Share based incentive plan
The Board of Directors of Oriola-KD approved on 19 December 2012 a new share-based incentive plan for the Group executives for the years 2013-2015. The share-based incentive plan includes three performance periods which are calendar years 2013, 2014 and 2015. The Board of Directors of the company will decide on the performance criteria and on targets to be established for them at the beginning of each performance period. The potential reward from the plan for the performance period 2013 will be based on Oriola-KD Group’s Earnings per Share (EPS) and Return on Capital Employed (ROCE), per cent.
The potential reward from the performance period 2013 will be paid partly in the company’s series B shares and partly in cash in 2016. The company will cover taxes and tax-related costs arising from the reward to the executives with the proportion to be paid in cash. No reward will mainly be paid if an executive’s employment or service in a Group company ends before the reward payment.
If an executive’s total earnings are more than his or her total salary of the calendar year preceding the reward payment multiplied by 3.5, the reward to be paid on the basis of the performance period will be reduced for such exceeding part. Total earnings mean total salary together with annual bonus and long-term incentive plan, and total salary means fixed base salary together with fringe benefits.
The target group of the new share-based incentive plan consists of approximately 10 executives during the performance period 2013. The rewards to be paid on the basis of the performance period 2013 will correspond to the value of a maximum total of 1,010,000 Oriola-KD Corporation series B shares (including also the proportion to be paid in cash).
In addition, Oriola-KD Corporation is planning to launch a share savings plan to be offered to 70 Group key personnel. Key employees will be offered an opportunity to save a proportion of their salaries. The accumulated savings are used for share purchases in the company. After approximately three years, each participant is awarded two free matching shares (including taxes and tax-related costs) for each three purchased shares, provided that the initially purchased shares are retained and the participant’s employment or service continues.
The intention of the Board of Directors is to finally decide on the launch of the share savings plan in spring 2013.