0001104659-14-025052.txt : 20140402 0001104659-14-025052.hdr.sgml : 20140402 20140402100433 ACCESSION NUMBER: 0001104659-14-025052 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 20140402 FILED AS OF DATE: 20140402 DATE AS OF CHANGE: 20140402 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Fresenius Medical Care AG & Co. KGaA CENTRAL INDEX KEY: 0001333141 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISC HEALTH & ALLIED SERVICES, NEC [8090] IRS NUMBER: 000000000 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-32749 FILM NUMBER: 14736449 BUSINESS ADDRESS: STREET 1: ELSE-KROENER STRASSE 1 CITY: BAD HOMBURG STATE: 2M ZIP: 61352 BUSINESS PHONE: 011-49-6172-6090 MAIL ADDRESS: STREET 1: ELSE-KROENER STRASSE 1 CITY: BAD HOMBURG STATE: 2M ZIP: 61352 6-K 1 a14-9014_16k.htm 6-K

 

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER

 

Pursuant to Rule 13a-16 or 15d-16 of the

Securities Exchange Act of 1934

 

For the month of April 2014

 

FRESENIUS MEDICAL CARE AG & Co. KGaA

(Translation of registrant’s name into English)

 

Else-Kröner Strasse 1

61346 Bad Homburg

Germany

(Address of principal executive offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F x

Form 40-F o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

 

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes o

No x

 

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82

 

 

 



 

On April 2, 2014 the Company published in the German electronic-Bundesanzeiger (Federal Gazette) the invitation and agenda for its 2014 Annual General Meeting (“AGM”) of Shareholders to be held May 15, 2014. The invitation and agenda for the 2014 AGM has been posted on the Company’s web site, www.fmc-ag.com, and is being furnished as an exhibit to this Report on Form 6-K. The Company has also posted on its web site two other reports referred to in the AGM invitation — the report of the Company’s Supervisory Board and the report of the Company’s general partner pursuant to § 289 ss. 4 and § 315 ss. 4 of the German Commercial Code. The Company is also furnishing with this Form 6-K report, copies of the report of the Company’s Supervisory Board and the report of the Company’s General Partner referred to in the AGM invitation.

 

On or about April 14, 2014 the Depositary for the American Depositary Receipts (“ADRs”) representing the Company’s ordinary shares will distribute to ADR holders (a) the AGM invitation and agenda, (b) a voting instruction card for ADR holders and (c) the Report of the Company’s Supervisory Board. The Company will also furnish to the ADR Depositary certain additional information (the “Supplemental Information”) that the Company has agreed to make available to its ADR holders pursuant to the Pooling Agreement among the Company, Fresenius Medical Care Management AG, the Company’s general partner, Fresenius SE & Co. KGaA and the Company’s independent directors designated in the Pooling Agreement. The Supplemental Information, which is derived from the Company’s 2013 Annual Report on Form 20-F, relates to (i) security ownership of certain beneficial owners of the Company; (ii) trading markets for the Company’s securities, (iii) directors and senior management of the Company; (iv) compensation of the Company’s management board and our supervisory board; (v) options to purchase the Company’s securities, and (vi) material transactions between the Company and its subsidiaries and directors, officers and controlling persons of the Company. The Supplemental Information for ADR holders has also been posted on the Company’s web site, www.fmc-ag.com, and will be provided to any holder of ADRs without charge upon request made to the Depositary. The Supplemental Information is also being furnished with this report. The Company will furnish the ADR voting instruction card with a report on Form 6-K when they are distributed to ADR holders by the Depositary.

 

2



 

The Company’s Annual Report on Form 20-F and the Company’s 2013 Annual Report have each been posted on the Company’s web site.

 

EXHIBITS

 

The following exhibits are being furnished with this Report:

 

Exhibit 99.1

 

English convenience translations of the Invitation and Agenda for the Annual General Meeting of Shareholders to be held May 15, 2014 published in the German electronic-Bundesanzeiger (Federal Gazette).

 

 

 

Exhibit 99.2

 

Report of the Supervisory Board of Fresenius Medical Care AG & Co. KGaA for the Fiscal Year 2013

 

 

 

Exhibit 99.3

 

Explanatory report of the General Partner on data under § 289 ss. 4, § 315 ss. 4 Commercial Code

 

 

 

Exhibit 99.4

 

Supplemental Information for ADR holders

 

3



 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

DATE: April 2, 2014

 

 

FRESENIUS MEDICAL CARE AG & Co. KGaA,

 

a partnership limited by shares, represented by:

 

 

 

FRESENIUS MEDICAL CARE MANAGEMENT AG, its

 

general partner

 

 

 

 

 

 

 

By:

/s/ RICE POWELL

 

 

Name:

Rice Powell

 

 

Title:

Chief Executive Officer and

 

 

 

Chairman of the Management Board

 

 

 

of the General Partner

 

 

 

 

 

 

By:

/s/ MICHAEL BROSNAN

 

 

Name:

Michael Brosnan

 

 

Title:

Chief Financial Officer and

 

 

 

Member of the Management Board

 

 

 

of the General Partner

 

4


EX-99.1 2 a14-9014_1ex99d1.htm EX-99.1

Exhibit 99.1

 

 

Convenience Translation

 

Fresenius Medical Care AG & Co. KGaA

 

Hof an der Saale

 

Convening of the ordinary General Meeting

 

ISIN: DE0005785802 // Securities Identification No. 578580

ISIN: DE000A1YDGF6 // Securities Identification No. A1YDGF
ISIN: US3580291066

We hereby invite our shareholders to the ordinary General Meeting to be held on

Thursday, 15 May 2014, at 10:00 a.m.

in the Congress Center Messe Frankfurt,

Ludwig-Erhard-Anlage 1, 60327 Frankfurt am Main, Germany.

 

1



 

I. Agenda

 

1.                                     Presentation of the annual financial statements and consolidated group financial statements each approved by the Supervisory Board, the management reports for Fresenius Medical Care AG & Co. KGaA and the consolidated group, the report by the General Partner with regard to the information pursuant to sections 289 (4), 315 (4) of the German Commercial Code (Handelsgesetzbuch - HGB) and the report of the Supervisory Board of Fresenius Medical Care AG & Co. KGaA for fiscal year 2013; resolution on the approval of the annual financial statements of Fresenius Medical Care AG & Co. KGaA for fiscal year 2013

 

The Supervisory Board endorsed the annual financial statements and the consolidated group financial statements drawn up by the General Partner according to section 171 German Stock Corporation Act (Aktiengesetz - AktG). According to section 286 (1) AktG, the annual financial statements are to be submitted for approval by the General Meeting; the other aforementioned documents are to be made accessible to the General Meeting without requiring the passing of any additional resolution.

 

The General Partner and the Supervisory Board propose that the annual financial statements of Fresenius Medical Care AG & Co. KGaA for the fiscal year 2013 as presented, showing a profit of EUR 487,354,727.91, be approved.

 

2.                                     Resolution on the allocation of distributable profit

 

The General Partner and the Supervisory Board propose to allocate the profit shown in the annual financial statements in the amount of EUR 487,354,727.91 for the fiscal year 2013 as follows:

 

2



 

Distribution to shareholders by payment of a dividend of EUR 0.77 for each of the 301,446,779 ordinary shares entitled to a dividend

 

EUR

232,114,019.83

 

 

 

 

 

 

Profit carried forward to new account

 

EUR

255,240,708.08

 

 

 

 

 

 

Distributable profit

 

EUR

487,354,727.91

 

 

The dividend is payable on 16 May 2014.

 

3.                                     Resolution on the approval of the actions of the General Partner

 

The General Partner and the Supervisory Board propose to approve the actions of the General Partner of the Company during the fiscal year 2013.

 

4.                                     Resolution on the approval of the actions of the Supervisory Board

 

The General Partner and the Supervisory Board propose to approve the actions of the members of the Supervisory Board of the Company during the fiscal year 2013.

 

5.                                     Election of the auditors and consolidated group auditors for fiscal year 2014

 

The Supervisory Board, based on the recommendation of its Audit and Corporate Governance Committee (Prüfungsausschuss), proposes the election of KPMG AG Wirtschaftsprüfungsgesellschaft, Berlin, as auditor and consolidated group auditor for the fiscal year 2014.

 

6.                                     Resolution on the approval of the amendment of an existing profit and loss transfer agreement

 

On 23 December 1997, a profit and loss transfer agreement was entered into between Fresenius Medical Care AG & Co. KGaA and Fresenius Medical Care Beteiligungsgesellschaft mbH, whose shares are entirely held by Fresenius Medical Care AG & Co.

 

3



 

KGaA. With effect as of 1 January 1998, this agreement forms the basis for the fiscal unity for income tax purposes between Fresenius Medical Care AG & Co. KGaA as controlling entity (Organträgerin) and Fresenius Medical Care Beteiligungsgesellschaft mbH as controlled entity (Organgesellschaft).

 

In order to be able to continue this fiscal unity for income tax purposes fully in accordance with the relevant tax requirements also in the future, the existing profit and loss transfer agreement shall be amended as a result of a legislative change which came into force in the past fiscal year: The so-called Act on the Modification and Simplification of Company Taxation and of the Tax Treatment of Travel Expenses as of 20 February 2013 provides, inter alia, that profit and loss transfer agreements with controlled entities in the legal form of a GmbH must include a reference to the provision on loss compensation pursuant to section 302 AktG, as amended from time to time, to ensure that the fiscal unity for income tax purposes is continued to be recognized by the competent tax authorities.

 

With regard to this legislative change, Fresenius Medical Care AG & Co. KGaA has entered into an amendment agreement with Fresenius Medical Care Beteiligungsgesellschaft mbH dated 12 March 2014 by which the existing contractual provision on loss compensation in the profit and loss transfer agreement is replaced by such reference to section 302 AktG, as amended from time to time. Furthermore, the interest clause currently set forth in the profit and loss transfer agreement, pursuant to which the respective profit to be transferred according to the provisions of this agreement by Fresenius Medical Care Beteiligungsgesellschaft mbH accrues interest as of the balance sheet date at a rate of 3% p.a. above the discount interest rate of the German Federal Bank (Diskontsatz der Deutschen Bundesbank), is deleted. For the purposes of easier handling, Fresenius Medical Care AG & Co. KGaA and Fresenius Medical Care Beteiligungsgesellschaft mbH have agreed to amend the profit and loss transfer agreement by deleting this interest clause. No economic consequences arise from this deletion since the accrual of interest does not impact the net profits/net losses of Fresenius Medical Care AG & Co. KGaA. The profit and loss transfer agreed upon by the parties will cause the net total between interest income and interest expenditure on the one hand and profit and loss transfer on the other hand to remain unchanged. With the exception of singular editorial modifications following, inter alia, from the change of legal form of Fresenius Medical Care AG & Co. KGaA which became effective in 2006 and from a change of the

 

4



 

company seat of Fresenius Medical Care Beteiligungsgesellschaft mbH in 1999, no further amendments are made by virtue of the amendment agreement.

 

Therefore, the essential content of the amendment agreement is as follows:

 

·                 Fresenius Medical Care AG & Co. KGaA undertakes to compensate any losses incurred by Fresenius Medical Care Beteiligungsgesellschaft mbH in accordance with section 302 AktG, as amended from time to time.

 

·                 The interest clause currently set forth in the profit and loss transfer agreement, pursuant to which the respective profit to be transferred by Fresenius Medical Care Beteiligungsgesellschaft mbH according to the provisions of this agreement accrues interest as of the balance sheet date at a rate of 3% p.a. above the discount interest rate of the German Federal Bank, is deleted.

 

In addition to the approval of the Shareholder´s Meeting of Fresenius Medical Care Beteiligungsgesellschaft mbH, which has already been obtained by virtue of shareholder resolution dated 17 March 2014, the aforementioned amendment agreement also requires the approval of the General Meeting of Fresenius Medical Care AG & Co. KGaA. The amendment agreement will come into effect upon the approval of the General Meeting of Fresenius Medical Care AG & Co. KGaA and the subsequent registration with the competent commercial register for Fresenius Medical Care Beteiligungsgesellschaft mbH in Bad Homburg v. d. Höhe.

 

The General Partner and the management board of Fresenius Medical Care Beteiligungsgesellschaft mbH have prepared a joint report in accordance with the statutory provisions (section 278 (3) AktG in connection with sections 295 (1) and 293a AktG), which, together with other documents to be disclosed, is available from the date of the convening of the General Meeting on the website of the Company under http://www.fmc-ag.com/AGM2014.htm.

 

Since all shares of Fresenius Medical Care Beteiligungsgesellschaft mbH are held by Fresenius Medical Care AG & Co. KGaA, neither an audit of the amendments to the profit and loss transfer agreement by a contract auditor (Vertragsprüfer) nor a respective audit report were required (section 278 (3) AktG in connection with sections 295 (1), 293b (1),

 

5



 

293c (1) AktG). Also for this reason, no compensation or settlement payments with regard to the amended profit and loss transfer agreement need to be made in the future.

 

The General Partner and the Supervisory Board propose to approve the amendment agreement between Fresenius Medical Care AG & Co. KGaA and Fresenius Medical Care Beteiligungsgesellschaft mbH dated 12 March 2014 to the profit and loss transfer agreement of 23 December 1997.

 

6



 

II. Further information regarding the convening of the
Annual General Meeting

 

Total number of shares and voting rights

 

At the time of the convening of the ordinary General Meeting, the share capital of the Company is composed of 309,107,675 non-par value shares and consists solely of bearer ordinary shares. At the time of the convening of the ordinary General Meeting, the Company holds a total of 7,548,951 treasury shares which do not entitle the Company to any rights. Therefore, the total number of shares carrying participation and voting rights at the time of the convening of the ordinary General Meeting amounts to 301,558,724 shares.

 

Conditions for participation in the General Meeting and for the exercise of the voting right

 

Only those shareholders who have registered with the Company in text form in the German or the English language by the end of 8 May 2014 (24:00 hours Central European Summer Time — CEST), at the latest at the following address

 

Fresenius Medical Care AG & Co. KGaA

c/o Computershare Operations Center

80249 Munich

Germany

Telefax: +49 89 30903 - 74675

E-Mail: anmeldestelle@computershare.de

 

and who have provided the Company with evidence of their entitlement to attend the General Meeting are entitled to participate and vote in the ordinary General Meeting. As evidence of their entitlement to attend the General Meeting and to exercise their voting right, shareholders must, by the end of 8 May 2014 (24:00 hours CEST), at the latest, provide evidence of their shareholding issued by their depositary bank in text form in the German or the English language to the aforementioned address referring to the beginning

 

7



 

of 24 April 2014, (00:00 hours CEST) (“Evidence Date”).

 

Significance of the Evidence Date

 

As regards the participation in the General Meeting and the exercise of the voting right only such persons qualify as shareholders of the Company who have provided evidence of their shareholding. The right of participation and the extent of the voting rights are solely determined by the shareholding on the Evidence Date. The Evidence Date is not accompanied by a lock on the sale of shares. Even in case of a complete or partial sale of the shareholding after the Evidence Date, this has no effect on the entitlement to participate and on the voting right. This also applies accordingly to the acquisition of shares after the Evidence Date. Persons who do not hold shares on the Evidence Date and become shareholders only thereafter are entitled to participate and vote for the shares held by them only to the extent that they are authorized by proxy or otherwise authorized to exercise rights. However, the Evidence Date has no significance for the entitlement to a dividend as this entitlement only depends on the shareholder status on the day of the resolution on the distribution of profits by the ordinary General Meeting.

 

Proxy voting procedure

 

Shareholders may also have their voting rights in the ordinary General Meeting exercised by a proxy, e.g. the depositary bank, an association of shareholders or another person of their choice. If the shareholder authorizes more than one person, the Company can reject one or more of such persons. The issue of the proxy, its revocation and the evidence of authorization to be presented to the Company require the text form; financial institutions, shareholders’ associations and persons equated thereto according to section 278 (3) AktG in connection with sections 135 (8) AktG and 135 (10) AktG in connection with section 125 (5) AktG may — to the extent powers of attorney are issued to them — provide for deviating provisions.

 

The evidence of the appointment of an authorized person may be submitted to the following address or be presented at the entrance to the meeting venue of the General Meeting on the day of the General Meeting:

 

8



 

Fresenius Medical Care AG & Co. KGaA
 - Investor Relations -
Else-Kröner-Straße 1
61352 Bad Homburg v. d. H.
Germany
Telefax: +49 (0)6172-609-2301
E-Mail: ir@fmc-ag.com

 

Procedure regarding Company-named proxies acting on shareholders’ voting instructions

 

The Company offers that shareholders may issue powers of attorney to proxies named by the Company who are bound to shareholders’ voting instructions. Such persons are employees of the Company or of an affiliated company who vote on the respective items of the agenda on the basis of powers of attorney by shareholders and in accordance with the instructions issued by them. The proxies named by the Company must, for this purpose, be issued powers of attorney in text form as well as express and unambiguous instructions for the exercise of the voting right. The proxies named by the Company are obligated to vote in accordance with the instructions. They cannot exercise the voting rights at their own discretion. To the extent there is no express and unambiguous instruction, the proxies named by the Company will abstain from voting on the respective voting matter.

 

Powers of attorney including voting instructions for the proxies named by the Company may already be submitted to the Company prior to the General Meeting. In this case, powers of attorney and voting instructions must be received by the Company until 12 May 2014 (24:00 CEST) at the following address:

 

Fresenius Medical Care AG & Co. KGaA

c/o Computershare Operations Center

80249 Munich

 

9



 

Germany

Telefax: +49 89 30903 - 74675

E-Mail: anmeldestelle@computershare.de

 

Irrespective of the above, shareholders may issue powers of attorney and voting instructions to proxies named by the Company during the General Meeting.

 

Further information on the proxy voting procedure

 

The shareholders shall receive forms for powers of attorney and for voting instructions as well as further information regarding the issuing of powers of attorney together with the entrance ticket.

 

Timely registration and evidence of the shareholding in accordance with the foregoing provisions are also required in case a power of attorney is issued. This does not exclude any granting of powers of attorney after the registration has occurred.

 

Rights of shareholders according to section 278 (3) AktG in connection with sections 122 (2), 126 (1), 127, 131 (1) AktG

 

Supplemental requests to the agenda at the request of a minority according to section 278 (3) AktG in connection with section 122 (2) AktG

 

Shareholders whose total combined shares amount to the twentieth part of the registered share capital or the proportionate amount of the share capital of EUR 500,000 (that is equivalent to 500,000 non-par value shares), can request, according to section 278 (3) AktG in connection with section 122 (2) AktG, that items be placed on the agenda and notice thereof be given. For each new item, reasons or a draft resolution must be attached.

 

Supplemental requests must be received by the Company at least 30 days prior to the Meeting in writing. The day of receipt and the day of the General Meeting are not included

 

10



 

in that calculation. Therefore, the last possible date for receipt is Monday, 14 April 2014 (24:00 hours CEST). Supplemental requests received after that date cannot be taken into account.

 

Applicants must provide evidence that they are holding the minimum quantity of shares for at least three months prior to the day of the General Meeting and that they hold the shares until the decision on the supplemental request (section 278 (3) AktG in connection with sections 142 (2) sentence 2 AktG, 122 (1) sentence 3, (2) sentence 1 AktG).

 

We ask shareholders to submit any supplemental requests to the following address:

 

Fresenius Medical Care AG & Co. KGaA

Die persönlich haftende Gesellschafterin

Fresenius Medical Care Management AG

- Vorstand -

Att. Mr. Rice Powell

Else-Kröner-Straße 1
61352 Bad Homburg v. d. H.

Germany

 

Motions and proposals for election by shareholders according to section 278 (3) AktG in connection with sections 126 (1), 127 AktG

 

Shareholders may send countermotions to the Company regarding proposals made by the General Partner and the Supervisory Board pertaining to a specific item on the agenda prior to the General Meeting. Shareholders may also make proposals for the election of the auditors. Reasons must be given for countermotions. For proposals for election, however, no reasons need to be given.

 

Countermotions and proposals for election to be made accessible that have been received at the address mentioned below at least 14 days prior to the General Meeting, the day of receipt and the day of the General Meeting not being included in the calculation, i.e. 30 April 2014 (24:00 hours CEST) at the latest, will be made available on the Company’s

 

11



 

website to the other shareholders, including the name of the shareholder and any reasons given at http://www.fmc-ag.com/AGM2014.htm. Any comments of the management will be also published there.

 

Countermotions and proposals for election are to be sent only to

 

Fresenius Medical Care AG & Co. KGaA
 - Investor Relations -
Else-Kröner-Straße 1
61352 Bad Homburg v. d. H.
Germany
Telefax: +49 (0)6172-609-2301
E-Mail: ir@fmc-ag.com

 

Countermotions and proposals for election sent to any other address cannot be taken into account.

 

Countermotions and reasons given do not need to be made accessible under the prerequisites set out in section 126 (2) sentence 1 AktG. According to section 126 (2) sentence 2 AktG, the reasons for a countermotion do not need to be made accessible if they amount to more than 5,000 characters in total.

 

Section 126 AktG applies analogously to the proposal of a shareholder for the election of auditors pursuant to section 127 AktG. Proposals for the election of auditors according to section 127 AktG will moreover only be made accessible if they contain the name, the profession exercised and the residential address of the proposed person or the name and registered office of the proposed legal entity.

 

Shareholders’ information rights according to section 278 (3) AktG in connection with sections 131 (1), 293g (3) AktG

 

According to section 278 (3) AktG in connection with section 131 (1) AktG, information on the affairs of the Company including the legal and business relationships with affiliated enterprises and on the situation of the group and the enterprises included in the consolidated group financial statements is to be given by the General Partner to every

 

12



 

shareholder upon the latter’s request in the General Meeting. This only applies to the extent the information is necessary for a proper evaluation of the item on the agenda. In connection with agenda item 6 and in accordance with section 278 (3) AktG in connection with section 293g (3) AktG, each shareholder shall upon request also be provided with information at the General Meeting on all matters of Fresenius Medical Care Beteiligungsgesellschaft mbH as other party (anderer Vertragsteil) that are material for the conclusion of the agreement.

 

Further explanations on the rights of the shareholders under section 278 (3) AktG in connection with sections 122 (2), 126 (1), 127, 131 (1), 293g (3) AktG are available on the Company’s website at http://www.fmc-ag.com/AGM2014.htm.

 

Availability of documents

 

From the day of the convening of the ordinary General Meeting, the following documents, amongst others, are available for inspection by the shareholders in the offices of the Company, Fresenius Medical Care AG & Co. KGaA, Else-Kröner-Straße 1, 61352 Bad Homburg v. d. H., Germany:

 

1)                  the annual financial statements and consolidated group financial statements approved by the Supervisory Board;

2)                  the management reports for Fresenius Medical Care AG & Co. KGaA and the consolidated group;

3)                  the report by the General Partner with regard to the information pursuant to sections 289 (4), 315 (4) HGB;

4)                  the General Partner’s proposal on the allocation of distributable profit;

5)                  the report of the Supervisory Board of Fresenius Medical Care AG & Co. KGaA for fiscal year 2013;

6)                  the annual report for the Fresenius Medical Care Group for fiscal year 2013 which contains the Report on Corporate Governance including the Remuneration Report as well as the Declaration on Corporate Governance for fiscal year 2013;

7)                  the report of the Joint Committee of the Company of 12 March 2014;

 

13



 

8)                  the profit and loss transfer agreement of 23 December 1997 concluded between

Fresenius Medical Care AG and Fresenius Beteiligungs GmbH;

9)                  the amendment agreement of 12 March 2014 concluded between Fresenius Medical Care AG & Co. KGaA and Fresenius Medical Care Beteiligungsgesellschaft mbH regarding the profit and loss transfer agreement of 23 December 1997 as well as the wording of the profit and loss transfer agreement following the amendment agreement;

10)           the annual financial statements and the management reports of Fresenius Medical Care AG & Co. KGaA as well as the annual financial statements of Fresenius Medical Care Beteiligungsgesellschaft mbH for the respective previous three business years; and

11)           the joint report of the General Partner of Fresenius Medical Care AG & Co. KGaA and the management board of Fresenius Medical Care Beteiligungsgesellschaft mbH pursuant to sections 295 (1) sentence 2, 293a AktG of 12 March 2014.

 

On request, each shareholder shall receive a copy of the aforementioned documents promptly and free of charge. These documents will, however, also be made available at the General Meeting of the Company.

 

The aforementioned documents and the information required pursuant to section 278 (3) AktG in connection with section 124a AktG are also available on the Company’s website at http://www.fmc-ag.com/AGM2014.htm.

 

Transmission in sound and vision

 

On the day of the General Meeting, the speech of the chairman of the Management Board of the General Partner will be broadcast in sound and vision if the chairman of the Meeting so orders. In this case, it can be followed live on the internet at http://www.fmc-ag.com/AGM2014.htm.

 

Hof an der Saale, April 2014

 

14



 

Fresenius Medical Care AG & Co. KGaA

The General Partner

Fresenius Medical Care Management AG

The Management Board

 

15



 

Information for holders of American Depositary Receipts regarding the Annual General Meeting

 

- ISIN: US3580291066 -

 

Holders of ADRs will generally submit their voting instructions to BNY Mellon, who, in its capacity as Depositary Bank, will then exercise the voting rights according to the instructions provided by the holders of ADRs. Guidelines as to the exercise of voting rights by means of “Proxy Voting” can be found in the materials of the Annual General Meeting, which will be sent to the holders of ADRs. Voting instructions must be received by BNY Mellon by 2 May 2014 (prior to 5 p.m. New York Time) at the latest.

 

Should, on an exceptional basis, a holder of ADRs wish to exercise voting rights in person at the Annual General Meeting, BNY Mellon will try on a best efforts basis to provide holders of ADRs with this possibility. However, due to the considerable amount of time required, an exercise of voting rights in person may not be guaranteed in all instances.

 

The custodian banks are advised of the separate publications in the German Wertpapier-Mitteilungen.

