Seco S.p.a. MIL:IOT
Seco S p A : Ordinary Shareholders' Meeting - Explanatory Report of the BoD on item 3 on the agenda
Source: MarketScreener
EXPLANATORY REPORT OF THE BOARD OF DIRECTORS
OF SECO S.P.A.
ON POINT 3) OF THE AGENDA OF THE ORDINARY SHAREHOLDERS'
MEETING CALLED FOR APRIL 27TH, 2026 IN SINGLE CALL
drafted pursuant to Article 114-bis and Article 125-ter of Legislative Decree No. 58 of February 24, 1998, as amended
Explanatory report of the Board of Directors of SECO S.p.A. drafted pursuant to Article 114-bis and Article 125-ter of Legislative Decree No. 58 of February 24, 1998, as amended
Dear Shareholders,
the Board of Directors of SECO S.p.A. (hereinafter, "SECO", the "Issuer", or the "Company") has called you to the Ordinary Shareholders' Meeting for April 26th, 2026 scheduled at 11.00 AM, at the offices of Notary Jacopo Sodi, in Florence, Via dei Della Robbia n. 38, in single call, to discuss and consider, among other matters, the following point 3) on the Agenda of the Ordinary session:
Proposal to approve the "2026-2029 Plan for the Chief Executive Officer and Senior Executives of SECO S.p.A.".
With this report (the "Report") - prepared pursuant to Article 114-bis and Article 125-ter of Legislative Decree No. 58 of February 24, 1998, as subsequently amended ("CFA"), we wish to provide an explanation of the reasons for the proposals related to point 3) on the Agenda of the Shareholders' Meeting, in Ordinary session.
Specifically, the Board of Directors has called you to the Shareholders' Meeting to discuss and resolve on the approval, pursuant to Article 114-bis of the CFA, of an incentive and loyalty plan called the "2026-2029 Plan for Chief Executive Officer and Senior Executives Plan of SECO S.p.A." (hereinafter the "2026-2029 CEO and Senior Executives Plan"), which provides the grant to the Company's current chief executive officer and senior executives (the "Beneficiary") up to 1.210.000 (onemilliontwohundredtenthousand) rights (hereinafter the "Rights"), each granting to the Beneficary the right to receive free of charge, in a single tranche, 1 (one) SECO ordinary share, upon fulfillment of specific performance objectives, and up to a maximum of 1,379,400 (onemillionthree hundredseventy-ninethousandfourhundred) ordinary shares in the event of overperformance of the aforesaid objectives.
As a preliminary matter, it is specified that, for the purposes of servicing the 2026-2029 CEO and Senior Executives Plan, the following sources may be used:
in the event of allocation to the chief executive officer, exclusively treasury shares held by the Company, subject to prior authorization of the Shareholders' Meeting pursuant to Articles 2357 et seq. of the Italian Civil Code;
in the event of allocation to the senior executives, at the Company's discretion: (i) newly-issued shares arising from a free share capital increase pursuant to Article 2349 of the Italian Civil Code, for a maximum nominal amount of Euro 4,756 (fourthousandseven hundredfifty-six), through the issuance of up to 475,600 (fourhundredseventy-fivethousand sixhundred) new no-par-value shares, subject to the approval of the relevant resolution under item 1) of the Extraordinary Session of the Shareholders' Meeting; and/or, in whole or in part, (ii) treasury shares held by the Company, subject to prior authorization of the Shareholders' Meeting pursuant to Articles 2357 et seq. of the Italian Civil Code.
REASONS FOR ADOPTING THE 2026-2029 CEO AND SENIOR EXECUITVES PLAN
The proposal for the adoption of the 2026-2029 CEO and Senior Executives Plan formulated by the Board of Directors' resolution on March 23rd, 2025 took into account the proposal of the Appointments and Remuneration Committee ("REMCO"), as well as the opinion of the Related Parties Committee, both of which held their respective meetings on March 18th, 2026.
Preliminary, it is hereby noted that the Company's Remuneration Policy 2026 (the "Policy"), approved by the REMCO on March 18th, 2026, which is subject to the approval of the Board of Directors on March 23rd, 2026, and thereafter of the Ordinary Shareholders' Meeting convened for April 27th, 2026 as point 2) of the agenda, is positioned in substantial continuity with the Remuneration Policy 2025, which was last approved by the Ordinary Shareholders' Meeting held on April 28th, 2025.
It should be recalled that, the Policy is designed to support the pursuit of the Company's sustainable success and to ensure the ability to attract, retain and motivate individuals with the skills and professional qualifications required for the roles they hold within the Company. For this purpose, the Policy provides that a significant portion of the remuneration of executive directors and senior executives is linked, also through monetary incentive plans and/or plans based on financial instruments, to the financial results achieved by the Issuer and/or the achievement of specific predefined objectives that are not exclusively based on a short-term period.
In this perspective, the 2026-2029 CEO and Senior Executives Plan represents an instrument to pursue the above-mentioned objectives by complementing the fixed compensation and the short-term monetary variable component, as specified in the Policy, with a medium-/long-term variable component based on financial instruments, that shall be granted subject to the achievement of certain Company performance objectives, in line with the approach of the best and most recent market practice, while maintaining the principle of sound and prudent management of the Group's activities and the related risk.
The adoption of the 2026-2029 CEO and Senior Executives Plan is particularly necessary in order to update and strengthen the incentive instruments that constitute the medium-/long-term variable component of the Company's remuneration framework. Indeed, the 2026-2029 CEO and Senior Executives Plan is conceived as an instrument complementary to: (i) the "2024-2027 New Stock Option Plan for the Chief Executive Officer", approved by the Ordinary Shareholders' Meeting on November 13rd, 2024 and reserved for the Chief Executive Officer ("2024-2027 CEO SOP"), and (ii) the "2024-2027 Plan for employees, senior management and collaborators", approved by the Ordinary Shareholders' Meeting on July 28th, 2023 and reserved, among others, for the Senior Executives ("2024-2027 Management SOP", and together with the 2024-2027 CEO SOP, the "2024-2027 SOPs").
