The Board of Directors of Cramo has resolved to establish new share-based incentive plans for the Adapteo Group employees. The aim is to align the objectives of the shareholders and the employees, to retain the employees at Adapteo, and to offer them continuity to current Cramo share-based incentive plans after the Demerger.
In the plan, the participants will have an opportunity to earn Adapteo shares based on the achievement of Board-established performance criteria. The plan includes three discretionary periods, 1 July‒31 December 2019 and calendar years 2020 and 2021. Each discretionary period is followed by a two-year vesting period. Each discretionary period is conditional to the Board’s resolution. A participant’s participation in the plan is contingent upon his or her participation in the Adapteo Plc Employee Share Savings Plan. Any rewards will be paid out after the vesting period partly in Adapteo shares and partly in cash to cover applicable taxes arising from the rewards to the participants.
The plan will constitute a transitional deviation from the requirement of the Swedish Corporate Governance Code 2016, which provides that the vesting period to the date for acquisition of shares is to be no less than three years. For business, continuity and programme design reasons, the discretionary periods and vesting periods of the Performance Share Plan 2019 have been set to match Adapteo’s financial year, being the calendar year. However, as the completion of the demerger was registered on 30 June, 2019, the demerger occurred during a calendar year. Therefore, the first discretionary period commenced on 1 July, 2019, and, as a result, the first discretionary period and vesting period would together be approximately two and a half years. It has been assessed that applying a discretionary period and vesting period of a total of three and a half years would be detrimental to the incentivising purpose of the program. The second and third discretionary periods, together with their vesting periods, would both be a total of three years.
The plan is directed to approximately 20 key employees. The reward from the discretionary period 2019 is based on the Group´s EPS and operative ROCE. Per current estimation, the rewards to be paid based on the discretionary period 2019 are approximately
SEK 9.4 million (EUR 0.9 million) at the maximum. The maximum rewards were converted to Adapteo shares when the trading on the Adapteo shares started.
A member of the Group Management Team must hold 50 per cent of the shares given on the basis of the plan, until his or her shareholding in total corresponds to the value of his or her annual gross salary.
The Employee Share Savings Plan is offered to all Adapteo Group employees. In the plan, the employees are offered an opportunity to voluntarily save a proportion of their regular salary to be used for the purchase of Adapteo shares.
The first plan period is 1 July–31 December 2019, during which savings from the participants’ salaries will be deducted monthly. The minimum savings amount per participant during one month is 2 per cent of gross salary and the maximum is 5 per cent. The total amount of all savings may not exceed SEK 8.4 million (EUR 0.8 million). The purchase of Adapteo shares using employee savings will occur on a quarterly basis, after Q3/2019 and Q4/2019.
Each participant will receive one free matching share for every two purchased savings shares after the designated holding period, which ends 15 May 2022, assuming the preconditions of shareholding and employment have been met.
The demerger affected the Cramo share-based incentive plans. The Board of Directors of Cramo has resolved on the adjustments to the reward payments of the plans as follows.
All rewards will be paid out in both Cramo and Adapteo shares and in cash to cover applicable taxes arising from the rewards to the participants, so that for each earned Cramo share, the participants receive one additional Adapteo share.
The pending confirmed rewards from the discretionary periods 2017 and 2018 will be paid to participants in the original schedule after the relevant vesting periods, in May 2020 and 2021.
For Adapteo participants, the discretionary period 2019 ended already on 30 June 2019. Any rewards accrued by 30 June 2019 will be paid to participants in the original schedule after the relevant vesting period, in May 2022. Reward payments are contingent upon the participation in Adapteo Plc Employee Share Savings Plan.
After the completion date pursuant to the Demerger, the pending matching shares in the One Cramo Share Plan will be paid to the participants in the original schedule after the relevant holding periods, in May 2020, 2021 and 2022. Matching shares will be paid out in both Cramo and Adapteo shares and in cash to cover applicable taxes arising from the rewards to the participants, so that for each earned Cramo share, the participants receive one additional Adapteo share.
For Adapteo participants, saving in the One Cramo Share Plan ended on 30 June 2019. Any savings not used for share purchases before the Demerger will be used to purchase Adapteo shares for Adapteo participants after the Demerger. The matching shares will be denominated respectively.