 7,331,327 LTIP Options have been awarded to Mohammed Seghiri, the Company's Chief Operating Officer.  

Vesting of the LTIP Options, which represent approximately 3 per cent. of the Company's existing issued ordinary share capital, will be subject to: (a) the Company's share price on the third anniversary of the date of grant (the "Performance Testing Date"); and (b) to the grantee remaining an executive employee of the Company on the Performance Testing  Date. Actual vesting of the LTIP Options, the number of which is determined on the Performance Testing Date, will then occur in three tranches on the third (25%), fourth (35%) and fifth (40%) anniversaries of grant. The number of LTIP Options vesting on the Performance Testing Date will be calculated as follows, with a linear relationship between vesting thresholds:  

Share price on Performance Testing Date	% Options Vesting
≥ 5.38p	50%
≥ 10.75p	100%

In the event the LTIP Options vest, in whole or in part, then they will be exercisable at a price of 2.4 pence per new ordinary share.

2020 and 2021 Annual Bonus Awards

The Company also announces that in order to preserve the Company's cash resources, annual bonus awards for each of 2020 and 2021 (made in accordance with Sound Energy's Remuneration Policy and adjusted for each individual in line with the degree to which they have achieved their individual KPIs), have been made in the form of nil-cost options to employees. 11,454,918 nil-cost options have now been awarded in respect of bonus awards for the year ended 31 December 2020 (the "2020 Options") and 8,781,710 nil-cost options have been awarded for the year ended 31 December 2021 (the "2021 Options") to certain of the Company's employees, including: Graham Lyon, the Company's Executive Chairman and Mohammed Seghiri, the Company's Chief Operating Officer. The awards to Messrs Lyon and Seghiri are as follows:

	2020 Options	2021 Options
Graham Lyon	4,543,269	3,197,674
Mohammed Seghiri	2,447,552	1,860,465

The issue of the 2020 Options and the 2021 Options represents the entire bonus awards for each of the recipients, with no cash bonuses payable to recipients in respect of the years ended 31 December 2020 and 31 December 2021.

The 2020 Options and 2021 Options vest immediately and expire five years from the date of grant.

Share-based Bonus

The Company also announces that an exceptional one-off share-based bonus payment (the "One-Time Bonus") has been awarded to Mohammed Seghiri, the Company's Chief Operating Officer. The One-Time Bonus follows the delivery of all elements required to take FID for Phase 1 of the Tendrara Development and for establishing the commercial framework for monetisation of Phase 2 of the Tendrara development. To preserve cash resources, this One-Time Bonus is also being paid in new Ordinary Shares, resulting the issue of a total of 13,419,891 new Ordinary Shares (the "Bonus Shares") to Mohammed Seghiri in recognition of his major contributions to the advancement of both Phase 1 and Phase 2 development of the Tendrara Production Concession.

Commenting, Christian Bukovics, Senior Independent Non-Executive Director and Chairman of the Sound Energy Remuneration Committee, commented:

"Due to continuous, dedicated efforts to negotiate the right commercial framework for Phases 1 and 2 of the Tendrara gas developments and reviewing new business development options, the Company has been prohibited from implementing its revised incentivisation structure and from making annual bonus awards for a prolonged period. The One-Time Bonus awarded to Mr Seghiri is based on an original agreement in 2018 and recognises the major milestones achieved thanks to his sustained efforts over several years. The new LTIP in particular focuses on value creation and will ensure that the interests of executive directors and senior managers remain aligned with those of the Company's shareholders." 

Further Issues of Equity and Total Voting Rights

As a result of the award of the Bonus Shares, the vesting of 1,057,211 historically awarded RSUs (the "RSU Shares") and the settlement of fees for services provided to the Company by third party service providers through the conditional issue of issue of 1,617,621 new Ordinary Shares, the Company has made application for an aggregate of 16,094,723 new Ordinary Shares (the "New Shares"), which will rank pari passu with the Company's existing Ordinary Shares, to be admitted to trading on AIM ("Admission") . Dealings in the New Shares are expected to commence on or around at 8.00 a.m. on 5 May 2022. 

On Admission, the Company will have 1,645,278,630 Ordinary Shares in issue. No Ordinary Shares are held in treasury. The figure of 1,645,278,630 may be used by the Company's shareholders as the denominator in the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company under the Financial Conduct Authority's Disclosure Guidance and Transparency Rules. 

