Audi 2007 Annual Report Download - page 141

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Additional disclosures pursuant to Section 315, Para. 4, of the German Commercial Code
(HGB)
Along with the introduction of the German Takeover Directive Implementation Act on July
14, 2006, Directive 2004/25/EC of the European Parliament and Council of April 21, 2004, on
takeover bids (“EU Takeover Directive”) has been implemented under German law. Among
other things, the law envisages changes to the German Commercial Code and necessitates
additional particulars in the Management Report, which are provided below:
Capital structure
On December 31, 2007, the share capital of AUDI AG remained unchanged at
EUR 110,080,000 and comprised 43,000,000 no-par bearer shares. Each share represents a
mathematical share of EUR 2.56 of the issued capital.
Stockholders’ rights and obligations
Stockholders enjoy property and administrative rights.
The property rights include, above all, the right to a share in the profit (Section 58,
Para. 4, of the German Stock Corporation Act [AktG]) and in the proceeds of liquidation
(Section 271 of the German Stock Corporation Act), as well as a subscription right to shares
in the event of capital increases (Section 186 of the German Stock Corporation Act).
The administrative rights include the right to participate in the Annual General Meeting
and the right to speak, ask questions, table motions and exercise voting rights there. Stock-
holders may assert these rights, in particular, by means of a disclosure and avoidance ac-
tion.
Each share carries an entitlement to one vote at the Annual General Meeting. The Annual
General Meeting elects the members of the Supervisory Board to be appointed by it, as well
as the auditors; it decides, in particular, on the ratification of the acts of members of the
Board of Management and Supervisory Board, on amendments to the Articles of Incorpora-
tion and Bylaws, as well as on capital measures, on authorizations to acquire treasury
shares and, if necessary, on the conduct of a special audit, the dismissal of members of the
Supervisory Board within their term of office and on liquidation of the Company.
The Annual General Meeting normally adopts resolutions by a simple majority of votes
cast, unless a qualified majority is specified by statute.
A control and profit transfer agreement exists between AUDI AG and Volkswagen AG as
the controlling company. This agreement permits Volkswagen to issue instructions. The net
profit of AUDI AG available for distribution is transferred to Volkswagen. Volkswagen AG is
obliged to make good any loss. Outside Audi stockholders receive a compensatory payment
that is linked to the dividend distributed on each Volkswagen share.
Composition of the Supervisory Board
The Supervisory Board comprises 20 members; half of them are representatives of the stock-
holders, elected by the Annual General Meeting. The other half of the Supervisory Board
members are employee representatives elected by the employees in accordance with the
German Codetermination Act. A total of seven of these employee representatives are em-
ployees of the Company; the remaining three Supervisory Board members are representa-
tives of the unions. The Chairman of the Supervisory Board, a stockholder representative
elected by the members of the Supervisory Board, ultimately has two votes on the Supervi-
sory Board in the event of a tie vote, pursuant to Section 13, Para. 3, of the Articles of Incor-
poration and Bylaws.