Articles of Association
Articles of Association are mandatory for stock corporations under the German Stock Corporation Act (Aktiengesetz, AktG). The currently applicable version is available for inspection.
|Articles of Association of Ernst Russ AG as of 27/06/2016 (German language)||download PDF|
I. General provisions
§ 1 Name of company / Registered office / Financial year
1. The name of the company is Ernst Russ AG.
2. Its registered office is Hamburg, Germany.
3. The company’s financial year is the calendar year.
§ 2 Object of the company
The object of the company is to acquire and hold investments in other companies, especially financial service providers.
A further object of the company is to structure and sell mutual funds, with particular focus on ocean shipping, property, private equity and life insurance.
A further and final object of the company is to operate shipping business including, in particular, shipping operations using proprietary and third-party vessels, conducting shipping and ship brokerage business including chartering brokerage, brokering temporary charter agreements and ship sales and purchases as well as all activities relating to contractual relationships governing the construction and repair of vessels, providing all nature of shipping services including operating ships for third parties and performing management duties for ocean vessel operations and other shipping companies, providing personnel services and personnel brokerage services, especially in the field of shipping, brokering contractual insurance coverage relating to the operation of ocean vessels and/or shipping business, and providing commercial and technical consultancy services to third parties relating to the aforementioned business activities.
The company does not conduct banking business as defined in Section 1 German Banking Act (Kreditwesengesetz, KWG).
The company may realise these objects itself or through subsidiaries and affiliated companies. In the case of companies in which it holds the majority stake, it may restrict its activities to managing the investment.
To the extent permitted by law, the company is entitled to transact all business and take all steps it deems expedient for promoting the object of the Company.
§ 3 Notices
Company notices are published in the Federal Gazette (Bundesanzeiger). If another form of notice is required by law, that form shall replace the notice in the Federal Gazette.
The company is entitled to use remote data transmission to communicate information to registered shareholders, subject to their consent.
II. Share capital and shares
§ 4 Share capital, shares
The share capital of the company is €32,434,030 (in writing: thirty-two million four hundred and thirty-four thousand thirty).
The share capital is divided into 32,434,030 (in writing: thirty-two million four hundred and thirty-four thousand thirty) shares with no par value. Shares are registered to the shareholders.
The Executive Board is authorised to raise the share capital before 22 June 2021 by up to €16,217,015 (in writing: sixteen million two hundred seventeen thousand fifteen euros) by issuing one or several tranches of new registered shares of no par value against consideration in cash and/or in kind, subject to consent by the Supervisory Board (Authorised Capital 2016). If the share capital is to be increased against contributions in cash, subscription rights must be granted to shareholders. Pursuant to section 186 (5) Stock Corporation Act (Aktiengesetz, AktG), the new shares can also be taken over by a bank that commits to offering them to shareholders for subscription. The Executive Board is, however, authorised to exclude shareholders’ subscription rights once or several times over, subject to consent by the Supervisory Board,
– in the case of fractional amounts,
– insofar as is necessary to grant holders of bonds with conversion or option rights or conversion obligations issued by the company or its group companies a pre-emptive right to new shares to the extent that they would be entitled to such rights after exercising their conversion or option rights, or conversion obligations,
– in the case of a capital increase against contributions in cash if the issue price of the new shares is not significantly lower than the quoted price of the same class of company shares as defined in section 186 (3) (4) AktG and the shares issued with subscription rights excluded as defined in section 186 (3) (4) AktG do not exceed ten per cent of the share capital at the time the authorisation becomes effective or is utilised. Shares issued to service bonds with conversion or option rights or conversion obligations must be included in this limit insofar as the bonds were issued by the company or one of its affiliates during the term of this authorisation with subscription rights excluded in application of section 186 (3) (4) AktG. Equally, any treasury shares that are sold must be included numerically in this limit insofar as the treasury shares were sold during the term of this authorisation with subscription rights excluded in application of section 186 (3) (4) AktG,
– in the case of a capital increase against contributions in kind.
