1032-00003 · Client 1032 · Corporate Governance & Listing

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MEMORANDUM

PRIVILEGED & CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION

From: Vivienne St. Claire, Partner, Capital Markets, Calderwood & Harkness LLP Claire Dempsey, Associate, Capital Markets, Calderwood & Harkness LLP

To: Wilhelm Ostermann, General Counsel (Chefjustitiar), Halcyon Semiconductor Aktiengesellschaft Katarina Dalmqvist, Chief Financial Officer (Finanzvorstand), Halcyon Semiconductor Aktiengesellschaft

CC: Robert Adeyemi, Partner, Capital Markets, Calderwood & Harkness LLP Audrey Zhou, Associate, Capital Markets, Calderwood & Harkness LLP Dr. Christoph Maurelban, Partner, Capital Markets, Bähr Stein Rechtsanwälte PartGmbB (German counsel input)

Date: February 28, 2026

Re: Halcyon Semiconductor AG — Proposed US Listing on the Nasdaq Global Select Market — Analysis of Corporate Governance Exemptions Available to Foreign Private Issuers Under Nasdaq Rule 5615(a)(3)

Matter No.: 1032-00003

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I. Executive Summary

Halcyon Semiconductor Aktiengesellschaft ("Halcyon," "HSAG," or the "Company"), a German Aktiengesellschaft incorporated and registered in Munich, Bavaria, Federal Republic of Germany (Commercial Register No. HRB 217458, Amtsgericht München), is currently listed on the Frankfurt Stock Exchange (FRA: HCY) in the Prime Standard segment. The Company is pursuing an initial public offering (the "IPO" or the "Offering") of American Depositary Shares ("ADSs") in the United States. The ADSs are proposed to be listed on the Nasdaq Global Select Market (the "Nasdaq GSM") under the ticker symbol "HCYN."

The ADSs will be issued by Meridian Trust Company, N.A. (the "Depositary"), acting as depositary bank pursuant to a Deposit Agreement to be entered into among Halcyon, the Depositary, and the holders of ADSs. Each ADS will represent two (2) ordinary shares (Stammaktien) of the Company, each with no par value (Stückaktien), at a ratio of 1 ADS = 2 ordinary shares. The underlying ordinary shares will continue to be listed on the Frankfurt Stock Exchange.

Halcyon intends to qualify — and, based on our preliminary analysis, does qualify — as a "foreign private issuer" (an "FPI") under Rule 3b-4 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Our detailed analysis of Halcyon's FPI status has been set forth in a separate Calderwood & Harkness memorandum dated February 14, 2026 (the "FPI Status Memorandum"), and we do not repeat that analysis here. For purposes of this memorandum, we assume that Halcyon satisfies the conditions for FPI status and will maintain that status through the completion of the Offering and for the immediately following fiscal year.

As an FPI, Halcyon is entitled under Nasdaq Rule 5615(a)(3) to follow certain home-country corporate governance practices in lieu of specified Nasdaq corporate governance listing standards applicable to domestic US-listed companies. This is a significant accommodation that reflects the recognition by the US securities regulatory framework that foreign companies are subject to their own comprehensive corporate governance regimes, which — although they may differ from US standards in structure and approach — often provide analogous or equivalent protections for shareholders and market integrity.

The purpose of this memorandum is to provide a comprehensive analysis of the corporate governance exemptions available to Halcyon as an FPI under Nasdaq Rule 5615(a)(3). Specifically, this memorandum:

(a) identifies each Nasdaq corporate governance rule from which Halcyon may claim an exemption as an FPI;

(b) describes in detail the corresponding German corporate governance practice that Halcyon follows under the Aktiengesetz (German Stock Corporation Act, "AktG"), the German Corporate Governance Code (Deutscher Corporate Governance Kodex, "DCGK"), the Mitbestimmungsgesetz (German Codetermination Act, "MitbestG"), and other applicable provisions of German law;

(c) sets forth our recommendations as to the scope of exemptions that Halcyon should claim in connection with the proposed Nasdaq listing;

(d) outlines the procedural requirements for filing the exemption notice with Nasdaq, including the requirement to obtain a home-country counsel certification letter; and

(e) addresses the mandatory Nasdaq requirements from which no FPI exemption is available — principally, the audit committee requirements under Nasdaq Rule 5605(c) as mandated by Exchange Act Rule 10A-3 — and analyzes the steps Halcyon must take to comply with those mandatory requirements.

We note at the outset that Halcyon's German two-tier board system — comprising the Vorstand (Management Board) and the Aufsichtsrat (Supervisory Board) — differs fundamentally from the unitary board model that is standard for US corporations and that underlies the Nasdaq corporate governance listing standards. Many of the differences that give rise to the need for FPI exemptions flow directly from this structural distinction and from the requirements of German codetermination law, which mandates employee representation on the Supervisory Board for companies of Halcyon's size. These are well-understood differences that are commonly addressed by German FPIs listing in the United States, and the exemption framework under Nasdaq Rule 5615(a)(3) is specifically designed to accommodate such differences.

This memorandum has been prepared in close coordination with Bähr Stein Rechtsanwälte PartGmbB, the Company's German legal counsel, and specifically with Dr. Christoph Maurelban, a partner in Bähr Stein's Capital Markets practice. All descriptions of German law and practice contained in this memorandum have been reviewed by Dr. Maurelban and his team for accuracy and completeness. To the extent that any German law question arises that is not addressed herein, we defer to Bähr Stein as the authoritative source of German legal advice.

Based on our analysis, we recommend that Halcyon claim a total of eight (8) exemptions from Nasdaq corporate governance listing standards, as set forth in the summary table in Section VI below and discussed in detail in Section III. We further recommend that Halcyon take the compliance steps described in Section IV with respect to the mandatory requirements that apply notwithstanding FPI status.

II. Legal Framework

A. Foreign Private Issuer Status — Overview

As noted above, Halcyon qualifies as a foreign private issuer under Rule 3b-4 of the Exchange Act. Rule 3b-4 defines a "foreign private issuer" as any foreign government or any foreign issuer other than a foreign government, except an issuer that meets both of the following conditions: (i) more than 50% of the issuer's outstanding voting securities are directly or indirectly held of record by residents of the United States; and (ii) any one of the following: (a) the majority of the executive officers or directors are US citizens or residents; (b) more than 50% of the assets of the issuer are located in the United States; or (c) the business of the issuer is administered principally in the United States.

Our detailed analysis confirming Halcyon's FPI status is contained in the FPI Status Memorandum, which concludes that (i) fewer than 50% of Halcyon's outstanding voting securities are held of record by US residents, and (ii) even if that threshold were exceeded, none of the three alternative conditions in clause (ii) above would be satisfied. Halcyon's executive management team is based in Munich, Germany; the Company's principal assets (including its semiconductor fabrication facilities in Dresden and its research and development center in Stuttgart) are located in Germany and across Europe; and the Company's business is administered principally from its Munich headquarters.

The key consequence of FPI status for purposes of this memorandum is that FPIs listed on Nasdaq are permitted to follow home-country corporate governance practices in lieu of most Nasdaq corporate governance listing standards, subject to certain disclosure requirements and a limited set of mandatory requirements from which no exemption is available. This accommodation applies specifically to the corporate governance listing standards set forth in the Nasdaq 5600 series of rules, as well as certain related provisions in the 5200 and 5600 series.

The statutory basis for the limited mandatory requirements that apply to FPIs notwithstanding the general exemption framework is Section 301 of the Sarbanes-Oxley Act of 2002 ("SOX"), codified as Exchange Act Section 10A(m), which directs the SEC to adopt rules requiring national securities exchanges to prohibit the listing of any security of an issuer that does not comply with the audit committee requirements set forth therein. These requirements are implemented through Exchange Act Rule 10A-3, which applies to FPIs, albeit with certain accommodations described in Section IV below.

B. Nasdaq Rule 5615(a)(3) — FPI Exemption Framework

Nasdaq Rule 5615(a)(3) provides the operative framework under which foreign private issuers may claim exemptions from Nasdaq corporate governance listing standards. The rule states, in substance, that a foreign private issuer may follow its home-country practice in lieu of certain requirements in the Nasdaq Rule 5600 series, provided that the issuer complies with the following conditions:

(i) Disclosure. The issuer must disclose in its annual report filed with the SEC (on Form 20-F) or on the issuer's website each requirement of the Nasdaq Rule 5600 series that it does not follow and must describe the alternative home-country practice it follows instead. Nasdaq's interpretive guidance encourages issuers to include this disclosure in both the annual report and on the issuer's website to provide maximum transparency to investors.

(ii) Home-Country Counsel Certification. The issuer must submit to Nasdaq a written statement from an independent counsel in its home country certifying that the issuer's practices are not prohibited by the laws of the issuer's home country. Alternatively, the issuer may submit a statement from an official of the home-country stock exchange on which the issuer's securities are listed, certifying the same. This certification requirement ensures that the issuer's reliance on home-country practices has been verified by qualified local legal counsel or exchange officials.

(iii) Annual Report Inclusion. The disclosure of exemptions relied upon must be included in the annual report on Form 20-F filed with the SEC for each fiscal year in which the exemptions are claimed, and must be updated to reflect any changes in the exemptions relied upon or in the home-country practices described.

Critically, the FPI exemption under Nasdaq Rule 5615(a)(3) does not extend to the following Nasdaq listing requirements, which remain mandatory for FPIs:

• Nasdaq Rule 5605(c)(2) — Audit committee composition requirements, to the extent mandated by Exchange Act Rule 10A-3. This is the single most significant mandatory requirement and is discussed in detail in Section IV.A below.

• Nasdaq Rule 5250(b)(3) — Disclosure of third-party director and nominee compensation arrangements. FPIs must disclose any arrangement or understanding pursuant to which any director or director nominee receives compensation from a third party in connection with such person's candidacy or service as a director.

• Nasdaq Rule 5250(c)(1) — Annual report distribution. FPIs must distribute or make available an annual report to shareholders and must file such annual report with the SEC on Form 20-F.

• Nasdaq Rule 5610 — Code of conduct. FPIs must adopt a code of conduct applicable to all directors, officers, and employees, although FPIs may follow home-country practices regarding the specific content of such code and the procedures for granting waivers from the code. The minimum content requirements of Nasdaq Rule 5610, including the requirement for an enforcement mechanism, remain applicable.

• Nasdaq Rule 5625 — Notification of non-compliance. FPIs must provide prompt notification to Nasdaq of any material non-compliance with Nasdaq listing standards, including any non-compliance arising from a change in home-country law or practice that affects the basis for a previously claimed exemption.

The full text of Nasdaq Rule 5615(a)(3) is reproduced in Appendix A to this memorandum.

C. German Corporate Governance Framework — Overview

To provide context for the rule-by-rule analysis in Section III, we set forth below a brief overview of the German corporate governance framework applicable to Halcyon. A more detailed description of the relevant provisions of German law is contained in Appendix B (key provisions of the AktG) and Appendix C (relevant DCGK recommendations).

Two-Tier Board Structure. Under the AktG, a German Aktiengesellschaft is governed by a mandatory two-tier board structure consisting of the Vorstand (Management Board) and the Aufsichtsrat (Supervisory Board). The Vorstand is responsible for the day-to-day management of the company and its strategic direction. The Aufsichtsrat is a separate and distinct body whose primary functions are to appoint and remove members of the Vorstand, to supervise and oversee the activities of the Vorstand, and to approve certain material transactions and corporate actions as specified by law, the company's Satzung (articles of association), or the Aufsichtsrat's own internal rules of procedure (Geschäftsordnung).

The two-tier structure is fundamentally different from the unitary board model that prevails in the United States and that underlies the Nasdaq corporate governance listing standards. Under the German system, members of the Vorstand cannot simultaneously serve on the Aufsichtsrat of the same company. This structural separation of management and supervisory functions is mandatory under German law and provides a form of governance oversight that, while different in form from the US model, serves analogous functions of management accountability and independent supervision.

Halcyon's Governance Structure. Halcyon's Aufsichtsrat currently consists of twelve (12) members, in accordance with the AktG and the Mitbestimmungsgesetz. Six (6) members are shareholder representatives elected by the Hauptversammlung (general meeting of shareholders), and six (6) members are employee representatives elected by the employees of the Halcyon group in accordance with the codetermination procedures prescribed by the Mitbestimmungsgesetz. The Chair of the Aufsichtsrat is Prof. Dr. Anneliese Voss, an independent shareholder representative who has served on the Aufsichtsrat since 2018. The Deputy Chair is Marcus Heller, an employee representative.

