System of Variable Remuneration and Incentive Scheme
Incentive program 2010
None of the current employees are included in the program.
The program was designed as a combined warrant- and profit-sharing program for year 2010. The warrants have expired.
The profit sharing plan is related to the value increase of the portfolio and has a 15 years duration. The profit sharing plan for 2010 relates to investments carried out 2009.
The annual plan entitles to cash payment corresponding to, in aggregate, 5 % of the part of the return from the investments to which the annual plan relates, that exceeds a “threshold” (“Surplus Return”). The threshold shall consist of the initial value of the investments to which the annual plan relates to the extent that such investments have been exited, adjusted with an annual threshold interest of 6 per cent for the years 2009-2012 and 8 per cent for year 2013 and onwards. On the “credit side” there will be proceeds received from exits. To the extent the Surplus Return exceeds an annual return of 35 per cent, the percentage on the exceeding part shall be reduced by half to 2.5 %.
To the extent that the Surplus Return exceeds 50 per cent, another reduction by half to 1.25 % shall apply. Surplus Return over and above 60 per cent shall not entitle to profit sharing.
In addition, the 2010 plan shall also entitle to an aggregate of 37.5 per cent of the so called ”KDAB Carried Interest” in accordance with the limited Partner Agreement signed with European Investment Fund (”EIF”) regarding KCIF Co-Investment Fund KB (”KCIF”) . KDAB Carried Interest can briefly be described as 20 per cent of the return exceeding a threshold interest of 6 per cent calculated on – and after repayment of – EIF´s investments in KCIF. According to the agreement with EIF, the company is entitled to that part of the KDAB Carried Interest only if it is included in the profit sharing program. Thus, the Company does not, when it comes to this part of the profit sharing program, abstain from any amount it otherwise would be entitled to, besides social security contributions incurred due to the pay-out.
Annual STI Program
The Board of Directors decides on annual Short-Term Incentive Program for executive management, based on a number of specific corporate goals established for one fiscal year at the time. The goals are designed to promote Karolinska Development’s long-term value creation. The remuneration is dependent on whether one or more goals are met and has a fixed cap corresponding to 6 months’ base salary for each participant.
Exit Bonus
Program Executive Management are entitled to a bonus based on exits in the portfolio. The remuneration totals of 4% of the net proceeds paid to the company upon the exit. The remuneration includes all of the company’s costs in relation to the payment. The maximum payment is limited to SEK 50 million per exit and calendar year.