WashTec AG Augsburg Securities Identification Number (WKN) 750 750 ISIN-Code: DE 000 750 750 1 Invitation to the Annual General Meeting of WashTec AG We hereby invite our shareholders to the 2016 Annual General Meeting of WashTec AG, Augsburg, to be held on Wednesday, May 11, 2016, at 11:00 a.m. (doors open at approx. 10:00 a.m.) in the offices of the Chamber of Industry and Commerce (IHK) for Augsburg and Swabia, located at Stettenstrasse 1+3, 86150 Augsburg. Agenda 1. Presentation of the approved annual and consolidated annual financial statements for the fiscal year ended December 31, 2015; presentation of the combined management report of WashTec AG and the WashTec Group for fiscal year 2015 including the explanatory report by the management board pursuant to sections 289 (4), 315 (4) of the German Commercial Code (HGB); presentation of the recommendation by the management board regarding the appropriation of the distributable profit and the report of the Supervisory Board for fiscal year 2015 There is no resolution required for this agenda item 1. Section 175 (1) sentence 1 of the German Stock Corporation Act (AktG) simply provides that a management board shall convene the annual general meeting of company shareholders in order to accept, among other things, the approved annual financial statements and management report and to decide on the use or appropriation of any distributable profit and, in the case of a parent company, to accept the consolidated annual financial statements and combined management report which has been approved by the supervisory board. Pursuant to sections 175 (2), 176 (1) sentence 1 AktG, the management board must make available to the annual general meeting, among other things, the annual financial statements, the management report, the supervisory board report, the recommendation by the management board regarding the appropriation of the distributable profit and in the case of publicly listed companies an explanatory report about takeover-related information and, in the case of a parent company, the consolidated annual financial statements, the combined management report and the supervisory board report thereon.
2 The foregoing documents will be explained in greater detail at the Annual General Meeting. Beginning on the date of the invitation to Annual General Meeting, these documents will be available to the shareholders for inspection at the offices of WashTec AG, located at Argonstrasse 7, 86153 Augsburg and at the Annual General Meeting itself and may be downloaded from the Company's website at www.washtec.de by going to the Investor Relations page. Upon request, each shareholder will be provided with copies of the displayed documents at no extra charge and without undue delay. 2. Resolution on the appropriation of distributable profit The management board and supervisory board recommend appropriating the distributable profit of EUR 22,983,636.87, which is reported in the annual financial statements of the Company for fiscal year 2012, as follows: a) paying a dividend in the amount of EUR 1.70 for each no-par value share which is entitled to dividends, thereby yielding an aggregate dividend payment of EUR 22,749,950.80; b) carry forward the remaining distributable profit of EUR 233,686.07 to new account. The dividend will be paid out as of May 13, 2016. 3. Resolution on the ratification of the actions taken by the management board for fiscal year 2015 The management board and supervisory board recommend formally ratifying the actions taken in fiscal year 2012 by the members of the management board, who were in office in fiscal year 2015. 4. Resolution on the ratification of the actions taken by the supervisory board for fiscal year 2015 The management board and supervisory board recommend formally ratifying the actions taken in fiscal year 2012 by the members of the supervisory board, who were in office in fiscal year 2015. 5. Appointment of the auditors of the annual and consolidated financial statements for fiscal year 2016 and appointment of the auditors for the review [prüferische Durchsicht] of the interim reports for fiscal year 2016 and the first quarter of 2017
3 The supervisory board recommends, in each case upon the recommendation of the Audit Committee, that the following resolutions be adopted: a) PricewaterhouseCoopers AG, Wirtschaftsprüfungsgesellschaft, Munich, is appointed to serve as the auditors of the annual and consolidated financial statements for fiscal year 2016. b) PricewaterhouseCoopers AG, Wirtschaftsprüfungsgesellschaft, Munich, is appointed to serve as the auditors for the review of the interim reports for fiscal year 2016 and the first quarter of 2017. 6. Resolution to revoke the current authorization to acquire and use the Company s own shares (treasury shares) and resolution on the authorization to acquire and use the Company s own shares (treasury shares) in accordance with section 71 (1) no. 8 AktG and to exclude preemptive rights In order to acquire and use its own shares, the Company will require special authorization from the Annual General Meeting, unless such action is expressly allowed by law. Since the authorization to acquire the Company s own shares, which was approved by the Annual General Meeting on May 15, 2013, expires on May 14, 2016, the Annual General Meeting should be presented with the recommendation to revoke the old authorization and once again grant the Company the authorization to acquire and use its own shares. Thus, management board and supervisory board recommend adopting the following resolutions: a) Revocation of the existing authorization to acquire the Company s own shares in accordance with section 71 (1) no. 8 AktG The authorization to acquire and use the Company s own shares in accordance with section 71 (1) no. 8 AktG, which was approved by the Annual General Meeting on May 15, 2013 under Agenda Item 7, is hereby revoked. b) Authorization to acquire the Company s own shares Pursuant to section 71 (1) no. 8 AktG, the Company will be authorized, on or before May 10, 2019 to purchase its own shares in the amount of up to 10% of the registered share capital of EUR 40,000,000.00, which exists at the time that the resolution is adopted, for purposes other than to trade in its own shares.
