Rules of procedure of the Supervisory Board

Resolved on 18 December 2017

§ 1 – Rights and responsibilities

The rights and responsibilities of the Supervisory Board and its members are set out in the Articles of association, these rules of procedure, the rules of procedure for the Executive Board and the provisions of German stock corporation law.

 

§ 2 – Representation

The Supervisory Board is represented externally and vis-à-vis the other governing bodies of the Company by its Chairman, or, if the latter is temporarily incapable, by the Deputy Chairman.

 

§ 3 – Convening of meetings

(1) The Supervisory Board shall hold one meeting per calendar quarter and must hold ad least two meetings per calendar half-year. The dates should be fixed at the beginning of the year in consultation with the Executive Board.

(2) Invitations to the meetings are issued by the Executive Board on behalf of the Chairman of the Supervisory Board. With regard to the form and deadline of the invitation, Article 13 (2) of the Articles of association applies. If a member is prevented from attending, he/she should inform the Chairman or the Executive Board in good time.

(3) With regard to the notification of the agenda, Article 13 (3) of the Articles of association shall apply. In addition to the cases set forth in Article 13 (3) sentence 2, the agenda has to be supplemented if a member of the Supervisory Board requests this, stating the purpose and reasons, at the latest three calendar days before the Supervisory Board meeting. The Executive Board shall immediately notify – on behalf of the Chairman of the Supervisory Board – all members of the Supervisory Board of such applications.

(4) Explanatory documents shall be sent to the members of the Supervisory Board, to the extent possible, together with the invitation. In urgent cases or if a request is made by a member of the Supervisory Board to convene a meeting in accordance with Section 110 (1), (2) German Stock Corporation Act (AktG), the deadline does not have to be observed. In such cases, the documents must be sent with a reasonable period of notice before the meeting or, in exceptional cases, be handed over at the meeting.

(5) In all other respects, the convening of the Supervisory Board shall be governed by the provisions of German stock corporation law and the provisions of the Articles of association.

 

§ 4 – Chairing of meetings, participation

(1) The Chairman of the Supervisory Board or, if he is prevented from doing so, his deputy shall chair the meetings of the Supervisory Board. If both are prevented, the oldest member of the Supervisory Board in terms of age shall take over as Chairman.

(2) The Executive Board shall regularly participate in the meetings. Subject to compliance with Section 109 AktG and Article 13 (4) of the Articles of association, the Chairman of the Supervisory Board may admit employees of the company or other persons, in particular experts and informants, to attend meetings in individual cases to discuss individual agenda items.

(3) The Chairman may postpone the discussion of motions and questions not related to items on the agenda to a later meeting.

 

§ 5 – Adoption of resolutions

(1) The Chairman determines the method of voting. If at least two members request so, voting shall take place by secret ballot.

(2) Supervisory Board members who are personally involved in a matter to be discussed or who are otherwise subject to a conflict of interest have to disclose such conflicts of interest to the Chairman in good time (see § 8 (2)) and may not participate in the voting or, if applicable, the discussion of this matter.

(3) Resolutions of the Supervisory Board are generally passed in meetings. In the cases specified in Article 14 (1) of the Articles of association, the adoption of resolutions outside of meetings is permissible.

 

§ 6 – Minutes

(1) Minutes shall be kept of the meetings and of the resolutions passed outside meetings, stating the place and date of the meeting or other resolution, the participants, the items on the agenda, the essential content of the discussions and the resolutions of the Supervisory Board. Minutes are usually recorded by a person appointed by the Executive Board.

(2) The minutes shall be submitted for signature to the respective chairperson of the meeting or, in the case of resolutions passed outside meetings, by the head of voting, if possible within two weeks of the meeting or resolution passed outside the meeting, and copies shall subsequently be sent to all members of the Supervisory Board. Minutes shall be deemed approved if the members of the Supervisory Board do not object to the correctness of the minutes in writing to the Chairman of the Supervisory Board or orally at the next meeting of the Supervisory Board at the latest by the next meeting of the Supervisory Board. The notice of objection shall be accompanied by information on the allegedly incorrect passages including an explanation of the incorrectness of the minutes.

