PROPOSAL TO OPTION HOLDERS UNDER THE SHARE OPTION SCHEME. in connection with the RECOMMENDED CASH OFFER. for ESCHER GROUP HOLDINGS PLC

Transcription

1 THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about the action you should take, you are recommended immediately to seek your own personal financial advice from your stockbroker, bank manager, solicitor, accountant or other independent financial adviser who, if you are taking advice in Ireland, is authorised or exempted under the Investment Intermediaries Act, 1995 (as amended) or the European Union (Markets in Financial Instruments) Regulations 2017, S.I. No. 375 of 2017 or, if you are taking advice in the United Kingdom, is authorised under the Financial Services and Markets Act 2000 of the United Kingdom (as amended), or if you are not so resident and are not taking advice in Ireland or the United Kingdom, another appropriately authorised independent professional adviser. This document and the accompanying form of election (the Election Form ) should be read in conjunction with the Offer Document dated 7 March 2018 (the Offer Document ) setting out, amongst other things, the terms of the recommended cash offer made by Hanover for the acquisition of Escher (the Acquisition ) as described in the Announcement and, unless the context otherwise requires, terms capitalised or otherwise defined in the Offer Document shall have the same meaning when used in this document and in the Election Form. PROPOSAL TO OPTION HOLDERS UNDER THE SHARE OPTION SCHEME in connection with the RECOMMENDED CASH OFFER for ESCHER GROUP HOLDINGS PLC by EXETER ACQUISITION LIMITED (an investment vehicle ultimately wholly-owned by Hanover Active Equity LP) The release, publication or distribution of this document in or into certain jurisdictions may be restricted by the laws of those jurisdictions. Accordingly, copies of this document and all other documents relating to the Acquisition are not being, and must not be, released, published, mailed or otherwise forwarded, distributed or sent in, into or from any Restricted Jurisdiction. Persons receiving such documents (including, without limitation, nominees, trustees and custodians) should observe these restrictions. Failure to do so may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, Exeter Acquisition (Holding) Limited ( Hanover HoldCo ), Hanover and Escher disclaim any responsibility or liability for the violations of any such restrictions by any person. The Hanover Directors and the Hanover HoldCo Directors accept responsibility for the information contained in this document other than that relating to Escher, the Escher Group and the Escher Directors and members of their immediate families, related trusts and persons connected with them. To the best of the knowledge and belief of the Hanover Directors and the Hanover HoldCo Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this document for which they accept responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information. The Escher Directors accept responsibility for the information contained in this document relating to Escher and the Escher Group and the Escher Directors and members of their immediate families, related trusts and persons connected with them. To the best of the knowledge and belief of the Escher Directors (who have taken all reasonable care to ensure such is the case), the information contained in this document for which they accept responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information. N plus 1 Singer Advisory LLP ( N+1 Singer ) which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting as financial adviser exclusively for Hanover and no one else in connection with the Acquisition, the contents of this document or any transaction or arrangement referred to herein. N+1 Singer will not regard any other person as its client in relation to the matters in this document and will not be responsible to anyone other than Hanover for providing the protections afforded to clients of N+1 Singer or its affiliates, nor for providing advice in relation to any matter referred to herein. Panmure Gordon (UK) Limited ( Panmure Gordon ), which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively as financial adviser to Escher and no one else in connection with the Acquisition, the contents of this document or any transaction or arrangement referred to herein. Panmure Gordon will not be responsible to anyone other than Escher for providing the protections afforded to clients of Panmure Gordon nor for providing advice in connection with the matters referred to in this document. Neither Panmure Gordon nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Panmure Gordon in connection with this document, any statement contained herein or otherwise. HE051/096/AC#

