La empresa: Tekno (parte de CPPQ)

ber to be agreed, including the additional benefits, shall not exceed the value of two annual salaries nor the value of remuneration for the remaining term of the employment contract for the Executive Board member. No compensation agreements exist with members of the Executive Board in the event of a takeover bid or a change of control in the company.

Individual remuneration

The total remuneration of each individual member of the Executive Board for the year under review and the previous fiscal year, broken down into fixed and varia- ble components, and the individual pension expense, plus the value reported in the consolidated financial statements pertaining to the stock options granted under stock option plans in previous fiscal years and redeemed in the past year, is disclosed in the following tables. In addition to his performance bonus, José A.

Avila was awarded a special bonus of €450 thousand for each of the 2011 and 2012 fiscal years for 100% attainment of targets stipulated on the basis of the EBIT reported for the Powertrain division in these fiscal years. However, the combined special bonus and performance bonus for the respective fiscal year can- not exceed the amount of the performance bonus for 150% target attainment. The Supervisory Board also granted José A. Avila a recognition bonus of €600 thousand for his excellent work, particularly in sustain- ably securing the diesel systems unit. In line with the regulations for the performance bonus, the special bonus and the recognition bonus are divided into a short-term and a long-term component. In fiscal 2012, the members of the Executive Board neither received nor were promised payments by a third party with respect to their activities on the Executive Board. Remuneration of the Executive Board in 2012

Remuneration components in € thousands Fixed1 Variable, short-term Variable, long-term2 _Total Share-based payment2,3 Dr. E. Degenhart 1,224 684 1,026 2,934 2,184 J. A. Avila 627 294 441 1,362 968 Dr. R. Cramer 630 259 388 1,277 1,253 H. Matschi 624 259 389 1,272 972 W. Schäfer 1,024 526 789 2,339 1,419 N. Setzer 631 486 729 1,846 1,637 E. Strathmann (from Jan. 1, 2012) 789 474 710 1,973 710 H.-G. Wente 631 421 631 1,683 1,291 Total 6,180 3,403 5,103 14,686 10,434

1

In addition to cash components, the fixed remuneration includes non-cash elements, such as company cars, insurance, and moving costs.

2 _{Long-term component of the variable remuneration which is converted into virtual shares of Continental AG in line with the new}

remuneration structure geared towards sustainable development of the company, including special and recognition bonuses.

3

Remuneration of the Executive Board in 2011 Remuneration components in € thousands Fixed1 Variable, short-term Variable, long-term2 _Total Share-based payment2,3 Dr. E. Degenhart 1,229 717 1,076 3,022 926 J. A. Avila 626 493 739 1,858 648 Dr. R. Cramer 630 500 750 1,880 630 H. Matschi 627 267 400 1,294 332 Dr. H.-J. Nikolin (until July 31, 2011) 375 313 469 1,157 5154 W. Schäfer 1,027 552 827 2,406 714 N. Setzer 633 475 713 1,821 578 H.-G. Wente 783 511 768 2,062 7674 Total 5,930 3,828 5,742 15,500 5,110

1 _{In addition to cash components, the fixed remuneration includes non-cash elements, such as company cars, insurance, and}

moving costs.

2

Long-term component of the variable remuneration which is converted into virtual shares of Continental AG in line with the new remuneration structure geared towards sustainable development of the company, including special bonuses.

3

Includes changes in the value of the virtual shares granted in previous years.

4

Includes the amount of personnel expenses carried in the consolidated financial statements (compensation cost) in 2011 for stock options granted and redeemed in previous fiscal years under the 2008 stock option plan.

Long-term component of share-based payment

The amounts of variable remuneration converted into virtual shares of Continental AG for active members of the Executive Board changed as follows in the year under review:

in € thousands or

in units Degenhart Avila Cramer Matschi Schäfer Setzer Strathmann Wente Total Outstanding as at Dec. 31, 2010 8,178 — 5,663 5,663 — 5,663 — — 25,167 Fair Value as at Dec. 31, 2010 392 — 271 271 — 271 — — 1,205 Change in fair value -2 — -1 -1 — -1 — — -5 Commitments1 _{14,532 8,978 11,750 6,604 11,177 13,205 — 12,419 78,665} Fair value of commitments1 744 460 602 338 573 676 — 636 4,029 Outstanding as at Dec. 31, 20111 _{22,710 8,978 17,413 12,267 11,177 18,868 — 12,419 103,832} Fair Value as at Dec. 31, 20111 1,134 460 872 608 573 946 — 636 5,229 Change in fair value 869 328 663 475 408 716 — 454 3,913 Commitments 15,660 10,757 10,917 5,828 12,047 10,376 — 11,175 76,760 Fair value of commitments 1,365 938 952 508 1,049 905 — 974 6,691 Outstanding as at Dec. 31, 2012 38,370 19,735 28,330 18,095 23,224 29,244 — 23,594 180,592 Fair Value as at Dec. 31, 2012 3,368 1,726 2,487 1,591 2,030 2,567 — 2,064 15,833

