oerlikon

Content and method of determining the compensation and share ownership programs

In a normal year, about half of the value of remuneration received by members of the Board of Directors is paid in cash and half in the form of stock options and/or shares. The amount of remuneration for Board members is proposed by the Human Resources Committee and set by the Board of Directors.

Members of the Executive Board receive remuneration composed of a fixed base salary and a variable component generally amounting to about 30 percent of total remuneration if goals are met. The amount of the variable component is based on attainment of individual (30 percent) and financial (70 percent) goals, with the financial goals measured against the operating profit. Additionally, Executive Board members receive shares and/or options as a long-term bonus. The Board of Directors approves remuneration plans for Executive Board members at the proposal of the Human Resources Committee. The option plan for members of the Executive Board was established by the Board of Directors on December 15, 2005.

Compensation for acting members of governing bodies

The total of all compensation that was conferred by OC Oerlikon Corporation AG, Pfäffikon or one of its Group companies for the financial year 2006 and directly or indirectly benefited non-executive members of the Board of Directors, amounted to CHF 795 000. The total of all compensation that was conferred by OC Oerlikon Corporation AG, Pfäffikon or one of its Group companies for the financial year 2006 and directly or indirectly benefited executive members of the Board of Directors, amounted to CHF 4 198 332.

Compensation for former members of governing bodies

In the financial year 2006, CHF 1 228 706 was paid to former executive members of the governing bodies. No payments were made to former non-executive Board members.

Share allocations

For the financial year 2006 a total of 1 169 shares were allotted to non-executive members of the Board of Directors (and parties closely linked to such persons), and a total of 7 000 shares to executive members of the Board of Directors and members of the Executive Board .

Share ownership

As at 31 December 2006, non-executive members of the Board of Directors (and parties closely linked to such people) held, by their own declaration, no registered shares in OC Oerlikon Corporation AG, Pfäffikon. The executive members of the Board of Directors who were active on December 31, 2006 and members of the Executive Board (and parties closely linked to such people) held, according to their own declarations, a total of 13 027 registered shares in OC Oerlikon Corporation AG, Pfäffikon.

Options

As at December 31, 2006, non-executive members of the Board of Directors held no options on equity securities in OC Oerlikon Corporation AG, Pfäffikon. The executive members of the Board of Directors and the members of the Executive Board on December 31, 2006 held a total of 40 000 options, which were allocated January 1, 2006. These options are blocked until December 31, 2008 and have an exercise price of CHF 250. The exercise period runs from January 1, 2009 to December 31, 2009. Options not exercised expire if the beneficiary leaves the company. Each option grants entitlement to a single registered share in OC Oerlikon Corporation AG, Pfäffikon.

Additional fees and remunerations

The members of the Board of Directors and Executive Board and parties closely related to those individuals received no fees or other remuneration for additional services rendered to OC Oerlikon Corporation AG, Pfäffikon or its Group companies in the financial year 2006.

Loans to members of governing bodies

As at December 31, 2006, OC Oerlikon Corporation AG, Pfäffikon and its Group companies had not granted any guarantees, loans, advances or credits to members of the Board of Directors, the Executive Board or and party related to those individuals.

Highest total compensation

The highest total compensation paid to a member of the Board of Directors in the financial year 2006 was as follows:

• Compensation: CHF 1 954 982
• Shares: 5 000 shares
• Options: 40 000 options*

* The options were granted in December 2005 to take effect from January 1, 2006. These options are blocked until December 31, 2008. The exercise price is CHF 250. The exercise period runs from January 1, 2009 to December 31, 2009. Options not exercised expire if the beneficiary leaves the company. Each option grants entitlement to a single registered share in OC Oerlikon Corporation AG, Pfäffikon.