Invitation to the Annual General Meeting

Transcription

1 Tagesordnung der Hauptversammlung Invitation to the Annual General Meeting Securing success through partnership and strategy a.m., May 28, 2010 at the Kurhaus Freudenstadt Homag Group AG Hauptversammlungsservice Homagstrasse Schopfloch GERMANY Phone +49 (0) Fax +49 (0) hv@homag-group.de

2 Group Key Figures Variance (%) Sales revenue EUR million Total operating performance EUR million EBITDA adjusted 1) EUR million EBITD adjusted 1) EUR million Capital expenditures on property, plant and equipment EUR million Total assets as end of reporting period EUR million Own funds as end of reporting period 2) EUR million Earnings per share 3) EUR Profit distribution per share EUR 0.00* Employees 4) annual average 5,158 5, Homag Group AG with registered offices in Schopfloch ISIN: DE Security identification number: Invitation to the 2010 Annual General Meeting We hereby invite you, our shareholders, to the annual general meeting of Homag Group AG, to be held on 1) 2) 3) * 4) Before taking into account employee participation and restructuring / non-recurring expenses Equity plus profit participation rights and obligation from employee participation Net profit/loss after minority interests, based on 15,688,000 shares Proposed As of January 1, 2009 including employees of BENZ (2009: 225 employees) Friday, May 28, 2010, at a.m. at the Kurhaus Freudenstadt, Lauterbadstrasse 5, Freudenstadt.

3 4 Agenda 5 1. Presentation of the ratified financial statements and management report of HOMAG Group AG as of December 31, 2009, the approved consolidated financial statements and group management report as of December 31, 2009, the report of the supervisory board and the explanatory report of the management board on the disclosures pursuant to Secs. 289 (4) and (5), 315 (2) No. 5 and (4) of HGB [ Handelsgesetzbuch : German Commercial Code] for the fiscal year Pursuant to Secs. 172 and 173 AktG [ Aktiengesetz : German Stock Corporation Act], no resolution by the annual general meeting is required for item 1 of the agenda. The supervisory board has approved the financial statements and consolidated financial statements prepared by the management board in accordance with Secs. 171 and 172 AktG. The financial statements have therefore been ratified in accordance with Sec. 172 AktG. Sec. 175 (1) Sentence 1 AktG requires only that the management board convene the annual general meeting so that it may take receipt of the ratified financial statements and management report, among other things, as well as pass a resolution on the appropriation of the distributable profit, and in the case of a parent company, take receipt of the consolidated financial statements and group management report as approved by the supervisory board. Pursuant to Secs. 175 (2) and 176 (1) Sentence 1 AktG, the management board must ensure that the annual general meeting has access to documents including the financial statements, the management report, the supervisory board report, the management board s proposal for the appropriation of net retained profit and, in the case of publicly traded companies, an explanatory report on the disclosures pursuant to Secs. 289 (4) and (5), 315 (2) No. 5 and (4) HGB, as well as, in the case of parent companies, the consolidated financial statements, group management report and supervisory board report thereon The aforementioned documents are discussed at length at the annual general meeting. From the date on which the annual general meeting is called, they are made available at the business premises of Homag Group AG, Homagstr. 3-5, Schopfloch, Germany, as well as at the annual general meeting itself, for inspection by the shareholders. They are also accessible online at Relations Each shareholder is entitled to request a copy of these documents, which will be dispatched free of charge and without delay. Resolution on the appropriation of net retained profit The management board and supervisory board propose carrying forward the net retained profit of EUR 25,493, reported in the ratified financial statements as of December 31, 2009 to new account. Resolution on the exoneration of the management board for the fiscal year 2009 The management board and supervisory board propose the exoneration of the serving members of the management board for the fiscal year Resolution on the exoneration of the supervisory board for the fiscal year 2009 The management board and supervisory board propose the exoneration of the serving members of the supervisory board for the fiscal year 2009.