2 JOINT LETTER FROM EXETER ACQUISITION LIMITED AND ESCHER GROUP HOLDINGS PLC Exeter Acquisition Limited Escher Group Holdings Plc Registered Office: Registered Office: Arthur Cox 111 St. Stephen s Green 10 Earlsfort Terrace Dublin 2 Dublin 2 D02 RW29 D02 T380 Ireland Ireland Registered Number: Registered Number: Directors: Matthew Peacock Fredrik Lundqvist Thomas Russell Directors: Nicholas Winks (Chairman) Liam Church Clement Garvey Fionnuala Higgins Stephen McLeod Paul Taylor To : Participants in the Escher 2011 Share Option Scheme (the Share Option Scheme ) of Escher Group Holdings plc Dear Escher Optionholder 8 March Introduction You are receiving this letter because you hold options ( Escher Options ) in respect of shares in Escher Group Holdings plc ( Escher ) granted to you under the Share Option Scheme ( your Escher Options ). An Escher Option gives you a right to acquire an ordinary share with a nominal price of 0.05 each in the capital of Escher ( Escher Shares ) at a pre-determined price, subject to certain terms and conditions. As you may be aware, Exeter Acquisition Limited ( Hanover ) is proposing to acquire the entire issued and to be issued share capital of Escher by way of a cash offer under the Takeover Act 1997, Takeover Rules 2013 (the Takeover Rules ) on the terms set out in the Offer Document (the Offer ) (the Acquisition ). Enclosed is a copy of the Offer Document dated 7 March 2018 setting out further details on the Acquisition. The purpose of this letter is to inform you how the Acquisition will affect your Escher Options. You are strongly recommended to read this document and to then take action and secure the benefit of your Escher Options. A separate Election Form is enclosed for you to complete and return so that you can efficiently secure the benefit of your Escher Options. 2. Your Escher Options A schedule detailing your Escher Options is contained within the enclosed Election Form. 2.1 Vested Escher Options If some or all of your Escher Options are vested, it means that the terms and conditions have been met and that you can (up until such time as the relevant Escher Options expire) exercise them by paying Escher the pre-determined exercise price and obtaining the relevant Escher Shares in your name. 2

3 Part A of the schedule specifies those of your Escher Options that are currently exercisable and in the money ( your Part A Options ). Your Part A Options are in the money in that the price at which you may exercise your Part A Options and receive Escher Shares is less than the Offer Price (as defined below). Escher Options granted in 2012 and 2016 under the Share Option Scheme, are exerciseable at a price of or 0.01 per Escher Share, respectively. Part B of the schedule specifies those of your Escher Options, that are currently exercisable but are not in the money ( your Part B Options ). Your Part B Options are not in the money because the the price at which you may exercise your Part B Options is more than the Offer Price. Escher Options granted in 2013 under the Share Option Scheme are exercisable at a price of per Escher Share. ( Your Part A Options and your Part B Options together comprise your Vested Escher Options ). The Offer has been made at the price of 185 pence per Escher Share (the Offer Price ). As your Part B Options are not in the money, to exercise them will cost each, which is more than you would receive if you accept the Offer and receive the Offer Price. Accordingly, this proposal is drafted on the basis that you will not wish to exercise your Part B Options. If this is not the case and you do wish to exercise your Part B Options, please contact Siobhain Rock at Escher on If the Offer becomes or is declared wholly unconditional (or the Acquisition otherwise takes effect), all your Part B Options will lapse at the Lapse Date (as defined below). To secure the benefit of your Part A Options you must opt to exercise your Part A Options in the event of the Offer becoming or being declared wholly unconditional (or the Acquisition otherwise taking effect). You can do this by completing the enclosed Election Form and returning it to Escher by not later than 28 March After 28 March 2018 you will no longer be able to submit the Election Form and avail of the cashless exercise facility. However, you may still exercise your Part A Options provided you do so by the earlier of the final closing date of the Offer (the Final Closing Date ), which will be announced by Hanover in accordance with the Takeover Rules, and the Lapse Date in accordance with Escher's share dealing code and the Share Option Scheme in the usual way. For further information, see paragraph 4.2 below. You will be notified when the Offer has become or been declared wholly unconditional (if applicable). If you do not complete the enclosed Election Form and your Part A Options are not otherwise exercised within 30 days of the date the Offer becomes or is declared wholly unconditional, being the time specified by the Escher Remuneration Committee pursuant to Rule 13.1 of the Share Option Scheme (the Lapse Date ), then your Part A Options will lapse, and you will lose the benefit of them. Accordingly, if you wish to realise the value of your Part A Options, it is critically important that you complete the enclosed Election Form. To facilitate the efficient exercise of your Part A Options on the Offer becoming or being declared wholly unconditional and to avoid the need for you to pay the total exercise price to Escher in advance of such exercise, Hanover will operate a cashless exercise facility. On the exercise of your Part A Options you will acquire Escher Shares. To use the facility you must authorise Hanover to (a) pay you the proceeds of the transfer of your Escher Shares to Hanover (at 185 pence per Escher Share) less the total exercise price in respect of your Part A Options, and (b) to account for that 3