1 _{The comparative figures are shown adjusted accordingly.}

Commitments with a fair value of €1.3 million (equivalent to 14,655 units) are attributable to Executive Board members who had left the company as at December 31, 2012.

Basis of fair value calculation

Owing to the individual arrangements specific to the company, there are certain features of the virtual shares as compared to standard options that must be taken into account in their measurement.

A Monte Carlo simulation is used in the measurement of stock options. This means that log-normal distrib- uted processes are simulated for the price of Continen- tal shares. The measurement model also takes into account the average value accumulation of share pric- es in the respective reference period and the floor and cap for the distribution amount.

The following parameters were used as of the meas- urement date of December 31, 2012:

► Constant zero rates as of the measurement date of December 31, 2012, of 0.00% for the 2009 tranche, -0.04% for the 2010 tranche, and -0.02% for the 2011 tranche.

► Interest rate based on the yield curve for government bonds.

► Dividend payments as the arithmetic mean based on publicly available estimates for 2013 and 2014; the dividend amounted to €1.50 per share in 2012, and Continental AG did not distribute a dividend in 2011.

► Historic volatilities on the basis of daily XETRA clos- ing rates for Continental shares based on the re- spective remaining term for virtual shares. The vola- tility for the 2009 tranche is 23.74%, for the 2010 tranche 43.26%, and for the 2011 tranche 40.18%. Post-employment obligations and service costs The defined benefit obligations (DBO) for all pension commitments for the active members of the Executive Board and the service cost calculated for the respec- tive fiscal year in accordance with international ac- counting policies are presented below:

Defined benefit obligations Service cost

in € thousands Dec. 31, 2012 Dec. 31, 2011 2012 2011 Dr. E. Degenhart 4,561 2,238 935 801 J. A. Avila 2,443 1,238 617 542 Dr. R. Cramer 1,491 682 286 205 H. Matschi 1,553 734 308 270 Dr. H.-J. Nikolin (until July 31, 2011)1 n/a n/a n/a n/a W. Schäfer 3,412 1,597 804 704 N. Setzer 1,337 585 247 180 E. Strathmann (from Jan. 1, 2012) 650 — 645 — H.-G. Wente 6,187 4,499 122 115 Total 21,634 11,573 3,964 2,817

1 _{The defined benefit obligations were omitted for Executive Board members who left the company in the previous year. We refer}

to Note 39 for details of pension obligations for former members of the Executive Board.

Remuneration of the Supervisory Board

Article 16 of the Articles of Incorporation regulates the remuneration paid to members of the Supervisory Board. This remuneration also has fixed and variable components. The chairman and vice chairman of the Supervisory Board and the chairs and members of committees qualify for higher remuneration.

In 2011, the Supervisory Board had its remuneration reviewed by an independent consultant. At the pro- posal of the Supervisory Board and the Executive Board, developed based on the findings of this review, the Annual Shareholders’ Meeting on April 27, 2012, resolved the following changes to the remuneration regulations:

The fixed portion of the remuneration was increased to reflect the higher requirements now placed on mem- bers of the Supervisory Board, whose work to fulfill their responsibilities does not necessarily increase or decrease in line with the company’s economic perfor- mance. The variable portion was reduced and now relates to a longer period of analysis, namely net in- come per share for the past fiscal year and the two previous fiscal years. The variable component is thus clearly geared towards sustainable development of the company. Furthermore, there is now greater differenti- ation in terms of the higher remuneration for special functions. Following the resolution by the Annual

Shareholders’ Meeting on April 27, 2012, the revised remuneration regulations will be applied for the first time for fiscal 2012.

In addition to their remuneration, the members of the Supervisory Board are also paid attendance fees and their expenses are reimbursed. The resolution by the Annual Shareholders’ Meeting on April 27, 2012, also increased the attendance fee. The D&O insurance policy also covers members of the Supervisory Board. As recommended by the German Corporate Govern- ance Code, their deductible also complies with the requirements of Section 93 (2) Sentence 3 AktG that only apply directly to the Executive Board.

