This remuneration policy concerns remuneration of the members of the board of directors and the members of the executive boardof Park Street Nordicom A/S (the “Company”) registered with the Danish Business Authority.
This remuneration policy has been prepared in accordance with the Danish Companies Act and is publicly available onthe Company’s websitewww.nordicom.dk.
This remuneration policy replaces the remuneration policy approved by general meeting on 23 April 2014.
Remuneration agreements including new agreements, amendments to or prolon-gation of existing agreements with members of the board of directors or members of the executive board executed after approval of this remuneration policy must comply with the terms in this remuneration policy.
Remuneration agreements executed prior to adoption of this remuneration policy will continue on the terms already agreed.
The object of this remuneration policy is to ensure identity between the interests of the members of the board of directors and the members of the executive board and the interests of the shareholders of the Company.
The aim of this remuneration policy is to ensure that the remuneration paid is reasonable at all times compared to the results achieved and the Company’s general situation.
Further, the object of the remuneration paid by the Company, including incentive-paid remuneration, is to attract and maintain the necessary management qualifications among members of the board of directors and members of the executive board and to promote management’s incentive to carry out the Company’s busi-ness strategy and goals and to create value in and for the Company.
Finally, the remuneration policy and its composition shall be structured to create alignment of the interests of the Company’s executive board and those of the Company’s shareholders. This includes promoting the strategy, external and in-ternal long-term sustainability and value creation in the Company supporting the Company’s long and short term objectives.
3. Remuneration of the board of directors
The remuneration of the board of directors is based on an annual fixed board fee based on the nature and the extent of the board duties and the number of meet-ings.
Efforts are made to ensure that the remuneration of the board of directors is com-petitive compared to the remuneration paid in other comparable companies yet considering the need for ad-hoc duties outside the normal scope of board duties in special circumstances.
The chairman of the board of directors receives 2.5 x annual fixed basic board fee, and the deputy chairman receives1.5 x annual fixed basic board fee.
I addition to the annual fixed basic board fee, an annual fixed committee fee is paid to the members of board committees. At present, the only board committee is an audit committee in which the chairman receives 0.75 x annual fixed commit-tee fee and any other members of the audit committee receive 0.5 x annual fixed committee fee.
Information about the level of the remuneration paid to the board of directors, and information about the level of the remuneration paid to the board committees can be found in the Company’s annual report that is available on the Company’s website www.nordicom.dk.
No incentive-based remuneration is paid to the board of directors, and the mem-bers of the board of directors are not offered any pension contribution or similar contributions.
The members of the board of directors are elected by the shareholders at the an-nual general meeting and for a term of office until the next annual general meet-ing. Board members may seek re-election.
4. Remuneration of the executive board
Efforts are made to ensure that the remuneration of the executive board is at a competitive level consideringthe remuneration of members of the executive man-agement in comparable companies and the qualifications and efforts of each member of the executive board including the results achieved.
The remuneration of the executive board is based on both fixed and variable re-muneration components.
In general, consideration has been made to the remuneration of the Company’s other employees. Remuneration of the other employees follows the same overall principles and to a large degree also the different remuneration components de-scribed in this remuneration policy, especially in relation to the key employees of the Company. Thus, the Company does not only consider the remuneration level in comparable companies, but the Company also considers the remuneration level of other employees of the Company. This is also the case as regards to the general terms of employment of the executive board.
4.1 Fixed annual remuneration
The fixed remuneration components focus on ensuring stability and continuous maintaining of qualified members of the Company’s management. Thus, the fixed remuneration components contribute to the long-term sustainable development of the Company’s business and thus, the fixed remuneration creates value for the Company’s shareholders.
The fixed annual remuneration components consist of a fixed annualbasic fee. In addition it is agreed that it is possible that a company car, a company-paid phone, internet subscription, housing allowance newspaper subscription,and a pension contribution corresponding to 10% of the fixed annual basic fee are of-fered as part of the fixed annual basic fee.
4.2 Incentive-based remuneration
The variable remuneration components focus on ensuring targeted and motivated efforts that are executed in an efficient manner without accepting unreasonable risks. Further, the variable remuneration components focus on being in a reasonable proportion to the results achieved by each member of the executive board and the Company’s situation in general.
