Merck Kommanditgesellschaft auf Aktien. Darmstadt. Germany - ISIN DE Securities Identification No

Transcription

1 Merck Kommanditgesellschaft auf Aktien Darmstadt Germany - ISIN DE Securities Identification No The shareholders of our company are hereby invited to attend the Annual General Meeting on Friday, April 29, 2016 at 10:00 a.m. to be held at the Jahrhunderthalle Frankfurt, Pfaffenwiese 301, Frankfurt am Main, Germany. 1 of 15

2 Agenda 1. Presentation of the annual financial statements approved by the Supervisory Board, as well as the consolidated financial statements approved by the Supervisory Board and the combined management report (including the explanatory report on the information in accordance with Section 289 (4) and (5), Section 315 (4) HGB) for fiscal 2015 and the Report of the Supervisory Board The Supervisory Board has approved the annual financial statements and the consolidated financial statements which were prepared by the Executive Board in accordance with Section 171 of the German Stock Corporation Act, hereinafter "AktG". In accordance with Section 286 (1) AktG, Article 29 (3) of the Articles of Association, the annual financial statements are to be adopted by the General Meeting (Item 2 of the Agenda). The aforementioned documents will be available on the company's website as of the date on which the Annual General Meeting is convened. In addition, they will be available for inspection by the shareholders at the business offices of the company once the Annual General Meeting has been convened (for more information see the section titled Information and Documents for the Annual General Meeting; company website ). No resolution is required for Item 1 of the Agenda. 2. Resolution on the adoption of the annual financial statements for fiscal 2015 The Executive Board and the Supervisory Board propose that the presented annual financial statements of the company for the year ended December 31, 2015 be approved. 3. Resolution authorizing the appropriation of the net retained profit for fiscal 2015 The Executive Board and the Supervisory Board propose that the share of the net retained profit of the company attributable to the shareholders amounting to Euro 151,135, be appropriated as follows: 2 of 15

3 a) Payment of a dividend of Euro 1.05 per no par value share of the dividendbearing share capital as of the date of this Annual General Meeting, being Euro 135,704, in total. b) Carryforward of the remaining amount of Euro 15,430, to new account. The dividend is payable on May 2, Resolution on the approval of the actions of the Executive Board for fiscal 2015 The Executive Board and the Supervisory Board propose that the actions of the members of the Executive Board in office in fiscal 2015 be approved for fiscal Resolution on the approval of the actions of the Supervisory Board for fiscal 2015 The Executive Board and the Supervisory Board propose that the actions of the members of the Executive Board in office in fiscal 2015 be approved for fiscal Resolution on the election of the auditors of the annual financial statements and the consolidated financial statements for fiscal 2016 as well as the auditors for the audit review of the interim financial statements and management report of the Group as of June 30, 2016 The Supervisory Board proposes the election of KPMG AG Wirtschaftsprüfungsgesellschaft, Berlin, as auditors of the annual financial statements and the consolidated financial statements for fiscal 2016 as well as for the audit review of the interim financial statements and management report of the Group as of June 30, of 15

4 7. Resolution on the amendment of Articles 27 (1), 30 (1) and Article 31 of the Articles of Association Because of the amendment of legal provisions it is necessary to adjust Articles 27 (1), 30 (1) and Article 31 of the Articles of Association. 1. Amendment of Articles 27 (1) and 30 (1) of the Articles of Association In accordance with Articles 27 and 28 of its Articles of Association, the Company participates in the net profit/loss of its sole general partner with an equity interest, E. Merck KG, Darmstadt, Germany (General Partner). Conversely, in accordance with Article 30 of the Articles of Association, the General Partner participates in the net profit/loss of the Company. The basis for calculating the share of net profit/loss attributable to the limited liability shareholders and to the General Partner, respectively, is the net profit/loss determined in accordance with the provisions of the German Commercial Code (HGB), which must be adjusted for certain expenses and income. The rules for adjusting the net profit/loss refer in part to legal provisions of HGB on items of the income statement. These were amended as a result of the German Accounting Directive Implementation Act (BilRUG) (BGBl. I p. 1245) of July 17, In accordance with Article 75 (1) of the Introductory Law to the German Commercial Code, the amended rules are to be applied for the first time to the Company's annual financial statements for fiscal Therefore, Articles 27 and 30 of the Articles of Association must be adapted to the new version of the German Commercial Code, without any changes to the contents and economic consequences of the principle of the allocation of net profit/loss. The Executive Board and the Supervisory Board propose that Article 27 (1) and Article 30 (1) of the Articles of Association be revised as follows (amendments are indicated by square brackets and underlining): a) Article 27 (1) of the Articles of Association will be revised as follows: "[1] The net income (Jahresüberschuss)/net loss (Jahresfehlbetrag) for the period reported in E. Merck's income statement (Section 275 (2) No. [20] 17 or Section 275 (3) No. [19] 16 HGB) represents E. Merck s authoritative net profit/loss for the purpose of the Company s share in the net profit/loss 4 of 15