Halcyon's Vorstand currently consists of four (4) members: Dr. Friedrich Wendt (Vorstandsvorsitzender / Chief Executive Officer), Katarina Dalmqvist (Finanzvorstand / Chief Financial Officer), Dr. Sebastian Roth (Vorstand Technologie / Chief Technology Officer), and Ingrid Bergström (Vorstand Vertrieb / Chief Commercial Officer).

Codetermination. The Mitbestimmungsgesetz (Codetermination Act of 1976) applies to German companies with more than 2,000 employees. Halcyon currently employs approximately 8,400 employees worldwide, of whom approximately 6,200 are employed in Germany. The Mitbestimmungsgesetz therefore requires that Halcyon's Aufsichtsrat consist of equal numbers of shareholder representatives and employee representatives. In the event of a deadlock on the Aufsichtsrat, the Chair — who must be a shareholder representative — holds a casting vote.

The employee representatives on the Aufsichtsrat include employees of the Halcyon group as well as representatives of the relevant trade unions. These employee representatives are elected through a formal codetermination election process that is separate from the shareholder election process at the Hauptversammlung. Employee representatives do not meet the definition of "independent director" under Nasdaq Rule 5605(a)(2), because they are employed by (or have a specified relationship with) the issuer. This is the single most significant source of divergence between Halcyon's governance structure and the Nasdaq corporate governance standards, and it underlies several of the exemptions recommended in this memorandum.

German Corporate Governance Code (DCGK). Halcyon adheres to the recommendations of the German Corporate Governance Code (Deutscher Corporate Governance Kodex, "DCGK"), which sets forth standards of good corporate governance for German listed companies. The DCGK operates on a "comply-or-explain" basis: listed companies are required by AktG § 161 to issue an annual declaration (Entsprechenserklärung) stating the extent to which the company complies with the DCGK recommendations and, to the extent it does not, explaining the reasons for any deviation. The DCGK is not statutory law; its recommendations do not have binding legal force. However, compliance with the DCGK is widely expected of companies listed on the Prime Standard segment of the Frankfurt Stock Exchange.

Among other matters, the DCGK sets forth recommendations regarding the independence of Aufsichtsrat members, the establishment of Aufsichtsrat committees (including an audit committee, a nomination committee, and a compensation/personnel committee), the transparency of executive compensation, and the disclosure of corporate governance practices. Halcyon's most recent Entsprechenserklärung, published in December 2025, confirms that the Company complies with all but two non-material recommendations of the DCGK.

Frankfurt Stock Exchange — Prime Standard. Halcyon's ordinary shares are listed on the Regulated Market (Regulierter Markt) of the Frankfurt Stock Exchange in the Prime Standard transparency segment. The Prime Standard imposes enhanced disclosure and transparency requirements beyond those applicable to the General Standard segment, including quarterly interim reports, financial reporting in English, and adherence to international financial reporting standards (IFRS). Halcyon prepares its consolidated financial statements in accordance with IFRS as adopted by the European Union.

III. Rule-by-Rule Analysis of Available Exemptions

In this Section III, we analyze each Nasdaq corporate governance rule from which Halcyon may claim an exemption as a foreign private issuer, describe the corresponding German home-country practice, and set forth our recommendation. The analysis is organized by Nasdaq rule number.

A. Majority of Independent Directors — Nasdaq Rule 5605(b)(1)

1. Nasdaq Requirement

Nasdaq Rule 5605(b)(1) requires that a majority of the board of directors of a listed company must be comprised of "independent directors" as defined in Nasdaq Rule 5605(a)(2). For purposes of this rule, "independent director" means a person other than an executive officer or employee of the company or any other individual having a relationship which, in the opinion of the company's board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The rule further specifies a number of categorical disqualifications from independent status, including (among others) that a person who is, or at any time during the past three years was, employed by the company cannot be considered independent.

For a foreign private issuer operating under a two-tier board structure, the "board of directors" for purposes of this rule would be construed as the relevant governing body charged with the oversight and supervisory functions that correspond to those performed by a board of directors under US corporate governance norms. In the case of a German Aktiengesellschaft, this body is the Aufsichtsrat (Supervisory Board), which performs the oversight, supervisory, and appointment functions that a unitary board of directors would perform in a US corporation.

2. German Home-Country Practice

Under the AktG and the Mitbestimmungsgesetz, the composition of the Aufsichtsrat of a German company with more than 2,000 employees is determined by the codetermination requirements described in Section II.C above. These requirements mandate that fifty percent (50%) of the Aufsichtsrat members be elected by the company's employees. Halcyon's twelve-member Aufsichtsrat includes six (6) shareholder-elected members and six (6) employee-elected members.

The employee representatives on Halcyon's Aufsichtsrat are either current employees of the Halcyon group or trade union officials who serve in a representative capacity on behalf of Halcyon's workforce. Under the definition of "independent director" in Nasdaq Rule 5605(a)(2), these employee representatives would not qualify as independent because they are employed by (or have a material relationship with) the Company. As a result, a majority of the members of Halcyon's Aufsichtsrat are not "independent" under Nasdaq's definition, and Halcyon cannot comply with Nasdaq Rule 5605(b)(1) without violating mandatory German codetermination law.

This situation is not unique to Halcyon; it is the standard position for all large German Aktiengesellschaften subject to the Mitbestimmungsgesetz, and it is precisely the type of home-country legal requirement that the FPI exemption framework is designed to accommodate.

The DCGK recommends that an "adequate number" of shareholder representatives on the Aufsichtsrat should be independent within the meaning of the DCGK's own independence criteria (which differ from, and are generally less prescriptive than, the Nasdaq independence criteria). The DCGK further recommends that more than half of the shareholder representatives should be independent. Halcyon complies with this DCGK recommendation: of the six shareholder representatives on Halcyon's Aufsichtsrat, four (4) are independent under the DCGK criteria (including Prof. Dr. Anneliese Voss, the Chair of the Aufsichtsrat). However, this level of independence among shareholder representatives does not produce an overall majority of independent directors on the full Aufsichtsrat as would be required by Nasdaq Rule 5605(b)(1).

German law does not require that a majority of the Aufsichtsrat as a whole be composed of independent members under US-style independence standards. The codetermination system reflects a fundamentally different policy choice: that employees of a company have a legitimate interest in participating in the supervision and oversight of management, and that the inclusion of employee representatives on the supervisory board enhances — rather than undermines — the quality of corporate oversight by bringing operational knowledge and workforce perspectives to the supervisory function.

3. Recommendation. We recommend that Halcyon claim an exemption from Nasdaq Rule 5605(b)(1).

The exemption disclosure should explain that Halcyon follows the German two-tier board system with mandatory codetermination under the Mitbestimmungsgesetz; that the composition of the Aufsichtsrat is determined by the AktG and the Mitbestimmungsgesetz and includes both shareholder-elected and employee-elected representatives; that the Company follows the DCGK recommendations regarding the independence of shareholder representatives; and that, accordingly, a majority of the Aufsichtsrat members may not be "independent" as defined by Nasdaq Rule 5605(a)(2).

B. Executive Sessions of Independent Directors — Nasdaq Rule 5605(b)(2)

1. Nasdaq Requirement

Nasdaq Rule 5605(b)(2) requires that the independent directors of a listed company must have regularly scheduled meetings at which only independent directors are present (commonly referred to as "executive sessions"). The purpose of this requirement is to ensure that independent directors have the opportunity to meet and deliberate without the presence of management or non-independent directors, thereby facilitating candid discussion of management performance, executive compensation, and other sensitive matters.

2. German Home-Country Practice

Under the German two-tier board system, the Aufsichtsrat is an inherently separate body from the Vorstand. Members of the Vorstand do not sit on the Aufsichtsrat, and the Aufsichtsrat regularly meets and deliberates without the Vorstand being present. While Vorstand members are frequently invited to attend Aufsichtsrat meetings to present reports and respond to questions from the Aufsichtsrat, they participate in an advisory and reporting capacity and are not members of the body. The Aufsichtsrat retains the right at all times to meet in the absence of the Vorstand, and it is standard practice for the Aufsichtsrat to hold portions of its meetings (or entire meetings) without Vorstand attendance.

This structural separation fulfills the core objective underlying Nasdaq Rule 5605(b)(2) — ensuring that the oversight body can meet and deliberate independently of management. However, the Aufsichtsrat's meetings without the Vorstand present include all Aufsichtsrat members, including the employee representatives, and are therefore not equivalent to US-style executive sessions limited to "independent" directors only. German law and the DCGK do not require separate meetings of only those Aufsichtsrat members who qualify as independent under any particular definition of independence.

3. Recommendation. We recommend that Halcyon claim an exemption from Nasdaq Rule 5605(b)(2).

The exemption disclosure should explain that the German two-tier board system provides for an inherent structural separation between management (Vorstand) and the supervisory body (Aufsichtsrat); that the Aufsichtsrat regularly meets without the Vorstand present; and that this structural separation serves the oversight function contemplated by the Nasdaq executive session requirement, although the Aufsichtsrat does not hold separate meetings limited to "independent" members as defined by Nasdaq standards.

C. Compensation Committee — Nasdaq Rule 5605(d)

1. Nasdaq Requirement

Nasdaq Rule 5605(d) requires that the compensation of executive officers of a listed company must be determined, or recommended to the board of directors for determination, by a compensation committee composed entirely of independent directors as defined in Nasdaq Rule 5605(a)(2). The rule further requires that the compensation committee have a written charter addressing specified matters, including the committee's authority to retain and obtain the advice of compensation consultants, legal counsel, and other advisors; the committee's responsibility for the appointment, compensation, and oversight of the work of any compensation consultant; and the committee's periodic evaluation of the independence of any compensation consultant or other advisor it retains.

2. German Home-Country Practice

Under AktG § 87, the compensation (Vergütung) of the members of the Vorstand is determined by the full Aufsichtsrat. This is a matter reserved by statute to the Aufsichtsrat and cannot be delegated exclusively to a subcommittee. The Aufsichtsrat determines the overall compensation package for each Vorstand member, including base salary, variable compensation components, long-term incentive compensation, pension arrangements, and severance terms. The Aufsichtsrat must ensure that the total compensation of each Vorstand member is appropriate in relation to the member's duties and responsibilities and to the financial condition of the company, and that it does not exceed customary levels without special justification.

Many German companies, including Halcyon, maintain a Personalausschuss (Personnel Committee or Compensation Committee) as a subcommittee of the Aufsichtsrat. Halcyon's Personalausschuss consists of four members: two shareholder representatives (including Prof. Dr. Anneliese Voss, the Chair of the Aufsichtsrat, who also chairs the Personalausschuss) and two employee representatives. The Personalausschuss prepares recommendations on Vorstand compensation for consideration by the full Aufsichtsrat, but the final determination of compensation remains with the full Aufsichtsrat in accordance with AktG § 87.

Because the Personalausschuss includes employee representatives and because the final compensation decision is made by the full Aufsichtsrat (which also includes employee representatives), the composition of neither the committee nor the full body meets the Nasdaq requirement that all members be "independent" as defined by Nasdaq Rule 5605(a)(2).

Additionally, since the implementation of ARUG II (Gesetz zur Umsetzung der zweiten Aktionärsrechterichtlinie, implementing Directive (EU) 2017/828 — the Shareholder Rights Directive II, "SRD II"), German listed companies are required to submit their Vorstand compensation system (Vergütungssystem) to the Hauptversammlung for a binding advisory vote (commonly known as "Say-on-Pay") at least every four years or whenever there is a material change to the system. Halcyon's most recent Say-on-Pay resolution was approved at the Hauptversammlung held on May 15, 2024, with approximately 87% of votes cast in favor.

3. Recommendation. We recommend that Halcyon claim an exemption from Nasdaq Rule 5605(d).

The exemption disclosure should explain that compensation of Vorstand members is determined by the full Aufsichtsrat in accordance with AktG § 87, with input from the Personalausschuss; that the Aufsichtsrat and the Personalausschuss include employee representatives under German codetermination requirements; that the Company follows the DCGK recommendations regarding executive compensation; and that German law requires a binding shareholder advisory vote on the Vorstand compensation system under the ARUG II implementation of SRD II.

