PROPOSALS OF THE BOARD OF DIRECTORS FOR DECISIONS UPON ALL ISSUES OF THE AGENDA OF THE ORDINARY GENERAL ASSEMBLY OF 29th of JULY 2020

ISSUE 1st: Submission and approval of the Annual Financial Report (Company & Group) for the financial year 01.01.2019 – 31.12.2019, including the Annual Financial Statements with the relevant Reports and Statements of the Board of Directors and the Certified Auditor.

The Board of Directors recommends the approval of the Annual Financial Report of the Company and the Group for the period 1.1.2019 to 31.12.2019 and the Auditor’s report as submitted to the statutory form of publicity and posted on the website.

ISSUE 2nd: Approval of overall top management 1.1.2019 – 31.12.2019 and discharge of the Chartered Auditor from any liability for the year 2019.

It is proposed the approval of the overall top management for the year 2019 and the discharge of the Chartered Auditor from any liability for compensation deriving from the Annual Financial Report and the administration and management in general of fiscal season 2019.

ISSUE 3rd: Election of Chartered Auditors (ordinary/deputy) for the period 1 January till 31 December 2020 and arrangement of their fees.

Following the relevant recommendation of the Audit Committee of the Company, It is proposed as auditor for the year 1.1.2020 to 31.12.2020 the auditing firm “Associated Certified Public Accountants S.A” (SOEL Reg. Number 125). The audit fee for the year 2020 will be determined by decision of the Board of Directors in accordance with auditing data. It is also proposed the approval of the fee of € 19.008 paid to the auditing firm “Associated Certified Public Accountants S.A” for auditing the financial statements for the year 2019.

ISSUE 4th: Approval of disposal of results.

The Company’s Board of Directors taking into account the Company’s current economic situation and the effects of the COVID-19 pandemic as well as its estimated future situation, proposes to the General Assembly to not distribute the dividend from the profits of the year 2019, as provided in article 161, par. 2 of Compulsory Law 4548/2018 and the distribution of the Company’s net profits amounting to euro 93.754 for the judged year as follows:

Legal Reserve	6.000   €
Retained earnings	87.754 €
Total	93.754 €

 

The non-distribution of dividend is estimated to have the following positive financial implications for the Company:

• Improving the ratio of equity to foreign capital.
• Improving the creditworthiness of the Company.
• Improving sustainability ratios (e.g total lending to equity).

 

 

ISSUE 5th: Submission and approval of Company remuneration in accordance with articles 110 and 111 of Law 4548/2018.

Mrs. Areti Kiriacoulis, shareholder of the Company, representing more than 1/20 of the paid-up share capital of the Company, in her letter to the Board of Directors of the Company dated 13.07.2020, requested, the above additional issue, to be added to the Agenda of the General Meeting that will be held on 29 July 2020. The above request was submitted in accordance with article 141 paragraph 2 of Law 4548/2018 and was accompanied by the following justification, as provided by the above article:

“To the Board of Directors of the societe anonyme:

“KIRIACOULIS MEDITERRANEAN CRUISES SHIPPING S.A”

Alimos, July 13^th 2020

 

Sirs,

As a shareholder of the Company with a direct participation percentage of 24.71% and in accordance with article 141 paragraph 2 of Law 4548/2018, I would like to request the addition of an issue concerning the amendment of the current Remuneration Policy for the members of the Board of Directors and the approval of a new remuneration policy, on the agenda of the Ordinary General Meeting of shareholders scheduled to take place on July 29, 2020 and specifically on the subject:

“Submission and approval of a new remuneration policy of the company in accordance with articles 110 and 111 of Law 4548/2018.”

Until the year 2019 and in accordance with the remuneration policy approved by the Ordinary General Meeting of the year 2019, the executive members of the Board of Directors (Chairman of the Board / Chief Executive Officer and Vice Chairman of the Board of Directors) who happens to be shareholders of the company, do not receive any remuneration for their participation in the Board of Directors, in the general management of the company as its legal representatives and the formulation of business policy, with the dividends collected being for them the main source of income. Due to the general negative economic environment that has been formed with the appearance of COVID-19, the proposal of decision to the General Assembly is already for the distribution of profits for the year 2019 provides for the non-distribution of dividends, which is estimated to happen in the coming years and at least for the profits of the years 2020 and 2021. Therefore, the main rationale for non-payment of any remuneration to the executive members of The Board of Directors, i.e. their reward from the distribution of dividends, will not be valid for the next years and I consider it appropriate to modify the Company’s remuneration policy in order to adapt to these new data.

