Exhibit 14(a).1
Corporate Governance
Introduction
This Corporate Governance Report explains the principles of management and
control of INFICON Holding AG at the highest corporate level in accordance with
the Directive on Information relating to Corporate Governance (the Corporate
Governance Directive) issued by the SWX Swiss Exchange. The Corporate Governance
Directive, which entered into force on July 1, 2002, applies to all annual
reports for financial years beginning on January 1, 2002 or later.
Corporate governance of INFICON Holding AG complies with the principles
and recommendations of the "Corporate Governance - Swiss Code of Best Practice"
dated March 25, 2002. The principles and rules of INFICON Holding AG on
corporate governance are laid down in the Articles of Incorporation,
Organizational Regulations and the Regulations of the board committees of
INFICON Holding AG.
Due to the fact that the shares of INFICON Holding AG are traded both on
the Swiss Exchange and the NASDAQ national market , INFICON's commitment to and
implementation of to corporate governance practices is guided by the legal and
regulatory requirements and both Switzerland the United States. Furthermore
INFICON's internal guidelines regarding corporate governance are provided in its
Articles of Incorporation, Organizational Regulations, Board Committee Charters,
CEO and CFO Code of Ethics as well as internal policies.
The following Corporate Governance Report follows the SWX directive.
1 Group structure and shareholders
1.1 Group structure
Operational group structure.
- ----------------------------------- ----------------------------------------
Committees:
--------- Audit
Board of Directors Strategy Committee
Human Resources and Nomination
- ----------------------------------- ----------------------------------------
|
- ----------------------------------- ----------------------------------------
CEO --------- Corporate Functions
- ----------------------------------- ----------------------------------------
Executive Management Team
- -----------------------------------
INFICON Holding AG is the parent company of the INFICON group which
operates from 12 countries and consists of a parent company, four manufacturing
companies, eight sales and service subsidiaries, and a management company
located in Bad Ragaz, Switzerland which performs administrative, inter-company
financing, and intellectual property management functions. The legal entity
structure of the INFICON group is as follows:
-------------------
INFICON Holding
Bad Ragaz
Switzerland
Parent Company
-------------------
|
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| | | | |
| ---------------- ----------------- -------------------- -------------------
|
| INFICON AG INFICON Inc. INFICON Aaland Ab. INFICON GmbH
| Balzers Syracuse Mariehamn Bad Ragaz
| Liechtenstein USA Finland Switzerland
| Manufacturing Manufacturing Manufacturing Managmement
|
| ---------------- ----------------- -------------------- -------------------
| | |
| ----------------- -------------------
|
| INFICON LT Inc. INFICON GmbH
| Cambridge Cologne
| USA Germany
| Software Manufacturing
|
| ----------------- -------------------
|
|------------------------------------------------------------------------------------------ --------------------------
| | | | | | |
- ---------------- --------------- ----------------- ---------------- --------------- ------------------- -----------------
INFICON S.A.R.L. INFICON Ltd. INFICON Ptd. INFICON Ltd. INFICON Ltd. INFICON Ltd. INFICON Co.
Courtaboeuf London Singapore Chubei City Hong Kong Bungdang-Ku Yokohama-Shi
France United Kingdom Taiwan China Korea Japan
Sales Sales Sales Sales Sales Sales Sales
- ---------------- --------------- ----------------- ---------------- --------------- ------------------ -----------------
|
------------------
Leybold Guangzhou
Service Centre Ltd.
Guangzhou
China
Service
------------------
Listed corporation: INFICON Holding AG
INFICON Holding AG is based in Bad Ragaz, Switzerland. It has share
capital of CHF 23.15 million made up of 2'315'000 shares with a nominal value of
CHF 10 each. Registered shares are listed on the Swiss Exchange under security
number 1102994, ISIN CH0011029946 and symbol IFCN. INFICON Holding AG American
Depositary Shares ("ADSs") are listed on the NASDAQ National Market system under
Cusip 45663T109 and symbol IFCN. Market capitalization as per December 31 2003
was CHF 243.075 million based on shares outstanding.
Share Capital - See statutory financial statements.
1.2 Significant Shareholders
Stockholder structure (based on number of registered stockholders)
Number of shares > 50,000 10,000 - 50,000 1 - 9,999
-------- --------------- ---------
Number of stockholders 5 20 1,443
Stockholders by Country
- -----------------------------------------------------------------------------------------------------------
Country Total Switzerland Germany Liechtenstein Rest of Europe Rest of World
----- ----------- ------- ------------- -------------- -------------
- -----------------------------------------------------------------------------------------------------------
Number of 1,468 1,307 53 41 36 31
stockholders
- -----------------------------------------------------------------------------------------------------------
Based upon number of registered stockholders as of December 31, 2003.