D. Nomination Committee — Nasdaq Rule 5605(e)

1. Nasdaq Requirement

Nasdaq Rule 5605(e) requires that director nominees must be selected, or recommended for the board's selection, either by a nominations committee composed entirely of independent directors as defined in Nasdaq Rule 5605(a)(2), or by a majority of the independent directors of the board voting in executive session. The rule further requires that the nominations committee (if one exists) adopt a formal written charter or board resolution, as applicable, addressing the nominations process and such related matters as may be required under the rule. Each listed company is also required to certify that it has adopted a formal written charter or board resolution addressing the nominations process.

2. German Home-Country Practice

Under the German two-tier board system, the process for selecting and electing members of the Aufsichtsrat is fundamentally different from the process for nominating directors under the US unitary board model. The shareholder representatives on the Aufsichtsrat are elected by the shareholders at the Hauptversammlung in accordance with AktG § 101. The employee representatives on the Aufsichtsrat are elected by the employees of the company in accordance with the Mitbestimmungsgesetz and the Wahlordnung (election regulations). The Vorstand has no formal role in nominating Aufsichtsrat candidates; the existing Aufsichtsrat may recommend candidates to the shareholders, but the ultimate decision rests with the shareholders (for shareholder representatives) and the employees (for employee representatives).

Many German listed companies, including Halcyon, maintain a Nominierungsausschuss (Nomination Committee) as a subcommittee of the Aufsichtsrat. The DCGK recommends the establishment of such a committee, which is tasked with identifying and recommending suitable candidates for shareholder representative positions on the Aufsichtsrat for nomination to the Hauptversammlung. Halcyon's Nominierungsausschuss currently consists of three shareholder representatives. However, German law does not require that this committee consist solely of "independent" directors as defined by Nasdaq, and the DCGK's "comply-or-explain" recommendations regarding committee composition permit flexibility.

Importantly, the employee representative positions on the Aufsichtsrat are entirely outside the scope of any nomination committee process, as those positions are filled through the separate codetermination election process mandated by the Mitbestimmungsgesetz. This further distinguishes the German nomination process from the US model contemplated by Nasdaq Rule 5605(e).

3. Recommendation. We recommend that Halcyon claim an exemption from Nasdaq Rule 5605(e).

The exemption disclosure should explain that members of the Aufsichtsrat are elected by shareholders and employees, respectively, in accordance with the AktG and the Mitbestimmungsgesetz; that the Company maintains a Nominierungsausschuss for the identification and recommendation of shareholder representative candidates; that the composition of the Nominierungsausschuss and the overall nomination process follow German home-country practices; and that the Vorstand has no formal role in the nomination of Aufsichtsrat members.

E. Shareholder Approval Requirements — Nasdaq Rule 5635

1. Nasdaq Requirement

Nasdaq Rule 5635 sets forth a series of shareholder approval requirements applicable to listed companies. Specifically:

(a) Related-Party Transactions (Rule 5635(a)). Shareholder approval is required prior to the issuance of securities in connection with the acquisition of the stock or assets of another company if any director, officer, or substantial shareholder of the listed company has a 5% or greater interest (or collectively a 10% or greater interest) in the company or assets to be acquired, and the present or potential issuance of common stock (or securities convertible into common stock) could result in an increase of 5% or more in the number of shares of common stock outstanding.

(b) Change of Control (Rule 5635(b)). Shareholder approval is required prior to the issuance of securities when such issuance or potential issuance will result in a change of control of the issuer.

(c) Equity Compensation (Rule 5635(c)). Shareholder approval is required prior to the establishment of, or material amendment to, any equity compensation plan pursuant to which stock may be acquired by officers, directors, employees, or consultants, subject to certain limited exceptions.

(d) 20% Issuance (Rule 5635(d)). Shareholder approval is required prior to the issuance of securities constituting 20% or more of the pre-transaction outstanding shares (or 20% or more of the voting power) at a price less than the Minimum Price (as defined in the rules), other than in a public offering.

2. German Home-Country Practice

The AktG provides its own comprehensive framework for shareholder approval of capital issuances and related transactions, which — while structurally different from the Nasdaq framework — provides robust shareholder protections. The principal elements of this framework are:

Authorized Capital (*Genehmigtes Kapital*). Under AktG §§ 202-204, the Hauptversammlung may authorize the Vorstand, with the approval of the Aufsichtsrat, to issue new shares up to a specified maximum amount within a period of up to five (5) years from the date of the authorization, without the need for an additional shareholder vote at the time of issuance. This "authorized capital" mechanism is widely used by German listed companies and provides the Vorstand and Aufsichtsrat with flexibility to issue shares for capital-raising, acquisitions, and other corporate purposes within the pre-approved parameters. The authorization is granted by the shareholders themselves and is subject to renewal and amendment only by further shareholder approval.

Halcyon's current authorized capital (Genehmigtes Kapital 2024) was approved at the Hauptversammlung held on May 15, 2024. This authorization permits the Vorstand, with Aufsichtsrat approval, to increase the Company's share capital by up to EUR 75,000,000 through the issuance of up to 75,000,000 new no-par-value ordinary shares (Stückaktien) on one or more occasions through May 14, 2029. The issuance of 30,000,000 new ordinary shares for the IPO will be made under this existing authorized capital authorization, with the consent of the Aufsichtsrat and the exclusion of pre-emptive rights as described below. A detailed analysis of the German corporate law considerations for the new share issuance is set forth in a separate memorandum prepared in coordination with Bähr Stein.

Pre-emptive Rights (*Bezugsrechte*). AktG § 186 grants existing shareholders statutory pre-emptive rights (Bezugsrechte) in connection with any issuance of new shares. These pre-emptive rights may be excluded, but only under limited circumstances and with a supermajority shareholder vote (at least 75% of the share capital represented at the Hauptversammlung), typically in connection with the authorization of authorized capital. The exclusion of pre-emptive rights is subject to judicial review to ensure it is justified by the company's interests and proportionate. The authorized capital authorization approved at Halcyon's May 2024 Hauptversammlung includes authorization to exclude pre-emptive rights in connection with capital increases for cash against contributions in kind, for the implementation of employee stock programs, and for other specified purposes.

Employee Stock Programs. The establishment of equity-based employee compensation programs is subject to shareholder approval as part of the general authorized capital framework. Halcyon's existing employee stock option program (the "HSAG ESOP 2023") was approved by the Hauptversammlung in May 2023.

Related-Party Transactions. Since the implementation of SRD II in German law through the ARUG II amendments, related-party transactions of material significance are subject to the approval of the Aufsichtsrat under AktG § 111b. The Aufsichtsrat's approval requires that any Aufsichtsrat member who is personally affected by the transaction abstain from the vote. This regime, while not requiring Hauptversammlung approval (as the Nasdaq framework does in certain circumstances), provides an analogous safeguard through the oversight of the independent supervisory body.

3. Recommendation. We recommend that Halcyon claim an exemption from Nasdaq Rule 5635 in its entirety (Rules 5635(a) through (d)).

The exemption disclosure should explain that Halcyon follows the AktG framework for shareholder approval of capital issuances, including the authorized capital (genehmigtes Kapital) mechanism, the statutory pre-emptive rights (Bezugsrechte) regime, and the related-party transaction approval requirements under AktG § 111b; that these provisions provide comprehensive shareholder protections that are equivalent in effect, though different in structure, to the Nasdaq shareholder approval requirements; and that the Company's governance practices comply with the applicable provisions of the AktG, the DCGK, and the Prime Standard listing rules of the Frankfurt Stock Exchange.

F. Quorum Requirements — Nasdaq Rule 5620(c)

1. Nasdaq Requirement

Nasdaq Rule 5620(c) requires that a listed company provide for a quorum of not less than 33⅓% of the outstanding shares of the company's common voting stock for any meeting of the holders of such common stock. This quorum requirement is intended to ensure that shareholder action is taken only when a meaningful proportion of the company's shareholders participate in the decision-making process.

2. German Home-Country Practice

The AktG does not impose a general quorum requirement for the Hauptversammlung. Unless the company's Satzung (articles of association) provides otherwise, a Hauptversammlung may be convened and may adopt resolutions regardless of the number of shares represented at the meeting. This is the standard practice for German Aktiengesellschaften, and Halcyon's Satzung does not impose a general quorum requirement.

However, it is important to note that German law provides meaningful voting protections through other mechanisms. For certain categories of resolutions that are considered particularly significant — including amendments to the Satzung, capital increases and decreases, the exclusion of pre-emptive rights, the authorization of the Vorstand to issue convertible bonds or bonds with warrants, changes to the corporate purpose, and the dissolution of the company — the AktG requires a supermajority vote of at least 75% of the share capital represented at the Hauptversammlung. This supermajority requirement, combined with the economic incentives for shareholders to participate in meetings at which important decisions are being made, provides a practical safeguard against the adoption of material resolutions by an unrepresentatively small group of shareholders.

Halcyon's Satzung is currently under review in connection with the IPO, and the relevant provisions regarding shareholder meeting procedures will be disclosed in the prospectus. We understand from Bähr Stein that no changes to the quorum provisions of the Satzung are contemplated in connection with the Offering.

3. Recommendation. We recommend that Halcyon claim an exemption from Nasdaq Rule 5620(c).

The exemption disclosure should explain that German law does not require a minimum quorum for general meetings of shareholders (Hauptversammlungen); that Halcyon follows the standard German practice of not imposing a general quorum requirement; and that German law provides alternative shareholder protections through supermajority voting requirements for specified material resolutions.

G. Proxy Solicitation — Nasdaq Rule 5620(b)

1. Nasdaq Requirement

Nasdaq Rule 5620(b) requires that listed companies solicit proxies and provide proxy statements for all meetings of shareholders, and that the solicitation be conducted in compliance with applicable SEC rules. For domestic US issuers, this includes compliance with the detailed proxy solicitation requirements of Regulation 14A under the Exchange Act, which mandates the preparation and distribution of a proxy statement containing specified information about the matters to be voted upon, the solicitation of proxies, and the filing of the proxy statement with the SEC.

2. German Home-Country Practice

German law requires that the Hauptversammlung be convened by publication of notice in the Federal Gazette (Bundesanzeiger) and on the company's website, with a minimum notice period of 30 days before the meeting date (AktG § 123). The convening notice must include specified information about the agenda items, the conditions for attendance and voting, and the shareholders' rights. Shareholders may attend the Hauptversammlung in person, may appoint a proxy (Bevollmächtigter) to attend and vote on their behalf, or may exercise their voting rights by postal ballot (Briefwahl) or electronic means, as provided in the company's Satzung and the convening notice.

Halcyon follows standard German practice for convening and conducting the Hauptversammlung. The Company publishes its convening notice in the Bundesanzeiger, on the Company's website, and through the clearing systems that facilitate the transmission of meeting information to shareholders and their custodian banks.

With respect to US holders of ADSs, the Deposit Agreement between Halcyon, Meridian Trust Company, N.A. (as Depositary), and the holders of ADSs will provide for the forwarding of shareholder meeting notices and agenda information to ADS holders, together with instructions for directing the Depositary to vote the underlying ordinary shares in accordance with the ADS holders' instructions. This mechanism ensures that ADS holders receive the equivalent of proxy-solicitation materials and have the opportunity to participate in the decision-making process at the Hauptversammlung, although the process is structured through the depositary rather than through the US proxy solicitation framework.

As an FPI, Halcyon will furnish proxy-equivalent information to the SEC on Form 6-K in connection with each Hauptversammlung, but will not be required to comply with the US proxy rules under Regulation 14A of the Exchange Act. This distinction is a well-established feature of the FPI regime and is consistent with the purpose of the FPI exemption framework.

3. Recommendation. We recommend that Halcyon claim an exemption from Nasdaq Rule 5620(b).

The exemption disclosure should explain that Halcyon follows German statutory procedures for convening and conducting the Hauptversammlung, including the publication of the convening notice in the Bundesanzeiger and on the Company's website; that ADS holders will receive meeting notices and voting instructions through the Depositary in accordance with the Deposit Agreement; and that Halcyon will furnish meeting materials to the SEC on Form 6-K but will not comply with the US proxy solicitation rules under Regulation 14A.