4 6 Agenda Election of the auditor and group auditor for the fiscal year 2010, as well as the auditor to review the condensed financial statements and interim management report in the six-month report for the fiscal year 2010 The supervisory board proposes engaging Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft, Stuttgart, Sec Sentence 1 of the German Corporate Governance Code requires that elections to the supervisory board be made on an individual basis. For the period up to the end of the annual general meeting deciding on the exoneration of the supervisory board for the fiscal year 2014, the supervisory board proposes that the shareholders elect the following persons, on an individual basis, to the company's supervisory board: to audit the financial statements and consolidated financial statements for the fiscal year 2010, as well as to review the condensed financial statements and interim management report (Sec. 37w (5), Sec. 37y No. 2 WpHG [ Wertpapierhandelsgesetz : German Securities Trading Act]) in the six-month report for the fiscal year This proposal is based on the recommendation of the audit committee Dr. Jochen Berninghaus, lawyer, Wirtschaftsprüfer [German public auditor] and tax advisor, resident of Dortmund Klaus M. Bukenberger, business consultant, former chairman of the management board of Homag Group AG, resident of Schenkenzell Torsten Grede, member of the management board of Deutsche Beteiligungs AG, Frankfurt am Main, resident of Frankfurt am Main 6. Election of six supervisory board members The term of office for members of the supervisory board runs until the end of the annual general meeting that agrees on the exoneration of the supervisory board for the fiscal year The term of office for members of the supervisory board therefore runs until the end of the HOMAG Group AG annual general meeting on May 28, The supervisory board comprises 12 members in accordance with Sec. 8 (1) of the articles of incorporation and bylaws, six of which are elected by the shareholders at the annual general meeting and six of which are elected by the employees in accordance with the provisions of MitbestG [ Mitbestimmungsgesetz : German Co-determination Act], pursuant to Secs. 96 (1) case 1, 101 (1) AktG and Sec. 7 (1) No. 1 MitbestG. The annual general meeting is not bound by nominations Ralf Hengel, head of IT at schlott GmbH, Freudenstadt, resident of Freudenstadt Dr. Dieter Japs, consultant engineer, former member of the management board of Michael Weinig AG, Tauberbischofsheim, resident of Reichenberg Thomas Keller, regional manager for Württemberg at Deutsche Bank AG, Frankfurt am Main, resident of Freiburg In accordance with Sec Setence 3 of the German Corporate Governance Code, we hereby give notice that Torsten Grede intends to stand for election as chairman in the event that he is elected to the supervisory board. Of the candidates for the supervisory board, Klaus M. Bukenberger among others qualifies as an impartial

5 8 Agenda 9 financial expert as defined by Sec. 100 (5) AktG. Re. Item 6: Disclosures pursuant to Sec. 125 (1) Sentence 5 AktG The persons proposed for election to the supervisory board (6.1 to 6.6) hold the following positions pursuant to Sec. 125 (1) Sentence 5 AktG, with the positions listed under a) being memberships in legally mandated supervisory boards and the positions listed under b) being memberships in similar supervisory bodies in commercial enterprises in Germany and other countries: Torsten Grede: a) Chairman of the supervisory board of Homag Holzbearbeitungssysteme AG, Schopfloch b) Member of the board of directors of Clyde Bergemann Power Group Inc., Delaware, USA; member of the advisory board of Grohmann Engineering, Prüm Ralf Hengel: 6.1 Dr. Jochen Berninghaus: a) Deputy chairman of the supervisory board of Geno-Volksbank-Essen e. G., Essen a) -- b) -- b) Member of the advisory board of Kludi GmbH & Co. KG, Menden; member of the advisory board of A.W. Kisker GmbH & Co. KG, Bielefeld; member of the advisory board of Heinrich Schlenkhoff GmbH, Essen; member of the board of trustees of the Erich und Hanna Klessmann Stiftung, Gütersloh 6.5 Dr. Dieter Japs: a) -- b) Member of the advisory baord of Leitz GmbH & Co. KG, Oberkochen 6.2 Klaus M. Bukenberger: a) Chairman of the supervisory board of SICK AG, Waldkirch b) Chairman of the advisory board of Carl Mahr GmbH & Co. KG, Göttingen; member of the advisory board of Rutronik GmbH, Ispringen; member of the advisory board of Deutsche Bank AG, Stuttgart; member of the economic advisory board of Hauck & Anhäuser KGaA, Frankfurt (since January 2010); advisory director of Investcorp Group, London, Great Britain 6.6 Thomas Keller: a) -- b) Member of the advisory board of Deutsche Clubholding GmbH, Frankfurt am Main; member of the advisory board of Sick Holding GmbH, Waldkirch; member of the advisory board of VENTA-Luftwäscher GmbH, Weingarten; member of the board of trustees of Vereinigung Baden-Württembergische Wertpapierbörse e.v., Stuttgart; member of the exchange council of Baden-Württembergische Wertpapierbörse (public institution with limited legal capacity), Stuttgart; member of the advisory board of trustees of Stiftung Ravensburger Verlag, Ravensburg;