Stockholders owning American Depositary Shares are not included in this count.
Major stockholders
The Company is aware of the following stockholders holding more than 5
percent of the voting rights as of December 31 2003:
Unaxis Holding AG 19.51%
FMR Corp., Boston USA 12.87%
Chase Nominees Ltd. Woolgate Hours 11.85%
Bank of New York, New York 7.38%
Changes subject to disclosure requirements during Fiscal 2003
In an announcement dated August 27 2003, published in conformity with Art. 20 of
the Federal Act on Stock Exchanges and Securities Strading (SESTA), Fidelity
Management & Research Company disclosed that is and its affiliated companies now
hold INFICON shares with voting rights of 10.05%.
1.3 Cross-shareholdings
INFICON Holding AG has no cross-shareholdings.
Section 2 Capital Structure
2.1 Capital (Issued, Authorized & Conditional)
Registered shares of CHF 10 each at December 31, 2003:
No. of shares Capital
------------- -------
Issued share capital 2,315,000 CHF 23,150,000
Authorized share capital 1,157,500 CHF 11,575,000
Conditional share capital 115,000 CHF 1,150,000
The issued share capital comprises 2,315,000 registered shares of CHF 10
each. Each share entitles the registered owner to one vote at the general
meeting of shareholders, as well a share of dividends, if any, declared by the
Company and proceeds from a liquidation, corresponding to its nominal value as a
percentage of the total nominal value of issued share capital.
2.2 Authorized and Conditional Share capital
The Board of Directors is authorized to issue at any time until May 7,
2005 up to 1,157,500 registered shares of CHF 10 each at an issue price to be
determined by the Board. The preemptive rights of existing shareholders may be
excluded if the shares are issued for the purpose of acquiring a company or
business.
The articles of incorporation provide for a conditional capital (according
to Art. 653 of the Swiss Code of Obligations) of a maximum of CHF 1,150,000
through the issuance of 115,000 registered shares of CHF 10 each by the exercise
of option rights granted to employees and members of the Board of Directors of
the Company. No options have been exercised as of December 31, 2003.
2.3 Changes in Stockholders' Equity
Changes in stockholders' equity for the three years ended December 31,
2003 are presented in the consolidated statements of stockholders' equity
section of the consolidated financial statements for INFICON Holding AG.
2.4 Shares
see 2.1. No participation certificates are issued.
2.5 Profit Sharing Certificates
The Company currently has no profit sharing certificates.
2.6 Limitations on Transferability and Nominee Registrations
The Articles of Incorporation contain no special regulations regarding
limitations on transferability and nominee registrations.
2.7 Convertible Bonds and Warrants/Options
The Company currently has no convertible bonds or bonds with warrants.
Summary of options granted
Aggregate Aggregate
Non Executive Directors Shares Grant Price Range Option Price Market Price Market Price
- ------------------------------------------------------------------------------------------------------------------------------------
Options Outstanding as of 01/01/2001 0 CHF 0 - CHF 0 CHF 0
- ------------------------------------------------------------------------------------------------------------------------------------
Options Granted (+) 3,580 CHF 124 - CHF 174 CHF 521,420 CHF 124 - CHF 174 CHF 521,420
- ------------------------------------------------------------------------------------------------------------------------------------
Options Outstanding as of 12/31/2001 3,580 CHF 124 - CHF 174 CHF 521,420
- ------------------------------------------------------------------------------------------------------------------------------------
Options Outstanding as of 01/01/2002 3,580 CHF 124 - CHF 174 CHF 521,420
- ------------------------------------------------------------------------------------------------------------------------------------
Options Granted (+) 4,901 CHF 69 - CHF 170 CHF 512,697 CHF 69 - CHF 170 CHF 512,697
- ------------------------------------------------------------------------------------------------------------------------------------
Options Outstanding as of 12/31/2002 8,481 CHF 69 - CHF 174 CHF 1,034,117
- ------------------------------------------------------------------------------------------------------------------------------------
Options Outstanding as of 01/01/2003 8,481 CHF 69 - CHF 174 CHF 1,034,117
- ------------------------------------------------------------------------------------------------------------------------------------
Options Granted (+) 6,199 CHF 75 - CHF 98 CHF 518,520 CHF 75 - CHF 95 CHF 317,435
- ------------------------------------------------------------------------------------------------------------------------------------
Options Outstanding as of 12/31/2003 14,680 CHF 69 - CHF 174 CHF 1,552,637
- ------------------------------------------------------------------------------------------------------------------------------------
Aggregate Aggregate
Employee Stock Options Shares Grant Price Range Option Price Market Price Market Price
- ----------------------------------------------------------------------------------------------------------------------------------