H. Shareholder Meeting Disclosure / Record Date Requirements — Nasdaq Rule 5620(a)

1. Nasdaq Requirement

Nasdaq Rule 5620(a) requires that listed companies provide advance notice of shareholder meetings and set record dates consistent with Nasdaq rules, which are in turn designed to coordinate with the SEC proxy solicitation requirements and the requirements of domestic US corporate law (e.g., Delaware General Corporation Law § 213 regarding record dates).

2. German Home-Country Practice

AktG § 123 sets forth the requirements for convening the Hauptversammlung, including a minimum notice period of 30 days before the date of the meeting. The convening notice must be published in the Bundesanzeiger and must include the full text of the agenda, the proposals for resolution, and information regarding the conditions for attendance and exercise of voting rights.

The record date for determining shareholder eligibility to attend and vote at the Hauptversammlung is governed by AktG § 123(4), which provides for a specific registration date (Nachweisstichtag). The Nachweisstichtag is the 21st day before the date of the Hauptversammlung. Shareholders who are recorded as holders of the Company's shares as of the Nachweisstichtag are entitled to attend and vote at the meeting, regardless of any subsequent changes in ownership. This registration date serves the same function as a record date under US corporate law, although the specific timing and mechanics differ.

Halcyon follows the AktG requirements for meeting notices and record dates, and these procedures are consistent with the Prime Standard listing rules of the Frankfurt Stock Exchange and with the DCGK recommendations.

3. Recommendation. We recommend that Halcyon claim an exemption from Nasdaq Rule 5620(a) to the extent that the Nasdaq requirements are inconsistent with German statutory requirements.

The exemption disclosure should explain that Halcyon follows the AktG requirements for convening the Hauptversammlung, including the 30-day minimum notice period and the registration date (Nachweisstichtag) prescribed by AktG § 123; and that these requirements provide equivalent shareholder protections regarding advance notice and record date procedures.

IV. Mandatory Nasdaq Requirements Applicable Despite FPI Status

As noted in Section II.B, certain Nasdaq corporate governance requirements apply to all listed companies, including foreign private issuers, and cannot be exempted under Nasdaq Rule 5615(a)(3). This Section IV analyzes each of those mandatory requirements and describes the steps Halcyon must take to achieve compliance.

A. Audit Committee — Nasdaq Rule 5605(c) / Exchange Act Rule 10A-3

No exemption is available from the audit committee requirements of Nasdaq Rule 5605(c)(2) to the extent mandated by Exchange Act Rule 10A-3. This is the single most important mandatory governance requirement for FPIs, and it requires careful attention.

Overview of Rule 10A-3. Exchange Act Rule 10A-3, adopted pursuant to Section 301 of SOX, requires that listed companies maintain an audit committee that satisfies the following minimum requirements:

(a) Independence. Each member of the audit committee must be "independent" as defined in Rule 10A-3(b)(1), which means that the member may not, other than in his or her capacity as a member of the audit committee, the board of directors, or any other board committee, accept directly or indirectly any consulting, advisory, or other compensatory fee from the issuer or any subsidiary thereof, and may not be an "affiliated person" of the issuer or any subsidiary thereof. The independence standard under Rule 10A-3(b)(1) is distinct from — and in certain respects narrower than — the independence standard under Nasdaq Rule 5605(a)(2).

(b) Authority and Responsibilities. The audit committee must be directly responsible for the appointment, compensation, retention, and oversight of the work of any registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review, or attest services for the issuer. The committee must have the authority to engage independent counsel and other advisors, as it determines necessary to carry out its duties. The committee must establish procedures for the receipt, retention, and treatment of complaints received by the issuer regarding accounting, internal accounting controls, or auditing matters, and for the confidential, anonymous submission by employees of the issuer of concerns regarding questionable accounting or auditing matters.

(c) Funding. Each listed issuer must provide appropriate funding, as determined by the audit committee, for payment of compensation to any registered public accounting firm engaged for the purpose of preparing or issuing an audit report, to any advisors employed by the audit committee, and of ordinary administrative expenses of the audit committee.

FPI Accommodation Under Rule 10A-3(c)(3). Rule 10A-3(c)(3) provides a limited accommodation for FPIs whose home-country legal or listing requirements require or permit a board of auditors or a similar body (a "statutory auditing body") to exercise oversight over the issuer's external audit function. Under this accommodation, a member of the statutory auditing body (or a member of the issuer's board of directors or supervisory board who is not a member of the statutory auditing body) may serve on the audit committee, provided that (i) the member is elected by a general vote of the shareholders or is appointed by a body other than the issuer's management, and (ii) the member is not an executive officer of the issuer. This accommodation may permit the participation of employee representatives on the audit committee if they meet the independence requirements of Rule 10A-3(b)(1) (which are distinct from the Nasdaq Rule 5605(a)(2) independence requirements), although this must be analyzed on a case-by-case basis.

Application to Halcyon. Halcyon's Aufsichtsrat currently maintains a Prüfungsausschuss (Audit Committee), which consists of four members: two shareholder representatives and two employee representatives. The Prüfungsausschuss is currently chaired by Dr. Maximilian Gruber, a shareholder representative with extensive financial expertise (former CFO of Weißberg Technologies SE). The composition and mandate of the Prüfungsausschuss comply with German requirements under AktG § 107(4) and the DCGK recommendations regarding audit committee composition.

For purposes of Rule 10A-3 compliance, the composition of Halcyon's Prüfungsausschuss must be evaluated against the independence standard in Rule 10A-3(b)(1). The two shareholder representatives (Dr. Maximilian Gruber and Dr. Elena Schreiber) preliminarily appear to meet the Rule 10A-3(b)(1) independence requirements, as neither receives compensatory fees from the Company (other than their Aufsichtsrat compensation) and neither appears to be an "affiliated person" of the Company. The two employee representatives present a more complex question: under Rule 10A-3(b)(1)(ii)(A), an employee of the issuer is considered an "affiliated person" and therefore would not meet the independence requirement. Accordingly, if the employee representatives on Halcyon's Prüfungsausschuss are current employees of the Company, they would not satisfy Rule 10A-3 independence.

We have discussed this issue with Bähr Stein and with the Company, and we recommend the following approach:

(i) Halcyon should establish or designate a US-compliant audit committee that consists solely of members who satisfy the independence requirements of Rule 10A-3(b)(1). This committee may be constituted as a subcommittee or designated portion of the existing Prüfungsausschuss, or as a separate committee of the Aufsichtsrat that operates in parallel with the Prüfungsausschuss for purposes of meeting the Rule 10A-3 requirements.

(ii) The US-compliant audit committee should include at least three independent members, all of whom should be shareholder representatives on the Aufsichtsrat who meet the Rule 10A-3(b)(1) independence standard. We recommend that Dr. Maximilian Gruber serve as chair of this committee, given his financial expertise.

(iii) At least one member of the audit committee must qualify as an "audit committee financial expert" as defined in Item 16A of Form 20-F (implementing SOX Section 407). Based on our review of the biographies of Halcyon's Aufsichtsrat members, Dr. Maximilian Gruber appears to qualify as an audit committee financial expert by virtue of his professional background and experience.

A separate draft Audit Committee Charter (US-Compliant) has been prepared by Calderwood & Harkness to meet the requirements of Rule 10A-3, Nasdaq Rule 5605(c), and SOX Section 301. The draft charter addresses the committee's authority, responsibilities, independence requirements, meeting procedures, and complaint-handling procedures. The draft has been shared with the Company and with Bähr Stein for review.

Independent Auditors. Halcyon's external auditors are Blackmere & Whitfield LLP / GmbH Wirtschaftsprüfungsgesellschaft. The engagement partner for the German statutory audit is Dieter Kaufmann, Wirtschaftsprüfer, based in Munich. The US PCAOB-related audit engagement is led by Graham Templeton, a partner in Blackmere & Whitfield's New York office. Blackmere & Whitfield is registered with the Public Company Accounting Oversight Board (PCAOB) as required for audit firms of SEC-reporting companies. The appointment of Blackmere & Whitfield as the Company's independent registered public accounting firm for US purposes will be subject to the oversight and approval of the US-compliant audit committee.

B. Code of Conduct — Nasdaq Rule 5610

Foreign private issuers must adopt a code of conduct applicable to all directors, officers, and employees that complies with the minimum content requirements of Nasdaq Rule 5610. The rule requires that the code provide for an enforcement mechanism, including the processing of complaints and the investigation of violations. Although FPIs may follow home-country practices regarding the specific content of the code and the procedures for granting waivers, the minimum substantive requirements of Nasdaq Rule 5610 apply.

In addition to the Nasdaq requirement, SOX Section 406 requires disclosure of whether the issuer has adopted a code of ethics for its senior financial officers (including the principal financial officer, principal accounting officer, controller, or persons performing similar functions), and, if not, the reasons therefor. If the issuer has adopted such a code, it must file the code as an exhibit to its annual report and disclose any amendments to or waivers from the code.

Halcyon currently maintains a Verhaltenskodex (Code of Conduct) that applies to all employees and management board members of the Halcyon group. This code was adopted in its current form in 2021 and covers topics including ethical business conduct, anti-corruption and anti-bribery compliance, conflicts of interest, confidentiality, data protection, and compliance with applicable laws and regulations.

We have reviewed Halcyon's existing Verhaltenskodex and identified certain areas where supplementation is needed to meet the minimum content requirements of Nasdaq Rule 5610 and SOX Section 406, including provisions regarding (i) prompt internal reporting of violations to an appropriate person identified in the code, (ii) accountability for adherence to the code, (iii) a fair and prompt process for determining violations and appropriate actions, and (iv) specific provisions regarding financial officers' responsibilities for full, fair, accurate, timely, and understandable disclosure in SEC filings and public communications.

A separate draft Code of Business Conduct and Ethics (US-Compliant) has been prepared by Calderwood & Harkness to meet these requirements. The draft is intended to supplement (not replace) Halcyon's existing Verhaltenskodex and has been shared with the Company and with Bähr Stein for review.

C. Disclosure Obligations — Nasdaq Rules 5250(b)(3), 5250(c)(1)

Third-Party Director Compensation (Rule 5250(b)(3)). Halcyon must disclose in its annual report on Form 20-F, or in the proxy-equivalent materials furnished on Form 6-K, any arrangement or understanding pursuant to which any member of the Aufsichtsrat or any nominee for election to the Aufsichtsrat receives compensation from any source other than the Company in connection with such person's candidacy or service as a member of the Aufsichtsrat. Based on our review of the Company's existing disclosure and our discussions with the Company, we are not aware of any such arrangements currently in effect. However, the Company should establish procedures to monitor for and disclose any such arrangements on an ongoing basis.

Annual Report Distribution (Rule 5250(c)(1)). Halcyon must distribute or make available an annual report to its shareholders and must file such annual report with the SEC. Halcyon will satisfy this requirement by filing its annual report on Form 20-F with the SEC via the EDGAR system, which will be publicly available, and by making the annual report available on its corporate website. The Company's existing practice of distributing the German annual report (Geschäftsbericht) to shareholders and making it available on the Company's website will continue in parallel.

D. Notification of Non-Compliance — Nasdaq Rule 5625

Halcyon must promptly notify Nasdaq of any material non-compliance with the Nasdaq listing standards that could reasonably be expected to have a significant effect on the Company's ability to maintain its listing on the Nasdaq GSM. This obligation applies to FPIs and cannot be exempted. It includes notification of any changes in the Company's home-country governance practices or in applicable German law that would affect the basis for any previously claimed exemption, as well as notification of any loss of FPI status.

We recommend that Halcyon establish an internal procedure, to be coordinated by the General Counsel's office (Wilhelm Ostermann) and the US securities counsel function, for monitoring compliance with Nasdaq listing standards and promptly notifying Nasdaq of any material non-compliance. A draft internal compliance procedure has been included in the broader Nasdaq Listing Standards Compliance Manual being prepared by Calderwood & Harkness.

V. Procedural Requirements for Filing the Exemption Notice

A. Written Notification to Nasdaq

In connection with its listing application, Halcyon must submit to Nasdaq a written statement (the "Corporate Governance Exemption Notice") identifying each Nasdaq listing requirement from which it claims an exemption under Nasdaq Rule 5615(a)(3) and describing the alternative home-country practice it follows in lieu of the exempted Nasdaq requirement. This notice must be sufficiently detailed to enable Nasdaq to evaluate the basis for each claimed exemption.

