Executive Board and Supervisory Board Operating Procedures as well as Composition and Mode of Operation of Committees

AIXTRON SE is a European stock company (Societas Europaea) and is subject not only to the German stock corporation law but also to the superordinate European SE regulations and the German SE Implementation Act. The Company has a dual management and control structure consisting of an Executive Board and a Supervisory Board.

The Executive Board is responsible for managing the Company and informs the Supervisory Board regularly, comprehensively and without delay about all relevant issues involving strategy, planning, business development, the risk situation, risk management and compliance.

The Supervisory Board appoints the Executive Board members and oversees and advises the Executive Board in its management duties. To perform certain transactions and measures specified by law, in the Articles of Association of AIXTRON SE or the Executive Board’s by-laws, the Executive Board must obtain the prior approval of the Supervisory Board. The Executive Board is required to report to the Supervisory Board on the conclusion, amendment or termination of important agreements that do not require approval under the Articles of Association or the Executive Board’s by-laws. The Executive Board is also required to notify the Supervisory Board of all material events, even those that do not require the approval of the Supervisory Board.

As in previous years, the Executive Board and the Supervisory Board worked closely together throughout 2021 for the benefit of the Company. The shared objective is to secure and expand AIXTRON’s leading market positions in the long term in order to benefit from growing end markets.

No committees have been set up by AIXTRON SE’s Executive Board.

The Supervisory Board of AIXTRON SE has established four committees, an Audit Committee, a Capital Market Committee, a Nomination Committee, and a Remuneration Committee. The Supervisory Board is authorized to establish additional committees from among its members.

The Audit Committee consists of a Chairwoman and two other members. As an independent member, the Chairwoman of the Audit Committee, Prof. Dr. Anna Weber, has expertise in the areas of accounting and auditing (Section 107 para. 4, Section 100 para. 5 AktG) and special knowledge and experience in the application of internal control procedures. The members are also familiar in their entirety with the sector in which AIXTRON is represented, which is partially due to their many years of experience. The Audit Committee deals in particular with the audit of the accounting, the monitoring of the accounting process, corporate governance & compliance, the effectiveness of the internal control system, the risk management system, the internal audit system. The Audit Committee also deals with the audit of the financial statements, the assessment of the quality of the audit, and the review of the sustainability report to be prepared by the Company. Furthermore, the Audit Committee submits to the full Supervisory Board a reasoned recommendation for the appointment of the auditor. This was done in November 2021 after the audit mandate for 2022 was retendered and a comprehensive selection process was conducted. The Audit Committee monitors the necessary independence of the auditor and the additional services provided by the auditor. Finally, it deals with the issuing of the audit mandate to the auditor, the determination of auditing focal points and the fee agreement.

The committee chairwoman, Prof. Dr. Anna Weber, reports regularly to the Supervisory Board on the work of the Audit Committee.

For the purpose of evaluating, supporting and implementing projects with capital market relevance, a Capital Market Committee has existed since 2014, consisting of two members, the Chairman of the Supervisory Board and another member of the Supervisory Board.

The Nomination Committee, which consists of three members of the Supervisory Board, makes election proposals to the full Supervisory Board in the event of new appointments to executive bodies and discusses issues relating to the replacement of members of the Supervisory Board.

In addition, a Remuneration Committee has been established, consisting of the same members as the Nomination Committee. This committee deals with the application of the compensation system in accordance with the DCGK.

Further details on the work of the Executive Board, Supervisory Board and committees during fiscal year 2021 can be found in the Report of the Supervisory Board, which is part of the Annual Report and can be downloaded from the AIXTRON website. Full details of the composition of the committees can be found in the section “Supervisory Board and its composition”.

Executive Board and its composition

According to Article 8 of AIXTRON SE’s Articles of Association, the Executive Board consists of two or more people. The Supervisory Board determines the precise number of Executive Board members. It also decides whether there should be a Chairman and whether deputy members or a Deputy Chairman should be appointed.

Following the resignation of Dr. Schulte from the Executive Board of AIXTRON SE as of March 31, 2021, the Executive Board consists of three persons at the time of reporting:

The appointment of Executive Board member Dr. Bernd Schulte regularly ended at the close of March 31, 2021. Dr. Bernd Schulte retired on March 31, 2021. The Supervisory Board appointed Dr. Christian Danninger as a new member of the Executive Board in the function of Chief Financial Officer (CFO) effective May 1, 2021. The appointment was made for three years.

Furthermore, the Supervisory Board appointed Executive Board member Dr. Felix Grawert as Chairman of the Executive Board effective April 1, 2021.

