Reebok 2006 Annual Report Download - page 118

Group Management Report ›› Reporting Pursuant to § 315 Section 2 No. 4 and Section 4 HGB
Reporting Pursuant to
§ 315 Section 2 No. 4
and Section 4 HGB
adidas AG as the parent company of the adidas Group
utilizes an organized market as defined by § 2 section 7 of
the German Securities Acquisition and Takeover Act (Wert-
papiererwerbs- und Übernahmegesetz – WpÜG) through
the Company’s issued shares with voting rights and there-
fore reports pursuant to § 315 section 2 No. 4 and section 4
of the German Commercial Code (HGB).
Subscribed Capital, Voting Right Restrictions and Shares
with Special Rights
As at December 31, 2006, the nominal capital of adidas AG
amounted to € 203,536,860, divided into 203,536,860 no-par-
value bearer shares (see Note 22, p. 165). Pursuant to § 21
section 1 of the adidas AG Articles of Association, each share
is entitled to one vote. The Executive Board is not aware of any
restrictions relating to the voting rights or transfer of shares,
including agreements between shareholders. Similarly, the
shares carry no special rights conferring powers of control.
Shareholdings and Voting Control
The Company is not aware of any direct or indirect share-
holdings exceeding 10% of the voting rights. The Company is
equally unaware of any voting control rights in the event that
employees with a shareholding do not exercise their rights of
control.
Appointment and Dismissal of Executive Board Members
The Executive Board of adidas AG currently comprises four
members appointed by the Supervisory Board pursuant to
§ 84 German Stock Corporation Act (AktG) for a period not
exceeding five years in each case. Repeated appointments are
permissible, as is an extension of the term of office. However,
the latter may not exceed the maximum five-year period in
any one instance. Any extension of the term of office requires
a Supervisory Board resolution and may be adopted no earlier
than one year prior to expiry of the current term of office. In
urgent cases, the Local Court (Amtsgericht) may appoint a
missing and required Executive Board member upon appli-
cation by any person with interests meriting protection (e.g.
other Executive Board members) (§ 85 AktG). This office
would, however, then be terminated as soon as the deficiency
could be rectified, e.g. as soon as the Supervisory Board has
appointed a missing Executive Board member. Dismissal of
an Executive Board member is permissible only with good
cause (§ 84 section 3 sentences 1 and 3 AktG). Good cause
includes gross negligence of duties, inability to duly perform
duties or revocation of confidence by the Annual General
Meeting, unless confidence was revoked for obvious unob-
jective reasons. Pursuant to § 6 of the adidas AG Articles of
Association, the Supervisory Board may appoint a Chairman
as well as a Deputy Chairman of the Executive Board. adidas
AG currently has a Chairman but no Deputy Chairman of the
Executive Board.
Powers of Executive Board to Issue Shares
The powers of the Executive Board to issue shares are estab-
lished in § 4 sections 2 to 7 of the Articles of Association.
» The Executive Board is authorized, subject to Supervisory
Board approval, to increase the nominal capital
› until June 19, 2010, by issuing new shares against con-
tributions in cash once or several times by no more than a
maximum of € 64,062,500 and, subject to Supervisory Board
approval, to exclude only fractional shares from sharehold-
ers’ subscription rights;
› until June 19, 2008, by issuing new shares against contri-
butions in cash or in kind once or several times by no more
than a maximum of € 6,250,000 and, subject to Supervi-
sory Board approval, to exclude shareholders’ subscription
rights;
› until May 28, 2011, by issuing new shares against con-
tributions in cash once or several times by no more than a
maximum of € 20,000,000 and, subject to Supervisory Board
approval, to exclude shareholders’ subscription rights for
fractional amounts and when issuing new shares at a price
not essentially below the stock exchange price of shares
with the same features. The authorization to exclude sub-
scription rights may, however, only be used to the extent that
the pro rata amount of the new shares in the nominal capital
together with the pro rata amount in the nominal capital of
other shares which were issued by the Company after May
11, 2006, subject to the exclusion of subscription rights pur-
suant to § 186 section 3 sentence 4 AktG on the basis of an
authorized capital or following a repurchase, or for which
conversion or subscription rights were granted after May
11, 2006, through issuance of convertible bonds or bonds
with warrants, with subscription rights excluded pursuant to
§ 186 section 3 sentence 4 AktG, does not exceed 10% of the
nominal capital existing on May 29, 2006 or, if this amount is
lower, as at the respective date on which the authorization
is used.
» Additionally, pursuant to the resolution of the Annual
General Meeting held on May 11, 2006, the Executive Board
is authorized, subject to Supervisory Board approval, to issue
convertible bonds or bonds with warrants with shareholders’
subscription rights excluded. Further, the Annual General
Meeting conditionally increased the nominal capital of adidas
AG by up to € 20,000,000 through the issuance of no more than
20,000,000 no-par-value shares for the purpose of meeting
obligations arising from the subscription or conversion rights
based on the bonds with warrants or convertible bonds.
114 ANNUAL REPORT 2006 › adidas Group ›