1032-00003 · Client 1032 · Corporate Governance & Listing

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AUDIT COMMITTEE CHARTER

HALCYON SEMICONDUCTOR AKTIENGESELLSCHAFT

Adopted by the Supervisory Board (Aufsichtsrat) in connection with the listing of American Depositary Shares on the Nasdaq Global Select Market

Draft — Prepared by Calderwood & Harkness LLP

Matter No. 1032-00003

To be effective upon the listing of American Depositary Shares ("ADSs") representing ordinary shares (Stammaktien) of Halcyon Semiconductor Aktiengesellschaft (anticipated Nasdaq ticker: HCYN) on the Nasdaq Global Select Market

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I. PURPOSE

The Audit Committee (the "Committee") is hereby established by the Supervisory Board (Aufsichtsrat) of Halcyon Semiconductor Aktiengesellschaft ("Halcyon" or the "Company"), a German stock corporation (Aktiengesellschaft) organized and existing under the laws of the Federal Republic of Germany, with its registered seat in Munich, Bavaria, and registered in the Commercial Register (Handelsregister) of the Local Court (Amtsgericht) of Munich under registration number HRB 217458. The Committee is a standing committee of the Supervisory Board and derives its authority from, and is accountable to, the Supervisory Board in all matters within its purview.

The Committee is established to assist the Supervisory Board in fulfilling its oversight responsibilities with respect to the following:

1. Integrity of Financial Statements. The integrity of the Company's consolidated and standalone financial statements prepared in accordance with International Financial Reporting Standards as adopted by the International Accounting Standards Board ("IFRS"), including the Company's annual consolidated financial statements, any interim financial information, and any other financial information provided to stockholders, regulatory bodies, or the public.

2. Legal and Regulatory Compliance. The Company's compliance with applicable legal and regulatory requirements, including, without limitation, the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the Sarbanes-Oxley Act of 2002 ("SOX"), the rules and regulations of the U.S. Securities and Exchange Commission (the "SEC") promulgated thereunder, the listing rules of the Nasdaq Stock Market LLC ("Nasdaq"), applicable provisions of the German Stock Corporation Act (Aktiengesetz or "AktG"), and the rules and regulations of the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse).

3. Independent Auditors. The qualifications, independence, and performance of the Company's independent auditors, currently Blackmere & Whitfield GmbH Wirtschaftsprüfungsgesellschaft (Munich, Germany) and Blackmere & Whitfield LLP (New York, New York) (collectively, "Blackmere & Whitfield" or the "Independent Auditors"), as further described in Article V of this Charter.

4. Internal Audit Function and Internal Controls. The performance of the Company's internal audit function and the adequacy and effectiveness of the Company's system of internal controls over financial reporting, including disclosures controls and procedures.

5. Risk Assessment and Risk Management. The Company's policies and processes for assessing and managing major categories of risk, including financial, operational, strategic, compliance, and reputational risk, to the extent such risks could materially affect the Company's financial condition, results of operations, or disclosures.

In adopting this Charter, the Supervisory Board acknowledges and recognizes that Halcyon qualifies as a "foreign private issuer" (an "FPI") under Rule 3b-4 of the Exchange Act. This Charter is designed to comply with Exchange Act Rule 10A-3, Nasdaq Rule 5605(c), and all other applicable requirements, taking into account the exemptions and accommodations available to foreign private issuers under Nasdaq Rule 5615(a)(3) and Exchange Act Rule 10A-3(b)(3).

The Supervisory Board further acknowledges that the Company's existing listing on the Frankfurt Stock Exchange (FRA: HCY), Prime Standard segment, subjects the Company to additional German corporate governance requirements, including those set forth in the AktG, the German Corporate Governance Code (Deutscher Corporate Governance Kodex), and the rules and regulations of the Frankfurt Stock Exchange. This Charter is not intended to supersede, replace, or diminish any of those requirements. To the extent that German law (including, without limitation, the AktG, the Co-Determination Act (Mitbestimmungsgesetz), and the rules of procedure for the Supervisory Board (Geschäftsordnung des Aufsichtsrats)) and U.S. requirements applicable to the Company conflict, the Committee shall follow the approach set forth in the Company's Corporate Governance Exemption Notice filed with Nasdaq pursuant to Nasdaq Rule 5615(a)(3), as such notice may be amended, supplemented, or replaced from time to time.

This Charter shall be interpreted and applied in a manner consistent with the Company's dual-listing obligations under both U.S. and German law and regulation, and in a manner that gives full effect to both sets of requirements to the greatest extent practicable.

II. COMPOSITION

A. Number of Members

The Committee shall consist of no fewer than three (3) members of the Supervisory Board. Each member of the Committee shall be appointed by, and shall serve at the discretion of, the Supervisory Board for a term coterminous with his or her service on the Supervisory Board, or until such member's earlier resignation, removal, or disqualification under applicable independence or other requirements. The Supervisory Board may appoint additional members to the Committee from time to time, provided that the total membership shall at all times satisfy the minimum composition and qualification requirements set forth in this Charter and applicable law.

The Supervisory Board shall designate one member of the Committee as the Chairperson of the Committee (the "Chairperson"). The Chairperson shall serve in that capacity until his or her replacement by the Supervisory Board, resignation, or removal from the Committee or the Supervisory Board.

B. Independence Requirements

Each member of the Committee must satisfy the independence requirements set forth below, subject to the limited exception described in this Section II.B:

(i) Exchange Act Rule 10A-3(b)(1). No member of the Committee may accept, directly or indirectly, any consulting, advisory, or other compensatory fee from the Company or any subsidiary thereof, other than in his or her capacity as a member of the Supervisory Board or any committee thereof. For purposes of this requirement, "compensatory fees" do not include the receipt of fixed amounts of compensation under a retirement plan (including deferred compensation) for prior service with the Company, provided that such compensation is not contingent in any way on continued service. Furthermore, no member of the Committee may be an "affiliated person" of the Company or any subsidiary thereof, as defined in Exchange Act Rule 10A-3.

(ii) Nasdaq Rule 5605(c)(2)(A). Each member of the Committee must meet the criteria for independence set forth in Nasdaq Rule 5605(a)(2), as interpreted and applied by Nasdaq from time to time. Under these criteria, each member of the Committee must be a person other than an executive officer or employee of the Company, and must not have a relationship that, in the opinion of the Supervisory Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

FPI Accommodation for Employee Representatives. The Supervisory Board acknowledges that, pursuant to Exchange Act Rule 10A-3(b)(3), one employee representative serving on the Supervisory Board as required under German law, including the Co-Determination Act (Mitbestimmungsgesetz), may serve on the Committee if (a) such employee representative is otherwise independent under Rule 10A-3, other than his or her status as an employee representative, and (b) such service is consistent with the exemption under Rule 10A-3(b)(3) for employee representatives required under home-country legal or listing requirements. Any reliance on this exemption shall be disclosed in the Company's annual report on Form 20-F.

The determination of independence of each Committee member shall be made by the Supervisory Board, taking into account all relevant facts and circumstances, including any relationships disclosed by Committee members or otherwise known to the Supervisory Board. The Supervisory Board shall review the independence of each Committee member at least annually and upon the occurrence of any event that could reasonably be expected to affect a member's independence. For the avoidance of doubt, Prof. Dr. Anneliese Voss, who has served as Chairperson of the Supervisory Board since 2018, has been determined by the Supervisory Board to be independent under both Exchange Act Rule 10A-3 and Nasdaq Rule 5605(a)(2).

C. Financial Literacy and Financial Expert

Each member of the Committee must be able to read and understand fundamental financial statements, including a company's balance sheet, income statement, and cash flow statement, at the time of his or her appointment to the Committee, as required by Nasdaq Rule 5605(c)(2)(A). The Supervisory Board shall determine, in its business judgment, whether each member satisfies this financial literacy requirement.

At least one member of the Committee must have past employment experience in finance or accounting, requisite professional certification in accounting, or any other comparable experience or background that results in the individual's "financial sophistication," as defined in Nasdaq Rule 5605(c)(2)(A). Such financial sophistication may include, without limitation, being or having been a chief executive officer, chief financial officer, controller, certified public accountant, auditor, or person holding a comparable position.

The Company shall disclose in its annual report on Form 20-F whether at least one member of the Committee qualifies as an "audit committee financial expert" within the meaning of Item 16A of Form 20-F and the rules and regulations of the SEC, and if so, the name of such person and whether he or she is independent of management. If no member of the Committee qualifies as an audit committee financial expert, the Company shall disclose the reasons therefor. Any change in the audit committee financial expert status of the Committee shall be disclosed promptly in accordance with applicable SEC and Nasdaq requirements.

D. Removal and Vacancies

Members of the Committee may be removed by the Supervisory Board at any time, with or without cause, by a resolution of the Supervisory Board, subject to applicable provisions of German law and the Company's articles of association (Satzung).

Any vacancy on the Committee, whether arising from resignation, removal, disqualification, or any other cause, shall be filled by the Supervisory Board as promptly as practicable. Any appointment to fill a vacancy shall comply with the independence, financial literacy, and other qualification requirements set forth in this Charter. During any period in which the Committee has fewer than three members, the Supervisory Board shall take all reasonable steps to fill the vacancy within a time frame consistent with applicable Nasdaq and SEC requirements.

III. MEETINGS AND PROCEDURES

A. Frequency. The Committee shall meet at least four (4) times per year, with one meeting scheduled to coincide with the close of each fiscal quarter, and at such additional times as the Chairperson of the Committee, any two members of the Committee, or the Supervisory Board may determine. Special meetings may be called by the Chairperson or by any two members of the Committee upon reasonable notice to the other members.

In addition to its regular meetings, the Committee shall meet separately and periodically with each of the following, in order to discuss matters that the Committee or any of these groups believe should be addressed privately:

(a) Members of management, including the Company's Chief Financial Officer, Katarina Dalmqvist, and the General Counsel, Wilhelm Ostermann, and such other members of management as the Committee deems appropriate;

(b) The head of the Company's internal audit function; and

(c) The Independent Auditors, Blackmere & Whitfield, including the lead engagement partners for both the German statutory/IFRS audit and the U.S. PCAOB-registered audit.

