Reimbursements

Senior management refers to the Board of Directors and the Executive Board. The guidelines also cover any remuneration to board members in addition to the board fee.

The guidelines apply to remuneration agreed after the 2020 AGM and to changes to remuneration already agreed thereafter. The guidelines do not apply to remuneration decided by the general meeting.

The 2020 Annual General Meeting resolved on the following guidelines regarding remuneration to senior executives:

The promotion of the Company's business, long-term interests and sustainability by the Guidelines

To operate successfully on the market and safeguard the company's long-term interests, including its sustainability, NOTE needs to be able to recruit and retain qualified employees. Accordingly, the total remuneration of the company's employees should be on market terms, competitive and commensurate with responsibility and authority.

The forms of compensation, etc.

Remuneration shall consist of the following components: fixed salary, any variable salary as separately agreed, pension and other benefits. In addition - and independently of these guidelines - the general meeting may decide on, for example, share and share price related remuneration.

Fixed salary

The fixed salary shall consist of a fixed cash salary and shall be reviewed annually. The fixed salary shall reflect the requirements of the position in terms of competences, responsibilities, complexity and how it contributes to the achievement of the business objectives. The fixed salary should also reflect the performance achieved by the executive and is thus individualised and differentiated.

Variable pay

In addition to a fixed salary, the CEO and other members of the Executive Board may, by separate agreement, receive a variable salary upon fulfilment of agreed criteria. The variable remuneration shall be linked to one or more predetermined and measurable targets set by the Board of Directors. The outcome shall be related to the fulfilment of objectives of a financial nature, such as profitability, growth and cash flow, as well as, where appropriate, individual measurable targets and qualitative targets.

By linking the remuneration of senior executives to the performance and sustainability of the Company, the targets promote the realisation of the Company's business strategy, long-term interests and competitiveness. The criteria shall apply for one financial year at a time. The fulfilment of criteria for the payment of variable remuneration shall be measured annually. As far as financial targets are concerned, the assessment is based on the latest financial information published by the Company.

The terms and conditions of variable remuneration are designed to allow the Board of Directors, in exceptional economic circumstances, to limit or withhold payment of variable remuneration if such action is deemed reasonable.

Additional variable cash remuneration may be paid in extraordinary circumstances to reward extraordinary performance beyond the person's normal duties. Such remuneration shall be decided by the Board of Directors upon proposal of the Remuneration Committee. However, the total variable remuneration during a calendar year may not exceed an amount corresponding to 100% of the fixed annual salary.

Pension scheme

For the CEO and other senior managers, pension benefits, including health insurance, shall be defined contribution and the premiums shall not exceed 30% of the fixed annual salary. Variable remuneration shall not be pensionable.

Other benefits

Other benefits, which may include car allowance, travel allowance and medical insurance, should be market-based and only represent a limited part of the total remuneration.

Conditions of cancellation

For the CEO and other members of the Group Management, the period of notice shall be 6 months in the event of termination by the executive. In the event of termination by the Company, a maximum notice period of 12 months shall apply. In the event of termination by the Company, the total amount of termination pay and severance pay shall not exceed 24 months' fixed salary.

In addition, compensation for any non-compete obligation may be paid. Such compensation shall compensate for any loss of income and shall only be paid to the extent that the former executive is not entitled to severance pay. The compensation may amount to a maximum of 100% of the fixed salary at the time of termination and be paid during the period of the non-competition undertaking, which shall be a maximum of 24 months after termination of employment.

Remuneration of members of the Board of Directors

In special cases, NOTE's AGM-elected Board members may be remunerated for services in their respective areas of expertise, which do not constitute Board work, for a limited time. Market-based fees shall be paid for these services (including services performed through a company wholly owned by a Board member) provided that such services contribute to NOTE's operations and long-term interests, including its sustainability.

Salaries and employment conditions for employees

In preparing the Board's proposal for these remuneration guidelines, salary and employment conditions for the Company's employees have been taken into account by including information on the employees' total remuneration, the components of the remuneration and the increase and growth rates over time as part of the Remuneration Committee's and the Board's basis for decision when evaluating the reasonableness of the guidelines and the limitations that follow from them.

Deliberation and decision-making process

One of the tasks of the Board's Remuneration Committee is to prepare principles for the remuneration of the Group Management and the Board's decision on proposals for guidelines for the remuneration of senior executives. The Board prepares proposals for new guidelines at least every four years and submits them to the AGM for approval.

The guidelines remain in force until new guidelines are adopted by the General Meeting. The Remuneration Committee monitors and evaluates programmes for variable remuneration to the Group Management, the application of the guidelines for remuneration to senior executives and the current remuneration structures and levels in the Company. Remuneration of the CEO is decided within the framework of approved principles by the Board of Directors after preparation and recommendation by the Remuneration Committee. Remuneration of other senior executives is decided by the CEO within the framework of established principles and after consultation with the Remuneration Committee. The CEO and other members of Group Management do not attend the Board's consideration of and decisions on remuneration-related matters, insofar as they are affected by the issues.

Extending the guidelines

The Board of Directors may decide to temporarily deviate from the guidelines, in whole or in part, if there are special reasons for doing so in individual cases and a deviation is necessary to fulfil the Company's long-term interests, including its sustainability, or to ensure the Company's financial viability.

For any employment relationships governed by rules other than Swedish, as far as pension and other benefits are concerned, due adjustments may be made to comply with mandatory such rules or established local practice, while recognising as far as possible the overall purpose of these guidelines.

Information on reimbursements decided but not yet due

On 10 June 2019, new rules were introduced in the Companies Act regarding, among other things, the format of remuneration guidelines. According to the transitional provisions of the new rules, the proposal for remuneration guidelines must contain information on previously decided remuneration that has not yet fallen due for payment. Apart from the commitments to pay ongoing remuneration such as salary, pension and other benefits, there is no previously decided remuneration to any senior executive that has not fallen due. For further information on the remuneration of senior management, see note 7 of the annual report.