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SUPPLEMENTAL INFORMATION
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" refers to the Company as a German stock corporation before the transformation of our legal
form into a partnership limited by shares; (3) "Fresenius SE & Co. KGaA" 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
28, 2011), a European Company (Societas Europaea) previously called Fresenius AG, a German stock corporation, and (4)
"Fresenius SE" refers to that company as a corporation both before and after the conversion of Fresenius AG from
a stock corporation into a European Company on July 13, 2007, until its change of form to a partnership limited by
As a foreign private issuer under the rules and regulations of the U.S. Securities and Exchange Commission, 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 to provide information to shareholders which is roughly 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 from our Annual Report on Form 20-F for the year ended December 31, 2010 filed with the SEC (our "2010 20-F"). Our 2010 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.
Security Ownership of Certain Beneficial Owners of Fresenius Medical Care
Our outstanding share capital consists of Ordinary shares and non-voting Preference shares that are 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 Exchange Act. 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 Exchange Act. In addition, under the German Securities Trading Act (Wertpapierhandelsgesetz), persons who discharge managerial responsibilities within an issuer of shares are obliged to notify the issuer and the German Federal Financial Supervisory Authority 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. We publish notifications we receive from our board members regarding their dealings in our shares on our web site. Additionally, 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 option agreements (excluding the 3% threshold).
We have been informed that as of December 31, 2010, Fresenius SE owned approximately 35.7% of our Ordinary shares. In August 2008, an indirect wholly-owned subsidiary of Fresenius SE issued 554.4 million aggregate principal amount of Mandatory Exchangeable Bonds due 2011 with each bond having a nominal value of 50,000 (the "FSE Bonds"). Fresenius SE may redeem the FSE Bonds at or prior to maturity solely by delivery of our Ordinary shares. The actual number of ordinary shares deliverable by Fresenius SE upon redemption of the FSE Bonds will depend upon the exchange ratio for the FSE Bonds at the time of exchange, subject to an adjusted minimum exchange price of 31.83 and an adjusted maximum exchange price of 37.56. Upon maturity of the FSE Bonds, Fresenius SE's holding of our Ordinary shares could decrease to between approximately 31% at the maximum exchange price and 30% at the minimum exchange price.
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 2010 20-F.
Bank of New York Mellon, our ADR depositary, informed us, that as of December 31, 2010, 17,702,065 Ordinary ADSs, each representing one Ordinary share, were held of record by 4,571 U.S. holders and there were 86,191 Preference ADSs, each representing one Preference share, held of record by 1 U.S. holder. For more information regarding ADRs and ADSs see Item 10.B, "Memorandum and Articles of Association - Description of American Depositary Receipts" in our 2010 20-F.
Ownership by our Supervisory Board and our Management Board
As of December 31, 2010, no member of the Supervisory Board or the Management Board beneficially owned 1% or more of our outstanding Ordinary shares or our outstanding Preference shares. At December 31, 2010, Management Board members of the General Partner held options to acquire 2,178,699 ordinary shares of which options to purchase 1,055,799 ordinary shares were exercisable at a weighted average exercise price of 26.15 ($34.94). See Item (v), below, "Options to Purchase our Securities." Those options expire at various dates between 2012 and 2017.
Security Ownership of Certain Beneficial Owners of Fresenius SE & Co. KGaA
In connection with the change of the legal form of Fresenius SE from a European Company to a partnership limited by shares, all of Fresenius SE's preference shares were converted into Fresenius SE & Co. KGaA ordinary shares, as a result of which Fresenius SE's share capital consists solely of ordinary shares, issued only in bearer form. Accordingly, Fresenius SE & Co. KGaA 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.
Else-Kr ner-Fresenius Stiftung is the sole shareholder of Fresenius Management SE, the general partner of Fresenius SE
& Co. KGaA, and has sole power to elect the supervisory board of Fresenius Management SE. In addition, based on the most
recent information available, Else-Kr ner-Fresenius Stiftung owns approximately 28.9% of the Fresenius SE & Co. KGaA
Ordinary shares, (reduced from approximately 58% as a result of the change of Fresenius SE's legal form). 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 Allianz SE, they hold, indirectly, approximately 4.26% of the
Fresenius SE & Co. KGaA Ordinary shares.