The Committee shall schedule sufficient time at each quarterly meeting, and at such other meetings as appropriate, for these separate sessions.

B. Quorum and Voting

A majority of the members of the Committee shall constitute a quorum for the transaction of business. Actions of the Committee shall require the affirmative vote of a majority of the members present at a meeting at which a quorum is present. Each member of the Committee shall have one vote. In the event of a tie, the Chairperson shall not have a casting vote, except to the extent provided under the Company's articles of association (Satzung) or the rules of procedure for the Supervisory Board (Geschäftsordnung des Aufsichtsrats).

The Committee may act by unanimous written consent in lieu of a meeting, to the extent permitted by German law and the Company's articles of association. Any action taken by unanimous written consent shall have the same force and effect as if taken at a duly convened meeting. Written consents may be transmitted by electronic means, including email, provided that the authenticity of the consent can be reasonably verified.

C. Agenda and Minutes

The Chairperson of the Committee (or, in his or her absence, another member designated by the Committee) shall preside at all meetings of the Committee, set the agenda for each meeting, and ensure that meeting materials, including relevant reports, analyses, and other documentation, are distributed to Committee members in advance of each meeting, in sufficient time for the members to review such materials and prepare for the meeting.

The Committee shall keep written minutes of each of its meetings, which shall be prepared by a secretary designated by the Committee or the Chairperson. The minutes shall record the attendees, the matters discussed, the actions taken, and the votes cast, and shall be filed with the records of the Supervisory Board. Draft minutes shall be circulated to Committee members promptly following each meeting, and final minutes shall be approved by the Committee at its next scheduled meeting or by such other method as the Committee deems appropriate.

The Committee shall report regularly to the full Supervisory Board on its activities, findings, and recommendations, and shall make such reports available to the full Supervisory Board at or promptly following each meeting of the Supervisory Board. Such reports shall include a summary of the matters discussed, the significant decisions made, and any recommendations requiring Supervisory Board action.

D. Attendance by Non-Members

The Committee may invite members of management, the Independent Auditors, internal auditors, legal counsel (both internal and external), and such other persons as it deems appropriate to attend meetings of the Committee and to provide pertinent information and analysis. The attendance of non-members at any meeting of the Committee shall be at the discretion of the Committee and may be limited to specific agenda items or portions of the meeting.

The Committee shall have the authority to exclude from any meeting, or any portion of a meeting, any persons it deems appropriate, including members of management, in order to meet in executive session. The Committee shall meet in executive session, without management present, at each regularly scheduled quarterly meeting, and at such other times as the Committee deems necessary or advisable.

IV. AUTHORITY

A. General Authority

The Committee shall have the sole authority and direct responsibility to appoint, compensate, retain, oversee, evaluate, and, where appropriate, terminate the Company's Independent Auditors. The Independent Auditors shall report directly to the Committee and are ultimately accountable to the Committee and the Supervisory Board. For the avoidance of doubt, the Committee's authority extends to both the German statutory/IFRS audit engagement (currently conducted by Blackmere & Whitfield GmbH Wirtschaftsprüfungsgesellschaft) and the U.S. PCAOB-registered audit engagement (currently conducted by Blackmere & Whitfield LLP), subject, in each case, to applicable requirements of German law regarding the election of the statutory auditor by the general meeting (Hauptversammlung) upon recommendation of the Supervisory Board.

The Committee shall have the authority to engage, retain, and determine the compensation of independent counsel, independent accounting advisors, and such other experts and advisors as it deems necessary or appropriate in order to carry out its duties and responsibilities under this Charter. Such engagement may be made without the prior approval of management or the full Supervisory Board, and all costs and expenses incurred in connection with any such engagement shall be borne by the Company.

The Company shall provide for appropriate funding, as determined by the Committee in its sole discretion, for:

(a) Payment of compensation to the Independent Auditors engaged for the purpose of preparing or issuing an audit report or performing other audit, review, or attest services for the Company or any of its subsidiaries;

(b) Payment of compensation to any independent counsel, advisors, or experts retained by the Committee in connection with the performance of its duties and responsibilities;

(c) Ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties, including expenses related to meetings, travel, training, and professional development of Committee members; and

(d) Any other expenses that the Committee determines are necessary or appropriate in connection with the discharge of its responsibilities under this Charter.

In no event shall the Company or any member of management withhold or condition funding necessary for the Committee to fulfill its obligations under this Charter, applicable law, or listing standards.

B. Access to Information

The Committee shall have full, free, and unrestricted access to the Company's books, records, facilities, and personnel, including, without limitation, all financial records, accounting records, internal audit reports, compliance reports, legal files, and such other documents and information as the Committee may request.

The Committee may require any officer or employee of the Company, or any representative of the Company's outside counsel or Independent Auditors, to attend a meeting of the Committee or to respond to Committee inquiries, whether in writing or in person. Officers and employees of the Company are expected to cooperate fully with the Committee in the performance of its duties.

The Committee shall receive and review the following on a regular basis:

(a) Periodic reports from the Independent Auditors regarding audit findings, internal control observations, recommendations for improvements, and management letters;

(b) Reports from management on the Company's financial reporting process, including significant accounting policies and estimates, changes in accounting standards, and the impact of any new or proposed regulations on the Company's financial statements and disclosures;

(c) Reports from management on the Company's risk management framework, including the identification, assessment, and mitigation of major risk exposures; and

(d) Reports from the Company's compliance function on legal and regulatory compliance matters, including matters relating to sanctions, anti-corruption, and export controls.

V. RESPONSIBILITIES AND DUTIES

The following is a description of the principal recurring responsibilities and duties of the Committee in carrying out its oversight functions. The Committee may, in its discretion, carry out such additional responsibilities and duties as it deems appropriate or as may be assigned to it by the Supervisory Board from time to time.

A. Independent Auditors

1. Appointment and Oversight. The Committee shall be directly responsible for the appointment, compensation, retention, and oversight of the work of the Independent Auditors, including the resolution of disagreements between management and the Independent Auditors regarding financial reporting. The Company's current Independent Auditors are:

(a) German Statutory/IFRS Audit: Blackmere & Whitfield GmbH Wirtschaftsprüfungsgesellschaft, Munich, Germany, led by Dieter Kaufmann, Wirtschaftsprüfer, Ganghoferstraße 29, 80339 Munich, Germany (the "German Audit Firm"), which serves as the statutory auditor (Abschlussprüfer) for purposes of the German statutory audit and the IFRS consolidated financial statements; and

(b) U.S. PCAOB-Registered Audit: Blackmere & Whitfield LLP, New York, New York, led by Graham Templeton, Partner, 7 Times Square, New York, NY 10036 (the "U.S. Audit Firm"), which is registered with the Public Company Accounting Oversight Board ("PCAOB") and serves as the auditor for purposes of the Company's audit requirements under U.S. securities laws.

The Committee shall obtain and review at least annually a written report from the Independent Auditors describing:

(a) The firm's internal quality-control procedures, including any findings or recommendations arising from the firm's most recent internal quality-control review;

(b) Any material issues raised by the most recent internal quality-control review, PCAOB inspection, or peer review of the firm, or by any inquiry or investigation by governmental or professional authorities within the preceding five (5) years regarding one or more independent audits carried out by the firm, and any steps taken to deal with any such issues; and

(c) All relationships between the Independent Auditors and the Company or any of its subsidiaries (including relationships involving both the German Audit Firm and the U.S. Audit Firm, and any shared or affiliated offices or personnel), in order to assess the auditors' independence from the Company.

The Committee shall actively engage in a dialogue with the Independent Auditors with respect to the matters described above and shall take appropriate action in response to any concerns raised.

2. Independence Assessment. The Committee shall evaluate the qualifications, performance, and independence of the Independent Auditors at least annually, taking into account the opinions of management and the head of the internal audit function. In conducting this evaluation, the Committee shall:

(a) Obtain and review the annual written statement from the Independent Auditors delineating all relationships between the auditors and the Company, consistent with applicable PCAOB rules, and discuss with the Independent Auditors any disclosed relationships or services that may impact the objectivity and independence of the auditors;

(b) Evaluate whether the provision of non-audit services by the Independent Auditors is compatible with maintaining the auditors' independence, taking into account the requirements of Exchange Act Section 10A, PCAOB rules, and applicable German law;

(c) Consider whether there should be regular rotation of the lead audit engagement partner, the concurring review partner, or the audit firm itself, taking into account both PCAOB auditor rotation requirements (including PCAOB Rule 3600T and the related SEC rules regarding partner rotation) and German rotation rules under the Wirtschaftsprüferordnung (WPO) and applicable EU regulations; and

(d) Present its conclusions regarding the qualifications, performance, and independence of the Independent Auditors to the Supervisory Board.

3. Pre-Approval of Audit and Non-Audit Services. The Committee shall pre-approve all audit services and all permitted non-audit services to be performed by the Independent Auditors for the Company or any of its subsidiaries, in accordance with Exchange Act Section 10A(i) and PCAOB Rule 3524.

The Committee shall establish written pre-approval policies and procedures for the engagement of the Independent Auditors to provide audit and permissible non-audit services. Such policies and procedures shall be detailed as to the particular service to be provided and shall not involve the delegation of Committee responsibilities to management. The policies and procedures shall specify:

(a) The types of services that require specific pre-approval by the Committee and the types of services, if any, for which general pre-approval may be granted;

(b) The terms, conditions, and limitations of any general pre-approval, including any monetary thresholds;

(c) The procedures by which the Committee will be promptly informed of any services commenced pursuant to a general pre-approval; and

(d) The requirement that management provide the Committee with periodic reports on the nature, scope, and fees associated with all services provided by the Independent Auditors.

The Committee may delegate pre-approval authority to one or more designated members of the Committee; provided, however, that the decisions of any such member shall be presented to the full Committee at its next scheduled meeting for ratification or further action.

The following categories of services require specific pre-approval by the Committee:

(a) Annual audit of the Company's consolidated financial statements under IFRS, including any required reconciliation to other applicable accounting frameworks;

(b) Quarterly or interim reviews of the Company's financial information;

(c) Comfort letters in connection with securities offerings, including, without limitation, the comfort letters to be provided by Blackmere & Whitfield in connection with the Company's initial public offering of ADSs in the United States, as requested by Calderwood & Harkness LLP in its capacity as underwriters' counsel or issuer's counsel, as applicable;

(d) Statutory audit services required under German law, including the audit of the Company's standalone financial statements (Jahresabschluss) and the statutory group financial statements (Konzernabschluss);

(e) Tax compliance, tax planning, and tax advisory services, to the extent such services are permissible under PCAOB rules and applicable law;

(f) Any other services not prohibited by applicable law or regulation.

