Elektrobit Group Oyj - ELEKTROBIT GROUP IS RENEWING ITS INCENTIVE SCHEMES
February 15, 2005
ELEKTROBIT GROUP IS RENEWING ITS INCENTIVE SCHEMES
The Group's incentive schemes are being developed toward a share-based and tax-effective direction. The objective is that in the future, besides bonuses, there is in place a profit-related pay scheme directed to the whole personnel and a management incentive scheme that aims toward long-term shareholding.
The Board of Directors of Elektrobit Group Plc. has in its meeting on 15 February 2005 resolved that a profit-related pay scheme directed to the whole personnel can be introduced in the Group. In accordance with the scheme a predetermined percentage of the Group's result will be paid as a profit-related payment to the personnel fund. The Board of Directors will separately decide on the basis for determination of the profit-related pay scheme annually. The Group personnel will, for its part, decide on the establishment of a personnel fund during spring 2005. In the beginning, the Group's employees working in Finland will be included in the personnel fund but the intention is that the whole personnel can be included in the fund in the future. The top management of the Group will not be included in the fund.
Furthermore, the Board of Directors of Elektrobit Group Plc. resolved to propose to the Annual General Meeting of Shareholders to be held on 17 March 2005 that stock options be issued to the management of the Group. The purpose of the new scheme is to encourage the management to work on a long-term basis to increase the shareholder value. The purpose of the new scheme is also to commit the management to the employer. In addition, the objectives of the owners and the management will be combined, and the management will become long-term shareholders in the company.
The total number of stock options is 22,500,000. These stock options entitle to subscription of a maximum of 22,500,000 Elektrobit Group Plc. shares. The stock options are divided into stock option classes 2005A, 2005B, 2005C and 2005D. Three special features are included in this stock option plan:
- The prerequisite for receiving 2005A- stock options is that a member of the management has purchased a certain number of Elektrobit Group Plc. shares, decided by the Board of Directors in advance, before distribution of 2005A- stock options. No share issue shall be arranged for this purpose.
- Some prerequisites based on the Group's financial targets are included in the 2005B-, 2005C- and 2005D- stock options. The share subscription period for these stock options cannot, however, commence, unless certain performance criteria, determined by the Board of Directors and based on the financial targets of the Group, have been attained before the distribution of these stock options. The criteria should support the Group's profitable development and efficient management of the trading capital. Those stock options 2005B, 2005C and 2005D, for which the criteria determined by the Board of Directors have not been attained, expire.
- According to the share ownership plan, associated with this stock option plan, the management is obliged to use a considerable part of the income earned from the stock options for purchasing of the company's shares.
The purpose of the stock options is to commit the management on a long-term basis. In case a person's employment or service in the company ends before the predetermined periods of time, a member of the management is obliged to offer the stock options back to the company without compensation for potential accrued value.
The main terms of the management incentive scheme that aims toward long-term shareholding are attached to this release.
In Oulunsalo, February 15, 2005
Elektrobit Group Plc.
The Board of Directors
Further Information:
Juha Sipilä
CEO
Elektrobit Group Plc.
Tel. No. +358 40 344 2900
Edvard Krogius
Director, Investor & Marketing Communications
Elektrobit Group Plc.
Tel. No. +358 40 344 2787
Ritva-Liisa Niskanen
Executive Vice President, Strategic Resources
Elektrobit Group Plc.
Tel. No. +358 40 344 2858
Distribution:
Helsinki Exchanges
Main Media
Attachment:
ELEKTROBIT GROUP PLC STOCK OPTIONS 2005, WHICH COMMIT THE MANAGEMENT TO SHAREHOLDING
In its meeting on 15 February 2005 the Board of Directors of Elektrobit Group Plc (Elektrobit Group or Company) (Board of Directors) has resolved to propose to the Annual General Meeting of Shareholders of Elektrobit Group to be held on 17 March 2005 that stock options, which commit the management to long-term shareholding in Elektrobit Group, be issued to the management of Elektrobit Group and its subsidiaries (the Group) and to a wholly owned subsidiary of Elektrobit Group on the following terms and conditions:
I TERMS AND CONDITIONS OF THE STOCK OPTIONS
1. Number of Stock Options
The total number of stock options issued shall be 22,500,000, which entitle to subscribe for a total of 22,500,000 shares in Elektrobit Group.