The principal trading market for our ordinary shares and the preference shares is the Frankfurt Stock Exchange (FWB Frankfurter Wertpapierb rse). All ordinary shares and preference shares have been issued in bearer form. Accordingly, we face difficulties determining precisely who our holders of ordinary and preference shares are or how many shares any particular shareholder owns, with the exception of the number of shares held in ADR form in the United States. For more information regarding ADRs see "Item 10.B. Memorandum and articles of association - Description of American Depositary Receipts" in our 2010 20-F. However, under the German Securities Trading Act, holders of voting securities of a German company listed on a stock exchange within the EU are obligated to notify the company of certain levels of holdings as described in Item (i), "Security Ownership of Certain Beneficial Owners of Fresenius Medical Care AG & Co. KGaA and Fresenius SE" above. Additionally, persons discharging managerial responsibilities and affiliated persons are obliged to notify the supervising authority and the Company of trades in their shares in excess of 5,000 in any year. The ordinary shares of Fresenius Medical Care AG had been listed on the Frankfurt Stock Exchange since October 2, 1996, the preference shares since November 25, 1996. Trading in the ordinary shares and preference shares of FMC-AG & Co. KGaA on the Frankfurt Stock Exchange commenced on February 13, 2006.
Our shares are listed on the Regulated Market (Regulierter Markt) and on the Prime Standard of the Regulated Market. The Prime Standard 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, each originally representing one-third of an Ordinary share and, commencing June 15, 2007, each representing one Ordinary share (the "Ordinary ADSs"), have been listed and traded on the New York Stock Exchange ("NYSE") under the symbol FMS. Since November 25, 1996 ADSs, each originally representing one-third of a Preference share and, commencing June 15, 2007, each representing one Preference share (the "Preference ADSs"), have been listed and traded on the NYSE under the symbol FMS/P. At December 31, 2010, there were 84,341 preference ADSs outstanding. Accordingly, while the preference ADSs remain listed on the New York Stock Exchange, the trading market for the preference ADSs is highly illiquid. In addition, in connection with the New York Stock Exchange listing of our ADSs upon consummation of our transformation of legal form and the related conversion offer, the New York Stock Exchange advised us that if the number of publicly held preference ADSs falls below 100,000, which has occurred, the preference ADSs could be delisted. The Depositary for both the Ordinary ADSs and the Preference ADSs is Bank of New York Mellon (the "Depositary").
Trading on the Frankfurt Stock Exchange
Deutsche B rse AG operates the Frankfurt Stock Exchange, which is the most significant of the six German stock exchanges. As of December 2009, the most recent figures available, the shares of more than 10,000 companies traded on the Regulated Market and the Regulated Unofficial Market of the Frankfurt Stock Exchange.
Trading on the floor of the Frankfurt Stock Exchange begins every business day at 9:00 a.m. and ends at 8:00 p.m., Central European Time ("CET"). In floor trading, lead brokers are responsible for price determination and quotation for the shares supported by them. The order book in which all buy and sell orders are compiled serves as their basis. Thereby, only one lead broker is in charge of each security. A performance measurement for price determination on the floor includes minimum requirements and therefore ensures
| permanent quotation during trading hours | ||
| best price execution (in terms of spread and speed) | ||
| full execution. |
Our shares are traded on Xetra , the electronic trading system of the Deutsche B rse, in addition to being traded on the Frankfurt floor. The trading hours for Xetra are between 9:00 a.m. and 5:30 p.m. CET. Only 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.
Deutsche B rse 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 B rse 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 B rsenaufsicht) and the Trading Monitoring Unit of the Frankfurt Stock Exchange (H ST Handelss berwachungsstelle) both monitor trading on the Frankfurt Stock Exchange.
The Federal Financial Supervisory Authority (Bundesanstalt f r 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 the Ordinary shares and the Preference shares on the Frankfurt Stock Exchange, as reported by the Frankfurt Stock Exchange Xetra system. Since January 4, 1999, all shares on German stock exchanges trade in euro. All share prices have been adjusted to reflect our one-for-three share splits in June 2007.
