MANAGEMENT AND CONTROL

SAF-HOLLAND is incorporated as a Société Anonyme (S.A.) in accordance with the laws of Luxembourg. Management and control are thereby organized differently to other German stock corporations: In Germany corporate law calls for a two-tier model with an Executive Board and Supervisory Board; the management structure of a S.A. is oriented toward the single-tier principle of the Anglo-American board system.

orders via an app or tablet pc as well as the use of QR codes. The spare parts range is conti- nuously expanded. Together with original spare parts we also increasingly offer products with the brands SAUER GERMANY QUALITY PARTS and GoldLine. They are targeted toward markets which are characterized by a large share of trucks and trailers that are in the later stage of their product lifecycle. These include, in particular, Asian and South American countries and regions in the Middle East, as well as East European nations and Next Eleven countries.

Focus of the growth strategy

SAF-HOLLAND pursues medium-term strategies covering a period of five years. The medium- term strategy that is relevant for the reporting period addresses three growth areas where we see particularly promising market opportunities.

__ Growth area 1: trailer market in North America

We want to further expand our market share in the North American trailer market, increasing it to 30%. In line with these efforts, we are now offering a full assortment of integrated axle systems in the region as well as our entire product range of suspension systems. For North America, SAF-HOLLAND has an extremely comprehensive product portfolio for the trailer industry. Our on-site production capacities were considerably expanded and can now be gradually utilized within the framework of the business expansion. Furthermore, we continue to count on the experience gained in Europe in the field of integrated axle production with disc brake technology. In this way, we can benefit from the change of technology that has begun and which has increasingly drawn the attention of North American fleet operators to disc brakes. __ Growth area 2: Aftermarket business

The spare parts business is an important success factor for SAF-HOLLAND. The share of Group sales of the Aftermarket Business Unit will, accordingly, expand to 30%. With this objective in mind, we have added the brands SAUER GERMANY QUALITY PARTS and GoldLine to our spare parts assortment. In addition to the original products, these brands open up sales potential in markets with a high share of trucks and trailers in later product lifecycles. We are also continuing to push the expansion of the global distribution and service network. A key role here is being played by our Parts Distribution Centers (PDC). Including the PDC in Malaysia, which was newly-added in 2014, SAF-HOLLAND currently has more than 11 centers of this kind located in North and South America, Europe, Africa, Asia and Australia.

__ Growth area 3: BRIC countries

With the continued economic development and the expansion of infrastructure, the transport volume in BRIC countries is increasing significantly. To benefit from the associated increase in demand for trucks and trailers, we have strengthened our on-site commitment. The focus is on Brazil and China, where in each country we are present with products that are adjusted to the specific needs of the market. Beyond the truck and trailer sector, we are at the same time in- tensifying our activities in the bus suspension system segment. Corpco, the company that was acquired in 2014 and which is headquartered in Beijing serves as a starting point in this regard and its activities are flanked by our company in India, which is also specialized in bus suspension systems. In the medium-term, we intend to also supply country markets on other continents with suspension systems for buses from Asia.

MANAGEMENT AND CONTROL UNDER LUXEMBOURG AND GERMAN CORPORATE LAW Stock company in accordance with

Luxembourg law (S.A.)

Stock company in accordance with German law (AG) Control

Board of

Directors Supervisory Board

General management

Management

Board Executive Board

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Board of Directors

A key characteristic of the single-level structure of the board system is the Board of Directors. Its most important task is to ensure that the company management acts in the interest of the shareholders. With this intention, the competences of the Board of Directors include both supervisory functions as well as management duties.

The members of the Board of Directors are elected by the Annual General Meeting. Generally, the Board includes both external members the Non-Executive Directors, and operationally active members of the relevant company, the Executive Directors. Similarly to a German Supervisory Board, the body elects a Chairman from among its members and establishes committees.

At SAF-HOLLAND, the Board of Directors currently consists of a total of seven members. Six of these elected representatives, including the Chairman Bernhard Schneider, are Non-Executive Directors. The seventh seat is held by Detlef Borghardt, the Chief Executive Officer (CEO) of SAF-HOLLAND. This means that one member of the Board is directly involved in the daily business of the company.

