SGL CARBON SE Wiesbaden, Germany German Securities Code Number (WKN) 723 530 ISIN DE0007235301 Shareholders are hereby invited to the Annual General Meeting to be held on Wednesday April 29, 2009, at 10.00 a.m. at the Kurhaus Wiesbaden, Kurhausplatz 1, 65189 Wiesbaden, Germany. Non-binding Courtesy Translation For information purposes only Agenda 1. Presentation of the adopted annual financial statements and the consolidated financial statements for the year ended December 31, 2008, as well as the management reports of SGL CARBON SE (formerly SGL CARBON AG) and the Group for the 2008 fiscal year, together with the report of the Supervisory Board and the report of the Executive Committee pursuant to sections 289 (4) and 315 (4) German Commercial Code. These documents are available for inspection at the headquarters of SGL CARBON SE, Rheingaustrasse 182, 65203 Wiesbaden, Germany or may be accessed via the Internet at www.sglgroup.de. Copies will also be sent free of charge to shareholders on request. 2. Resolution approving the use of profits made during fiscal year 2008. The Executive Committee and Supervisory Board recommend that the profits made during fiscal year 2008 in the amount of 90,775,000 be used as follows: Profits 90.775.000 Allocation to surplus reserve 45,387,500 Undistributed profits 45,387,500 3. Resolution approving the actions of the Executive Committee during fiscal year 2008. The Executive Committee and Supervisory Board propose that this resolution be granted for sitting members of the Executive Committee during fiscal year 2008. 4. Resolution approving the actions of the Supervisory Board during fiscal year 2008. The Executive Committee and Supervisory Board propose that this resolution be granted for sitting members of the Supervisory Board during fiscal year 2008. 5. Appointment of the Auditors and Group Auditors for fiscal year 2009. The Supervisory Board proposes the appointment of Ernst & Young Aktiengesellschaft, Wirtschaftsprüfungsgesellschaft, Eschborn/Frankfurt am Main as auditors and Group auditors for fiscal year 2009.
6. Appointment of employees to the Supervisory Board. 2 In accordance with section 8 (1) of the Company s Articles of Association, and with Part III Clause 15 ff. of the Agreement on the participation of Employees in SGL CARBON SE of December 8 2008 ( Participation Agreement ), sections 21 (3) SEBG, 17 SEAG and Art. 40 (2) and (3) of Council Order (EC) No 2157/2001 of October 8 2001 on the European Company Statute, the Supervisory Board of SGL CARBON SE is composed as follows: The Supervisory Board consists of twelve (12) members. Of these six (6) are shareholder representatives and six (6) employee representatives. All members are appointed by the Annual General Meeting. The appointment of the employee representatives are made on the recommendation of employees. The Annual General Meeting is bound by these recommendations. The period of office of all the members of the Supervisory Board ended with the coming into effect of the conversion of the Company into SGL CARBON SE. The shareholder representatives of the first Supervisory Board of SGL CARBON SE were appointed in accordance with section 8 (3) of the SE Articles of Association. The employee representatives of the first Supervisory Board of SGL CARBON SE were appointed by a ruling of the Wiesbaden district court of February 27 2009 until their appointment by the Annual General Meeting. In accordance with Part II Clause 17.3 of the Participation Agreement, the period of office of the employee representatives in the first Supervisory Board shall correspond to the period of office of the shareholder representatives. In accordance with section 21 (3) SEBG, and with Part III Clause 17 ff of the Participation Agreement, the employees have put forward the following proposal for the employee representatives to be appointed by the Annual General Meeting and their alternate members: a) At the suggestion of the employees the following persons shall be appointed as members of the Supervisory Board of SGL CARBON SE for a period of office up to the end of the Annual General Meeting that resolves the actions of the third (3 rd ) fiscal year, whereby the fiscal year in which the period of office begins shall not be included and the appointment shall end on April 30 2013: aa) bb) cc) Helmut Jodl, Meitinen, Germany, programmer. Michael Pfeiffer, Holzheim, Germany, political secretary IG Metall. Marek Plata, Stary Sacz, Poland, manager, personnel administration. Mr. Plata is a member of the Board of SGL CARBON Polska S.A., Raciborz, Poland dd) ee) ff) Josef Scherer, Augsburg, Germany, Works Council member (full-time), Chairman of the Joint Works Council. Stuart Skinner, Hilton, Ross-shire, UK deputy shift supervisor. Heinz Will, Idstein, Germany, Works Council member (full-time). b) At the recommendation of the employees, the following persons shall be appointed as alternate members for a period of office until the end of the Annual General Meeting that resolves the actions of the third (3 rd ) fiscal year after the beginning of the period of office, whereby the fiscal year in which the period of office begins shall not be included and the appoint shall end on April 30 2013: aa) bb) Markus Stettenberger, Allmannshofen, Germany, Instructor, as deputy for Helmut Jodl. Jürgen Kerner, Königsbrunn, Germany, 1. General Secretary of IG Metall Augsburg as deputy for Michael Pfeiffer. Mr. Kerner is member of the Supervisory Board of MAN Diesel SE, Augsburg, of MAN AG, München, of manroland, Offenbach, of KUKA AG, Augsburg, of Eurocopter Deutschland GmbH, Donauwörth and of Premium Aerotec GbH, Augsburg.
