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Supervisory Board (Status: December 31,2008)

Shareholder representatives


Peter Michaelis
Chairman
Independent, first elected on May 18, 2001. Born in 1946.
Member of the Management Board of Österreichische Industrieholding AG, Chairman of the Supervisory Board of Telekom Austria AG, Austrian Airlines AG and APK-Pensionskasse AG,
Deputy Chairman of the Supervisory Board of OMV AG
Rainer Wieltsch
Deputy Chairman.
Independent, first elected on May 6, 2002. Born in 1944.
Consultant
Chairman of the Supervisory Board of OMV AG and Bundesrechenzentrum GmbH (until December 31, 2008), Second Deputy Chairman of the Supervisory Board of Austrian Airlines AG, Member of the Supervisory Board of Telekom Austria AG
Dieter Bock Independent, first elected on May 18, 2001. Born in 1948.
Self-employed management consultant.
Horst Breitenstein Independent, first elected on January 1, 2003. Born in 1941.
Consultant
Member of the Supervisory Board of BEKO Holding AG
Edith Hlawati Independent, first elected on April 26, 2007. Born in 1957.
Partner of the law fi rm Cerha Hempel Spiegelfeld Hlawati (CHSH)
Deputy Chairman of the Supervisory Board of Telekom Austria AG
Gerhard Roiss Independent, first elected on April 26, 2007. Born in 1952.
Deputy Chairman of OMV AG
Chairman of the Supervisory Board of Borealis AG
Deputy Chairman of the Supervisory Board of several OMV AG subsidiaries
Karl Stoss1 Independent, first elected on April 4, 2006. Born in 1956.
Chairman of Casinos Austria AG as well as
Managing Director of Österreichische Lotterien Gesellschaft m.b.H., Entertainment
Glücks- und Unterhaltungsspiel GmbH and Casinos Austria International Holding GmbH
Member of the Supervisory Board of Burgtheater GmbH
Deputy Chairman of the Supervisory Board of Kathrein & Co. Privatgeschäftsbank AG
First Deputy Chairman of the Supervisory Board of Omnimedia Werbegesellschaft m.b.H,
Chairman of the Supervisory Board of Österreichische Sportwetten GmbH
Hans Wehsely Independent, fi rst elected on August 31, 1999. Born in 1943.
Authorised signatory at Siemens AG Austria as well as Managing
Director of VA TECH Transmission & Distribution GmbH

1Karl Stoss participated in less than 50% of the Supervisory Board meetings.

All shareholder representatives have been elected for the period which is terminated at the end of the Annual General Meeting resolving upon the discharging of the Management and Supervisory Boards for the 2009 financial year.

Employee representatives


Gerhard Fritz Member since September 5, 2001. Born in 1960.
Chairman of the Central Works Council of Austrian Post
Martin Palensky Member since February 22, 2002. Born in 1963.
Deputy Chairman of the Central Works Council of Austrian Post
Helmut Köstinger Member since April 14, 2005. Born in 1957.
Member of the Central Works Council of Austrian Post
Manfred Wiedner Member since March 3, 1999. Born in 1963.
Member of the Central Works Council of Austrian Post

Committees of the Supervisory Board


Executive committee Peter Michaelis (Chairman), Rainer Wieltsch
Presidential committee Peter Michaelis (Chairman), Rainer Wieltsch, Gerhard Fritz
Audit committee Peter Michaelis (Chairman), Rainer Wieltsch, Karl Stoss1,
Hans Wehsely, Gerhard Fritz, Manfred Wiedner
Branch Network committee Peter Michaelis (Chairman), Rainer Wieltsch, Gerhard Roiss,
Hans Wehsely, Martin Palensky, Manfred Wiedner


Independence of the Supervisory Board
In accordance with C-Rule 53 of the Austrian Corporate Governance Code, the Supervisory Board has enacted guidelines to determine the independence of Supervisory Board members as contained in Annex 1 of the Austrian Corporate Governance Code. The members of the Supervisory Board elected by the Annual General Meeting have taken the initiative to evaluate their own independence, concluding that there are a sufficient number of Supervisory Board members who can be qualified as independent both in the Supervisory Board itself as well as in all committees. Moreover, the Supervisory Board consists of seven representatives who can be considered as independent from the core shareholder of Austrian Post. Accordingly, the majority of the Supervisory Board members do not have any direct relationship to the majority shareholder of the company.

Mode of operation of the Supervisory Board
The Supervisory Board has decided to establish special committees consisting of its own members to carry out specific functions:

■ The executive committee is responsible for regulating the relationships between the company and the members of the Management Board, with the exception of the appointment and revocation of the Management Board members, as well as granting options to obtain shares in the company. The executive committee also performs the functions of the remuneration committee as regards to the remuneration to be paid to the members of the Management Board.

