INVITATION TO THE ANNUAL GENERAL MEETING OF DIC ASSET AG, FRANKFURT AM MAIN

Transcription

1 INVITATION TO THE ANNUAL GENERAL MEETING OF DIC ASSET AG, FRANKFURT AM MAIN Tuesday, 5 Juli 2016, 10:00 a.m. (CEST) Deutsche Nationalbibliothek, Vortragssaal (Lecture Hall) Adickesallee Frankfurt am Main ISIN: DE 000A1X3XX4 (WKN: A1X3XX)

2 Content Convening of the Annual General Meeting I. Agenda 1. Presentation of the adopted annual financial statements of DIC Asset AG and the approved consolidated financial statements for the year ended 31 December 2015, the combined management and group management report, the report of the Supervisory Board for the financial year 2015 and the explanatory report of the Management Board on the disclosures pursuant to sections 289 (4) and 315 (4) German Commercial Code (HGB) 2 2. Resolution on the appropriation of retained earnings 2 3. Resolution on the approval of the actions of the members of the Management Board for the financial year Resolution on the approval of the actions of the members of the Supervisory Board for the financial year Election of the auditor of the annual and consolidated financial statements for financial year 2016 and the auditor for the review of the half-yearly financial report and a review of additional interim financial information performed on an as-needed basis 3 6. Supervisory Board election 4 7. Resolution on amending the Articles of Association to change the remuneration of the Supervisory Board 5 8. Resolution on a new authorisation to purchase and use own shares and to disapply the right to tender shares in an acquisition and to disapply pre-emptive rights when the shares are used 7

3 II. Report to the Annual General Meeting Written report of the Management Board pursuant to section 71 (1) no. 8 sentence 5 AktG in conjunction with section 186 (4) sentence 2 AktG on agenda item 8 outlining the reasons for the authorisation of the Management Board to disapply the right of shareholders to tender shares in an acquisition and the pre-emptive right of shareholders when own shares are used 11 III. Additional information on convening the Annual General Meeting Conditions for participating in the Annual General Meeting and exercising voting rights 18 Free availability of shares and registration of transfers in the share register 18 Procedure for proxy voting 19 Shareholders rights 21 Other explanations and information on the Company s website 23 Total number of shares and voting rights at the time of convening of the Annual General Meeting 23

4 Convening of the Annual General Meeting Our shareholders are invited to the Annual General Meeting on Tuesday, 5 July 2016, at 10:00 a.m. in the lecture hall at Deutsche Nationalbibliothek, Adickesallee 1, Frankfurt am Main. I. Agenda 1. Presentation of the adopted annual financial statements of DIC Asset AG and the approved consolidated financial statements for the year ended 31 December 2015, the combined management and group management report, the report of the Supervisory Board for the financial year 2015 and the explanatory report of the Management Board on the disclosures pursuant to sections 289 (4) and 315 (4) German Commercial Code (HGB) The documents presented with respect to agenda item 1 are made available at the Company s website at hauptversammlung/ (in German only) from the convening of the Annual General Meeting onward. The same applies to the proposal on the appropriation of retained earnings by the Management Board. In addition, the documents will be available for inspection at the Annual General Meeting, where a verbal explanation will be given. The Supervisory Board approved the annual financial statements and consolidated financial statements prepared by the Management Board pursuant to sections 171, 172 AktG (German Stock Corporation Act). The annual financial statements are therefore adopted. In accordance with the applicable legal provisions, no resolution on agenda item 1 by the Annual General Meeting is planned. 2. Resolution on the appropriation of retained earnings The Management Board and the Supervisory Board propose to resolve upon the appropriation of the retained earnings of DIC Asset AG reported as at 31 December 2015 in the amount of EUR 27,221, as follows: Distribution of a dividend of EUR 0.37 per no-par value share on the share capital carrying dividend rights of EUR 68,577,747.00, comprising 68,577,747 no-par value shares EUR 25,373, Carried forward to new account EUR 1,847, Retained earnings EUR 27,221,

5 The number of shares carrying dividend rights can change up to the time the resolution on the appropriation of retained earnings is adopted. In this case, the Management Board and Supervisory Board will distribute to the Annual General Meeting an adjusted proposed resolution on the appropriation of retained earnings, which will stipulate an unchanged distribution of EUR 0.37 per nopar value share carrying dividend rights. The adjustment will be carried out as follows: To the extent that the number of shares carrying dividend rights, and therefore the dividend amount, decreases, the total to be carried forward to new account will increase accordingly. To the extent that the number of shares carrying dividend rights, and therefore the dividend amount, increases, the total to be carried forward to new account will decrease accordingly. 3. Resolution on the approval of the actions of the members of the Management Board for the financial year 2015 The Management Board and the Supervisory Board propose to approve the actions of the members of the Management Board for the financial year Resolution on the approval of the actions of the members of the Supervisory Board for the financial year 2015 The Management Board and the Supervisory Board propose to approve the actions of the members of the Supervisory Board for the financial year Election of the auditor of the annual and consolidated financial statements for financial year 2016 and the auditor for the review of the half-yearly financial report and a review of additional interim financial information performed on an as-needed basis Based on recommendation of the Audit Committee, the Supervisory Board proposes to adopt the following resolution: Rödl & Partner GmbH Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft, Nuremberg, is appointed as auditor of the annual and consolidated financial statements for the financial year 2016 and audit review of the condensed financial statements and interim management report for the first half of the financial year 2016 (sections 37w (5) sentence 1, 37y German Securities Trading Act (WpHG )). In addition, Rödl & Partner GmbH Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft, Nuremberg, is appointed as auditor in the event the Management Board decides to undertake a review of any additional interim financial information within the meaning of section 37w (7) WpHG for the financial year 2016 prior to the next Annual General Meeting. 3