 

Hof an der Saale, April 2014

 

Fresenius Medical Care AG & Co. KGaA

The General Partner

Fresenius Medical Care Management AG

The Management Board

 

16


EX-99.2 3 a14-9014_1ex99d2.htm EX-99.2

Exhibit 99.2

 

Report of the Supervisory Board
of Fresenius Medical Care AG & Co. KGaA
for the Financial Year 2013

 

The supervisory board of Fresenius Medical Care AG & Co. KGaA dealt in the financial year 2013 again intensively with questions of the effects of the change to the cost reimbursement system in the U.S.A., with the expansion of the present business, with possibilities to expand business activities to include adjacent business areas and with questions of research and development. In addition to other topics, the further improvement of efficiency of production and service and cost-saving measures were discussed with the management board of the general partner. The supervisory board also considered the conversion of the remaining preference shares into ordinary shares resolved on by the shareholders in May 2013 and the conduct of the share buy back program initiated in the financial year 2013.

 

Details:

 

The supervisory board, in the expired financial year 2013, again dealt extensively with the situation and the perspectives of the company and with various special issues and undertook the duties imposed on it by the law, the Articles of Association, the rules of procedure and the German Corporate Governance Code. We regularly advised the management board of the general partner, Fresenius Medical Care Management AG (Management), on the management of the company and supervised the Management within our responsibility as the supervisory board of the partnership limited by shares. The management informed us in written and oral reports regularly, promptly and comprehensively about all significant questions of business policy and the company planning and strategy, the progress of transactions, on acquisitions, the profitability and liquidity, the situation of the company and the group and the risk

 

1



 

situation and risk management. These and all business issues significant for the company were discussed by us on the basis of reports of the management board of the general partner in the committees and in full session comprehensively. The strategic direction of the company was also discussed with the management board of the general partner. In accordance with the procedure in previous years, we again reviewed the economic development of acquisitions of the previous years and compared them with the planning and prognoses at the time of each acquisition. The supervisory board passed resolutions within the scope of its responsibilities under statute and under the Articles of Association.

 

Meetings:

 

In the financial year 2013, five meetings — some of which extended to more than one day - of the supervisory board and several telephone conferences took place. No supervisory board member attended less than half of the meetings. Between the meetings, written reports were provided. The chairman of the supervisory board also maintained close contact with the management board of the general partner between the meetings.

 

Focus of the Discussions in the Supervisory Board

 

In the expired financial year 2013, the supervisory board dealt again with the changed provisions of the reimbursement system in the U.S.A. and with their effects on the company. The decisions now made by the responsible U.S. authority indicate a framework for state reimbursement in the U.S.A. for the medium-term. The supervisory board consulted with the management board of the general partner a number of times on this issue. The developments in reimbursement systems outside the U.S.A. were also discussed.

 

The business development, the competitive situation and the planning of the management board in the respective regions were again at the centre of the discussions. The supervisory board has

 

2



 

been informed about the planning of the company to improve the cost situation.

 

The supervisory board informed itself about the quality assurance systems and the qualitative results of the various production facilities and together with the management board discussed the anticipated quantitative development in the existing facilities and their expansion. The supervisory board also discussed with the management board lawsuits filed and anticipated to be filed by plaintiffs in the U.S.A. alleging generally that inadequate labeling and warnings for two acid concentrate products (NaturaLyte® and Granuflo®) caused harm to patients.

 

The financing of the company was again intensively discussed. The supervisory board also discussed the execution of the share buy back program and agreed thereto after comprehensive discussion with the management board of the general partner.

 

At the ordinary general meeting 2013, it was decided to convert all remaining preference shares of the company into ordinary shares. The supervisory board was intensively involved in this process.

 

The Audit and Corporate Governance Committee

 

Prof. Dr. Fahrholz, Mr. Johnston, Dr. Krick und Dr. Weisman were members of the Audit and Corporate Governance Committee.  The Audit and Corporate Governance Committee, under the chairmanship of Dr. Walter L. Weisman (independent financial expert according to Sec. 100 ss. 5 German Stock Corporation Act) held a total of five meetings and a number of telephone conferences in the year under report. It dealt with the annual and consolidated financial statements, the proposal for the application of profit and the Form 20-F report for the American Securities and Exchange Commission (SEC). The Audit and Corporate Governance Committee also discussed each quarterly report with the Management. It also satisfied itself as to the independence of the auditor of the annual and consolidated financial statements, instructed him to undertake

 

3



 

the audit, concluded the fee agreement with him and discussed and determined with him the focuses of the audit. The Audit and Corporate Governance Committee also discussed the compliance of the company, in particular communications received by the Company alleging certain conduct in certain countries outside the U.S.A and Germany that may violate the U.S. Foreign Corrupt Practices Act (“FCPA”) or other anti-bribery laws. The Audit and Corporate Governance Committee is conducting an internal review with assistance of outside counsel retained for such purpose, which also covered the internal control processes. It is anticipated that the Audit and Corporate Governance Committee will continue to deal with the progress of this investigation in the current year since at the end of the year under report no final results were available.

 

Representatives of the auditor attended all meetings of the Audit and Corporate Governance Committee and several telephone conferences and reported thereby on their auditing and the audit review of the quarterly financial statements and, in the absence of members of the management board of the general partner, on the cooperation with them. The representatives of the auditor also reported on the significant results of their audit and were also available for additional information.

 

The accounting process, the effectiveness of the internal control system, of the risk management system and of the internal audit system, as well as the audit were discussed several times in the Audit and Corporate Governance Committee. KPMG AG Wirtschaftsprüfungsgesellschaft reviewed, in the course of the audit, the internal control and risk management system in relation to the accounting process and the establishment of the early risk recognition system and raised no objections thereto. The management board of the general partner provided periodic reports on larger individual risks. The management board of the general partner also informed the committee regularly i.e. at all ordinary meetings of the Audit and Corporate Government Committee and sometimes in telephone conferences on the compliance situation of the company. In addition, the head of internal audit reported at regular intervals to the committee.

 

4



 

In 2013, the Audit and Corporate Governance Committee again dealt with the internal control system of the company in accordance with the Sarbanes-Oxley Act (“SOX 404”). The company received on 25 February 2014 an unqualified audit certificate of KPMG AG Wirtschaftsprüfungsgesellschaft, Berlin, for the implementation of the regulations of SOX 404 in the financial year 2013.

 

The legal and business relations of the company to Fresenius SE & Co. KGaA and/or its affiliates were again subject matter of the reviews of the Audit and Corporate Governance Committee. It was possible to confirm in each case that the relationships corresponded to those “at arms’ length”.

 

The results of the discussions and resolutions of the Audit and Corporate Governance Committee were reported by its chairman to the supervisory board in each case.

 

Joint Committee

 

The Joint Committee, the approval of which is required for certain important transactions and certain transactions between the company and Fresenius SE & Co. KGaA and/or its affiliates, convened twice in 2013. The subject of both meetings of the Joint Committee was consideration of the approval of two contracts concluded by the company or its group companies with group companies of Fresenius SE & Co. KGaA. One of these contracts concerned IT services and the other the supply of various products in particular in the area of plasma collection. The Joint Committee after detailed debate respectively decided unanimously to approve these contracts. In accordance with Sec. 13e ss. 2 of the Articles of Association, the Joint Committee will report to the annual general meeting on its activity. The comprehensive report of the Joint Committee thereon is accessible on the Internet site of the company from the time of the convening of the annual general meeting.

 

For the general partner, its supervisory board members Dr. Ulf M. Schneider and Dr. Gerd Krick are delegated to the Joint Committee

 

5



 

of the company and for Fresenius Medical Care AG & Co KGaA, Dr. Walter L. Weisman and Mr. William P. Johnston are elected to the Joint Committee.

 

Nomination Committee:

 

The Nomination Committee of the company, the members of which in the year under report were Dr. Gerd Krick (chairman), Dr. Walter L. Weisman and Dr. Dieter Schenk, prepares personnel proposals of the supervisory board and proposes to the supervisory board of the company suitable candidates for its election proposals to the general meeting. In the year under report, the Nomination Committee did not meet as there was no requirement for it to do so.

 

Ad-hoc Committee in connection with the Conversion of the remaining Preference Shares into Ordinary Shares.

 

The ordinary general meeting of 16 May 2013 and the special meeting of the preference shareholders of the same date decided, inter alia, to convert the remaining preference shares into ordinary shares and in this connection to adjust the conditional capital pursuant to Sec. 4 ss. 5 of the Articles of Association. With regard to the registration of the conversion of the preference shares into ordinary shares and the adjustment of the conditional capital in the Commercial Register, the shareholders had authorised the supervisory board to up-date and/or replace, in the course of the registration notification to the Commercial Register, the figures and amounts not yet finally determined at the time of the relevant resolution. On the basis of these authorisations, the supervisory board formed, by resolution of 10 June 2013 passed in the circulation procedure, a temporary Ad-hoc Committee which, on 24 June 2013, conducted the above described up-dating and/or replacement.

 

6



 

The Ad-hoc Committee consisted of Dr. Dieter Schenk (chairman), Dr. Gerd Krick and Prof. Dr. Bernd Fahrholz. In the financial year, the Ad-hoc Committee held one telephone conference.

 

Corporate Governance

 

The supervisory board again reviewed the efficiency of its work and also dealt with the exchange of information between the management board of the general partner and the supervisory board (including regular information from the management board on new developments in Corporate Governance and Compliance) and between the supervisory board and the Audit and Corporate Governance Committee. No objections arose in the course thereof.

 

The supervisory board members Classon, Johnston, Dr. Krick, Dr. Schenk and Dr. Weisman are also members of the supervisory board of the general partner, Fresenius Medical Care Management AG. The supervisory board members Dr. Krick and Dr. Schenk are also members of the supervisory board of Fresenius Management SE (Dr. Krick as chairman and Dr. Schenk as vice chairman) which acts as general partner of Fresenius SE & Co. KGaA which holds approx. 31.3% of the shares of the company and all shares in its general partner, Fresenius Medical Care Management AG. Dr. Krick is also a member (chairman) of the supervisory board of Fresenius SE & Co. KGaA.

 

Consultancy or other service relationships between supervisory board members and the company apply in the year under report only to Dr. Dieter Schenk who is also partner in the law firm Noerr LLP; companies of the internationally operating law firm Noerr provided legal advice to Fresenius Medical Care AG & Co. KGaA and affiliated companies. In the year under report, Fresenius Medical Care paid approx. EUR 1 million (plus VAT) to the law firm Noerr or in December 2013 gave instructions for such payment (2012: approx. EUR 1.4 million). This is less than 2 % of the legal and consultancy costs paid by Fresenius Medical Care worldwide. Concerning the amount paid or processed for payment in the year

 

7



 

under report, it does not include payments which have been executed in the year under report, but had been instructed for payment in 2012 and had therefore been reported for fiscal year 2012 already. The supervisory board (and the supervisory board of the general partner) approved the engagement and the payments after presentation of detailed information thereon and following the recommendation of the Audit and Corporate Governance Committee by resolution accordingly, in each case with Dr. Schenk abstaining. Payments were only effected after the respective approvals of the supervisory board.

 

The supervisory board found that it and its committees have, in its opinion, an adequate number of independent members.

 

At its meeting on 3 December 2013, the supervisory board discussed and resolved on the company’s declaration of compliance under § 161 Stock Corporation Act on the German Corporate Governance Code. The version of the declaration of compliance of December 2013 as it appears at present permanently accessible on the Internet site of the company applies. The deviations from the recommendations of the Code refer firstly to the (absence of) reference to or setting of an age limit for members of the management board of the general partner and the lack of setting concrete objectives regarding the composition of the supervisory board and, when making recommendations to the competent election bodies, take these objectives into account and reporting on their implementation. Since that would unduly limit the selection of qualified candidates for the management board and as the composition of the supervisory board needs to be aligned to the company’s interest and has to ensure the effective supervision and consultation of the management board, it is a matter of principle and of prime importance that each member is suitably qualified. When discussing its recommendations to the competent election bodies, the supervisory board will take into account the international activities of the company, potential conflicts of interest, the number of independent supervisory board members within the meaning of Code number 5.4.2, and diversity. This includes the aim to establish an appropriate female representation on a long-term basis. In order,

 

8



 

however, not to limit the selection of qualified candidates in a general way in the interest of the company, the supervisory board confines itself to a general declaration of intent and particularly refrains from fixed diversity quotas and from an age limit. Furthermore, the employment contracts of the members of the management board of the general partner do not contain severance payment arrangements for the reasons stated in the company’s declaration of compliance. The company also deviates from the recommendations of the Code newly introduced in 2013 to the extent that these recommendations relate to caps on compensation components for the management board and to the presentation of the compensation for each individual member of the management board in the compensation report by using corresponding model tables. The performance-oriented short-term compensation (the variable bonus) is capped. As regards stock options and phantom stocks as compensation elements with long-term incentives, the service agreements with members of the management board do provide for a possibility of limitation but not for caps regarding specific amounts. Introducing caps regarding specific amounts in relation to such stock-based compensation elements would contradict the basic idea of the members of the management board participating appropriately in the economic opportunities and risks of the company. Instead of that, Fresenius Medical Care pursues a flexible concept considering each individual case. In situations of extraordinary developments in relation to the stock-based compensation which are not related to the performance of the management board, the supervisory board may cap the stock-based compensation. Since Fresenius Medical Care does not provide for caps regarding specific amounts for all compensation elements and, therefore, does not provide for caps regarding specific amounts for the overall compensation, the presentation of management board remuneration in the compensation report cannot meet all recommendations of the Code in the future.

 

The Corporate Governance Report of the general partner and of the supervisory board together with the declaration on corporate governance according to Sec. 289a Commercial Code are on pages 128 ff. of the annual report. The declaration on corporate

 

9



 

governance for the year under report was discussed by the supervisory board and approved at its meeting of 12 March 2014.

 

Annual and consolidated financial statements

 

The annual financial statements of Fresenius Medical Care AG & Co. KGaA and the annual management report were prepared in accordance with the regulations of the German Commercial Code, the consolidated financial statements and consolidated management report under Sec. 315a German Commercial Code in accordance with International Financial Reporting Standards (IFRS) as applicable in the European Union. The accountancy, the annual financial statements and the annual management report of Fresenius Medical Care AG & Co. KGaA and the consolidated financial statements and consolidated annual management report of Fresenius Medical Care AG & Co. KGaA, in each case for the financial year 2013, were audited by KPMG AG Wirtschaftsprüfungsgesellschaft, Berlin which was elected as auditor by resolution of the annual general meeting of 16 May 2013 and instructed by the Audit and Corporate Governance Committee of the supervisory board. The said documents each carry an unqualified certificate. The audit reports of the auditor were available to the Audit and Corporate Governance Committee and to the supervisory board. The Audit and Corporate Governance Committee, taking account of the audit reports of the auditor of the annual and consolidated financial statements and the discussions with him, reviewed the annual and consolidated financial statements and annual management reports and reported to the supervisory board thereon.

 

The supervisory board also reviewed the annual financial statements, the annual management report and the proposal for the application of profit and the consolidated financial statements and consolidated annual management report in each case for the financial year 2013. The documents were provided to it in good time. The supervisory board declared its agreement to the result of the audit of the annual financial statements and the consolidated financial statements by the auditor. The representatives of the

 

10



 

auditor of the annual and consolidated financial statements who signed the audit reports also participated in the discussions of the supervisory board of the annual and consolidated financial statements, reported on the significant results of the audit and were available for additional information. No objections are to be raised by the supervisory board to the annual financial statements and the annual management report of the company or to the consolidated financial statements and the consolidated annual management report even after the final results of its own review.

 

At its meeting on 24 February 2014, the supervisory board discussed the draft of the report according to Form 20-F for filing with the Securities and Exchange Commission (SEC), which contains, inter alia, the consolidated financial statements and the consolidated annual management report in accordance with the “U. S. Generally Accepted Accounting Principles”, (US GAAP) with the US dollar as the reporting currency. At its meeting on 12 March 2014, the supervisory board approved the annual financial statements and annual management report of Fresenius Medical Care AG & Co. KGaA for 2013 presented to it by the general partner. The declaration on corporate governance for the reporting year 2013 was also a subject at that meeting and approved. At its meeting of 12 March 2014, the consolidated financial statements and the consolidated annual management report were also approved by the supervisory board. The supervisory board further approved the general partner’s proposal for the application of profit which provides for a dividend of € 0.77 for each ordinary share.

 

Dependency report:

 

The general partner, Fresenius Medical Care Management AG, prepared a report on the relationships to affiliates in accordance with § 312 Stock Corporation Act for the financial year 2013. The report contains the final declaration of the general partner that the company, in accordance with the circumstances known to the general partner at the time at which the transaction was undertaken or the measures taken or omitted, received reasonable consideration

 

11



 

for each transaction and was not disadvantaged by the conduct of the measures or their omission.

 

The supervisory board and the Audit and Corporate Governance Committee received the report in good time and reviewed it. The auditor participated in the relevant discussions, reported on the main results of his audit and was available for additional information. The supervisory board and the Audit and Corporate Governance Committee share the view of the auditor who added the following certificate to that report on 25 February 2014:

 

“In accordance with our conscientious audit and assessment, we confirm that (1) the statements of fact in the report are correct, (2) the consideration of the company in the course of the transactions listed in the report was not unreasonably high, (3) the measures listed in the report are not the occasion for an assessment substantially different from that of the general partner”.

 

According to the final result of the review by the supervisory board also, no objections to the declaration of the general partner at the foot of the report on the relationships to affiliates are to be raised.

 

Composition of the management board of the general partner :

 

As already reported last year, the supervisory board of the general partner appointed the former vice chairman of the management board Mr. Rice Powell as chairman of the management board with effect from 1 January 2013 in succession to Dr. Lipps. Likewise with effect from 1 January 2013, Mr. Ronald Kuerbitz was nominated as a member of the management board for the region of North America. Dr. Olaf Schermeier was appointed as an ordinary member of the management board of Fresenius Medical Care Management AG for research and development with effect from 1 March 2013.

 

12



 

The supervisory board thanks the members of the management board of the general partner as well as all employees for their commitment and for the successful work performed in 2013.

 

 

Bad Homburg v.d.H., 12 March 2014

 

 

 

The supervisory board

 

 

 

 

 

signed Dr. Gerd Krick

 

 

 

Chairman

 

 

13


EX-99.3 4 a14-9014_1ex99d3.htm EX-99.3

Exhibit 99.3

 

GRAPHIC

 

Explanatory report

of the General Partner

on information according to Sec. 289 para. 4, Sec. 315 para. 4
of the German Commercial Code

 

The information contained in the management report to the group financial statements and the separate financial statements of Fresenius Medical Care AG & Co. KGaA  for the fiscal year 2013 according to Sec. 289 para. 4, Sec. 315 para. 4 of the German Commercial Code are explained as follows:

 

The share capital held by the Company’s shareholders at December 31, 2013 totals approximately € 301 M, divided into 301,446,779 bearer shares, each arithmetically representing € 1.00 of the share capital (non-par shares).

 

This includes 60,665 shares issued to Company employees in 2013 in conjunction with a corporate agreement and which are subject to a two years’ holding period. Additionally, the Company holds 7,548,951 treasury shares acquired during the period from May 20, 2013 to August 14, 2013 on the basis of the authorization — granted at the Company’s Annual General Meeting on May 12, 2011 — to acquire treasury shares. No voting rights can be exercised from the treasury shares. The treasury shares were acquired on the stock exchange via the XETRA trading system. Including treasury shares, the share capital of the Company therefore amounts to approximately € 309 M, divided into 308,995,730 shares. All of the shares acquired on this basis  — corresponding to a par value of approximately € 8 M or about 2.44% of the share capital — were still held by the Company on December 31, 2013. The acquired treasury shares will only be used to reduce the Company’s share capital (by cancellation of the relevant shares) or to service employee incentive plans.

 

The rights of the shareholders are governed by the German Stock Corporation Act (Aktiengesetz - AktG) and the Company`s Articles of Association. Pursuant to the provisions of the AktG each share shall be entitled to one vote at the Company’s General Meeting.

 

The General Partner, Fresenius Medical Care Management AG, is responsible for managing and representing the Company. The General Partner does not participate in the profit or loss or net assets of the Company. The General Partner’s management authority also encompasses exceptional management measures. The right of the shareholders to consent to such measures at the General Meeting is excluded. Vis-à-vis the General Partner, the Company is represented by the Supervisory Board.

 

The General Partner will cease to be General Partner of the Company if and when all shares in the General Partner entity are no longer held directly or indirectly by one party, which at the same time must hold, directly or indirectly by means of a controlled company as defined by § 17 para. 1 AktG, more than 25% of the Company’s share capital. This does not apply if all the shares of the General Partner entity are held directly or indirectly by the Company. Additionally, the General Partner will cease to be the

 



 

Company’s General Partner if the shares in the General Partner entity are acquired by another person

 

·                                who does not at the same time acquire shares of the Company in the amount of more than 25 % of the Company’s share capital or

 

·                                who has not, within three months after the effectiveness of such acquisition, submitted a voluntary or mandatory takeover offer to the Company’s shareholders according to the rules of the German Takeover Act (WpÜG); the fair consideration offered to the shareholders must also reflect the consideration which the purchasers pay for the share in the General Partner, if the amount for such consideration is above the amount of its equity capital.

 

The other grounds for withdrawal as provided by the law remain unaffected with respect to the General Partner.

 

As at December 31, 2013, Fresenius SE & Co. KGaA, Bad Homburg v.d.Höhe, Germany, holds 94,380,382 ordinary shares of the Company and thus 31.31% of the Company’s share capital with voting rights.

 

The appointment and removal of members of the Management Board of the General Partner entity are governed by § 84 and § 85 AktG. Changes in the Articles of Association must be made in accordance with § 179 AktG in conjunction with § 133 AktG. The Articles of Association entitle the Supervisory Board of the Company, without resolution of the General Meeting, to make amendments to the Articles of Association which concern only its wording.

 

The General Partner is entitled, subject to approval by the Supervisory Board, to increase the Company’s share capital as follows in accordance with the resolutions passed by the shareholders’ at the General Meeting:

 

·                                authorization, in the period up to May 10, 2015 to increase, on one or more occasions, the capital of the Company by up to a total of € 35 M by issuing new bearer ordinary shares in return for cash contributions (Authorized Capital 2010/I).

 

·                                authorization, in the period up to May 10, 2015 to increase, on one or more occasions, the capital of the Company by up to a total of € 25 M by issuing new bearer ordinary shares in return for non-cash contributions (Authorized Capital 2010/II).

 

In both cases, the General Partner is entitled, under certain circumstances and with the approval of the Supervisory Board, to decide on the exclusion of shareholders’ pre-emption rights.

 



 

In addition to the above, at December 31, 2013 the following conditional capital is in place:

 

·                                The Company’s share capital has been increased conditionally by up to € 3.908 M. This conditional increase in capital will only be carried out to the extent that convertible bonds were issued in accordance with the International Employee Participation Scheme in accordance with the shareholders’ resolutions on May 23, 2001 and May 15, 2007 and May 16, 2013 and the holders of such convertible bonds exercise their conversion rights.

 

·                                The Company’s share capital has been increased conditionally by up to € 7.559 M. This conditional share capital increase will only be carried out to the extent that options were issued in accordance with the Stock Option Plan 2006 based on the shareholders’ resolutions taken on May 9, 2006 and May 15, 2007, the holders of such options exercise their rights and the Company does not issue any own (treasury) shares to settle the options; in the case of options issued to members of the Managing Board of the General Partner entity, the Supervisory Board of that entity shall be responsible.

 

·                                The Company’s share capital has been increased conditionally by up to € 12.000 M. This conditional share capital increase will only be carried out to the extent that options were issued in accordance with the Stock Option Plan 2011 based on the shareholders’ resolution taken on May 12, 2011, the holders of such options exercise their rights and the Company does not issue any own (treasury) shares to settle the options; in the case of options issued to members of the Managing Board of the General Partner entity, the Supervisory Board of that entity shall be responsible.

 

A change of control in conjunction with a takeover bid would — under certain circumstances — have an impact on a number of long-term financing agreements, especially the 2012 Credit Agreement, the Senior Notes and the Accounts receivable facility, which contain change of control provisions. These are customary change of control provisions, which give creditors the right to terminate agreements early or to request early repayments of outstanding amounts in case of change of control. These termination rights partly become effective if the change of control is followed by decline of the Company’s rating or of the respective financing instrument.

 



 

Hof an der Saale, April 2014

 

Fresenius Medical Care AG & Co. KGaA

 

represented by Fresenius Medical Care Management AG

as General Partner

 

signed Rice Powell

signed Michael Brosnan

Member of the Management Board

Member of the Management Board

 

 

 

 

Fresenius Medical Care AG & Co. KGaA, 61346 Bad Homburg, Germany, T +49 6172 609-0, F +49 6172 609-2422

Registered Office and Commercial Register: Hof an der Saale, HRB 4019

Chairman of Supervisory Board: Dr. Gerd Krick

General Partner: Fresenius Medical Care Management AG

Registered Office and Commercial Register: Hof an der Saale, HRB 3894

Management Board: Rice Powell (Chairman), Michael Brosnan, Roberto Fusté, Ronald Kuerbitz, Dr. Olaf Schermeier
Kent Wanzek, Dominik Wehner

Chairman of Supervisory Board: Dr. Ulf M. Schneider

Bank Account: Commerzbank AG, Frankfurt/Main, IBAN: DE23 5008 0000 0711 6731 00, SWIFT/BIC: DRES DE FF 501

 


EX-99.4 5 a14-9014_1ex99d4.htm EX-99.4

Exhibit 99.4

 

 

SUPPLEMENTAL INFORMATION

 

In this letter (1) “FMC AG & Co. KGaA”, the “Company”, “we” or “our” refer to Fresenius Medical Care AG & Co. KGaA, a German partnership limited by shares, (2) “Fresenius Medical Care AG” and “FMC-AG” refer to the Company as a German stock corporation before the transformation of our legal form into a partnership limited by shares; (3) “Fresenius SE” refers to Fresenius SE & Co. KGaA, a German partnership limited by shares resulting from the change of legal form of Fresenius SE (effective as of January 2011), a European Company (Societas Europaea) previously called Fresenius AG, a German stock corporation.