Timing. The Corporate Governance Exemption Notice should be filed with Nasdaq concurrently with, or promptly following, the submission of H

MEMORANDUM
PRIVILEGED & CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION
From: Vivienne St. Claire, Partner, Capital Markets, Calderwood & Harkness LLP Claire Dempsey, Associate, Capital Markets, Calderwood & Harkness LLP
To: Wilhelm Ostermann, General Counsel (Chefjustitiar), Halcyon Semiconductor Aktiengesellschaft Katarina Dalmqvist, Chief Financial Officer (Finanzvorstand), Halcyon Semiconductor Aktiengesellschaft
CC: Robert Adeyemi, Partner, Capital Markets, Calderwood & Harkness LLP Audrey Zhou, Associate, Capital Markets, Calderwood & Harkness LLP Dr. Christoph Maurelban, Partner, Capital Markets, Bähr Stein Rechtsanwälte PartGmbB (German counsel input)
Date: February 28, 2026
Re: Halcyon Semiconductor AG — Proposed US Listing on the Nasdaq Global Select Market — Analysis of Corporate Governance Exemptions Available to Foreign Private Issuers Under Nasdaq Rule 5615(a)(3)
Matter No.: 1032-00003
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I. Executive Summary
Halcyon Semiconductor Aktiengesellschaft ("Halcyon," "HSAG," or the "Company"), a German Aktiengesellschaft incorporated and registered in Munich, Bavaria, Federal Republic of Germany (Commercial Register No. HRB 217458, Amtsgericht München), is currently listed on the Frankfurt Stock Exchange (FRA: HCY) in the Prime Standard segment. The Company is pursuing an initial public offering (the "IPO" or the "Offering") of American Depositary Shares ("ADSs") in the United States. The ADSs are proposed to be listed on the Nasdaq Global Select Market (the "Nasdaq GSM") under the ticker symbol "HCYN."
The ADSs will be issued by Meridian Trust Company, N.A. (the "Depositary"), acting as depositary bank pursuant to a Deposit Agreement to be entered into among Halcyon, the Depositary, and the holders of ADSs. Each ADS will represent two (2) ordinary shares (Stammaktien) of the Company, each with no par value (Stückaktien), at a ratio of 1 ADS = 2 ordinary shares. The underlying ordinary shares will continue to be listed on the Frankfurt Stock Exchange.
Halcyon intends to qualify — and, based on our preliminary analysis, does qualify — as a "foreign private issuer" (an "FPI") under Rule 3b-4 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Our detailed analysis of Halcyon's FPI status has been set forth in a separate Calderwood & Harkness memorandum dated February 14, 2026 (the "FPI Status Memorandum"), and we do not repeat that analysis here. For purposes of this memorandum, we assume that Halcyon satisfies the conditions for FPI status and will maintain that status through the completion of the Offering and for the immediately following fiscal year.
As an FPI, Halcyon is entitled under Nasdaq Rule 5615(a)(3) to follow certain home-country corporate governance practices in lieu of specified Nasdaq corporate governance listing standards applicable to domestic US-listed companies. This is a significant accommodation that reflects the recognition by the US securities regulatory framework that foreign companies are subject to their own comprehensive corporate governance regimes, which — although they may differ from US standards in structure and approach — often provide analogous or equivalent protections for shareholders and market integrity.
The purpose of this memorandum is to provide a comprehensive analysis of the corporate governance exemptions available to Halcyon as an FPI under Nasdaq Rule 5615(a)(3). Specifically, this memorandum:
(a) identifies each Nasdaq corporate governance rule from which Halcyon may claim an exemption as an FPI;
(b) describes in detail the corresponding German corporate governance practice that Halcyon follows under the Aktiengesetz (German Stock Corporation Act, "AktG"), the German Corporate Governance Code (Deutscher Corporate Governance Kodex, "DCGK"), the Mitbestimmungsgesetz (German Codetermination Act, "MitbestG"), and other applicable provisions of German law;
(c) sets forth our recommendations as to the scope of exemptions that Halcyon should claim in connection with the proposed Nasdaq listing;
(d) outlines the procedural requirements for filing the exemption notice with Nasdaq, including the requirement to obtain a home-country counsel certification letter; and
(e) addresses the mandatory Nasdaq requirements from which no FPI exemption is available — principally, the audit committee requirements under Nasdaq Rule 5605(c) as mandated by Exchange Act Rule 10A-3 — and analyzes the steps Halcyon must take to comply with those mandatory requirements.
We note at the outset that Halcyon's German two-tier board system — comprising the Vorstand (Management Board) and the Aufsichtsrat (Supervisory Board) — differs fundamentally from the unitary board model that is standard for US corporations and that underlies the Nasdaq corporate governance listing standards. Many of the differences that give rise to the need for FPI exemptions flow directly from this structural distinction and from the requirements of German codetermination law, which mandates employee representation on the Supervisory Board for companies of Halcyon's size. These are well-understood differences that are commonly addressed by German FPIs listing in the United States, and the exemption framework under Nasdaq Rule 5615(a)(3) is specifically designed to accommodate such differences.
This memorandum has been prepared in close coordination with Bähr Stein Rechtsanwälte PartGmbB, the Company's German legal counsel, and specifically with Dr. Christoph Maurelban, a partner in Bähr Stein's Capital Markets practice. All descriptions of German law and practice contained in this memorandum have been reviewed by Dr. Maurelban and his team for accuracy and completeness. To the extent that any German law question arises that is not addressed herein, we defer to Bähr Stein as the authoritative source of German legal advice.
Based on our analysis, we recommend that Halcyon claim a total of eight (8) exemptions from Nasdaq corporate governance listing standards, as set forth in the summary table in Section VI below and discussed in detail in Section III. We further recommend that Halcyon take the compliance steps described in Section IV with respect to the mandatory requirements that apply notwithstanding FPI status.
II. Legal Framework
A. Foreign Private Issuer Status — Overview
As noted above, Halcyon qualifies as a foreign private issuer under Rule 3b-4 of the Exchange Act. Rule 3b-4 defines a "foreign private issuer" as any foreign government or any foreign issuer other than a foreign government, except an issuer that meets both of the following conditions: (i) more than 50% of the issuer's outstanding voting securities are directly or indirectly held of record by residents of the United States; and (ii) any one of the following: (a) the majority of the executive officers or directors are US citizens or residents; (b) more than 50% of the assets of the issuer are located in the United States; or (c) the business of the issuer is administered principally in the United States.
Our detailed analysis confirming Halcyon's FPI status is contained in the FPI Status Memorandum, which concludes that (i) fewer than 50% of Halcyon's outstanding voting securities are held of record by US residents, and (ii) even if that threshold were exceeded, none of the three alternative conditions in clause (ii) above would be satisfied. Halcyon's executive management team is based in Munich, Germany; the Company's principal assets (including its semiconductor fabrication facilities in Dresden and its research and development center in Stuttgart) are located in Germany and across Europe; and the Company's business is administered principally from its Munich headquarters.
The key consequence of FPI status for purposes of this memorandum is that FPIs listed on Nasdaq are permitted to follow home-country corporate governance practices in lieu of most Nasdaq corporate governance listing standards, subject to certain disclosure requirements and a limited set of mandatory requirements from which no exemption is available. This accommodation applies specifically to the corporate governance listing standards set forth in the Nasdaq 5600 series of rules, as well as certain related provisions in the 5200 and 5600 series.
The statutory basis for the limited mandatory requirements that apply to FPIs notwithstanding the general exemption framework is Section 301 of the Sarbanes-Oxley Act of 2002 ("SOX"), codified as Exchange Act Section 10A(m), which directs the SEC to adopt rules requiring national securities exchanges to prohibit the listing of any security of an issuer that does not comply with the audit committee requirements set forth therein. These requirements are implemented through Exchange Act Rule 10A-3, which applies to FPIs, albeit with certain accommodations described in Section IV below.
B. Nasdaq Rule 5615(a)(3) — FPI Exemption Framework
Nasdaq Rule 5615(a)(3) provides the operative framework under which foreign private issuers may claim exemptions from Nasdaq corporate governance listing standards. The rule states, in substance, that a foreign private issuer may follow its home-country practice in lieu of certain requirements in the Nasdaq Rule 5600 series, provided that the issuer complies with the following conditions:
(i) Disclosure. The issuer must disclose in its annual report filed with the SEC (on Form 20-F) or on the issuer's website each requirement of the Nasdaq Rule 5600 series that it does not follow and must describe the alternative home-country practice it follows instead. Nasdaq's interpretive guidance encourages issuers to include this disclosure in both the annual report and on the issuer's website to provide maximum transparency to investors.
(ii) Home-Country Counsel Certification. The issuer must submit to Nasdaq a written statement from an independent counsel in its home country certifying that the issuer's practices are not prohibited by the laws of the issuer's home country. Alternatively, the issuer may submit a statement from an official of the home-country stock exchange on which the issuer's securities are listed, certifying the same. This certification requirement ensures that the issuer's reliance on home-country practices has been verified by qualified local legal counsel or exchange officials.
(iii) Annual Report Inclusion. The disclosure of exemptions relied upon must be included in the annual report on Form 20-F filed with the SEC for each fiscal year in which the exemptions are claimed, and must be updated to reflect any changes in the exemptions relied upon or in the home-country practices described.
Critically, the FPI exemption under Nasdaq Rule 5615(a)(3) does not extend to the following Nasdaq listing requirements, which remain mandatory for FPIs:
•  Nasdaq Rule 5605(c)(2) — Audit committee composition requirements, to the extent mandated by Exchange Act Rule 10A-3. This is the single most significant mandatory requirement and is discussed in detail in Section IV.A below.
•  Nasdaq Rule 5250(b)(3) — Disclosure of third-party director and nominee compensation arrangements. FPIs must disclose any arrangement or understanding pursuant to which any director or director nominee receives compensation from a third party in connection with such person's candidacy or service as a director.
•  Nasdaq Rule 5250(c)(1) — Annual report distribution. FPIs must distribute or make available an annual report to shareholders and must file such annual report with the SEC on Form 20-F.
•  Nasdaq Rule 5610 — Code of conduct. FPIs must adopt a code of conduct applicable to all directors, officers, and employees, although FPIs may follow home-country practices regarding the specific content of such code and the procedures for granting waivers from the code. The minimum content requirements of Nasdaq Rule 5610, including the requirement for an enforcement mechanism, remain applicable.
•  Nasdaq Rule 5625 — Notification of non-compliance. FPIs must provide prompt notification to Nasdaq of any material non-compliance with Nasdaq listing standards, including any non-compliance arising from a change in home-country law or practice that affects the basis for a previously claimed exemption.
The full text of Nasdaq Rule 5615(a)(3) is reproduced in Appendix A to this memorandum.
C. German Corporate Governance Framework — Overview
To provide context for the rule-by-rule analysis in Section III, we set forth below a brief overview of the German corporate governance framework applicable to Halcyon. A more detailed description of the relevant provisions of German law is contained in Appendix B (key provisions of the AktG) and Appendix C (relevant DCGK recommendations).
Two-Tier Board Structure. Under the AktG, a German Aktiengesellschaft is governed by a mandatory two-tier board structure consisting of the Vorstand (Management Board) and the Aufsichtsrat (Supervisory Board). The Vorstand is responsible for the day-to-day management of the company and its strategic direction. The Aufsichtsrat is a separate and distinct body whose primary functions are to appoint and remove members of the Vorstand, to supervise and oversee the activities of the Vorstand, and to approve certain material transactions and corporate actions as specified by law, the company's Satzung (articles of association), or the Aufsichtsrat's own internal rules of procedure (Geschäftsordnung).
The two-tier structure is fundamentally different from the unitary board model that prevails in the United States and that underlies the Nasdaq corporate governance listing standards. Under the German system, members of the Vorstand cannot simultaneously serve on the Aufsichtsrat of the same company. This structural separation of management and supervisory functions is mandatory under German law and provides a form of governance oversight that, while different in form from the US model, serves analogous functions of management accountability and independent supervision.
Halcyon's Governance Structure. Halcyon's Aufsichtsrat currently consists of twelve (12) members, in accordance with the AktG and the Mitbestimmungsgesetz. Six (6) members are shareholder representatives elected by the Hauptversammlung (general meeting of shareholders), and six (6) members are employee representatives elected by the employees of the Halcyon group in accordance with the codetermination procedures prescribed by the Mitbestimmungsgesetz. The Chair of the Aufsichtsrat is Prof. Dr. Anneliese Voss, an independent shareholder representative who has served on the Aufsichtsrat since 2018. The Deputy Chair is Marcus Heller, an employee representative.
Halcyon's Vorstand currently consists of four (4) members: Dr. Friedrich Wendt (Vorstandsvorsitzender / Chief Executive Officer), Katarina Dalmqvist (Finanzvorstand / Chief Financial Officer), Dr. Sebastian Roth (Vorstand Technologie / Chief Technology Officer), and Ingrid Bergström (Vorstand Vertrieb / Chief Commercial Officer).
