Shareholder Agreement / By Law
of VG Media Gesellschaft zur Verwertung der Urheber- und Leistungsschutzrechte von Medienunternehmen mbH
as amended on 22 September 2010
§ 1 Corporate Name, Registered Office and Financial Year
1. The Company shall bear the corporate name "VG Media Gesellschaft zur Verwertung der Urheber- und Leistungsschutzrechte von Medienunternehmen mbH."
2. The Company's registered office shall be in Berlin.
3. The financial year shall be the calendar year.
§ 2 Corporate Purpose
1. The corporate purpose of the Company shall consist in the representation in trust of the rights and claims arising from the Copyright Act for media companies that are assigned to it by the beneficiaries and the distribution of the earned revenues to the beneficiaries.
2. To achieve the corporate purpose, the Company shall be empowered to take part in mergers with other performance rights societies or to take shares in similar enterprises. The Company shall also be entitled to assume collection mandates from other performance rights societies, provided such societies have been licensed by the German Patent and Trademark Office in accordance with §§ 1, 2 and 18 of the Copyright Management Act. In addition to the original ancillary copyrights, the Company may also represent in trust the copyrights and ancillary copyrights of media companies granted or transferred by such media companies.
3. The Company may establish branch offices.
4. The business operations are not geared towards profit.
§ 3 Representation of Transferred Rights
1. A representation agreement shall be concluded with the beneficiaries concerning the type and scope of the rights and claims to be represented; the rights to be represented by the Company shall be transferred by way of such agreement.
2. The beneficiaries may terminate the representation agreement upon notice of three months.
3. The shareholders in general meeting shall decide with the approval of the Advisory Board which rights and duties in particular are to be included in the representation agreement.
§ 4 Distribution of Revenue
1. The revenue earned from the compensation claims and the other revenue shall be distributed to the beneficiaries pursuant to § 7 of the Copyright Management Act after deducting the administrative costs.
2. The revenue shall be distributed based on a distribution plan adopted by the shareholders in general meeting with the approval of the Advisory Board; such plan must be acknowledged by the beneficiaries when concluding the representation agreement.
3. The following principles are to be applied to the distribution plan:
a) As determinable by reasonable means, each beneficiary must receive the share of the distributable revenue allocable to the use of his or her rights.
b) If the individual usage share cannot be determined by reasonable means, general valuation and distribution rules are to be created to calculate the generally approximate shares.
c) The share of the total distributable revenue allocable to each beneficiary shall be determined, for example, in accordance with the market share and the technical range, and, if relevant, in accordance with other suitable criteria.
d) Separate tariffs and distribution plans may be created for the use of analog, digital, encrypted and unencrypted terrestrial and satellite signals in the total distributable revenue.
4. The settlement for each beneficiary must be made using the settlement key determined in the distribution plan corresponding to the principle established in § 4(3)a, specifying the percentage of administrative costs.
5. When distributing the revenue from the rights represented by the Company, due regard is to be paid to § 8 of the Copyright Management Act, which provides for the establishment of pension and support funds, only insofar as natural persons come into consideration as beneficiaries. In no event may the means for such social security purposes exceed 10% of the distributable revenue.
§ 5 Capital Stock
The Company's capital stock amounts to € 41,500 (in words: forty-one thousand five hundred euros) and has been fully paid in.
§ 6 Disposal and Encumbrance of Shares
1. The disposal and encumbrance of shares and fractions thereof shall require the approval of the shareholders in general meeting.
2. Shares may be divided at any time by resolution of the shareholders in general meeting; the nominal amount of the newly formed shares must be denominated in whole euros. Several fully paid-in shares of one shareholder may be consolidated by resolution of the shareholders in general meeting without the approval of the affected shareholder into a single share.
3. In the event of resolutions of the shareholders in general meeting pursuant to Paragraphs 1 and 2, the shareholder whose shares are affected shall also be entitled to vote.
§ 7 Managing Directors and Their Power of Representation
1. The Company shall have one or more managing directors.
2. If only one managing director is appointed, such managing director shall represent the Company alone. If several managing directors have been appointed, the Company shall be represented jointly by two managing directors or by one managing director jointly with a holder of commercial powers of attorney. Some or all managing directors may be authorized to represent the Company alone by the shareholders in general meeting. Furthermore, some or all managing directors may be released from the restrictions of § 181 of the Civil Code generally or in specific cases and in whole or in part.