6 10 Tagesordnung Agenda der Hauptversammlung Resolution on the authorization to acquire and use treasury shares, also excluding subscription rights, including authorization to repurchase acquired treasury shares and rescission of existing authorization The management board and the supervisory board propose that the following resolution be passed: Upon the conclusion of this annual general meeting, the company will be authorized to acquire treasury shares of up to a total of 10% of the capital stock available when this annual general meeting is called, which comes to 1,568,800 no-par value bearer shares. Shares acquired using this authorization may not at any time amount to more than 10% of total share capital when taken together with other treasury shares held by the company or allocable to the company in accordance with Secs. 71 a et seq. AktG. The company may not use the authorization to trade with treasury shares. The authorization may be exercised by the company in full or in part, on one or several occasions, and also by third parties on behalf of the company. The authorization expires on April 30, The management board can choose to purchase the treasury shares either a) on the stock exchange or b) by means of a public offer made to all shareholders. a) In the case of purchasing the shares directly on the stock exchange, the price paid per share (excluding incidental acquisition costs) may not exceed or fall short of the mean closing rate of the company s shares on the Xetra exchange (or a comparable successor system) of the Frankfurt/Main stock exchange during the last five trading days prior to acquiring the shares by more than 10%. 7.4 b) If the acquisition takes the form of a public offer (or public invitation to make an offer) to all shareholders, the purchase price or the upper and lower limits of the range of purchase prices offered per share (excluding incidental acquisition costs) may not exceed or fall short of the mean closing rate of the company s shares on the Xetra exchange (or a comparable successor system) of the Frankfurt/Main stock exchange during the last five trading days prior to acquiring the shares by more than 10%. If demand exceeds supply, acceptance must follow a quota system. Provision may be made to give preferential acceptance to small numbers of shares up to a maximum of 100 shares offered for sale to each shareholder. Subject to the approval of the supervisory board, the management board is authorized to redeem the treasury shares purchased pursuant to the authorization issued above without requiring any further resolutions by the annual general meeting. Redemption leads to a capital decrease. In derogation from this, the management board may decide that the capital stock is not to be decreased, but that instead, the proportion of other shares in the capital stock be increased in accordance with Sec. 8 (3) AktG. In this case, the management board is authorized to adjust the number of shares given in the company s articles of incorporation and bylaws accordingly. Moreover, subject to the approval of the supervisory board, treasury shares acquired on the basis of the above authorization can be sold in another manner, provided that they are purchased in exchange for contributions in cash and at a price that does not fall materially short of the quoted price of the same category of the company s shares at the time of the sale. The total imputed share in capital stock attributable to the number of treasury shares sold under this authorization together with the imputed share in capital stock attributable to new shares issued, while precluding subscription

7 12 Agenda rights in accordance with Sec. 186 (3) Sentence 4 AktG directly or by analogy, since the resolution granting this authorization was passed, may not exceed a total of 10% of the share capital as of the date on which the authorization takes effect or, if lower, as of the date on which the above authorization is exercised. The price at which the company s shares are sold to third parties in accordance with the above authorization may not fall short by more than five percent (excluding incidental purchase costs) of the average closing rate the company s shares in Xetra trading (or a comparable successor system) on the Frankfurt am Main stock exchange during the five trading days prior to the agreement with the third party. Subject to the approval of the supervisory board, the management board is also authorized to offer the treasury shares purchased under the aforementioned authorization to third parties in the course of business combinations or for the purpose of acquiring entities, parts of entities or equity investments. The subscription rights of the shareholders arising from their own shares are excluded in accordance with this section 7.4 in the event that the treasury shares are used in accordance with the authorizations. The authorization to purchase treasury shares issued by the annual general meeting on May 27, 2009, currently in place and expiring on October 31, 2010, is rescinded from the time that the new authorization enters into force. Re. Item 7: Written report from the management board pursuant to Secs. 71 (1) No. 8 Sentence 5, 186 (4) Sentence 2 AktG on the reasoning for the authorization of the management board to exclude the subscription rights of shareholders in connection with the sale of treasury shares Secs. 71 (1) No. 8 Sentence 5 and 186 (4) Sentence 2 AktG require the management board to give a written report on the reasoning for the exclusion of shareholders' subscription rights in connection with the sale of treasury shares as per item 7 of the agenda. The content of this report is published as follows: The authorization to acquire treasury shares is permitted under Sec. 71 (1) No. 8 AktG because the total number of shares that can be repurchased does not exceed 10% of the total capital stock, and the term of the authorization is within the statutory upper limit of five years. For the company, the option of offering treasury shares acquired on the basis of the authorization in connection with the exclusion of the subscription rights of the shareholders constitutes a suitable, necessary and appropriate means to implement business combinations or acquire entities, parts of entities or shares in companies if the seller expresses a suitable interest in the company s shares. This type of counterperformance is often requested in such transactions, and gives the company the opportunity to implement business combinations and acquisitions flexibly in order to improve its competitive position and boost its earning power, particularly without convening a shareholders' meeting which is often not possible due to time restraints. Using treasury shares for acquisitions also has the advantage for existing shareholders that their voting rights are not diluted in comparison to the situation prior to the acquisition of treasury shares by the company. When determining the valuation ratio, the management board will ensure that the shareholders' interests are sufficiently taken into account. They will generally base the value of the shares transferred as counterperformance on the market rate of HOMAG Group AG's shares. Strict linking to the market rate is not envisaged, however, mainly to avoid jeopardizing the results of negotiations through fluctuations in the market rate. The option to sell treasury shares acquired on the basis of the authorization to third parties in return for cash, subject to the exclusion of subscription rights on the part of the shareholders, is already permitted by Sec. 71 (1) No. 8 Sentence 5 in conjunction with Sec. 186 (3) Sentence 4 AktG, as

