Long-term incentive program 2024 (LTIP 2024)

Eltel AB's Annual General Meeting 2024 adopted a long-term incentive program (LTIP 2024) for senior executives and other key individuals in order to encourage a personal long-term ownership in the company, and in order to increase and strengthen the potential for recruiting, retaining and motivating such senior executives and key individuals.

Participants will, after a qualifying period and assuming an investment of their own in Eltel Shares, be given the opportunity to, without consideration, receive allotment of Eltel Shares (defined below) and, if applicable, exercise options issued by the company. The number of allotted Eltel Shares and, if applicable, options will depend on the number of Eltel Shares that they have purchased themselves and on the fulfilment of certain performance requirements. Eltel Shares are ordinary shares in the company (“Eltel Shares”). The term of LTIP 2024 is three years.

Basic features of LTIP 2024

LTIP 2024 will be directed towards a maximum of twenty-two (22) senior executives and other key individuals in the Eltel Group. The participants are based in Sweden and other countries where the Eltel Group is active. Participation in the LTIP 2024 assumes that the participant acquires and locks a certain minimum and maximum, respectively, number of Eltel Shares into LTIP 2024 (“Savings Shares”). Savings Shares shall be newly acquired Eltel Shares or Eltel Shares held by the participant, but which do not constitute Savings Shares in any other long-term incentive program introduced by the company.

For each acquired Savings Share, the participant shall be entitled to, after a certain vesting period (defined below), provided continued employment and dependent on the fulfilment of certain performance requirements during the financial years 2024-2026, receive allotment of Eltel Shares (”Performance Shares”) and, if applicable, exercise options issued by the company (“Performance Options”).

The performance requirements are linked to certain financial key figures. The participant shall not pay any consideration for the allotted Performance Shares and, if applicable, Performance Options.

The participant shall, if applicable, have the right to exercise the Performance Options commencing on the day after the end of the vesting period and during two weeks thereafter (“Exercise Period”). The exercise price when the participant exercises the Performance Option shall correspond to 120% of the volume-weighted average price according to Nasdaq Stockholm’s official price list for the Eltel Share during the first ten trading days that directly follows after 14 May 2024 (the “Purchase Price”). Customary recalculation of the Purchase Price as well as of the number of Eltel Shares that each Performance Option corresponds to may occur in certain situations. The exercise of the Performance Options may be made by using so called net strike.

Participation in LTIP 2024

LTIP 2024 will be directed towards a maximum of twenty-two (22) senior executives and other key individuals, divided into four categories of participants:

Category

 

Maximum number of Savings Shares
per person
Maximum number of
Performance Shares
per Savings share
Maximum number of Performance Options
per Savings share
A) CEO,
maximum 1 person
42,000 8.0x 8.0x
B) Group Management Team,
maximum 8 persons
17,000 8.0x 8.0x
C) Other key individuals,
maximum 13 persons
11,500 8.0x 8.0x
D) Other participants,
maximum 9 persons
11,000 8.0x 8.0x

To be eligible to participate in LTIP 2024, the participant must invest in Savings Shares for an amount corresponding to approximately five (5)% of the participant’s fixed base salary for the current year, however, not exceeding the number of Savings Shares that the participant can tie up within the scope of LTIP 2024 according to the above.

Allotment of Performance Shares and Performance Options

Allotment of Performance Shares and Performance Options within LTIP 2024 will be made during a limited period of time following the latter of the date of (i) the presentation of the first quarterly report for the first quarter of 2027, and (ii) the first record date for dividends decided by the Annual General Meeting 2027. The period up to this date is referred to as the qualification period (vesting period).

In order for the participant to be entitled to receive allotment of Performance Shares and, if applicable, Performance Options, it is assumed that the participant remains an employee of the Eltel Group during the full qualification period up until allotment, that the participant, during this period, has kept all Savings Shares, and that any of the performance requirements are fulfilled.

The participant can receive allotment of a maximum of eight (8) Performance Shares and, if applicable, eight (8) Performance Options per Savings Share. The Participant’s Performance Shares and, if applicable, Performance Options, respectively, shall be capped to an amount. The outcome shall be capped for Performance Shares and Performance Options, respectively, in the event the volume-weighted average price according to Nasdaq Stockholm’s official price list for the Eltel Share during the last ten trading days in March 2027 exceeds a share price corresponding to five times the volume-weighted average price according to Nasdaq Stockholm’s official price list for the Eltel Share during the first ten trading days that directly follows after 14 may 2024.

The Board of Directors shall, in accordance with the resolutions by the General Meeting set forth herein, be responsible for the detailed design and implementation of LTIP 2024. The Board of Directors may also decide on the implementation of an alternative cash based incentive for participants in countries where the acquisition of Savings Shares or allotment of Performance Shares and/or Performance Options (if applicable) is not possible, as well as if otherwise considered appropriate. Such alternative incentive shall to the extent practically possible be designed to correspond to the terms of LTIP 2024.