6 6. Supervisory Board election The Supervisory Board of the Company comprises six members to be elected by the Annual General Meeting pursuant to sections 95 sentence 2, 96 (1) last alternative, 101 (1) AktG and article 8 (1) of the Articles of Association. By resolution of Frankfurt am Main Local Court on 11 January 2016, Ulrich Höller was appointed as a member of the Supervisory Board in accordance with section 104 (2) AktG on request of the Management Board based on a proposal by shareholders with more than 25% of the voting rights. Mr Höller s court appointment expires at the end of the Annual General Meeting on 5 July The shareholders Deutsche Immobilien Chancen AG & Co. Kommanditgesellschaft auf Aktien and DIC Opportunistic GmbH, which together hold more than 25% of the voting rights of the Company, have proposed in accordance with section 100 (2) sentence 1 no. 4 AktG that Ulrich Höller, who stepped down from the Management Board of DIC Asset AG with effect from 31 December 2015, be elected to the Supervisory Board as a shareholder representative. The Supervisory Board supports this proposal. The Supervisory Board proposes the following resolution: Mr Ulrich Höller, resident in Frankfurt am Main, Management Board Chairman of GEG German Estate Group AG, is elected to the Supervisory Board for a term of office starting at the conclusion of the Annual General Meeting on 5 July 2016 and ending at the conclusion of the Annual General Meeting that approves the actions of the Supervisory Board during the fourth financial year following the start of the term of office; the financial year in which the term of office begins is not included. Disclosures pursuant to section 125 (1) sentence 5 AktG: Companies with statutory supervisory boards on which Mr Ulrich Höller serves as a member are listed below under a) and companies in which he is a member of a comparable governing body in Germany or abroad are listed below under b): a) Deutsche Immobilien Chancen Beteiligungs AG (Member of the Supervisory Board) DIC Onsite GmbH (Chairman of the Supervisory Board) b) Commerzbank Aktiengesellschaft (Member of the Advisory Board) 4

7 Disclosures pursuant to clause (5) to (7) of the German Corporate Governance Code: Mr Ulrich Höller maintains the following business relationships with the Company, Group companies, governing bodies and major shareholders of the Company: GEG German Estate Group AG maintains the following business relationships with the Company and a Group company: GEG German Estate Group AG operates as a service provider for three project developments in which the Company has an interest, including MainTor, Opera Offices and Junges Quartier projects. Service contracts for real estate management have been signed by GEG German Estate Group AG with DIC Onsite GmbH, a subsidiary of the Company. Mr Höller holds an indirect business interest amounting to 0.9% in Deutsche Immobilien Chancen AG & Co. Kommanditgesellschaft auf Aktien, which is a major shareholder of the Company. Ulrich Höller also holds equity investments in AIRE GmbH and DIC Capital Partners GmbH in which the two Supervisory Board members of the Company, Prof. Dr. Gerhard Schmidt and Klaus-Jürgen Sontowski, also hold an interest. Detailed information about the candidate for the Company s Supervisory Board (CV) is available on the Company s website at (in German only). 7. Resolution on amending the Articles of Association to change the remuneration of the Supervisory Board In accordance with the current provision for the remuneration of the Supervisory Board stipulated in article 10 (1) of the Articles of Association, each member of the Supervisory Board receives a fixed annual remuneration of EUR 15, Each member also receives EUR 2, annually for each percentage of the dividend over the rate of seven percent, calculated on the amount of the share capital that is distributed, but no more than EUR 12, The Chairman is paid twice the fixed and variable remuneration, and the Vice Chairman is paid one-and-a-half times the fixed and variable remuneration. Supervisory Board members who are members of a Supervisory Board committee that has met at least once during the financial year, currently receive an annual remuneration of EUR 2,500 per committee, but no more than EUR 5,000 in total. The Chairman of a committee receives double this amount of additional remuneration. 5