Notwithstanding the Executive Board’s overall legal responsibility and the obligation of the Executive Board members to collaborate closely and in confidence with their colleagues, the assigned responsibilities of the individual members of the Executive Board are as follows in accordance with the currently valid business distribution plan as of December 15, 2021:

The Chairman of the Executive Board, Dr. Grawert, coordinates the work of the Executive Board and is also responsible for Strategic Planning, Marketing, Sales, Customer Service, and Innovation within the AIXTRON Group.

Executive Board member Dr. Danninger is responsible for the Group's Finance and Reporting, Human Resources, Investor Relations & Communications, ESG (Environment, Social and Governance), Corporate Governance, Compliance & Risk Management, and Information Security and Legal departments.

The Executive Board member Dr. Linck has Group-wide responsibility for Procurement, Product Cost Management, Manufacturing and Logistics, Quality Management, IT, Facility Management, and Research and Development.

With the approval of the Supervisory Board, the Executive Board has adopted Rules of Procedure  which are regularly reviewed for their appropriateness and topicality. Among other things, they contain a list of matters of fundamental or significant importance on which the Executive Board must formally resolve. This concerns, for example, decisions on: the Company‘s strategies, business plans and budgets; material changes to the Company and Group organization; the commencement or cessation of the Company‘s activities; the acquisition and sale of land or land rights; the conclusion, amendment and termination of corporate or significant license agreements; the award of major external consulting and research contracts; fundamental issues relating to human resources and personnel policy; determining the principles for representation in business organizations and associations; appointments to the management and supervisory bodies of subsidiaries and associated companies; important publications and information to the public outside the regular publicity; initiating lawsuits and legal disputes; providing collateral and assuming guarantees. 

The Rules of Procedure for the Executive Board and the Articles of Association each contain a catalog of significant transactions and measures that additionally require the prior approval of the Supervisory Board. The transactions and measures requiring approval under the Articles of Association or the Rules of Procedure include, for example, decisions on the establishment or sale of business premises, the acquisition or sale of land, the commencement or discontinuation of business activities or the granting or taking out of loans. 

In accordance with the Rules of Procedure, meetings of the Executive Board take place at least twice a month and when the well-being of the Company so requires. Meetings of the Executive Board are convened and chaired by the Chairman of the Executive Board. Each member of the Executive Board can arrange an additional meeting on a specific topic at any time. If the Chairman of the Executive Board is unable to attend, the meeting shall be chaired by the member of the Executive Board designated for this purpose by the Chairman of the Executive Board or by the oldest member of the Executive Board. The Executive Board constitutes a quorum if all members have been invited and more than half of its members are present at the time the resolution is adopted, whereby members of the Executive Board connected by telephone or video conference are deemed to be present. Unless otherwise provided by law, the Articles of Association or the Rules of Procedure, the Executive Board shall decide by a simple majority of the votes cast. In the case of a tie, the Chairman of the Executive Board shall cast the deciding vote.

Each member of the Executive Board will disclose conflicts of interest to the Supervisory Board without delay and inform the other members of the Executive Board accordingly. Members of the Executive Board may only take on secondary activities, in particular Supervisory Board mandates outside the company, with the approval of the Supervisory Board.

Long-term succession planning for the Executive Board and age limit for the Executive Board
 

AIXTRON is a global company operating in a very dynamic and technologically demanding market environment. Therefore, it is of strategic importance for AIXTRON to have a competent Executive Board and to appoint suitable candidates to the Executive Board. After the complete change of generation in the Executive Board, the Supervisory Board will also pursue a long-term succession planning. As part of the succession planning, the Supervisory Board and the Executive Board will also discuss suitable internal candidates to be appointed to the Executive Board. The age limit for the Executive Board is 65 years and is set out in the Executive Board's Rules of Procedure.

Supervisory Board and its composition

Pursuant to Article 11 of AIXTRON SE’s Articles of Association, the Supervisory Board consists of five members. The members of the Supervisory Board are generally appointed until the end of the Annual General Meeting in which the shareholders represented ratify the approval of the Supervisory Board’s activities for the fourth fiscal year after the term of office begins, whereby the fiscal year in which the appointment was made is not included.

The Supervisory Board elects a Chairman and a Deputy Chairman from among its members. The Supervisory Board Chairman or – if he is unable to do so – his Deputy convenes and conducts the Supervisory Board meetings.

The Supervisory Board has adopted Rules of Procedure. They govern the tasks, rights and obligations of the Supervisory Board, the organization of meetings and resolutions and the formation of committees. The Rules of Procedure of the Supervisory Board were last revised in fiscal year 2021. The Audit Committee has separate Rules of Procedure established by the Supervisory Board.

The Chairman of the Supervisory Board is generally available for discussions with investors but only to the extent that such discussions take place within a reasonable framework and the topics fall within the sole competence of the Supervisory Board. No discussions with the Chairman of the Supervisory Board were requested in the past fiscal year. Accordingly, no such discussions took place.

