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Remuneration Statement

Updated on 20 March 2013.

Remuneration Statement of CapMan Plc (CapMan) has been prepared in accordance with the Recommendation 47 of the Finnish Corporate Governance Code (Code), which entered into force on 1 October 2010. The Code as a whole is publicly available on the website of the Securities Market Association at www.cgfinland.fi.

When deliberating the remuneration elements set out in this Remuneration Statement, the Remuneration Committee and the Board of Directors have foremost applied principles of fairness and competitiveness, balancing of interests of shareholders, fund investors as well as employees, and promoting as well as strengthening the performance culture both short and long term.

Board of Directors

Board of Directors - principles of remuneration and the decision-making process

The remuneration of the members of the Board of Directors is confirmed by the AGM. According to the decision of the AGM 2013, the Chairman of the Board of Directors is paid a monthly basic fee of EUR 4,000, the Vice Chairman is paid a monthly basic fee of EUR 3,200 and members of the Board are each paid a monthly basic fee of EUR 2,800. In addition, the Chairmen of the Board’s Committees are paid a meeting fee of EUR 900 per meeting and the members of the Board’s Committees are paid a meeting fee of EUR 600 per committee meeting. These remunerations are not currently payable in shares. All members of the Board shall be reimbursed for reasonable travel expenses.

Remuneration and benefits related to an employment contract or service agreement with the company

The Chairman of the Board, Heikki Westerlund, and a member of the Board of Directors, Ari Tolppanen, are also employed by a CapMan Group company and work actively with CapMan’s investment operations as Senior Partners. The base salary and bonuses paid to Westerlund in 2012 are displayed in the table below. As a Senior Partner he is also entitled to the additional pension insurance as described below. Tolppanen was elected member of the Board of Directors at the 2013 Annual General Meeting. Westerlund has a 6-month mutual notice period and is entitled to a severance fee corresponding to six months’ salary, if his employment is terminated by the company. Tolppanen has a 3-month mutual notice period and is entitled to a severance fee corresponding to three months’ salary, if his employment is terminated by the company.

Participation in share-related compensation schemes

CapMan deviates from the Code’s Recommendation 43, which covers the participation of non-executive directors in share-related remuneration schemes. Non-executive members of the Board can participate in a share-related remuneration scheme in accordance with the decision of the General Meeting, in which case the shareholders have the opportunity to evaluate whether such remuneration is in their interest. Over the past years the practice has been that non-executive Board members do not participate in share-related compensation schemes. All shares and share-related rights that are granted to Board members are published in Insider issues section on the company’s website.

Currently, one Board member is part of a share-related compensation scheme, the stock option program 2008. Chairman Heikki Westerlund, who is also CapMan’s Senior Partner, was granted stock options in January 2010 before he joined the Board.

Biographical details of the members of the Board

The biographical details of the members of the Board are available at the company’s website in Board of Directors and Insider issues.

Remuneration of the members of the Board in 2012

Name	Position	Main occupation	Board remune-ration, €	Committee fees, €	Time Period	Other remuneration paid to members of the Board employed by CapMan or members acting as advisors to CapMan, €
Heikki Westerlund	Chairman	Senior Partner, CapMan	54,000	1,600	01.01.-31.12.2012	273,096
Teuvo Salminen	Vice Chairman	Board professional	54,000	7,200	01.01.-31.12.2012	3,000
Karri Kaitue*	Member	Board professional	40,000	1,600	14.03.-31.12.2012	-
Conny Karlsson**	Member	Board professional	12,000	2,400	01.01.-13.03.2012	-
Nora Kerppola	Member	Managing Director of Nordic Investments Oy	48,000	5,600	01.01.-31.12.2012	-
Claes de Neergaard	Member	Board professional	48,000	4,000	01.01.-31.12.2012	-
Koen Dejonckheere***	Member	CEO of Gimv NV	-		01.01.-31.12.2012	-

^{* CapMan Board member from 14 March 2012
** CapMan Board member to 13 March 2012
*** Mr. Dejonckheere has informed the company that he prefers not to accept board compensation.}

CEO and Management Group

Principles of remuneration and the decision-making process

The Board of Directors of CapMan confirms the overall remuneration principles and elements covering the CEO and Management Group members on an annual basis. The Board’s Remuneration Committee, consisting of at least two independent Board members and no executives, prepares remuneration-related matters for the Board.

Currently, the total compensation program consists of a monthly fixed salary, additional pension insurance, performance bonuses as short-term incentives (STI) and stock options as long-term incentives (LTI). No share plans are currently in use. The CEO and other Management Group members do not receive any payment or remuneration for their work on any CapMan-related boards, committees, or other decision-making or preparatory bodies. The monthly salary of individual Management Group members (apart from the CEO) can be increased on the basis of a proposal by the CEO and subsequent approval by the Remuneration Committee / the Board.

