Source: http://www.medion.com/en/investor/general_meeting/_agm2010/invitation_annual_meeting_2010.php
Timestamp: 2018-01-23 15:38:46
Document Index: 459164177

Matched Legal Cases: ['§ 2', '§ 12', '§ 13', '§ 12', '§ 13', '§ 15', '§ 13']

MEDION AG - Invitation Annual Meeting 2010
Invitation to the Annual Shareholders' Meeting 2010
on Wednesday, May 26, 2010, at 2 p.m.
Invitation Annual Meeting 2010
1. Presentation of the adopted annual financial statements and the approved consolidated financial statements for fiscal 2009, the management report (combined management report of the MEDION Group and MEDION AG pursuant to section 315 (3) of the German Commercial Code [HGB]), the report of the Supervisory Board for fiscal 2009, and the explanatory report of the Management Board on the disclosures pursuant to section 289 (4) and (5) and section 315 (4) HGB.
In addition to the explanatory report on the disclosures pursuant to section 289 (4) and (5) and section 315 (4) HGB, the Management Board makes the following documents available to the Annual Shareholders' Meeting in accordance with section 176 (1) sentence 1 German Stock Corporation Act (AktG):
the adopted annual financial statements of MEDION AG for the year ended December 31, 2009;
the approved consolidated financial statements for the year ended December 31, 2009;
Pursuant to section 172 AktG, on March 10, 2010 the Supervisory Board approved the annual financial statements and consolidated financial statements prepared by the Management Board and thus adopted the annual financial statements. Therefore, the Annual Shareholders' Meeting is not required to adopt the annual financial statements or approve the consolidated financial statements in accordance with section 173 AktG. The annual financial statements, combined management report of the MEDION Group and MEDION AG, consolidated financial statements, the report of the Supervisory Board, and the explanatory report of the Management Board on the disclosures pursuant to section 289 (4) and (5) and section 315 (4) HGB must be made available to the Annual Shareholders' Meeting but, according to the German Stock Corporation Act, a resolution is not required.
The Management Board and Supervisory Board propose that the profits of MEDION AG for fiscal 2009 amounting to €25,125,072.83 be appropriated as follows:
Payment of a dividend of €0.20 per share
on 44,607,442 no-par-value shares: € 8,921,488.40
Transfer to retained earnings € 16,203,584.43
Profit for 2009 € 25,125,072.83
At the time the meeting was called, MEDION AG held 3,810,958 treasury shares, which are not entitled to dividends. This has been taken into consideration in the proposed appropriation of profits. In the event that the number of treasury shares held by MEDION AG should change by the date of the Annual Shareholders' Meeting, an adjusted proposal for the appropriation of profits will be presented to the shareholders at the meeting. The calculation of any difference will be reflected in the line item 'Transfer to retained earnings'.
3. Resolution on the approval of the actions of the Management Board for fiscal 2009
4. Resolution on the approval of the actions of the Supervisory Board for fiscal 2009
5. Authorization for the purchase and sale of treasury shares pursuant to section 71 (1) no. 8 AktG, including authorization to redeem shares and disapply tender rights for purchases and subscription rights for sales
The authorization for the purchase of treasury shares pursuant to section 71 (1) no. 8 AktG granted at the last Annual Shareholders' Meetings and limited through to November 12, 2010 by the most recent Annual Shareholders' Meeting on May 15, 2009 has been partially utilized (3,810,958 shares). To remain in a position to purchase treasury shares in the future, the Management Board is to be granted a new authorization to purchase such shares pursuant to section 71 (1) no. 8 AktG in revocation of the resolution currently still in effect concerning the purchase of treasury shares. Pursuant to section 71 (1) no. 8 AktG as amended by the Act to Enact the Shareholders' Rights Directive of July 30, 2009 (ARUG), authorization can now be granted for a period of up to five years.
a) New authorization for the purchase and sale of treasury shares
The Management Board is authorized until May 25, 2015, to purchase treasury shares of up to 10 percent of the current share capital of €48,418,400.00 or, if this amount is lower, of the share capital existing at the time of the exercise of this authorization, for any permissible purpose within the limits of legal restrictions and in accordance with the provisions set forth below.
The acquired shares together with other treasury shares held by the Company or attributable to the Company pursuant to section 71 AktG must not at any time represent more than 10 percent of the share capital.
b) Types of acquisition and use
At the discretion of the Management Board, the acquisition of the shares may be effected (a) on the stock exchange, (b) by way of a public purchase offer addressed to all shareholders or a public solicitation of such an offer, or (c) by way of granting tender rights to the shareholders.
