Porsche 2011 Annual Report Download - page 27

D&O insurance) is complied with by conclusion of new
D&O insurance policies at regular intervals and
No. 4.2.3 (3) sentences 2 and 3 (comparison pa-
rameters for variable compensation) by introducing a
long-term incentive plan. Due to the above-mentioned
protection of existing rights, the recommendation set
forth in No. 4.2.3 (4) (severance payment cap) has
been complied with only when entering into new con-
tracts with members of the board of management.
Finally, the board of management and super-
visory board of Volkswagen AG declared on 3 De-
cember 2010 that the recommendations of the Ger-
man Corporate Governance Code as of 26 May 2010
were complied with in the period from 2 July 2010 to
3 December 2010, with the following two exceptions:
Due to the protection of rights in existing contracts,
the severance payment cap (No. 4.2.3 (4)) is not
included in contracts with members of the board of
management concluded prior to 20 November 2009.
No. 5.4.1 (2) (specification of concrete objectives for
the composition of the supervisory board) has been
added to the code; following a discussion and the
determination of concrete objectives by the supervi-
sory board on 19 November 2010, this recommenda-
tion has only been complied with as of that date.
The declaration of compliance can be found
on the website www.volkswagenag.com/ir, under the
header Corporate Governance, and the menu item
declaration of compliance.
AUDI AG
The board of management and supervisory
board of AUDI AG issued the declaration of compli-
ance with the German Corporate Governance Code on
29 November 2010. In this document, they declared
that the recommendations of the German Corporate
Governance Code in the version dated 18 June 2009
was complied with until publication of the new version
dated 2 July 2010. However, there were qualifications:
the supervisory board had not formed a nomination
committee (No. 5.3.3) and members were not elected
to the supervisory board on an individual basis
(No. 5.4.3, sentence 1). Since 23 November 2009, a
cap on severance payments has been agreed when
entering into new board of management contracts,
which means that No. 4.2.3 (3) and (4) has been
complied with for new contracts since that date.
Because of the grandfathering arrangements, con-
tracts entered into before that date remain unaffected
by this new rule. Effective as of 1 January 2010, a
deductible was included in the D&O insurance policy
in accordance with the recommendation set forth in
No. 3.8 (2) Sentence 2 such that this recommenda-
tion is also complied with as of that date. The rec-
ommendation contained in No. 4.2.3 (3) sentences 2
and 3 (high, relevant comparison parameters for
variable compensation and no subsequent amend-
ment of targets) has been complied with as of
22 February 2010 following adoption of new remu-
neration system for members of the management
board on that date.
The executive board and supervisory board of
AUDI AG also declared on 29 November 2010 that
after publication of the current version of the code on
2 July 2010, the recommendations of the German
Corporate Governance Code as of 26 May 2010 were
and are complied with, with the exception of No.
5.4.1 (composition of the supervisory board),
No. 5.3.3 (nomination committee) and No. 5.4.3
sentence 1 (elections to the supervisory board on an
individual basis). The supervisory board believes that
a nomination committee would merely increase the
number of committees without noticeably improving
the supervisory board’s work. List-based elections are
quite common in democratic voting processes. The
recommendations introduced in 5.4.1 are new. Follow-
ing deliberations, the supervisory board on
29 November 2010 specified concrete objectives for
its composition, and the recommendations of
No. 5.4.1 have therefore been complied with as of
that date.
The declaration of compliance of AUDI AG
can be found on the internet at www.audi.de/cgk-
erklaerung.
Stuttgart, 9 March 2012
The supervisory board The executive board
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