(1) The management board decides on the substance of the rights to a share of stock and the terms governing the issuance of the shares of stock unless the authorisation has made stipulations in this regard. The decision of the management board requires the consent of the supervisory board; the same applies to the decision of the management board pursuant to section 203 (2) as to the preclusion of the pre-emptive right to newly issued shares of stock.
(2) Where preferential stock without voting rights exists, the preferential stock that is to take precedence before such stock, or that is to have equivalent rank, in the distribution of the profits or of the company’s assets may be issued only if this has been provided for in the authorisation.
(3) Where annual financial statements certified by an unqualified audit report recognise a surplus for the year, shares of stock may also be issued to the employees of the company such that the contribution to be made for them is covered by that part of the surplus for the year that the management board and the supervisory board could allocate to other retained earnings pursuant to section 58 (2). The provisions governing a capital increase in return for contributions in cash apply to the issuance of the new shares of stock, to the exception of section 188 (2). The annual financial statements as approved and established are to be attached, along with the audit report, to the application for registration of the implementation of the capital stock increase. Furthermore, the parties filing the application for registration are to also make the declaration stipulated by section 210 (1) sentence 2.