Options Outstanding as of 01/01/2001 118,360 CHF 225 - CHF 225 CHF 26,631,000
- ----------------------------------------------------------------------------------------------------------------------------------
Options Canceled (Totals) (-) 443 CHF 225 - CHF 225 CHF 99,675
- ----------------------------------------------------------------------------------------------------------------------------------
Options Outstanding as of 12/31/2001 117,917 CHF 225 - CHF 225 CHF 26,531,325
- ----------------------------------------------------------------------------------------------------------------------------------
Options Outstanding as of 01/01/2002 117,917 CHF 225 - CHF 225 CHF 26,531,325
- ----------------------------------------------------------------------------------------------------------------------------------
Options Granted (+) 22,640 CHF 165 - CHF 165 CHF 3,735,600 CHF 165 - CHF 165 CHF 3,735,600
- ----------------------------------------------------------------------------------------------------------------------------------
Options Canceled (Totals) (-) 1,415 CHF 165 - CHF 225 CHF 313,095
- ----------------------------------------------------------------------------------------------------------------------------------
Options Outstanding as of 12/31/2002 139,142 CHF 165 - CHF 225 CHF 29,953,830
- ----------------------------------------------------------------------------------------------------------------------------------
Options Outstanding as of 01/01/2003 139,142 CHF 165 - CHF 225 CHF 29,953,830
- ----------------------------------------------------------------------------------------------------------------------------------
Options Granted (+) 36,211 CHF 50 - CHF 92 CHF 2,076,607 CHF 50 - CHF 92 CHF 2,076,607
- ----------------------------------------------------------------------------------------------------------------------------------
Options Canceled (Totals) (-) 1,080 CHF 165 - CHF 165 CHF 178,200
- ----------------------------------------------------------------------------------------------------------------------------------
Options Outstanding as of 12/31/2003 174,273 CHF 50 - CHF 225 CHF 31,852,237
- ----------------------------------------------------------------------------------------------------------------------------------
Each of the above options is for the purchase of one registered share of INFICON
Holding AG stock. For details on the stock option plans please see note 21 to
our consolidated financial statements for the year ended December 31, 2003.
Section 3 Board of Directors
3.1 Members of the Board of Directors, other Activities and Vested Interests,
Internal Organizational Structure
Board of Directors and Management Board
Our articles of incorporation provide that the Board of Directors may
consist of one or more members at any time. Directors are elected and removed by
shareholder resolution. Members of our board of directors serve three-year terms
and may be reelected upon completion of their term of office. The shareholders
may remove the directors without cause. Our six directors currently in office
were elected by shareholder resolution.
According to the law, the Board of Directors is responsible for the
ultimate direction and supervision of INFICON Holding AG. The Board of Directors
has delegated the conduct of the day-to-day business operations to the Company's
executive officers, which is headed by the Chief Executive Officer. The Chief
Executive Officer is responsible for the management of INFICON Holding AG and
for all other matters except for those reserved by law and the Articles of
Incorporation. The Board of Directors is required to resolve all matters which
are not defined by the law, Articles of Incorporation, or management bylaws as
being the responsibility of any other governing body. According to the Swiss
Code of Obligations the following non-transferable and inalienable
responsibilities are incumbent on the Board of Directors:
o the ultimate management of the Corporation and the issuance of the
necessary directives;
o the determination of the organization;
o the structuring of the accounting system and of the financial
controls, as well as the financial planning insofar as this is
necessary to manage the Corporation;
o the appointment and the removal of the persons entrusted with the
management and representation of the Corporation and the granting of
the signatory power;
o the ultimate supervision of the persons entrusted with the
management, particularly with regard to compliance with the law,
these Articles of Incorporation and regulations and directives;
o the preparation of the business report as well as the General
Meeting of Shareholders, and the implementation of the latter's
resolutions;
o the notification of the judge in the case of over-indebtedness;
o the passing of resolutions regarding the subsequent payment of
capital with respect to non-fully paid-in shares;
o the passing of resolutions confirming increases in the share capital
and regarding the amendments to the Articles of Incorporation
entailed thereby;
o the examination of the professional qualifications of the specially
qualified auditors in those cases in which the law foresees the use
of such auditors.