■ The presidential committee also serves as the nominating committee.

■ The audit committee is responsible for auditing and preparing the approval of the company’s annual financial statements, the proposal on the distribution of profits, and the Management Report as well as the consolidated annual financial statements and the Group Management Report. Further more, the audit committee is responsible for issues relating to the auditors’ report relating to the effectiveness of the company’s risk management system, and to the internal audit schedule.

■ The Branch Network committee was set up as a working group with the purpose of dealing with specific issues involving the Branch Network.

Number and agenda of meetings
The Supervisory Board and Management Board intensively discussed the economic status and business development of the company within the context of six Supervisory Board meetings and two meetings of the Branch Network committee, as well as one session of the audit committee. The key issues discussed at the Supervisory Board meetings held during the 2008 financial year were the upcoming liberalisation of the postal market in 2011, the restructuring of the Parcel & Logistics Division as well as the development of new models for the structure of the branch network and postal delivery services.

In addition, the executive committee convened when required, discussing, amongst other issues, the negotiations and conclusion of the employment contract with Carl-Gerold Mende and changes in the by-laws for the Management Board as a result of the enlargement of the Management Board.

The presidential committee dealt with preparing the request for applications to fill the position of a new Member of the Management Board with management responsibility for the Parcel & Logistics Division as well as preparing the resolution of the Supervisory Board in respect to the selection of a Member of the Management Board with management responsibility for the Parcel & Logistics Division of Austrian Post.

The audit committee convened on March 4, 2008 in a meeting attended by the auditors, properly carrying out its responsibilities as stipulated by law.

The Branch Network committee convened twice, on February 4, 2008 and March 4, 2008, in order to deal with issues relating to the optimisation and development potential of the Branch Network Division. All members of the committees were present at the respective meetings.

Remuneration report


The Remuneration report summarises the principles applied in determining the remuneration of the Management Board of Austrian Post and describes the amount and structure of income received by the members of the Management Board. Moreover, the Remuneration report also presents the principles and amount of remuneration paid to the members of the Supervisory Board, as well as information disclosing the shareholdings of the Management Board and Supervisory Board.

Management Board
The remuneration system encompasses fixed and variable salary components. The fixed salary is linked to the salary structure of publicly listed Austrian companies and takes into account the range of responsibilities assumed by each of the members of the Management Board. The variable remuneration system is closely linked to Austrian Post achieving pre-defined performance targets (EBIT) and also encompasses the achievement of qualitative performance targets. The variable salary component may not surpass the limit of 100% of the total annual fixed salary. The corresponding remuneration is paid in the following year.

The total cash remuneration paid to the Members of the Management Board in the 2007 and 2008 financial years is comprised of the following:


Remuneration (EUR ’000s) 2007 2008
Fixed components 1,360 1,591
Variable components 655 770
Total remuneration 2,015 2,361

All members of the Management Board also receive payment in kind. In case the employment contract is terminated, members of the Management Board whose employment contracts took effect before January 1, 2008, are entitled to severance pay amounting to one year’s annual salary. All members of the Management Board have concluded a pension fund agreement, under which Austrian Post is required to pay 10% of the individual’s fixed annual gross salary into the pension fund each year.

Any additional work potentially carried out by a Member of the Management Board outside of the company requires the approval of the executive committee. This ensures that neither the time involved nor the remuneration granted for this work represents a conflict of interest with the board member’s responsibilities to Austrian Post.

The members of the Management Board of Austrian Post are insured within the framework of a Directors and Officers Liability Insurance (D&O), which covers the judicial and extrajudicial protection against unfounded claims for damages as well as the settlement of such claims which may be considered as legally justified.

Share-based remuneration programme
Management salaries generally consist of fixed and variable salary components. Above and beyond this system, the Management Board and Supervisory Board of Austrian Post decided to introduce a sharebased remuneration programme for approximately 35 of the top managers at Austrian Post within the context of the Initial Public Offering. Comparable programmes are planned for the upcoming years. The remuneration scheme is designed to align the interests of company management with those of Austrian Post shareholders to achieve a medium-term to long-term increase in shareholder value, as well as to further increase the motivational level of the top executives.

The performance-based pay is calculated on the basis of so-called appreciation rights granted to each participant. Appreciation rights are granted to individual participants contingent upon such participants making an initial investment of some 30% of their personal target value by purchasing shares in the company, either in the course of the IPO or through the stock exchange, and holding these shares without interruption for the term of their appreciation rights. The remuneration is linked to the total shareholder return, i. e. to increases in the share price plus any dividends that are reinvested over the period under consideration.

The appreciation rights of the share-based remuneration programmes in 2006 and 2007 have a term of two and three years, respectively, from the day they are awarded, and entitle their holders to receive a cash amount at the end of that term equivalent to the value of the appreciation rights assigned to them. The Management Board fully took advantage of the appreciation rights granted to them within the context of the share-based remuneration programme (18,500 appreciation rights for the 2007 share-based remuneration programme, 25,480 appreciation rights for 2006).

