With this remuneration report, the Supervisory Board and the Management Board of SolarWorld AG again comply with the recommendations of the German Corporate Governance Code (GCGC) in its most recent version of 18 June 2009. While section 3.10 of the GCGC requires a Corporate Governance report, which is included in this Annual report under a separate headline and, incidentally, is also covered in the Report by the Supervisory Board, section 4.2.5 of the GCGC requires an explanation concerning the remuneration system for Management Board members, including disclosure of individualized remuneration, and section 5.4.6 requires that the remuneration for members of the Supervisory Board be reported individually in the Corporate Governance Report, broken down by components, including remuneration paid and benefits extended for services provided individually, in particular advisory and agency services.

MANAGEMENT BOARD REMUNERATION. The annual Management Board remuneration agreed with all Management Board members and determined in terms of its structure by the Supervisory Board of SolarWorld AG consists of fixed and variable components. It is based on paragraph 87 of the German Stock Corporation Act, according to which total remuneration for an individual Management Board member must be commensurate with his tasks and the situation of the company. It also meets the requirements of the GCGC and reflects special features of the company in the context of the group, as well as the individual performance in the HR and functional areas, taking the relevant environment into account. The financial situation of the SolarWorld Group is also taken into consideration. The financial situation, in turn, determines the profit distribution possibilities which form the basis for the variable components of Management Board remuneration.

The Management Board remuneration also meets the requirements of the German Act on the Appropriateness of Management Board Renumeration, adopted by the federal parliament on 18 June 2009. Account is taken both of the individual performance of a Board member and the customary remuneration in the sector as well as sustainable corporate development. The new deductible for Management Board members of at least 10 per cent of the respective loss and at least 150 per cent of the fixed annual remuneration was already agreed as of 1 January 2010 for D&O insurance policies. Other than that, the SolarWorld AG Management Board remuneration was determined by the principles already applying prior to the German Act on the Appropriateness of Management Board Renumeration coming into force.

As fringe benefits, D&O insurance costs are paid for all Management Board members, who are also provided with the use of an upper mid-range company car. Furthermore, all work-related out-of-pocket costs, expenditure and expenses are refunded pursuant to paragraph 670 of the German Civil Code. In addition, the Management Board members in charge of Finance (CFO), Operations (COO), and Sales (CSO), receive grants towards their health insurance. The Chairman of the Management Board (CEO) also receives remuneration as the Supervisory Board chairman of Deutsche Solar AG and Sunicon AG.

In the event of premature termination of service contracts, Management Board contracts do not contain any severance pay agreements. The severance pay cap recommended in the latest version of the GCGC dated 6 June 2008 has been taken into account with regard to new appointments made since then. In the follow-up contracts for the COO, the CEO and the CFO, this was already implemented with effect from 1 September 2008, 10 January 2009, and 1 May 2009, respectively.

There are no separate pension entitlements. Management Board members are therefore also allowed to convert part of their remuneration into company pension schemes.

The fixed annual remuneration for Management Board members is payable in twelve monthly installments at the end of each month. In addition, every Management Board member receives a variable, performance-related special payment that is equivalent to an individually negotiated euro amount per cent and share of the dividend distributed to shareholders. This amount is paid within four weeks of the AGM at which the underlying dividend distribution was approved. The individualization of Management Board remuneration presented below relates, on the one hand, to fixed remuneration due and paid in 2009. On the other hand, it also covers variable remuneration relating to fiscal year 2009 which, however, can only fall due after the next Annual General Meeting and depends on approval of the profit appropriation proposal submitted by management, according to which 16 eurocents are to be distributed per share.

Variable remuneration has been capped so that a Management Board member must not be paid more than a multiple of the fixed remuneration previously agreed with the Supervisory Board per fiscal year. For the CFO and the CSO, the cap is three times the fixed amount (the variable component amounts to up to 200 per cent of the fixed remuneration), and for the CEO and COO, it is four times the fixed amount (the variable component may not exceed 300 per cent of the fixed remuneration).

At the Annual General Meeting of 20 May 2009, our shareholders signaled where they see the appropriate level of management salaries in Germany. In accordance with a proposal concerning a resolution to cap Management Board remuneration, it was resolved that the remuneration for a Management Board member be capped at 20 times the average pay in the SolarWorld Group. The calculation is based on gross wages and salaries in each completed fiscal year, divided by the headcount at year-end. This regulation will apply with immediate effect until an AGM decides otherwise. It is based on a Board request in accordance with paragraph 119 (2) of the German Stock Corporation Act. This was required to justify the AGM’s competence. At the end of the day, it therefore ultimately constitutes a self-commitment by the incumbent Board implemented with the consent of the Supervisory Board, and is to be taken into account in future employment contracts. Remuneration components affected are the variable and fixed part of the respective annual income. The only components not affected are inventors’ compensation, compensation for Supervisory Board mandates and other sideline payments or payments in kind. In accordance with section 4.2.2, the level and structure of remuneration are continually reviewed by the Supervisory Board. In addition, they are discussed at an annual meeting dealing with Board matters and agreed upon and updated in agreement with each Board member.

SUPERVISORY BOARD REMUNERATION. The AGM of SolarWorld AG on 25 May 2005 resolved on Supervisory Board remuneration consisting of a fixed component, performance-related special remuneration, fringe benefits and the reimbursement of expenses. This resolution took effect as of 1 January 2005 and was to apply for subsequent years unless a resolution to the contrary was passed by another AGM for the future.

