(Información remitida por la empresa firmante)
LTIP 2023 will have marginal effects on Orexo’s key ratios since delivery of shares shall be made by way of transfer of Orexo’s repurchased shares as is described under section “Delivery under LTIP 2023” below. Since delivery of shares under LTIP 2023 shall be made by way of transfer of Orexo’s repurchased shares, LTIP 2023 entails no dilution of the shareholding of the company. The maximum level of dilution for all other outstanding long-term incentive programs in the company amounts to 0 percent, since delivery of shares shall be made by way of transfer of Orexo’s repurchased shares.
Information on Orexo’s existing incentive programs can be found in the 2022 annual report, note 10 and 24, as well as on the company’s website www.orexo.com.
Delivery under LTIP 2023
The board of directors proposes that delivery of shares under LTIP 2023 shall be made by way of transfer of Orexo’s repurchased shares. In addition, the board of directors proposes that delivery may also be satisfied through payment of a cash amount that is equal to the value of the Orexo share on the date of vesting less the applicable strike price for any Employee Stock Options.
Resolution regarding adoption of new performance-based long-term incentive program LTIP Stay-on 2023 (item 21)
The board of directors proposes that the annual general meeting resolves to implement a new performance-based long-term incentive program for certain Global Management Team (“GMT”) employees and US Leadership Team (“USLT”) employees within the Orexo group (“LTIP Stay-on 2023”). LTIP Stay-on 2023 is proposed to include up to approximately 13 GMT and USLT employees within the Orexo group.
LTIP Stay-on 2023 is a three-year performance-based program. Under LTIP Stay-on 2023, the participants will be granted, free of charge, (i) performance-based share awards (“Share Awards”), and (ii) performance-based employee stock options (“Employee Stock Options”), entitling to a maximum of 60,000 shares in Orexo, in accordance with the terms stipulated below. The Share Awards entitle to a maximum of 30,000 shares in Orexo and the Employee Stock Options entitle to a maximum of 30,000 shares in Orexo.
The rationale for the proposal
LTIP Stay-on 2023 substantially corresponds with the performance based long-term incentive program adopted at the annual general meeting 2022 (LTIP Stay-on 2022). LTIP Stay-on 2023 is intended for certain GMT and USLT employees within the Orexo group and qualification for participation in LTIP Stay-on 2023 is conditional upon the participant either keeping shares from allocations in Orexo’s other on-going long-term incentive programs (the “implemented LTIPs”) or investing in new Orexo shares with part of or the entire annual cash bonus of the participant. The board of directors of Orexo believes that an equity incentive program is an important part of a competitive remuneration package to be able to attract, retain and motivate qualified employees to the Orexo group. The board of directors further believes that LTIP Stay- on 2023 constitutes an important incentive for GMT and USLT employees to keep shares in the company. With reference thereto, the board of directors has decided to propose the adoption of a program corresponding to the program adopted at the annual general meeting 2022 (LTIP Stay-on 2022). LTIP Stay-on 2023 is based on performance-based Share Awards and Employee Stock Options and adapted to the current needs of the Orexo group.
The purpose of LTIP Stay-on 2023 is to attract, retain and motivate employees of the Orexo group, provide a competitive remuneration package and to align the interests of GMT and USLT employees with the interests of the shareholders. The board of directors is of the opinion that this strengthens the interest for Orexo’s business and also stimulates company loyalty in the future. In light of the above, the board of directors believes that the implementation of LTIP Stay-on 2023 will have a positive effect on the development of the Orexo group and consequently that LTIP Stay-on 2023 is beneficial to both the shareholders and the company.
Conditions for Share Awards and Employee Stock Options
The following conditions shall apply for the Share Awards and the Employee Stock Options.
— Qualification for participation in LTIP Stay-on 2023 is conditional upon the participant
(i) keeping shares from allocations in any of Orexo’s implemented LTIPs between 1 May 2023 and 31 July 2023 (“Opt-in 1”), or (ii) investing in new Orexo shares with part of or the entire annual cash bonus of the participant between 1 February 2024 and 30 April 2024 (“Opt-in 2”). Under Opt-in 1, the Share Awards and the Employee Stock Options shall be granted free of charge to the participants as soon as possible after 31 July 2023 and no later than on 31 August 2023.
— Under Opt-in 2, the Share Awards and the Employee Stock Options shall be granted free of charge to the participants as soon as possible after 30 April 2024 and no later than on 31 May 2024.
— Out of the granted Share Awards and Employee Stock Options, 50 percent shall constitute Share Awards and 50 percent shall constitute Employee Stock Options. Every five (5) shares kept in accordance with Opt-in 1 and every five (5) shares acquired in accordance with Opt-in 2, respectively, entitle the participant to one (1) Share Award and one (1) Employee Stock Option.
— Each Share Award entitles the holder to receive one share in the company, free of charge, except for the appropriate taxes, three years after the granting of the Share Award (the vesting period), provided that the holder, with some exceptions, still is employed by the Orexo group.
— Each Employee Stock Option entitles the holder to receive one share in the company upon payment of the strike price, three years after the granting of the Employee Stock Option (the vesting period), provided that the holder, with some exceptions, still is employed by the Orexo group. The strike price shall be fixed to 100 percent of the volume-weighted average price for the Orexo share during the ten trading days preceding the date of the annual general meeting 2023.
— A prerequisite for entitlement to receive shares on the basis of Share Awards is that Performance Targets 1 and/or 2 have been satisfied pursuant to the terms and conditions specified below.
— A prerequisite for entitlement to receive shares on the basis of Employee Stock Options is that Performance Target 1 has been satisfied pursuant to the terms and conditions specified below.
— The number of Share Awards and Employee Stock Options encompassed by LTIP Stay- on 2023 is to be re-calculated in the event that changes occur in Orexo’s equity capital structure, such as a bonus issue, merger or consolidation of shares, new issue, reduction of the share capital or similar measures.
— To make the participants’ interest equal with the shareholders’, Orexo will compensate the participants for distributed dividends, if any, during the vesting period by increasing the number of shares that each Share Award and each Employee Stock Option, respectively, entitles to after the vesting period.
— The Share Awards and the Employee Stock Options are non-transferable and may not be pledged.
The Share Awards and the Employee Stock Options can be granted by the parent company and any other company within the Orexo group.
Performance Conditions
The Share Awards are to be divided according to two different performance conditions encompassed by LTIP Stay-on 2023. The performance conditions focus on the holder still being employed by the Orexo group (“Performance Target 1”) and Orexo’s financial and operational targets for 2023 (“Performance Target 2”). Of each participant’s granted Share Awards, 50 percent will pertain to Performance Target 1 and up to 50 percent will pertain to Performance Target 2.
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