Arbonia : Invitation

Invitation to the 36th Annual General Meeting

Dear Shareholders,

We are pleased to invite you to our 36th Annual General Meeting.

Date:

Friday, 21 April 2023, 2.00 p.m. (doors open: 1.30 p.m.)

Venue:

Würth Haus Rorschach, Carmen Würth Saal, Churerstrasse 10, 9400 Rorschach

Catering

Following the Annual General Meeting, we invite the attending shareholders to join us for refreshments.

Arrival by car coming from Chur: exit Rheineck coming from Zurich: exit Kreuzlingen / Arbon / Rorschach then drive towards Rorschach.

Please note that only a limited number of parking spaces is available.

by public transport

Rorschach train station (2 minutes walkway)

Agenda items and voting items proposed by the Board of Directors

1.

Approval of the management report, the financial state- ments and the consolidated financial statements for 2022:

4. Elections

Proposal: The Board of Directors proposes that the manage- ment report, the financial statements and the consolidated financial statements for 2022 be approved.

4.1 Election of the Chairman and the members of the Board of Directors, as well as the members of the Compensation Committee

Justification: The management report, the financial state- ments and the consolidated financial statements were pre- pared in accordance with the applicable accounting standards and the Swiss Code of Obligations. The audit reports were issued without reservations. The Board of Directors is also of the opinion that neither the management report, nor the financial statements, nor the consolidated financial statements contain any elements that require special emphasis with regard to the vote.

• 4.1.1 Proposal: The Board of Directors proposes the election of Alexander von Witzleben as a member of the Board of Directors and as its Chairman and as a member of the Compensation Committee.

• 4.1.2 Proposal: The Board of Directors proposes the election of Peter Barandun as a member of the Board of Directors and as a mem-ber of the Compensation Committee.

• 4.1.3 Proposal: The Board of Directors proposes the election of Peter E. Bodmer as a member of the Board of Directors.

  2. Discharge of the members of the Board of Directors and Group Management

• 4.1.4 Proposal: The Board of Directors proposes the election of Heinz Haller as a member of the Board of Directors and as a member of the Compensation Committee.

  Proposal: The Board of Directors proposes that the members of the Board of Directors and members of Group Management active during the financial year 2022 be granted discharge for the financial year 2022.

• 4.1.5 Proposal: The Board of Directors proposes the election of Markus Oppliger as a member of the Board of Directors.

  Justification: The Board of Directors is not aware of any facts that would make it necessary to refuse the discharge.

• 4.1.6 Proposal: The Board of Directors proposes the election of Michael Pieper as a member of the Board of Directors.

  3.

  Appropriation of the retained earnings and of the capital contribution reserves

• 4.1.7 Proposal: The Board of Directors proposes the election of Thomas Lozser as a member of the Board of Directors.

  3.1

  Proposal: The Board of Directors proposes that the retained earnings as of 31.12.2022, namely:

• 4.1.8 Proposal: The Board of Directors proposes the election of Dr. Carsten Voigtländer as a member of the Board of Directors.

  Justification: The Board of Directors works efficiently and effectively in its current composition. It has a balanced compo- sition with regard to the shareholder base, the experience of its members and other aspects relevant to the composition of the Board of Directors. Therefore, the Board of Directors proposes the re-election of all of its members. Mr. Alexander von Witz-leben leads the Board of Directors in an excellent and prudent manner. The Board of Directors therefore proposes him for re-election. The Board of Directors is further convinced that the Compensation Committee is well-balanced and ideally reflects the views of all stakeholders, with the persons proposed for re-election.

4.2 Election of the independent proxy

Justification: The retained earnings make it possible to con-tinue the company's consistent dividend policy and fulfil the expectations of the shareholders. The Board of Directors there- fore proposes the payment of a dividend of CHF 0.15 per share.

Proposal: The Board of Directors proposes the election of Dr. iur. Roland Keller, LL.M., Attorney at Law, Raggenbass Attor- neys at Law, Bahnhofstrasse 9, 8580 Amriswil, as independent proxy until the conclusion of the next Annual General Meet-ing.

