Share-related incentive programs

The aim of the performance-based incentive programs is to retain and recruit competent employees, who are expected to contribute to the Group’s continued favorable performance. The programs are to promote well-founded decision-making and desirable results in a manner that corresponds with the company’s vision and values. The intention is to increase the participants’ sense of investment in the company, which is expected to be good for the company in the long term. The programs are to encourage increased ownership in the company, with the allotment of performance shares taking place on the condition that certain performance criteria are met. Increased partial ownership among the company’s employees is expected to result in a stronger sense of loyalty to the company.

Sectra holds 1,456,406 series B treasury shares connected to the ongoing long-term performance-based incentive programs. This means a maximum dilution of approximately 0.7%.

Employment conditions (all programs)

Participation in the programs is voluntary and available to all employees, provided that they are or are considered to be permanent employees on at least a 50% basis as of the date of the AGM’s resolution to implement each program. For every calendar year during the terms of the programs in which any of the performance conditions have not been met, one tenth of all of the participant’s share rights will be forfeited.

LTIP 2021

In accordance with the resolution by the Annual General Meeting 2021, Sectra has implemented two long-term performance-based incentive programs: one for employees in the US and Canada (LTIP 2021 NA) and one for employees in Sweden and the rest of the world (LTIP 2021 SROW). In total, more than 50% of the entitled employees chose to participate in the programs. Following the vesting period, participants will be allotted shares in the company free of charge provided they remain employed by the company and certain performance conditions have been met.

Sectra has issued 1,000,000 shares in the company to cover both allocation to employees at full performance and the costs of the social security contributions that are expected to arise in connection with the allotment of the so-called Performance shares under LTIP 2021. Of these shares 780,000 were available for allotment to employees and 220,000 are intended to be sold over the stock exchange to cover social security contributions and payroll overhead.

LTIP 2021 SROW

Employees have allocated 238,097 savings shares (Sectra series B shares) to the program.  All savings shares are to be deposited during the entire qualification period. One savings share comprises one Class B share in Sectra AB.

A Share Grant refers to a right to receive a Performance Share free of charge, provided that certain conditions are met.

LTIP 2021 NA

A Performance Stock Unit (PSU) gives the right to receive a Performance Share in the company free of charge, provided that certain conditions are met.

Performance conditions LTIP 2021

For every calendar year during the term of the program (qualification period) for employees in North America, Sectra must have a) received a minimum of one “Best in KLAS” award (in any category), and b) received a first, second or third place ranking in “Best in KLAS for PACS/Radiology for large hospitals” in the US or Canada depending on where the participant is employed.

For every calendar year during the qualification period for employees in companies other than Sectra Communications AB and its subsidiaries (the Sectra Communications Group), Sectra must have a) received a minimum of one “Best in KLAS” award (in any category), and b) received a first, second or third place ranking in “Best in KLAS for PACS/Radiology for large hospitals” in the US.

For employees in the Sectra Communications Group, the Sectra Communications Group must have, for every calendar year during the qualification period, a) achieved an operating margin of at least 15%, and b) achieved EBIT growth of at least 8% year-on-year.

For further details refer about perfomance conditions and the program, please refer to the Annual General Meeting 2021 documents.

LTIP 2022

In accordance with the resolution by the Annual General Meeting 2022, Sectra has implemented a long-term performance-based incentive programs for employees in the Sectra Group. Following the vesting period, participants will be allotted shares in the company free of charge provided they remain employed by the company and certain performance conditions have been met.

Sectra has issued 453,406 shares in the company to cover both allocation to employees at full performance and the costs of the social security contributions that are expected to arise in connection with the allotment of the so-called Performance shares. In addition to the issued shares, 546,594 of the Class B shares held by Sectra as a result of LTIP 2021 will be usable in LTIP 2022, i.e. a total of 1,000,000 Class B shares. Of these shares 780,000 are available for allotment to employees and 220,000 are intended to be sold over the stock exchange to cover social security contributions and payroll overhead.

A Share Grant refers to a right to receive a Performance Share free of charge, provided that certain conditions are met.

Performance conditions LTIP 2022

For every calendar year during the qualification period for participants in the program who are not employees of the Sectra Communications Group, Sectra must have a) received a minimum of one “Best in KLAS” award (in any category) in the employee’s region, and b) received a first, second or third place ranking in “Best in KLAS for PACS/Radiology for large hospitals” in the US. “Region” refers to i) for employees in the US: the US, ii) for employees in Canada: Canada, iii) för employees in Europe including Sweden: Europe and iv) for employees in ANZ: Asia-Pacific.

The research company KLAS Research has revised the division of regions for the Best in KLAS awards. As a result, in June 2024, the Board of Directors, supported by the Annual General Meeting’s instructions and the terms of LTIP 2022, resolved to modify the performance criteria linked to Sectra winning Best in KLAS in accordance with the following: “region” refers to the region the employee belongs to, based on the KLAS division of regions for the awards handed out each calendar year.

For employees in central functions in Sweden (Sectra AB, Sectra Imaging IT Solutions AB, Sectra Medical Education AB and Sectra Ortho-paedics AB) and employed outside of the previously mentioned regions, Sectra must have a) received a minimum of two “Best in KLAS” awards in any category in any of the regions for each calendar year during the qualification period.

For employees of the Sectra Communications Group, the Sectra Communications Group must have, for every calendar year during the qualification period, a) achieved an operating margin of at least 10% for the 2022/2023 fiscal year and at least 15% for the following fiscal year, and b) achieved EBIT growth of at least 10% year-on-year.

For further details about performance conditions and the program, please refer to the Annual General Meeting 2022 documents.