If the shares are purchased on the stock exchange, the purchase price per share paid by the Company (excluding incidental costs) must not be more than 10 percent higher or lower than the average closing auction price of Company shares in the Xetra trading system (or a comparable successor system) on the Frankfurt Stock Exchange on the three trading days preceding the day on which the purchase commitment was entered into. If the shares are purchased through a public purchase offer addressed to all shareholders or a public solicitation of such an offer, the purchase price offered or the limits of the purchase price range per share (excluding incidental costs) must not be more than 10 percent higher or lower than the average closing auction price of Company shares in the Xetra trading system (or a comparable successor system) on the Frankfurt Stock Exchange on the last five trading days before the day of the public announcement of the offer or the public solicitation of a purchase offer. If significant deviations from the controlling price should arise after the publication of a public offer or the public solicitation of a purchase offer, the offer or the solicitation of such an offer may be adjusted. In such a case, an adjustment may potentially be made in line with the average closing auction price of the Company shares in the Xetra trading system (or a comparable successor system) on the Frankfurt Stock Exchange during the last five trading days before the day of the public announcement of any adjustment. If the public offer is oversubscribed, or if in the case of a solicitation of such an offer it is not possible to accept multiple equal offers, the acceptance may be accomplished on a quota basis. Arrangements may provide that priority be given to accepting small numbers of up to 100 tendered shares per shareholder. Any right of the shareholders to tender more shares is disapplied in this regard. The public offer or solicitation of such an offer can stipulate additional conditions. If tender rights are extended to the shareholders for the purpose of purchasing shares, such rights are allocated to the shareholders in proportion to their shareholding corresponding to the ratio between the volume of the shares to be bought back by the Company and the share capital. Fractions of tender rights do not need to be allocated; in such a case any partial tender rights are disapplied. The price and the limits of the offered purchase price range (each excluding incidental costs) within which shares may be sold in the exercise of tender rights are determined and, if necessary, adapted in accordance with the provisions on the solicitation of purchase offers.
Subject to the consent of the Supervisory Board, the Management Board is authorized to resell treasury shares acquired on the basis of this or earlier authorizations while disapplying shareholder subscription rights through means other than the stock exchange or an offer addressed to all shareholders, specifically if the sale price to be paid in cash is not significantly lower than the market price of the shares. "Not significantly" within the meaning of the preceding sentence is a sale price that is not more than 5 percent lower than the average closing auction price of Company shares in the Xetra system (or a comparable successor system) on the Frankfurt Stock Exchange during the last five trading days before the sale of the shares.
Subject to the consent of the Supervisory Board, the Management Board is further authorized to transfer the treasury shares acquired on the basis of the authorization while disapplying shareholder subscription rights to third parties as consideration in connection with the acquisition of, or merger with, companies or the acquisition of investments in companies.
Subject to the consent of the Supervisory Board, the Management Board is authorized to redeem some or all of the shares acquired on the basis of this authorization without the redemption or the implementation thereof requiring a separate resolution at the Annual Shareholders' Meeting. The Management Board may also specify that the share capital is not diminished by the redemption, but instead that the proportion of the remaining shares to share capital is increased pursuant to section 8 (3) AktG. In such a case, the Management Board is authorized to adjust the number of shares stated in the Articles of Incorporation.
The Supervisory Board is authorized to use shares purchased by the Company as follows while disapplying shareholder subscription rights, provided the shares do not have to be used for another specific purpose and are utilized in compliance with the principle of appropriate compensation (section 87 (1) AktG): They may be transferred to members of the Management Board of the Company as compensation in the form of a share bonus, with the proviso that the further transfer of these shares by the respective member of the Management Board is, within a minimum period of two years from the date of transfer (retention period), not permitted, as is the conclusion of hedging transactions through which the economic risk of the shares' price performance is partly or wholly transferred to third parties during the retention period. In relation to the transfer, the respective current market price shall apply to the shares (in the form of an average price determined on a calculation basis to be specified by the Supervisory Board). The shares may also be promised to members of the Company’s Management Board as compensation in the form of a share bonus. In such instances, the preceding provisions apply mutatis mutandis. The time of the promise then replaces the time of the transfer. Subject to the consent of the Supervisory Board, the Management Board is further authorized to issue the acquired treasury shares to employees of the Company or of subsidiaries within the meaning of section 15 et seq. AktG.