 

§ 7 – Membership in the Supervisory Board

(1) The composition of the Supervisory Board has to ensure that its members collectively have the knowledge, skills, and professional expertise required to properly perform all duties. The Supervisory Board shall include what it considers to be an appropriate number of independent members, thereby taking into account the shareholder structure. Only persons who have not reached the age of 70 at the time of election shall be proposed for election as members of the Supervisory Board of the Company. Each member of the Supervisory Board ensures that he or she has sufficient time to devote the expected amount of time required. As a rule, membership in the Supervisory Board should not exceed three terms of office. With regard to the equal participation of women and men in the Supervisory Board, the statutory provisions in their currently valid version apply, which as of 1 January 2016 require a minimum of 30% women and 30% men for listed companies and companies with equal co-determination

(2) Members of the Management Board of a listed corporation shall not accept more than a total of three Supervisory Board mandates in listed corporations (including the Company) or on supervisory bodies of non-group entities that make similar requirements.

(3) Members of the Supervisory Board may not be members of governing bodies of, or exercise advisory functions at, significant competitors of the company.

(4) The above rules as well as the other relevant recommendations of the German Corporate Governance Code (GCGC) and regulations of the German Stock Corporation Act are to be taken into account when proposing candidates for election to the Supervisory Board. The Supervisory Board shall determine concrete objectives regarding its composition, and shall prepare a profile of skills and expertise for the entire Board. Within the Company-specific situation, the composition of the Supervisory Board shall reflect appropriately the international activities of the Company, potential conflicts of interest, the number of independent Supervisory Board members within the meaning of no. 5.4.2 GCGC, the age limit set forth in § 7 (1) of these Rules of Procedure and the regular limit to Supervisory Board members’ term of office, as well as diversity. Proposals by the Supervisory Board to the Annual General Meeting shall take these targets into account, while simultaneously aiming at fulfilling the overall profile of required skills and expertise of the Supervisory Board. The implementation status shall be published in the Corporate Governance Report. This report shall also provide information about what the Supervisory Board regards as the appropriate number of independent Supervisory Board members representing shareholders, and the names of these members.

(5) The Supervisory Board and the members of the Supervisory Board comply with the recommendations of the German Corporate Governance Code that affect them, unless deviations identified by a majority vote in the declaration of compliance to be submitted annually together with the Executive Board are declared in the declaration of compliance.

 

§ 8 – Chairman and deputy; Internal order of the Supervisory Board

(1) Under the chairmanship of the oldest member of the Supervisory Board in terms of age, the Supervisory Board elects from among its members the Chairman of the Supervisory Board and his Deputy in accordance with Section 27 (1) and (2) of the German Co-Determination Act 1976 (MitbestG 1976) at the first meeting following its election for its term of office or for a shorter period determined by it.

(2) If the Chairman of the Supervisory Board or his Deputy resigns during his term of office, the Supervisory Board shall without undue delay elect a replacement for the remaining term of office of the resigning member.

(3) Each member of the Supervisory Board is committed to the interests of the Company. In making its decisions, it must neither pursue personal interests nor take advantage of business opportunities that are available to the Company.

(4) Each member of the Supervisory Board shall inform the Supervisory Board of any conflicts of interest, particularly if they could arise as a result of an advisory or governing body function at clients, suppliers, lenders or other third parties. Material conflicts of interest involving a member of the Supervisory Board that are not merely temporary shall result in the termination of that member’s Supervisory Board mandate. In its report to the Annual General Meeting, the Supervisory Board shall inform the Annual General Meeting of any conflicts of interest that have arisen and how they were addressed.

(5) Members of the Supervisory Board may not demand or accept payments or other advantages for themselves or for third parties in connection with their activities, insofar as the interests of the Company or the interests of customers may be impaired thereby.

(6) Each member of the Supervisory Board must immediately notify the Company in writing of the acquisition and sale of shares or related financial instruments of the Company and its Group companies. If the value of the transactions carried out by an individual Supervisory Board member within a calendar year reaches EUR 5,000, the Company publishes these notifications on its website and makes corresponding statements in the annual report. Furthermore, the corporate governance report discloses the shareholdings or related financial instruments of individual members of the Supervisory Board if they directly or indirectly exceed 1% of the shares issued by the Company. Likewise, the total holdings of the Supervisory Board and the Executive Board is reported there separately for the Supervisory Board and the Executive Board if the total holdings of the Supervisory Board and the Executive Board exceed 1% of the shares issued by the company. Section 15a German Securities Trading Act (WpHG) remains unaffected.

 

§ 9 – Reappointment of Executive Board members

The reappointment of a member of the Executive Board before the end of one year prior to the end of the term with simultaneous termination of the current appointment is only permissible under special circumstances.

 

§ 10 – Committees

(1) The Supervisory Board forms committees from among its members. Insofar as other committees are formed in addition to the standing committees pursuant to paragraphs (2) and (3), their tasks and the powers to which they are entitled shall be defined by the resolution of the Supervisory Board on their formation. The members of the committees are elected by simple majority of the votes cast. Unless a shorter term of office is determined upon election, their term of office shall correspond to their term of office as members of the Supervisory Board.

