Lattice bosses forego £3m pay-off

12 April 2012

THREE executives at Lattice will forego a near-£3m payoff by rolling their share options over into the merged UK gas and power utility they aim to create with National Grid.

Merger documents released over the weekend confirmed the move, which applies to finance director Steve Lucas and fellow directors John Wybrew and Colin Matthews. The company said it was an expression of confidence in the new company, and a gesture of solidarity with Grid directors, who had no such opportunity.

All three are to take up senior posts on the new board, which will put Lattice's monopoly national gas network Transco together with monopoly electricity carrier National Grid as a £15bn company.

Though structured as an agreed all-share bid for Lattice by National Grid, the 22 April deal was billed as merger, not a takeover, because Lattice shareholders were offered no significant takeover premium and because senior Lattice executives were to take up top posts at the new company.

According to the terms of their performance-related share options incentive scheme, the three executives would have been allowed to cash in their options in full on completion of the merger deal. 'They agreed to forego the right to have these shares transferred to them and instead the Lattice shares will be substituted by National Grid Transco shares and made subject to nil-cost options which will not normally be exercisable until October 2003,' the merger document said.

At Monday's 175 1/2p share price Wybrew's 860,443 share options are worth about £1.51m, while Lucas's 553,945 are worth about £972,000 Matthews' 257,572 are worth £452,000. Chairman John Parker is also moving to the new company as chairman, but as a non-executive director he has no share options.

The partners expect to complete their merger in autumn 2002.

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