Declaration of Corporate Governance

1. Declaration in accordance with section 161 of the German Stock Corporation Act
On July 30, 2010 in accordance with section 161 of the German Stock Corporation Act, the Executive Board and Supervisory Board issued the following declaration:

“Bilfinger Berger AG complies with all recommendations of the German Corporate Governance Code (GCGC) as amended on May 26, 2010, with the following exceptions

• The service contracts concluded with the members of the Executive Board before the recommendation in section 4.2.3 sentence 5 (taking into account both positive and negative developments when determining variable remuneration components) was published do not take full account of this recommendation in that they provide for a customary annual bonus to be determined on the basis of an assessment period of no more than one year.  The Supervisory Board and the members of the Executive Board agree that a variable remuneration complying with the recommendation in section 4.2.3 sentence 5 GCGC will apply to all Executive Board contracts from 1 January 2011, as it is envisaged to apply the remuneration system for Executive Board members uniformly to all members of the Executive Board.

• The Supervisory Board does not follow the recommendation in section 5.1.2 (appropriate consideration of women) to the extent that the Supervisory Board, when appointing the members of the Executive Board, takes its decision exclusively on the basis of the qualifications of the candidates without giving priority consideration to gender-related aspects in this decision-making process.
  

• In deviation from the newly drafted recommendations in section 5.4.1 (specification of concrete objects regarding the composition of the Supervisory Board and follow-up measures), the Supervisory Board has not yet specified any concrete objects within the meaning of section 5.4.1 para. 2, as the Supervisory Board has not yet been able to discuss the issue as extensively as the subject deserves.
  
  
• The company does not follow the recommendation in section 5.4.3 sentence 3 (announcement of proposed candidates for the Supervisory Board chair to the shareholders), since this recommendation is not in line with the distribution of powers stipulated in the German Stock Corporation Act, which states that the Supervisory Board alone is responsible for electing its chair.
  
  
• Once the conversion of the company into a European stock corporation (SE) has become effective, the recommendation in section 5.4.6 sentence 4 (fixed and variable remuneration components for the members of the Supervisory Board) will no longer be followed.  The members of the Supervisory Board of the future Bilfinger Berger SE will solely receive a fixed remuneration.  In our opinion, this system of fixed remuneration, as compared to performance-related remuneration, is better suited for the supervisory tasks incumbent on the members of the Supervisory Board, as it will rule out that Supervisory Board members may be guided by financial interests of their own in making corporate decisions.
  

Since issuing the declaration of compliance of March 2010, Bilfinger Berger AG has complied with all recommendations of the GCGC as amended on June 18, 2009, with the exception of the recommendations in sections 4.2.3 sentence 5, 5.4.3 sentence 3 and 5.4.6 sentence 4.”

2. Principles of Corporate Governance
We follow legal requirements, the regulations set out in the Articles of Incorporation  of Bilfinger Berger AG and the German Corporate Governance Code. We also apply the following principles of governance:

Code of Conduct
Our Corporate Governance practices take the company’s Code of Conduct, a key component of our Compliance System, into consideration. Bilfinger Berger is aware that the interests of the Company and its partners can only be effectively guaranteed through responsible dealings and adherence to ethical principles. These principles have been clearly formulated in our Code of Conduct. The Behavioral Guidelines, which apply to all Group employees, include fundamental rules for the counteraction of corruption, bribery, bid rigging, illegal employment as well as guidelines on dealing with confidential information, donations and social behavior in the Company. Because of the wide variety of legal and social conditions which exist in Germany and abroad, the Code of Conduct also includes country-specific behavioral guidelines.

A network, consisting of the Chief Compliance Officer of the Group and the Compliance officers of the first tier operating units that report to him is responsible for the distribution and application of our Code of Conduct. To complement the function of internal ombudsmen, we have appointed an external ombudsman, Dr. Erich G. Bähr, attorney (tel. +49 (0) 69 7450 59 50) through whom employees, and also persons outside of the company, can point out misconduct.

