In July 2020, the Company initiated a 2020 long-term investment program (2020 LTIP) for the Executive
Management and certain other employees with the same terms and conditions as the 2017 LTIP and the 2019
LTIP. However, in case of termination of a participant’s employment and designation as a Good Leaver, the
right to receive Matching Shares and Performance Shares will be prorated and calculated through the date of
notice of termination. During 2020, awards were granted on four different grant dates shown in the table
below. Matching Shares for all awards granted under the 2020 LTIP was fully vested on January 1, 2021. The
maximum number of Performance Shares that can vest in January 2024 as part of the 2020 LTIP is 489,757.
In April 2021, the Company initiated a 2021 new long-term share-based incentive program (original 2021
LTIP) for the Executive Management and other employees. The LTIP grants comprise Restricted Share Units
(“RSUs”) and Performance Share Units (“PSUs”) which entitle the participants, subject to vesting occurring, to
be allocated a number of shares in the Company, equivalent to the number of vested RSUs and/or PSUs,
against payment of the par value of each share. The RSUs will have a total vesting period of three years
(beginning on January 1 or July 1 in 2021) and with one third of the granted RSUs vesting on each January 1
or July 1 in the following three financial years. The PSUs will have a total vesting period of three years
(beginning on January 1 or July 1 in 2021) and with the granted PSUs vesting, in whole or in part, on January
1 or July 1 in the third year. Vesting of RSUs is not conditional upon achieving any financial or non-financial
targets, whereas vesting of PSUs is conditional upon an increase in the quoted share price of the Company’s
shares, while vesting of both RSUs and PSUs is conditional upon the participant remaining employed
throughout the total vesting period. However, in case of termination of a participant’s employment and
designation as a Good Leaver, the right to receive vested RSUs or PSUs will be prorated and calculated through
the date of release of the Participant’s work obligations. The vested RSUs and PSUs can only be exercised
within four months after the expiration of the total vesting period. However, the delivery period may be
extended to the next open trading window in certain circumstances. The original LTIP were expected to
comprise up to 607,460 shares in total.
In October 2021, the Company initiated a modified 2021 long-term share-based incentive program (modified
2021 LTIP) for the Executive Management and other employees. The terms of the modified LTIP are the same
as the LTIP that was implemented in April 2021, however, the number of RSUs and PSUs and the applicable
performance target for the PSUs were reset, calculated based on a share price equal to DKK 31.94 per share,
corresponding to the volume weighted average share price of the Company’s shares as quoted on Nasdaq
Copenhagen during the ten (10) trading days from September 1, 2021. The exercise of the RSUs and PSUs to
be granted under the modified LTIP is conditional upon the participant not exercising his or her RSUs or PSUs
granted in April 2021, which will subsequently lapse and no longer be exercisable, and are therefore considered
replacement equity instruments for the cancelled equity instruments. The fair value of the originally granted
RSUs and PSUs at the date of the modification was determined to be DKK 24.72 and DKK 7.70, respectively.
The incremental fair value, calculated based on the number of modified awards granted multiplied with the
modified unit fair value less the fair value of the original LTIP granted remeasured at the modification date, will
be recognised as an expense over the period from the modification date to the end of the vesting period. The
expense for the original LTIP grant will continue to be recognised as if the terms had not been modified. In
connection with the modified LTIP, the members of Executive Management received an extraordinary grant of
RSUs and PSUs corresponding to 100% of the grant under the modified LTIP and on the same terms as the
modified LTIP, and the sign-on RSUs granted to the CEO in April 2021 were also reset after the same principles
as the modified LTIP but with immediate vesting upon grant. The modified LTIP including the other share-
based retention grants to the Executive Management are expected to comprise up to 595,916 shares in total.
No long-term share-based incentive program was announced in 2022 because of the restructuring of the
Company and subsequent sale of substantially all of its assets and business activities.
The fair value of RSU awards was estimated using a Black Scholes option valuation model, whereas all other
LTIP awards were estimated using a Monte-Carlo simulation model at the respective grant dates, considering
the terms and conditions on which the awards were granted.
The risk-free interest rate has been estimated based on Danish government bonds with similar maturities.
Since November 2020, expected volatility has been determined based on the Company’s own historical
volatility, as the Company has been publicly traded for three years. Before November 2020, expected volatility
was determined based on the historical volatility of comparable listed companies. The Company does not plan
to pay out dividends in the foreseeable future.
The following table presents the fair value of the shares granted in 2021 under each program and the inputs
used in the valuation models at the respective grant dates:
2021
RSU
Apr 2021
(original)
58,040
-
2021
PSU
Apr 2021
(original)
20,020
-
Program
2021 RSU
Oct 2021
(modified)
24,720
2021 PSU
Oct 2021
(modified)
12,560
Grant date
Fair value at the measurement date (DKK 000)
Dividend yield (%)
-
-
Expected volatility (%)
98.6%
(0.61%)
0.23-2.23
25,700
98.6%
(0.61%)
2.23
55.6%
(0.53%)
0.69-2.69
59,050
55.6%
(0.53%)
2.69
Risk-free interest rate (%)
Expected life of awards (years)
Weighted average share price (DKK)
25,700
59,050
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