Corporate Governance Information

Rule 34:
In accordance with Rule 34 of the Austrian Code of Corporate Governance, excerpts from the Rules of Procedure of the Supervisory Board regarding the establishment of committees and their competences shall be published.

Excerpt from the rules of procedure as amended on 21 March 2006
§ 5 Supervisory Board Committees

1. The Supervisory Board can appoint committees from among its members and stipulate their tasks and competences. The authorization to make decisions may also be granted to committees. The committees shall have a number of members considered sufficient by the Supervisory Board who meet the criteria for independence in accordance with Rule 53 of the Austrian Code of Corporate Governance as amended in January 2006.Irrespective of the size of the Supervisory Board, an Audit Committee shall be set up to audit and prepare the approvals of the annual financial statements, of the proposal for the appropriation of accumulated profit and of the management report. The Audit Committee shall also audit the consolidated financial statements and make a proposal for the appointment of the auditors and shall report on it to the Supervisory Board. In the case of listed companies, one person shall form part of the Audit Committee who has special knowledge and experience in finance and accounting and in reporting (financial expert). Persons who have been a member of the Management Board, a manager or auditor of the company or who have signed the auditor’s opinion in the past three years, shall not be eligible to act as the chairperson of the Audit Committee or as the financial expert.
2. In the committees of the Supervisory Board, employee representatives have a seat and vote according to § 110 (4) ArbVG (Austrian Labor Constitution Act). This does not apply to committees which deal with the relations between the Company and the members of the Management Board in accordance with
   § 92 (4), 2^nd sentence AktG (Companies Act), with the exception of resolutions regarding the appointment of the cancellation of the appointment of a member of the Management Board, as well as granting options for shares of the Company.
3. A Supervisory Board Committee shall have a quorum if at least three members take part in the meeting. If a committee only consists of two members, it shall have a quorum if both members are present. The provisions of § 4 paragraphs
   4 to 6 apply.
4. The Supervisory Board shall set up a Nomination Committee. If the number of Supervisory Board members including employee representatives does not exceed six members, this function may be exercised by the entire Supervisory Board.
   The Nomination Committee submits proposals for filling mandates that become free in the Management Board to the Supervisory Board and deals with issues of successor planning.
   The Nomination Committee or the entire Supervisory Board submits proposals to the Annual General Meeting regarding appointments to mandates that become free in the Supervisory Board.
5. The Supervisory Board shall set up a Compensation Committee whose chairperson is the Chairperson of the Supervisory Board. If the number of Supervisory Board members including employee representatives does not exceed six members, this function may be exercised by the entire Supervisory Board. The Compensation Committee may be identical to the Nomination Committee.
   The Compensation Committee shall deal with matters regarding the compensation of the members of the Management Board and the contents of contracts of employment of members of the Management Board.
6. The Supervisory Board shall ensure that a committee or the Presidium is authorized to make decisions in urgent cases.

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Rule 53:
In accordance with Rule 53 of the Austrian Code of Corporate Governance, the Supervisory Board establishes criteria according to which a Supervisory Board member is to be considered independent. At its meeting on 21 March 2006, the RHI Supervisory Board established the following criteria:

A)  Independence of a member of the Supervisory Board
A member of the Supervisory Board of RHI AG is to be considered independent when he/she has no business or personal relations with the Company and its Management Board which could lead to a material conflict of interest and may therefore influence the behaviour of the member.

B)  Lack of independence
A member of the Supervisory Board of RHI AG is not to be considered independent if

• the Supervisory Board member has been a member of the Management Board or a manager of the company or a subsidiary of the company in the past five years;
• the Supervisory Board member has, or has had in the past years, business relations with the company or a subsidiary of the company in a scope that is significant for the Supervisory Board member. This also applies to business relationships with companies, in which the Supervisory Board member holds a material economic interest. The approval of individual transactions by the Supervisory Board in accordance with L-Rule 48 does not automatically lead to the qualification not independent;
• the Supervisory Board member has been an auditor of the company or a partner of employee of the auditing company in the past three years;
• the Supervisory Board member is a member of the Management Board of another company, in which a member of the Management Board of RHI AG is a Supervisory Board member;
• the Supervisory Board member is a close relative (direct offspring, spouses, partners, parents, uncles, aunts, siblings, nieces, nephews) of a member of the Management Board or of persons who are in one of the above-mentioned positions.

C)  Sufficient number of independent members
In the opinion of the Supervisory Board, the number of two independent Supervisory Board members of RHI AG determined in accordance with Rule 54 CGC currently corresponds to the sufficient number of independent members to be determined by the Supervisory Board in accordance with Rule 53. It is stated that the Supervisory currently comprises six independent capital representatives.
In accordance with Figure 54 Corporate Governance Code, the members of the Supervisory Board shall, in the case of companies with a free float of more than 50%, include at least two independent members who are not shareholders with a stake of more than 10% or who represent such a shareholder’s interests. RHI AG has declarations by Mr. Gröller and Mr. Peskes stating that they meet these criteria.

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Rule 58:
In addition, other supervisory board mandates or comparable functions in domestic or foreign listed companies shall be disclosed for each Supervisory Board Member in accordance with Rule 58 of the Austrian Code of Corporate. The following members of the RHI Supervisory Board exercise other such mandates:

Note to figures 53, 54, 58: Dr. Draxler is NOT an independent member of the Supervisory Board