In the past year there were no consultant agreements or other service or work agreements between the company and members of the Supervisory Board or related parties.

The remuneration of individual Supervisory Board members in 2012 as provided for under these arrange- ments is shown in the following table. In comparison to the regulations applicable prior to those adopted by the Annual Shareholders’ Meeting in April 2012, the remuneration for an ordinary member of the Supervi- sory Board (excluding meeting-attendance fees and reimbursement of expenses) decreased by 18.3%.

Remuneration of the Supervisory Board

Remuneration components 2012 2011

in € thousands Fixed1 _{Variable Fixed}1 _Variable

Prof. Dr.-Ing. Wolfgang Reitzle 231 113 83 105 Werner Bischoff2 116 56 65 79 Michael Deister2 _{118 56 64 79}

Dr. Gunter Dunkel 79 38 42 53 Hans Fischl2 _{118 56 65 79}

Dr. Jürgen Geißinger 79 38 42 53 Prof. Dr.-Ing. E.h. Hans-Olaf Henkel 79 38 42 53 Michael Iglhaut2 118 56 45 54 Jörg Köhlinger2 _{79 38 45 53}

Prof. Dr. Klaus Mangold 79 38 42 53 Hartmut Meine2 _{118 56 66 79} Dirk Nordmann2 79 38 45 53 Artur Otto2 _{79 38 45 53} Klaus Rosenfeld 119 56 64 79 Georg F. W. Schaeffler 119 56 63 79 Maria-Elisabeth Schaeffler 79 38 42 53 Jörg Schönfelder2 _{79 38 45 53} Dr. Bernd W. Voss 194 94 84 105 Prof. KR Ing. Siegfried Wolf 78 38 42 53 Erwin Wörle2 79 38 44 53 Total 2,119 1,017 1,075 1,321

1 _{Including meeting-attendance fees.} 2

These employee representatives have declared that their board remuneration is transferred to the Hans Böckler Foundation in accordance with the guidelines issued by the German Federation of Trade Unions.

Corporate Profile

46 Structure of the Corporation 48 Corporate Strategy

51 Research and Development 54 Divisions and Business Units 64 Corporate Management 68 Sustainability 69 Employees 75 The Environment 78 Social Responsibility Economic Environment

80 Economic Development in Selected Regions 82 Macroeconomic Development

82 Development of Key Customer Sectors 85 Development of the Raw Material Markets

Earnings, Financial and Net Assets Position

88 Earnings Position 96 Financial Position 99 Net Assets Position

102 Key Figures for the Automotive Group Development of the Divisions: 103 Chassis & Safety

106 Powertrain 109 Interior

112 Key Figures for the Rubber Group Development of the Divisions: 113 Tires

116 ContiTech

119 Net Assets, Financial and Earnings Position of the Parent Company

122 Report Pursuant to Section 289 (4) and Section 315 (4) of HGB

126 Report on Subsequent Events 126 Dependent Company Report

126 Corporate Governance Declaration Pursuant to Section 289a of HGB

In addition to its parent company Continental AG, a stock corporation under German law, the Continental Corporation comprises 443 companies around the world, including minority holdings. Around 170,000 employees at 291 locations in 46 countries work to offer our customers the best possible products and solutions to their problems every single day.

The Continental Corporation is divided into the Auto- motive Group and the Rubber Group, which contribute 60% and 40% of total sales respectively. They com- prise five divisions with 28 business units. The divi- sions and business units are classified according to products, product groups and certain regions. The divisions and business units bear full responsibility for their business, including their results. This organiza- tional structure ensures a high degree of flexibility and speedy coordination of operating business across countries and companies. It enables us to respond to technological changes and market developments rapidly and provides the basis for optimal deployment of our economic resources.

Continental AG’s Executive Board has overall respon- sibility for corporate management. The divisions are each represented by a member of the Executive Board. The central units, except for Corporate Pur- chasing, are represented by the Chief Executive Officer (Chairman of the Executive Board), the Chief Financial Officer and the Chief Human Resources Officer. The central units assume the cross-divisional functions necessary for corporate management, including Fi- nance and Controlling, Law and Compliance, Corpo- rate Social Responsibility, Environment and Quality Management in particular.

As a result, our organization ensures that Continental’s central management areas are coordinated with its operating activities. On the one hand, this enables us to react flexibly and quickly to market conditions and the requirements of our global customers. On the other hand, it ensures that the overall success of the Continental Corporation is achieved in the interests of sustainable value creation.

Continental Corporation: 291 locations in 46 countries