 

As a foreign private issuer under the rules and regulations of the U.S. Securities and Exchange Commission, the Company is not presently subject to the SEC’s Proxy Rules. However, under the stipulations of the Pooling Agreement among us, Fresenius SE & Co. KGaA, our general partner and our independent directors, FMC AG & Co. KGaA has agreed that in connection with any exercise of voting or consent rights by our shareholders, the Company will make available information to shareholders which is generally comparable to that which would be provided by a U.S. corporation, except that it agreed to provide the following information as it would be provided by a foreign private issuer under the SEC’s rules:

 

(i) Security Ownership of Certain Beneficial Owners of Fresenius Medical Care AG & Co. KGaA; (ii) Trading markets: (iii) Directors and Senior Management; (iv) Compensation of our Management Board and our Supervisory Board; (v) Options to Purchase Our Securities, and (vi) material transactions between FMC AG & Co. KGaA and its subsidiaries and directors and officers of FMC AG & Co. KGaA, controlling persons of FMC AG & Co. KGaA, and relatives or spouses of such directors, officers and controlling persons. The above information contained in this letter, as well as the information in item (vii) “Principal Accountant Fees and Services,” has been derived principally from our Annual Report on Form 20-F for the year ended December 31, 2013 filed with the SEC (our “2013 20-F”). Our 2013 20-F is available on the web site maintained by the SEC at www.sec.gov and on our web site at www.fmc-ag.com.

 

(i)                         Security Ownership of Certain Beneficial Owners of Fresenius Medical Care AG & Co. KGaA and Fresenius SE & Co. KGaA

 

Security Ownership of Certain Beneficial Owners of Fresenius Medical Care

 

On June 28, 2013, all of our outstanding preference shares were converted on a 1:1 basis to ordinary shares and all remaining options to acquire preference shares were converted into options to acquire ordinary shares. Our outstanding share capital consists solely of ordinary shares issued only in bearer form. Accordingly, unless we receive information regarding acquisitions of our shares through a filing with the Securities and Exchange Commission or through the German statutory requirements referred to below, or except as described below with respect to our shares held in American Depository Receipt (“ADR”) form, we face difficulties precisely determining who our shareholders are at any specified time or how many shares any particular shareholder owns. Because we are a foreign private issuer under the rules of the Securities and Exchange Commission, our directors and officers are not required to report their ownership of our equity securities or their transactions in our equity securities pursuant to Section 16 of the Securities and Exchange Act of 1934. However, persons who become “beneficial owners” of more than 5% of our ordinary shares are required to report their beneficial ownership pursuant to Section 13(d) of the Securities and Exchange Act of 1934. In addition, under the German Securities Trading Act (Wertpapierhandelsgesetz or “WpHG”), persons who discharge managerial responsibilities within an issuer of shares are obliged to notify the issuer and the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht or “BaFin”) of their own transactions in shares of the issuer. This obligation also applies to persons who are closely associated with the persons discharging managerial responsibility. Additionally,

 

1



 

holders of voting securities of a German company listed on the regulated market (Regulierter Markt) of a German stock exchange or a corresponding trading segment of a stock exchange within the European Union are obligated to notify the company of the level of their holding whenever such holding reaches, exceeds or falls below certain thresholds, which have been set at 3%, 5%, 10%, 15%, 20%, 25%, 30%, 50% and 75% of a company’s outstanding voting rights. Such notification obligations will also apply to other financial instruments that result in an entitlement to acquire shares or that causes the hedging of shares (excluding the 3% threshold).

 

We have been informed that as of February 19, 2014, Fresenius SE owned 94,380,382, approximately 31.3%, of our ordinary shares. The following schedule illustrates the latest threshold notifications furnished to us by third parties pursuant to the German Securities Trading Act:

 

Voting Rights Notifications (Last Reported Status)

 

Notifying party

 

Date of reaching,
exceeding or
falling bellow

 

Reporting
threshold

 

Reporting criteria

 

Percentage of
voting rights

 

Number of
voting rights

 

BlackRock Financial Management, Inc.,

New York, USA

 

September 18, 2012

 

5% Exceeding

 

Attribution pursuant to Section 22 (1) sentence 1 No. 6 as well as (1) sentence 2 WpHG

 

5.002

 

15,105,551

 

BlackRock Holdco 2, Inc.,

Wilmington, USA

 

September 18, 2012

 

5% Exceeding

 

Attribution pursuant to Section 22 (1) sentence 1 No. 6 as well as (1) sentence 2 WpHG

 

5.002

 

15,105,551

 

BlackRock, Inc.,

New York, USA

 

December 19, 2012

 

5% Falling below

 

Attribution pursuant to Section 22 (1) sentence 1 No. 6 as well as (1) sentence 2 WpHG

 

4.970

 

15,017,045

 

British Ministry of Finance

(HM Treasury),

London, United Kingdom

 

May 21, 2013

 

3% Falling below

 

Attribution pursuant to Section 22 (1) sentence 1 No. 1 WpHG

 

1.270

 

3,847,973

 

The Royal Bank of Scotland Group plc,

Edinburgh, United Kingdom

 

May 21, 2013

 

3% Falling below

 

Attribution pursuant to Section 22 (1) sentence 1 No. 1 WpHG

 

1.270

 

3,847,973

 

The Royal Bank of Scotland plc,

Edinburgh, United Kingdom

 

May 21, 2013

 

3% Falling below

 

Section 21 (1) WpHG

 

1.270

 

3,847,973

 

Thornburg Investment Management, Inc.,

Santa Fé, USA

 

January 31, 2014

 

5% Falling below

 

Attribution pursuant to Section 22 (1) sentence 1 No. 6 WpHG

 

4.960

 

15,321,357

 

Mr. Garrett Thornburg, USA

 

January 31, 2014

 

5% Falling below

 

Attribution pursuant to Section 22 (1) sentence 1 No. 6 as well as sentence 2 WpHG

 

4.960

 

15,321,357

 

 

2



 

All of our ordinary shares have the same voting rights. However, as the sole shareholder of our General Partner, Fresenius SE is barred from voting its ordinary shares on certain matters. See Item 16.G, “Corporate Governance — Supervisory Board” in our 2013 20-F.

 

Bank of New York Mellon, our ADR depositary, informed us, that as of December 31, 2013, 25,705,490 ordinary ADSs, each representing one half of an ordinary share, were held of record by 3,713 U.S. holders. For more information regarding ADRs and ADSs see Item 10.B, “Memorandum and Articles of Association — Description of American Depositary Receipts” in our 2013 20-F.

 

Security Ownership of Certain Beneficial Owners of Fresenius SE

 

Fresenius SE’s share capital consists solely of ordinary shares, issued only in bearer form. Accordingly, Fresenius SE has difficulties precisely determining who its shareholders are at any specified time or how many shares any particular shareholder owns. However, under the German Securities Trading Act, holders of voting securities of a German company listed on the regulated market (Regulierter Markt) of a German stock exchange or a corresponding trading segment of a stock exchange within the European Union are obligated to notify the company of certain levels of holdings, as described above.

 

The Else Kröner-Fresenius Stiftung is the sole shareholder of Fresenius Management SE, the general partner of Fresenius SE, and has sole power to elect the supervisory board of Fresenius Management SE. In addition, based on the most recent information available, Else Kröner-Fresenius Stiftung owns approximately 26.8% of the Fresenius SE ordinary shares. See item (vi), “Material Transactions between FMC-AG & Co. KGaA and its Subsidiaries and Directors, Officers and Controlling Persons of FMC-AG & Co. KGaA, below. According to the last information received from Allianz SE, they hold, indirectly, approximately 4.26% of the Fresenius SE ordinary shares.

 

(ii)                      Trading Markets for our Securities

 

The principal trading market for our ordinary shares is the Frankfurt Stock Exchange (FWB® Frankfurter Wertpapierbörse). All ordinary shares have been issued in bearer form. For more information regarding ADRs see Item 10.B., “Memorandum and articles of association — Description of American Depositary Receipts” in our 2013 20-F. The ordinary shares of Fresenius Medical Care AG had been listed on the Frankfurt Stock Exchange since October 2, 1996. Trading in the ordinary shares of FMC-AG & Co. KGaA on the Frankfurt Stock Exchange commenced on February 13, 2006.

 

Our shares have been listed on the Regulated Market (Regulierter Markt) of the Frankfurt Stock Exchange and on the Prime Standard of the Regulated Market, which is a sub-segment of the Regulated Market with additional post-admission obligations. Admission to the Prime Standard requires the fulfillment of the following transparency criteria: publication of quarterly reports; preparation of financial statements in accordance with international accounting standards (IFRS or U.S. GAAP); publication of a company calendar; convening of at least one analyst conference per year; and publication of ad-hoc messages (i.e., certain announcements of material developments and events) in English. Companies aiming to be listed in this segment have to apply for admission. Listing in the Prime Standard is a prerequisite for inclusion of shares in the selection indices of the Frankfurt Stock Exchange, such as the DAX®, the index of 30 major German stocks.

 

Since October 1, 1996, ADSs representing our ordinary shares (the “Ordinary ADSs”), have been listed and traded on the New York Stock Exchange (“NYSE”) under the symbol FMS. Effective December 3, 2012, we effected a two-for-one split of our Ordinary ADSs outstanding and our Preference ADSs, which changed the ratio of each class of ADSs from one ADSs representing one share to two ADSs representing one share. The Depositary for the Ordinary ADSs is Bank of New York Mellon (the “Depositary”).

 

Trading on the Frankfurt Stock Exchange

 

Deutsche Börse AG operates the Frankfurt Stock Exchange, which is the largest of the six German stock exchanges by value of shares traded. Our shares are traded on Xetra, the electronic trading system of the Deutsche Börse. The trading hours for Xetra are between 9:00 a.m. and 5:30 p.m. Central European Time (“CET”). Only

 

3



 

brokers and banks that have been admitted to Xetra by the Frankfurt Stock Exchange have direct access to the system and may trade on it. Private investors can trade on Xetra through their banks and brokers. As of March 2012, the most recent figures available, the shares of more than 11,000 companies were traded on Xetra.

 

Deutsche Börse AG publishes information for all traded securities on the Internet, http://www.deutsche-boerse.com.

 

Transactions on Xetra and the Frankfurt Stock Exchange settle on the second business day following the trade except for trades executed on Xetra International Markets, the European Blue Chip segment of Deutsche Börse AG, which settle on the third business day following a trade. The Frankfurt Stock Exchange can suspend a quotation if orderly trading is temporarily endangered or if a suspension is deemed to be necessary to protect the public.

 

The Hessian Stock Exchange Supervisory Authority (Hessische Börsenaufsicht) and the Trading Monitoring Unit of the Frankfurt Stock Exchange (HÜST Handelsüberwachungsstelle) both monitor trading on the Frankfurt Stock Exchange.

 

The Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht), an independent federal authority, is responsible for the general supervision of securities trading pursuant to provisions of the German Securities Trading Act (Wertpapierhandelsgesetz) and other laws.

 

The table below sets forth for the periods indicated, the high and low closing sales prices in euro for our Ordinary shares on the Frankfurt Stock Exchange, as reported by the Frankfurt Stock Exchange Xetra system. All shares on German stock exchanges trade in euro.

 

4



 

As of March 26, 2014, the closing price for shares traded on the Frankfurt Stock Exchange was €50.39.

 

 

 

Price per ordinary
share (€)

 

 

 

High

 

Low

 

 

 

 

 

 

 

2014

February

 

53.57

 

48.63

 

 

January

 

54.05

 

50.64

 

2013

December

 

51.86

 

49.98

 

 

November

 

51.77

 

47.57

 

 

October

 

49.28

 

47.00

 

 

September

 

49.55

 

48.09

 

2013

Fourth Quarter

 

51.86

 

47.00

 

 

Third Quarter

 

54.44

 

47.40

 

 

Second Quarter

 

58.06

 

51.70

 

 

First Quarter

 

58.12

 

48.21

 

2012

Fourth Quarter

 

59.43

 

51.30

 

 

Third Quarter

 

59.51

 

54.38

 

 

Second Quarter

 

55.83

 

51.21

 

 

First Quarter

 

57.03

 

50.80

 

 

 

 

 

 

 

2013

Annual

 

58.12

 

47.00

 

2012

Annual

 

59.51

 

50.80

 

2011

Annual

 

55.13

 

41.11

 

2010

Annual

 

45.79

 

36.10

 

2009

Annual

 

37.71

 

26.07

 

 

The average daily trading volume of the Ordinary shares and traded on the Frankfurt Stock Exchange during 2013 was 820,387 shares. This is based on total yearly turnover statistics supplied by the Frankfurt Stock Exchange.

 

Trading on the New York Stock Exchange

 

As of March 26, 2014, the closing price for the ADSs traded on the NYSE was $34.65.

 

The table below sets forth, for the periods indicated, the high and low closing sales prices for the Ordinary ADSs on the NYSE. All ADS prices have been adjusted to reflect the two for one split of our ADSs in December 2012.

 

5



 

 

 

Price per ordinary
ADS ($)

 

 

 

High

 

Low

 

 

 

 

 

 

 

2014

February

 

36.62

 

33.29

 

 

January

 

36.82

 

34.73

 

2013

December

 

35.61

 

34.27

 

 

November

 

34.99

 

31.92

 

 

October

 

33.86

 

31.74

 

 

September

 

32.79

 

31.88

 

2013

Fourth Quarter

 

35.61

 

31.74

 

 

Third Quarter

 

35.50

 

31.02

 

 

Second Quarter

 

36.07

 

33.40

 

 

First Quarter

 

35.55

 

32.26

 

2012

Fourth Quarter

 

38.90

 

32.80

 

 

Third Quarter

 

37.10

 

34.40

 

 

Second Quarter

 

36.40

 

32.10

 

 

First Quarter

 

37.10

 

33.30

 

 

 

 

 

 

 

2013

Annual

 

36.07

 

31.02

 

2012

Annual

 

38.93

 

32.13

 

2011

Annual

 

39.96

 

27.88

 

2010

Annual

 

32.01

 

23.79

 

2009

Annual

 

27.48

 

17.83

 

 

Dividends

 

We generally pay annual dividends on our shares in amounts that we determine on the basis of FMC-AG & Co. KGaA’s prior year unconsolidated earnings as shown in the statutory financial statements that we prepare under German law on the basis of the accounting principles of the German Commercial Code (Handelsgesetzbuch or HGB), subject to authorization by a resolution to be passed at our general meeting of shareholders.

 

The General Partner and our Supervisory Board propose dividends and the shareholders approve dividends for payment in respect of a fiscal year at the annual general meeting (AGM) in the following year. Since all of our shares are in bearer form, we remit dividends to the depositary bank (Depotbank) on behalf of the shareholders.

 

Our 2012 Senior Credit Agreement restricts our ability to pay dividends. Item 5.B, “Operating and Financial Review and Prospects — Liquidity and Capital Resources” in our 2013 20-F and the notes to our consolidated financial statements included in our 2013 20-F discuss this restriction.

 

The table below provides information regarding the annual dividend per share that we paid on our Ordinary shares. These payments were paid in the years shown for the results of operations in the year preceding the payment. As of June 28, 2013 we converted all preference shares to ordinary shares and all options for preference shares to options for ordinary shares. At December 31, 2013 we have only one class of shares outstanding.

 

Per Share Amount

 

2013

 

2012

 

2011

 

 

 

 

 

 

 

 

 

Ordinary share

 

0.75

 

0.69

 

0.65

 

 

We have announced that the general partner’s Management Board and our Supervisory Board have proposed dividends for 2013 payable in 2014 of €0.77 per ordinary share. These dividends are subject to approval by our shareholders at our AGM to be held on May 15, 2014. Our goal is for dividend development to be more closely aligned with our growth in basic earnings per share, while maintaining dividend continuity.

 

6



 

Except as described herein, holders of ADSs will be entitled to receive dividends on the Ordinary shares represented by the respective ADSs. We will pay any cash dividends payable to such holders to the depositary in euros and, subject to certain exceptions, the depositary will convert the dividends into U.S. dollars and distribute the dividends to ADS holders. See Item 10, “Additional Information — Description of American Depositary Receipts — Share Dividends and Other Distributions” in our 2013 20-F. Fluctuations in the exchange rate between the U.S. dollar and the euro will affect the amount of dividends that ADS holders receive. Dividends paid to holders and beneficial holders of the ADSs will be subject to deduction of German withholding tax. You can find a discussion of German withholding tax in “Item 10.E. Taxation” in our 2013 20-F.

 

Governance Matters

 

ADSs representing our ordinary shares are listed on the New York Stock Exchange (“NYSE”). However, because we are a “foreign private issuer,” as defined in the rules of the Securities and Exchange Commission (“SEC”), we are exempt from substantially all of the governance rules set forth in Section 303A of the NYSE’s Listed Companies Manual, other than the obligation to maintain an audit committee in accordance with Rule 10A-3 under the Exchange Act the obligation to notify the NYSE if any of our executive officers becomes aware of any material non-compliance with any applicable provisions of Section 303A, and the obligation to file annual and interim written affirmations, on forms mandated by the NYSE, relating to our compliance with applicable NYSE governance rules. Many of the governance reforms instituted by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, including the requirements to provide shareholders with “say-on-pay” and “say-on-when” advisory votes related to the compensation of certain executive officers, are implemented through the SEC’s proxy rules.  Because foreign private issuers are exempt from the proxy rules, these governance rules are also not applicable to us. However, the compensation system for our Management Board was reviewed by an independent external compensation expert at the beginning of 2013. See item (iv) below, Compensation of the Management Board and the Supervisory Board.” Similarly, the more detailed disclosure requirements regarding management compensation applicable to U.S. domestic companies (including, if it is adopted as proposed, the requirement to disclose the ratio of the median of the total compensation of all employees of an issuer to the total compensation of the issuer’s chief executive officer) are found in SEC Regulation S-K, whereas compensation disclosure requirements for foreign private issuers are set forth in the Form 20-F and generally limit our disclosure to the information we disclose under German law. Subject to the exceptions noted above, instead of applying their governance and disclosure requirements to foreign private issuers, the rules of both the SEC and the NYSE require that we disclose the significant ways in which our corporate practices differ from those applicable to U.S. domestic companies under NYSE listing standards.

 

As a German company FMC-AG & Co. KGaA follows German corporate governance practices. German corporate governance practices generally derive from the provisions of the German Stock Corporation Act (Aktiengesetz, or AktG”) including capital market related laws, the German Codetermination Act (Mitbestimmungsgesetz, or MitBestG”) and the German Corporate Governance Code. Our Articles of Association also include provisions affecting our corporate governance. German standards differ from the corporate governance listing standards applicable to U.S. domestic companies which have been adopted by the NYSE. See Item 16.G, “Governance,’ in our 2013 20-F, for information regarding our organizational structure, management arrangements and governance, including information regarding the legal structure of a KGaA, management by a general partner, certain provisions of our Articles of Association and the role of the Supervisory Board in monitoring the management of our company by our General Partner. Item 16.G of our 2013 20-F includes a brief, general summary of the principal differences between German and U.S. corporate governance practices, together with, as appropriate, a comparison to U.S. principles or practices.

 

7



 

(iii)                            Directors and Senior Management

 

General

 

As a partnership limited by shares, under the German Stock Corporation Act (Aktiengesetz), our corporate bodies are our General Partner, our Supervisory Board and our general meeting of shareholders. Our sole General Partner is Management AG, a wholly-owned subsidiary of Fresenius SE.  Management AG is required to devote itself exclusively to the management of Fresenius Medical Care AG & Co. KGaA.

 

For a detailed discussion of the legal and management structure of Fresenius Medical Care AG & Co. KGaA, including the more limited powers and functions of the Supervisory Board compared to those of the general partner, see Item 16.G, “Governance — The Legal Structure of Fresenius Medical Care AG & Co. KGaA” in our 2013 20-F.

 

Our General Partner has a supervisory board and a management board. These two boards are separate and no individual may simultaneously be a member of both boards. A person may, however, serve on both the supervisory board of our General Partner and on our Supervisory Board.

 

The General Partner’s Supervisory Board

 

The supervisory board of Management AG consists of six members who are elected by Fresenius SE (acting through its general partner, Fresenius Management SE), the sole shareholder of Management AG. Pursuant to a pooling agreement for the benefit of the public holders of our shares, at least one-third (but no fewer than two) of the members of the General Partner’s supervisory board are required to be independent directors as defined in the pooling agreement, i.e., persons with no substantial business or professional relationship with us, Fresenius SE, the general partner, or any affiliate of any of them.

 

Unless resolved otherwise by the general meeting of shareholders, the terms of each of the members of the supervisory board of Management AG will expire at the end of the general meeting of shareholders held during the fourth fiscal year following the year in which the Management AG supervisory board member was elected by Fresenius SE, but not counting the fiscal year in which such member’s term begins. Fresenius SE, as the sole shareholder of Management AG, is at any time entitled to re-appoint members of the Management AG supervisory board. The most recent election of members of the General Partner’s supervisory board took place in July 2011. Members of the General Partner’s supervisory board may be removed only by a resolution of Fresenius SE in its capacity as sole shareholder of the General Partner.  Neither our shareholders nor the separate Supervisory Board of FMC AG & Co. KGaA has any influence on the appointment of the supervisory board of the General Partner.

 

The General Partner’s supervisory board ordinarily acts by simple majority vote and the Chairman has a tie-breaking vote in case of any deadlock. The principal function of the general partner’s supervisory board is to appoint and to supervise the General Partner’s management board in its management of the Company, and to approve mid-term planning, dividend payments and matters which are not in the ordinary course of business and are of fundamental importance to us.

 

8



 

The table below provides the names of the members of the supervisory board of Management AG and their ages as of January 1, 2014.

 

Name

 

Age as of
January 1,
2014

 

Dr. Ulf M. Schneider, Chairman (1)

 

48

 

Dr. Dieter Schenk, Vice Chairman (4)

 

61

 

Dr. Gerd Krick (1) (2)

 

75

 

Mr. Rolf A. Classon (3) (4)

 

68

 

Dr. Walter L. Weisman (1) (2) (3)

 

78

 

Mr. William P. Johnston (1) (2) (3) (4)

 

69

 

 


(1) Members of the Human Resources Committee of the supervisory board of Management AG

(2) Members of the Audit and Corporate Governance Committee of FMC-AG & Co. KGaA

(3) Independent director for purposes of our pooling agreement

(4) Member of the Regulatory and Reimbursement Assessment Committee of the supervisory board of Management AG

 

DR. ULF M. SCHNEIDER has been Chairman of the Supervisory Board of Management AG, the Company’s General Partner, since April 2005. He is also Chairman of the Management Board of Fresenius Management SE, the general partner of Fresenius SE & Co. KGaA, and Chairman or member of the Board of a number of other Fresenius SE group companies. Additionally, he was Group Finance Director for Gehe UK plc., a pharmaceutical wholesale and retail distributor, in Coventry, United Kingdom. He has also held several senior executive and financial positions since 1989 with Gehe’s majority shareholder, Franz Haniel & Cie. GmbH, Duisburg, a diversified German multinational company.

 

DR. DIETER SCHENK has been Vice Chairman of the Supervisory Board of Management AG since 2005 and is also Vice Chairman of the Supervisory Board of FMC AG & Co. KGaA and a member of the Supervisory Board of Fresenius Management SE. He is an attorney and tax advisor and has been a partner in the law firm of Noerr LLP (formerly Nörr Stiefenhofer Lutz) since 1986. Additionally, he also serves as the Chairman of the Supervisory Board of Gabor Shoes AG and TOPTICA Photonics AG and as a Vice-Chairman of the Supervisory Board of Greiffenberger AG. Dr. Schenk is also Chairman of the Advisory Board of Else Kröner-Fresenius-Stiftung, the sole shareholder of Fresenius Management SE, which is the sole general partner of Fresenius SE & Co. KGaA.

 

DR. GERD KRICK has been a member of the Supervisory Board of Management AG since December 2005 and the Chairman of the Company’s Supervisory Board since February 2006.  He is the Chairman of the Supervisory Board of Fresenius Management SE and of Fresenius SE & Co. KGaA and is also Chairman of the Board of Vamed AG, Austria.

 

MR. ROLF A. CLASSON has been a member of the Supervisory Board of Management AG since July 7, 2011 and a member of the Company’s Supervisory Board since May 12, 2011. Mr. Classon is the Chairman of the Board of Directors for Auxilium Pharmaceuticals, Inc. and Tecan Group Ltd. Additionally, Mr. Classon is the Chairman of the Board of Directors for Hill-Rom Holdings, Inc.

 

DR. WALTER L. WEISMAN has been a member of the Supervisory Board of Management AG since December 2005 and also serves on the Company’s Supervisory Board. Additionally, he is the former Chairman and Chief Executive Officer of American Medical International, Inc., and was a member of the Board of Directors of Occidental Petroleum Corporation until May 4, 2012. He is also a Senior Trustee of the Board of Trustees for the California Institute of Technology, a Life Trustee of the Board of Trustees of the Los Angeles County Museum of Art, a Trustee of the Oregon Shakespeare Festival and Chairman of the Board of Trustees of the Sundance Institute.

 

MR. WILLIAM P. JOHNSTON has been a member of the Supervisory Board of Management AG since August 2006 and also serves on the Company’s Supervisory Board. Mr. Johnston has been an Operating Executive of The Carlyle Group since June 2006. He is also a member of the Board of Directors of The Hartford Mutual Funds, Inc. and HCR-Manor Care, Inc.

 

9



 

The General Partner’s Management Board

 

Each member of the Management Board of Management AG is appointed by the Supervisory Board of Management AG for a maximum term of five years and is eligible for reappointment thereafter. Their terms of office expire in the years listed below.

 

The table below provides names, positions and terms of office of the present members of the Management Board of Management AG and their ages as of January 1, 2014.

 

Name

 

Age as of
January
1, 2014

 

Position

 

Year term
expires

 

 

 

 

 

 

 

 

 

Rice Powell

 

58

 

Chief Executive Officer and Chairman of the Management Board

 

2017

 

Michael Brosnan

 

58

 

Chief Financial Officer

 

2017

 

Roberto Fusté

 

61

 

Chief Executive Officer for Asia Pacific

 

2016

 

Ronald Kuerbitz

 

54

 

Chief Executive Officer, Fresenius Medical Care North America

 

2015

 

Dr. Olaf Schermeier

 

41

 

Chief Officer of Global Research & Development

 

2017

 

Kent Wanzek

 

54

 

Head of Global Manufacturing Operations

 

2017

 

 

RICE POWELL has been with the Company since 1997.  He became Chairman and Chief Executive Officer of the Management Board of Management AG effective January 1, 2013. He is also a member of the Board of Administration of Vifor Fresenius Medical Care Renal Pharma, Ltd., Switzerland. He was the Chief Executive Officer and director of Fresenius Medical Care North America until December 31, 2012. Mr. Powell has over 30 years of experience in the healthcare industry, which includes various positions with Baxter International Inc., Biogen Inc., and Ergo Sciences Inc.