Prohibited non-audit services include those set forth in Exchange Act Section 10A(g) and PCAOB rules, including, without limitation, the following:

(a) Bookkeeping or other services related to the accounting records or financial statements of the Company;

(b) Financial information systems design and implementation;

(d) Actuarial services;

(e) Internal audit outsourcing services;

(f) Management functions or human resources services;

(g) Broker-dealer, investment adviser, or investment banking services;

(h) Legal services; and

(i) Expert services unrelated to the audit.

4. Audit Planning and Results. The Committee shall review and discuss with the Independent Auditors the overall audit scope, plan, and approach for the annual audit, including:

(a) Staffing levels and the composition of the engagement team, including the involvement of audit specialists (e.g., IT audit, tax, transfer pricing, and valuation specialists);

(b) Materiality thresholds and the basis for their determination;

(c) Locations and entities to be visited or subject to audit procedures, including the Company's Munich headquarters, Dresden fabrication facilities, Santa Clara (California) design center, Singapore regional operations, Shanghai operations (Halcyon Shanghai Semiconductor Co., Ltd.), and Brno (Czech Republic) operations (Halcyon Automotive Components s.r.o.);

(d) The extent of reliance on the Company's internal audit function and the coordination between the Independent Auditors and internal audit; and

(e) Any anticipated challenges, risks, or areas of particular audit focus.

The Committee shall review and discuss with the Independent Auditors the results of the annual audit, including, without limitation:

(a) Any audit problems or difficulties encountered during the course of the audit, including any restrictions on the scope of the auditors' work or access to requested information, and management's response to such problems or difficulties;

(b) Critical accounting policies and practices used by the Company, including any significant changes in accounting policies during the period;

(c) Alternative treatments of financial information within IFRS that have been discussed with management, the ramifications of the use of such alternative treatments, and the treatment preferred by the Independent Auditors;

(d) Any material written communications between the Independent Auditors and management, including management representation letters, schedules of adjusted and unadjusted audit differences, any engagement letter or independence letter, and any other correspondence required by applicable auditing standards; and

(e) Any other matters required to be communicated to the Committee under applicable PCAOB auditing standards, including AS 1301 (Communications with Audit Committees).

B. Financial Statements and Disclosure

1. Annual and Interim Financial Statements. The Committee shall review and discuss with management and the Independent Auditors the Company's annual audited financial statements, including the IFRS consolidated financial statements and the notes thereto, prior to the filing of the Company's annual report on Form 20-F with the SEC. Such review shall include discussion of significant accounting policies and estimates, the quality and appropriateness of accounting principles applied, the clarity of the financial statement disclosures, and any significant changes in accounting methods or assumptions.

The Committee shall review and discuss with management and the Independent Auditors any interim financial information included in current reports on Form 6-K furnished to the SEC, including a discussion of any significant changes in the Company's financial condition or results of operations since the most recent annual report.

Based on its review and discussions, the Committee shall recommend to the Supervisory Board whether the audited financial statements should be included in the Company's annual report on Form 20-F for filing with the SEC.

2. Earnings Releases and Financial Guidance. The Committee shall review and discuss with management the Company's earnings press releases, including the use of any "pro forma" or "adjusted" non-IFRS financial information, reconciliations to the most directly comparable IFRS measures, and the reasons for the presentation of non-IFRS measures. The Committee shall also review and discuss financial information and earnings guidance provided to analysts, rating agencies, and the public.

The Committee need not discuss in advance each earnings release or each instance in which the Company provides earnings guidance; however, the Committee shall discuss generally the types of information to be disclosed and the types of presentations to be made, and shall review the Company's policies regarding the use of non-IFRS financial measures and earnings guidance.

3. MD&A and Other Disclosures. The Committee shall review and discuss with management and the Independent Auditors the Company's disclosures under "Operating and Financial Review and Prospects" (the MD&A equivalent for foreign private issuers) in the Company's annual report on Form 20-F, including a discussion of the Company's critical accounting estimates, known trends and uncertainties, off-balance-sheet arrangements, and contractual obligations.

The Committee shall review any comment letters received from the SEC staff related to the Company's financial statements, disclosures, or other filings, and management's responses thereto. The Committee shall be informed promptly of any SEC comment letter and shall have the opportunity to review and discuss management's proposed response before such response is submitted.

C. Internal Controls and Internal Audit

1. Internal Controls Over Financial Reporting. The Committee shall review and discuss with management and the Independent Auditors the adequacy and effectiveness of the Company's internal controls over financial reporting, including the Company's disclosure controls and procedures and the design and operating effectiveness of the Company's control environment.

The Supervisory Board and the Committee acknowledge that, as a foreign private issuer, Halcyon is subject to a phased implementation of the internal control reporting requirements of Sarbanes-Oxley Section 404. Specifically, the Company's first management assessment of internal controls over financial reporting under Section 404(a) will be required for the fiscal year ending December 31, 2027, and the first independent auditor attestation report on the effectiveness of internal controls under Section 404(b) will likewise be required for the fiscal year ending December 31, 2027. The Committee shall oversee management's preparation for compliance with these requirements, including the design and implementation of a testing and remediation plan, and shall receive periodic status reports from management regarding the progress of the Section 404 readiness effort.

The Committee shall receive and review reports from management and the Independent Auditors regarding:

(a) Any significant deficiencies or material weaknesses in the design or operation of internal controls over financial reporting that are reasonably likely to adversely affect the Company's ability to record, process, summarize, and report financial information;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal controls over financial reporting; and

(c) Any changes in internal controls over financial reporting that occurred during the most recent fiscal period that have materially affected, or are reasonably likely to materially affect, the Company's internal controls over financial reporting.

The Committee shall review management's remediation plans for any identified significant deficiencies or material weaknesses and shall monitor the progress of remediation efforts on a regular basis.

2. Internal Audit Function. The Committee shall review and approve the appointment, replacement, reassignment, or dismissal of the head of the Company's internal audit function. The head of the internal audit function shall report functionally to the Committee and administratively to management.

The Committee shall review with the head of internal audit the scope, plan, organizational structure, qualifications, and budget of the internal audit function on at least an annual basis, and shall ensure that the internal audit function has adequate resources and authority to fulfill its responsibilities.

The Committee shall review significant findings and recommendations of the internal audit function and management's responses thereto, including any matters relating to the adequacy and effectiveness of internal controls, compliance with Company policies, and the results of investigations conducted by the internal audit function.

3. SOX Certifications. The Committee shall review and discuss the certifications to be provided by the Chief Executive Officer, Dr. Friedrich Wendt, and the Chief Financial Officer, Katarina Dalmqvist, under Sarbanes-Oxley Sections 302 and 906 in connection with each periodic report filed with the SEC, including the annual report on Form 20-F and any interim reports on Form 6-K that contain financial statements.

The Committee shall review and discuss any disclosures made by the CEO or CFO regarding significant deficiencies, material weaknesses, or fraud during the evaluation of internal controls over financial reporting, and shall take appropriate action in response to any such disclosures.

D. Compliance, Legal, and Risk Oversight

1. Legal and Regulatory Compliance. The Committee shall review periodically with the Company's General Counsel, Wilhelm Ostermann, and outside counsel, including Calderwood & Harkness LLP (as U.S. securities counsel) and Bähr Stein Rechtsanwälte PartGmbB (as German counsel), any legal matters that could have a significant impact on the Company's financial statements, internal controls, or compliance policies. Such review shall include, without limitation, pending or threatened litigation, regulatory investigations, government enforcement actions, and any material legal developments affecting the Company or its industry.

The Committee shall review the Company's compliance with applicable laws and regulations, including, without limitation, the Exchange Act, SOX, Nasdaq listing rules, German securities laws (Wertpapierhandelsgesetz), the Market Abuse Regulation (EU No. 596/2014), and applicable provisions of the Frankfurt Stock Exchange Prime Standard.

2. Related-Party Transactions. The Committee shall review and approve or ratify all related-party transactions required to be disclosed pursuant to Item 7.B of Form 20-F. The Committee's review and approval responsibilities shall extend to, but not be limited to, the following types of transactions:

(a) Transactions between the Company (or any of its subsidiaries) and Rheintal Industrieholding GmbH, a pre-IPO shareholder holding approximately 22.3% of the Company's outstanding ordinary shares prior to the IPO, which is a holding company controlled by Margarethe Wendt, the sister of the Company's Chief Executive Officer, Dr. Friedrich Wendt;

(b) Transactions involving members of the Company's Management Board (Vorstand), the Supervisory Board, or their respective immediate family members;

(d) Any other transaction that would be required to be disclosed as a related-party transaction under applicable SEC rules, IFRS (IAS 24), or German law.

The Committee shall establish written policies and procedures for the identification, review, approval, and ongoing monitoring of related-party transactions, including procedures for the reporting of potential related-party transactions by management and directors.

3. Risk Assessment and Risk Management. The Committee shall discuss with management the Company's major financial risk exposures and the steps management has taken to monitor and control such exposures, including the Company's risk assessment and risk management policies, procedures, and controls. The Committee's oversight of risk management shall be coordinated with the Supervisory Board's broader risk oversight responsibilities, and the Committee shall report to the Supervisory Board on its risk-related activities.

Areas of particular focus for the Committee shall include, without limitation:

(a) Semiconductor industry cyclicality: The impact of industry cycles on the Company's revenue, profitability, and inventory management;

(b) Currency risk: The Company's exposure to fluctuations in exchange rates, particularly EUR/USD and other functional currencies used in the Company's operations, and the effectiveness of the Company's hedging strategies;

(c) Supply chain concentration: The risks associated with reliance on a limited number of suppliers for critical raw materials, equipment, and components, and the Company's business continuity planning;

(d) Export control and sanctions compliance: The Company's compliance with OFAC sanctions regulations, EU sanctions, and U.S. export control regulations (including the Export Administration Regulations ("EAR") and the International Traffic in Arms Regulations ("ITAR")), particularly as they relate to the Company's semiconductor technology and products; and

(e) intellectual property risk: The risks associated with the protection and enforcement of the Company's intellectual property portfolio, including patents, trade secrets, and proprietary design information.

