Disclosures Required Under Takeover Law


The disclosures required under takeover law as specified by sections 289(4) and 315(4) of the Handelsgesetzbuch (HGB – German Commercial Code) are presented in the following.

Capital structure

On December 31, 2009, the share capital of Volkswagen AG amounted to €1,024,623,813.12 (previous year: €1,024,405,726.72); it was composed of 295,005,397 ordinary shares and 105,238.280 preferred shares. Each share conveys a notional interest of €2.56 in the share capital.

Shareholder rights and obligations

The shares convey pecuniary and administrative rights. The pecuniary rights include in particular shareholders’ right to participate in profits (section 58(4) of the Aktiengesetz (AktG – German Stock Corporation Act)), to participate in liquidation proceeds (section 271 of the AktG) and preemptive rights on shares in the event of capital increases (section 186 of the AktG). Administrative rights include the right to attend the Annual General Meeting and the right to speak there, to ask questions, to propose motions and to exercise voting rights. Shareholders can enforce these rights in particular through actions seeking disclosure and actions for avoidance.

Each ordinary share grants the holder one vote at the Annual General Meeting. The Annual General Meeting elects shareholder representatives to the Supervisory Board and elects the auditors; in particular, it resolves the appropriation of net profit, formally approves the actions of the Board of Management and the Supervisory Board, resolves amendments to the Articles of Association, capitalization measures, authorizations to purchase treasury shares and, if required, the conduct of a special audit; it also resolves premature removal of Supervisory Board members and the winding-up of the Company.

Preferred shareholders generally have no voting rights. However, in the exceptional case that preferred shareholders are granted voting rights by law (for example, when preferred share dividends were not paid in one year and not compensated for in full in the following year), each preferred share also grants the holder one vote at the Annual General Meeting. Furthermore, preferred shares entitle the holder to a €0.06 higher dividend than ordinary shares (further details on this right to preferred dividends are specified in Article 27(2) of the Articles of Association).

The Gesetz über die Überführung der Anteilsrechte an der Volkswagenwerk Gesellschaft mit beschränkter Haftung in private Hand (VW-Gesetz – Act on the Privatization of Shares of Volkswagenwerk Gesellschaft mit beschränkter Haftung) of July 21, 1960 includes various provisions in derogation of the Aktiengesetz (AktG – German Stock Corporation Act), for example on exercising voting rights by proxy (section 3 of the VW-Gesetz) and on majority requirements (section 4(3) of the VW-Gesetz).

Volkswagen AG held an Extraordinary General Meeting on December 3, 2009 in Hamburg at which in particular a resolution was also adopted that the State of Lower Saxony is entitled to appoint two members of the Supervisory Board of Volkswagen AG for as long as the State of Lower Saxony directly or indirectly holds at least 15% of Volkswagen AG’s ordinary shares. The Extraordinary General Meeting also resolved that resolutions by the General Meeting that are required by law to be adopted by a qualified majority will – irrespective of the VW-Gesetz – continue to require a majority of more than 80% of the share capital represented when the resolution is adopted, unless another majority is prescribed by law.

Knightsbridge Vermögensverwaltungs- und Beteiligungs GmbH, Munich, CIA Consulting Investment Asset Management GmbH, Hamburg, CDHL-Vermögensverwaltungsgesellschaft mbH, Hamburg, VC-Services GmbH, Hamburg, and Edmund Zimmermann GmbH, Geesthacht, filed actions for avoidance and annulment of the resolutions of the Extraordinary General Meeting.

Shareholdings exceeding 10% of voting rights

Shareholdings in Volkswagen AG that exceed 10% of voting rights are shown in the Notes to the Annual Financial Statements of Volkswagen AG and in the Notes to the Volkswagen Consolidated Financial Statements.

Qatar sent Volkswagen AG a notification in January 2010 in accordance with section 27a(1) of the WpHG, which was published on January 25, 2010. It can be accessed at www.volkswagenag.com/ir.