4 total exercise price to Escher. To avail of the cashless exercise facility you should choose Option 1, further details of which are set out at paragraph Unvested Escher Options If some or all of your Escher Options are not yet exercisable (assuming they have not expired) it means that the terms and conditions attaching to your Escher Options have not yet been met and, ordinarily, you must wait until they are before you can exercise them and obtain the relevant Escher Shares in your name ( your Unvested Escher Options ). Where some or all of your Escher Options become exercisable before the Lapse Date, they become Vested Escher Options and can be exercised as set out at paragraph 2.1. However, save with respect to the Specific Options (as defined below) which are the only Escher Options due to vest during the course of the Offer, the effect of the Acquisition is that, if the Offer becomes or is declared wholly unconditional (or the Acquisition otherwise takes effect), all your Unvested Escher Options (as at the Lapse Date) will lapse and you will lose the benefit of them. 3. Specific Options due to vest during the course of the Offer Notwithstanding paragraph 2.2, under the terms of Rule 13.1 of the Share Option Scheme the Escher Reumeration Committee may waive any outstanding terms and conditions with respect to some or all of a participant s Unvested Escher Options. Where Unvested Escher Options are the subject of a waiver they will become exercisable in the event of the Offer becoming or being declared wholly unconditional (or the Acquisition otherwise taking effect). As set out in the Rule 2.5 Announcement, the chief financial officer of Escher has a tranche of 60,000 Unvested Escher Options that have met the terms and conditions attaching to them and are expected to become exercisable on 1 April 2018 (the Specific Options ). The Escher Remuneration Committee and Hanover have decided to include the Specific Options in the Offer and have provided that the Specific Options will vest and may be exercised upon the Offer becoming or being declared wholly unconditional. The Specific Options shall be included within Part A of the relevant schedule. Save for the Specific Options, the Escher Remuneration Committee does not intend to waive any outstanding terms and conditions in relation any Unvested Escher Options, as no other Unvested Escher Options are due to vest during the course of the Offer. 4. Exercising your Vested Escher Options 4.1 Option 1: Complete the Election Form & avail of Cashless Exercise Completion of the enclosed Election Form will ensure that your Part A Options (or any Specific Options where applicable) are exercised immediately upon the Offer becoming or being declared wholly unconditional. Upon such exercise you will acquire Escher Shares which will, without any further action on your part, be transferred to Hanover. The cashless exercise facility will apply and you will receive a payment of 185 pence for each of your Escher Shares, less the total exercise price owed by you on the exercise of your Part A Options (or any Specific Options where applicable). If you complete the enclosed Election Form and return it to Escher to arrive not later than 28 March 2018 you will not need to take any further action in relation to exercising your Part A Options (or any Specific Options where applicable) or 4

5 accepting the Offer in respect of the resulting Escher Shares to be acquired by Hanover. See paragraph 5 for instructions on completing the Election Form. You should note however that, other than in jurisdictions where there is a mandatory withholding obligation on your employer, any tax and social security obligations that arise on the exercise of your Part A Options (or any Specific Options where applicable) are for your own account. You should therefore seek local tax advice. After 28 March 2018 you will no longer be able to submit the Election Form and avail of the cashless exercise facility. However, you may still exercise your Part A Options provided you do so by the earlier of the Final Closing Date, to be announced by Hanover, and the Lapse Date, in accordance with Escher's share dealing code and the Share Option Scheme in the usual way. For further information, see paragraph 4.2 below. 4.2 Option 2: Exercise your Vested Escher Options using the normal Escher exercise procedure and receive Escher Shares Subject to compliance with the terms of the Escher share dealing code and the Share Option Scheme, you will be able to exercise your Vested Escher Options that are (and remain) exercisable at any time prior to the Lapse Date in the usual way. This will require you to pay the aggregate exercise price to Escher in advance, as the cashless exercise facility will not be available. Please contact Siobhain Rock at Escher on if you would like more detail. If you do exercise your Vested Escher Options under this Option 2 and wish to accept the Offer, you will need to do so by the earlier of the Final Closing Date, to be announced by Hanover, and the Lapse Date. If you do exercise your Vested Escher Options and do not accept the Offer (or if you exercise your Vested Escher Options after the Final Closing Date), please note that if Hanover receives acceptances of the Offer in respect of 80% of the Escher Shares, and assuming all other conditions have been satisfied or waived (if capable of being waived), Hanover intends to exercise its right pursuant to Section 457 of the Companies Act 2014 to compulsorily acquire the remaining Escher Shares on the same terms as the Offer. In addition, if you do exercise your Vested Escher Options and do not accept the Offer (or if you exercise your Vested Escher Options after the Final Closing Date), please note that if Hanover receives acceptances of the Offer in respect of 75% of the Escher Shares, and assuming all other conditions have been satisfied or waived (if capable of being waived), then Hanover may decide to procure the making of an application by Escher to the London Stock Exchange for the cancellation of the admission to trading of Escher Shares on AIM and to re-register Escher as a private company as soon as it is appropriate to do so under the provisions of the Act. It is anticipated that any cancellation of admission to trading on AIM would take effect no earlier than twenty Business Days after Hanover has acquired or agreed to acquire 75 per cent. of the voting rights attaching to the Escher Shares. Cancellation of admission to trading on AIM would significantly reduce the liquidity and marketability of all Escher Shares not assented to the Offer at that time. 5