As of February 18, 2011, the share prices for the Ordinary and Preference shares traded on the Frankfurt Stock Exchange were 47.23 and 40.01, respectively.
| Price per ordinary share ( ) | Price per preference share ( ) | ||||||||
| High | Low | High | Low | ||||||
| 2011 | January | 43.51 | 41.11 | 36.38 | 34.48 | ||||
| 2010 | December | 45.78 | 43.01 | 36.40 | 33.50 | ||||
| November | 45.65 | 45.33 | 37.90 | 34.80 | |||||
| October | 45.79 | 44.36 | 38.00 | 36.39 | |||||
| September | 45.51 | 43.53 | 37.96 | 36.10 | |||||
| August | 45.41 | 42.12 | 37.89 | 35.51 | |||||
| 2010 | Fourth Quarter | 45.79 | 43.01 | 38.00 | 33.50 | ||||
| Third Quarter | 45.51 | 41.13 | 38.00 | 35.00 | |||||
| Second Quarter | 44.71 | 38.21 | 38.50 | 32.35 | |||||
| First Quarter | 41.78 | 36.10 | 35.87 | 28.20 | |||||
| 2009 | Fourth Quarter | 37.71 | 31.86 | 33.46 | 30.50 | ||||
| Third Quarter | 34.20 | 30.03 | 34.00 | 28.72 | |||||
| Second Quarter | 32.19 | 27.64 | 30.00 | 25.24 | |||||
| First Quarter | 35.48 | 27.07 | 35.30 | 25.60 | |||||
| 2010 | Annual | 45.79 | 36.10 | 38.50 | 28.20 | ||||
| 2009 | Annual | 37.71 | 26.07 | 35.30 | 25.24 | ||||
| 2008 | Annual | 39.10 | 29.73 | 37.60 | 28.31 | ||||
| 2007 | Annual | 38.67 | 33.05 | 36.78 | 31.32 | ||||
| 2006 | Annual | 36.30 | 27.50 | 33.83 | 25.03 |
The average daily trading volume of the Ordinary shares and the Preference shares traded on the Frankfurt Stock Exchange during 2010 was 824,535 shares and 1,230 shares, respectively. The foregoing figures are based on total yearly turnover statistics supplied by the Frankfurt Stock Exchange.
Trading on the New York Stock Exchange
As of February 18, 2011, the share prices for the Ordinary ADSs and Preference ADSs traded on the NYSE were $64.32 and $52.69, respectively.
The table below sets forth, for the periods indicated, the high and low closing sales prices for the Ordinary ADSs and the Preference ADSs on the NYSE:
| Price per ordinary ADS ($) | Price per preference ADS ($) | ||||||||
| High | Low | High | Low | ||||||
| 2011 | January | 58.32 | 55.75 | 48.00 | 46.00 | ||||
| 2010 | December | 60.65 | 56.53 | 50.00 | 48.00 | ||||
| November | 63.48 | 57.98 | 53.11 | 50.00 | |||||
| October | 64.01 | 61.46 | 53.11 | 52.00 | |||||
| September | 61.80 | 55.99 | 49.00 | 45.04 | |||||
| August | 57.76 | 55.12 | 48.00 | 45.31 | |||||
| 2010 | Fourth Quarter | 64.01 | 56.53 | 53.11 | 48.00 | ||||
| Third Quarter | 61.80 | 52.17 | 49.00 | 45.00 | |||||
| Second Quarter | 56.70 | 47.57 | 49.70 | 38.88 | |||||
| First Quarter | 56.20 | 49.62 | 50.72 | 42.70 | |||||
| 2009 | Fourth Quarter | 54.96 | 47.57 | 49.60 | 44.75 | ||||
| Third Quarter | 50.29 | 42.31 | 49.18 | 40.00 | |||||
| Second Quarter | 45.04 | 36.94 | 50.00 | 32.00 | |||||
| First Quarter | 47.67 | 35.66 | 43.00 | 35.00 | |||||
| 2010 | Annual | 64.01 | 47.57 | 53.11 | 38.88 | ||||
| 2009 | Annual | 54.96 | 35.66 | 50.00 | 32.00 | ||||
| 2008 | Annual | 59.01 | 39.84 | 55.00 | 28.87 | ||||
| 2007 | Annual | 56.70 | 43.69 | 53.50 | 40.00 | ||||
| 2006 | Annual | 47.60 | 34.50 | 40.00 | 31.00 |
We generally pay annual dividends on both our preference shares and our ordinary shares in amounts that we determine on the basis of Fresenius Medical Care 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. Under our articles of association, the minimum dividend payable on the preference shares is 0.04 per share and, if we declare dividends, holders of our preference shares must receive 0.02 per share more than the dividend on an ordinary share. Under German law, we must, in all cases, pay the annual dividend declared on our preference shares before we pay dividends declared on our ordinary shares.
