Declarations of Compliance
Corporate Governance Report and Declaration of Compliance
for the business year 2008
Basic structural conditions
Rational AG is an Aktiengesellschaft (public limited company) under German law with its registered office in Landsberg am Lech, and since March 2000 has been listed on the stock exchange. The company is administered by the Executive Board and the Supervisory Board.
As at 31.12.2008 the Executive Board of RATIONAL AG consists of Dr Günter Blaschke (Chief Executive Officer), Peter Wiedemann (Chief Technical Officer), Erich Baumgärtner (Chief Financial Officer) and Reinhard Banasch (Chief Sales Officer). Mr Banasch was newly appointed to the Executive Board of RATIONAL AG on 01.04.2008.
As before, the Supervisory Board consists of Mr Siegfried Meister (Chairman of the Supervisory Board), Walter Kurtz (Deputy Chairman of the Supervisory Board) and Roland Poczka (Member of the Supervisory Board). Since the Supervisory Board comprises just three members, no committees are formed.
The Executive Board submits detailed reports to the Supervisory Board each month about the current business situation and the strategic orientation of the business. Six regular meetings of the Supervisory Board were held in 2008 in addition to numerous individual discussions.
Remuneration report
In fiscal 2008 the Executive Board of RATIONAL AG was paid a total of €3,040 thousand (previous year €2,708 thousand) for the performance of its services. Of this, €1,471 thousand was paid as a profit-related, variable component (previous year €1,242 thousand).
Remuneration for the Supervisory Board for its monitoring and advisory work totalled €542 thousand (previous year €552 thousand). Of this, Mr Meister received €216 thousand (previous year €218 thousand), Mr Kurtz €185 thousand (previous year €188 thousand) and Mr Poczka €141 thousand (previous year €146 thousand).
The payments to the Supervisory Board consist of fixed and profit-related components. In fiscal 2008 payments to the members of the Supervisory Board were as follows:
| Fixed (€ th.) | Profit-related (€ th.) | Other (€ th.) | Total (€ th.) | |
| Mr Meister | 150 | 41 | 25 | 216 |
| Mr Kurtz | 125 | 41 | 19 | 185 |
| Mr Poczka | 100 | 41 | 0 | 141 |
| 375 | 123 | 44 | 542 |
Stock option scheme
On 3 February 2000 RATIONAL AG launched a stock option scheme for members of the Executive Board for a maximum of 200,000 individual shares in the company. The stock options are subject to waiting periods and time limits for exercising the rights, which are decided on by the Supervisory Board. The exercise of option rights is linked to a specified increase in the value of the business measured against the SDAX Performance Index. In February 2000 a first tranche of 34,500 option rights was issued, which was drawn on in 2002 in the form of a cash settlement. A second tranche of 34,500 option rights was issued in January 2004 with a waiting period until March 2006. This tranche was likewise drawn on in the form of a cash settlement. As at the balance sheet date 2008 the shareholding of all the board members stands at well below one percent.
Mandatory publications in 2008
In 2008, RATIONAL AG provided Information for shareholders and interested parties pursuant to Section 15 German Securities Trading Act (WpHG) in the form of five detailed, up-to-date ad-hoc communications within the prescribed periods concerning the Company’s position as regards finance, assets and revenue. Share transactions by members of the Supervisory Board and the Executive Board were announced in 27 notifications in accordance with Section 15 German Securities Trading Act (WpHG) as soon as we gained knowledge thereof.
Further information on the business was provided to shareholders in the form of the annual and quarterly reports, press and capital market conferences and individual meetings, as well as on RATIONAL’s Internet site.
Principles of responsible corporate management
The Executive Board and the Supervisory Board of RATIONAL AG have always striven to take all actions and decisions on the basis of corporate management which is responsible and which is geared to long-term, sustained value creation. Openness and transparency in corporate communication and consideration of the interests of shareholders are principles of paramount importance to RATIONAL.
In consequence of this, RATIONAL AG welcomes the German Corporate Governance Code, published by the Government Commission on 26 February 2002 and most recently amended on 6 June 2008, along with the standards and recommendations contained therein.
Shareholding of the Supervisory Board
As founder of the company the Chairman of the Supervisory Board, Siegfried Meister, holds 63.78 percent of the issued RATIONAL shares. The Deputy Chairman of the Supervisory Board, Walter Kurtz, holds 7.81 percent of the shares. Mr Roland Poczka’s shareholding is under one percent.
Declaration of Compliance by RATIONAL AG
Pursuant to Article 161 of the Stock Corporation Act (AktG) the Executive Board and the Supervisory Board of RATIONAL AG submitted the first declaration of compliance with the German Corporate Governance Code on 18 February 2003. The present version has been amended in accordance with the current edition of 6 June 2008.
RATIONAL Aktiengesellschaft therefore complies with the recommendations of the Government Commission on the German Corporate Governance Code, with the exception of:
Re 3.8
“If the company takes out a D&O (directors’ and officers' liability insurance) policy for the Management Board and Supervisory Board, a suitable deductible shall be agreed.”
A Directors' & Officers' policy has been taken out for the members of the Executive Board and Supervisory Board. No specific deduction for the insured parties has been agreed.
Re 4.2.4
“The total compensation of each member of the Management Board is to be disclosed by name, divided into non-performance-related, performance-related and long-term incentive components, unless decided otherwise by the General Meeting by three-quarters majority.”
By resolution of the General Meeting of Shareholders of 17 May 2006 RATIONAL AG has dispensed with the publication of individualized figures for Executive Board compensation. The other provisions are complied with in full.
Re 5.3
"Formation of committees”
Forming committees of the Supervisory Board to handle complex issues, such as an Audit Com-mittee, is not appropriate for RATIONAL AG because the Supervisory Board consists of only three members.
Re 5.4.1
“For nominations for the election of members of the Supervisory Board, care shall be taken that the Supervisory Board, at all times, is composed of members who, as a whole, have the required knowledge, abilities and expert experience to properly complete their tasks and are sufficiently independent. The international activities of the enterprise, potential conflicts of interest and an age limit to be specified for the members of the Supervisory Board shall be taken into account.“
No age limit has been set for members of the Supervisory Board.
Landsberg, February 2009
RATIONAL Aktiengesellschaft
The Supervisory Board
The Executive Board
Declarations of Previous Years
