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I have worked for my employer for 12 years and as they were the only trading Ltd company of a PLC listed on AIM I started to receive several share option packs over the years as part of an Enterprise Management Initiative, however due to the price listed on AIM these were never exercised. About 2 years ago the company swapped all my old share options of 19.6p to equivalent number of 10p options. I thought this was generous and signed the relevant agreement but to this date neither myself of colleagues ever received countersigned copies back.

 

Last year we were subject to a reverse takeover (unsure if reverse bit is relevant) by a company who now trade on AIM using 'our old account' but with a new name- essentially they needed funds from the markets to start a new overseas project and reversing into a PLC was easiest method. A retired Director I am friendly with told me the takeover was completed at 6.75p per share.

 

I have had no correspondence regarding my share options since the takeover and when I ask my MD he states he doesn't know and he cannot get answers from the PLC Company Secretary or so he tells me - could he be lying?

 

The Ltd Company has now been put up for sale by the new PLC as we are not part of their core business.

 


Should the new PLC have offered me something for my options or swap for an equivalent share scheme or benefit in kind?,


do they now even exist as the listing on AIM is under a different name to my previous employer?

 

Any help would be appreciated as I am worried if we are sold quickly by the new PLC that my chance may be lost

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If this was a true reverse takeover, I would think the AIM company should be still be the same entity it always was, just with different shareholders. A change of name does not affect a company's legal obligations so the option should still apply.

 

You should be able to check what happened on Companies House webcheck - look up the current company and review its history of name changes. The offer documentation and regulatory filings, including details of the price, should be publicly available on the AIM website.

 

Assuming the Takeover Code applied here (applies to AIM companies centrally managed in the UK), my understanding is that holders of share options should have received offer documentation at the time.

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Thanks Steampowered, I am fairly sure what you say is correct, the board members are different from the old ones.

 

I am very inexperienced in these matters and my boss (MD of the Ltd company who I work for) is either deliberately avoiding my questions or does not know himself.

 

Can you explain what 'offer documentation' is? I have received nothing prior to or after takeover so what should I have got ? Ive done some searching on the web and can see alternatives including making me an offer to buy my unexcersised options to replacing with new options in the 'new' plc at the sale price of 6.75 p per share which is much better than my old 10p share options and would show me a small profit.

 

I havent got much money but is this a legal issue to pursue with a solicitor, financial advisor or other party?

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Offer documentation would be documents informing you of your ability to exercise the option, and to vote your shares in favour of the takeover. I am making a lot of assumptions here about how the deal was structured, it is difficult to say for sure unless you want to name the company, and I guess you never received any offer documents. These documents are now historic so not worth worrying about now.

 

The first thing is to check whether the company which you have share options in still the same company. Go to Companies House here: http://wck2.companieshouse.gov.uk//wcframe?name=accessCompanyInfo, and find the company. Check that its former name is listed under "previous names". You are trying to confirm that this is the same entity which has been through a name change, rather than a completely different company.

 

I don't think you need to pursue this with a solicitor, especially if you are not currently wanting to exercise the options. What you should do is track down a copy of the Option Agreement, if you don't have it already, and work out what it says about how you actually exercise your option.

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Thanks Steampowered, the company does have us under a previous name although strangely it gives a different registered address to that listed on the London Stock Exchange, Id have thought legally they must be the same?.

 

My concerns are that if the sale of the Ltd Company goes through I lose my options; and if as an ex director friend of mine says they should have been reisssued to me post takeover at 6.75 p/share I stand to make around £3000 profit (currently 7.75) as opposed to losing them. They have been nearly 9p a few weeks back.

 

If they stick to the 10p agreement I signed then of course I wouldn't be actioning them.

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Companies are permitted to change their name or address at any time. This does not affect the company's legal obligations, as the company still remains the same entity. The only thing that never changes is the company number on Companies House. As long as it is the same company, then your existing rights under any previous options should remain valid.

 

If the options should have been reissued after the takeover, then of course you would need to get the documents before you can exercise them. Surely HR should have a copy?

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Thanks , we dont have HR as we only have appx 25 staff,

 

"..If the options should have been reissued after the takeover..."

 

This is what I am trying to establish- should they have been? all my MD says is that the original agreement is still valid (@10p),but is not giving me any more advice. Im trying to find out if

a) should they legally have been reissued @ 6.75p (as that was the price per share on takeover,as stated by my now retired CEO

b)if not should they have made me an offer to buy my options off me

c) will they lapse if the Ltd company (my employer) is sold

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a) No particular reason why the options would need to be reissued. There would only need to be a reissue if the option price was lowered to 6.75p. There is no particular reason why the option price should have been reduced to match the price at which the shares were bought.

b) No. If this was a Takeover Code transaction subject to shareholder voting you should have been informed of your right to exercise the option and vote your shares in favour or against of the transaction, but I don't know enough to comment on whether that was the case and in any event of limited significance now since the deal went through.

c) There is no legal reason why the options would lapse. But you would need to check the terms of the option documentation to be sure.

 

Its a rather odd situation, I find it difficult to believe that no-one knows about an important staff benefit, someone must have a copy of the option document.

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Thanks, I will ask for my countersigned copy.

 

interstingly I can see all the Directors of the new company are getting millions of share options at 1p each, seems a bit unfair I have to pay 10p for mine,

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