4. Sanctions, Anti-Corruption, and Export Controls. The Committee shall oversee the Company's compliance with all applicable sanctions, anti-corruption, and export control laws and regulations, including, without limitation:

(a) U.S. Office of Foreign Assets Control ("OFAC") sanctions regulations;

(b) European Union sanctions regulations;

(d) The United Kingdom Bribery Act 2010;

(e) The Export Administration Regulations ("EAR") administered by the U.S. Bureau of Industry and Security; and

(f) The International Traffic in Arms Regulations ("ITAR") administered by the U.S. Directorate of Defense Trade Controls.

The Committee's oversight shall encompass compliance matters arising from the Company's global operations, including operations conducted through Halcyon Shanghai Semiconductor Co., Ltd. in the People's Republic of China, and any other jurisdictions in which the Company operates that present heightened sanctions, anti-corruption, or export control risk.

The Committee shall receive periodic reports from the General Counsel and the compliance function on sanctions, anti-corruption, and export controls compliance matters, including reports on training programs, internal investigations, voluntary disclosures, and any communications with regulatory authorities.

E. Complaint Procedures (Whistleblower)

1. Establishment of Procedures. The Committee shall establish and maintain procedures for:

(a) The receipt, retention, and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters, whether submitted by employees, officers, directors, stockholders, or third parties; and

(b) The confidential, anonymous submission by employees of the Company and its subsidiaries of concerns regarding questionable accounting or auditing matters. The term "subsidiaries" for this purpose includes, without limitation, Halcyon Semiconductor USA Inc. (Delaware), Halcyon Power Solutions GmbH (Munich, Germany), Halcyon Asia Pacific Pte. Ltd. (Singapore), Halcyon Shanghai Semiconductor Co., Ltd. (Shanghai, People's Republic of China), and Halcyon Automotive Components s.r.o. (Brno, Czech Republic).

These procedures are required by Sarbanes-Oxley Section 301 and Exchange Act Rule 10A-3(b)(3), and the Committee shall ensure that such procedures comply in all respects with applicable law and regulation, including any applicable data privacy, employment, and whistleblower protection laws in the jurisdictions in which the Company and its subsidiaries operate.

The Company has adopted a separate Whistleblower Policy in connection with the listing of its ADSs on the Nasdaq Global Select Market, which sets forth detailed procedures for the submission, receipt, investigation, and resolution of complaints. The Committee shall oversee the implementation and effectiveness of the Whistleblower Policy and shall review it at least annually.

2. Review and Investigation. The Committee shall review all complaints received through the whistleblower mechanism that relate to accounting, internal accounting controls, or auditing matters. The Committee shall determine the appropriate course of action with respect to each complaint, including whether further investigation is warranted and the manner in which such investigation should be conducted.

The Committee shall have the authority to investigate, or to cause the investigation of, any matter brought to its attention, with full access to all Company books, records, facilities, and personnel, and with the authority to engage outside advisors — including independent legal counsel, forensic accountants, and other consultants — at the Company's expense, without the need for prior approval from management or the Supervisory Board.

The Committee shall maintain a log of all complaints received and the disposition of each complaint, and shall report to the Supervisory Board on a periodic basis regarding the nature and resolution of any material complaints.

F. Directors' and Officers' Insurance

The Committee shall review and discuss with management the Company's directors' and officers' ("D&O") liability insurance program, including the scope of coverage, policy terms and conditions, and the adequacy of coverage limits in light of the Company's business activities, dual-listing obligations, and overall exposure profile.

As of the date of adoption of this Charter, the Company's D&O insurance program is structured as follows:

The estimated annual premium for the foregoing program is $2,800,000. The program is brokered by Clearwater D&O Insurance Brokers Ltd. (contact: Emma Callister, Vice President, Financial Lines).

The Committee shall review the adequacy of the D&O insurance program at least annually, taking into account, among other factors, the Company's listing on the Nasdaq Global Select Market, the increased litigation exposure associated with a U.S. listing, changes in the Company's business or risk profile, developments in applicable law, and the availability and cost of coverage in the insurance market. The Committee shall make recommendations to the Supervisory Board regarding any proposed changes to the D&O insurance program.

VI. REPORTING

The Committee shall report regularly to the Supervisory Board on its activities, and such reports shall include, without limitation:

(a) A summary of the Committee's review of the Company's annual audited financial statements and its recommendation regarding the inclusion of such financial statements in the Company's annual report on Form 20-F;

(b) The Committee's assessment of the qualifications, performance, and independence of the Independent Auditors, including any recommendation regarding the appointment, retention, or termination of the Independent Auditors;

(c) Any material issues or concerns regarding the Company's internal controls over financial reporting, compliance with applicable laws and regulations, or risk management;

(d) A summary of any complaints received through the whistleblower mechanism and the disposition thereof;

(e) A summary of related-party transactions reviewed and approved or ratified by the Committee during the reporting period; and

(f) Any other matters the Committee deems appropriate or that the Supervisory Board requests.

The Committee shall prepare, or cause to be prepared, any report or disclosure required by the rules and regulations of the SEC, Nasdaq, or the Frankfurt Stock Exchange to be included in the Company's annual report on Form 20-F, the Company's annual report for the Frankfurt Stock Exchange, or any other public filings, including any report of the audit committee required under applicable SEC rules.

VII. ANNUAL SELF-ASSESSMENT

The Committee shall conduct an annual self-assessment of its performance, including a review of its compliance with this Charter, the adequacy and appropriateness of the Charter's provisions, and the effectiveness of the Committee's processes and procedures. The self-assessment may take such form as the Committee deems appropriate, including written questionnaires, interviews, or facilitated discussions.

The Committee shall report the results of the annual self-assessment to the Supervisory Board and shall recommend any proposed changes to this Charter for approval by the Supervisory Board. The Supervisory Board shall consider and, if appropriate, approve any such changes.

This Charter shall be reviewed by the Committee at least annually and shall be updated as necessary to reflect changes in applicable law, regulation, SEC rules, PCAOB standards, Nasdaq listing standards, the German Corporate Governance Code, or the Company's business circumstances. The current version of this Charter shall be made available on the Company's website, as required by applicable Nasdaq listing rules.

VIII. LIMITATIONS

While the Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Committee to plan or conduct audits or to determine that the Company's financial statements and disclosures are complete and accurate and are in accordance with IFRS and applicable rules and regulations. These are the responsibilities of management, the Independent Auditors, and, where applicable, the Company's internal audit function.

Nothing in this Charter shall be construed to reduce the professional responsibilities or legal liabilities of the Company's management or the Independent Auditors, or to impose upon the Committee or its members any duty or obligation beyond those imposed by applicable law, regulation, and listing standards.

Members of the Committee are not full-time employees of the Company, and it is not the duty or responsibility of the Committee or its members to conduct "field work" or other types of auditing, accounting, or compliance reviews or procedures. The designation of a member of the Committee as an "audit committee financial expert" does not impose on such person any duties, obligations, or liabilities that are greater than the duties, obligations, and liabilities imposed on such person as a member of the Committee and the Supervisory Board in the absence of such designation.