The authorizations to purchase treasury shares, sell them, use them in some other way, or redeem them may be exercised independently of each other, one or more times, in whole or in part.
The authorization to purchase treasury shares granted with the resolutions of the last Annual Shareholders' Meetings, most recently the Annual Shareholders' Meeting on May 15, 2009, so far as it has not yet been utilized, will be revoked upon the entry into effect of this resolution and replaced with this resolution. The foregoing does not apply to the authorizations granted with the aforementioned resolution adopted at the Annual Shareholders' Meeting on May 15, 2009 to use treasury shares already acquired.
6. Resolution on the authorization to use equity derivatives in connection with the purchase of treasury shares in accordance with section 71 (1) no. 8 AktG and to disapply tender rights and subscription rights
Supplementing the authorization to purchase treasury shares pursuant to section 71 (1) no. 8 AktG proposed for resolution under Agenda Item 5, the Company is also to be authorized to purchase such shares using equity derivatives. Rather than increasing the total volume of shares that can be purchased, this is simply meant to provide another alternative for the purchase of treasury shares.
The Management Board and Supervisory Board therefore propose that the following resolution be adopted:
Supplementing the authorization to purchase treasury shares pursuant to section 71 (1) no. 8 AktG proposed for resolution under Agenda Item 5, in addition to the means described therein, the purchase of shares in the Company may also be effected using equity derivatives. Subject to the consent of the Supervisory Board, the Management Board is authorized to acquire options that give the Company the right to acquire MEDION shares by exercising the options (call options). Subject to the consent of the Supervisory Board, the Management Board is further authorized to sell options that require the Company to acquire MEDION shares when the options are exercised by their holders (put options). Furthermore, the acquisition can be accomplished through a combination of call and put options as well as the use of other equity derivatives as set forth in the following.
All share purchases accomplished through the use of call options, put options, a combination of call and put options, or other equity derivatives are limited to shares amounting to no more than 5 percent of the share capital existing at the time when the resolution is adopted at the Annual Shareholders' Meeting or, if this amount is lower, of the share capital existing at the time of the exercise of this authorization.
The options must be concluded with a financial institution in line with market conditions. They must be set up in such a way to ensure that the options are only serviced with shares acquired in compliance with the principle of equal treatment of the shareholders; the purchase of the shares via the stock exchange at the market price valid at the time of such purchase is sufficient to establish such compliance. The maturity of the options must be selected in such a manner that the acquisition of the shares through exercise of the options does not occur after May 25, 2015.
The purchase price for a MEDION share when exercising a call option must not be more than 10 percent higher or lower (excluding the respective incidental costs) than the average closing auction price of Company shares in the Xetra trading system (or a comparable successor system) on the Frankfurt Stock Exchange on the three trading days preceding the day of the exercise of the call option; the residual value of the call option is not taken into consideration in the foregoing. The purchase price for a MEDION share when exercising a put option must not be more than 10 percent higher or lower (excluding incidental costs) than the average closing auction price of Company shares in the Xetra trading system (or a comparable successor system) on the Frankfurt Stock Exchange on the three trading days preceding the day of issue of the put option.
Furthermore, it can be agreed with a financial institution that the financial institution will deliver to the Company within a time period to be defined in advance a number of shares to be defined in advance or a purchase price in euros defined in advance for shares in the Company. The price at which the Company acquires treasury shares is discounted to the arithmetic mean of the volume-weighted average prices of the MEDION shares in the Xetra trading system, calculated over a number of trading days to be defined in advance. Furthermore, the financial institution must commit to purchase the shares to be delivered on the stock exchange at prices that are within the range that would apply in the case of a direct acquisition via the stock exchange by the Company.
If treasury shares are purchased using equity derivatives in consideration of the foregoing provisions, any rights of the shareholders to enter into such option transactions or other equity derivatives with the Company are disapplied, as are any tender rights of the shareholders.
For the use of treasury shares acquired using equity derivatives, the conditions set forth in the resolution proposed under Agenda Item 5(b) apply mutatis mutandis. The subscription rights of the shareholders to treasury shares are disapplied to the extent that these shares are used in accordance with the authorizations proposed for resolution under Agenda Item 5.
7. Resolution on an amendment of the Articles of Incorporation (object of the Company)
In light of the Company's future strategy, the object of the Company needs to be expanded to include the trading of telecommunications services and the trading of digital content.
