Summary:
• The planned incentive scheme for the Executive Board and other executive
staff members of TK Development has been implemented.
Forging a link between the individual staff member's efforts and long-term
value creation in the Group
As described in Company Announcement no. 5/2010, the Supervisory Board has
decided to exercise the authorization given to it at the Annual General Meeting
on 25 May 2010 to issue warrants. Thus, warrants for nominally DKK 7,880,000
(394,000 shares of nominally DKK 20) have been issued to the Executive Board
and other executive staff members of TK Development.
The aim of allocating warrants is to forge a link between the individual staff
member's efforts and long-term value creation in the Group.
The warrants have been allocated to 28 employees in all. The two Executive
Board members have received 50,000 warrants each, and other executive staff
members have received a total of 294,000 warrants. No warrants have been
allocated to members of the Supervisory Board.
The above-mentioned 394,000 warrants correspond to 1.4 % of the share capital.
The warrants allocated under the incentive scheme can be exercised in three
six-week periods placed as follows:
• following publication of the preliminary announcement of financial statements
for 2011/12 (from around 30 April 2012);
• following publication of the interim announcement of results for the first
half of 2012/13 (from around 30 September 2012);
• following publication of the preliminary announcement of financial statements
for 2012/13 (from around 30 April 2013).
An advance return of 8 % p.a. for TK Development's existing shareholders
Each warrant entitles the holder to subscribe for one share of nominally DKK 20
at a subscription price fixed as a simple average of the daily market prices
quoted for all trades in the TK Development share during the period from 9 to
22 June 2010, plus an annual 8 % adjustment to reflect an advance return to
existing shareholders and less dividend payments made to shareholders until the
time of exercise of the warrants.
Thus, based on a price of DKK 24.3 per share of nominally DKK 20, the
subscription price, before a deduction for any dividend, can be calculated at
DKK 28.0, DKK 28.9 and DKK 30.3 for the exercise of warrants in the three
respective six-week periods.
The main condition for exercising warrants is that the employee has not given
notice to terminate his or her employment before having exercised the warrants
allocated. If the Company terminates the employee's employment without this
being due to breach of contract by the employee, he or she will be entitled to
exercise the warrants.
Based on a price of DKK 23.5 per share and an annual dividend of DKK 0 per
share, using the Black-Scholes pricing formula, the value of the newly issued
warrants has been calculated at DKK 1.9 million, to be expensed over the term
of the incentive scheme.
The calculation is based on an anticipated future volatility of 40 %, a hurdle
rate of 8 % p.a. and a risk-free interest rate of 5 % p.a. In addition, it is
assumed that the warrants will be exercised in the second exercise period.
Further information is available from Frede Clausen, President and CEO, on tel.
+45 8896 1010.
