Incentive plans

Summary of implemented incentive schemes

On an annual basis, the Board of Directors of Clas Ohlson AB (publ) (referred to below as “Clas Ohlson”) evaluates whether a long-term incentive scheme (for example, one based on shares or share price) will be proposed to the Annual General Meeting (AGM).

The aim of the proposed incentive plan is to create the prerequisites for cost-efficient retaining and recruitment of senior executives and other key employees judged to have considerable potential to influence Clas Ohlson’s long-term development. Descriptions of the implemented incentive schemes (and their outcome) are presented below.

Long-term incentive plan LTI 2008 (completed)  

Summary of programme  

An Extraordinary General Meeting held on 10 April 2008 resolved to adopt a performance-based incentive plan (LTI 2008). The LTI 2008 covered a maximum of 40 senior executives and other key employees judged to have considerable potential to influence the long-term development of Clas Ohlson. Under the incentive programme, the Participants are to acquire Series B Clas Ohlson shares at market price. The company is subsequently to match this private investment free of charge by allotting restricted share awards and performance-based employee stock options in accordance with the principles described below.  

Personal investment in Clas Ohlson shares  

Under LTI 2008, Participants were to acquire Series B Clas Ohlson shares at a market value corresponding to at least 5 and a maximum of 10 per cent of their annual fixed salaries on 1-11 May 2008 (the “Acquisition Period”). However, the Board of Directors has the authority to permit individuals who are new employees and fall under the definition of Participant to enter the programme up to and including 31 July 2008. Preliminary options and share awards were to be allotted five days after the end of the Acquisition Period (the “Start Date”).  

Share matching  

The private investment is subsequently to be matched by the company free of charge by allotting restricted share awards and performance-based employee stock options. A condition for the exercise of the share awards and employee stock options was that the employee retained his/her invested shares and, with certain exceptions, remains employed from the Start Date up to and including 30 April 2011 (the “Qualification Period”). For each Series B share acquired by the employee under the LTI 2008 programme, the company was to allot a share award and a number of preliminary employee stock options. Matching is to be based on the number of shares in which the employee invests at the standard share price on the purchase date. The scope of LTI 2008 can never exceed 540,000 shares (702,000 shares if social security expenses are included). Each share award entitles the holder to receive one Series B share in the company free of charge. The share awards do not provide entitlement to dividends on the underlying shares during the Qualification Period. The share awards are nontransferrable and can be issued by the company or other Group companies.  

Performance-based employee stock options  

Each exercisable employee stock option entitles the holder to acquire one Series B share in the company. The purchase price for the shares when the options are exercised shall correspond to 110 per cent of the volume-weighted average of the most recent price paid for series B Clas Ohlson shares on the NASDAQ OMX Nordic Exchange during a period of 10 trading days prior to 1 May 2008. The employee stock options are exercisable no earlier than 20 June 2011 and no later than 30 April 2015. The employee stock options do not provide entitlement to dividends on the underlying shares during the Qualification Period. The employee stock options are non-transferrable and can be issued by the company or other Group companies. The number of employee stock options that are exercisable for acquiring shares depends on the number of Series Bshares acquired by the employee and the fulfilment of certain target levels established by the Board regarding the company’s performance, growth and results during the Qualification Period. The levels established are: entry, target and ceiling. The levels correspond to the following: 5 employee stock options/acquired Series B shares for the entry level, 10 employee stock options/acquired Series B shares for target level and 15 employee stock options/acquired Series B shares for the ceiling level. Vesting of employee stock options between the entry and ceiling levels is straight-line. No employee stock options are to be allotted if the entry level is not achieved. If the share price on the acquisition date varies, the LTI 2008 could theoretically encompass more shares than the proposed scope of the programme. In such a case, allotment will be proportionally reduced in accordance with the principles decided by the Board.  

Costs of the programme  

The LTI 2008 will be recognised in accordance with IFRS 2 Share-based Payment. Based on an unchanged dividend and maximum outcome of the LTI 2008 criteria, the initial costs for LTI 2008 in accordance with IFRS 2 will not exceed SEK 18 M. The Meeting resolved to implement a buyback programme, as described above, to provide the company with the opportunity to transfer treasury shares to the Participants and to also use repurchased shares to ensure sufficient liquidity for the payment of future social security expenses associated with LTI 2008. It is not intended that any new shares will be issued as a result of the programme.  

Outcome LTI 2008  

The qualification and performance periods for the long-term incentive scheme LTI 2008 were from 1 May 2008 until 30 April 2011. A total of 31,520 shares were allotted on 2 May in accordance with the AGM resolution regarding share matching of one share per share purchased for those Participants who remained employed after the qualification period. The established performance criteria regarding average sales growth and increased earnings per share for the period 2008-2011 were not achieved, meaning that no options were allotted to the participants and thereby the LTI 2008 has been concluded.  

Long-term incentive programme, LTI 2009   

Summary of programme  

The Annual General Meeting held on 13 September 2008 resolved to adopt the performance-based incentive plan (LTI 2009) proposed by the Board. The LTI 2008 covers a maximum of 40 senior executives and other key employees judged to have considerable potential to influence the long-term development of Clas Ohlson. Under the incentive programme, the Participants are to acquire Series B Clas Ohlson shares at market price. The company is subsequently to match this private investment free of charge by allotting restricted share awards and performance-based employee stock options in accordance with the principles described below.  