§ 2 (1) sentence 1 of the Articles of Incorporation is amended to include "trading with telecommunications services and trading with digital content" and therefore reads as follows:
1. The object of the Company is the performance and placement of services and the sale of products in the fields of multimedia hardware and software, entertainment and consumer electronics, telecommunications and satellite technology, and other non-food articles of any kind as well as trading with telecommunications services and trading with digital content.
8. Resolution on amendments to the Articles of Incorporation regarding calling and attending the Annual Shareholders' Meeting to reflect the Act to Enact the Shareholders' Rights Directive (ARUG)
The Act to Enact the Shareholders' Rights Directive (ARUG) aims to strengthen the rights of shareholders in listed companies. The Act therefore amends many of the provisions of the German Stock Corporation Act, including regarding calling annual shareholders' meetings, facilitating the exercise of shareholders' rights, and simplifying the proxy voting rights of banks. As a result, the Company's Articles of Incorporation need to be amended to reflect the new legal situation.
The Management Board and Supervisory Board therefore propose that the following resolutions be adopted:
a) § 12 (3) sentence 1 of the Articles of Incorporation is amended as follows:
The Annual Shareholders' Meeting must be called at least 30 days before the day by the end of which shareholders have to register (§ 13 of the Articles of Incorporation). This period does not include the day on which the meeting is called.
b) The following new paragraph 5 is added to § 12 of the Articles of Incorporation:
5. The Management Board is authorized to provide visual and/or audio broadcasts of the entire or parts of the Annual Shareholders' Meeting.
c) § 13 of the Articles of Incorporation is amended as follows:
1. Only those shareholders who register on time for the Annual Shareholders' Meeting are entitled to attend the Annual Shareholders' Meeting, exercise their voting rights, and file motions. The registration must be received by the Company or an office designated in the invitation to the meeting at least six days before the meeting. This period does not include the day of the meeting or the day of receipt of registration.
2. Proof of entitlement to attend the Annual Shareholders' Meeting, exercise voting rights, and file motions must be provided. This proof must be provided by means of a shareholdings certificate in text form (Textform as defined in section 126b German Civil Code) in German or English from the depository bank. The proof must relate to the start of the 21st day before the Annual Shareholders' Meeting and must be received by the Company or an office designated in the invitation to the meeting at least six days before the meeting. This period does not include the day of the meeting or the day of receipt of proof.
3. The day of the meeting is not included when calculating periods and deadlines that count back from the meeting. They cannot be shifted to an earlier or later date to avoid a Sunday, Saturday, or public holiday. Sections 187 to 193 of the German Civil Code do not apply.
d) § 15 (3) of the Articles of Incorporation is amended as follows:
3. Voting rights may be exercised by proxies. The appointment, cancellation, re-vocation, and proof of the appointment of a proxy must be in text form (Textform as defined in section 126b German Civil Code) unless otherwise provided for by law. Proof of appointment of a proxy can be sent to the Company via an electronic communications channel specified by the Management Board. The details will be provided in the invitation to the Annual Shareholders' Meeting.
9. Appointment of auditors for the annual financial statements, consolidated financial statements, and review of the half-year financial report for fiscal 2010
The Supervisory Board proposes that Märkische Revision GmbH Wirtschaftsprüfungsgesellschaft, Essen, be appointed as auditors of the annual financial statements of MEDION AG and the consolidated financial statements for fiscal 2010 as well as for the review of the half-year financial report for the first half of fiscal 2010.
Pursuant to the provisions of section 71 (1) no. 8 and section 186 (4) sentence 2 AktG, the Management Board submits the following report:
Written report of the Management Board in accordance with section 71 (1) no. 8 sentence 5 and section 186 (4) sentence 2 AktG on Agenda Item 5 concerning the reasons for authorizing the Management Board to disapply shareholders' tender rights and subscription rights in the purchase or sale of treasury shares:
Section 71 (1) no. 8 of the German Stock Corporation Act offers the opportunity for the Company to purchase treasury shares of up to a total of 10 percent of its share capital on the basis of an authorization adopted at the Annual Shareholders' Meeting. The Management Board was authorized to purchase treasury shares pursuant to section 71 (1) no. 8 AktG by resolutions adopted at the Annual Shareholders' Meetings, most recently the Annual Shareholders' Meeting on May 15, 2009. The Management Board has partially utilized these authorizations (3,810,958 shares).
The resolution in Agenda Item 5 proposes that the Management Board again be authorized to purchase treasury shares, which together with the treasury shares already held by the Company must not exceed 10 percent of the share capital.
a. Disapplication of tender rights in the purchase of treasury shares
The authorization to purchase treasury shares is designed to put the Management Board in a position to use the buyback of shares as a financial instrument in the interest of the Company and its shareholders.