3 cc) dd) ee) ff) Mrs Malgorzata Pasikowska, Nowy Sacz, Poland, Sales Manager Export, as deputy for Marek Plata. Josef Jung, Nordendorf, Germany, Works Council member (full-time) as deputy for Josef Scherer. Bob McClymont, Avoch, Ross-Shire, UK,, Manager Black Belt (Six Sigma) as deputy for Stuart Skinner. Franz Mehle, Meitingen Germany, Works Council (full-time), as deputy for Heinz Will. 7. Resolution on the cancellation of the existing Authorized Capital I and the creation of a new Authorized Capital I. In accordance with section 3 (6) of the Articles of Association, the Executive Committee is authorized to increase the Company s share capital with the approval of the Supervisory Board by issuing up to 20,587,457 new no-par value shares against cash and/or non-cash contributions on one or several occasions for no more than 52,704,350.72. This authorization will expire on April 29 2009. To enable the Company to further increase the share capital if need be, the Executive Committee and Supervisory Board recommend that the existing Authorized Capital I. be cancelled and new Authorized Capital I be created. The Executive Committee and Supervisory Board therefore propose the following resolution: a) Cancellation of the existing Authorized Capital I The authorization in accordance with Article 3 (6) of the Articles of Association to increase the share capital in the period up to April 29 2009, with the approval of the Supervisory Board, by issuing up to 20,587,457 no-par value bearer shares against cash and/or non-cash contributions on one or several occasions for up to 52,704,350.72 (Approved Capital I) is hereby cancelled. b) Creation of new Authorized Capital I The Executive Committee is authorized to increase the share capital, with the approval of the Supervisory Board, by up to a total of 52,736,000.00 by issuing up to 20,600,000 new no-par value bearer shares with a pro rata amount of the share capital of 2.56 attributable to each share against cash or non-cash contributions (Authorized Capital I) on one or several occasions in the period up to April 28, 2014. Shareholders are granted a subscription right. The new shares can be subscribed by one or more banks determined by the Executive Committee or companies acting pursuant to Article 53 (1) sentence 1 or par. 7 Banking Act with the obligation to offer them to shareholders for subscription (indirect subscription right). However, the Executive Committee is authorized, with the approval of the Supervisory Board, to exempt fractions of subscription rights. In addition, the Executive Committee can exclude subscription rights with the approval of the Supervisory Board (i) (ii) if the new shares are issued to employees of SGL CARBON SE participating in the Matching Share plan or with companies affiliated with the Company within the meaning of sections 15 ff. of the AktG. However, for this purpose the share capital can only be increased by a total of no more than 896,000.00 by issuing a total of up to 350,000 new no-par value bearer shares with a pro rata amount of the share capital of 2,56 attributable to each share on one or several occasions; if the new shares are issued as part of a capital increase for non-cash contributions for the acquisition of companies, parts of companies or equity interests in companies. The Executive Committee is authorized, with the approval of the Supervisory Board, to determine the further details of the capital increase and its implementation, particularly the rights associated with shares and the terms and conditions of the share issue.
c) Article 3 (6) of the Articles of Association will be revised as follows: 4 "(6) The Executive Committee is authorized to increase the Company's share capital, with the approval of the Supervisory Board, by a total of up to 52,736,000.00 (Authorized Capital I) by issuing a total of no more than 20,600,000 new no-par value bearer shares with a pro rata amount of the share capital of 2.56 attributable to each share against cash and/or non-cash contributions on one or several occasions in the period up to April 20, 2014. The shareholders are to be granted subscription rights. However, the Executive Committee is authorized, with the approval of the Supervisory Board, to exempt fractions of subscription rights. Furthermore, the Executive Committee can exclude subscription rights with the approval of the Supervisory Board (i) (ii) if the new shares are issued to employees of SGL CARBON SE participating in the Matching Share plan or with companies affiliated with the Company within the meaning of sections 15 ff. of the AktG. However, for this purpose the share capital can only be increased by a total of no more than 896,000.00 by issuing a total of up to 350,000 new no-par value bearer shares with a pro rata amount of the share capital of 2,56 attributable to each share on one or several occasions; if the new shares are issued as part of a capital increase for non-cash contributions for the acquisition of companies, parts of companies or equity interests in companies. The Executive Committee is authorized, with the approval of the Supervisory Board, to determine the further details of the capital increase and its implementation, particularly the rights associated with shares and the terms and conditions of the share issue. d) The Supervisory Board is authorized to amend the wording of Article 3 (6) of the Articles of Association after full or partial implementation of the share capital increase in line with the respective utilization of the authorized capital, and if the new Authorized Capital I is not utilized, or is not utilized in full, by April 28, 2014, to amend it after the end of the authorization period. 8. Resolution on the reduction of the existing conditional capital in Article 3 (10) of the Articles of Association and amendments to the Articles of Association. In accordance with Article 3 (10) of the Articles of Association, the share capital is conditionally increased by no more than 38,400,00.00 by issuing a total of up to 15,000,000 no-par value shares. The conditional capital will be used to grant rights to holders of bonds with warrants and/or convertible bonds that are issued by April 29 2009 by the Company or a fully-owned direct or indirect affiliate on the basis of the authorization of the Annual General Meeting of April 30, 2004. The Company made partial use of this authorization in May 2007 by issuing a convertible bond with a total volume of 200 mio. To grant rights to the holders of these convertible bonds, the Company needs a maximum of no more than 6,500,000 new shares. The issue of more convertible bonds on the basis of the authorization of the Annual General Meeting of April 30 2004 is not possible as it expires on 29 April 2009. To adjust the conditional capital to actual needs and simultaneously give the Company greater flexibility for more conditional capital increases, the conditional capital must be correspondingly reduced in Article 3 (10) of the Articles of Association. The Executive Committee and the Supervisory Board therefore propose the following resolution: a) The share capital in accordance with Article 3 (10) of the Articles of Association at the amount of 38,400,000.00, divided into a total of 15,000,000 new no-par value bearer shares with a pro rata amount of the share capital of 2.56 attributable to each share, will be reduced to 16,640,000.00, divided into a total of 6,500,000 new no-par value bearer shares with a pro rata amount of the share capital of 2.56 attributable to each share. Otherwise the conditional capital pursuant to Article 3 (10) of the Articles of Association remains unchanged.