5 after the deduction of the income reported under income from investments (Erträge aus Beteiligungen) (Section 275 (2) No. 9 or Section 275 (3) No. 8 HGB) from E. Merck's interest in the Company, after the addition of interest and similar expenses for capital borrowed from banks to finance an increase in the equity interest in the Company or to purchase shares or subscription rights in the Company (Section 275 (2) No. 13 or Section 275 (3) No. 12 HGB), after the deduction of any types of income (including income from disposals) from the investment of capital borrowed from banks to finance an increase in the equity interest in the Company or to purchase shares or subscription rights in the Company (Section 275 (2) Nos. 4, 10, 11 or Section 275 (3) Nos. 6, 9, 10 HGB), [after addition of ]modified by including trade earnings tax (Gewerbeertragsteuer) (Section 275 (2) No. [18] 14 or Section 275 (3) No. [17] 13 HGB) after the deduction of possible losses resulting from past losses of E. Merck calculated in accordance with (1) which have been carried forward for the purpose of the profit/loss participation and not yet been eliminated against the net profit determined in accordance with (1)." b) Article 30 (1) of the Articles of Association will be revised as follows: "[1] The basis for the allocation of the Company s profit between E. Merck and the limited liability shareholders is the [profit from ordinary activities (gewöhnliche Geschäftstätigkeit)] net income/net loss for the period reported in the Company's income statement [(Section 275 (2) No. 14 or Section 275 (3) No. 13 HGB)] (Section 275 (2) No. 17 or Section 275 (3) No. 16 HGB) excluding the share of profit attributable to the Equity Interest of E. Merck pursuant to (2) as expense or income, 5 of 15

6 excluding the income or expense from the Company s share in E. Merck s net profit or net loss (Article 26 (1)), [adjusted for extraordinary income and expenses (Section 275 (2) no. 17 or Section 275 (3) no. 16 HGB),] adjusted for [taxes (Section 275 (2) No. 18/19 or Section 275 (3) No. 17/18 HGB) with the exception of] corporation tax (Körperschaftsteuer) and wealth tax (Vermögensteuer) payable by the company. If, due to the receipt of dividends from an equity investment in a foreign company, foreign corporation tax owed by this company is refunded by foreign or German fiscal authorities, the Company is entitled to the amount refunded as income from its equity investment in the foreign company. In addition, in the event that corporation tax paid by the investee is reimbursed in addition to the dividends from an equity investment, the Company is entitled to the amount reimbursed." Notes The proposed amendment of the Articles of Association takes into account the changes to HGB due to BilRUG and adapts the calculation mechanism to the current version of the law while retaining the previous logic. Article 27 of the Articles of Association regulates the Company's participation in the net profit/loss of its General Partner. However, the net profit/loss of the General Partner also contains the interest in the Company (Article 30 of the Articles of Association). This item must be excluded prior to the allocation of the Company's net profit/loss between the General Partner and the limited liability shareholders. For this adjustment, reference is made to the items of the income statement in accordance with Section 275 HGB. With the amendment of the Articles of Association, the legal references are adapted to the new version of Section 275 HGB. In addition, in the second-to-last bullet of Article 27 (1) of the Articles of Association, the wording is adapted to the corresponding regulation in Article 30 of the Articles of Association. These adaptations do not result in any change to the contents of Article of 15