3. The managing directors shall be appointed and dismissed by the shareholders in general meeting. The shareholders in general meeting shall conclude employment agreements with the managing directors; the shareholders in general meeting are also responsible for the modification, rescission and termination of employment agreements.
§ 8 Powers of Management
1. The rights and duties of the managing directors shall be established by law, this Shareholder Agreement, the employment agreements and resolutions adopted by the shareholders in general meeting and/or the Advisory Board. Managing directors must conduct the business with the diligence of a prudent businessperson.
2. If several managing directors are appointed, each of them shall be entitled internally to manage the Company alone.
3. The powers of management shall extend to all act in the ordinary course of the Company's business. Managerial acts outside the ordinary course of business shall require a prior affirmative shareholder resolution. Managerial acts subject to approval shall include in particular:
a) die Anschaffung von Wirtschaftsgütern des beweglichen Anlagevermögens, wenn der Einzelanschaffungswert € 10.000 übersteigt;
b) the acquisition of movable assets exceeding a value of € 10,000 each;
c) the establishment and dissolution of branch offices and permanent establishments;
d) the taking of shares in other enterprises and the disposal of such shareholdings;
e) the assumption of the status of a general partner;
f) the bestowal of loans and assumption of sureties, guaranties or similar obligations;
g) the issuance of general and specific commercial powers of attorney and the revocation and conclusion or white- or blue-collar employment agreements of all types, if the monthly charges to the Company exceed € 2,500;
h) the assumption of pension and other benefit claims;
i) the conclusion of legal transactions with a shareholder if the obligation of the Company within a single financial year exceeds a total amount of € 10,000, or, outside an employment relation, with a holder of commercial powers of attorney, commercial agent or other executive;
j) the borrowing of loans in a value of up to and including € 50,000 in any specific case.
§ 9 Shareholder Resolutions
1. The shareholders in general meeting shall have the tasks foreseen in § 46 of the GmbH Act. In particular, the shareholders in general meeting shall supervise the management and issue management instructions of a general and specific nature. The shareholders in general meeting shall moreover resolve on the items allocated to them by operation of law or these Articles of Association, particularly concerning:
a) the managerial acts subject to approval pursuant to § 8(3);
b) the appointment of members of the Advisory Board pursuant to § 10(2)a;
c) the selection of the auditor.
2. The shareholders shall meet in general meeting at least once per calendar year. Beyond this, general shareholders' meeting is to be convoked when
a) one or more shareholders whose shares together constitute at least a share of 20% of the capital stock request the convocation of a general shareholders' meeting while specifying the agenda;
b) prescribed Shareholder Agreement / by law or the management deems it necessary to convoke a general meeting; or
c) the Advisory Board resolves to convoke a general meeting.
The request pursuant to Litera a) must be sent in text form (§ 126b of the Civil Code) to management.
General shareholders' meeting shall take place at the Company's registered office, unless all shareholders approve another place of meeting.
3. Invitations to general shareholders' meetings shall be made by the management in text form (§ 126b of the Civil Code) providing notice of at least two weeks and specifying the agenda and the time and place of the meeting. When calculating the period, the day of the dispatch and the day of the meeting are not to be counted. Decisive of the observance of the period shall be the dispatch of the invitation, provided the invitation is sent (at least also) per fax or e-mail. In urgent cases, the period may be appropriately shortened by management. Unless an urgent event justifies a later notice, additions to the agenda must be communicated at the latest on the seventh day before the meeting in text form (§ 126b of the Civil Code); Sentence 3 shall apply correspondingly in this regard.
4. Resolutions of the shareholders shall in principle be adopted in general meetings. Unless another form of vote is mandatorily prescribed by law, resolutions may moreover also be adopted outside general meetings or by way of a combined vote by casting votes verbally, in text form (§ 126b of Civil Code), by phone and/or using other means of telecommunications or electronic media, provided:
a) the shareholders in general meeting previously approve or order the type of vote for the relevant subject of the resolution; or
b) no shareholder objects to this type of vote.