Personal investment in Clas Ohlson shares  

Under LTI 2009, Participants were to acquire Series B Clas Ohlson shares at a market value corresponding to at least 5 and a maximum of 10 per cent of their annual fixed salaries on 1-11 May 2009 (the “Acquisition Period”). Preliminary options and share awards were to be allotted five days after the end of the Acquisition Period (the “Start Date”).  

Share matching  

The private investment is subsequently to be matched by the company free of charge by allotting restricted share awards and performance-based employee stock options. A condition for the exercise of the share awards and employee stock options is that the employee retains his/her invested shares and, with certain exceptions, remains employed from the Start Date up to and including 30 April 2012 (the “Qualification Period”). For each Series B share acquired by the employee under the LTI 2009 programme, the company will allot a share award and a number of preliminary employee stock options. Matching is to be based on the number of shares in which the employee invests at the standard share price on the purchase date. The scope of LTI 2009 can never exceed 715,000 shares (930,000 shares if social security expenses are included). Each share award entitles the holder to receive one Series B share in the company free of charge. The share awards do not provide entitlement to dividends on the underlying shares during the Qualification Period. The share awards are non-transferrable and can be issued by the company or other Group companies.  

Performance-based employee stock options  

Each exercisable employee stock option entitles the holder to acquire one Series Bshare in the company. The purchase price for the shares when the options are exercised shall correspond to 110 per cent of the volume-weighted average of the most recent price paid for series B Clas Ohlson shares on the NASDAQ OMX Nordic Exchange during a period of 10 trading days prior to the first day of the Acquisition Period. The employee stock options are exercisable no earlier than 20 June 2012 and no later than 30 April 2016. The employee stock options do not provide entitlement to dividends on the underlying shares during the Qualification Period. The employee stock options are nontransferrable and can be issued by the company or other Group companies. The number of employee stock options that are exercisable for acquiring shares depends on the number of Series B shares acquired by the employee and the fulfilment of certain target levels established by the Board regarding the company’s performance, growth and results during the Qualification Period. The levels established are: entry, target and ceiling. The levels correspond to the following: 5 employee stock options/acquired Series B shares for the entry level, 10 employee stock options/acquired Series B shares for target level and 15 employee stock options/acquired Series B shares for the ceiling level. Vesting of employee stock options between the entry and ceiling levels is straightline. No employee stock options are to be allotted if the entry level is not achieved. If the share price on the acquisition date varies, the LTI 2009 could theoretically encompass more shares than the proposed scope of the programme. In such a case, allotment will be proportionally reduced in accordance with the principles decided by the Board.  

Costs of the programme  

The LTI 2009 will be recognised in accordance with IFRS 2 Share-based Payment. Based on an unchanged dividend and maximum outcome of the LTI 2009 criteria, the initial costs for LTI 2009 in accordance with IFRS 2 will not exceed SEK 11.6 M. In addition, social security expenses will be incurred, calculated in greater detail in the Board’s full proposal for the LTI 2009. The Meeting resolved to implement a buyback programme to provide the company with the opportunity to transfer treasury shares to the Participants, as described above, and to also use repurchased shares to ensure sufficient liquidity for the payment of future social security expenses associated with LTI 2009. It is not intended that any new shares will be issued as a result of the programme.  

Outcome LTI 2009  

The qualification and performance periods for the long-term incentive scheme LTI 2009 were valid from 1 May 2009 until 30 April 2012. A total of 30,751 shares were allotted on 2 May 2012 in accordance with the AGM’s resolution regarding share matching of one share per share purchased to those Participants who remained employed after the qualification period. Following the close of the qualification period, the Board of Directors resolved to award seven options per purchased share (5-15 options in cases of target fulfilment), based on established criteria for sales and profit growth. A total of 215,257 options were awarded. The employee stock options are to be exercisable as of 20 June 2012 but no later than 30 April 2016, and entitle Participants to purchase Clas Ohlson shares at the price of SEK 98.10 per share.  

Long-term incentive programme, LTI 2010 (completed)  

Summary of programme  

The Annual General Meeting held on 12 September 2009 resolved to adopt the performance-based incentive plan (LTI 2010) proposed by the Board. The programme covers a maximum of 45 senior executives and other key employees judged to have considerable potential to influence the long-term development of Clas Ohlson. Under the incentive programme, the Participants are to acquire Series B Clas Ohlson shares at market price. The company is subsequently to match this private investment free of charge by allotting restricted share awards and performance-based employee stock options in accordance with the principles described below.  

Personal investment in Clas Ohlson shares  

Under LTI 2010, Participants are to acquire Series B Clas Ohlson shares at a market value corresponding to at least 5 and a maximum of 10 per cent of their annual fixed salaries on 1-11 May 2010 (the “Acquisition Period”). Preliminary options and share awards are allotted five days after the end of the Acquisition Period (the “Start Date”).  