As a rule, the purchase must be accomplished via the stock exchange or via a public purchase offer addressed to all shareholders or a public solicitation of such an offer.
While the German Stock Corporation Act specifically addresses the sale of treasury shares in section 71 (1) no. 8 sentence 5 AktG, with regard to the purchase of treasury shares over the counter, there is only the proviso that the principle of equal treatment of the shareholders pursuant to section 53a AktG be fulfilled. Accordingly, as a rule the Management Board must act neutrally when purchasing shares and ensure equal opportunities. However, the principle of equal treatment is not absolute in application; rather it is a standard of non-arbitrariness. For instance, it is generally acknowledged that formal unequal treatment is permissible if it is objectively justified. If in connection with a purchase through a public offer the public offer is oversubscribed, or if in the case of a solicitation of such an offer it is not possible to accept multiple equal offers, the acceptance may be accomplished in proportion to the shares subscribed or offered. In addition, it needs to be permissible to give priority to accepting small numbers of up to 100 tendered shares per shareholder. Any right of the shareholders to tender more shares is disapplied in this regard. When establishing the quotas for acquisition this makes it possible to avoid both fragmented amounts and small residual holdings, thus making technical processing easier. No disadvantages for the shareholders arise as a consequence.
b. Disapplication of subscription rights in the sale of treasury shares
The possibility of selling treasury shares serves the purpose of simplifying the process of raising funds. Pursuant to section 71 (1) no. 8 sentence 5 AktG, the shareholders can also authorize a company to undertake a form of sale other than via the stock exchange or an offer directed to all shareholders. The condition is that pursuant to section 186 (3) sentence 4 AktG, the shares are sold at a price that is not significantly lower than the market price of the Company's shares at the time of the sale. Considering the intense competition on the capital markets, the possibility for MEDION AG to sell treasury shares while disapplying subscription rights and in a form other than via the stock exchange or an offer to all shareholders is in the interest of the Company. It gives the Company the opportunity to quickly and flexibly offer shares to German and international investors, expand the shareholder base, and stabilize the value of the share. By selling shares at a price that is not significantly lower than the market price, and by limiting the total proportion of treasury shares to a maximum of 10 percent of the share capital, the shareholders' wealth-maximizing interests are adequately fulfilled. In addition, the Company has an opportunity to have treasury shares available in order to offer them as consideration in the event of the acquisition of, or merger with, companies or the investment in companies. In the market for corporate acquisitions and investments, this form of consideration is increasingly in demand. The authorization proposed here is designed to give the Company the necessary flexibility to quickly and easily take advantage of opportunities to acquire or invest in companies. This does not represent a disadvantage to shareholders in so far as the Company could also utilize the authorized capital pursuant to the Articles of Incorporation while disapplying shareholders' subscription rights.
c. Bonus payments in shares
Subparagraph 4.2.3 German Corporate Governance Code suggests that the variable compensation components of management board members should include components with a long-term incentive effect and risk character. According to the Code, shares with a multi-year lock-up period serve as such compensation components in particular.
The resolution proposed under Agenda Item 5 takes this factor into consideration as well. The provision also gives the Supervisory Board the opportunity to make bonus payments in the form of shares. Since the authorization may only be utilized in compliance with the principle of appropriate compensation (section 87 (1) AktG), an appropriate legal and economical minimum lock-up period has been specified, and the shares must be allocated and transferred at the respective current market price, it has been ensured that the subscription rights of the shareholders are not disproportionately disapplied and only in the interest of the Company. The members of the Management Board who receive shares on this basis as a form of compensation have an additional interest in enhancing the Company's value as expressed in the share price. They also bear the market risk of the shares since a sale or other utilization of the shares is not permissible during the lock-up period. Accordingly, this form of compensation has a risk character. The same applies when shares used as a compensation component are not immediately transferred, but are initially only promised in consideration of the fact that they cannot yet be sold in any event. In such instances, too, the risk of the future price performance lies with the respective member of the Management Board.
The further details are determined by the Supervisory Board within the framework of its legal powers. In particular, the Supervisory Board decides whether, when, and to what extent it utilizes the authorization (section 87 (1) AktG). The responsibility to comply with any other requirements of the German Corporate Governance Code also rests with the Supervisory Board. In consideration of the statutory separation of powers, however, the Supervisory Board itself cannot acquire treasury shares as a representative body of the Company for the purposes of compensating members of the Management Board, nor can it call upon the Management Board to do so. Accordingly, if no treasury shares are available that can be used for this purpose, the authorization cannot be utilized. This does not rule out the implementation of the suggestion in the German Corporate Governance Code by other means in such instances.
