Performance Share Plan (PSP)

Infineon Technologies AG

www.infineon.com
 This brochure consists of two elements: the first part
summarizes the key terms of the Performance Share Plan
(PSP) and has been designed to give better guidance and
a general understanding of the plan. The second part
describes the detailed plan rules of the PSP outlining
the legal terms and conditions of any equity award. The
terms and conditions of the PSP may be amended from
time to time. In any case of discrepancy or doubt, the
plan rules in its current version (as published on the
Infineon intranet at goto.infineon.com/PSP) will take
precedence.

2
Content

Plan description 5
Introduction 5
Performance Share Plan (PSP) – at a glance 7
Performance Share Plan (PSP) – step by step 8
1 Annual grant 8
2 Self-investment 9
3 Waiting period 11
4 Performance hurdle 12
5 Settlement 13
Glossary of terms 14
Further questions? 14

Plan rules 15
Mission of the plan 16
Terms & conditions 16
§1 Definition of performance shares 17
§2 Duration of the plan 17
§3 Eligibility group 17
§4 Grant of performance shares 18
§5 Self-investment 19
§6 Waiting period 22
§7 Performance hurdle 22
§8 Settlement of performance shares 23
§9 Termination of employment 24
§10 Change of control 25
§11 Tax treatment 26
§12 Insider trading 26
§13 Personal hedging 26
Administrative details 28

3
 “Our main goal as leaders is to ensure the success of the
company today and in the future. With the PSP we participate
in this success as our achievements materialize in the
long-term development of our share price.”

Reinhard Ploss, CEO

“Representing our joint commitment to the lasting success of

our company, the PSP is an important element in our efforts to
attract, retain and motivate our leadership teams in all regions.”

Helmut Gassel , CMO

“The PSP is a competitive standard for long-term

compensation. It offers an excellent opportunity to
benefit from sustainable management decisions.”

Jochen Hanebeck , COO

“Our shareholders expect us to increase the value of our

company. The PSP contributes to aligning the interests of our
leaders with those of our investors and the entire company.”

Sven Schneider, CFO

4
Introduction
Dear Colleagues,

As leaders you have a strong influence on the success of the The PSP principles apply to all top management and the
company today and in the future. With the Performance management board. It contributes to aligning the interests
Share Plan (PSP) you can benefit from your achievements of our leaders with those of our investors and the entire
as they materialize in the long-term development of the company. In a true equity culture, top managers are critical
Infineon share price. investors and decision-makers at the same time – striving
for sustainable, profitable growth.
This offer underlines our commitment to attracting and
motivating key employees. To this effect, the compensation This brochure describes what the PSP means in detail and
package for our top management consists of three the terms and conditions that apply. With our joint
elements: the fixed income is a strong foundation, the commitment to the success of our company, all of us will
annual success bonus is a short-term incentive, and the PSP ultimately gain from our efforts. Thank you for your
rewards the long-term effects of our management decisions continuing support on our high performance journey.
and is intended to retain our key employees.

With the PSP we want to create a vital equity culture at top

management level. Every participant is required to make a
personal investment in Infineon shares. While limiting the
risks, the PSP offers excellent opportunities for benefiting
from sustainable management decisions. With the PSP we
provide a worldwide and competitive standard for
long-term compensation.

Reinhard Ploss Helmut Gassel Jochen Hanebeck Sven Schneider

5
6
Performance Share Plan (PSP)
– at a glance –

Performance shares represent an entitlement to Infineon

shares granted to an employee and subject to a waiting
period of four years. Their transformation into Infineon
shares after the waiting period depends – in part – on a
performance target.

1 Annual Grant
Employee receives and accepts an entitlement to a
number of performance shares via the annual grant.

2 Self-Investment
Employee agrees to hold a certain number of Infineon
shares during the waiting period in a private custody
account.

3 Waiting Period
All granted performance shares are subject to a waiting
period of four years.

4 Performance Hurdle
50% of the granted performance shares must meet a
performance target measured at the end of the waiting
period.

5 Settlement
Upon settlement Infineon will create or procure the
necessary amount of Infineon shares and transfer these
shares to our provider’s omnibus custody account at the
disposal of the plan participant.
The final value of the settlement will depend on the
share price development since grant and on the perfor-
mance hurdle.