Share matching  

The private investment is subsequently to be matched by the company free of charge by allotting restricted share awards and performance-based employee stock options. A condition for the exercise of the share awards and employee stock options is that the employee retains his/her invested shares and, with certain exceptions, remains employed from the Start Date up to and including 30 April 2013 (the “Qualification Period”). For each Series B share acquired by the employee under the LTI 2010 programme, the company will allot a share award and a number of preliminary employee stock options. Matching is to be based on the number of shares in which the employee invests at the standard share price on the purchase date. The scope of LTI 2010 can never exceed 640,000 shares (832,000 shares if social security expenses are included). Each share award entitles the holder to receive one Series B share in the company free of charge. The share awards do not provide entitlement to dividends on the underlying shares during the Qualification Period. The share awards are non-transferrable and can be issued by the company or other Group companies.  

Performance-based employee stock options  

Each exercisable employee stock option entitles the holder to acquire one Series B share in the company. The purchase price for the shares when the options are exercised shall correspond to 110 per cent of the volume-weighted average of the most recent price paid for series B Clas Ohlson shares on the NASDAQ OMX Nordic Exchange during a period of 10 trading days prior to the first day of the Acquisition Period. The employee stock options are exercisable as of 17 June 2013 and no later than 28 April 2017. The employee stock options do not provide entitlement to dividends on the underlying shares during the Qualification Period. The employee stock options are nontransferrable and can be issued by the company or other Group companies. The number of employee stock options that are exercisable for acquiring shares depends on the number of Series B shares acquired by the employee and the fulfilment of certain target levels established by the Board regarding the company’s performance, growth and results during the Qualification Period. The levels established are: entry, target and ceiling. The levels correspond to the following: 5 employee stock options/acquired Series B shares for the entry level, 10 employee stock options/acquired Series B shares for target level and 15 employee stock options/acquired Series B shares for the ceiling level. Vesting of employee stock options between the entry and ceiling levels is straightline. No employee stock options are to be allotted if the entry level is not achieved. If the share price on the acquisition date varies, the LTI 2010 could theoretically encompass more shares than the proposed scope of the programme. In such a case, allotment will be proportionally reduced in accordance with the principles decided by the Board.  

Costs of the programme  

The LTI 2010 will be recognised in accordance with IFRS 2 Share-based Payment. Based on an unchanged dividend and maximum outcome of the LTI 2010 criteria, the initial costs for LTI 2010 in accordance with IFRS 2 will not exceed SEK 19.3 M. In addition, social security expenses will be incurred, calculated in greater detail in the Board’s full proposal for the LTI 2010. The Meeting resolved to implement a buyback programme to provide the company with the opportunity to transfer treasury shares to the Participants, as described above, and to also use repurchased shares to ensure sufficient liquidity for the payment of future social security expenses associated with LTI 2010. It is not intended that any new shares will be issued as a result of the programme.  

Maturity of LTI 2010  

The qualification and performance periods for the long-term incentive programme LTI 2010 extended from 1 May 2010 until 30 April 2013. A total of 26,581 shares were allotted on 2 May 2013 in accordance with the AGM’s resolution regarding share matching of one share per share purchased to those participants who remained employed after the three-year qualification period. The established performance criteria regarding average sales growth and increased earnings per share for the period 20102013 were not achieved, meaning that no options were allotted to the participants and, accordingly, the LTI 2010 has been concluded.  

Long-term incentive programme, LTI 2011  

Summary of programme  

The Annual General Meeting held on 11 September 2010 resolved to adopt the performance-based incentive plan (LTI 2011) proposed by the Board. The programme covers a maximum of 45 senior executives and other key employees judged to have considerable potential to influence the long-term development of Clas Ohlson. Under the incentive programme, the Participants are to acquire Series B Clas Ohlson shares at market price. The company is subsequently to match this private investment free of charge by allotting restricted share awards and performance-based employee stock options in accordance with the principles described below.  

Personal investment in Clas Ohlson shares  

Under LTI 2011, Participants are to acquire Series B Clas Ohlson shares at a market value corresponding to at least 5 and a maximum of 10 per cent of their annual fixed salaries on 1-11 May 2011 (the “Acquisition Period”). Preliminary options and share awards are allotted five days after the end of the Acquisition Period (the “Start Date”).  

Share matching  

The private investment is subsequently to be matched by the company free of charge by allotting restricted share awards and performance-based employee stock options. A condition for the exercise of the share awards and employee stock options is that the employee retains his/her invested shares and, with certain exceptions, remains employed from the Start Date up to and including 30 April 2014 (the “Qualification Period”). For each Series B share acquired by the employee under the LTI 2011 programme, the company will allot a share award and a number of preliminary employee stock options. Matching is to be based on the number of shares in which the employee invests at the standard share price on the purchase date. The scope of LTI 2011 can never exceed 630,000 shares (820,000 shares if social security expenses are included). Each share award entitles the holder to receive one Series B share in the company free of charge. The share awards do not provide entitlement to dividends on the underlying shares during the Qualification Period. The share awards are non-transferrable and can be issued by the company or other Group companies.  