5 b) Sentences 1 and 2 of Article 3 (10) of the Articles of Association are revised as follows: (10) The share capital is conditionally increased by no more than 16,640,000.00 by the issue of a total of 6,500,000 new no-par value bearer shares with a pro rata amount of the share capital of 2.56 attributable to each share (Conditional Capital 2004). The conditional capital increase will be used to grant rights to holders of bonds with warrants and/or convertible bonds that were issued during the period up to April 29, 2009 by the Company or a fully-owned direct or indirect affiliate of the Company on the basis of the authorization of the Annual General meeting of April 30, 2004. c) The Supervisory Board is authorized to amend the wording of Article 3 (10) of the Articles of Association in line with the issue of new shares and to make all other related changes that are only relevant to the wording. The same applies for a case where the Conditional Capital 2004 is not fully used after the expiry of the period for exercising subscription rights. 9. Resolution on the authorization to issue convertible bonds and bonds with warrants with the possibility of excluding subscription rights as well as create a new Conditional Capital and amend the Articles of Association. To further ensure sufficient financial flexibility of the Company, the Executive Committee shall be authorized to issue convertible bonds and bonds with warrants. A new Conditional Capital 2009 shall be approved to service the conversion rights or warrants. The Executive Committee and the Supervisory Board therefore propose the following resolution: a) The Executive Committee shall be authorized, with the approval of the Supervisory Board, to issue on one or several occasions by April 28, 2014 bearer or name-registered convertible bonds or bonds with warrants (together referred to as bonds ), with or without a term restriction, in a total nominal amount of up to 800,000,000.00, entitling the holders of the bonds to convert their conversion rights or warrants into no-par value bearer shares of SGL CARBON SE with a pro-rata amount of the share capital of a total of up to 51,200,000.00 in accordance with the more detailed terms and conditions of the convertible bonds, or bonds with warrants. The bonds can be issued in Euros or with a restriction to the corresponding equivalent value in a legal foreign currency, for example that of an OECD country. They can also be issued by affiliated companies controlled by the Company ( Group Company ). In such case, the Executive Committee shall be authorized, with the approval of the Supervisory Board, to assume the guarantee for the bonds on behalf of the Company and to grant the bond holders SGL-shares in order to fulfill their conversion rights or warrants. The bond issues shall be divided into fractional bonds. Should bonds with warrants be issued, one or more warrants which, in accordance with the warrant terms and conditions established by the Executive Committee, entitle the holder to receive the no-par value bearer shares of the Company, shall be attached to each fractional bond. The pro-rata amount of the no-par value shares to be received from each fractional bond on the Company s share capital should not exceed the nominal amount of the fractional bond.. Fractions may also be joined together or settled in cash. In case of convertible bonds being issued, the holders of the convertible bonds shall be entitled to convert their fractional bonds into new SGL no-par value bearer shares in accordance with the more detailed terms and conditions of the convertible bond. The conversion ratio shall be obtained by dividing the nominal amount of a fractional bond by the stipulated conversion price for a no-par value bearer share of SGL CARBON SE. Should the amount of a fractional bond issued be less than its nominal amount, the conversion ratio shall be obtained by dividing the amount issued of the fractional bond by the conversion price for a new no-par value bearer share. The conversion ratio can be rounded off to a whole number ratio. If necessary a cash payment can also be stipulated. Fractions may also be joined together or settled in cash. The pro-rata amount of the share capital attributable to the shares to be issued on conversion may not exceed the nominal amount of the fractional bond.
