(1) The company may purchase treasury shares of stock solely in the following cases:
1. if the purchase is necessary in order for the company to avert serious and imminent damage;
2. if it is intended to offer the shares of stock for sale to persons who are or were in an employment relationship with the company or an enterprise affiliated with it;
3. where the purchase is made in order to compensate stockholders pursuant to section 305 (2), section 320b of the present Act or pursuant to section 29 (1), section 125 sentence 1 read in conjunction with section 29 (1), section 207 (1) sentence 1, section 313 (1), also read in conjunction with section 327, or section 340 (1) of the Transformation Act (Umwandlungsgesetz – UmwG);
4. if the purchase is made without monetary consideration or if a credit institution or securities institution is executing a buying commission by making such purchase;
5. by way of universal succession;
6. based on a resolution adopted by the general meeting to redeem shares of stock in accordance with the provisions governing the reduction of the capital stock;
7. if it is a credit institution, financial services provider, securities institution or financial enterprise: based on a resolution adopted by the general meeting for purposes of securities trading. The resolution must stipulate that, at the end of any given day, the trading portfolio of the shares of stock to be purchased for this purpose must not exceed five per cent of the capital stock; the resolution must stipulate the lowest and highest equivalent value. The authorisation may be valid for a maximum of five years; or
8. based on an authorisation granted by the general meeting that is valid for a maximum of five years and that stipulates the lowest and highest equivalent value as well as the portion of the capital stock, which must not exceed 10 per cent. It is prohibited to have as a purpose the trade in treasury shares of stock. Section 53a is to be applied to purchases and disposals. Purchases and disposals via the stock exchange are compliant with this stipulation. The general meeting may adopt a resolution as to different manners of disposing over the shares; in such event, section 186 (3) and (4) and section 193 (2) no. 4 are to be applied accordingly. The general meeting may grant authority to the management board to redeem the treasury shares of stock without any further resolution having been adopted by the general meeting.
(2) The shares of stock purchased for the purposes set out in subsection (1) nos. 1 to 3, 7 and 8 may not amount to more than 10 per cent of the capital stock, taken in the aggregate with the other shares of stock in the company that the company has already purchased and of which it is still in possession. Furthermore, such purchase is permissible only if the company were able, at the time at which the purchase is made, to form reserves in the amount of the expenditures for the purchase, without reducing the capital stock or any reserves that are to be formed under law or in accordance with the by-laws and that may not be used to make payment to the stockholders. In the cases governed by subsection (1) nos. 1, 2, 4, 7 and 8, the purchase will be permissible only if the issue price for the shares of stock has been paid in in the full amount.
(3) In the cases governed by subsection (1) nos. 1 and 8, the management board is to notify the next general meeting of the reasons for the purchase and the purpose pursued by such purchase, the number of the shares of stock purchased and the amount of the capital stock allocated to them, the portion of the capital stock they represent, as well as the equivalent value of the shares of stock. In the case governed by subsection (1) no. 2, the shares of stock are to be issued to the employees in the course of one year after they have been purchased.
(4) A violation of subsection (1) or (2) will not render the purchase of treasury shares of stock ineffective. However, a transaction under the law of obligations regarding the purchase of treasury shares of stock will be null and void should the purchase violate subsection (1) or (2).