LDK Solar Co., Ltd. - Asia Europe Clean Energy (Solar) Advisory Co ...

Dividends
LDK SOLAR CO., LTD. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Ì (Continued)
FOR THE PERIOD FROM JULY 5, 2005 TO DECEMBER 31, 2005
AND THE YEAR ENDED DECEMBER 31, 2006
(Amounts in US$ thousands, except share and per share data)
The Series C Shares holders shall be entitled to receive dividends out of any funds legally available for
this purpose, when and if declared by the Board of Directors of the Company. No dividends shall be declared
or paid on any of the ordinary shares unless they shall also be declared or paid on all the outstanding preferred
share pro rata treating the preferred shares as the greatest whole number of shares of ordinary shares then
issuable upon conversion of such preferred shares.
Liquidation preference
In the event of any liquidation, dissolution or winding up of the Company, the holders of Series C Shares
shall be entitled to receive, prior to any distribution of any of the assets or surplus funds of the Company to the
holders of ordinary shares, an amount equal to 130% of Series C issue price plus all declared but unpaid
dividends and interests as of the liquidation date.
(17) ORDINARY SHARES
As at December 31, 2005 and 2006, there were nil and 134,000,000 authorized ordinary shares of the
Company with US$0.10 par value per share (adjusted for the ten-for-one share split effected on July 18,
2006). During 2006, the Company issued 75,000,000 ordinary shares at par value of US$0.10 per share
(adjusted for the ten-for-one share split effected on July 18, 2006) in connection with the Reorganization. As
at December 31, 2006, US$7,490 was receivable from LDK New Energy Holding Limited in respect of the
share subscription and is recognized as a reduction to shareholders' equity in the accompanying consolidated
financial statements. The receivable is interest free and collectible on demand.
(18) STATUTORY RESERVE
Under the Law of the PRC on Enterprises with Wholly Owned Foreign Investment, JXLDK is required
to allocate at least 10% of their after tax profits, after making good of accumulated losses as reported in their
PRC statutory financial statements, to the general reserve fund and have the right to discontinue allocations to
the general reserve fund if the balance of such reserve has reached 50% of their registered capital. A transfer of
US$3,623 from retained earnings to statutory reserve was recorded for the year ended December 31, 2006.
(19) SHARE OPTION
Share options to employees
On August 1, 2006, the Board of Directors of the Company approved the granting of 6,230,000 share
options to the Company's executives and employees at an exercise price of US$4.45 with a contractual term of
five years and vesting period of no less than three years, with no more than one-third of the options to be
vested each year.
Share options to non employees
On August 1, 2006, the Board of Directors of the Company approved the granting of 210,000 share
options to the Company's external consultants in exchange for certain services provided. The exercise price of
the share options is US$4.45 and the contractual term is five years. The vesting period is no less than three
years, with no more that one-third of the options to be vested each year.
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