The Board of Directors, as of the date of this filing, has established an
Audit Committee, a Strategy Committee, and a Human Resources and Nominating
Committee. Each of these committees has regulations which outline their duties
and responsibilities. The Chairman for each committees is elected by the Board
of Directors. The committees meet regularly and are required to provide with
Board of Directors with updates and recommendations at its regular meetings. The
agendas for the committee meetings are set by their respective chairperson.
The Audit Committee
The Audit Committee consists of three non-executive members of the Board
of Directors. Currently, the Audit Committee is comprised of the following
members:
Dr. Thomas Staehelin (Chairman),
John Grad and
Mario Fontana.
The responsibilities of the audit committee include:
o recommending to the board of directors the independent public
accountants to be selected to conduct the annual audit of our books
and records;
o reviewing the proposed scope of such audit and approving the audit
fees to be paid;
o reviewing the adequacy and effectiveness of our accounting and
internal financial controls with the independent public accountants
and our financial and accounting staff;
o reviewing and approving transactions between the Company, its
directors, officers and affiliates; and
o reviewing and reassessing, on an annual basis, the adequacy of our
audit committee charter.
The Human Resources and Nominating Committee
The Human Resources and Nominating Committee are to provide a general
review of our compensation and benefit plans to ensure they meet corporate
financial and strategic objectives as well as to make recommendation to the
board regarding appointment, dismissal and career development of senior
management positions. The responsibilities of the Human Resources and Nominating
Committee also include the administration of employee incentive plans. The Human
Resources and Nominating Committee consists of three non-executive members of
the Board of Directors. Currently, the Human Resources and Nominating Committee
is comprised of the following members:
Paul Otth (Chairman)
John Grad,
Kurt Muck
The Strategy Committee
This Committee is responsible for advising the board on the long term
strategy and how to portray INFICON's strategy to shareholders and the
investment community. The Strategy Committee consists of three non-executive
members of the Board of Directors. Currently, the Strategy Committee is
comprised of the following members:
Mario Fontana (Chairman)
Richard Fischer
Kurt Muck
Frequency of meetings of the Board of Directors and its Committees
The Board of Directors hold four or more meetings per year, and additional
ad hoc meetings and conference calls as necessary. The Audit Committee holds
four meetings per year in addition to three quarterly conference calls. The
Strategy Committee and the Human Resources and Nominating Committee hold two or
more meetings per year.
The Company's Board of Directors includes:
John Grad (Citizen of the United States)
Chairman of the Board of Directors
Member Human Resources and Nominating Committee
Member Audit Committee
Mr. Grad is President of John J. Grad and Associates, Inc. Management
Consultants. In 1987, Mr. Grad joined Landis & Gyr AG where he became President
of Landis & Gyr Powers, Inc. In 1991, he was named to their Executive Board and
in 1993, he assumed the responsibility for Landis & Gyr Holding, Inc., the
holding company for all North American divisions, while retaining the position
of a President and CEO of Landis & Gyr Powers, Inc. In March 1996, he became
President and CEO of Landis & Staefa, Inc., a position that he retained until
the creation of Siemens Building Technologies. From October 1998 through October
2000, Mr. Grad served as President and Chief Executive Officer of Siemens
Building Technologies, Inc. Mr. Grad holds a Bachelor of Science degree in
Industrial Management and a M.B.A. from the University of Cincinnati.
Paul Otth (Citizen of Switzerland)
Vice Chairman of the Board of Directors
Chairman Human Resources and Nominating Committee
In June 2000, Mr. Otth became the Chief Financial Officer and a Member of
the Executive Board of Unaxis Corporation. From 1989 until November 1996, Mr.