7 Article 30 of the Articles of Association regulates the allocation of the Company's net profit/loss between the General Partner and the limited liability shareholders. The allocation corresponds to the ratio of equity interest and share capital to total capital (Article 30 (2) of the Articles of Association). The basis for the allocation is the Company's net profit/loss as determined in accordance with the provisions of German commercial law. As this net profit/loss contains the General Partner's share of profits and the net profit/loss of the General Partner attributable to the Company in accordance with Article 28 of the Articles of Association as expense or income, these items must be excluded prior to the allocation of net profit/loss. The same applies to taxes included as expense or income in the net profit/loss which, however, affect the General Partner and the limited liability shareholders differently (in particular corporation tax). The adjustment was previously made in the item "Profit from ordinary activities". In the income statement structure as now provided for by BilRUG in Section 275 HGB, this item has been excluded without replacement. Therefore, "Net income/net loss for the period" must be used as the future basis. This amount will be adjusted using the same logic as in the past. The adjustment for the positive or negative "extraordinary net profit/loss" has been excluded as these expenses and income are no longer reported separately in the income statement, but are included in the "net income/net loss for the period". Previously, it was necessary to add taxes that had to be taken into account in the allocation, as they were not included in "Profit/loss from ordinary activities". It is now necessary to exclude taxes affecting the partner/shareholder groups differently. Besides the adaptation of the calculation method, the legal references in Article 30 (1) of the Articles of Association also are adapted to the new version of Section 275 HGB. The contents and economic consequences of the principle of the allocation of net profit/loss remain unchanged. 2. Amendment of Article 31 of the Articles of Association Effective as of January 1, 2017, the law to amend the German Stock Corporation Act (Aktienrechtsnovelle 2016) (BGBl. I p. 2565) of December 22, 2015 introduces to the German Stock Corporation Act a provision regarding the dividend payment date. With the aim of harmonizing securities processing within Europe in accordance with the Market Standards for Corporate Actions Processing that have been developed at European level, Section 58 (4) sentence 2 AktG in the version applicable as of January 1, 2017 stipulates that the dividend will be due on the third business day following 7 of 15

8 the Annual General Meeting. By contrast, Article 31 (4) of the Company s Articles of Association, in accordance with current standard practice in Germany, stipulates that the net retained profit intended for distribution to the limited liability shareholders and the General Partner s share of the profit intended for withdrawal are payable on the first stock exchange trading day after the Annual General Meeting. To correct this deviation of the Articles of Association from the legal provision applicable as of January 1, 2017, Article 31 (4) of the Articles of Association shall be deleted. The Executive Board and the Supervisory Board therefore propose that the following resolution be adopted: a) Article 31 (4) of the Articles of Association shall be deleted without replacement. b) The current Article 31 (5) shall become Article 31 (4) of the Articles of Association Requirements for participating in the Annual General Meeting and exercising voting rights 1. Registration and evidence of share ownership In accordance with Article 22 (1) and (2) of the Articles of Association of the company, to be eligible to participate in the Annual General Meeting and to exercise voting rights, shareholders must register with the company under the following address and submit evidence of share ownership issued by the custodial bank or financial institute to the following address: Merck KGaA c/o Deutsche Bank AG Securities Production General Meetings Postbox Frankfurt am Main Germany Telefax: wp.hv@db-is.com 8 of 15

9 Evidence of share ownership must relate to the start of April 8, 2016 (0:00 hours, record date ) and must be received by the company along with the registration no later than April 22, 2016, (24:00 hours), at the address given above. Registration and evidence of share ownership must be in text form (Section 126b German Civil Code) in either German or English. Following receipt of registration and evidence of share ownership, the admission ticket to the Annual General Meeting will be sent to the shareholder entitled to participate in the Annual General Meeting or his/her authorized representative. In order to ensure the timely receipt of the admission tickets, we kindly request shareholders to be sure to send their registration and evidence of share ownership to the company in a timely manner. 2. Meaning of the record date The record date is the date that determines the extent and exercise of participation and voting rights at the Annual General Meeting. In relation to the company, individuals who wish to participate in the Annual General Meeting or to exercise voting rights must be deemed to be shareholders by having submitted evidence of share ownership by the record date. Eligibility to participate or the extent of voting rights is determined exclusively by share ownership on the record date. Changes in share ownership after the record date have no significance here. The record date does not involve a suspension of the ability to sell the shares held. Also in the event of the complete or partial sale of the shares owned after the record date, share ownership on the record date is exclusively definitive for participation and exercising voting rights. This means that the sale of shares after the record date has no impact on eligibility to participate or to exercise voting rights. This applies accordingly to the acquisition of additional shares after the record date. Persons who do not yet own shares as of the record date, and only become shareholders thereafter, are not entitled to participate or to vote. The record date is of no relevance to a possible dividend entitlement. 3. Voting by proxy Shareholders who do not wish to attend the Annual General Meeting personally may also have their voting rights exercised by an authorized representative, e.g. by a bank or shareholder association, or by a proxy appointed by the company who is bound to vote in accordance with the shareholder's instructions or another 9 of 15