The Executive Board is further authorised to specify the details governing the capital increase and its implementation, and particularly the scope of rights and the terms and conditions for issuing shares, subject to consent by the Supervisory Board. The Supervisory Board is authorised to amend the Articles of Association to reflect each utilisation of Authorised Capital.
The share capital of the company is conditionally increased by up to €16,217,015 (in writing: sixteen million two hundred seventeen thousand fifteen euros) by issuing up to 16,217,015 new registered shares of no par value (Conditional Capital 2016). The Conditional Capital shall only be utilised to the extent that
– holders of bonds with conversion or option rights issued by the company or companies in which it holds the direct or indirect majority under the resolution governing authorisation that was adopted by the shareholders’ meeting of 23 June 2016 actually exercise their conversion or option rights, or
– holders of bonds with conversion obligations issued by the company or companies in which it holds the direct or indirect majority under the resolution governing authorisation that was adopted by the shareholders’ meeting of 23 June 2016 fulfil their conversion obligations
and provided no cash compensation is granted or shares already in existence are used to service the rights or obligations. The new shares must be issued at the respective conversion or option price to be determined in accordance with the resolution governing authorisation that was adopted by the shareholders’ meeting of 23 June 2016. The new shares are entitled to participate in the company’s profits from the beginning of the financial year in which they are created by exercise of conversion rights and/or option rights or by fulfilment of conversion obligations.
The Executive Board is authorised to determine further details concerning the execution of the conditional capital increase. The Supervisory Board is authorised to amend the Articles of Association to reflect each utilisation of the Conditional Capital; the same applies if the authorisation of 23 June 2016 to issue bonds with conversion or option rights is not exercised during the term of the authorisation, and if the Conditional Capital is not utilised after expiry of the deadlines for exercising option or conversion rights or for fulfilling conversion or option obligations.
If the share capital is increased during the course of a year, the provisions governing the profit participation entitlement of the new shares may deviate from section 60 (2) AktG.
The Executive Board determines the nature of the share certificates, subject to consent by the Supervisory Board. Profit participation and renewal certificates will not be issued. Shareholders are not entitled to demand securitisation of their shares.
III. The Executive Board
§ 5 Composition
The Executive Board consists of at least two members.
The Supervisory Board appoints members to the Executive Board and determines their number. The Supervisory Board can appoint deputy members of the Executive Board.
The Supervisory Board can appoint a Chief Executive Officer and a Vice Chair.
§ 6 Representation of the company
The company is legally represented
a) by two members of the Executive Board; b) by one member of the Executive Board together with an authorised agent (Prokurist).
Deputy members of the Executive Board have the same powers of representation as ordinary members of the Executive Board.
The Supervisory Board may exempt all or individual members of the Executive Board and authorised agents empowered to represent the company when acting jointly with an Executive Board member from the ban on multiple representation as specified in section 181 2nd alt. German Civil Code (Bürgerliches Gesetzbuch, BGB), without prejudice to section 112 AktG.
§ 7 Rules of procedure
The Executive Board unanimously defines its own rules of procedure to be approved by the Supervisory Board unless the Supervisory Board itself defines rules of procedure for the Executive Board.
The allocation of responsibilities among Executive Board members must be approved by the Supervisory Board.
The Supervisory Board must adopt a resolution defining the specific types of transactions that require its approval.
IV. The Supervisory Board
§ 8 Composition, term of office, resignation from office
The Supervisory Board consists of four members.
Members are elected to the Supervisory Board for terms ending at the close of the shareholders’ meeting that adopts resolutions approving their actions in the third financial year following commencement of their term of office. The financial year in which their term of office commences is not included in this calculation.
Deputies can be elected to replace Supervisory Board members who leave office before the end of their term. The sequence of succession must be specified during the election procedure.
If a deputy succeeds a departing member of the Supervisory Board, their term of office is the same as the residual term of office of the departing member. If a deputy succeeds the departing member, their appointment to the Board expires when the residual term of office of the departing member comes to an end.
