In pursuance of Section 69 b of the Danish Companies Act, Topsil Semiconductor Materials A/S has laid down the following overall guidelines for incentive-based remuneration of the Board of Directors and Management Board of the company.
Group of Persons
The group of persons comprised by these guidelines is the members of the Management Board registered with the Danish Commerce and Companies Agency.
In accordance with the company’s corporate governance rules, the Board of Directors’ remuneration cannot be linked to incentive-based remuneration schemes.
Incentive-Based Remuneration
The Board of Directors may solely grant share options to the above group of persons in accordance with authorisations set out in the company’s Articles of Association.
Furthermore, the Board of Directors may grant cash bonus schemes to the above group of persons.
The authorisation for the Board of Directors to issue share options shall be adopted as a separate item on the agenda at the company’s General Meeting.
Granting of Share options
Share options may be granted to the above group of persons in accordance with the Board of Directors’ authorisation and in accordance with the following overall criteria:
- The company’s wish to attract and hold on to qualified employees.
- The company’s wish to promote long-term conduct for group of persons comprised.
- The company’s wish to recognise and reward an outstanding performance.
The Board of Directors will, moreover, lay down such further criteria and terms for the individual incentive-based remuneration schemes that the Board of Directors prepares in accordance with the authorisation granted.
The subscription price, at which the holder is entitled to subscribe for shares,must not be below par and shall, moreover, be fixed by the Board of Directors in connection with the preparation of the individual incentive-based remuneration scheme.
Share and incentive-based remuneration programme
Future share and incentive-based remuneration programmes must comply with the below overall guidelines.
Each share option entitles the holder to subscribe for one share of a nominal value of DKK 0.25 in the company at a stipulated exercise price (strike price).
In connection with the exercise of the share options, the company will issue new shares, which, in pursuance of the company’s Articles of Association, shall be issued with a legal status that is identical to the status of the company’s other shares in any and all respects:
a) The existing shareholders shall not have a right of pre-emption to the new shares
b) The new shares shall be paid up in cash on exercise of the option
c) The new shares shall be negotiable instruments
d) The new shares shall be registered in the name of the holder
e) The new shares shall be freely negotiable
f) The new shares shall entitle the shareholder to a dividend and other rights in the company from the
time when the increase in share capital is registered with the Danish Commerce and Companies
Agency
g) If changes have been implemented to the rights attached to the company’s shares in general, the
new shares shall have the same rights as the company’s other shares
h) The company shall pay all costs pertaining to the issue and implementation of the capital increase
i) The share options cannot be assigned to another party
j) The share options may not be pledged or taken in execution.
Share and incentive-based remuneration programmes may have a term of up to five years.
Share and incentive-based programmes will allow for single grants of share options which may be exercised during the term of the programme according to the rules on vesting.
Each year, the options will vest proportionately in connection with the publication of the company’s annual report so that a fraction of the options fixed by the Board of Directors will vest and may be exercised within a six-week period following the publication of the company’s annual report. The options vested, but not exercised, may be exercised during the subsequent exercise periods until the incentive-based programme expires, after which the unexercised options shall be cancelled.
The exercise price must correspond to or exceed the market price at the time of the grant.
Share and incentive-based remuneration programmes may contain provisions, making granting and exercising options conditional upon continued employment.
Performance-based cash bonus programmes
The above provisions on share and incentive-based remuneration programmes shall apply mutatis mutandis to any performance-based cash bonus programmes subject to the necessary modifications. Thus, the above rules on timing of granting and vesting do not apply to the cash bonus programmes.
Performance-based cash bonus programmes may be granted annually and may be conditional upon the achievement of individually fixed performance goals. These programmes yield cash bonus payment based on the company’s concrete profit or growth for the year.
Fair value of the incentive-based remuneration programmes
The fair value of the share and incentive-based programmes is calculated on the basis of the Black & Scholes formula. The fair value will depend on a number of parameters, including historical volatility, the level of interest rates, etc. These parameters may and will vary up to the time of granting the options. The fair value per option comprised by the incentive-based remuneration programme for approval at the Annual General Meeting on 29 April 2009, and any subsequent extraordinary general meeting, was DKK 0.30 as at 17 April 2009. Thus, upon the full exercise of the authorisation granted to the Board, the incentive-based remuneration programme’s fair value was DKK 3,006,751 as at 17 April 2009.
The value of the specific performance-oriented cash bonus programmes comprised by these guidelines and forming an integral part of the incentive-based remuneration programme mentioned above may not exceed an amount equivalent to 1.70% of the net profit/loss for the year before tax (including the value of the bonus) plus an amount equivalent to 6.80% of the increase of the mentioned loss/profit from one financial year to the next.
Publication
The present overall guidelines were approved at the company’s Annual General Meeting on 29 April 2009.
