Festi hf.: Allocation of share options

At Festi Board meeting on April 23, 2024, a decision was made to grant key employees of the Group share options covering a total of 4,725,000 shares in the Company, corresponding to 1.57% of the Company's issued share capital. The CEO and the Executive management of the Company were granted share options for a total of 1,890,000 shares or 270,000 shares each.

Share option agreements for the allocated shares were signed today, April 24, 2024. Their terms are in accordance with the resolution of the Festi Annual General Meeting on March 6, 2024, approving a share option program for the CEO, senior management and key employees of the Group and the Company's Remuneration Policy, which is attached. The total number of shares that may be allocated based on the share option program is 5,500,000. The purpose of granting share options is to align the long-term incentives of the Group's management with its performance and long-term goals, and thus the long-term interests of its shareholders.

The main terms of the share option agreements are as follows:

• Share options are granted at the base price of ISK 191.50 per share, which is the weighted average price of the Company's shares over the last ten whole trading days on the main market of Nasdaq Iceland prior to the allocation date. The base price will increase annually by 5.5%, i.e. from the conclusion of the share option agreements until the first possible exercise date during each exercise period. The base price shall also be adjusted (downward) for future dividend payments and the corresponding distribution of the Company's assets to shareholders.
• The share options will vest over a period of three years from the conclusion of the share option agreements.
• After the vesting period, share options will be exercisable in three stages, spread over one year. Option holders will be able to exercise one third of their share option following the publication of the Company's 2027 first quarter results, one third following the publication of the 2027 third quarter results and one third following the publication of the 2028 first quarter results. Option holders can defer the exercise of vested options until the next exercise period to the extent that if a share option has not been exercised after the third exercise period, the share option will expire.  

• The CEO and Executive management of the Company must hold, until the end of their employment with the Group, any shares that have been delivered following the exercise of share options in an amount corresponding to the net profit from exercised share options, after deduction of taxes, and which corresponds to 9 times their monthly salary, and 3 times the monthly salary of other key employees, measured in terms of the value of shares in the Company at that time.

• Share options will generally expire if the option holder's employment relationship with the Company is terminated before the end of the vesting period.
• In the event of an option holder's termination of employment, after the vesting period due to events for which the option holder cannot be blamed, the option holder shall retain the share option and will be permitted to exercise the full vested share option after the publication of the Company's next quarterly results.
• Should there be a change in control of the Company, see Article 100 of Act no. 108/2007 on takeovers, option holders shall be permitted to exercise their full share options following the publication of the Company's next quarterly results from the time that a takeover offer is made, or a tender offer obligation arises in the Company.
• The Company is not permitted to grant loans or guarantees of any kind in connection with the share option scheme.

Following the allocation of the share options, the total number of outstanding share options will cover 4,725,000 shares, or 1.57% of the Company's issued share capital, which Festi has granted to 39 employees in the Group.

The estimated total expense (charge) for the share options, based on the Black Scholes model, amounts to ISK 122 million.

At the Festi Annual General Meeting on March 6, 2024, the Board of Directors was also authorised to approve a share option program based on Article 10 of Act no. 90/2003 on income tax and enter into share option agreements with all permanent employees of the Group regarding the purchase of shares in the Company, see the attached document. All permanent employees of the Group have been offered share options in the Company in accordance with that resolution at the same price as previously reported. The result of that allocation will be announced when the final participation is known, before the opening of the markets on Thursday, May 2, 2024.

Information is attached on share options that have been granted to the CEO and Executive management in respect of both share option schemes.

Attachments

• Starfskjarastefna Festi hf.
• Kaupréttaráætlun fyrir forstjóra, æðstu stjórnendur og lykilstarfsmenn Festi hf. og dótturfélaga
• Kaupréttaráætlun fyrir starfsmenn Festi hf. og dótturfélaga
• Tilkynning - Ásta S. Fjeldsted (1)
• Tilkynning - Ásta S. Fjeldsted (2)
• Tilkynning - Eva Guðrún Torfadóttir (1)
• Tilkynning - Eva Guðrún Torfadóttir (2)
• Tilkynning - Magnús Kr. Ingason (1)
• Tilkynning - Magnús Kr. Ingason (2)
• Tilkynning - Óðinn Árnason (1)
• Tilkynning - Óðinn Árnason (2)
• Tilkynning - Óttar Örn Sigurbergsson (1)
• Tilkynning - Óttar Örn Sigurbergsson (2)
• Tilkynning - Ýmir Örn Finnbogason (1)
• Tilkynning - Ýmir Örn Finnbogason (2)
• TIlkynning - Guðrún Aðalsteinsdóttir (1)
• Tilkynning - Guðrún Aðalsteinsdóttir (2)

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