In particular, it is proposed that the Company’s remuneration policy should stipulate that the executive members of the Board of Directors who hold the position of Chairman of the Board / Chief Executive Officer and Vice Chairman of the Board of Directors and are shareholders of the Company but not contracted with the Company, receive a one-time fee for their participation in the Board of Directors, as well as for the management of the Company in general and the formulation of a business strategy, which will be a function of the payment or not, but also the value of dividends paid by the Company’s profits.

Based on the rationale of my proposal, this remuneration will allow these executive members of the Board of Directors to be fully committed to their management duties, without being detached from the fact of non-distribution of dividends. In addition, for greater flexibility in the event that it is required to make extraordinary payments to the members of the Board, it is proposed to add a term which will allow deviation from the Remuneration Policy for the members of the Board of Directors. Finally, it is proposed to update the wording of this remuneration policy in a way that better reflects the current operating conditions of the Company.

The Shareholder,

Areti Kiriacoulis “

 

In view of the above, the Board of Directors unanimously approved at its meeting of 14.07.2020 the addition of the above item to the Agenda of the Ordinary General Meeting as item No. 5, renumbering items 5,6,7,8 to 6, 7, 8 and 9 respectively for the logical continuation of the discussion and decision making of the General Assembly.

Following the above request and the substantial changes in the world economy that have occurred due to the pandemic of the COVID-19, the Board of Directors at its meeting of 15.07.2020 prepared and approved a draft of a new Remuneration Policy for the members of the Board of Directors, which it submits for approval by the shareholders of the Company. The changes proposed in relation to the previously approved Remuneration Policy are as follows:

50. a) The executive members of the Board who hold the positions of Chairman of the Board / Chief Executive Officer and Vice Chairman of the Board of Directors, when they are also shareholders of the Company and they are not contracted with the Company with an employment contract, will receive a lump sum remuneration of up to 50.000 euros each in case of non-payment dividend from the Company from the profits of the previous year as well as in case the amount of dividends paid corresponding to each executive member of the the Board of Directors is less than the amount of 50.000 euros, for their services as executive members of the Board of Directors and as legal representatives of the Company. This change is proposed as the main reasoning of the previous Remuneration Policy for the non-payment of any remuneration to the executive members of the Board, i.e. their remuneration from the distribution of dividends, is not expected to apply for the coming years due to the unfavourable economic climate caused by the COVID-19 pandemic, especially in the tourism sector.

 

1. b) It is proposed to provide for the possibility of the Board of Directors in exceptional circumstances to apply a derogation from the provisions of the Policy in relation to the remuneration of the members of the Board of Directors, if this is necessary for the long-term service of the interests of the Company or to ensure its viability. The derogation should be decided by the Board of Directors of the Company with a quorum and a majority of 100% of its members, to be accompanied by a special justification and will be valid until the next Ordinary General Meeting of shareholders. This possibility is considered appropriate, so that the Company is more flexible in adapting to substantial changes in the conditions of the economy, as happened this year.

 

Following the above it is proposed to approve a new revised Remuneration Policy with the following content:

“REMUNERATION POLICY FOR THE MEMBERS OF THE BOARD OF DIRECTORS”

 Introduction

The initial Remuneration Policy for the members of the Board of Directors was approved by a decision of the Annual Ordinary General Meeting of the shareholders of “Kiriacoulis Mediterranean Cruises Shipping SA”. (hereinafter the “Company”) dated July 29, 2019 and published according to the law. According to the above Remuneration Policy approved by the Ordinary General Meeting of the year 2019, the executive members of the Board of Directors (Chairman of the Board / Chief Executive Officer and Vice Chairman of the Board) who are also shareholders of the Company, do not receive any remuneration for their participation in the Board of Directors, the general management of the Company as its legal representatives and its business policy design, given that it was judged that the dividends they receive as shareholders of the Company from its profits are a sufficient reward for the services they provide to the Company from their position as executive members of the Board.

