Articles of Association
I. General provisions:
1. Company name, registered office and duration
1.1. The name of the Company is KTM AG.
1.2. The place of the Company’s registered office is Mattighofen.
1.3. The duration of the Company is indefinite.
2. Object of the Company’s business
2.1. The object of the Company’s business is the development, manufacture and distribution of motorised leisure equipment (Power Sports), in particular under the “KTM” trademark, as well as the acquisition of interests in enterprises for the development, manufacture and distribution of such equipment.
2.2. The Company shall be entitled to perform all business and to take all measures deemed necessary or expedient to fulfil the objective of the Company, in particular to establish branches and subsidiaries in Austria and abroad, to acquire other enterprises or companies or interests therein, to take on management and representation of such enterprises or companies and to lease out and let assets.
2.3. The Company is not authorised to engage in banking business.
Announcements of the Company shall be made in the “Official Journal of Wiener Zeitung”, to the extent that and as long as mandatorily required under the Austrian Joint-Stock Companies Act [Aktiengesetz/AktG]. For the remainder, announcements of the Company shall be made in accordance with the respectively applicable statutory regulations. All announcements shall also be made available on the Company’s website.
II. Stock and shares:
4. Registered capital, bearer shares
4.1. The Company’s registered capital amounts to € 10,845,000.00 (ten million eight hundred and fourty five thousand euros) and is divided into 10,845,000 (ten million eight hundred and fourty five thousand) shares with a nominal value of € 1.00 (one euro) each. From the Company’s registered capital, € 9,330,000.00 is deposited in cash. According to the contribution agreement and the agreement on a contribution in kind dated 26 February 2010, CROSS Finanzierungs GmbH, FN 256459 x, has claimed a loan receivable at the nominal amount of € 12,200,000.00 including interest, and Mag. Hans-Jörg Hofer, born 30 January 1949, has claimed a loan receivable at the nominal amount of € 600,000.00 including interest respectively towards KTM-Sportmotorcycle AG, FN 116267 g in the form of a contribution in kind. In return for this contribution in kind, CROSS Finanzierungs GmbH received 742,484 bearer shares and Mr Hans-Jörg Hofer received 36,516 bearer shares. By the Agreement on a Contribution to Capital and a Contribution in Kind of 1 March 2011 CROSS Industries AG, FN 261823 i, contributed its share in KTM Immobilien GmbH, FN 351879 w, corresponding to a fully paid in initial capital of EUR 34,650.00 (thirty four thousand six hundred and fifty euros) which equals a share of 99% (ninety nine per cent) by contribution in kind. In return for this contribution CROSS Industries AG received 355,000 bearer shares. By the Agreement on a Contribution to Capital and a Contribution in Kind of 1 June 2012 CROSS Industries AG, FN 261823 i, contributed its claim to the company at a nominal value of EUR 8,400,000.00 arising from the loan agreement with Raiffeisen Zentralbank Österreich Aktiengesellschaft on 8 May 2009 on the grant of a collateral loan of EUR 42 million insofar as they are not collateralized by a liability assumed by the Province of Upper Austria by contribution in kind. In return for this contribution CROSS Industries AG received 336,000 bearer shares.
4.2. All shares are bearer shares.
4.3. If in the case of a capital increase the resolution on such capital increase fails to indicate whether the shares should be registered shares or bearer shares, they shall also be bearer shares.
4.4. The board of directors shall be entitled, for a maximum period of five years after registration of this amendment to the Articles of Association in the commercial register, and with the consent of the supervisory board, to increase the registered capital of the Company – if necessary, in several tranches – by a maximum total amount of € 2,526,000.00 by means of issuing 2,526,000 bearer shares in the nominal value of € 1.00 (one euro) each at a minimum initial offering price of 100 % (one hundred percent) against contributions in cash and to determine the initial offering price as well as the issuing terms with the consent of the supervisory board, whereby the board of directors shall be authorised, with the consent of the supervisory board, to determine that the new shares be subscribed for by a bank as defined in Section 153 para 6 AktG subject to the obligation to offer such shares to the shareholders for subscription.
5. Form and content of the share certificates
5.1. The form and content of the share certificates, dividend coupons, renewal coupons and debentures and other securities to be issued by the Company shall be determined by the board of directors.
5.2. The Company shall be entitled to combine several shares in one certificate (global certificate). The right of the shareholder to securitize his proportion is excluded.
III. Constitution of the company:
6. Bodies of the Company
The bodies of the Company are:
A) The board of directors
B) The supervisory board
C) The general meeting.
A) The board of directors:
7. Members, appointment and management
7.1. The board of directors shall consist of one, two, three, four or five persons. Appointment of deputy members is admissible. The last time that an individual may be appointed as a member of the board of directors is before reaching the age limit of 65 years.
7.2. The supervisory board shall determine the allocation of tasks for the board of directors and the transactions which, in addition to those provided for by law (Section 95 para 5 AktG), require its approval; to the extent provided for by law (Section 95 para 5 lines 1, 2, 4, 5 and 6 AktG), the supervisory board shall also determine pecuniary limits up to which approval from the supervisory board is not required. The supervisory board shall issue internal rules of procedure for the board of directors.
