Remuneration Principles for Board Members and ... - Affitech

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commensurate to the amount of work undertaken by each of them. Individual board members may take on specific ad hoc tasks outside their normal duties assigned by the board. In each such case the board shall determine a fixed fee for the work carried out related to those tasks. Expenses, such as travel and accommodation in relation to board meetings as well as relevant education, are reimbursed. Board members may exceptionally be offered stock options, warrants or participation in other incentive schemes in accordance with the over‐all principles set out below. No other amounts or benefits are paid to the board members. 2. Executive Management and Other Executive Personnel a. Process Executive remuneration is proposed by the Remuneration Committee and subsequently approved by the board. b. Remuneration Policy The company’s executive remuneration policy is based on the principle that remuneration packages should be broadly comparable to those available to executives of similar experience, role and responsibility in companies which Affitech regards as its competitors for executive recruitment. Executive remuneration is evaluated annually against Danish, Nordic and international benchmarks of similar companies with international activities. The company’s executive remuneration package normally consists of fixed annual base salary, a variable annual performance based cash bonus, a longer‐term share‐based incentive, pension contributions and other benefits. c. Fixed base salary The annual base salary is set at a level appropriate for the role and responsibility of each individual executive manager, irrespective of salary paid to other executives. d. Incentive programmes To align the interests between the executive management and the shareholders and to consider both short‐term and long‐term targets, the annual base salary for executives may be eligible for incentive based remuneration consisting of: 2
(i) Performance based cash bonus The performance based cash bonus scheme is based on achievement of group or individual management objectives, set at the beginning of each calendar year and assessed at the end of each year by the Remuneration Committee. The potential maximum bonus payable is defined for each executive as a percentage of annual base salary. No bonus paid shall exceed 50% of annual base salary. In addition, the board of directors may enter into other kinds of cash bonus plans with the members of the executive management under which a bonus will be payable upon the occurrence of a specific event. The cash bonus for each such bonus plan shall not exceed an amount equivalent to six months’ fixed salary. (ii) Long‐term Incentive Programmes based on equity participation Long‐term incentives may involve the issue of one or more grants of warrants to subscribe for the company’s shares at an exercise price established at the date of grant. Warrant grants are normally structured to provide an incentive for recruitment, performance and retention. The initial grant on recruitment may be followed by further grants from time to time. The size and number of such grants is at the discretion of the board and subject to shareholder approvals. A provision may be included in the terms of the warrants to the effect that they can be exercised to subscribe for shares six months after grant, at the earliest, and five years after grant, at the latest. The exercise price must, as a minimum, be equivalent to the average market price of the company’s shares on the date of grant, however not less than par. It may be resolved to make the exercise price subject to annual indexation until exercise takes place. The board of directors may change or phase out one or more incentive plans introduced pursuant to these guidelines. In the evaluation of whether this should be done, the criteria that formed the basis of the establishment of the plan will be taken into account. However, such changes can only be made within the framework of these guidelines. More extensive changes must be approved by the shareholders and will be described in an updated version of these guidelines. e. Pension The company’s contribution to pension may vary from 6% to 30% of the fixed base salary. f. Other benefits 3
Page 1: Introduction Remuneration Principle

Remuneration Principles for Board Members and ... - Affitech

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