In accordance with paragraph 113 (1) of the German Stock Corporation Act, Supervisory Board remuneration must be appropriate in relation to the tasks of the Supervisory Board members and the position of the company. The SolarWorld AG AGM also resolved that the company would pay the premiums for appropriate insurance cover against the legal liability resulting from Supervisory Board activities (D&O insurance). Since the Supervisory Board also follows the GCGC recommendation of also applying the deductible that is mandatory only for the Management Board to the Supervisory Board, the terms and conditions of the relevant D&O insurance will be adjusted accordingly as of 1 July 2010.

Accordingly, members of the Supervisory Board receive annual remuneration of € 17,500.00 respectively; the vice chairman of the Supervisory Board receives one and a half times that amount, i.e. € 26,250.00, and the chairman of the Supervisory Board receives twice that amount, i.e. € 35,000.00, plus, in each case, value-added tax if applicable. This remuneration was paid in 2010 retroactively for fiscal year 2009. In addition, each member of the Supervisory Board received a lump sum allowance of € 250.00 each to cover expenses per meeting and AGM attendance, which in 2009 was triggered eight times and added up to a total of € 2,000.00, again plus value-added tax if invoiced, which, however, the company was able to deduct as input tax. In addition, every member of the Supervisory Board received and receives performance-related special remuneration, originally determined as € 150.00 per dividend cent with capital stock consisting of 6,350,000 shares, subject to the proviso that the basic amount shall rise in line with an increase in the number of shares. As the number of shares rose from 6,350,000 to 111,720,000, a multiplier of 17.5937 applies to this fiscal year, triggering a basic amount of € 2,639.055. If the next AGM resolves on a dividend of 16 eurocents per share, the variable special remuneration will be € 42,224.80 (previous year: € 39,585.83) per Supervisory Board member. However, at its meeting on 6 August 2007, the SolarWorld AG Supervisory Board submitted a “Self-Commitment Declaration” entailing a partial renunciation. It is linked to the agreements made with the Management Board members on variable remuneration and reads as follows: “As long as the resolution of the AGM of 25 May 2005 applies to the remuneration of the Supervisory Board, the Supervisory Board members accept that variable remuneration due to them be capped to double the fixed annual remuneration due to them. Consequently, even if due to special results for the year and/or a further increase in the relevant number of shares, more than double the fixed annual remuneration could be claimed as variable special remuneration, the total amount paid per fiscal year will not exceed three times the fixed annual remuneration. The Supervisory Board thus agrees to (and among itself) the cap regulation provided for in section 4.2.3, penultimate paragraph of the German Corporate Governance Code.”

The performance-related special remuneration is also paid plus value-added tax if applicable. Payment is due after the close of the AGM that resolved on the underlying dividend distribution. The variable remuneration shown in the following list for 2009 will therefore only fall due and be paid when the AGM approves the dividend proposed by the Management Board and Supervisory Board.

With regard to the disclosure recommended in the last paragraph of section 5.4.6 of the GCGC, it is pointed out that the chairman of the Supervisory Board of SolarWorld AG is a partner in the law firm of Schmitz Knoth Rechtsanwälte. Essentially via other partners and employees of the law firm, this firm provides legal advice and representation services to the SolarWorld Group as well as international coordination services that are necessary in this context.

Concerning the provision of services for SolarWorld AG in 2009 – the year under review – the law firm of Schmitz Knoth Rechtsanwälte charged € 469,244.87, excluding VAT and tax-free expenses. For the 2009 service period, subsidiaries incurred additional attorney’s fees, which amounted to € 124,312.20 for Deutsche Solar AG, € 11,754.60 for Deutsche Cell GmbH, € 5,538.07 for Solar Factory GmbH, € 2,059.20 for SolarWorld Industries Deutschland GmbH, € 15,446.60 for Sunicon AG and € 44,283.20 for SolarWorld Innovations GmbH. All individual items and the total of € 672,638.74 (previous year: € 591,301.76) paid by the group were approved by the Supervisory Board of SolarWorld AG, a resolution on commissioning the relevant work was adopted, and the necessity and appropriateness of the work were confirmed at the meeting on 15 March 2010, which was convened to adopt the annual accounts.

In conclusion, it is stated that the Supervisory Board members Dr. Claus Recktenwald and Dr. Georg Gansen are concurrently and respectively Deputy Chairmen of the Supervisory Board of Deutsche Solar AG. Frank H. Asbeck, CEO of SolarWorld AG, is chairman of that Supervisory Board. Remuneration for the Supervisory Board of Deutsche Solar AG was increased to an annual amount of € 25,000.00 at the AGM of 6 December 2007. That amount also applied to each Supervisory Board member in 2009, plus an attendance fee of € 750,00 per meeting reported in the list provided below. With six meetings charged in 2009, the total amount per Supervisory Board member was € 29,500.00 net, which will only fall due and be paid upon completion of the fiscal year, as is the case with all other remuneration for Supervisory Board members.

Dr Claus Recktenwald, Dr. Georg Gansen and Frank H. Asbeck are also members of the Supervisory Board of Sunicon AG. The company’s AGM on 18 December 2008 resolved on Supervisory Board remuneration of € 15,000.00 net per Supervisory Board member, to apply to fiscal year 2008 for the first time and not payable until 1 January 2009, as is the attendance fee of € 400.00. With five meetings charged, the total amount per Supervisory Board member will be € 17,000.00, plus value-added tax.