ACCELL GROUP ANNUAL REPORT 2019 | 6.3 Compliance with the Code

6.3
Compliance with the Code

At the end of 2019, we made an assessment of Accell Group's compliance with the Code. Actions were taken to optimise and safeguard the compliance with the best practices, by updating the charters, policies and organising an annual calendar with topics for Board of Management and Supervisory Board meetings. This has resulted that Accell Group fully applies and complies with the principles and best practices of the Code (insofar as these are applicable to the Company) except for the following one exception:

Best practice provisions 2.1.5 and 2.1.6

These best practice provisions describe the existence of a diversity policy, as well as accountability on diversity. Although Accell Group acknowledges the benefits of diversity and made steps in this respect in 2018 with fulfilling the vacancies in the Board of Management and Supervisory Board, the effects are still limited. Therefore early 2020 an internal taskforce was formed and a diversity policy has been approved by the Board of Management. The taskforce has been asked to prepare a diversity program for Accell Group to be launched ultimately mid-2020.

Decree article 10 of the Takeover Directive

The following is an overview of the information required under article 1 of the Decree on article 10 of the Takeover Directive:

The Company’s authorised share capital amounts to € 1,200,000 divided into 120,000,000 shares with a nominal value of € 0.01 each, divided into 55,000,000 ordinary shares, 5,000,000 cumulative preference shares F, and 60,000,000 cumulative preference shares B. As of 5 March 2020, the issued and paid-up capital of Accell Group amounted to € 268,027.51 divided into 26,802,751 ordinary shares with a nominal value of € 0.01 each. Only ordinary shares have been issued. The ordinary shares are traded on the Euronext Amsterdam stock exchange.

The following rights attached to the shares into which the Company’s capital is divided follow from the articles of association and the Dutch Civil Code. There is no difference in the voting rights attached to an ordinary share, a cumulative preference share F and a cumulative preference share B. As all shares have the same nominal value (€ 0.01), every issued and outstanding share of a class gives the right to cast one (1) vote in the General Meeting and to cast one (1) vote in the meeting of holders of that specific class. Ordinary shares and cumulative preference shares F may only be issued against payment in full. Preference shares B may be issued against partial payment. Holders of ordinary shares and holders of cumulative preference shares F do have a pre-emptive right in respect of new ordinary shares and new cumulative preference shares F to be issued, unless restricted or excluded pursuant to a resolution of the competent corporate body. Holders of ordinary shares and holders of cumulative preference shares F do not have a pre-emptive right in respect of new cumulative preference shares B to be issued. Holders of preference shares B do not have a pre-emptive right in respect of shares to be issued. The relevant financial rights attached to the shares concerns the application of the profits in relation to the classes of cumulative preference shares (if issued). These rights follow from article 25 of the articles of association.

A brief summary of that article will be given:

From the profit realised in any financial year (and if there are not enough profits as far as possible from the distributable reserves), an amount will first be distributed on the cumulative preference shares B. That amount will be 3.5% of the average of the refinancing interest determined by the European Central Bank. A dividend (and if there are not enough profits, as much as possible from the distributable reserves) will be distributed on the cumulative preference shares F of a certain series, related to the arithmetic average of the effective return on government loans. Subsequently, the Board of Management shall determine with the approval of the Supervisory Board what part of the profit will be added to the reserves. The part of the profit that remains thereafter is at the disposal of the General Meeting, subject to the provision that no further dividends have to be distributed on the cumulative preference shares B and F.
The Company has no statutory or contractual limitation on the transfer of shares, with the exception of the statutory blocking provision with respect to the transfer of cumulative preference shares F. According to the articles of association, the transfer of cumulative preference shares F requires the approval of the Board of Management.
An overview of substantial interests in the equity of Accell Group, which have at the time of preparing this management report been reported under the provisions concerning the reporting of controlling interests under the disclosure of the Dutch Financial Supervision Act (Wft), is included in section 1.4 The Share.
The Company has not issued any shares with special controlling rights.
Accell Group does not have a monitoring mechanism for an employee share scheme.
There are no limitations or terms on the execution of the voting rights attached to ordinary shares.
There are no depositary receipts for shares issued with the cooperation of the Company.
The Company is not aware of any agreements involving a shareholder of the Company that may limit the transfer of shares or that may limit the voting rights.
The General Meeting appoints the members of the Supervisory Board, based on a recommendation from the Supervisory Board. The Supervisory Board appoints the members of the Board of Management. A more detailed explanation of the appointment and dismissal of members of the Board of Management and the Supervisory Board can be found in the articles of association of the Company. Resolutions to amend the articles of association and to dissolve the Company may only be adopted by the General Meeting pursuant to a proposal of the Board of Management and subject to approval of the Supervisory Board. Resolutions of the General Meeting to amend the articles of association and to dissolve the Company may be taken with a majority of the votes cast, but if less than half of the issued capital is represented the resolutions have to be taken with a majority of at least two/thirds of the votes cast.

Resolutions on the issuance of shares are adopted by the General Meeting, insofar as and if it has not designated another corporate body. The pre-emptive rights can be limited or excluded by the corporate body authorised to adopt resolutions on the issuance of shares, provided that said authorisation is granted expressly to that corporate body. On 24 April 2019, a resolution of the General Meeting extended to 24 October 2020 the period during which the Board of Management is authorised, with the approval of the Supervisory Board, to: (i) issue ordinary shares up to a maximum of 10% of the outstanding share capital, and (ii) limit or exclude pre-emptive rights upon the issuance of ordinary shares. See also section 4.1 of this report.
On 24 April 2019, the General Meeting granted the Board of Management the authority to repurchase Accell Group shares. The authorisation was granted under the following conditions: (i) the authorisation would be valid for 18 months (until 24 October 2020), (ii) the Supervisory Board’s approval would be required for the acquisition of Accell Group shares, (iii) the number of shares would not exceed 10% of the issued share capital and (iv) the acquisition price would not exceed 110% of the average share price on the preceding five trading days. See also section 4.1 of this report.
A number of agreements between the Company and its lenders include the provision that the lenders have the right to terminate the agreements and to reclaim the loans issued prematurely in the event of a substantial change in the control over the Company following a public bid as meant in article 5:70 of the Dutch Financial Supervision Act (Wft).
The Company is not aware of any agreements with members of the Board of Management or employees that provide for a payment in the event that the employment is terminated following a public bid as meant in article 5:70 of the Dutch Financial Supervision Act (Wft).