4 The management board may opt to acquire these shares on the stock exchange, by means of a public purchase offer tendered to all shareholders or by means of a public invitation to submit sale offers directed at all shareholders. If the shares are acquired on the stock exchange, then the consideration paid by the Company for each share (excluding ancillary acquisition costs) may not exceed or fall below the average stock exchange price of the Company's shares, which is established in the closing Xetra auction (or that of a comparable successor system) on the Frankfurt Stock Exchange, by more than 10% during the last five exchange trading days prior to the acquisition of the shares. If the shares are acquired by means of a public purchase offer tendered to all shareholders or by means of a public invitation to submit sale offers directed at all shareholders, then the purchase price offered or the limits of the purchase price spread for each share (excluding ancillary acquisition costs) may not exceed or fall below the average stock exchange price of the Company's shares, which is established in the closing Xetra auction (or that of a comparable successor system) on the Frankfurt Stock Exchange, by more than 15 % during the last five exchange trading days prior to the date on which the public purchase offer or public invitation to offer is officially announced. If, following the publication of a public purchase offer or public invitation to submit sale offers, there are considerable deviations between the stock exchange price of the Company's shares and the purchase price offered or the limits of the offered purchase price spread, then the offer/invitation to submit sale offers can be adjusted. In such cases, the adjusted purchase price may not exceed or fall below the average stock exchange price of the Company's shares, which is established in the closing Xetra auction (or that of a comparable successor system) on the Frankfurt Stock Exchange, by more than 15 % during the last five exchange trading days prior to the public announcement of any adjustment. If the public offer is oversubscribed or if an invitation to submit sale offers results in the submission of several offers of equal value and not all such offers are accepted, then acceptance must be effected in accordance with ratios. This may involve the preferential acquisition or preferential acceptance of small quantities of up to 100 of the Company's shares offered for acquisition per shareholder. The public offer or invitation to submit such offers may provide for further terms and conditions. c) Use of treasury shares; Exclusion of preemptive rights
5 The management board is authorized, in each case with the consent of the supervisory board, to use the treasury shares, which were acquired on the basis of the aforementioned authorization or an earlier authorization, in the following manner, including by means other than a sale on the stock exchange or an offer to all shareholders: Such shares may be 1. offered and transferred as a consideration to third parties in connection with a direct or indirect acquisition of companies, divisions of companies or interests in companies, or in connection with a merger; 2. used to satisfy options, which are granted to members of the management of the enterprises affiliated with the Company and to employees of the Company or of enterprises affiliated with the Company as part of a stock option plan; or 3. used for other purposes, provided that the treasury shares are sold for cash and at a price not substantially lower than the stock exchange price for the shares on the date of sale. The aforementioned authorization shall be limited to the sale of treasury shares collectively representing no more than 10% of the registered share capital, either at the time of the authorization or, if the amount is lower, at the time this authorization is exercised. The foregoing limit of 10% of the share capital shall be amended by the amount of registered share capital represented by any shares issued or sold by the Company during the effective period of this authorization in the direct or mutatis mutandis application of section 186 (3) sentence 4 AktG. The Supervisory Board is authorized to use the treasury shares acquired on the basis of this authorization to satisfy options granted to members of the management board as part of a stock option plan. The aforementioned authorizations to use the shares may be exercised, either in whole or in part and one or more times, in a manner other than for selling the shares on the stock exchange or for tendering them in an offer to all shareholders. The use may be made for one or more of the aforementioned purposes. The shareholders preemptive rights to purchase the Company s own shares will be excluded, to the extent the shares are used, as provided above, in a manner other than for sale on the stock exchange or an offer to all shareholders.