Otth was with Landis & Gyr AG, where he became the Chief Financial Officer and a
Member of the Executive Board in November 1994. From November 1996 until October
1998, he served as the Chief Financial Officer and a Member of the Executive
Board of Elektrowatt AG (a successor company of Landis & Gyr AG). From October
1998 until May 2000, he served as Chief Financial Officer and a member of the
Group Board of Siemens Building Technologies (a successor company of Elektrowatt
AG). From June 2000 until December 2002, Mr. Otth served as Chief Financial
Officer and a Member of the Executive Board of Unaxis Corporation. Mr. Otth is a
Certified Public Accountant. Mr. Otth also currently holds directorships in
other corporations, which include:
Company Position
------- --------
Swiss Rail (SBB AG) Member
Ascom Holding AG Vice Chairman
Swissquote Group Holding AG Member
Esec Holding AG Member
EAO Holding AG Chairman
Thomas Staehelin (Citizen of Switzerland)
Director
Chairman Audit Committee
Dr. Staehelin is a Swiss corporate and tax attorney and partner in the
Basel based law firm Fromer, Schultheiss and Staehelin. Dr. Staehelin is a
private investor and serves on the boards of various Swiss listed or unlisted
companies in various capacities ranging from a member, Vice-Chairman, or
Chairman. Dr. Staehelin holds a Ph.D. in Law from the University of Basel. He
currently serves as Chairman of the Chamber of Commerce of Basle and was a
member of parliament. Dr. Staehelin currently holds directorships in the
following corporations:
Company Position
------- --------
Kuhne & Nagel International AG Member & Audit Committee
Siegfried Holding AG Vice-Chairman & Chairman Audit Committee
Basler Kantonalbank Member
Rothornbahn und Scalottas AG Chairman
Swissport International AG Chairman & Audit Committee
Lantal Textiles Member
Regula Holding AG Member
Kurt Muck (Citizen of Germany)
Director
Member Human Resources and Nominating Committee
Member Strategy Committee
Mr. Muck was a Member of the Executive Board of Unaxis Corporation from
2000 until 2003. During this period of time he held certain positions as a
Member of Boards within Unaxis. From 1985 to 1996, Mr. Muck held various
positions at Philips GmbH including Managing Director of Philips GmbH, Germany
and Managing Director of Philips Semiconductors for Central Europe. In 1997, Mr.
Muck served as President of Siemens Division for Electro Mechanical Components.
Mr. Muck holds an Engineering degree from the Technical College in Nuremberg.
James L. Brissenden (Citizen of the United States)
Director
Chief Executive Officer until 12/31/2003
Mr. Brissenden retired as President and CEO of INFICON Holding AG on
December 31, 2003. Mr. Brissenden joined INFICON Leybold Hereaus as President
and Chief Executive Officer in 1984. In 1996, Mr. Brissenden became President
and Chief Executive Officer of Balzers and Leybold Instrumentation, our
predecessor. Prior to joining INFICON, Mr. Brissenden spent 20 years with
Carborundum Company with his last position being Vice President and General
Manager, Electric Products Division. Mr. Brissenden has served as President of
the Unaxis holding company in the United States and Chairman of Contraves Inc.,
a Unaxis subsidiary. Mr. Brissenden holds a BSBA from Ohio State University and
an MBA from the State University of New York.
Richard Fischer (Citizen of Austria)
Director
Member Strategy Committee
Dr. Fischer is a co-owner of VAT Holding AG. VAT is the global leading
supplier of vacuum valves. Since 1984, he has served as VAT's Chief Executive
Officer, and since 1997 as the company's President and Chairman of the Board.
Prior to joining VAT, Dr. Fischer was Technical Director of Gama, Access
Systems, an Austrian company. Dr. Fischer holds a Ph.D. in Engineering from the
University of Vienna. Dr. Fischer currently holds directorships in other
Corporations, which include:
Company Position
------- --------
ARS A Member
Sysmec CH Member
Mario Fontana (Citizen of Switzerland)
Director
Chairman Strategy Committee
Member Audit Committee
Mr. Fontana started his professional career in 1970 with IBM Switzerland.
In 1977, he moved to Brazil where he worked for Brown Boveri. Mr. Fontana then
worked for Hewlett-Packard for over 15 years, first as General Manager in
Switzerland, Germany and Europe, and last as head of the Global Financial
Services unit in Cupertino, CA. Mr. Fontana studied at ETH Zurich and the
Georgia Institute of Technology. Mr. Fontana currently holds directorships in
other corporations, which include:
Company Position
------- --------
SBB Member
Leica Geosystems Chairman
Sulzer Member
Swissquote Chairman
Buro-Furrer Member
3.2 Other Activities and Vested Interests
see 3.1
3.3 Cross-involvement
There are no cross-memberships between the Board of Directors of INFICON
Holding AG and any other listed company except as listed in the preceding
section.
3.4 Elections and Terms of Office
According to the Articles of Incorporation the members of the Board of
Directors are elected for a term of three years. The members of the Board of
Directors were elected as follows:
Board of Directors Date Elected Term Expires
------------------ ------------ ------------
James L. Brissenden.................. November 2000 May 2006
Richard Fischer...................... May 2003 May 2006
Mario Fontana........................ May 2003 May 2006
John J. Grad......................... November 2000 May 2006
Paul E. Otth......................... November 2000 May 2006
Kurt Muck............................ November 2000 May 2006
Thomas Staehelin..................... May 2001 May 2004
3.5 Internal organizational Structure
see 3.1
3.6 Definition of Areas of Responsibility
The Board of Directors has delegated authority to the Company's executive
officers to execute the Company's approved annual budget. INFICON Holding AG has
a comprehensive financial and enterprise reporting system to gather and report
its financial results. The quarterly financial results are reviewed and approved
by the Audit Committee prior to issuance to the public. Additionally, the Board
of Directors provides oversight and approval for potential acquisitions or
strategic partnerships.