(2) Immediately after the election of the Chairman and his Deputy, the Supervisory Board shall form a committee (Mediation Committee) to perform the duties described in Section 27 (3) of the German Codetermination Act, which shall comprise the Chairman, his Deputy and two other members, one elected by the Supervisory Board members representing the employees and one by those representing the shareholders, both tob e elected with a majority of the votes cast.

(3) In addition to the Mediation Committee, the Audit Committee, the Finance Committee, the Personnel Committee and the Property Committee are established as standing committees. At the beginning of a term of office, each committee shall elect a committee chairperson and a deputy from among its members by a majority of two thirds of the members of which it is to consist of in total. If the majority required under the preceding sentence is not achieved in the election of the committee chairperson or his deputy, a second ballot shall be held to elect the committee chairperson and his deputy. In this ballot, the shareholders' committee members elect the committee chairperson and the employees' committee members elect the deputy chairperson, in each case by a majority of the votes cast.

 (4) The task of the Finance Committee is to prepare the negotiations and resolutions of the Supervisory Board which are of material financial importance. These include, in particular, the matters specified in Article 12 (1) no. 2 (but with the exception of those parts of the business plan that relate to the Real Estate subgroup (cf. Article 2 (2) of the Articles of Association)), 3, 4, 5, 6, 7, 8, 13, 14 and 15 (but in each case with the exception of those matters that relate to the Real Estate subgroup) of the Rules of Procedure for the Executive Board.

The Finance Committee comprises six members to be elected by the Supervisory Board from among its members

(5) The Audit Committee deals with

a) the monitoring of the accounting, the accounting process and the audit of the financial statements and its effectiveness, in particular the review of the documents relating to the financial statements, the preparation of the Supervisory Board's decision on the adoption of the financial statements, the approval of the consolidated financial statements and the Executive Board's proposal for the appropriation of net income; it may submit recommendations or proposals to the Executive Board to ensure the integrity of the accounting process,

b) the effectiveness of the internal control system, the risk management system, the internal audit system and compliance,

c) the audit of the non-financial declarations or, where these are prepared, of the separate non-financial reports, in each case for the Company and the Group; in this respect, it decides on an external review of the content of the non-financial declarations or reports and, if an external audit is to be conducted, issues the audit engagement,

d) the additional services provided by the auditor, including the approval of non-audit or tax consulting services within the meaning of Art. 5 para. 4 of the Regulation on the Audit of Annual Financial Statements (Regulation no. 537/2014 of 16 April 2014) or Section 319a (3) of the German Commercial Code (HGB); the audit committee may pass a catalogue of pre-approved services for this purpose,

e) determining and monitoring the required independence of the auditor, preparation of the resolution proposal of the Supervisory Board to the Annual General Meeting for the election of the auditor, including the implementation of any selection procedures; after the auditor has been elected by the Annual General Meeting, issuing the audit mandate to the auditor, determining focal points of the audit and agreeing the fee with the auditor.

The Audit Committee comprises six members to be elected by the Supervisory Board from among its members.

(6) The Personnel Committee

a) prepares the personnel decisions incumbent on the Supervisory Board, ensures long-term succession planning together with the Executive Board and also pays attention to diversity in the composition of the Executive Board,

b) deals with the provisions and represents the Company in concluding, amending and terminating service contracts with members of the Executive Board (the appointment and dismissal of Executive Board members and the determination of the total­ remuneration of the individual Executive Board members in accordance with Section 87 (1) AktG, any reductions in remuneration in accordance with Section 87 (2) sentences 1 and 2 AktG, the resolution on the remuneration system for the Executive Board including the main contractual  elements and the regular review of the remuneration system are reserved for the Supervisory Board as a whole) and grants the approval of the Supervisory Board with regard to the appointment and dismissal of Prokurists and the determination of contractual conditions of contracts with Prokurists (cf. § 12 (1) no. 1 of the Rules of Procedure for the Executive Board),

c) acts as a nomination committee for the submission of proposals to the Annual General Meeting for the election of shareholder representatives to the Supervisory Board.

The Personnel Committee consists of the four members of the Mediation Committee (see paragraph 2) and two further members elected from among the members of the Supervisory Board. If the Personnel Committee convenes as Nomination Committee, it is composed exclusively of the shareholders’ representatives on the Personnel Committee.