6 d) Redemption and cancellation of own shares The management board is authorized, with the consent of the supervisory board, to redeem and cancel all or some of the shares, which were acquired in accordance with the aforementioned authorization or on the basis of a previous authorization, without the redemption/cancellation or its implementation requiring a further resolution from the Annual General Meeting. The redemption and cancellation shall result in a capital reduction. Alternatively, the management board may stipulate that the registered share capital will not be reduced, but that the proportion of registered share capital accounted for by the remaining shares shall be increased. In those cases, the management board is authorized to amend the Company s articles of association in order to reflect the number of shares. e) Partial utilization; lowest price threshold All of the aforementioned authorizations may be exercised by the Company, with respect to either the full amount or partial amounts, on one or more occasions and in order to pursue one or several objectives. With the exception of the authorization to cancel treasury shares, the authorizations may also be exercised by subsidiaries of the Company or by third parties on behalf of either the Company or subsidiaries of the Company. The authorizations under subparagraphs c) and d) also cover the use of the Company s shares which were acquired pursuant to section 71d, sentence 5 AktG. 7. Elimination of existing authorized capital pursuant to subsection 5.1 of the articles of association and creation of new authorized capital with the possibility of excluding preemptive rights and a corresponding amendment to subsection 5.1 of the articles of association The current authorized capital, which exists pursuant to section 5.1 of the Company s articles of association and of which no use has yet been made, will expire on May 14, 2016. In order to allow the Company, if needed, to quickly and flexibly procure equity capital on favorable conditions, the existing authorized capital should be eliminated and the management board should be given the authority to increase the registered share capital by issuing new no par bearer shares. The management board and supervisory board recommend adopting the following resolutions:
7 a) The authorized capital pursuant to section 5.1 of the articles of association, which was approved by the Annual General Meeting on May 15, 2013 under Agenda Item 8 is hereby eliminated. b) The management board is granted the authority until May 10, 2019, with the consent of the supervisory board, to increase one or more times the registered share capital by up to a total amount of EUR 8,000,000.00 (Authorized Capital) by issuing no par bearer shares in exchange for cash and/or non-cash capital contributions, whereby this authorized amount at the time the new shares are issued shall include the percentage amount of the registered share capital that is attributable to the no par bearer shares, on which conversion rights or obligations or option rights or obligations exist that were granted or imposed during the term of this authorization on the basis of the authorization provided under Agenda Item 8 of the shareholders meeting of May 11, 2016; if the aforementioned conversion rights or duties or option rights or duties no longer exist because they had been exercised as of the date the new shares were issued, then the shares issued thereon must be included. In this respect, the shareholders must be granted a preemptive right, unless provided otherwise below. The new shares may be underwritten by one or more banks designated by the management board, subject to the obligation that such share must be offered to the shareholders for purchase (indirect preemptive right). The management board is authorized, with the consent of the supervisory board, to exclude the shareholders statutory preemptive rights: aa) bb) cc) for fractional amounts; if the new shares do not in total constitute more than 10% of the pro rata amount of the registered share capital and the new shares are issued in exchange for a non-cash capital contribution, specifically in connection with the purchase of companies, divisions of companies or interests in companies; in the event of capital increases against cash capital contributions, if - at the time the management board performs the final issue price fixing - the issue price of the new shares is not significantly below (within the meaning of section 203 (1) and (2) and section 186 (3) sentence 4 AktG) the stock exchange price of existing publicly listed shares of the same class and with the same features, and the pro rata amount of the registered share capital, which is attributable to the new shares on which the preemptive rights were excluded, does not exceed in total 10% of the registered share
8 capital either at the time the authorization becomes effective or in the event this amount is lower at the time this authorization is exercised. Included in the 10% registered share capital threshold is the registered share capital accounting for those shares, which are sold subject to the exclusion of the shareholder preemptive rights pursuant to section 71 (1) no. 8, sentence 4 and section 186 (3), sentence 4 AktG during the term of the authorized capital, as well as those shares, which are issued for purposes of satisfying warrant-linked bonds and convertible bonds with conversion or option rights or with conversion or option duties, where the bonds are issued subject to the exclusion of the shareholder preemptive rights under the analogous application of section 186 (3), sentence 4 AktG during the term of the authorized capital; dd) if it becomes necessary in order to grant the holders of options and/or convertible bonds, which are issued by the Company or its subsidiaries, a right to subscribe for new shares in the amount to which they would be entitled if they exercised the option or conversion right or satisfied the conversion or option duties. The management board is further authorized, with the consent of the Supervisory Board, to define additional details regarding the capital increase and its implementation, including the content of the share rights and the terms and conditions of the share issue. The supervisory board is authorized to amend the language of the articles of association following the complete or partial implementation of the registered share capital increase from the authorized capital. c) Subsection 5.1 of the articles of association shall now read as follows: The management board is granted the authority until May 10, 2019, with the consent of the supervisory board, to increase one or more times the registered share capital by up to a total amount of EUR 8,000,000.00 (Authorized Capital) by issuing no par bearer shares in exchange for cash and/or non-cash capital contributions, whereby this authorized amount at the time the new shares are issued shall include the percentage amount of the registered share capital that is attributable to the no par bearer shares, on which conversion rights or obligations or option rights or obligations exist that were granted or imposed during the term of this authorization on the basis of the authorization provided under Agenda Item 8 of the shareholders meeting of May 11, 2016; if the
