DECLARATION OF THE MANAGEMENT BOARD OF HANSEYACHTS AG IN ACCORDANCE WITH ARTICLE 289A OF THE GERMAN COMMERCIAL CODE (HGB):
This declaration of the management board contains a declaration of compliance, details on practises of corporate management, and a description of the workings of the management and supervisory boards. HanseYachts AG is aiming to ensure that the presentation of management remains lucid and meaningful.
The management and supervisory boards of HanseYachts AG are committed to the German Corporate Governance Code (DCGK) and identify with the goals of this Code to promote good and responsible corporate management, oriented to that which benefits the shareholders, employees and customers.
This fact is evident from a policy of responsible management and supervision of HanseYachts AG based on maximizing profitability. This also entails transparently presenting its corporate principles and developments in its business, with the aim of ensuring and reinforcing the confidence of customers, business partners and investors in HanseYachts. Parameters of proper corporate management continue to be close and efficient cooperation between the management board and the supervisory board, regard for shareholders’ interests, proper corporate communication, correct accounting and auditing as well as responsible risk management.
HanseYachts AG regards corporate governance as an ongoing process and will continue to follow future developments attentively and make use of them accordingly.
COMPLIANCE WITH THE GERMAN CORPORATE GOVERNANCE CODE (DCGK) IN ACCORDANCE WITH ARTICLE 161 OF THE GERMAN STOCK CORPORATION ACT (AKTG)
On 6 October 2011, the management and supervisory boards issued a declaration of compliance with the recommendations of the Government Commission on the German Corporate Governance Code (CGC) pursuant to Article 161 of the German Stock Corporation Act and have made it accessible at all times on HanseYacht’s website at www.hansegroup.com. The declaration of compliance states the following:
“Since its last declaration of compliance on 05 October 2010, HanseYachts AG has complied with the recommendations of the Government Commission on the DCGC in the version of 26 May 2010, with the exception of the following deviations, and will continue to do so in future with the exception of the following non-conformance:
- There has been no compliance with the recommendations under Section 3.8 of the DCGC (Deductible in the D&O Insurance for the supervisory board as well)—nor will there be any in future. A deductible has not been stipulated for the supervisory board, as in the opinion of HanseYachts a deductible would not be appropriate to influence the motivation and responsibility, with which the members of said supervisory board approach their duties. Moreover, a deductible is not considered commensurate due to the relatively small amount of remuneration paid to members of the supervisory board.
- The recommendations under Sections 4.2.4 and 4.2.5 of the Code have not and will not be applied, as remuneration for the management board is not disclosed for individual members of the management board. At the general shareholders’ meeting on 16 January 2007, HanseYachts’ shareholders passed a corresponding resolution valid for five years.
- The recommendations in Section 5.1.2, Paragraph 2, Sentence 3, and Section 5.4.1, Sentence 2 of the GCGC have not been observed and will not be observed in future in so far as an age limit for members of the management and supervisory boards should be fixed. A generalised age limit does not represent a suitable criterion for quality in the opinion of HanseYachts AG and would unnecessarily restrict the search for particularly qualified and experienced candidates. Moreover, the present age structure of the directors and officers (D&O) would not make fixing such an age limit imperative.
- There has been no compliance with the recommendations under Section 5.3.3 of the DCGC (Formation of a Nominating Committee)—nor will there be any in future. The supervisory board considers it preferable to present the nominations to the general shareholders’ meeting for election to the supervisory board for the entire supervisory board in order to permit the diversity already present in said supervisory board to flow into such nominations.
- In the past the recommendations in accordance with Section 5.4.1, Sentences 2 to 4 of the GCGC (Defining Concrete Goals for the Composition of the Supervisory Board) have not yet been observed, as a resolution on the goals to be defined has not yet been adopted. In the past the goals to be defined have thus not yet been published in HanseYachts’ Corporate Governance report. Nevertheless the supervisory board intends to formulate corresponding goals in the near future and then to include them in subsequent Corporate Governance reports.”
DISCLOSURES ON CORPORATE MANAGEMENT PRACTISES
HanseYachts makes use of any and all legally stipulated corporate management practises. There are no additional guidelines, such as ethical standards or labour and social standards that are applied company-wide.
