Remuneration

Remuneration to the board of directors

Remunerations to board members elected by the general meeting are resolved by the general meeting. At the extraordinary general meeting on September 4, 2017 it was resolved that the remuneration for the current term should be TSEK 425 to the chairman of the board, TSEK 237.5 to the deputy chairman of the board and TSEK 200 to each of the other board members not employed by the Company.

The annual general meeting further resolved that a remuneration of TSEK 40 is to be paid to each of the members of the remuneration committee and that a remuneration of TSEK 60 is to be paid to each of the members of the audit committee. For the financial year 2016 the members of the board of directors received remuneration as set out in the table below. All amounts in TSEK.

Name Position

Basic salary

Board fee Pension

Total

Lars Lannfelt (1) Chairman

886

187

1,073

Pär Gellerfors (2) Board member

1,620

356

1,976

Wenche Rolfsen (3, 4) Board member

66

66

Ivar Verner (4) Board member

99

99

Hans Ekelund (4) Board member

116

116

Mikael Smedeby (4, 5) Board member

112

112

Total  

2,506

393 543

3,442

1) Lars Lannfelt, active in the Company and employed at approx. 50% duty rate in 2016. At the end of the year, the duty rate was 90%.
2) Pär Gellerfors, active in the Company and employed at 100% duty rate.
3) Wenche Rolfsen, board member since July 2016.
4) Board member, has invoiced his/her board fee including social fees via company.
5) Mikael Smedeby, resigned from his duties as board member at his own request on June 21, 2017 in order to meet Nasdaq’s requirements regarding the number of independent members of the board.

Remuneration to the CEO and senior management

Remuneration to senior management consists of basic salary, variable remuneration, pension provisions and other benefits. For the fiscal year 2016 the CEO and senior executives received remuneration as set out in the table below. All amounts in TSEK.

Name

Basic salary

Pension Variable remuneration

Total

CEO Gunilla Osswald

2,365

9381) 2,6401)

5,943

Other senior executives (6)2)

6,665

793 856

8,314

Total

9,030

1,731 3,496

14,257

1) The amounts include corrections of salaries to the amount of TSEK 480 and pensions to the amount of TSEK 168 relating to the previous year.
2) The amount includes invoiced fees including fees via companies to the amount of TSEK 2,028.

The Company’s CEO Gunilla Osswald receives a fixed salary amounting to SEK 185,400 per month. Gunilla Osswald is further entitled to pension contributions corresponding to 35 percent of the fixed salary.

The CEO is covered by the bonus programs which targets all employees in the Company. In addition, the CEO is entitled to a variable remuneration (which is not subject to pension contributions) amounting to a maximum of 25 percent of the total fixed salary during 2017. 75 percent of the variable remuneration is to be paid in connection with the completion of the ongoing listing and the remaining 25 percent is to be paid upon fulfillment of certain business-related goals.

Between the Company and the CEO there is a notice period of 12 months if the Company gives notice of termination and 6 months if the CEO gives notice of termination. If the Company gives notice of termination there is no working obligation during the notice period, but the CEO shall be available to the Company when needed. In the event that the CEO enter into a new employment, the new salary will be set off against the remuneration from the Company. For other senior executives the notice period is mutually three months, alternatively the notice period set out in the Employment Protection Act (LAS). Severance pay is not applied.

Bonus programs

BioArctic has two bonus programs linked to the Company’s Alzheimer and Parkinson projects, covering all permanent employees (including the CEO). Bonus is paid when the Company achieves certain goals linked to the clinical research programs for BAN2401 for Alzheimer’s disease and BAN0805 for Parkinson’s disease. As the bonus programs are linked to the clinical research programs, the bonus payments may occur irregularly as these goals are reached. Some of these goals are also far in the future. One condition for receiving bonus is that the employee has been employed for at least six months at the time when the goal that is the basis for payment of bonus is reached. The potential bonus for the employee amounts to one monthly salary. The bonus is not subject to pension contributions. In 2016 one bonus payment was made within the framework of the development program for Parkinson’s disease in connection with the signing of the collaboration and license agreement with AbbVie. For 2016 has, in addition to variable remuneration to the CEO, variable remunerations been paid with one to three monthly salaries.

Share related incentive programs and acquisition of shares by board directors and senior executives

The Company does not have any outstanding securities-backed incentive programs or any other outstanding warrants. The Company has, however, two incentive programs for employees including the CEO and senior executives, see above.

The main shareholders have issued a total of 22,635 call options to certain board directors and senior executives in the Company, including the CEO, concerning a total of 339,525 of the main shareholders’ B-shares in the Company. Pursuant to the option agreement the exercise period (i.e. the period during which the option can be exercised) runs up to and including June 30, 2020.  Each call option entitles to the acquisition of 15 B-shares in the Company. The exercise price for the warrants is approximately SEK 26.70 per share. In connection with the issue of the options the option holders have paid an option premium corresponding to the market value of the option calculated according to the Black &Scholes model to the main shareholders.

The options are freely negotiable. The agreement, however, includes a right of the main shareholders to repurchase the warrants if the option holder terminates employment or his/her employment or assignment in the Company during the term of the options or if the impending listing of the Company’s B-shares should not be completed.