Apply and explain

Corporate governance structure in the light of the Dutch Corporate Governance Code
The provisions of the Corporate Governance Code of 2003, are applicable to Kendrion. Kendrion has applied virtually all principles and provisions – to the extent that they are applicable – laid down in the Code.
The company reserves the right, both now and in the future, not to apply the occasional best-practice provision, whereby the company shall always comply with the principle formulated in the Code that the company shall explain why it has not applied the best-practice provision. For example, the company will not be able to breach existing agreements at will. It should be noted that the Code also states that agreements of this nature should be respected. The provisions of the Corporate Governance Code that have not been applied are listed below.

ii.1.1 A Management Board member is appointed for a maximum period of four years. This provision is not in line with the contractual situation of the current CEO. Kendrion respects this contractual situation.

ii.2.8 The maximum remuneration in the event of dismissal is one year’s salary. This provision is not in line with the contractual situation of the current CEO (two years). Kendrion respects this contractual situation.

iv.3.1 All investor relations meetings shall be announced in advance, and provisions shall be made for all shareholders to follow these meetings in real time. Kendrion announces all press conferences and analyst meetings in advance. Kendrion is of the opinion that webcasting these meetings is not necessary. Unannounced meetings with individual analysts are also held. No price-sensitive information is disclosed during these meetings.

The Corporate Governance Code was amended on 10 December 2008, and the amended Code will come into force as from the 2009 financial year. Kendrion is in agreement with the general objective of and background to the amendments. Kendrion already complies with a substantial proportion of the amended or supplementary provisions. During the course of 2009 the Board and the Supervisory Board shall review the best approach to the incorporation of the amended Code within Kendrion’s organisation. Kendrion shall place the Section of the Annual Report 2009 reviewing the outlines of the corporate governance structure and compliance with the amended Code as a separate item on the agenda of the General Meeting of Shareholders to be held in 2010.