7.3. The board of directors shall manage the business of the Company in accordance with and subject to the laws, these Articles of Association and the internal rules of procedure to be resolved by the supervisory board.
7.4. The board of directors shall pass its resolutions by simple majority. If a member of the board of directors has been appointed chairman of the board of directors by the supervisory board, the chairman shall have the casting vote in the event of a tie.
8.1. If the board of directors consists of one person, the Company shall be represented by the same; if the board of directors consists of several persons, the Company shall be represented by two board members jointly or by any of them together with an authorised signatory.
8.2. The supervisory board shall be authorised to stipulate that sole power of representation be granted to individual or all members of the board of directors.
B) The supervisory board:
9. Number and appointment of supervisory board members
9.1. The supervisory board shall consist of at least three and no more than six members elected by the general meeting. The election of supervisory board members shall be subject to the provisions of Section 87 AktG.
9.2. Unless they are elected for a shorter term of office, members of the supervisory board shall be elected for a term expiring at the end of the general meeting that resolves on approval of the actions of the supervisory board for the fourth business year following the election; the business year in which the election takes place shall not be counted. Re-election is permissible. The last time that an individual may be appointed as a member of the board of directors is before reaching the age limit of 75 years. Section 87 para 9 AktG shall apply to the appointment of the first supervisory board.
9.3. Every supervisory board member may retire from office by giving at least four weeks’ notice to the chairman by registered letter. The chairman shall address his notice of retirement to his deputy. If elected supervisory board members retire from the supervisory board prior to expiry of their terms of office, a by-election must be held immediately only if the number of supervisory board members falls below three. Any by-elections shall be held only for the residual term of office of the retired supervisory board member.
10. Internal procedures of the supervisory board
10.1. Immediately after the general meeting at which all supervisory board members to be elected by the general meeting have been elected, the supervisory board shall elect a chairman and a deputy chairman from among its members for the entire term of office of the supervisory board, at a meeting which shall be held without special invitation. If at an election no member is elected by absolute majority, a second ballot shall be held between the two persons who received the most votes. If the second ballot results in a tie, the decision shall be made by drawing lots. The chairman and his deputy shall together form the chair of the supervisory board. The chairman and the deputy chairman may be re-elected. If he acts as representative of the chairman, the deputy chairman shall have the same rights and duties as the chairman.
10.2. If the chairman of the supervisory board or his deputy retires early during his term of office, the supervisory board shall hold a new election.
10.3. The supervisory board may appoint committees from among its members and confer certain powers upon them.
10.4. The supervisory board shall issue internal rules of procedure for itself.
11. Meetings of the supervisory board
11.1. Meetings of the supervisory board shall be convened by the chairman or his deputy by means of letter, phone, cable, fax or e-mail.
11.2. The supervisory board shall constitute a quorum if at least three members elected by the general meeting are present. Representation of supervisory board members by other supervisory board members as laid down in Section 95 para 7 AktG is permissible. The meeting shall be chaired by the chairman or, if he is unable to attend the meeting, by his deputy.
11.3. Resolutions may be passed in writing or by voting via fax or e-mail if no member of the supervisory board objects to such procedure. The chairman or, if he is unable to do so, his deputy shall inform the other supervisory board members by registered letter, fax or e-mail about the matter to be resolved and shall include a request to comment thereon within a period of at least three days of issuing the request. If no such comment is made within the prescribed period, this shall be considered as a vote against it. Any objections to such mode of voting shall be raised within the same period, by letter, fax or e-mail, to the person conducting the voting. Receipt of the relevant comment by the person conducting the voting shall in any case be decisive for the timeliness of the objection or comment. In the case of written votes or votes sent by fax or e-mail, representation by other supervisory board members is not permitted.
11.4. The provisions of Articles 11.1 to 11.3 shall apply mutatis mutandis to supervisory board committees. If a committee consists of only two members, the committee shall only constitute a quorum if both members are present.
12.1. The supervisory board shall pass its resolutions by simple majority of the members who are present or represented. In the case of a tie, the chairman of the meeting shall have the casting vote - this regulation also holds true with respect to elections. Contracts, in particular consulting contracts of the Company with individual supervisory board members or related companies, shall require approval from the entire supervisory board, with the exception of routine daily business transactions. The chairman of the meeting shall determine the mode of voting. In the case of written voting or voting via fax or e-mail, these provisions shall apply mutatis mutandis.
12.2. Minutes shall be kept on the discussions and resolutions of the supervisory board, which shall be signed by the chairman or his deputy. Resolutions passed outside of meetings shall be presented at the next meeting of the supervisory board and included in the minutes.
12.3. The supervisory board shall be authorised to resolve on amendments to the Articles of Association that only concern the form.
13. Declarations of intent of the supervisory board
Declarations of intent of the supervisory board and its committees shall be made by the chairman of the supervisory board or, if he is unable to do so, by his deputy.
14. Reporting duties
In addition to the statutory regulation, the supervisory board may define the board of directors’ reporting duty in more detail. In particular, the supervisory board may decide that, in connection with the reporting duty, the board of directors shall be required to prepare income statements, investment plans and other forecast budgets, budget balance sheets and financial plans – the type and scope of which shall be defined in more detail by the supervisory board – and shall present the same to the supervisory board or the chairman of the supervisory board on a regular basis.