10 third party. Pursuant to the aforementioned provisions, timely registration and evidence of share ownership are also required in the case of voting right proxies. The authorization and evidence thereof vis-à-vis the company must be given in text form or electronically via a Web-based authorization system on the company s website ( The revocation of an authorization is possible in the form described in the foregoing or without a separate, express declaration if the shareholder granting the authorization attends the Annual General Meeting personally. Shareholders wishing to authorize a proxy are kindly requested to use either the form on the admission ticket they received after registering, or the Web-supported proxy authorization system in order to grant the authorization. In order to use the Web-supported authorization system, it is necessary to enter the admission ticket number as well as a special code that can also be found on the admission ticket. The Web-supported authorization system simultaneously serves as an electronic means of transmitting evidence to the company of having appointed a proxy. For organizational reasons, the use of the Web-supported authorization system on the day of the Annual General Meeting (April 29, 2016) can only be offered until the end of the speech by the Chairman of the Executive Board. The authorization, its revocation and evidence of having authorized a proxy can also be transmitted to the company prior to the Annual General Meeting by surface mail, by fax or by e- mail to the following address: Merck KGaA c/o Computershare Operations Center Munich Germany Telefax: MRK-hv2016@computershare.de If authorizations, their revocation or evidence of having authorized a proxy are sent to the company by surface mail, by fax or by , for organizational reasons it will only be possible to ensure they are taken into account if received by April 28, 2016 (15:00 hours). Providing evidence to the company of having authorized a proxy can also proceed on the day of the Annual General Meeting if the proxy presents the evidence (e.g. the original or a copy of the authorization) at the registration desk. 10 of 15

11 The granting of authorization to banks and shareholder associations, as well as other equivalent parties, institutions, or companies as defined in Section 135 AktG, is governed by legal provisions, particularly Section 135 AktG, and, in certain circumstances, by additional requirements formulated by the party being granted authorization. The same applies to the revocation of said authorization, as well as to providing corresponding evidence to the company. We therefore kindly request shareholders wishing to authorize a bank, a shareholders association or any other equivalent person, institute or entity in accordance with Section 135 AktG to confer with the proxy regarding the form and the content of the authorization. In addition, we continue to offer our shareholders the possibility to exercise their voting rights through a proxy appointed by our company. For this purpose, these proxies must be given the required authorization and instructions on how the votes are to be cast. The proxies are obliged to vote in line with the instructions given to them; without instructions from the shareholder, the proxies appointed by the company are not authorized to exercise the shareholder's voting rights. Prior to the Annual General Meeting, authorizations and instructions to the proxies appointed by the company can be granted electronically via the form entitled "Authorizations and Instructions for proxy voting by representatives appointed by the company", which can be found on the admission ticket, which is sent to shareholders after registration. Authorizations and instructions to the proxies appointed by the company that are submitted to the company by surface post, by fax or by must be received by the company no later than April 28, 2016 (15:00 hours) at the following address: Merck KGaA c/o Computershare Operations Center Munich Germany Telefax: MRK-hv2016@computershare.de The same applies if shareholders wish to revoke the authorization granted to the proxy appointed by the company via the aforementioned procedure. Authorizations and instructions may also be granted, amended or revoked via the Web-based authorization system even during the Annual General Meeting (April 29, 2016) until the Chairman of the Executive Board has completed his speech. 11 of 15