The Remuneration Policy has been drafted in accordance with the European Union Directive on Shareholders’ Rights, which was incorporated into Greek law by Law 4548/2018. The Remuneration Policy applies to the remuneration of all members of the Board of Directors (hereinafter ” BoD”). The Policy defines in detail, on the one hand (i) the existing rights of the BoD members and the obligations of the Company to them and on the other hand (ii) the conditions, based on which remuneration will be provided, in the future, to existing and / or new members of the BoD during its validity. The Remuneration Policy takes into account the European best practices for listed companies and at the same time reflects the existing agreements regarding the remuneration of the executive members of the BoD. In addition, the Remuneration Policy takes into account the provisions of the Company’s Articles of Association, the Corporate Governance Code adopted by the Company, as well as the Internal Rule Book of the Company. The Remuneration Policy is available on the Company’s website www.kiriacoulis.com.

The relevant Managements of the Company came to the present Remuneration Policy, which was suggested to the BoD and then the BoD approved it, by its decision at its Meeting of 15 July 2020. During the discussion of the salary of a member of the BoD, this member was not present at the discussion. After being approved by the Board of Directors, the Policy is submitted for approval to the Annual General Meeting of the Company’s Shareholders. The relevant Managements of the Company will regularly examine whether the Policy is still in line with the Company’s business strategy or whether amendments to the Policy should be suggested to the BoD. Every four years (or earlier in case there is a need for modification), upon the recommendation of the relevant Directorates of the Company, the BoD will submit the new Policy to the Shareholders for approval, taking into account the applicable provisions of the law as well as the relevant decisions of the BoD, the Hellenic Capital Market Commission and / or other supervisory authorities.

Basic Forming Factors

The key factors of the internal and external environment of the Company that shape the Remuneration Policy for the members of the BoD are the following:

• Liquidity. Cash resources saved by management expenses enhance the Company’s working capital, improving liquidity.
• The strengthening of the share in the markets in which the Company is already active and the entry into new markets. Money savings from management costs can be used to increase disposal costs, which are the key means of achieving this strategic goal.
• The percentage of free dispersion of the Company’s shares. Due to the relatively low percentage of free distribution of its shares, it is estimated that the Company is more properly represented when the persons who are its legal representatives are executives and are majority shareholders.
• The existence of alternative forms of return of benefits to the members of the BoD. Based on the current composition of the BoD, two executive members are shareholders of the majority of the Company and receive dividends when the Company has profits and decides their disposal to shareholders. Furthermore, in case of purchase of own shares or issue of new shares that will result from capitalization of retained earnings or distributors of reserves or difference from the issuance of equity shares, the Company will consider offering free shares to the independent non-executive members of the BoD by the procedure mentioned below.
• The existing Greek legislation governing the taxation the employees’ earnings, has created the paradox that human employment costs dearly for a domestic company, while at the same time the after-tax benefit of employment is small.
• The financial situation of the regions-markets of the Company. Uncertainty created by the indefinite – in size and time – effects that events disrupt the economies of the countries from which the Company derives its customers (such as the departure of one or more Member States of an economic association, the trade wars of financial superpowers, pandemics, etc.), makes it imperative to implement a policy of containment of the total operating expenses of the Company and, at the same time, continuous review of their composition.

Existing Rights and Remuneration of Board Members

The Company, on an annual basis, evaluates the accounting and forecasting course of the aforementioned factors. Taking into account the results of the last evaluation, the Company formulated the content of this Policy.

