Kitron : AGM Documents

Kitron ASA

REPORT ON REMUNERATION TO SENIOR EXECUTIVES AND BOARD MEMBERS FOR 2022

KITRON ASA

Prepared for the annual general meeting 28 April 2023

1. Introduction

This report on remuneration to senior executives (the "Report") is prepared by the board of directors of Kitron ASA ("Kitron" or the "Company" and together with its subsidiaries the "Group"). The Report has been prepared in accordance with the Norwegian Public Limited Liability Companies Act 1997 section 6-16b, the Norwegian Regulation on Guidelines and Report on Remuneration of Leading Employees of 2020 (Nw.: Forskrift om retningslinjer og rapport om godtgjørelse for ledende personer) section 6 and the Norwegian Accounting Act section 7-31b.

The Report comprises remuneration to the Company's CEO, CFO and other members of the management who report directly to the CEO ("Senior Executives"), as well as members of the board of directors who are or have been employed by, or held office in, the Company for the financial year 2022. The purpose of the Report is to provide a comprehensive, clear and understandable overview over awarded and due gross salary and remuneration to Senior Executives and board members for the last financial year and how the remuneration is in accordance with the guidelines for remuneration of Senior Executives adopted by the annual general meeting 2021 of the Company (the "Remuneration Guidelines") and to what extent the remuneration is linked to the performance of the Company. The Report provides details, both in total and individualised, on the remuneration of the Company's Senior Executives as well as the remuneration received by members of the Company's board of directors in their capacity as board members in the Company.

Remuneration of the members of the board of directors of the Company (except for those board members who are also employed in the Company) is covered in section 6 of this Report.

2. Company highlights in 2022

Overall company performance in 2022

Kitron's revenue for the year reached NOK 6 486.7 million (NOK 3 711.4 million), which represented a 75 per cent increase compared with 2021. The revenue growth reflects underlying growth for all business units including the acquisition of Danish EMS provider BB Electronics AS and easing of supply constraints during the year. EBITDA for the group reached NOK 621.0 million compared to NOK 341.9 million in 2021. Net profit for the year amounted to NOK 287.1 million (NOK 152.8 million), corresponding to NOK 1.45 per share (NOK 0.78). For further details on the Company's performance in 2022, reference is made to the Company's consolidated annual accounts for 2022.

Overview of the application of the remuneration guidelines in 2022

Under the Remuneration Guidelines, remuneration of Senior Executives shall be competitive and based on market terms, relate to responsibility and authority, and may consist of the following components: fixed salary, bonus scheme, share-based long term investment program, pension benefits, and other benefits.

The Remuneration Guidelines, adopted by the annual general meeting 2021, and the Company's report regarding the Company's compliance with the Remuneration Guidelines, which is reviewed and controlled by the auditor, can be found on the Company's website https://kitron.com/investors.

The Remuneration Guidelines, adopted by the general meeting 2021, have been fully implemented. No deviations from the Remuneration Guidelines have been decided and no derogations from the procedure for implementation of the Remuneration Guidelines have been made.

No remuneration has been reclaimed by the Company during the reported financial year.

3. Total remuneration of Senior Executives in the Company

Table 1 below sets out total remuneration, split by component, paid and due to each current or previous Senior Executive in the Company for the last financial year.

Table 1a - Total remuneration of Senior Executives in the Company in 2022 and 2021

Name of Senior	Reported		1			2
Executive	financial	Fixed remuneration	Variable remuneration
Position	year
(start/end date)
		Base	Fees	Other	Short-term		Long-term	4	5	6
		salary		benefits 1	incentive		incentive 3	Pension	Total	Proportion of
(amounts in NOK					earned 2			expense 4	remuneration	fixed and
1,000)
									variable
										remuneration
Peter Nilsson	2022	3 125	0	295	2 629		6 413	1 503	13 965	35%/65%
CEO
(01.01.2022-	2021	3 030	0	294	0		0	1 502	4 826	100%/0%
31.12.2022
Cathrin	2022	2 220	0	282	1 868		2 746	295	7 411	38%/62%
Nylander
CFO	2021	2 153	0	282	0		0	294	2 729	100%/0%
(01.01.2022-
31.12.2022
Stian Haugen	2022	1 398	0	216	1 190		0	96	2 900	59%/41%
CTO
(01.01.2022-	2021	1 217	0	172	0		0	73	1 461	100%/0%
31.12.2022
Kristoffer	2022	2 308	0	113	1 938		845	354	5 558	50%/50%
Asklöv
COO	2021	764	0	0	0		0	269	1 033	100%/0%
(01.01.2022-
31.12.2022
Israel Losada	2022	-	-	-	-		-	-	-	-
Salvador, COO
(01.01.2021-	2021	1 726	0	121	0		0	204	2 051	100%/0%
30.09.2021)

1. Other benefits include the value of any benefits or prerequisites, such as non-business or non-assignment related travel, medical, car, education and training, residence or housing, credit cards, and other benefits in kind or prerequisites.
2. Short-termincentive earned includes the total monetary value of annual bonuses from the short-term incentive program for the

financial year.