8 14 Agenda 15 the cumulative portion of capital stock allocable to the number of shares sold using this authorization together with the portion of capital stock allocable to new shares issued since the resolution on this authorization subject to the exclusion of subscription rights or corresponding application of Sec. 186 (3) Sentence 4 AktG does not exceed 10% of the lower of the capital stock either as of the entry into force of this authorization or as of the exercise of said authorization, and the purchase price of the shares may not fall significantly short of the market rate of shares of the same category and with the same rights already listed on the stock market at the time of the sale. The proposed authorization will in particular enable the company to issue shares at short notice, thus guaranteeing that the company has an adequate equity base in the long term. By limiting the number of shares to be sold and requiring the purchase price of the new shares to be based on the market rate, shareholders are sufficiently protected from any dilution of the value of their shares. The management board will keep any discount on the market rate as low as possible subject to the market conditions prevailing at the time of placement. 8.1 Art. 5 (3) of the articles of incorporation and bylaws previously read: (3) The supervisory board may assign the conclusion, amendment and termination of the service contracts to a supervisory board committee. According to Sec. 107(3) Sentence 3 AktG in conjunction with Sec. 87 (1) and (2) Sentence 1 and 2 AktG, the remuneration of management board members may no longer be determined by a supervisory board committee. Sec. 5 (3) of the articles of incorporation and bylaws contravenes this new legal regulation. The management board and the supervisory board propose that the following resolution be passed: Sec. 5 (3) of the articles of incorporation and bylaws is to be deleted without replacement. 8. Changes to the articles of incorporation and bylaws with regard to ARUG [ Aktionärsrechterichtlinie- Umsetzungsgesetz : German Act to Implement the Shareholders Rights Directive] and other legal developments ARUG entered into force for the first time on September 1, The articles of incorporation and bylaws of HOMAG Group AG must be amended with regard to this and other new legislation. [As the articles of incorporation and bylaws do not exist in English, the previous and new wording presented below is a convenience translation of the German original only.] The management board and the supervisory board therefore propose that the following resolutions to amend the articles of incorporation and bylaws be passed: 8.2 Art. 17 (1) of the articles of incorporation and bylaws previously read: (1) Shareholders attending the annual who wish to exercise their right to vote must register for the meeting and demonstrate their entitlement. The registration and substantation of entitlement must be received by the company at the address given in the invitation at least seven days prior to the annual general meeting (registration date). If the end of this period falls on a Saturday, Sunday or another legally recognized holiday at the company s registered offices, the last working day before that day shall be definitive for the receipt of the documents. Sec. 123 (2) and (3) AktG now contains the provision that the registration and substantiation of shareholdings must be received by the company at least six days prior to the annual general meeting. Sec.