The non-executive members of the BoD do not receive any remuneration for the service of their duties arising from their participation in the BoD. The executive members of the BoD who hold the positions of Chairman of the Board / Chief Executive Officer and Vice Chairman of the BoD, when they are also shareholders of the Company and they are not contracted with the Company with an employment contract, will receive a lump sum remuneration of up to 50.000 euros each in case of non-payment dividend from the Company from the profits of the previous year as well as in case the amount of dividends paid corresponding to each executive member of the the BoD is less than the amount of 50.000 euros, for their services as executive members of the BoD and as legal representatives of the Company. This fee will be paid to these members until the end of the fiscal year in which the general meeting took place. The Ordinary General Meeting of shareholders of each year will legally decide on the distribution or not of a dividend from the profits of the previous year. It is noted that in case the number of dividends paid corresponding to each executive member of the BoD separately is greater than 50.000 euros, then no fee will be paid to these members.

A member of the BoD is associated with the Company with an employment contract of indefinite duration, receiving a monthly salary for her employment as head Accountant on an eight-hour basis. This contract has been concluded on their usual terms of purchase and the applicable provisions of labour law apply to all matters concerning it, including the terms of retirement, the period of termination and the payment of the relevant compensation.

The Company may reimburse business expenses of a reasonable amount borne by the members of the BoD in the performance of their duties. The above expenses include indicative and not restrictive: travel and accommodation expenses, which are reimbursed according to the respective policy of the Company, attendance of training programs and purchase of relevant professional training material according to the respective policy of the Company so that the member of the BoD to be aware of any related issues. Also, the Company may allow the use of cars owned by the members of the BoD, to provide the members of the BoD mobile phone devices and their connection to a mobile telephony service provider, as well as to provide other non-monetary benefits to them, after approval by the Ordinary General Meeting.

 

Conditions for the provision of remuneration in the future to existing and / or new independent non-executive members of the Board

 

With this remuneration policy is established the possibility of a share option scheme to the independent non-executives members of the BoD according with the Article 32 of Law 4548/2018 as in force and the specific terms of the program of free distribution of shares to the members of the BoD are the following:

 

With a quorum of 100% and a unanimous decision of the BoD of the Company a program of distribution of shares to the independent non-executive members of the Board of Directors may be established in the form of an option (acquisition) of shares, according to the terms of this decision, a summary of which is made public. The total nominal value of shares made available under this paragraph, may not exceed overall 1/10 of the capital paid up at the dated of the decision of the BoD. The decision of the BoD shall state whether, in order to satisfy the option, the company shall increase its share capital or use shares which are acquired or have been acquired in accordance with Article 49 of Law 4548/2018 as in force.

In all events, the decision of the BoD must state the maximum number of shares which may be acquired or issued if the beneficiaries exercise the above right, the price or method of its determination, the terms of offering  of the shares to the beneficiaries or their categories without prejudice to Article 35 (2) of Law 4548/2018, as in force, the duration of the program, and any other relevant conditions. The BoD also determines the beneficiaries, the manner of exercising the right and any other term of the share offering scheme. In accordance with the terms of the scheme , the BoD shall provide beneficiaries who exercised their option with share option certificates and every calendar quarter at the most shall deliver the shares which have been issued or shall issue and deliver shares to the above beneficiaries by increase the Company’s capital and amending the Articles of Association accordingly, It also certifies the increase in capital and adheres to publication requirements. The decision of the BoD on the capital increase and confirming its payment shall be taken every calendar quarter by way of derogation to the provisions of Article 20 of Law 4548/2018.  Article 26 of Law 4548/2018, shall not apply to capital increases.

Validity-Duration-Revision

This remuneration policy is valid for four (4) years from its approval by the General Meeting. The remuneration policy is submitted to the General Assembly for approval whenever there is a substantial change in the conditions under which the approved remuneration policy was drafted and, in each case, every four (4) years from its approval. In case of revision of the remuneration policy, the relevant report of the BoD must describe and explain all changes in remuneration policy. The relevant decision of the General Meeting of Shareholders must describe the manner in which the votes and views of the shareholders on the policy and reports were taken into account, from the last vote on the remuneration policy at the general meeting of shareholders onwards.