Subject to the consent of the Supervisory Board, the Management Board is authorized to issue the acquired treasury shares to employees of the Company or of subsidiaries within the meaning of section 15 et seq. AktG.
In decisions concerning the use of treasury shares, the Management Board will be guided exclusively by the interests of the shareholders and the Company.
The Management Board will inform the shareholders of the utilization of the authorizations referred to above at the next Annual Shareholders' Meeting.
This report is accessible to shareholders on the internet at http://www.medion.com/agm and will also be available for inspection during the Annual Shareholders' Meeting.
Report of the Management Board on Agenda Item 6 in accordance with section 71 (1) no. 8 and section 186 (4) sentence 2 AktG
Supplementing the report on Agenda Item 5, the Management Board also makes a written report pursuant to section 71 (1) no. 8 and section 186 (4) sentence 2 AktG on the resolution proposed under Agenda Item 6:
In addition to the possibilities for the purchase of treasury shares provided in Agenda Item 5, the Company also needs to be authorized to purchase such shares using equity derivatives. Rather than increasing the total volume of shares that can be purchased, this is simply meant to provide another alternative for the purchase of treasury shares. This additional alternative increases the Company’s opportunities to flexibly structure the purchase of treasury shares.
It can be advantageous for the Company to purchase call options, sell put options, or purchase MEDION shares using a combination of call and put options or other equity derivatives instead of directly purchasing Company shares. This alternative is limited from the outset to shares amounting to no more than 5 percent of the share capital existing at the time when the resolution is adopted at the Annual Shareholders' Meeting or, if this amount is lower, of the share capital existing at the time of the exercise of this authorization. The maturity of the options must be selected in such a manner that the acquisition of the shares through exercise of the options does not occur after May 25, 2015. This ensures that, after the expiration of the authorization to purchase treasury shares valid until May 25, 2015, the Company cannot purchase such shares unless a new authorization is granted.
If a call option is negotiated, the Company receives the right, against payment of an option premium, to purchase a previously determined number of MEDION shares at a specific price (strike price) from the respective seller of the option, the option writer. The exercise of the call option makes sense from the Company's perspective if the price of the MEDION share is higher than the strike price, since the Company can then purchase the shares from the option writer at a better price than on the market. This alternative also protects the Company’s liquidity, since the strike price for the shares does not have to be paid until the call option is exercised. These considerations can make it justifiable in certain instances for the Company to pay an option premium in line with market conditions in exchange for the negotiation of a call option; in other words, in consideration of factors such as the strike price, the maturity of the option, and the volatility of MEDION shares, the premium roughly corresponds to the value of the call option.
By entering into put options, the Company grants the holder of the put option the right to sell Company shares to the Company at a price determined in the put option (strike price). As consideration for the obligation to purchase treasury shares in accordance with the put option, the Company receives an option premium, which in turn must be determined in line with market conditions; in other words, in consideration of factors such as the strike price, the maturity of the option, and the volatility of MEDION shares, the premium corresponds to the value of the put option. The exercise of the put option only makes economic sense for the option holder if, at the time of the exercise, the price of the MEDION share is lower than the strike price, since the option holder can then sell the shares to the Company at a higher price than on the market; the Company, in turn, can hedge against the excessively high risk of price volatility in the market. From the perspective of the Company, however, the consideration provided for the purchase of the shares is reduced by the option premium already collected. Buying back shares using put options gives the Company the advantage of being able to determine a certain strike price as soon as the option transaction is entered into, while liquidity is not affected until the day on which the option is exercised. If the option holder does not exercise the option, in particular because the share price on the day of exercise or in the exercise period is higher than the strike price, the Company does not purchase any treasury shares through this method, but it does ultimately collect the option premium.