Performance-based employee stock options  

Each exercisable employee stock option entitles the holder to acquire one Series B share in the company. The purchase price for the shares when the options are exercised shall correspond to 110 per cent of the volume-weighted average of the most recent price paid for series B Clas Ohlson shares on the NASDAQ OMX Nordic Exchange during a period of 10 trading days prior to the first day of the Acquisition Period. The employee stock options are to be exercisable as of 16 June 2014 and no later than 27 April 2018. The employee stock options do not provide entitlement to dividends on the underlying shares during the Qualification Period. The employee stock options are nontransferrable and can be issued by the company or other Group companies. The number of employee stock options that are exercisable for acquiring shares depends on the number of Series B shares acquired by the employee and the fulfilment of certain target levels established by the Board regarding the company’s performance, growth and results during the Qualification Period. The levels established are: entry, target and ceiling. The levels correspond to the following: 5 employee stock options/acquired Series B shares for the entry level, 10 employee stock options/acquired Series B shares for target level and 15 employee stock options/acquired Series B shares for the ceiling level. Vesting of employee stock options between the entry and ceiling levels is straightline. No employee stock options are to be allotted if the entry level is not achieved. If the share price on the acquisition date varies, the LTI 2011 could theoretically encompass more shares than the proposed scope of the programme. In such a case, allotment will be proportionally reduced in accordance with the principles decided by the Board.  

Costs of the programme  

The LTI 2011 will be recognised in accordance with IFRS 2 Share-based Payment. Based on an unchanged dividend and maximum outcome of the LTI 2011 criteria, the initial costs for LTI 2011 in accordance with IFRS 2 will not exceed SEK 18.6 M. In addition, social security expenses will be incurred, calculated in greater detail in the Board’s full proposal for the LTI 2011. The Meeting resolved to implement a buyback programme to provide the company with the opportunity to transfer treasury shares to the Participants, as described above, and to also use repurchased shares to ensure sufficient liquidity for the payment of future social security expenses associated with LTI  

2011. It is not intended that any new shares will be issued as a result of the programme.  

Outcome of LTI 2011  

The qualification and performance periods for the long-term incentive scheme LTI 2011 were valid from 1 May 2011 until 30 April 2014. A total of 34 050 shares were allotted on 

2 May 2014 in accordance with the AGM’s resolution regarding share matching of one share per share purchased to those Participants who remained employed after the Qualification period. Following the close of the Qualification period, the Board of Directors resolved to award 7.6 options per purchased share (5-15 options in cases of target fulfilment), based on established criteria for sales and profit growth. A total of 258 780 options were awarded. The employee stock options are to be exercisable earliest 16 June 2014 but no later than 27 April 2018, and entitle Participants to purchase Clas Ohlson shares at the price of SEK 108.10 per share.  

  

Long-term incentive programme, LTI 2012   

Summary of programme  

The Annual General Meeting held on 10 September 2011 resolved to adopt the performance-based incentive plan (LTI 2012) proposed by the Board. The programme covers 44 senior executives and other key employees judged to have considerable potential to influence the long-term development of Clas Ohlson. Under the incentive programme, the Participants are to acquire Series B Clas Ohlson shares at market price. The company is subsequently to match this private investment free of charge by allotting restricted share awards and performance-based employee stock options in accordance with the principles described below.  

Personal investment in Clas Ohlson shares  

Under LTI 2012, the Participants are to acquire Series B Clas Ohlson shares at a market value corresponding to at least 5 and a maximum of 10 per cent of their annual fixed salaries on 1-11 May 2012 (the “Acquisition Period”). Preliminary options and share awards are allotted five days after the end of the Acquisition Period (the “Start Date”).  

Share matching  

The private investment is subsequently to be matched by the company free of charge by allotting restricted share awards and performance-based employee stock options. A condition for the exercise of the share awards and employee stock options is that the employee retains his/her invested shares and, with certain exceptions, remains employed from the Start Date up to and including 30 April 2015 (the “Qualification Period”). For each Series B share acquired by the employee under the LTI 2012 programme, the company will allot a share award and a number of preliminary employee stock options. Matching is to be based on the number of shares in which the employee invests at the standard share price on the purchase date. The scope of LTI 2012 can never exceed 654,000 shares (850,000 shares if social security expenses are included). Each share award entitles the holder to receive one Series B share in the company free of charge. The share awards do not provide entitlement to dividends on the underlying shares during the Qualification Period. The share awards are non-transferrable and can be issued by the company or other Group companies.  

Performance-based employee stock options  

Each exercisable employee stock option entitles the holder to acquire one Series B share in the company. The purchase price for the shares when the options are exercised shall correspond to 110 per cent of the volume-weighted average of the most recent price paid for series B Clas Ohlson shares on the NASDAQ OMX Nordic Exchange during a period of 10 trading days prior to the first day of the Acquisition Period. The employee stock options are to be exercisable as of 15 June 2015 and no later than 26 April 2019. The employee stock options do not provide entitlement to dividends on the underlying shares during the Qualification Period. The employee stock options are nontransferrable and can be issued by the company or other Group companies. The number of employee stock options that are exercisable for acquiring shares depends on the number of Series B shares acquired by the employee and the fulfilment of certain target levels established by the Board regarding the company’s performance, growth and results during the Qualification Period. The levels established are: entry, target and ceiling. The levels correspond to the following: 5 employee stock options/acquired Series B shares for the entry level, 10 employee stock options/acquired Series B shares for target level and 15 employee stock options/acquired Series B shares for the ceiling level.

Vesting of employee stock options between the entry and ceiling levels is straightline. No employee stock options are to be allotted if the entry level is not achieved. If the share price on the acquisition date varies, the LTI 2012 could theoretically encompass more shares than the proposed scope of the programme. In such a case, allotment will be proportionally reduced in accordance with the principles decided by the Board.  