15. Obligation to maintain secrecy
The members of the supervisory board shall maintain secrecy over the facts and circumstances that have become known to them in connection with their activities. With respect to this obligation to maintain secrecy, it is irrelevant whether knowledge of such facts or circumstances may also be obtained by other persons or not. In addition, the members of the supervisory board are prohibited from passing on documents they received or prepared themselves in connection with their activities to third parties who are not on the supervisory board. Persons attending supervisory board meetings who are not members of the supervisory board must be expressly subjected to an obligation to maintain secrecy, unless they are already subject to a statutory obligation to maintain secrecy.
16. Remuneration of the supervisory board
The members of the supervisory board shall be reimbursed for cash expenses which they incur while performing their duties. In addition, they may be granted remuneration by resolution of an annual general meeting, the amount of which shall be determined by the general meeting in consideration of Section 98 AktG. If the term of office of a supervisory board member starts or ends during a business year, the remuneration shall be granted on a pro-rata basis. The supervisory board shall be responsible for distributing the remuneration to the members. Any taxes payable on the remuneration of the supervisory board shall be borne by the Company.
C) The general meeting:
17. Place and convening of general meetings
17.1. General meetings shall be convened by the supervisory board or the board of directors. The invitation to the general meeting shall be published in accordance with the law and in consideration of Article 3 and Article 18.
17.2. General meetings shall be held at the Company’s registered office or in Mattighofen or in a district town in Upper Austria or the provincial capital of Austria stated in the invitation to the general meeting.
18. Right to attend general meetings
18.1. The right to attend general meetings and exercise shareholder’s rights depends on the shareholding as at the end of the tenth day before the day of the general meeting (evidence date). Shareholders who wish to attend a general meeting and exercise shareholder’s rights must provide the Company with evidence of their shareholding as at the evidence date.
18.2. In the case of bearer shares kept by a depositary, a deposit certificate as defined in Section 10a AktG, which must be received by the Company no later than on the third business day before the general meeting, shall suffice as evidence of the shareholding. The deposit certificate shall be issued by the custodian bank,, the registered office of which must be in a Member State of the European Economic Area or in a Full Member State of the OECD. The deposit certificate shall contain the information provided for in Section 10a para 2 AktG as a minimum. If the deposit certificate is to serve the purpose of evidence of current shareholder status, it must not be older than seven days at the time of being presented to the Company. Deposit certificates must be in writing.
19. Voting right
19.1. The voting right shall correspond to the nominal value of the shares.
19.2. Voting rights may be exercised by proxy if a proxy was issued; this shall be submitted to and retained or provably recorded by the Company. The written form shall be sufficient in all cases. If a shareholder has issued a proxy to his custodian bank (Section 10a AktG), it shall suffice if, in addition to providing the deposit certificate, the bank declares that it has been granted proxy. The proxy may also be submitted to the Company by letter, fax or e-mail to the contact person advised in connection with the invitation.
20. Chair and passing of resolutions at general meetings
20.1. General meetings shall be chaired by the chairman of the supervisory board or by his deputy. If neither of the two has appeared or is willing to chair the meeting, the notary invited for recording shall chair the meeting until election of a chairman. If at an election nobody is elected by absolute majority, a second ballot shall be held between those two persons who received the most votes. If the second ballot results in a tie, the decision shall be made by drawing lots.
20.2. The chairman shall chair the meeting and determine the order of the items to be discussed and the mode of voting. If several motions have been filed regarding a specific item on the agenda, the chairman shall also determine, in accordance with the law, in particular Section 119 para 3 AktG, the order in which those motions shall be resolved on.
20.3. If in the case of elections no absolute majority of the votes cast can be reached in the first ballot, a second ballot shall be held between the two candidates who received the most votes. If the second ballot results in a tie, the decision shall be made by drawing lots.
IV. Business year and profit appropriation:
21. Business year
An abbreviated business year shall be established for the period from 1 (first) September 2010 to 31 (thirty-first) December 2010. The subsequent business years shall be identical to the calendar year.
22. Distribution of profit
22.1. The general meeting shall decide on the appropriation of the net profit for the year. The general meeting may exclude the net profit for the year from the distribution, in whole or in part. The net profit for the year that is to be distributed among the shareholders shall be distributed in proportion to the contributions made on the nominal value of the shares. Contributions made during the course of the business year shall be taken into account in proportion to the time that has lapsed since the contribution was made. When issuing new shares, a different regulation may be stipulated.
22.2. Unless otherwise resolved by the general meeting, profit shares shall be due for payment fourteen days after the general meeting was held.
22.3. Profit shares of shareholders that are not collected within three years of the due date shall be forfeited for the benefit of the Company’s statutory reserve.
23. Regulation on languages
23.1. Legally effective notifications by shareholders, or by third parties acting on their behalf or in their name (e.g. banks), shall be addressed to the Company in German or English. This applies to deposit certificates in particular.
23.2. The language at general meetings shall be German.