Main Elements of the Management Group’s Remuneration

Short-term Incentive Plan

Variable pay according to the Short-term Incentive Plan will be based on achievement of targets. The earning period for the variable pay is the calendar year. The targets are set separately for each earning period. The setting of targets and the review of their achievement is decided on a one-over-one basis. The criteria for the short-term variable pay are the financial and strategic targets. In 2022 and 2023 the financial targets of the Management Group have been based on operating profit or other financial objectives or personal targets. Personal targets vary between duties. In 2023 the financial targets of the Management Group have been based on operating profit.

Long-term Incentive Plan

The Board of Directors of the Company has approved two share-based long-term incentive schemes for the Company’s management. Both comprise a Performance Share Plan (“PSP1” and “PSP2”).

The objectives of the Performance Share Plans are to align the interests of the Company´s management with those of the Company’s shareholders and, thus, to promote shareholder value creation in the long term, to commit the management to achieving the Company’s strategic targets and the retention of the Company´s management.

PSP1

The previous Performance Share Plan consisted of three annually commencing three-year performance share plans, PSP1 2020-2022, PSP1 2021-2023 and PSP1 2022-2024, each with a one-year performance period, which was followed by the payment of the share reward and a two-year transfer restriction period. The commencement of each plan was, however, subject to a separate Board decision which has already been made with respect to each plan (PSP1 2020-2022, PSP1 2021-2023 and PSP1 2022-2024).

Eligible to participate in the first and second plan (PSP1 2020–2022 and PSP1 2021-2023) were the members of the Company´s Management Group. The top management of the Company, including the members of Company´s Management Group were eligible to participate in the third PSP1 2022–2024 plan.

The performance measures based on which the potential share reward under PSP1 2020-2022, PSP1 2021-2023 and PSP1 2022-2024 was be paid were the revenue growth and cash flow before financial items of Bittium. A precondition for the payment of the share reward was, in addition, that the employment relationship of the participant with Bittium continued at the time the reward was paid. The potential reward was be paid in shares of the Company.

In addition to the performance measures each plan contained a share price increase-based maximum limit for the share reward payable to the participants as separately determined by the Board.

PSP2

The PSP2 consists of three annually commencing three-year performance share plans, PSP2 2023–2025, PSP2 2024–2026 and PSP2 2025–2027, each with a one-year performance period, which is followed by the payment of the share reward and a two-year transfer restriction period. The commencement of the following two plans, PSP2 2024–2026 and PSP2 2025–2027, is, however, subject to a separate Board decision.

The performance measure based on which the potential share reward under the first plan, PSP2 2023–2025, will be paid is the revenue growth of Bittium. The number of shares that may be awarded within the plans and the payment are always subject to, and conditional on, a separate decision and approval of the Board