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

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monies of or belonging to us may be placed out on or invested, or for any other loss, misfortune or damage which may happen in the execution of their respective offices or trusts. This indemnity will not, however, extend to any fraud or dishonesty which may attach to any of said persons. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. 2006 Stock Incentive Plan We adopted our 2006 stock incentive plan on July 31, 2006. The purpose of our 2006 stock incentive plan is to recognize and acknowledge the contributions the eligible participants made to our company and to promote the success of our business. Through the provision of an opportunity to have a personal stake in our company, our 2006 stock incentive plan aims to: ‚ motivate the eligible participants to optimize their performance efficiency for the benefit of our company; ‚ attract and retain the best available personnel in our industry through additional incentive to our employees and directors; and ‚ attract and otherwise maintain our on-going business relationship with consultants and business entities whose contributions are or will be beneficial to our long-term growth. Eligible participants Under our 2006 stock incentive plan, our board of directors may, at its discretion, offer to grant an option to subscribe for such number of our ordinary shares at an exercise price as our directors may determine to: ‚ any full-time or part-time employees, executives or officers of our company or any of our subsidiaries; ‚ any directors, including non-executive directors and independent non-executive directors, of our company or any of our subsidiaries; ‚ any advisers, consultants and agents to us or any of our subsidiaries; and ‚ such other persons who, in the sole opinion of our board of directors, will contribute or have contributed to our development and operations. Maximum number of shares The maximum number of ordinary shares in respect of which options may be granted (including ordinary shares in respect of which options, whether exercised or still outstanding, have already been granted) under our 2006 stock incentive plan may not in the aggregate exceed 10% of the total number of ordinary shares in issue from time to time, including ordinary shares issuable upon conversion of any of our preferred shares in issue from time to time. Immediately following completion of this initial public offering, the maximum number of ordinary shares in respect of which we may grant options (including ordinary shares in respect of which options, whether exercised or still outstanding, have already been granted) under our 2006 stock incentive plan will be 10,397,210 ordinary shares (assuming no exercise of the over-allotment option) or 10,657,970 ordinary shares (assuming full exercise of the over-allotment option). Price of shares Our board of directors may, in its discretion, determine the subscription price of an ordinary share in respect of any particular option granted under our 2006 stock incentive plan. However, such determination by our board of directors of the subscription price will be by reference to the fair market value of the ordinary shares. If there exists a public market for our ordinary shares, including our ADSs, the fair market value of our ordinary shares will be the closing price for the last market trading day prior to the time of the determination on the stock exchange determined by our board of directors to be the primary market for our ordinary shares or ADSs. If there is no established market for our ordinary shares, our board of directors will determine the fair market value of our ordinary shares in good faith by reference to the placing price of the latest private 92
placement of our ordinary shares and the development of our business operations since such latest private placement. Performance criteria Our 2006 stock incentive plan allows our board of directors to establish the performance criteria when granting stock options on the basis of any one of, or combination of, increase in our share price, earnings per share, total shareholder return, return on equity, return on assets, return on investment, net operating income, cash flow, revenue, economic value added, personal management objectives, or other measures of performance selected by our board of directors. Partial achievement of the specified criteria may result in a vesting corresponding to the degree of achievement as specified in the award agreement with the relevant optionee. Outstanding options granted under our 2006 stock incentive plan The following table summarizes, as of the date of this prospectus, the outstanding options granted under our 2006 stock incentive plan to several of our directors, executive officers and investors and to other individuals as a group. Unless otherwise noted, the options granted vest over a three-year period beginning on the date of their respective grants. Ordinary Shares Underlying Outstanding Exercise Price Name Options ($/Share) Date of Grant Date of Expiration Xiaofeng Peng (1) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,500,000 $ 4.45 August 1, 2006 July 31, 2011 Xingxue Tong (2) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,300,000 9.00 February 6, 2007 February 5, 2012 Liangbao Zhu (3) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,000,000 4.45 August 1, 2006 July 31, 2011 Yonggang Shao (4) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,000,000 4.45 August 1, 2006 July 31, 2011 Gang Wang (5) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 100,000 9.00 April 17, 2007 April 16, 2012 Louis T. Hsieh ** ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 100,000 9.00 May 31, 2007 May 30, 2012 Jack Lai (6) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ * 4.45 August 1, 2006 July 31, 2011 Nicola Sarno (7) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ * 4.45 August 1, 2006 July 31, 2011 Yuepeng WanÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ * 9.00 February 6, 2007 February 5, 2012 Rongqiang Cui ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ * 4.45 August 1, 2006 July 31, 2011 Pietro Rossetto (8) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ * 4.45 August 1, 2006 July 31, 2011 Qiqiang Yao (9) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Boundless Future Investment * 4.45 August 1, 2006 July 31, 2011 Limited (10) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 100,000 4.45 August 1, 2006 July 31, 2011 Brilliant Ever Investments Limited (10) ÏÏ 100,000 4.45 August 1, 2006 July 31, 2011 Other employees as a group (11) ÏÏÏÏÏÏÏÏ 1,133,900 4.45 August 1, 2006 July 31, 2011 Other employees as a group (11) ÏÏÏÏÏÏÏÏ 665,900 9.00 February 6, 2007 February 5, 2012 Other employees as a group (11) ÏÏÏÏÏÏÏÏ 350,900 $25.00 May 14, 2007 May 13, 2012 Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 8,710,700 (1) Mr. Peng is holding his stock options through his wholly owned British Virgin Islands company, LDK New Energy. (2) Mr. Tong is holding his stock options through his wholly owned British Virgin Islands company, Superb Bright Limited. (3) Mr. Zhu is holding his stock options through his wholly owned British Virgin Islands company, Feliz International Inc. (4) Mr. Shao is holding his stock options through his wholly owned British Virgin Islands company, SM Future Investment Inc. (5) Mr. Wang is holding his stock options through his wholly owned British Virgin Islands company, Sun Forever Limited. (6) Relates to options granted to Mr. Lai in his capacity as consultant prior to his employment at our company and in anticipation of his employment at our company. (7) Mr. Sarno is holding his stock options through his wholly owned British Virgin Islands company, Flamerstead Ltd. (8) Mr. Rossetto is holding his stock options through his wholly owned British Virgin Islands company, Well Elegant Holdings Limited (9) Mr. Yao is holding his stock options through his wholly owned British Virgin Islands company, Qiqiang Investment Consulting Inc. 93
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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
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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
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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 94 and 95: directors on our audit committee wi
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
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LDK SOLAR CO., LTD. AND SUBSIDIARIE
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