In the event of Litera b) above, the participation in the vote shall be considered as approval if the type of vote is not expressly objected at the same time by the affected shareholder; for the purposes of this provision, a shareholder shall take part in the vote if he or she abstains from voting. Management is to establish a reasonable period for the shareholders not taking part in the vote to declare an objection; in such event, the resolution shall then first become valid when either all shareholders not taking part in the vote approve or none of these shareholders protest to management within the period.
5. A quorum shall be constituted at general meetings when at least 75% of the capital stock is represented. If this is not the case, a new general meeting with the same agenda must immediately be convoked for a date two weeks after the first meeting at the earliest. A quorum shall be constituted at the second general meeting without regard to how many shareholders are present or represented, though only if reference is expressly made to this provision in the convocation.
6. Shareholders resolutions shall require a simple majority of the votes cast, unless a different majority is prescribed as compulsory Shareholder Agreement / by law or expressly stipulated in these Articles of Association. Shareholders shall vote in accordance with their shares. Each nominal euro amount of a share shall grant its holder one vote.
7. Shareholders may authorize each other or a third party in writing to represent them at general meetings. The chairperson of the Advisory Board or the vice chairperson shall be entitled to participate at general shareholders' meetings.
8. Unless a notarized instrument is required, written minutes must be kept of all shareholder resolutions, specifying the motions, and must be signed by the shareholder who assumed responsibility for drafting the minutes. The shareholders, management and the chairperson or vice chairperson of the Advisory Board must be sent copies of the minutes without delay. Minutes shall be considered as approved unless a protest is made to the Company within one month after receipt.
§ 10 Advisory Board
1. The Company shall have an Advisory Board, which shall [be entitled] to represent the beneficiaries in accordance with § 6(2) of the Copyright Management Act ("Beneficiaries"). The Advisory Board shall consist of 10 members.
2. The Advisory Board shall be composed as follows:
a) four members shall be elected by the shareholders in general meeting for the period until the cessation of the general meeting in which the shareholders resolve on the approval of the annual financial statements for the third financial year as of the start of the term of office; the financial year in which the term of office commences shall be counted. The following shareholders or shareholder groups shall be entitled to a nomination right in accordance with the details of the provisions below. The shareholders in general meeting shall be bound to such nominations.
The shareholders of the Radio Division shall jointly have a right to nominate two Advisory Board members.
The shareholders of the Television Division shall be entitled to nominate two further Advisory Board members. The relevant nomination rights shall be divided among the shareholders of the Television Division in accordance with their shareholdings in the capital stock of the Company so that a shareholder in the capital stock of more than 20% but less than 40% shall establish the right to nominate one Advisory Board member and a shareholder in the capital stock of at least 40% shall establish a right to nominate two Advisory Board members. Several shareholders of the Television Division may also consolidate their shareholdings in the capital stock to exercise corresponding nomination rights and then exercise the relevant nomination rights jointly.
(For example: Three shareholders from the Television Division each holding 8% of the shares jointly have a right to nominate one Advisory Board member; three shareholders from the Television Division each holding 15% of the shares jointly have a right to nominate two Advisory Board members).
b) Six further members shall be elected for the period until the cessation of the annual assembly of the Beneficiaries that takes place in the fourth financial meeting from the start of the term of office each by a majority of 70% of the votes cast at an assembly of all Beneficiaries convoked for this purpose by management; the financial year in which the term of office commences shall be counted. Every two Advisory Board members must stem from the Radio Division and every four must stem from the Advisory Board members from the Television Division. In the assembly of the Beneficiaries, each Beneficiary shall have one vote; during the election of the Advisory Board members from the Radio Division, however, only Beneficiaries from the Radio Division shall be entitled to vote; and during the election of the Advisory Board members from the Television Division only Beneficiaries from the Television Division shall be entitled to vote.
3. By majority of 70 % of the votes cast, the assembly of Beneficiaries may elect for the term of office designated in Paragraph 2, Litera b), Sentence 1 up to six alternate members, who, in the event of the withdrawal of any member elected in accordance with Paragraph 2, Litera b), shall replace such member for his or her residual term of office; Paragraph 2, Litera b), Sentence 3 shall apply accordingly.
4. Advisory Board members in the terms of Paragraph 2 may only be natural persons who are Beneficiaries or the legal representatives or authorized full-time employees of entitled legal persons that have concluded a representation agreement with the Company or the legal representatives or authorized full-time employees of a company that pertains to the same corporate group as the entitled legal person pursuant to § 18 of the Corporation Act or is affiliated therewith pursuant to § 15 of the Corporation Act.