Information that is given to the ombudsman through the hotline (tel. +49 (0) 180 1240 843) remains anonymous since, on this special line, the number of the caller cannot be identified. Internal whistleblowers are protected against reprisals, the voluntary disclosure of one’s own misconduct will have a beneficial impact on the employee.

The control systems we have implemented to ensure compliance with the Code of Conduct include both routine and extraordinary audits from Internal Auditing, special controls with regard to compliance with regulations for competition and employee deployment as well as regulating and controlling the use of third parties in connection with order acquisition. Our Code of Conduct and the Compliance System are part of employee events, employee reviews and comprehensive training measures. With the intranet-based e-learning program we introduced over the course of the reporting year, we will be training a large number of employees on compliance issues without them ever having to leave their desks. Through the immediate reporting of serious cases, as well as through the Chief Compliance Officer’s quarterly reports, the Executive Board, the Audit Committee of the Supervisory Board and the Plenum of the Supervisory Board are informed regularly about the developments in this area.

A Compliance Committee made up of the Heads of Legal, Internal Auditing and Human Resources, which meets at least once in each quarter, supports the Chief Compliance Officer in the general framework and the further development of the Compliance System.

We actively pursue information on compliance violations through our own investigations, by notifying the relevant authorities and cooperating with them to achieve a full resolution. Any misconduct that is discovered will result in personnel consequences and organizational measures as required. The insights gained from reporting, the comparison with other systems and the evaluations from external specialists all lead to the ongoing development and improvement of our Compliance System.

UN Global Compact
We are a member of the United Nations’ “Global Compact”, an international association of companies and organizations. Its members have committed themselves, on the basis of ten principles to supporting human rights, abolishing discriminatory labor and social practices, improving environmental protection and fighting corruption in all its forms within their scope of influence.

3. Executive Board and Supervisory Board procedures as well as the composition and procedures of their committees
Bilfinger Berger AG is a stock corporation under German law and as such has a dual management and control structure consisting of the Executive Board and the Supervisory Board. These bodies work together closely for the benefit of the company.

Executive Board
The Executive Board manages the Company in its own responsibility. The six members of the Executive Board manage the business of the Company in accordance with legal requirements, the Rules of Procedure established by the Supervisory Board for the Executive Board, the schedule of responsibilities of the Executive Board, the Code of Conduct of Bilfinger Berger and the Executive Board resolutions. Details of their management authority are regulated in the Executive Board schedule of responsibilities; they have joint and equal responsibility for the management of the Company. The resolutions of the Executive Board are made primarily in Executive Board meetings, but also in written procedures or through other methods of communication. In 2009, 25 Executive Board meetings were convened. The Rules of Procedure for the Executive Board regulates, among other things, which situations require a resolution from the Executive Board and which transactions and actions require the approval of the Supervisory Board. The Chairman of the Executive Board coordinates the work of Executive Board members.

Supervisory Board
The Supervisory Board appoints, supervises and advises the Executive Board and is directly involved in key decisions affecting the Company. The Supervisory Board executes its tasks in accordance with legal requirements, the Articles of Incorporation, its Rules of Procedure and its resolutions. It is composed of 20 members, of whom ten are representatives of the shareholders and ten are representatives of the employees. Members of the Supervisory Board all have the same rights and obligations and are not bound by instructions or orders. The resolutions of the Supervisory Board are made primarily in Supervisory Board meetings, but also in written procedures or through other methods of communication. In 2009, six meetings of the Supervisory Board took place. The Supervisory Board issues the auditing assignment to the auditor selected by the Executive Board for the individual and consolidated financial statements and agrees a fee with him. The Chairman of the Supervisory Board coordinates the work of the Supervisory Board.

