Share Based Incentive Plans

Corporate Governance

Share Based Incentive Plans

In addition to the short-term performance bonus scheme, Technopolis operates share-based incentive plans decided by the company’s Board of Directors and intended for the Group’s management and other key persons.

The aim of these incentive plans is to support implementation of the company’s strategy, align the goals of shareholders and key personnel to increase the value of the company, and commit key personnel by means of a reward plan based on share ownership.

Performance Share Plan 2018–2020

Performance Share Plan 2018–2020 includes three one-year earning periods which constitute of the calendar years 2018, 2019 and 2020. Under the Plan the key personnel has the opportunity to earn rewards that corresponds the value maximum of 900,000 shares, including also the portion that will be paid in cash.

The rewards from the Performance Share Plan will be paid after the end of each earning period in years 2019, 2020 and 2021, by end of April. The payable reward shall consist of the net number of shares remaining after the deduction of a cash proportion that is required for covering the taxes due to the confirmed reward. In those countries where the company has an obligation to withhold taxes arising from the reward to the participant, the company shall withhold and pay such taxes from the cash proportion of the reward according to the law in force.

The earning of the Performance Share Plan criteria consist (100% weight) of the growth in the net asset value per share calculated in accordance with EPRA (European Public Real Estate Association) guidelines.

The Board of Directors decides annually on the key employees to be covered by the incentive scheme, the earning criteria and set objectives as well as the maximum number of shares transferred. After the end of each earning period, the Board of Directors confirms the results of the earning criteria and the number of shares granted based on them. The Board of Directors annually confirms the number of shares to be granted by the end of April following the earning period.

The Performance Share Plan includes the restriction to assign the shares during the restriction period, which commences at the payment of the reward and ends on December 31, 2021 for the shares earned in the period 2018, on December 31, 2022 for the shares earned in the period 2019 and on December 31, 2023 for the shares earned in the period 2020.

Should a Group Company or a key person give notice of termination or terminate an employment contract, a service contract or another contractual relationship of a key person, during the restriction period, a key person shall return the shares given as reward back to the company. The Board of Directors may, however, in these cases, decide that a key person is entitled to keep all or a part of the securities, which are subject to the returning obligation.

Should a key person in accordance with this Plan receive a reward, which is subsequently proven to have been incorrectly paid for a reason assignable to the key person, the Board of Directors has the right to amend the amount of the reward afterwards and, in this respect, oblige the key person to repay to the company such amount to be reduced from the original reward paid.

The terms and conditions of the Performance Share Plan 2018–2020

Performance Share Plan 2016–2020

Performance Share Plan 2016–2020 includes three three-year earning periods which constitute of the calendar years 2016–2018, 2017–2019 and 2018–2010. The company’s Board of Directors has decided to replace the last earning period 2018–2020 with a new earning period 2018 based on the Performance Share Plan 2018–2020. Therefore, no reward will be paid form the earning period 2018-2020 under the Performance Share Plan 2016–2020. Under the Plan the key personnel has the opportunity to earn a maximum of 597,532 shares (before the adjustment a maximum of 520,000 shares). The maximum amount is based on a revision of the Performance Share Plans of the company accepted by the Board of Directors of Technopolis in order to note and eliminate the dilution of the plan resulting from the issuance of new shares against payment in 2016.

The rewards from the Performance Share Plan will be paid partly in the company’s shares and partly in cash after the end of each earning period in years 2019, 2020 and 2021, by end of May. The cash proportion is intended to cover taxes and tax-related costs incurred to the participant due to the reward. The cash proportion corresponds at maximum to the value of all shares conveyed at the time of registration.

Under the Performance Share Plan the earning criteria have been determined separately for different personnel groups. The earning criteria are weighted and for the CEO, other Group Management Team members and named key employees working in the Group functions consist the total shareholder return growth (50% weight) and the operating result calculated in accordance with the EPRA (European Public Real Estate Association) guidelines. The key employees working in the business units, the earning criteria consists of the total shareholder return growth (30% weight), the unit EDITBA growth (35% weight) and the unit financial occupancy rate growth (35% weight).

The Board of Directors has decided annually on the key employees to be covered by the incentive scheme, the earning criteria and set objectives as well as the maximum number of shares transferred. After the end of each earning period, the Board of Directors confirms the results of the earning criteria and the number of shares granted based on them. The Board of Directors annually confirms the number of shares to be granted by the end of April following the earning period.

The Performance Share Plan includes the restriction to assign the shares during the restriction period, which commences at the payment of the reward and ends on May 31, 2020 for the shares earned in the period 2016–2018 and on May 31, 2021 for the shares earned in the period 2017–2019

Should a Group Company or a key person give notice of termination or terminate an employment contract, a service contract or another contractual relationship of a key person, during the restriction period, a key person shall return the shares given as reward back to the company. The Board of Directors may, however, in these cases, decide that a key person is entitled to keep all or a part of the securities, which are subject to the returning obligation.

Should a key person in accordance with this Plan receive a reward, which is subsequently proven to have been incorrectly paid for a reason assignable to the key person, the Board of Directors has the right to amend the amount of the reward afterwards and, in this respect, oblige the key person to repay to the company such amount to be reduced from the original reward paid.

The terms and conditions of the Performance Share Plan 2016–2020

Performance Share Plan 2013–2017

Performance Share Plan 2013–2017 included three three-year earning periods: calendar years 2013–2015, 2014–2016 and 2015–2017.

The rewards from the Performance Share Plan have been paid partly in the company’s shares and partly in cash after the end of each earning period in years 2016, 2017 and 2018. The cash proportion was provided to cover taxes and tax-related costs incurred to the participant due to the reward. The cash proportion corresponded at maximum to the value of all shares conveyed at the time of registration.

The Performance Share Plan includes the restriction to assign the shares during the restriction period, which commences at the payment of the reward and ends on 30 April 2019 for the shares earned for the 2015–2017 earning period. Regarding shares earned for the 2013–2015 earning period, the restriction period ended on 30 April 2017 and regarding shares earned for the 2014–2016 earning period, the restriction period ended on 30 April 2018.

Should a Group Company or a key person give notice of termination or terminate an employment contract, a service contract or another contractual relationship of a key person, during the restriction period, a key person shall return the shares given as reward back to the company. The Board of Directors may, however, in these cases, decide that a key person is entitled to keep all or a part of the securities, which are subject to the returning obligation.

Should a key person in accordance with this Plan receive a reward, which is subsequently proven to have been incorrectly paid for a reason assignable to the key person, the Board of Directors has the right to amend the amount of the reward afterwards and, in this respect, oblige the key person to repay to the company such amount to be reduced from the original reward paid.

The terms and conditions of the Performance Share Plan 2013–2017

Recommendation Issued by the Board of Directors Regarding Share Ownership

The Company’s Board of Directors has given a recommendation, according to which all key persons who are part of the Technopolis Plc’s share-based incentive plans, should during their employment or contract with the company own Technopolis Plc’s shares worth 50% of their gross annual salary, and as regards the CEO, 100% of his/her gross annual salary.

Last updated 11.7.2018