5. Advisory Board members shall withdraw from the Advisory Board upon the expiration of their representation agreement or the expiration of the representation agreement of the legal person whom they represent or by whom they have been commissioned. The term of office of an Advisory Board member shall automatically cease when the member withdraws from the entitled legal person whom the relevant member represents or when the powers of attorney of a commissioned Advisory Board member are revoked by the entitled legal person delegating such powers. The withdrawn members shall be replaced for the residual term of office of the withdrawn members
a) in the case of Advisory Board members elected by the shareholders in general meeting by members to be newly appointed without delay by the shareholders pursuant to Paragraph 2, Litera a);
b) in the case of Advisory Board members elected by the assembly of Beneficiaries the alternate members elected in accordance with Paragraph 3 or, if no alternate members have been elected, members who are elected pursuant to Paragraph 2, Litera b) in the next assembly of Beneficiaries following the withdrawal.
6. The Advisory Board shall resolve on:
a) he determination of the rights to be represented by the Company and the terms and conditions of the representation agreements pursuant to § 3 and modifications of the representation agreements;
b) the preparation, supplementation and modification of distribution plans for the rights represented by the Company pursuant to § 4;
c) the preparation, modification and retraction of tariffs pursuant to § 13 of the Copyright Management Act;
d) the conclusion of reciprocity agreements with other performance rights societies;
e) the conclusion of collection agreements;
f) the conduct of litigation in landmark issues with an amount in controversy of at least € 25,000, the invocation of arbitral tribunals in accordance with § 14 of the Copyright Management Act and the appeal of their decisions;
g) the Company's annual framework plan, particularly the budget and personnel;
h) the annual financial statements to be presented to the shareholders in general meeting;
i) the acquisition, sale and encumbrance of real properties and leasehold rights;
j) he borrowing of loans in an amount exceeding € 50,000 in any specific case;
k) the bestowal of loans and the assumption of sureties, guarantees or other similar obligations;
l) the conclusion of lease, operating lease, delivery and service agreements with a fixed term of more than five years;
m) shareholdings in other enterprises and the relinquishment of such shareholdings.
If a valid resolution is not reached for a new financial year concerning the framework plan pursuant to Litera g), the framework plan of the preceding financial year shall continue to apply to the new financial year, unless some provisions are obviously not transferable in any way. This shall apply so long as no valid resolution concerning the framework plan is reached for the new financial year. The managing directors shall be entitled to act until such date based on the preceding framework plan.
7. An extraordinary assembly of the Beneficiaries is to be convened by management if requested by 25% of the Beneficiaries in writing. Such assembly must take place at the latest on the 90th day after receipt of the convocation request. By way of a qualified majority of 70% of the votes cast, the assembly of Beneficiaries may make motions for resolution by the Advisory Board pursuant to Paragraph 6, Literi a) to f) and may also dismiss and/or re-elect Advisory Board members pursuant to Paragraph 2, Litera b) or alternate members pursuant to Paragraph 3. Paragraph 2, Litera b), Sentence 3 shall apply accordingly, subject to the provision that the second clause thereof shall also be applicable to the dismissal of Advisory Board members and the alternative members thereof.
8. The Advisory Board members and alternative members in office as of the effective date of the Articles of Association revised by resolution of the shareholders in general meeting on 22 September 2010 shall remain in office without regard to the new provision on the composition of the Advisory Board for the period until the dates below:
a) In the case of Advisory Board members elected by the shareholders in general meeting: until the end of the general meeting in which the shareholders elect new Advisory Board members pursuant to Paragraph 2, Litera a), though at maximum until the end of the general meeting in which the shareholders resolve on the approval of the annual financial statements for the financial year ending 31 December 2010.
b) In the case of Advisory Board members and alternative members elected by the assembly of Beneficiaries: until the end of the annual the assembly of Beneficiaries in 2011.
Other grounds for cessation of the office of Advisory Board members or alternative members shall not be prejudiced hereby.