6 The convertible bond conditions can also provide for a conversion obligation at the end of the term (or at an earlier time). In such a case the Company can be entitled under the terms and conditions of the bond to settle wholly or partially in cash the difference between the nominal amount of the convertible bond and the product of the conversion price and conversion ratio. Article 9 (1) and Article 199 of German Stock Corporations Act remain unaffected. The terms and conditions of the convertible bonds or bonds with warrants can provide for the right of the Company to wholly or partially grant the holders of the bond shares in lieu of a payment of the due cash amount. The terms and conditions of the convertible bond or bond with warrants can establish that in the event of the exercise of the conversion or warrant price the Company can deliver also own shares. It can also be provided that the Company does not grant the beneficiaries of conversions or warrants SGL-shares but pays the equivalent value in cash. The warrant or conversion price is determined as follows: aa) bb) cc) dd) (i) (ii) (iii) (iv) In the event of the issue of bonds granting a warrant, the warrant exercise price corresponds (i) in case of an issue without subscription rights 130 percent of the volumeweighted average price of the Company share in Xetra trading (or a comparable replacement system) on the Frankfurt Stock Exchange during the book-building period, and (ii) in case of an issue with subscription rights 130 percent of the volume-weighted average price of the Company share in Xetra trading (or a comparable replacement system) on the Frankfurt Stock Exchange in the period from the beginning of the subscription period to the day before the announcement of the final terms and conditions in accordance with Article 186 (2) sentence 2 of the German Stock Corporations Act (including) (the average price referred to, hereafter also the reference price ). In the case of the issue of bonds that grant a conversion right but do not determine a conversion obligation the conversion price corresponds to 130 of the reference price. In the case of the granting of SGL- shares in lieu of payment of the due cash amount on the final maturity of bonds with conversion rights or warrants, the conversion price corresponds to the arithmetical average value of the price of the SGL-share at the closing of Xetra trading (or a comparable replacement system) on the Frankfurt Stock Exchange during the last ten trading days before the final maturity date. In the case of the issue of bonds that determine a conversion obligation, the conversion price corresponds to the following amount on the maturity of the bond. 100 percent of the reference price, if the arithmetical average value of the price of the SGL-share at the closing of Xetra trading (or a comparable replacement system) on the Frankfurt Stock Exchange during the 20 trading days ending with the third trading day before the maturity of the bonds is less than or equal to the reference price; 120 percent of the reference price, if the arithmetical average value of the price of the SGL-share at the closing of Xetra trading (or a comparable replacement system) on the Frankfurt Stock Exchange during the 20 trading sessions ending with the third trading day before the maturity of the bonds is greater than or equal to 120% of the reference price; The arithmetical average value of the price of the Company share at the closing of Xetra trading (or a comparable replacement system) at the Frankfurt Stock Exchange during the 20 trading sessions ending with the third trading day before the maturity of the bonds, if this amount is greater than the reference price and less than 120 percent of the reference price; Notwithstanding the above provisions 120 percent of the reference price, if the holder of the bonds makes use of an existing conversion right prior to the commencement of the conversion obligation.
7 Article 9 (1) and Article 199 of the German Stock Corporations Act remain unaffected. To the extent not provided by mandatory law, the terms and conditions of the convertible bond or bond with warrant shall ensure that the economic value of the warrant or conversion rights is unaffected by adjusting the value of conversion or warrant rights in the event that the Company increases its share capital during the conversion or option period, either by granting subscription rights to its shareholders, or by issuing additional bonds with warrant or convertible bonds, or by granting or guaranteeing warrants, and does not also grant subscription rights to holders of already existing warrants or conversion rights as if they had exercised options or conversion rights, or as a result of a capital increase from reserves. If there is a capital reduction or other capital measure involving restructuring, take-over by third party, or other extraordinary measures or events that could lead to a dilution of the share value, the terms and conditions may also provide for a value-preserving adjustment of the warrant or conversion. Article 9 (1) and Article 199 of German Stock Corporations Act remain unaffected. The shareholders have subscription rights. The bonds can be taken over by one or more banks determined by the Executive Committee or companies acting in accordance with Article 53 (1) sentence 1 or Article 53b (1) sentence 1 or par. 7 Banking Act with the obligation of offering them to shareholders for subscription (indirect subscription right). Should bonds be issued by an affiliated company, the Company must ensure the granting of legal subscription rights for the Company s shareholders. The Executive Committee is however authorized, with the approval of the Supervisory Board, to exclude the shareholders subscription rights for bonds if they are issued against cash payments and the Executive Committee comes to the opinion after thorough review in accordance with its obligations that the issue price is not essentially below the theoretical market value calculated by recognizable financial mathematics methods. This however only applies to bonds with a conversion or warrant right to shares with a pro rata amount of the share capital of up to ten (10) percent of the share capital at the time this authorization takes effect or if this amount is less is exercised. The pro rata amount of the share capital which is attributable to the shares or to which conversion or warrant rights or obligations relate from bonds that were issued since the granting of this authorization or sold from own shares with the exclusion of subscription rights in direct or analogous application of Article 186 (3) sentence 4 German Stock Corporations Act, should be calculated with this restriction. The Executive Committee is also authorized, with the approval of the Supervisory Board, to exclude the subscription rights of shareholders to fractions that arise on the basis of the subscription ratio and also to exclude subscription rights, with the approval of the Supervisory Board, insofar as this is required to grant subscription rights to the holders of conversion or warrant rights to the SGL no-par value bearer shares as if they had exercised their conversion or option rights or fulfilled their conversion obligations. The Executive Committee is authorized, with the approval of the Supervisory Board, to stipulate further details of the bond issue, particularly the interest rate, the issue price and the term or establish them jointly with the SGL Group affiliate issuing the bond. b) The Company s share capital shall be conditionally increased by up to 51,200,000.00 through the issue of up 20,000,000 new no-par value bearer shares with a pro rata amount of the share capital of 2.56 attributable to each share. The conditional capital increase serves to grant shares to holders of convertible bonds or bonds with warrants that are issued in accordance with the above authorization. The conditional capital increase should only be executed if use is made of the conversion or warrant rights, or conversion obligation from such convertible bonds or bonds with warrants are fulfilled, and if own shares are not used for servicing. New shares are issued at the warrant or conversion price to be determined in accordance with the above authorization. The new shares carry dividend rights from the beginning of the fiscal year in which they arise by exercising conversion or warrant rights or fulfilling conversion obligations. The Executive Committee, with the approval of the Supervisory Board, is authorized to stipulate further details of the execution of the conditional capital increase.