 

MICHAEL BROSNAN has been with the Company since 1998.  He is a member of the Management Board and Chief Financial Officer of Management AG. He is member of the Board of Administration of Vifor Fresenius Medical Care Renal Pharma, Ltd., Switzerland. He was a member of the Board of Directors of Fresenius Medical Care North America. Prior to joining Fresenius Medical Care, Mr. Brosnan held senior financial positions at Polaroid Corporation and was an audit partner at KPMG.

 

ROBERTO FUSTÉ has been with the Company since 1991 and his present positions include member of the Management Board of Management AG and Chief Executive Officer for Asia Pacific. Additionally, he founded the company Nephrocontrol S.A. in 1983. In 1991, Nephrocontrol was acquired by the Fresenius Group, where Mr. Fusté has since worked. Mr. Fusté has also held several senior positions within the Company in Europe and the Asia Pacific region.

 

RONALD KUERBITZ has been with the Company since 1997. He became a member of the Management Board of Management AG and Chief Executive Officer of Fresenius Medical Care North America on January 1, 2013. Mr. Kuerbitz is a member of the board of directors for Fresenius Medical Care Holdings, Inc. and member of the board of directors for Specialty Care Services Group, LLC. Mr. Kuerbitz has more than 20 years of experience in the health care field, having held positions in law, compliance, business development, government affairs and operations.

 

DR OLAF SCHERMEIER was appointed Chief Executive Officer for Global Research and Development on March 1, 2013. Previously, he served as President of Global Research and Development for Draeger Medical, Lübeck, Germany. Dr. Schermeier has many years of experience in various areas of the health care industry, among others at Charite-clinic and Biotronik, Germany.

 

10



 

KENT WANZEK has been with the Company since 2003.  He is a member of the Management Board of Management AG with responsibility for Global Manufacturing Operations and prior to joining the Management Board was in charge of North American Operations for the Renal Therapies Group at Fresenius Medical Care North America since 2004. Additionally, Mr. Wanzek held several senior executive positions with companies in the healthcare industry, including Philips Medical Systems, Perkin-Elmer, Inc. and Baxter Healthcare Corporation.

 

DOMINIK WEHNER became the Management Board Member for the Europe, Middle East and Africa region effective April 1, 2014. Mr. Wehner began his career at Fresenius Medical Care in 1994 as Sales Manager and was Executive Vice President responsible for the regions of Eastern Europe, Middle East and Africa (EMEA) which he turned into one of the growth drivers of EMEA and Latin America (EMEALA). He also serves on the Vifor Fresenius Medical Care Renal Pharma Board of Directors and was instrumental in the successful extension of the venture activities in EMEALA.

 

On March 12, 2014, the Company announced the resignations of Dr. Emanuele Gatti, and Dr. Rainer Runte, both effective March 31, 2014, from the general partner’s management board. Dr. Gatti’s position on the Management Board and duties relating to Europe, Middle East and Africa have been assumed by Mr. Wehner, effective April 1, 2014, while Latin America region management duties have been assumed by Mr. John Anderson who will report directly to CEO Mr. Powell. Until such time as a permanent successor to Dr. Runte is named, Mr. David Kembel, Chief Compliance Officer for Fresenius Medical Care North America, has assumed Dr. Runte’s responsibilities for Global Compliance on an interim basis and CEO Mr. Powell, as the Chairman of the Management Board, will assume Dr. Runte’s remaining responsibilities for Global Law, Intellectual Property and Labor relations in Germany, until the search for a General Counsel is complete.

 

The business address of all members of our Management Board and Supervisory Board is Else-Kröner-Strasse 1, 61352 Bad Homburg, Germany.

 

The Supervisory Board of FMC-AG & Co. KGaA

 

The Supervisory Board of FMC-AG & Co. KGaA consists of six members who are elected by the shareholders of FMC-AG & Co. KGaA in a general meeting. The most recent Supervisory Board elections occurred in May of 2011. Fresenius SE, as the sole shareholder of Management AG, the general partner, is barred from voting for election of the Supervisory Board of FMC-AG & Co. KGaA, but it nevertheless has and will retain significant influence over the membership of the FMC-AG & Co. KGaA Supervisory Board in the foreseeable future. See Item 16.G, “Governance — The Legal Structure of FMC-AG & Co. KGaA” in our 2013 20-F.

 

The current Supervisory Board of FMC-AG & Co. KGaA consists of six persons, five of whom — Messrs. Krick (Chairman), Schenk (Vice-Chairman), Classon, Johnston, and Weisman— are also members of the supervisory board of our General Partner. For information regarding those members of the Supervisory Board of FMC-AG & Co. KGaA, see “The General Partner’s Supervisory Board,” above. The sixth member of the Supervisory Board of FMC-AG & Co. KGaA is Prof. Dr. Bernd Fahrholz. Information regarding his age, term of office and business experience is as follows:

 

PROF. DR. BERND FAHRHOLZ, age 66 was a member of the Supervisory Board of Management AG from April 2005 until August 2006 and was a member of the Supervisory Board of FMC-AG from 1998 until the transformation of legal form to KGaA and has been a member of the Supervisory Board of FMC-AG & Co. KGaA since the transformation. He is Vice Chairman of our Audit and Corporate Governance Committee. Additionally, he was of counsel and a partner in several large law firms. He also is the Chairman of the Supervisory Board of SMARTRAC N.V.

 

The terms of office of the aforesaid members of the Supervisory Board of FMC-AG & Co. KGaA will expire at the end of the general meeting of shareholders of FMC-AG & Co. KGaA, in which the shareholders discharge the Supervisory Board held during the fourth fiscal year following the year in which they were elected, but not counting the fiscal year in which such member’s term begins. Fresenius SE, as sole shareholder of our general partner, does not participate in the vote on discharge of the Supervisory Board. Members of the FMC-AG & Co. KGaA Supervisory Board may be removed only by a resolution of the shareholders of FMC-AG & Co. KGaA with a majority of three quarters of the votes cast at such general meeting. Fresenius SE is barred from voting on such

 

11



 

resolutions. The Supervisory Board of FMC-AG & Co. KGaA ordinarily acts by simple majority vote and the Chairman has a tie-breaking vote in case of any deadlock.

 

The principal function of the Supervisory Board of FMC-AG & Co. KGaA is to oversee the management of the Company but, in this function, the supervisory board of a partnership limited by shares has less power and scope for influence than the supervisory board of a stock corporation. The Supervisory Board of FMC-AG & Co. KGaA is not entitled to appoint the General Partner or its executive bodies, nor may it subject the general partner’s management measures to its consent or issue rules of procedure for the general partner. Only the supervisory board of Management AG, elected solely by Fresenius SE, has the authority to appoint or remove members of the General Partner’s Management Board. See Item 16.G, “Governance — The Legal Structure of FMC-AG & Co. KGaA” in our 2013 20-F. Among other matters, the Supervisory Board of FMC-AG & Co. KGaA will, together with the general partner, fix the agenda for the AGM and make recommendations with respect to approval of the Company’s financial statements and dividend proposals. The Supervisory Board of FMC-AG & Co. KGaA will also propose nominees for election as members of its Supervisory Board. The Audit and Corporate Governance Committee also recommends to the Supervisory Board a candidate as the Company’s auditors to audit our German statutory financial statements to be proposed by the Supervisory Board to our shareholders for approval and, as required by the SEC and NYSE audit committee rules, retains the services of our independent auditors to audit our U.S. GAAP financial statements.

 

Board Practices

 

For information relating to the terms of office of the Management Board and the supervisory board of the General Partner, Management AG, and of the Supervisory Board of FMC-AG & Co. KGaA, and the periods in which the members of those bodies have served in office, see item (iii) — Directors and Senior Management - General,” above. For information regarding certain compensation payable to certain members of the General Partner’s Management Board after termination of employment, see item (iv) “Compensation of the Management Board and the Supervisory Board — Commitments to Members of Management for the Event of the Termination of their Employment,” below. Determination of the compensation system and of the compensation to be granted to the members of the Management Board is made by the full supervisory board of Management AG. It is assisted in these matters, particularly evaluation and assessment of the compensation of the members of the General Partner’s management board, by the Human Resources Committee of the General Partner’s supervisory board, the members of which are Dr. Ulf M. Schneider (Chairman), Dr. Gerd Krick (Vice Chairman), Mr. William P. Johnston and Dr. Walter L. Weisman.

 

The Audit and Corporate Governance Committee of the Supervisory Board of FMC-AG & Co. KGaA consisted of Dr. Walter L. Weisman (Chairman), Prof. Dr. Bernd Fahrholz (Vice Chairman), Dr. Gerd Krick and Mr. William P. Johnston, all of whom are independent directors for purposes of SEC Rule 10A-3. The primary function of the Audit and Corporate Governance Committee is to assist FMC-AG & Co. KGaA’s Supervisory Board in fulfilling its oversight responsibilities, primarily through:

 

·                        overseeing management’s accounting and financial reporting process, the internal performance of the internal audit function and the effectiveness of the financial control systems;

 

·                        overseeing the independence and performance of the FMC-AG & Co. KGaA’s outside auditors

 

·                        overseeing the effectiveness of our systems and processes utilized to comply with relevant legal and regulatory standards for global healthcare companies, including adherence to our Code of Business Conduct;

 

·                        overseeing the effectiveness of our internal risk management system;

 

·                        overseeing our corporate governance performance according to the German Corporate Governance Code;

 

·                        providing an avenue of communication among the outside auditors, management and the Supervisory Board;

 

·                        overseeing our relationship with Fresenius SE & Co. KGaA and its affiliates and reviewing the report of our General Partner on relations with related parties and for reporting to the overall Supervisory Board thereon;

 

12



 

·                        recommending to the Supervisory Board a candidate as independent auditors to audit our German statutory financial statements (to be proposed by the Supervisory Board for approval by our shareholders at our AGM) and approval of their fees;

 

·                        retaining the services of our independent auditors to audit our U.S. GAAP financial statements and approval of their fees; and

 

·                        pre-approval of all audit and non-audit services performed by KPMG, our independent auditors.

 

The Audit and Corporate Governance Committee has also been in charge of conducting the internal investigation described in Item 15.B, “Management’s annual report on internal control over financial reporting” in our 2013 20-F.

 

In connection with the settlement of the shareholder proceedings contesting the resolutions of the Extraordinary General Meeting (“EGM”) held August 30, 2005 that approved the transformation, the conversion of our preference shares into ordinary shares and related matters, we established a joint committee (the “Joint Committee”) (gemeinsamer Ausschuss) of the supervisory boards of Management AG and FMC-AG & Co. KGaA consisting of two members designated by each supervisory board to advise and decide on certain extraordinary management measures, including:

 

·                        transactions between us and Fresenius SE with a value in excess of 0.25% of our consolidated revenue, and

 

·                        acquisitions and sales of significant participations and parts of our business, the spin-off of significant parts of our business, initial public offerings of significant subsidiaries and similar matters. A matter is “significant” for purposes of this approval requirement if 40% of our consolidated revenues, our consolidated balance sheet total assets or consolidated profits, determined by reference to the arithmetic average of the said amounts shown in our audited consolidated accounts for the previous three fiscal years, are affected by the matter.

 

Furthermore, a nomination committee prepares candidate proposals for the supervisory board and suggests suitable candidates to supervisory board and for its nomination prospects to the General Meeting. The nomination committee consisted of Dr. Gerd Krick (Chairman), Dr. Walter L. Weisman, Dr. Dieter Schenk.

 

The supervisory board of our General Partner, Management AG, is supported by a Regulatory and Reimbursement Assessment Committee (the “RRAC”) whose members were Mr. William P. Johnston (Chairman), Mr. Rolf A. Classon (Vice-Chairman) and Dr. Dieter Schenk. The primary function of the RRAC is to assist and to represent the board in fulfilling its responsibilities, primarily through assessing the Company’s affairs in the area of its regulatory obligations and reimbursement structures for dialysis services. In the United States, these reimbursement regulations are mandated by the HHS and CMS for dialysis services. Similar regulatory agencies exist country by country in the International regions to address the conditions for payment of dialysis treatments. Furthermore, the supervisory board of Management AG has its own nomination committee, which consisted of Dr. Ulf. M. Schneider (Chairman), Dr. Gerd Krick and Dr. Walter L. Weisman.

 

We are exempt from the NYSE rule requiring companies listed on that exchange to maintain compensation committees consisting of independent directors. See Item 16.G, “Corporate Governance” in our 2013 20-F.

 

(iv)                             Compensation of the Management Board and the Supervisory Board

 

Report of the Management Board of Management AG, our General Partner

 

The compensation report of FMC-AG & Co. KGaA summarizes the main elements of the compensation system for the members of the Management Board of Fresenius Medical Care Management AG as general partner of FMC-AG & Co. KGaA and in this regard notably explains the amounts and structure of the compensation paid to the Management Board. Furthermore, the principles and the amount of the remuneration of the Supervisory Board are described. The compensation report is part of the management report of the annual financial statements and the annual consolidated group financial statements of FMC-AG & Co. KGaA as of December 31, 2013. The compensation report is prepared on the basis of the recommendations of the German Corporate Governance Code

 

13



 

and also includes the disclosures as required pursuant to the applicable statutory regulations, notably in accordance with the German Commercial Code (HGB).

 

Compensation of the Management Board

 

The entire Supervisory Board of Fresenius Medical Care Management AG is responsible for determining the compensation of the Management Board. The Supervisory Board is assisted in this task by a personnel committee, the Human Resources Committee. In the 2013 fiscal year, the Human Resources Committee was composed of Dr. Ulf M. Schneider (Chairman), Dr. Gerd Krick (Vice Chairman), Mr. William P. Johnston and Dr. Walter L. Weisman. See Item 16.G, “Corporate Governance” in our 2013 20-F.

 

The current Management Board compensation system was last approved by resolution of the General Meeting of FMC-AG & Co. KGaA on May 12, 2011 with a majority of 99.71% of the votes cast. Furthermore, this compensation system is reviewed by an independent external compensation expert at the beginning of each fiscal year.

 

The objective of the compensation system is to enable the members of the Management Board to participate reasonably in the sustainable development of the Company’s business and to reward them based on their duties and performance as well as their success in managing the Company’s economic and financial position giving due regard to the peer environment.

 

The amount of the total compensation of the members of the Management Board is measured taking particular account of relevant reference values of other DAX-listed companies and similar companies of comparable size and performance in the relevant industry sector.

 

The compensation of the Management Board is, as a whole, performance-based and consisted of three components in the fiscal year:

 

·                  non-performance-based compensation (fixed compensation and fringe benefits)

 

·                  short-term performance-based compensation (one-year variable compensation)

 

·                  components with long-term incentive effects (multi-year variable compensation, consisting of stock options and share-based compensations with cash settlement)

 

The individual components are designed on the basis of the following criteria:

 

In the 2013 fiscal year, the fixed compensation paid in Germany was divided in twelve instalments, while the fixed compensation paid in the U.S. was divided in twenty-four instalments as base salary. Moreover, the members of the Management Board received additional benefits consisting mainly of payment for insurance premiums, the private use of company cars, special payments such as foreign supplements, rent supplements, reimbursement of fees for the preparation of tax returns and reimbursement of certain other charges and additional contributions to pension and health insurance.

 

Performance-based compensation will also be awarded for the 2013 fiscal year as a short-term cash component (one-year variable compensation) and as components with long-term incentive effects (stock options and share-based compensations with cash settlement). The share-based compensations with cash settlement consist of phantom stocks and of the Share Based Award.

 

The amount of the one-year variable compensation and of the Share Based Award depends on the achievement of the following individual and common targets:

 

·                  Net income growth

 

·                  Free cash flow (Net cash provided by (used in) operating activities after Capital Expenditures, before Acquisitions and Investments) in percent of revenue

 

·                  Operating income margin

 

14



 

The level of achievement of these targets is derived from the comparison of target amounts and actual results. Furthermore, targets are divided into Group level targets and those to be achieved in individual regions. Lastly, the various target parameters are weighted differently by their relative share in the aggregate amount of variable compensation depending on the respective (regional and/or sectoral) areas of responsibility assumed by the members of the Management Board.

 

The respective minimum level of Net income growth to be achieved was at least 6% in the fiscal year, with the maximum bonus payable upon achievement of Net income growth of 15%. Furthermore, the members of the Management Board assuming Group functions and the members of the Management Board with regional responsibilities were also evaluated by reference to the development of free cash flow within the Group or in the relevant regions, respectively, during the fiscal year, with the targets being within a range of rates between 3% and 6% of the respective free cash flow in percent of revenue. For Board members without Group functions, growth of regional operating income margins within the fiscal year was compensated within individual targets ranging between 13% and 18.5%, reflecting the particularities of the respective Board responsibilities.

 

The targets are, as a rule, weighted differently depending on whether the Management Board member exercises Group functions — these are Mr. Rice Powell, Mr. Michael Brosnan and, during 2013, Dr. Rainer Runte — or whether the Management Board member is responsible for regional earnings — these are Mr. Roberto Fusté, Mr. Ronald Kuerbitz and, during 2013, Dr. Emanuele Gatti — or takes on specific Management Board responsibilities without Group functions — these are Mr. Kent Wanzek for Global Manufacturing Operations and Dr. Olaf Schermeier for Research & Development. For members of the Management Board with Group functions, Net income growth accounts for 80% and is thus weighted higher than for the other Board members, where Net income growth accounts for 60%. For members of the Management Board without Group functions, a further 20% is based upon the evaluation of the operating income margin. Achievement of the target for free cash flow in percent of revenue is weighted at 20% for all members of the Management Board equally.

 

Multiplying the level of target achievement by the respective fixed compensation and another fixed multiplier provides a total amount, of which a 75% share is paid out in cash to the Management Board members (one-year variable compensation) after approval of the annual financial statements for the fiscal year. Since the maximum level of target achievement is set at 120%, the Management Board’s maximum achievable one-year variable compensation is limited. The Management Board’s maximum achievable and minimum one-year variable compensation in the fiscal year are as follows:

 

 

 

Amounts of the short-term 
performance-related cash
compensation (annual bonus)

 

 

 

Minimum

 

Maximum

 

 

 

2013

 

2013

 

 

 

in thousands

 

Rice Powell

 

$

281

 

$

2,475

 

Michael Brosnan

 

$

163

 

$

1,435

 

Roberto Fusté

 

$

164

 

$

1,446

 

Dr. Emanuele Gatti1)

 

$

216

 

$

1,928

 

Ron Kuerbitz

 

$

191

 

$

1,683

 

Dr. Rainer Runte1)

 

$

127

 

$

1,157

 

Dr. Olaf Schermeier2)

 

$

93

 

$

877

 

Kent Wanzek

 

$

117

 

$

1,030

 

 


(1) Compensation information for 2013 in this and the following compensation tables and other parts of the compensation report includes compensation paid to Dr. Emanuele Gatti and Dr. Rainer Runte, both of whom resigned from the general partner’s management board effective March 31, 2014.

(2) pro rata temporis

 

15



 

The remaining share, amounting to 25% of the total amount calculated according to the key data above, is granted to the members of the Management Board in the form of the Share Based Award, which is included in components with long-term incentive effects. The Share Based Award is subject to a three- or four-year waiting period, although a shorter period may apply in special cases (e.g. professional incapacity, entry into retirement, non-renewal by the Company of expired service agreements). The amount of the cash payment of the Share Based Award is based on the share price of FMC-AG & Co. KGaA ordinary shares upon exercise after the three- or four-year waiting period.

 

In determining the variable compensation, it is ensured that performance-based components with long-term incentive effects (i.e. the Share Based Award as well as the stock option and phantom stock components described below) are granted in amounts which constitute at least 50% of the sum of one- and multi-year variable components. Should this turn out not to be the case mathematically, the Management Board members’ contracts provide that the portion of variable compensation payable as one-year variable compensation shall be reduced and the portion payable as the Share Based Award correspondingly increased, in order to meet this requirement. The components with long-term incentive effects also contain a limitation possibility for cases of extraordinary developments. The Supervisory Board may also grant a discretionary bonus for extraordinary performance.

 

In addition, a special bonus component applied in some cases for fiscal years 2006, 2007 and 2008 which was linked to the achievement of targets measured only over this three-year period but whose payment was also subject, in part, to a waiting period of several years through 2012. This bonus component also included special components linked to the achievement of extraordinary financial targets related to special integration measures (e.g. in connection with the acquisition of Renal Care Group in the U.S.) and thus required the achievement of an extraordinary increase in earnings. The present report also reflects those payments based on this earlier bonus component but exercised and paid only in the previous fiscal year (see table “Expenses for Long-term Incentive Components”).

 

For the fiscal year and the previous year, the amount of cash compensation payments to members of the Management Board without components with long-term incentive effects consisted of the following:

 

 

 

Amount of Cash Payments

 

 

 

Non-Performance Related
Compensation

 

Performance
Related
Compensation

 

Cash Compensation
(without long-term
Incentive Components)

 

 

 

Salary

 

Other1)

 

Bonus

 

 

 

 

 

 

 

2013

 

2012

 

2013

 

2012

 

2013

 

2012

 

2013

 

2012

 

 

 

in thousands

 

in thousands

 

in thousands

 

in thousands

 

Rice Powell

 

$

1,250

 

$

990

 

$

224

 

$

40

 

$

495

 

$

1,587

 

$

1,969

 

$

2,617

 

Michael Brosnan

 

725

 

675

 

193

 

317

 

287

 

998

 

1,205

 

1,990

 

Roberto Fusté

 

730

 

707

 

400

 

322

 

370

 

889

 

1,500

 

1,918

 

Dr. Emanuele Gatti

 

973

 

899

 

165

 

148

 

702

 

1,204

 

1,840

 

2,251

 

Ronald Kuerbitz

 

850

 

 

35

 

 

668

 

 

1,553

 

 

Dr. Ben Lipps2)

 

 

1,250

 

 

387

 

 

1,847

 

 

3,484

 

Dr. Rainer Runte

 

584

 

565

 

58

 

53

 

231

 

835

 

873

 

1,453

 

Dr. Olaf Schermeier

 

442

 

 

92

 

 

175

 

 

709

 

 

Kent Wanzek

 

521

 

520

 

70

 

37

 

403

 

834

 

994

 

1,391

 

Total

 

$

6,075

 

$

5,606

 

$

1,237

 

$

1,304

 

$

3,331

 

$

8,194

 

$

10,643

 

$

15,104

 

 


(1) Includes insurance premiums, private use of company cars, rent supplements, contributions to pension and health insurance and other benefits.

(2) Chairman of the Management Board until December 31, 2012.

 

In addition to the Share Based Award, stock options under the Company’s Stock Option Plan 2011 and phantom stock awards under the Phantom Stock Plan 2011 were granted to members of the Management Board as additional components with long-term incentive effects in the fiscal year. These stock-option and phantom-stock components are granted during the course of each fiscal year. The Stock Option Plan 2011, together with the Phantom Stock Plan 2011, forms the Long Term Incentive Program 2011 (LTIP 2011).

 

16



 

In addition to the Members of the management boards of affiliated companies, managerial staff members of the Company and of certain affiliated companies the members of the Management Board are entitled to participate in LTIP 2011. Under LTIP 2011 a combination of stock options and phantom stock awards are granted to the participants. Stock options and phantom stock awards will be granted on specified grant days during a period of five years. The number of stock options and phantom stock awards to be granted to the members of the Management Board is determined by the Supervisory Board in its discretion. In principle all members of the Management Board are entitled to receive the same number of stock options and phantom stock awards, with the exception of the Chairman of the Management Board, who is entitled to receive double the granted quantity. At the time of the grant participants can choose a ratio based on the value of the stock options vs. the value of phantom stock awards in a range between 75:25 and 50:50. The exercise of stock options and phantom stock awards is subject to several conditions, including the expiration of a four year waiting period, the consideration of black-out periods, the achievement of a defined success target and the existence of a service or employment relationship. Stock options may be exercised within four years and phantom stock awards within one year after the expiration of the waiting period. For Management Board members who are U.S. tax payers specific conditions apply with respect to the exercise period of phantom stock awards. The success target is achieved in each case if, during the waiting period, either the adjusted basic income per share increases by at least eight per cent per annum in comparison to the previous year in each case or - if this is not the case - the compounded annual growth rate of the adjusted basic income per share during the four years of the waiting period reflects an increase of at least eight per cent per annum. If with regard to any reference year or more than one of the four reference years within the waiting period neither the adjusted basic income per share increases by at least eight per cent per annum in comparison to the previous year nor the compounded annual growth rate of the adjusted basic income per share during the four years of the waiting period reflects an increase of at least eight per cent per annum, the stock options and phantom stock awards subject to such waiting period are cancelled to such proportion to which the success target was not achieved within the waiting period, i.e. in the proportion of 25% for each year in which the target is not achieved within the waiting period, up to 100%.

 

Additional information regarding the basic principles of the LTIP 2011 and of the other employee participation programs in place at the beginning of the 2013 fiscal year and secured by conditional capital, which entitled their participants to convertible bonds or stock options (from which, however, in the past fiscal year no further options could be issued), are described in more detail in Note 15, “Stock Options,” in the Notes to Consolidated Financial Statements included in our 2013 20-F, in item (v) below, “Options to Purchase Our Securities” and in Item 10.B, “Additional Information - Articles of Association - General Information Regarding Our Share Capital - Conditional Capital” in our 2013 20-F.

 

Under Stock Option Plan 2011 in the 2013 fiscal year 2,141,076 stock options were granted in total (2012: 2,166,035), with 328,680 stock options (2012: 310,005) granted to the Management Board members. Moreover, in the fiscal year 186,392 (2012: 178,729) phantom stock awards were granted under the Phantom Stock Plan 2011, of which 25,006 awards (2012: 23,407) were granted to Management Board members.