3.2 Proposal: The Board of Directors proposes to distribute CHF 0.15 per registered share as follows from the capital contribution reserves:

Justification: The independent proxy has performed his work in an impeccable manner over several years. The Board of Directors therefore proposes his re-election.

Reserves carried forward from capital contribution CHF 442'787'878

4.3

Election of auditors

- Distribution2 of CHF 0.15 per registered share for the financial year 2022 CHF -10'420'986

Capital contribution reserves CHF 432'366'892

Proposal: The Board of Directors proposes the election of KPMG AG, St. Gallen, as auditors for the financial year 2023 (to audit the annual financial statements, the consolidated financial statements and the compensation report).

Justification: In addition to the dividend payment, the Board of Directors proposes, also in view of the continuity of the pay- ments, a tax-efficient distribution from the capital contribution reserves in the same amount per share as the dividend, i.e. CHF 0.15.

Justification: The auditors have performed their duties im- peccably over several years. The Board of Directors therefore proposes their re-election.

Profit for the year 2022	CHF	47'292'783
+ Profit carried forward	CHF	195'409'264
Retained earnings	CHF	242'702'047
be used as follows:
Dividend1 of CHF 0.15 per registered
share for the financial year 2022	CHF	10'420'986
Balance carried forward to new account	CHF	232'281'061
Retained earnings	CHF	242'702'047

• 1 None of the shares held by Arbonia AG or one of its subsidiaries entitle their holders to receive dividends.

• 2 None of the shares held by Arbonia AG or one of its subsidiaries entitle their holders to receive distributions.

5.

Amendments to the Articles of Association

5.1 Capital band - Art. 3a of the Articles of Association

Proposal 1: The Board of Directors proposes to adapt Art. 3a of the Articles of Association to the attached version excluding the expressions in square brackets designated as alternatives.

Proposal 2 (extension of the lower limit of the capital band): The Board of Directors proposes, in the event that proposal 1 is adopted, that the lower limit of the capital band be extended to -10%, i.e., as indicated as an alternative in square brackets in the attachment.

Justification: Art. 3a of the Articles of Association contained authorised capital. This expires on 22 April 2024 and can no longer be extended under the new company law, which came into force on 1 January 2023. The new company law provides for a capital band instead of an authorised capital. The pro- posed capital band pursuant to amended Article 3a of the Articles of Association authorizes the Board of Directors to increase the share capital during a period until 20 April 2028 by issuing a maximum of 13,800,000 (approximately 20%) fully paid registered shares with a par value of CHF 4.20 each in one or several steps to a maximum of CHF 349,747,620.60 (upper limit of the capital band) and to reduce it in one or several steps to not less than CHF 277,297,620.60 (lower lim- it of the capital band), either by cancelling a maximum of 3,450,000 registered shares at a par value of CHF 4.20 each or by reducing the par value of the registered shares to not less than CHF 3.992. In this respect, the Board of Directors is authorised to increase the share capital by a maximum of 20% and to reduce it by a maximum of 5% within the capital band. The authorization to increase the share capital in the capital band is reduced to the extent that the conditional capital proposed under agenda item 5.2 is used or reserved. Thus, the authorization of the Board of Directors to increase the capital is limited to 20%.

The creation of the capital band proposed by the Board of Directors will give the Board of Directors, as in the past with the authorised capital, an instrument that enables it, among other things, to finance investment projects quickly and as inexpensively as possible by taking advantage of favourable market circumstances. In the case of acquisitions to expand the business, there is also the possibility of allocating part of the risk of the acquisition to the sellers. It also enables various other projects for which a limited number of shares must be available to the Board of Directors at short notice.

This includes the participation of a strategic partner, for exam- ple, in order to benefit from its know-how and to incenti-vize him in the interest of the company. It may also be neces- sary to underpin or support financial instruments with shares issued from the capital band. In certain situations, employee participation cannot be created through financial instruments but derive from the capital band. In all these situations, the exclusion of subscription rights has to be possible. It also has to be possible to exclude subscription rights for regulatory reasons. The exclusion of subscription rights is only possible in respect of 6,900,000 registered shares (approximately 10%) during the term of the capital band. However, this number will be reduced to the extent that the priority subscription rights are excluded in the event that the conditional capital proposed under agenda item 5.2 is utilized. Thus, the exclu- sion of subscription rights and priority subscription rights is limited to 10%.