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 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 Amended 2006 Senior Credit Agreement and outstanding euro notes, as well as the senior subordinated indentures relating to our trust preferred securities, restrict our ability to pay dividends. Item 5.B, "Operating and Financial Review and Prospects - Liquidity and Capital Resources" and the notes to our consolidated financial statements in our 2010 20-F for further information.
The table below provides information regarding the annual dividend per share that we paid on our Preference shares and Ordinary shares. These payments were paid in the years shown for the results of operations in the year preceding the payment.
| Per Share Amount | 2010 | 2009 | 2008 | ||||||
| Preference share | 0.63 | 0.60 | 0.56 | ||||||
| Ordinary share | 0.61 | 0.58 | 0.54 |
We have announced that the general partner's Management Board and our Supervisory Board have proposed dividends for 2010 payable in 2011 of 0.67 per preference share and 0.65 per ordinary share. These dividends are subject to approval by our shareholders at our Annual General Meeting to be held on May 12, 2011.
Except as described herein, holders of ADSs will be entitled to receive dividends on the ordinary shares and the preference 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 2010 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 on the preference shares and 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 below in "Item 10.E. Taxation" in our 2010 20-F.
American Depositary Shares representing our Ordinary shares and our Preference 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, 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 Securities Exchange Act of 1934, as amended, 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. Instead, 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, "AktG") including capital market related laws, the German Codetermination Act (Mitbestimmungsgesetz, "MitBestG") and the German Corporate Governance Code which was adopted in 2002 and revised periodically thereafter by the German government commission, most recently in May 2010. 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. For certain information regarding our organizational structure, management arrangements and governance, including information regarding the legal structure of a partnership limited by shares, or KGaA, management by our general partner, certain provisions of our Articles of Association and the role of our supervisory board in monitoring the management of our company by the general partner, as well as a 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, see Item 16G, "Corporate Governance," in our 2010 20-F.
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 Fresenius Medical Care Management AG ("Management AG"), a wholly-owned subsidiary of Fresenius SE & Co. KGaA. Management AG is required to devote itself exclusively to the management of Fresenius Medical Care AG & Co. KGaA.
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 & Co. KGaA (acting through its general partner, Fresenius Management SE) as the sole shareholder of Management AG. Pursuant to pooling agreements for the benefit of the public holders of our ordinary shares and the holders of our preference 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 agreements, i.e., persons with no substantial business or professional relationship with us, Fresenius SE & Co. KGaA, 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 in which the shareholders discharge the Supervisory Board for the fourth fiscal year following the year in which the Management AG supervisory board member was elected by Fresenius SE & Co. KGaA, but not counting the fiscal year in which such member's term begins. Members of the general partner's Supervisory Board may be removed only by a resolution of Fresenius SE & Co. KGaA in its capacity as sole shareholder of our 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.
The table below provides the names of the members of the Supervisory Board of Management AG and their ages as of December 31, 2010.
