Tesmec S p A : Report of the BoD on the agenda items for the extraordinary session of the Shareholders' meeting on April 18th, 2024

TESMEC S.P.A.

ORDINARY AND EXTRAORDINARY SHAREHOLDERS' MEETING OF 18 APRIL 2024

ON SINGLE CALL

REPORT OF THE BOARD OF DIRECTORS

ON THE ITEMS ON THE AGENDA OF THE EXTRAORDINARY PART

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Board of Directors' Explanatory Report of Tesmec S.p.A., written pursuant to Articles 125-ter of Legislative Decree no. 58 of 24 February 1998, as subsequently integrated and amended ("TUF"), 72 and 84-ter of the Regulation adopted by Consob Resolution no. 11971 of 14 May 1999, as subsequently integrated and amended ("Issuers' Regulation").

Dear Shareholders,

this report illustrates the proposals submitted for your approval by the Board of Directors of Tesmec S.p.A. (hereinafter "Tesmec" or the "Company") in relation to the items on the agenda of the Extraordinary Shareholders' Meeting to be held on April 18, 2024, at 10:30 a.m. at Tesmec's registered office in Grassobbio (BG), Via Zanica 17/O 24050

1. Amendments to Article 5 and Article 9 of the Company's Bylaws in order to introduce the increased voting right pursuant to Article 127-quinquies of Legislative Decree no. 58/1998; related and consequent resolutions.

1.1. Reasons and aims of the proposal

Article 127-quinquies of the TUF introduces the possibility for companies with shares listed on a regulated market to provide, by means of a special amendment to the Bylaws, for the attribution of an increased vote 'up to a maximum of two votes, for each share' to shareholders who maintain their shareholding for an uninterrupted period of not less than twenty-four months from the date of registration on a special list kept by the issuer.

This would primarily enable listed companies to equip themselves with an incentive tool for shareholders who have chosen to prefer a long-term investment in the listed company, also bringing benefits in terms of (i) countering the phenomena of share volatility, often linked to the short-term choices of financial investors; and (ii) stability of the Group's assets.

In light of the above, the Board of Directors proposes to you the introduction of an increase in voting rights, pursuant to Article 127-quinquies of the TUF, and, therefore, to amend the Company's Bylaws in the terms outlined below.

1.2. Majority Coefficient and Vesting Period

Art. 127-quinquies of the TUF allows companies to determine in their Bylaws the extent of the increased voting right (up to a maximum of two votes per share) and the minimum period of ownership of the shares eligible to determine the acquisition of the increased voting right (provided that it is not less than 24 months from the date of registration in a special list kept by the Company).

With regard to the amount of the increased voting right, the Board of Directors deems appropriate to make full use of the option granted by Article 127-quinquies of the TUF and to set the maximum limit of the increase at two votes per share.

The Board of Directors believes, in fact, that a majority coefficient of two votes is appropriate to ensure that the increase rewards adequately shareholders who wish to participate, and that a vesting period of 24 months is coherent with the objective of ensuring stable and long-lasting investments in the Company.

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1.3. Special list: registration and waiver

Pursuant to Article 127-quinquies, paragraph 2, of the TUF, the entitlement to benefit from the increased voting right requires the registration of shareholders who intend to benefit from such right in a special list, the content of which is governed by Article 143-quater of the Consob Regulation on Issuers ("Special List"). Entry in the Special List occurs following an application by the interested party accompanied by a communication from the intermediary on whose accounts the shares are registered, certifying the ownership of such shares by the requesting shareholder. This is done in order to start the period of time necessary to accrue the right to the vote increase. The request may also be made with respect to only a part (and not all) of the shares held by the requesting party.

This list does not constitute a new company register, but is complementary to the shareholders' register and, therefore, it is subject to the rules of publicity applicable to the shareholders' register, including the right of inspection by shareholders pursuant to Article 2422 of the Civil Code.

Accordingly, the Board of Directors proposes to set up such Special List and to grant the Board of Directors the mandate and all related powers to (i) adopt the regulation for the increased voting right (the "Regulation") aimed mainly at determining the procedures for the registration, maintenance and updating of the Special List, in compliance with applicable laws and regulations and, in particular, with the provisions of Article 143-quater of the Consob Regulation on Issuers; and to (ii) appoint the person in charge of maintaining the Special List.

