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, the Board of Directors of Oriola-KD has on 28 May 2013 approved the terms and conditions of the Key Personnel Share Savings Plan. The objective is to further align the interests of Key Personnel with that of Oriola-KD shareholders.
The Plan is offered to approximately 70 Group key employees. The Savings Period will begin on 1 October 2013 and end on 30 September 2014. The maximum monthly saving is 10 percent and the minimum is 2 percent of each participant's fixed monthly gross salary. The accumulated savings are used for purchasing Oriola-KD class B shares for the participants at the market price quarterly.
In return, each participant will receive two free class B matching shares for every three acquired savings shares. Matching shares will be delivered to a participant if the participant holds the acquired shares from the Savings Period until the end of the designated holding period and if his or her employment with a company has not been terminated on the last day of the holding period on bad leaver terms. The holding period will end on the publication date of the Oriola-KD Q3/2015 interim report. Matching shares will be paid partly in the Company's class B shares and partly in cash. The cash proportion is intended for covering taxes and tax-related payments arising from the reward to a key person.
A key person will participate in the Plan for one year at a time. Shares will be acquired with the accrued savings at the market price quarterly, after the publication date of the relevant interim report. Any dividends paid on purchased shares during the commencing Savings Period will automatically be reinvested into additional class B shares on the following purchase date. These shares will have an equal right to matching shares.