AcadeMedia currently has three long term incentive programs in the form of one share matching plan, one warrant program and one convertible program. At the Annual General Meeting 2018 decision was taken to adopt a new long-term incentive program in the form of a directed issue of convertible bonds to the employees within the AcadeMedia group, excluding the CEO and members of the Group Management. The new program was launched in February 2019.
The rationale for the incentive programs is to motivate and retain competent employees, align the participants’ goals with those of the Company, as well as to increase the motivation to meet and exceed the Company’s financial targets.
Current incentive programs:
- Programs resolved at the General Meeting on November 24, 2017
- Share matching plan 2018
- Warrant program 2018
- Programs resolved at the General Meeting on November 22, 2018
- Convertible program 2019
- Program resolved and issued by main shareholder Mellby Gård
- Stock options to Executive Management 2018
The share matching plan
The share-matching plan is aimed at senior executives and other key employees in the Group, approximately 80 individuals. The participants in the plans must have invested in the Group through the acquisition of new shares in AcadeMedia. Thereafter, participants will be given the opportunity to receive common shares in the program free of charge, known as matching shares.
More information about the share matching plan can be found in the Annual report 2018/19 Note 6, and in the notice of annual shareholders’ meeting of AcadeMedia AB (publ) 2017, item 17.
The warrant programs
The warrant program is directed to Executive Management, who invested in the company’s share matching program and entered into a pre-acquisition agreement with the company. They are offered to purchase warrants at market value calculated in accordance with the Black-Scholes valuation model. The holding of warrants and shares by senior executives in the Group Management is reported on the website in connection with the presentation of each executive.
More information about the warrant programs can be found in the Annual report 2018/19 Note 6.
The convertible program is aimed at the employees within the AcadeMedia group, excluding the CEO and members of Executive Management. The participants in the program must have entered into a Pre-emption Agreement with the company. The program includes the issue of convertible bonds with a maximum nominal value of SEK 152,100,000 and an estimated maximum dilution of 2.5 percent. The participants are offered to buy convertibles at their nominal value, which corresponds to their estimated market value. Each convertible can be converted into shares in the company at a conversion rate of 120 percent of the average volume weighted share price during the period 1 February 2019 up to and including 7 February 2019. The convertible bonds carry interest from and including March 15, 2019, and may be converted into shares during four periods. The first period will take place approximately three years from the time of issue.
More information about the convertible program can be found in the Annual report 2018/19 Note 6 and in the full proposal by the Board of Directors of AcadeMedia AB (publ) on a directed issue of convertibles on the homepage,
https://corporate.academedia.se/en/corporate-governance/general-meeting/annual-general-meeting-2018/. Please note that the original proposal was adjusted, the changes are described in the press release on November first 2018.
Stock options to Executive Management
In November 2018, Mellby Gård AB, the principal owner, offered Group Management to buy cash-settled options. The purpose of the program is to promote the company’s long-term development and earnings. AcadeMedia AB has not participated in the offering and will not incur any costs as a result of the offering. The program will not either result in any dilution of the AcadeMedia share.
In total, Group Management has acquired 681 000 options as of 30 November 2018. Participants have acquired each option for SEK 3.90, which corresponds to the market value as calculated according to the Black & Scholes model and using assumptions regarding volatility and risk-free interest at the time of issue. If the options are exercised, a cash settlement will be paid from Mellby Gård AB. No shares will be sold.
The option’s underlying assets are AcadeMedia’s common shares held by Mellby Gård. The options have a term of a little more than three years. The options have a threshold value (corresponding to strike price) of SEK 52.30 per option, corresponding to 120% of the share price at the time of issue. When exercised, the options are attributed a Final Value that corresponds to the volume-weighted share price of the AcadeMedia share during the five trading days closest to the exercise date. The cash settlement is calculated as the Final Value less the threshold value. The maximum cash settlement is SEK 28.80 kr per option. If the Final Value is less than the threshold value, no payment will be made. The options may be exercised from the day following the announcement of the Company’s interim report for the period 1 July to 31 December 2021, and will then give the right to the cash settlement for a period of two months, after which the Options expire. If the specified exercise period of is not applicable, the Options will give the right to the cash settlement, calculated in the same manner, during the period from 1 March to 1 May 2022.