Saab 2014 Annual Report Download - page 69

Performance Share Plans for 2011 to 2013 (solely
for senior executives and key persons) entitle
participants to 1–4 matching shares, depending
on the category to which the employee belongs.
e Annual General Meeting held on 8 April
2014 resolved in accordance with the Board’s pro-
posal to adopt a long-term incentive programme
2014 (LTI 2014), consisting of a Share Matching
Plan 2014 and a Performance Share Plan 2014.
Share Matching Plan 2014 is unchanged from pre-
vious years’ programmes. Performance Share Plan
2014 was modied to attract and retain talented
employees on competitive terms as well as to better
reect Saab’s business strategy and nancial tar-
gets. e Performance Share Plan covers a maxi-
mum of 175 key people, including the President
and CEO. Participants can save up to 7.5 percent
of their base salary to purchase Series B shares over
twelve months. Investments made under this pro-
gramme also count as a basis for participation in
the Share Matching Plan 2014, up to a maximum
of 5 per cent of base salary. If the purchased shares
are retained by the employee for three years and
they remain employed by the Saab Group, the
employee will be entitled to matching perfor-
mance shares, free of consideration, provided that
the performance targets are met. e programme
gives the employee the right to 2-7 performance
shares for each purchased share. e number of
performance shares is linked to the performance
targets established by the Board of Directors. e
terms for the performance matching are based on
three independent targets: organic sales growth,
EBIT margin and operating cash ow1) during the
nancial year 2015. e relative apportionment
between the targets is as follows: 30 per cent of the
allotment is attributable to organic sales growth,
40 per cent to EBIT margin and 30 per cent to ope-
rating cash ow. e performance targets are esta-
blished by the Board of Directors with a minimum
and maximum level for each target. e Board of
Directors decides on the performance matching
aer the end of the one-year measuring period,
i.e., the nancial year 2015. If the maximum levels
for the performance targets are reached or
exceeded, the performance matching will amount
to (and not exceed) the maximum number of
440,000 shares. If the performance outcome falls
short of the maximum level but exceeds the mini-
mum level, a linear proportioned performance
matching will occur. No performance matching
will occur if the performance outcome amounts to
or falls short of the minimum level. Performance
shares are allotted three years aer the investment,
i.e., normally during 2018 and in January 2019.
e Annual General Meeting 2014 also resol-
ved to authorise the Board of Directors to decide
to acquire not more than 1 340 000 Saab Series B
shares to secure delivery of shares to participants
in Saab’s long-term Share Matching Plan and Per-
formance Share Plan and for subsequent transfers
to cover certain expenses associated with LTI
2014, mainly social security costs. Repurchases
may be eected on Nasdaq Stockholm. On 5 June
2014, Saab announced that the Board of Directors
had decided to exercise this authorisation and
during the period 21 July to 17 September 2014
purchased a total of 1 340 000 Series B shares on
Nasdaq Stockholm at a cost of MSEK 252.
Furthermore, the Annual General Meeting
2014 also resolved to authorise the Board of Direc-
tors to decide to repurchase Saab Series B shares
up to a maximum of 10 per cent of all the shares in
the company. e purpose of the authorisation is
to be able to adapt the company’s capital structure
and thereby contribute to increased shareholder
value as well as to enable continuous use of
repurchased shares in connection with potential
company acquisitions and for the company’s
share-based incentive programmes. Repurchases
may be eected on Nasdaq Stockholm. During
2014, the Board of Directors has not made any
decisions regarding exercise of this repurchase
mandate.
Both repurchase mandates apply until the
Annual General Meeting 2015.
1) As of 1 January 2014, free cash flow is reported by the Group. It was
previously named as operating cash flow. Performance targets tied to
cash flow in Performance Share Plan 2014 is named as “operating
cash flow” in accordance with the Annual General Meeting’s resolu-
tion. In its proposal for Performance Share Plan 2015, the Board of
Directors has suggested that the performance target named in the
2014 programme as “operating cash flow” instead be named as “free
cash flow” in the 2015 programme.
SAAB ANNUAL REPORT 2014 – 65