7
 Performance Share Plan (PSP)
– step by step –
1 Annual grant
Employee receives and accepts an entitlement to a number of performance shares via the annual grant.

Allocated amount
20,000€
(in €)

÷
Average IFX
20.30€
share price

= Calculated number
of shares
985.22

Number of 984
› performance shares
granted
(rounded down to
nearest even number)

There is a pre-defined allocation amount for each job level (calculated as an average over a period of the nine months
(GG/TL). The number of performance shares actually prior to the grant date). The employee must accept the
granted once per year on March 01 is derived by dividing grant and declare consent with the plan rules to become a
this allocation amount by the Infineon share price plan participant.

8
2 Self-investment
Employee agrees to hold a certain number of Infineon shares during the waiting period in a private custody account.

Number of
performance 984
shares granted

÷
Self-investment
10%
percentage

= Calculated number
of shares
98.4

98
› Number of
self-investment shares
(rounded down to
nearest whole number)

Each employee, who participates in the Performance Share previously acquired shares as self-investment shares.
Plan has to commit to a certain self-investment. This will be Infineon will conduct yearly checks and will impose conse-
a fixed percentage of the granted performance shares (GG/ quences resulting from a violation against the self-invest-
TL16 = 10%, GG/TL17+ = 15%). The self-investment can be ment requirements (i.e. forfeiture of the Performance
fulfilled by either buying Infineon shares or using Share grant).

9
10
3 Waiting period
All granted performance shares are subject to a waiting period of four years.

Grant Settlement

4-year waiting period

Grant Settlement

4-year waiting period

Grant Settlement

4-year waiting period

01.03.2018 01.03.2019 01.03.2020 28.02.2022 28.02.2023 29.02.2024

After a waiting period of four years, which ends on the During the waiting period all granted performance shares
last day of February, the previously granted performance are non-tradable, non-transferable and not connected with
shares will be settled and a certain number of Infineon any shareholder rights such as dividend entitlements or
shares will be transferred to our provider’s omnibus custo- subscription or voting rights.
dy account at the disposal of the plan participant.

11
 4 Performance hurdle
50% of the granted performance shares must meet a performance target measured at the end of the waiting period.

Example 1
Initial Values End Value
IFX: 20.30€ IFX: 23.35€ = +15%
SOX: 1,026pts 150% SOX: 1,139pts = +11%
140%
130% IFX has outperformed SOX
Hurdle met
120%
110%
100%
SOX
90%
IFX
80%

4-Year Waiting Period

9 Months 9 Months

Example 2
Initial Values End Value
IFX: 20.30€ IFX: 23.35€ = +15%
SOX: 1,026pts 150% SOX: 1,262pts = +23%
140%
130% SOX has outperformed IFX
Hurdle not met
120%
110%
100%
SOX
90%
IFX
80%

4-Year Waiting Period

9 Months 9 Months

The Infineon share price development during the waiting taking into account the previous nine months each.
period must have exceeded the performance of the The measurement of the performance hurdle will be done
comparative “Philadelphia Semiconductor Index” (SOX). only once on the last day of February four years after the
Initial and end values are calculated as average figures grant date.

12
5 Settlement
Upon settlement Infineon will create or procure the necessary amount of Infineon shares and transfer these shares to
our provider’s omnibus custody account at the disposal of the plan participant. The final value of the settlement will
depend on the share price development since grant and on the performance hurdle.

Example 1
Total value at grant 20,000€, performance hurdle met, IFX at grant 20.30€, share price development ±25%

Scenario 1 Value before tax

492
IFX +25% 25.38€ 24,974€
shares
984 Custody
shares account
492
IFX -25% 15.23€ 14,986€
shares
Scenario 2

Example 2
Total value at grant 20,000€, performance hurdle not met, IFX at grant 20.30€, share price development ±25%

Scenario 1 Value before tax

492
IFX +25% 25.38€ 12,487€
shares
984 Custody
shares account
1,594
IFX -25% 15.23€ 7,493€
shares
Scenario 2

The banking provider will withhold from the final amount the transaction process. Infineon reserves the right to settle
of transferrable Infineon shares a certain number of shares the performance share grant by a cash payment, in each
and instantly sell them at the current going market price in case reflecting the market price of the respective Infineon
order to cover any applicable income and social taxes as shares.
well as any applicable administration fees resulting from

13
 Glossary of terms

Term Definition

LTI Long Term Incentive (LTI) is that portion of the top management reward package
(besides the fixed and the variable compensation) that is directed at long-term
success sharing.

