Annual and transition report of foreign private issuers pursuant to Section 13 or 15(d)

Share-Based Payments

v3.23.1
Share-Based Payments
 12 Months Ended
Dec. 31, 2022
Disclosure Of Sharebased Payment Arrangements Abstract  
Share-based payments

26. Share-based payments

 

Under the Incentive Equity Plan, the Group operates an equity-settled share-based incentive scheme whereby options are granted under Unapproved share options for UK-based employees and Restricted Stock Units for Europe-based employees. The options vest in instalments over four years with expiry after ten years. Unvested options are forfeited if the employee leaves the Group before the options vest.

 

Certain executive directors received awards, equally split between time-based and performance-based awards. Under the terms of the Incentive Equity Plan, the time-based awards will be eligible to vest in equal annual instalments on each of the first four anniversaries of the grant date, subject to continued employment through each such anniversary, and market performance criteria. Any portion of the performance-based awards that remain unvested as of the fifth anniversary of the grant will be forfeited.

 

In January 2022, the Group established a SAYE scheme. The scheme provides employees an option to purchase shares in the Company in three years’ time at a discounted price per share which is fixed at the grant date.

 

The Group recognized a share-based charge for the year as follows:

 

    Year ended
December 31
2022		     Year ended
December 31
2021		     Year ended
December 31
2020		  
    £’000     £’000     £’000  
                   
Incentive Equity Plan     44,312       13,599      
-
  
SAYE     184      
-
      
-
  
EMI prior to the Transaction    
-
       73       182  
Unapproved prior to the Transaction    
-
       29,096       3,577  
Modification at the Transaction    
-
       1,103      
-
  
                         
      44,496       43,871       3,759  

 

The following options were granted during the year ended December 31, 2022:

 

Scheme   Number     Grant date   Expiry date
               
Incentive Equity Plan     2,295,099     01/01/2022   01/01/2032
Incentive Equity Plan     1,269,100      01/04/2022   01/04/2032
Incentive Equity Plan     1,087,250     01/07/2022   01/07/2032
Incentive Equity Plan     427,300     01/10/2022   01/10/2032
Incentive Equity Plan – Directors     3,933,339     01/10/2022   01/10/2032
SAYE     1,496,903     26/01/2022   31/08/2025
                 
Total 2022     10,508,991          
                 
                 
Unapproved prior to the Transaction     469,000     01/01/2021   01/01/2031
Unapproved prior to the Transaction     2,023,516     01/04/2021   01/04/2031
Incentive Equity Plan     23,915,248     01/10/2021   01/10/2031
                 
Total 2021     26,407,764          

 

Movements in share options during the year

 

The following reconciles the share options outstanding at the beginning and end of the year.

 

    EMI     Unapproved     Incentive
Equity Plan		     SAYE  
    Number of
options		     Number of
options		     Number of
options		     Number of
options		  
At December 31, 2020     4,683,683       8,121,393      
-
      
-
  
                                 
Granted prior to the Transaction    
-
       2,492,516      
-
      
-
  
Forfeited prior to the Transaction     (66,413 )     (579,713 )    
-
      
-
  
Cash settled at the Transaction     (34,690 )     (44,114 )    
-
      
-
  
Replacements at the Transaction1     (4,582,580 )     (9,990,082 )     50,347,491      
-
  
Granted after the Transaction    
-
      
-
       23,915,248      
-
  
At December 31, 2021    
-
      
-
       74,262,739      
-
  
                                 
Granted during the year    
-
      
-
       9,012,088       1,496,903  
Exercised during the year    
-
      
-
       (9,513,868 )    
-
  
Forfeited during the year    
-
      
-
       (10,732,364 )     (884,823 )
Expired during the year    
-
      
-
       (599,238 )    
-
  
At December 31, 2022    
-
      
-
      

62,429,357

       612,080  

 

1 The replacement options granted at the Transaction reflect the exchange ratio established in the Business Combination Agreement. Refer to Note 1 for further details.

 

The share option numbers above are before giving effect to the reverse stock split which became effective on February 8, 2023. Refer to Note 28 for further details.

 

Employee share option fair value assessment

 

The following information is relevant in the determination of fair value of the employee share options granted during 2022:

 

    Incentive Equity
Plan		   Incentive Equity
Plan – Executive
Directors		   SAYE
             
Valuation method   N/A1   Monte-Carlo   Black-Scholes
Exercise price   £nil  
£nil
   £3.60
Expected volatility   N/A   98%   53%
Dividend yield   Nil  
Nil
  
Nil
Risk free interest rate   N/A   4.2%   1.2%
Fair value per share   £0.40 - £4.46   £0.31   £0.98

 

1 Considering that the Incentive Equity Plan awards vest over time without any further restrictions, the fair value is equal to the Company’s closing stock price as of the grant date.

 

The following information is relevant in the determination of fair value of the employee share options granted during 2021:

 

    Unapproved   Incentive Equity
Plan		   Incentive Equity
Plan – Executive
Directors
             
Valuation method   Monte-Carlo   N/A   Monte-Carlo
Exercise price   £nil  
£nil
  
£nil
Expected volatility   50%  
N/A
   53%
Dividend yield   Nil  
Nil
  
Nil
Risk free interest rate   0.0%  
N/A
   1.2%
Fair value per share   £8.27 - £23.74   £5.33   £2.93