1. Principles This Compliance Guideline (the "Guideline") has been issued on the basis of Section 12 of the Ordinance of the Securities Supervision Authority (BWA) on the principles for information transfer in companies and also relating to organizational actions to avoid insider information misuse for issuers (Issuer Compliance Regulation - ECR) (Attachment ./1) .
The KTM Power Sports AG is issuer within the meaning of the ECR.
The ECR forms an integral part of this Guideline.
2. Contents and bindingness of the Guideline The Guideline documents the obligations for the handling of insider information in the issuer's company and stipulates the regulations to be complied with when transferring insider information.
The KTM Power Sports AG's Board of Directors has declared the Guideline as binding for the company's employees and instructs all employees to follow the instructions contained in the Guideline during and outside the business hours. All persons with an employment relationship with KTM Power Sports AG confirm their knowledge of and compliance with this Guideline by signing a declaration (Attachment ./2) and returning it to the Board of Directors.
3. Addressees Addresses of this Guideline and persons from the confidentiality area are all members of the Board of Directors as well as all employees and others acting for the issuer, who have been assigned organizationally or functionally to a confidentiality area as per Section 6. to render their services, and also other persons who typically receive information without being an employee of the issuer.
4. Compliance responsibility The members the Board of Directors are responsible under Section 13 ECR, for implementation of and compliance with ECR.
5. Compliance Register The compliance officer shall maintain a compliance register containing the information listed in Section 8 Subs 5 ECR. The compliance register shall be used to record all applications relating to intended stock transaction within lock-up periods, as well as the name of the applicant, the extent of the transaction and decision of the Board of Directors. The compliance register shall be regularly updated.
6. Confidentiality areas 6.1. Permanent confidentiality areas. The whole company of the issuer represents a single confidentiality area.
6.2. Temporary (project-related) confidentiality areas. The issuer sets up temporary (project-related) confidentiality areas, as far as, according to common experience, in the context of projects, insider information typically appears (as e.g. accomplishing of a transaction). Temporary confidentiality areas will be brought to the knowledge of the involved persons in an adequate manner.
7. Technical measures 7.1. For the prevention of a non-compliant use or transfer of insider information, the following measures should be particularly provided:
(i) Locking of doors
(ii) Locking files away
(iii) Securing PCs and insider information with passwords
(iv) Refraining from conversations about insider information
(v) Use of code names for confidential projects
(vi) Encryption programs for emails
(vii) Refraining from removing documents containing insider informationfrom the issuer's premises.
7.2. If any doubts arise on how to deal with confidential information or categorize information as confidential, the Board of Directors shall be informed and its decision awaited before any utilization, transfer or any use whatsoever of the information.
8. Knowledge, transfer and reporting of insider information 8.1. All insider information, became known within the confidentiality area, have to be brought immediately to the knowledge of the Board of Directors. The Board of Directors has to register following information: information content, name of the reporting person, time of the report.
8.2. Within a confidentiality area, insider information may be passed only to persons whose work involves processing this information.
8.3. The transfer of insider information to the issuer's allied companies is only permitted under the condition that this transfer is required for the company's purposes, that it should be limited to the absolute necessary extent and that the addressees of the insider information are informed about the fact that it is a matter of insider information.
8.4. The transfer of insider information to persons outside the company is only permitted if this is necessary for the company's purposes, the transfer is limited to the absolute necessary extent, and the person commits through an agreement to keep insider information secret. This is only valid if the person outside the company is not already bound by statute or professional regulations to confidentiality. The confidentiality of the transferred information shall be pointed out.
8.5. Section 48d Subs 4 Stock Exchange Act (BörseG) obligates the Board of Directors, the managerial employees and the members of the Supervisory Board of the issuer, as well as persons who are in a close relationship with them (Section 48a Subs 1 line 9 Stock Exchange Act (BörseG)) to notify to the Financial Market Supervisory Office every buy and sale of shares of the issuer, as far as an annual amount of EUR 5,000.00 is exceeded. The person subgroup described the last has to report about such transactions to the compliance officer only if the mentioned person is employed in the Company.
9. Lock-up periods and trading bans 9.1. Within the following periods, persons of the confidentiality areas may not issue any orders relating to the issuer's securities:
(i) 3 weeks before the planned publication of the (interim) quarter figures
(ii) 6 weeks before the planned publication of the (interim) annual figures
(iii) from the time when a letter of intent is signed or a supervisory or management board resolution has been adopted involving the execution of a transaction (for example the acquisition or sale of company shares) with a volume of at least EUR 10,000,000.00, until publication of information on the transaction by the issuer or until a resolution not to execute the transaction.
9.2. The following orders shall be treated the same as orders under Section 9.1.:
(i) those issued by persons in confidentiality areas in the name and/or on the account of a third party,
(ii) those issued by a third party in the name and/or on the account of persons in confidentiality areas, and also
(iii) those issued by legal entities, institutions acting as a trustee, or associations without independent legal existence (partnerships), which are directly or indirectly controlled by a person from the confidentiality area, which were founded for the benefit of such a person, or the economic purpose of which widely correspond to such a person
9.3. The Board of Directors can grant in particularly justified cases an exception from the trading ban.
10. Consequences in the situation of a contravention Violations of the trading ban defined at Section 9. may lead to criminal prosecution.
Violations of the obligations defined in this Guideline shall always result in employment-law actions being taken (e.g. instruction, admonition, dismissal).
The issuer also reserves itself the right to claim damages from any persons violating this Guideline.
Explanation: The Compliance Guideline of the KTM Power Sports AG which has become valid on July 26, 2006 is replacing the Compliance Guideline from June 02, 2005 entirely.
