Corporate Governance

Declaration of Conformity to the German Corporate Governance Code for the Financial Year 2008/2009

MAGIX AG Management Board and Supervisory Board attach great importance to the rules of legal Corporate Governance. Both institutions support the principle of proper and responsible company management as stated in the German Corporate Governance Code (short: the Code).

Since the last compliance statement from January 2009, MAGIX AG has followed and continues to follow the recommendations of the "Governing Commission of the German Corporate Governance Code" in its version from June 18, 2009, or since its validity in the amended version from June 6, 2008 with the following exceptions:

• Cost sharing in D&O liability insurance for the Supervisory Board (section 3.8 of the Code). The company assumes that the arrangement of cost sharing in the D&O insurance for the Supervisory Board members has no effect on behavior, and is not in a position to influence motivation and responsibility. For this reason, the D&O insurance for the Supervisory Board Members does not include cost sharing.
  
  
• Taking into account of personal performance in measuring variable compensation of members of the Management Board (section 4.2.2. of the Code from June 6, 2008). Compensation of Management Board members is dependent on their individual performance and tasks. In measuring the variable compensation, no contingency on individual goals has been considered. On the one hand, the areas of responsibility of Management Board members moderately interlock, making it impossible to define company goals for each area of competency. On the other, the basis for the company's success lies precisely in the collective responsibility of the Management Board.
  
  
• Determination of a compensation cap during signing of Management Board contracts in the event of premature termination of Management Board duties (section 4.2.3, paragraph 4 of the Code). Regulation of the compensation payment in the event of premature termination of Management Board duties is deemed impracticable. It would contradict the principle which states that contracts made for a certain duration may not be terminated at an earlier date. Additionally, such a regulation is considered inappropriate to accommodate the circumstances of the situation surrounding the particular event. Finally, the company will not be able to enforce such a limitation one-sidedly.
  
  
• Age limit of the Management Board (section 5.1.2 of the Code). Due to the age structure of the Management Board of MAGIX AG, such regulation is currently deemed unnecessary.
  
  
• Formation of Supervisory Board committees (sections 5.3.1, 5.3.2 of the Code). The Supervisory Board of MAGIX AG currently consists of three board members, making it impossible to form committees.
  
  
• Definition of performance-related remuneration of the Supervisory Board (section 5.4.6 of the Code). It is the opinion of the company that the Supervisory Board will fulfill its legal obligation as an independent supervisory body better without its remuneration being linked to the success of the company, as this serves to guarantee interest neutrality.
  
  
• Publication of the consolidated financial statement and interim reports within the limits set forth in the Code (section 7.1.2 of the Code). The company will publish preliminary, unaudited quarterly and semi-annual reports within the time limits set forth in the Code. With regard to the consolidated financial statement and interim reports, however, the company regards the requirements as sufficient for companies listed in the Prime Standard of the Frankfurt Stock Exchange.

On this page you will also find information on the Stock currently held by board members, the Transactions by members of the Management Board of MAGIX AG subject to notification, the salary of the Management Board and the Supervisory Board as well as information regarding the Stock Option Plan.

The current version of the German Corporate Governance Code can be found here.

Stock currently held by board members

At the time of the report's publication, the stock currently held by the members of the Management Board and the Supervisory Board was as follows:

* Jürgen Jaron and Dieter Rein each hold 50% of the limited partnership capital of Presto Capital Management GmbH & Co. KG. Accordingly, Jürgen Jaron and Dieter Rein collectively hold, either directly or indirectly, approximately 56.52 % of the voting rights in the Company.

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Transactions by Board members of the MAGIX AG subject to notification since September 30, 2008:

During the reporting period, the following transactions subject to notification have been conducted by Board members of MAGIX AG:

Remuneration of the Management Board

The members of the Management Board receive an annual remuneration that consists of success-related, success-independent as well as long-term success-dependent elements.

Members of the Management Board receive a fixed salary irrespective of the success of the company as well as fringe benefits. Such mainly include use of a company car, travel expenses and telephone costs. The bonus is determined by the Supervisory Board based on the revenue and profit goals for the current fiscal year. In the event of extraordinary achievements, the Supervisory Board may also approve a special bonus.

Total compensation of the Management Board in the 2008/2009 fiscal year comprised kEUR 1.154. Success-independent components totaled kEUR 450 (fixed salaries: kEUR 421, fringe benefits: kEUR 29). Bonuses totaling kEUR 704 were paid. No stock options rights were allotted to the Management Board members during the period of the report. Loans or similar services were not given. In addition, Board members were not promised or granted benefits by third parties with regard to their activity as members of the Management Board.

The remunerations were apportioned as follows (in kEUR):

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Remuneration of the Supervisory Board

In accordance with Section 13, paragraph 1 of the MAGIX AG Articles of Association concluded at the shareholders' meeting, the Supervisory Board of the company is to receive a fixed remuneration per financial year. This is to be decided at the shareholders' meeting. Furthermore, the expenses of the Supervisory Board will be refunded. These also include the value added tax added to the remuneration insofar the member of the Supervisory Board is entitled to invoicing VAT separately. In addition, an appropriate liability insurance (D&O insurance) for the member of the Supervisory Board can be purchased at the expense of the company.

The following remuneration is paid to the members of the Supervisory Board (in kEUR):

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Stock option plan

No stock options were granted to employees of MAGIX AG in the 2008/2009 fiscal year.