2. Stock Options
Of the stock options 4,500,000 shall be marked with the symbol 2005A, 6,000,000 shall be marked with the symbol 2005B, 6,000,000 shall be marked with the symbol 2005C and 6,000,000 shall be marked with the symbol 2005D.
The persons, to whom stock options are issued, shall be notified in writing by the Company about the offer of stock options. The stock options shall be distributed to the recipient when he/she has accepted the offer of the Company. Stock option certificates shall, upon request, be delivered to a stock option owner at the beginning of the relevant share subscription period, unless the stock options have been transferred to the book-entry securities system.
3. Right to Stock Options
The stock options shall, with deviation from the shareholders' pre-emptive right to subscription, be issued to the management of the Group and to Elektrobit Technologies Ltd (Elektrobit Technologies), a wholly-owned subsidiary of Elektrobit Group. Elektrobit Technologies is serving as a so-called reserve company in this Stock Option Plan. It is proposed that the shareholders' pre-emptive right to subscription be deviated from since the stock options are intended to form part of the Group's incentive and commitment program for the management.
4. Distribution of Stock Options
The Board of Directors shall decide upon the distribution of the stock options. Elektrobit Technologies shall be granted stock options to such extent that the stock options are not distributed to the management of the Group. The Board of Directors of Elektrobit Group shall later on decide upon the further distribution of the stock options granted to Elektrobit Technologies, to the management employed by or to be recruited by the Group.
The prerequisite for receiving 2005A- stock options is that a member of the management has purchased a certain number of Elektrobit Group shares, decided by the Board of Directors in advance, before distribution of 2005A- stock options.
Upon issue, all stock options 2005B, 2005C and 2005D and those stock options 2005A that are not distributed to the management, shall be granted to Elektrobit Technologies. Elektrobit Technologies may distribute stock options 2005 to the management employed by or to be recruited by the Group by the resolution of the Board of Directors of Elektrobit Group.
5. Transfer of Stock Options and Obligation to Offer Stock Options
The stock options are freely transferable, when the relevant share subscription period has begun. The Board of Directors may, however, permit the transfer of a stock option also before such date. The Company shall keep the stock options on behalf of a stock option owner until the beginning of the share subscription period. A stock option owner has the right to acquire the possession of the stock options when the relevant share subscription period begins. Should a stock option owner transfer his/her stock options, such person is obliged to inform the Company about the transfer in writing, without delay.
Should a stock option owner cease to be employed by or in the service of the Group, or should a stock option owner go on a statutory pension, on a pension in compliance with the employment contract or on a pension otherwise determined by the Company, or should a stock option owner die, before 1 April 2011, such person or his/her estate shall, without delay, offer to the Company or its order, free of charge, the stock options for which the share subscription period in accordance with Section II.2 had not begun at the last day of such person's employment or service. The Board of Directors can, however, in the above-mentioned cases, decide that a stock option owner is entitled to keep such stock options or a part of them, which are under offering obligation.
Should a stock option owner sell his/her Elektrobit Group shares or a part of them, which he/she has purchased as a prerequisite for receiving 2005A- stock options, before 1 April 2008, such person shall, without delay, offer to the Company or its order, free of charge, the number of 2005A- stock options that correspond to the proportion that the Board of Directors has decided in advance. The Board of Directors can, however, in the above-mentioned cases, decide that a stock option owner is entitled to keep such stock options or a part of them, which are under offering obligation.