9 16 Agenda (7) AktG also now contains a provision relating to this deadline that is specific to stock corporation law, according to which the deadline may not be moved from a Sunday, Saturday or holiday to a previous or subsequent working day. The management board and the supervisory board propose that the following resolution be passed: Art. 17 (1) of the articles of incorporation and bylaws is to be amended as follows: (1) Shareholders attending the annual who wish to exercise their right to vote must register for the meeting and demonstrate their entitlement. The registration and substantiation of entitlement must be received by the company at the address given in the invitation at least six days prior to the annual general meeting (registration date). A shorter deadline measured in days may be stipulated in the invitation. 8.4 (2) The voting right may also be exercised by a proxy. The right of proxy may be issued, rescinded and demonstrated in text form; Sec. 135 AktG remains unaffected. The invitation may stipulate a less strict formal requirement. Pursuant to Sec. 118 (1) Sentence 2 AktG, the articles of incorporation and bylaws may also stipulate or authorize the management board to stipulate that the shareholders may participate in the annual general meeting where they are without attending and without a proxy, and to exercise all or some of their rights in full or in part by means of electronic communication. According to Sec. 118 (2) AktG, the articles of incorporation and bylaws may also stipulate or authorize the management board to stipulate that shareholders may also vote in writing or by means of electronic communication without attending the annual general meeting ("postal vote"). 8.3 Art. 18 (2) of the articles of incorporation and bylaws previously read: (2) The voting right may be exercised by a proxy. This right of proxy must be issued in writing and this shall be sufficient." Sec. 134 (3) AktG now provides for the simplified granting of proxy voting rights. According to the new provision, the right of proxy may be issued, rescinded and demonstrated in text form. This new regulation contradicts Art. 18 (2) of the articles of incorporation and bylaws in its current form. The management board and the supervisory board propose that the following resolution be passed: Art. 18 (2) of the articles of incorporation and bylaws is to be amended as follows: The management board and the supervisory board propose that the following resolution be passed: The following paragraph (6) is to be added to Art. 17 (Participation in the Annual General Meeting, Audio and Visual Broadcasting) of the articles of incorporation and bylaws: (6) The management board is authorized to stipulate a) that the shareholders may participate in the annual general meeting where they are without attending and without a proxy, and to exercise all or some of their rights in full or in part by means of electronic communication. The management board is authorized to stipulate conditions regarding the extent and form of electronic participation in the annual general meeting, which are to be announced in the invitation to the annual general meeting;

10 18 Agenda and/or b) that the shareholders may vote in writing or by means of electronic communication without attending the annual general meeting (postal vote). The management board is authorized to stipulate conditions regarding the postal vote which are to be announced in the invitation to the annual general meeting. Resolution on the restructuring of supervisory board remuneration (amendment to the articles of incorporation and bylaws) The remuneration of the members of the supervisory board is to be restructured in Art. 14 (1) of the articles of incorporation and bylaws in accordance with the recommendations and suggestions of Sec of the German Corporate Governance Code. Art. 14 (1) of the articles of incorporation and bylaws previously read: (1) For each full fiscal year of membership, the members of the supervisory board receive fixed remuneration of EUR 10, In addition, for each full fiscal year, they receive variable remuneration of EUR for each percentage point by which the dividend payment for the year in question exceeds 10% of the capital stock of the Company, but at most EUR 20, The chairman receives three times the fixed and variable compensation together, the deputy chairman one-and-a-half times that amount. Supervisory board members who are also committee members in accordance with the above Art. 11 (2) and (3) of the articles of incorporation and bylaws receive a lump-sum fee of EUR 1, per committee meeting. The chairman of a committee receives twice this amount. Supervisory board members who do not belong to the supervisory board for the whole fiscal year are remunerated based on their length of service on the supervisory board. Fixed and variable remuneration is payable with the dividend which serves as a calculation base for the variable remuneration. Directors and Officers Liability Insurance (D&O insurance) is taken out by the Company for the supervisory board members as a benefit. The management board and the supervisory board propose that the following resolution be passed: Art. 14 (1) and (2) of the articles of incorporation and bylaws are to be amended as follows: (1) For each full fiscal year of membership, the members of the supervisory board receive fixed remuneration of EUR 10, In addition, for each full fiscal year, they receive variable remuneration of EUR for each one-tenth of a percentage point of the company performance indicator HOMAG Value Added, up to a maximum of EUR 20,000,00. This does not affect Sec. 113 (3) AktG. The HOMAG Value Added (HVA) for any fiscal year is calculated as follows: HVA (%) = ROCE - WACC (ROCE minus WACC) a) ROCE (Return on Capital Employed) is calculated as follows: ROCE (%) = (NOPAT / CE) x 100 (NOPAT divided by CE, multiplied by 100) NOPAT (Net Operating Profit After Tax) consists of the operating group net result before taxes, interest, result from associates and the result from the employee profit participation (EBIT be-

