Conflict of interests and related parties

In the event of a transaction where a Director’s interest conflicts with the interest of Galapagos NV, the Director shall notify the Board of Directors in advance of the conflict and will act in accordance with the relevant rules of the Belgian Companies Code (i.e. article 523 of the Belgian Companies Code). In addition, Galapagos’ Corporate Governance Charter and Galapagos’ Related Person Transaction Policy contain procedures for transactions between Galapagos and its Directors, members of its Executive Committee or major shareholders. Without prejudice to the procedure defined in article 523 of the Belgian Companies Code, these policies provide that all transactions between Galapagos and its Directors, its members of the Executive Committee or its representatives need the approval of the Audit Committee and the Board of Directors, which approval can only be provided for transactions at normal market conditions. Moreover, conflicts of interest, even in the event they are not a conflict of interest within the meaning of article 523 of the Belgian Companies Code, are enacted in the meeting minutes, and the Director or member of the Executive Committee cannot participate to the voting.

In 2015, three cases of conflict of interests between Galapagos NV and a Director within the meaning of article 523 of the Belgian Companies Code were noted:

1. In a meeting of the Board of Directors held on 23 June 2015, the following was reported in accordance with article 523 of the Belgian Companies Code and in connection with the recommendation of the Nomination and Remuneration Committee, further to the resolution of the Shareholders’ Meeting of 28 April 2015, as to the allocation of the aggregate annual remuneration of €200,000 (plus expenses) for Directors (other than Dr. Parekh and Mr. Van de Stolpe) for the exercise of their mandate as Director: the Chairman declared that the Directors involved had informed the Board of a conflict of interest, concerning their proposed remuneration. It has been explained to the Board that the proposed remuneration for each Director falls within the scope and limits of the authorization of the AGM of 28 April 2015. The level of these remunerations will have no material impact on the financial position of Galapagos NV. Insofar as it related to his/her individual remuneration, the Director involved did not take part in the deliberation and the vote concerning this decision.
   
   
2. During the same meeting of 23 June 2015, the following was reported in accordance with article 523 of the Belgian Companies Code and in connection with an exceptional bonus of €275,000 for the CEO as reward for the tremendous importance and impact and the exceptional success of the NASDAQ listing: the Chairman declared that Mr. Van de Stolpe had informed the Board of Directors of a conflict of interest, concerning the proposed award to him of said exceptional bonus. The Board was of the opinion that said exceptional bonus is a justified reward for the exceptional success of the recent offering and NASDAQ listing, which completely changed and strengthened the position of the company. The exceptional bonus will have no material impact on the financial position of the company. Mr. Van de Stolpe did not take part in the deliberation and the vote concerning this decision.
   
   
3. In a meeting of the Board of Directors held on 1 December 2015, the following was reported in accordance with article 523 of the Belgian Companies Code and in connection with the salary increase and bonus for the CEO: the Chairman declared that Mr. Onno van de Stolpe had informed the Board of Directors of a conflict of interest, concerning the proposed award to him of a salary increase and a bonus. The salary of Mr. Van de Stolpe was increased with 3.50% as of 2016. Given the actual level of achievement of the criteria from the Senior Management Bonus Scheme to be entitled to a bonus (i.e. the corporate objectives for 2015) a bonus equal to 100% of his 2015 salary was awarded to Mr. Van de Stolpe for 2015. It has been explained to the Board that said salary increase and bonus is a justified reward for the results achieved by Mr. Van de Stolpe in 2015. The salary increase and bonus will have no material impact on the financial position of the company. The Board shares the opinion of the Remuneration Committee that the proposed salary increase and bonus is justified and reasonable. Mr. Van de Stolpe did not take part in the deliberation and the vote concerning this decision.