8 In order to address the increased scope of activity and time commitment required of the members of the Supervisory Board and the Audit Committee and to better enable the Company to find qualified candidates to serve on its Supervisory Board, it has been proposed that the amount of annual fixed and variable remuneration paid to individual Supervisory Board members and the amount of annual remuneration paid to individual committee members be changed (hurdle rate increase). The remuneration system as such and the factor by which the remuneration is multiplied for the Chairman or Vice Chairman of the Supervisory Board and the Chairman of a committee will remain unchanged. The Management Board and Supervisory Board propose the following resolution: Article 10 (1) of the Articles of Association shall be amended and revised as follows: 1. The members of the Supervisory Board receive fixed remuneration of EUR 25,000 for each full financial year of membership of the Supervisory Board. Such remuneration shall be payable after the end of the financial year and shall be posted as an expense. Each member also receives EUR 2,500 annually for each percentage of the dividend over the rate of ten percent, calculated on the amount of the share capital that is distributed, but no more than EUR 25,000. The Chairman is paid twice the fixed and variable remuneration, and the Vice Chairman is paid one-and-a-half times the fixed and variable remuneration. Supervisory Board members who are members of a Supervisory Board committee that has met at least once during the financial year, receive an annual remuneration of EUR 5,000 per committee for each full financial year of their membership of this committee, but no more than EUR 10,000 in total. The chairman of a Supervisory Board committee receives double this amount of additional remuneration. In years in which their term of office begins or ends, Supervisory Board members receive this remuneration on a pro rata basis. The above provision supersedes the current provision for the remuneration of the Supervisory Board members stipulated in Article 10 (1) of the Articles of Association when the amendment to the Articles of Association takes effect and shall be applied for the first time for the financial year beginning on 1 January

9 8. Resolution on a new authorisation to purchase and use own shares and to disapply the right to tender shares in an acquisition and to disapply pre-emptive rights when the shares are used The Company requires special authorisation from the Annual General Meeting pursuant to section 71 (1) no. 8 AktG to purchase own shares insofar as the purchase is not expressly permitted by law. The authorisation to purchase own shares most recently issued by the Annual General Meeting on 5 July 2011 expires on 4 July In order for the Company to be able to buy back shares in the future, a new, five-year authorisation to purchase own shares is required. The Management Board and Supervisory Board propose to adopt the following resolution: a) Authorization to purchase own shares The Management Board shall be authorised, with the prior approval of the Supervisory Board, to acquire own shares until 4 July 2021 representing up to 10% of the lower of the Company s share capital at the date of the resolution or at the date the authorisation is exercised. At no time may the acquired shares together with other treasury shares in the possession of the Company or allocated to it under sections 71a et seq. AktG represent more than 10% of the share capital. The authorisation may not be used for the purpose of trading treasury shares. The authorisation may be exercised in whole or in part, once or repeatedly, for one or more than one purpose, by the Company or by companies dependent on it or majority-owned by it, or by third parties acting on their behalf or on behalf of the Company. b) Types of purchase At the Management Board s discretion, and with the prior approval of the Supervisory Board, shares may be purchased (1) through the stock exchange or (2) based on a public offering directed to all shareholders or a public invitation to all shareholders to submit offers to sell. (1) If the shares are purchased through the stock exchange, the purchase price per share paid by the Company (not including incidental acquisition costs) may not exceed or fall below by more than 10% the price determined on the trading day in the opening auction in the Xetra trading system (or a comparable successor system) on the Frankfurt Stock Exchange. 7

10 (2) If the shares are purchased based on a public offering directed to all shareholders or a public invitation to all shareholders to submit offers to sell, the purchase price per share offered (not including incidental acquisition costs) in the event of a public offering directed to all shareholders, or the limits of the purchase price range determined by the Company (not including incidental acquisition costs) in the event of a public invitation to all shareholders to submit offers to sell, may not exceed or fall below by more than 10% the average closing price of the Company s shares in the Xetra trading system (or a comparable successor system) on the Frankfurt Stock Exchange during the last five trading days prior to the day of the public announcement of the public offering or the public invitation to submit offers to sell. If substantial deviations occur in the applicable price after publication of a public offering directed to all shareholders or a public invitation to all shareholders to submit offers to sell, the offering or the invitation to submit offers to sell may be amended. In this case, the applicable price will be based on the average closing price of the Company s shares in the Xetra trading system (or a comparable successor system) on the Frankfurt Stock Exchange during the last five trading days prior to the public announcement of the amendment. The volume of the public offering directed to all shareholders or the public invitation to all shareholders to submit offers to sell may be restricted. Insofar as the volume of the offered shares exceeds the planned repurchase volume in the case of a public offering or a public invitation to submit offers to sell, the acquisition can take place proportionate to the shares subscribed to or offered in each case; to this extent, the shareholders right to offer their shares proportionate to the percentage of shares that they hold is disapplied. A preferential acceptance of smaller numbers up to 100 offered shares per shareholder can be stipulated, as can commercial rounding to avoid arithmetic fractions of shares. To this extent, any further right of the shareholders to tender shares is disapplied. The public offering directed to all shareholders or the public invitation to all shareholders to submit offers to sell may stipulate further conditions. 8

