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GROUP HR RULES

I am firmly convinced that in our new MONIER Group the importance of our people’s performance will be greater than ever. Our ambitious business targets can only be achieved if our people act with entrepreneurial spirit and outstanding professional expertise. Their accountability for results, their ability to engage in teamwork and their commitment to safety will be key drivers for our success. In our Commitments we commit to building up a culture and an organization that will encourage the development of such distinctive talents. To achieve this, we in the Executive Committee have agreed on a set of HR Rules. They relate to areas such as Health & Safety – which remains our first value, compensation and benefits, appraisal interviews, job vacancies, high potential development and career management. A limited number of rules is a prerequisite for efficiency and fairness in an independent organization like ours. This document presents the HR Rules that should be known throughout the Group and implemented consistently in all our Business Units in all the countries where we operate. They will help ensure a successful future for MONIER and the people who work here.

Andrea Benincasa Group SVP Organization & Human Resources


September 2007

Monier Group GmbH, Frankfurter Landstrasse 2-4, 61440 Oberursel, Germany T +49 6171 61 006 F +49 6171 61 2300


GROUP HR RULES


A limited number of rules are a prerequisite to efficiency and fairness. These rules are mandatory and should be known by everyone in our organization and implemented consistently throughout the MONIER Group. 1. Safety Safety is our first value, a matter of ethics and moral responsibility for every single employee of our Group – it is also a matter of performance since there can be no operational performance without safety in the workplace. All managers are responsible for ensuring that safety systems, programs and policies are in place and effectively implemented to provide employees, subcontractors and third parties with a safe working environment. Business Units must implement the Group’s Health and Safety Management System, including the corresponding reporting requirements. 2. Annual Appraisal Interview and Regular Feedback Delegation, feedback and evaluating results are part of the responsibilities of every manager. It is important to periodically discuss and agree on an individual’s commitment and contribution to the performance of the company in a formalized way. All managers Hay 13 and above must have an appraisal interview with their superior (N+1) at least once a year to evaluate their performance, identify potential issues, set their personal objectives and review their development plan. Appraisals must respect a common standard: “SMART” (= Specific, Measurable, Achievable, Realistic, Timely) personal objectives, a formalized personal development plan, upward feedback and validation by N+2. The N+1, with the support of the HR function, is responsible for the follow-up of the personal development plan of his/her direct reports. Furthermore all managers should regularly conduct feedback sessions with direct reports to monitor their performance and review their development plan throughout the year. 3. Appointment / Termination / Compensation review Our local businesses are usually small and can only provide limited career opportunities. To ensure that we offer the best development options to individuals, we believe that career management should involve people who have sufficient visibility of what the organization can offer. The recommendation for all major decisions regarding people management, including position appointments, terminations and compensation reviews, is made by the N+1 with the support of the HR function. The final decision is made by N+2, who ensures that the process has been fair and that it respects the interest of the Group and of the individuals concerned. The relevant functional heads at Group level must be informed about vacancies for functional or technical jobs in the Business Units, help HR identify possible candidates and make recommendations to N+1 and N+2.


4. Vacancies In order to offer employees a greater variety of job opportunities and assure transparency in career moves, all positions between Hay 13 and Hay 20 are to be published on the Group’s intranet Job Market for the country concerned. Business Units may publish all positions Hay 12 and below at their discretion. Group HR has to be timely informed about all vacancies at level Hay 18 and above, especially vacancies in the Business Units’ Executive Committees. Positions within the Group are to be filled giving first priority to equally qualified internal candidates. Transfers between Business Units: The interviewing Business Unit HR manager must inform the “home” Business Unit HR manager before establishing any contact with the potential candidate. If the latter takes the initiative the contacted Business Unit HR manager has to inform the home HR manager. All internal candidates must receive a timely feedback from the interviewing Business Unit HR manager on the outcome of the interview process. The feedback shall be agreed upon with the home Business Unit HR manager. 5. High Potential Development To prepare the Group’s next generation of leaders, we need to monitor the career paths of the most promising individuals in the organization. Each CEO, supported by the HR manager, must identify, follow and ensure the development of the High Potential population through the O&HR review process. Group HR and the Group Career Committee follow the High Potential’s career development to ensure adequate succession of the Group’s Senior Executives. 6. Expatriation The Group believes that the internationalization of our managers is critical to continue our international growth, and represents an element of attractiveness for High Potential profiles. In order to achieve consistency and fairness within the Group, the package design and cost allocation between the host and home Business Units for expatriates must follow Group guidelines. These are based on the principle that an expatriate should be able to maintain a comparable standard of living as in his/her country of origin. They incorporate rules regarding total compensation, taxation, benefits coverage and family issues. Every expatriation has to be finally approved by Group HR. 7. Career Management Each manager has the duty to develop his/her people, providing clear objectives, proper means, the right level of information, and regular feedback. The ability of the manager to develop his/her people is a criterion for his/her own career potential. HR´s role is to design the right processes and to provide adequate tools and support for the development of the skills and competencies of people.


Both the manager and HR are responsible for managing the career expectations of the employees. 8. Hay Grading In order to facilitate the exchange of people within the Group, and to maintain fairness between employees, managerial positions are evaluated according to the same method. Monier uses the Hay method. Each managerial position must have a Hay grade assigned, which is to be communicated to the position holder. All positions of the Business Units Executive Committees and all positions Hay 18 and above have to be graded exclusively by the Group Hay Committee. 9. Compensation for Senior Managers The way we reward performance must be consistent throughout the Group and must comply with Group policies concerning bonus schemes and compensation for senior managers. The total remuneration packages for Business Unit Executive Committee members and managers above Hay 18 must follow Group policies. In particular, the Group bonus scheme is linked to EBITDA and Cash Flow, as financial performance indicators, and to personal objectives, each of those indicators accounting for 1/3 of the bonus. The annual salary review process is initiated and monitored by Group HR. 10. Pension Any significant pension plan change in a Business Unit must be approved by Group HR. Depending on the level of financial impact, an agreement from the Finance Department may also be required. 11. Organization & Human Resources Review (O&HR) The purpose of the O&HR Review is to ensure that the organization of our Business Units and their human resources are aligned with our business strategies, and that we are adequately supporting and developing people to achieve those strategies. Each Business Unit performs an O&HR Review once a year. The O&HR Review engages the responsibility of the Business Unit CEO. It is prepared jointly with the HR manager and provides an opportunity for discussion and alignment of the Business Unit’s management team and the human resources function. The O&HR Review is presented to the respective COO and Group HR.


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