c) Article 3 of the Articles of Association is supplemented by the following par. (13): 8 (13) The share capital is conditionally increased by up to 51,200,000.00 through the issue of up to 20,000,000 new no-par value bearer shares with a pro rata amount of the share capital of 2.56 attributable to each share. The conditional capital increase shall only be executed if (i) holders of conversion rights or warrants make use of conversion or warrant rights that are attached to conversion bonds or bonds with warrants, issued until April 28 2014 by the Company or Group companies controlled by the Company, on the basis of the authorization resolved by the Annual General Meeting of April 29, 2009 or (ii) holders or creditors obliged to convert the convertible bonds, issued until April 28 2014 by the Company or Group companies controlled by the Company, on the basis of the authorization resolution of the Annual General Meeting of April 29, 2009 fulfill their conversion obligation, and to the extent no other forms of fulfillment are used to service these rights. New shares are issued in accordance with the above-described authorization resolution at warrant and conversion prices to be determined. The new shares carry a dividend right from the start of the fiscal year in which the conversion or option right is exercised, or conversion obligations are fulfilled. The Executive Committee is authorized, with the approval of the Supervisory Board, to determine the further details of the implementation of a conditional capital increase." d) The Executive Committee is instructed to ensure with the competent registration court that the resolutions under b) or c) are only entered in the commercial register after the reduction in the Conditional Capital approved in agenda item 8 is entered in the commercial register in accordance with Article 3 (10) of the Articles of Association. e) The Supervisory Board is authorized to amend the wording of Article 3 (13) of the Articles of Association in line with the issue of new shares and to make all other related amendments to the Articles of Association that only relate to the wording. The same applies to non or incomplete use of the authorization to issue subscription rights after the expiry of the authorization period and for non or incomplete use of the Conditional Capital 2009 after expiry of the period for exercising subscription rights. 10. Resolution on the authorization to issue stock appreciation rights carrying the right to subscribe for Company shares, the creation of new Conditional Capital and amendments to the Articles of Association. The Company has operated a stock option program since 2000, in which members of the Company's Executive Committee, members of the management of Group companies and other managers of SGL CARBON SE and Group companies can participate. The Annual General Meeting on April 30, 2004 approved a stock appreciation rights plan ( SAR Plan/2004 ), which expires at the end of this year. The Executive Committee and the Supervisory Board of SGL CARBON SE therefore propose to the Annual General Meeting to extend the SAR plan for another five years and to set up a new SAR-Plan/2009. The clear focus of the SAR plan for the future lies in absolute and relative total shareholder return and is suitable for the growth strategy of the SGL Group. Like the SAR-Plan/2004, the successor SAR Plan provides for issuing stock appreciation rights (SAR) whose rise in value would entitle beneficiaries to acquire Company shares, to the extent the Company does not settle the value of the SAR in cash. The Executive Committee and Supervisory Board therefore propose the following resolution: a) Conditional capital increase The Company's share capital shall be conditionally increased by a further amount of up to 5,376,000.00 against non-cash contributions. The sole purpose of the conditional capital increase is to issue up to 2,100,000 no par-value bearer shares ("SGL shares" or New Shares ) with a pro rata amount of the share capital of 2.56 attributable to each share to service option rights on shares of SGL CARBON SE granted on one or several occasions to members of the Executive Committee and senior managers of SGL CARBON SE and members of the management and senior managers of affiliated companies of SGL CARBON SE within the meaning of sections 15ff of the AktG (Group companies) as part of Stock Appreciation Rights (SARs). The New Shares shall be subscribed against the contribution of beneficiaries' remuneration claims under the stock appreciation rights granted to them, issued by SGL CARBON SE in line with the authorization below. The conditional capital increase will
9 only be implemented to the extent that the stock appreciation rights were issued on the basis of the authorization resolved hereafter by the Annual General Meeting, that the beneficiaries exercised their options and contributed their remuneration entitlements to the Company, and insofar as the Company does not satisfy the beneficiaries' options in the form of own shares or a cash payment. The New Shares will be issued at the minimum price of 2.56 ("issue price"). b) Authorization to issue stock appreciation rights (SARs) The Executive Committee is authorized, with the approval of the Supervisory Board, and to the extent that members of the Executive Committee of SGL CARBON SE are affected, the Supervisory Board is authorized, to grant stock appreciation rights ("SARs") with options for a total of up to 2,100,000 SGL shares on one or several occasions between January 1, 2010 and December 31, 2014 to members of the Executive Committee and senior managers of the Company and members of the management and senior managers of Group companies ("beneficiaries"). The Executive Committee is authorized, with the approval of the Supervisory Board, and to the extent that the Executive Committee is benefited, the Supervisory Board is authorized, to stipulate the details and features of the SARs ("SARs terms and conditions"). The SARs terms and conditions must as in the SAR-Plan/2004 - contain the following minimum stipulations: aa) Terms of the SARs /options rights The SARs entitle the beneficiaries to benefit from an increase in the price of SGL's shares in the period between the date the SARs are granted and the date they are exercised. A SAR grants the beneficiary the right to demand variable remuneration (i) from the Company in the amount of the difference ("increase in value") between the price of SGL's shares at the time the SAR is granted ("reference price") and when it is exercised ("exercise price"), plus the dividends paid by the Company during this period and the value of the options, as well as (ii) the right to acquire at the exercise price the number of SGL shares whose price corresponds to the increase in value. Each SAR entitles the beneficiary to purchase a fraction of a new SGL share, which is calculated by dividing the increase in value by the exercise price up to a maximum of one SGL share. The reference price is calculated on the basis of the average closing price of SGL's shares on the last 20 trading days in the XETRA securities trading system (or in a similar replacement system) on the Frankfurt Stock Exchange before the respective SAR was granted. The exercise price is calculated in the same way as the reference price, whereby the requirement regarding the last 20 trading days prior to the grant of the respective SAR is replaced by a requirement stipulating