Informations about the Annual general meeting /\\/ Cewe - sim...

Informations about the Annual general meeting /\/ CeWe - simply beau... http://www.cewecolor.com/index.php?id=100&L=1
Agenda item 5 includes a proposal that the Managing Board be authorized within the meaning of section 71 (1) no. 8 of the
German Stock Corporation Law (AktG) to acquire up to 600,000 no-par value bearer shares up to December 1, 2007,
constituting almost 10.0% of the current share capital.
This authorization aims to give the company the opportunity to directly or indirectly acquire treasury shares via dependent
group companies within the meaning of section 17 of the German Stock Corporation Law (AktG) or by third parties for the
company’s account or for the account of dependent companies within the meaning of section 17 of the German Stock
Corporation Law (AktG). The company can re-sell these shares either via the stock exchange or via an offer made to all
shareholders. In the first case, the shareholders’ subscription rights remain in force economically via the opportunity to buy
shares on the stock market. In the second case they also remain in force legally.
In addition, it should also be possible to use treasury shares for other purposes that make it legally necessary to exclude
subscription rights:
On Stock Option Program II:
The General Meeting of the company authorized the company, for example on June 30, 2005, to acquire treasury shares of the
company to serve Stock Option Plan II.
Granting stock options to executives whose decisions have a major influence on the company’s growth and success is standard
practice – both internationally and in Germany. The Managing and Supervisory Boards continue to believe that this is a suitable
instrument for securing the company’s future success and thus to sustainably increase the enterprise value, which is generally
expressed in increasing share prices.
As a result, the company wishes to continue to be able to grant stock options to a close group of around 80 executives so that
these executives are authorized to acquire shares of the company. As a result, options for 199,500 shares from Stock Option
Plan II were issued in fiscal year 2005. This motivates executives to increase the enterprise value via excellent performance and
thus to impact the performance of the share price. This type of performance incentive is in the interests of both the company
and the shareholders.
The shares to be supplied by the company as a result of the options being exercised are to be acquired via the stock market if
these are not held by the company. The requested approval for sale to our executives is equivalent to the exclusion of
shareholders’ statutory subscription rights and is required in order to be able to offer shares to this group of people.
The executives can only exercise the acquired options after a two-year lock-up period and only if the closing auction prices of
the shares in Xetra trading on Deutsche Börse AG exceed on average at least 115.0 % of the underlying price (performance
target) on ten successive stock market trading days during the term of the options. The underlying price for one share to be set
in each case corresponds to the current ten-day average of the stock market price for shares of the company on the date the
options are issued. The fact that the underlying price is geared to the stock market price, i.e., the share price which exists when
the options are issued, and the inclusion of a performance target, means that the executives are motivated to work towards a
long-term increase in the company’s value. In line with increasing the loyalty of executives to the CeWe Color Group, the
options may only be exercised as long as the option participant is in an un-terminated employment relationship with CeWe
Color Group. Exceptions may only be made in cases of death, professional disability and retirement and if the affected
subsidiary exits the group of companies.
The exact group of executives authorized to participate, the scope of the respective rights to acquire options and the features of
the options as part of the authorization requested are to be decided by the Managing Board and, if the Managing Board is
concerned, by the Supervisory Board.
Further exclusions of subscription rights:
Shareholders’ subscription rights are also to be excluded to the extent that the Managing Board offers or grants the reacquired
shares with the approval of the Supervisory Board as part of corporate mergers or during the acquisition of companies, parts of
companies or participating interests in companies, including increasing existing shareholdings.
Practical experience shows that the acquisition of shares of the acquiring company is often demanded as compensation for
attractive acquisition targets. For this reason, the company must be given the opportunity to have treasury shares available in
order to be able to offer these as compensation as part of corporate mergers or for the acquisition of companies, parts of
companies or participating interests in companies. These decisions typically have to be taken with a very tight timescale. The
proposed authorization should give the company the necessary latitude required to be able to flexibly use opportunities for
acquisitions and corporate mergers that present themselves, without having to previously implement a capital increase by
calling a General Meeting. For this purpose, it is also necessary for the Managing Board to be authorized to grant treasury
shares excluding shareholders’ subscription rights with the approval of the Supervisory Board.
Currently there are no concrete acquisition plans. The Managing Board will check in each individual case to ascertain if it
should use the requested authorization to use treasury shares excluding subscription rights, if opportunities for corporate
mergers or for the acquisition of companies, parts of companies or participating interests in companies should become concrete.
It will only use the authorization if it is convinced that the acquisition against transfer of shares of the company is in the
company’s best interests. The Supervisory Board will only issue the required approval to use this authorization to use treasury
shares while excluding subscription rights if it is also convinced of this fact. The Managing Board will also report on the details
of the approach it took to the General Meeting following the use of this authorization.
In addition, the Managing Board is also to be authorized within the meaning of section 71 (1) no. 8 sentence 5 of the German
Stock Corporation Law (AktG) in conjunction with section 186 (3) sentence 4 of the German Stock Corporation Law (AktG) to
sell re-acquired shares of the company with the proportion of the share capital due to these shares of a maximum of 10.0% with
the approval of the Supervisory Board, excluding shareholders’ subscription rights, in manners other than via the stock market
or via an offer to all shareholders against cash payment at a price which is not significantly lower than the stock market price of
shares of the company with the same rights on the date of the sale.
The opportunity to sell the shares in a manner other than via the stock market or via an offer to all shareholders is in the
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