Costs of the programme  

The LTI 2012 will be recognised in accordance with IFRS 2 Share-based Payment. Based on an unchanged dividend and maximum outcome of the LTI 2012 criteria, the initial costs for LTI 2012 in accordance with IFRS 2 will not exceed SEK 17.0 M. In addition, social security expenses will be incurred, calculated in greater detail in the Board’s full proposal for the LTI 2012. The Meeting resolved to implement a buyback programme to provide the company with the opportunity to transfer treasury shares to the Participants, as described above, and to also use repurchased shares to ensure sufficient liquidity for the payment of future social security expenses associated with LTI 2012. It is not intended that any new shares will be issued as a result of the programme. 

Outcome of LTI 2012  

The qualification and performance periods for the long-term incentive scheme LTI 2012 were valid from 1 May 2012 until 30 April 2015. A total of 35 217 shares were allotted on  

4 May 2015 in accordance with the AGM’s resolution regarding share matching of one share per share purchased to those Participants who remained employed after the Qualification period. Following the close of the Qualification period, the Board of Directors resolved to award 9 options per purchased share (5-15 options in cases of target fulfilment), based on established criteria for sales and profit growth. A total of 316 953 options were awarded. The employee stock options are to be exercisable earliest 15 June 2015 but no later than 26 April 2019, and entitle Participants to purchase Clas Ohlson shares at the price of SEK 109.10 per share.  

 

Long-term incentive programme, LTI 2013   

Summary of programme  

The Annual General Meeting held on 8 September 2012 resolved to adopt the performance-based incentive plan (LTI 2013) proposed by the Board. The programme covers 38 senior executives and other key employees judged to have considerable potential to influence the long-term development of Clas Ohlson. Under the incentive programme, the Participants are to acquire Series B Clas Ohlson shares at market price. The company is subsequently to match this private investment free of charge by allotting restricted share awards and performance-based employee stock options in accordance with the principles described below.  

Personal investment in Clas Ohlson shares  

Under LTI 2013, Participants are to acquire Series B Clas Ohlson shares at a market value corresponding to at least 5 and a maximum of 10 per cent of their annual fixed salaries on 1-11 May 2013 (the “Acquisition Period”). Preliminary options and share awards are allotted five days after the end of the Acquisition Period (the “Start Date”).  

Share matching  

The private investment is subsequently to be matched by the company free of charge by allotting restricted share awards and performance-based employee stock options. A condition for the exercise of the share awards and employee stock options is that the employee retains his/her invested shares and, with certain exceptions, remains employed from the Start Date up to and including 30 April 2016 (the “Qualification Period”). For each Series B share acquired by the employee under the LTI 2013 programme, the company will allot a share award and a number of preliminary employee stock options. Matching is to be based on the number of shares in which the employee invests at the standard share price on the purchase date. The scope of LTI 2013 can never exceed 653,000 shares (859,000 shares if social security expenses are included). Each share award entitles the holder to receive one Series B share in the company free of charge. The share awards do not provide entitlement to dividends on the underlying shares during the Qualification Period. The share awards are non-transferrable and can be issued by the company or other Group companies.  

Performance-based employee stock options  

Each exercisable employee stock option entitles the holder to acquire one Series B share in the company. The purchase price for the shares when the options are exercised shall correspond to 110 per cent of the volume-weighted average of the most recent price paid for series B Clas Ohlson shares on the NASDAQ OMX Nordic Exchange during a period of 10 trading days prior to the first day of the Acquisition Period. The employee stock options are to be exercisable as of 15 June 2016 and no later than 24 April 2020. The employee stock options do not provide entitlement to dividends on the underlying shares during the Qualification Period. The employee stock options are nontransferrable and can be issued by the company or other Group companies. The number of employee stock options that are exercisable for acquiring shares depends on the number of Series B shares acquired by the employee and the fulfilment of certain target levels established by the Board regarding the company’s performance, growth and results during the Qualification Period. The levels established are: entry, target and ceiling. The levels correspond to the following: 5 employee stock options/acquired Series B shares for the entry level, 10 employee stock options/acquired Series B shares for target level and 15 employee stock options/acquired Series B shares for the ceiling level. Vesting of employee stock options between the entry and ceiling levels is straightline. No employee stock options are to be allotted if the entry level is not achieved. If the share price on the acquisition date varies, the LTI 2013 could theoretically encompass more shares than the proposed scope of the programme. In such a case, allotment will be proportionally reduced in accordance with the principles decided by the Board.  

Costs of the programme  

The LTI 2013 will be recognised in accordance with IFRS 2 Share-based Payment. Based on an unchanged dividend and maximum outcome of the LTI 2013 criteria, the initial costs for LTI 2013 in accordance with IFRS 2 will not exceed SEK 13.2 M. In addition, social security expenses will be incurred, calculated in greater detail in the Board’s full proposal for the LTI 2013. The Meeting resolved to implement a buyback programme to provide the company with the opportunity to transfer treasury shares to the Participants, as described above, and to also use repurchased shares to ensure sufficient liquidity for the payment of future social security expenses associated with LTI  2013. It is not intended that any new shares will be issued as a result of the programme.