6 4.3 Option 3: Do nothing If the Offer becomes or is declared wholly unconditional and if you do not avail of Option 1 or Option 2 to exercise any or all of your Vested Escher Options before the Lapse Date, those Vested Escher Options not exercised will lapse and you will lose the benefit of them. Accordingly, you are strongly urged to make a prompt decision. You are advised to take independent tax and/or financial advice if you are in any doubt about your individual circumstances or as to what action you should take. If you subsequently have any queries as to how to implement your decision, please contact Siobhain Rock at Escher on Completing the Election Form To avail of Option 1 (including to avail of the cashless exercise facility) you will need to complete the Election Form enclosed with this letter in accordance with this paragraph. Following completion and return of the Election Form you will not need to take any further action to effect the exercise of your Part A Options (or any Specific Options where applicable) in accordance with Option 1. To fully complete the Election Form, you need to complete Section A, Section B and Section D. Marking X in the box in Section A of the Election Form means that you irrevocably elect to exercise all of your Part A Options (or any Specific Options where applicable) that remain outstanding immediately upon the Offer becoming or being declared wholly unconditional (or the Acquisition otherwise taking effect). Marking X in the box in Section B of the Election Form means that you confer an irrevocable power of attorney on Escher, or any person nominated by Escher, and authorise and instruct such attorney to do all things that may be required to accept the Offer, or do all things that may be required to vote in favour of or otherwise accept and implement the Acquisition, in respect of the Escher Shares that you will receive on the exercise of your Part A Options (or any Specific Options where applicable). By completing and returning the Election Form you will agree to the terms and conditions set out in Section C of the Election Form, including as to the conferring of irrevocable powers of attorney, and confirm that the decisions which you have made on the Election Form cannot be withdrawn or altered except with the agreement of Escher and Hanover. You should read these terms and conditions carefully. You need to sign the Election Form in Section D and have your signature witnessed by a person who is 18 years of age or older and who is not your spouse or civil partner. The Election Form should be returned to Siobhain Rock at Escher such that it is received on or before 28 March For the avoidance of doubt, you do not need to complete the election form if you are taking Option 2 or Option Recommendation The Escher Directors, who have been so advised by Panmure Gordon, consider the terms set out in this document to be fair and reasonable. In providing its advice to the directors of Escher, Panmure Gordon has taken into account the commercial assessments of the Escher Directors. Panmure Gordon is providing independent financial advice to the Escher Directors 6

7 for the purposes of Rule 3 of the Irish Takeover Rules. Accordingly, the Escher Directors advise that, if you wish to realise the value of your Part A Options (or any Specific Options where applicable), you should exercise all your Part A Options (or any Specific Options where applicable) in the event of the Offer becoming or being declared wholly unconditional (or the Acquisition otherwise taking effect) and, if applicable, vote in favour of or otherwise accept and implement the Acquisition. The manner in which you exercise your Vested Escher Options will depend on your individual circumstances, including, but not limited to, the tax consequences of each of those choices and, for the avoidance of doubt, the Escher Directors make no recommendation as to the appropriate choice. 7. Tax Consequences If you are in any doubt about your tax position in relation to your Escher Options and the Acquisition you should consult an appropriate independent professional tax adviser immediately. Neither Hanover, Escher or their respective advisers are giving any taxation advice to Escher Optionholders in connection with the Acquisition and it is your sole responsibility to comply with all tax requirements applicable to you in any jurisdiction in connection with the Acquisition. 8. Rules of the Share Option Scheme A copy of the rules of the Share Option Scheme is available for inspection at the registered office of Escher during usual business hours prior to the Offer becoming or being declared wholly unconditional. Alternatively, any Escher Option Holder who requires a copy of the rules of the Share Option Scheme should contact Siobhain Rock at Escher on Miscellaneous Information Accidental omission to despatch this document to, or any failure to receive the same by, any person to whom the choices set out in this document apply, or should apply, shall not invalidate the choices set out in this document in any way. N+1 Singer and Panmure Gordon have each given and not withdrawn their respective written consent to the issue of this document with the inclusion of the references to their names in the form and context in which they appear. Unless otherwise defned herein, defined terms used in the Offer Document have the same meanings when used in this document and/or in the Election Form. Yours faithfully Matthew Peacock Director On behalf of Exeter Acquisition Limited Nicholas Winks Chairman On behalf of Escher Group Holdings plc 7