The Board of Directors also proposes to specify in the Company's Bylaws:

1. Shareholders who intend to take advantage of the increased voting right must apply to be registered in the Special List supporting their application with: (a) an indication of the number of shares for which registration is required (which may also be limited to a part of the shares held); (b) a communication from the intermediary with whom the shares are deposited attesting to the ownership of the shares by the applicant; and (c) any other documentation required by the regulations in force. the request must specify whether the entity is subject to direct or indirect control by third parties and the identification data of the possible controlling party;
2. following registration in the Special List, the registered party may, at any time, request in writing to the Company to be removed from the Special List for all or part of the registered shares, with the consequent loss of entitlement to the benefit of the increased voting right and, in any case, irrevocably waive, for all or part of the shares, the increased voting right already accrued, by means of a written notice to the Company; in the event of resignation, the increased voting rights may be reacquired upon re-registration in the Special List and full expiry of the period of continuous membership of not less than 24 (twenty-four) months;
3. it being understood that the increased voting right accrues automatically after twenty-four months from the date of entry in the Special List, the acquisition of the benefit of the increased voting right is ascertained on the earlier of the following dates: (a) the fifth trading day of the calendar month following the month in which the conditions required by the Bylaws for obtaining the increased voting right have been fulfilled; or (b) the so-calledrecord date of any shareholders' meeting, determined in accordance with applicable law, following the date on which the conditions required by the Bylaws for obtaining the increased

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voting right have been fulfilled;

1. the updates of the Special List are made by the fifth trading day following the end of each calendar month and, in any case, by the so-called record date provided for by the regulations in force in relation to the right to participate and vote in shareholders' meetings, so as to be able to fulfil the obligations to notify Consob and the public of the total amount of voting rights, in accordance with the procedures and timing set forth in Article 85-bis, paragraph 4- bis of the Consob 'Regulations on Issuers

1.4. Legitimising right in rem and possible transfer

The Board of Directors proposes that it should be stated in the Bylaws that, for the purpose of the attribution of the increased voting right, the uninterrupted ownership referred to in Article 127- quinquies of the TUF, must be interpreted as referring to the shares whose voting rights have been held by the same person for the uninterrupted period of 24 months from the date of registration in the Special List by virtue of one of the following legitimising rights in rem:

a. full ownership of the share with voting right;

b. the bare ownership of the share with voting right;

c. usufruct of the share with voting right.

Pursuant to Article 127-quinquies, paragraph 3, of the TUF, without prejudice to what is stated in the following paragraph, the benefit of the increased voting rights ceases to apply:

1. in the event of a transfer of the share for valuable consideration or free of charge, it being understood that "transfer" means any transaction involving the transfer of the share, as well as the establishment of a pledge, usufruct or other encumbrance on the share when such establishment entails the loss of the shareholder's voting right;
2. in the event of the direct or indirect disposal of controlling interests in companies or entities holding shares with voting rights in excess of the threshold provided for in Article 120, paragraph 2, of the TUF.

The occurrence of any of the aforementioned cases during the 24 (twenty-four) month period following registration in the Special List determines the removal from the Special List and inhibits the accrual of the benefit, without prejudice to the effects of a new registration, if the conditions are met.

The Board of Directors proposes to state in the Bylaws that the following do not entail the loss of the increased voting right or the restarting of the computation of the uninterrupted period of ownership necessary for the attribution of the benefit:

1. succession due to death of the person registered in the Special List
2. the establishment, by the person registered in the Special List, of a pledge or usufruct or other lien on the shares (as long as the voting right remains with the shareholder);
3. the merger or demerger of the entity registered in the Special List;

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1. a gratuitous transfer in favour of an entity such as, by way of example, a trust, estate fund or foundation of which the transferor himself or his heirs are beneficiaries;
2. where the legitimising right in rem is held through a trust or trust company, the change of trustee or trust company and the beneficiaries or trustees do not change.

1.5. Preservation and extenion of increased voting rights

The Board of Directors, as allowed by Article 127-quinquies of the TUF, deems appropriate to provide within the Bylaws the extension of the benefit of the increased voting right in the following cases:

1. proportionally to the newly issued shares in the event of a capital increase, whether free or with new contributions;
2. to the shares allotted in exchange for those to which the increased voting right is attributed, in the event of merger or demerger if so provided by the relevant merger or demerger plan;
3. proportionally to the newly issued shares in the event of the exercise of the conversion right attached to convertible bonds and other debt securities, however structured, which so provide in their regulations.