In this regard, it should be recalled that the 2024-2027 SOPs constitute stock option plans aimed at linking the medium-/long-term variable remuneration of their respective beneficiaries to the pursuit of the Company's value-creation objectives, which are expected to be reflected in the appreciation of the Company's share price.
The stock option mechanism envisaged under the 2024-2027 SOPs provides for the grant to the respective beneficiaries of options exercisable upon payment of a predetermined exercise price or, alternatively, solely for the beneficiaries of the 2024-2027 Management SOP, without payment of the exercise price through a cashless exercise mechanism. Within this framework, in the first case, the option holder benefits from any positive difference between the market price of the shares and the exercise price; in the second case, the option holder benefits from the free allotment of a number
of shares determined on the basis of the 'in-the-money' value of the options. In both cases, once the options have been exercised and the shares allotted, an alignment of interests is achieved between the beneficiary - by virtue of his/her position as a shareholder - and the Company, its shareholders and, more broadly, its stakeholders.
In light of the foregoing, the 2024-2027 SOPs constitute effective instruments for pursuing the objectives underlying them, provided that the market value of the Company's shares exceeds the exercise price of the options. Under such circumstances, the beneficiaries may effectively benefit from the positive performance of the Company's share price, thereby demonstrating the direct link between the Company's performance and the medium-/long-term variable remuneration.
That being said, the current market environment has, to date, not allowed for the occurrence of the condition outlined above.
Indeed, in the period between May 1st, 2025 - being the first date on which the options granted to the chief executive officer under the 2024-2027 CEO SOP could be exercised following completion of the relevant vesting period - and the date of this Report, the market price of the Company's shares has neither reached nor exceeded the exercise price of such options, equal to €4.15.
Likewise, in the period between June 1st, 2025 - being the first date on which the options granted to the senior managers under the 2024-2027 Management SOP could be exercised following completion of the relevant vesting period - and the date of this Report, the market price of the Company's shares has neither reached nor exceeded the exercise price of said options, equal to
€3.75.
For contextual clarity, it should be noted that during 2024 - being the year in which the options were granted, and the relevant exercise price was determined - the Company recorded a contraction in customer orders, a trend consistent with that observed by major competitors at a global level. The decline in demand resulted in a reduction in sales volumes and, consequently, had an adverse impact on the Company's financial results for the year, leading to a depreciation of the SECO share price.
Subsequently, in the course of 2025, the gradual absorption of the destocking phenomenon and the progressive normalization of market conditions supported an improvement in the industrial environment, with an increase in revenues and a gross margin performance exceeding the guidance disclosed to the market. This evolution reflects the consolidation of the recovery in order intake and a significant rebound in sales volumes across the Company's main vertical markets.
The improvement in the operating environment translated into an appreciation of the SECO share price over the course of 2025. However, in the latter part of the year, this upward trend was once again tempered by uncertainties affecting the technology sector and by renewed concerns regarding a potential 'tech bubble', in a context characterized by elevated valuations and a broader market debate on the sustainability of returns on investments in artificial intelligence and the timeframe for their monetization - factors that may have more pronounced effects on growth stocks.
Lastly, the performance of the Company's stock during the periods under review was also influenced by persistent geopolitical tensions, particularly those related to the conflicts in the Middle East, which contributed to heightened uncertainty and increased volatility in equity markets. In this context, more recently, the possibility of an escalation of tensions in the Gulf region - also in light of potential repercussions on energy supply routes - has led to upward movements in crude oil prices, with possible implications for inflation expectations and, consequently, the macroeconomic environment.
In light of the foregoing, and considering that market conditions have not allowed for the full achievement of the objectives underlying the 2024-2027 SOPs - nor, at present, is there certainty that the necessary conditions will materialize - the Company deems it appropriate to approve an additional instrument capable of pursuing the objectives set out in the Policy, including in a scenario marked by changing and continuously evolving market conditions.
CHARACTERISTICS OF THE 2026-2029 CEO AND SENIOR EXECUTIVES PLAN
In light of the foregoing, we hereby submit for your consideration the proposal to approve the 2026-2029 CEO and Senior Executives Plan, which provides for the grant of Rights - and, consequently, the free allotment of a corresponding number of shares - conditional upon the achievement of specific performance indicators relating to operating profitability, relative shareholder value creation, sustainability and commercial execution, weighted respectively 40%, 30%, 15% and 15%.
The features of the performance indicators identified render the 2026-2029 CEO and Senior Executives Plan an instrument capable of strengthening the alignment between the medium-/long-term variable remuneration of the Beneficiaries and the sustainable value creation for the Company, insofar as the attribution of shares is measurably linked to the achievement of multi-year objectives consistent with the Group's industrial and strategic priorities, thereby reducing the dependence on exogenous factors and ensuring a performance assessment that is not strictly tied to short-term share price movements.
In this perspective, the 2026-2029 CEO and Senior Executives Plan also fosters a direct correlation between the results achieved by the Beneficiaries and the outcomes expected from the Plan at the end of the envisaged vesting period, while simultaneously reinforcing retention objectives through the application of a holding period on the shares allotted.
As previously indicated, in order to leverage the incentive effect of the 2026-2029 CEO and Senior Executives Plan, the vesting of the Rights and the consequent allotment of the shares are linked to the achievement of specific KPIs measured at the end of the vesting period - running from April 30th, 2026 to April 30th, 2029 - and subject to the continued existence of the relationship with the Company.
In particular, the 2026-2029 CEO and Senior Executives Plan, which spans a multi-year time horizon (2026-2029), provides for the following performance objectives:
40%
The Cumulative Delta EBITDA Adjusted is calculated as the percentage change between:
- the Cumulative Adjusted EBITDA Target, equal to the sum of the annual Adjusted EBITDA values over the three-year vesting period as set out in the Group's industrial plan approved by the Board of Directors or, in the absence thereof, the sum of the annual Adjusted EBITDA values provided for in the budgets approved by the Board of Directors over the three-year vesting period; and
Weighting with respect to the Performance Share Rights
Definition
Cumulative Delta EBITDA Adjusted
30%
The Relative TSR is calculated as the percentage change between:
the Actual TSR, which measures the total return of a share according to the following formula: (Final Share Price - Initial Share Price) / Initial Share Price; and
the Reference Index, equal to the weighted average of the percentage change of the following two indices recorded between the beginning and the end of the three-year vesting period:
a peer group of selected companies (weight: 50%);
the FTSE Italia STAR Index (weight: 50%).