The CEO of CapMan, Niko Haavisto, is entitled to the same benefits as other members of the Management Group as explained below and has no separate or special compensation elements. Any adjustments to the CEO’s salary and other compensation can only be made with the Board’s approval. The CEO has a 12-month mutual notice period. No special severance fee has been agreed upon for the potential termination of the CEO’s agreement with the company.

Additional pension scheme

The CEO, Senior Partners appointed after 1 January 2010 and Management Group members based in Finland are covered by an additional payment-based pension insurance, for which the company pays an annual premium equivalent to 5% of the participant’s annual salary including vacation pay. This premium can be increased by up to 10% of the annual salary if the Board so decides. The individual’s entitlement to a premium-free policy grows gradually after 3 years and after 6 years covers 100% of the cumulative additional pension saving. The retirement age is set at 60 years of age.

Any Management Group member in Norway is entitled to a defined benefit plan which will currently give about 66% of pensionable income, including national pension, up to 12 Basic Amounts if employed 30 years.

Any Management Group member in Sweden is entitled to a defined contribution plan which grants 4,5% of up to 7,5 Basic Amounts plus 30% of up to 30 Basic Amounts in pension contributions.

Performance incentive scheme

The annual performance-based incentive scheme is tied to CapMan Group’s profit level, Business Unit profit level, where applicable, as well as to the annual individual performance. The CEO’s and the Management Group members’ bonuses are approved by the Board.

On an annual basis, the Board defines in advance a minimum profit level (threshold) for any bonuses to be paid out, together with a profit level at which the maximum bonuses are payable subject to individual performance. The maximum bonus potential for each individual is defined based on career path level and/or role. The bonus potential of both the CEO and other Management Group members is currently set at twelve times their monthly base salary.

Business Development incentive scheme

The following members of the Management Group are part of the business development incentive scheme:

- Head of Business Development & Investor Relations

The business development incentive scheme is linked to a success fee defined by the Board on a fund by fund basis. The incentive is typically defined as a percentage of the total amount of capital raised (excl. CapMan’s own investment) as well as overall performance assessment. The business development incentive is divided principally between the members of the fundraising team, and the amount of payable incentive depends on fundraising success, the team’s and individual’s role and individual performance.

Stock option program

Stock options are used to commit key individuals/executives to the company and reinforce the alignment of interests of key individuals/executives and CapMan shareholders. CapMan currently has two stock option programs in force, the stock option program 2008 and the stock option program 2013. The terms and conditions of the programs are available here.

In January 2010, all Management Group members were granted 2008A and 2008B stock options. In November 2011 the Board granted Lennart Simonsen, former CEO, and Niko Haavisto, CEO and CFO, additional 2008B stock options with a lock-up period until 31 December 2012. The Management Group members’ holdings are specified in Insider issues section on company’s website.

Biographical details of Management Group members

The Management Group’s biographical details are available at the company’s website in the Management section.

Remuneration of CEO and Management Group in 2012

Name	Salary, €	Bonus linked to financial performance and achievement of personal goals, €	In total, €	Option rights granted
CEO Lennart Simonsen	340,200	97,490	437,690	500,000
Management Group*	1,404,849	971,398	2,376,247	925,000

^{* Excluding the CEO. The figures include the aggregate remuneration paid by CapMan during the financial year 2012 to the members of the Management Group.}

Carried interest income and Maneq funds

The investment team responsible for the fund’s investment activities receives a share of carried interest from funds established in 2004 and thereafter. In connection with the establishment of a new fund, the Board makes a decision on the division of the possible carried interest between CapMan and the investment team responsible for the fund’s investment activities. The investment team’s share of carried interest received from a fund is typically at least 50%.

It is common practice in the private equity industry to direct part of the carried interest income to the members of the investment teams. The aim of the carried interest split is to align the interests of the fund investors and the investment professionals and to commit the investment professionals to the company in a long term. A new fund typically starts to generate carried interest after 6 or 7 years, provided that the original investment and a preferred annual return, which is generally 8%, have been paid to investors. The investment team’s share of carried interest is further divided among the team members. An individual investment professional’s right to receive carried interest income requires that he or she has made an investment in the carried interest vehicle of the fund. The amount of carried interest income also depends on the fund’s overall performance (i.e. on the success of the investment operations) and on the investment professional’s career path level.

CapMan employees have historically had the opportunity to invest in portfolio companies alongside the funds managed by CapMan through so called Maneq funds. The latest Maneq fund, in which CapMan personnel has been entitled to invest, was established in 2011. Currently it is not expected that new CapMan personnel Maneq funds will be established.

For additional information, please see:

Remuneration statement as approved by the Board of Directors on 7 February 2013