When options are used, the purchase price to be paid by the Company for MEDION shares is the determined strike price. It can be higher or lower than the market price of the MEDION share on the day of entering into the option transaction and on the day of purchasing the shares on the basis of exercising the option. In determining the equivalent value per share, for which an upper and a lower limit were defined in the resolution, the strike price is taken into consideration as well as the intrinsic value of the option used at the time of exercising the option (in other words, without taking into account any remaining maturity) or the option premium. The Company may also negotiate equity derivatives providing for a delivery of shares with a discount on a weighted average price. Due to the obligation to only negotiate options and other equity derivatives with a financial institution and to ensure in the process that the options and other equity derivatives are only serviced with shares acquired in compliance with the principle of equal treatment, there is no possibility of shareholders being disadvantaged when treasury shares are purchased using equity derivatives. In accordance with the provision set forth in section 71 (1) no. 8 AktG, the purchase of the shares via the stock exchange at the current market price for MEDION shares is sufficient to establish compliance with the principle of equal treatment. Since the price for the option (option price) is determined in line with market conditions, the shareholders participating in the option transactions do not suffer any disadvantage in terms of value. Ultimately, the shareholders are in the same position they would be in if the Company were to purchase the shares directly on the stock exchange. On the other hand, being able to negotiate equity derivatives puts the Company in a position to take advantage of market opportunities at short notice and to enter into corresponding option transactions or other equity derivatives. Any rights of the shareholders to enter into such option transactions and other equity derivatives with the Company are disapplied, as are any tender rights of the shareholders. This disapplication is required in order to make it possible to use equity derivatives in connection with the repurchase of treasury shares and hence to achieve the related advantages for the Company. It would not be possible to enter into corresponding equity derivatives with all shareholders.
After weighing the interests of the shareholders and the Company, the Management Board considers the authorization to withhold or to limit any rights of the shareholders to enter into such equity derivatives with the Company as well as any tender rights of the shareholders to be justified due to the advantages that can arise for the Company from the use of put options, call options, a combination of put and call options, or other equity derivatives referred to above.
With respect to the use of treasury shares acquired on the basis of equity derivatives, there are no differences from the possible uses proposed in Agenda Item 5. Accordingly, with respect to the justification for disapplying shareholder subscription rights when using the shares, reference is made to the report of the Management Board on Agenda Item 5.
In accordance with § 13 of the Articles of Incorporation, shareholders are entitled to attend the Annual Shareholders' Meeting and exercise their voting right if they have registered in text form (Textform as defined in section 126b German Civil Code, BGB) in German or English by no later than the end of the seventh day before the day of the Annual Shareholders' Meeting (May 19, 2010, midnight CEST). In addition, shareholders must provide proof of their entitlement to attend the Annual Shareholders Meeting and exercise their voting right. The foregoing must be accomplished by the end of the seventh day before the day of the Annual Shareholders' Meeting (May 19, 2010, midnight CEST) by submission to the registration office in text form (Textform as defined in section 126b BGB) in German or English of proof provided by the depository bank about the shareholding:
The proof must relate to the beginning of the 21st day before the Annual Shareholders' Meeting (May 5, 2010, midnight CEST).
Each share carries one vote at the Annual Shareholders' Meeting.
Shareholders who do not wish to attend the Annual Shareholders' Meeting in person may appoint a proxy, such as the depository bank, a shareholders' association, or another person of their choice, to vote on their behalf. Banks, shareholders' associations, and other professional agents as defined in section 135 (8) AktG may be appointed as proxies in any determinable, verifiable form; otherwise proxies must be appointed in text form (Textform as defined in section 126b German Civil Code).
As a special service, we offer our shareholders the option of appointing proxies bound by instructions and provided by the Company in advance of the Annual Shareholders' Meeting. Shareholders who would like to appoint proxies provided by the Company require an admission ticket for the Annual Shareholders’ Meeting, which they can request from the depository bank. To ensure they receive their admission ticket in time, they should request it from the depository bank at the earliest possible convenience. Shareholders can use the admission ticket to appoint and instruct the proxies. The completed form should be mailed to the address given in the proxy form by no later than May 19, 2010 (date of receipt by the Company).
Related information is available to shareholders on the internet at http://www.medion.com/agm. If shareholders appoint the proxies provided by the Company, they must instruct the proxies on how to exercise their voting right. The proxies are required to vote in accordance with the instructions.
Shareholders wishing to be represented by a proxy voting on their behalf other than the proxies provided by the Company and bound by the shareholder's instructions should use the proxy appointment form pursuant to section 30a (1) no. 5 of the German Securities Trading Act (WpHG) on the reverse of the ticket, which is sent to shareholders after they have completed the registration procedure described above in a correct and timely manner. The proxy appointment form can also be downloaded at http://www.medion.com/agm.
Proof of appointment of a proxy pursuant to section 134 (3) AktG can also be sent by email to HV2010@medion.com.