In relation to the aforementioned cases, the Bylaws should specify that the new shares acquire the increased voting rights:

1. for newly issued shares to which the holder is entitled in relation to shares for which the increased voting right has already accrued, from the time of their registration in the Special List, without the need for a further uninterrupted holding period;
2. for newly issued shares to which the holder is entitled in respect of shares for which the increased voting right has not already accrued (but is in the process of accruing), from the time of completion of the holding period calculated from the date of original registration in the Special List.

1.6. Calculation of Shareholders' meeting quorum

Pursuant to Article 127-quinquies, paragraph 8, of the TUF., the Board of Directors intends to propose that the increased voting right be counted for the purpose of calculating the quorum, constitutive and deliberative, of shareholders' meetings that refer to percentages of the share capital, it being understood that the increase has no effect on rights, other than voting rights, due by virtue of the possession of certain percentages of the share capital.

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1.7. Effects that the introduction of increased voting would have on the Company's ownership structure.

It should be noted, also for the purposes of Recommendation No. 2 of the Corporate Governance Code, that as of the date of this Report, the shareholders holding a significant stake in the Company's share capital are as follows (1):

• TTC S.r.l. which holds, directly and through its subsidiary FI.IND. S.p.A. and its subsidiaries RX S.r.l. and MTS - Officine Meccaniche di Precisione S.p.A., a 47.813% stake in the share capital; and
• Palladio Holding S.p.A., which holds, directly and through Fenice S.r.l., a 4.78% stake in the share capital.

In the event that the above-mentioned relevant shareholders were to request the increase of their voting rights with respect to their entire shareholding and no other shareholders were to request the increase of their voting rights, at the end of the 24 uninterrupted period of ownership, starting from the date of their registration in the Special List, TTC S.r.l. would retain control over the Company pursuant to Articles 2359 of the Civil Code and 93 of the TUF.

In light of the above, it is not expected that the introduction of the increased voting rights will have any significant effects on the Company's ownership structure and future strategies.

1.8. Decision-makingprocess followed in the formulation of proposals for statutory amendments

Also for the purposes of Recommendation No. 2 of the Corporate Governance Code, it should be noted that the proposal for amendments to the Bylaws referred to in this Report was approved by the Board of Directors on 8 march 2024, as it was a matter outside the competence of the internal committees. The resolution was submitted to the Board following an induction activity with information material prepared for this purpose, and was adopted unanimously.

The reasons for this positive assessment are expressed in the preceding paragraphs of this Report.

1.9. Comparison of statutory clauses

Text in force	Proposed text
Art. 5	Art. 5

1. The share capital shall total EUR UNCHANGED 15.702.162,00 and shall be divided into 606.460.200 shares, with no indication of their

nominal value.

1 The data concerning the percentage of Tesmec S.p.A.'s share capital was taken from the communications received by the Company pursuant to Article 120 TUF

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2. The shares shall be registered and indivisible		2. The shares shall be registered and
and may be freely transferred and shall entitle		indivisible and may be freely transferred and
their owners to equal rights.		shall entitle their owners to equal rights,
		except as provided in the following Art. 9.
3. If and as long as the shares are traded on a		UNCHANGED
regulated market, the option right may be
excluded, in the event of share capital increase,
within the limit of ten percent of the previously
existing capital pursuant to Article 2441 (4) of
the Italian Civil Code.
4. The shares shall be issued in paperless form		UNCHANGED
and managed by the centralised system for
financial instruments traded in regulated
markets.
5. Pursuant to Article 2349 of the Italian Civil		UNCHANGED
Code the Company may distribute profits,
according to the procedures permitted by law.
6. Shareholders who did not contribute to		UNCHANGED
approval of resolutions concerning the
introduction, amendment or removal of
restrictions on share circulation shall not be
entitled to withdraw.
Art. 9		Art. 9
1. Each share shall entitle to one vote.		UNCHANGED
		2. Notwithstanding the foregoing, each share is
		entitled to two votes per share where both of
		the following conditions are met: (i) the share
		has belonged to the same person by virtue of a
		right in rem legitimating the exercise of voting
		rights (full ownership with voting rights or bare
		ownership with voting rights or usufruct with
		voting rights) for an uninterrupted period of at
		least twenty-four months; (ii) the recurrence of
		the condition under iii) is attested by the
		uninterrupted registration for the Period in the
		special list set up by the Company in
		accordance with this Article 9 of the Articles of
		Association (the "Special List").
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3. Notwithstanding the fact that the increased voting right accrues automatically upon the expiry of the twenty fourth month from the date of registration in the Special List, the acquisition of the benefit of the increased voting right will be ascertained on the earlier of the following dates: (i) The fifth trading day of the calendar month following the month in which the conditions required by the Bylaws for the increased voting right have been fulfilled; or