Outcome of LTI 2013  

The qualification and performance periods for the long-term incentive scheme LTI 2013 were valid from 1 May 2013 until 30 April 2016. A total of 40 569 shares were allotted on  

2 May 2016 in accordance with the AGM’s resolution regarding share matching of one share per share purchased to those Participants who remained employed after the Qualification period. Following the close of the Qualification period, the Board of Directors resolved to award 15 options per purchased share (5-15 options in cases of target fulfilment), based on established criteria for sales and profit growth. A total of 608 535 options were awarded. The employee stock options are to be exercisable earliest 15 June 2016 but no later than 24 April 2020, and entitle Participants to purchase Clas Ohlson shares at the price of SEK 94.30 per share.  

Long-term incentive programme, LTI 2014   

Summary of programme  

The Annual General Meeting held on 7 September 2013 resolved to adopt the performance-based incentive plan (LTI 2014) proposed by the Board. The programme covers 45 senior executives and other key employees judged to have considerable potential to influence the long-term development of Clas Ohlson. Under the incentive programme, the Participants are to acquire Series B Clas Ohlson shares at market price. The company is subsequently to match this private investment free of charge by allotting restricted share awards and performance-based employee stock options in accordance with the principles described below.  

Personal investment in Clas Ohlson shares  

Under LTI 2014, Participants are to acquire Series B Clas Ohlson shares at a market value corresponding to at least 5 and a maximum of 10 per cent of their annual fixed salaries on 1-10 May 2014 (the “Acquisition Period”). Preliminary options and share awards are allotted five days after the end of the Acquisition Period (the “Start Date”).  

Share matching  

The private investment is subsequently to be matched by the company free of charge by allotting restricted share awards and performance-based employee stock options. A condition for the exercise of the share awards and employee stock options is that the employee retains his/her invested shares and, with certain exceptions, remains employed from the Start Date up to and including 30 April 2017 (the “Qualification Period”). For each Series B share acquired by the employee under the LTI 2014 programme, the company will allot a share award and a number of preliminary employee stock options. Matching is to be based on the number of shares in which the employee invests at the standard share price on the purchase date. The scope of LTI 2014 can never exceed 656,000 series B shares (862,000 shares if social security expenses are included). Each share award entitles the holder to receive one Series B share in the company free of charge. The share awards do not provide entitlement to dividends on the underlying shares during the Qualification Period. The share awards are nontransferrable and can be issued by the company or other Group companies.  

Performance-based employee stock options  

Each exercisable employee stock option entitles the holder to acquire one Series B share in the company. The purchase price for the shares when the options are exercised shall correspond to 110 per cent of the volume-weighted average of the most recent price paid for series B Clas Ohlson shares on the NASDAQ OMX Nordic Exchange during a period of 10 trading days prior to the first day of the Acquisition Period. The employee stock options are to be exercisable no earlier than 15 June 2017 and no later than 23 April 2021. The employee stock options do not provide entitlement to dividends on the underlying shares during the Qualification Period. The employee stock options are non-transferrable and can be issued by the company or other Group companies. The number of employee stock options that are exercisable for acquiring shares depends on the number of Series B shares acquired by the employee and the fulfilment of certain target levels established by the Board regarding the company’s performance, growth and results during the Qualification Period. The levels established are: entry, target and max. The levels correspond to the following: 5 employee stock  

options/acquired Series B shares for the entry level, 10 employee stock options/acquired Series B shares for target level and 15 employee stock options/acquired Series B shares for the ceiling level. Vesting of employee stock options between the entry and max levels is straight-line. No employee stock options are to be allotted if the entry level is not achieved. If the share price on the acquisition date varies, the LTI 2014 could theoretically encompass more shares than the proposed scope of the programme. In such a case, allotment will be proportionally reduced in accordance with the principles decided by the Board.  

Costs of the programme  

The LTI 2014 will be recognised in accordance with IFRS 2 Share-based Payment. Based on an unchanged dividend and maximum outcome of the LTI 2014 criteria, the initial costs for LTI 2014 in accordance with IFRS 2 will not exceed SEK 10.6 M. In addition, social security expenses will be incurred, calculated in greater detail in the Board’s full proposal for the LTI 2014. The Meeting resolved to implement a buyback programme to provide the company with the opportunity to transfer treasury shares to the Participants, as described above, and to also use repurchased shares to ensure sufficient liquidity for the payment of future social security expenses associated with LTI 2014. It is not intended that any new shares will be issued as a result of the programme.  

   

Long-term incentive programme, LTI 2015 

Summary of programme  

The Annual General Meeting held on 13 September 2014 resolved to adopt the performance-based incentive plan (LTI 2015) proposed by the Board. The programme encompass a maximum of 100 participants, comprising of two groups; (1) a maximum of 20 members of Senior Management including the CEO, Group Management, and country managers or corresponding positions, regarded as having considerable potential in their present position to influence Clas Ohlson AB’s long-term development (“Senior Management”) and (2) up to 80 other employees who could develop into members of Senior Management or other key positions within the Group and thus influence Clas Ohlson AB’s long-term development (“Key Individuals”).  

Under the incentive programme, members of Senior Management are to acquire Series B Clas Ohlson shares at market price. The company is subsequently to match this private investment free of charge by allotting restricted share awards and performancebased employee stock options. For Key Individuals no initial investment is made, but performance based employee stock options are allocated in accordance with certain predetermined criteria. The principles regulating the programme are set out below. 

