ACCELL GROUP ANNUAL REPORT 2020 | 2.7.4 Compliance with the code

2.7.4
Compliance with the code

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The Company is committed to the principles of corporate governance, and constantly seeks to enhance its corporate governance standards and framework. In 2020, Accell Group reviewed the principles and best practices of the Code and has, where feasible and relevant, taken actions to implement further improvements.

With respect to best practice provisions 2.1.5 and 2.1.6 (describing the existence of a diversity policy, as well as accountability on diversity), which was an exception to the Code in reporting year 2019, in 2020 Accell Group took steps to define targets and establish a group-wide programme to achieve the Company’s Diversity & Inclusion ambition.

Taking this into account, Accell Group applied all principles and best practices of the Code throughout the year (insofar as these are applicable to the Company).

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Decree article 10 of the Takeover Directive

The following information and explanations relate to the provisions of the Decree of 5 April 2006 implementing article 10 of Directive number 2004/25/EC of the European Parliament and the Council of the European Union dated 21 April 2004 and last revised on 13 October 2015:

Capital structure

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 4 March 2021, the issued and paid-up capital of Accell Group amounted to € 268,050.31, divided into 26,805,031 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 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 are related to the application of the profits in relation to the classes of cumulative preference shares (if issued). A brief summary of that article is provided in the following sub-section.

A brief summary of Article 25 of the Articles of Association

From the profit realised in any financial year (and if there is not enough profit, 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% above the average refinancing interest determined by the European Central Bank for the past year.

Subsequently, if possible, a dividend will be distributed on the cumulative preference shares F of a certain series, equal to the arithmetic average of the effective return on government bonds.

After the distributions referred to above on shares B and/or F, 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.

Limits on the transfer of shares

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.

Substantial interests

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 related to the reporting of controlling interests under the disclosure of the Dutch Financial Supervision Act (WFT), is included in section The Accell Share.

Special control rights

Since 2008 a long-term incentive plan based on performance shares has been introduced for the members of the Management Board. Early 2020, a long-term incentive plan was introduced for senior executive positions below the Management Board; that plan currently applies to approx. twenty five employees. The Company does not have any other employee share or employee option plans

The Company has not issued any shares with special controlling rights.

Voting rights

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.

Shareholders’ Agreements

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.

Appointment and dismissal of members of the Supervisory Board and members of the Board of Management and amendment of the Articles of Association

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 Company’s articles of association. 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 are subject to the 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.

Powers of the Board of Management

The company is managed by the Board of Management. The Board of Management’s powers are those arising from legislation and regulations. See the Board of Management rules for a more detailed description of duties. Resolutions on the issuance of shares are adopted by the General Meeting, insofar as and if it has not designated another corporate body. The corporate body authorised to adopt resolutions on the issuance of shares may limit or exclude the pre-emptive rights, provided that said authorisation is granted expressly to that corporate body. On 22 April 2020, a resolution of the General Meeting extended to 23 October 2021 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 the section Corporate Governance of this report.

On 22 April 2020, 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 23 October 2021), (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 the section Corporate Governance of this report. Resolutions to amend the Articles of Association, or to dissolve the company may only be passed by the General Meeting on the basis of a proposal put forward by the Board of Management and approved by the Supervisory Board.

Change of control provisions in significant agreements

Accell Group differentiates the following categories of agreements, as referred to in the Decree on Article 10 of the EU Takeover Directive:

The Group has a financing agreement with a syndicate of banks. See for further details section 4.9.1.1 of the financial statements. This agreement stipulates that in the event of a change of control the lenders have the right to terminate the agreement 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).
Accell Group and its subsidiaries have entered into various agreements that contain clauses that in the event of a change of control the other party has the right to terminate the agreement. These agreements are in themselves not considered key agreements within the meaning of the Decree on Article 10 of the Takeover Directive, but jointly they may be considered significant.
The terms and conditions of the conditional performance share plan stipulate that, upon the occurrence of a change of control, the Supervisory Board may decide to accelerate the vesting of the conditional performance shares on a pro rata basis, both in terms of time and performance. However, the Supervisory Board is also authorised to withdraw conditional and unconditional performance shares in exchange for a cash payment at market value.
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).