11 c) Use of own/treasury shares The Management Board shall be authorised, with the prior approval of the Supervisory Board, to use the own shares acquired on the basis of items a) and b) above for any legal purpose, in particular the following: (1) The shares may be redeemed, and such redemption or its execution shall not require another resolution of the Annual General Meeting. They may also be redeemed in a simplified procedure without reducing capital by adjusting the pro-rata share of the remaining no-par value shares in the Company s share capital. If they are redeemed in a simplified procedure, the Management Board is authorised to adjust the number of no-par value shares in the Articles of Association. (2) The shares may also be sold in a way other than through the stock exchange or based on an offering directed to all shareholders if the purchase price payable in cash is not significantly lower than the stock market price of equivalent shares already listed. The number of shares sold in this manner disapplying pre-emptive rights may not exceed 10% of the share capital, neither at the time this authorisation becomes effective nor at the time it is exercised. Other shares that are issued or sold during the term of this authorisation while disapplying pre-emptive rights in direct or corresponding application of section 186 (3) sentence 4 AktG are to be counted toward this upper limit of 10% of the share capital. Shares that are issued to service option rights and/or conversion rights or conversion obligations from bonds with warrants and/or convertible bonds and/or profit participation rights are also to be counted towards this limit if such bonds or profit participation rights are issued during the term of this authorisation while disapplying pre-emptive rights in corresponding application of section 186 (3) sentence 4 AktG. (3) The shares may be sold in return for contributions in kind, in particular in connection with business combinations, for the purpose of acquiring companies, parts of companies, equity interests in companies or other assets, or claims for acquiring other assets including receivables in respect of the Company. (4) The shares may be used to implement a scrip dividend in which shares of the Company are used (including partially and alternatively) to fulfil shareholder dividend claims. 9

12 (5) The shares may be used to fulfil subscription and exchange rights on the basis of the exercise of conversion and/or option rights or the fulfilment of conversion obligations arising from convertible bonds and/or bonds with warrants issued by the Company or one of its Group companies wholly owned by DIC Asset AG either directly or indirectly. The aforementioned authorisations may be used once or repeatedly, in whole or in part, individually or jointly. The authorisations listed under (2), (3) (4) and (5) may also be exercised by companies dependent on the Company or majority-owned by it, or by third parties acting on their behalf or on behalf of the Company. The pre-emptive right of shareholders to the own shares acquired based on the authorisations listed under (2), (3), (4) and (5) will be disapplied to the extent that they are used pursuant to the aforementioned authorisations in some way other than a sale through the stock exchange or an offer to sell directed to all shareholders. Moreover, in the event of the sale of the treasury shares through an offer to sell directed to all shareholders, the pre-emptive right of shareholders to fractional amounts may be disapplied. However, the authorisation to use own shares while disapplying the pre-emptive right of shareholders is limited to the extent that, following exercise of the authorisation, the treasury shares used while disapplying the pre-emptive rights of shareholders plus the number of other shares issued from authorised capital or sold during the term of this authorisation while disapplying pre-emptive rights, or arising during the term of this authorisation from convertible bonds and/or bonds with warrants and/or profit participation rights issued while disapplying pre-emptive rights, may not exceed a total of 20% of the share capital; either the share capital at the time the authorisation enters into force or the share capital existing at the time this authorisation is exercised, whichever figure is lower, is applicable. 10

13 II. Report to the Annual General Meeting Written report of the Management Board pursuant to section 71 (1) no. 8 sentence 5 AktG in conjunction with section 186 (4) sentence 2 AktG on agenda item 8 outlining the reasons for the authorisation of the Management Board to disapply the right of shareholders to tender shares in an acquisition and the pre-emptive right of shareholders when own shares are used In section 71 (1) no. 8, the German Stock Corporation Act (AktG) offers companies the option of acquiring own shares totalling up to 10% of their share capital based on an authorisation by the Annual General Meeting. The Annual General Meeting of the Company most recently adopted a resolution to authorise the acquisition of own shares on 5 July 2011; this authorisation expires on 4 July For this reason, a new authorisation to acquire own shares which will be in force for a period of five years is proposed. The proposed resolution in agenda item 8 stipulates that the Management Board is authorised, with the prior approval of the Supervisory Board, to acquire own shares representing up to 10% of the lower of the Company s share capital at the date of the resolution or at the date the authorisation is exercised. The shares must be acquired through the stock exchange, based on a public offering directed to all shareholders or based on a public invitation to all shareholders to submit offers to sell. The principle of equal treatment under the German Stock Corporation Act must be observed in each case. In the event of a public invitation to all shareholders to submit offers to sell, the recipients of this invitation may decide how many shares they wish to offer the Company and at what price (within a specified price range). In the event of a public offering or a public invitation to submit offers to sell directed to all shareholders, the volume of the offering or the invitation to submit offers to sell may be limited. It is possible that the number of shares of the Company tendered by shareholders may exceed the number of shares required by the Company. In this case, quotas will be used for allocation. This will permit allotment according to the proportion of subscribed or tendered shares (tender ratios) in each case instead of the percentage interest held, because this makes the purchase process technically easier to conduct in an economically viable manner. This will also enable preferred acceptance of smaller quantities of up to 100 shares tendered per shareholder. This option 11

