Explanatory Report of the Executive Board
On the Disclosures Pursuant to Section 289, Subsections 4, and Section 315, Subsection 4, of the German Commercial Code (HGB)
Composition of the Issued Capital | Limitations to Voting Rights
Sartorius AG’s capital stock totals €18,720,000. It comprises 18,720,000 no par value individual bearer shares, 9,360,000 of which are ordinary shares and 9,360,000 of which are non-voting preference shares. Each share certificate represents a calculated proportion of €1 of the issued capital.
The rights and obligations associated with these shares are governed by the provisions of the German Stock Corporation Law (Aktiengesetz, abbreviated “AktG”). According to the company’s Articles of Association, preference shares are entitled to a dividend payment that is higher than that for ordinary shares, by an amount equal to 2% of each preference share’s calculated proportion of the issued capital (i.e., two euro cents per share). In any case, the dividend entitlement shall be at least 4% of each preference share’s calculated proportion of the issued capital (i.e., four euro cents per share). Apart from the cases provided for in Sections 140 and 141 of the German Stock Corporation Law (AktG), preference shares are non-voting. However, they do grant all other rights to which every shareholder is entitled.
The company holds 806,944 ordinary shares and 815,983 preference shares; these do not entitle the company to any membership rights.
Direct or Indirect Equity Ownership Exceeding 10.0% of Voting Rights
The community of heirs consisting of Mrs. U. Baro, resident of Munich, Germany; Mrs. C. Franken, resident of Bovenden, Germany; Mr. A. Franken, resident of Riemerling, Germany; Mr. K.-C. Franken, resident of Goettingen, Germany; and Mrs. K. Sartorius-Herbst, resident of Northeim, Germany, holds a voting percentage of approximately 50.1% in Sartorius AG (4,688,540 votes; source: according to the list of attendees at the Annual Shareholders’ Meeting on April 9, 2015). The decedent Horst Sartorius ordered that his will be executed. The appointed executor of the will is Prof. Dr. Dres. h.c. Arnold Picot, resident of Gauting, Germany, who exercises the specified voting rights at his own discretion as defined by Section 22, Subsection 1, Sentence 1, No. 6, of the German Securities Trading Act (Wertpapierhandelsgesetz, abbreviated “WpHG”).
According to a mandatory announcement dated April 1, 2011, Bio-Rad Laboratories Inc., 1000 Alfred Nobel Drive, Hercules, California 94547, USA, to which the voting rights of Bio-Rad Laboratories GmbH, Heidemannstr. 164, 80939 Munich, Germany, are ascribed according to Section 22, Subsection 1, Sentence 1, No. 1, of the German Securities Trading Act (WpHG), holds 30.01% (2,809,299 votes) of the voting rights in Sartorius AG.
Appointment and Dismissal of Executive Board Members | Amendment to the Articles of Association
Executive Board members of Sartorius AG are nominated and | or appointed as well as dismissed in accordance with Sections 84 et seq. of the German Stock Corporation Law (AktG) and Sections 31 and 33 of the German Codetermination Law (Mitbestimmungsgesetz, abbreviated “MitBestG”). Amendments to Sartorius AG’s Articles of Association are regulated by Sections 133 and 179 of the German Stock Corporation Law (AktG).
Powers of the Executive Board to Issue Shares
Subject to approval by the Supervisory Board, the Executive Board is authorized to sell treasury shares held by the corporation, including selling them through channels other than the stock exchange or by tendering an offer to all shareholders in proportion to their participation in the company, provided that these shares are transferred to third parties as contribution in kind, particularly in the (indirect) acquisition of companies, in return. Under these circumstances, the preemptive rights of the shareholders are excluded.
Material Agreements with Clauses Regulating the Event of a Change of Control
Sartorius AG has two material agreements containing clauses regulating the possible event of a change of control. One is a syndicated loan agreement concluded in 2014 for a current volume of €400 million and a term until December 2020, and the other is a note loan “Schuldscheindarlehen” placed in 2012 with a volume of €100 million and for a maturity term of five to ten years. The respective clauses that are customary for the market give the participating lenders the option of extraordinary termination in the event of a change of control.