Performance share A performance share is a grant of Infineon share units in which the recipient’s
rights in the share are contingent on a waiting period of four years and – in part –
the achievement of a pre-established performance hurdle.

Waiting period Waiting period is a period of four years in which the granted performance shares
cannot be traded nor transferred. They do not allow any shareholder rights
either.

Performance hurdle Performance hurdle is a performance target that applies to 50% of the granted
performance shares. The hurdle is met if the Infineon share performance over
the waiting period exceeds the performance development of the SOX index.

SOX index The SOX is a Philadelphia Stock Exchange index composed of companies
primarily involved in the design, distribution, manufacture, and sale of
semiconductors – in other words: Infineon’s biggest competitors.

Settlement Settlement takes place right after the waiting period when – depending on the
results of the performance hurdle measurement – the performance shares are
transformed into Infineon shares and transferred to our providers’s omnibus
custody account at the disposal of the plan participant.

Further questions?

Human resources is committed to supporting the plan

participant in the most effective way. If you have any further
questions on the Performance Share Plan (PSP), please refer
to the Infineon Intranet or send us an e-mail.

[email protected] http://goto.infineon.com/PSP

14
Plan rules
Performance Share Plan (PSP)

15
 Mission of the plan Terms & conditions
Infineon (i.e. Infineon Technologies AG together with the These plan rules define the general terms and conditions
Infineon Group companies (= companies in which Infineon according to which performance shares can be granted and
Technologies AG holds more than 50% of the voting rights) will eventually be settled.
is committed to attracting and rewarding key employees.
The compensation package consists of three major
elements: the fixed income is a strong foundation, the
annual success bonus is a short-term incentive, and the PSP
rewards the long-term effects of our management decisions
and is intended to retain our key employees.

Infineon has chosen performance shares as the preferred

Long Term Incentive (LTI) vehicle (see §1 Definition of
Performance Shares). Additionally, Infineon requires every
plan participant to carry out a self-investment to promote
equity culture at Infineon (see §5 Self-Investment).

The PSP widely replicates the LTI principles of the

management board compensation also for Infineon’s top
management executives thereby underlining the impor-
tance of a uniform compensation strategy.

With the PSP Infineon ensures that

› top management executives and other selected key
personnel receive market competitive long-term
incentives and reward,
› plan participants can participate in the long-term
success of Infineon and hence increase their commitment
to actively drive profitable growth,
› both top management employees and key personnel
have a strong incentive to uphold their employment with
Infineon,
› by means of the required self-investment the entrepre-
neurial spirit among the plan participants is fostered and
the necessary link between the executive’s own perfor-
mance and shareholder value is created, and
› with a 4-year waiting period (see §6 Waiting period) and
an additional performance target for 50% of the granted
performance shares (see §7 Performance hurdle) the
long-term compensation vehicle shall also gain broad
acceptance among Infineon’s shareholders.

16
§1 Definition of performance
shares §2 Duration of the plan
A performance share represents an entitlement to an The PSP is an unlimited plan with no expiry date.
Infineon share and is granted to the plan participant at the All terms and conditions shall apply unless the PSP
grant date. The number of performance shares granted is changed, suspended, terminated, or replaced by a
will be derived from an allocation amount in EUR and an new plan (see Administrative details/plan authority).
average Infineon share price prior to the grant date (see §4
Grant of performance shares).