PROCEDURES OF THE MANAGEMENT AND SUPERVISORY BOARDS
The supervisory and management boards of HanseYachts AG cooperate closely and confidently with each other. All relevant questions relating to the business situation and developments, financing as well as strategy and planning are discussed between the two management entities.
The supervisory board advises and monitors the management board in managing the HanseGroup and reviews all major business transactions by examining the relevant documents on the basis of the German Stock Corporation Act and the Articles of Incorporation. The supervisory board is elected at the general shareholders’ meeting. The management board is appointed by the supervisory board. The supervisory board decides on the number of members on the management board and determines the chairman (CEO). In the internal bylaws for the management board, the supervisory board stipulates a catalogue of transactions requiring board approval as well as a schedule of responsibilities. The supervisory board acts on the basis of its own rules of procedure.
The supervisory board finalizes the annual financial statements and approves the consolidated financial statements. Each year the chairman of the supervisory board explains the activities of said board in his report to the shareholders and at the general shareholders’ meeting. The supervisory board of HanseYachts AG consists of six members. There is also an audit committee, composed of three members of the supervisory board. In addition to advising on examining the annual financial statements, its duties include discussing corporate planning.
The management board currently consists of three members: chairman (CEO), a chief financial officer (CFO) and a director for production (COO). A management board comprising three members has proven effective at HanseYachts AG. The management board runs the company on its own responsibility. Individual areas of responsibility are stipulated in the allocation plan. The heads of the various business units report to the management board about their respective departments and bear responsibility for the results of their respective units. The management board reports comprehensively to the supervisory board about the planning and developments in business as well as the status of the HanseGroup, including risk management, at regular intervals and in timely fashion, both in writing and at regularly scheduled meetings. The management board takes part in all of the meetings of the supervisory board, reports orally and in writing on the individual items on the agenda as well as on drafts of resolutions and responds to questions of individual members of the supervisory board.
Drafts of resolutions are conveyed to the members of the supervisory board in writing prior to the respective meetings. The possibility of drafting resolutions by circulation procedure is used relatively seldom and then only in cases that are particularly urgent.
REMUNERATION OF THE MANAGEMENT BOARD (REMUNERATION REPORT) PURSUANT TO SECTION 4.25 OF THE DCGC
Total remuneration for the management board has been fixed at a commensurate level by the supervisory board. Criteria for determining this commensurate level include, in particular, the individual responsibilities of the respective member of the management board, personal performance, the performance of the management board as a whole, the economic situation, the success and future prospects of HanseYachts as well as the usualness of such remuneration in light of that, which is paid in comparable companies and the salary structure otherwise applicable within HanseYachts.
The members of the management board of HanseYachts AG receive a fixed annual salary, which also includes compensation for side activities at affiliates, and comparable mandates. The members of the management board also receive a commensurate annual bonus in accordance with a separate bonus agreement. In addition, the members of the management board may participate in any (to date nonexistent) stock-option plans offered by HanseYachts AG. Remuneration for the members of the management board is determined by the supervisory board. This remuneration comprises a fixed and a variable component as well as personal use of company cars and insurance premiums. Taxes accruing for personal use of company vehicles are borne by the members of the management board themselves. The variable components are performance-based. Performance parameters include the absolute amount of earnings before taxes as well as the return on sales (ratio of EBT to total turnover). Variable remuneration consists of a proportional share of earnings before taxes (EBT). There is a ceiling on the variable components. The variable remuneration component is paid once annually, depending on the results of the past fiscal year after the annual financial statements have been finalized. The variable remuneration components for newly concluded contracts with management board members contain short-term and long-term elements, whose amounts and due dates for payouts will depend on future developments in shareholder value. No provision has been made for pensions. In the fiscal year that ended on 31 July 2011, total remuneration for the entire management board, including use of company vehicles and insurance premiums, amounted to EUR 591 000 (EUR 509 000 last year). For the fiscal year reported here, as in the previous two years, the management board did not receive any variable remuneration components.
