DIRECTOR COMPENSATION

Directors’ compensation guidelines were reviewed on May 11, 2005 and August 30, 2005. The Nominating & Governance Committee approved the directors’ compensation guidelines on August 30, 2005. The Nominating & Governance Committee’s objective was to further align interests of directors and shareholders by incenting ownership in the form of share options and restricted share units while maintaining competitive compensation levels.

We use a combination of cash and equity compensation to attract and retain qualified candidates to serve on our Board. In setting director compensation, we consider both the significant amount of time and the skill-level required by our directors to fulfill their duties. Our policy is, with the exception of the spousal program (as described below under “Board Perquisites”), not to provide any perquisites to the directors in lieu of compensation or otherwise. The total compensation package for director service consists of three components:

Equity Components

The share option awards are immediately vested options to purchase our common shares, which are granted each year on the date of the annual general meeting. The number of share options granted is determined using the Black-Scholes methodology.

The restricted share units are immediately vested and awarded on a quarterly basis. Each restricted share unit award has a minimum share delivery date restriction of five years from the date of grant. Directors may elect to extend the share delivery date restriction to 10 years or 15 years from the date of grant. Upon termination of the director’s service for any reason other than death, the delivery deferral will be lifted six months following termination and the shares will be delivered immediately thereafter. In the case of termination for death, the delivery deferral will be lifted at termination and the shares will be immediately delivered to the director’s designated beneficiary or estate, as the case may be. Dividend equivalents on cumulative restricted share unit awards are paid out quarterly in cash.

All equity awards for the directors are made from the 2003 Non-Employee Director Stock Plan (the “2003 Director’s Plan”). A total of 500,000 common shares may be issued under the 2003 Director’s Plan.

The 2003 Director’s Plan may be amended or terminated by us at any time, in whole or in part. However, any amendment for which shareholder approval is required by law will not be effective until such approval has been obtained. Unless terminated earlier, the 2003 Director’s Plan expires on May 22, 2013, the tenth anniversary of its adoption by the Board, and no further share options or restricted share units may be granted thereunder after such date.

Elective Equity Incentive

In order to further align director and shareholder interests, the guidelines allow directors to elect each year to defer 50 percent or 100 percent of their cash compensation to be paid out in equity. Increased share ownership is further incented by a match of 25 percent on the value of deferred cash compensation. This value is paid out in restricted share unit awards, which are granted under the same terms and conditions as the other restricted share unit grants.

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Board of Directors Ownership Guidelines

Directors are asked to own a minimum amount of our common shares equal to four times his/her annual cash compensation entitlement. For purposes of determining levels of ownership, both shares owned by directors as well as restricted share units are included in each of the director’s holdings. Directors who do not meet the ownership guideline are required to defer at least 50 percent of their cash compensation in restricted share units until the guideline is met. As with elective equity incentive, mandatory deferrals receive a company match equivalent to 25 percent.

Maximum Annual Equity Awards

All share option and restricted share unit awards made to directors shall not exceed the maximum annual limits as stated in the 2003 Director’s Plan.

Compensation for the Chairman of the Board

For services as Chairman in 2006, we granted Mr. Rollwagen equity awards under the approved guidelines of 8,070 share options and 5,114 restricted share units. For 2006, pursuant to the Elective Equity Incentive, Mr. Rollwagen elected to defer 100 percent of his cash compensation and was therefore entitled to receive a company match equivalent to 25 percent of his deferral.

Board Perquisites

Every other year we invite the partners of the directors and named executive officers to a board meeting and provide an extra optional program for their participation. Such a program took place in 2006 during the September meeting of the Board in Berlin. The cost of the extra program was U$23,821 at an average of U$2,647 per director/executive officer who utilized the spousal program. Other than the spousal program we do not provide any perquisites to our directors either in lieu of compensation or otherwise.

Management Director’s Fees and Directors’ Expenses

Mr. Thiele, our Chief Executive Officer, is the only member of management who serves on the Board. As our employee, Mr. Thiele is not paid any fees or additional compensation for services as director or as a member of any committee thereof. All directors, including Mr. Thiele, are reimbursed for travel and other related expenses incurred in attending meetings of the Board or committees thereof.

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