 

For the 2013 fiscal year the number and value of stock options issued to members of the Management Board and the value of the share-based compensations with cash settlement paid to them, each as compared to the previous year, are shown individually in the following table:

 

17



 

 

 

Components with Long-term Incentive Effect

 

 

 

Stock Options

 

Share-based
Compensation with
Cash Settlement
1)

 

Total

 

 

 

2013

 

2012

 

2013

 

2012

 

2013

 

2012

 

2013

 

2012

 

 

 

Number

 

in thousands

 

in thousands

 

in thousands

 

Rice Powell

 

74,700

 

56,025

 

$

884

 

$

870

 

$

476

 

$

794

 

$

1,360

 

$

1,664

 

Michael Brosnan

 

37,350

 

37,350

 

442

 

580

 

251

 

509

 

693

 

1,089

 

Roberto Fusté

 

37,350

 

37,350

 

442

 

580

 

278

 

473

 

720

 

1,053

 

Dr. Emanuele Gatti

 

29,880

 

29,880

 

354

 

464

 

482

 

703

 

836

 

1,167

 

Ronald Kuerbitz

 

37,350

 

 

442

 

 

378

 

 

820

 

 

Dr. Ben Lipps2)

 

 

74,700

 

 

1,160

 

 

969

 

 

2,129

 

Dr. Rainer Runte

 

37,350

 

37,350

 

442

 

580

 

232

 

455

 

674

 

1,035

 

Dr. Olaf Schermeier

 

37,350

 

 

442

 

 

214

 

 

656

 

 

Kent Wanzek

 

37,350

 

37,350

 

442

 

580

 

290

 

455

 

732

 

1,035

 

Total

 

328,680

 

310,005

 

$

3,890

 

$

4,814

 

$

2,601

 

$

4,358

 

$

6,491

 

$

9,172

 

 


(1) This includes Phantom Stocks granted to Board Members during the fiscal year. The share-based compensation amounts are based on the grant date fair value.

(2) Chairman of the Management Board until December 31, 2012.

 

The stated values of the stock options granted to the members of the Management Board in the fiscal year correspond to their fair value at the time of grant, namely a value of $11.84 (€8.92) (2012: $15.53/€12.68) per stock option. The exercise price for the stock options granted is $66.03 (€49.76) (2012: $70.17/€57.30).

 

At the end of the 2013 fiscal year, the members of the Management Board held a total of 1,993,305 stock options and convertible bonds (collectively referred to as stock options; 2012: 2,201,205 stock options).

 

The development and status of stock options of the members of the Management Board in the 2013 fiscal year are shown in more detail in the following table:

 

 

 

Development and status of the stock options

 

 

 

Rice

 

Michael

 

Roberto

 

Dr. Emanuele

 

Ronald

 

Dr. Rainer

 

Dr. Olaf

 

Kent

 

 

 

 

 

Powell

 

Brosnan

 

Fusté

 

Gatti

 

Kuerbitz

 

Runte

 

Schermeier

 

Wanzek

 

Total

 

Options outstanding at January 1, 2013 Number

 

336,150

 

340,878

 

359,169

 

334,698

 

184,002

 

321,210

 

 

160,500

 

2,036,607

 

Weighted average exercise price in $

 

59.02

 

50.16

 

51.88

 

50.40

 

58.96

 

54.36

 

 

63.93

 

54.51

 

Options granted during the fiscal year Number

 

74,700

 

37,350

 

37,350

 

29,880

 

37,350

 

37,350

 

37,350

 

37,350

 

328,680

 

Weighted average exercise price in $

 

66.03

 

66.03

 

66.03

 

66.03

 

66.03

 

66.03

 

66.03

 

66.03

 

66.03

 

Options exercised during the fiscal year Number

 

49,800

 

47,244

 

49,800

 

125,538

 

 

99,600

 

 

 

371,982

 

Weighted average exercise price in $

 

46.77

 

35.39

 

42.05

 

38.09

 

 

44.41

 

 

 

41.13

 

Weighted average share price in $

 

51.09

 

52.21

 

52.18

 

49.75

 

 

53.29

 

 

 

51.51

 

Options outstanding at December 31, 2013 Number

 

361,050

 

330,984

 

346,719

 

239,040

 

221,352

 

258,960

 

37,350

 

197,850

 

1,993,305

 

Weighted average exercise price in $

 

62.70

 

54.35

 

55.09

 

59.15

 

60.59

 

60.25

 

68.62

 

64.82

 

59.33

 

Weighted average remaining contractual life in years

 

4.76

 

3.50

 

3.37

 

4.07

 

4.10

 

4.28

 

7.58

 

5.00

 

4.17

 

Range of exercise price in $

 

44.09 - 79.02

 

27.94 - 79.02

 

27.94 - 79.02

 

44.09 - 79.02

 

44.09 - 79.02

 

44.09 - 79.02

 

68.62 - 68.62

 

44.09 - 79.02

 

27.94 - 79.02

 

Options exercisable at December 31, 2013 Number

 

174,300

 

218,934

 

234,669

 

149,400

 

124,002

 

149,400

 

 

85,800

 

1,136,505

 

Weighted average exercise price in $

 

51.81

 

44.63

 

49.38

 

50.63

 

50.86

 

50.63

 

 

53.68

 

49.03

 

 

Based on the targets achieved in the 2013 fiscal year, members of the Management Board also earned entitlements to Share Based Awards totalling $1.110 million (2012: $2.751 million). On the basis of that value, determination of the specific number of virtual shares will not be made by the Supervisory Board until March of the

 

18



 

following year, based on the then current price of the ordinary shares of FMC-AG & Co. KGaA. This number will then serve as a multiplier for the share price and as a base for calculation of the payment of this respective share-based compensation after the three-year waiting period.

 

Phantom stocks with a total value of $1.491 million (2012: $1.607 million) were granted to the Management Board members under the Company’s Phantom Stock Plan 2011 in July of the 2013 fiscal year as further share-based compensation components with cash settlement.

 

Therefore, the amount of the total compensation of the Management Board for the 2013 fiscal year and for the previous year is as shown in the following table:

 

 

 

Total Compensation

 

 

 

Cash Compensation
(without long-term
Incentive
components)

 

Components with
long-term Incentive
Effect

 

Total Compensation
(including long-term
Incentive
Components)

 

 

 

2013

 

2012

 

2013

 

2012

 

2013

 

2012

 

 

 

in thousands

 

in thousands

 

in thousands

 

Rice Powell

 

$

1,969

 

$

2,617

 

$

1,360

 

$

1,664

 

$

3,329

 

$

4,281

 

Michael Brosnan

 

1,205

 

1,990

 

693

 

1,089

 

1,898

 

3,079

 

Roberto Fusté

 

1,500

 

1,918

 

720

 

1,053

 

2,220

 

2,971

 

Dr. Emanuele Gatti

 

1,840

 

2,251

 

836

 

1,167

 

2,676

 

3,418

 

Ronald Kuerbitz

 

1,553

 

 

820

 

 

2,373

 

 

Dr. Ben Lipps1)

 

 

3,484

 

 

2,129

 

 

5,613

 

Dr. Rainer Runte

 

873

 

1,453

 

674

 

1,035

 

1,547

 

2,488

 

Dr. Olaf Schermeier

 

709

 

 

656

 

 

1,365

 

 

Kent Wanzek

 

994

 

1,391

 

732

 

1,035

 

1,726

 

2,426

 

Total

 

$

10,643

 

$

15,104

 

$

6,491

 

$

9,172

 

$

17,134

 

$

24,276

 

 


(1) Chairman of the Management Board until December 31, 2012.

 

Components with long-term incentive effects, i.e. stock options and share-based compensation components with cash settlement, can be exercised only after the expiration of the specified vesting period. Their value is allocated over the vesting period recognized as an expense in the respective fiscal year of the vesting period. Compensation expenses attributable to the fiscal year and for the previous year are shown in the following table:

 

19



 

 

 

Expenses for Long-term Incentive Components

 

 

 

Stock Options

 

Share-based
Compensation with
Cash Settlement

 

Share-based
Compensation

 

 

 

2013

 

2012

 

2013

 

2012

 

2013

 

2012

 

 

 

in thousands

 

in thousands

 

in thousands

 

Rice Powell

 

$

432

 

$

690

 

$

586

 

$

564

 

$

1,018

 

$

1,254

 

Michael Brosnan

 

272

 

397

 

333

 

239

 

605

 

636

 

Roberto Fusté

 

272

 

492

 

308

 

284

 

580

 

776

 

Dr. Emanuele Gatti

 

239

 

447

 

495

 

602

 

734

 

1,049

 

Ronald Kuerbitz

 

46

 

 

17

 

 

63

 

 

Dr. Ben Lipps1)

 

 

2,745

 

 

2,160

 

 

4,905

 

Dr. Rainer Runte

 

275

 

481

 

353

 

242

 

628

 

723

 

Dr. Olaf Schermeier

 

46

 

 

17

 

 

63

 

 

Kent Wanzek

 

272

 

397

 

287

 

211

 

559

 

608

 

Total

 

$

1,854

 

$

5,649

 

$

2,396

 

$

4,302

 

$

4,250

 

$

9,951

 

 


(1) Chairman of the Management Board until December 31, 2012.

 

Commitments to Members of the Management Board for the Event of the Termination of their Appointment

 

The following pension commitments and other benefits are also part of the compensation system for the members of the Management Board: there are individual contractual pension commitments for the Management Board members Mr. Rice Powell and Mr. Roberto Fusté, Mr. Michael Brosnan and Mr. Kent Wanzek and with each of the former Management Board members Dr. Emanuele Gatti and Dr. Rainer Runte. Under all of these commitments, Fresenius Medical Care Management AG as of the end of the fiscal year has aggregate pension obligations of $25.210 million (2012: $19.494 million).

 

Each of the pension commitments provides for a pension and survivor benefit as of the time of conclusively ending active work, at age 65 at the earliest (at age 60 at the earliest with respect to Dr. Emanuele Gatti) or upon occurrence of disability or incapacity to work (Berufs- oder Erwerbsunfähigkeit), however, calculated by reference to the amount of the recipient’s most recent base salary.

 

The retirement pension will be based on 30% of the last fixed compensation and will increase for each complete year of service by 1.5 percentage points up to a maximum of 45%. Current pensions increase according to legal requirements (Sec. 16 of the German Act to improve company pension plans, “BetrAVG”). 30% of the gross amount of any post-retirement income from an activity of the Management Board member is offset against the pension obligation. Any amounts to which the Management Board members or their surviving dependents, respectively, are entitled from other company pension rights of the Management Board member, even from service agreements with other companies, are also to be set off. If a Management Board member dies, the surviving spouse receives a pension amounting to 60% of the resulting pension claim at that time. Furthermore, the deceased Management Board member’s own legitimate children (leibliche eheliche Kinder) receive an orphan’s pension amounting to 20% of the resulting pension claim at that time, until the completion of their education or they reach 25 years of age, at the latest. All orphans’ pensions and the spousal pension together reach a maximum of 90% of the Management Board member’s pension, however. If a Management Board member leaves the Management Board of Fresenius Medical Care Management AG before he reaches 65 or (in the case of Dr. Gatti) 60, except in the event of a disability or incapacity to work (Berufs- oder Erwerbsunfähigkeit), the rights to the aforementioned benefits remain, although the pension to be paid is reduced in proportion to the ratio of the actual years of service as a Management Board member to the potential years of service until reaching 65 or (in the case of Dr. Gatti) 60 years of age.

 

Management Board members Mr. Rice Powell, Mr. Michael Brosnan, Mr. Ronald Kuerbitz and Mr. Kent Wanzek participated in the U.S.-based 401(k) savings plan in the fiscal year. This plan generally allows employees in the U.S. to invest a portion of their gross salaries in retirement pension programs. The Company supports this investment, for full-time employees with at least one year of service, with a contribution of 50% of the investment

 

20



 

made, up to a limit of 6% of income - whereupon the allowance paid by the Company is limited to 3% of the income - or a maximum of $17,500 ($23,000 for employees 50 years of age or older). The aforementioned Management Board members were each contractually enabled to participate in this plan; in the past fiscal year the Company paid out $8.800 million (2012: $9.239  million) respectively in this regard.

 

Furthermore, the Management Board members Mr. Rice Powell, Mr. Michael Brosnan and Mr. Ronald Kuerbitz have acquired non-forfeitable benefits from participation in employee pension plans of Fresenius Medical Care North America, which provide payment of pensions as of the age of 65 and the payment of reduced benefits as of the age of 55. In March 2002, the rights to receive benefits from the pension plans were frozen at the level then applicable.

 

Additions to pension provisions in the fiscal year amounted to $5.678 million (2012: $10.893 million). The pension commitments are shown in the following table:

 

 

 

Development and status of pension commitments

 

 

 

As of January 1,
2013

 

increase

 

As of December 31,
2013

 

 

 

in thousands

 

Rice Powell

 

$

5,048

 

$

1,148

 

$

6,196

 

Michael Brosnan

 

1,742

 

654

 

2,396

 

Roberto Fusté

 

3,978

 

934

 

4,912

 

Dr. Emanuele Gatti

 

6,597

 

2,055

 

8,652

 

Ronald Kuerbitz

 

209

 

(20

)

189

 

Dr. Rainer Runte

 

1,672

 

494

 

2,166

 

Dr. Olaf Schermeier

 

 

 

 

Kent Wanzek

 

763

 

413

 

1,176

 

Total

 

$

20,009

 

$

5,678

 

$

25,687

 

 

A post-employment non-competition covenant was agreed upon with all Management Board members. If such covenant becomes applicable, the Management Board members receive compensation amounting to half their annual base salaries for each year of respective application of the non-competition covenant, up to a maximum of two years. The employment contracts of the Management Board members contain no express provisions that are triggered by a change of control of the Company.

 

Miscellaneous

 

All members of the Management Board have received individual contractual commitments for the continuation of their compensation in cases of sickness for a maximum of 12 months, although after six months of sick leave, insurance benefits may be set off against such payments. If a Management Board member dies, the surviving dependents will be paid three more monthly instalments after the month of death, not to exceed, however, the amount due between the time of death and the scheduled expiration of the agreement.

 

With Dr. Ben Lipps, the Chairman of the Management Board until December 31, 2012, there is an individual agreement instead of a pension provision, to the effect that, upon termination of his employment contract/service agreement with Fresenius Medical Care Management AG, he will be retained to render consulting services to the Company for a period of ten years. Accordingly, Fresenius Medical Care Management AG and Dr. Ben Lipps entered into a consulting agreement for the period January 1, 2013 to December 31, 2022. By this consulting agreement Dr. Ben Lipps will provide consulting services on certain fields and within a specified time frame as well as complying with a non-compete covenant. The annual consideration to be granted by Fresenius Medical Care Management AG for such services amounts for the fiscal year $730,000 (including reimbursement of expenses, temporary reimbursement of property expenses, company car provided temporarily). The present value of this agreement (including pension payments for the surviving spouse in case of death) amounted to $4.872 million as at December 31 of the fiscal year.

 

21



 

In the fiscal year, no loans or advance payments of future compensation components were made to members of the Management Board of Fresenius Medical Care Management AG.

 

The payments to U.S. Management Board members Mr. Rice Powell, Mr. Michael Brosnan and Mr. Kent Wanzek were paid in part in the U.S. (USD) and in part in Germany (EUR). For the part paid in Germany, the Company has agreed that due to varying tax rates in both countries, the increased tax burden to such Management Board members arising from German tax rates in comparison to U.S. tax rates will be balanced (net compensation). Pursuant to a modified net compensation agreement, these Management Board members will be treated as if they were taxed in their home country, the United States, only. Therefore the gross amounts may be retroactively changed. Since the actual tax burden can only be calculated in connection with the preparation of the Board members’ tax returns, subsequent adjustments may have to be made, which will then be retroactively covered in future compensation reports.

 

To the extent permitted by law, Fresenius Medical Care Management AG undertook to indemnify the members of the Management Board against claims against them arising out of their work for the Company and its affiliates, if such claims exceed their liability under German law. To secure such obligations, the Company has obtained directors & officers liability insurance carrying a deductible which complies with the requirements of the German Stock Corporation Act (AktG). The indemnity applies for the time in which each member of the Management Board is in office and for claims in this connection after termination of membership on the Management Board in each case.

 

Former members of the Management Board did not receive any compensation in the fiscal year other than that mentioned under section II. above and in the present section III. As of December 31 of the fiscal year, pension obligations to these members exist in an amount of $2 million (2012: $852,000).

 

Compensation of the Supervisory Board of Fresenius Medical Care & Co. KGaA and Supervisory Board of Management AG

 

The compensation of the FMC-AG & Co. KGaA Supervisory Board is set out in clause 13 of the Articles of Association.

 

In accordance with this provision, the members of the Supervisory Board are to be reimbursed for the expenses incurred in the exercise of their offices, which also include the applicable VAT.

 

As compensation, each Supervisory Board member receives in the first instance a fixed salary of $80,000 per respective complete fiscal year, payable in four equal instalments at the end of a calendar quarter. Should the General Meeting resolve on a higher compensation, with a majority of three-fourths of the votes cast and taking the annual results into account, such compensation shall apply.

 

The chairman of the Supervisory Board receives additional compensation of $80,000 and his deputy additional compensation of $40,000 per respective complete fiscal year. In addition, each member of the Supervisory Board shall also receive as a variable performance-related compensation component an additional remuneration which is based upon the respective average growth in basic earnings per share of the Company (EPS) during the period of the last three fiscal years prior to the payment date (3-year average EPS growth). The amount of the variable remuneration component is $60,000 in case of achieving a 3-year average EPS growth corridor from 8.00 to 8.99%, $70,000 in the corridor from 9.00 to 9.99% and $80,000 in case of a growth of 10.00% or more. If the aforementioned targets are reached, the respective variable remuneration amounts are earned to their full extent, i.e. within these margins there is no pro rata remuneration. In any case, this variable component is limited to a maximum of $80,000 per annum. Reciprocally, the members of the supervisory board are only entitled to the variable remuneration component if the 3 year average EPS growth of at least 8.00% is reached. The variable remuneration component, based on the target achievement, is in principle disbursed on a yearly basis, namely following approval of the Company’s annual financial statements, this for the fiscal year 2013 based on the 3-year average EPS growth for the fiscal years 2011, 2012 and 2013.

 

As a member of a committee, a Supervisory Board member of FMC-AG & Co. KGaA additionally annually receives $40,000, or, as chairman or vice chairman of a committee, $60,000 or $50,000, respectively payable in identical instalments at the end of a calendar quarter. For memberships in the Nomination Committee and in the Joint

 

22



 

Committee as well as in the capacity of their respective chairmen and deputy chairmen, no separate remuneration shall be granted. This also applies for the membership in the temporary Ad-hoc Committee in the fiscal year 2013.

 

During 2013, the total fees paid to the Audit and Corporate Governance Committee members for service on the committee were $0.190 million.

 

Should a member of the FMC-AG & Co. KGaA Supervisory Board be a member of the Supervisory Board of the General Partner Fresenius Medical Care Management AG at the same time, and receive compensation for his work on the Supervisory Board of Fresenius Medical Care Management AG, the compensation for the work as a FMC-AG & Co. KGaA Supervisory Board member shall be reduced by half. The same applies to the additional compensation for the chairman of the FMC-AG & Co. KGaA Supervisory Board and his deputy, to the extent that they are at the same time chairman and deputy, respectively, of the Supervisory Board of Fresenius Medical Care Management AG. If the deputy chairman of the FMC-AG & Co. KGaA Supervisory Board is at the same time chairman of the Supervisory Board at Fresenius Medical Care Management AG, he shall receive no additional compensation for his work as deputy chairman of the FMC-AG & Co. KGaA Supervisory Board to this extent.

 

The compensation for the Supervisory Board of Fresenius Medical Care Management AG and the compensation for its committees were charged to FMC-AG & Co. KGaA in accordance with section 7 paragraph 3 of the Articles of Association of FMC-AG & Co. KGaA.

 

The total compensation of the Supervisory Board of FMC-AG & Co. KGaA including the amount charged by Fresenius Medical Care Management AG to FMC-AG & Co. KGaA, is listed in the following tables, with the table immediately positioned hereinafter displaying the fixed compensation, whilst the subsequent table sets out the performance related compensation:

 

 

 

Fixed compensation
for Supervisory Board
at FMC Management
AG

 

Fixed compensation
for Supervisory Board
at FMC-AG
& Co. KGaA

 

Compensation for
committee services at
FMC Management
AG

 

Compensation for
committee services at
FMC-AG
& Co. KGaA

 

Non-Performance
Related
Compensation

 

 

 

2013

 

2012

 

2013

 

2012

 

2013

 

2012

 

2013

 

2012

 

2013

 

2012

 

 

 

(in thousands)1)

 

(in thousands)1)

 

(in thousands)1)

 

(in thousands)1)

 

(in thousands)1)

 

Dr. Gerd Krick

 

$

40

 

$

40

 

$

120

 

$

120

 

$

60

 

$

60

 

$

47

 

$

40

 

$

267

 

$

260

 

Dr. Dieter Schenk

 

60

 

60

 

60

 

60

 

50

 

50

 

 

 

170

 

170

 

Dr. Ulf M. Schneider2)

 

160

 

160

 

 

 

70

 

70

 

7

 

 

237

 

230

 

Dr. Walter L. Weisman

 

40

 

40

 

40

 

40

 

50

 

50

 

67

 

60

 

197

 

190

 

William P. Johnston

 

40

 

40

 

40

 

40

 

120

 

120

 

47

 

40

 

247

 

240

 

Prof. Dr. Bernd Fahrholz3)

 

 

 

80

 

80

 

 

 

50

 

50

 

130

 

130

 

Rolf A. Classon

 

40

 

40

 

40

 

40

 

60

 

60

 

 

 

140

 

140

 

Total

 

$

380

 

$

380

 

$

380

 

$

380

 

$

410

 

$

410

 

$

218

 

$

190

 

$

1,388

 

$

1,360

 

 


(1) Shown without VAT and withholding tax

(2) Chairman of the supervisory board of FMC Management AG, but not member of the supervisory board of FMC-AG & Co. KGaA; compensation paid by FMC Management AG

(3) Member of the supervisory board of FMC-AG & Co. KGaA, but not member of the supervisory board of FMC Management AG; compensation paid by FMC-AG & Co. KGaA

 

23



 

 

 

Performance Related
Compensation in FMC
Management AG

 

Performance Related
Compensation in
FMC-AG & KGaA

 

Performance Related
Compensation

 

Total compensation

 

 

 

2013

 

2012

 

2013

 

2012

 

2013

 

2012

 

2013

 

2012

 

 

 

(in thousands)

 

(in thousands)

 

(in thousands)

 

(in thousands)

 

Dr. Gerd Krick

 

$

 

$

35

 

$

 

$

35

 

$

 

$

70

 

$

267

 

$

400

 

Dr. Dieter Schenk

 

 

35

 

 

35

 

 

70

 

170

 

310

 

Dr. Ulf M. Schneider1)

 

 

70

 

 

 

 

70

 

237

 

370

 

Dr. Walter L. Weisman

 

 

35

 

 

35

 

 

70

 

197

 

330

 

William P. Johnston

 

 

35

 

 

35

 

 

70

 

247

 

380

 

Prof. Dr. Bernd Fahrholz2)

 

 

 

 

70

 

 

70

 

130

 

270

 

Rolf A. Classon

 

 

35

 

 

35

 

 

70

 

140

 

280

 

Total

 

$

 

$

245

 

$

 

$

245

 

$

 

$

490

 

$

1,388

 

$

2,340

 

 


(1) Chairman of the supervisory board of FMC Management AG, but not member of the supervisory board of FMC-AG & Co. KGaA

(2) Member of the supervisory board of FMC-AG & Co. KGaA, but not member of the supervisory board of FMC Management AG

 

(v)                                 Options to Purchase our Securities

 

Stock Option and Other Share Based Plans

 

Fresenius Medical Care AG & Co. KGaA Long Term Incentive Program 2011

 

On May 12, 2011, the FMC-AG & Co. KGaA Stock Option Plan 2011 (“2011 SOP”) was established by resolution of the AGM. The 2011 SOP, together with the Phantom Stock Plan 2011, which was established by resolution of the General Partner’s management and supervisory boards, forms the Company’s Long Term Incentive Program 2011 (“2011 LTIP”). Under the 2011 LTIP, participants will be granted awards, which will consist of a combination of stock options and phantom stock. Awards under the 2011 LTIP will be granted over a five-year period and can be granted on the last Monday in July and/or the first Monday in December each year. Prior to the respective grant, the participants will be able to choose how much of the granted value is granted in the form of stock options and phantom stock in a predefined range of 75:25 to 50:50, stock options v. phantom stock. The amount of phantom stock that plan participants may choose to receive instead of stock options within the aforementioned predefined range is determined on the basis of a fair value assessment pursuant to a binomial model. With respect to grants made in July, this fair value assessment will be conducted on the day following the AGM and with respect to the grants made in December, on the first Monday in October.

 

Members of the Management Board of the General Partner, members of the management boards of the Company’s affiliated companies and the managerial staff members of the Company and of certain affiliated companies are entitled to participate in the 2011 LTIP. With respect to participants who are members of the General Partner’s Management Board, the General Partner’s supervisory board has sole authority to grant awards and exercise other decision making powers under the 2011 LTIP (including decisions regarding certain adjustments and forfeitures). The General Partner has such authority with respect to all other participants in the 2011 LTIP.

 

The awards under the 2011 LTIP are subject to a four-year vesting period. The vesting of the awards granted is subject to achievement of performance targets measured over a four-year period beginning with the first day of the year of the grant. For each such year, the performance target is achieved if the Company’s adjusted basic income per ordinary share (“Adjusted EPS”), as calculated in accordance with the 2011 LTIP, increases by at least 8% year over year during the vesting period or, if this is not the case, the compounded annual growth rate of the Adjusted EPS reflects an increase of at least 8% per year of the Adjusted EPS during the four-year vesting period. At the end of the vesting period, one-fourth of the awards granted is forfeited for each year in which the performance target is not achieved. All awards are considered vested if the compounded annual growth rate of the Adjusted EPS reflects an increase of at least 8% per year during the four-year vesting period. Vesting of the portion or portions of a grant for a year or years in which the performance target is met does not occur until completion of the four-year vesting period.