| Name | Age as of December 31, 2010 | |
| Dr. Ulf M. Schneider, Chairman | (1) | 45 |
| Dr. Dieter Schenk, Vice Chairman | (4) | 58 |
| Dr. Gerd Krick | (1) (2) | 72 |
| Dr. Walter L. Weisman | (1) (2) (3) | 75 |
| Mr. John G. Kringel | (3) (4) | 71 |
| Mr. William P. Johnston | (1) (2) (3) (4) | 66 |
| (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 since April 15, 2005. He was a member of the Fresenius Medical Care AG Supervisory Board from May 2004 and Chairman of its Supervisory Board until the effective date of the transformation when he resigned upon the Company's transformation to a KGaA. He was Chief Financial Officer of FMC-AG from November 2001 until May 2003. On March 7, 2003, Dr. Schneider announced his resignation from the FMC-AG Management Board to become Chairman of the Management Board of Fresenius SE, effective May 28, 2003 and, effective January 28, 2011, he is Chairman of the Management Board of Fresenius Management SE, the general partner of Fresenius SE & Co. KGaA. Previously he was Group Finance Director for Gehe UK plc., a pharmaceutical wholesale and retail distributor, in Coventry, United Kingdom. He has 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. Schneider is Chairman of the Supervisory Boards of Fresenius Kabi AG, HELIOS Kliniken GmbH and Fresenius Medical Care Groupe France S.A.S., France. Dr. Schneider is a member of the Supervisory Boards of Fresenius Kabi Espa a S.A., Spain and Fresenius HemoCare Netherlands B.V., the Netherlands. He was member of the Supervisory Board of Fresenius Kabi Austria GmbH, Austria, until June 30, 2010. Dr. Schneider is a member of the Board of Directors of APP Pharmaceuticals, Inc., USA. He remains a member of the Board of Directors of Fresenius Kabi Pharmaceuticals Holding, Inc., USA and is a member of the Board of Directors of FHC (Holdings), Ltd., Great Britain.
DR. DIETER SCHENK has been a member of the Supervisory Board of Management AG since April 8, 2005 and Vice Chairman of the Supervisory Board of Management AG since April 15, 2005. He was Vice Chairman of the Supervisory Board of FMC-AG from 1996 until the transformation of legal form to a KGaA. He is also Vice Chairman of the Supervisory Board of FMC-AG & Co. KGaA. He is an attorney and tax advisor and has been a partner in the law firm of Noerr LLP (formerly N rr Stiefenhofer Lutz) since 1986. Dr. Schenk is also Vice Chairman of the Supervisory Board of Fresenius Management SE and Chairman of the Advisory Board of Else-Kr ner-Fresenius-Stiftung, which owns approximately 28.9% of the shares of Fresenius SE & Co. KGaA. He was Vice Chairman of the Supervisory Board of Fresenius SE until January 28, 2011. 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 was Chairman of the Supervisory Board of NSL Consulting AG until September 2008.
DR. GERD KRICK has been a member of the Supervisory Board of Management AG since December 28, 2005 and was Chairman of the Supervisory Board of FMC-AG from January 1, 1998 until the transformation of legal form to a KGaA. He is also Chairman of the Supervisory Boards of FMC AG & Co. KGaA and Fresenius Management SE. He was Chairman of the Fresenius AG Management Board from 1992 to May 2003 at which time he became chairman of its Supervisory Board. He was Chairman of the Supervisory Board of Fresenius SE and effective January 28, 2011, he is the Chairman of the Supervisory Board of Fresenius Management SE and a member of the Supervisory Board of Fresenius SE & Co. KGaA. Prior to 1992, he was a Director of the Medical Systems Division of Fresenius AG and Vice-Chairman of the Fresenius AG Management Board. From September 1996 until December 1997, Dr. Krick was Chairman of the Management Board of FMC-AG. Dr. Krick was a member of the Advisory Board of HDI Haftpflichtverband der deutschen Industrie V.a.G until December 31, 2008. He is also the Chairman of the Supervisory Board of Vamed AG, Austria and was a member of the Supervisory Board of Allianz Private Krankenversicherungs-AG until April 16, 2008.
MR. JOHN G. KRINGEL has been a member of the Supervisory Board of Management AG since December 28, 2005 and was a member of the Supervisory Board of FMC-AG from October 20, 2004, when his appointment to fill a vacancy was approved by the local court, until the transformation of legal form to a KGaA. His election to the Supervisory Board was subsequently approved by the shareholders of FMC-AG at the Annual General Meeting held May 24, 2005. He is also a member of the Supervisory Board of FMC-AG & Co. KGaA. He has the following other mandates: Natures View, LLC, Alpenglow Development, LLC, Justice, LLC, and River Walk, LLC. Formerly he was also an Advisory Board member of Visionary Medical Device Fund. Mr. Kringel spent 18 years with Abbott Laboratories prior to his retirement as Senior Vice President, Hospital Products, in 1998. Prior to Abbott Laboratories, he spent three years as Executive Vice President of American Optical Corporation, a subsidiary of Warner Lambert Co. and ten years in the U.S. Medical Division of Corning Glassworks.
