1. Name, Registered Office, Duration 1.1. The name of the Company shall be KTM Power Sports AG.
1.2. The place of the Company's registered office shall be Mattighofen.
1.3. The duration of the company shall not be limited to a definite period of time.
2. Object of the Company's Business 2.1. The object of the Company's business shall be development, manufacturing and distribution of motorised leisure equipment (Power Sports), in particular under the "KTM" trademark, as well as acquisition of interests in enterprises for development, manufacturing and distribution of such equipment.
2.2. The Company shall be entitled to carry out all transactions and to take all measures which are 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 and companies or interests therein, to take on management and representation of such enterprises and companies as well as to lease and let assets.
2.3. The company shall not be entitled to engage in banking business.
3. Publications The announcements of the Company shall be published in "Wiener Zeitung". 4. Registered Capital, Bearer Shares 4.1. The Company's registered capital amounts to EUR 6,892,643.00 (six million eight hundred and ninety-two thousand six hundred and forty-three euros) and is divided into 6,892,643 (six million eight hundred and ninety-two thousand six hundred and forty-three) shares with a nominal value of EUR 1 (one euro) each.
4.2. All shares shall be bearer shares.
4.3. If in the case of a capital increase the resolution on such capital increase fails to provide whether the shares should be registered shares or bearer shares, they shall also be bearer shares.
4.4. The executive board shall be entitled, for a maximum period of five years after registration of this amendment to the Articles of Association in the Business Register, with the consent of the supervisory board to increase the registered capital of the Company by up to a nominal value of EUR 3,000,000.00 (in words: three million euros) by issuance of 3,000,000 (in words: three million) bearer shares in the nominal value of EUR 1 (in words: one euro) each at a minimum initial offering price of 100% (in words: one hundred per cent) against contributions and to determine the initial offering price as well as the terms of issuance, and the executive board shall be authorised, with the consent of the supervisory board, to determine that the new shares be taken over by a bank as defined in Section 153 para (6) Austrian Statue on Joint-stock Companies [Aktiengesetz/AktG] with the obligation to offer such shares to the shareholders for acquisition.
5. Form and Content of the Share Certificates 5.1. The form and content of the share certificates, interim certificates, dividend coupons, renewal coupons and debentures and other securities to be issued by the Company shall be determined by the Executive Board.
5.2. The Company shall be entitled to combine several shares in one certificate (global share certificate). Unless the Company is obliged to issue individual share certificates due to other statutory provisions, the shareholder's claim for issuance of individual share certificates shall be excluded in accordance with Section 10 para 6 AktG.. 6. Bodies of the Company
The Company's bodies shall be:
A) the Executive Board
B) the Supervisory Board
C) the Shareholders' Meeting.
A) The Executive Board:
7. Members, Appointment and Management 7.1. The Executive Board shall consist of one, two, three, four or five persons. Appointment of deputy members shall be admissible. The last time that an appointment as executive board member is possible shall be before the age limit of 65 years is reached.
7.2. The Supervisory board shall determine the allocation of tasks on the Executive Board and the transactions which, in addition to those provided for by law (Section 95 para 5 AktG), require its consent; to the extent provided for by law (Section 95 para 5 items 1, 2, 4, 5 and 6 AktG) the Supervisory Board shall also determine pecuniary limits up to which the consent of the Supervisory Board shall not be necessary. The Supervisory Board shall issue internal rules of procedure for the Executive Board.
7.3. The Executive Board 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 Executive Board shall pass its resolutions by simple majority. If a member of the Executive Board has been appointed chairman, the chairman shall have the casting vote in the case of a tie.
8. Representation 8.1. If the Executive Board consists of only one person, the Company shall be represented by the same; if the Executive Board consists of several persons, the Company shall be represented by two Executive Board members jointly or by any of them jointly with a Prokurist [translator's note: authorised officer].
8.2. The Supervisory Board shall be authorised to decide that sole power of representation be granted to individual or all members of the Executive Board.
B) The Supervisory Board:
9. Number and Appointment of the Supervisory Board Members 9.1. The Supervisory Board shall consist of at least three and not more than six members elected by the Shareholders' Meeting.
9.2. Unless they are elected for a shorter term of office, members of the Supervisory Board shall be elected for a term ending at the end of the Shareholders' Meeting that resolves on approval of the actions of the Supervisory Board in respect of the fourth business year following the election of the members of the Supervisory Board; the financial year in which the election takes place shall not be counted. Re-election shall be permissible. The last time that an appointment as supervisory board member is possible shall be before the age limit of 75 years is reached. Section 87 para 4 AktG shall apply to appointment of the first Supervisory Board.
9.3. Every Supervisory Board member may retire from office by giving four weeks' notice to the chairman by registered letter. By-elections, if any, 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. After the shareholders' meeting at which all Supervisory Board members to be elected by it 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 not be convened separately. The chairman and his deputy together shall form the chair of the Supervisory Board.
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 establish 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 in writing, by telephone, cable, fax or e-mail.
11.2. The Supervisory Board shall constitute a quorum if at least three of the members elected by the Shareholders' Meeting are present. Mutual representation of Supervisory Board members according to Section para 6 AktG shall be 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 by voting by secure electronic signature as defined in Section 4 Austrian Signature Act [Signaturgesetz] 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 or fax about the matter to be resolved upon including a request to comment thereon within a period of at least three days of service of the request. If no such comment is made within the fixed period, this shall be considered a vote against it. Objections, if any, against such mode of voting shall be made in writing or via fax to the chairman of the election within the same period. Receipt of the relevant statement by the chairman of the election shall in each case be decisive for timeliness of the objection or comment.