In addition to the increase of the capital, the proposed capital band offers the Board of Directors the possibility to make lim- ited share buybacks to cancel shares and thereby, if necessary, to make distributions other than dividends. When implemen-ting a capital reduction through the capital band, the Board of Directors will pay strict attention to the equal treatment of shareholders and the careful exercise of rights.

The Board of Directors is of the opinion that the creation of a capital band in accordance with the proposed Art. 3a of the Articles of Association is in the interest of the company. In particular, it creates the flexibility that is necessary and justi-fiable to enable the company to act quickly in extraordinary opportunities and situations.

The proposed alternative of an extended reduction option of up to 10% takes into account the fact that the company is authorised to acquire up to 10% of its own shares in any case. The cancellation of shares in the context of a capital reduction is then only the logical consequence and serves as means for adjustment. It enables the Board of Directors to carry out an- nounced share buybacks on a second line, while ensuring equal treatment of shareholders. This would not be possible for the Board of Directors if it did not have the possibility to reduce the share capital. It would only be possible to a limited extent if the alternative were not approved. Buybacks would then be less targeted and less transparent. Beyond the 5%, they would be associated with the risk that the shares would suddenly have to be sold as an emergency measure to avoid subsequent taxation.

• 5.2 Conditional capital for financing - Art. 3b of the Arti-cles of Association

  Proposal: The Board of Directors proposes to amend Art. 3b of the Articles of Association conform the attached version.

  Justification: The Board of Directors adapts the previous provision on conditional capital for financing via financial instruments, such as convertible bonds and bonds with warrants, to the new company law. This is essentially done by enabling the exercise via electronic means. This will increase the efficiency of the process. The Board of Direc- tors also requests an increase in the scope of possible financial instruments to 20% of the current share capital. However, priority subscription rights can only be restricted or excluded until 10%. Both the 20% and the 10% are linked to the authority to increase the share capital and the authority to exclude priority rights under the capital band. This has the effect of limiting the overall authority of the Board of Directors to the aforementioned 20% where it concerns the authority to create additional shares and 10% where it concerns the authority to do so without granting subscription rights to shareholders. Thus, the Board of Directors is granted extensive powers to choose financing instruments, but these are controlled by the aforemen- tioned upper limits. This combines flexibility for the com-pany with protection for the shareholders in an ideal way.

• 5.3 Conditional capital for participation plans - Art. 3c of the Articles of Association

  Proposal: The Board of Directors proposes to include Art. 3c of the Articles of Association conform the attached version.

  Justification: The Board of Directors proposes to make avail- able approximately 3% of conditional capital for the participa- tion of employees and members of the Board of Directors. The company did not have a provision to this effect and it has therefore been difficult for it to implement its share participa- tion plan, which serves as an incentive scheme, not the least because market purchases are difficult for the company to make. The proposed conditional capital therefore safeguards the company's current compensation model and makes it easier for the company to hire suitable employees and moti- vate them, especially in an environment where competition for talent is very tight. The conditional capital for participation plans is linked to Art. 3a para. 4 letter k of the Articles of Association, so that it is ensured that the maximum number of shares available for employee participation does not exceed 2,100,000 shares or approximately 3%.

• 5.4 Form of notices to shareholders - Art. 10 par. 2 and Art. 33 of the Articles of Association

  Proposal: The Board of Directors proposes to add an addi- tional sentence to Art. 10 para. 2 of the Articles of Association and to reword Art. 33 of the Articles of Association conform the attached version.

  Justification: The proposed provisions make it possible to notify shareholders by electronic means, namely e-mail. How- ever, this possibility only exists if the shareholder has his/her e-mail address entered in the share register. In this respect, the shareholder can decide for himself/herself whether a com- munication to him/her can be made by e-mail or not. The pos- sibility of electronic communication increases efficiency and reduces costs for the company.