DR. WALTER L. WEISMAN has been a member of the Supervisory Board of Management AG since December 28, 2005 and was a member of the Supervisory Board of FMC-AG from 1996 until the transformation of legal form to a KGaA. He is also a member of the Supervisory Board of FMC-AG & Co. KGaA. He is a private investor and a former President and Chief Executive Officer of American Medical International, Inc., and is a member of the Board of Directors of Occidental Petroleum Corporation. He is 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, and Chairman of the Board of Trustees of the Sundance Institute. Dr. Weisman was Vice-Chairman and Lead Director of Maguire Properties, Inc. until September 1, 2008 and was Vice-Chairman of the Board of Trustees of the Samuel H. Kress Foundation until November 1, 2008.
MR. WILLIAM P. JOHNSTON was elected to the Supervisory Board of Management AG on August 30, 2006. He has been a member of the Supervisory Board of FMC-AG & Co. KGaA since May 2006. He was the former Chairman of the Board of Directors of Renal Care Group, Inc. Mr. Johnston has been a Senior Advisor of The Carlyle Group since June 2006. He is also a member of the Board of Directors of The Hartford Mutual Funds, Inc., HCR-Manor Care, Inc. and LifeCare Holdings, Inc. Mr. Johnston is a member of the Board of Directors of the Georgia O'Keeffe Museum.
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 members of the Management Board of Management AG and their ages as of December 31, 2010.
| Name | Age as of Jan. 1, 2011 | Position | Year term expires | |||
| Dr. Ben J. Lipps | 70 | Chairman of the Management Board, Chief Executive Officer of FMC-AG & Co. KGaA | 2012 | |||
| Rice Powell | 55 | Deputy Chairman of the Management Board and Chief Executive Officer, Fresenius Medical Care North America | 2014 | |||
| Michael Brosnan | 55 | Chief Financial Officer of FMC-AG & Co. KGaA | 2012 | |||
| Roberto Fust | 58 | Chief Executive Officer for Asia Pacific | 2011 | |||
| Dr. Emanuele Gatti | 55 | Chief Executive Officer for Europe, Middle East, Africa and Latin America and Chief Strategist for FMC-AG & Co. KGaA | 2012 | |||
| Dr. Rainer Runte | 51 | Chief Administrative Officer for Global Law, Compliance, Intellectual Property and Corporate Business Development and Labor Relations Director for Germany | 2015 | |||
| Kent Wanzek | 51 | Head of Global Manufacturing Operations | 2012 |
DR. BEN J. LIPPS became Chairman and Chief Executive Officer of the Management Board of Management AG on December 21, 2005. He served as acting Chief Financial Officer from September 1, 2009 until December 31, 2009. He was Chairman and Chief Executive Officer of the Management Board of FMC-AG from May 1, 1999 until the transformation of legal form to a KGaA and was Vice Chairman of the Management Board until May 1999. He was Chief Executive Officer of Fresenius Medical Care North America until February 2004. He was President, Chief Executive Officer, Chief Operating Officer and a director of Fresenius USA from October 1989 through February 2004, and served in various capacities with Fresenius USA's predecessor from 1985 through 1989. He is a member of the management board of Fresenius Management SE. Dr. Lipps is a member of the Board of Administration of Vifor Fresenius Medical Care Renal Pharma Ltd., Switzerland. He has been active in the field of dialysis for more than 40 years. After earning his master's and doctoral degrees at the Massachusetts Institute of Technology in chemical engineering, Dr. Lipps led the research team that developed the first commercial hollow fiber artificial kidney at the end of the 1960s. Before joining the Fresenius Group in 1985, Dr. Lipps held several research management positions in various companies, among them with DOW Chemical.
