A GLOBAL AMBITION ANNuAL REPORT 2006 - Dufry

Dufry Annual Report 2006 — Corporate Governance
. CoMPENSaTIoN, ShaREhoLDINGS aND LoaNS
. Content and method of determining the compensation and the shareholding
programmes
board of Directors
The Board determines the amount of the fixed remuneration of its members,
taking into account their responsibilities, experience, and the time which they
invest in their activity as members of the Board. The Nomination and Remuneration
Committee makes proposals in relation to the compensation of the
members of the Board. Extraordinary assignments or work which a member of
the Board accomplishes outside of his / her activity as a Board member shall be
specifically remunerated. Such remuneration shall be approved by the Board.
In addition, the Board shall be reimbursed all reasonable cash expenses properly
incurred by them in the discharge of their duties.
Group Executive Committee
Members of the Group Executive Committee receive compensation packages,
which consist of a basic salary in cash and a performance related cash bonus,
as well as other cash compensation. The bonus is defined once per year and
depends on the overall financial result of the Group and of specific sub-divisions
thereof, as well as on achieving defined goals by each individual person.
The Nomination and Remuneration Committee makes proposals in relation to
the compensation of the CEO. The Board of Directors has the ultimate authority
to approve such proposals.
In addition, the Company has a Restricted Stock Unit (RSU) plan for certain
members of the Dufry Group management (RSU plan participants). Under the
RSU plan, the Company granted the RSU plan participants in 2006 a right to receive
on January 1, 2008, free of charge, 100’000 shares of Dufry Ltd on aggregate,
provided that the average price per share on the SWX Swiss Exchange for
the ten trading days immediately preceding the vesting date is equal or higher
than 101 percent of the share price at grant date. The rights granted to the RSU
participants in 2006 vested on January 1, 2007. From an economic point of view,
the Restricted Stock Units are stock options with an exercise price of nil.
The RSU plan is designed to provide its participants with an incentive equal to
100 percent of their base salary in case of a 20 percent increase in the price per
share during each respective vesting period. Any Restricted Stock Units granted
will be forfeited should the RSU plan participant cease to be an employee of
the Dufry Group during the vesting period.