Xior Student Housing : Draft of new renumeration policy - EN unofficial

6 REMUNERATION POLICY

Scope

This remuneration policy applies to the members of the Board of Directors (the non-executive directors and the executive directors) and the members of the Executive Management, subject to approval by the General Meeting to be held on 15 September 2022 or, if the required quorum would not be reached at such first General Meeting, on 6 October 2022.

This remuneration policy, as approved by the Board of Directors on 12 August 2022 and subject to approval by the General Meeting to be held on 15 September 2022 or, if the required quorum would not be reached at such first General Meeting, on 6 October 2022, will be applicable as of 1 January 2023 (financial year 2023), without prejudice to the terms of the remuneration policy currently in force and the remuneration of the Executive Management for the financial year 2022.

This remuneration policy will be submitted to the General Meeting for approval every four years, or upon any material change to it.

Procedure

This remuneration policy was drawn up and shall be amended and modified, on the proposal of the Company's Remuneration and Nomination Committee, by the Board of Directors, in each case subject to the approval of the General Meeting in the event of material changes, pursuant to the BCCA (art. 7:89/1 §3) and the Corporate Governance Code.

Conflicts of interest in the context of drawing up or amending the remuneration policy are avoided by the following measures:

• the fact that the Remuneration and Nomination Committee currently consists exclusively of non-executive directors, whereby the committee should invite the executive directors (and the Executive Management) if they are required to be present at the meeting. In this way, the Remuneration and Nomination Committee can meet without the executive directors being present and, in any case, they have no voting rights;
• decisions on the remuneration of non-executive directors shall, in any case, be subject to the approval of the General Meeting;
• decisions on remuneration should be taken with due regard to the rules on conflicts of interest of the BCCA and the B-REIT Law.

Benchmarking

The remuneration policy is evaluated annually, on the basis of an external benchmarking conducted on a two-yearly basis or in case of significant change to the size of the Company or the roles and responsibilities of the Executive Management. In terms of remuneration, the Company aims to be positioned at the median of the benchmarking group.

The peer group identified by the Company in this regard consists of a group of comparable listed real estate companies (including, among others, other B-REITs). More specifically, the Company selected the following companies for its benchmarking: Warehouses De Pauw, Cofinimmo, Aedifica, Montea,

35

Retail Estates, Care Property Invest, Vonovia (adjusted for size) and Unite Group (adjusted for size).

On a four-yearly basis, it is submitted to the General Meeting for approval, on the understanding that if the annual evaluation or benchmarking leads to material changes, these changes are also subject to the approval of the General Meeting.

General

The remuneration should be sufficient to attract, retain and motivate directors and members of the Executive Management who fit the profile determined by the Board of Directors.

The remuneration of the directors is determined by the General Meeting upon proposal by the Board of Directors. Prior to such proposal, the Remuneration and Nomination Committee formulates a proposal to the Board of Directors. No one decides on his or her own remuneration.

The directors shall be reimbursed for normal and justified expenses and costs, which they may claim to have incurred in the performance of their duties.

In accordance with article 35 of the B-REIT Law, the remuneration of the directors cannot be allocated in function of a specific transaction or operation of the Company or any companies belonging to the same group.

Remuneration report

The Company shall draw up a remuneration report. This remuneration report forms a specific part of the Corporate Governance Statement.

The Company's remuneration report contains the following information regarding the directors, the other persons mandated with management and the persons mandated with daily management:

• the total amount of the remuneration, divided per component, granted by the Company or a company belonging to the same group. This information must be provided with a breakdown between:
  o base remuneration;
  o variable remuneration: all additional remuneration linked to performance criteria, indicating the form in which this variable remuneration was paid;
  o pension: the amounts paid during the financial year covered by the annual report or the cost of the services provided during the financial year covered by the annual report, depending on the type of pension plan, with an explanation of the applicable pension scheme; and
  o the other components of the remuneration, such as the cost or value of insurances and other benefits in kind, with an explanation of the details of the main components;
• the relative amount of fixed and variable remuneration;
• an explanation of how the total amount of remuneration is consistent with the adopted remuneration policy, and in particular how it contributes to the long-term performance of the Company; and
• information on how the performance criteria have been applied:

36

1. the number of shares, share options or other rights to acquire shares offered, granted, exercised or lapsed during the financial year covered by the annual report, their main characteristics as well as the material conditions for exercise, including

price and date of exercise, and any change thereof;

1. in the event of departure, the justification and the decision by the Board of Directors or the supervisory committee, upon proposal of the Remuneration and Nomination Committee, as to whether the persons concerned qualify for severance pay, and the calculation basis;

1. where applicable, information on the use of the possibility of clawing back variable remuneration; and

1. information on any deviations from the procedure for implementing the remuneration policy and any deviations as referred to in article 7:89/1 § 5 BCCA, with an explanation of the nature of the exceptional circumstances and with an indication of the specific elements deviated from.

With regard to the directors, as well as the persons charged with the daily management, this information is provided on an individual basis.

In relation to the other persons charged with the management the information referred to in the third paragraph, 1°, 4° and 5°, is provided as a whole, while the information referred to in paragraph 3, 2° and 3°, is to be provided on an individual basis.

The remuneration report shall also describe the annual change in remuneration, the annual change in the development of the Company's performance and the annual change in average remuneration, expressed in full-time equivalents, of employees of the Company other than the directors, the persons charged with management and the persons charged with daily management over at least five financial years and presented jointly in a manner that allows for comparison.

The remuneration report shall also state the ratio between the highest remuneration of the members of management, and the lowest remuneration (in full-time equivalent) of the employees.