Weighting with respect to the Performance Share Rights
Definition
Relative TSR
- the Cumulative Actual Adjusted EBITDA, equal to the sum of the Adjusted EBITDA values effectively achieved by the Company over the three-year vesting period.
The ESG Objective consists of the set of Environmental, Social and
Governance targets defined in accordance with the evolution of the 15% priorities identified by the Company.
Weighting with respect to the Performance Share Rights
Definition
ESG Objective
The Strategic Partnership Objective consists of the execution of a
defined number of strategic partnership agreements with silicon 15% vendors.
Weighting with respect to the Performance Share Rights
Definition
Strategic Partnership Objective
Following the conclusion of the vesting period, the Board of Directors shall verify the level of achievement of each of the performance objectives applicable to the Rights, determining the number of vested shares, which shall be communicated to the Beneficiary by means of the share-allotment notice.
The allotment of the shares is subject to the continued existence of the relationship with the Company, in accordance with the good leavership and bad leavership scenarios, consistent with market practice and as further detailed in the Prospectus.
For further information on the key features of the 2026-2029 CEO and Senior Executives Plan - and in particular, by way of example, the procedures and clauses for its implementation, as well as the determination of the conditions precedent to granting the Rights and the restriction on the non-transferability of the Rights-please refer to the Prospectus attached to this Report and prepared pursuant to Article 84-bis of Consob Regulation No. 11971/1999, as subsequently amended and supplemented, in accordance with the indications contained in Schedule No. 7 of Annex 3A of the Regulation.
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In light of the above, the Board of Directors intends to propose to the Shareholders' Meeting the following proposal resolution regarding point 3) on the agenda of the Ordinary session Meeting:
Proposed resolution on point 3)
"The Ordinary Shareholders' Meeting of SECO S.p.A.,
- having acknowledge the explanatory report of the Board of Directors concerning the "2026-2029 Plan for the Chief Executive Officer and Senior Executives";
resolvesto approve, pursuant to and in accordance with Article 114-bis of Legislative Decree No. 58/1998, the establishment of a new incentive plan called the "2026-2029 Plan for the Chief Executive Officer and Senior Executives" having the characteristics (including the conditions and prerequisites for implementation) illustrated in the Prospectus attached to the Board of Directors' Explanatory Report, empowering the Board of Directors to adopt the relevant regulations and delegating the implementation and administration of the Plan to the Board of Directors of the Company, with the right to sub-delegate to the Chairperson;
to grant the Board of Directors, with the right to sub-delegate to the Chairperson, the performance of all activities inherent in, consequent to, or related to the implementation of the above resolution and thus, in particular, by way of example only, any power indicated in the Prospectus prepared pursuant to Article 84-bis of Consob Regulation No. 11971/1999, as subsequently amended and supplemented, including any power to make allocations of the rights and to allot the shares to the beneficiaries, make any necessary or appropriate amendments and/or additions to the Plan, within the limits permitted by the applicable regulations and according to the applicable adjustment criteria and generally-accepted financial markets methods, also in the case of any corporate transactions affecting the company share capital structure and/or which modify the financial content of the Plan, extraordinary and/or non-recurring and/or non-core activity events, significant changes to the economic environment and/or other events which may affect the shares and, more generally, the Plan, in order to adjust it to the altered situation and reflect the above changes, while at the same time maintaining the substantial content and financial content of the Plan unchanged, as well as perform any act, fulfillment, formality, and/or communication that is necessary or appropriate for the purposes of managing and/or implementing the Plan.".
* * *
Arezzo, March 23rd, 2026
For the Board of Directors The Chairman
Daniele Conti
Annex
PROSPECTUS FOR THE 2026-2029 PLAN FOR THE CHIEF EXECUTIVE OFFICER AND SENIOR EXECUTIVES OF SECO S.P.A.
(prepared pursuant to Article 84-bis of the Issuers' Regulation adopted by Consob with Resolution No. 11971 of May 14th, 1999 and subsequent amendments and additions)
Definitions
For purposes of this Prospectus, the terms below shall have the meanings ascribed to them as follows:
"Actual TSR" means the indicator that measures the total return of a Share according to the following formula: (Final Share Price - Initial Share Price) / Initial Share Price;
"Adjusted EBITDA" means the Adjusted EBITDA as reported in the SECO Group's Annual Financial Report;
"Beneficiary" means the addressee of the Plan, i.e. the Company's chief executive officer and the senior executives with strategic responsibilities who have received, signed out and returned to the Company the letter of allocation of Rights;
"Board of Directors" or "Board" means the Board of Directors of the Company;
"Cashless" means the exercise of Options without the payment of the Exercise Price, which grants the right to receive a number of SECO Treasury shares calculated according to the formula indicated in Section 3.4;
"Company" or "Issuer" or "SECO" means SECO S.p.A.;
"CFA" means Legislative Decree No. 58/1998, as subsequently amended and supplemented;
"Cumulative Actual Adjusted EBITDA" means the sum of the Adjusted EBITDA values actually achieved by the Company during the Vesting Period, it being understood that, for the purposes of calculating the Cumulative Actual Adjusted EBITDA, the initial measurement date shall be January 1st, 2026;
"Cumulative Adjusted EBITDA Delta" means the percentage change between the Cumulative Adjusted EBITDA Target and the Cumulative Actual Adjusted EBITDA;
"Cumulative Adjusted EBITDA Target" means the amount in Euro resulting from the sum of the annual Adjusted EBITDA values over the Vesting Period as set out in the SECO Group's industrial plan approved by the Board of Directors or, in the absence thereof, the sum of the annual Adjusted EBITDA values provided for in the budgets approved by the Board of Directors during the Vesting Period, without prejudice to the Board of Directors' discretion to amend such amount in order to maintain substantially unchanged the Performance Objective relating to the Cumulative Adjusted EBITDA Delta and the substantive and economic content of the Plan, should exceptional circumstances occur during the Vesting Period;
"ESG Objective" means the set of Environmental, Social and Governance objectives defined in accordance with the evolution of the priorities identified by the Company;
