Remuneration Board of Management 2010

Remuneration Board of Management 2010

In accordance with best-practice provision II.2.1, the Remuneration & Nomination Committee of the Supervisory Board analyzed the outcome of the variable remuneration elements and their consequences for the remuneration of the members of the Board of Management before determining the remuneration of the individual members of the Board of Management, so called scenario analysis.

Base salary

The base salary of Frank Dorjee has been adjusted in 2010 in relation with his new function as CEO and Chairman of the Board of Management. The salary of Okke Koo was determined at his entrance into office in January 2010.

Short term incentive

On the basis of the financial targets, the short-term incentive bonus for 2010 will be 50% of base salary. As regards the discretionary element, the Supervisory Board has decided to pay to Frank Dorjee 30% of his base salary. The Supervisory Board has thus decided to pay a total bonus of 80% (compared with the maximum of 90%) of base salary for 2010 to Frank Dorjee.

The Supervisory Board has decided to pay to Okke Koo a bonus of 60% of his base salary.

An additional bonus of € 300.000 has been granted to Frank Dorjee in 2010 as compensation for the period in 2009 when he took over the position of CEO in combination with his function as CFO as well as the period in 2010 when he acted as the sole member of the Board of Management and ensured the proper functioning of the Board of Management.

Long term incentive

The members of the Board of Management, consistent with this policy, have been awarded conditional performance shares to the value of 55% of base salary in respect of 2010.

Pensions

Frank Dorjee has a defined-contribution pension plan, for which the contributions have been structured as follows since 1 January 2006:

• from 1 January 2006 to age of 54 23.0%
of base salary

• age 55 – 59 28.6%
of base salary

•  from age 60 36.1% of base salary

The contribution to Frank Dorjee's pension plan is based on his base salary in excess of the threshold (amounting to € 12,673 in 2010).

Okke Koo has a defined-contribution pension plan, for which the contributions have been structured as follows since 1 January 2010:

• from 1 January 2010 to age of 54 23.0%
of base salary
• age 55 – 59 28.6%
of base salary

The contribution to Okke Koo’s pension plan is based on his base salary in excess of the threshold (amounting to € 12,673 in 2010).

Overview

The table below shows the expense incurred by the Company in respect of remuneration of the members of the Board of Management in 2010.

2010 Direct Remuneration Board of Management

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In thousands of euro	Base salary	Paid out holiday	Short term incentive	Allowances	Total cash remuneration	Pension charges	Long term incentive	Total remuneration	Employer's expense	Total remuneration expense
Frank Dorjee	550	34	740	3	1.327	130	293	1.750	7	1.757
Okke Koo	475	-	285	6	766	109	87	962	7	969

The long-term incentive reflects the market value of shares (conditionally) granted to the members of the Board of Management. The actual grant of shares depends on the Company's future performance compared with the peer group.

The members of the Board of Management currently hold no options on ordinary Draka Holding N.V. shares.

The number of shares held by the members of Board of Management since their appointment as at 31 December of each calendar year was as follows:

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	Number of shares	Value of shares in euro	Number of conditionally granted performance shares	Value on date of grant in euros	Value on date of vesting in euros	Value on date shares became freely disposable
Frank Dorjee
31-12-2005	-	-	-	-	-	-
31-12-2006	4,737	122,215	-	-	-	-
31-12-2007	9,940	228,620	24,788	702,740	n/a	n/a
31-12-2008	9,940	65,008	44,582	944,029	n/a	n/a
31-12-2009	9,940	133,792	99,834	1.163,379	n/a	n/a
31-12-2010	9,940	189,854	95,267	763,145	n/a	n/a
Okke Koo
31-12-2010	0	-	5,821	87,082	n/a	n/a

Employment contracts

The members of the Board of Management have been appointed for a determinate period.

Frank Dorjee's employment contract was entered into on 1 June 2007 for a period of four years and will therefore expire on 31 May 2011. The employment contract provides for a notice period of three months in the case of termination by Frank Dorjee and six months in the case of termination by the Company. An exit arrangement had been agreed with Frank Dorjee which provided for payment of one full year's base salary plus a one-year bonus equal to the average bonus received in the previous three years in the event of the employment contract being terminated other than for cause before 31 May 2011.

Frank Dorjee’s employment contract has been revised in connection with his appointment as Chairman of the Board of Management and Chief Executive Officer with effect from 1 January 2010. The exit arrangements under this revised employment contract comply with best-practice provision II.2.8 of the Code. The exit payment will now be one year’s base salary in the event of the employment contract being terminated other than for cause before 31 May 2011. A clawback clause in accordance with best-practice provision II.2.11 of the Code is also included, which makes provision for the recovery of variable remuneration awarded on the basis of incorrect (financial) information.

Okke Koo’s employment contract was entered into on 1 January 2010 for a period of four years and will therefore expire on 31 December 2013. The employment contract provided for a notice period of three months in the case of termination by Okke Koo and six months in the case of termination by the Company. An exit arrangement had been agreed with Okke Koo which provided for payment of one year’s base salary in the event of the employment contract being terminated other than for cause before the end of the period. Okke Koo has prematurely terminated his employment contract as of 31 December 2010.

Remuneration policy Board of Management 2011

The remuneration policy for the members of the Board of Management, as adopted by the General Meeting in 2007, will continue to apply in 2011. Consistent with this policy, Frank Dorjee’s base salary in his position as Chairman of the Board of Management and Chief Executive Officer is
€ 561,000 gross.