The Board of Directors of SAF-HOLLAND makes decisions on the basis of a simple majority, in accordance with the Articles of Incorporation. For the exercising of its duties, the Board has formed one committee: the Audit Committee, whose tasks are comparable to the audit com- mittee in a Supervisory Board.

More detailed information on the Board of Directors can be found in the relevant report on page 8. An overview of the mandates of Board members is provided on page 188.

Changes in personnel

At the Annual General Meeting of SAF-HOLLAND S.A. on Thursday, April 24, 2014, shareholders elected Martina Merz as new Member of the Board of Directors. She had already belonged to the Board as an associated member from December 1, 2013 until April 24, 2014. Mechanical Engineer Martina Merz was as of December 31, 2014 the Chief Executive Officer of Chassis Brakes International, a producer of car brakes in Amsterdam, the Netherlands.

Martina Merz‘s mandate runs until the Annual General Meeting which will decide on financial year 2016. The Board of Directors mandates of Bernhard Schneider, Sam Martin and Detlef Borghardt were confirmed by the shareholders in the reporting period and extended until the end of the Annual General Meeting for financial year 2016, the mandate of Anja Kleyboldt was extended until the end of the Annual General Meeting for financial year 2015.

After the Annual General Meeting of April 24, 2014, the Board of Directors met to appoint – as previously – Bernhard Schneider as Chairman of this Committee and Sam Martin as Deputy Chairman.

Management Board

The Board of Directors at SAF-HOLLAND has assigned a Management Board. This body is res- ponsible for and steers the operational management of the company. The members of the Management Board are appointed by the Board of Directors. For the purposes of sustainable value creation, the Board of Directors and the Management Board work closely together. The Management Board at SAF-HOLLAND currently consists of a total of five members, including Detlef Borghardt who as Chief Executive Officer (CEO) is also part of the Board of Directors and Wilfried Trepels as Chief Financial Officer (CFO). The Business Unit Presidents – Alexander Geis, Jack Gisinger and Steffen Schewerda – are directly involved in the Management Board. This ensures the constant flow of information and guarantees short reaction times. More detailed information on the Management Board can be found on page 6.

Annual General Meeting

The shareholders of SAF-HOLLAND exercise their voting rights at the Annual General Meeting. Each share is granted one vote. The Annual General Meeting takes place each year on the fourth Thursday in April and, thus, within the first six months of the financial year. The Board of Directors presents the annual and consolidated financial statements to the shareholders. The Annual General Meeting decides on the annual financial statements of the SAF-HOLLAND S.A., the appropriation of profits and on ratifying the actions of the members of the Board of Directors as well as those of the external auditor, whom they also appoint. They resolve on changes to the Articles of Incorporation and significant entrepreneurial measures. These include, among other things, the election of the members of the Board of Directors and extension of mandates.

The convening of the Annual General Meeting along with the agenda and relevant documen- tation is published on the company‘s website. The significant date for the legitimization of the shareholders is the beginning of the fifteenth day before the Annual General Meeting (record date). Shareholders can exercise their voting rights through an authorized representative of their own choice, a voting rights representative of the company bound by instructions or in writing.

Directors’ Dealings

In accordance with Section 15a of the German Securities Trading Act (WpHG), managers of the company are obligated to disclose their own transactions with company shares or deriva- tive financial instruments when the value of the purchase or sale meets or exceeds a total of EUR 5,000 within a calendar year. This obligation also applies to persons who are closely related to the managers. SAF-HOLLAND publishes these transactions immediately when the company receives the information.