§ 11 Advisory Board Resolutions
1. The Advisory Board shall gather in meetings at least twice per year and, beyond this, when requested by the majority of the Advisory Board members or the chairperson or vice chairperson or the shareholders in general meeting. Advisory Board meetings shall take place at the Company's registered office, unless another place of meeting is approved by all Advisory Board members. The managing directors are to participate at Advisory Board meetings.
2. The invitations to the Advisory Board meetings are to be made by management in text form (§ 126b of the Civil Code) providing a notice period of at least two weeks and specifying the agenda and the time and place of the meeting. When calculating the period, the day of the dispatch and the day of the meeting are not to be counted. Decisive of the observance of the period shall be the dispatch of the invitation, provided the invitation is sent (at least also) per fax or e-mail. In urgent cases, the period may be appropriately shortened by management. Unless an urgent event justifies a later notice, additions to the agenda must be communicated at the latest on the fifth day before the meeting in text form (§ 126b of the Civil Code); Sentence 3 shall apply correspondingly in this regard.
3. Unless stipulated otherwise in Paragraphs 5 and 6 below, a quorum of the Advisory Board shall be constituted when at least half of the members are present or represented or participate otherwise in the voting pursuant to Paragraph 7.
4. Unless expressly stipulated otherwise, resolutions of the Advisory Board shall be adopted by a simple majority of votes. Each Advisory Board member shall have one vote.
5. Resolutions related to the radio distribution plan may only be adopted with the participation of all Advisory Board representatives of the Radio Division in the vote and with a majority of the votes cast by the Advisory Board representatives of the Radio Division. Resolutions related to the television distribution plan may only be adopted with the participation of all Advisory Board representatives of the Television Division in the vote and with a majority of the votes cast by the Advisory Board representatives of the Television Division. Should resolutions concern both radio and television, the Advisory Board members shall endeavor to obtain consensus during the vote between the Advisory Board representatives of the Radio Division and the Advisory Board representatives of the Television Division. With respect to the division of the compensation and the use of the programs on broadband cable, the Advisory Board representatives of the Radio Division and of the Television Division have agreed on a distribution key of 15% radio and 85% television.
6. If no quorum of the Advisory Board has been constituted pursuant to Paragraph 5 above for a resolution foreseen in the agenda because, despite a proper summons, not all Advisory Board representatives of the Radio Division or of the Television Division necessary in accordance with Paragraph 5 take part in the vote, a resolution pursuant to Paragraph 5 above may be adopted at variance with the provision of Paragraph 5 in a newly convoked meeting of the Advisory Board whose agenda contains the same item of business irrespective of the number of Advisory Board representatives of the Radio and/or Television Divisions participating in the vote, provided reference is made to this fact in the summons. The majority requirements pursuant to Paragraph 5 above shall also apply to the vote in this newly convoked meeting.
7. Resolutions of the Advisory Board may moreover be adopted outside meetings (or by way of combined voting) by votes cast in text form (§ 126b of the Civil Code), provided no Advisory Board member objects to this type of vote. Participation in the vote shall be considered as approval, provided the type of vote is not at the same time expressly protested by the relevant Advisory Board member; for purposes of this provision, an Advisory Board member shall take part in the vote if he or she abstains from voting. The Advisory Board chairperson is to establish a reasonable period for the Advisory Board members not taking part in the vote to declare an objection; in such event, the resolution shall then first become valid when either all Advisory Board members not taking part in the vote approve or none of these Advisory Board members protest to the chairperson within the period.
8. The Advisory Board shall elect from its midst for the duration of its term of office a chairperson and two vice chairpersons. Re-elections shall be permissible. The vice chairpersons shall carry out the duties of the chairperson if the latter is hindered from doing so; if no order of vice chairpersons is determined during the election, both vice chairpersons shall be entitled individually in this regard.
9. Advisory Board members may authorize each other in writing to represent them in Advisory Board meetings.
10. At the request of a majority of its members, the Advisory Board may involve experts at specific meetings to provide advice.
11. Written minutes must be kept of the deliberations and resolutions of the Advisory Board and must be signed by the chairperson or the substitute person chairing the meeting. A minutes keeper who need not pertain to the Advisory Board may be involved. Management must be sent a signed copy of the minutes without delay. Minutes shall be considered as approved, unless opposed by an Advisory Board member in writing within one month after the dispatch.
