Reebok 2011 Annual Report Download - page 140

adidas Group
2011 Annual Report
GROUP MANAGEMENT REPORT – FINANCIAL REVIEW
136
2011
03.2 Group Business Performance Disclosures pursuant to § 315 Section 4 and § 289 Section 4 of the German Commercial Code
03.2
Executive Board appointment and dismissal
Pursuant to § 6 of the Articles of Association and § 84 AktG, the Super-
visory Board is responsible for determining the number of members
of the Executive Board, for their appointment and dismissal as well as
for the appointment of the Chief Executive Officer (CEO). Currently, the
adidas AG Executive Board comprises the CEO as well as three further
members SEE EXECUTIVE BOARD, P. 34 . Executive Board members may be
appointed for a maximum period of five years. Such appointments may
be renewed and the terms of office may be extended, provided that no
term exceeds five years.
The Supervisory Board may revoke the appointment of an individual
as member of the Executive Board or CEO for good cause, such as
gross negligence of duties or a vote of no confidence by the Annual
General Meeting. As adidas AG is subject to the regulations of the
German Co-Determination Act (Mitbestimmungsgesetz – MitbestG),
the appointment of Executive Board members and also their dismissal
requires a majority of at least two thirds of the Supervisory Board
members (§ 31 MitbestG). If such a majority is not established in the
first vote by the Supervisory Board, upon proposal of the Mediation
Committee, the appointment or dismissal may be made in a second
vote with a simple majority of the votes cast by the Supervisory Board
members. Should the required majority not be established in this case
either, a third vote, again requiring a simple majority, must be held in
which, however, the Chairman of the Supervisory Board has two votes.
Furthermore, the Fuerth local court shall, pursuant to § 85 section 1
AktG, in urgent cases, make the necessary appointment upon appli-
cation by any party involved, if the Executive Board does not have the
required number of members.
Amendments to the Articles of Association
Pursuant to § 179 section 1 sentence 1 AktG, the Articles of Associ-
ation of adidas AG can, in principle, only be amended by a resolution
passed by the Annual General Meeting. Pursuant to § 21 section 3
of the Articles of Association in conjunction with § 179 section 2
sentence 2 AktG, the Annual General Meeting of adidas AG principally
resolves upon amendments to the Articles of Association with a simple
majority of the votes cast and with a simple majority of the nominal
capital represented when passing the resolution. If mandatory legal
provisions stipulate a larger majority of voting rights or capital, this
is applicable. When it comes to amendments solely relating to the
wording, the Supervisory Board is, however, authorised to make these
modifications in accordance with § 179 section 1 sentence 2 AktG in
conjunction with § 10 section 1 of the Articles of Association.
Authorisation of the Executive Board to issue shares
The authorisations of the Executive Board are regulated by §§ 76
et seq. AktG in conjunction with § 7 of the Articles of Association.
The Executive Board is responsible, in particular, for managing the
company and represents the company judicially and extra-judicially.
The authorisation of the Executive Board to issue shares is regulated
by § 4 of the Articles of Association and by statutory provisions:
Authorised Capital
– Until June 21, 2014, the Executive Board is authorised to increase the
nominal capital, subject to Supervisory Board approval, by issuing
new shares against contributions in cash once or several times by
no more than € 50,000,000 altogether (Authorised Capital 2009/I).
– Until July 4, 2014, the Executive Board is authorised to increase the
nominal capital, subject to Supervisory Board approval, by issuing
new shares against contributions in kind once or several times by no
more than € 25,000,000 altogether (Authorised Capital 2011).
– Until July 12, 2015, the Executive Board is authorised to increase the
nominal capital, subject to Supervisory Board approval, by issuing
new shares against contributions in cash once or several times by no
more than € 20,000,000 altogether (Authorised Capital 2010).
Subject to Supervisory Board approval, shareholders’ subscription
rights may be excluded in certain cases for each of the above-
mentioned authorisations SEE NOTE 25, P. 198 .
Contingent Capital
– Until May 5, 2015, the Executive Board is authorised, subject to
Supervisory Board approval, to issue bonds with warrants and/
or convertible bonds by the company or affiliated companies once
or several times in the total amount of up to € 1.5 billion, with
or without a limited term, against contributions in cash and to
accept guarantee of such bonds issued by affiliated companies.
Furthermore, the Executive Board is authorised, subject to
Supervisory Board approval, to grant to bondholders or bond
creditors subscription or conversion rights relating to no more than
a total of 36,000,000 shares in compliance with the corresponding
conditions of the bonds. For this purpose, the nominal capital was
conditionally increased by up to € 36,000,000 (Contingent Capital
2010). The Executive Board is authorised, subject to Supervisory
Board approval, to exclude shareholders’ subscription rights for
fractional amounts. The authorisation also provides for excluding
shareholders’ subscription rights insofar as this is necessary for
granting subscription rights to which holders or creditors of bonds
already issued before are entitled. Furthermore, the Executive Board
is authorised, subject to Supervisory Board approval, to also exclude
shareholders’ subscription rights if the issue price of the bonds is
not significantly below the market value of these bonds and the
number of shares to be issued does not exceed 10% of the nominal
capital. The issuance of new shares or the use of treasury shares
must be taken into account when calculating the limit of 10% in
certain specific cases.