14 aims to prevent fractions of shares when calculating the ratios of shares to be acquired and to avoid smaller remainders, thus simplifying technical settlement of the share buyback. A de facto disadvantage to smaller-scale shareholders is also avoided. Lastly, rounding according to commercial principles can be stipulated to avoid fractions of shares. In this sense, the acquisition ratio and the number of shares to be acquired from individual shareholders tendering shares can be rounded as necessary to technically reflect the acquisition of whole shares in the settlement process. The Management Board and the Supervisory Board consider the disapplication of a possible right to tender by shareholders above and beyond this scope to be objectively justified. The price offered or the limits of the purchase price range specified by the Company per share (not including incidental acquisition costs) may not exceed or fall below by more than 10% the average closing price of the Company s shares in the Xetra trading system (or a comparable successor system) on the Frankfurt Stock Exchange during the last five trading days prior to the day of the public announcement of the offering or the public invitation to submit offers to sell. If substantial deviations occur in the applicable price after publication of a public offering directed to all shareholders or a public invitation to all shareholders to submit offers to sell, the offering or the invitation to submit offers to sell may be amended. In this case, the applicable price is based on the average price during the last five trading days prior to the public announcement of the amendment. The offering directed to all shareholders or the invitation to all shareholders to submit offers to sell may stipulate further conditions. The additionally proposed option to sell or use the treasury shares aims to provide a simplified way to raise funds. According to section 71 (1) no. 8 sentence 5 AktG, the Annual General Meeting can also authorise the Management Board to dispose of shares by means other than through the stock exchange or based on an offering to all shareholders. Pursuant to the proposed resolution, the Management Board also requires the prior approval of the Supervisory Board for the use of treasury shares. The requirement for this in the alternative proposed here in agenda item 8 c) (2) is that the treasury shares are sold at a price that does not fall substantially below the stock market price of equivalent shares of the Company already listed at the time of the sale in accordance with section 186 (3) sentence 4 AktG. Use is hereby made of the option to simplify the disapplication of pre-emptive rights permitted by law and commonly applied in practice. The issue of protecting share- 12

15 holders against dilution is addressed by only permitting the shares to be sold at a price that does not fall substantially below the applicable stock exchange price. The final selling price for treasury shares will be determined shortly before the sale. The Management Board with the approval of the Supervisory Board will calculate the discount from the stock exchange price to be as low as possible in view of the market conditions prevailing at the time of placement. In no case will the discount from the stock exchange price total more than 5% of the stock exchange price. The possibility of selling treasury shares while disapplying pre-emptive rights and in a way other than through the stock exchange or by way of an offering directed to all shareholders is in the interests of the Company considering the intense competition on capital markets. For the Company, this opens up the possibility to offer treasury shares to investors in Germany and abroad quickly and flexibly, to expand its group of shareholders and to stabilise the value of the Company s shares. The financial interests of shareholders are adequately protected when the shares are sold at a purchase price not falling substantially below the stock exchange price and the percentage of treasury shares that can be sold while making use of this type of disapplication of pre-emptive rights is limited to a total of no more than 10% of the share capital (upon entry into force and upon exercise of the authorisation). Other shares that are issued or sold during the term of the authorisation while disapplying pre-emptive rights in direct or corresponding application of section 186 (3) sentence 4 AktG are to be counted toward this upper limit of 10% of the share capital. Shares that are issued to service option rights and/or conversion rights or conversion obligations from bonds with warrants and/or convertible bonds and/or profit participation rights are also to be counted towards this limit if such bonds or profit participation rights are issued during the term of this authorisation while disapplying pre-emptive rights in corresponding application of section 186 (3) sentence 4 AktG. Since the treasury shares are placed at a price close to the stock exchange price, as a rule any shareholder can acquire shares on the market at nearly the same terms in order to preserve the percentage interest they hold. According to the proposed resolution in agenda item 8 c) (3), the Company also has the option of keeping treasury shares available to offer as consideration when acquiring contributions in kind, in particular as part of business combinations, when acquiring companies, parts of companies, equity interests in companies, other assets or claims for acquiring other assets, including receivables in respect of the Company, if such consideration is requested. The authorisation proposed here is intended to give the Company the necessary leeway to quickly and flexibly take advantage of opportunities that arise to make such acquisitions or participate in such business combinations. 13