BOARD OF DIRECTORS AS OF DECEMBER 31, 2014

Bernhard Schneider Chairman of Board of Directors

Sam Martin Deputy Chairman of Board of Directors

Detlef Borghardt Member of Board of Directors

Dr. Martin Kleinschmitt Member of Board of Directors

Anja Kleyboldt Member of Board of Directors

Martina Merz Member of Board of Directors

Richard Muzzy Member of Board of Directors

MANAGEMENT BOARD AS OF DECEMBER 31, 2014

Detlef Borghardt Chief Executive Officer (CEO)

Wilfried Trepels Chief Financial Officer (CFO)

Jack Gisinger President Powered Vehicle Systems Business Unit & Group Technical Services

Steffen Schewerda President Trailer Systems Business Unit & Group Operations

Alexander Geis President Aftermarket Business Unit

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We received six notices regarding Directors‘ Dealings in reporting year 2014 which have been placed on our website at http://corporate.safholland.com/en/investoren/investor-news/directors- dealings.html. Current information on Directors‘ Dealings can also be accessed using the same link.

Main features of the remuneration system

For their service in the Board of Directors, the members of the Board receive remuneration. They also receive additional fees for special functions such as chairing the Audit Committee. The CEO of the Management Board receives no remuneration for his work on the Board of Directors.

The performance-related remuneration system for the Management Board is underpinned by short and medium-term performance agreements. In addition, a share-based remuneration component for members of the Management Board was created that is geared towards the medium to long-term success of the company.

Disclosures pursuant to Article 11 (1) and (3) of the Luxembourg Law on Takeovers of May 19, 2006

a) Information regarding Article 11 (1) Law (structure of capital) can be found on page 76 of this Annual Report.

b) The transfer of shares is, pursuant to the company‘s articles of incorporation, not limited. c) In accordance with the requirements of Article 11 (1) c of the Law on Takeovers, we present

the significant shareholders within the meaning of Directive 2004/109/EG (Transparency Directive) as follows:

d) There are no shareholders with special control rights.

e) The control rights of any shares issued in connection with employee share plans are exer- cised directly by the respective employees.

f) The company‘s articles of incorporation do not include limitations on voting rights. g) As of Tuesday, December 31, 2014, there are no agreements among shareholders which are

known to the Company that could result in restrictions on the transfer of shares or voting rights within the meaning of Directive 2004/109/EG (Transparency Directive).

h) The members of the Board of Directors are appointed and may be dismissed by the General Meeting of the Shareholders duly convened with a simple majority of the shareholders present and voting (meaning 50% of the voting rights present at the General Meeting of the Share- holders plus one vote) in accordance with Article 7.1 and 7.4 in connection with Article 17.10 of the Articles of Incorporation as well as Article 67 (2) of the Luxembourg law of August 10, 1915 on commercial enterprises, as amended. There is no quorum requirement. The period in office of a Member of the Board of Directors may not exceed six years, a re-election is, however, possible. Should a Member of the Board of Directors step down, the remaining members can, with a simple majority, elect a replacement member for the period until the next Annual General Meeting. Any vote of the Annual General Meeting on an item relating to an amendment of the Articles of Incorporation requires a quorum of at least 50% of the share capital and a majority of two thirds of the votes rights represented or present at the meeting. Should the quorum requirement not be met in the first Annual General

Meeting, a second Annual General Meeting can be convened for the same purposes in which there is no quorum requirement.

i) The Board of Directors is equipped with wide-ranging powers for the execution of all admin- istrative tasks in the interests of the Company. Information regarding the powers of the Board of Directors to issue, redeem and buy back of shares can be found in the consolidated financial statements in the “Equity” chapter.

j) There are no important agreements to which the company is a party and which take effect, alter or terminate upon a change of control in the company following a takeover bid. k) There are no agreements between the company and members of the Board of Directors or

employees providing for compensation to members of the Board of Directors or employees in the case of a takeover bid if the employment relationship is terminated without valid reason or due to a takeover offer.

Corporate governance and Declaration of compliance

As a company in accordance with Luxembourg corporate law whose shares are listed exclusively in Germany, SAF-HOLLAND is subject to neither the German nor the Luxembourg require- ments regarding corporate governance. However, the members of our Board of Directors and the Management Board consider responsible and transparent corporate governance as an important basis for the success of the company. We therefore voluntarily comply with the recommendations and suggestions of the German Corporate Governance Code. We do, however, face limits when this is not compatible with Luxembourg corporate law or our single-tier management structure. The resulting limitations are reflected in the Declaration of Compliance in accordance with Section 161 of the German Stock Corporation Act, which we submit voluntarily.