Permitted derogation

The BoD may in exceptional circumstances apply a derogation from the provisions of this Policy for the remuneration of the members of the BoD, if this is necessary for the long-term service of the interests of the Company or to ensure its viability. The derogation should be decided by the BoD of the Company with a quorum and a majority of 100% of its members, to be accompanied by a special justification and will be valid until the next Ordinary General Meeting of the shareholders. In this case, information on any derogation from the application of the Remuneration Policy with an explanation of the exceptional nature of the circumstances and the indication of the specific elements of the Policy against which the derogation occurred is included in the Remuneration Report in accordance with Article 112 (2) ( g) of Law 4548/2018.

Pre-existing Commitments

During the approval of this Policy, the Company reserves the right to comply with any contractual obligations already undertaken with the members of the BoD, before the date of entry into force of this Policy. Details of such payments (based on pre-existing contractual commitments) will be presented in the Remuneration Report as they arise. ”

 

The Board of Directors proposes the approval of the fee paid  for the year 2018 to the member of the Board, Mrs. Hariklia D. Theodorou for her services as Head of the Accounting Department. Furthermore, the Board of Directors recommends, the same as year 2018, payment of remuneration from January 1st, 2019 and until the Ordinary General Assembly of the year 2020, to Mrs. Hariklia Theodorou, for her services as Head of the Accounting Department. Further, it is proposed the approval of the paid expenses to the members of the Board of Directors for travel, movement and entertainment in general as well as the use of company cars by members of the Board of Directors during fiscal season 2018 and to authorize and approve the payment of costs of travel, movement, residence, various entertainment expenses, etc. for all members of the Board of Directors, if acting on the company’s affairs, as well as the use of company cars by members of the Board of Directors during the current year.

ISSUE 6th: Approval of the remuneration and compensations paid to the members of the Board of Directors for year 2019 and pre-approval of the remuneration for the year 2020.

The Board of Directors proposes the approval of the fee paid for the year 2019 to the member of the Board, Mrs. Hariklia D. Theodorou for her services as Head of the Accounting Department. Furthermore, the Board of Directors recommends, the same as year 2019, payment of remuneration from January 1st, 2020 and until the Ordinary General Assembly of the year 2021, to Mrs. Hariklia Theodorou, for providing the aforementioned services. According to the new remuneration policy of the company and subject to its approval by the Ordinary General Meeting, as well as its decision according to the suggestion of the BoD for the non-distribution of dividend from the profits of the year 2019, it is proposed to approve the payment to the executive members of the BoD Theofanis Kiriacoulis and Spiridonas Kiriacoulis up to the amount of fifty thousand euros (50.000), as a lump sum fee until the end of the current year. Furthermore, it is proposed to approve the use of the company’s cars by members of the BoD during the corporate fiscal year 2019 and to give the license and pre-approval for the use of the company’s cars by members of the BoD  during the current fiscal year as well as until the next Ordinary General Meeting.

 

SUBJECT 7th: Submission and voting of the Remuneration Report of the Company for the fiscal year 2019 according to article 112 of Law 4548/2018.

The Ordinary General Meeting of 29.07.2019 approved the remuneration policy with a four-year term for the Members of the BoD, as provided by article 110 paragraph 2 of Law 4548/2018, which does not provide for the payment of any remuneration to the members of the Board of Directors for their participation in it. The members of the Board of the Company, Chairman of the BoD / CEO Theofanis Kiriacoulis and Vice Chairman of the Board Spiridon Kiriacoulis do not receive any remuneration for the service of their executive duties. A member of the BoD, Mrs. Hariklia Theodorou, is associated with the Company with an indefinite employment contract with the usual market conditions, receiving a monthly salary for her employment as a head Accountant on an eight-hour basis. Based on the above, the Board of Directors will submit to the General Meeting the Remuneration Report for the year 2019, which will include the data provided in article 112 of Law 4548/2018.

 

ISSUE 8th: Licensing, in accordance with article 98 of Law 4548/18, to the members of the Board of Directors to participate in companies pursuing the same or similar purposes.

The Board of Directors recommends the granting of authorization pursuant to Article 98 of Law 4548/18 to the members of the Board of Directors and the Company’s executives, to participate in Boards of Directors or in the management of companies inside and outside the Group.

ISSUE 9th: Various issues and announcements.