1. Long term incentive program includes programs that have vested during the year and shows total benefit of shares and cash consideration.
2. Pension expense includes contributions that effectively took place during the reported financial year to finance a fund or other pension scheme for future pension payout for the senior executive.

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Table 1b - Remuneration of Senior Executives from undertakings of Kitron

Name of Senior	Reported		1			2
Executive	financial	Fixed remuneration	Variable remuneration
Position	year
(start/end date)
		Base	Fees	Other	Short-term		Long-term	4	5	6
		salary		benefits	incentive		incentive	Pension	Total	Proportion of
(amounts in NOK					earned			expense	remuneration	fixed and
1,000)
									variable
										remuneration
Zygimantas	2022	1 632	0	523	1 434		2 985	90	6 664	34%/66%
Dirse
Managing
2021	1 738	0	327	0		0	78	2 144	100%/0%
Director, Kitron
Electronics
Manufacturing
(Ningbo) CO
Ltd., China
(01.01.2022-
31.12.2022
Stefan Hansson	2022	1 616	0	81	1 416		2 757	785	6 655	37%/63%
Mutas
Managing	2021	1 695	0	107	0		0	782	2 584	100%/0%
Director, Kitron
AB, Sweden
(01.01.2022-
31.12.2022
Mindaugas	2022	2 092	0	62	1 757		2 985	0	6 897	31%/69%
Sestokas
Managing	2021	2 080	0	27	0		0	0	2 107	100%/0%
Director, UAB
Kitron,
Lithuania & VP
Central Eastern
Europe
(01.01.2022-
31.12.2022
Hans Petter	2022	1 898	0	203	1 597		2 737	227	6 662	35%/65%
Thomassen
Managing	2021	1 840	0	198	0		0	227	2 265	100%/0%
Director, Kitron
AS, Norway &
VP North
America
(01.01.2022-
31.12.2022
Carsten	2022	2 904	0	301	2 428		0	0	5 632	57%/43%
Christensen
CEO BB	2021	-	-	-	-		-	-	-	-
Electronics
(joined 10.01
2022)

4. Share based remuneration

The Company has implemented a share option program for its Senior Executives comprising of up to 5,000,000 shares. The share option program was implemented in 2018 and is divided into four three-year subprograms, each with an allocation of 1,250,000 options, where the first program started in 2019, and is followed by one program every year until 2022.

The share option program entails that Senior Executives, on certain terms, may be granted a right to subscribe for shares in Kitron at NOK 0.10 per share after a vesting period of three years. The number of options that are

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vested for each subprogram are linked to the development of the market capitalization at Oslo Stock Exchange, adjusted for dividends and share buy-backs. For each program to vest fully, the market capitalization adjusted for dividends and share buy-backs must increase 50 per cent. The program starts to vest at an increase of 20 per cent and will vest linearly between 20 per cent to 50 per cent.

Each subprogram is capped at 200 per cent increase of the market capitalization, adjusted for dividends and share buy-backs.

Any shares delivered as a result of exercising options are subject to a three-yearlock-up period. During the first year of the lock-up period, no sales are allowed. The following two years, 1/8 of the option shares are released each quarter of the calendar year. Further, the program has a claw back clause that provides the Company with a right to purchase option shares if the option holder's employment with the Company is terminated and the criteria of the program are not met during the lock-up program.

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Table 2 - Share options awarded or due to the Senior Executives for the financial year 2022

Name of Senior	Options	Options	Options	Options	Options	Option shares	Exercise
Executive	outstanding at	granted	vested	granted and	exercised	subject to a	price
Position	the beginning			unvested		lock-up period
(start/end date)	of the year
Peter Nilsson	1 030 000	225 000	350 000	905 000	350 000	183 920	0.10
CEO
(01.01.2022-
31.12.2022)
Cathrin Nylander	370 000	75 000	150 000	295 000	150 000	79 622	0.10
CFO
(01.01.2022-
31.12.2022)
Kristoffer Asklöv	250 000	100 000	50 000	300 000	50 000	50 000	0.10
COO
(01.01.2022-
31.12.2022)
Stian Haugen	220 000	75 000	0	295 000	0	0	0.10
CTO
(01.01.2022-
31.12.2022)
Zygimantas Dirse	370 000	75 000	150 000	295 000	150 000	82 500	0.10
Managing
Director, Kitron
Electronics
Manufacturing
(Ningbo) CO Ltd.,
China
(01.01.2022-
31.12.2022)
Stefan Hansson	370 000	75 000	150 000	295 000	150 000	76 020	0.10
Mutas
Managing
Director, Kitron
AB, Sweden
(01.01.2022-
31.12.2022)
Mindaugas	370 000	75 000	150 000	295 000	150 000	102 000	0.10
Sestokas
Managing
Director, UAB
Kitron, Lithuania &
VP Central Eastern
Europe
(01.01.2022-
31.12.2022)
Hans Petter	370 000	75 000	150 000	295 000	150 000	82 602	0.10
Thomassen
Managing
Director, Kitron
AS, Norway & VP
North America
(01.01.2022-
31.12.2022)

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