9 aforementioned conversion rights or duties or option rights or duties no longer exist because they had been exercised as of the date the new shares were issued, then the shares issued thereon must be included.. In this respect, the shareholders must be granted a preemptive right, unless provided otherwise below. The new shares may be underwritten by one or more banks designated by the management board, subject to the obligation that such share must be offered to the shareholders for purchase (indirect preemptive right). The management board is authorized to exclude the shareholders statutory preemptive right with the consent of the Supervisory Board: aa) bb) cc) for fractional amounts; if the new shares do not in total constitute more than 10% of the pro rata amount of the registered share capital and the new shares are issued in exchange for a non-cash capital contribution, specifically in connection with the purchase of companies, divisions of companies or interests in companies; in the event of capital increases against cash capital contributions, if - at the time the management board performs the final issue price fixing - the issue price of the new shares is not significantly below (within the meaning of section 203 (1) and (2) and section 186 (3) sentence 4 AktG) the stock exchange price of existing publicly listed shares of the same class and with the same features, and the pro rata amount of the registered share capital, which is attributable to the new shares on which the preemptive rights were excluded, does not exceed in total 10% of the registered share capital either at the time the authorization becomes effective or in the event this amount is lower at the time this authorization is exercised. Included in the 10% registered share capital threshold is the registered share capital accounting for those shares, which are sold subject to the exclusion of the shareholder preemptive rights pursuant to section 71 (1) no. 8, sentence 4 and section 186 (3), sentence 4 AktG during the term of the authorized capital, as well as those shares, which are issued for purposes of satisfying warrant-linked bonds and convertible bonds with conversion or option rights or with conversion or option duties, where the bonds are issued subject to the exclusion of the shareholder preemptive rights under the analogous application of section 186 (3), sentence 4 AktG during the term of the authorized capital;
10 dd) if it becomes necessary in order to grant the holders of options and/or convertible bonds, which are issued by the Company or its subsidiaries, a right to subscribe for new shares in the amount to which they would be entitled if they exercised the option or conversion right or satisfied the conversion or option duties. The management board is further authorized, with the consent of the Supervisory Board, to define additional details regarding the capital increase and its implementation, including the content of the share rights and the terms and conditions of the share issue. 8. Authorization to issue warrant-linked and convertible bonds, participation rights or participating bonds or a combination of such instruments and to exclude the preemptive rights together with the contemporaneous creation of a contingent capital account and an amendment to the articles of association while simultaneously eliminating the corresponding authorization granted in 2013 and the Contingent Capital I Account pursuant to subsection 5.2 of the articles of association The Contingent Capital I Account, existing pursuant to subsection 5.2 of the Company s articles of association, will soon become invalid since the authorization, which had been granted by the Company s shareholders on May 15, 2013 to issue warrant-linked and convertible bonds, participation rights or participating bonds or a combination of such instruments, was never exercised and this authorization lapses on May14, 2016. In order to expand its financing flexibility into the future as well, the authorization dating from 2013 is revoked and the Management Board should be once again authorized to issue warrant-linked and convertible bonds, participation rights and participating bonds or a combination of such instruments. To service the warrant-linked and convertible bonds, participation rights or participating bonds or a combination of such instruments, new contingent capital account (the new Contingent Capital I Account) should be approved and the existing Contingent Capital I Account is revoked. Management board and supervisory board recommend adopting the following resolutions: a) Revocation of the 2013 authorization to issue warrant-linked and convertible bonds and the Contingent Capital I Account pursuant to subsection 5.2 of the articles of association
11 The authorization granted by the Annual General Meeting on May 15, 2013 under Agenda Item 9 and the Contingent Capital I Account created under the same Agenda Item pursuant to subsection 5.2 of the articles of association are hereby revoked. b) Authorization to issue warrant-linked and convertible bonds, participation rights and participating bonds or a combination of such instruments and to exclude the preemptive rights. The management board is authorized, with the consent of the Supervisory Board, on or before May 10, 2019 to issue one or more times bearer or registered warrant-linked bonds and/or convertible bonds, participation rights or participating bonds or a combination of such instruments (hereinafter collectively referred to as the "Bonds") with a total face value of up to EUR 50,000,000.00 with or without term limitations and to grant option rights or impose option duties upon the holders or creditors of warrant-linked bonds, option participation rights or option participating bonds or to grant option rights or impose option duties upon the holders or creditors of the convertible bonds, convertible participation rights or convertible participating bonds on the Company s no par value bearer shares accounting for a pro rata amount of registered share capital totaling up to EUR 8,000,000 pursuant to the more specific terms and conditions of such Bonds, whereby this percentage amount of the registered share capital must include the amount by which the registered share capital is increased on the basis of the authorization