 

The 2011 LTIP was established with a conditional capital increase up to €12,000,000 subject to the issue of up to twelve million non-par value bearer ordinary shares with a nominal value of €1.00, each of which can be exercised to obtain one ordinary share. Of these twelve million shares, up to two million stock options are designated for

 

24



 

members of the Management Board of the General Partner, up to two and a half million stock options are designated for members of management boards of direct or indirect subsidiaries of the Company and up to seven and a half million stock options are designated for managerial staff members of the Company and such subsidiaries. The Company may issue new shares to fulfill the stock option obligations or the Company may issue shares that it has acquired or which the Company itself has in its own possession.

 

The exercise price of stock options granted under the 2011 LTIP shall be the average stock exchange price on the Frankfurt Stock Exchange of the Company’s ordinary shares during the 30 calendar days immediately prior to each grant date. Stock options granted under the 2011 LTIP have an eight-year term and can be exercised only after a four-year vesting period. Stock options granted under the 2011 LTIP to US participants are non-qualified stock options under the United States Internal Revenue Code of 1986, as amended. Options under the 2011 LTIP are not transferable by a participant or a participant’s heirs, and may not be pledged, assigned, or disposed of otherwise.

 

Phantom stock under the 2011 LTIP entitles the holders to receive payment in Euro from the Company upon exercise of the phantom stock. The payment per phantom share in lieu of the issuance of such stock shall be based upon the stock exchange price on the Frankfurt Stock Exchange of one of the Company’s Ordinary shares on the exercise date. Phantom stock will have a five-year term and can be exercised only after a four-year vesting period, beginning with the grant date. For participants who are U.S. tax payers, the phantom stock is deemed to be exercised in any event in the March following the end of the vesting period.

 

Incentive plan

 

In 2013, the Management Board was eligible for performance—related compensation that depended upon achievement of targets. The targets are measured by reference to operating income margin, net income growth and free cash flow (net cash provided by operating activities after capital expenditures before acquisitions and investments) in percentage of revenue, and are derived from the comparison of targeted and actually achieved current year figures. Targets are divided into Group level targets and those to be achieved in individual regions and areas of responsibility.

 

Those performance-related bonuses for fiscal year 2013 will consist proportionately of a cash component and a share-based component which will be paid in cash. Upon meeting the annual targets, the cash component will be paid after the end of 2013. The share-based component is subject to a three- or four-year vesting period, although a shorter period may apply in special cases. The amount of cash for the payment relating to the share-based component shall be based on the closing share price of Fresenius Medical Care AG & Co. KGaA ordinary shares upon exercise. The amount of the achievable bonus for each of the members of the Management Board is capped.

 

In 2006, Management AG adopted a three-year performance related compensation plan for fiscal years 2008, 2007 and 2006, for the members of its Management Board in the form of a variable bonus. A special bonus component (award) for some of the management board members consisted in equal parts of cash payments and a share-based compensation based on development of the share price of FMC-AG & Co. KGaA’s ordinary shares. The amount of the award in each case depended on the achievement of certain performance targets. The targets were measured by reference to revenue growth, operating income, consolidated net income, and cash flow development. Annual targets have been achieved and the cash portion of the award has been paid after the end of the respective fiscal year. The share-based compensation portion of the award has been granted but subject to a three-year vesting period beginning after the respective fiscal year in which the target has been met and is amortized over the same three-year vesting period. The payment of the share-based compensation portion corresponds to the share price of FMC-AG & Co. KGaA’s ordinary shares on exercise, i.e. at the end of the vesting period, and was also made in cash. The share-based compensation was revalued each reporting period during the vesting period to reflect the market value of the stock as of the reporting date with any changes in value recorded in the reporting period. This plan was fully utilized at the end of 2011.

 

The share-based compensation incurred under these plans for years 2013, 2012 and 2011 was $1.1 million, $2.8 million and $2.3 million, respectively.

 

25



 

Fresenius Medical Care AG & Co. KGaA Stock Option Plan 2006 and prior plans

 

On May 9, 2006, as amended on May 15, 2007 for a three-for-one share split (the “Share Split”), the FMC-AG & Co. KGaA Stock Option Plan 2006 (the “Amended 2006 Plan”) was established by resolution of our AGM with a conditional capital increase up to €15,000,000 subject to the issue of up to fifteen million no par value bearer ordinary shares with a nominal value of €1.00 each. Under the Amended 2006 Plan, up to fifteen million options can be issued, each of which can be exercised to obtain one ordinary share, with up to three million options designated for members of the management board, up to three million options designated for members of management boards of direct or indirect subsidiaries of the Company and up to nine million options designated for managerial staff members of the Company and such subsidiaries. With respect to participants who are members of the Management Board, the General Partner’s supervisory board has sole authority to grant stock options and exercise other decision making powers under the Amended 2006 Plan (including decisions regarding certain adjustments and forfeitures). The Management Board has such authority with respect to all other participants in the Amended 2006 Plan.

 

Options under the Amended 2006 Plan were granted the last Monday in July and/or the first Monday in December. The exercise price of options granted under the Amended 2006 Plan shall be the average closing price on the Frankfurt Stock Exchange of our ordinary shares during the 30 calendar days immediately prior to each grant date. Options granted under the Amended 2006 Plan have a seven-year term but can be exercised only after a three-year vesting period. The vesting of options granted is subject to achievement of performance targets, measured over a three-year period from the grant date. For each such year, the performance target is achieved if our adjusted basic income per ordinary share (“EPS”), as calculated in accordance with the Amended 2006 Plan, increases by at least 8% year over year during the vesting period, beginning with EPS for the year of grant as compared to EPS for the year preceding such grant. Calculation of EPS under the Amended 2006 Plan excludes, among other items, the costs of the transformation of our legal form to a KGaA and the conversion of preference shares into ordinary shares. For each grant, one-third of the options granted are forfeited for each year in which EPS does not meet or exceed the 8% target. The performance targets for 2012, 2011, and 2010 were met but the options that vested will not be exercisable until expiration of the full 3-year vesting period of each year’s grants. Vesting of the portion or portions of a grant for a year or years in which the performance target is met does not occur until completion of the entire three-year vesting period. The last grant under the Amended 2006 Plan took place on December 6, 2010. No further grants are possible under the Amended 2006 Plan. For information regarding options granted to each member of the Management Board, see item (iv), “- Compensation of the Management Board and the Supervisory Board” above.

 

Options granted under the Amended 2006 Plan to U.S. participants are non-qualified stock options under the United States Internal Revenue Code of 1986, as amended. Options under the Amended 2006 Plan are not transferable by a participant or a participant’s heirs, and may not be pledged, assigned, or otherwise disposed of.

 

At December 31, 2013, we had awards outstanding under the terms of various prior stock-based compensation plans, including the 2001 plan. Under the 2001 plan as amended on May 16, 2013 for the conversion of our preference shares to ordinary shares, convertible bonds with a principal of up to €10,240,000 were issued to the members of the Management Board and other employees of the Company initially representing grants for up to 4 million non-voting Preference shares. Following the Share Split in 2007 and the conversion of preference shares into ordinary shares in 2013, the convertible bonds have a par value of €0.85, bear interest at a rate of 5.5% and are convertible into ordinary shares instead of non-voting preference shares. Except for the members of the Management Board, eligible employees were able to purchase the bonds by issuing a non-recourse note with terms corresponding to the terms of and secured by the bond. We have the right to offset our obligation on a bond against the employee’s obligation on the related note; therefore, the convertible bond obligations and employee note receivables represent stock options we issued and are not reflected in the consolidated financial statements. The options expire in ten years and one third of each grant can be exercised beginning after two, three or four years from the date of the grant. Bonds issued to Board members who did not issue a note to us are recognized as a liability on our balance sheet.

 

Upon issuance of the option, the employees had the right to choose options with or without a stock price target. The conversion price of options subject to a stock price target becomes the stock exchange quoted price of the ordinary shares upon the first time the stock exchange quoted price exceeds the initial value by at least 25%. The initial value (“Initial Value”) is the average price of the shares during the last 30 trading days prior to the date of grant. In the case of options not subject to a stock price target, the number of convertible bonds awarded to the eligible employee would be 15% less than if the employee elected options subject to the stock price target. The conversion price of the options without a stock price target is the Initial Value, as adjusted in accordance to the Share

 

26



 

Split. Each option entitles the holder thereof, upon payment the respective conversion price, to acquire one ordinary share. Up to 20% of the total amount available for the issuance of awards under the 2001 plan could be issued each year through May 22, 2006. Effective May 2006, no further grants could be issued under the 2001 plan.

 

At December 31, 2013, the Management Board members held 1,993,305 stock options for Ordinary shares and employees of the Company held 8,797,450 stock options for ordinary shares with an average remaining contractual life of 4.83 years and 4,711,245 exercisable ordinary options at a weighted average exercise price of $50.21.

 

(vi)                   Material Transactions between FMC-AG & Co. KGaA and its Subsidiaries and Directors, Officers and Controlling Persons of FMC-AG & Co. KGaA

 

In connection with the formation of FMC-AG & Co. KGaA, and the combination of the dialysis businesses of Fresenius SE and W.R. Grace & Co. in 1996, Fresenius SE and its affiliates and FMC-AG & Co. KGaA and its affiliates entered into several agreements for the purpose of giving effect to the Merger and defining our ongoing relationship. Fresenius SE and W.R. Grace & Co. negotiated these agreements. The information below summarizes the material aspects of certain agreements, arrangements and transactions between FMC-AG & Co. KGaA and Fresenius SE and their affiliates. The following descriptions are not complete and are qualified in their entirety by reference to those agreements, which have been filed with the Securities and Exchange Commission and the New York Stock Exchange. We believe that the leases, the supply agreements and the service agreements are no less favorable to us and no more favorable to Fresenius SE than would have been obtained in arm’s-length bargaining between independent parties. The trademark and other intellectual property agreements summarized below were negotiated by Fresenius SE and W.R. Grace & Co., and, taken independently, are not necessarily indicative of market terms.

 

Dr. Gerd Krick, Chairman of our Supervisory Board, is also a member of the supervisory board of our General Partner as well as Chairman of the supervisory board of Fresenius SE and Chairman of the supervisory board of its general partner, Fresenius Management SE. Dr. Dieter Schenk, Vice Chairman of the supervisory board of our General Partner and of the Supervisory Board of FMC-AG & Co. KGaA, is also Vice Chairman of the supervisory board of Fresenius Management SE and Chairman of the Advisory Board of Else Kröner-Fresenius-Stiftung, the sole shareholder of Fresenius Management SE, and Dr. Ulf M. Schneider, Chairman of the supervisory board of our General Partner and a former member of the Management Board of FMC-AG & Co. KGaA, is Chairman of the management board of Fresenius Management SE. Mr. Rolf A. Classon, Dr. Walter L. Weisman and Mr. William P. Johnston are members of both our Supervisory Board and our general partner’s supervisory board.

 

In the discussion below regarding our contractual and other relationships with Fresenius SE:

 

·                        the term “we (or us) and our affiliates” refers only to FMC-AG & Co. KGaA and its subsidiaries; and

 

·                        the term “Fresenius SE and its affiliates” refers only to Fresenius SE and affiliates of Fresenius SE other than FMC-AG & Co. KGaA and its subsidiaries.

 

Real Property Lease

 

We did not acquire the land and buildings in Germany that Fresenius Worldwide Dialysis used when we were formed in 1996. Fresenius SE or its affiliates have leased part of the real property to us, directly, and transferred the remainder of that real property to two limited partnerships. Fresenius SE is the sole limited partner of each partnership, and the sole shareholder of the general partner of each partnership. These limited partnerships, as landlords, have leased the properties to us and to our affiliates, as applicable, for use in our respective businesses. The aggregate annual rent payable by us under these leases is approximately €20.3 million, which was approximately $27.0 million as of December 31, 2013, exclusive of maintenance and other costs, and is subject to escalation, based upon development of the German consumer-price-index determined by the Federal Statistical Office (Statistisches Bundesamt). The leases for manufacturing facilities have a ten-year term, followed by two successive optional renewal terms of ten years each at our election. The leases for the other facilities have a term of ten years. The current option period for the lease agreements is set to expire in 2016. Based upon an appraisal, we believe that the rents under the leases represent fair market value for such properties. For information with respect to our principal properties in Germany, see “Item 4.D. Property, plants and equipment” in our 2013 20-F.

 

27



 

Trademarks

 

Fresenius SE continues to own the name and mark “Fresenius” and its “F” logo. Fresenius SE and Fresenius Medical Care Deutschland GmbH, one of our German subsidiaries, have entered into agreements containing the following provisions. Fresenius SE has granted to our German subsidiary, for our benefit and that of our affiliates, an exclusive, worldwide, royalty-free, perpetual license to use “Fresenius Medical Care” in our company names, and to use the Fresenius marks, including some combination marks containing the Fresenius name that were used by the worldwide dialysis business of Fresenius SE, and the “Fresenius Medical Care” name as a trade name, in all aspects of the renal business. Our German subsidiary, for our benefit and that of our affiliates, has also been granted a worldwide, royalty-free, perpetual license:

 

·                        to use the “Fresenius Medical Care” mark in the then current National Medical Care non-renal business if it is used as part of “Fresenius Medical Care” together with one or more descriptive words, such as “Fresenius Medical Care Home Care” or “Fresenius Medical Care Diagnostics”;

 

·                        to use the “F” logo mark in the National Medical Care non-renal business, with the consent of Fresenius SE. That consent will not be unreasonably withheld if the mark using the logo includes one or more additional descriptive words or symbols; and

 

·                        to use “Fresenius Medical Care” as a trade name in the renal business

 

We and our affiliates have the right to use “Fresenius Medical Care” as a trade name in other medical businesses only with the consent of Fresenius SE. Fresenius SE may not unreasonably withhold its consent. In the U.S. and Canada, Fresenius SE will not use “Fresenius” or the “F” logo as a trademark or service mark, except that it is permitted to use “Fresenius” in combination with one or more additional words such as “Pharma Home Care” as a service mark in connection with its home care business and may use the “F” logo as a service mark with the consent of our principal German subsidiary. Our subsidiary will not unreasonably withhold its consent if the service mark includes one or more additional descriptive words or symbols. Similarly, in the U.S. and Canada, Fresenius SE has the right to use “Fresenius” as a trade name, but not as a mark, only in connection with its home care and other medical businesses other than the renal business and only in combination with one or more other descriptive words, provided that the name used by Fresenius SE is not confusingly similar to our marks and trade names. Fresenius SE’s ten-year covenant not to compete with us, granted in 1996, has expired, and Fresenius SE may use “Fresenius” in its corporate names if it is used in combination with one or more additional distinctive word or words, provided that the name used by Fresenius SE is not confusingly similar to the Fresenius Medical Care marks or corporate or trade names.

 

Other Intellectual Property

 

Some of the patents, patent applications, inventions, know-how and trade secrets that Fresenius Worldwide Dialysis used prior to our formation were also used by other divisions of Fresenius SE. For Biofine®, the polyvinyl chloride-free packaging material, Fresenius SE has granted to our principal German subsidiary, for our benefit and for the benefit of our affiliates, an exclusive license for the renal business and a non-exclusive license for all other fields except other non-renal medical businesses. Our German subsidiary and Fresenius SE share equally any royalties from licenses of the Biofine® intellectual property by either our German subsidiary or by Fresenius SE to third parties outside the renal business and the other non-renal medical businesses. In addition, Fresenius SE transferred to our German subsidiary the other patents, patent applications, inventions, know-how and trade secrets that were used predominantly in Fresenius SE’s dialysis business. In certain cases Fresenius Worldwide Dialysis and the other Fresenius SE divisions as a whole each paid a significant part of the development costs for patents, patent applications, inventions, know-how and trade secrets that were used by both prior to the Merger. Where our German subsidiary acquired those jointly funded patents, patent applications, inventions, know-how and trade secrets, our subsidiary licensed them back to Fresenius SE exclusively in the other non-renal medical businesses and non-exclusively in all other fields. Where Fresenius SE retained the jointly funded patents, patent applications, inventions, know-how and trade secrets, Fresenius SE licensed them to our German subsidiary exclusively in the renal business and non-exclusively in all other fields.

 

28



 

Supply Agreements and Arrangements

 

We produce most of our products in our own facilities. However, Fresenius Kabi AG, a wholly-owned subsidiary of Fresenius SE, manufactures some of our products for us, principally dialysis concentrates and other solutions, at facilities located in Germany, Brazil, France and South Africa. Conversely, our facilities in Germany and Italy produce products for Fresenius Kabi AG.

 

Our local subsidiaries and those of Fresenius SE have entered into supply agreements for the purchase and sale of products from the above facilities. Prices under the supply agreements are determined by good-faith negotiation. During 2013, we sold products to Fresenius SE in the amount of $30.1 million. In 2013, we made purchases from Fresenius SE in the amount of $34.2 million.

 

The parties may modify existing or enter into additional supply agreements, arrangements and transactions. Any future modifications, agreements, arrangements and transactions will be negotiated between the parties and will be subject to the approval provisions of the pooling agreements and the regulatory provisions of German law regarding dominating enterprises.

 

On September 10, 2008, Fresenius Kabi AG acquired Fresenius Kabi USA, Inc. (formerly APP Pharmaceuticals Inc.) (“Kabi USA”), which manufactures and sells sodium heparin. Heparin is a blood thinning drug that is widely and routinely used in the treatment of dialysis patients to prevent life-threatening blood clots. FMCH currently purchases heparin supplied by Kabi USA through MedAssets, Inc. MedAssets Inc. is a publicly-traded U.S. corporation that provides inventory purchasing services to healthcare providers through a group purchasing organization (“GPO”) structure. The Company has no direct supply agreement with Kabi USA and does not submit purchase orders directly to Kabi USA. A GPO is an organization that endeavors to manage supply and service costs for hospitals and healthcare providers by negotiating discounted prices with manufacturers, distributors and other vendors. Vendors discount their prices and pay administrative fees to GPOs because GPOs provide access to a large customer base, thus reducing vendors’ sales and marketing costs and overhead. FMCH is one of many U.S. healthcare providers that participate in the MedAssets GPO. FMCH purchases pharmaceuticals and supplies used in its dialysis services business through the MedAssets GPO contract. During 2013, we acquired $17.7 million of heparin from Kabi USA through the GPO.

 

On July 3, 2013, we entered into an agreement with a Fresenius SE company for the manufacturing of plasma collection devices. We agreed to produce 3,500 units, with an option to produce a total of 4,550 units. Production of these units will commence in March of 2014 with an estimated contract value of approximately $55 million. A fairness opinion was also obtained from a reputable global accounting firm.

 

Services Agreement

 

We obtain administrative and other services from Fresenius SE headquarters and from other divisions and subsidiaries of Fresenius SE. These services relate to, among other things, administrative services, management information services, employee benefit administration, insurance, IT services, tax services and treasury services. For 2013, Fresenius SE and its affiliates charged us approximately $103.6 million for these services. Conversely, we have provided certain services to other divisions and subsidiaries of Fresenius SE relating to research and development, central purchasing and warehousing. For 2013 we charged approximately $7.6 million to Fresenius SE and its subsidiaries for services we rendered to them.

 

We and Fresenius SE may modify existing or enter into additional services agreements, arrangements and transactions. Any such future modifications, agreements, arrangements and transactions will be negotiated between the parties and will be subject to the approval provisions of the pooling agreement and the regulations of German law regarding dominating enterprises.

 

Financing

 

During 2013, we received advances from Fresenius SE of between €3.2 million and €100 million which carried interest rates between 1.363% and 1.541%. See Note 10 of the Notes to Consolidated Financial Statements, “Short-Term Borrowings and Short-Term Borrowings from Related Parties — Short-Term Borrowings from Related Parties” in our 2013 20-F. As of December 31, 2013, we had loans of CNY 352 million ($58.2 million) outstanding

 

29



 

with a subsidiary of Fresenius SE at a weighted average interest rate of 6.1%, with the majority of the loans due on May 23, 2014. We also provided a loan of €4.4 million to Fresenius SE at an interest rate of 1.563% which came due and was paid on January 3, 2014. On August 19, 2009, the Company borrowed €1.5 million ($2.0 million) from the General Partner at 1.335%. The loan repayment is currently scheduled for August 20, 2014 at an interest rate of 1.796%. On November 28, 2013, the Company borrowed an additional €1.5 million ($2.0 million) from the General Partner at 1.875%. This loan is due on November 28, 2014.

 

Other Interests

 

Dr. Dieter Schenk, Vice Chairman of the supervisory boards of FMC-AG Co. KGaA and of Management AG and a member of the supervisory board of Fresenius Management SE, is a partner in the law firm of Noerr, which has provided legal services to Fresenius SE and its subsidiaries and to FMC-AG & Co. KGaA and its subsidiaries. The Company incurred expenses in the amount of $1.268 million, $1.519 million, and $2.120 million for these services during 2013, 2012, and 2011, respectively. Dr. Schenk is one of the executors of the estate of the late Mrs. Else Kröner. Else Kröner-Fresenius-Stiftung, a charitable foundation established under the will of the late Mrs. Kröner, is the sole shareholder of the general partner of Fresenius SE and owns approximately 26.8% of the voting shares of Fresenius SE. Dr. Schenk is also the Chairman of the advisory board of Else Kröner-Fresenius-Stiftung. See “— Security Ownership of Certain Beneficial Owners of Fresenius SE.”

 

Under the Articles of Association of FMC AG & Co. KGaA, we will pay Fresenius SE annual compensation for assuming unlimited liability at 4% of the amount of the General Partner’s share capital. See Item 16.G, “Corporate Governance — The Legal Structure of FMC AG & Co. KGaA” in our 2013 20-F.

 

General Partner Reimbursement

 

Management AG is a 100% wholly-owned subsidiary of Fresenius SE. The Company’s Articles of Association provide that the General Partner shall be reimbursed for any and all expenses in connection with management of the Company’s business, including compensation of the members of the General Partner’s supervisory board and Management Board. The aggregate amount reimbursed to Management AG for 2013 was approximately $16.3 million for its management services during 2013 including $0.2 million as compensation for its exposure to risk as general partner. The Company’s Articles of Association fix this compensation as a guaranteed return of 4% of the amount of the General Partner’s share capital (which is currently €3.0 million). See Item 16.G “Governance —The Legal Structure of FMC-AG & Co. KGaA” in our 2013 20-F.

 

(vii)                         Principal Accountant Fees and Services

 

In the AGM held on May 16, 2013, our shareholders approved the appointment of KPMG to serve as our independent auditors for the 2013 fiscal year. KPMG billed the following fees to us for professional services in each of the last two years:

 

 

 

2013

 

2012

 

 

 

(in thousands)

 

Audit fees

 

$

10,062

 

$

11,208

 

Audit related fees

 

32

 

424

 

Tax fees

 

578

 

443

 

Other fees

 

3,904

 

1,536

 

Total

 

$

14,576

 

$

13,611

 

 

“Audit Fees” are the aggregate fees billed by KPMG for the audit of our German statutory and U.S. GAAP consolidated and annual financial statements, reviews of interim financial statements and attestation services that are provided in connection with statutory and regulatory filings or engagements. Fees related to the audit of internal control are included in Audit Fees. “Audit-Related Fees” are fees charged by KPMG for assurance and related

 

30



 

services that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “Audit Fees.” This category comprises fees billed for comfort letters, consultation on accounting issues, the audit of employee benefit plans and pension schemes, agreed-upon procedure engagements and other attestation services subject to regulatory requirements. “Other fees” include amounts related to supply chain consulting fees. “Tax Fees” are fees for professional services rendered by KPMG for tax compliance, tax advice on implications for actual or contemplated transactions, tax consulting associated with international transfer prices, and expatriate employee tax services.

 

Audit Committee’s pre-approval policies and procedures

 

As a German company, we prepare statutory financial statements under German law on the basis of the accounting principles of the German Commercial Code (Handelsgesetzbuch or HGB) and consolidated financial statements in accordance with International Financial Reporting Standards. Our supervisory board engages our independent auditors to audit these financial statements, in consultation with our Audit and Corporate Governance Committee and subject to approval by our shareholders at our AGM in accordance with German law.

 

We also prepare financial statements in accordance with U.S. GAAP, which are included in registration statements and reports that we file with the Securities and Exchange Commission.  Our Audit and Corporate Governance Committee engages our independent auditors to audit these financial statements in accordance with Rule 10A-3 under the Exchange Act and Rule 303A.06 of the NYSE Governance Rules. See also the description in “Item (iii) Directors and Senior Management,” above.

 

In 2003, Fresenius Medical Care AG’s audit committee also adopted a policy requiring management to obtain the committee’s approval before engaging our independent auditors to provide any audit or permitted non-audit services to us or our subsidiaries. Pursuant to this policy, which is designed to assure that such engagements do not impair the independence of our auditors, the Audit and Corporate Governance Committee pre-approves a catalog of specific audit and non-audit services in the categories Audit Services, Audit-Related Services, Tax Services, and Other Services that may be performed by our auditors as well as additional approval requirements based on fee amount and nature.

 

The general partner’s Chief Financial Officer reviews all individual management requests to engage our auditors as a service provider in accordance with this catalog and, if the requested services are permitted pursuant to the catalog, fee level, and fee structure, approves the request accordingly.  Services that are not included in the catalog exceed applicable fee levels or fee structure are passed on either to the chair of the Audit and Corporate Governance Committee or to the full committee, for approval on a case by case basis. Additionally we inform the Audit and Corporate Governance Committee about all approvals on an annual basis. Neither the chairman of our Audit and Corporate Governance Committee nor the full committee is permitted to approve any engagement of our auditors if the services to be performed either fall into a category of services that are not permitted by applicable law or the services would be inconsistent with maintaining the auditors’ independence.