Currently, the composition of the Supervisory Board in accordance with the Articles of Association and as determined by the General Meeting is as follows:

Independence of Supervisory Board Members and cooperation between the Supervisory Board and the Executive Board

The Supervisory Board shall comprise what it considers to be a sufficient number of independent members (Recommendation C.6 DCGK 2020). Accordingly, the Supervisory Board has set itself the goal that more than half of its members shall be independent (recommendation C.7 DCGK 2020). AIXTRON considers Mr. Schindelhauer to be independent despite the period of time he has been a member of the Supervisory Board. During his time as Chairman of the Supervisory Board, Mr. Schindelhauer has always maintained a professional distance from the Company and the Executive Board and has always fulfilled his monitoring and advisory duties by applying an appropriate critical attitude (recommendation C.8 DCGK 2020).

As all members of the Supervisory Board, which consists exclusively of elected shareholder representatives, are therefore to be regarded as independent, this objective is also met or declared. 

The Supervisory Board includes Mr. Schindelhauer, a former member of the Executive Board, whose term of office as a member of the Executive Board, however, was more than two years ago (see also C.7 DCGK 2020). The Supervisory Board therefore complies with recommendation C.11 of the DCGK 2020 that it should not include more than two former members of the Executive Board. 

The Supervisory Board must include at least one member with expertise in the field of auditing and at least one other member with expertise in the field of accounting. These requirements are met by the two members Prof. Dr. Weber and Mr. Schindelhauer.

In the run-up to the Supervisory Board meeting in December 2021, the members of the Supervisory Board received the self-evaluation questionnaire prepared annually by the Chairman of the Supervisory Board. After evaluation of the questionnaire, the Supervisory Board determined that the Supervisory Board performs its activities effectively in accordance with recommendation D.13 of the DCGK 2020.

Further mandates of the members of the Executive Board and the Supervisory Board are listed in the notes to the consolidated financial statements in section 36 “Supervisory Board and Management Board”.

The Company did not enter into or carry out any material transactions with any related parties in the 2021 fiscal year.

The Audit Committee is chaired by Prof. Dr. Weber, an independent and expert member of the Supervisory Board in accordance with Recommendation D.4 DCGK 2020. She is not the same person as the Chairman of the Supervisory Board. In the persons of Prof. Dr. Weber and Mr. Schindelhauer, the Audit Committee includes one member with expertise in the field of auditing and one further member with expertise in the field of accounting.

Like the Audit Committee, the Supervisory Board holds four regular meetings per calendar year. Extraordinary Supervisory Board meetings as well as meetings of the Nomination Committee and the Capital Market Committee are convened as required. 

At the request of the Chairman of the Supervisory Board or the Chairmen of the Committees, the Executive Board regularly attends the ordinary meetings (generally four times a year) of the Supervisory Board or individual committee meetings, reports in writing and orally on the individual agenda items and draft resolutions and answers the questions of the individual Supervisory Board members. Between meetings, all members of the Supervisory Board receive detailed quarterly reports from the Executive Board on the situation of the Company. In addition, the Chairman of the Supervisory Board or the Chairwoman of the Audit Committee are informed by the Executive Board about important developments and upcoming important decisions in telephone calls and personal discussions. In accordance with recommendation D.7 DCGK 2020, meetings are also held regularly without participation of the Executive Board.

As a rule, resolutions of the Supervisory Board and its committees are passed at the meetings. In justified exceptional cases, Supervisory Board members may also participate in a meeting of the Supervisory Board or a committee by telephone or video conference. The Supervisory Board and its committees shall each constitute a quorum if two thirds of its members participate in the adoption of the resolution (outside of meetings by means of a vote conducted in writing, by fax, by telephone or by e-mail or by a combination of these aforementioned communication media, provided that no member of the Supervisory Board objects to this procedure). Resolutions require a simple majority of the votes cast. In the event of a tie, the chairman of the meeting has the casting vote. 

Each member of the Supervisory Board shall disclose to the Supervisory Board any conflicts of interest, in particular those that may arise as a result of a consultancy or directorship function with customers, suppliers, lenders or other third parties. Material and not only temporary conflicts of interest in the person of a member of the Supervisory Board result in that person having to resign from office.

Self-evaluation of the Supervisory Board

In fiscal year 2021, the Supervisory Board conducted an internal self-evaluation based on a questionnaire, taking into account AIXTRON-specific topics. The results were discussed by the Supervisory Board and confirmed that the cooperation both within the Supervisory Board and with the Executive Board was characterized by a high degree of trust and openness and was always professional and constructive. The Supervisory Board and its committees were also considered to be adequately informed and effective in their work. Hence there is no fundamental need for change.