Supervisory Board
Remuneration of the Supervisory Board for the previous financial year is determined at the Annual General Meeting, which also decides on the fee for attending meetings. At present, the fee totals EUR 300 per session and is paid to each of the members for each Super visory Board meeting which they attend. Further more, travel expenses incurred by the members are covered. The Annual General Meeting held on April 22, 2008 resolved to grant an annual fixed sum totalling EUR 15,000 for the 2008 financial year applying to each of the members of the Supervisory Board, whereas EUR 25,000 was awarded to the Chairman of the Supervisory Board and EUR 20,000 to the Deputy Chairman. Payment is generally made immediately after the Annual General Meeting.

The total remuneration paid to the Supervisory Board in the 2008 financial year (including attendance fees and travel expenses) amounted to EUR 158,000.

The employee representatives perform their duties on the Supervisory Board on an honorary basis and are compensated for their involvement in the works committee in accordance with their respective employment contracts. They may only be discharged of their responsibilities by the works committee, but this may occur at any time.

Directors’ dealings


Sales and acquisitions of Austrian Post shares made by members of the Management Board and Supervisory Board of Austrian Post are reported to the Austrian Financial Market Authority within five days after the transactions have been concluded, and published on the website of the Austrian Financial Market Authority, in accordance with § 48d Austrian Stock Exchange Act. The following total shareholdings on the part of the Management Board and Supervisory Board of Austrian Post were reported to the Austrian Financial Market Authority during the period under review:

Shares owned Dec. 31, 2007 Purchase Sale Dec. 31, 2008
Management Board        
Anton Wais 12,000     12,000
Rudolf Jettmar 9,110     9,110
Walter Hitziger 6,421 579   7,000
Herbert Götz 28,684     28,684
Carl-Gerold Mende 0     0
Supervisory Board        
Peter Michaelis 600     600
Rainer Wieltsch 1,200     1,200
Total 58,015 579   58,594

External evaluation


Austrian Post voluntarily submitted to an external evaluation carried out by KPMG Austria GmbH Steuerberatungs- und Wirtschaftsprüfungs gesellschaft for the period January 1, 2008 to December 31, 2008, assessing its compliance with the rules stipulated by the Austrian Corporate Governance Code. The appraisal was carried out on the basis of an official questionnaire developed by the Austrian Work ing Group for Corporate Governance, concluding that the public declaration of Austrian Post relating to its observance of the Austrian Corporate Governance Code corresponds to its actual business practices. The evaluation report submitted by the auditors can be found at www.post.at. The law firm CMS Reich-Rohrwig Hainz was contracted to evaluate the compliance with the stipulations contained in the Austrian Corporate Governance Code (Rules 74 to 80) in respect to the auditors. Following completion of the evaluation, the report prepared by the contracted law fi rm was published on the website of Austrian Post.

Statement by the Chairman of the Supervisory Board


Despite major turbulences on international capital markets, Austrian Post was the only company listed in the ATX index which even managed to slightly rise in value in 2008. Not only does this clearly demonstrate the success of the company’s strategy in recent years, but also the Initial Public Offering carried out in 2006. The business development in 2008 gives reason to be satisfied. An increase in revenue and earnings, a solid balance sheet structure without external borrowing and further acquisitions were just a few of the most important highlights in the past financial year. There is no doubt that the resulting high cash flow and dividend strength will play a decisive role in the ongoing development of Austrian Post’s shareholder value.

In the upcoming months, the top priority for Austrian Post will be to advance further a sustainable concept for the future, against the backdrop of ongoing demands to maintain nationwide postal services, increasing competition and the need to take account of the interests of employees and shareholders. The pre-requisite for success are well-defined legal regulations which political decision-makers agreed to develop by the middle of 2009. The legal framework must ensure fair competition and a transparent model to finance universal postal services without being to the detriment of Austrian Post.

Based on this new legal framework, Austrian Post will develop detailed strategic measures for the future. In the light of the complete liberalisation of the letter mail market, it will be essential to make changes to the branch network in the form of establishing more postal partner offices designed to replace unprofitable branches. At the same time, it will be important to exploit the company’s unique position as Austria‘s largest logistics company with the country’s densest branch network in order to systematically develop new and attractive products and services.

I would like to take this opportunity to sincerely thank the Management Board as well as the management of Austrian Post, and in particular Anton Wais, who resigned his position on the Management Board for health reasons effective March 31, 2009. Futhermore, I would like to extend my thanks to all employees, whose commitment and hard work each and every day make a significant contribution to the success of this company.

Peter Michaelis m. p..
Chairman of the Supervisory Board