Regardless of whether a stock option owner has offered his/her stock options to the Company or not, the Company is entitled to inform a stock option owner in writing that a stock option owner has lost his/her stock options on the basis of the above-mentioned reasons. Should the stock options be transferred to the book-entry securities system, the Company has the right, whether or not the stock options have been offered to the Company, to request and get transferred all the stock options, which are under offering obligation, from a stock option owner's book-entry account to the book-entry account appointed by the Company, without the consent of a stock option owner. In addition, the Company is entitled to register transfer restrictions and other restrictions concerning the stock options to a stock option owner's book-entry account, without the consent of a stock option owner.
II TERMS AND CONDITIONS OF THE SHARE SUBSCRIPTION
1. Right to Subscribe for New Shares
Each stock option entitles its owner to subscribe for one (1) new share in Elektrobit Group. The book equivalent value of each share is EUR 0.02. As a result of the subscriptions the share capital of Elektrobit Group may be increased by a maximum of EUR 450,000 and the number of shares by a maximum of 22,500,000 new shares.
Elektrobit Technologies, as a subsidiary of Elektrobit Group, shall not be entitled to subscribe for shares in Elektrobit Group on the basis of the stock options.
2. Share Subscription and Payment
The share subscription period shall be:
for stock options 2005A 1 April 2008 - 30 April 2010,
for stock options 2005B 1 April 2009 - 30 April 2011,
for stock options 2005C 1 April 2010 - 30 April 2012 and
for stock options 2005D 1 April 2011 - 30 April 2013.
The share subscription period for stock options 2005B, 2005C and 2005D shall, however, not commence, unless certain performance criteria, determined by the Board of Directors and based on the financial targets of the Group, have been attained before the distribution of these stock options. Those stock options 2005B, 2005C and 2005D for which the criteria determined by the Board of Directors have not been attained, expire in the manner decided by the Board of Directors.
The share subscription shall take place at the head office of Elektrobit Group or possibly at another location to be informed later. The subscriber shall transfer the respective stock option certificates with which he/she subscribes shares to the Company, or in case the stock options have been transferred to the book-entry securities system, the stock options with which shares have been subscribed shall be deleted from the subscriber's book-entry account. Payment of shares subscribed shall be effected upon subscription to the bank account appointed by the Company. The Company shall decide on all measures concerning the share subscription.
3. Share Subscription Price
The share subscription price shall be:
for stock option 2005A the trade volume weighted average quotation of the Elektrobit Group share on the Helsinki Exchanges during twenty (20) trading days after the publishing of the January - March 2005 interim report,
for stock option 2005B the trade volume weighted average quotation of the Elektrobit Group share on the Helsinki Exchanges during twenty (20) trading days after the publishing of the January - September 2005 interim report,
for stock option 2005C the trade volume weighted average quotation of the Elektrobit Group share on the Helsinki Exchanges during twenty (20) trading days after the publishing of the January - September 2006 interim report and
for stock option 2005D the trade volume weighted average quotation of the Elektrobit Group share on the Helsinki Exchanges during twenty (20) trading days after the publishing of the January - September 2007 interim report.
The share subscription price with stock options 2005B, 2005C and 2005D shall, nevertheless, always amount to at least the share subscription price with 2005A- stock options.
The Board of Directors can, however, decide to raise the share subscription price before the Board of Directors, for the first time, decides on the distribution of stock options of each stock option class.
From the share subscription price of stock options shall, as per the dividend record date, be deducted the amount of the dividend decided after the beginning of the period for determination of the share subscription price but before share subscription. The share subscription price shall, nevertheless, always amount to at least the book equivalent value of the share.
4. Registration of Shares
Shares subscribed for and fully paid shall be registered in the book-entry account of the subscriber.
5. Shareholder Rights
Dividend rights of the shares and other shareholder rights shall commence when the increase of the share capital has been entered into the Trade Register.
