Siemens 2006 Annual Report Download - page 89

Corporate Governance Report 85
The Audit Committee of Siemens AG is subject to the standards of the SOA and the Securi-
ties Exchange Act of 1934, as applicable to a foreign private issuer, and performs functions
similar to those of an audit committee subject to the full NYSE Standards. Nevertheless, Ger-
man law precludes certain responsibilities from being delegated to a committee, such as the
selection of the independent auditors, who are required by German law to be elected at the
shareholders’ meeting.
Siemens AG also has an Ownership Rights Committee and a Mediation Committee, the lat-
ter of which is required by German law. Neither is required under the NYSE Standards.
Shareholder approval of equity compensation plans; stock repurchases
The NYSE Standards generally require U.S. domestic companies listed on the NYSE to obtain
shareholder approval of all equity compensation plans (including stock option plans) and
any material revisions to them. Similarly, our adoption of stock option plans and any material
revisions thereto require the approval by our shareholders in so far as the issuance of shares
and/or stock options under authorized or contingent capital authorizations requires share-
holder approval (which approval requires consideration of the key elements of the applicable
option plan or relevant modifications). The 2001 Siemens Stock Option Plan, for example, was
approved in 2001 by our shareholders. This approval expires in December 2006 (five years
after the first grant of options under this authorization). Similarly, under German law, share
buy-backs generally require the prior authorization by shareholders. Such approval was pro-
vided at our January 26, 2006 Annual Shareholders’ Meeting, and this matter will generally be
voted upon annually.
Declaration of Conformity with the Code
On December 6 and December 11, 2006, respectively, the Managing Board and the Supervisory
Board approved the following Declaration of Conformity pursuant to § 161 of the German
Stock Corporation Act:
Siemens AG fully complies and will continue to comply with the recommendations of the
German Corporate Governance Code (Code) in the version of June 12, 2006 with one exception
(no individual disclosure of the annual allocation to accrued pension liabilities or pension
funds for members of the Managing Board in the case of pension plans, Section 4.2.5 para. 2,
2nd sentence of the Code). Since making its last Declaration of Conformity dated November 9,
2005, Siemens AG has fully complied with the recommendations of the Code in the version of
June 2, 2005.
Berlin and Munich, December 11, 2006
Siemens Aktiengesellschaft
Managing Board Supervisory Board