approved by the shareholders meeting of May 11, 2016 with respect to item 7 (Authorized Capital); such inclusion shall be made already at the time that the relevant resolution to increase the capital is adopted. The Bonds may be issued not only in euros but also in the official currency of an OECD country, limited to the corresponding euro equivalent value. They may also be issued by one of the Company's downstream group companies. In that case, the management board will be authorized, with the consent of the supervisory board, to guarantee the Bonds on behalf of the Company and to grant the holders or creditors option or conversion rights or option or conversion duties on the Company's no par value bearer shares. If the shareholders are not able to purchase the Bonds directly, then the shareholders will be granted the statutory preemptive right by allowing the Bonds are to be acquired by a financial institution or a syndicate of financial institutions which would then be obligated to offer the Bonds to the shareholders for subscription. If the Bonds are issued by a downstream group company, then the
12 Company must ensure that the statutory preemptive right is granted to the Company's shareholders in the manner described in the foregoing sentences. Nevertheless, the management board is authorized, with the consent of the supervisory board, to exclude from the shareholders' preemptive rights any fractional amounts that result from the subscription ratio and to exclude the preemptive right to the extent necessary to grant the holders of previously issued option or conversion rights or duties the number of subscription rights to which they would be entitled as shareholders after exercising the options or conversion rights or upon satisfying the option or conversion obligations. The management board is further authorized, with the consent of the supervisory board, to completely exclude the shareholders' preemptive right on Bonds, which are issued against cash payment and which include option or conversion rights or duties, provided that the management board reaches a conclusion, following a duly performed review, that the issue price for the Bonds is not significantly lower than the hypothetical market value as calculated in accordance with the recognized (specifically financial mathematical) methods. This authorization to exclude the preemptive rights applies, however, only to Bonds, which are issued with an option or conversion right or duty, and to Bonds, with an option or conversion right or an option or conversion duty on shares accounting for a pro rata amount of the registered share capital, which may not in total exceed 10% of the registered share capital, either at the time the authorization enters into effect or if that amount is lower at the time that the aforementioned authorization is exercised. Included in the calculation of the aforementioned 10% threshold are the Company's own shares (treasury shares), which are sold subject to an exclusion of preemptive rights pursuant to section 186 (3) sentence 4 AktG during the valid term of this authorization until the date the Bonds with option and/or conversion rights or duties are issued under a preemptive rights exclusion pursuant to section 186 (3) sentence 4 AktG. Furthermore, included in the calculation of the aforementioned 10% threshold are those shares, which are sold subject to an exclusion of preemptive rights pursuant to section 186 (3) sentence 4 AktG during the valid term of this authorization until the date the Bonds with option and/or conversion rights or duties are issued from authorized capital under a preemptive rights exclusion pursuant to section 186 (3) sentence 4 AktG. If participation rights or participating bonds are issued with no conversion right/duty or option right/duty, then the management board will be authorized, with the consent of the supervisory board, to exclude all of the shareholder preemptive rights, if such participation rights or participating bonds contain
13 similar obligations; i.e. no membership rights in the Company are established, no participation in the liquidation proceeds are granted, and the amount of any yield is not calculated on the basis of annual net income, distributable profit or dividends. Furthermore, in this case, the yield and the face value of the participation rights or participating bonds must match the market conditions existing at the time that the instruments were issued. The Bonds are divided into partial bonds [Teilschuldverschreibungen]. In the event warrant-linked bonds are issued, then each partial bond will include one or more warrants, which will entitle the holder to subscribe for the Company's no par value bearer shares pursuant to the more specific requirements set forth in the warrant terms and conditions as stipulated by the management board. For euro-denominated warrant-linked bonds issued by the Company, the warrant terms and conditions may provide that the warrant price could also be satisfied by transferring the partial bonds and, in some cases, by making additional cash payment. The pro rata amount of the registered share capital, which is accounted for by the shares that could be subscribed for each partial bond, may not exceed the aggregate face value of the partial bonds. If a conversion results in fractional amounts of shares, then provision may be made, pursuant to the terms and conditions of the warrants or bonds and, if necessary, against additional payments that such fractional amounts could be rounded up to facilitate the subscription of whole number shares. The same rule applies if warrants are attached to a participation right or participating bond. If convertible bonds are issued, then in the case of bearer bonds, the holders (otherwise the creditors of the partial bonds) will be granted an irrevocable right to convert their partial bonds into the Company's no par value bearer shares pursuant to the convertible bond terms and conditions as stipulated by the management board. The conversion ratio is calculated by dividing the partial bond s face value or the below-face-value issue price of a partial bond by the stipulated conversion price for a no par value bearer share of the Company and can then be rounded up or down to the nearest whole number. Moreover, an additional cash payment and the consolidation of or compensation for nonconvertible fractional amounts can be set. The bond terms and conditions may provide for a variable conversion ratio and a determination of the conversion price (subject to a minimum price defined below) within a pre-established range which depends on the performance of the Company's no par value shares during the term of the bond. The aforementioned will also apply, if the conversion right is linked to a participation right or a participating bond.