the last 20 trading days prior to the exercise of the SAR. Where the number of SARs exercised by the beneficiary does not entitle him or her to purchase a whole number of SGL shares, the beneficiary is entitled to purchase the lower number of whole SGL shares and the difference in value to the total amount of fractions of shares resulting from the exercise of the SARs will be paid in cash. The issue price for new SGL shares is subscribed by contribution of the beneficiaries' remuneration claim from the SARs they have been granted. The amount of the beneficiaries' remuneration entitlement that exceeds the issue price is shown as a capital reserve of the company. The SARs terms and conditions may provide that instead of granting new SGL shares from conditional capital, the Company may grant own shares or satisfy the beneficiary's claim via a cash payment. bb) Distribution of SARs among beneficiaries Members of the Executive Committee of SGL CARBON SE will receive a maximum of 30% of the total of 2,100,000 options which may be granted to beneficiaries by issuing SARs, and a maximum of 20% may be granted to members of the management of Group companies. The remaining 50% of the options will be allocated to the other senior managers of SGL CARBON SE and Group companies who are participating in the SAR
10 Plan. Where options granted to the members of the Executive Committee or the management of Group companies who are participating in the SAR Plan are not taken up in the above volumes, these options may be granted to the other managers in the Group. Beneficiaries belonging to more than one of the above categories may only be granted options as a member of one of the categories and only in the proportion provided for the relevant category. The Executive Committee and, where members of the Executive Committee are involved, the Supervisory Board, determines the beneficiaries and the number of SARs to be granted in each case. Some or all of the SARs and the New Shares, issued when the SARs are exercised, may be issued to a trustee for the account of the respective beneficiaries for the purpose of the settlement of the SAR Plan. cc) Term, lock-up period, subscription period, exercise period The SARs can have a term of up to ten years from the date on which they are granted. The SARs expire without compensation if they not exercised during their term. It is only possible to grant SARs to beneficiaries within defined annual periods (the "granting periods"). The granting periods may be defined as the periods up to ten trading days after the end of a fiscal year and after SGL CARBON SE's public reporting dates. The SARs granted may not be exercised before the end of a two-year qualifying period calculated from the date on which the respective SARs are granted ("lock-up period"). The SARs terms and conditions may also provide for a longer qualifying period and for the graduated exercise of the SARs in individual tranches. The SARs may only be exercised during defined periods over their term (the "exercise periods"). Where options were granted to members of the Executive Committee, the Supervisory Board may stipulate and, where options are granted to others participating in the Plan, the Executive Committee may stipulate that the exercise periods constitute at least two and no more than four periods of up to 20 trading days after the public reporting dates of SGL CARBON SE in each case. The SARs terms and conditions may provide in general terms that SARs may not be granted or exercised during certain periods (e.g. during the subscription period for capital increases), the details of which are determined by the Executive Committee and if the Executive Committee is affected, by the Supervisory Board. In such instances, the SARs terms and conditions may provide that the relevant period is deferred until after the period in which SARs could not be granted or exercised. dd) Performance target In addition, the SARs can only be exercised if, after expiry of the lock-up period, the performance targets specified in the SARs terms and conditions within the meaning of section 193 (2) clause 4 of the AktG have been reached at the beginning of the respective exercise period. The performance target for 75% of the SARs granted to each beneficiary is an increase in the total shareholder return ("TSR") of SGL's shares ("absolute performance target"). A relative performance target applies to the remaining 25% of the SARs. This portion of the SARs can only be exercised if SGL's share price performance at least matches that of the MDax. The TSR is defined as the absolute increase in the price of SGL shares in the period between the granting and the exercise of the SARs, plus the dividends distributed by the Company in this period and the value of subscription rights. To reach the performance target, the TSR must amount to at least 15% of the reference price. The relative performance target is defined as the relative increase in the price of SGL shares in the period between the granting and the exercise of the SARs, plus the dividends distributed by the Company in this period and the value of subscription rights, as compared with the development of the benchmark index over the same period. The benchmark index is Deutsche Börse's MDax index or a replacement selection index for mid-cap shares. To reach the performance target, the relative increase in the price of
11 SGL's shares must at least match that of the benchmark index in the two years prior to the exercise of the SARs. If one of the two performance targets is not met in an exercise period, only those SARs for which the performance target has been met may be exercised; the SARs relating to the performance target that has not been met may be exercised in a later exercise period during the term if the performance target is reached. ee) Additional arrangements The beneficiaries must retain at least the number of shares of SGL CARBON SE which, in terms of value, correspond to 15% of the gross proceeds of the shares subscribed on exercising the SARs for a further 12 months. c) The following new paragraph (12) shall be inserted in Article 3 of the Articles of Association: "(12) The Company's share capital is conditionally increased by a further amount of up to 5,376,000.00 against non-cash contributions. The sole purpose of the conditional capital increase is to issue up to 2,100,000 no par-value bearer shares with a pro rata amount of the share capital of 2.56 attributable to each share, to service options for shares of SGL CARBON SE granted as stock appreciation rights (SARs), until December 31, 2014, on one or several occasions to members of the Executive Committee and senior managers of SGL CARBON SE and members of the management and senior managers of affiliated companies of SGL CARBON SE within the meaning of sections 15ff of the AktG (Group companies) on the basis of the authorization granted by the Annual General Meeting on April 20, 2009. The New Shares shall be subscribed against the contribution of beneficiaries' remuneration claims under the stock appreciation issued in line with the authorization granted by SGL CARBON SE's Annual General Meeting on April 29, 2009. The conditional capital increase will only be executed to the extent that the stock appreciation rights were issued on the basis of the authorization resolved by the Annual General Meeting on April 29, 2009, the beneficiaries exercised their options and contributed their remuneration