Every member of the Supervisory Board and every deputy may resign from office by serving one month’s notice in writing to the Executive Board.
§ 9 Chair and Vice Chair(s)
Following a shareholders’ meeting in which new elections take place of all of the Supervisory Board members whose appointment is subject to vote by the shareholders’ meeting, the Supervisory Board will hold a meeting without the need for separate invitation. During this meeting, which is chaired by the oldest member of the Supervisory Board, the Supervisory Board shall elect one of its members as Chair and one Vice Chair, both for the term of its office. If the Chair or Vice Chair leaves the Supervisory Board during their term of office, the Supervisory Board must immediately elect replacements.
The Vice Chair is only authorised to assume the Chair’s rights and obligations under law and/or the Articles of Association if the latter is unable to do so.
§ 10 Supervisory Board meetings and resolutions
Meetings of the Supervisory Board are convened by the Chair or, if unable to do so, by the Vice Chair, whenever required by law or for business reasons.
The Supervisory Board is quorate if its members have been invited in writing, by email or by fax to the last known address, and if at least half of the members required by law to make up the Supervisory Board, but at least three members, attend in person or vote on resolutions in writing. Members who join meetings by telephone or video conference are deemed to be present in person. Meetings are chaired by the Chair or Vice Chair of the Supervisory Board. The Chair of the meeting determines the manner of voting.
Resolutions may also be adopted by written, telegraphic or other electronic means of communication, including and in particular video conferences, without convening a meeting.
Resolutions of the Supervisory Board are adopted by simple majority of the votes unless otherwise provided by law. If a vote is tied, the Chair has the casting vote.
Minutes must be kept of meetings and resolutions of the Supervisory Board, which must be signed by the Chair of the meeting. All members must be provided with copies of the minutes without delay.
§ 11 Responsibilities, internal arrangements, remuneration
The Supervisory Board must perform the duties assigned to it under law and the Articles of Association.
The Supervisory Board must define its own rules of procedure that take account of legal provisions and these Articles of Association.
The Supervisory Board may define rules of procedure for the Executive Board. These rules of procedure supersede any rules of procedure that the Executive Board may set itself.
Each member of the Supervisory Board receives remuneration amounting to €36,000 (in writing: thirty-six thousand euros) each year, payable after the close of the financial year.
The Chair receives twice and the Vice Chair one and a half times this amount. If a member leaves the Supervisory Board during the course of a financial year, their remuneration will be payable pro rata temporis. Members of the Supervisory Board are entitled to an attendance fee of €1,000 (in writing: one thousand euros) for each Supervisory Board meeting they attend. Supervisory Board members are, moreover, entitled to reimbursement of their expenses plus VAT at the statutory rate.
The company may purchase liability insurance for the members of the Supervisory Board to cover the risks associated with the performance of their duties (D&O insurance) by paying a reasonable standard market premium.
V. The shareholders’ meeting
§ 12 Convening a shareholders’ meeting
Shareholders’ meetings are held at the registered office of the company or in a city that is home to a German stock exchange.
Shareholders’ meetings are convened by the Executive Board, or by the Supervisory Board where stipulated by law.
Ordinary shareholders’ meetings take place within the first eight months of each financial year. Extraordinary shareholders’ meetings may be convened as often as seems necessary in the interests of the company.
Unless otherwise specified by law, shareholders’ meetings must be convened at least 36 days prior to the shareholders’ meeting by announcement published in the Federal Gazette.
§ 13 Eligibility to attend shareholders’ meetings
Shareholders are only entitled to attend shareholders’ meetings and exercise their voting rights if they are listed in the company’s share register on the day of the shareholders’ meeting and have registered their attendance with the company in text form (section 126 BGB) prior to the shareholders’ meeting. Registrations must be received by the company at the address indicated for this purpose in the invitation no later than six days prior to the shareholders’ meeting, not counting the day of the shareholders’ meeting itself, nor the day of receipt.
Invitations to shareholders’ meetings must include details of how to register and obtain admission cards.