 

31


GRAPHIC 6 g90141mqi001.jpg GRAPHIC begin 644 g90141mqi001.jpg M_]C_X``02D9)1@`!`0$`8`!@``#_VP!#``H'!P@'!@H("`@+"@H+#A@0#@T- M#AT5%A$8(Q\E)"(?(B$F*S7J#A(6&AXB)BI*3E)66EYB9FJ*CI*6FIZBIJK*SM+6VM[BYNL+#Q,7& MQ\C)RM+3U-76U]C9VN'BX^3EYN?HZ>KQ\O/T]?;W^/GZ_\0`'P$``P$!`0$! M`0$!`0````````$"`P0%!@<("0H+_\0`M1$``@$"!`0#!`<%!`0``0)W``$" M`Q$$!2$Q!A)!40=A<1,B,H$(%$*1H;'!"2,S4O`58G+1"A8D-.$E\1<8&1HF M)R@I*C4V-S@Y.D-$149'2$E*4U155E=865IC9&5F9VAI:G-T=79W>'EZ@H.$ MA8:'B(F*DI.4E9:7F)F:HJ.DI::GJ*FJLK.TM;:WN+FZPL/$Q<;'R,G*TM/4 MU=;7V-G:XN/DY>;GZ.GJ\O/T]?;W^/GZ_]H`#`,!``(1`Q$`/P#4\=Z5J/AN M\75-(OKN"SN'/F)',P$4AYZ=`#_2L&U\?^)[7@:D9AZ31JWZXS7L^HZ?;ZII M\UC=IOAF7:P_J/<=:\]O/A&PR;'5\^BSQ?U'^%=U*M3<;5#GG"2=XE*U^+&K MQX%S86DX[E2R'^M;%K\6]/<@7>F7,/J8V5Q_2N5O?AOXEM,E+6*Z4=X91G\C M@U@WFDZEIYQ>:?9`@G`Y/H*TK/P[K6H8-KI5U(I_B\LJOYG`I_5 MJ4=6'M9O8Z.Z^*FNS<6]O:6X]0I<_J?Z5CW7C?Q+=DE]7F0>D0$?\A6G9_"_ MQ#'AM8+ M5)%WX?:+=PV7]LZK//-=W2_NA-(6,(?$<'C1='TB]6(2I&(T9$QN([DBKFEP?$+^U+8WU[;/:"53.J MM'DIGGHM:>Q:C=M$<^MK'=T5Y3IVN^-]>U6\M-,U&/-NS$B1$4!=Q`_AK6\. M>*M?@\5_\([X@\J61N`Z*`5.W<.G!!'M3EAY*^JT!5$ST"BO*+;Q#XRU?6KV MRT[4X5\AW($JQJ`H;`Y*\UT>F7GBO1['4=3\0SPW5O!;%X5B*\N#[`4I4''J M@51/H=I17E6FZOXY\2K+>:=J-LFQR!;AD4^O"D$X]R:W[_5_$MA\/Y=0U`QV MNI*ZA2B#(7T5KV/0 MJ*XFR\:2:KX&OKV&58=4LH3Y@`'7LX![&LZ/Q3K3?#:75S>_Z:MWY8E\M?NY M'&,8I>PE^-@]HCT>BO-=4\5ZW;^`M(U.*]VW=S*ZRR>6IW`%L<8QV%=3=ZG> M1>`#J:38N_L"R^9M'WRH.<=*3HR5O6PU-,Z&BO-K/QQJMMX"EU2X=;F]>\-O M$[H`%^4')`QG'-5[.[^(5W9)JME?P7D;C=Y*&-B!Z%<Q6U%/!:+.=U7%V:/HB/3[**4RQV<"2'JZQ@$_CBBYU"RLEW75W!`/^FD@7^=>#2>( M]F[GE< M(D=NA[8]3T'M]:]#KEJQA&7+$ MU@VU=A111619Y-XRL%U7XFPV#R-&MPL2%UZKD'D5VGA?P7;^%[J>>&]FN#.@ M0B0`8P<]JTY_#VDW.KIJTUFK7L9!6;*>'] M*U75=:U5=)U%[*:+>YV,5,GSG"Y'O6O\-(+6\\0W5UJ$LTFJ0`E!*VB:+JGA.R M\.R:3#JL=Y;6\,CRB0]3V/A' M0--E>6TTV)&=#&V26#*>H()([4JE:$UU",)1['F-YI?@^:TDOM)\02V^/ZUW,G@#PO+-YI MTI`JZ'IEW87"SPF>0!USC('-=7_ M`,(!X6_Z!$?_`'\?_&K$G@_0)=/BL'TY#;0NSQQ[VPI/4]:3KPJ::62RU"W$J7& MGVEW8-87$"R6S($,;=,#I5(>%]%723I(L5^Q,_F&']PY)+8Y+0ETBS^&A/B)&^RW=T6B51\Y/`#+^1/TK`U6PT/2X!J'A[Q- M))-N&(,%9![Y&.GN*]DNM,L;VS^QW5I#+;@8$;(-H^GI6-'X`\+Q3"4:4A(. M0K.S+^1.*<,1%-MW$Z;V1:\)7UWJ7A>PN[TDSR1_,Q&-V"0#^(`-;--551`B M*%51@`#``IUEV[L?X@ MFUOSM6%XLT>YU72B^GW$MO?V^7@>)RI)[J<=C_/%7!^]O84MMBA%\,_#, M4YE-O-(O:-YCM']?UK>L=%TO30!9:?;P8[I&`?SZUY#8Z]XNUR]@T:+5;D2. M^PXPK*.Y8@9XKV+3+"/3-/ALXF=Q&N"[G+.>Y)]2:VK1G'24KF<'%[(M4445 MS&H4444`>:>+_%VK:%XU6*"Y8V<:QN]OM&&!^\,XSS70>,_%2Z7X9BNM/G'G MWP`MG&#A2,EOR_4BN4\6:?'JOQ/CL)256XB1,CL=IP?SQ6+:Z3J%_%?PZBS^ M3H%M(H4]%?)POYY/T`KT%3@U%OH:KJL\%_')O:-0=HPWR_P`)[`=ZI124K+KVN*[TUZ'3^*=2\1>'O"&G M&;4,:B9V6:6,`[A\Q'4>F.U9DNI>/])TJ'6Y;R.YLG19""%;"MC&X8!'7M5O MXCZK9:SX7LKO3YQ/";LKO`(Y"G/6H=5\9Z.?`$6D6\S37;VD<+*$("$`9R3] M#TJ()\J]W=ZZ%2:N]2_KWC&[NO`=KK.FRFSN)+@12A<':0&R.>W`-.U+QI=Z M1X(TNY#";4KZ+AW'`QU8@?4<5SM]I\^G_"FU^T(4:>_$P5A@A2I`_09_&F^* M+&9O!7AS444M%%!Y;GLI.",_D::IPNETNQ.4M7Y&BW_"Q[*W@U3[0]R)B#]F M50Y&>F5`X'T/%=KJ6MS:;X2DU:\M_LURL&3"2#MD/`'OR:QI?B=H5OI4%PAD MGN&"A[95(9/7)/''ZUB?$373K%OI6F6$I_*L^24Y)2C M8JZBG9W'^!?%VK7.OI8:S=/*EW#F`NH7YNH(P.A`-:'Q)U[5-%ETX:=>-;B4 M/OV@'=C;CJ/BG3?[/5(87`.&V\KGGKUK9^)M[%J-IH5[" MHQ$M$A/)*@FG,P52S'``R2>U\&WWBHWMS8:_:2/%%D+=,H'S#MG^('U%2`EL?PN!@_J#7E&C-KUXVIZA:Z*VHC45>&:0@X7<I2\/W_`(X\2K.U MAK*@6Y4/YNT=#_%.LS:]=:!K;)+/"KXE4`$,O4''!'O7'>%]%U7 M5-.U.XTO49K:2U56,,;,/.."<9!]C^==)\+(=/E^WW3,[:FHPV]L_NSW'OD< M_A5U8Q2EHM/(F#=T96C:SXPUUYQ;:_%#Y.,_:'1,YST^7GI7::+8^+$LF_M# M4HIW9]R.C`C9@8_A]L_#EW)$M/ MT^WLH=7!CMHEB0M&^2%&!GY?:IKIK2,?P'3?5O\`$ZNBBBO/.D****`,NRT# M3K'6[S5((=MS=`;SV'KCTSU-:E%%5)MO42"BBBI&%%%%`&?+H6ES:JFJ264; M7J8VS'.X8X%32:992QW4;VT96\_X^!C_`%G`'/X`444^9]Q6163P[H\>E/I: M6$0LI&W-#SM)R#G]!5/_`(0;PQ_T!K?]?\:**I3DNHVFPF MUCD,BQM-M?"/AZSF$T&D6JNO(8INQ^=%%+GEW#E78O:EI5CJ]L+;4+ M9+B(,&"/TR._ZTZ/3K.+3UT]+:/[(J;!"1E=OI@T44KNU@LC,@\%^&[:Y%Q% MI%N)%.1D$@'Z$XJU)X?TF755U22QC:]4@B8YR"!@444W.3ZARKL6-0TVRU6U M-K?VZ7$)(;8_3(Z&J,WA30;BU@M9=,A>&VW>2ASA,G)QSZT44*4ELPLF0KX( M\,JP9='MP0<@\_XUO444.3ENP22V,O4_#6BZS*)=0TZ&>0#&\@AL?45K7"R+.GZ;9Z5:BUL+=+>$$D(G3)ZU M63P[H\>I/J26$2WVEA%#<2;@SID9SR:**?-+N%D4_^$&\,'_F#6_Z_XT?\(-X8 3_P"@-;_K_C113]I/NQQ__V3\_ ` end GRAPHIC 7 g90141ms01i001.jpg GRAPHIC begin 644 g90141ms01i001.jpg M_]C_X``02D9)1@`!`0$`8`!@``#_VP!#``H'!P@'!@H("`@+"@H+#A@0#@T- M#AT5%A$8(Q\E)"(?(B$F*S7J#A(6&AXB)BI*3E)66EYB9FJ*CI*6FIZBIJK*SM+6VM[BYNL+#Q,7& MQ\C)RM+3U-76U]C9VN'BX^3EYN?HZ>KQ\O/T]?;W^/GZ_\0`'P$``P$!`0$! M`0$!`0````````$"`P0%!@<("0H+_\0`M1$``@$"!`0#!`<%!`0``0)W``$" M`Q$$!2$Q!A)!40=A<1,B,H$(%$*1H;'!"2,S4O`58G+1"A8D-.$E\1<8&1HF M)R@I*C4V-S@Y.D-$149'2$E*4U155E=865IC9&5F9VAI:G-T=79W>'EZ@H.$ MA8:'B(F*DI.4E9:7F)F:HJ.DI::GJ*FJLK.TM;:WN+FZPL/$Q<;'R,G*TM/4 MU=;7V-G:XN/DY>;GZ.GJ\O/T]?;W^/GZ_]H`#`,!``(1`Q$`/P#U'7]?@\.V MB7EU;SR6Y;:[PJ#L]"1GI6?:?$+PS=D*-1$3'M*A7]<8K=OK*#4;*:SN4#PS M(58>U>!>(-%FT#6)]/GY"',;?WT/0UV8>E3JIQ>C.3$5:E*TEJCWFVUC3+S_ M`(]M0MIO9)5)_+-6Z^:@2O*DCZ'%7;76]5L0%M=2NH0.@24@5M+`=I&$<>NL M3Z)HKP^V^(OB>VP/MXE'I)&I_7&:KW7CKQ->*5DU65`?^>($?\JS^HU+[HT^ MO4[;,]V9U1=SL%'J3BLZZ\2:)99^T:K:H1U7S03^0KP.XO[R[;=KR$ MU7]S6L*Z>UF:XM8IVB:(R*&V/U M7/8^]>2_#7PQ_:FI?VK=)FUM&^0'H\G^`KV"N7$0ITY:NTGTS3%U_1F8*NJV9)X`\]?\:?++L+F7ZBC@8`K M(S@*<],'O4-IK>E7TOE6NH6\TG]Q)`2?PHY7O8+K8OT52N-8TRTF,-QJ%M#( MO5'E`(_`TD&M:7HJK!J=A=3M;V][!+, MN=T:2`L,=>*6?4+*VG2">ZABED^XCN`S?0=Z+,+HLT5DW'BG1+351I<]^B7A M94$15LY;&!TQSD500R/\`=620*3]`:+W4K'3E5KV[AMPWW?,<#/TI68[HM454L]5T_421 M9WL$Y7J(W!(_"K=#36X)I[!1112&%%%%`!1110`56N].LK]-EY:PSC&,2(#5 MFBA.P;G+7OPY\-7AW"R-NWK"Y4?ETKG[WX0QG)L=5=3GI/&#_+%:WB_Q5K'A M6_CD%I#=6$_W6.59&'49%4[/XMZ9+Q>6-Q!_M)AQ7=#ZSRJ47='%-8=RY9*S M.6N_ACXCMV/E1P7"YX*28/Y&K%E\*=!_#EAM,>F1.R]&E^<_K7+7OQ>A7<+'2W8CHTSX!_`5UOA:^U75 M-+&H:I'%"9_FBAC!^5.Q)/K657ZPHWFS2E[!NT$;$4,4$8CBC6-!T51@4^BB MN0ZS$\9?\BAJ?_7`UY%HK>$%L,:VE\;KO>+T>3PGJ2(C.Q@. M%49)_"N?^'&CVTGAC-]IZ&7SF_UT7S8X]17=1J*%%M]^AQUH.=5+R,/QSH]A MHW@_3X=.$GD37!E'F')Y45E:M9>"T\-K+I]XYU/:I,8+$%NX.>`*ZWXK6TLF MBV,=M`\FV8_+&A;`Q[5A>*_""V.BZ9JVEV;!@B"XB52Q+'D,1]>#6U&:<8W; MU;_IF-:#YI62T2_I%/7'NY?AKHK7F2?M3B,MR2FTXI?#MAX-UFXM-->"^%[, M,,V\!-V.:U?&UU-KO@K1[B&RF23SB)(5A;*$*0>,=*ATSQI=:99V\">%"TD" M!?-\E@QQWSBJ3DZ?NK6[ZV):BJGO/2RZ7(_B3:2V.I:7#)',^E6]ND:`'C@X M(S_>P!1H-GX'U#7+.2TN;NRE1P1;SGY9&[`-]:VM:\6Z^MK8WB>'Q+8S1;ID MDC+Y8GIZC'T[URDEK<>*=?M3I?AXZ=M93*54A>N2QSP*4.9T[2TWU3_,))9.!^^? MC)%8OBIKFP^(YU!=.EO(X!&=OE$J_P`F.N*V]&\=71S['I71Z MYK5KX@\5^'+^V(^VDGV>=)5/F1D*P,GJ:R)_" MMYX?\`_P"%P:AQ_P`MI_YU!XCM+I_BLDR6TS1_:K8[Q&2O`3OC%3Z_ M8ZMX3\;R:_96;75O.Y?(4L/F^\IQTYJ;IP4>KB4DU-RMHI"_$\#_`(2[2./X M%_\`1E9OC0>3X\EEUV&>:Q)'EJC;I)K:\4>)=9T_6I8+KPZEWIO"Q;X]V[U((Z?2IBW!Q@M6D^I(DO-*O+A)D0[+2XX.?4'O]*]*KQ[PYI=WK/C:WU*RTAM,L MH)5D88(50.W/<^U>PURXI6FM;Z?<=.&=XO2P4445RG2%%%%`!1110`4444`9 MVNZ/;Z]I$^GW`XD'RMW1NQKQW4/A_P")-/))L3<(#PT!W9'KCJ*]SIKL$0N< MX49.!FNBCB)TM$<];#PJZL^;I[>>V8I<0R1,#@AU(J>STG4=0;;9V-Q.?]B, MFO>8K_0];CRDUG>*O4-M;!^AZ4^+5M*%VFG6]U`9R/EAB()`'?`Z"NMXV5OA MU.18*-_BT/,O#?PVU2;4H)]7@6"S0[W0N"SX[8[5ZXJA5"J``!@`=J6BN*K6 ME5=Y'=2HQI*T0HHHK$U&NZ1(7D8(HY+,<`4D4T4Z;X9$D7^\C`BL?QE_R*&I M_P#7`UP/PO\`$4>GW%SIEU($@D0S(S'A64?-^8_E6\*+G3I MO=6\>)9#T1G`)_"FR7UG"Y26ZA1QU5I`"*\5CU9]=^(5OJ#])+M1&#_" M@.`/RJSXS2R?XBS#46=+0LGG-&,L%V]JW6$]Y1;Z7,?K7NN276Q[#'?6GD6Z\DE9;^9[4DB2KNC=7 M7U4Y%9\?B'1Y=1.FQZC`UV'*>2&^;<.HQ^!KS6Q6]\">/+;2EO'FL[AD4J>` MRL<`XZ`@_P`JATOCXQ/_`-?\_P#)JI89:N^EKHEXEZ*VM[,]=GNK>U7=<3QQ M+ZNP'\Z6&XAN$WP2I*OJC`C]*\CTRRF^(OBR\?4+F2.V@RPC4_=7.`H]/K75 M>%O!&H>&M?FN(M1!T]@0(CG+^F1T!'K6:. M('IO8#/YU(K*RAE8%2,@@\$5Y+X_EN/$?BQM,LE\P6$#$KZD#[OXUI"C%P M4IRM%?`KM?78N;J"'RU MEQ]YCPO^?:O,_#$UUX;U[2M4N`5M[_(+'^)2VTY^AP:*>'YXMI[;>8JE?DDE M;??R/;9KB"W`,\T<0/0NP&?SIB:A92-M2\@8GL)`:X7XNX.DZ>>#^^;'Y5RV MK:'X6M/#ZWNGZV)-0"JWDJX8ECU&!R,55/#J<4V]_(52NXR:2V\SV>:>&W4- M-*D2DX!=@!^M0_VG8?\`/];_`/?U?\:\HUJ[N[[X7Z9+>%G=;DJK/U91G!]Z MBT31?!>KR6ME]MOA?3@!E"84-CGG%-89*+SV165U#*P92,@ M@Y!IU06-HEA8P6D9)2",1J3UP!BIZXV=:"BBB@`HHHH`\@^)'ADZ5J?]K6B% M;:Z;YPO\$G?\_P#&NL^'/A?^QM*_M"YCQ>7B@X(YC3L/QZG\*ZR[L[:_@,%W M"DT1()5QD9!R*FKIEB)2I*!S1P\8U',6BBBN8Z0HHHH`Q/&0)\(ZF`,_N#TK MRQ_#DMWX'L-4LXB;A)VAE`&"P9L*?S./QKVT@$8(!'H:38FW;L7'7&.*Z*5= MTU9+J<]6@JCN^QY#?:,NA^,=`L8TR8TB,C!?O.3R:C\63PV?Q)DNKJU-S;Q, MC/%MSO&WI7L11"VXJ"?4BD,4;')12?4BM%BM;M=+$/#:63ZW.!\/>.M(_M*# M3]/T&2S^V2JA90`,GC)KD],UX^&O&6I7S6CW`:69-HXZN>:]J$48.1&H(]J/ M*C)R8US_`+HI1KP5_=W\QNA-V][5>1Y7I%KJOC;QI!KEU9M;V=NRL"0<87D* M">IS532R#\8G_P"O^?\`DU>Q5472M.2[^UI86RW&XMYPA4/D]3G&DV\3/O(.4('`S_$2>U=^\:2+MD177T89%`C0)L"*%_NXXJ95XS5Y1U[E1HR M@[1EIV/&_#&@>(M?FO-7T^^CLG=RKO+G+[N2!P>*N^"C<^%_&]QHEX6S M*#M+8W*1_+\:]8554850!["D,:%MQ12?7'-5+%.5TUHR8X91::>J/%/#WB0^ M%]?O[EK*2X$I9,#C'S9KT;PGXR'BBXN818/;>0@;+-G.3]*Z3R8O^>:?]\BE M5$3[JJOT%15K0J:\NOJ73I3AIS:>AQ_Q+T"ZUG1(IK.-I9;1RYC49+*1@XKF MH?B7J,6B0:=;:KTP0Q"3S!&@?^]M&?SI0K)1491O8 MOXU#XL\'PZ1H^G:OIT;LCJOGHYW?,1D M'Z=J]@\J/&/+7'IBG%5*[2H(],4XXIQMRK37\0EAE*_,]=#S'QI?0:I\/]+N M+2$1H9`IB1<;"!@C%5-)\9Z#IEO;$>&G-U`@!F50"6`ZUZOY<>W;L7'IBCR8 MO^>:?]\BI5>/+RN/XE.C+FYE+\"MI.H+JNE6]^L;1+.FX(W45 GRAPHIC 8 g90141mm01i001.jpg GRAPHIC begin 644 g90141mm01i001.jpg M_]C_X``02D9)1@`!`0$`8`!@``#_VP!#``H'!P@'!@H("`@+"@H+#A@0#@T- M#AT5%A$8(Q\E)"(?(B$F*SP#`2(``A$!`Q$!_\0` M'P```04!`0$!`0$```````````$"`P0%!@<("0H+_\0`M1```@$#`P($`P4% M!`0```%]`0(#``01!1(A,4$&$U%A!R)Q%#*!D:$((T*QP152T?`D,V)R@@D* M%A<8&1HE)B7J#A(6&AXB)BI*3E)66EYB9FJ*CI*6FIZBIJK*SM+6VM[BYNL+#Q,7& MQ\C)RM+3U-76U]C9VN'BX^3EYN?HZ>KQ\O/T]?;W^/GZ_\0`'P$``P$!`0$! M`0$!`0````````$"`P0%!@<("0H+_\0`M1$``@$"!`0#!`<%!`0``0)W``$" M`Q$$!2$Q!A)!40=A<1,B,H$(%$*1H;'!"2,S4O`58G+1"A8D-.$E\1<8&1HF M)R@I*C4V-S@Y.D-$149'2$E*4U155E=865IC9&5F9VAI:G-T=79W>'EZ@H.$ MA8:'B(F*DI.4E9:7F)F:HJ.DI::GJ*FJLK.TM;:WN+FZPL/$Q<;'R,G*TM/4 MU=;7V-G:XN/DY>;GZ.GJ\O/T]?;W^/GZ_]H`#`,!``(1`Q$`/P#N[OXAZ)IV MM7&E:BMU:26_61XPZ-T(QL+'D'/('O@\54W&.S MX..1STK!^*/A@ZKI`U6VC5KFQ5FDS@%H<9/)'.WJ!D<%L9)%>-DY[YYSUKV\ M)E]#%4N:,FGU.*I7G3E9H^G([B*>))8I%DCG!J^8HI'@E26% MVCD1@R.APRD=""/H*V+/QEXDL93)#K5VS,NTB:3S1^3Y`/O5SR2I]B:!8Q=4 M?0VX=N:`-FW&=V>F,=ZR+SQOX9LHEDEUJT<,0`(9/-//0X3)` MXZ]*SC"NJ&`Q,]H/\C-UZ<=V>H[AWXI"U>)WGQ5\2 MW402(VEHP8'?##DGV^>,O$E]*))M:NU*KM`AD\H?DF`3[UUPR;$2 MW:1D\7!;'T')<101/++(L<:`L[N&#I6D'5;F M-5N;Y5:/&"5AQD<@<;NI&3P%S@@UW8&">:\3$QI0JN-+9'93]9/B3P_;>(]&FTZX;R]^&CE"@F-AT(S^78X)&1FNS`XIX:KS/9[ MF-:G[2)\ZTE=UJ?PFURU\U[&XM[Y$QL7=YI_I7UU/&8>I\$D>7*E..Z,>E!I/?FEQ[_E74 MFF9V#/H2/QHS_/UHQ24@#CT_SC'\J7/^U%HA:Z1=N)ANCD:(I&PQG.\X7&.ASSQZU$JL(*\G8:C)[( MRJZOX>^&E\0ZYYMP,V5EMEE&`1(<_*A!['!SP>`1QD&K^F_";7+HQ/?7%O8H MV=R[O,D3&<<#Y3D@=&[_`(5ZAX;\/VWAS1H=.MV\S9EI)2H4R.>I./R'4X`& M3BO%QV94E3<*3O)G70P\KWDC45<#TIU&**^7/2%I":6LOQ+)+#X9U26&1HY( M[.5E=3@J0AP0?K5)7=A-V5S2W"C-?.7_``DWB#MKFI=/^?J3_&E_X2;7_P#H M.ZE_X%2?XU[?]BU?YD(/\`H.ZEP,\WU+FN3\`>*G\3:1(MWM^WV;!)BH^^#]USQ@9P>!QD=LXKS#Q% MXAUR#Q)JD4.LW\<<=Y*JHERZJJAS@8!XX_E7'1P%2K5E2V:-9UXQBI=SWO-& M:^<_^$G\0?\`0=U+_P`"Y/\`&C_A)M?QDZ[J/_@6_P#C79_8U7^9&7UM=CZ, MS[4@.>O%<7?^+_\`A'/`&E7TI%S?75K$(A(_WG,8)=N23NN<*Q`5,X'"\!,M>T_4X+Q]4O; ME(G#/#+Z:/JMKK>E0:G9ES#<+D;UPPP<$$>Q!''% M8XO!5,-;FU3+I5E4+^?6C.:\#\1>(=<@\2ZG%%K-_&D=Y,BHERZA0'.``#TQ MBO1M"OKV;X1RWLEW,]U]DNF$[R$OD&3!W9SQ@?E5UL!.E3C4;TD3"NIMJVQV MV:,BOG/_`(2;7^O]N:CZ_P#'T_\`C7HOQ9U/4--&D"QO[FU\P3;_`"9F3=C9 MC.#SU/YU=3+*D*D*;E\7Z$K$IQ2#PSJDT$C1R)9RLKJ<%2$."#ZURU\-*C5]E)F ML*BE'F1IYHS[5\Y?\)-K_7^W-2Z?\_;_`.->L:CXM_X1SP#I5[*?M-]=6L0B M61_O,4!+MSD@=\BCZ`#@>E06US/9W"W%K/+!,GW9(W*LN>N"/;BNU9 M'/ENYZ^GZF3Q=NFA]-`YI17"_#?Q/KGB"&Y74HXY8;?"K=;2C.Y))7`&TX&. MF,<9!SFNY4YKQJU*5&;A+='7":FKH=1116184444`%%%%`!1110`4444`%(1 MFEI,4`(1D=<9I,#UIQXINX9I`4KS0])U"437NFVES(%VAYH%=@,YQDCU)/XU MS5Y\*O#-UL\F.YL]N<^3,3OZ==^[&,=L=:[(/D$XX%+D8SBMH5ZM/X)-?,AP MC+='E&I?!ZYC);3-5BDW2';'*;%99&TMIX MHCC?`ZN7YP"J@[B.AZ5[WU]L4F/QKOI9MB8:-W]48RPL&?-$EC>0WHL9+69+ MHL%$#QD.2<8&T\Y.16UIW@+Q/J6TQZ5+!&7"%[G$6WIR5;YL8/8'H:]]V4;> MN3G)STKHEG56WN12(6$CU9Y+8_!W49"_V[5K:WQC9Y"-+GKG.=N.WKW_`!ZB MR^%/ABUW^=%<7F[&WSIL;,>FS;^N>G&.:[/I[YHS@9Q7!4S#$SWFUZ:&T:$( M]#/T_P`/Z1I1#6&G6UNX3R_,2(!RO'!;J>@/)[5?QSUH+\`@<4;JXVW+5NYJ MDEL*!2@8H'-%2,6BBBF`5E>*?^14U?\`Z\9O_0#6K63XI_Y%35O^O&;_`-`- M7#XT3+9GSGC('&?8CK7IP\;_``_`_P"17S[_`&"`_P#LV:\QR,<^G6N[/PB\ M0GD76FYZ_P"LD_\`B*^NQRP[Y76DUVM\CRZ3FK\J.X\-Q^$_%%A)>V7AVUB2 M.4Q,)K.)6W``]L]F%>:?$<$>/-1V_P#3+UQ_JEKU'P%X_KVKE8=,O[FUDNH+&YEMX\B29(F*K@9.2!@8'-5E3PB6(=93OY'.ZGNT^"_#-GX;T@('7M7<>"[OP]XO-Y_P`4EIMG]EV=(D?=NW?[`Q]W]:XC M1/ASK&OZ3#J=I$_P"T#?RVTGVGR]GD M,QQMW9SD#^\*YL>\)&$^27OW[OOJ70]IS*ZT,'XP6OD6NC>1"4MX?-C&Q<*F M=FU?0<`X'L?2N&\-ZTGA_5UOY-.@OE12!'+QM/!#*2#M(('./4>]>_:I;6-[ MIEQ!J2QM9M&?.\UL*%'))/;'7/;&:\WO/A<1GT764DC=5:%)U!#`XY,B\8 MZD87T^M3@<;1]A["MHOS^XJM2ES\T2=_%7@#Q*IDUO3OLMQ\C.[1,6=MN"`\ M7+`=/FQGCCT[O0M.L-*T:WL]-??:(@,;[]^\'YMV>^22>..>*\&USPSJ_AZ0 MKJ5HR1$X2=?FC?KC#=.=I.TX..U=1\*=DT=RS07H+*.?DD49SUXRH(/ M&3A?2JQ6!BZ'M*,[Q72]T%.JU.TD@('7M6/XF'_%5:MV_TZ;K_OM6QHGPYUC7])@U M.TN;)(9]VT2.X888JE4]A]7@Z^BLN_;R.:/-SOE.V\%W?A_P`7F\_X MI+3K/[+L_P"62/NW;O\`8&/N_K3?BU#';^#[.*%%2-+Q%1%&`H$;@`"KOP_\ M(:CX4_M#[?-;2?:O+V>0S'&W=G.0/[PJK\7_`/D5+7_K^3_T!Z\*,H?7HJD[ MQNK':TU2?-N>.\8KLOAUXK70-4-C>RJEA>-\TDCD+"X!PWH`>A_`DX%9?@>Q MMM2\7V=E>0K-;S"571NA_=N1]"#R#VQFJOB'0[CP[K,VFW!\S9AHY`A59%/0 M@'\?Q!&3BOHJ_LZTGAI[M)HX8Q>'?^2+2_\`7E=_^A25PYE'DH4X]FE^!KAW>39XYV/T MKU#XS?\`,%_[;_\`M.O+^WX5ZA\9O^8+])__`&G6^(_WNA\_R(A_"G\C*^$/ M_(V7/_7B_P#Z&E>H^*/^13U?_KQF_P#0#7DWPJO8K7QD(G#$W5N\2;<<'(?G MGIA"/J17K'BAO^*3U?/`^PS-F2:QOW'7A]:3/G3_"N\\?9_P"$4\'X M_P"?$_A\D5<'VYXXKZ#?1+63P3%HVKNHABLTCFE23:%**/F#'I@KGGTYKU