1. the so-called record date of any
   shareholders' meeting, determined in accordance with applicable laws and regulations, subsequent to the date on which the conditions required by the Bylaws for the increase in voting right have been fulfilled.

. The Company establishes and maintains, in accordance with the forms and contents provided for by the applicable laws and regulations, the Special List to which shareholders who intend to benefit from the increased voting right must register. In order to obtain registration in the Special List, the person entitled pursuant to this Article must submit a specific request, attaching a communication certifying share ownership - which may also concern only part of the shares owned by the owner - issued by the intermediary with whom the shares are deposited pursuant to applicable regulations.

The increase voting right may also be requested for only part of the shares held by the shareholder. The applicant may at any time, by means of a special request, indicate additional shares for which it requests registration in the Special List.

In the case of entities other than natural persons, the request must specify whether the entity is subject to direct or indirect control by third parties and the identification data of the controlling entity.

The Special List will be updated by the Company by the fifth trading day following the end of each calendar month and, in any case, by the so-called record date provided for by the

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regulations in force in relation to the right to attend and vote in shareholders' meetings. The person registered in the Special List must notify and consent to the intermediary notifying the Company of any circumstance and event that results in the loss of the prerequisites for the increase of the voting right or affects the ownership of the legitimising right in rem and/or the relative voting right by the end of the month in which such circumstance occurs and in any case by the trading day preceding the so-called record date.

The provisions relating to the register of shareholders set forth in Article 2422 of the Italian Civil Code and any other relevant provisions in force apply to the Special List, mutatis mutandis also with regard to the publicity of information and the right of inspection of members.

5. The Company shall proceed to the removal from the Special List in the following cases:

(i) waiver, total or partial, by the interested party of the benefit of the increased vote. The right of the person entitled to the increased voting right to irrevocably renounce the increased voting right at any time, with respect to all or part of the shares for which registration in the Special List has been effected, by means of a written notice to be sent to the Company, is always recognised, it being understood that the increased voting right may be reacquired with respect to the shares for which it was renounced with a new registration in the Special List and the full expiry of the uninterrupted Period of ownership of not less than 24 months;

(ii) communication by the interested party or intermediary proving that the conditions for the increase of the voting right have ceased to exist or that the ownership of the legitimising right in rem and/or the related voting right has been lost;

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1. ex officio, if the Company becomes aware of the occurrence of facts entailing the loss of the prerequisites for the increase of the voting right or the loss of the ownership of the legitimising right in rem and/or of the relevant voting right.

6. Notwithstanding the provisions of the following paragraph, the increased voting right shall cease to apply:

a) in the event of a transfer for consideration or free of charge of the share, it being understood that "transfer" shall mean any transaction involving the transfer of the share, as well as the constitution of a pledge, usufruct or other encumbrance on the share when such constitution entails the loss of the shareholder's voting right. The constitution of a pledge, usufruct or other encumbrance and the transfer of bare ownership with retention of the usufruct shall not result in the loss of the shareholder's entitlement to the increased voting right if the voting right is retained by the previous holder. If, following the establishment of the aforesaid encumbrances with loss of voting rights by the shareholder, subsequently the voting rights for the shares subject to the encumbrances are again attributed to the shareholder himself, the increased voting right may be acquired again for such shares (also in part) with a new entry in the Special List and the full expiry of the uninterrupted Period of ownership of not less than 24 months.

b) in the event of the direct or indirect disposal of controlling interests in companies or entities that hold shares with increased voting right in excess of the threshold provided for pro tempore by Article 120(2) of Legislative Decree No. 58 of 24 February 1998, or by subsequent regulations replacing it in whole or in part.

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