Harju Elekter

Remuneration Information • Mar 30, 2022

Remuneration policies for members of the Management Board of AS Harju Elekter

• 1. These remuneration policies for the members of the Management Board of AS Harju Elekter have been prepared in accordance with the Estonian Securities Market Act. The aim of the remuneration policy is to ensure that the long-term objectives and interests of the company are protected and sustainable.
• 1. The remuneration of the members of the Management Board is determined taking into account the current practice, strategy, short- and long-term objectives, financial indicators, and the duties and responsibilities of each member of the Management Board. Remuneration needs to be competitive to retain professional and competent top managers.
• 1. The Supervisory Board of AS Harju Elekter has the right to decide on the remuneration policy for members of the Management Board and the amount of remuneration. The Supervisory Board supervises the remuneration of the members of the Management Board.
• 1. The amount of remuneration payable to a member of the Management Board and the procedure for payment shall be determined by a resolution of the Supervisory Board. The Supervisory Board shall ensure that, when determining the remuneration of a member of the Management Board and the amount of remuneration payable and other benefits, and when concluding a contract with a member of the Management Board, the total amount of payments to the member of the Management Board is in reasonable proportion to the duties of the member of the Management Board and the economic situation of the company.
• 1. The basic remuneration paid to a member of the Management Board shall be reviewed annually.
• 1. The rate of performance pay for a member of the Management Board is set at 0.75% of the consolidated operating profit of Harju Elekter Group. The performance pay will be paid in two instalments: (i) 80% of the performance pay for the first half of the year, after the results of the first half of the year have been published; (ii) the performance pay for the second half of the year, together with a previously established reserve of 20%, after the results of the audited financial year have been published. In addition, the member of the Management Board is paid annual performance pay in the amount of 1.0% of the consolidated net profit. Disbursement of the performance pay for the second half of the year and the annual performance pay is coordinated with the Supervisory Board, and disbursed after the audit of the Group's annual accounts. The amount of performance pay is proportional to the share of basic salary in the basic salary total.
• 1. Additional benefits may be agreed upon with the member of the Management Board in his or her contract of service, such as additional paid holiday, a company car, telephone compensation, etc.
• 1. A member of the Management Board shall only be entitled to stock options with and on the basis of a corresponding resolution of the General Meeting.
• 1. An overview of the remuneration and compensation paid to the members of the Management Board is provided in the remuneration report, which is submitted to the General Meeting of Shareholders for a vote as an annex to the annual report. Shareholders have the right to demand a vote at the General Meeting on whether the actual remuneration conforms to the remuneration policy.
• 10.The General Meeting of AS Harju Elekter shall vote on the remuneration policy at least once every four years. Significant changes to the remuneration policy will be put to a vote at the General Meeting. Remuneration policies shall be deemed approved if more than one-half of the votes represented at the General Meeting are in favour.
• 11.Shareholders of AS Harju Elekter may submit proposals in writing to change the remuneration policies in accordance with the procedure set out in the notice convening the General Meeting of Shareholders.
• 12.These remuneration policies were approved by the Supervisory Board of AS Harju Elekter on 29 March 2022, and will be put to a vote at the General Meeting of Shareholders.