The Board of Directors of the Singapore Exchange (SGX) is pleased to announce a second renewal of the service contract of its Chief Executive Officer (CEO), Mr Hsieh Fu Hua, whose current term of service expires on 31 December 2007. The new contract extends the CEO's term of service to 30 September 2009.
Mr Hsieh joined SGX on 1 March 2003. His initial contract of service was for three years, and was replaced with a new contract on 28 February 2005.
The Board takes this opportunity to thank Mr Hsieh, and his team, for the sound performance of SGX in the past four years. The management team has built up a strong and credible organisation, boosted the financial sector, enhanced the regulatory framework of our marketplace, and delivered solid returns.
The board will continue to support the management team in meeting the demands of the marketplace, extending SGX's reach across Asia and the world, strengthening the organisation, and satisfying shareholders.
Appendix
PRINCIPAL PARAMETERS OF MR HSIEH FU HUA'S CONTRACT
| 1. TERM | - Expires on 30 September 2009
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| 2. COMPENSATION | - Guaranteed base salary of S$750,000 per year
- Short-term incentive: Variable bonus as decided by the Board based on company and individual performance against set targets
- Long-term incentive: The Performance Share Plan (PSP) is a share-based incentive plan. This award is contingent on individual performance as well as SGX's performance over a 3-year period. The final award will be based on the pre-determined achievement levels of Return on Equity and Total Shareholder Return
Performance shares granted to-date:
(i) Award date: 30 June 2006§ Performance period: 1 July 2005 – 30 June 2007
§ Vesting date: 30 June 2007 (50%), 30 June 2008 (50%)
§ Base allocation: 440,000 shares
§ The shares awarded on the vesting date could range from zero to 150% of the base allocation, depending on the level of achievement against the performance conditions
(ii) Award date: 1 November 2006§ Performance period: 1 July 2006 – 30 June 2009
§ Vesting date: 2 November 2009
§ Base allocation: 415,000 shares
§ The shares awarded on the vesting date could range from zero to 150% of the base allocation, depending on the level of achievement against the performance conditions
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| 3. TERMINATION | - Termination by SGX before expiry date without cause
§ Mr Hsieh will be paid his remaining annual base salary pro-rated to the expiry date of the contract
§ All share options (under the terminated ESOP) shall continue to vest and be exercisable until the 7th anniversary of their grant
§ If termination is before the end of the relevant performance period in respect of a PSP grant, the base allocation shall vest on the termination date
If termination is on or after the end of the relevant performance period in respect of a PSP grant, the final award shall vest on the termination date
- Termination by CEO before expiry date
§ Mr Hsieh to pay SGX his remaining annual base salary pro-rated up to the expiry date
§ All unexercised share options will lapse
§ All unvested shares under a PSP grant will lapse
§ However, in the event of adverse change in personal circumstances, Mr Hsieh may terminate employment at any time with agreement of the Board and any compensation to SGX will be by mutual consent - Termination by SGX before expiry date for cause
§ No compensation is payable to Mr Hsieh if he:§ Commits a serious or persistent breach of his contract
§ Becomes guilty of grave misconduct or wilful negligence in discharge of his duties
§ Becomes bankrupt or makes any arrangement or composition with his creditors
§ Is or becomes prohibited by law or regulatory bodies from being a director of SGX
§ The vesting and amount of shares to be awarded under the PSP, and whether share options can be exercised after termination, will be subject to the discretion of the Remuneration Committee
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4. CHANGE OF
CONTROL | - In the event of a change of control of SGX or business, resulting in Mr Hsieh ceasing to hold the position and title of CEO, Mr Hsieh may terminate his employment, and be treated as follows:
§ Compensation for loss of office will be determined by the Remuneration Committee, and be subject to shareholders' approval
§ Share options granted previously will continue to vest and be exercisable until the 7th anniversary of their grant
§ If termination is before the end of the relevant performance period in respect of a PSP grant, the base allocation shall vest on the termination date
§ If termination is on or after the end of the relevant performance period in respect of a PSP grant, the final award shall vest on the termination date
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