AUDIT COMMITTEE CHARTER
OF
HALCYON SEMICONDUCTOR AKTIENGESELLSCHAFT
Adopted by the Supervisory Board (Aufsichtsrat) in connection with the listing of American Depositary Shares on the Nasdaq Global Select Market
Draft — Prepared by Calderwood & Harkness LLP
Matter No. 1032-00003
To be effective upon the listing of American Depositary Shares ("ADSs") representing ordinary shares (Stammaktien) of Halcyon Semiconductor Aktiengesellschaft (anticipated Nasdaq ticker: HCYN) on the Nasdaq Global Select Market
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I. PURPOSE
The Audit Committee (the "Committee") is hereby established by the Supervisory Board (Aufsichtsrat) of Halcyon Semiconductor Aktiengesellschaft ("Halcyon" or the "Company"), a German stock corporation (Aktiengesellschaft) organized and existing under the laws of the Federal Republic of Germany, with its registered seat in Munich, Bavaria, and registered in the Commercial Register (Handelsregister) of the Local Court (Amtsgericht) of Munich under registration number HRB 217458. The Committee is a standing committee of the Supervisory Board and derives its authority from, and is accountable to, the Supervisory Board in all matters within its purview.
The Committee is established to assist the Supervisory Board in fulfilling its oversight responsibilities with respect to the following:
1.  Integrity of Financial Statements. The integrity of the Company's consolidated and standalone financial statements prepared in accordance with International Financial Reporting Standards as adopted by the International Accounting Standards Board ("IFRS"), including the Company's annual consolidated financial statements, any interim financial information, and any other financial information provided to stockholders, regulatory bodies, or the public.
2.  Legal and Regulatory Compliance. The Company's compliance with applicable legal and regulatory requirements, including, without limitation, the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the Sarbanes-Oxley Act of 2002 ("SOX"), the rules and regulations of the U.S. Securities and Exchange Commission (the "SEC") promulgated thereunder, the listing rules of the Nasdaq Stock Market LLC ("Nasdaq"), applicable provisions of the German Stock Corporation Act (Aktiengesetz or "AktG"), and the rules and regulations of the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse).
3.  Independent Auditors. The qualifications, independence, and performance of the Company's independent auditors, currently Blackmere & Whitfield GmbH Wirtschaftsprüfungsgesellschaft (Munich, Germany) and Blackmere & Whitfield LLP (New York, New York) (collectively, "Blackmere & Whitfield" or the "Independent Auditors"), as further described in Article V of this Charter.
4.  Internal Audit Function and Internal Controls. The performance of the Company's internal audit function and the adequacy and effectiveness of the Company's system of internal controls over financial reporting, including disclosures controls and procedures.
5.  Risk Assessment and Risk Management. The Company's policies and processes for assessing and managing major categories of risk, including financial, operational, strategic, compliance, and reputational risk, to the extent such risks could materially affect the Company's financial condition, results of operations, or disclosures.
In adopting this Charter, the Supervisory Board acknowledges and recognizes that Halcyon qualifies as a "foreign private issuer" (an "FPI") under Rule 3b-4 of the Exchange Act. This Charter is designed to comply with Exchange Act Rule 10A-3, Nasdaq Rule 5605(c), and all other applicable requirements, taking into account the exemptions and accommodations available to foreign private issuers under Nasdaq Rule 5615(a)(3) and Exchange Act Rule 10A-3(b)(3).
The Supervisory Board further acknowledges that the Company's existing listing on the Frankfurt Stock Exchange (FRA: HCY), Prime Standard segment, subjects the Company to additional German corporate governance requirements, including those set forth in the AktG, the German Corporate Governance Code (Deutscher Corporate Governance Kodex), and the rules and regulations of the Frankfurt Stock Exchange. This Charter is not intended to supersede, replace, or diminish any of those requirements. To the extent that German law (including, without limitation, the AktG, the Co-Determination Act (Mitbestimmungsgesetz), and the rules of procedure for the Supervisory Board (Geschäftsordnung des Aufsichtsrats)) and U.S. requirements applicable to the Company conflict, the Committee shall follow the approach set forth in the Company's Corporate Governance Exemption Notice filed with Nasdaq pursuant to Nasdaq Rule 5615(a)(3), as such notice may be amended, supplemented, or replaced from time to time.
This Charter shall be interpreted and applied in a manner consistent with the Company's dual-listing obligations under both U.S. and German law and regulation, and in a manner that gives full effect to both sets of requirements to the greatest extent practicable.
II. COMPOSITION
A. Number of Members
The Committee shall consist of no fewer than three (3) members of the Supervisory Board. Each member of the Committee shall be appointed by, and shall serve at the discretion of, the Supervisory Board for a term coterminous with his or her service on the Supervisory Board, or until such member's earlier resignation, removal, or disqualification under applicable independence or other requirements. The Supervisory Board may appoint additional members to the Committee from time to time, provided that the total membership shall at all times satisfy the minimum composition and qualification requirements set forth in this Charter and applicable law.
The Supervisory Board shall designate one member of the Committee as the Chairperson of the Committee (the "Chairperson"). The Chairperson shall serve in that capacity until his or her replacement by the Supervisory Board, resignation, or removal from the Committee or the Supervisory Board.
B. Independence Requirements
Each member of the Committee must satisfy the independence requirements set forth below, subject to the limited exception described in this Section II.B:
(i) Exchange Act Rule 10A-3(b)(1). No member of the Committee may accept, directly or indirectly, any consulting, advisory, or other compensatory fee from the Company or any subsidiary thereof, other than in his or her capacity as a member of the Supervisory Board or any committee thereof. For purposes of this requirement, "compensatory fees" do not include the receipt of fixed amounts of compensation under a retirement plan (including deferred compensation) for prior service with the Company, provided that such compensation is not contingent in any way on continued service. Furthermore, no member of the Committee may be an "affiliated person" of the Company or any subsidiary thereof, as defined in Exchange Act Rule 10A-3.
(ii) Nasdaq Rule 5605(c)(2)(A). Each member of the Committee must meet the criteria for independence set forth in Nasdaq Rule 5605(a)(2), as interpreted and applied by Nasdaq from time to time. Under these criteria, each member of the Committee must be a person other than an executive officer or employee of the Company, and must not have a relationship that, in the opinion of the Supervisory Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.
FPI Accommodation for Employee Representatives. The Supervisory Board acknowledges that, pursuant to Exchange Act Rule 10A-3(b)(3), one employee representative serving on the Supervisory Board as required under German law, including the Co-Determination Act (Mitbestimmungsgesetz), may serve on the Committee if (a) such employee representative is otherwise independent under Rule 10A-3, other than his or her status as an employee representative, and (b) such service is consistent with the exemption under Rule 10A-3(b)(3) for employee representatives required under home-country legal or listing requirements. Any reliance on this exemption shall be disclosed in the Company's annual report on Form 20-F.
The determination of independence of each Committee member shall be made by the Supervisory Board, taking into account all relevant facts and circumstances, including any relationships disclosed by Committee members or otherwise known to the Supervisory Board. The Supervisory Board shall review the independence of each Committee member at least annually and upon the occurrence of any event that could reasonably be expected to affect a member's independence. For the avoidance of doubt, Prof. Dr. Anneliese Voss, who has served as Chairperson of the Supervisory Board since 2018, has been determined by the Supervisory Board to be independent under both Exchange Act Rule 10A-3 and Nasdaq Rule 5605(a)(2).
C. Financial Literacy and Financial Expert
Each member of the Committee must be able to read and understand fundamental financial statements, including a company's balance sheet, income statement, and cash flow statement, at the time of his or her appointment to the Committee, as required by Nasdaq Rule 5605(c)(2)(A). The Supervisory Board shall determine, in its business judgment, whether each member satisfies this financial literacy requirement.
At least one member of the Committee must have past employment experience in finance or accounting, requisite professional certification in accounting, or any other comparable experience or background that results in the individual's "financial sophistication," as defined in Nasdaq Rule 5605(c)(2)(A). Such financial sophistication may include, without limitation, being or having been a chief executive officer, chief financial officer, controller, certified public accountant, auditor, or person holding a comparable position.
The Company shall disclose in its annual report on Form 20-F whether at least one member of the Committee qualifies as an "audit committee financial expert" within the meaning of Item 16A of Form 20-F and the rules and regulations of the SEC, and if so, the name of such person and whether he or she is independent of management. If no member of the Committee qualifies as an audit committee financial expert, the Company shall disclose the reasons therefor. Any change in the audit committee financial expert status of the Committee shall be disclosed promptly in accordance with applicable SEC and Nasdaq requirements.
D. Removal and Vacancies
Members of the Committee may be removed by the Supervisory Board at any time, with or without cause, by a resolution of the Supervisory Board, subject to applicable provisions of German law and the Company's articles of association (Satzung).
Any vacancy on the Committee, whether arising from resignation, removal, disqualification, or any other cause, shall be filled by the Supervisory Board as promptly as practicable. Any appointment to fill a vacancy shall comply with the independence, financial literacy, and other qualification requirements set forth in this Charter. During any period in which the Committee has fewer than three members, the Supervisory Board shall take all reasonable steps to fill the vacancy within a time frame consistent with applicable Nasdaq and SEC requirements.
III. MEETINGS AND PROCEDURES
A. Frequency.  The Committee shall meet at least four (4) times per year, with one meeting scheduled to coincide with the close of each fiscal quarter, and at such additional times as the Chairperson of the Committee, any two members of the Committee, or the Supervisory Board may determine. Special meetings may be called by the Chairperson or by any two members of the Committee upon reasonable notice to the other members.
In addition to its regular meetings, the Committee shall meet separately and periodically with each of the following, in order to discuss matters that the Committee or any of these groups believe should be addressed privately:
(a) Members of management, including the Company's Chief Financial Officer, Katarina Dalmqvist, and the General Counsel, Wilhelm Ostermann, and such other members of management as the Committee deems appropriate;
(b) The head of the Company's internal audit function; and
(c) The Independent Auditors, Blackmere & Whitfield, including the lead engagement partners for both the German statutory/IFRS audit and the U.S. PCAOB-registered audit.
The Committee shall schedule sufficient time at each quarterly meeting, and at such other meetings as appropriate, for these separate sessions.
B. Quorum and Voting
A majority of the members of the Committee shall constitute a quorum for the transaction of business. Actions of the Committee shall require the affirmative vote of a majority of the members present at a meeting at which a quorum is present. Each member of the Committee shall have one vote. In the event of a tie, the Chairperson shall not have a casting vote, except to the extent provided under the Company's articles of association (Satzung) or the rules of procedure for the Supervisory Board (Geschäftsordnung des Aufsichtsrats).
The Committee may act by unanimous written consent in lieu of a meeting, to the extent permitted by German law and the Company's articles of association. Any action taken by unanimous written consent shall have the same force and effect as if taken at a duly convened meeting. Written consents may be transmitted by electronic means, including email, provided that the authenticity of the consent can be reasonably verified.
C. Agenda and Minutes
The Chairperson of the Committee (or, in his or her absence, another member designated by the Committee) shall preside at all meetings of the Committee, set the agenda for each meeting, and ensure that meeting materials, including relevant reports, analyses, and other documentation, are distributed to Committee members in advance of each meeting, in sufficient time for the members to review such materials and prepare for the meeting.