4.2.1 Bonus scheme (cash based)
The variable remuneration componentscan consistof a bonus scheme that is based on specific objectives determined by the board of directors. Those objec-tives relate to the Company’s earnings performance and a number of individual performance indicators.
Individual performance indicators typically relate to delivery of annual business results of the Company and its subsidiaries or the occurrence of a relevant event.
The above individual performance indicators contribute to the Company’s busi-ness strategy, long-term interest and sustainability by maximizing alignment with shareholder value and financial sustainability for the Company.
Evaluation of the extent of fulfilment of the above made by the board of directors must be based on the facts and data in relevant published audited report(s), other announcements published by the Company and facts and data announced in statutory statements such as corporate governance reports, etc. available on the Company’s website.
The maximum value of a bonus allocation according to the bonus scheme is 20% of the fixed annual basic fee.
4.2.2 Share-based remuneration
At present, the members of the executive board have no stock options or any other similar share-based incentive instruments.
The members of the executive board may be offered to participate in a long-term incentive plan (the “Plan”) based on stock options in the Company if decided by the board of directors.
Thestock options are offered to members of management who have been em-ployed by the Company for at least a continuous period of 2 years at the time of the grant at the board of directors’ sole discretion.
Each member who is offered to participate in the Planmust sign an individual grant letter in which the total number of stock options granted is included. The grant of stock options is free of charge.
According to the Plan, the stock options will vest on the fifth-year anniversary of the date whena member of management is offered to participate in the program.
Upon the vesting period, the stock options can be exercised during an exercise window following the publication of the Company’s annual and quarterly reports.
Each of the stock options will represent a right to purchase 1A-share in the Com-pany of a nominal value of DKK 1 at an exercise price of DKK 0.1 per A-share.
The board of directors is entitled at the board’s solediscretion to make, in whole or in part, cash settlement as an alternative to delivering A-shares in the Company. The cash settlement will be performed by payment to the member of the execu-tive board of a cash amount equal to the difference between (a) the exercise price and (b) the share price, whereas the share price amounts to the simple average of the closing price of the Company’s A-shares on Nasdaq Copenhagen for a period of [5 trading days running from the first day of the relevant exercise window / following the expiry of the relevant exercise window / prior to the relevant exercise window.
The board of directors is entitled atthe board’s sole discretion to make changes to the Plan and the terms contained in the Plan, as appropriate, in case of special circumstances includingin the event of an exit of the Company or material struc-tural changes in the Company such as capital increases, capital decreases, grant of warrantsor convertible debt instruments, merger, demerger, delisting of the Company’s A-shares, etc.
In case a member of the executive board breaches the terms of his/her employ-ment contract during his/her employment or after termination of his/her employ-ment while holding unexercised stock options, the stock options will be cancelled automatically and without compensation.
In case a member of the executive board ceases to be employed in the Company, the right to exercise the stock options will be affected depending on the termina-tion situation as described in detail in the Plan.
A member of the executive board who is offered to participate in the Planis not entitled to transfer the rights and obligations or to sell, pledge or in any other way transfer the rights to stock options except (i) to a company wholly owned and controlled by the member or (ii) as inheritance to the member’s spouse or children according to the Danish Inheritance Act (arveloven) subject to the Company’s prior written consent or (iii) as part of an exit of the Company.
The Plan, including the grant and exercise of stock options, is subject to statutory requirements and regulations which may result in postponement of initiation of a planned stock option program.
The terms of the Plan may be amended by the board of directors at the board’s sole discretion, as appropriate, in accordance with applicable law with effect forall granted and vested or unvested stock options. In such case, the Company will informthe relevant members of the executive board in writing of any adjustments made.
4.2.3 Extraordinary remuneration
With the aim of achieving the objects of this remuneration policy, the board of di-rectors may decide to award individual members of the executive board one-off discretionary remuneration for extraordinary performances, sign-on bonuses, hand-over bonuses in relation to termination of employment,or other types of ex-traordinary remuneration that are not comprised in the bonusscheme described above.
Such extraordinary remuneration will consist of cash-based remuneration, and the maximum value of the extraordinary remuneration is 20% of the annual fixed fee paid to the member of the executive board at the time of payment.
Evaluation of whether extraordinary performances entitleto payment of an ex-traordinary remuneration is made by the board of directors based on the facts and data in the relevant audited report(s), other announcements published by the Company, and facts and data announced in statutory statements such as corporate governance reports, etc. available on the Company’s website.
