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

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directors on our audit committee will be independent directors. Within a year following this offering, all members of our audit committee will be independent directors. The audit committee oversees our accounting and financial reporting processes and the audits of the financial statements of our company. The audit committee is responsible for, among other things: ‚ selecting the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors; ‚ reviewing and approving all proposed related-party transactions; ‚ discussing the annual audited financial statements and interim financial statements with management and the independent auditors; ‚ annually reviewing and reassessing the adequacy of our audit committee charter; ‚ meeting separately and periodically with management and the independent auditors; ‚ such other matters that are specifically delegated to our audit committee by our board of directors from time to time; and ‚ reporting regularly to the full board of directors. Compensation committee Our compensation committee initially will consist of Xiaofeng Peng, Louis T. Hsieh and Liangbao Zhu. Mr. Hsieh satisfies the ""independence'' requirements of the New York Stock Exchange Listing Rules and the Securities and Exchange Commission regulations. Our compensation committee assists the board in reviewing and approving the compensation structure of our directors and executive officers, including all forms of compensation to be provided to our directors and executive officers. The compensation committee is responsible for, among other things: ‚ reviewing and determining the compensation package for our senior executives; ‚ reviewing and making recommendations to the board with respect to the compensation of our directors; ‚ reviewing and approving officer and director indemnification and insurance matters; ‚ reviewing periodically and approving any long-term incentive compensation or equity plans, programs or similar arrangements, annual bonuses, employee pension and welfare benefit plans; and ‚ reporting regularly to the full board of directors. Corporate governance and nominating committee Our corporate governance and nominating committee initially will consist of Xiaofeng Peng, Louis T. Hsieh and Xingxue Tong. Mr. Hsieh satisfies the ""independence'' requirements of the New York Stock Exchange Listing Rules and the Securities and Exchange Commission regulations. The corporate governance and nominating committee assists the board of directors in identifying individuals qualified to become our directors and in determining the composition of the board and its committees. The corporate governance and nominating committee is responsible for, among other things: ‚ identifying and recommending to the board nominees for election or re-election to the board; ‚ appointment to fill any vacancy; ‚ reviewing annually with the board the current composition of the board in light of the characteristics of independence, age, skills, experience and availability of service to us; ‚ identifying and recommending to the board the directors to serve as members of the board's committees; ‚ advising the board periodically with respect to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any corrective action to be taken; 90
‚ monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance; and ‚ reporting regularly to the full board of directors. Duties of Directors Under Cayman Islands law, our directors have a common law duty of loyalty to act honestly in good faith with a view to our best interests. Our directors also have a duty to exercise the skill they actually possess and such care and diligence that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duty of care to us, our directors must ensure compliance with our memorandum and articles of association. A shareholder has the right to seek damages if a duty owed by our directors is breached. You should refer to ""Description of Share Capital Ì Differences in Corporate Law'' for additional information on our standard of corporate governance under Cayman Islands law. Employment Agreements Officers are selected by and serve at the discretion of our board of directors. Each executive officer has entered into an employment agreement with us for an initial term of one year, which will be automatically renewed for successive one-year terms until terminated by either party with three months' notice in writing to the other party. Compensation of Directors and Executive Officers All directors receive reimbursements from us for expenses necessarily and reasonably incurred by them for providing services to us or in the performance of their duties. Our directors who are also our employees receive compensation in the form of salaries, housing allowances, other allowances and benefits in kind in their capacity as our employees. Each of our directors is entitled to a discretionary bonus as determined by the compensation committee of our board of directors provided that the total amount of bonuses payable to all of our directors for such year shall not exceed 5% of our audited consolidated profit after taxation and minority interests but before extraordinary items (if any) for the relevant year. In 2005, the aggregate cash compensation and benefits that we paid to our directors and executive officers for the period from July 5 to December 31, 2005 was approximately $3,000. We did not make any contribution to the pension schemes in respect of our directors for the period from July 5 to December 31, 2005. Under our current arrangements, the aggregate remuneration and benefits in kind which our directors and executive officers received for the year ended December 31, 2006 and the three months ended March 31, 2007 were approximately $552,000 and $337,000, respectively, excluding any discretionary bonuses which may be paid to our directors and executive officers. No executive officer is entitled to any severance benefits upon termination of his or her employment with our company. You may find more details of the stock options we have granted to our directors and executive officers pursuant to our 2006 stock incentive plan under ""Ì 2006 Stock Incentive Plan Ì Outstanding options granted under our 2006 stock incentive plan'' below. Indemnification Cayman Islands law does not limit the extent to which a company's articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against civil fraud or the consequences of committing a crime. Pursuant to our memorandum and articles of association, our directors and officers, as well as any liquidator or trustee for the time being acting in relation to our affairs, will be indemnified and held harmless out of our assets and profits from and against all actions, costs, charges, losses, damages and expenses that any of them or any of their heirs, executors or administrators may incur or sustain by reason of any act done, concurred in or omitted in or about the execution of their duties in their respective offices or trusts. Accordingly, none of these indemnified persons will be answerable for the acts, receipts, neglects or defaults of each other; neither will they be answerable for joining in any receipts for the sake of conformity, or for any bankers or other persons with whom any moneys or effects belonging to us may have been lodged or deposited for safe custody, or for insufficiency or deficiency of any security upon which any 91
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PROSPECTUS 17,384,000 American Depo
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We were incorporated in the Cayman
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percentage of light energy from the
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Listing ÏÏÏÏÏÏÏÏÏÏÏÏÏ
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(1) Gross profit for the year ended
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RISK FACTORS Investment in our ADSs
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Reduction or elimination of governm
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capacity or to increase our manufac
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delivery or failure to meet deliver
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specifications or product defects.
