b) to provide and motivate these executives with a balanced and competitive remuneration.

Transcription

1 Nomination, Selection and Remuneration Committee ASM International N.V. REMUNERATION REPORT 2008 This remuneration report 2008 is based on the remuneration policy of ASM International, dated 30 April The remuneration policy was adopted by the 2005 Annual General Meeting of Shareholders. 1. The remuneration policy is applicable to members of the Management Board of ASM International. The objective of the remuneration policy is twofold: a) to create a remuneration structure that will allow ASMI to attract, reward and retain qualified executives who will lead ASMI in achieving its strategic objectives; and b) to provide and motivate these executives with a balanced and competitive remuneration. The remuneration structure includes five elements: base salary, annual incentive (cash bonus), long term incentive (stock options and/or equity linked instruments), pension and other arrangements. The Nomination, Selection and Remuneration Committee will review the remuneration policy in Possible changes will be proposed for adoption at the 2010 Annual General Meeting of Shareholders. 2. ASM Pacific Technology Ltd. Mr. Lee Wai Kwong is a member of the Management Board of ASMI and Managing Director of ASM Pacific Technology, ASMI s 53% subsidiary. ASM Pacific Technology is established in Hong Kong and has its principal operations in Hong Kong, the People's Republic of China, Singapore and Malaysia. Mr. Lee Wai Kwong received remuneration in his capacity of Managing Director of ASM Pacific Technology. The Asian market was used as the appropriate reference when benchmarking his remuneration. His remuneration for 2008 has been set by the Board of ASM Pacific Technology as recommended by the Remuneration Committee of the Board of ASM Pacific Technology. Page 1 of 6

2 3. Outside advice Towers Perrin advised the Nomination, Selection and Remuneration Committee during 2005 on the structure of the remuneration and on specific remuneration packages for members of the Management Board, taking into account remuneration for labour market peer group companies. In 2008, no specific advice from Towers Perrin has been obtained. ASM International has participated in the Towers Perrin 2008 top executive general industry survey in exchange for which it received a participant report. The Nomination, Selection and Remuneration Committee intends to retain outside advice for The labour market peer group being used is based on two criteria: Which companies does / will ASM International attract its future Board members and senior management from? Which companies does ASM International risk losing its Board members and senior management to? The companies which have been selected are targeted to meet a combination of the criteria outlined below: Companies active in the semi-conductor (equipment) industry; Companies headquartered in Europe; Companies with a global presence; Companies which pursue an aggressive growth strategy; Innovative companies which success largely depends on their R&D; Companies which operate and manufacture internationally; and Companies with a minimum size in revenue. Page 2 of 6

3 4. Base salary Management Board The amounts paid as base salaries to the members of the Management Board in 2008 were as follows: C.D. del Prado 465,000 Lee Wai Kwong 312,000 A.J.M. van der Ven 282,000 J.F.M. Westendorp 332,000 A.H. del Prado 97,000 (period 1 January 29 February 2008) The base salary for Mr. Lee Wai Kwong was set by the Board of ASM Pacific Technology, as recommended by the Remuneration Committee of the Board of ASM Pacific Technology. The base salary of Mr. C.D. del Prado was increased to 500,000 upon his appointment as CEO per 1 March The base salaries for Mr. van der Ven and Mr. Westendorp were kept at the level of The base salaries will be reviewed in Annual incentive (cash bonus) Management Board The bonuses paid in 2008 were as follows: C.D. del Prado 63,000 Lee Wai Kwong 242,000 A.J.M. van der Ven 54,000 J.F.M. Westendorp 67,000 A.H. del Prado 0 The bonus paid to Mr. Lee Wai Kwong reflects the strong performance of the Back-end operations of ASM International. The amount has been set by the Board of ASM Pacific Technology, as recommended by the Remuneration Committee of the Board of ASM Pacific Technology. For the other Management Board members the bonuses over 2007 paid in 2008 were determined based on the fact that two of the three financial performance targets for 2007 have been met, and a large part of the personal performance criteria. Page 3 of 6

4 6. Long term incentive (stock options) Management Board The option scheme for the members of the Management Board, which has been approved in the 2006 Annual General Meeting of Shareholders, has the following main features; 1. options will be conditional; 2. a percentage not exceeding 150% of the options which have been granted conditionally will become unconditional and exercisable after three years, based on the total return on the ASMI shares for the three years after the options are granted compared to the average total return on the shares during the same three-year period of a relevant number of companies which are similar to ASMI; 3. the amount for which options are granted each year will be a percentage of the fixed salary; 4. the options will have a term of eight years; 5. the exercise price will be the closing stock price on the Euronext Amsterdam stock exchange on the date the options are granted. Based on the option scheme, in 2008 a conditional option on 100,000 shares ASM International has been granted to Mr. C.D. del Prado with an exercise price of Long term incentive (Employee Share Incentive Scheme of ASM Pacific Technology) In February 2008, Mr. Lee Wai Kwong in his capacity of member of the Board of Directors of ASM Pacific Technology was granted 110,000 shares in the share capital of ASM Pacific Technology under the Employee Share Incentive Scheme of ASM Pacific Technology. The shares were issued in December The fair value of the shares granted amounted to 479,000. Page 4 of 6

5 8. Pensions Management Board The pension contributions paid in 2008 were as follows: C.D. del Prado 20,000 Lee Wai Kwong 19,000 A.J.M. van der Ven 18,000 J.F.M. Westendorp 24,000 A.H. del Prado 0 Members of the Management Board residing in the Netherlands are offered a defined contribution plan, except for the Chief Executive Officer who served till 1 March This plan is offered under the same financial conditions as offered to all employees residing in the Netherlands with salaries that exceed the maximum salary of the industry wide pension fund. For the first 62,224, the employee contributes 50% of the contribution and ASMI pays the remaining part. For the remaining pensionable salary, the total contributions vary from 6.10% % of this surplus in pensionable salary depending on age. The employee contributes 4.60% of the surplus in the pensionable salary and ASMI pays the remaining part. The pensionable salary is capped at 200,000. The pension contribution for Mr. Lee Wai Kwong has been set by the Board of ASM Pacific Technology as recommended by the Remuneration Committee of the Board of ASM Pacific Technology. There are no arrangements regarding early retirement. 9. Other arrangements Management Board A number of other arrangements are offered to members of the Management Board, such as expense and relocation allowance, medical insurance, accident insurance and a car allowance. ASMI s policy does not allow personal loans to members of the Management Board. Page 5 of 6

6 10. Contracts of employment Management Board All members of the Management Board have a written contract of employment with ASMI or one of its related subsidiaries. The members of the Management Board have been appointed to the Management Board for a four year period: Lee Wai Kwong, starting 1 January 2008; C.D. del Prado, starting 18 May 2006; A.J.M. van der Ven, starting 1 June 2005; J.F.M. Westendorp, starting 18 May For future new appointments to the Management Board, the term of the appointment will also be set at four years. 11. Remuneration Supervisory Board In the 2006 AGM the following annual remuneration for the Supervisory Board has been approved. No changes were made in for a member of the Supervisory Board 25,000 for the chairman of the Supervisory Board 50,000 for a member of the Audit Committee 5,000 for the chairman of the Audit Committee 7,500 for a member of the Nomination, Selection and Remuneration Committee 4,000 for the chairman of the Nomination, Selection and Remuneration Committee 5,000 Page 6 of 6