Report by the Board of Directors

Incentive Systems

Stock Option Program

2008A-C

The Annual General Meeting decided on March 14, 2008 that there is a weighty financial reason for the company to issue stock options since the stock options are intended for use as part of the incentive and commitment program for key personnel.

The maximum total number of stock options was 4,200,000, of which 1,400,000 were marked with the symbol 2008A, 1,400,000 with the symbol 2008B, and 1,400,000 with the symbol 2008C. The stock options entitled to subscription of a maximum total of 4,200,000 new shares of the company or treasury shares.

The subscription price for the shares to be subscribed based on the stock options was based on the prevailing market value of the Bittium Corporation share at Nasdaq Helsinki in January 2009, January 2010 and January 2011. 

At the end of the year 2015, 1,292,322 stock options with symbol 2008A, 1,089,000 stock options with symbol 2008B, and 1,385,000 stock options with symbol 2008C were distributed to the key employees of Bittium Corporation.

A total of 55,498 new shares in Bittium Corporation were subscribed for between December 1, 2015 and March 31, 2016 by virtue of the option rights 2008C. The share subscription period for stock options 2008C ended on March 31, 2016.

Variable Pay System

A limited amount of Bittiumīs employees are participating into Variable Pay (VP) program. The criteria for the short-term merit pay are the financial strategic targets of the company. In addition, part of the targets may be other companyīs objectives or personal targets. Personal targets vary between duties. In 2016, the operating profit formed the financial targets.

In 2016, the earning period for the Variable Pay was the calendar year. The targets are determined separately for each earnings period. The setting of targets and the review of their achievement is decided on one-over-one basis.

Directed Share Issue without Consideration

Based on the authorization granted by Bittium Corporationīs Annual General Meeting of Shareholders held on April 15, 2015, the Board of Directors of Bittium Corporation decided on March 22, 2016 on a directed share issue without consideration as reward payments to the key persons of the company and its subsidiaries. In the share issue, 37,500 new shares were issued without consideration to the key persons entitled to the share bonus. The share bonus was issued to 8 key persons of the company defined by the Board of Directors, with the condition that they must be employed by Bittium Corporation or its subsidiaries at the time of payment of the share bonus. The shares issued in the directed share issue without consideration are subject to restrictions on the right of disposal until December 31, 2018. However, the Board of Directors may grant permission to dispose or use the shares prior to the given date. The shares were registered to the trade register and on the book-entry accounts of the recipients on March 24, 2016, and became subjects to trading on the trading list of Nasdaq Helsinki on March 29, 2016. The CEO received 10,000 shares of Bittium Corporation, and the rest of the members of the Management Group received in total 27,500 shares of Bittium Corporation.