Incentivisation, Warrants / Options
The Company, when refocused in 2014, did not have Board level employees. Its Founding Directors are the Founding Shareholder Rob Terry, Tracey Terry, Steve Scott and joining in 2016, Tim Scurry.
The Company pays all reasonable travel expenses for the directors (and when required to facilitate business travel, any family members), indemnifies the Founding Directors for all legal and other expenses which may have been caused by their involvement in the Company and will continue to agree one-off consultancy payments (with the Founding Directors’ related companies) from time to time for services provided for specific projects. However, any project based payments will typically be tied to meeting performance criteria including profit targets.
However, none of the Founding Directors are paid an annual fee, despite a significant amount of their time, particularly that of Rob Terry and Steve Scott, being used by the Company and charged out by it at premium rates, typically £12,500 per day, to the Company’s consultancy clients and to certain related investments. All other directors have executive or non-executive service agreements as do other employees and consultants, in each case, on normal commercial terms.
A Key Achievement has been creating capacity to provide Options and Warrants to attract required talent, without additional potential dilution for existing shareholders. This has been achieved by settling all prior incentivisation arrangements in the Company’s PPMs. Consequently, the Board have agreed in HI 2017 to allow 300,000 non-voting shares, in total, to be acquired by these Founding Directors’ related companies at £1 par value as envisaged under certain conditions in the Company’s PPMs. Prior to this potentially a much greater amount of shares (and voting) could have been issued.
By the Board settling the amount of shares to be issued, capacity has been created to authorise up to a further 1,250,000 shares via conditional Warrants and Options at a £7.50 per share exercise price. This should attract the talent needed to support the intended rapid expansion leading up to the first IPO and establishing the new Technology Committee & Advisory Boards.
This exercise price is based on a 50% discount to the current £15 share price, which is acceptable for tax purposes for a minority holding in a private company, a 50% premium to £5 per share and a 25% discount to £10 per share issued respectively under the Company’s PPMs. After this, on a fully diluted basis, the Company has 10m shares in issue.