14 The option or conversion price that is to be set for a single no par value share of the Company must, except in those cases in which an option or a conversion duty or a right to have the shares delivered exists, equal (i) at least 80% of the volumeweighted, average closing price of the Company's no par value shares as established in electronic trading on the Frankfurt Stock Exchange on the last 10 trading days prior to the date on which the management board adopts the resolution regarding the issuance of the Bonds which include the option or conversion right or duty or (ii) in the event that a preemptive right is granted, at least 80% of the volume-weighted, average stock exchange price for the Company's shares as established in electronic trading on the Frankfurt Stock Exchange during the subscription period but excluding the date of the subscription deadline, which is required in order to seasonably provide notice of the option or conversion price as required under section 186 (2) sentence 2 AktG. Section 9 (1) AktG and section 199 AktG will not be affected thereby. Notwithstanding section 9 (1) AktG, the option or conversion price for bonds that are linked to option or conversion rights or duties may, on the basis of an antidilution clause, be lowered pursuant to the more specific provisions under the terms and conditions, if the Company, during the option or conversion period, (i) increases the registered share capital through a capital increase from the Company's own funds; or (ii) increases the registered share capital or sells its own (treasury) shares upon granting its shareholders exclusive preemptive rights; or (iii) issues, grants or guarantees to its shareholder additional bonds with option or conversion rights or duties upon granting its shareholders exclusive preemptive rights, and in those cases (i) through (iii) the holders of previously existing option or conversion rights or duties are not granted for such transactions any preemptive rights, to which they would be entitled following the exercise of the option or conversion right or following the satisfaction of the option or conversion duty. The reduction in the option or conversion price may also be effected through a cash payment when the option or conversion right is exercised or when an option or conversion duty is satisfied. The terms and conditions of the Bonds, which are linked to option or conversion rights or duties, may also provide for a modification of the option or conversion rights or option or conversion duties in the event of a capital reduction or other extraordinary measures or events, which are tied to an economic dilution of the value of the option or conversion rights or duties (e.g., loss of control to third parties). Section 9 (1) AktG and section 199 AktG remain unaffected thereby.
15 The bond terms and conditions may include the right of the Company, in the event the conversion or option is exercised, not to grant any no par value shares, but instead to pay out on the number of shares that would otherwise be delivered a cash amount which equals the volume-weighted, average closing price for the Company's no par value shares as established in electronic trading on the Frankfurt Stock Exchange during a time specified in the bond terms and conditions. The bond terms and conditions may also provide that the bond, which is linked to the option or conversion rights or duties, could at the Company's discretion be converted not into new shares from contingent capital but rather into pre-existing shares of the Company or of another publicly listed company or that the option right can be satisfied through the delivery of such shares or the option duty could be serviced through the delivery of such shares. The bond terms and conditions may also provide for a conversion duty or option duty at the end of the term (or at another point in time) or the right of the Company at the final maturity of the bond which is linked to option or conversion rights or duties (and this also includes a maturity triggered by a termination), to grant the holders or creditors not a full or partial payment of the cash amount due but instead no par value shares of the Company. In these cases, the option or conversion price, as more specifically stipulated in the bond terms and conditions, can equal at least either the aforementioned minimum price or the volumeweighted average price of the Company's no par value shares as established in electronic trading on the Frankfurt Stock Exchange during a reference period of 15 days prior to the maturity date or the other established date, even if this average price is below the aforementioned minimum price (80%). The pro rata amount of the registered share capital accounted for by the Company's no par shares that are issued upon conversion or option exercise may not exceed the face value of the convertible bonds. Section 9 (1) in connection with section 199 (2) AktG must be observed. The management board is authorized, with the consent of the Supervisory Board, to stipulate more details regarding the issuance and features of the Bonds, including the interest rate, issue price, term and denomination, anti-dilution provisions, option exercise or conversion period as well as the conversion and option price within the foregoing range or to prescribe the same with the consent of the governing bodies of the Company s group enterprise that issues the warrant-linked bonds or convertible bonds. c) Contingent Capital I Account
16 The registered share capital is increased conditionally by up to EUR 8,000,000.00 through the issuance of up to 2,795,394 new no par value bearer shares (Contingent Capital I Account), whereby this percentage amount of the registered share capital must include the amount by which the registered share capital is increased on the basis of the authorization approved by the shareholders meeting of May 11, 2016 with respect to Agenda Item 7 (Authorized Capital); such inclusion shall be made already at the time that the relevant resolution to increase the capital is adopted. This contingent capital increase serves the purpose of granting no par value bearer shares when the conversion or option rights are exercised (or when the corresponding option/conversion duties are satisfied) or when the Company exercises its elective right not to pay the cash amount due but instead grant no par value shares of the Company to the holders of the convertible or warrant-linked bonds, participation rights or participating bonds (or a combination of such instruments), which are issued on or before May 11, 2016 until May 10, 2019 by the Company or one of its downstream group companies in exchange for