Half-Year Report 2021

8 Employee share plan and share-based payment

In the first half of 2021, SoftwareONE granted new awards under the Long-term Incentive Plan (‘LTIP21’). In addition, arrangements that were launched in previous years, the Share-based Payment Plan, the Management Equity Plan (‘MEP’), the Free Share Grant and the Long-term Incentive Plan (‘LTIP20’) exist. The objective of the programs is to support a business policy that is primarily oriented towards the interests of the shareholders by creating long-term increase in value through greater customer focus, employee satisfaction as well as enhanced passion, loyalty and retention of employees. Furthermore, the remuneration of the Board of Directors is partially paid out in shares.

SoftwareONE recognized total share-based payment expenses of TCHF 8,860 for the six months to 30 June 2021 (comparative period: TCHF 12,534). The following table discloses how the expenses are allocated to the existing share-based payment arrangements:

SoftwareONE has recognized an increase in equity in the balance sheet of TCHF 8,816 for share-based payment (comparative period: TCHF 14,054). In the comparative period tax effects of TCHF 1,520 were considered.

Long-term Incentive Plan

The LTIP21 grants the Executive Board, the Executive Leadership Team and selected key employees so-called performance share unit (PSU) subscription rights.

The number of PSUs granted is determined by dividing the individual LTIP grant on the grant date by the fair value of one PSU, rounding up to the next whole PSU. Each PSU subscription right securitizes a right to receive shares depending on the development of the underlying vesting factor. The vesting factor depends 75% on a gross profit and 25% on a relative total shareholder return (rTSR). In both variables, the target factor is 1.00, while the minimum factor is 0.00 and the maximum factor is 2.00. The gross profit vesting factor depends on SoftwareONE’s gross profit during year three and is determined on a straight-line basis between the target ranges. The relative rTSR vesting factor depends on the TSR of the company and the TSR of the STOXX ® Global 1800 Industry Technology Index. A relative TSR of <= -33% leads to a vesting factor of 0 and a TSR of >= 33% to a vesting factor of 2.0. The rTSR vesting factor distributes linearly between the target ranges. The award cycle (service period) is three years from the contractual grant date.

The PSUs granted under the LTIP21 were classified as an equity-settled share-based payment according to IFRS 2. The LTIP21 is valued using a Monte Carlo simulation.

SoftwareONE has taken into account the following parameters in the valuation:

The term of the PSUs granted in 2021 starts on 4 June 2021 (valuation date) and ends on 3 June 2024 (end of the vesting period). An average expected fluctuation of 0% p.a. for the Executive Board, 5.0% p.a. for the Executive Leadership Team including the regional leaders and 15% p.a. for the other beneficiaries has been applied as at 30 June 2021 based on historical fluctuation and management estimates.

Remuneration of Board of Directors partially paid in shares

The Board of Directors' fees are settled 60% in cash and 40% in SoftwareONE shares. The share part of the compensation is granted immediately after the Annual General Meeting and the election or re-election of the members of the Board of Directors. The Swiss franc amount is converted into shares at the closing price of the ex-date, the first date after the Annual General Meeting the shares are traded ex dividend (for 2021: 25 May 2021). The shares vest until the next Annual General Meeting and afterwards are subject to transfer restrictions of three years.

On 28 June 2021, the granted amount of TCHF 628 was converted into 27,846 shares (CHF 22.55 per share).