"Holding Period" means the 12 (twelve)-month period commencing at the end of the Vesting Period during which the Shares may not be transferred by the Beneficiary;
"Issuers' Regulation" means the Regulation issued by Consob Resolution No. 11971 of 1999 (as subsequently amended);
"Performance Objectives" means the objectives of the Plan as defined by the Board of Directors, the achievement of which is a condition for the vesting of the Performance Share Rights and for the allotment of the Shares to each Beneficiary at the end of the Vesting Period;
"Performance Share Right" means the right the vesting of which is subject to the achievement of the respective Performance Objective, as well as the continued existence of the Relationship at the end of the Vesting Period, under the terms and conditions set out in the Plan regulations;
"Plan" means the incentive and loyalty plan based on the grant of Rights, reserved for the Beneficiaries, subject to approval by the Shareholders' Meeting;
"Prospectus" means this document prepared in accordance with Article 84-bis of the Issuers' Regulation and complying with, also in terms of the numbering of the relative paragraphs, the indications of Schedule 7 of Annex 3A of the same Issuers' Regulation;
"Reference Index" means the weighted average of the percentage change of the following two indices recorded between the beginning and the end of the Vesting Period: (i) a peer group of selected companies (weight: 50%); and (ii) the FTSE Italia STAR Index, the segment of Borsa Italiana to which the Company belongs (weight: 50%). This is without prejudice to the Board of Directors' discretion, based on its own assessment, to replace such indices should exceptional circumstances arise during the Vesting Period (by way of example, the Company's inclusion in another stock market index or, with respect to the peer group, mergers, acquisitions, delistings or any other extraordinary event that alters the relevant corporate scope);
"Related Party Committee" means the related party transactions committee;
"Relationship" means the management relationship or the open-ended employment relationship between the Beneficiary and the Company;
"Relative TSR" means the difference between the Actual TSR (expressed as a percentage) and the Reference Index (expressed as a percentage);
"REMCO" means the Appointments and Remuneration Committee;
"Rights" means the rights granted to the Beneficiaries to receive, free of charge, one Share upon the vesting of the Performance Share Right, under the terms and conditions set out in the Plan regulations;
"SECO Group" means SECO and the companies controlled, directly or indirectly, by SECO pursuant to Article 93 of the CFA, or which qualify as subsidiaries in accordance with the currently applicable accounting standards, or which are included in the consolidation scope;
"Shareholders' Meeting" means the Shareholders' Meeting of SECO;
"Shares" or "SECO Shares" means the ordinary shares of the Company, with no par value indicated;
"Strategic Partnerships Objective" means the execution of a defined number of strategic partnership agreements with silicon vendors;
"Vesting Period" means the period from April 30th, 2026 to April 30th, 2029.
Introduction
This Prospectus, drawn up pursuant to Article 84-bis and Schedule 7 of Annex 3A of the Issuers' Regulation, which concerns the Plan submitted, in accordance with Article 114-bis, first paragraph of the CFA, for the approval of the Shareholders' Meeting, as per the explanatory report approved by the Board of Directors on November 23rd, 2026, on the basis of the proposal of REMCO and following the issue of the opinion of the Related Parties Committee both rendered on March 18th, 2026.
The Plan is to be considered of "particular relevance" in accordance with Article 114-bis, paragraph 3 of the CFA and Article 84-bis, paragraph 2 of the Issuers' Regulation, as the chief executive officer and senior executives with strategic responsibilities are addressed as Beneficiaries.
The above proposal to adopt the Plan is submitted for the approval of the Shareholders' Meeting called on April 26th, 2026 as point 3) on the Agenda of this Shareholders' Meeting in ordinary session.
At the date of this Prospectus, the proposal to adopt the Plan has therefore not yet been approved by the Shareholders' Meeting and therefore:
this Prospectus is prepared based on the contents of the proposal for adoption of the Plan approved by the Board of Directors, upon the proposal of the REMCO and following the issue of the opinion of the Related Parties Committee mentioned above;
any reference to the Plan in this Prospectus should be understood to refer to the proposed adoption of the Plan.
It is hereby noted that the resolution approving the Plan proposed for the approval of the Ordinary Shareholders' Meeting is subject to the following: (i) the approval of the resolution authorizing the purchase and disposal of treasury shares, following prior authorization by the Shareholders' Meeting pursuant to Articles 2357 et seq. of the Italian Civil Code, as a tool to service the allocation of Shares to the chief executive officer and the senior executives, and (ii) subject to the approval of the resolution concerning the free increase of the share capital referred to in item 1) of the Agenda of the Extraordinary Shareholders' Meeting, as a tool to service the allocation of Shares exclusively to the senior executives.
THE BENEFICIARIES
Names of the beneficiaries who are members of the financial instruments issuer's Board of Directors or of the management board, the companies controlling the issuer and the companies directly or indirectly controlled by it.
The Plan is addressed to the Company's chief executive officer, Mr. Massimo Mauri, as well as to the Company's senior executives with strategic responsibilities, who are parties to an open-ended subordinated employment relationship.
Categories of employees or collaborators of the issuer and of the parent companies or subsidiaries of this issuer.
As of the Date of the Prospectus, the Plan has not yet been approved by the Shareholders' Meeting.
As anticipated in paragraph 1.1, the Plan is reserved, in addition to the chief executive officer, for employees who are parties to an open-ended subordinated employment relationship with Seco and who are identified as senior executives with strategic responsibilities of the Company by the Board of Directors or by the Chief Executive Officer.
Beneficiaries of the plan belonging to the following groups:
General Managers of the issuer of financial instruments.
Not applicable, as the Company has not appointed General Managers.
other Senior Executives of the issuer of financial instruments which are not considered of "small", as per Article 3, paragraph 1, letter f) of Regulation No. 17221 of March 12th, 2010, in the case in which they have received during the year total remuneration (obtained by adding the monetary compensation and the financial instrument-based compensation) of greater than the higher total compensation between that allocated to the members of the Board of Directors, or the management board, and to General Managers of the issuer of financial instruments.