• 5.5 Purely virtual General Meeting - Art. 10 para. 6 of the Articles of Association

  Proposal: The Board of Directors proposes to insert a new Art. 10 para. 6 into the Articles of Association as indicated in the attached version.

  Justification: The proposed provision makes it possible to hold General Meetings purely virtually. This can reduce costs and, above all, make it possible to convene extraordinary gen- eral meetings at shorter notice, because there is no need to reserve a location way in advance. However, the Board of Directors will only use this option once it has been demon- strated that such General Meetings can be held without any problems. The Board of Directors will also be very cautious in its use of virtual general meetings, as it acknowledges the value of physical general meetings, especially where it concerns the annual general meeting.

• 5.6 Mandates outside the Group - Art. 29 of the Articles of Association

  Proposal: The Board of Directors proposes to amend the ex-isting Art. 29 of the Articles of Association conform the at-tached version.

  Justification: The Board of Directors proposes the adjust- ment of the number of mandates conform the attached articles of association. It has become apparent that this amendment in the number of mandates is necessary so as to enable a competent composition of the Board of Directors. In addition, the Board of Directors proposes to adapt the description of the mandates in accordance with the revised law, which is no longer based on the entry in the commercial register, but rather on whether the company has an economic purpose.

• 5.7 Formal adjustments due to the new company law and clean-up corrections

  Proposal: The Board of Directors proposes that the following articles of the Articles of Association be adapted to the attached version, with the following justifications:

  • · Art. 4 para. 1: Clarification that uncertificated securities are not ledger-based securities.

  • · Art. 5 paras. 1 to 3: Adaptation to the revised law and editorial change from share register to share ledger.

  • · Art. 8: Adaptation to the revised law.

  • · Art. 9 para. 3 and 4: Adaptation to the revised law conform the version designated as ALTERNATIVE 1.

• · Art. 10 paras. 3 to 5: Adaptation to the revised law.

• · Art. 11 paras. 4 and 5 (newly inserted): Adaptation to the revised law.

• · Art. 12 para. 5: Adaption to the revised law.

• · Art. 13: Adaptation to the revised law.

• · Art. 16: Adaptation to the revised law.

• · Art. 18 paras. 2 and 3 (newly inserted or replacing): Adaptation to the revised law.

• · Art. 22 para. 4 (split off from para. 3 and amending): Adaptation to the revised law.

• · Art. 28: Adaptation to the revised law.

• · Art. 30 para. 2: Adaption to the revised law.

Justification: The provisions that came into force with the new company law have the consequence that the current Articles of Association of the company partly are inconsistent with the new law or are incomplete. The Board of Directors is of the opinion that the Articles of Association should be adap-ted to the new law in order to avoid contradictions to the current law and legal uncertainties. Furthermore, the Articles of Association should also be adjusted from an editorial point of view on this occasion. The Board of Directors is therefore of the opinion that both the adaptation of the Articles of Association to the new company law and the implementation of editorial corrections and clarifications are in the interest of the company.

5.8 Change in shareholdings resp. voting rights for agenda items or proposals - Art. 9 para. 4 of the Articles of Association

Proposal: The Board of Directors proposes, in the event that the proposal under agenda item 5.7 is adopted, that in Art. 9 para. 4, ALTERNATIVE 1 as stated in the attachment to be replaced by ALTERNATIVE 2, i.e. that the right to place items on the agenda or to propose voting items is granted to share- holders holding at least 0.5% of the share capital or voting rights and not representing a nominal value of shares in the amount of CHF 1,000,000.

Justification: The new law is based on a percentage of 0.5%, which means that the right to add items to the agenda and to propose voting items is adapted to changes in capital in a flexi- ble manner. This is not the case under the current solution of CHF 1,000,000 that stems from the former laws in this respect. This amount is currently below the 0.5%. However, this can be changed rapidly, e.g. in the case of a reduction of the capital for the purpose of tax-efficient distribution. The CHF 1,000,000 is below the 0.5% threshold due to the capital being increased substantially in 2015 and 2016. The Board of Directors is of the opinion that an adjustment to the 0.5% stipulated in the law would take due and long-term account of the interests of the shareholders to include justified concerns while avoiding an excessive amount of requests.