Annual Report 2012 - Investor Relations

Corporate Governance45general rule, the qualitative targets (individual targets) are in referenceto the functional area of the respective Executive Committeemember and are comprised of performance targets with clear-cutmeasurable criteria. The performance bonuses are paid out in Aprilof the following year or optionally in the form of shares (cf. section5.2, Shareholding plan).Due to the unusual situation in which the company found itself duringthe year under review, the Board of Directors decided to suspendthe bonus plan for the Executive Committee in favour of thefollowing arrangement: the members of the Executive Committeewere offered the prospect of compensation amounting to a maximumof 25% in excess of their base salary, payment to be dividedinto two equal parts and comprised of 50% in shares (for the proceduresused to calculate the allocation of shares, please refer tosection 5.2, Shareholding plan). The first part of this compensationwas not made subject to any conditions and was disbursed to allmembers of the Executive Committee in September of 2012 whowere in the company’s employ at this time. The Board of Directorswill decide on the payment of the second part in March of 2013,this portion also to be 50% in cash and 50% in shares. Payment isdependent on the achievement of selected quantitative corporatetargets. Those entitled to receive this are the Executive Committeemembers who were still in the company’s employ as of theend of December 2012.The total amount of compensation of Executive Committee members,compensation of former Executive Management Boardmembers and the highest compensation paid to any one memberof the Executive Committee and the Executive ManagementBoard respectively for FY 2012 and 2011 are stated on page 75ff ofthe financial statements of Cham Paper Group Holding AG.5.2 Shareholding planDuring FY 2010, a shareholding plan was introduced for the membersof the Board of Directors and the Executive Committee. Theshares for this program are issued from the company’s own holdings.Under the shareholding plan, the members of the Board of Directorsestablish at the beginning of the financial year what share oftheir compensation they would like to receive in the form of sharesfor the current year (25%, 50%, 75% or 100%). This share maybe changed during the course of the year, this applying to the remainderof the year. The allocation of shares usually takes place on31 December of the respective year. The share price applicable tothe allocation of shares is based on the weighted average price ineffect during the preceding month, generally November. Upon allocation,the shares remain blocked for one year. During this vestingperiod the share owners are precluded from exercising theirvoting rights for the shares being vested. All Board of Directorsmembers are eligible for participation in the plan who have workedon a full-time basis during the respective financial year. The portionof compensation drawn in cash is subject to disbursement on aquarterly basis.The members of the Executive Committee have the option of receivingthe performance bonuses due them in the form of shares,either in whole or in part (25%, 50%, 75% or 100%). The allocationof shares usually takes place on 30 April of the following year.The share price applicable to the allocation of shares is based onthe weighted average price in effect during the preceding month,generally March. Upon allocation, the shares remain blocked forone year. During this vesting period the share owners are precludedfrom exercising their voting rights for the shares being vested.All members of the Executive Committee are eligible for participationwho are in the company’s employ on 31 March of the followingyear.5.3 Allocation of shares during the year under reviewDuring the year under review, 2,311 shares of Cham Paper GroupHolding AG were allocated to members of the Board of Directorsor related parties. During the same period 336 shares 3 were allocatedto members of the Executive Committee or related parties.5.4 Termination benefitsDuring the year under review, no termination benefits were disbursedor agreed.6. Shareholders’ rights of participationThe shareholders’ rights of participation are defined in the Articlesof Association of Cham Paper Group Holding AG. The followingremarks contain extracts from the Articles of Association of ChamPaper Group Holding AG. A full version of the Articles of Associationcan be consulted on the website, under Investor Relations/Corporate Governance/Articles of Association 4 .6.1 Restrictions on voting rights and representationEach registered share entitles to one vote at the General Meetingof Shareholders of the company. This notwithstanding, votingrights may be exercised only by persons whose registered sharesare entered in the share register of Cham Paper Group Holding AGas having voting rights. According to Swiss corporate law, registrationis subject to a declaration that the shareholder has acquiredthe shares in his or her own name and on his or her own account.According to the Articles of Association, the Board of Directorsmay refuse to make an entry with voting rights in the share registeronly under the following circumstances:• provided that, and for as long as, acceptance of the applicant asa shareholder with voting rights might hinder the company inproviding evidence of Swiss control as required by Swiss federallaw, in particular the Federal Law on the Acquisition of RealEstate by Non-Residents, or3 Thereof 240 to members who left office during the reporting period4 http://ir.champaper.com/cgi-bin/show.ssp?id=730&companyName=champaper&language=English