Cooperation between the Executive and Supervisory Boards
The Executive Board agrees the Company’s strategic orientation with the Supervisory Board and regularly discusses with it the status of strategy implementation. The Executive Board also regularly informs the Supervisory Board, both verbally and in writing, on business developments and the situation of the Company. On the basis of this reporting in particular, the Supervisory Board monitors the legality, correctness, suitability and profitability of the Executive Board’s management of the business. The Rules of Procedure prepared by the Supervisory Board for the Executive Board lists those transactions and activities for which the approval of the Supervisory Board is required. This applies, among other things, to the acquisition and sale of shareholdings, for the submission of bids for major projects and for the investment budget. The most important issues that are discussed and agreed between the Executive Board and the Supervisory Board also include economic development, corporate planning, earnings situation, risk management, corporate financing and corporate structure.

The Supervisory Board, taking into account the auditors and the audit report submitted by them, undertakes a detailed examination, as required by law, of the individual financial statements, the consolidated financial statements and management reports of Bilfinger Berger AG and the Group, as well as the proposal of the Executive Board on the appropriation of profits.

Executive Board Committees
The Executive Board has not formed any committees.

Supervisory Board Committees
In order to enhance the efficiency of its activities, the Supervisory Board formed a Presiding Committee, an Audit Committee and a Nomination Committee. In addition, in accordance with Article 11, Paragraph 2 of the Articles of Incorporation, a committee of the Supervisory Board has been formed to perform the duties described in Article 31, Paragraph 3 of the German Industrial Codetermination Act (Mediation Committee).

The Presiding Committee of the Supervisory Board consists of Dr. h.c. Bernhard Walter, Stephan Brückner and Udo Stark. The main tasks of the Presiding Committee include, in particular, regulating the personnel issues of the Executive Board, unless the provisions of the German Stock Corporation Act and the German Corporate Governance Codex stipulate that they are to be regulated by the plenum of the Supervisory Board, and taking decisions on certain business dealings and transactions. The Presiding Committee also prepares the plenary meetings and makes recommendations on important resolutions. In financial year 2009, four meetings of the Presiding Committee took place.

The Audit Committee consists of Udo Stark, Dr. h.c. Bernhard Walter and Klaus Obermierbach. It deals, among other things, with questions of accounting, risk management, compliance and auditing. In financial year 2009, six meetings of the Audit Committee took place.

In accordance with the recommendation of the German Corporate Governance Code, the Supervisory Board formed a Nomination Committee made up exclusively of shareholder representatives whose purpose it is to recommend suitable candidates to the Supervisory Board for its own recommendations to the Annual General Meeting. The Nomination Committee consists of Dr. h.c. Bernhard Walter and Udo Stark. The Committee met once in 2009.

The Mediation Committee consists of Dr. h.c. Bernhard Walter, Stephan Brückner, Udo Stark and Dirk Gieß. It submits personnel-related proposals to the Supervisory Board when the two-thirds majority required for the appointment and dismissal of Executive Board members cannot be reached. It was not necessary to convene the Mediation Committee in the 2009 financial year.

The resolutions of the committees were made primarily in the meetings, but also in written procedures or through other methods of communication. The Chairmen of the Committees reported to the plenary session of the Supervisory Board in its meetings on work of their respective committees.

4. Annual General Meeting
The Annual General Meeting is to be convened at least once each year. The Executive Board presents to the Annual General Meeting certain documents, including the individual and consolidated financial statements, and the management reports for the Company and the Group. The Meeting decides on the appropriation of profits and on ratifying the actions of the Executive Board and the Supervisory Board, elects the members of the Supervisory Board representing the shareholders, and the external auditors. In addition, it makes decisions on amendments to the Articles of Incorporation and in certain other cases as specified by applicable law or the Articles of Incorporation. Each share grants entitlement to one vote in the Annual General Meeting.

5. Corporate Governance Report
The Executive Board and Supervisory Board, in accordance with the requirements of the German Corporate Governance Code, prepare for the Annual Report a Corporate Governance Report on the corporate governance of the Company. The Corporate Governance Report is, in accordance with Clause 3.10 of the German Corporate Governance Code in the version of May 26, 2010, a supplementary component of this declaration of compliance. It is accessible to the general public in the Internet as part of the Annual Report 2009.