This grant is preliminary as it depends on certain §3 Eligibility group

conditions:
Generally, eligible to participate in the PSP are
During a 4-year period, the so-called waiting period (see §6
Waiting period), all granted entitlements are nontradable, › top management executives of Infineon with a Global
non-transferrable and not connected with any shareholder Grade 16 or higher,
rights such as dividend entitlements or subscription or › incumbents of equivalent positions on the technical
voting rights. ladder, and
› selected other key personnel of Infineon.
After the expiration of the waiting period, 50% of the
granted performance shares pass into final ownership of Regardless of the general eligibility the actual nomination
the plan participant without any further conditions – of an individual for a grant of performance shares shall be
the other 50% of the granted performance shares pass into made by decision of the management board.
final ownership only if a performance target is met (see §7
Performance hurdle). The grant of performance shares to an individual is at the
sole and absolute discretion of the management board. It
As a result, all performance shares being subject to the has neither factual nor legal binding effect on any
waiting period only and those additionally meeting the entitlement to possible future grants.
required performance hurdle will be settled, i.e. Infineon
shares will eventually be transferred to our provider’s omni-
bus custody account at the disposal of the plan participant.
Performance shares may also be cashed-out under certain
circumstances (see §8 Settlement of performance shares).

17
 §4 Grant of performance shares
Only one grant can be made during a fiscal year. The date The grant is preliminary, i.e. the performance shares are
on which the plan participant is granted performance subject to a time restriction (see §6 Waiting period) and –
shares shall be March 01 (grant date). applicable to 50% of the performance shares – to a perfor-
mance target (see §7 Performance hurdle). Furthermore,
The number of performance shares granted is derived from the performance shares may forfeit entirely or on a pro-rata
an individual allocation amount in EUR. This amount is basis upon termination of employment with Infineon (see
divided by the arithmetic mean of the daily closing Infineon §9 Termination of employment with Infineon).
share price on the XETRA trading system on the Frankfurt
Stock Exchange (or a comparable successor system) over a Only after the expiration of the waiting period and, if appli-
period of nine months prior to the grant date. cable, the measurement of the performance hurdle will the
The calculation result is rounded down to the nearest even grant of performance shares become final (see §8 Settle-
number and represents the number of performance shares ment of performance shares).
granted.

Example
Individual allocation amount in EUR 20,000 EUR
Average IFX share price prior to grant date 20.30 EUR
985,22 
Calculation result rounded down
to 984
Number of performance shares granted 984

The plan participant must declare his/her consent with

the grant (as further stated on the grant certificate), these
plan rules and the self-investment requirements (see §5
Selfinvestment) in writing no later than two months after
the grant date. Infineon reserves the right to set up an elec­
tronic acceptance process. Consent after the final deadline
will be rejected by Infineon. Without the plan participant
having declared his/her consent properly the grant of
performance shares will forfeit.

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§5 Self-investment
Purpose of self-investment Example
Number of performance shares granted 984
Infineon requires a personal investment of every plan Self-investment percentage 10%
par­ticipant in Infineon shares (self-investment shares) as a 98.4 
Calculation result rounded down
key prerequisite for plan participation. The self-investment to 98
shall Number of self-investment shares 98
› promote an entrepreneurial behavior among plan partici-
pants (act as owner rather than as employee),
› increase the identification of plan participants with The required number of self-investment shares will be
Infineon, and stated in the individual grant certificate that each plan
› support long-term thinking and acting in a sustainable participant receives upon the annual grant.
way among plan participants.
In order to comply with the self-investment regulations, the
Eventually participation in the PSP in general, and the plan participant may either purchase new Infineon shares
self-investment feature in particular, shall generally lead or use previously acquired Infineon shares (e.g. by way of
to a higher appreciation of Infineon stock ownership and purchase, inheritance, earlier stock option and PSP settle-
promote a stock ownership culture at Infineon among top ments) as self-investment shares.
management executives and key personnel.
Self-investment shares must be held and owned by the
plan participant himself/herself and must be kept in one
Definition, volume and terms of self-investment (or several) private custody account(s). These accounts may
be jointly owned by the plan participant and other closely
The plan participant agrees to hold a certain number of related persons (e.g. legal spouse, civil partner). Shares
selfinvestment shares per each grant under the PSP. exclusively held or owned by other persons, how­ever, will
not be accepted as self-investment shares.
Generally, the required number of self-investment shares
to be held depends on the number of performance shares Self-investment shares must be shares resulting from a
granted per each annual grant. The following self-invest- direct acquisition or investment. Infineon shares existing as
ment percentages shall apply for the different Global Grade part of a stock fund (e.g. DAX fund) will not be accepted as
(GG)/Technical Ladder (TL) levels: self-investment shares.
› GG/TL 17–20: 15%
› GG/TL 16 and below: 10% By accepting the annual grant, the plan participant agrees
to hold the necessary number of self-investment shares
The required number of self-investment shares to be held starting at the latest after the end of a period of six months
in connection with each annual grant is calculated by following the grant date and until the end of the full 4-year
multiplying the number of performance shares granted by waiting period for which they serve as self-investment.
the respective self-investment percentage. The result is
rounded down to the nearest whole number.