Composition of the Supervisory Board

The Supervisory Board consists of 20 members, half of whom are shareholder representatives; as a general rule, shareholder representatives are elected by the Annual General Meeting. As soon as the resolution to this effect adopted by the Extraordinary General Meeting on December 3, 2009 is entered in the commercial register, the State of Lower Saxony will be entitled to appoint two members of the Supervisory Board, which would therefore reduce the number of shareholder representatives to be elected by the Annual General Meeting. Various actions for avoidance and annulment were filed against the resolution by the Extraordinary General Meeting on December 3, 2009 to grant the State of Lower Saxony such rights of appointment.

The other half of the Supervisory Board consists of employee representatives elected by the employees in accordance with the Mitbestimmungsgesetz (German Codetermination Act). A total of seven of these employee representatives are Company employees; the other three employee representatives on the Supervisory Board are representatives of the trade unions elected by the workforce. The Chairman of the Supervisory Board, generally a shareholder representative on the Supervisory Board who is elected by his Supervisory Board colleagues, has a casting vote in the Supervisory Board, in accordance with the Mitbestimmungsgesetz (German Codetermination Act).

Statutory requirements and requirements of the Articles of Association with regard to the appointment and removal of Board of Management members and to amendments to the Articles of Association

The appointment and removal of members of the Board of Management are governed by sections 84 and 85 of the AktG, whereby members of the Board of Management are appointed by the Supervisory Board for a maximum of five years. Board of Management members may be reappointed or have their term of office extended for a maximum of five years in each case. In addition, Article 6 of the Articles of Association states that the number of Board of Management members is stipulated by the Supervisory Board and that the Board of Management must consist of at least three persons.

Powers of the Board of Management, in particular concerning the issue of new shares and the repurchase of treasury shares

According to German stock corporation law, the Annual General Meeting can, for a maximum of five years, authorize the Board of Management to issue new shares. It can also authorize the Board of Management, for a maximum of five years, to issue convertible bonds on the basis of which new shares are to be issued. The Annual General Meeting also decides the extent to which shareholders have preemptive rights to the new shares. The highest amount of authorized share capital or contingent capital available for these purposes is determined by Article 4 of the Articles of Association of Volkswagen AG, as amended.

The Extraordinary General Meeting on December 3, 2009, resolved to authorize the Board of Management, with the consent of the Supervisory Board, to increase the share capital by a total of up to €345,600,000 (135 million new non-voting preferred bearer shares) on one or more occasions up to December 2, 2014. The shareholders are granted preemptive rights to the new shares issued.

Various actions for avoidance and annulment were filed against this resolution. Further details on the authorization to issue new shares and their permitted uses may be found in the Notes to the Consolidated Financial Statements.

Opportunities to acquire treasury shares are governed by section 71 of the AktG. At the most recent Annual General Meeting in Hamburg on April 23, 2009, the Board of Management was authorized, in accordance with section 71(1) no. 8 of the AktG and with the consent of the Supervisory Board, to acquire ordinary shares and/or non-voting preferred shares of Volkswagen AG on one or more occasions, up to a maximum of 10% of the share capital – i.e. up to a maximum of 40,016,362 shares – via the stock market or by way of a public purchase offer to all shareholders. This authorization applies until October 23, 2010.

Material agreements of the parent company that take effect in the event of a change of control following a takeover bid

A banking syndicate has granted Volkswagen AG a syndicated credit line amounting to €7.8 billion until June 2012. The syndicate members have the right to require the return of their portion of the credit line in the event of a change of control. Agreement was reached that, if a Porsche Group company should gain control of Volkswagen AG, a change of control will only take place if a control and profit and loss transfer agreement is entered into between Porsche Holding SE and Volkswagen AG.

Restrictions on the transfer of shares

To the Board of Management’s knowledge, there is a restriction on the transfer of Volkswagen AG shares in the amount of 17.0% of Volkswagen AG’s voting share capital for a period of approximately eight months from the date of this Annual Report by virtue of an agreement between shareholders of Volkswagen AG.

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