(7) The Real Estate Committee is mandated and authorized to perform the following tasks on behalf of the Supervisory Board:

a) Acceptance of all reports by the Executive Board and discussion of all issues with the Executive Board relating to the Company's Real Estate subgroup (cf. Articles 2 (2) and 31 of the Articles of Association) and the direct and indirect subsidiaries and majority interests of the Company attributable to the Real Estate subgroup (hereinafter collectively referred to as the "Real Estate subgroup"),

b) Decision on granting the approval of the Supervisory Board with regard to all legal transactions and measures requiring approval in accordance with § 10 of the Rules of Procedure for the Executive Board, insofar as these relate to the Real Estate subgroup in individual cases or generally,

c) Review of the documents relating to the annual financial statements and preparation of the Supervisory Board's decision on the adoption of the annual financial statements, the approval of the consolidated financial statements and the Executive Board's proposal for the appropriation of net income, in each case to the extent that these relate to the Real Estate subgroup or the portion of net income attributable to the Real Estate subgroup,

d) Decisions on all other Supervisory Board resolution items that relate entirely or predominantly to the Real Estate subgroup, unless the transfer of decision-making authority is prevented by mandatory statutory regulations; in this case, the Real Estate Committee is merely required to prepare the Supervisory Board's decision.

The Real Estate Committee comprises six members elected from among the members of the Supervisory Board.

(8) In addition to the provisions of the Articles of Association relating to the Supervisory Board, the provisions of these Rules of Procedure relating to the full Supervisory Board shall apply mutatis mutandis to the procedure of the committees. The minutes of the meetings of the committees shall be sent to all members of the Supervisory Board.

 

§ 11 – Confidentiality

(1) Each member of the Supervisory Board is obliged to maintain secrecy about all matters subject to trade secret or other confidential matters and about secrets of the Company and its affiliated companies which he or she learns in his capacity as a member of the Supervisory Board, even after the termination of office as a member of the Supervisory Board. This also applies to confidential reports received and the content of confidential consultations. At the end of the mandate, all confidential documents must be returned to the company. The members of the Supervisory Board shall ensure that the employees and consultants they employ also comply with the confidentiality obligation in the same manner.

(2) If a member of the Supervisory Board wishes to pass on to third parties information which he has received in his capacity as a member of the Supervisory Board, he or she must inform the Chairman of the Supervisory Board of this in advance, unless the passing on of such information is obviously permissible.

(3) The provisions of Sections 394, 395 AktG remain unaffected. The obligations from paragraph 2 do not apply insofar as a member of the Supervisory Board is not subject to a duty of confidentiality in accordance with Section 394 AktG.

(4) The audit reports of the auditor commissioned by the Supervisory Board are to be handed out to each member of the Supervisory Board.

 

§ 12 – Reporting

(1) The Supervisory Board ensures that the Executive Board fulfils its reporting obligations as specified in Section 90 AktG and the reporting obligations between the Executive Board and the Supervisory Board.

(2) Reporting is the responsibility of the chairperson of the Executive Board; all members of the Executive Board shall support the chairperson in this task. The Executive Board shall submit to the Supervisory Board reports, usually in writing, on the matters of the Company as set out in Section 90 AktG. In individual cases and where necessary, timely verbal reports shall be made. Written reports may also be submitted to the members of the Supervisory Board by fax or electronic means.

(3) As part of the reporting pursuant to paragraph 1, the Supervisory Board shall be regularly informed at its meetings about the intended business policy and other fundamental issues of the Company, in particular the asset, financial and earnings situation, the risk situation, risk management and risk controlling. In addition, a report on fundamental issues of corporate planning, in particular financial and personnel planning, must be submitted at least once a year.

(4) The Supervisory Board resolves on the remuneration system for the Executive Board and reviews it regularly.

(5) Between meetings, the Chairman of the Supervisory Board shall be in regular contact with the Executive Board, in particular the chairperson of the Executive Board, in order to discuss with them issues of strategy, planning, business development, the risk situation, risk management and compliance of the Company. The chairperson of the Executive Board informs the Chairman of the Supervisory Board without undue delay of major events that are of material importance for the assessment of the Company’s status and performance, and for the management of the Company. In such case, the Chairman of the Supervisory Board subsequently informs the Supervisory Board and, if required, shall convene an extraordinary Supervisory Board meeting.

 

§ 13 – Self-evaluation

The Supervisory Board regularly reviews the efficiency of its activities, at least once after half of the regular term of office of its members.

 

§ 14 – Validity

(1) These Rules of Procedure shall remain in force until the Supervisory Board resolves otherwise.

(2) The Supervisory Board may decide by simple majority to deviate from these Rules of Procedure in individual cases.