6. Share Issues, Convertible Bonds and Stock Options before Share Subscription
Should the Company, before the share subscription, increase its share capital through an issue of new shares, or issue of convertible bonds or stock options, so that the shareholders have pre-emptive right to subscription, a stock option owner shall have the same right as or an equal right to that of a shareholder. Equality is reached in the manner determined by the Board of Directors by adjusting the number of shares available for subscription, the share subscription price or both of these.
Should the Company, before the share subscription, increase its share capital by way of a bonus issue, the subscription ratio shall be amended so that the ratio to the share capital of shares to be subscribed by virtue of stock options remains unchanged. If the number of shares that can be subscribed for by virtue of one stock option should be a fraction, the fractional part shall be taken into account by reducing the share subscription price.
7. Rights in Certain Cases
If the Company reduces its share capital before the share subscription, the subscription right accorded by the terms of the stock options shall be adjusted accordingly, as specified in the resolution to reduce the share capital.
If the Company is placed in liquidation before the share subscription, a stock option owner shall be given an opportunity to exercise his/her subscription right before the liquidation begins, within a period of time determined by the Board of Directors.
If the Company resolves to merge in another company as the company being acquired or in a company to be formed in a combination merger, or if the Company resolves to be divided, the Stock Option Plan shall be replaced by a new stock option plan issued by the companies involved in the merger or, if the dividing company so decides, by a new stock option plan issued by the recipient company, on the basis of which the recipient company's new shares can be subscribed for, in accordance with the corresponding terms and conditions.
If the Stock Option Plan is replaced by a new stock option plan issued by the recipient company, the stock option owners shall have no right to require that stock options be redeemed in accordance with Chapter 14 Section 3 in the Companies Act. Alternatively, by the resolution of the Board of Directors, a stock option owner shall be given the right to subscribe for the shares with his/her stock options, before the merger or division, within a period of time determined by the Board of Directors. No subscription right shall exist after the expiry of the period of time. Also in this situation, a stock option owner has no right to require that the stock options be redeemed in accordance with Chapter 14 Section 3 in the Companies Act.
If the Company, after the beginning of the share subscription period, resolves to acquire its own shares by an offer made to all shareholders, the stock option owners shall be made an equivalent offer. In other cases, acquisition of the Company's own shares does not require the Company to take any action in relation to the stock options.
In case, before the end of the share subscription period, a situation, as referred to in Chapter 14 Section 19 in the Companies Act, in which a shareholder possesses over 90% of the shares of the Company and therefore has the right and obligation to redeem the shares of the remaining shareholders, or a situation, as referred to in Chapter 6 Section 6 in the Securities Market Act, arise, the stock option owners shall be entitled to use their right of subscription by virtue of the stock option, within a period of time determined by the Board of Directors.
If the number of the Company's shares is changed, while the share capital remains unchanged, the share subscription terms and conditions shall be amended so that the relative proportion of shares available for subscription with the stock options to the total number of the Company's shares, as well as the share subscription price total, remain the same.
Converting the Company from a public company into a private company shall not affect the terms and conditions of the stock options.
III Other Matters
The laws of Finland shall be applied to these terms and conditions. Disputes arising in relation to the stock options shall be settled by arbitration in accordance with the Arbitration Rules of the Central Chamber of Commerce. The arbitration proceeding shall be held in Finnish or in English.
The Board of Directors may decide on the transfer of the stock options to the book-entry securities system at a later date and on the resulting technical amendments to these terms and conditions, including those amendments and specifications to the terms and conditions, which are not considered essential. Other matters related to the stock options shall be decided on by the Board of Directors. The stock option documentation is kept available for inspection at the head office of Elektrobit Group.
The Company is entitled to withdraw the stock options which have not been transferred, or with which shares have not been subscribed for, free of charge, if a stock option owner acts against these terms and conditions, or against regulations given by the Company on the basis of these terms and conditions, or against applicable law, or against regulations by authorities.
These terms and conditions have been made in Finnish and English. In case of any discrepancy between the Finnish and English terms and conditions, the Finnish terms and conditions are decisive.