RICE POWELL became Deputy Chairman of the Management Board and Chief Executive Officer of Fresenius Medical Care North America effective January 1, 2010. He was a member of the Management Board of FMC-AG from February 2004 until the transformation of legal form and was Co-Chief Executive Officer of Fresenius Medical Care North America and CEO of Renal Therapy Group of Fresenius Medical Care North America. He is the Deputy Chairman of the Board of Administration of Vifor Fresenius Medical Care Renal Pharma Ltd., Switzerland. He has over 30 years of experience in the healthcare industry. From 1978 to 1996 he held various positions within Baxter International Inc. (USA), Biogen Inc. (USA) and Ergo Sciences Inc. (USA).
MICHAEL BROSNAN became a member of the Management Board of Management AG and Chief Financial Officer on January 1, 2010. Previously, he served as Chief Financial Officer and member of the Board of Directors of Fresenius Medical Care North America for seven years. He is a member of the Board of Administration of Vifor Fresenius Medical Care Renal Pharma Ltd., Switzerland. Mr. Brosnan joined the Company in 1998 as Vice President of Finance and Administration for Spectra Renal Management, the Company's laboratory services organization. Since then, he has held several executive positions in North America. Prior to joining Fresenius Medical Care, Mr. Brosnan held senior financial positions at Polaroid Corporation and was an audit partner at KPMG.
DR. EMANUELE GATTI became a member of the Management Board of Management AG and Chief Executive Officer for Europe, Latin America, Middle East and Africa on December 21, 2005. He held such positions in FMC-AG from May 1997 until the transformation of legal form. He became Chief Strategist effective January 1, 2010. After completing his studies in bioengineering, Dr. Gatti lectured at several biomedical institutions. He continues to be involved in comprehensive research and development activities focusing on dialysis and blood purification, biomedical signal analysis, medical device safety and health care economics. Dr. Gatti has been with the company since 1989. Before being appointed to the Management Board in 1997, he was responsible for the Company's dialysis business in Southern Europe.
ROBERTO FUST became a member of the Management Board of Management AG and Chief Executive Officer for Asia Pacific on December 21, 2005. He held such positions in FMC-AG from January 1, 1999 until the transformation of legal form. After finishing his studies in economic sciences at the University of Valencia, he founded the company Nephrocontrol S.A. in 1983. In 1991, Nephrocontrol was acquired by the Fresenius Group, where Mr. Fust has since worked. Before being appointed to the Management Board of FMC-AG in 1999, Mr. Fust held several senior positions within the Company in Europe and the Asia Pacific region.
DR. RAINER RUNTE is the Company's Chief Administrative Officer for Global Law, Compliance, Intellectual Property and Corporate Business Development and Labor Relations Director for Germany. He has been a member of the Management Board of Management AG since December 2005. He became Chief Administrative Officer including, among other responsibilities, Labor Relations Director for Germany, effective January 1, 2010. He was a member of the Management Board responsible for Law, Compliance and Intellectual Property of FMC-AG from January 1, 2004 until the transformation of legal form to a KGaA. Dr. Runte is a member of the Board of Administration of Vifor Fresenius Medical Care Renal Pharma Ltd., Switzerland. He has worked for the Fresenius group for 20 years. Previously he served as scientific assistant to the law department of the Johann Wolfgang Goethe University in Frankfurt and as an attorney in a law firm specialized in economic law. Dr. Runte took the position as Senior Vice President for Law of Fresenius Medical Care in 1997 and was appointed as deputy member of the Management Board in 2002.
KENT WANZEK became a member of the Management Board of Management AG effective January 1, 2010, with responsibility for Global Manufacturing Operations. Previously, Mr. Wanzek was in charge of North American Operations for the Renal Therapies Group at Fresenius Medical Care North America since 2004. Prior to joining the Company in 2003, Mr. Wanzek held several senior executive positions with companies in the health care industry, including Philips Medical Systems, Perkin-Elmer, Inc. and Baxter Healthcare Corporation.
The business address of all members of our Management Board and Supervisory Board is Else-Kr ner-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. Fresenius SE & Co. KGaA, 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, nevertheless has and will retain significant influence over the membership of the FMC-AG & Co. KGaA Supervisory Board in the foreseeable future. See Item 16G, "Governance - The Legal Structure of FMC-AG & Co. KGaA" in our 2010 20-F.