The Executive Board may make arrangements for shareholders to take part in the shareholders’ meeting without being present in person and without naming an authorised representative, and to exercise all or some of their rights in whole or in part by electronic means. The Executive Board also determines the further details of the procedure and announces them when convening the shareholders’ meeting.
§ 14 Voting rights
Each share carries one voting right at a shareholders’ meeting.
Voting rights can be exercised by proxies. Unless otherwise provided by law, such authorisation must be in text form (section 126b BGB); proof of authorisation can be provided electronically to the company by means to be defined in more detail by the Executive Board. Details must be announced when convening the shareholders’ meeting.
The Executive Board may make arrangements for shareholders to vote in writing or by electronic means without attending the shareholders’ meeting (postal vote). The Executive Board also determines the further details of this procedure and announces them when convening the shareholders’ Meeting.
§ 15 Chairing a shareholders’ meeting;
attendance by Executive Board and Supervisory Board members; video and audio transmission
Shareholders’ meetings are chaired by the Supervisory Board Chair or, if unable to do so, another member of the Supervisory Board.
The Chair leads the proceedings and determines the sequence of agenda items.
The Chair may determine the sequence of speakers and is, moreover, authorised to impose reasonable time limits on the right of shareholders to ask questions and generally speak. Before a shareholders’ meeting commences, or while it is in progress, the Chair is also entitled to impose a reasonable time limit on the entire shareholders’ meeting proceedings, on individual agenda items, or on individual questions or statements.
Members of the Executive Board and Supervisory Board should attend shareholders’ meetings in person. Attendance using video and audio transmission is possible if members of the Supervisory Board are prevented from attending in person for just reasons.
The Executive Board may make arrangements for video and audio transmission of some or all of the shareholders’ meeting, which it shall announce accordingly when convening the shareholders’ meeting.
§ 16 Adoption of resolutions
Resolutions are adopted in shareholders’ meetings by simple majority of the votes cast and, if the capital majority is required in addition to the majority of votes, by simple majority of the share capital represented when the resolution is adopted, unless otherwise specified by law or the Articles of Association.
The Chair determines the form and further details of the voting procedure.
The Supervisory Board is authorised to make any amendments to the Articles of Association that relate only to the wording.
§ 17 Records of shareholders’ meetings
A notarial record must be kept of the proceedings in shareholders’ meetings, which must be signed by the notary public and the Chair.
This record shall be conclusive for the shareholders among themselves and in relation to their proxies.
Authorisations must not be annexed to the record.
VI. Annual financial statements, management report and appropriation of annual profits
§ 18 Annual financial statements and management report
The Executive Board is responsible for preparing the annual financial statements, consolidated financial statements and management reports for financial years just ended within the statutory deadlines, and for submitting them to the Supervisory Board. When presenting these statements, the Executive Board must, moreover, indicate the proposal it intends to submit to the shareholders’ meeting in respect of the appropriation of profits.
The annual financial statements must be approved by the Management and Supervisory Boards. They are authorised to allocate the net profit after deduction of statutory accruals and any loss carryforwards in part or in whole to another profit reserve as long as it does not exceed one half of the company’s share capital or would not exceed the same after accrual.
§ 19 Resolutions adopted in shareholders’ meetings
After receiving the report to be submitted by the Supervisory Board pursuant to section 171 (2) AktG, the shareholders’ meeting must adopt resolutions within the first eight months of each financial year approving the actions of the Management and Supervisory Boards, the appropriation of the annual profits, and – where provided by law – the appointment of the auditors and the adoption of the annual financial Statements.
§ 20 Appropriation of profits
When adopting resolutions governing the appropriation of the net profit, the shareholders’ meeting is bound by the annual financial statements it has approved.
When adopting resolutions governing the appropriation of the net profit, the shareholders’ meeting may allocate amounts to profit reserves or carry them forward.
§ 21 Costs
The company must bear the cost of incorporation and conversion, estimated to be around €100,000 (in writing: one hundred thousand euros).