§ 12 Committees

(1) The Supervisory Board is entitled to appoint one or more committees from its ranks, defining their duties and powers. Decision-making powers of the Supervisory Board may also be transferred to these committees.

(2) The Supervisory Board must set up an audit committee.

One member of the audit committee must be a person with specific knowledge and practical experience relevant to the requirements of the company in the field of finance and accounting as well as reporting (financial expert). Neither the chairperson of the audit committee nor the financial expert may be a person who has, in the past three years, served as a member of the Management Board, a senior executive, an external auditor of the company, someone who has signed the auditors’ report or someone who for other reasons is not independent and therefore biased.

The duties of the audit committee include:

(a) overseeing the process of financial reporting;

(b) assessing the effectiveness of the internal monitoring system, the internal auditing system and the risk management system;

(c) overseeing the (Group) auditing process;

(d) checking and monitoring the independence of the (Group) auditor, particularly with regard to additional services performed on behalf of the company;

(e) auditing and preparing for the adoption of the annual financial statements; examining the proposal on the distribution of profit, the management report and the corporate governance report; reporting the results of these examinations to the Supervisory Board;

(f) auditing the consolidated financial statements and Group management report; reporting the results of the audits to the Supervisory Board;

(g) preparing the proposal of the Supervisory Board on the selection of the (Group) auditor.

(3) The Supervisory Board also sets up the following committees:

- a nomination committee that makes proposals to the Supervisory Board on filling forthcoming vacant positions on the Management Board and deliberates on questions relating to succession planning. The nomination committee or the full Supervisory Board make proposals to the Ordinary General Meeting on the filling of forthcoming vacancies on the Supervisory Board.

- a remuneration committee, which is always chaired by the chairperson of the Supervisory Board. The make-up of the remuneration committee and the nomination committee may be identical. The remuneration committee deals with matters relating to the remuneration of Management Board members and with the content of employment contracts for Management Board members. The Supervisory Board assigns members of the remuneration committee the right to conclude, amend and rescind contracts of employment with Management Board members and to grant remunerations. The remuneration committee must approve the payment of voluntary extraordinary contributions to the workforce where these exceed 10 % of total wages and salaries in any business year.

- an investment committee which, in cooperation with the Management Board (and involving independent experts where necessary), prepares critical decisions that must be made by the full Supervisory Board. The investment committee can also grant approval on behalf of the Supervisory Board for the transactions stated in § 11 section 1(a), provided the costs in a specific case are between EUR 15,000,000 and EUR 75,000,000. The approval of the full Supervisory Board is also required in all cases.

- a presiding committee, to which the chairperson of the Supervisory Board, one of his/her deputies and another Supervisory Board member shall belong. The presiding committee may be identical to the remuneration and/or nomination committees. The committee rules on business matters requiring approval where a delay linked to the convening of a Supervisory Board meeting might expose the company to significant pecuniary prejudice.

Committee meetings may be held within the context of full Supervisory Board sessions.

(4) Committees must be formed on a yearly basis at the constituent Supervisory Board meeting that takes place following the Ordinary General Meeting.

(5) A committee shall comprise three or more members.

(6) The chairperson of the Supervisory Board (or a deputy where he/she is unable to attend) shall preside over committees. Article 2 section 5 applies accordingly.

(7) Other members of the Supervisory Board may participate in committee meetings in the place of committee members prevented from attending, and may vote where authorised to do so in writing by a non-attending committee member; committee members represented in this way must not be counted when determining whether a meeting is competent to pass resolutions.

(8) A committee is competent to pass resolutions where all members were invited in the proper manner and the chairperson (or a deputy) and at least one other committee member take part in the meeting.

(9) The activities of committees shall be correspondingly governed by the rules of procedure of the Supervisory Board, unless otherwise stipulated in separate rules of procedure decreed by the Supervisory Board.

<< back