§ 12 Annual Financial Statements
1. The annual financial statements (with notes and a management report and the income statement) are to be prepared by the managing directors within the periods foreseen Shareholder Agreement / by law and signed by all managing directors.
2. The annual financial statements are to be audited by an auditor. A written report must be prepared about the audit and must contain an auditor's opinion in accordance with § 9(5) of the Copyright Management Act. The annual financial statements must be published pursuant to § 9(6) of the Copyright Management Act.
3. If the annual financial statements are subsequently modified or corrected, particularly based on a tax field audit by the competent revenue service office, the modified or corrected annual financial statements shall be decisive.
4. Should it become evident during the settlement with the competent revenue service office that performances of the Company to the shareholders are found to be hidden profit distributions, the respectively affected shareholder hereby agrees to pay back the corresponding amounts to the Company without delay.
§ 13 Duration of Company
1. The Company shall exist for an indefinite period of time. The Company may be terminated upon observance of a notice period of 6 months effective from the end of any financial year by registered letter to the Company.
2. If a shareholder terminates the Company, the other shareholders shall have the right to approve the continuation of the Company by simple majority. In such event the terminating shareholder shall be obligated to transfer its share to the Company or a shareholder determined by the Company or a third party determined by the Company; the consideration shall be determined in accordance with § 16. If the continuation resolution pursuant to Sentence 1 is not adopted, the shareholders shall be obligated to approve the wind-up of the Company.
§ 14 Redemption of Shares
1. If the initial contributions are fully paid in, a share may be redeemed with the approval of the affected shareholder. The redemption shall be valid upon receipt of the redemption resolution by the shareholder.
2. Shares may also be redeemed without the approval of the affected shareholder (compulsory amortization) in the event:
a) judicial insolvency proceedings are initiated concerning the assets of a shareholder or the initiation of such proceedings is dismissed due to a lack of assets;
b) the share of a shareholder is attached based on a not merely provisionally enforceable judgment and the attachment is not lifted within a period of 6 weeks;
c) good cause exists, particularly if a shareholder breaches its shareholder duties grossly and persistently.
3. The redemption shall be made in return form compensation. The amount of the compensation shall be determined in accordance with § 16.
4. The redemption shall be made by resolution of the shareholders; the affected shareholder may not participate in the vote. If the Company only consists of two shareholders, the redemption shall be made by declaration to the affected shareholder.
§ 15 Exclusion of a Shareholder
1. Under the conditions under which shares may be redeemed in accordance with § 14(2), the affected shareholder may be excluded from the Company by shareholder resolution. The shareholder shall then be obligated, at the choice of the Company, to assign its share in whole or in part to the Company itself, to one or more shareholders or to a third party to be named by the Company.
2. In the event of a vote pursuant to Paragraph 1, the affected shareholder may not participate in the vote.
3. Otherwise, § 16 shall apply.
§ 16 Valuation of Shares
1. In all events in which a shareholder withdraws from the Company by termination, redemption or exclusion, the shareholder shall receive an indemnity for its share. The indemnity shall be determined in accordance with the value assessed by the revenue service office for such share. If no such value can be determined any longer, the value shall be computed by an independent auditor proposed by the Independent Auditors' Institute. The estimate of the independent auditor shall exclude recourse to courts of law.
2. If a shareholder (withdrawn shareholder) can demand consideration for the transfer of its share based on the provisions of this Agreement, the shareholder shall only be entitled to such consideration, unless stipulated otherwise or prohibited by compulsory provisions of law, in three equal installments, whereby the first installment shall be due one month after the determination of the consideration, the second installment one year later and the third installment two years later. The consideration shall accrue interest from the due date at a rate of 2% above the 3-month EURIBOR. The party obligated to render the consideration shall be entitled to pay the consideration early at any time in whole or in part.
§ 17 Final Provisions
1. All agreements of the shareholders between themselves and with the Company relating to the corporate relation must be made in writing, unless notarization is prescribed by law.
2. Should any provisions of this Agreement be invalid, the Agreement shall otherwise remain valid. In such an event, the invalid provision is to be replaced by a resolution of the shareholders in general meeting which most closely approximates the financial purpose intended with the invalid provision. This shall also apply in the event any contractual gaps become evident during the performance of this Agreement.
§ 18 Notices
Notices of the Company shall only be made in the electronic Bundesanzeiger.