Declaration of conformity according to § 161 German Stock Corporation Act

In 2001 the German government established a commission in order to develop a German Corporate Governance Code. This Code was presented on February 26, 2002. On June 2, 2005, the fourth version of the German Corporate Governance Code was completed and published on July 20, 2005 by the government’s electronic Federal Gazette.

The Code contains three types of standard:

– legal regulations describing currently valid standards in Germany,
– recommendations,
– suggestions.

German corporations are only obliged to observe the legal regulations.

With regard to the recommendations, the German Stock Corporation Act (§ 161) requires listed companies to publish a declaration of observance once per year.

Companies are allowed to deviate from the suggestions without the need for declaration.

The Corporate Governance principles of are anchored in the company’s statutes (including its Articles of Association and rules of procedure) and as such determine our current and future behavior. These principles differ in certain aspects from those of the German Corporate Governance Code, in the version dated June 2, 2005:

Deductibles in the case of D&O insurance policies

Should a company take out a so-called D&O insurance policy (directors and officers’ liability insurance) for its Management Board and Supervisory Board, the German Corporate Governance Code recommends that a suitable deductible be agreed.

  does not have any arrangement for deductibles and does not plan to change its current D&O policies.

Audit Committee

The German Corporate Governance Code recommends that the Supervisory Board set up an Audit Committee which, in particular, should handle issues of accounting and risk management, the necessary independence required of the auditor, the issuing of the audit mandate to the auditor, the determination of auditing focal points and the fee agreement.

The Supervisory Board of currently consists of three members: in addition to their other duties, the members also deal as a group with the above-mentioned topics. The Supervisory Board´s rules of procedure state that such a (separate) Audit Committee should only be formed if there are more than three members of the Supervisory Board.

Compensation of Supervisory Board members

The German Corporate Governance Code recommends that the compensation of Supervisory Board members should also take into account the exercising of the Chair and Deputy Chair positions in the Supervisory Board as well as the chair and membership in committees. The Code also recommends that the members of the Supervisory Board receive a performance-oriented remuneration in addition to their fixed payments. The Code further recommends that the compensation of the members of the Supervisory Board should be reported in the Corporate Governance Report, on an individual basis and subdivided according to components.

In the case of only the Chair position in the Supervisory Board is considered – as long as the Supervisory Board consists of no more than three members and no committees are formed. A performance related component of remuneration was decided by the Annual General Meeting on May 17, 2005. The compensation of the members of the Supervisory Board will be reported for the first time on an individual basis and subdivided according to components in the Corporate Governance Report which is included in the Annual Report 2005.

Montabaur, im November 2005