This excerpt taken from the ASML 20-F filed Jan 29, 2010.
Members of the Board of Management are eligible for a maximum performance stock award, under the conditions set out in the 2008 remuneration policy, with a value equal to a maximum of 96.25 percent of their base salary (whereas the value at target performance equals 55 percent of their base salary). In 2008 the Supervisory Board decided that the maximum number of performance stock to be granted conditionally in 2009, would be equal to the maximum number of stock determined for 2008. The ultimately awarded number of performance stock will be determined over a three-year period upon achievement of targets set in 2009 relating to the Companys relative ROAIC position in the peer group. ASML accounts for this stock award performance plan as a variable plan. The fair value of the stock granted in 2007, 2008 and 2009 was EUR 20.39, EUR 17.20 and EUR 13.05, respectively. The compensation expenses recorded in the consolidated statements of operations for the year ended December 31, 2009 amount to EUR 2.5 million (2008: EUR 3.3 million and 2007: EUR 3.3 million).
The maximum number of performance stock which can be awarded in relation to performance targets are as follows:
This excerpt taken from the ASML 6-K filed Apr 19, 2006.
Performance stock will be awarded yearly under the condition of fulfilment of a predetermined performance target, which is measured over a period of three calendar years. The performance measure for obtaining performance stock will be ASMLs relative Return on Invested Capital (ROIC) position compared to the Peer Group at the end of the three years.
The Peer Group which is used for the measurement of ROIC contains KLA-Tencor, Varian Semiconductor, Applied Materials, Novellus, Cymer, Lam Research, MKS Instruments, Advanced Energy, Asyst and ASMI.
The number of performance stock will be awarded relative to the targeted ROIC position and the ultimately obtained ROIC position at the end of the three year performance period.
The number of performance stock to be awarded on target will equal 50% of base salary divided by the value of one performance stock. The maximum number of performance stock for over performance to target will equal 87.5% of base salary. The exact number with a value between 0% and this maximum will be calculated at the end of the performance period, pro-rated linearly to the level of the actual versus targeted ROIC position obtained after three years. The number of performance stock is accrued during the calendar year in which the conditional award is done.
The target setting is done every year according to the circumstances and expectations then prevailing for a three year period. In very exceptional cases, where unforeseen business circumstances require and justify an adaptation of the ultimate target originally set, the Supervisory Board will have the discretion to do so.
The value of the performance stock is determined by using the market value of the stock on the day of publication of ASMLs annual results in the year in which the targets are set in line with US GAAP and applying a performance discount of 30% in line with market practice and taking into account Dutch wage withholding taxation guidelines. The value is calculated at the beginning of the performance period, on the day of publication of ASMLs annual
results in the year in which the targets are set, using the market value of the underlying stock during the three preceding years.
Once the stock is released after fulfilment of the performance condition, the stock will be retained by the Board Member for a certain minimum period. This period will be at least two years after the date of release or until at least the time of termination of employment, whichever period is shorter. As the date of release lies three years after the date of conditional award and the Board Member has to retain the stock for at least two subsequent years, the period before one obtains full rights to the stock will be five years in total. The Remuneration Committee feels that the total period is in compliance with the Dutch Corporate Governance Code. In so far as taxation is due in respect of the released stock, the Board Member will be allowed to sell released stock with a value equal to the amount of tax due.