The Committee shall keep written minutes of each of its meetings, which shall be prepared by a secretary designated by the Committee or the Chairperson. The minutes shall record the attendees, the matters discussed, the actions taken, and the votes cast, and shall be filed with the records of the Supervisory Board. Draft minutes shall be circulated to Committee members promptly following each meeting, and final minutes shall be approved by the Committee at its next scheduled meeting or by such other method as the Committee deems appropriate.
The Committee shall report regularly to the full Supervisory Board on its activities, findings, and recommendations, and shall make such reports available to the full Supervisory Board at or promptly following each meeting of the Supervisory Board. Such reports shall include a summary of the matters discussed, the significant decisions made, and any recommendations requiring Supervisory Board action.
D. Attendance by Non-Members
The Committee may invite members of management, the Independent Auditors, internal auditors, legal counsel (both internal and external), and such other persons as it deems appropriate to attend meetings of the Committee and to provide pertinent information and analysis. The attendance of non-members at any meeting of the Committee shall be at the discretion of the Committee and may be limited to specific agenda items or portions of the meeting.
The Committee shall have the authority to exclude from any meeting, or any portion of a meeting, any persons it deems appropriate, including members of management, in order to meet in executive session. The Committee shall meet in executive session, without management present, at each regularly scheduled quarterly meeting, and at such other times as the Committee deems necessary or advisable.
IV. AUTHORITY
A. General Authority
The Committee shall have the sole authority and direct responsibility to appoint, compensate, retain, oversee, evaluate, and, where appropriate, terminate the Company's Independent Auditors. The Independent Auditors shall report directly to the Committee and are ultimately accountable to the Committee and the Supervisory Board. For the avoidance of doubt, the Committee's authority extends to both the German statutory/IFRS audit engagement (currently conducted by Blackmere & Whitfield GmbH Wirtschaftsprüfungsgesellschaft) and the U.S. PCAOB-registered audit engagement (currently conducted by Blackmere & Whitfield LLP), subject, in each case, to applicable requirements of German law regarding the election of the statutory auditor by the general meeting (Hauptversammlung) upon recommendation of the Supervisory Board.
The Committee shall have the authority to engage, retain, and determine the compensation of independent counsel, independent accounting advisors, and such other experts and advisors as it deems necessary or appropriate in order to carry out its duties and responsibilities under this Charter. Such engagement may be made without the prior approval of management or the full Supervisory Board, and all costs and expenses incurred in connection with any such engagement shall be borne by the Company.
The Company shall provide for appropriate funding, as determined by the Committee in its sole discretion, for:
(a) Payment of compensation to the Independent Auditors engaged for the purpose of preparing or issuing an audit report or performing other audit, review, or attest services for the Company or any of its subsidiaries;
(b) Payment of compensation to any independent counsel, advisors, or experts retained by the Committee in connection with the performance of its duties and responsibilities;
(c) Ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties, including expenses related to meetings, travel, training, and professional development of Committee members; and
(d) Any other expenses that the Committee determines are necessary or appropriate in connection with the discharge of its responsibilities under this Charter.
In no event shall the Company or any member of management withhold or condition funding necessary for the Committee to fulfill its obligations under this Charter, applicable law, or listing standards.
B. Access to Information
The Committee shall have full, free, and unrestricted access to the Company's books, records, facilities, and personnel, including, without limitation, all financial records, accounting records, internal audit reports, compliance reports, legal files, and such other documents and information as the Committee may request.
The Committee may require any officer or employee of the Company, or any representative of the Company's outside counsel or Independent Auditors, to attend a meeting of the Committee or to respond to Committee inquiries, whether in writing or in person. Officers and employees of the Company are expected to cooperate fully with the Committee in the performance of its duties.
The Committee shall receive and review the following on a regular basis:
(a) Periodic reports from the Independent Auditors regarding audit findings, internal control observations, recommendations for improvements, and management letters;
(b) Reports from management on the Company's financial reporting process, including significant accounting policies and estimates, changes in accounting standards, and the impact of any new or proposed regulations on the Company's financial statements and disclosures;
(c) Reports from management on the Company's risk management framework, including the identification, assessment, and mitigation of major risk exposures; and
(d) Reports from the Company's compliance function on legal and regulatory compliance matters, including matters relating to sanctions, anti-corruption, and export controls.
V. RESPONSIBILITIES AND DUTIES
The following is a description of the principal recurring responsibilities and duties of the Committee in carrying out its oversight functions. The Committee may, in its discretion, carry out such additional responsibilities and duties as it deems appropriate or as may be assigned to it by the Supervisory Board from time to time.
A. Independent Auditors
1. Appointment and Oversight.  The Committee shall be directly responsible for the appointment, compensation, retention, and oversight of the work of the Independent Auditors, including the resolution of disagreements between management and the Independent Auditors regarding financial reporting. The Company's current Independent Auditors are:
(a) German Statutory/IFRS Audit: Blackmere & Whitfield GmbH Wirtschaftsprüfungsgesellschaft, Munich, Germany, led by Dieter Kaufmann, Wirtschaftsprüfer, Ganghoferstraße 29, 80339 Munich, Germany (the "German Audit Firm"), which serves as the statutory auditor (Abschlussprüfer) for purposes of the German statutory audit and the IFRS consolidated financial statements; and
(b) U.S. PCAOB-Registered Audit: Blackmere & Whitfield LLP, New York, New York, led by Graham Templeton, Partner, 7 Times Square, New York, NY 10036 (the "U.S. Audit Firm"), which is registered with the Public Company Accounting Oversight Board ("PCAOB") and serves as the auditor for purposes of the Company's audit requirements under U.S. securities laws.
The Committee shall obtain and review at least annually a written report from the Independent Auditors describing:
(a) The firm's internal quality-control procedures, including any findings or recommendations arising from the firm's most recent internal quality-control review;
(b) Any material issues raised by the most recent internal quality-control review, PCAOB inspection, or peer review of the firm, or by any inquiry or investigation by governmental or professional authorities within the preceding five (5) years regarding one or more independent audits carried out by the firm, and any steps taken to deal with any such issues; and
(c) All relationships between the Independent Auditors and the Company or any of its subsidiaries (including relationships involving both the German Audit Firm and the U.S. Audit Firm, and any shared or affiliated offices or personnel), in order to assess the auditors' independence from the Company.
The Committee shall actively engage in a dialogue with the Independent Auditors with respect to the matters described above and shall take appropriate action in response to any concerns raised.
2. Independence Assessment.  The Committee shall evaluate the qualifications, performance, and independence of the Independent Auditors at least annually, taking into account the opinions of management and the head of the internal audit function. In conducting this evaluation, the Committee shall:
(a) Obtain and review the annual written statement from the Independent Auditors delineating all relationships between the auditors and the Company, consistent with applicable PCAOB rules, and discuss with the Independent Auditors any disclosed relationships or services that may impact the objectivity and independence of the auditors;
(b) Evaluate whether the provision of non-audit services by the Independent Auditors is compatible with maintaining the auditors' independence, taking into account the requirements of Exchange Act Section 10A, PCAOB rules, and applicable German law;
(c) Consider whether there should be regular rotation of the lead audit engagement partner, the concurring review partner, or the audit firm itself, taking into account both PCAOB auditor rotation requirements (including PCAOB Rule 3600T and the related SEC rules regarding partner rotation) and German rotation rules under the Wirtschaftsprüferordnung (WPO) and applicable EU regulations; and
(d) Present its conclusions regarding the qualifications, performance, and independence of the Independent Auditors to the Supervisory Board.
3. Pre-Approval of Audit and Non-Audit Services.  The Committee shall pre-approve all audit services and all permitted non-audit services to be performed by the Independent Auditors for the Company or any of its subsidiaries, in accordance with Exchange Act Section 10A(i) and PCAOB Rule 3524.
The Committee shall establish written pre-approval policies and procedures for the engagement of the Independent Auditors to provide audit and permissible non-audit services. Such policies and procedures shall be detailed as to the particular service to be provided and shall not involve the delegation of Committee responsibilities to management. The policies and procedures shall specify:
(a) The types of services that require specific pre-approval by the Committee and the types of services, if any, for which general pre-approval may be granted;
(b) The terms, conditions, and limitations of any general pre-approval, including any monetary thresholds;
(c) The procedures by which the Committee will be promptly informed of any services commenced pursuant to a general pre-approval; and
(d) The requirement that management provide the Committee with periodic reports on the nature, scope, and fees associated with all services provided by the Independent Auditors.
The Committee may delegate pre-approval authority to one or more designated members of the Committee; provided, however, that the decisions of any such member shall be presented to the full Committee at its next scheduled meeting for ratification or further action.
The following categories of services require specific pre-approval by the Committee:
(a) Annual audit of the Company's consolidated financial statements under IFRS, including any required reconciliation to other applicable accounting frameworks;
(b) Quarterly or interim reviews of the Company's financial information;
(c) Comfort letters in connection with securities offerings, including, without limitation, the comfort letters to be provided by Blackmere & Whitfield in connection with the Company's initial public offering of ADSs in the United States, as requested by Calderwood & Harkness LLP in its capacity as underwriters' counsel or issuer's counsel, as applicable;
(d) Statutory audit services required under German law, including the audit of the Company's standalone financial statements (Jahresabschluss) and the statutory group financial statements (Konzernabschluss);
(e) Tax compliance, tax planning, and tax advisory services, to the extent such services are permissible under PCAOB rules and applicable law;
(f) Any other services not prohibited by applicable law or regulation.
Prohibited non-audit services include those set forth in Exchange Act Section 10A(g) and PCAOB rules, including, without limitation, the following:
(a) Bookkeeping or other services related to the accounting records or financial statements of the Company;
(b) Financial information systems design and implementation;
(c) Appraisal or valuation services, fairness opinions, or contribution-in-kind reports;
(d) Actuarial services;
(e) Internal audit outsourcing services;
(f) Management functions or human resources services;
(g) Broker-dealer, investment adviser, or investment banking services;
(h) Legal services; and
(i) Expert services unrelated to the audit.
4. Audit Planning and Results.  The Committee shall review and discuss with the Independent Auditors the overall audit scope, plan, and approach for the annual audit, including:
(a) Staffing levels and the composition of the engagement team, including the involvement of audit specialists (e.g., IT audit, tax, transfer pricing, and valuation specialists);
(b) Materiality thresholds and the basis for their determination;
(c) Locations and entities to be visited or subject to audit procedures, including the Company's Munich headquarters, Dresden fabrication facilities, Santa Clara (California) design center, Singapore regional operations, Shanghai operations (Halcyon Shanghai Semiconductor Co., Ltd.), and Brno (Czech Republic) operations (Halcyon Automotive Components s.r.o.);
