Eimskip: Allocation of share options

The Board of Directors of Eimskipafélag Íslands hf. decided today to allocate share options to certain key employees of the company globally amounting to 1,090,620 shares, which constitutes 0.62% of Eimskip’s share capital when the share option plan was approved. Thereof 486,180 share options were allocated to the CEO and Executive Management and the respective agreements signed today.

The share option plan sets forth a long-term incentive program intended to align the interests of the CEO, Executive Management and other key employees of the company, on one hand, and its shareholders, on the other hand, with a system which takes capital costs into account and adjusts for dividend payments, and as such seeks the equality of share option holders and shareholders. The terms and conditions of the share option agreements are in line with the share option plan approved at the Company’s Annual General Meeting on 17 March 2022 and the Company’s Remuneration Policy.

The main content of the share option agreements is as follows:

Exercise price of the share options is ISK 353 pr. share, i.e. the Company’s average share price in ISK for the last 10 business days, as recorded on Nasdaq Iceland prior to the allocation date. The exercise price shall be adjusted (for reduction) for future dividend payments and corresponding capital allocation to the shareholders from the Company’s assets on a krona-to-krona basis. The exercise price shall also be adjusted (upwards) with 3% annual interest, added to risk free interest until the first day of each exercise period.
Vesting time is three (3) years from the date of allocation.
Exercise period is immediately upon the conclusion of the minimum vesting period (3 years from the date of allocation), whereas the option holder can exercise 33.33% of his total options (period 1), a year thereafter, the option holder can exercise 33.33% of total options (period 2) and a year thereafter, the option holder can exercise 33.33% of total options (period 3).
The CEO, Executive Management and other key employees must retain shares amounting to the value of their net-profit from the exercise of their options, with taxes deducted, until the following amounts are reached, measured in the value of their shareholding in the company as a multiple of base salary: CEO 12 times monthly salary, Executive Management and other key employees 6 times monthly salary.
Generally, the share options shall become void if the holder’s employment with the company is terminated.
Should there be a change of control of the Company, cf. Art. 100 of Act, No. 108/2007, on takeovers, all outstanding share options shall vest immediately (acceleration of vesting period).
The Company shall not be permitted to issue a loan or security of any sort in relation to the share option plan.

Following the allocation of the share options the total outstanding share options which Eimskip has allocated to key employees is 2,628,000 or around 1.5% of the Company’s share capital at the time when the share option program was approved. The Board of Directors is authorized to issue up to 2,628,000 as total number of share options.

The total cost, according to the Black & Scholes model, regarding the share option agreements hereby announced is estimated to be ISK 36.5 million over next six years.

See attachments for information on share options allocated to the members of the Executive Management.

Attachments