11 20 Agenda 21 fore employee profit participation) less income taxes. CE (Capital Employed) comprises net working capital and fixed assets. Net working capital refers to the total inventories reported in the consolidated statement of financial position plus receivables and other assets, consisting of trade receivables, receivables from long-term construction contracts, receivables from associates and other assets and prepaid expenses, plus income tax receivables and deferred tax assets, less other non-current receivables, deferred tax liabilities, trade payables, payments received on account of orders, liabilities for long-term construction contracts, liabilities to associates, other current liabilities and deferred income, tax liabilities and other current provisions. Fixed assets refers to the total intangible assets reported in the consolidated statement of financial position plus property, plant and equipment, investments in associates, other financial investments and other financial assets. b) WACC (Weighted Average Cost of Capital) is calculated as follows: aa) A fictitious, average ROCE is recognized on borrowed capital, which consists of noncurrent financial liabilities plus other noncurrent liabilities, pension obligations and similar obligations, liabilities relating to the employee profit participation, current financial liabilities and other financial liabilities less cash and cash equivalents. bb) Furthermore, fictitious average ROCE is also recognized on the amount of equity reported in the consolidated statement of financial position. cc) Finally, the relevant interest amounts for borrowed capital and equity are to be calculated in accordance with the above regulation. The ratio is then found between the total interest amounts and the total equity plus borrowed capital, and calculated in accordance with the fictitious ROCE (borrowed capital plus equity). This percentage interest rate corresponds to the cost of capital (WACC). (2) The members of the supervisory board also receive fixed remuneration of EUR 1, for each meeting. The chairperson receives three times the fixed and variable remuneration together, the deputy chairman one-and-a-half times that amount. Supervisory board members who are also committee members in accordance with the above Art. 11 (2) and (3) of the articles of incorporation and bylaws receive a lump-sum fee of EUR 1, per committee meeting. The chairman of a committee receives twice the fixed remuneration per committee meeting. Supervisory board members who did not belong to the supervisory board for the whole fiscal year receive fixed and variable remuneration based on their length of service on the supervisory board. The fixed and variable remuneration for supervisory board meetings and committee meetings is payable within one month of the annual general meeting exonerating the supervisory board for the relevant fiscal year. Directors and Officers Liability Insurance (D&O insurance) is taken out by the Company for the supervisory board members as a benefit, in accordance with statutory provisions. What was previously Art. 14 (2) is now to become Art. 14 (3) of the articles of incorporation and bylaws.

12 22 Agenda 23 Conditions for attending the annual general meeting and exercising a right to vote Only those shareholders who have registered for the annual general meeting and demonstrated their shareholding to the company are entitled to attend the annual general meeting and exercise their right to vote. The substantiation of the shareholding must take the form of a text certificate issued by the custodian bank in English or German with reference to the beginning of the 21st day prior to the annual general meeting, i.e. 00:00 hours (CEST) on Friday, May 7, 2010 ( record date ). The registration and substantiation of the shareholding must be received by the company by 24:00 hours (CEST) on Friday, May 21, 2010 at the latest at the following address: Homag Group AG c/o Commerzbank AG WASHV dwpbank AG Wildunger Straße Frankfurt am Main Fax: +49 (0) 69/ hv-eintrittskarten@dwpbank.de Once the registration and substantiation of shareholdings has been received by the company, the tickets for the annual general meeting are sent to those shareholders entitled to attend. In order to ensure the timely receipt of the tickets, we request that the shareholders take care to submit their registration and substantiation of their shareholdings to the company in good time, and to contact their custodian bank without delay. The company is entitled to request suitable further substantiation in the event of doubt regarding the correctness or authenticity of the substantiation of entitlement. If this additional substantiation is also subject to doubt, the company may refuse the shareholder entitlement to attend the annual general meeting and exercise a right to vote. Record date pursuant to Sec. 123 (3) AktG and its significance An individual only counts as a shareholder in the company with entitlement to attend the annual general meeting and exercise a right to vote provided that substantiation of the shareholding has been provided. Entitlement to attend the annual general meeting and the extent of the voting right are based solely on the shareholder s shareholding as of the report date. There is no ban on selling the shares held as of the record date. Even in the event of the full or partial sale of the shareholding after the record date, entitlement to attend the annual general meeting and exercise a voting right is based solely on the shareholding of the shareholder as of the record date, which means that any change in the shareholding or transfers of shares after the record date do not affect entitlement to attend the annual general meeting or the extent of the voting right. The same applies to the acquisition of shares after the record date. Individuals not holding share as of the record date who subsequently become shareholders are not entitled to attend or vote unless they are granted a right of proxy or power of attorney by shareholders who are entitled to attend and exercise a right to vote. The record date is not significant for the entitlement of shareholders to a dividend. Procedure for voting by proxy Shareholders not attending the annual general meeting in person may provide for their vote to be exercised at the annual general meeting by a proxy, for example a bank, shareholders association or other person. Timely registration for the annual general meeting and a substantiation of shareholdings are also required in this case in accordance with the above conditions. In accordance with Sec. 134 (3) AktG, the right of proxy must be issued, rescinded and substantiated in text form with regard to the company, in contrast to the provisions of Art. 18 (2) of the articles of incorporation and bylaws.