Codetermination. The Mitbestimmungsgesetz (Codetermination Act of 1976) applies to German companies with more than 2,000 employees. Halcyon currently employs approximately 8,400 employees worldwide, of whom approximately 6,200 are employed in Germany. The Mitbestimmungsgesetz therefore requires that Halcyon's Aufsichtsrat consist of equal numbers of shareholder representatives and employee representatives. In the event of a deadlock on the Aufsichtsrat, the Chair — who must be a shareholder representative — holds a casting vote.
The employee representatives on the Aufsichtsrat include employees of the Halcyon group as well as representatives of the relevant trade unions. These employee representatives are elected through a formal codetermination election process that is separate from the shareholder election process at the Hauptversammlung. Employee representatives do not meet the definition of "independent director" under Nasdaq Rule 5605(a)(2), because they are employed by (or have a specified relationship with) the issuer. This is the single most significant source of divergence between Halcyon's governance structure and the Nasdaq corporate governance standards, and it underlies several of the exemptions recommended in this memorandum.
German Corporate Governance Code (DCGK). Halcyon adheres to the recommendations of the German Corporate Governance Code (Deutscher Corporate Governance Kodex, "DCGK"), which sets forth standards of good corporate governance for German listed companies. The DCGK operates on a "comply-or-explain" basis: listed companies are required by AktG § 161 to issue an annual declaration (Entsprechenserklärung) stating the extent to which the company complies with the DCGK recommendations and, to the extent it does not, explaining the reasons for any deviation. The DCGK is not statutory law; its recommendations do not have binding legal force. However, compliance with the DCGK is widely expected of companies listed on the Prime Standard segment of the Frankfurt Stock Exchange.
Among other matters, the DCGK sets forth recommendations regarding the independence of Aufsichtsrat members, the establishment of Aufsichtsrat committees (including an audit committee, a nomination committee, and a compensation/personnel committee), the transparency of executive compensation, and the disclosure of corporate governance practices. Halcyon's most recent Entsprechenserklärung, published in December 2025, confirms that the Company complies with all but two non-material recommendations of the DCGK.
Frankfurt Stock Exchange — Prime Standard. Halcyon's ordinary shares are listed on the Regulated Market (Regulierter Markt) of the Frankfurt Stock Exchange in the Prime Standard transparency segment. The Prime Standard imposes enhanced disclosure and transparency requirements beyond those applicable to the General Standard segment, including quarterly interim reports, financial reporting in English, and adherence to international financial reporting standards (IFRS). Halcyon prepares its consolidated financial statements in accordance with IFRS as adopted by the European Union.
III. Rule-by-Rule Analysis of Available Exemptions
In this Section III, we analyze each Nasdaq corporate governance rule from which Halcyon may claim an exemption as a foreign private issuer, describe the corresponding German home-country practice, and set forth our recommendation. The analysis is organized by Nasdaq rule number.
A. Majority of Independent Directors — Nasdaq Rule 5605(b)(1)
1. Nasdaq Requirement
Nasdaq Rule 5605(b)(1) requires that a majority of the board of directors of a listed company must be comprised of "independent directors" as defined in Nasdaq Rule 5605(a)(2). For purposes of this rule, "independent director" means a person other than an executive officer or employee of the company or any other individual having a relationship which, in the opinion of the company's board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The rule further specifies a number of categorical disqualifications from independent status, including (among others) that a person who is, or at any time during the past three years was, employed by the company cannot be considered independent.
For a foreign private issuer operating under a two-tier board structure, the "board of directors" for purposes of this rule would be construed as the relevant governing body charged with the oversight and supervisory functions that correspond to those performed by a board of directors under US corporate governance norms. In the case of a German Aktiengesellschaft, this body is the Aufsichtsrat (Supervisory Board), which performs the oversight, supervisory, and appointment functions that a unitary board of directors would perform in a US corporation.
2. German Home-Country Practice
Under the AktG and the Mitbestimmungsgesetz, the composition of the Aufsichtsrat of a German company with more than 2,000 employees is determined by the codetermination requirements described in Section II.C above. These requirements mandate that fifty percent (50%) of the Aufsichtsrat members be elected by the company's employees. Halcyon's twelve-member Aufsichtsrat includes six (6) shareholder-elected members and six (6) employee-elected members.
The employee representatives on Halcyon's Aufsichtsrat are either current employees of the Halcyon group or trade union officials who serve in a representative capacity on behalf of Halcyon's workforce. Under the definition of "independent director" in Nasdaq Rule 5605(a)(2), these employee representatives would not qualify as independent because they are employed by (or have a material relationship with) the Company. As a result, a majority of the members of Halcyon's Aufsichtsrat are not "independent" under Nasdaq's definition, and Halcyon cannot comply with Nasdaq Rule 5605(b)(1) without violating mandatory German codetermination law.
This situation is not unique to Halcyon; it is the standard position for all large German Aktiengesellschaften subject to the Mitbestimmungsgesetz, and it is precisely the type of home-country legal requirement that the FPI exemption framework is designed to accommodate.
The DCGK recommends that an "adequate number" of shareholder representatives on the Aufsichtsrat should be independent within the meaning of the DCGK's own independence criteria (which differ from, and are generally less prescriptive than, the Nasdaq independence criteria). The DCGK further recommends that more than half of the shareholder representatives should be independent. Halcyon complies with this DCGK recommendation: of the six shareholder representatives on Halcyon's Aufsichtsrat, four (4) are independent under the DCGK criteria (including Prof. Dr. Anneliese Voss, the Chair of the Aufsichtsrat). However, this level of independence among shareholder representatives does not produce an overall majority of independent directors on the full Aufsichtsrat as would be required by Nasdaq Rule 5605(b)(1).
German law does not require that a majority of the Aufsichtsrat as a whole be composed of independent members under US-style independence standards. The codetermination system reflects a fundamentally different policy choice: that employees of a company have a legitimate interest in participating in the supervision and oversight of management, and that the inclusion of employee representatives on the supervisory board enhances — rather than undermines — the quality of corporate oversight by bringing operational knowledge and workforce perspectives to the supervisory function.
3. Recommendation.  We recommend that Halcyon claim an exemption from Nasdaq Rule 5605(b)(1).
The exemption disclosure should explain that Halcyon follows the German two-tier board system with mandatory codetermination under the Mitbestimmungsgesetz; that the composition of the Aufsichtsrat is determined by the AktG and the Mitbestimmungsgesetz and includes both shareholder-elected and employee-elected representatives; that the Company follows the DCGK recommendations regarding the independence of shareholder representatives; and that, accordingly, a majority of the Aufsichtsrat members may not be "independent" as defined by Nasdaq Rule 5605(a)(2).
B. Executive Sessions of Independent Directors — Nasdaq Rule 5605(b)(2)
1. Nasdaq Requirement
Nasdaq Rule 5605(b)(2) requires that the independent directors of a listed company must have regularly scheduled meetings at which only independent directors are present (commonly referred to as "executive sessions"). The purpose of this requirement is to ensure that independent directors have the opportunity to meet and deliberate without the presence of management or non-independent directors, thereby facilitating candid discussion of management performance, executive compensation, and other sensitive matters.
2. German Home-Country Practice
Under the German two-tier board system, the Aufsichtsrat is an inherently separate body from the Vorstand. Members of the Vorstand do not sit on the Aufsichtsrat, and the Aufsichtsrat regularly meets and deliberates without the Vorstand being present. While Vorstand members are frequently invited to attend Aufsichtsrat meetings to present reports and respond to questions from the Aufsichtsrat, they participate in an advisory and reporting capacity and are not members of the body. The Aufsichtsrat retains the right at all times to meet in the absence of the Vorstand, and it is standard practice for the Aufsichtsrat to hold portions of its meetings (or entire meetings) without Vorstand attendance.
This structural separation fulfills the core objective underlying Nasdaq Rule 5605(b)(2) — ensuring that the oversight body can meet and deliberate independently of management. However, the Aufsichtsrat's meetings without the Vorstand present include all Aufsichtsrat members, including the employee representatives, and are therefore not equivalent to US-style executive sessions limited to "independent" directors only. German law and the DCGK do not require separate meetings of only those Aufsichtsrat members who qualify as independent under any particular definition of independence.
3. Recommendation.  We recommend that Halcyon claim an exemption from Nasdaq Rule 5605(b)(2).
The exemption disclosure should explain that the German two-tier board system provides for an inherent structural separation between management (Vorstand) and the supervisory body (Aufsichtsrat); that the Aufsichtsrat regularly meets without the Vorstand present; and that this structural separation serves the oversight function contemplated by the Nasdaq executive session requirement, although the Aufsichtsrat does not hold separate meetings limited to "independent" members as defined by Nasdaq standards.
C. Compensation Committee — Nasdaq Rule 5605(d)
1. Nasdaq Requirement
Nasdaq Rule 5605(d) requires that the compensation of executive officers of a listed company must be determined, or recommended to the board of directors for determination, by a compensation committee composed entirely of independent directors as defined in Nasdaq Rule 5605(a)(2). The rule further requires that the compensation committee have a written charter addressing specified matters, including the committee's authority to retain and obtain the advice of compensation consultants, legal counsel, and other advisors; the committee's responsibility for the appointment, compensation, and oversight of the work of any compensation consultant; and the committee's periodic evaluation of the independence of any compensation consultant or other advisor it retains.
2. German Home-Country Practice
Under AktG § 87, the compensation (Vergütung) of the members of the Vorstand is determined by the full Aufsichtsrat. This is a matter reserved by statute to the Aufsichtsrat and cannot be delegated exclusively to a subcommittee. The Aufsichtsrat determines the overall compensation package for each Vorstand member, including base salary, variable compensation components, long-term incentive compensation, pension arrangements, and severance terms. The Aufsichtsrat must ensure that the total compensation of each Vorstand member is appropriate in relation to the member's duties and responsibilities and to the financial condition of the company, and that it does not exceed customary levels without special justification.
Many German companies, including Halcyon, maintain a Personalausschuss (Personnel Committee or Compensation Committee) as a subcommittee of the Aufsichtsrat. Halcyon's Personalausschuss consists of four members: two shareholder representatives (including Prof. Dr. Anneliese Voss, the Chair of the Aufsichtsrat, who also chairs the Personalausschuss) and two employee representatives. The Personalausschuss prepares recommendations on Vorstand compensation for consideration by the full Aufsichtsrat, but the final determination of compensation remains with the full Aufsichtsrat in accordance with AktG § 87.
Because the Personalausschuss includes employee representatives and because the final compensation decision is made by the full Aufsichtsrat (which also includes employee representatives), the composition of neither the committee nor the full body meets the Nasdaq requirement that all members be "independent" as defined by Nasdaq Rule 5605(a)(2).
Additionally, since the implementation of ARUG II (Gesetz zur Umsetzung der zweiten Aktionärsrechterichtlinie, implementing Directive (EU) 2017/828 — the Shareholder Rights Directive II, "SRD II"), German listed companies are required to submit their Vorstand compensation system (Vergütungssystem) to the Hauptversammlung for a binding advisory vote (commonly known as "Say-on-Pay") at least every four years or whenever there is a material change to the system. Halcyon's most recent Say-on-Pay resolution was approved at the Hauptversammlung held on May 15, 2024, with approximately 87% of votes cast in favor.
3. Recommendation.  We recommend that Halcyon claim an exemption from Nasdaq Rule 5605(d).
The exemption disclosure should explain that compensation of Vorstand members is determined by the full Aufsichtsrat in accordance with AktG § 87, with input from the Personalausschuss; that the Aufsichtsrat and the Personalausschuss include employee representatives under German codetermination requirements; that the Company follows the DCGK recommendations regarding executive compensation; and that German law requires a binding shareholder advisory vote on the Vorstand compensation system under the ARUG II implementation of SRD II.
D. Nomination Committee — Nasdaq Rule 5605(e)
1. Nasdaq Requirement
