Turku, Finland, 2011-12-05 09:00 CET (GLOBE NEWSWIRE) --
TELESTE CORPORATION STOCK EXCHANGE RELEASE 5.12.2011 AT 10:00
THE BOARD OF DIRECTORS OF TELESTE CORPORATION DECIDED ON INCENTIVE PLANS DIRECTED TO MEMBERS OF THE MANAGEMENT GROUP AND TO KEY EMPLOYEES
The Board of Directors of Teleste Corporation has today decided on two new share-based incentive plans directed to the members of the Teleste Management Group and to key employees. The purpose of the new plans is to combine the objectives of the owners and members of the Management Group and key employees in order to increase the value of the Company, to commit the members of the Management Group and key employees to Teleste Corporation (“Teleste”) by encouraging them to acquire and hold Teleste’s shares, as well as to offer them competitive reward plans based on long-term holding the Company’s shares.
Incentive Plan for Members of the Management Group
Through the incentive plan directed to members of the Management Group, the directors personally invest a considerable amount of their own funds in Teleste’s shares. The directors finance their investments partly themselves and partly by a loan provided by Teleste. The actual owner risk will be carried out personally by the directors for the part of their personal investment in the plan.
For the purpose of the share ownership, some of the members of the Management Group have established a limited liability company named Teleste Management II Oy (“Teleste Management II”), whose entire capital stock they or corporations over which they exercise control own. Upon establishment of the Plan, the intention of Teleste Management II is to acquire Teleste shares for a maximum of EUR 1,600,000, in total. The share acquisition will be financed by capital investments in Teleste Management II by members of the Management Group, in the maximum total amount of EUR 320,000, as well as by a loan provided by Teleste. Some of the members of the Management Group will finance their capital investments in Teleste Management II by selling the Teleste shares they currently hold.
It is possible to expand the plan by present or new members of the Management Group to be recruited. The maximum number of Teleste’s shares to be acquired for Teleste Management II, on the basis of the whole Plan, is, however, 700,000 in total. After the plan has been implemented in full, members of the Management Group will hold 3.7% of the Teleste’s shares through Teleste Management II. The members of the Management Group earlier hold 2.1% of the Teleste’s shares through Teleste Management Oy established in 2010.
On the basis of authorization granted by the Annual General Meeting of Shareholders of Teleste on 8 April 2011, the Board of Directors of Teleste decided on a share issue against payment directed to Teleste Management II. In the share issue, a maximum total of 542,000 new shares in Teleste will be offered for subscription by Teleste Management II, in derogation from the shareholders’ pre-emptive subscription rights. There are weighty financial reasons for the derogation from the shareholders’ pre-emptive subscription rights as the shares to be issued in the share issue will be used for the implementation of the incentive and commitment plan of the members of the Teleste Management Group.
The subscription price of the new share is the trade volume weighted average quotation of Teleste´s share on NASDAQ OMX Helsinki Ltd. during 18 November — 1 December 2011, i.e. EUR 2.95. The subscription price is based on the prevailing market price of Teleste’s share. Teleste Management II has subscribed for 542,000 shares. The subscribed shares must be paid by 31 December 2011, at the latest. The subscription price will be credited to the reserve for invested unrestricted equity of Teleste. Right to dividend and other shareholder rights will commence after the new shares have been entered into the Trade Register. The shares will be registered on the book-entry account of the subscriber and will be applied for public trading on NASDAQ OMX Helsinki Ltd after their Trade Register entry.
As part of the plan, the Board of Directors of Teleste has today decided to grant to Teleste Management II an interest-bearing loan in the maximum amount of EUR 1,600,000 to finance the acquisition of Teleste’s shares. The loan will be repaid in full by 1 July 2015, at the latest. Should the plan be continued by one year at a time in 2015, in 2016 and in 2017, the loan period may be extended correspondingly. Teleste Management II has the right to repay the loan prematurely at any time, and the obligation to repay the loan prematurely by selling the Teleste’s shares it holds, in case the Teleste’s share price exceeds a certain level determined in the plan, otherwise than occasionally.
The plan will be valid until summer 2015, at which time the plan is intended to be dissolved in a manner to be determined later. The plan may be dissolved, e.g., by merging Teleste Management II with Teleste, or by otherwise selling the Teleste’s shares held by Teleste Management II. The plan will be continued by one year at a time, in case the Teleste’s share price in April—May 2015, in April—May 2016 or in April—May 2017 is lower than the average share price which Teleste Management II paid for its Teleste’s shares.
During the validity of the plan, the transfer of the Teleste’s shares held by Teleste Management II has been restricted. The share ownership in Teleste Management II by the members of the Management Group will be valid until the plan is dissolved.
Upon establishment of the plan, four members of the Management Group will be included in the incentive plan directed to members of the Management Group.
Key Employees Performance Share Plan
The new key employees’ performance share plan includes three performance periods, calendar years 2012, 2013 and 2014. The Board of Directors or the Company will decide on the performance criteria of the Plan and their targets at the beginning of each performance period. The prerequisite for participation in the plan and receipt of reward provides that a key employee purchases Teleste’s shares in accordance with the terms and conditions of the performance share plan and decision by the Board of Directors. The potential reward from the performance period 2012 is based on the Operating Profit of the Teleste Group and / or of the business areas, as well as on fulfillment of the above participation prerequisite. Furthermore, a key employee will have a possibility to earn restricted reward, the amount of which depends on the number of purchased shares. Restricted reward is tied to the validity of employment or service relationship. Rewards will be paid partly in the Company’s shares and partly in cash in 2015. The cash proportion is intended to cover taxes and tax-related costs arising from the reward to a key employee. No reward will be paid if a key employee’s employment or service contract terminates before the reward payment.
The target group of the performance share plan consists of approximately 30 key employees. The total amount of rewards to be paid on the basis of the share performance plan is a maximum of 250,000 Teleste’s shares and cash payments corresponding to the value of shares.
The Board of Directors
Mr Jukka Rinnevaara, CEO, Tel. +358 2 2605 866 or +358 400 747 488
NASDAQ OMX Helsinki Ltd