Skandia to introduce stock option programme

Skandia to introduce stock option programme Skandia's board of directors has decided on the principles for a new incentive programme for the group's employees. The programme, which is directed to senior executives as well as other employees, is based on the issuance of stock options from a trust established expressly for such purpose. Technically this will be accomplished through a directed new issue to the trust of promissory notes with detachable warrants. At the same time, the trust will issue stock options to the employees involved. Upon exercise of stock options, the trust will subscribe for new shares for subsequent transfer to the employees in question. The new programme will be put to the shareholders for a decision, and thus the Board has also decided to call an Extraordinary General Meeting on Thursday, 27 January 2000. In the new programme, each year all employees, in principle, will annually be granted stock options. Each stock option corresponds to a warrant for a new Skandia share. If the employee remains employed after two years, each stock option can then be used to purchase one Skandia share at a price corresponding to that which prevailed at the time the options were granted. In addition to this, each year senior executives will be granted additional stock options. In order to be able to exercise these and participate in the value appreciation of Skandia's stock, these executives will have to remain employed three years after receiving their options. Allocation to senior executives will be made individually and will be based on local market conditions. Most of these options will be granted to internationally active key employees. The intention is that Skandia's CEO, Lars-Eric Petersson, will be granted 75,000 options for the year 2000. A total of not more than 13,200,000 stock options are intended to be granted each year. A certain portion of these will be reserved to cover social security charges associated with the programme. If all options are exercised, the number of shares outstanding will increase by approximately 2.6 per cent yearly. Assuming 10 per cent annual growth in the value of Skandia's stock for three years, the transfer of value to the employees for a year's fund will amount to slightly more than 0.6 per cent of Skandia's market capitalization. It the Skandia-share increases 100 per cent in value during the same time, the transfer of value will amount to approximately 1,3 per cent of Skandia's market capitalization at that time Commenting on the programme, Skandia's Chairman, Lars Ramqvist said: "Competitive and attractive compensation and incentive programmes are becoming increasingly essential in all companies, especially in knowledge- based companies like Skandia. Through the proposed stock option programme, it will be possible to offer a competitive and attractive programme to the group's key employees, especially those who are active internationally. Moreover, through the programme's design, the employees and shareholders will have the same goals in the form of good growth in the value of Skandia's stock." For further information, please contact: Jan-Mikael Bexhed, Company Secretary, tel. +46-8-788 3722 ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/2000/01/04/20000104BIT00120/bit0001.doc http://www.bit.se/bitonline/2000/01/04/20000104BIT00120/bit0002.pdf