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Deutsche EuroShop - Annual Report 2006

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Remuneration Report

Compensation system for the Executive Board

Compensation for the Executive Board is set by the Executive Committee of the Supervisory Board. The compensation system provides for a fixed basic annual compensation component based on the individual Executive Board member’s duties and a variable compensation component. This compensation component is paid annually and is based on personal performances and the performance of the Executive Board as a whole, as well as the Company’s economic situation, success and future prospects in comparison with its peer group. The variable compensation is paid by the Supervisory Board on the approval of the consolidated financial statements. There are no stock option plans or similar securities-based incentive systems. In the event that the Company does not wish to renew the existing contracts of the members of the Executive Board upon their expiration, Mr. Claus-Matthias Böge would receive a one-time severance payment of €150 thousand and Mr. Olaf Borkers would receive three months’ salary.

Compensation system for the Supervisory Board

The compensation of the Supervisory Board is based on Article 8(4) of the Articles of Association of Deutsche EuroShop AG, according to which each member of the Supervisory Board shall receive appropriate compensation after the close of the financial year, as determined by resolution of the Annual General Meeting. Membership in committees is not taken into account when the compensation paid to the Supervisory Board is determined. Moreover, compensation does not contain any performance-based elements. The proposal to the Annual General Meeting is based on the size of the Company and hence the responsibility associated with the role, as well as on the Company’s financial position.

In line with the proposal by the Executive Board and Supervisory Board, the Annual General Meeting resolved on 22 June 2006 to grant the members of the Supervisory Board the following compensation for the 2005 financial year: €30,000 for the chairman, €22,500 for the deputy chairman and €15,000 for each of the other members of the Supervisory Board. In addition, travel costs are reimbursed. Members who have served on the Board for less than a full financial year receive pro-rated compensation.

Miscellaneous

In his position as personally liable partner of Centro Commerciale Friuli Claus-Matthias Böge & Co. S.a.s., Milan, Italy, Mr Böge received €9 thousand in compensation for previous years.

Members of the Executive and Supervisory boards do not receive loans from the Company. No pensions are paid to former members of the Executive or Supervisory boards or to their dependents.

For further details, please refer to the supplementary disclosures on remuneration contained in the Notes.




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