Not applicable.
physical persons controlling the issuer of the shares, who are employees or who collaborate with the issuer.
Not applicable.
Description and numeric indication, by category:
of Senior Executives other than those indicated at letter b) of paragraph 1.3.
Information relating to the Company's senior executives with strategic responsibilities is set out under point (b) below.
in the case of "small" companies, pursuant to Article 3, paragraph 1 (f) of Regulation No. 17221 of March 12th, 2010, the aggregate indication of all the Senior Executives of the issuer of the financial instruments.
Not applicable, as at the date of the Information Document the Plan has not yet been approved by the Shareholders' Meeting. It is specified that, among the Beneficiaries of the Rights that may be granted by the Board of Directors, following the approval of the Plan by the Shareholders' Meeting, there may be included the senior executives with strategic responsibilities of SECO, as identified by the Board of Directors or by the Company's chief executive officer.
of any other categories of employees or collaborators for which differentiated features of the plan are provided for (e.g. Executives, managers, white-collar employees etc.)
There are no categories of employees or collaborators for which differentiated features of the Plan have been provided.
REASONS FOR THE ADOPTION OF THE PLAN
The objectives intended to be achieved through the plan.
The Plan is an instrument which supplements the monetary component of the remuneration package of the Beneficiaries through a variable medium/long-term component, to be granted on the basis of operating profitability indicators, relative shareholder value creation, sustainability and commercial execution, with weightings equal to 40%, 30%, 15% and 15% respectively, and aligned with the strategic objectives of Seco Group, according to best market practice, although maintaining the principle of sound and prudent management of the Group's activities and of the related risks.
Specifically, the Plan has the function of (i) involving and incentivizing the Beneficiaries, whose activity is deemed of fundamental importance to the achievement of the Group's strategic objectives, (ii) building the Beneficiaries' loyalty by incentivizing his/her retention in the Group, and (iii) aligning the Beneficiaries' interests with those of the Company and the shareholders over the Plan's time horizon by recognizing the Beneficiary's contribution to increasing the value of the Company, not solely linked
to the share price performance and to the achievement of a specific minimum threshold required for the vesting of the Rights.
The objectives that the Company seeks to achieve with the adoption of the Plan are in line with the 2025 Remuneration Policy (as outlined in the relative Section I), which will be submitted to the vote of the Shareholders' Meeting on April 27th, 2026, as well as with the recommendations of the Corporate Governance Code promoted by the Corporate Governance Committee of Borsa Italiana S.p.A.
The Plan has a long-term timeframe with the Rights granted in a single tranche, as illustrated in greater detail in Section 4 below. The Rights granted are subject to a Vesting Period, and the Shares allotted following the vesting of the Performance Share Rights are subject to a Holding Period (the Vesting Period and the Holding Period are specified below in paragraph 2.2). It is believed that the above terms facilitate the achievement of the incentive and retention objectives under the Plan.
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Key variables, also in the form of performance indicators, considered for the granting of financial instrument based plans.
Key variables considered in the Plan for the granting of Performance Shares Rights
In order to strengthen the incentive effect of the Plan, the vesting of the Performance Share Rights and the consequent allotment of the Shares shall be linked to the achievement of the following Performance Objectives identified by the Board of Directors, subject to the continued existence of the Relationship:
Cumulative Adjusted EBITDA Delta (weight: 40% of the Performance Share Rights granted);
Relative TSR (weight: 30% of the Performance Share Rights granted);
ESG Objective (weight: 15% of the Performance Share Rights granted);
Strategic Partnerships Objective (weight: 15% of the Performance Share Rights granted).
Following the end of the Vesting Period, the Board of Directors, having heard the opinion of the REMCO, shall verify the level of achievement of each of the Performance Objectives applicable to the Performance Share Rights and shall determine the number of vested Shares, which shall be communicated to the Beneficiary by means of the share-allotment notice.
Vesting Period
The Plan is structured over a multi-year time horizon, with the grant of the Performance Share Rights in a single tranche, which vest upon completion of the Vesting Period commencing on April 30th, 2026 and ending on April 30th, 2029.
Holding Period
The Shares allotted following the vesting of the Performance Share Rights are subject to a Holding Period, being a period of 12 (twelve) months starting from the end of the Vesting Period, during which the Shares may not be transferred by the Beneficiaries.
Factors underlying the determination of the extent of remuneration based on financial instruments, or the criteria used for its determination.
The number of Rights granted to the Beneficiary is linked to the Company's organizational structure and is determined taking into account not only the importance of the organizational position held by
the Beneficiary concerned, but also market benchmarks and the Company's interest in graduating their long-term incentive as part of its strategies.
In determining the total number of Rights, the Board of Directors, based on REMCO's proposal and following the advice of the Related Parties Committee, acted with discretion in accordance with the Company's remuneration and incentive policies. This discretion has been exercised:
having regard to the interests of the Company and the Group;
with a view to ensuring that the granting of Rights is consistent with the Company's overall choices in terms of strategies, long-term objectives and corporate governance structure;
taking into account, among other matters, the role of the Beneficiaries for the results of the Company and the Group, the strategic importance of the position, the potential of the Beneficiaries and any other useful element, within the limits established by the applicable laws and regulations.
In granting the Rights to the Beneficiaries, the Board of Directors also considered the criticality of the role held and the value of the Beneficiaries' individual performance.
The number of the Performance Shares Rights effectively vested at the end of the Vesting Period shall depend on the level of achievement of the Performance Objectives.
If none of the Performance Objectives is achieved at the 'Entry Point' level, the Beneficiaries shall not be entitled to receive any Shares.
The Performance Objectives indicated constitute independent objectives. Failure to achieve a Performance Objective at the 'Entry Point' level, considered with reference to each individual Performance Objective, shall not allow for the allotment of the Shares related to the achievement of that specific Performance Objective.