Remuneration of non-executive directors and the Chairperson

The remuneration of the non-executive directors and the Chairperson takes into account their regular role as directors, and their specific roles, as chairperson or (if applicable) as member of a committee, as well as the resulting responsibilities and time commitment. In order to determine their remuneration, a benchmarking exercise was also conducted. See section 6.3 for more information.

The non-executive directors only receive a fixed remuneration, which partly depends on their presence. All members of the Board of Directors (executive and non-executive) are covered by a directors' liability policy ("D&O Insurance"), the premium of which is paid by Xior. The non-executive directors do not enjoy any other benefits (company car, pension, mobile phone, etc.). They do not receive any performance- related remuneration, such as bonuses or long-termshare-related incentive programmes, and no benefits in kind or benefits linked to pension schemes. The members of the Board of Directors do not receive any additional remuneration for their presence on the audit committee or Remuneration and Nomination Committee, as the tasks of these committees were carried out by the Board of Directors as a whole when determining the remuneration of the directors. The non-executive directors who are members of the investment committee do receive additional remuneration (consisting of a fixed fee and

37

an attendance fee per investment committee meeting).

This remuneration policy for the non-executive directors was drawn up in line with the B-REIT Legislation, and ensures that the non-executive directors can fully execute their role as directors of a B-REIT, focused on the long-term interests of the shareholders (investors) in the Company. The Company believes that this method of remuneration (in line with the objectives of the B-REIT Legislation) contributes in the best way to the long-term strategy and goals of the Company.

The non-executive directors are remunerated on an independent basis (as directors) and are subject to ad nutum disposal by the General Meeting.

If an agreement with a non-executive director would nevertheless provide for variable remuneration, such provision on variable remuneration must be approved in advance by the next ordinary General Meeting, in accordance with article 7:92 BCCA. No variable remuneration can be granted to an independent director.

Provision 7.6 of the Corporate Governance Code recommends that non-executive directors receive part of their remuneration in the form of shares in the Company, to allow them to act with the perspective of a long-term shareholder. Xior deviates from this principle and does not grant remuneration in shares to directors. The Board of Directors is convinced that the application of this principle would not contribute to acting with the perspective of a long-term shareholder, given the nature of the Company (as a B-REIT) and the actual circumstances of the directors. The amounts of the remuneration of the non- executive directors of the Company are such that the impact of such remuneration paid in shares would be very limited, and the legal framework of the Company and its outlined strategy (as determined by the Board of Directors), in the opinion of the Board of Directors, sufficiently ensures that the perspective of the long-term shareholders of the Company is taken into account.

Remuneration of executive directors and members of the Executive Management

The Board of Directors shall endeavour to determine the level and structure of the remuneration of the Executive Management (and the relationship between such remuneration and the remuneration of the other employees of the Company) in such a way that qualified and expert professionals can be attracted, retained and motivated, taking into account the nature and scope of their individual responsibilities (for each category).

The Board of Directors, upon recommendation of the Remuneration and Nomination Committee, approves the contracts for the appointment of the CEO and of the other members of the Executive Management (if applicable, applying the conflict-of-interest rules of the BCCA and the B-REIT Law).

The targets, minimum thresholds and maximum performance levels are determined at the beginning of the relevant performance cycle, i.e. the annual performance cycle for the short-term incentive and the three-year performance cycle for the long-term incentive (such that the targets, minimum thresholds and maximum performance levels for the long-term incentive measured over two and three years are determined at the beginning of the first year of the three-year performance cycle).

The remuneration package of the members of the Executive Management consists exclusively of the following components:

• Fixed remuneration

38

• Variable remuneration (part of which must be used to acquire shares) o Short-term incentive
  o Long-term incentive

The relationship between these components is shown schematically below, per 100 euros of fixed remuneration, in three scenarios in terms of achieving the performance criteria for the variable remuneration (performance below minimum threshold, performance at target level, performance at maximum recognized level), as further detailed below.

	Below minimum				Target level				Maximum
Fixed		Variable			Fixed		Variable			Fixed		Variable
	Short term	Long term			Short term		Long term			Short term			Lang
	(1y)	2y	3y			(1y)		2y	3y			(1y)		2y		3y
	(inc. LTIP)					(inc. LTIP)						(inc. LTIP)
100	0	0	0		100	50		25	25		100	75		37.5		37.5
(100%)	(0%)	(0%)	(0%)		(50%)	(25%)		(12.5%)	(12.5%)		(40%)	(30%)		(15%)		(15%)

Percentages express what the variable remuneration represents relative to the total remuneration.

Fixed remuneration

The amount of fixed remuneration for members of the Executive Management is determined taking into account their individual responsibilities, skills and performance.

The fixed remuneration constitutes a cash payment which is granted regardless of the Company's results.

The amount of annual fixed remuneration is laid down in the individual management agreements established by the Company with the relevant member of the Executive Management. This amount is paid in cash, indexed annually, and subject to local tax and social security regulations (charged to the relevant member of Executive Management).

Variable remuneration

In order to align the interests of the CEO and other members of the Executive Management with those of the Company and its shareholders, an appropriate part of their remuneration package is linked to the performance of the Company and individual performance.

Pursuant to article 7:90 BCCA, the criteria making the allocation of remuneration to an executive director, a person entrusted with the daily management (CEO and other members of the Executive Management) variable must be expressly included in the contractual or other provisions governing the legal relationship concerned. This variable remuneration can only be paid out if the criteria have been met over the designated period. If these rules are not observed, these variable remunerations are not taken into account in the calculation of the severance pay.

For all members of the Executive Management, the total maximum package of variable remuneration is set at 150% of their fixed remuneration, such that it can represent a maximum of 60% of their total remuneration. This variable remuneration is further divided (for the executive directors, in accordance

39