Corporate Governance
Status: December 2006
Pursuant to § 161 of the German Stock Corporation Act (AktG), the Management Board and Supervisory Board of companies listed on the stock exchange in Germany must make an annual declaration stating that the recommendations of the Government Commission on the German Corporate Governance Code have been and are being complied with or list the recommendations not being applied. This declaration must be made permanently accessible.
The German Corporate Governance Code (the "Code") contains regulations with different binding force. In addition to current stock corporation law regulations, it also contains recommendations from which companies may deviate; they are obliged however, to make full annual disclosure of these deviations. The Code also contains guidelines which may be deviated from without disclosure.
For the period up to to 11.06.06, the following declaration refers to the version of the Code from 02.06.05. For subsequent and future Corporate Governance Code practice of TELES AG, the following declaration refers to the requirements in the Code from 12.06.06.
The Management Board and the Supervisory Board of TELES AG hereby declare that the recommendations of the "Government Commission of the German Corporate Governance Code" published by the Federal Ministry of Justice in the official section of the electronic Federal Journal have been and are being complied with since the last Compliance Statement of December 2005 with the following exceptions.
1. Item 4.2.5 (Management Board — Reimbursement Report and Stock Option Value Information) ñ formerly Item 4.2.3
As a supplement to Item 4.2.4, the German Corporate Governance Code recommends disclosure of management board reimbursements in a compensation report which also describes the management board reimbursement system in a generally understandable way as part of the Corporate Governance Report.
The description of the concrete configuration of a stock option plan or comparable components with long-term incentive effect and risk character should include their respective values. Pension promise allocations to pension reserves or pension funds should be specified.
Taking into consideration the unforeseeability of the entry of the exercise conditions of the stock option program, as well as the lack of knowledge when exercised, information related to the value of stock options is abstract in nature and is therefore not accounted for in this respect.
As regards the Reimbursement Report, the Management Board refers to the current company report.
2. Item 5.1.2 (Age Limit for Members of the Management Board)
The German Corporate Governance Code recommends that the Supervisory Board specifies an age limit for members of the Management Board. The specification of an age limit does not apply to TELES, particularly due to the public commitment expressed by the founding shareholder on the occasion of the IPO to continue his activies within the company.
3. Item 5.3 (Formation of Committees)
The German Corporate Governance Code recommends that the Supervisory Board forms professionally qualified committees subject to the specific conditions of the company and the number of members. At present, the Supervisory Board of TELES AG consists of three members. The formation of committees is not foreseen as these members deal in their totality with — in addition to their other duties -the committee-related themes referred to in the Code.
4. Item 5.4.7 (Performance-related Reimbursement of the Members of the Supervisory Board) — formerly Item 5.4.5
The German Corporate Governance Code recommends that members of the Supervisory Board receive fixed as well as performance-related reimbursement. In view of the adjudication of the Federal Court of Justice regarding stock options, performance-related reimbursement for members of the Supervisory Board was also not planned in 2006.
Furthermore, the Corporate Governance Code recommends that the annual Corporate Governance Report should contain inter alia details of individual reimbursement structure of the Supervisory Board and ownership (Item 5.4.7), acquisition and disposal of company stocks (Item 7.1.3) by the Management Board and Supervisory Board (Item 6.6), as well as concrete information pertaining to company stock option programs (Item 7.1.3). For this purpose, TELES AG refers to detailed internet-published company documents including, for example, the current company report and information pursuant to § 15a of the WpHG.
Berlin, December 2006
TELES AG Informationstechnologien
Prof. Dr.- Ing. Sigram Schindler
CEO
Walter Rust
Supervisory Board Chairman