In March 2015, the Board of Directors submitted the following Declaration of Compliance which is permanently available on our website at http://corporate.safholland.com/en/investoren/ corporate-governance.html.

Declaration of Compliance with the recommendations of the German Corporate Governance Code

The Board of Directors of SAF-HOLLAND S.A. declares that SAF-HOLLAND has complied and will comply with the recommendations of the Government Commission’s German Corporate Governance Code in its version of May 13, 2013 as published by the Federal Ministry of Justice on June 10, 2013 in the German Federal Gazette, taking into account the above-mentioned particularities of its legal structure, with the following exceptions:

• Clause 3.8 of the Code: The liability insurance policies taken out for the Board of Directors do not provide for a deductible. A deductible does not appear necessary to ensure that members of the Board of Directors act responsibly and solely in the interest of the Company.

• Clauses 3.10, 4.2.5, 5.4.6, 6.3 and 7.1.3 of the Code: The Company’s Annual Report does not contain a separate corporate governance report (no. 3.10). As a result there is no section containing disclosures regarding the remuneration of members of the Board of Directors (no. 4.2.5 and 5.4.6) nor are stock option programs and similar securities-based incentive systems of the Company listed (no. 7.1.3). Consequently, no disclosure will continue to be made of the ownership of shares in our Company or related financial instruments by the members of the Board of Directors if these directly or indirectly exceed 1% of the shares issued by our Company; correspondingly, separate disclosure broken down by members of the Board of Directors will not be made if the entire holdings of all members of the Board of Directors exceeds 1% of the shares issued by our Company (no. 6.3). The expenses associated with creating a separate Corporate Governance Report seem unreasonable. Shareholders‘ need for information is ensured by full compliance with disclosures required by law. Considerations as to why the Company does not comply with individual recommendations of the Code also stem from the reasons for the individual deviations already listed.

Name of the shareholder Shares Percentage of voting rings

FMR LLC, Boston, Massachusetts, USA 2,294,277 5.06%

Deutsche Bank AG, Frankfurt, Germany 2,401,539 5.29%

Ameriprise Financial Inc. /

Threadneedle Asset Management Ltd., London 2,376,212 5.24%

1) 2) 1)

1) _{As of December 31, 2014.} 2) _{Total shares SAF-HOLLAND:}

45,361,122.

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• Clause 4.2.3 (2 and 3) as well as clause 5.4.6 of the Code: With the exception of one member, the members of the Board of Directors do not receive performance-related compensation in addition to fixed compensation. The monetary components of remuneration of individual members of the Board of Directors therefore do not include, other than the aforementioned exception, variable components in addition to the fixed components (no. 4.2.3 (2 and 3)). • Clause 4.2.3 (4) of the Code: Contracts for members of the Board of Directors have a term of

up to three years, and as such, payments in the case of service in the boards ending prema- turely will not exceed three years’ compensation. As a result, the payments may exceed the severance cap of two years’ compensation. This is primarily because existing contracts do not yet contain delimitation clauses. The payments, however, always relate to the remaining term of the employment contract.

• Clause 4.2.4 (5) of the Code: In the case of service in the Board of Directors ending prematurely as a result of a change in control, the contractual obligation of the Company may surpass 150% of the severance cap of two years’ compensation.

• Clause 4.2.3 (6) of the Code: The Chairman of the Board of Directors will not inform the Annual General Meeting about the main features of the remuneration system and any changes to it.

• Clause 5.3.3 of the Code: The Nomination Committee of the Board of Directors was dissolved. Establishing a Nomination Committee no longer seems appropriate due to the Board‘s structure. • Clauses 5.1.2 and 5.4.1 of the Code: The age limit for members of the Board of Directors may

not exceed 68 years at the time of the election. The Company reserves the right to make exceptions. A strict age limit appears unreasonable as it does not allow a sufficient conclusion based on the competence and performance of the member.

• Clause 5.4.1 of the Code: The Board of Directors’ mid-term plans include the appropriate participation of women; it does not, however, consider concrete goals for its composition