12. Resolutions 12.1. The Supervisory Board shall pass its resolutions by simple majority of the members present or represented. In the case of a tie the chairman of the meeting shall have the casting vote. Contracts, in particular consulting contracts of the Company with individual Supervisory Board members or companies closely connected with them shall require the consent of the entire Supervisory Board, except for transactions of everyday life. The chairman of the meeting shall determine the mode of voting. In the case of voting in writing or voting via fax or voting via secure electronic signature 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 other than at meetings shall be presented at the next meeting of the Supervisory Board and recorded in 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 Executive Board's reporting duty in more detail. In particular, the Supervisory Board may decide that in connection with the reporting duty the Executive Board shall have to prepare income statements, investment plans and other forecast budgets, budgeted balance sheets and financial plans the type and scope of which shall be defined in more detail by the Supervisory Board, and 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 about the facts and circumstances that have become known to them in connection with their activities. With respect to such obligation to maintain secrecy it shall be 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 shall be prohibited from passing on documents they received or prepared themselves in connection with their activities to third parties who do not belong to the Supervisory Board. Persons attending Supervisory Board meetings who are no members of the Supervisory Board shall be expressly put under an obligation to maintain secrecy.
16. Remuneration of the Supervisory Board The members of the Supervisory Board shall be reimbursed the cash expenses incurred by them in carrying out their activities. In addition, they may be granted remuneration by resolution of an ordinary shareholders' meeting the amount of which shall be determined by the shareholders' meeting in consideration of Section 98 AktG. Any taxes payable on the remuneration of the Supervisory Board shall be borne by the Company.
C) The Shareholders' Meeting:
17. Place and Convening of Shareholders' Meetings 17.1. Shareholders' meetings shall be convened by the Supervisory Board or the Executive Board. The invitation shall be published in accordance with Article 18; publication shall be made at least three weeks prior to the Shareholders' Meeting.
17.2. Shareholders' Meetings shall be held at the registered office of the Company or at Mattighofen or at a district town in Upper Austria or provincial capital of Austria stated in the invitation to the Shareholders' Meeting.
18. Right to Attend a Shareholders' Meeting 18.1. If shares or interim certificates have been issued only those shareholders are entitled to attend the shareholders' meeting who deposit their shares (interim certificates) with the Company, an Austrian notary public, the head office of an Austrian bank or with those Austrian or foreign banks stated in the invitation to the shareholders' meeting within the periods stated in the following paragraphs during business hours until the end of the shareholders' meeting.
18.2. The shares (interim certificates) must be deposited in such a timely manner that at least three working days lie between the day of depositing and the date of the shareholders' meeting; as of invitation to the shareholders' meeting the shareholders shall have at least fourteen days to deposit their shares; the day of publication shall not be counted. If the last day of that period is a Sunday or public holiday, the following working day shall also be available to the shareholders for depositing their shares. For the purposes of these provisions Saturdays, Good Friday, 24 (twenty-fourth) December and 31 (thirty-first) December shall not be deemed working days but holidays.
18.3. Shares shall also be considered deposited duly if they are blocked for the/a depository with the depository's consent with other banks until the end of the Shareholders' Meeting.
18.4. The depositories shall submit the certificate of deposit to the Company not later than one day after expiration of the deposit period.
18.5. If shares (interim certificates) have not been issued, the prerequisites to be fulfilled by the shareholders to be allowed to attend the Shareholders' Meeting shall be announced when the meeting is convened.
19. Voting Right 19.1. The voting right shall correspond to the nominal value of the shares.
19.2. Exercise of the voting right by proxy shall only be possible if a written proxy is presented, which shall be kept by the Company. In the case that a voting right is exercised as laid down in Section 114 para 4 AktG the requirement that the proxy be kept by the Company shall not apply.
20. Chair and Passing of Resolutions at the Shareholders' Meeting 20.1. Shareholders' Meetings shall be chaired by the chairman of the Supervisory Board or by his deputy. If none 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.
20.2. The chairman shall chair the meeting, determine the order of the items to be discussed and the mode of voting.
20.3. Unless the law mandatorily provides for a different majority the Shareholders' Meeting shall pass its resolutions by simple majority of the votes cast and in the cases where a majority of the capital is required by simple majority of the registered capital represented at the time the resolution is passed. 21. Business Year and Annual Financial Statements 21.1. The business year shall be from 1 (first) September until 31 (thirty-first) August of the following year.
21.2. In the first five months of a business year the Executive Board shall prepare annual financial statements including notes, consolidated financial statements and a management report for the past business year and, after they have been audited by the auditor, present them to the Supervisory Board including a proposal for distribution of the profit.
21.3. Within the first eight months of each business year the Shareholders' Meeting shall resolve on distribution of the net profit, approval of the actions of the Executive Board and the Supervisory Board, on election of the auditor and, in the cases provided for by law, on adoption of the annual financial statements (ordinary shareholders' meeting).
22. Distribution of Profit 22.1. The Shareholders' Meeting shall resolve on appropriation of the net profit for the year. The net profit for the year to be distributed among the shareholders shall be distributed in proportion to the contributions made to the nominal value of the shares. Contributions made in 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 determined.
22.2. Unless otherwise resolved by the Shareholders' Meeting, profit shares shall be due for payment 14 (fourteen) days after the Shareholders' Meeting was held.
22.3. Profit shares of shareholders that are not collected within three years of the due date shall forfeit for the benefit of the Company's statutory reserve.
