This statement to the Annual General Meeting in Cxense ASA (“Cxense” or “the Company”) on 12 May 2016 has been prepared by the board of directors of Cxense (the “Board”) in accordance with Section 6-16a of the Norwegian Public Limited Companies Act (the “PLCA”). The statement contains guidelines and main principles for the Company’s remuneration of the executive management. The statement also outlines the implementation and effects of the policies in effect in 2015.
2. Advisory guidelines for remuneration of executive management
Note: The guidelines in this section set out the principles for executive remuneration at large. These guidelines are subject to a separate vote at the Annual General Meeting, which result is advisory (non-binding) to the Board.
In order to attract and retain the leadership competence that Cxense needs, the remuneration of managers, and all other employees, shall be competitive and comprise a basic salary including standard benefits, which salary may be supplemented by performance-based cash bonus and incentive subscription rights. All parts of the remuneration shall reflect the responsibility and performance over time of the respective manager. Bonus payments are contingent on efforts and contribution to achievement of business and/or operational objectives.
The basic salary is evaluated and adjusted annually.
Managers do not receive any additional compensation for serving as board members of subsidiaries in the group. For the avoidance of doubt, travel and other out-of-pocket expenses in connection with such duty is refunded per normal expense refund practices.
The Board determines the salary and other remuneration to the CEO. There is a maximum amount of cash incentive remuneration per calendar year for a performance dependent bonus. It follows from the nature of the incentive subscription rights program resolved by the Annual General Meeting that the limit does not apply to the possible gain on subscription rights. The Board has adopted a policy for the CEO’s remuneration of the employees.
No so-called “golden parachutes” are in effect, and post-employment pay will only apply in case the Company invokes contractual non-competition clauses.
3. Binding guidelines for share-based remuneration to executive management
Note: The guidelines in this section set out the principles for share-based executive remuneration. These guidelines are subject to a separate vote at the annual general meeting, which result is binding for the Board.
The Company’s subscription rights plan(s) as resolved by the Annual General Meeting is the same for senior managers as for all employees. Grants are scaled based on position, results and competitive considerations. The purpose of such plans is to strengthen the Company by providing to employees, management and consultants additional performance incentive.
According to the programme rules, as resolved separately by the Annual General meeting, the exercise price shall, as a minimum, be the average closing price of the Cxense share as reported by Oslo Axess over ten trading days immediately preceding the date of the grant. Unless resolved otherwise by the Board, 25 per cent of each grant of subscription rights vest each 12 months after the date of the grant. The subscription rights lapse on the fifth anniversary after the Annual General Meeting that resolved the programme.
4. Implementation and effect of the policies on remuneration to executive management in 2015
The bonus plan works to motivate senior managers to achieve the Company’s operational and business objectives in the annual planning cycle. The share-based incentive plan with vesting over several years, works to align the interests of executive management with shareholders’ interests also in the long term.
Salary, pension and any paid bonuses including pertinent employer’s tax is expensed simultaneously with the paid or earned remuneration. The earned compensation of each senior manager in 2015 is reported in note 18 to the annual financial statements for 2015.
For the shareholders an actual or possible exercise will represent a dilution. At the end of 2015, the number of outstanding subscription rights and share options to management amounted to 286850, corresponding to 4.5% per cent of the share capital.
Oslo 21 April 2016
The Board of Directors of Cxense ASA