(d) The extent of reliance on the Company's internal audit function and the coordination between the Independent Auditors and internal audit; and
(e) Any anticipated challenges, risks, or areas of particular audit focus.
The Committee shall review and discuss with the Independent Auditors the results of the annual audit, including, without limitation:
(a) Any audit problems or difficulties encountered during the course of the audit, including any restrictions on the scope of the auditors' work or access to requested information, and management's response to such problems or difficulties;
(b) Critical accounting policies and practices used by the Company, including any significant changes in accounting policies during the period;
(c) Alternative treatments of financial information within IFRS that have been discussed with management, the ramifications of the use of such alternative treatments, and the treatment preferred by the Independent Auditors;
(d) Any material written communications between the Independent Auditors and management, including management representation letters, schedules of adjusted and unadjusted audit differences, any engagement letter or independence letter, and any other correspondence required by applicable auditing standards; and
(e) Any other matters required to be communicated to the Committee under applicable PCAOB auditing standards, including AS 1301 (Communications with Audit Committees).
B. Financial Statements and Disclosure
1. Annual and Interim Financial Statements.  The Committee shall review and discuss with management and the Independent Auditors the Company's annual audited financial statements, including the IFRS consolidated financial statements and the notes thereto, prior to the filing of the Company's annual report on Form 20-F with the SEC. Such review shall include discussion of significant accounting policies and estimates, the quality and appropriateness of accounting principles applied, the clarity of the financial statement disclosures, and any significant changes in accounting methods or assumptions.
The Committee shall review and discuss with management and the Independent Auditors any interim financial information included in current reports on Form 6-K furnished to the SEC, including a discussion of any significant changes in the Company's financial condition or results of operations since the most recent annual report.
Based on its review and discussions, the Committee shall recommend to the Supervisory Board whether the audited financial statements should be included in the Company's annual report on Form 20-F for filing with the SEC.
2. Earnings Releases and Financial Guidance.  The Committee shall review and discuss with management the Company's earnings press releases, including the use of any "pro forma" or "adjusted" non-IFRS financial information, reconciliations to the most directly comparable IFRS measures, and the reasons for the presentation of non-IFRS measures. The Committee shall also review and discuss financial information and earnings guidance provided to analysts, rating agencies, and the public.
The Committee need not discuss in advance each earnings release or each instance in which the Company provides earnings guidance; however, the Committee shall discuss generally the types of information to be disclosed and the types of presentations to be made, and shall review the Company's policies regarding the use of non-IFRS financial measures and earnings guidance.
3. MD&A and Other Disclosures.  The Committee shall review and discuss with management and the Independent Auditors the Company's disclosures under "Operating and Financial Review and Prospects" (the MD&A equivalent for foreign private issuers) in the Company's annual report on Form 20-F, including a discussion of the Company's critical accounting estimates, known trends and uncertainties, off-balance-sheet arrangements, and contractual obligations.
The Committee shall review any comment letters received from the SEC staff related to the Company's financial statements, disclosures, or other filings, and management's responses thereto. The Committee shall be informed promptly of any SEC comment letter and shall have the opportunity to review and discuss management's proposed response before such response is submitted.
C. Internal Controls and Internal Audit
1. Internal Controls Over Financial Reporting.  The Committee shall review and discuss with management and the Independent Auditors the adequacy and effectiveness of the Company's internal controls over financial reporting, including the Company's disclosure controls and procedures and the design and operating effectiveness of the Company's control environment.
The Supervisory Board and the Committee acknowledge that, as a foreign private issuer, Halcyon is subject to a phased implementation of the internal control reporting requirements of Sarbanes-Oxley Section 404. Specifically, the Company's first management assessment of internal controls over financial reporting under Section 404(a) will be required for the fiscal year ending December 31, 2027, and the first independent auditor attestation report on the effectiveness of internal controls under Section 404(b) will likewise be required for the fiscal year ending December 31, 2027. The Committee shall oversee management's preparation for compliance with these requirements, including the design and implementation of a testing and remediation plan, and shall receive periodic status reports from management regarding the progress of the Section 404 readiness effort.
The Committee shall receive and review reports from management and the Independent Auditors regarding:
(a) Any significant deficiencies or material weaknesses in the design or operation of internal controls over financial reporting that are reasonably likely to adversely affect the Company's ability to record, process, summarize, and report financial information;
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal controls over financial reporting; and
(c) Any changes in internal controls over financial reporting that occurred during the most recent fiscal period that have materially affected, or are reasonably likely to materially affect, the Company's internal controls over financial reporting.
The Committee shall review management's remediation plans for any identified significant deficiencies or material weaknesses and shall monitor the progress of remediation efforts on a regular basis.
2. Internal Audit Function.  The Committee shall review and approve the appointment, replacement, reassignment, or dismissal of the head of the Company's internal audit function. The head of the internal audit function shall report functionally to the Committee and administratively to management.
The Committee shall review with the head of internal audit the scope, plan, organizational structure, qualifications, and budget of the internal audit function on at least an annual basis, and shall ensure that the internal audit function has adequate resources and authority to fulfill its responsibilities.
The Committee shall review significant findings and recommendations of the internal audit function and management's responses thereto, including any matters relating to the adequacy and effectiveness of internal controls, compliance with Company policies, and the results of investigations conducted by the internal audit function.
3. SOX Certifications.  The Committee shall review and discuss the certifications to be provided by the Chief Executive Officer, Dr. Friedrich Wendt, and the Chief Financial Officer, Katarina Dalmqvist, under Sarbanes-Oxley Sections 302 and 906 in connection with each periodic report filed with the SEC, including the annual report on Form 20-F and any interim reports on Form 6-K that contain financial statements.
The Committee shall review and discuss any disclosures made by the CEO or CFO regarding significant deficiencies, material weaknesses, or fraud during the evaluation of internal controls over financial reporting, and shall take appropriate action in response to any such disclosures.
D. Compliance, Legal, and Risk Oversight
1. Legal and Regulatory Compliance.  The Committee shall review periodically with the Company's General Counsel, Wilhelm Ostermann, and outside counsel, including Calderwood & Harkness LLP (as U.S. securities counsel) and Bähr Stein Rechtsanwälte PartGmbB (as German counsel), any legal matters that could have a significant impact on the Company's financial statements, internal controls, or compliance policies. Such review shall include, without limitation, pending or threatened litigation, regulatory investigations, government enforcement actions, and any material legal developments affecting the Company or its industry.
The Committee shall review the Company's compliance with applicable laws and regulations, including, without limitation, the Exchange Act, SOX, Nasdaq listing rules, German securities laws (Wertpapierhandelsgesetz), the Market Abuse Regulation (EU No. 596/2014), and applicable provisions of the Frankfurt Stock Exchange Prime Standard.
2. Related-Party Transactions.  The Committee shall review and approve or ratify all related-party transactions required to be disclosed pursuant to Item 7.B of Form 20-F. The Committee's review and approval responsibilities shall extend to, but not be limited to, the following types of transactions:
(a) Transactions between the Company (or any of its subsidiaries) and Rheintal Industrieholding GmbH, a pre-IPO shareholder holding approximately 22.3% of the Company's outstanding ordinary shares prior to the IPO, which is a holding company controlled by Margarethe Wendt, the sister of the Company's Chief Executive Officer, Dr. Friedrich Wendt;
(b) Transactions involving members of the Company's Management Board (Vorstand), the Supervisory Board, or their respective immediate family members;
(c) Transactions involving holders of more than 5% of the Company's ordinary shares or ADSs; and
(d) Any other transaction that would be required to be disclosed as a related-party transaction under applicable SEC rules, IFRS (IAS 24), or German law.
The Committee shall establish written policies and procedures for the identification, review, approval, and ongoing monitoring of related-party transactions, including procedures for the reporting of potential related-party transactions by management and directors.
3. Risk Assessment and Risk Management.  The Committee shall discuss with management the Company's major financial risk exposures and the steps management has taken to monitor and control such exposures, including the Company's risk assessment and risk management policies, procedures, and controls. The Committee's oversight of risk management shall be coordinated with the Supervisory Board's broader risk oversight responsibilities, and the Committee shall report to the Supervisory Board on its risk-related activities.
Areas of particular focus for the Committee shall include, without limitation:
(a) Semiconductor industry cyclicality: The impact of industry cycles on the Company's revenue, profitability, and inventory management;
(b) Currency risk: The Company's exposure to fluctuations in exchange rates, particularly EUR/USD and other functional currencies used in the Company's operations, and the effectiveness of the Company's hedging strategies;
(c) Supply chain concentration: The risks associated with reliance on a limited number of suppliers for critical raw materials, equipment, and components, and the Company's business continuity planning;
(d) Export control and sanctions compliance: The Company's compliance with OFAC sanctions regulations, EU sanctions, and U.S. export control regulations (including the Export Administration Regulations ("EAR") and the International Traffic in Arms Regulations ("ITAR")), particularly as they relate to the Company's semiconductor technology and products; and
(e) intellectual property risk: The risks associated with the protection and enforcement of the Company's intellectual property portfolio, including patents, trade secrets, and proprietary design information.
4. Sanctions, Anti-Corruption, and Export Controls.  The Committee shall oversee the Company's compliance with all applicable sanctions, anti-corruption, and export control laws and regulations, including, without limitation:
(a) U.S. Office of Foreign Assets Control ("OFAC") sanctions regulations;
(b) European Union sanctions regulations;
(c) The U.S. Foreign Corrupt Practices Act of 1977, as amended ("FCPA");
(d) The United Kingdom Bribery Act 2010;
(e) The Export Administration Regulations ("EAR") administered by the U.S. Bureau of Industry and Security; and
(f) The International Traffic in Arms Regulations ("ITAR") administered by the U.S. Directorate of Defense Trade Controls.
The Committee's oversight shall encompass compliance matters arising from the Company's global operations, including operations conducted through Halcyon Shanghai Semiconductor Co., Ltd. in the People's Republic of China, and any other jurisdictions in which the Company operates that present heightened sanctions, anti-corruption, or export control risk.
The Committee shall receive periodic reports from the General Counsel and the compliance function on sanctions, anti-corruption, and export controls compliance matters, including reports on training programs, internal investigations, voluntary disclosures, and any communications with regulatory authorities.
E. Complaint Procedures (Whistleblower)
1. Establishment of Procedures.  The Committee shall establish and maintain procedures for:
(a) The receipt, retention, and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters, whether submitted by employees, officers, directors, stockholders, or third parties; and