H`)B.-VV[&RK!P=K?,,?_7]>UDU MOX<^([0S:I:?V;=N6+;(F5][`9?=&,/SG!;G@\=:BN?A$9K9Y])UN*=),-`D ML?RE24EJM#WW0K"PTS1;:STUM]I&@,;[]V\,=V[(]22>..>*T5 M[UY-\)M>NAJ4FAS7"FU,32P)(>5<$9"_4%B1[$\7(P<@9(`S_$,$FNSIK#/&*TIU)4IJ<>A,H\RL?/UGXY\464 M)BBUF9ANW'SE64@X]7!('MTKH[/XP:LDQ-[IEI.FT[5A+1-GUR2W'7C'>LOX M@^%6\/ZN;JUC?^S[LED(0!8G).8QC@`=N!QZX)KDL?K7UU/#X3$TU44%K_70 M\ISJ4W:YZW9_&+2VA)OM,NX7W840LLBD>N25YZ\8[5T=IX^\+WLWDQ:O$C8W M?OU:$'Z%P`3[=>OI7@/&>0/?CK1Q^)ZFL)Y/0E\+:_$TCBIK<^EX]1LIK/[; M%=026N"QG60%,#.3NZ<8-9%[X[\+V&SSM:MGW@D>0WF\>IV9Q^/6OG[@]?\` M/&*4$?Y-80R2-_>F[%O&/HCV"_\`B]H\*RK9V-W%CTOZF3Q%1]3>O/'7B MB]A\N769D`;=F%5B.<>J`$CVKU#X?>';JPLY=7U=YY-4OU&_[3\SQH/NKDY. M2,$CC^$8!6N!^'7A?^W-:%Y>6YDTZTRS[U)21^R=1G^\>O0`\-S[>OTQ7DYI M5I0?L**2[_Y'3AHR?O2%`Q2T45XAV!1110`5D^*CCPIJ_P#UXS?^@&M:H;NU MBO;66UN$WPS(8Y%R1N4C!''/2JB[23$U<^9/8=0.E?3H'`YKF/\`A6GA+`'] ME<#_`*>)?_BJZG&*]',,93Q/+R)JW?Y'/0I.G>X'BO!_B0?^*]U+G&/*[_\` M3):]X(S6!J7@;P[J]_)?7]@9KB7&]_.D7.!@\=71AD,#&F00>Q%>;^)M#E\/:_2)2JN'9#CKC*D9Y]>F3ZFNBAF$:6(E4M>,B)T+TU'JCF/A7XA^WZ,^DSR M[KBR_P!7N/+Q'IC)).T\=``-HKS'Q-QXJU<_]/TV#_P,U[AI7@O0-%O1>:=9 MM;SA2NY9Y""#U!!;!_&H+GX?>%[RZFNKC3-\T[F21_/D&YB/Z;XV\1:181V%AJ'DVT6=B>3&V,DD\E2>I-6_^%C^+>^KG M_P`!XO\`XFO4/^%:^$?^@5_Y,R__`!5!^&OA+_H%$?\`;S+_`/%5T/'X&3;= M+?R1"HUEM(X3Q+XFUN_^'VE"X#21WS2?:KHQKM8I(=B#'W?NY/`S@8/WA7+: M1XDUG0MXTR_EMT?.Y.&4GC)VMD9X'.,]J^@--TJSTBPCL;"(0V\6=B9+8R23 MR23U)K*N_`/A>]E$LVCPA@-H\DM",?1"`3SUZUA1S##P3IRI^[=OH7*A-M-/ M4\9U;Q9KNO6RVVI7OVB)'\P((D7#8(S\HST)KJ?A7X9NI]437YD9+6W5E@;. M/-<@J<#'(`+<\T@B@A3[L<:!5 M'?@#CK3Q.94I4G2H1LGOHOT"GAY*7--W/GGQ+_R-6K<_\OTV#_P,U:T[QKXB MT>QCL+#4?)MHL[$\F-L9))Y*D]2:]>N?A[X7O+J:ZN--WS3R-)(WGR# M&J,?#7PC_P!`G_R9E_\`BJW69X5THTZD&[>2(^KU$[Q=CR[_`(6/XMX']KG/ MM;Q?_$UN^)]3N]7^%&CWM]+YUQ-?'<^T+G'FCH,=A7:'X:^$O^@4F\'Z%/HD.BR66;"!]\<7FN-K<\Y!S_$>_>N:IC<)S0=.%K.^R+5&K9J M3O<\@^'!_P"*]TT^OF_^BVKU3QQX83Q-H31(/]+M\RV[!02S8^X2>@;V(Y`/ M.*FTWP-X=TB_COK&P\JXBSL?SY&QD8/!;'0UO[:PQ>.57$1K4KJQI2H\L'%G MS'+')#.T,Z,DR,5=7!#!AU!'7BO7_#QQ\%IO^O*[_G)6Y?>`?#6HWDMW]1EQ@@H&_ASP M?3*@''4+_P`*T\)8`_LK@=/](E_^*KJ-@X]JC&9A&K.$Z5TX]_D.E0<4U+J? M-7_$PTB_PWVFPO(?=HY(\C\",@_D:TM5\8>(-9M/LFH:DTMN6#%%1$!(Z9V@ M9`ZX/&0#VKVW6/">B:_-'-J=BL\D:[5<.R$#TRI&1]>F3ZFLX_#3PE_T"O\` MR8E_^*KK6:X>=I5:=Y>B_`S^K36D7H>4^#O"4_BC4A&PDAL8\F:<(<<8R@;& M-YR#ST!S@XQ76?%K5-3_`'&F);7,.G\&2;'[NX<\JN1_=VDX)R>N,`$^FVUG M;V=NMO:P1P0I]V.-`JCG)X'N)-9T'=_9FH2P(^@KVR[\`>%KV422Z/`K!=H$):$8^B$#\:CC^' M/A2*5)$TH;D8,`TTC`D>H+8(]CP:[UFF%3Y_9^]\OS,'AJCTOH<7\)M!NCJ4 MFN36ZBU6)HH'<_P#]:OIN2".>%X9T66.0%61QD,#P01W% M<_J'P^\,:B69M+B@D*;`]MF+;[A5^7(]2#T%>M2SI/\`B1^XY981]&>!_P`J M7CUYKUM_@YIAO4=-4NA:A?FC*(9">>C8P!TXVGOSSQN:;\-_#.G>4WV$W4L> M?WERY?=G/5?NG`.!QV'?FNB><8=+W;OY$+"S>YX;;6L]Y<)!:P2SRN3MCB0N MQP,G`'L*Z'3OAWXFU+RF_L_[+%)GY[IPFW&?O+RPY'IW]*]SMK*WLH%M[6". M"%,[8XD"JO.>`/U*"#7SO;>+?$%M=PW`U>]E,3J_ER MW+LCXYPPSR#CFO?=*U&WU;3+?4+5MT-Q&'7)!(]0<9Y!X(SU%=F*P-3"VYG> MYE2K1J%LMBC-&I/)EV7EWF&#:V"N?O..0>!T(SABM>6^'O$.N3 M>)=+AFUB_=)+R)71[EV!!<9!!/ID4Z&!G6I.JG9(52LH2Y3WK/%+FO./BUJ> MH:<=)^PW]S:^9YV_R)63=C9C.#SC)_.O.?\`A)O$'_0=U+_P+D_QK;#Y74KT ME4C)6)J8E0ERM'T;FD+8(KYT_P"$F\09_P"0[J7_`(%2?XUV?PNUC5=1\37$ M%[J5W=1BS9@DT[.`=Z#."?<_G55\KJ4:;J.2=A0Q,92M8]9W?A1FO`_$/B'7 M(?$FJ10ZU?QQQWDJJBW3A5`<@`#/`K/_`.$FU_D?VYJ1[?\`'U)_C5PRBI** MES+4EXI)VL?1@/M29KQ/1/B?KFFNJWS)J5N`!MDPCC`(&'`[G!)8$G%>OZ-J MMKKFE0:C9[O)F7(#KAE(.""/4$$?A7#B<'5PS]]:&U.M&IL7L^M&?2O`_$7B M'6X?$NJ11:S?QQQWDR(B7+JJJ'.``#QQBO5/`E_)+X#L[[4+MI"%E>6>>3)" MK(W)8GH`.]7B,#.A2C4;O<5.LIR<>QU!/&<$TF[%>1>)?BGJ$]Y)#H+K;6L; M#$[Q`O)UR<,#M!SP",\#IDBN*?6-3DO4OGU&\:ZB!5)S,Q=1SP&SP.3Q[FNF MCE%:I&\FD9RQ44]%<^DMPHSZ"O%?!OCK4['6[:VU/49;BPGDVR&=]Y0MP&#L M>`"!D9QC=QFO::XL5A9X:?+,VI5%45T.SQ2;L5Y)\2_%>H1>(ETW3[R MYLULT'F&&1D,CL`W.#R`-N,\C)]JH^!/%NIQ>++6#4=4N;BWNB8")YGD`9ON MD#/!W!1GT)^M=$VOTN9O$1YN4]JSS1FFC&<`=/TKRCXIZQJFG>)X(; M+4KNVC:S5BD,[("=[C.`?0#\JY,-AY8BHJ:=F:U)\D>9GK(.12BO-_A)J>H: MD=6^WW]S=>7Y.SSY6?;G?G&3QT'Y5Z12KT94*KIR>PX34XW0M(:6FDX(K!E@ M3BC=7,>-/&5MX7LMBJL^H3*3#`3T'3>V.@_F>!W(\AUKQAKFO!H[V^;R&8D6 M\.$3!.0"!RP&!C<3T^M>CAR^`O$[>)-!62XD5[ZW/EW&,#)[/@'H1 MWP.0<#BGB\NJX:*F]4*G74W8Z@G%-#5E>)]9_L'P[>:F$W/`GR`C(+$[5SR. M,D9YZ5X3_P`)+K^>=X4F[!^M?.G_"3>(#TUS4O_`J3_&D/B;7\?\`(=U' MZ_:W_P`:]?\`L6K_`#(Y?K:['T;NI`PR1Z5X3H?Q$U_1I09;IM0MRVYX[IRY MZC.U_O#@>X&3Q7HOBC7?MWPUN-9TFXGMQ((S&ZYCD3]ZJL..AZCC]:XZV7U: M4XQ?5VN;0KQE%M=#LMPHS7SE_P`)+X@SQKFI9_Z^Y/\`&E_X2;7_`/H.ZE_X M%2?XUV?V+5WYD9?6UV/HS-`->!^'O$6N3>)-,AEUJ_DCDO(59'N7(8%U!!!/ M/%>]8SU`/UKS\9A)X62BW>YO2J*HKDE%%%%CB6X\UI&%6HZ?2Z/HD-R\U*ST^(2WMU#;1EMH>:0 M("<9QDX[`_E7@:>,_$B6,EH-:O/*<[F)?=(#QT<_,.@X!]?4U!IUI>^)_$$% MJ\\LUQ=2`/-(YD8*!RW)YPJDX]L#TKM_L>4$Y5)I)&/UJ[M%'T%IVJ6>K0-< M6,WG0AV02*I"L0<':2/F&>XR.#S5NJ>E:=;Z3IL&GVHQ%;H$7(&3ZDXP,DY) M/,W_H!K6K*\4_ M\BIJ_P#UXS?^@&KI_&O4F7PL^M='DTING+F1T?Q*UL:MXKDAA=C#8KY`^8XW@_.0#T M.?E_X"#6'X9_Y&K2/^OZ'_T,56L;"XU":6.W7/DP23R-V544L2<#CT'N0*L^ M&?\`D:M(_P"OZ'_T,4*$:6'E2B]HAS.4[L[WXS]=&_[;_P#M.N#\-WMAIVNV MUUJEK]JM$W>9#Y:ONRI`^5N.I%=Y\9^NC?\`;?\`]IUY]HFD7&NZM!IEJ\:3 M3[MIE)"\*6[`^GI7-@5%X#WG9:_FS2O?VVAWX\;_``_51GPMQ_UX0?\`Q5>B M6>BZ582F:QTRTM9"NTM#`J$CTR!["O*/^%1^(1Q]KTT_]M)/_B*]D!`%>'C5 M0C;V$F[WN=E'FUYD?.GB8D>*]6.>1?3=_P#;->I^`-`T>^\%6%S=Z593S/YF MZ22W1F.)&`R2/0"O+/$V#XKU89Y-]-Q_VT->Q?#8X\!:;_VU_P#1KUZ>8MQP M5.SMM^1S8=7JNYYK\0?#,7AO6XVLH_+L;I-T*Y)V,N`PY))[')_O8[5O?![5 MI5N[W1B,PM']I0Y'R$%5/;)SD=^-O3FHOC!J%O/J=A8Q-NEM4=Y2,$+OVX'U MPN<>A'K5?X0Q2GQ/=2B-S&MF59]IPI+J0"?4@$_A53;J99S5-_\`@B7NU_=. M6\3_`/(UZO\`]?TW_H9KLYM2DT_X(V*1;@UW,T!97VE1YCL?J"%*D>C&N,\3 M_P#(U:O_`-?TW_HQJZG4XW?X+:.41F"7C,Q`R%&Z49/H,D#/J0.];UTG2H7[ MQ_(B#:E(X_1[1+_6K"QE+"*XN$B<,P!_G_+K7N5SX'\.7.G-8_P!E6\0* M!%FBC`E7'0A\9SQU).>^,=*FB56)N5C.X9&USL/XX;BOH,$$9 MQ7!G-6<*T5%V5C?"QC*+N>:Z1\'XH[IY-7O_`#X5<[(K<%=ZY&"QZC/(('MA MJ]!NYX=(TF:Y?S&AM(2[9;.O%ATT)EK^3YF(X5$(8]QSDKCKWKSTZV+K1A4 M?_#&[4:<&XGDUU//JVJ2W'E;KB[F+F.)23@4:E9?V?JEW9>89!; M3/%OVXW;6(SWQT/K3M)O4TS5[6^EB>9;:59?+6386*G(&<'C.,\>O2K7B76H M_$.NRZHEH;5IU7>AD#_,`%R#M&.`/\?3ZY*:J*"C[B7XGF75K]3W?PWJJZWX M?LM2!4M/$#)L4J`XX8`'G`8$=3TZGK7EOQ?_`.1LMO\`KQ3_`-#>M;X/:JJI MJ&CN5#;A*?^AO7S^$HNCF')Z_<=M6 M7-03-7X+]=9^D'_M2O417EWP8ZZS_P!L/_:E>H9]JX\S_P![G\OR1MAOX2'4 MUAGZ4;N:":\\W/G_`,HWUI'=2^>8%6=0Z*H56SM(QDY_(#'4YX;Q3')'XLU82(R,;R5@&&#@L M2"/J""/8@UZI\)[N6X\(>5(JA;:Y>),`Y(.'YSWRY'T`KZ?&R<,!!0TV/.HJ M]9W*WBGX7VVJ7L5WH[PZ>S,%N(]N$V_WE`Z-[<`]<@YSN>%O!EAX6B?[/+/- M/*H$KNY"MC'1!\N`Q$?FOM!P,DY/0`=SQD@ M=2*M,1CCZ<5X,L36E34)-N)V*$%+F2U/,OC!K'-EHJ+_`-/4CD?[RKCG_?SQ MZ8[UYZFG2'1I=4.]8X[B.!?D.&+*S'YO4!02!_>'2I_$FL?V[XBO=35=BS2? MNQC!"`!5SR><`9YZU=L_$]O:>#+OPZ=.D?[5(96G%P!M?*D878>/E7()YYY& M>/J*%&IA\/&%-:NU_GN>=.2G-MFY\)=46S\0W&G/L47T64^4DETR0,C@#:7/ M/7`Y[5Z=XG_Y%35Q_P!.,W_H#5\^65V^GW]O?1!6DMI4E4.,@E6!&?49_P#U MU[[KES%>>"-1NH&W13:=+(C8(RIC)!P>>]>5FE'EQ$:BV?Z'3AY7IN)\]=AT M_'I7NO\`Q;X#/_%.Y`YSY.0*\+'X].U6;W3+[3M@O[&XM/,SL\^)DW8ZXR.> MHZ>HKU\7A5B.5.7*U?YG+2JER76Y+)]*8R>F?8CK7IH\;_#_'_(KY]S80'_`-FKS+C\ M^.M=T?A%X@)_X^]-Y_Z:O_\`$5T8Z.';C[>3B9T>=?"CT/P]:>&]9TZVU?3] M#M+=78M&6M8U=2K$9XZ$=(N-`\,VNF7;QO-!OW-$25.79AC(' M8^E;.[VKY&JTZCY7==#U(*RU0^BBBLR@HHHH`*0TM)0`A%V.Z2(8)+J1\R`#N<#'!Y`'& M3SKF%VW,TN22`"I&TG;D$]VQCC'?*,9'XUZ^/S!5Z:A#3O\`Y'+1H,W_H!K6J&[M8;VTEM;A=\ M,R&.1Q\[>&O^1JT@>E]!_Z&*[+XLZ!]FOX-<@&([K$ M4QSP)`/E/)[J,<#`V>IKM[7X>>%[*ZAN;?3=DT#AXV\^4[6!R#@MCM6OK&D6 MNN:5/IMZ&,$ZX;:VTC!R"#[$`_A7L5XCQ/?64WE!ARD(0X[`C<0Y4'I;H^W4FKAYRFY)GEI^)'BT\?VMC_MWB_P#B:W?!?C;Q M%J_BVRL;_4?-MI=^]/)C7.$8CD+GJ!7:_P#"M?"/_0*/_@3+_P#%59TWP-X= MTB_BO["P,-Q%G8_GR-C((/!8CH34U<9@I4W&%.SMV01I5D[N1XCXF)_X2K5@ M>GVZ;C_@;58LO&&OZ=I@TNSU)H+5595140%=Q))#8R#DGG/%>PW/P]\+WEW- M=7&F;YIYⅅSY!EB&=.,)P;M; M>Q'U>IS73/$K:"]U?4EAMUDNKVZDXYR[,>222?J23TZGBO;?`?AEO#6@".XC M1;VX8R7!4@[?[JY`YP/<\EL'FMNTT/2M/E,MEIMI;2%=I>&!48C(.,@=.!5S M8/SK@QN8/$)0BK1-Z-#D=V[L^=/$QSXJU8<\WTV/^^S7J?A/2(==^$\&F3G" MW"2J&P?E82L5.,C.&`..^*U;KX>>&+RZFNKC3=\T[F21O/E&YB*Q\*M"$()IQM^"%3H.,VWLSYZUG1;W M0M2ET_4(MDJ=&'W9%[,#W!__`%X(-:$?CKQ/%9&S76IC$59=S;6<9SGYR"V1 MGKGCC%>ZZAI%AJUJUKJ%K%.Z+`"6#<#"&PI8E>57YN3Z&M3Q[JC:IXJF0EG%BHM!(Z`,Y3.YCCC)8MT`& M,<"O:])\/Z7H4!@TRSCMD;[Q499N2>6/)ZG&3QG%8_\`PK3PED?\2H<=O/D_ M^*J8YI2=?VDHO1:!]6FH\J9YMX.\`2>++":\_M%;2.*3RE'E>86(`)SR`.H] M<\],5>\1?"Z30M#N=2CU1KQK=0WDK:[21N`)SN.``22<=!7K.F:7::/81V-A M%Y5O%G8FXMC))/))/4FI;JTAO;26UN$WPS(4D7)&5(P1Q7-+-:[JWB_=OMH: M+#1Y;=3YZ\,:JNB^)K#4)"HCBE`D9U)VH?E8X'.0I)'N!72?%S'_``E5L?\` MIQ3_`-#>N^_X5IX1_P"@5_Y,2_\`Q56KWP-X:WGF-%XB-9)Z*SV_P`R%0FH.!XCHWB75O#QF_LJ[^S^?M\S]VC[ ML9Q]X'U-:G_"R/%W_07_`/)>+_XFO4?^%:^$?^@5_P"3,O\`\52?\*T\(_\` M0*_\F)?_`(JMIYC@9R6_%'P?<27#^(K!/,38!=H,[EP,"3W&``0.F,^I'`:3K>IZ):Z73+K5-"^'^HSW;W/V;4,6=G;2@F,!P6>0`XP"I."IP2>0>*]%L?AS MX7L6BD734GEC&"]PS2;SC!+*3M)/7IUZ8K2UKPQI'B'R?[4M?M`@W>7^\=,9 MQG[I&>@ZUI6S&A/EA&%HK^M"8X>:;=]3Y[LK5[^^M[*(JLEQ(L:E\A06.`3C M.!DUZ./@R3C_`(G^/^W/_P"SKLM-\"^'=)OX[ZQT_P`JXB)*/YTC8RI4\%B. MA-;^ST.*C$YM4DU[!V7R_P"".GA4E[^I\Z^)M#?PYKP2`J M#D#)XR2,YZ@UW7@[55NOAAK>G,R^986\XV@$$(Z,P)[$EMXX[`5V^L>#]#UZ MZ6ZU*R\^9$$:MYKKA02<84CN345EX&\.Z=]H^R:?Y8N8&MY1Y\A#1M]X8+<9 MQU'-%;,:=>A&$T^96U"%!PG=;'S[[=?:OH#QIH'_``D?AFXLT7-R@\VWP>FQ>--1M]6^%]SJ%JVZ&=(77) M!(_>)P<$\@\'T(-:%S\/?#%Y=S74^G%YIW,DC?:)1N8G).`WKVZ5=3PIHZ:' M)H@MF.GR-N,#32,`<@\$MD#(S@'&?J:K%8VA6G":333784*,HJ2[GSN#\Q'2 MNF'Q'\7#@:L?_`>+_P")KU$?#3PEC_D%'_P)E_\`BJ7_`(5KX1_Z!7_DS+_\ M57;4S3!U+<]-NW=+_,R6'JQ^%GGFA>/_`!1>>(-.M;C4R\,]U%'(OD1CTC.*YVV^'OA>SNX;JWTS9-`XDC;SY#M8'(."V*Z/:/2O&QM6C6FG2C9 +>B.JC"4%[SN?_]D_ ` end