At two-year intervals, the supervisory board reviews total remuneration paid to the management board, considering in particular the earnings situation of HanseYachts AG and the performance of the individual members, and adjusts said total remuneration accordingly.
Furthermore, HanseYachts has taken out liability insurance for pecuniary damages for directors and officers (D&O insurance) with a commensurate deductible to be borne by them.
In the event of revocation of an appointment of a member to the management board or resignation of a management board mandate, the employment contract, and hence payment of remuneration and other benefits provided by HanseYachts AG, shall end between 6 and 18 months after the end of the calendar month, in which said revocation or resignation shall have taken place. Should the office as a member of the management board expire or be eliminated due to, or as a result of, a change in corporate form or a restructuring measure, HanseYachts or a legal successor thereof shall have, inter alia, the option of terminating the employment contract of the members of the management board with 12 or 18 months notice. If a member of the management board resigns in such a case, any severance pay shall be limited to his or her income for one year. The Chief Financial Officer is entitled to an extraordinary right to give notice to cancel his employment contract if another shareholder should take over control of a majority of the voting rights (Change of Control). Should the Chief Financial Officer exercise this right, he is entitled to compensation amounting to the salary that he would have earned until expiration of the regular term of his contract, but limited to the income for one year.
At the general meeting, the chairman of the supervisory board also informs the shareholders of HanseYachts AG about the basic principles of the remuneration system and any amendments to it.
REMUNERATION OF THE SUPERVISORY BOARD PURSUANT TO SECTION 5.4.6 OF THE DCGC
Remuneration for members of the supervisory board is determined by the shareholders at the general meeting and has been regulated in Article 14 of the Articles of Incorporation of HanseYachts AG. In addition to reimbursement for expenses, each member of the supervisory board receives fixed annual remuneration of EUR 6000, payable at the end of a fiscal year. In addition each member of the supervisory board receives variable remuneration of EUR 50 for each cent, by which consolidated earnings after taxes per share exceed EUR 1.30. The chairman of the supervisory board, Mr Dirk Borgwardt, receives three times the normal fixed and variable remuneration; his vice-chairman, Mr Matthias Harmstorf, and the head of a commission, Mr Hans-Joachim Zwarg, receive twice those amounts. Remuneration or any other benefits for services personally rendered by members of the supervisory board were paid by HanseYachts AG exclusively to Mr Borgwardt in the amount of EUR 7000 and to Mr Zwarg in the amount of EUR 19 000 plus expenses in the year under review. For the fiscal year reported here, as in the previous two years, the management board did not receive any variable remuneration components.
SHAREHOLDINGS OF THE MANAGEMENT BOARD AND SUPERVISORY BOARD PURSUANT TO SECTION 6.6 OF THE DCGC
Mr Michael Schmidt is entitled to 64.67 % of the voting rights (4 139 000 shares) of HanseYachts AG, of which 38.28 % of the voting rights (2 450 000 shares) have been assigned to him via the Michael Schmidt Beteiligungs-GbR. Otherwise, the members of the management and supervisory boards of HanseYachts AG do not have any shareholdings above 1% of stock issued by their company that would require disclosure within the scope of Section 6.6 of the DCGC.
HanseYachts AG publishes extensive information about the shareholdings and stock transactions of the management and supervisory boards. Stock transactions falling under Article 15a of the Securities Trading Act (WpHG) on mandatory disclosure of stock transactions, so-called Directors' Dealings have always been appropriately published on the website of HanseYachts AG.
ADDITIONAL INFORMATION ON CORPORATE GOVERNANCE
Transparency and the requirement to inform shareholders and the public quickly and comprehensively have a high priority at HanseYachts AG. Consequently, current developments and vital company information are made available in real time on HanseYachts AG’s website (http://www.hansegroup.com). In addition to information on corporate governance, the website also publishes details about the management board, the supervisory board and the general shareholders’ meeting, legally required company reports (annual financial statements, six-month financial report and interim reports from management), a financial calendar including all key dates as well as ad hoc press releases and mandatory disclosure of notifiable securities transactions (Directors’ Dealings).
Greifswald, 6 October 2011
The Supervisory Board The Management Board