claims to the Company, and insofar as the Company does not satisfy the beneficiaries' options in the form of own shares or a cash payment. The new shares are issued at the minimum price of 2.56." Report by the Executive Committee on agenda item 7 on the opportunity to exclude subscription rights with the utilization of Approved Capital I in accordance with sections 203 (2) sentence 2 and 186 (4) sentence 2 of the AktG, and Article 9 (1) SE-VO The Executive Committee has provided a written report on the proposed authorization to utilize the Approved Capital with the partial exclusion of subscription rights in agenda item 7 in accordance with sections 203 (2) sentence 2 and 186 (4) sentence 2 AktG, and Article 9 (1) SE-VO. This report is displayed from the date of the announcement of the convocation of the Annual General Meeting at the Company s office and will on request be immediately sent to shareholders free of charge. The content of the report is announced as follows: The Executive Committee is authorized in accordance with Article 3 (6) of the Articles of Association, with the approval of the Supervisory Board, to issue by April 29, 2009 new shares for up to 52,704,350.72 against cash or non-cash contributions (Approved Capital I). This authorization will expire on April 29, 2009. The Executive Committee and Supervisory Board therefore propose to the Annual General Meeting, while revoking the existing Approval Capital I, to give the Executive Committee a new authorization to increase the share capital by a total of 52,736,000.00 until April 28, 2014, with the approval of the Supervisory Board, by issuing new no-par value bearer shares against cash or non-cash contributions on one or several occasions. In the utilization of Approved Capital I the shareholders are granted a subscription right to new shares in accordance with the recommended authorization. The Executive Committee must however be authorized to exclude the legal subscription rights of shareholders to fraction, with the approval of the Supervisory Board. This serves in the exercise of the authorization to create a subscription ratio that is as fraction-free as possible and thus to simplify the technical implementation of the capital increase. The shares excluded as free fractions of the subscription right of the shareholders are either utilized by the stock market or in
12 other ways as best as possible for the Company. The Executive Committee shall strive to keep the volumes of free fractions as low as possible. By a restriction of such fractional amounts the shareholders suffer no considerable damage to their holdings. The shareholders asset interests are granted for best possible use by the obligation. In addition to a direct issue of new shares to shareholders it should also be possible for new shares from one or more banks or other financial institutions, determined by the Executive Committee, to subscribe the new shares with the obligation that they will offer them for subscription to shareholders. The intervention of these intermediaries will technically simplify the processing of share issues. In addition, the authorization also provides that the Executive Committee can exclude subscription rights for shareholders, with the approval of the Supervisory Board, if new shares are issued to employees of SGL CARBON SE or its affiliated companies participating in the Share plan ("Matching Share Plan"). To this end, the share capital can, however, only be increased by an amount of a total of up to 896,000.00 by the issue of a total of 350,000 new no-par value shares on one or several occasions. The authorization to exclude subscription rights to issue new shares is intended to enable the Company to use the Share Plan as a long-term tool for motivating and encouraging loyalty of senior managers of SGL CARBON SE and selected SGL CARBON Group companies. The Share Plan is a supplement to the other incentive programs for senior executives such as the SAR plan, particularly because a condition for participation in the Share Plan is that participants invest a portion of their annual bonus in SGL CARBON SE shares. The share plan was resolved at the Annual General Meeting of April 27, 2000 under agenda item 8. The invitation to the 2000 Annual General Meeting at which the details of the share plan were explained, is available at the Company s office for inspection by shareholders and will be sent to them on request. It can also be inspected on the internet at www.sglgroup.de and during the Annual General Meeting. The Executive Committee should finally be authorized, with the approval of the Supervisory Board, to exclude subscription rights in the event of capital increases against non-cash contributions in order to grant new shares for a consideration in the context of mergers or the acquisition of companies, parts of companies, or equity interests in companies. This will allow the Company to use its own shares as an acquisition currency. National and international competition often requires this type of consideration. The authorization proposed here should give the Company the opportunity to react quickly and flexibly if a suitable occasion arises to acquire companies, parts of companies, or equity interests in companies. Credit assistance conditions have become more restrictive in the context of the financial crisis so that company acquisitions in particular can only be financed with difficulty using credit facilities. The shareholders asset interests are protected by the commitment of the Executive Committee to exercise the authorization pursuant to Article 225 (2) AktG to issue new shares at an issue amount that is in an appropriate ratio to the value of the non-cash contribution. In measuring the value of the shares granted for a consideration the Executive Committee is guided by the stock market price. A schematic link with a stock market price is, however, not provided for, particularly so as not to undermine already achieved negotiation results by fluctuations in the stock market price. Report by the Executive Committee on agenda item 9 on the exclusion of subscription rights in issuing of bonds with warrants and convertible bonds in accordance with sections 221 (4) sentence 2, 186 (2) sentence 2 AktG, and Article 9 (1) SE-VO: In agenda item 9 in accordance with 221 (4), 186 (4) sentence 2 AktG, and Article 9 (1) SE-VO, the Executive Committee submitted a written report on the reason for the authorization of the Executive Committee to exclude shareholders subscriptions rights in exercising the authorization. This report is available from the date of the announcement of the convocation of the Annual General Meeting at the Company s office and will on request be immediately sent to shareholders free of charge. The content of the report is announced as follows: We propose to the Annual General Meeting a new authorization and new conditional capital to issue bonds with warrants or convertible bonds (together referred to as bonds ). The issue of bonds with warrants or convertible bonds (or a combination of these instruments), in addition to the conventional possibilities of raising equity or loan facilities, can also offer the opportunity, depending on the market situation, of attractive financing alternatives on the capital market. The volume should be limited to a total nominal amount in bonds of a maximum of 800,000,000.000 entitling the bond holders to acquire up to 20,000,000 no-par value bearer shares.