Personal investment in Clas Ohlson shares (Senior Management) 

Under LTI 2015, members of Senior Management are to acquire Series B Clas Ohlson shares at a market value corresponding to at least 5 and a maximum of 10 per cent of their annual fixed salaries on 1-10 May 2015 (the “Acquisition Period”). Preliminary options and share awards are allotted five days after the end of the Acquisition Period (the “Start Date”). The Board is entitled to adjust the interval for the Acquisition Period, for Individual Participants, to the extent the Participant is covered by trade embargo regulations when the Acquisition Period occurs. 

Share matching (Senior Management) 

The private investment is subsequently to be matched by the company free of charge by allotting restricted share awards and performance-based employee stock options. A condition for the exercise of the share awards and employee stock options is that the member of Senior Management retains his/her invested shares and, with certain exceptions, remains employed from the Start Date up to and including 30 April 2018 (the  “Qualification Period”). For each Series B share acquired under the LTI 2015 programme, the company will allot a share award and a number of preliminary employee stock options. Matching is to be based on the number of shares in which the member of Senior Management invests at the standard share price on the purchase date. The scope of LTI 2015 can never exceed 656,000 series B shares (860,000 shares if social security expenses are included). Each share award entitles the holder to receive one Series B share in the company free of charge. The share awards do not provide entitlement to dividends on the underlying shares during the Qualification Period. The share awards are non-transferrable and can be issued by the company or other Group companies.  

Performance-based employee stock options  

Each exercisable employee stock option entitles the holder to acquire one Series B share in the company. The purchase price for the shares when the options are exercised shall correspond to 100 per cent of the volume-weighted average of the most recent price paid for series B Clas Ohlson shares on the NASDAQ OMX Stockholm AB during a period of 10 trading days prior to the first day of the Acquisition Period. The employee stock options are to be exercisable no earlier than 15 June 2018 and no later than 23 April 2022. The employee stock options do not provide entitlement to dividends on the underlying shares during the Qualification Period. The employee stock options are nontransferrable and can be issued by the company or other Group companies. Vesting of employee stock options between the Entry and Stretch performance levels occurs at a 

straight line. Should the threshold level, Entry, not be attained, no employee stock

options will be allotted. Should the share price decline to such an extent that Series B shares are acquired by members of Senior Management at a price resulting in LTI 2015 encompassing more shares than the proposed scope, allotment will be reduced proportionately in accordance with the principles determined by the Board. 

            1.      Senior Management 

 The number of employee stock options that may be exercised for acquiring shares depends on the number of Series B shares acquired by the member of Senior Management and the fulfilment of certain target levels established by the Board regarding the company’s performance, growth and results during the Qualification Period. The performance levels established are Entry, Target, Stretch and Max. The performance levels correspond to: 5 employee stock options/acquired Series B shares (Entry), 10 employee stock options/acquired Series B shares (Target), 15 employee stock options/acquired Series B shares (Stretch), and 25 employee stock options/acquired Series B shares (Max) (this level is conditional upon the existence of a specific situation and a single member of Senior Management fulfilling the exceptional tasks resolved by the Board). 

            2.      Key Individuals 

LTI 2015 entails that Key Individuals on the Start Date receive an allocation of performance-based employee stock options free of charge. The number of allocated employee stock options corresponds to the number of shares, which, at the prevailing market price on the Start Date, correspond to the value of a minimum of 5 per cent and a maximum of 10 per cent of the Key Individual’s annual fixed salary.   

The number of employee stock options that may be exercised for acquiring shares depends on the number of employee stock options that are allotted to the Key Individual at the Start Date and the fulfilment of certain target levels established by the Board regarding the company’s performance, growth and results during the Qualification Period. The three performance levels that were established are: Entry, Target and Stretch. The levels corresponds to: 5 employee stock options/allocated conditional upon performance base-based employee stock options on the Start Date (Entry), 10 employee stock options/ allocated conditional upon performance base-based employee stock options on the Start Date (Target), 15 employee stock options/ allocated conditional upon performance base-based employee stock options on the Start Date (Stretch). 

 

Costs of the programme  

The LTI 2015 will be recognised in accordance with IFRS 2 Share-based Payment. Based on an unchanged dividend and maximum outcome of the LTI 2015 criteria, the initial costs for LTI 2015 in accordance with IFRS 2 will not exceed SEK 16.7 M. In addition, social security expenses will be incurred, calculated in greater detail in the Board’s full proposal for the LTI 2015. The Meeting resolved to implement a buyback programme to provide the company with the opportunity to transfer treasury shares to the Participants, as described above, and to also use repurchased shares to ensure sufficient liquidity for the payment of future social security expenses associated with LTI 2015. It is not intended that any new shares will be issued as a result of the programme.  

Long-term incentive programme, LTI 2016 

Summary of programme  

The Annual General Meeting held on 12 September 2015 resolved to adopt the performance-based incentive plan (LTI 2016) proposed by the Board. The programme encompass a maximum of 100 participants, comprising of two groups; (1) a maximum of 20 members of Senior Management including the CEO, Group Management, and country managers or corresponding positions, regarded as having considerable potential in their present position to influence Clas Ohlson AB’s long-term development (“Senior Management”) and (2) up to 80 other employees who could develop into members of Senior Management or other key positions within the Group and thus influence Clas Ohlson AB’s long-term development (“Key Individuals”).  