Nasdaq Rule 5605(e) requires that director nominees must be selected, or recommended for the board's selection, either by a nominations committee composed entirely of independent directors as defined in Nasdaq Rule 5605(a)(2), or by a majority of the independent directors of the board voting in executive session. The rule further requires that the nominations committee (if one exists) adopt a formal written charter or board resolution, as applicable, addressing the nominations process and such related matters as may be required under the rule. Each listed company is also required to certify that it has adopted a formal written charter or board resolution addressing the nominations process.
2. German Home-Country Practice
Under the German two-tier board system, the process for selecting and electing members of the Aufsichtsrat is fundamentally different from the process for nominating directors under the US unitary board model. The shareholder representatives on the Aufsichtsrat are elected by the shareholders at the Hauptversammlung in accordance with AktG § 101. The employee representatives on the Aufsichtsrat are elected by the employees of the company in accordance with the Mitbestimmungsgesetz and the Wahlordnung (election regulations). The Vorstand has no formal role in nominating Aufsichtsrat candidates; the existing Aufsichtsrat may recommend candidates to the shareholders, but the ultimate decision rests with the shareholders (for shareholder representatives) and the employees (for employee representatives).
Many German listed companies, including Halcyon, maintain a Nominierungsausschuss (Nomination Committee) as a subcommittee of the Aufsichtsrat. The DCGK recommends the establishment of such a committee, which is tasked with identifying and recommending suitable candidates for shareholder representative positions on the Aufsichtsrat for nomination to the Hauptversammlung. Halcyon's Nominierungsausschuss currently consists of three shareholder representatives. However, German law does not require that this committee consist solely of "independent" directors as defined by Nasdaq, and the DCGK's "comply-or-explain" recommendations regarding committee composition permit flexibility.
Importantly, the employee representative positions on the Aufsichtsrat are entirely outside the scope of any nomination committee process, as those positions are filled through the separate codetermination election process mandated by the Mitbestimmungsgesetz. This further distinguishes the German nomination process from the US model contemplated by Nasdaq Rule 5605(e).
3. Recommendation.  We recommend that Halcyon claim an exemption from Nasdaq Rule 5605(e).
The exemption disclosure should explain that members of the Aufsichtsrat are elected by shareholders and employees, respectively, in accordance with the AktG and the Mitbestimmungsgesetz; that the Company maintains a Nominierungsausschuss for the identification and recommendation of shareholder representative candidates; that the composition of the Nominierungsausschuss and the overall nomination process follow German home-country practices; and that the Vorstand has no formal role in the nomination of Aufsichtsrat members.
E. Shareholder Approval Requirements — Nasdaq Rule 5635
1. Nasdaq Requirement
Nasdaq Rule 5635 sets forth a series of shareholder approval requirements applicable to listed companies. Specifically:
(a) Related-Party Transactions (Rule 5635(a)). Shareholder approval is required prior to the issuance of securities in connection with the acquisition of the stock or assets of another company if any director, officer, or substantial shareholder of the listed company has a 5% or greater interest (or collectively a 10% or greater interest) in the company or assets to be acquired, and the present or potential issuance of common stock (or securities convertible into common stock) could result in an increase of 5% or more in the number of shares of common stock outstanding.
(b) Change of Control (Rule 5635(b)). Shareholder approval is required prior to the issuance of securities when such issuance or potential issuance will result in a change of control of the issuer.
(c) Equity Compensation (Rule 5635(c)). Shareholder approval is required prior to the establishment of, or material amendment to, any equity compensation plan pursuant to which stock may be acquired by officers, directors, employees, or consultants, subject to certain limited exceptions.
(d) 20% Issuance (Rule 5635(d)). Shareholder approval is required prior to the issuance of securities constituting 20% or more of the pre-transaction outstanding shares (or 20% or more of the voting power) at a price less than the Minimum Price (as defined in the rules), other than in a public offering.
2. German Home-Country Practice
The AktG provides its own comprehensive framework for shareholder approval of capital issuances and related transactions, which — while structurally different from the Nasdaq framework — provides robust shareholder protections. The principal elements of this framework are:
Authorized Capital (*Genehmigtes Kapital*). Under AktG §§ 202-204, the Hauptversammlung may authorize the Vorstand, with the approval of the Aufsichtsrat, to issue new shares up to a specified maximum amount within a period of up to five (5) years from the date of the authorization, without the need for an additional shareholder vote at the time of issuance. This "authorized capital" mechanism is widely used by German listed companies and provides the Vorstand and Aufsichtsrat with flexibility to issue shares for capital-raising, acquisitions, and other corporate purposes within the pre-approved parameters. The authorization is granted by the shareholders themselves and is subject to renewal and amendment only by further shareholder approval.
Halcyon's current authorized capital (Genehmigtes Kapital 2024) was approved at the Hauptversammlung held on May 15, 2024. This authorization permits the Vorstand, with Aufsichtsrat approval, to increase the Company's share capital by up to EUR 75,000,000 through the issuance of up to 75,000,000 new no-par-value ordinary shares (Stückaktien) on one or more occasions through May 14, 2029. The issuance of 30,000,000 new ordinary shares for the IPO will be made under this existing authorized capital authorization, with the consent of the Aufsichtsrat and the exclusion of pre-emptive rights as described below. A detailed analysis of the German corporate law considerations for the new share issuance is set forth in a separate memorandum prepared in coordination with Bähr Stein.
Pre-emptive Rights (*Bezugsrechte*). AktG § 186 grants existing shareholders statutory pre-emptive rights (Bezugsrechte) in connection with any issuance of new shares. These pre-emptive rights may be excluded, but only under limited circumstances and with a supermajority shareholder vote (at least 75% of the share capital represented at the Hauptversammlung), typically in connection with the authorization of authorized capital. The exclusion of pre-emptive rights is subject to judicial review to ensure it is justified by the company's interests and proportionate. The authorized capital authorization approved at Halcyon's May 2024 Hauptversammlung includes authorization to exclude pre-emptive rights in connection with capital increases for cash against contributions in kind, for the implementation of employee stock programs, and for other specified purposes.
Employee Stock Programs. The establishment of equity-based employee compensation programs is subject to shareholder approval as part of the general authorized capital framework. Halcyon's existing employee stock option program (the "HSAG ESOP 2023") was approved by the Hauptversammlung in May 2023.
Related-Party Transactions. Since the implementation of SRD II in German law through the ARUG II amendments, related-party transactions of material significance are subject to the approval of the Aufsichtsrat under AktG § 111b. The Aufsichtsrat's approval requires that any Aufsichtsrat member who is personally affected by the transaction abstain from the vote. This regime, while not requiring Hauptversammlung approval (as the Nasdaq framework does in certain circumstances), provides an analogous safeguard through the oversight of the independent supervisory body.
3. Recommendation.  We recommend that Halcyon claim an exemption from Nasdaq Rule 5635 in its entirety (Rules 5635(a) through (d)).
The exemption disclosure should explain that Halcyon follows the AktG framework for shareholder approval of capital issuances, including the authorized capital (genehmigtes Kapital) mechanism, the statutory pre-emptive rights (Bezugsrechte) regime, and the related-party transaction approval requirements under AktG § 111b; that these provisions provide comprehensive shareholder protections that are equivalent in effect, though different in structure, to the Nasdaq shareholder approval requirements; and that the Company's governance practices comply with the applicable provisions of the AktG, the DCGK, and the Prime Standard listing rules of the Frankfurt Stock Exchange.
F. Quorum Requirements — Nasdaq Rule 5620(c)
1. Nasdaq Requirement
Nasdaq Rule 5620(c) requires that a listed company provide for a quorum of not less than 33⅓% of the outstanding shares of the company's common voting stock for any meeting of the holders of such common stock. This quorum requirement is intended to ensure that shareholder action is taken only when a meaningful proportion of the company's shareholders participate in the decision-making process.
2. German Home-Country Practice
The AktG does not impose a general quorum requirement for the Hauptversammlung. Unless the company's Satzung (articles of association) provides otherwise, a Hauptversammlung may be convened and may adopt resolutions regardless of the number of shares represented at the meeting. This is the standard practice for German Aktiengesellschaften, and Halcyon's Satzung does not impose a general quorum requirement.
However, it is important to note that German law provides meaningful voting protections through other mechanisms. For certain categories of resolutions that are considered particularly significant — including amendments to the Satzung, capital increases and decreases, the exclusion of pre-emptive rights, the authorization of the Vorstand to issue convertible bonds or bonds with warrants, changes to the corporate purpose, and the dissolution of the company — the AktG requires a supermajority vote of at least 75% of the share capital represented at the Hauptversammlung. This supermajority requirement, combined with the economic incentives for shareholders to participate in meetings at which important decisions are being made, provides a practical safeguard against the adoption of material resolutions by an unrepresentatively small group of shareholders.
Halcyon's Satzung is currently under review in connection with the IPO, and the relevant provisions regarding shareholder meeting procedures will be disclosed in the prospectus. We understand from Bähr Stein that no changes to the quorum provisions of the Satzung are contemplated in connection with the Offering.
3. Recommendation.  We recommend that Halcyon claim an exemption from Nasdaq Rule 5620(c).
The exemption disclosure should explain that German law does not require a minimum quorum for general meetings of shareholders (Hauptversammlungen); that Halcyon follows the standard German practice of not imposing a general quorum requirement; and that German law provides alternative shareholder protections through supermajority voting requirements for specified material resolutions.
G. Proxy Solicitation — Nasdaq Rule 5620(b)
1. Nasdaq Requirement
Nasdaq Rule 5620(b) requires that listed companies solicit proxies and provide proxy statements for all meetings of shareholders, and that the solicitation be conducted in compliance with applicable SEC rules. For domestic US issuers, this includes compliance with the detailed proxy solicitation requirements of Regulation 14A under the Exchange Act, which mandates the preparation and distribution of a proxy statement containing specified information about the matters to be voted upon, the solicitation of proxies, and the filing of the proxy statement with the SEC.
2. German Home-Country Practice
German law requires that the Hauptversammlung be convened by publication of notice in the Federal Gazette (Bundesanzeiger) and on the company's website, with a minimum notice period of 30 days before the meeting date (AktG § 123). The convening notice must include specified information about the agenda items, the conditions for attendance and voting, and the shareholders' rights. Shareholders may attend the Hauptversammlung in person, may appoint a proxy (Bevollmächtigter) to attend and vote on their behalf, or may exercise their voting rights by postal ballot (Briefwahl) or electronic means, as provided in the company's Satzung and the convening notice.
Halcyon follows standard German practice for convening and conducting the Hauptversammlung. The Company publishes its convening notice in the Bundesanzeiger, on the Company's website, and through the clearing systems that facilitate the transmission of meeting information to shareholders and their custodian banks.
With respect to US holders of ADSs, the Deposit Agreement between Halcyon, Meridian Trust Company, N.A. (as Depositary), and the holders of ADSs will provide for the forwarding of shareholder meeting notices and agenda information to ADS holders, together with instructions for directing the Depositary to vote the underlying ordinary shares in accordance with the ADS holders' instructions. This mechanism ensures that ADS holders receive the equivalent of proxy-solicitation materials and have the opportunity to participate in the decision-making process at the Hauptversammlung, although the process is structured through the depositary rather than through the US proxy solicitation framework.
As an FPI, Halcyon will furnish proxy-equivalent information to the SEC on Form 6-K in connection with each Hauptversammlung, but will not be required to comply with the US proxy rules under Regulation 14A of the Exchange Act. This distinction is a well-established feature of the FPI regime and is consistent with the purpose of the FPI exemption framework.
3. Recommendation.  We recommend that Halcyon claim an exemption from Nasdaq Rule 5620(b).
The exemption disclosure should explain that Halcyon follows German statutory procedures for convening and conducting the Hauptversammlung, including the publication of the convening notice in the Bundesanzeiger and on the Company's website; that ADS holders will receive meeting notices and voting instructions through the Depositary in accordance with the Deposit Agreement; and that Halcyon will furnish meeting materials to the SEC on Form 6-K but will not comply with the US proxy solicitation rules under Regulation 14A.
H. Shareholder Meeting Disclosure / Record Date Requirements — Nasdaq Rule 5620(a)
1. Nasdaq Requirement