3.7 Information and Control Instruments vis-a-vis the Senior Management
Information regarding the current state of the business is provided
continuously at the meetings of the Board of Directors in an appropriate format
and is presented by the persons bearing responsibility for oversight of the
financial and operational aspects of the business.
Section 4 Senior Management
4.1 Members of the Board of the Senior Management, other Activities and Vested
Interests, Management Contracts
Our executive officers are responsible for our day-to-day management. The
executive officers have individual responsibilities established by our
Organizational Regulations and by the Board of Directors.
Lukas Winkler (Citizen of Switzerland)
President and Chief Executive Officer as of 1/1/2004
Vice President - Vacuum Control until 12/31/2003
Mr. Winkler became President and Chief Executive Officer of INFICON
Holding AG January 1, 2004. Mr. Winkler joined the company in January 1993 and
served as our Vice President, Vacuum Control from January 1997 to December 2003.
From January 1995 to January 1997, Mr. Winkler served our Balzers AG subsidiary
as General Manager Production. Mr. Winkler has a Masters Degree in engineering
from the Swiss Federal Institute of Technology (ETH-Zurich) and an Executive-MBA
from Syracuse University.
Peter G. Maier (Citizen of Germany)
Vice President and Chief Financial Officer
Mr. Maier joined INFICON in 1996 as Director of Information Systems and
became Vice President of Finance for Leybold Inficon, and Controller for the
Instrumentation Division in 1998. Prior to joining us, Mr. Maier served Deloitte
Consulting as project manager and consultant for enterprise application
integration from 1994 to 1996. From 1992 to 1994, Mr. Maier served as Controller
for Heidelberger Druckmaschinen AG in Germany. Mr. Maier holds a masters degree
in business administration and computer science from the University of
Karlsruhe, Germany.
Ulrich Doebler (Citizen of Germany)
Vice President - Leak Detection
Dr. Doebler joined INFICON in 1986. From 1996 to December 1999, Dr.
Doebler was the Marketing and Engineering Manager of our Leak Detection business
unit. Dr. Doebler holds a PhD in physics from the University of Cologne.
Gary W. Lewis (Citizen of the United States)
Vice President - Environmental, Health and Safety
Mr. Lewis joined INFICON in November 1984 as Manufacturing Manager and was
named Vice President of Quality Assurance in 1991. He has managed various leak
detection products for the HVAC markets since 1995 and assumed responsibility
for the EHS Business Unit in 2000. Mr. Lewis holds a B.S. in electrical
engineering from Clarkson University and an MBA from Chapman University..
Linda Van Roekel (Citizen of the United States)
Vice President - Process Knowledge and Control
Ms. Van Roekel joined INFICON in December 1984. Ms. Van Roekel has been an
officer since November 1992, when she was named Vice President of Marketing. Ms.
Van Roekel holds an M.S. in chemistry from the University of Washington and an
MBA from Syracuse University.
Urs Walchli (Citizen of Switzerland)
(Vice President, Vacuum Control - as of 3/1/2004)
Mr. Walchli joined the company in 1998. In 2000, he was appointed R&D
Manager of our Vacuum Control business unit and became Technical Director of
this unit in 2003. Mr. Walchli holds a Ph.D. in physics from Berne University
and a Master of Industrial Management from ETH Zurich/Swiss Federal institute of
Technology Zurich.
4.2 Other Activities and Vested Interests
See 4.1 for any activities and vested interests.
4.3 Management Contracts
INFICON Holding AG has not entered into any management contracts with
third parties outside the Group.
Section 5 Compensation, Shareholdings and Loans ($ in Thousand USD)
5.1 Content and method of determining the Compensation and of the
share-ownership programs
The Content and method of determining the Compensation and of the
share-ownership programs for the members of the Board of Directors and for the
Senior Management are proposed by Human Resources and Nominating Committee and
approved by the Board of Directors.
5.2 Compensations for acting members of governing bodies
The aggregate cash compensation accrued for members of the Board of
Directors and of the management board for the year ended December 31, 2003 is as
follows:
- ---------------------------------------------------------------------------------------------
Board members and Executive Management in place at December 31, 2003
- ---------------------------------------------------------------------------------------------
Non-Executive Board Executive Board Members and
Members Management Total
- ---------------------------------------------------------------------------------------------
Total Compensation $ 486 $ 1,780 $ 2,266
- ---------------------------------------------------------------------------------------------
No severance payments were made to the Board members and Executive
Management as of December 31, 2003.