19
 Should the plan participant be unable to fulfill the self- Proof of self-investment
investment requirement within the first six months follow-
ing the grant date due to mandatory legal requirements Self-investment is a key prerequisite for ongoing PSP
(e.g. statutory or Infineon internal insider trading rules), he/ participation. Therefore, the plan participant is obliged to
she must request an extension of the 6-months purchas- present, without further notice, a meaningful proof of the
ing period with the Human Resources department. The required self-investment for all grants currently held by
management board will decide about such extension on him/her immediately after the transaction (e.g. by a copy of
a case-by-case basis. Should the plan participant be un- custody account statement(s) showing the requested
able to fulfill the self-investment requirement at all due to number of self-investment shares on his/her account(s)) at
mandatory legal (e.g. prohibition of private share holdings his/her cost to Infineon‘s Human Resources department.
in his/her country of residence) or insurmountable practical
difficulties (e.g. restrictions for the opening of a securities
account for non-residents) or should Infineon consider the Consequences of self-investment
self-investment requirement to be inappropriate, the man- violation
agement board will decide upon the exceptional waiving of
the self-investment requirements on a case-by-case basis. By accepting the annual grant, the plan participant agrees
to the prerequisite of making, and providing a proof of, a
Self-investment shares are not subject to any performance self-investment as laid down in these plan rules and to the
hurdle and serve no other purpose than to support the consequences resulting from any violation. Should the plan
self-investment requirement for the specific grant of perfor- participant fail to prove the required number of self-invest-
mance shares. Accordingly, self-investment shares keep on ment shares to Infineon’s satisfaction in due time, all grants
guaranteeing their regular shareholder rights like dividend, for which the ownership of self-investment shares is not
subscription and voting rights. sufficient will forfeit in their entirety with immediate and
permanent effect (starting retrospectively with the most
As soon as the waiting period for a grant ends or a grant recent grant(s) for which the self-investment cannot be
forfeits for other reasons completely or according the proven). There will be no compensation in any form for the
pro-rata rule partialy (see §9 Termination of employment grants forfeited as a result from the violation. Furthermore
with Infineon), the self-investment requirement of the the management board may decide to exclude participants
respective grant will be released or reduced and the shares from participation in the next following grant.
can immediately be disposed of freely, e.g. be sold or used
as self-investment for any other PSP grant requiring a
self-investment.

20
Example 1 Grant 1 Grant 2 Grant 3

Performance shares allocated 1.000 1.200 800

10% self-investment required 100 120 80 300

Actual total self-investment held by plan participant 100 120 50 270

 Forfeiture of Grant 3

Example 2 Grant 1 Grant 2 Grant 3

Performance shares allocated 1.000 1.200 800

10% self-investment required 100 120 80 300

Actual total self-investment held by plan participant 100 100 0 200

 Forfeiture of grant 2 and 3

Compliance, cost and tax liability for

self-investment

All mandatory legal requirements upon stock purchase and Infineon will not assume any tax liability for the self-
holding (e.g. statutory and Infineon internal insider trading investment. All taxes resulting from the self-investment
rules) must be observed by the plan participant in connec- (incl. fees for tax consulting, if applicable) must be borne
tion with the acquisition and holding of the self-investment by the plan participant. Infineon recommends consulting
shares. Any violation of such mandatory legal requirements a profess­ional tax advisor for any tax related questions
is at the own risk of the plan participant (see §12 Insider arising from the self-investment.
trading).
The self-investment is solely at the economic risk of the
The cost of self-investment (incl. fees and commissions for plan participant. Infineon cannot be held liable for any loss
one-time stock purchases and ongoing custody account resulting therefrom.
management) are to be borne by the plan participant.