The current Supervisory Board of FMC-AG & Co. KGaA consists of six persons, five of whom - Messrs. Schenk, Krick, Kringel, Weisman and Johnston - are also members of the Supervisory Board of our General Partner. For information regarding the names, ages, terms of office and business experience of 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 63, was a member of the Supervisory Board of Management AG from April 8, 2005 until August 30, 2006 and was a member of the Supervisory Board of FMC-AG from 1998 until the transformation of legal form to a KGaA and a member of the Supervisory Board of FMC-AG & Co. KGaA following the transformation. He is a member of our Audit and Corporate Governance Committee. He is partner in the law firm of Dewey & LeBoeuf, LLP, and from 2004 until September 30, 2005 was a partner in the law firm of N rr Stiefenhofer Lutz (now Noerr LLP). He was a member of the Management Board of Dresdner Bank AG beginning in 1998 and was Chairman from April 2000 until he resigned in March of 2003. He also served as the vice-chairman of the Management Board of Allianz AG and chairman of the Supervisory Board of Advance Holding AG until March 25, 2003. He served on the Supervisory Boards of BMW AG until May 13, 2004 and Heidelberg Cement AG until May 6, 2004. Prof. Dr. Fahrholz is 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 for 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. 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 & Co. KGaA is barred from voting on such 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 & Co. KGaA, 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 2010 20-F. Among other matters, the Supervisory Board of FMC-AG & Co. KGaA will, together with the general partner, fix the agenda for the annual general meeting and make recommendations with respect to approval of the company's annual 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 and propose the Company's auditors for approval by shareholders.
For information relating to the terms of office of the Supervisory Board and the Management Board of the general partner, Fresenius Medical Care 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 "The General Partner's Supervisory Board," "The General Partner's Management Board" and The Supervisory Board of FMC-AG & Co. KgaA," above. For information regarding certain compensation payable to certain members of the general partner's management board after termination of employment, see Item 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. The functions usually performed by a remuneration committee, particularly evaluation and assessment of the compensation of the members of the general partner's Management Board, are performed 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, Mr. William P. Johnston and Dr. Walter L. Weisman. Determination of the compensation system and of the compensation to be granted is to be made by the full Supervisory Board of Management AG. In 2010, the Audit and Corporate Governance Committee of FMC-AG & Co. KGaA consisted of Dr. Gerd Krick, Prof. Dr. Bernd Fahrholz, Dr. Walter L. Weisman (Chairman) 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 conduct of our financial reporting process and the internal accounting and financial control systems and auditing of our financial statements; | ||
| monitoring our internal controls risk program; | ||
| monitoring our corporate governance performance according to the German corporate governance codex; | ||
| monitoring the independence and performance of our outside auditors; | ||
| providing an avenue of communication among the outside auditors, management and the Supervisory Board; | ||
| reviewing the report of our general partner on relations with related parties and for reporting to the overall supervisory board thereon; | ||
| recommending the appointment of our independent auditors to audit our German statutory financial statements (subject to the approval by our shareholders at our Annual General Meeting) 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. |
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 (now Fresenius SE & Co. KgaA) 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 the Company's Supervisory Board and for its nomination prospects to the General Meeting. In 2010, the nomination committee consisted of Dr. Gerd Krick (Chairman), Dr. Walter G. Weisman and 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 are Mr. William P. Johnston (Chairman), Mr. John Gerhard Kringel 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 Department of Health and Human Services and the Centers for Medicare and Medicaid Services for dialysis services. Similar regulatory agencies exist country by country in our International segment to address the conditions for payment of dialysis treatments. Furthermore, the Supervisory Board of Management has its own nomination committee, which consisted of Dr. Ulf. M. Schneider (Chairman), Dr. Gerd Krick and Dr. Walter G. Weisman in 2010.
Report of the Management Board of Management AG, our General Partner
The compensation report of Fresenius Medical Care 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 Fresenius Medical AG & Co. KGaA and in this regard notably explains the amounts and structure of the compensation paid to the Management Board. The compensation report is part of the group management report. The compensation report is prepared on the basis of the recommendations made by the German Corporate Governance Code 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