Director/PDMR Shareholding

Of the 13,419,891 Bonus Shares and 322,092 RSU Shares issued in respect of the RSU's historically awarded to Mohammed Seghiri, a total of 2,658,667 Ordinary Shares were sold to cover tax liabilities in respect of the Ordinary Share issues to Mr. Seghiri. On Admission Mohammed Seghiri will be interested in 11,083,316 Ordinary Shares, representing approximately 0.7 per cent. of the Company's issued ordinary share capital. 

The notifications below, made in accordance with the requirements of the UK Market Abuse Regulation, provide further details.

Related Party Transactions

As directors of the Company, Graham Lyon and Mohammed Seghiri are each deemed to be related parties of Sound Energy under the AIM Rules for Companies (the "AIM Rules") and, on account of the award of LTIP Options to Messrs Lyon and Seghiri and the issue of the Bonus Shares to Mohammed Seghiri, the implementation of the LTIP and the award of the LTIP Options and the One-Time Bonus constitute related party transactions for the purposes of Rule 13 of the AIM Rules (the "Related Party Transactions").

The independent directors of the Company (being Christian Bukovics, David Blewden and Marco Fumagalli) consider, having consulted with the Company's nominated adviser, that the terms of the Related Party Transactions are fair and reasonable insofar as the Company's shareholders are concerned.

For further information please contact:

Vigo Consulting - PR Adviser Patrick d'Ancona Finlay Thomson	Tel: [phone]
Sound Energy Graham Lyon, Executive Chairman	[e-mail]
Cenkos Securities - Nominated Adviser Ben Jeynes  Peter Lynch	Tel: [phone]
SP Angel Corporate Finance LLP Richard Hail	Tel: [phone]

NOTIFICATIONS AND PUBLIC DISCLOSURES 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		Graham Lyon
2		Reason for the notification
a)		Position/status		PDMR (Executive Chairman)
b)		Initial notification/Amendment		Initial Notification
3	Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor
a)	Name		Sound Energy plc
b)	LEI		213800VQKS2TU6FOW115
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		Ordinary shares of 1p each
	Identification code		GB00B90XFF12
b)	Nature of the transaction		1.  Award of options to subscribe for new ordinary shares pursuant to Sound Energy plc LTIP 2.  Award of nil cost options in respect of 2020 annual bonus 3.  Award of nil cost options in respect of 2021 annual bonus
c)	Price(s) and volumes(s)		Price(s)		Volume(s)
			1.  Nil 2.  Nil 3.  Nil		1.  12,218,879 2.  4,543,269 3.  3,197,674
d)	Aggregated information		NA (single transactions)
	Aggregated volume		-
	Price		-
e)	Date of the transaction		1.  3 May 2022 2.  3 May 2022 3.  3 May 2022
f)	Place of the transaction		Outside a trading venue

1		Details of the person discharging managerial responsibilities / person closely associated
a)		Name		Mohammed Seghiri
2		Reason for the notification
a)		Position/status		PDMR (Chief Operating Officer)
b)		Initial notification/Amendment		Initial Notification
3	Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor
a)	Name		Sound Energy plc
b)	LEI		213800VQKS2TU6FOW115
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		Ordinary shares of 1p each
	Identification code		GB00B90XFF12
b)	Nature of the transaction		1.  Award of options to subscribe for new ordinary shares pursuant to Sound Energy plc LTIP 2.  Award of nil cost options in respect of 2020 annual bonus 3.  Award of nil cost options in respect of 2021 annual bonus 4.  Issue of ordinary shares following vesting of Restricted Stock Units 5.  Bonus award 6.  Bonus award 7.  Sale of Shares to cover taxes
c)	Price(s) and volumes(s)		Price(s)		Volume(s)
			1.  Nil 2.  Nil 3.  Nil 4.  Nil 5.  1.3p 6.  1.57p 7.  2.4132p		1.  7,311,327 2.  2,447,552 3.  1,860,465 4.  322,092 5.  6,923,076 6.  6,496,815 7.  2,658,667
d)	Aggregated information		NA (single transactions)
	Aggregated volume		-
	Price		-
e)	Date of the transaction		1.3 May 2022 2. 3 May 2022 3. 3 May 2022 4. 3 May 2022 5. 3 May 2022 6. 3 May 2022 7. 29 April 2022
f)	Place of the transaction		1.  Outside of a trading venue 2.  Outside of a trading venue 3.  Outside of a trading venue 4.  Outside of a trading venue 5.  Outside of a trading venue 6.  Outside of a trading venue 7.  AIMX

 

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