13 The issue of bonds for warrants or convertible bonds enables capital to be raised in attractive conditions. The achieved conversion or warrant premiums benefit the Company s capital base and enables it to use favorable financial opportunities. The additional possibilities, in addition to granting conversion and warrant rights to establish conversion obligations, expand the scope for the arrangement of these financial instruments. The authorization provides the Company with the necessary flexibility to place the bonds itself or have it done by Group companies controlled by the Company ( Group companies ). In addition to Euros bonds can be issued in other legal currencies such as those of an OECD country with or without a term limitation. The authorization sets the conversion or warrant price. Shareholders are in principle granted subscription rights. In a placing by Group companies the Company must likewise ensure that the Company grants legal subscription rights to shareholders. To make settlement easier, the opportunity is provided for to issue the bonds to one or more banks with the obligation to offer the bonds for subscription to shareholders in line with their subscription rights. The Executive Committee should also be authorized, with the approval of the Supervisory Board, to exclude subscription rights if the issue of shares on the basis of conversion or warrant rights or conversion obligations is restricted to ten percent of the Company s share capital. Other issues of shares against cash, or sales of own shares or issue of warrant or conversion rights should be included in this restriction to ten percent of the share capital if this occurs with the exclusion of subscription rights in accordance with Article 186 (3) sentence 4 AktG during the period of validity of this authorization. These calculations ensure that no bonds for warrants or convertible bonds are issued if this would lead to subscription rights for shareholders in direct or indirect application of Article 186 (3) sentence 4 AktG being excluded to a total of more than ten percent of the share capital. This further restriction is in the interest of shareholders who wish to maintain their holdings with corresponding capital measures. This possibility of excluding subscription rights allows the Company the flexibility to take advantage of favorable capital market situations in the short term and to obtain better conditions in stipulating coupons and issue prices of the bonds by establishing better conditions according to market requirements. What counts here in contrast to an issue of bonds with subscription rights, is that the issue price can only be stipulated directly before the placing, which can prevent an increased risk of a price change for the period of a subscription term. In granting subscription rights the subscription price must be published by the third last day of the subscription term. In view of the often observed volatility in the share markets, there is thus a market risk over several days, which leads to haircuts in setting bond conditions and thus conditions that are not in accordance with market requirements. With the granting of subscription rights the successful placing with third parties is also endangered by or linked with additional expenses because of uncertainty over its exercise. By providing that the issue price of the bonds is not substantially below its determined market value according to its recognized financial mathematics methods, the requirement to protect shareholders against a dilution of their shareholdings is taken into account. With such an issue price for the bonds the subscription rights would have a value of nearly zero. This guarantees the protection of shareholders from a dilution of their shareholdings and shareholders do not suffer any fundamental disadvantage by an exclusion of subscription rights. Shareholders who wish to maintain their share in the Company s share capital or acquire bonds in line with their holdings, can do this by purchasing on the market. It is also intended to authorize the Executive Committee, with the approval of the Supervisory Board, to exclude subscription rights for fractions. This serves when exercising the authorization to create subscription ratios that are as fraction-free as possible and thus to make the technical implementation of the capital increase easier. The excluded shares as free fractions of shareholder subscription rights can either be used by the stock market or in other ways for the best possible benefit of the Company. The Executive Committee shall strive to keep the volume of free fractions as low as possible. A restriction of such fractional amounts does not cause serious damage to shareholders holdings. The obligation of the best possible use preserves shareholders asset interests. The Executive Committee should also have the possibility, with the approval of the Supervisory Board, to exclude subscription rights to the extent necessary to grant the holders of conversion rights and warrants and the holders of conversion obligations the subscription rights as if they had already exercised their conversion rights or warrants, or had already fulfilled their conversion obligations. This offers the opportunity to prevent, in the event of exercising the authorization, the reduction of the warrant or conversion price for holders of existing conversion rights or warrants in accordance with the warrant and conversion terms and conditions there, or the Company having to grant additional protection against dilution.