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Compliance with environmental regul
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operations or the price of our ADSs
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tax rates and other measures. Forei
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company in connection with any incr
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of approximately $22.05 in the net
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outside the United States. As a res
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The forward-looking statements cont
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CAPITALIZATION The following table
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DILUTION If you invest in our ADSs,
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DIVIDEND POLICY We have never decla
Page 44 and 45: SELECTED CONSOLIDATED FINANCIAL AND
Page 46 and 47: MANAGEMENT'S DISCUSSION AND ANALYSI
Page 48 and 49: polysilicon prices will decline in
Page 50 and 51: listed public company in the United
Page 52 and 53: increase. See ""Risk Factors Ì Ris
Page 54 and 55: subjective. The assumptions used in
Page 56 and 57: 2006 and February 6, 2007. During t
Page 58 and 59: value of the our business. Under th
Page 60 and 61: Year Ended December 31, 2006 (in th
Page 62 and 63: ""Exchange Rate Information'' in th
Page 64 and 65: ended September 30, 2006, net incom
Page 66 and 67: For additional information relating
Page 68 and 69: The non-cancelable purchase obligat
Page 70 and 71: previously deemed material, but are
Page 72 and 73: module production will increase fro
Page 74 and 75: The following diagram illustrates t
Page 76 and 77: Because we are a pure-play solar wa
Page 78 and 79: Wafering. After passing inspection,
Page 80 and 81: our revenue and customer base to ta
Page 82 and 83: ‚ Our agreement with E'mei Semi-c
Page 84 and 85: photovoltaic cell or modules, and w
Page 86 and 87: A breakdown of our employees by are
Page 88 and 89: tax treatments to foreign-invested
Page 90 and 91: On September 21, 2006, the CSRC pub
Page 92 and 93: Gang Wang is a non-executive direct
Page 96 and 97: monies of or belonging to us may be
Page 98 and 99: (10) Vests on July 31, 2007. Brilli
Page 100 and 101: Securities (USA) LLC, which is a re
Page 102 and 103: interest-bearing loans directly to
Page 104 and 105: person, by its duly authorized repr
Page 106 and 107: History of Securities Issuances The
Page 108 and 109: persuasive authority in the Cayman
Page 110 and 111: making any sale by public or privat
Page 112 and 113: Reports and Other Communications Wi
Page 114 and 115: Amendment and Termination How may t
Page 116 and 117: ‚ deliver distributions on any AD
Page 118 and 119: SHARES ELIGIBLE FOR FUTURE SALE Upo
Page 120 and 121: TAXATION The following summary of m
Page 122 and 123: individual, up to $3,000 of capital
Page 124 and 125: person and on sales of ordinary sha
Page 126 and 127: The estimated offering expenses pay
Page 128 and 129: Pricing of the Offering Prior to th
Page 130 and 131: ADS with a view to selling it to th
Page 132 and 133: EXPENSES RELATING TO THIS OFFERING
Page 134 and 135: ‚ no new admissible evidence rele
Page 136 and 137: WHERE YOU CAN FIND ADDITIONAL INFOR
Page 138 and 139: REPORT OF INDEPENDENT REGISTERED PU
Page 140 and 141: LDK SOLAR CO., LTD. AND SUBSIDIARIE
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LDK SOLAR CO., LTD. AND SUBSIDIARIE
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