21
 §6 Waiting period
Performance shares granted under the PSP are subject to a Step 1
waiting period of four years following the grant date. Only The basis for the initial value for the comparison is
after the waiting period will they be settled and Infineon › the arithmetic mean of the daily closing Infineon share
shares be transferred to the plan participant (see §7 Perfor- price on the XETRA trading system on the Frankfurt Stock
mance Hurdle and §8 Settlement of performance shares). Exchange (or a comparable successor system) over a
The waiting period ends on the last day of February four period of nine months prior to the grant date and
years after the grant date. › the arithmetic mean of the daily closing SOX index value
over a period of nine months prior to the grant date.
During the waiting period all granted performance share For the purpose of comparison the respective performance
entitlements are non-tradable, non-transferrable and not rates are quoted in percent and both normed at 100% at
connected with any shareholder rights such as dividend the grant date.
entitlements or subscription or voting rights.
Step 2
The basis for the end value for the comparison is
› the arithmetic mean of the daily closing Infineon share
§7 Performance hurdle price on the XETRA trading system on the Frankfurt Stock
Exchange (or a comparable successor system) over a
Besides the 4-year waiting period the LTI regulations for period of nine months prior to the last day of February
the management board include a demanding performance four years after the grant date and
target to foster long-term success and sustainable growth. › the arithmetic mean of the daily closing SOX index value
As it is Infineon’s overall compensation strategy to achieve over a period of nine months prior to the last day of
a widely uniform long-term incentive structure across man- February four years after the grant date.
agement board and top management, the same perfor- The performance hurdle is met if the percentaged end value
mance target has also been adopted for the PSP. of the Infineon stock is higher than the respective percent-
aged end value of the SOX index.
Therefore, in addition to the 4-year waiting period, 50% of
the performance shares granted under the PSP are sub- The measurement of the required outperformance will
ject to a performance hurdle – this is also true for 50% of be done only once on the last day of February four years
the performance shares reduced on a pro-rata basis due after the grant date. Depending on the result of this mea-
to a termination (see §9 Termination of employment with surement, the 50% of the performance shares subject to
Infineon). the performance hurdle will either be settled and Infineon
shares will be transferred to the plan participant or the
The Infineon share price development during the waiting performance shares will forfeit irrevocably.
period must have exceeded the performance of the com-
parative “Philadelphia Semiconductor Index” (SOX). The The remaining 50% of the performance shares are just
measurement will be done in two steps: subject to a time restriction, i.e. the lapse of the 4-year wait-
ing period. They will be settled and Infineon shares will be
transferred to the plan participant after the waiting period
has lapsed.

22
§8 Settlement of performance
shares
After the end of the waiting period, the granted perfor- In any case, the banking provider will withhold from the
mance shares are partially or fully settled, i.e. Infineon final amount of transferrable Infineon shares a certain
shares will be transferred to the plan participant – depend- number of shares and instantly sell them at the current
ing on whether the performance hurdle was met or not (see going market price in order to cover any applicable income
§7 Performance hurdle). Infineon will either create new and social taxes as well as any applicable administration
shares, buy existing Infineon shares from the market or use fees resulting from the transaction process (see §11 Tax
Infineon shares acquired earlier and transfer them to our Treatment). The amount of Infineon shares to be sold will
provider’s omnibus custody account; it is expected that be based on a hypothetical tax rate applied. Any difference
settlement per annum requires a number of shares in an to the actual individual tax liability will be corrected in a
aggregate amount not exceeding 1% of the share capital. separate subsequent payroll run.
The actual time required for the share creation or the pur-
chase process as well as for the transfer of the shares to the For the time being, Infineon has selected EQUATEX AG as a
provider’s omnibus custody account on the disposal of the banking service provider to support plan participants in all
plan participant may vary and usually takes a processing administrative matters of the PSP.
time of up to one month. Infineon shall not be held liable
for any delay in the settlement process or for share price
fluctuations in between the end of the waiting period and
the day that the transferred Infineon shares are actually
accessible to the plan participant.