13 24 25 Shareholders may use the proxy slip on the ticket form received after registration to grant a right of proxy. However, it is also possible for shareholders to draw up a separate right of proxy in text form. It is sufficient for a bank, similar institute or company (Secs. 135 (10), 125 (5) AktG), shareholders' association or persons to whom the provisions of Sec. 135 (1) to (7) AktG apply mutatis mutandis pursuant to Sec. 135 (8) AktG to hold a declaration of proxy ready for inspection. This declaration must be complete and may only include statements relating to the exercise of the vote. The substantiation of the right of proxy must either be demonstrated by the proxy holder on the day of the annual general meeting or received by the company at the following address by 24:00 hours (CEST) on Wednesday, May 26, 2010 at the latest: Homag Group AG Hauptversammlungsservice Homagstraße Schopfloch Fax: 07443/ HV@homag-group.de The company offers its shareholders the option of being represented at the annual general meeting by a proxy appointed by the company with authorization to cast votes on their instructions. Shareholders wishing to issue a right of proxy and/or instructions to the company s voting proxies require a ticket to the annual general meeting. Shareholders are provided with more information on voting by proxy and a corresponding form for granting rights of proxy and instructions to the company s proxies along with their ticket. The company must also be notified of rights of proxy and instructions to the voting proxies appointed by the company in text form. The voting proxies appointed by Homag Group AG will not exercise a voting right without express instructions. If the voting proxies designated by the company are to be granted right of proxy before the day of the annual general meeting, the rights of proxy and instructions must be received by the company by 24:00 hours (CEST) on Wednesday, May 26, 2010 at the latest, at the following address: Homag Group AG Hauptversammlungsservice Homagstraße Schopfloch Fax: 07443/ HV@homag-group.de Rights of the shareholders Motions to add to the agenda pursuant to Sec. 122 (2) AktG Shareholders with shares totaling one twentieth of total share capital or the amount of EUR 500, ( quorum ) are entitled in accordance with Sec. 122 (2) AktG to demand that items be added to the agenda and announced. Every new item must be accompanied by grounds for the motion or draft resolution. This demand must be addressed to the management board, Homag Group AG Vorstand Homagstraße 3-5, Schopfloch and must be received by the company at least 30 days prior to the annual general meeting (not including the day of the annual general meeting and the day of receipt), i.e. 24:00 hours (CEST) on Tuesday, April 27, 2010 at the latest. The movers of the motion must demonstrate that they have held their shares for at least three months (cf. Sec.

