Components and specification process for compensation and equity participation plans

The basic features of the remuneration policy are elaborated by the Personnel, Compensation and Nominations Committee (NCC) and approved by the Board of Directors, who is also in charge of the approval of the Group bonus plan and of the share purchase plan. The Board of Directors fixes the remuneration of the Board of Directors and of the Group Executive Board, based on suggestions of the NCC. The Board of Directors reviews annually the main features of the remuneration policy, rules the fixed portion of the remuneration of the Group Executive Board, and defines the targets for the Group bonus plan, as well as the key parameters for the share purchase plan. The Board of Directors has not engaged third-party consultants for the elaboration of the salary policy or of compensation programs.

Remuneration of the Board of Directors

The members of the Board of Directors may opt to obtain all or part of their remuneration in cash or in Autoneum shares. The cash component is paid out in December of the business year. The share price applicable for the conversion of the remuneration into shares is based on the average trading price of the last ten trading days in February and the first ten trading days in March 2012. The resulting average price is discounted in order to reflect the applicable three-years’ restriction to sell the shares.

Remuneration of the Group Executive Board

Remuneration of the Group Executive Board consists of a fixed component, a performance-related bonus, and the opportunity to participate in the share purchase plan. The basic salary is derived from salaries paid for comparable positions in the market relevant for Autoneum (comparable automotive component suppliers). The members of the Group Executive Board may reach a bonus of up to 80 % of their basic salary, subject to the achievement of defined minimum profitability and liquidity targets of the Group or the Business Groups (BG), respectively.

The targets for the CEO and the CFO refer to net profit (weighted with 60%), EBIT (30%) and free cashflow (10%). For the heads of the BG the targets refer to EBIT (60%), RONOA (30%), and free cashflow (10%); the mentioned targets at Group level are weighted with 30% and the ones at BG level with 70%. Lower and upper limits are defined for the weighted targets. Achievement of the lower limit is a condition for the bonus, while maximum bonus is achieved at the upper limit. Bonus develops linearly between the two limits. Irrespective of the other targets, a bonus is only earned in case of a positive Group result (net profit).

According to the shares purchase plan, the members of the Group Executive Board could purchase in 2011, for up to 40% of their basic salary, Autoneum shares with a discount of 25%. The purchase price was the average trading price between July 15 and August 15, 2011, less the discount of 25%. The discount rate was fixed by the Board of Directors. The purchased shares cannot be sold during three years, in order to foster the long-term engagement of management.

There are no shares option plans.

The employment contract of the CEO cannot be terminated before April 30, 2014.