Whereas performance shares do not confer any share­holder

rights, each Infineon share transferred to the plan
participant in the settlement process carries such rights,
in particular voting, dividend and subscription rights.

Infineon reserves the right to settle the performance share

grant, or parts of such grant, by any form of cash payment
reflecting the market price of the respective Infineon shares.
Any payout under such cash settlement shall therefore be
made within one month after the settlement, in each case
based upon the Infineon closing share price (XETRA) and, if
applicable, the exchange rate (source: Euro foreign ex-
changes reference rates published by the European Central
Bank) on the last trading day of the waiting period.

23
 §9 Termination of employment
In the events of However, the number of performance shares received
› voluntary leave or under each grant shall be reduced based on time spent
› termination of employment for cause by Infineon with Infineon, i.e. for each full month (starting from the
becoming effective during the waiting period the perfor- respective grant date month until the last full month before
mance shares of the person concerned will forfeit with the end of his/her employment with Infineon) the plan
effect from that date. participant shall keep 1/48, rounded down to the nearest
even number, of the performance shares received under
In the event of death of the plan participant during the the respective grant; the reduction shall cover perfor-
waiting period the performance shares will forfeit with mance shares with and without a performance hurdle in
effect from the day of death and there will be a cash pay- equal parts. The number of self-investment shares for the
ment for the benefit of the statutory or testamentary heirs. respective grant will also be re-calculated on basis of the
The cash payment will be calculated based on the respec- pro-rated performance shares and according to the respec-
tive grants’ original EUR allocation amounts (as stated on tive percentages for the different Global Grades (see §5
the grant certificates). For each applicable PSP grant the Self-investment). Should the plan participant pass away
allocation amount shall be pro-rated on a monthly basis prior to the settlement of the performance shares, the
(starting from the grant date month until the last full month above paragraph concerning the event of death of the plan
before the death of the plan participant). The resulting participant shall apply.
gross cash amount shall be paid subject to statutory
deductions in best time. In any case of forfeiture of performance shares, there will
be no reimbursement by Infineon for losses resulting from
In the events of the self-investment.
› termination of employment by Infineon
(except for cause),
› restructuring or similar processes resulting in a termi­
nation of the employment relationship with Infineon (e.g.
divestiture, sale of organizational unit, transformation),
› long-term disability,
› expiry of a temporary employment contract,
› retirement, or
› early retirement,
during the waiting period the performance shares shall not
forfeit but be settled according to the general rules, partic-
ularly considering the waiting period and the performance
hurdle.

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§10 Change of control
For all the outstanding performance shares– whether they › all or all key assets of Infineon Technologies AG are
are provided with a performance hurdle or not – the waiting introduced directly or indirectly into a joint venture with
period as per § 6 shall end at the point in time of a change a third party or several third parties, and, after the intro­
of control (“new due date”). duction a third party individually or jointly with others
holds at least 30% of the voting rights in the joint venture.
The performance hurdle as per § 7 remains valid.
A change of control thus also occurs if, after its completion,
The following method of calculation will apply, however, in another than one of the aforementioned processes should
order to define if the performance hurdle has been met in lead to a third party individually or jointly with others hold-
the event of a change of control: (i) The target achievement ing at least 30% of voting rights in Infineon Technologies AG
shall not be based on the end of the 4-year waiting period, or in the Company that continues Infineon Technologies AG
but on the new due date instead; (ii) on the new due date, either wholly or in substantial parts.
the arithmetic 9-month averages of the Infineon share and
of the SOX index before the end of the waiting period shall Purely intra-group change of control processes are not
not be used, but instead the share and index values on the considered.
new due date (Infineon share = XETRA closing price; SOX =
Closing index level). Crucial for the occurrence of the new due date in all the
aforementioned cases is the first-time externally docu­
If on the new due date the performance hurdle is met as per mented entry into force of the change of control, in the
the method of calculation described above, the owner of form of a capital market law notification (e.g., as per the
the performance shares shall be entitled to a transfer of a WpHG or, in the case of a compulsory or takeover bid, as
corresponding number of Infineon shares upon the expiry per the WpÜG \[German Securities and Takeover Act]) or a
of the new due date as per § 8. constitutive registration in the commercial register (e.g., in
the case of a reorganisation pursuant to the UmwG).
After the new due date, the plan participant shall be free
to dispose of the Infineon shares purchased as self-invest- Affected by the provisions of this § 10 are all plan partici-
ment for participation in a PSP instalment despite any still pants, who at the time of the change of control are in an
open waiting periods. employment relationship with Infineon, with the exception
of the Members of the Management Board of Infineon.
A change of control occurs when
› someone individually or jointly with others, directly or If, after the entry of a change of control, it should prove to
indirectly acquires at least 30% of voting rights in Infineon be legally or factually impossible to fulfill the entitlement
Technologies AG, or of the plan participants by transferring a corresponding
› Infineon Technologies AG as per §§ 2 ff. UmwG (German number of Infineon shares, Infineon shall make a decision,
Reorganization Act) is merged into a new legal entity or well in advance, on the implementation of an economically
another entity is merged with Infineon Technologies AG equivalent (e.g., cash) compensation. For any cash com-
and in both cases after completion of the merger, a third pensation the principles laid out in the 3rd paragraph of § 8
party either individually or jointly with others, directly (Settlement of performance shares) shall apply.
or indirectly holds at least 30% of the voting rights in the
acquiring legal entity or Infineon Technologies AG, or