The number of Shares to be allotted to each Beneficiary shall therefore be determined as follows:
Performance Objective
Weighting with respect to the Performance Share
Rights
Shares allotted (as a percentage of the Shares deriving from the Performance Share Rights) based on the level of performance
Entry Point1
Target2
Overperformance3
Cumulative Adjusted EBITDA Delta
40%
93,55%
100%
120%
Relative TSR
30%
Relative TSR
> 0
100%
120%
1 Entry Point: represents the minimum level of achievement of each Performance Objective, below which no right to the allotment of the Shares shall vest. Upon achievement of the Entry Point level, the right to the allotment of the corresponding percentage level of the Shares deriving from the Rights granted to the Beneficiary with respect to the individual Performance Objective shall vest.
2 Target: represents the target level of each Performance Objective, upon achievement of which the right to the allotment of 100% of the Shares deriving from the Rights granted to the Beneficiary with respect to the individual Performance Objective shall vest.
3 Overperformance: represents the maximum level of achievement of the Performance Objective, upon achievement of which, where provided for, the right to the allotment of 120% of the Shares deriving from the Rights granted to the Beneficiary with respect to the individual Performance Objective shall vest.
ESG Objective
15%
33.33%
100%
--
Strategic Partnership Objective
15%
100%
100%
--
Reasons for any decision to grant remuneration plans based on financial instruments not issued by the issuer of financial instruments, such as the financial instruments issued by subsidiaries or parent companies or third party companies outside of the Group; in the case in which the above instruments are not traded on regulated markets, information on the criteria utilized for the calculation of the attributable value.
Not applicable.
Evaluations concerning significant tax and accounting implications impacting the drawing up of the plans.
There are no significant tax or accounting implications impacting the drawing up of the Plan.
Support to the Plan by the Special fund to incentivize worker involvement in enterprises, as per Article 4, paragraph 112 of Law No. 350 of December 24th, 2003.
The Plan does not receive support from the special fund for the incentivization of the involvement of workers in enterprises, as per Article 4, paragraph 112 of Law No. 350 of December 24th, 2003.
APPROVAL PROCEDURE AND TIMEFRAME FOR THE GRANTING OF THE INSTRUMENTS
Scope of powers and functions delegated by the Shareholders' Meeting to the Board of Directors for implementation of the Plan.
Indication of the parties appointed to administer the Plan and their functions and duties.
The Board of Directors' resolution of March 13rd, 2026, based on the proposal of the REMCO and following the opinion of the Related Parties Committee both rendered on March 18th, 2026, resolved to submit the proposal for adoption of the Plan under Article 114-bis of the CFA to the Shareholders' Meeting for approval. The Ordinary Shareholders' Meeting is therefore called to resolve, inter alia, (i) to approve the Plan, and (ii) to grant the Board of Directors, and on its behalf the Chairperson, with the right to sub-delegate all powers necessary to implement the resolution.
The Company's Board of Directors, with the right to sub-delegate, shall be responsible for the administration of the Plan, availing itself, within their respective areas of competence, of the REMCO and the Related Parties Committee, as well as, where necessary, of the cooperation of the relevant corporate functions for the activities concerned. Furthermore, at any time, the Company may entrust, in whole or in part, the management of the administrative obligations related to the Plan to an external trust company or to a company specialized in the operational management of incentive plans based on financial instruments.
Any existing procedures for the review of the plans, also in relation to potential changes in the underlying objectives.
Without prejudice to the competence of the Shareholders' Meeting to resolve on any substantial amendments to the Plan, the Board of Directors, shall be the competent body to make amendments to the Plan.
Means to establish availability and for the assignment of the financial instruments on which the Plans are based (e.g.: free allocation of shares, share capital increases with exclusion of pre-emption rights, purchase and sale of treasury shares)
The Plan provides for the overall free grant of a maximum of no. 1,210,000 (one million two hundred ten thousand) Rights, entitling the Beneficiaries to receive a maximum aggregate number of no. 1,403,600 (one million four hundred three thousand six hundred) SECO Shares upon the vesting of the Performance Share Rights and, in the event of overperformance, upon achievement of the Performance Objectives relating to the Cumulative Adjusted EBITDA Delta and the Relative TSR.
The newly issued Shares shall be sourced as follows:
in the event of allocation to the chief executive officer, exclusively from treasury shares held by the Company, subject to prior authorization by the Shareholders' Meeting pursuant to Articles 2357 et seq. of the Italian Civil Code;
In in the event of allocation to the senior executives with strategic responsibilities, at the Company's discretion, (i) from newly issued shares arising from a free increase of the share capital pursuant to Article 2349 of the Italian Civil Code, for a maximum nominal amount of Euro 4,756 (fourthousandsevenhundredfifty-six), through the issuance of up to 475,600 (fourhundred seventy-fivethousandsixhundred) new no-par-value Shares, subject to the approval of the relevant resolution by the Extraordinary Shareholders' Meeting, and/or, in whole or in part, (ii) from treasury shares held by the Company, subject to prior authorization by the Shareholders' Meeting pursuant to Articles 2357 et seq. of the Italian Civil Code.
Role carried out by each Director in defining the features of these plans; any conflicts of interest involving the Directors concerned.
As of the date of the Prospectus, the Plan has not yet been approved by the Shareholders' Meeting. The features of the Plan were determined collectively by the Board of Directors based on the proposal of the REMCO and following the issue of the opinion of the Related Parties Committee.
For the purposes of the requirements as per Article 84-bis, paragraph 1, the date of the decision taken by the relevant body to propose the approval of the plans to the Shareholders' Meeting and any proposal of the Remuneration Committee.
Please refer to paragraph 3.2 of this Prospectus.
For the purposes of Article 84-bis, paragraph 5, letter a), the date of the decision taken by the relevant body for the granting of the instrument and the proposal to the aforementioned body by the Remuneration Committee.
As of the date of the Prospectus, the Plan has not yet been approved by the Shareholders' Meeting.
Market price, recorded on the above-stated dates, of the financial instruments on which the plans are based, if traded on regulated markets.