12 Also in the event of the shareholder being represented by a third party or by the proxy appointed by the company, it is necessary to register and to submit evidence of share ownership before the specified deadlines as described in the foregoing. If the shareholder authorizes more than one person, the company may reject one or more of them. Shareholders will receive further details on participating in the Annual General Meeting as well as on granting authorization and issuing voting instructions together with the admission ticket or by visiting the website of the company ( Disclosure of rights of shareholders in accordance with Sections 122 (2), 126 (1), 127, 131 (1) AktG 1. Motions to add agenda items pursuant to Section 122 (2) AktG Demands to add items to the agenda pursuant to Section 122 (2) AktG must reach the company by March 29, 2016 (24:00 hours) at the following address: Merck KGaA - HV-Büro - Frankfurter Strasse Darmstadt Germany Further details on motions to add agenda items pursuant to Section 122 (2) AktG and the preconditions thereof can be found on the company's website ( 2. Motions by shareholders pursuant to Section 126 (1) AktG Every shareholder has the right to submit countermotions at the Annual General Meeting to proposals put forward by the Executive Board and/or the Supervisory Board regarding agenda items. Countermotions that the company has received by April 14, 2016, 24:00 hours, will be published without delay on the Web at insofar as they are to be made available to other shareholders in observance of Section 126 (2) AktG. 12 of 15

13 Countermotions are to be sent exclusively to the following address: Merck KGaA - HV-Büro - Frankfurter Strasse Darmstadt Germany Telefax: hauptversammlung@merckkgaa-darmstadt-germany.com Any countermotions sent to any other addresses will be disregarded. Further details on countermotions pursuant to Section 126 (1) AktG and the preconditions thereof as well as specific reasons as to why a countermotion and its reasons need not be published on the website pursuant to Section 126 (2) AktG can be found on the aforementioned website of the company. 3. Election proposals by shareholders in accordance with Section 127 AktG Every shareholder has the right to make election proposals concerning the election of the auditors. Election proposals that the company has received by April 14, 2016, 24:00 hours, at the address stated above in Section 2 will be made accessible to shareholders without delay on the Web at insofar as they are to be made available to other shareholders. Further details on election proposals pursuant to Section 127 AktG and the preconditions thereof as well as specific reasons as to why an election proposal and its reasons need not be published on the website pursuant to Section 127 sentence 1 in conjunction with Section 126 (2) AktG can be found on the aforementioned website of the company. 4. Shareholders right to information in accordance with Section 131 (1) AktG Upon request, every shareholder will be provided with information by the Executive Board at the Annual General Meeting regarding the company s affairs, to the extent that such information is necessary to permit a proper evaluation of the relevant agenda item. The duty to provide information also extends to the 13 of 15

14 company s legal and business relations with any affiliate as well as to the situation of the Group and the entities included in the consolidated financial statements. Under certain conditions (Section 131 (3) AktG), the Executive Board may refuse to provide information. Further details on the information rights of shareholders pursuant to Section 131 (1) AktG can be found on the website of the company ( Information and Documents for the Annual General Meeting; company website The information pursuant to Section 124a AktG and further information relating to the Annual General Meeting is available on the following website of the company once the Annual General Meeting has been convened: In particular, the documents mentioned with reference to agenda item 1 are available there. These documents can also be inspected at the business offices of Merck KGaA Visitor Reception Frankfurter Strasse Darmstadt Germany Upon request, each shareholder will forthwith and free of charge receive a copy of the abovementioned documents. The request is to be sent to the address referred to above in Section 2 (Motions by shareholders pursuant to Section 126 (1) AktG). The documents that are required to be made available will also be available for inspection during the Annual General Meeting. Any demands for items to be included on the agenda, countermotions and nominations of candidates for election that require publication will also be made available on the aforementioned website. 14 of 15

15 Total number of shares and voting rights when the General Meeting is convened As of the date on which the General Meeting is convened, the subscribed capital of the company amounts to 168,014, (in words: one hundred and sixtyeight million, fourteen thousand nine hundred twenty-seven euros and sixty cents), divided into 129,242,251 no par value bearer shares plus one registered share. Each of the total number of 129,242,252 shares grants the holder one vote, which means that as of the date on which the General Meeting is convened, 129,242,252 voting rights existed. Broadcasting of the Annual General Meeting on the Web As authorized by the Chairman of the Meeting, all shareholders as well as interested members of the public can follow the Annual General Meeting live on the website of the company ( on April 29, 2016 from 10:00 a.m. until the Chairman of the Executive Board completes his speech. The speech by the Chairman of the Executive Board as well as the voting results will likewise be published on the aforementioned website after the Annual General Meeting. The notice of this Annual General Meeting was published on March 16, 2016 in the German Federal Gazette (Bundesanzeiger) and was forwarded to those media that can be assumed to disseminate information throughout the entire European Union. Darmstadt, Germany, March 16, 2016 Merck Kommanditgesellschaft auf Aktien The Executive Board 15 of 15