Under the incentive programme, members of Senior Management are to acquire Series B Clas Ohlson shares at market price. The company is subsequently to match this private investment free of charge by allotting restricted share awards and performance based employee stock options. For Key Individuals no initial investment is made, but performance based employee stock options are allocated in accordance with certain predetermined criteria. The principles regulating the programme are set out below. 

Personal investment in Clas Ohlson shares (Senior Management) 

Under LTI 2016, members of Senior Management are to acquire Series B Clas Ohlson shares at a market value corresponding to at least 5 and a maximum of 10 per cent of their annual fixed salaries on 2-10 May 2016 (the “Acquisition Period”). Preliminary options and share awards are allotted five days after the end of the Acquisition Period (the “Start Date”). The Board is entitled to adjust the interval for the Acquisition Period, for Individual Participants, to the extent the Participant is covered by trade embargo regulations when the Acquisition Period occurs. 

Share matching (Senior Management) 

The private investment is subsequently to be matched by the company free of charge by allotting restricted share awards and performance-based employee stock options. A condition for the exercise of the share awards and employee stock options is that the member of Senior Management retains his/her invested shares and, with certain exceptions, remains employed from the Start Date up to and including 30 April 2019 (the 

“Qualification Period”). For each Series B share acquired under the LTI 2016 programme, the company will allot a share award and a number of preliminary employee stock options. Matching is to be based on the number of shares in which the member of Senior Management invests at the standard share price on the purchase date. The scope of LTI 2016 can never exceed 656,000 series B shares (860,000 shares if social security expenses are included). Each share award entitles the holder to receive one Series B share in the company free of charge. The share awards do not provide entitlement to dividends on the underlying shares during the Qualification Period. The share awards are non-transferrable and can be issued by the company or other Group companies.  

Performance-based employee stock options  

Each exercisable employee stock option entitles the holder to acquire one Series B share in the company. The purchase price for the shares when the options are exercised shall correspond to 100 per cent of the volume-weighted average of the most recent price paid for series B Clas Ohlson shares on the NASDAQ OMX Stockholm AB during a period of 10 trading days prior to the first day of the Acquisition Period. The employee stock options are to be exercisable no earlier than 14 June 2019 and no later than 21 April 2023. The employee stock options do not provide entitlement to dividends on the underlying shares during the Qualification Period. The employee stock options are nontransferable and can be issued by the company or other Group companies. Vesting of employee stock options between the Entry and Stretch performance levels occurs at a straight line. Should the threshold level, Entry, not be attained, no employee stock options will be allotted. Should the share price decline to such an extent that Series B shares are acquired by members of Senior Management at a price resulting in LTI 2016 encompassing more shares than the proposed scope, allotment will be reduced proportionately in accordance with the principles determined by the Board. 

  1. Senior Management 

The number of employee stock options that may be exercised for acquiring shares depends on the number of Series B shares acquired by the member of Senior Management and the fulfilment of certain target levels established by the Board regarding the company’s performance, growth and results during the Qualification Period. The performance levels established are Entry, Target, Stretch and Max. The performance levels correspond to: 5 employee stock options/acquired Series B shares (Entry), 10 employee stock options/acquired Series B shares (Target), 15 employee stock options/acquired Series B shares (Stretch), and 25 employee stock options/acquired Series B shares (Max) (this level is conditional upon the existence of a specific situation and a single member of Senior Management fulfilling the exceptional tasks resolved by the Board). 

  1. Key Individuals 

LTI 2016 entails that Key Individuals on the Start Date receive an allocation of performance-based employee stock options free of charge. The number of allocated employee stock options corresponds to the number of shares, which, at the prevailing market price on the Start Date, correspond to the value of a minimum of 5 per cent and a maximum of 10 per cent of the Key Individual’s annual fixed salary.  

The number of employee stock options that may be exercised for acquiring shares depends on the number of employee stock options that are allotted to the Key Individual at the Start Date and the fulfilment of certain target levels established by the Board regarding the company’s performance, growth and results during the Qualification Period. The three performance levels that were established are: Entry, Target and Stretch. The levels corresponds to: 5 employee stock options/allocated conditional upon performance base-based employee stock options on the Start Date (Entry), 10 employee stock options/ allocated conditional upon performance base-based employee stock options on the Start Date (Target), 15 employee stock options/ allocated conditional upon performance base-based employee stock options on the Start Date (Stretch). 

Costs of the programme  

The LTI 2016 will be recognised in accordance with IFRS 2 Share-based Payment. Based on an unchanged dividend and maximum outcome of the LTI 2016 criteria, the initial costs for LTI 2016 in accordance with IFRS 2 will not exceed SEK 13.7 M. In addition, social security expenses will be incurred, calculated in greater detail in the Board’s full proposal for the LTI 2016. The Meeting resolved to implement a buyback programme to provide the company with the opportunity to transfer treasury shares to the Participants, as described above, and to also use repurchased shares to ensure sufficient liquidity for the payment of future social security expenses associated with LTI 2016. It is not intended that any new shares will be issued as a result of the programme.

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