Audi 2011 Annual Report Download - page 145

142
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. Stockholders may
assert these rights in particular by means of a disclosure and avoidance action.
Each share carries an entitlement to one vote at the Annual General Meeting. The Annual Gen-
eral Meeting elects the members of the Supervisory Board to be appointed by it, as well as the
auditors; in particular, it decides on the ratification of the acts of members of the Board of Man-
agement and Supervisory Board, on amendments to the Articles of Incorporation and Bylaws, as
well as on capital measures, on authorizations to acquire treasury shares and, if necessary, on
the conducting 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, Wolfsburg, as the controlling company. This agreement
permits Volkswagen AG to issue instructions. The profit after tax of AUDI AG is transferred to
Volkswagen AG. Volkswagen AG is obliged to make good any loss. All Audi stockholders (with the
exception of Volkswagen AG) receive a compensatory payment in lieu of a dividend. The amount
of the compensatory payment corresponds to the dividend that is distributed in the same fiscal
year to Volkswagen AG stockholders for each Volkswagen ordinary share.
Capital interests exceeding 10 percent of the voting rights
Volkswagen AG, Wolfsburg, holds around 99.55 percent of the voting rights in AUDI AG. For
details of the voting rights held in Volkswagen AG, please refer to the Management Report
of Volkswagen AG.
Composition of the Supervisory Board
The Supervisory Board comprises 20 members. Half of them are representatives of the stockhold-
ers, elected by the Annual General Meeting; the other half are employee representatives elected
by the employees in accordance with the German Codetermination Act. A total of seven of these
employee representatives are employees of the Company; the remaining three Supervisory Board
members are representatives of the unions. The Chairman of the Supervisory Board, normally a
stockholder representative elected by the members of the Supervisory Board, ultimately has two
votes on the Supervisory Board in the event of a tie vote, pursuant to Section 13, Para. 3 of the
Articles of Incorporation and Bylaws.
Section 9, Para. 3 of the Articles of Incorporation and Bylaws stipulates that the term of office
for a Supervisory Board member elected to replace a Supervisory Board member who has not
fulfilled his term of office ends upon expiration of the term of office of the Supervisory Board
member leaving.
Statutory requirements and provisions under the Articles of Incorporation and Bylaws
on the appointment and dismissal of members of the Board of Management and on
the amendment of the Articles of Incorporation and Bylaws
The appointment and dismissal of members of the Board of Management are stipulated in Sec-
tions 84 and 85 of the German Stock Corporation Act. Members of the Board of Management
are accordingly appointed by the Supervisory Board for a period of no more than five years.
Reappointment or an extension of the term of office, in each case for no more than five years,
is permitted. Section 6 of the Articles of Incorporation and Bylaws further stipulates that the
number of members of the Board of Management is to be determined by the Supervisory Board
and that the Board of Management must comprise at least two persons.
Authorizations of the Board of Management in particular to issue new shares and to
re-acquire treasury shares
According to stock corporation regulations, the Annual General Meeting may grant authorization
to the Board of Management for a maximum of five years to issue new shares. The meeting may
authorize it, again for a maximum of five years, to issue convertible bonds on the basis of which
new shares are to be issued. The extent to which the stockholders have an option on these new