The Supervisory Board (“SB”) is a mandatory corporate body of an Austrian Joint Stock Corporation.

Division of Duties:  The SB controls the management of the Company. It appoints the members of the Executive Board (“EB”) and is also entitled to dismiss them in case of existence of an important reason. Certain management decisions by the EB require prior approval by the SB (e.g. the purchase and sale of real estate plots or the establishment or closing of branches).

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The SB is entitled to review the Company books and records as well as to demand reports from the EB. Moreover, the SB reviews the annual financial statements of the Company.

Composition: The SB consists of at least 3 but not more than 20 members. Only physical persons with full legal capacity can be SB members. The SB members elect their Chairman and at least one Deputy Chairman. The Chairman represents the SB vis-à-vis third parties and coordinates its actions. An SB member of a listed Joint Stock Corporation who, during the last 2 years before his/her appointment as SB member, was an EB member of such Company is not eligible to be elected Chairman of the SB. Decisions by the SB require a simple majority vote of its members. In general, the Chairman of the SB has no casting vote (in German: “Dirimierungsrecht”). Members of the EB of a Joint Stock Corporation or its subsidiaries, their alternates and employees in charge of the management of the Joint Stock Corporation cannot be SB members. Moreover, a person is not eligible to be appointed an SB member if he/she (i) is already an SB member of 10 other companies or (ii) is the legal representative of a subsidiary of the Joint Stock Corporation in which he/she shall become an SB member or (iii) is the legal representative of a Company with an SB one of whose members is at the same time an EB member of the Joint Stock Corporation in which he/she shall become an SB member, except in cases in which the involved companies are part of a multi-corporate enterprise.

Appointment/Dismissal Competence:  The SB members are appointed by way of Shareholders’ resolution (simple majority vote) at a General Meeting (“GM”) or nominated by individual Shareholders on grounds of the Articles of Association (“AoA”). Furthermore, pursuant to the Austrian Labor Constitution Act, the body representative of employees is entitled to nominate one SB member for every 2 members appointed by the Shareholders. An SB member´s term of office expires at the end of the GM deciding on such SB member´s discharge for the fourth financial year after his/her appointment. The term of office of a member of the first SB, however, expires at the end of the GM deciding on such SB member´s discharge for the first financial year after his/her appointment. Dismissal of an SB member requires a respective Shareholders’ resolution to be passed with a majority of 75 % of the votes cast. The members of the first SB may be dismissed by simple majority vote. 10 % of the registered share capital may demand dismissal of an SB member by the competent court in case of existence of an important reason (e.g. inability to perform his duties, gross violation of duties etc.). SB members who were appointed by individual Shareholders may be dismissed by such Shareholders at any time. Moreover, 10 % of the registered share capital may demand dismissal of such SB member by the competent court in case of existence of an important reason (e.g. inability to perform his/her duties, gross violation of duties etc.).

Alternates: The rights of an SB member cannot be exercised by a third party. However, an SB member may authorize another member in writing to represent him‑/herself in the course of a single SB Meeting. If the Chairman is unable to fulfill his/her obligations, he/she is represented by the Deputy Chairman.

For a description of how to change the respective board members, please see the individual steps in the "Step-by-Step"-schedules below. As all information on how to change board members in Austria on the CBM Site by nature is generic (i.e. does not include specific requirements for listed companies, special requirements in statutory documents or as otherwise stipulated in any type of special law), we strongly recommend seeking legal advice with Cerha Hempel Spiegelfeld Hlawati Partnerschaft von Rechtsanwälten before actually changing any board members in Austria.