25
 §11 Tax treatment §13 Personal hedging
All taxes, employee social security contributions or similar Should a plan participant use personal hedging strategies
obligations resulting from the settlement of the perfor- or compensation- and liability-related insurance to under-
mance shares or from the disposal of the Infineon shares mine the risk alignment embedded in the grant of perfor-
transferred to the plan participant in the settlement mance shares and/or the self-investment requirements, the
process as well as from the purchase or disposal of the management board may decide upon the immediate and
self-investment shares must be borne by the plan partici- permanent forfeiture of all grants targeted by the respec-
pant. The individual tax treatment might differ considerably tive hedging or insurance. There will be no compensation
due to personal circumstances or changes in applicable for the performance shares forfeited or any losses resulting
tax rules. from the self-investment.

Infineon therefore recommends that plan participants

consult their tax advisor about the individual tax treatment
prior to accepting the grant.

§12 Insider trading

With regard to the disposal of the Infineon shares trans-
ferred to the plan participant in the settlement process
as well as the acquisition and disposal of self-investment
shares, plan participants acknowledge that they may be
subject to statutory insider trading provisions as defined in
the German Securities Trading Act or other local laws,
specifically in their home countries or current countries
of residence other than Germany. Plan participants are
obliged to observe applicable insider trading provisions
and may subject themselves to punishment in case of
violation. In addition, Infineon’s internal insider trading
provisions shall apply at all times.

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 Administrative details

Prospectus obligations Plan authority

The PSP does not trigger any prospectus obligations. At The management board of Infineon Technologies AG is
least, exemptions to possible prospectus obligations in the authorized to create, alter and amend the rules of the PSP,
relevant securities laws do apply (e.g. § 4 (1) no. 5 and (2) including the administration processes and other techni­
no. 6 of the German Securities Prospectus Act [WpPG ]). calities regarding the settlement of the performance shares.
Such amendments to the terms and conditions of the plan
are possible at any time.
Data transfer and protection

For the purpose of the administration of the PSP, Infineon

may store, process, transfer and use personal data of plan
participants, also involving third parties employed to ad-
minister or to assist with the administration and implemen-
tation of the PSP (e.g. the banking service provider).
All service providers are carefully selected and must comply
with “state of the art” data protection standards and
technology.

More information
More explanatory information about the PSP can be found
on the Infineon intranet. General information on Infineon is
available under http://www.infineon.com

[email protected] http://goto.infineon.com/PSP

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Infineon Technologies AG Published by
Infineon Technologies AG

© 2019 Infineon Technologies AG.

81726 Munich All rights reserved.

Germany
Document number: B179-I0096-V6-7600-EU-EC
Date: 02 / 2020 www.infineon.com