14 (2) Sentence 2 AktG in conjunction with Sec. 122 (1) Sentence 3, (2) Sentence 1 AktG). Entitlement to transfer from a bank, financial services institute or company active in accordance with Sec. 53 (1) Sentence 1 or Sec. 53b (1) Sentence 1 or (7) of KWG [ Gesetz über das Kreditwesen : German Banking Act] is deemed equal to ownership. The period of ownership of a legal predecessor is allocated to shareholder if it acquires the share free of charge from a trustee as universal successor, upon dissolution of an alliance or a portfolio transfer pursuant to Sec. 14 VAG [ Gesetz über die Beaufsichtigung der Versicherungsunternehmen : German Insurance Supervisory Act] or Sec. 14 of BausparkG ["Gesetz über Bausparkassen": German law governing building societies] (cf. Sec. 70 AktG). It is unclear whether the three-month deadline is based on the day of the annual general meeting or the day that the motion to add items is received by the company. In order to give those moving the motion the benefit of the doubt, the company assumes that the three-month deadline is based on the day of the annual general meeting. The company will therefore apply this deadline, which favors the movers of the motion, and publicize the motion to add items to the agenda as soon as substantiation has been provided that the shares fulfilling the quorum requirement have been held since February 28, Countermotions and nominations for election from shareholders pursuant to Secs. 126 (1), 127 AktG Shareholders are entitled to move motions on individual items of the agenda (Sec. 126 AktG). The same applies to nominations for the election of supervisory board members or auditors (Sec. 127 AktG). Countermotions and nominations from shareholders are to be submitted to the following address only: Homag Group AG Hauptversammlungsservice Homagstraße Schopfloch Fax: 07443/ HV@homag-group.de Countermotions and nominations with differing addresses will not be considered. In accordance with Sec. 126 (1) AktG, the company will provide access to countermotions, including the name of the shareholder, the grounds and any comments on the motion by the management board to all entitled parties pursuant to Sec. 125 (1) to (3) AktG (including shareholders who have requested such access) subject to the conditions contained therein, as well as on the company s website Relations/ Annual general meeting provided that the shareholder has submitted a countermotion (with grounds) against the proposal of the management board and/or supervisory board on a specific point of the agenda to the above address at least 14 days prior to the company's annual general meeting (not counting the day of the annual general meeting and the day of receipt). This must therefore be received by 24:00 hours (CEST) on Thursday, May 13, 2010 at the latest. The company is authorized to refrain from publishing a countermotion and its grounds subject to the conditions given in Sec. 126 (2) AktG. The reasoning for a countermotion do not have to be published if it contains more than 5,000 characters in length. This does not affect the right of every shareholder to bring a countermotion against the various items on the agenda during the annual general meeting itself, without first submitting them to the company. Please note that

15 28 29 countermotions submitted to the company in advance and within the deadline are only considered by the annual general meeting if they are moved verbally at the meeting. Nominations by shareholders do not require reasoning pursuant to Sec. 127 AktG. Nominations are only published if they include the name, profession and place of residence of the nominated party, and, in the case of nomination for the supervisory board, details of their membership in other statutory supervisory boards (cf. Sec. 127 Sentence 3 in conjunction with Sec. 124 (3) Sentence 4 and Sec. 125 (1) Sentence 5 AktG). Sec. 127 Sentence 1 AktG in conjunction with Sec. 126 (2) AktG gives other conditions under which nominations for election do not have to be made accessible on the website. In all other cases, the conditions and regulations for publishing motions apply mutatis mutandis. Nominations by shareholders requiring publication (including the name of the shareholder) will also be made accessible without delay upon receipt at the web address Relations/ Annual general meeting Shareholders right to information pursuant to Sec. 131 (1) AktG Information on the company s website Information on the annual general meeting pursuant to Sec. 124a AktG can be accessed on the company s website at Relations/ Annual general meeting Total number of shares and voting rights on the date of issue of the invitation to the annual general meeting The company s capital stock of EUR 15,688, is divided into 15,688,000 no-par value bearer shares as of the time that this annual general meeting was convened. Each no-par value share grants one vote, giving a total of 15,688,00 voting rights. Schopfloch, April 2010 Homag Group AG The Management Board At the annual general meeting, every shareholder and shareholder s representative is entitled to demand information from the management board on the company s affairs, insofar as the information is necessary to properly assess an item of the agenda. This duty to provide information includes the company s legal and business relationships with affiliates, as well as the situation of the group and consolidated companies. The management board may refuse to provide information subject to the conditions given in Sec. 131 (3) AktG. The chairperson of the annual general meeting is entitled under Sec. 19 (2) of the articles of incorporation and bylaws to set appropriate time limits on the right of shareholders to pose questions and hold speeches.

16 30 Directions 31 Factory tour In order to give our shareholders the opportunity to get to know Homag Group s machines at first hand, we are offering them a tour of the operations of Homag Holzbearbeitungssysteme Aktiengesellschaft in Schopfloch following the annual general meeting (duration: 1.5 hours including transport). Shuttle buses will be waiting at the Kurhaus after the annual general meeting to take you to Schopfloch. Our annual general meeting will take place in Kurhaus Freudenstadt Lauterbadstrasse 5, Freudenstadt By road from Karlsruhe or Freiburg Autobahn A 5 between Karlsruhe and Freiburg, Exit 54 Appenweier, B 28 towards Freudenstadt By road from Stuttgart or Singen Autobahn A 81 between Stuttgart and Singen, Exit 30 Horb, B 28a towards Freudenstadt Carparking: - Underground carpark Kurhaus - Carpark Friedrich-Ebert-Strasse and Lauterbadstrasse Stadtbahnhof von Wildbad Ringstraße von A81 Loßburger Str. Marktplatz P Freudenstadt P P Promenadeplatz Kurhaus von Straßburg