Opportunities for claw-back apply in relation to the bonus scheme, the share-based remuneration and the extraordinary remuneration resulting in a right for the Company to require reclaim of remuneration already paid or stock options offered if it comes to light that theremuneration was paid/earnedor that the stock options were offeredon the basis of incorrect, misstated or wrong information.
The access to the right to reclaim remuneration or shares offered is limited in time, whereas a reclaim in relation to the bonus scheme and extraordinaryremu-neration can only take place within 1year(s)from the granting of the cash bonus or an extraordinary remuneration, and reclaim in relation to share-based remuneration can only take place within 2 year(s) from the granting of stock options.
Reclaim in full or in part is determined at the discretion of the board of directors.
4.3.1 Termination and severance pay
The Company may terminate the employment of a member of the executive board by giving maximum 12 months’ notice to the end of a calendar month. The members of the executive board may resign from the Company by giving at least 6 months’ notice to the end of a calendar month.
The Company may pay severance pay corresponding to a maximum of 12 times the fixed monthly basic fee in the event of dismissal by the Company without breach of contract by the member of the executive board.
5. Deviations from the remuneration policy
The board of directors may decide to temporarily deviate from the remuneration policy in special circumstances when it is deemed necessary by the board of di-rectors in order to safeguard the Company’s long-term interests.
Such temporary deviation may only take place during the relevant period in which the special circumstance is present. Special circumstances may consist in unexpected need to employ a new management profile or special needs in connection with a business acquisition, mergers, divestments or change of control, etc.
Deviations may, depending on the circumstances,concern the terms of bonus scheme, share-based incentive remuneration and the extraordinary remuneration.
Any deviation must be approved and decided by the board of directors, and the deviation and the purpose of such deviation must be described in the Company’s annual report for the financial year in which the deviation was decided.
In case it is deemed necessary by the board of directors in order to safeguard the Company’s long-term interests, a deviation may be incorporated in the remunera-tion policy as a permanent term of the remuneration policy. In such case, the board of directors will propose a change to the remuneration policy to be ap-proved by the subsequent general meeting.
6. Decision-making as regards to the remuneration policy and conflicts of interest
The board of directors is responsible for preparing, reviewing and assessing the terms of the remuneration policy, and the remuneration policy is reviewed at least once a year.
Further, the board of directors is responsible for the execution of the remuneration policy and will approve each remuneration contract.
If the board of directors assesses a need for amending the remuneration policy, the board of directors will be responsible for the preparation of such amendments. The board of directors will present an updated version of the remuneration policy to the shareholders for consideration and approval at the subsequent general meeting.
The board of directors may consult with the executive board while reviewing the remuneration policy. However, the executive board has no authority to make any decisions in relation to the remuneration policy.
If deemed necessary by the board of directors in order to safeguard the Compa-ny’s short-term or long-term interests, the board of directors may set up a remu-neration committee or use external advisors to assist the board of directors in preparing, reviewing and assessing the remuneration policy.
As the remuneration of the board of directors consists of a fixed fee approved by the general meeting, there is no potential risk of a conflict of interest in connection with the board of directors’ work in respect of the remuneration policy.
Conflicts of interest in relation to the remuneration of the executive board are mi-tigated by the board of directors’ continuous review and assessment and by ob-taining the board of directors’ approval.
7. Approval and publication of the remuneration policy
The remuneration policy is reviewed and approved annually by the board of directors. Further, the remuneration policy is reviewed annually by a remuneration committee if such committee is set up by the board of directors.
Any material changes to the remuneration policy must be prepared, incorporated and approved by the board of directors. Upon such preparation, incorporation and approval, material changes must be approved by the general meeting. In any event, the remuneration policy must be approved by the general meeting at least every fourth year.
The executive board may express its opinion on the remuneration policy and po-tential changes thereto. However, the executive board does not have any deci-sion power in relation to the remuneration policy.
The Remuneration Policy is approved by the company’s shareholders at the An-nual General Meeting on 23 April 2020. The Remuneration Policy was approved by 100% of the votes represented at the Annual General Meeting, corresponding to 92.31% of the total share capital entitled to vote.
The Company’s articles of association have beenamended where relevant upon approval of the remuneration policy.