5.3 Compensations for former members of governing bodies
Board members and Executive Management who left the Group in 2003
- ---------------------------------------------------------------------------------------------
Non-Executive Board Executive Board Members and
Members Management Total
- ---------------------------------------------------------------------------------------------
Number of Individuals 1 1 2
- ---------------------------------------------------------------------------------------------
Total Compensation $ 22 $ 363 $ 385
- ---------------------------------------------------------------------------------------------
5.4/5.5 Share ownership and Share allotment in the year under review
The number of shares held by the Board of Directors and executive management:
- -------------------------------------------------------------------------------------------
Board members and Executive Management in place at December 31 2003
- -------------------------------------------------------------------------------------------
Non-Executive Board Executive Board Members and
Members Management Total
- -------------------------------------------------------------------------------------------
Shares of the Company
owned on 12/31/2003 3,062 12,344 15,406
- -------------------------------------------------------------------------------------------
No shares were allotted in the year under review.
5.6 Options
All options are granted at prices equal to 100% of the market value of the
common stock at the date of grant. The number of options allocated to members of
the Company's Board of Directors and executive officers were:
- ----------------------------------------------------------------------------------------------------
Board members and Executive Management in place at December 31 2003
- ----------------------------------------------------------------------------------------------------
Non-Executive Board Members Executive Board Members and Management
- -------------------------------------------------- -------------------------------------------------
Option Option
Option Exercise Options Option Exercise Options
Grant Option Price per per Options Grant Option Price per per Options
Year Life Share Share Outstanding Year Life Share Share Outstanding
- ----------------------------------------------------------------------------------------------------
2000 7 years CHF 225.00 1.00 61,715
- ----------------------------------------------------------------------------------------------------
2001 7 years CHF 174.00 1.00 1,296
- ----------------------------------------------------------------------------------------------------
2001 7 years CHF 124.00 1.00 1,776
- ----------------------------------------------------------------------------------------------------
2002 7 years CHF 165.00 1.00 10,200
- ----------------------------------------------------------------------------------------------------
2002 7 years CHF 170.00 1.00 1,512
- ----------------------------------------------------------------------------------------------------
2002 7 years CHF 69.00 1.00 2,685
- ----------------------------------------------------------------------------------------------------
2003 7 years CHF 50.00 1.00 14,200
- ----------------------------------------------------------------------------------------------------
2003 7 years CHF 75.00 1.00 3,368
- ----------------------------------------------------------------------------------------------------
2003 7 years CHF 97.50 1.00 2,382
- ----------------------------------------------------------------------------------------------------
Total 13,019 Total 86,115
- ----------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Board members and Executive Management in place at December 31 2003
- --------------------------------------------------------------------------------
Total
- --------------------------------------------------------------------------------
Option
Option Exercise Options
Grant Option Price per per Options
Year Life Share Share Outstanding
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2000 7 years CHF 225.00 1.00 61,715
- --------------------------------------------------------------------------------
2001 7 years CHF 174.00 1.00 1,296
- --------------------------------------------------------------------------------
2001 7 years CHF 124.00 1.00 1,776
- --------------------------------------------------------------------------------
2002 7 years CHF 165.00 1.00 10,200
- --------------------------------------------------------------------------------
2002 7 years CHF 170.00 1.00 1,512
- --------------------------------------------------------------------------------
2002 7 years CHF 69.00 1.00 2,685
- --------------------------------------------------------------------------------
2003 7 years CHF 50.00 1.00 14,200
- --------------------------------------------------------------------------------
2003 7 years CHF 75.00 1.00 3,368
- --------------------------------------------------------------------------------
2003 7 years CHF 97.50 1.00 2,382
- --------------------------------------------------------------------------------
Total 99,134
- --------------------------------------------------------------------------------
5.7 Additional Fees and Remunerations
In the year 2003 no reportable fees or remunerations were paid to members
of the board of directors or members of executive management.
5.8 Loans to members of governing bodies
In November 2000, certain officers and key employees purchased 16,480
shares of common stock and paid the exercise price by issuing cash and full
recourse and interest bearing promissory notes, denominated in U.S. Dollars,
Swiss Francs, and Euros, to the Company totaling U.S.$1,371,000. The loans have
an interest rate equal to 120% of the mid-term applicable federal rate (as
defined in the Internal Revenue Code) determined on the date the loans are made.
