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German Corporate Governance and Declaration of Conformity

The German Corporate Governance Code was established to increase confidence in the corporate governance of publicly traded companies. It aims to provide more transparency for domestic and foreign investors with regard to existing regulations covering the management and monitoring of companies. Our value-enhancing strategies, as well as the majority of the guidelines, recommendations, and proposals for responsible management contained in the Code, have been basic components of our activities for many years. Extensive information on the subject of corporate governance can be found on our website www.fresenius.com, see Who we are – Corporate Governance.

The Supervisory Board of Fresenius SE & Co. KGaA and the Management Board of the general partner have issued the required Declaration of Conformity pursuant to Section 161 of the German Stock Corporate Act (AktG) and have made it available to shareholders on the website of the Company:

“Declaration by the Supervisory Board of Fresenius SE & Co. KGaA and the Management Board of the general partner of Fresenius SE & Co. KGaA, Fresenius Management SE, on the German Corporate Governance Code pursuant to Section 161 German Stock Corporation Act (Aktiengesetz).

The Supervisory Board of Fresenius SE & Co. KGaA and the Management Board of the general partner of Fresenius SE & Co. KGaA (hereafter the “Management Board”) declare that the recommendations of the “Government Commission on the German Corporate Governance Code” published by the Federal Ministry of Justice (Justizministerium) in the official section of the electronic Federal Gazette (Bundesanzeiger) (hereafter the “Code”) in the version of May 26, 2010, have been met since issuance of the previous declaration of conformity in March 2011 and will continue to be met. Only the following recommendations have not been adhered to:

  • Clause 4.2.3, para. 4 of the Code: Compensation cap
    Pursuant to clause 4.2.3 paragraph 4 of the Code, upon termination of a Management Board contract, it should be ensured that the payments to the Management Board member whose service for the Company is prematurely terminated shall not, including all ancillary payments, exceed the value of two annual remunerations (compensation cap) and shall remunerate for no more than the remaining term of the Management Board agreement. The compensation cap shall be calculated on the basis of the total compensation for the previous financial year and, as applicable, also the expected total compensation for the current financial year.
    The service agreements of the members of the Management Board do not include a provision dealing with the early termination of service for the Company without good cause. Such compensation provision would contradict the concept to conclude the service agreements with the Management Board members for the period of their appointment, such concept practiced by Fresenius since long in line with the German Stock Corporation Act (Aktiengesetz). Applying this concept, any early termination of the service agreement requires good cause.
  • Clause 5.1.2, para. 2, sentence 3 of the Code: Age limit for members of Management Board
    Pursuant to clause 5.1.2, paragraph 2, sentence 3 of the Code, an age limit shall be specified for the members of the Management Board. As in the past, Fresenius will refrain from determining an age limit for the members of the Management Board in the future, since this would generally limit the selection of qualified candidates.
  • Clause 5.4.1, paras. 2 and 3 of the Code: Specification of concrete objectives regarding the composition of the Supervisory Board and taking them into account when making recommendations to the competent election bodies
    Pursuant to clause 5.4.1, paragraphs 2 and 3 of the Code, the Supervisory Board shall specify concrete objectives regarding its composition and, when making recommendations to the competent election bodies, take these objectives into account. The objectives specified by the Supervisory Board and the status of the implementation shall be published in the Corporate Governance Report. These recommendations are not adhered to. As the composition of the Supervisory Board needs to be aligned to the enterprise’s interest and has to ensure the effective supervision and consultation of the Management Board, it is a matter of principle and of prime importance that each member is suitably qualified. When discussing its recommendations to the competent election bodies, the Supervisory Board will take into account the international activities of the enterprise, potential conflicts of interest, and diversity. This includes the aim to establish an appropriate female representation on a long-term basis.
    However, in the enterprise’s interest not to limit the selection of qualified candidates in a general way, the Supervisory Board confines itself to a general declaration of intent and particularly refrains from fixed diversity quotas and from an age limit. As the next regular elections of the Supervisory Board will take place in the year 2016, reasonably a report on implementation of the general declaration of intent cannot be made till then.

Bad Homburg v. d. H., December 2011
The Supervisory Board of Fresenius SE & Co. KGaA
The Management Board of the general partner of
Fresenius SE & Co. KGaA (Fresenius Management SE)“

In accordance with Section 161 AktG and clause 3.10 sentence 4 of the Code, this declaration and all past declarations are published on our website at www.fresenius.com. To download these documents, see Who we are − Corporate Governance.

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