Although at the date of this Prospectus the Plan has not yet been approved by the Shareholders' Meeting, the market price of the Shares was: (i) Euro 2.56 as of the date of approval of the Plan proposal to be submitted to the Shareholders' Meeting by the Board of Directors (i .e. March 23rd, 2025); (ii) Euro 2.63 as of the date of approval of the Plan proposal to be submitted to the Board of Directors by REMCO (i.e. March 18th, 2026).
In case of plans based on financial instruments traded on regulated markets, within which terms and according to which procedures the issuer takes into account, when identifying the
timing for the granting of the instruments in implementation of the plans, the possible timeframe between:
the granting or any decisions undertaken by the REMCO, and
the communication of any relevant information in accordance with Article 17 of Regulation (EU) No. 596/2014; for example, where this information is:
not yet published and which may prompt an increase in the market share price, or
already published and may prompt a decrease in the market share price.
The structure of the Plan, the conditions, the duration and the means to grant the Rights and allotting of the Shares, currently does not indicate that the assignment or vesting may be significantly influenced by any circulation of relevant information as per Article 114, paragraph 1 of the CFA, while the procedure to grant the Rights and to vest the Shares shall be undertaken, in any case, in full compliance with the disclosure obligations upon the company, in order to ensure transparency and the provision of equal information to the market, in addition to compliance with the internal procedures adopted by the company.
The Beneficiaries shall in any case be required to comply with the applicable regulatory provisions, particularly with regards to the market abuse regulation and concerning the granting of the Rights and allotment of the Shares resulting from the vesting of the Performance Shares Rights as a result of participation in the Plan.
FEATURES OF THE INSTRUMENTS GRANTED
Description of the forms by which the financial instrument-based compensation plans are structured; e.g. indicate whether the Plan is based on the granting of: financial instruments (granting of restricted stock); the increase in the value of these instruments ("phantom stock"); rights which permit the subsequent acquisition of financial instruments ("grant options") with settlement by physical provision ("stock options") or in cash on the basis of a differential ("stock appreciation right").
As better specified in the previous paragraph 2.2, the Plan provides for the grant of Rights free of charge and, likewise, upon the vesting of the Performance Share Rights, the relevant Shares are allotted free of charge.
Indication of the effective implementation period of the plan with regards also to any differing cycles.
The Plan provides for a single grant cycle of the Rights with a multi-year Vesting Period. The vesting of the Rights shall occur at the end of the Vesting Period, subject to the verification of the level of achievement of the Performance Objectives.
The allotment of the Shares shall take place following the end of the Vesting Period and, in any event, no later than the final term of the duration of the Plan, i.e. by May 30th, 2030.
Plan duration.
As indicated in the preceding paragraph 4.2, the allotment of the Shares may take place by the final deadline of May 30th, 2030, without prejudice in any event to compliance with the Holding Period.
The Plan therefore develops over an overall time horizon of four years, comprising a three-year vesting period for the Rights and a subsequent twelve-month Holding Period. The overall duration of the Plan has also been determined taking into account market practices
emerging from a comparative analysis of medium- to long-term incentive plans adopted by companies comparable in size and sector of activity, and has been deemed suitable to pursue the objectives of aligning the interests of the Beneficiaries with those of the Company and its shareholders.
In this context, the Company has taken into account the guidance set out in Recommendation No. 28 of the Corporate Governance Code, which provides for an overall duration of at least five years, considering that, in the present case, the identified duration is consistent with the characteristics of the Plan and the relevant reference context.
It is further specified that the Plan provides for the possibility of early allotment of the Shares to the Beneficiaries upon the occurrence of the events indicated below, provided that, at such time, the Relationship is still in existence:
for the entire period during which the Company's shares are listed on a regulated market, the launch of a public tender offer for the Company's shares pursuant to Article 102 et seq. of the CFA; or
for the entire period during which the Company's shares are listed on a regulated market, the approval of transactions that may result in the delisting of SECO Shares from a regulated market; or
for the entire period during which the Company's shares are listed on a regulated market, the acquisition, including indirectly, by any person of control over the Company pursuant to Article 93 of the CFA.
Maximum number of financial instruments, also in the form of options, granted in each fiscal year in relation to the parties identified or to the categories indicated.
The maximum number of Shares that may be allotted in execution of the Plan is equal to 1,403,600 (onemillionfourhundredthreethousandsixhundred).
Methods and implementation clauses of the Plan, specifying whether the effective granting of the instrument is subject to the achievement of conditions or the achievement of results (including performance based); description of these conditions and results.
With regard to the methods and clauses for the implementation of the Plan, please refer to that set out in the individual sections of this Prospectus and, in particular, to Paragraphs 2.2 for what concerns the achievement of the Performance Objectives.
The granting of Rights is also linked to the continued existence of the Relationship, according to the cases of good leavership and bad leavership, in line with market practice.
Indication of any restrictions on the availability of the instruments granted or the instruments resulting from the exercise of the options, with particular reference to the terms within which the subsequent transfer to the company or third parties is permitted or prohibited.
The Plan provides that the Rights are granted on a personal basis and may be exercised solely by each Beneficiary (or by his/her heirs, in the event of death, or by his/her legal representative, in the event of incapacity). Accordingly, the Rights may not be transferred under any circumstances, except mortis causa, nor may they be assigned or negotiated either by inter vivos acts or pursuant to provisions of law.
In line with the principles of the Remuneration Policy, and in order to strengthen the retention purpose of the Plan and adopt mechanisms aimed at linking medium-term results to longer-term value
creation, the Plan provides for a Holding Period, as specified in paragraph 2.2.
Description of any resolution conditions for the granting of plans if the beneficiaries undertake hedging transactions that neutralize any restrictions on the sale of the financial instruments granted, including those in the form of options, or the financial instruments resulting from the exercise of such options.
Not applicable.
Description of the effects caused by the termination of the relationship with the Company or a subsidiary.
The allotment of the Shares is conditional upon the continued existence of the Relationship with the Company, in accordance with the good leavership and bad leavership scenarios, in line with market practice.