Nasdaq Rule 5620(a) requires that listed companies provide advance notice of shareholder meetings and set record dates consistent with Nasdaq rules, which are in turn designed to coordinate with the SEC proxy solicitation requirements and the requirements of domestic US corporate law (e.g., Delaware General Corporation Law § 213 regarding record dates).
2. German Home-Country Practice
AktG § 123 sets forth the requirements for convening the Hauptversammlung, including a minimum notice period of 30 days before the date of the meeting. The convening notice must be published in the Bundesanzeiger and must include the full text of the agenda, the proposals for resolution, and information regarding the conditions for attendance and exercise of voting rights.
The record date for determining shareholder eligibility to attend and vote at the Hauptversammlung is governed by AktG § 123(4), which provides for a specific registration date (Nachweisstichtag). The Nachweisstichtag is the 21st day before the date of the Hauptversammlung. Shareholders who are recorded as holders of the Company's shares as of the Nachweisstichtag are entitled to attend and vote at the meeting, regardless of any subsequent changes in ownership. This registration date serves the same function as a record date under US corporate law, although the specific timing and mechanics differ.
Halcyon follows the AktG requirements for meeting notices and record dates, and these procedures are consistent with the Prime Standard listing rules of the Frankfurt Stock Exchange and with the DCGK recommendations.
3. Recommendation.  We recommend that Halcyon claim an exemption from Nasdaq Rule 5620(a) to the extent that the Nasdaq requirements are inconsistent with German statutory requirements.
The exemption disclosure should explain that Halcyon follows the AktG requirements for convening the Hauptversammlung, including the 30-day minimum notice period and the registration date (Nachweisstichtag) prescribed by AktG § 123; and that these requirements provide equivalent shareholder protections regarding advance notice and record date procedures.
IV. Mandatory Nasdaq Requirements Applicable Despite FPI Status
As noted in Section II.B, certain Nasdaq corporate governance requirements apply to all listed companies, including foreign private issuers, and cannot be exempted under Nasdaq Rule 5615(a)(3). This Section IV analyzes each of those mandatory requirements and describes the steps Halcyon must take to achieve compliance.
A. Audit Committee — Nasdaq Rule 5605(c) / Exchange Act Rule 10A-3
No exemption is available from the audit committee requirements of Nasdaq Rule 5605(c)(2) to the extent mandated by Exchange Act Rule 10A-3. This is the single most important mandatory governance requirement for FPIs, and it requires careful attention.
Overview of Rule 10A-3. Exchange Act Rule 10A-3, adopted pursuant to Section 301 of SOX, requires that listed companies maintain an audit committee that satisfies the following minimum requirements:
(a) Independence. Each member of the audit committee must be "independent" as defined in Rule 10A-3(b)(1), which means that the member may not, other than in his or her capacity as a member of the audit committee, the board of directors, or any other board committee, accept directly or indirectly any consulting, advisory, or other compensatory fee from the issuer or any subsidiary thereof, and may not be an "affiliated person" of the issuer or any subsidiary thereof. The independence standard under Rule 10A-3(b)(1) is distinct from — and in certain respects narrower than — the independence standard under Nasdaq Rule 5605(a)(2).
(b) Authority and Responsibilities. The audit committee must be directly responsible for the appointment, compensation, retention, and oversight of the work of any registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review, or attest services for the issuer. The committee must have the authority to engage independent counsel and other advisors, as it determines necessary to carry out its duties. The committee must establish procedures for the receipt, retention, and treatment of complaints received by the issuer regarding accounting, internal accounting controls, or auditing matters, and for the confidential, anonymous submission by employees of the issuer of concerns regarding questionable accounting or auditing matters.
(c) Funding. Each listed issuer must provide appropriate funding, as determined by the audit committee, for payment of compensation to any registered public accounting firm engaged for the purpose of preparing or issuing an audit report, to any advisors employed by the audit committee, and of ordinary administrative expenses of the audit committee.
FPI Accommodation Under Rule 10A-3(c)(3). Rule 10A-3(c)(3) provides a limited accommodation for FPIs whose home-country legal or listing requirements require or permit a board of auditors or a similar body (a "statutory auditing body") to exercise oversight over the issuer's external audit function. Under this accommodation, a member of the statutory auditing body (or a member of the issuer's board of directors or supervisory board who is not a member of the statutory auditing body) may serve on the audit committee, provided that (i) the member is elected by a general vote of the shareholders or is appointed by a body other than the issuer's management, and (ii) the member is not an executive officer of the issuer. This accommodation may permit the participation of employee representatives on the audit committee if they meet the independence requirements of Rule 10A-3(b)(1) (which are distinct from the Nasdaq Rule 5605(a)(2) independence requirements), although this must be analyzed on a case-by-case basis.
Application to Halcyon. Halcyon's Aufsichtsrat currently maintains a Prüfungsausschuss (Audit Committee), which consists of four members: two shareholder representatives and two employee representatives. The Prüfungsausschuss is currently chaired by Dr. Maximilian Gruber, a shareholder representative with extensive financial expertise (former CFO of Weißberg Technologies SE). The composition and mandate of the Prüfungsausschuss comply with German requirements under AktG § 107(4) and the DCGK recommendations regarding audit committee composition.
For purposes of Rule 10A-3 compliance, the composition of Halcyon's Prüfungsausschuss must be evaluated against the independence standard in Rule 10A-3(b)(1). The two shareholder representatives (Dr. Maximilian Gruber and Dr. Elena Schreiber) preliminarily appear to meet the Rule 10A-3(b)(1) independence requirements, as neither receives compensatory fees from the Company (other than their Aufsichtsrat compensation) and neither appears to be an "affiliated person" of the Company. The two employee representatives present a more complex question: under Rule 10A-3(b)(1)(ii)(A), an employee of the issuer is considered an "affiliated person" and therefore would not meet the independence requirement. Accordingly, if the employee representatives on Halcyon's Prüfungsausschuss are current employees of the Company, they would not satisfy Rule 10A-3 independence.
We have discussed this issue with Bähr Stein and with the Company, and we recommend the following approach:
(i) Halcyon should establish or designate a US-compliant audit committee that consists solely of members who satisfy the independence requirements of Rule 10A-3(b)(1). This committee may be constituted as a subcommittee or designated portion of the existing Prüfungsausschuss, or as a separate committee of the Aufsichtsrat that operates in parallel with the Prüfungsausschuss for purposes of meeting the Rule 10A-3 requirements.
(ii) The US-compliant audit committee should include at least three independent members, all of whom should be shareholder representatives on the Aufsichtsrat who meet the Rule 10A-3(b)(1) independence standard. We recommend that Dr. Maximilian Gruber serve as chair of this committee, given his financial expertise.
(iii) At least one member of the audit committee must qualify as an "audit committee financial expert" as defined in Item 16A of Form 20-F (implementing SOX Section 407). Based on our review of the biographies of Halcyon's Aufsichtsrat members, Dr. Maximilian Gruber appears to qualify as an audit committee financial expert by virtue of his professional background and experience.
A separate draft Audit Committee Charter (US-Compliant) has been prepared by Calderwood & Harkness to meet the requirements of Rule 10A-3, Nasdaq Rule 5605(c), and SOX Section 301. The draft charter addresses the committee's authority, responsibilities, independence requirements, meeting procedures, and complaint-handling procedures. The draft has been shared with the Company and with Bähr Stein for review.
Independent Auditors. Halcyon's external auditors are Blackmere & Whitfield LLP / GmbH Wirtschaftsprüfungsgesellschaft. The engagement partner for the German statutory audit is Dieter Kaufmann, Wirtschaftsprüfer, based in Munich. The US PCAOB-related audit engagement is led by Graham Templeton, a partner in Blackmere & Whitfield's New York office. Blackmere & Whitfield is registered with the Public Company Accounting Oversight Board (PCAOB) as required for audit firms of SEC-reporting companies. The appointment of Blackmere & Whitfield as the Company's independent registered public accounting firm for US purposes will be subject to the oversight and approval of the US-compliant audit committee.
B. Code of Conduct — Nasdaq Rule 5610
Foreign private issuers must adopt a code of conduct applicable to all directors, officers, and employees that complies with the minimum content requirements of Nasdaq Rule 5610. The rule requires that the code provide for an enforcement mechanism, including the processing of complaints and the investigation of violations. Although FPIs may follow home-country practices regarding the specific content of the code and the procedures for granting waivers, the minimum substantive requirements of Nasdaq Rule 5610 apply.
In addition to the Nasdaq requirement, SOX Section 406 requires disclosure of whether the issuer has adopted a code of ethics for its senior financial officers (including the principal financial officer, principal accounting officer, controller, or persons performing similar functions), and, if not, the reasons therefor. If the issuer has adopted such a code, it must file the code as an exhibit to its annual report and disclose any amendments to or waivers from the code.
Halcyon currently maintains a Verhaltenskodex (Code of Conduct) that applies to all employees and management board members of the Halcyon group. This code was adopted in its current form in 2021 and covers topics including ethical business conduct, anti-corruption and anti-bribery compliance, conflicts of interest, confidentiality, data protection, and compliance with applicable laws and regulations.
We have reviewed Halcyon's existing Verhaltenskodex and identified certain areas where supplementation is needed to meet the minimum content requirements of Nasdaq Rule 5610 and SOX Section 406, including provisions regarding (i) prompt internal reporting of violations to an appropriate person identified in the code, (ii) accountability for adherence to the code, (iii) a fair and prompt process for determining violations and appropriate actions, and (iv) specific provisions regarding financial officers' responsibilities for full, fair, accurate, timely, and understandable disclosure in SEC filings and public communications.
A separate draft Code of Business Conduct and Ethics (US-Compliant) has been prepared by Calderwood & Harkness to meet these requirements. The draft is intended to supplement (not replace) Halcyon's existing Verhaltenskodex and has been shared with the Company and with Bähr Stein for review.
C. Disclosure Obligations — Nasdaq Rules 5250(b)(3), 5250(c)(1)
Third-Party Director Compensation (Rule 5250(b)(3)). Halcyon must disclose in its annual report on Form 20-F, or in the proxy-equivalent materials furnished on Form 6-K, any arrangement or understanding pursuant to which any member of the Aufsichtsrat or any nominee for election to the Aufsichtsrat receives compensation from any source other than the Company in connection with such person's candidacy or service as a member of the Aufsichtsrat. Based on our review of the Company's existing disclosure and our discussions with the Company, we are not aware of any such arrangements currently in effect. However, the Company should establish procedures to monitor for and disclose any such arrangements on an ongoing basis.
Annual Report Distribution (Rule 5250(c)(1)). Halcyon must distribute or make available an annual report to its shareholders and must file such annual report with the SEC. Halcyon will satisfy this requirement by filing its annual report on Form 20-F with the SEC via the EDGAR system, which will be publicly available, and by making the annual report available on its corporate website. The Company's existing practice of distributing the German annual report (Geschäftsbericht) to shareholders and making it available on the Company's website will continue in parallel.
D. Notification of Non-Compliance — Nasdaq Rule 5625
Halcyon must promptly notify Nasdaq of any material non-compliance with the Nasdaq listing standards that could reasonably be expected to have a significant effect on the Company's ability to maintain its listing on the Nasdaq GSM. This obligation applies to FPIs and cannot be exempted. It includes notification of any changes in the Company's home-country governance practices or in applicable German law that would affect the basis for any previously claimed exemption, as well as notification of any loss of FPI status.
We recommend that Halcyon establish an internal procedure, to be coordinated by the General Counsel's office (Wilhelm Ostermann) and the US securities counsel function, for monitoring compliance with Nasdaq listing standards and promptly notifying Nasdaq of any material non-compliance. A draft internal compliance procedure has been included in the broader Nasdaq Listing Standards Compliance Manual being prepared by Calderwood & Harkness.
V. Procedural Requirements for Filing the Exemption Notice
A. Written Notification to Nasdaq
In connection with its listing application, Halcyon must submit to Nasdaq a written statement (the "Corporate Governance Exemption Notice") identifying each Nasdaq listing requirement from which it claims an exemption under Nasdaq Rule 5615(a)(3) and describing the alternative home-country practice it follows in lieu of the exempted Nasdaq requirement. This notice must be sufficiently detailed to enable Nasdaq to evaluate the basis for each claimed exemption.
Timing. The Corporate Governance Exemption Notice should be filed with Nasdaq concurrently with, or promptly following, the submission of H

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