(1) A profit and loss absorption agreement must provide appropriate compensation for the external stockholders by way of a recurring payment of money in proportion with the shares in the capital stock (payment of compensation). A control agreement must guarantee to the external stockholders, unless the company is also under obligation to remit its entire profits, a specified annual participation in the profits as appropriate compensation, in keeping with the amount determined for the payment of compensation. Determining an appropriate compensation may be forgone only if the company has no external stockholder at the point in time at which its general meeting adopts a resolution as to the agreement.
(2) At a minimum, the annual payment of an amount is to be committed to as compensation that foreseeably could be distributed as an average participation in the profits for the individual share of stock, based on the company’s current revenue situation and its future revenue prospects, taking account of appropriate depreciations and value adjustments, but without forming other retained earnings. Where the other contracting party is a stock corporation or a public partly limited partnership, that amount may be committed to, as compensation payment, that accrues to the shares of stock in the other company in each case as a participation in the profits, based on an appropriate conversion ratio. The appropriateness of the conversion is determined based on the ratio in which shares of stock of the other company would have to be allotted to one share of stock of the company in the case of a merger.
(3) An agreement providing for no compensation at all, in contravention of subsection (1), is null and void. An action for avoidance of the resolution adopted by the general meeting of the company to consent to the agreement or to its amendment pursuant to section 295 (2) may not be based on section 243 (2) or on the fact that the compensation determined in the agreement is not a fair equivalent. Where the compensation determined in the agreement is not a fair equivalent, the court determined in section 2 of the Act on Valuation Proceedings under Corporate Law (Spruchverfahrensgesetz – SpruchG) is to determine, upon a corresponding petition having been filed, the compensation contractually owed; if, in this context, the agreement provides for the compensation to be calculated pursuant to subsection (2) sentence 2, then the court is to determine the compensation pursuant to this provision.
(4) Where the court determines the compensation, the other contracting party may terminate the agreement within two months of the decision having become final and binding without observing any period of notice.