STOCKHOLM, Sweden, March 18, 2002 (PRIMEZONE) -- Skandia's board of directors proposed that the Annual General Meeting on 17 April 2002 decide on a stock option programme for the Skandia Group for the years 2003-2005, and as part of this programme, on a directed issue of a promissory note with detachable warrants for new shares, according to the following in all essential respects:
Proposal for stock option programme for the Skandia group, 2003-2005
The proposed stock option programme is in line with the programme that applies for the years 2000-2002. Continuity between the two programmes will thus be maintained. However, the volume of the programme now being proposed is lesser than for the 2000-2002 programme. Furthermore, the exercise price has been set at a higher figure. Like the current programme, the proposed programme is targeted at essentially all employees (programme A) and key employees mainly in the USA and the UK (programme B). Stock options will be granted, without charge and on three occasions: in February 2003, February 2004 and February 2005. The price per share upon exercise of the stock options - the exercise price - will correspond to the market value of Skandia shares at the respective granting dates, plus 10 per cent. For programme A, which in principle will include all full-time employees with at least one year of service with the Skandia group, a total of not more than 6,000,000 stock options will be granted for all three years (including a reserve for social security costs). The grants will be equal for all employees - 300 stock options per year - without any special categorical breakdown. The term of the stock options in programme A will be a maximum of three years and three months. For programme B, which is directed at key employees in the Skandia group, mainly in the US and UK operations, a total of not more than 34,000,000 stock options will be granted for all three years (including a reserve for social security costs). Grants will be made annually on an individual basis by the Board's Compensation Committee. The maximum term of the stock options will be seven years for programme B. No general categorical breakdown will be made. Assuming that all the total number of stock options proposed are exercised, the total value transfer for each year's allocation will amount to approximately 0.5 per cent if Skandia's stock price rises by 10.0 per cent per annum during the seven- year period. If Skandia's stock rises by 20.0 per cent per annum during the seven-year period, the value transfer for each year's allocation will be approximately 0.8 per cent.
Proposal for directed issue of promissory note with detachable warrants to subscribe for new shares in Skandia Insurance Company Ltd.
As part of the stock option programme, it is proposed that the company raise a loan with a nominal value of SEK 10,000,000 through the issuance of a promissory note with 40,000,000 detachable warrants for the subscription of new shares, whereby each warrant shall carry entitlement to subscribe for one new share, with a par value of SEK 1. The warrants shall have terms running through the end of 2012. As a result of this, the Company's share capital can increase by a maximum of SEK 40,000,000. The right to subscribe for the promissory note with detachable warrants to subscribe for new shares ("the Promissory Note"), with deviation from the shareholders' pre-emption rights, shall only be given to Skandia Umbrella Trust 2000. The Promissory Note shall be subscribed for in its nominal amount. The price for which new shares may be subscribed for shall correspond to the lowest available average price paid for Skandia shares on the Stockholm Stock Exchange during the five days of trading immediately following the release of Skandia's year-end report for 2002, 2003 and 2004, plus 10 per cent. The reason for the deviation from the shareholders' pre-emption rights is as follows: The issuance is being carried out on account of the proposed stock option programme. The issued warrants may not be used for any other purpose than to meet the commitments arising from issued stock options. It is important for the Company and its shareholders that part of the employees' compensation is related to the price development of Skandia's shares.
The Board proposes that a decision by the Annual General Meeting on the above matters shall require a qualified majority pursuant to Para. 3 of the Act (1987:464) on Certain Directed Issues in Stock Market Companies, etc.
More detailed information on the proposed stock option programme will be distributed to all directly registered shareholders.
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