a cash capital contribution pursuant to the authorization resolution adopted by the Annual General Meeting on May 11, 2016. The new shares will be issued in each case at the option or conversion price determined in accordance with the aforementioned authorization resolution. The contingent capital increase shall be carried out only in the event there is an issuance of bonds, which include option or conversion rights or duties, as prescribed in the authorization resolution adopted by the Annual General Meeting on May 11, 2016 and only to the extent that option or conversion rights are enforced or the bondholders, who are obligated to convert or exercise the options, satisfy their obligation to effect the conversion or exercise the option, or only to the extent that the Company exercises an elective right in complete or partial lieu of payment of the cash amount due to grant Company shares and to the extent no cash compensation is granted or treasury shares or shares of another publicly listed company are used to service the obligation. The new shares to be issued will have dividend rights beginning in the fiscal year in which they are created. The management board is authorized, with the consent of the supervisory board, to prescribe additional details regarding the implementation of the contingent capital increase. d) Amendment to the articles of association Subsection 5.2 of the articles of association shall now read as follows:
17 The registered share capital is increased conditionally by up to EUR 8,000,000.00, which is divided into up to 2,795,394 no par value bearer shares (Contingent Capital I Account), whereby this percentage amount of the registered share capital must include the amount by which the registered share capital is increased pursuant to section 5.1 of the articles of association (Authorized Capital); such inclusion shall be made already at the time that the relevant resolution to increase the capital is adopted. This contingent capital increase will be carried out only to the extent that the holders or creditors of options or conversion rights or persons obligated to exercise their conversion or option rights under warrant-linked or convertible bonds, participation rights or participating bonds (or a combination of such instruments), which are issued in exchange for cash capital contributions and are issued or guaranteed on or before May 14, 2016 by the Company or by a downstream group enterprise of the Company based on the authorization granted to the Management Board by the Annual General Meeting on May 11, 2016 until May 10, 2019 make use of their option or conversion rights or, to the extent they are obligated to exercise the option or conversion rights, satisfy their obligation to exercise their conversion or option rights, or to the extent that the Company exercises an elective right in complete or partial lieu of payment of the cash amount due grants its Company shares, provided that no cash compensation is granted or treasury shares or the shares of another publicly listed company are used to satisfy those obligations. The new shares will be issued in each case at the option or conversion price determined in accordance with the aforementioned authorization resolution. The new shares will have dividend rights beginning in the fiscal year in which they are created. The management board is authorized, with the consent of the supervisory board, to prescribe additional details regarding the implementation of the contingent capital increase. e) Authorization to amend the articles of association The supervisory board is authorized to amend subsections 4.1 and 5.2 of the articles of association in order to reflect each issue of share subscriptions and to make all other related amendments to the articles of association, provided that only the language is affected. The aforementioned shall also apply in the event that the authority to issue Bonds is not used after the expiration of the authorization period and in the event the contingent capital is not used following the expiration of the periods for exercising the option or conversion rights or for satisfying the conversion or option duties. 9. Resolution pursuant to sections 286 (5), 314 (2) sentence 2 HGB on the authorization of the management board to refrain from publishing information about the remuneration of individual management board members
18 The annual general meeting has the option to decide for itself about the extent to which the management board compensation is disclosed. According to the statutory provisions of sections 286 (5), 314 (2) sentence 2 HGB, the remuneration of individual management board members does not need to be published for up to five years, if the annual general meeting adopts a resolution to this effect. The management board and supervisory board are of the opinion that the legitimate interests of the shareholders in obtaining information is adequately taken into account by indicating the total compensation of the members of the management board. The supervisory board shall in accordance with its statutory obligations ensure that the individual compensation packages are appropriate. The management board and supervisory board recommend adopting the following resolution: For the fiscal year commencing on January 1, 2016 and for all subsequent fiscal years up to the fiscal year ending December 31, 2020 at the latest, the information specified in section 285 no. 9 (a) sentences 5 to 8 and section 314 (1) no. 6 (a) sentences 5 to 8 HGB shall be omitted. If the law applicable to a given fiscal year should prescribe a shorter maximum period of validity, then this resolution shall apply until the latest possible point in time under that law. Written Management Board report in accordance with sections 71 (1) no. 8 sentence 5, 186 (4) sentence 2 AktG with respect to Agenda Item 6 on the reasons for the authorization of the management board to exclude shareholders preemptive rights in the event that treasury shares are sold Under Agenda Item 6, the management board and supervisory board propose to authorize the Company, in accordance with section 71 (1) no. 8 AktG, to acquire its own shares accounting for up to 10% of its existing registered share capital at the time of the resolution. In accordance with section 71 (1) no. 8 AktG, which allows for an authorization for up to 5 years, the authorization shall be granted for three years; i.e., ending May 10, 2019. This should enable the management board, in the interests of the Company and its shareholders, to acquire using different means - the Company s own shares accounting for up to a total of 10% of the Company's current registered share capital.
