Long Term Incentive Programme 2016
At the extraordinary general meeting in Hansa Medical, held on 21 November 2016, it was resolved to adopt a long-term incentive programme in the form of a performance based share programme for employees of the group (”LTIP 2016”). LTIP 2016 has been implemented to motivate and retain competent employees as well as for the alignment of the targets of the employees with those of the shareholders and the company, as well as to increase the motivation of meeting and exceeding the company’s financial targets.
Participants who, with certain exceptions, are employed by Hansa Medical during the entire programme period of three years will, by the end of the period, receive so called performance shares, i.e. listed Hansa Medical shares, free of charge, provided that the total shareholder return (the return to shareholders through an increased share price and reinvestments of any dividends during the vesting period) on the company’s ordinary shares exceeds 25 percent (maximum allotment is obtained if the total shareholder return amounts to 100 percent) during the programme period.
As of 15 December 2016, 23 employees had chosen to participate in LTIP 2016, meaning that the total number of shares which may be allotted under LTIP 2016 will not exceed 234,750 ordinary shares. Together with a maximum of 96,000 ordinary shares which may be used to secure social charges arising as a result of LTIP 2016, this corresponds to in total 0.94 percent of the existing number of ordinary shares in Hansa Medical. The costs for LTIP 2016 are reported in accordance with IFRS 2. For further details, see the board of directors’ proposal to the general meeting.
Share warrant programme 2015-2019
A total of 296,000 warrants were acquired by the company’s employees in 2015 under the warrant program that Hansa Medical’s Annual General Meeting adopted on June 2, 2015. Each warrant entitles the holder to subscribe for one new share in Hansa Medical. Subscription for shares in accordance with the terms of the warrants may take place during the period from June 15, 2018, and June 15, 2019.
The warrants were sold to the company’s employees on market terms at a price established on the basis of an estimated market value of the warrants using the Black & Scholes model calculated by an independent valuation institute. The value has been set at SEK 8.40 per option based on a share price of SEK 36.04 with a future annual increase of 7 percent. The increase in the company’s share capital upon full exercise of the share warrants will amount to SEK 296,000, and corresponds to a dilution of approximately 0.9 percent of the total number of shares and the total number of votes in the company.
The option program is subsidized by the company and the employees have been given a one-time bonus as part of the stock option purchase. The options are linked to continued employment with the company only in the sense that, if the employment would be terminated, the stock option owner shall offer the warrants to the company and repay the resulting subsidy.