(b) The confidential, anonymous submission by employees of the Company and its subsidiaries of concerns regarding questionable accounting or auditing matters. The term "subsidiaries" for this purpose includes, without limitation, Halcyon Semiconductor USA Inc. (Delaware), Halcyon Power Solutions GmbH (Munich, Germany), Halcyon Asia Pacific Pte. Ltd. (Singapore), Halcyon Shanghai Semiconductor Co., Ltd. (Shanghai, People's Republic of China), and Halcyon Automotive Components s.r.o. (Brno, Czech Republic).
These procedures are required by Sarbanes-Oxley Section 301 and Exchange Act Rule 10A-3(b)(3), and the Committee shall ensure that such procedures comply in all respects with applicable law and regulation, including any applicable data privacy, employment, and whistleblower protection laws in the jurisdictions in which the Company and its subsidiaries operate.
The Company has adopted a separate Whistleblower Policy in connection with the listing of its ADSs on the Nasdaq Global Select Market, which sets forth detailed procedures for the submission, receipt, investigation, and resolution of complaints. The Committee shall oversee the implementation and effectiveness of the Whistleblower Policy and shall review it at least annually.
2. Review and Investigation.  The Committee shall review all complaints received through the whistleblower mechanism that relate to accounting, internal accounting controls, or auditing matters. The Committee shall determine the appropriate course of action with respect to each complaint, including whether further investigation is warranted and the manner in which such investigation should be conducted.
The Committee shall have the authority to investigate, or to cause the investigation of, any matter brought to its attention, with full access to all Company books, records, facilities, and personnel, and with the authority to engage outside advisors — including independent legal counsel, forensic accountants, and other consultants — at the Company's expense, without the need for prior approval from management or the Supervisory Board.
The Committee shall maintain a log of all complaints received and the disposition of each complaint, and shall report to the Supervisory Board on a periodic basis regarding the nature and resolution of any material complaints.
F. Directors' and Officers' Insurance
The Committee shall review and discuss with management the Company's directors' and officers' ("D&O") liability insurance program, including the scope of coverage, policy terms and conditions, and the adequacy of coverage limits in light of the Company's business activities, dual-listing obligations, and overall exposure profile.
As of the date of adoption of this Charter, the Company's D&O insurance program is structured as follows:
The estimated annual premium for the foregoing program is $2,800,000. The program is brokered by Clearwater D&O Insurance Brokers Ltd. (contact: Emma Callister, Vice President, Financial Lines).
The Committee shall review the adequacy of the D&O insurance program at least annually, taking into account, among other factors, the Company's listing on the Nasdaq Global Select Market, the increased litigation exposure associated with a U.S. listing, changes in the Company's business or risk profile, developments in applicable law, and the availability and cost of coverage in the insurance market. The Committee shall make recommendations to the Supervisory Board regarding any proposed changes to the D&O insurance program.
VI. REPORTING
The Committee shall report regularly to the Supervisory Board on its activities, and such reports shall include, without limitation:
(a) A summary of the Committee's review of the Company's annual audited financial statements and its recommendation regarding the inclusion of such financial statements in the Company's annual report on Form 20-F;
(b) The Committee's assessment of the qualifications, performance, and independence of the Independent Auditors, including any recommendation regarding the appointment, retention, or termination of the Independent Auditors;
(c) Any material issues or concerns regarding the Company's internal controls over financial reporting, compliance with applicable laws and regulations, or risk management;
(d) A summary of any complaints received through the whistleblower mechanism and the disposition thereof;
(e) A summary of related-party transactions reviewed and approved or ratified by the Committee during the reporting period; and
(f) Any other matters the Committee deems appropriate or that the Supervisory Board requests.
The Committee shall prepare, or cause to be prepared, any report or disclosure required by the rules and regulations of the SEC, Nasdaq, or the Frankfurt Stock Exchange to be included in the Company's annual report on Form 20-F, the Company's annual report for the Frankfurt Stock Exchange, or any other public filings, including any report of the audit committee required under applicable SEC rules.
VII. ANNUAL SELF-ASSESSMENT
The Committee shall conduct an annual self-assessment of its performance, including a review of its compliance with this Charter, the adequacy and appropriateness of the Charter's provisions, and the effectiveness of the Committee's processes and procedures. The self-assessment may take such form as the Committee deems appropriate, including written questionnaires, interviews, or facilitated discussions.
The Committee shall report the results of the annual self-assessment to the Supervisory Board and shall recommend any proposed changes to this Charter for approval by the Supervisory Board. The Supervisory Board shall consider and, if appropriate, approve any such changes.
This Charter shall be reviewed by the Committee at least annually and shall be updated as necessary to reflect changes in applicable law, regulation, SEC rules, PCAOB standards, Nasdaq listing standards, the German Corporate Governance Code, or the Company's business circumstances. The current version of this Charter shall be made available on the Company's website, as required by applicable Nasdaq listing rules.
VIII. LIMITATIONS
While the Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Committee to plan or conduct audits or to determine that the Company's financial statements and disclosures are complete and accurate and are in accordance with IFRS and applicable rules and regulations. These are the responsibilities of management, the Independent Auditors, and, where applicable, the Company's internal audit function.
Nothing in this Charter shall be construed to reduce the professional responsibilities or legal liabilities of the Company's management or the Independent Auditors, or to impose upon the Committee or its members any duty or obligation beyond those imposed by applicable law, regulation, and listing standards.
Members of the Committee are not full-time employees of the Company, and it is not the duty or responsibility of the Committee or its members to conduct "field work" or other types of auditing, accounting, or compliance reviews or procedures. The designation of a member of the Committee as an "audit committee financial expert" does not impose on such person any duties, obligations, or liabilities that are greater than the duties, obligations, and liabilities imposed on such person as a member of the Committee and the Supervisory Board in the absence of such designation.
In discharging their duties, members of the Committee are entitled to rely on information, opinions, reports, and statements, including financial statements and other financial data, prepared or presented by:
(a) Officers and employees of the Company whom the Committee believes to be reliable and competent in the matters presented;
(b) Legal counsel, whether internal or external, as to matters the Committee believes to be within such counsel's professional competence;
(c) The Independent Auditors, as to matters the Committee believes to be within such auditors' professional or expert competence; and
(d) Other persons, including independent advisors, consultants, and experts, as to matters the Committee believes to be within such person's professional or expert competence.
Such reliance shall be in good faith and shall not constitute negligence or misconduct on the part of any Committee member.
IX. FOREIGN PRIVATE ISSUER STATUS
This Charter has been adopted in recognition of the Company's status as a foreign private issuer under Rule 3b-4 of the Exchange Act. The Company's foreign private issuer status affords it certain exemptions and accommodations under U.S. securities laws and Nasdaq listing rules, which the Supervisory Board and the Committee have taken into account in the design and adoption of this Charter.
Certain provisions of Nasdaq's corporate governance rules permit the Company to follow home-country (German) practices in lieu of Nasdaq requirements, as disclosed in the Company's Corporate Governance Exemption Notice filed with Nasdaq pursuant to Nasdaq Rule 5615(a)(3). The specific areas in which the Company follows home-country practice are set forth in the Corporate Governance Exemption Notice and in the Company's annual report on Form 20-F.
Notwithstanding the foregoing, the Committee's composition and procedures comply with Exchange Act Rule 10A-3 and Nasdaq Rule 5605(c), as these requirements are not subject to the FPI home-country practice exemption, except as specifically provided in Rule 10A-3(b)(3) regarding employee representatives required under home-country legal or listing requirements. The Committee shall monitor the Company's compliance with these requirements on an ongoing basis.
If the Company ceases to qualify as a foreign private issuer under Rule 3b-4 of the Exchange Act, this Charter shall be amended as promptly as practicable and in any event within the time periods prescribed by applicable law and Nasdaq listing standards, so as to comply with the then-applicable corporate governance and audit committee requirements for domestic U.S. issuers, including, without limitation, the requirements of Nasdaq Rule 5605(c) that are otherwise subject to FPI exemptions.
The Company's foreign private issuer status under Rule 3b-4 shall be assessed annually as of the last business day of the Company's most recently completed second fiscal quarter, and the results of such assessment shall be reported to the Committee promptly following such determination. The Committee shall, in consultation with the General Counsel and outside counsel, evaluate the implications of any change in the Company's FPI status for this Charter and for the Company's corporate governance practices generally.
X. AMENDMENT AND INTERPRETATION
This Charter may be amended, restated, or replaced by the Supervisory Board at any time, by a resolution of the Supervisory Board, without the need for approval by the Company's stockholders, the Management Board (Vorstand), or any other person or body, except as otherwise required by applicable law.
In the event of any conflict between this Charter and applicable law, regulation, SEC rules, PCAOB standards, or Nasdaq listing standards, the applicable law, regulation, or listing standard shall control. The Committee shall promptly amend or supplement this Charter to the extent necessary to resolve any such conflict.
In the event of any conflict between this Charter and the Company's articles of association (Satzung) or the rules of procedure for the Supervisory Board (Geschäftsordnung des Aufsichtsrats) under German law, the parties shall endeavor in good faith to reconcile such provisions in a manner that gives effect to the intent and purpose of this Charter while complying with applicable German law. The General Counsel, Wilhelm Ostermann, shall advise the Committee on the resolution of any such conflict, in consultation with the Company's U.S. securities counsel, Calderwood & Harkness LLP, and the Company's German counsel, Bähr Stein Rechtsanwälte PartGmbB, as appropriate. Any such conflict and its resolution shall be reported to the Supervisory Board.
XI. EFFECTIVE DATE
This Charter shall become effective upon the date of listing of the Company's American Depositary Shares on the Nasdaq Global Select Market, which is targeted for on or about June 22, 2026, subject to the SEC's declaration of effectiveness of the Company's Registration Statement on Form F-1 (File No. 333-__) and the satisfaction of all other conditions to listing.
Prior to the effective date of this Charter, the Supervisory Board may take such preparatory actions as it deems appropriate to facilitate the implementation of this Charter, including the appointment of Committee members, the adoption of pre-approval policies and procedures, and the establishment of whistleblower procedures.
Adopted by the Supervisory Board of Halcyon Semiconductor Aktiengesellschaft on ____, 2026.
HALCYON SEMICONDUCTOR AKTIENGESELLSCHAFT SUPERVISORY BOARD (AUFSICHTSRAT)
By: ________
Name: Prof. Dr. Anneliese Voss
Title: Chairperson of the Supervisory Board (Vorsitzende des Aufsichtsrats)
Date: ________
Prepared by Calderwood & Harkness LLP, One Liberty Plaza, 42nd Floor, New York, NY 10006. Matter No. 1032-00003. For review and discussion purposes. Subject to revision. This document does not constitute legal advice and is provided solely for the purpose of facilitating discussions among the Company, its Supervisory Board, and its legal counsel. All rights reserved.
Layer | Insurer | Limit of Liability | Attachment Point
Primary | Thornhill Assurance plc | $15,000,000 | $0 (ground-up)
First Excess | Arcadian Indemnity Corp. | $20,000,000 | $15,000,000
Second Excess | Helmsman Re Ltd. | $20,000,000 | $35,000,000
Third Excess | Nordic Specialty Insurance SE | $20,000,000 | $55,000,000
Total Program Limit | $75,000,000