With specific reference to senior executives with strategic responsibilities, in the event that a termination of the Relationship with SECO occurs, the conditions for the application of the above scenarios shall not be deemed to be met where each Beneficiary, without interruption, continues to maintain (or assumes) another Relationship with the Company that qualifies the relevant individual as a Beneficiary pursuant to the Plan regulations.
In the event of termination of the Relationship with the Company prior to the end of the Vesting Period due to a bad leaver scenario, all Rights granted to the Beneficiary shall automatically lapse and be deprived of any effect and validity, irrespective of the date of termination of the Relationship with the Company, with the consequent release of the Company from any obligation or liability towards the Beneficiary.
Furthermore, in the event of termination of the Relationship with the Company prior to the end of the Vesting Period due to a good leaver scenario, the Beneficiary (or, where applicable, the Beneficiary's heirs) shall retain the right to be allotted: (i) the Rights vested as of the date of termination of the Relationship; and (ii) the Rights not yet vested as of the date of termination of the Relationship on a pro rata temporis basis, taking into account the duration of the Relationship during the Vesting Period and on the basis of the assessment of the Performance Objectives in accordance with the Plan, or on the basis of a different criterion to be adopted by the Board of Directors, after consultation with the REMCO where required, provided that such criterion is not more unfavorable to the Beneficiary.
Details of any other causes for the plan cancellation.
In addition to the provisions of pargraph 4.8 above with reference to the effects on the Plan brought about by the Termination of the Relationship, as well as the provisions of the Introduction, there are no other causes for the cancellation of the Plan.
Reasons behind the provision for the "redemption", by the company, of the financial instruments subject to the plans, established as per Articles 2357 and subsequent of the Civil Code; for the beneficiaries of the redemption indicate whether such applies only to particular categories of employees; the effects of termination of the employment relationship on this redemption.
The Plan does not stipulate redemption clauses in favor of the Company.
Any loans or other facilities intended to be granted for the purchase of shares pursuant to Article 2358 of the Civil Code.
Not applicable.
Indication on the valuations regarding the expected charge upon the company at the relative grant date, as may be estimated on the basis of the terms and conditions thus far defined, for the total amount and in relation to each plan instrument.
Not applicable, as at the date of this Prospectus, the Plan has not yet been approved by the Shareholders' Meeting.
Details of any dilution effects on the capital resulting from the remuneration plans.
The maximum number of Shares servicing the Plan represents, as of the date of the Prospectus, 1.055% of the fully diluted capital.
Any limits for the exercise of voting rights and for the granting of equity rights.
Not applicable.
In the case in which the shares are not traded on regulated markets, all useful information for a comprehensive valuation.
Not applicable.
Number of financial instruments underlying each option.
Not applicable.
Maturity of the options.
Not applicable.
Mode (American/European), timing (e.g., valid exercise periods), and exercise clauses (e.g., knock-in and knock-out clauses).
Not applicable.
The exercise price of the option or the methods and criteria for its determination, with particular regard to: a) the formula for calculating the exercise price in relation to a given market price (so-called fair market value) (for example: exercise price equal to 90%, 100% or 110% of the market price), and b) the methods for determining the market price used as a reference for determining the exercise price (for example: last price on the day prior to the granting, average for the day, average of the last 30 days, etc.).
Not applicable.
In the case in which the exercise price is not equal to the market price as indicated in point
4.19.b (fair market value), reasons for this difference.
Not applicable.
Criteria upon which different exercise prices are considered between the various parties or various beneficiaries.
Not applicable.
In the case in which the underlying financial instruments to the options are not traded on regulated markets, indication of the value attributable to the underlying instruments or their measurement criteria.
Not applicable.
Criteria for adjustments necessary following extraordinary share capital operations or other operations affecting the number of underlying instruments (share capital increases, extraordinary dividends, reverse stock split and splits of underlying shares, mergers and spin-offs, conversions to other share classes etc.).
The Plan provides that in the event of (i) corporate transactions affecting the Company's share capital structure (such as, purely by way of example, stock splits, reverse stock splits, free or paid increases in the Company's capital with the issuance of shares or other instruments of a dilutive nature - such as, e.g., warrants and/or convertible bonds - mergers by incorporation, spin-offs and/or distribution of extraordinary dividends) and/or having the effect of modifying the economic contents of the Plan, (ii) events of an extraordinary and/or non-recurring nature and/or not concerning core operations (by way of example only, purchase or sale of business units), (iii) significant changes in the economic environment and/or (iv) other events likely to affect the Shares and, more generally, the Plan, the Board of Directors shall make such changes to the Plan regulations as it deems necessary or, at its discretion, appropriate, within the limits permitted by the regulations in force from time to time and according to the applicable adjustment criteria and generally-accepted financial market methods, in order to adapt it to the changed situation and reflect the aforementioned changes, while keeping the substantive and economic content of the Plan unchanged.
The Board of Directors, therefore, will have the power to proceed with the modification of the Exercise Price per Share in order to reflect the changes resulting from the above-mentioned corporate transactions and to make further amendments and/or additions to the Plan itself where deemed necessary or appropriate to keep the essential contents of the Plan, the number of Shares issued and the maximum amount of the increase linked to the Plan, unchanged as much as possible, within the limits allowed by current regulations, subject to any proposal and/or resolution of the internal committees where necessary, notifying the Beneficiary.
In addition, the Board of Directors may make such amendments and additions to the Plan and its regulations as it deems appropriate, independently and without the need for further Shareholders' Meeting approval, subject to the matters falling within the competence of the Shareholders' Meeting, in order to, inter alia, (i) take into account any legislative changes; (ii) ensure that the Beneficiary may benefit, or continue to benefit, from favorable regulations, by promptly notifying the Beneficiary of such changes.
Any rounding that may be necessary due to the existence of fractions shall be made downward and therefore the Beneficiary, regardless of the size of the fraction, will have the right, subject to all other conditions, to one less Share.
For information on the early exercise of the Options, please refer to Paragraph 4.3.
Financial instrument-based remuneration plans (table)
Table No. 1 required by paragraph 4.24 of the same Schedule 7 of Annex 3A of the Issuers' Regulation will be provided according to the terms and conditions indicated by Article 84-bis, paragraph 5, letter
a) of the same Regulation.