19 The principle of equal treatment in accordance with section 53a AktG must be observed with respect to the acquisition of the Company s own shares. The proposed acquisition of shares on the stock exchange, by way of a public offer or by way of a public invitation to submit sale offers takes account of this principle. Insofar as a public offer or public invitation to submit sale offers is oversubscribed, acceptance must be effected in accordance with ratios. A preferential acceptance of smaller quantities of up to 100 of the offered shares per shareholder may be provided for, as well as rounding-off in accordance with commercial principles. This option serves to avoid fractional amounts and small residual amounts when the ratios to be acquired are fixed, thereby facilitating technical settlement. The shares acquired on the basis of the proposed authorization may be used not only for sale on the stock exchange or by way of an offer to all shareholders, but also for the following purposes with the exclusion of shareholders' preemptive rights: 1. The Company should have the option of having treasury shares available in order to be able to offer them as a consideration for the acquisition of companies, divisions of companies or interests in companies. The management board continuously assesses opportunities for the Company to acquire companies or interests in companies in the car wash sector, in order thereby to strengthen the Company s competitive position. In many cases, it is more favorable for the Company, or required by the market, that the Company use treasury shares as the currency of acquisition. The proposed authorization is designed to give the Company the option of exploiting any opportunities to acquire companies, divisions of companies or interests in companies that may arise, in a quick and flexible manner. When determining the value of the shares granted as consideration, the management board shall base its calculations on the stock exchange price. No schematic link to the market price is provided for, in particular so that any negotiation results achieved are not jeopardized by fluctuations in the market price. 2. Furthermore, the Company should be given the opportunity, relying on the authority granted under c) 2. above, to use treasury shares in order to satisfy options granted to members of the Company's Management Board, to members of the management of the Company's affiliated enterprises, and to employees of the Company or enterprises affiliated with the Company, in accordance with the terms and conditions under the applicable stock option plans. In order to service the options under the stock option plan with treasury shares, the shareholder preemptive rights must be excluded. The decision about whether to offer or transfer the shares from a portfolio of treasury shares in order to satisfy the options will
20 be made by the management board and supervisory board in each case relying on the specific liquidity situation and market conditions. Where the options held by management board members should be serviced, the decision-making authority shall rest solely with the supervisory board. 3. Finally, the treasury shares should also be used for other purposes, provided that they are sold for cash payment at a price not substantially lower than the stock exchange price for the shares on the date of sale. Moreover, the authorization shall be limited to the sale of treasury shares collectively representing no more than 10% of the registered share capital, either at the time of authorization or, if the amount is lower, at the time this authorization is exercised. Credited against the foregoing limit of 10% of the registered share capital is the registered share capital accounting for those shares, which are issued or sold by the Company during the effective period of this authorization in the direct or mutatis mutandis application of section 186 (3) sentence 4 AktG. This authorization makes use of the option that is granted in accordance with section 71 (1) no. 8 AktG in the mutatis mutandis application of section 186 (3) sentence 4 AktG to simplify the exclusion of preemptive rights. In the interests of the Company, this should make it possible, above all, to offer the shares of the Company to domestic and international institutional investors and to expand the shareholder base. The requested authorization should enable the Company to react quickly and flexibly to favorable conditions in the stock market. The economic interests and voting rights of the shareholders will be suitably protected in any such actions. The authorization to exclude preemptive rights in the disposal of treasury shares, supported by section 186 (3) sentence 4 AktG, including any authorizations to issue new shares, is limited in total to a maximum of 10% of the Company s registered share capital. The decisive amount is the registered share capital at the time the authorization takes effect or the time it is exercised, whichever amount is lower. Credited against this upper limit is the share capital accounting for those shares that are otherwise issued with the exclusion of preemptive rights in accordance or pursuant to section 186 (3) sentence 4 AktG. The shareholders' value is protected from dilution in that the shares may be sold only at a price that is not materially below the stock exchange price. The final determination of the selling price for treasury shares occurs immediately before the sale. The Management Board shall thereby make an effort taking the then-current market conditions into consideration to keep any discount from the stock exchange price as low as possible. Interested shareholders can maintain their investment ratio by purchasing shares on the stock market under basically the same conditions. The management board is also authorized, in accordance with section 71 (1) no. 8 sentence 6 AktG, to cancel the shares without the need for an additional resolution by the Annual General