16 The proposed disapplication of pre-emptive rights is conducive to this end. In determining the valuation ratios, the Management Board and Supervisory Board will take care to adequately protect the interests of shareholders. In particular, they will use the stock exchange price of the Company s shares as a guide for calculating the value of the treasury shares used as consideration. In order to avoid having the results of completed negotiations called into question due to possible volatility in the stock exchange price, however, systematic linking to a stock exchange price is not envisaged. Moreover, the proposal in agenda item 8 c) (4) includes authorising the Management Board to use the treasury shares in other ways than through an offering to all shareholders in order to issue a scrip dividend. In a scrip dividend using treasury shares, an offer is made to shareholders to relinquish to the Company their claim for payment of a cash dividend arising from the Annual General Meeting resolution on the appropriation of retained earnings and to subscribe for treasury shares in return. A scrip dividend using treasury shares can be carried out as an offering directed to all shareholders while preserving their pre-emptive rights and in accordance with the principle of equal treatment. For reasons of practicality in executing the scrip dividend, shareholders are only offered whole shares for subscription. Regarding the part of their dividend claim that falls below or exceeds the subscription price for a whole share, shareholders receive the cash dividend and to this extent cannot receive any shares. Normally, fractional rights will not be offered and there will be no trading of pre-emptive rights or fractions thereof; in these cases, shareholders will receive a proportional cash dividend instead of subscribing treasury shares. The proposal also calls for authorising the Management Board to disapply the preemptive right of shareholders when implementing a scrip dividend in order to carry out the scrip dividend under optimal terms and conditions. Depending on the capital market situation at the time, it can be advantageous to structure a scrip dividend using treasury shares such that the Management Board in principle issues an offer to all shareholders who are entitled to dividends to acquire treasury shares in return for relinquishing their claim to a dividend while adhering to the general principle of equal treatment (section 53a AktG) and therefore preserves the pre-emptive right of shareholders in beneficial terms, but disapplies the pre-emptive right of shareholders to new shares in legal terms. This type of disapplication of pre-emptive rights enables the scrip dividend to be carried out under flexible terms and conditions. In view of the fact that all shareholders are offered the treasury shares and excess dividend amounts are settled by paying the dividend in cash, we consider disapplying the pre-emptive right in this case to be justified and appropriate. 14

17 Furthermore, the authorisation in agenda item 8 c) (5) specifies that the own shares acquired as a result of the proposed authorisation can be used while disapplying the pre-emptive right of shareholders in order to fulfil conversion and/or option rights or conversion obligations arising from convertible bonds or bonds with warrants issued by the Company or one of its Group companies wholly owned by DIC Asset AG either directly or indirectly. The proposed resolution will not create any new authorisation to grant further conversion and/or option rights. It serves solely to give management the option to use treasury shares in whole or in part instead of contingent capital to fulfil conversion and/or option rights or conversion obligations that have already arisen based on other authorisations. This does not place any burden on shareholders beyond the dilutive effects possibly associated with the disapplication of pre-emptive rights in the issuance of convertible bonds and/or bonds with warrants. Rather, the effect is solely to increase the flexibility of the Management Board because the Board is not obliged to service convertible bonds and/or bonds with warrants using contingent capital, but instead can also use treasury shares for this purpose if this appears to be more favourable to the interests of the Company and its shareholders in specific situations. There are not yet currently any conversion and/or option rights or conversion obligations which might be serviced using treasury shares, but these could arise, for example, on the basis of the authorisation of the Annual General Meeting on 2 July 2015 for the issue of convertible bonds and/or bonds with warrants. Finally, the own shares acquired based on this resolved authorisation may be redeemed by the Company in accordance with the proposed resolution in agenda item 8 c) (1) without this requiring a new resolution to be adopted by the Annual General Meeting. In accordance with section 237 (3) no. 3 AktG, the Annual General Meeting of a company can resolve to redeem its fully paid-up no-par value shares without requiring a reduction in the company s share capital. The authorisation proposed here expressly provides for this alternative in addition to redemption with a capital reduction. Redeeming treasury shares without reducing capital automatically increases the proportion of the share capital represented by the remaining no-par value shares of the Company. The Management Board should therefore also be authorised to complete the amendment of the Articles of Association then required regarding the change in the number of no-par value shares caused by the redemption. 15

