This excerpt taken from the QGEN 6-K filed Jul 22, 2005.
Explanatory Note to Item 12Equity-based Remuneration of the Supervisory Board
Dutch law stipulates that the shareholders at the Annual General Meeting, upon the proposal of the Supervisory Board, determine the remuneration of the members of the Supervisory Board. The shareholders of the Company are hereby being asked to adopt the equity-based remuneration of the members of the Supervisory Board. The Supervisory Board proposes the following equity-based remuneration.
Equity-based remuneration of members of the Supervisory Board:
The objective of QIAGENs remuneration is to achieve a total remuneration level, both short-term and long-term, that is comparable with levels provided by other European and United States-based companies of similar size and complexity in similar industries, including biotechnology, life sciences supplies, diagnostics and pharmaceuticals. Independent external compensation surveys shall be taken into account in determining the appropriate remuneration levels for the members of the Supervisory Board.
The members of the Supervisory Board shall receive fixed as well as performance-related compensation in the form of stock options or other equity-based compensation. Individual compensation will take into account the scope of responsibilities of each member of the Supervisory Board, as well as the economic situation and performance of the Company. In determining individual compensation, the Supervisory Board will also consider positions of Chair and Deputy Chair, as well as the chair and membership positions on the committees held by the members of the Board. Compensation for each member of the Supervisory Board shall be reported in the Notes to our Consolidated Financial Statements and subdivided into appropriate categories.
Non-qualified stock options are granted to the members of the Supervisory Board in general once a year under the QIAGEN N.V. 1996 Employee, Director and Consultant Stock Option Plan, which, if approved by the shareholders, will be renamed the Amended and Restated 2005 Stock Plan. The number of options granted to members of the Supervisory Board is comparable to the number granted as standard practice by other companies within our and other comparable industries. The option exercise price is equal to the closing price on the Nasdaq National Market on the date of grant plus a mark-up of 2%. In general, options are subject to a vesting period or
to sales restrictions. Terms and conditions of the applicable vesting period and exemptions therefrom are determined by the Compensation Committee or the Supervisory Board. In addition, if the Amended and Restated 2005 Stock Plan is approved by the shareholders, periodically Supervisory Directors will be granted restricted stock or restricted stock units, the terms and conditions of which will be determined by the Compensation Committee or the Supervisory Board.
In addition to the remuneration outlined above, each Supervisory Director shall be granted annually an award with respect to 10,000 shares of the Companys common stock in the form of options, or, if the Amended and Restated 2005 Stock Plan is approved by the shareholders, options, restricted stock, restricted stock units, or a combination thereof as determined by the Compensation Committee or the Supervisory Board.
One of the best practice provisions of the Code states that a Supervisory Board member should not be granted any shares and/or rights to purchase shares by way of remuneration. It is not uncommon for internationally oriented companies to grant stock options and other equity-based compensation to members of their Supervisory Boards. For that reason, the Company wishes to continue granting to members of the Supervisory Board options to purchase common stock and other equity-based compensation as part of their remuneration.
THE SUPERVISORY BOARD AND THE MANAGING BOARD UNANIMOUSLY RECOMMEND A VOTE FOR THIS ITEM. THE ACCOMPANYING PROXY WILL BE VOTED IN FAVOR THEREOF UNLESS INSTRUCTIONS ARE OTHERWISE PROVIDED.