In accordance with section 30b (1) no. 1 WpHG, notice is given that, at the time the Annual Shareholders' Meeting was called, the share capital of MEDION AG amounted to €48,418,400.00 and was divided into the same number of no-par-value shares each with a share of the subscribed capital of €1. At the time the Annual Shareholders' Meeting was called, the Company held 3,810,958 treasury shares. Therefore, the total number of shares carrying participation and voting rights at the Annual Shareholders' Meeting was 44,607,442 at the time the meeting was called. To determine the voting rights on the day of the Annual Shareholders' Meeting, the number of treasury shares will be deducted from the total number of shares (48,418,400). As far as the Company is aware, no other shares did not carry voting rights at the time the meeting was called.
Disclosure of shareholders' rights pursuant to sections 122 (2), 126 (1), 127, and 131 (1) AktG
Shareholders whose shares together make up a twentieth of the share capital or a pro-rata amount of €500,000.00 can request that items are added to the agenda and published. A justification or a draft resolution must be provided for each new item.
The Company must receive supplementary requests in writing at least 30 days before the Annual Shareholders' Meeting; this period does not include the day of receipt of the request or the day of the meeting. The Company must therefore receive any supplementary requests by midnight CEST on Friday, April 23, 2010. Supplementary requests received after this time will not be taken into consideration. Supplementary requests are taken into consideration only if the applicant proves that he or she has been the holder of the shares making up the required minimum shareholding in the three months before the day of the Annual Shareholders' Meeting.
Any supplementary requests should be submitted to the following address: MEDION AG, Investor Relations, Am Zehnthof 77, 45307 Essen, Germany, or fax: +49 (0)201 8383 6510.
At the Annual Shareholders' Meeting, every shareholder is entitled to file a counter-motion, along with justification for it, to the proposals of the Management Board and/or Supervisory Board for a particular agenda item. Counter-motions received by the Company at the address below at least 14 days before the meeting (this period does not include the day of receipt of the counter-motion or the day of the meeting), i.e. by midnight CEST on Tuesday, May 11, 2010 at the latest, will be made available without delay, along with the name of the shareholder, justification for the counter-motion, and any responses from the Management, on the internet at http://www.medion.com/agm (see section 126 (1) sentence 3 AktG).
Any counter-motions (including the justification) must be submitted to the following address: MEDION AG, Investor Relations, Am Zehnthof 77, 45307 Essen, Germany, or fax: +49 (0)201 8383 6510. Counter-motions sent to a different address will not be taken into consideration.
Section 126 (2) AktG specifies the cases in which a counter-motion and its justification do not have to be made available on the internet. These are published on the Company's website at http://www.medion.com/agm.
Every shareholder has the right to submit nominations for the election of the auditors (Agenda Item 9).
Nominations from shareholders received by the Company at the address below at least 14 days before the meeting (this period does not include the day of receipt of the nomination or the day of the meeting), i.e. by midnight CEST on Tuesday, May 11, 2010 at the latest, will be made available without delay on the internet at http://www.medion.com/agm. Nominations from shareholders will be published only if they contain the information required by section 127 in conjunction with section 124 (3) sentence 3 and section 125 (1) sentence 5 AktG. In contrast to counter-motions pursuant to section 126 (1) AktG, justification does not need to be provided for nominations. According to section 127 sentence 1 in conjunction with section 126 (2) AktG, there are other cases in which nominations do not have to be made available on the internet. These are published on the Company's website at http://www.medion.com/agm.
Any nominations must be submitted to the following address: MEDION AG, Investor Relations, Am Zehnthof 77, 45307 Essen, Germany, or fax: +49 (0)201 8383 6510. Nominations sent to a different address will not be taken into consideration.
This is without prejudice to the right of all shareholders to make nominations for the election of the auditors (Agenda Item 9) during the Annual Shareholders' Meeting without submitting them to the Company by the deadline before the meeting.
In certain circumstances, specified in section 131 (3) AktG, the Management Board is permitted to refuse to give information. A detailed description of the circumstances in which the Management Board is permitted to refuse to give information is published on the Company's website at http://www.medion.com/agm.
This invitation to the Annual Shareholders' Meeting, the documents to be made available to the Annual Shareholders' Meeting, and other information related to the meeting are available on the Company's website at http://www.medion.com/agm.
Audio transmission of the introductory speeches by the chairman of the Supervisory Board and Management Board will be publicly available on the internet at http://www.medion.com/agm.
Essen, April 2010