18 The pre-emptive right of shareholders to the own shares acquired may be disapplied to the extent that these shares are used pursuant to agenda item 8 c) (2) to (5) in some other way than a sale through the stock exchange or an offering directed to all shareholders. In the event of the sale of the treasury shares, disapplication of the preemptive right of shareholders for fractional amounts will be enabled by an offer to sell directed to all shareholders. The disapplication of the pre-emptive right for fractional amounts is necessary to allow technical implementation of the sale of acquired treasury shares by way of an offering to shareholders. The fractions of treasury shares for which the pre-emptive right of shareholders has been disapplied will either be sold through the stock exchange or otherwise utilised for the maximum benefit of the Company. The use of treasury shares while disapplying pre-emptive rights in accordance with the authorisation in agenda item 8 c) would only be considered in cases where the proportion of share capital accounted for by treasury shares used in this manner does not exceed a total of 20% of the share capital while taking into account shares issued from authorised capital during the term of the authorisation while disapplying pre-emptive rights, shares sold based on other authorisations while disapplying pre-emptive rights, and new shares to be issued based on convertible bonds and/or bonds with warrants or profit participation rights issued during the term of this authorisation while disapplying pre-emptive rights. Either the share capital existing at the time the authorisation enters into force or the share capital existing at the time the treasury shares are sold, depending on which is lower, is applicable here. In this way, the Company ensures in the interests of shareholders that the option to use treasury shares while disapplying pre-emptive rights is limited to a share volume totalling 20% of the share capital even when all other authorisations to disapply pre-emptive rights are taken into account. Please note that, in addition to the authorisation to acquire and use own shares proposed in agenda item 8, the Company has authorised capital of up to EUR 34,288, pursuant to article 5 of the Articles of Association and contingent capital also amounting to up to EUR 34,288, pursuant to article 6 of the Articles of Association for the purpose of servicing conversion and/or option rights or conversion obligations arising from convertible bonds and/or bonds with warrants. The authorisations to disapply pre-emptive rights in the event of capital increases from authorised capital and to disapply pre-emptive rights when issuing convertible bonds and/or bonds with warrants are limited to a total of 20% of the share capital. New shares issued from authorised capital while disapplying pre-emptive rights and new shares 16

19 issued from contingent capital to be used to service convertible bonds and/or bonds with warrants while disapplying pre-emptive rights would be applied to the aforementioned limit on capital of 20% of the share capital for treasury shares used while disapplying pre-emptive rights. In deciding whether to acquire and use own shares, the Management Board will be guided solely by the best interests of the shareholders and the Company. The Management Board will inform the next Annual General Meeting about the use of the aforementioned authorisations. 17

20 III. Additional information on convening the Annual General Meeting Conditions for participating in the Annual General Meeting and exercising voting rights Every shareholder who is recorded in the share register and registers for the Annual General Meeting in good time is entitled to take part in the Annual General Meeting and exercise voting rights, according to article 12 of the Articles of Association. The registration must be written in text form in German or English and submitted to the Company at least six days prior to the Annual General Meeting (not including the day of the Annual General Meeting and the day of receipt), in other words, no later than on Tuesday, 28 June 2016, 24:00 hrs. (receipt), at the following address: DIC Asset AG c/o HCE Haubrok AG Landshuter Allee Munich Fax: +49 (0) Free availability of shares and registration of transfers in the share register Pursuant to section 67 (2) sentence 1 AktG, only those shareholders who are registered as such in the share register are deemed to be shareholders in respect of the Company. The status of the share register on the day of the Annual General Meeting is the deciding factor for the right to participate and for the number of voting rights to which participants in the Annual General Meeting are entitled. Please note that for technical reasons, no transfers can be recorded in the share register during the period from the end of 28 June 2016 at 24:00 hrs. (Technical Record Date) to the end of the day of the Annual General Meeting (moratorium on the registration of transfers). The status of the share register on the day of the Annual General Meeting therefore corresponds to the status on 28 June 2016 at 24:00 hrs. Registering for the Annual General Meeting does not result in shares being locked up or blocked. Shareholders can therefore continue to freely dispose of their shares even after successful registration and despite the moratorium on the registration of transfers. However, buy- 18

21 ers of shares whose transfer registration requests are received by the Company after 28 June 2016 can only exercise participation and voting rights arising from these shares if they have been issued a proxy or have been authorised to exercise these rights by the shareholder still recorded in the share register. All buyers of shares in the company who are not yet registered in the share register are therefore asked to file their applications for registration as early as possible. Procedure for proxy voting Shareholders who do not want to participate in the Annual General Meeting themselves can also exercise their voting rights in the Annual General Meeting through a proxy, e.g. a bank or a shareholder association, or another person of their choice. In these cases as well, recording in the share register and registration for the Annual General Meeting in good time is required as stipulated above. In line with section 134 (3) sentence 3 AktG, text form is required for issuance of a proxy, its revocation and proof of the proxy in respect of the Company. Authorising banks, shareholder associations or another person or institution equivalent to these pursuant to section 135 (8) and (10) in conjunction with section 125 (5) AktG, or revoking or providing proof of such an authorisation may be subject to special conditions. In such a case, shareholders are requested to consult in good time with the person or institution to function as the proxy concerning a possibly required form of authorisation and the process for issuing the authorisation. The declaration for issuing a proxy can be made in respect of the proxy or the Company. Proof of a proxy issued to an authorised representative can be furnished to the Company by way of the authorised representative presenting the proxy at the entrance checkpoint on the day of the Annual General Meeting. In order to submit the proof of proxy by mail, fax or electronically (by ), please send it to the following address/number: DIC Asset AG c/o HCE Haubrok AG Landshuter Allee Munich Fax: +49 (0) vollmacht@hce.de The above communication methods are also available to shareholders intending to issue a proxy by way of making a declaration to the Company; no separate proof that the proxy was issued is necessary in this case. In addition, revocation of a proxy already issued can be declared to the Company directly by using the aforementioned communication methods. We request that our shareholders submit proxies, proof of 19

