Long Term Incentive Programme 2018
The Annual General Meeting in Hansa Medical held on May 29, 2018 resolved, in accordance with the Board of Directors’ proposal, to adopt a long-term incentive programme for employees in Hansa Medical, whereby not more than 52 individuals within the Hansa Medical group may participate. The participants in the programme are given the opportunity to acquire warrants at market value and/or receive so called performance based share awards free of charge which, provided that certain conditions are met, may give the right to acquire shares in the Company.
A maximum of 491,419 warrants or 297,902 share awards may be allotted to participants under the programme. The Annual General Meeting further resolved, in accordance with the Board of Directors’ proposal, to adopt certain hedging arrangements to ensure delivery of shares based on share awards to participants at the end of the programme, as well as to cover any social charges arising as a result of the programme. The hedging arrangements include a share issue authorisation for the Board of Directors to issue not more than 391,503 Class C shares, of which 93,601 Class C shares will be issued to cover social security costs, an authorisation for the Board of Directors to repurchase the issued Class C shares and a resolution to transfer the re-purchased shares, after a conversion to ordinary shares, to participants of the programme and in the market in order to cover the cash flow effects of social charges.
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 May 19 2017, 26 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 289,750 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 1.1 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.