On December 31, 2003, the outstanding balance on the notes due from three of the
executive officers was U.S.$382,823.
5.9 Highest Total Compensation
The highest total compensation for 2003 for a member of the Board of
Directors was U.S.$590,014.
Section 6 Shareholder Participation
6.1 Restrictions on voting rights
Each of our shares carries one vote at our shareholders' meetings. Voting
rights may be exercised only after a shareholder has been recorded in our share
register (Aktienbuch) as a shareholder with voting rights. We may enter into
agreements with banks or financial companies which hold shares for the account
of other persons (nominees) regarding the exercise of the voting rights related
to the shares. Registration with voting rights is subject to restrictions.
Our shares are cleared and settled through SIS Sega Inter Settle AG. The
shares will not be physically represented by certificates but will be managed
collectively in book-entry form by SIS Sega Inter Settle AG. Shareholders are
therefore not entitled to have their shares physically represented and delivered
in certificate form (aufgehobener Titeldruck). They can, however, request a
statement confirming their ownership of the shares.
6.2 Statutory quorums
The Articles of Incorporation contain no quorums greater than that set out
by the applicable legal provisions.
6.3 General meetings of shareholders
The Articles of Incorporation contain no rules on the convocation of the
General meeting of shareholders that differ from applicable legal provisions.
6.4 Agenda
Shareholders holding shares with a par value of at least CHF 1 million
have the right to request in writing, at least 50 days prior to the day of the
respective shareholders' meeting, that a specific proposal be discussed and
voted upon at such shareholders' meeting.
6.5 Entries into the Share Register
Only those shareholders with voting rights whose names were recorded in
the company's register of shareholders on the respective closing date may attend
the General Meeting of Shareholders and exercise their voting rights. The Board
of Directors endeavors to set the closing date for registration as close as
possible to the date of the General Meeting, i.e. not more than 3 to 4 weeks
before the General Meeting. There are no exceptions to this rule regarding the
closing date for registration.
Section 7 Changes of Control and Defense Measures
7.1 Duty to Make an Offer
The Company's Articles of Incorporation do not include "opting-out" or
"opting-up" clauses and accordingly under Article 32 of the Swiss Securities
Exchanges and Securities Trading Act a shareholder who acquires 33 1/3% or more
of the Company's shares is obliged to submit a public offer for the remaining
shares.
7.2 Clauses on Changes of Control
Our Chief Executive Officer, Lukas Winkler, has an agreement under which
he would become entitled to a special payment upon a change of control of the
Company.
Section 8 Auditors
8.1 Duration of the mandate and term of office of the lead auditor
Statutory auditors and group auditors pursuant to Art. 727 ff. and 731a,
respectively, of the Swiss Code of Obligations are PricewaterhouseCoopers AG,
Zurich, elected for one year. PricewaterhouseCoopers AG commenced their mandate
as statutory and group auditors of INFICON Holding AG in June 2002. The lead
engagement partner, Mr. Stephen Williams, has been responsible for the audit of
INFICON Holding AG since June 2002. The subsidiaries of INFICON Holding AG are
audited by member firms of PricewaterhouseCoopers.
8.2 Auditing fees
Audit fees for the 2003 audit were approximately CHF 522,996
(U.S.$388,775).
8.3 Additional fees
Fees paid to PricewaterhouseCoopers for non-audit services rendered during
2003 totaled CHF 207,481 (U.S.$167,014).
8.4 Supervisory and Control Instruments pertaining to the audit
The Audit Committee of the Board proposed the appointment of
PricewaterhouseCoopers AG following a review of offers received from 3 competing
firms of independent accountants for the 2002 reporting year. The Audit
Committee evaluates the performance, fees, and independence of the statutory
auditors and Group auditors each year. Typically the Audit Committee receives a
summary of the scope of work planned by the auditors on an annual basis and
meets with the auditors to review these audit plans. Following the audit work
the auditors submit a report on the results of their work including all
communications required to be made to the audit committee in accordance with
auditing standards generally accepted in the USA. The audit committee meets with
the auditors to discuss and review their feedback. Based on this information, it
determines changes and improvements as necessary.
Section 9 Information policy
INFICON Holding AG pursues an information policy which is based on
truthfulness, timeliness, and continuity. Matters affecting the share price are
published immediately as ad hoc announcements, in accordance with the obligation
to publish on the SWX Swiss Exchange. Annual financial reports are issued for
the benefit of shareholders and potential investors at the end of March
following the year end closing. Interim financial reports are prepared on a
quarterly basis. Information available for investors can be found at
www.inficon.com.