22 proxy and the revocation of proxies, if these are to be submitted by mail or by fax, to the Company no later than Monday, 4 July 2016, 24:00 hrs. (receipt). A form that can be used to issue proxies will be sent to shareholders along with the invitation and is also printed on the admission ticket. This form is also available for download on the Company s website at (in German only). If shareholders authorise more than one person to represent them, the Company is entitled to turn away one or more of these individuals. The Company offers shareholders the option of authorising proxies named by the Company to exercise their voting rights prior to the Annual General Meeting. Shareholders who wish to authorise proxies named by the Company to exercise their voting rights must be recorded in the share register pursuant to the provisions above and must register for the Annual General Meeting in good time. If authorised, the proxies named by the Company will exercise the voting rights according to instructions. The proxies named by the Company are not authorised to exercise voting rights without instructions from the shareholder. A form for issuing a proxy and instructions to the proxies named by the Company will be sent along with the invitation. This form is also available for download on the Company s website at de/hauptversammlung/ (in German only). Proxies and instructions issued to proxies named by the Company must also be submitted to the Company in text form. Shareholders who wish to authorise a proxy named by the Company to exercise their voting rights prior to the Annual General Meeting are requested to submit their proxies and instructions no later than by Monday, 4 July 2016, 24:00 hrs. (receipt), by mail, fax or to the following address/number: DIC Asset AG c/o HCE Haubrok AG Landshuter Allee Munich Fax: +49 (0) vollmacht@hce.de In addition, we offer shareholders who are recorded in the share register according to the provisions above, who have registered for the Annual General Meeting in good time and who are present at the Annual General Meeting, the option to authorise a proxy named by the Company to exercise their voting rights at the Annual General Meeting. 20

23 Shareholders rights w Requests to add supplementary items to the agenda pursuant to section 122 (2) AktG Shareholders whose combined shares constitute one twentieth of the share capital or the proportionate amount of EUR 500, may in accordance with section 122 (2) AktG request that items be added to the agenda and announced. Every request for a new agenda item must be accompanied by an explanation of the reasons therefor or a proposed resolution. The request must be sent in writing to the Management Board and be received by the Company at least 30 days prior to the Annual General Meeting (not counting the day of the Annual General Meeting and the day of receipt), in other words, no later than on Saturday, 4 June 2016, 24:00 hrs. (receipt). Please send such requests to the following address: DIC Asset AG Investor Relations Mr Peer Schlinkmann Neue Mainzer Strasse 20 MainTor Frankfurt am Main w Counter-proposals and candidate nominations by shareholders pursuant to sections 126 (1), 127 AktG Shareholders can submit to the Company counter-motions to proposals made by the Management Board and/or Supervisory Board on specific agenda items as well as nominate candidates for the Supervisory Board election and/or election of the auditor. Countermotions and candidate nominations pursuant to sections 126 (1), 127 AktG must be sent to the following address only: DIC Asset AG Investor Relations Mr Peer Schlinkmann Neue Mainzer Strasse 20 MainTor Frankfurt am Main Telefax: +49 (0) ir@dic-asset.de 21

24 In accordance with section 126 (1) AktG, the Company makes counter-motions, along with the name of the shareholder, the justification and any statement by management, available on the Company s website at (in German only) if the counter-motion along with a justification have been received at least 14 days prior to the Annual General Meeting (not including the day of the Annual General Meeting and the day of receipt), in other words, no later than on Monday, 20 June 2016, 24:00 hrs. (receipt), at one of the addresses provided above. Proposals addressed otherwise will not be considered. The Company may refrain from publishing a counter-motion under the conditions outlined in section 126 (2) AktG, for example because the counter-motion would lead the Annual General Meeting to adopt a resolution that is against the law or the Articles of Association. Publishing the justification for the counter-motion is not mandatory if it totals more than 5,000 characters. Pursuant to section 127 AktG, the sentences above apply analogously to proposals by shareholders to nominate candidates for the Supervisory Board election and/or election of the auditor. Nominations of candidates by shareholders do not require justification and publication is also not required (except in the cases listed in section 126 (2) AktG) if the motion fails to include the name, profession and place of residence of the proposed candidate and, in the case of the Supervisory Board election, does not include information about the candidate s membership on other statutory supervisory boards. Please note that the counter-motions and candidate nominations will only be considered at the Annual General Meeting if they are presented orally or distributed there, even if they have been submitted to the Company in a timely manner in advance. The right of every shareholder to submit counter-motion to the various items on the agenda or to nominate candidates during the Annual General Meeting even without submitting them to the Company beforehand shall remain unaffected. w Shareholder s right to information pursuant to section 131 (1) AktG According to section 131 (1) AktG, all shareholders are entitled to receive information from the Management Board about the Company s affairs upon making an oral request in the Annual General Meeting as long as the information is required to make an informed assessment about an agenda item. The duty to provide information also extends to the Company s legal and commercial relations with affiliates and the situation of the Group and the companies included in the consolidated financial statements. 22