Decree on 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 lastly revised on 13 October 2015.
The company has three classes of shares: ordinary shares, preference shares B and series of preference shares F. Note 15 of the financial statements may be used as a reference for the company’s capital structure. At the balance sheet date 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 a preference share B, a preference share F and an ordinary share. As all ordinary shares, preference shares F and preference shares B have the same nominal value (EUR 0.10) every issued and outstanding share of a class gives the right (i) to cast one (1) vote in the general meeting and (ii) to cast one (1) vote in the meeting of holders of that specific class. Ordinary shares and preference shares F may only be issued against payment in full. Preference shares B may be issued against partial payment. Holders of ordinary shares do have a pre-emptive right in respect of new ordinary shares to be issued, unless restricted or excluded pursuant to a resolution of the General Meeting. Holders of ordinary shares do not have a pre-emptive right in respect of new preference shares to be issued. Holders preference shares B and holders of preference shares F do not have a pre-emptive right in respect of shares to be issued. The transfer of ordinary shares and preference shares F is not restricted by the articles of association. According to the articles of association the transfer of preference shares B requires the approval of the Executive Board.
The relevant financial right attached to the shares which follows from Article 31 of the Articles of Association concerns the application of the profit in relation to Class B and Class F preference shares. A brief summary of that article is provided in the following subparagraph.
A brief summary of Article 31 of the Articles of Association
From the profit realised in any financial year, an amount will first be distributed, where possible, on the Class B cumulative preference shares, calculated by applying the percentage stated below to the amount that must be paid up on those shares as at the start of the financial year for which the distribution is made. The percentage referred to above will be equal to the average of the Euribor rates for money market loans with a maturity of twelve months – weighted according to the number of days for which these rates prevailed – during the financial year for which the distribution is made, plus one percentage point. Euribor refers to the Euro Interbank Offered Rate as determined and published by the European Central Bank.
Subsequently, if possible, a dividend will be distributed on each financing preference share of a certain series, with due consideration of the provisions of Article 31(6) of the Articles of Association, see chapter 7.3 For Articles of Association provisions governing the distribution of profit.
Limits on the transfer of shares
The company has no limitation, under the Articles of Association or by contract, on the transfer of shares or depositary receipts issued with the company’s cooperation, apart from the restriction on the transfer of Class B preference shares contained in the Articles of Association. Article 13 of the company’s Articles of Association stipulates that approval is required from the company’s Executive Board for the transfer of Class B preference shares. The scheme is included in order to offer the company the facility – because of the specific purpose of issuing these shares, namely the acquisition of finance or achieving protection – of offering the holders of these shares an alternative in the event that they wish to dispose of their shares.
As regards the Class B preference shares, the company and Stichting Aandelenbeheer BAM Groep (Foundation Preference Shares BAM Group) have agreed that the company will not proceed to issue these shares or to grant any rights to purchase them to anyone other than the said foundation without the foundation’s permission. The foundation will not dispose of or encumber any Class B preference shares, nor renounce the voting rights relating to them, without permission from the company. Please refer to page 212 onward of this Integrated Report with regard to the reasons behind protecting the company and the manner in which this is done.
The company is aware of the following interests in its equity, which are now reported under the provisions concerning the reporting of controlling interests under the Disclosure of the Financial Supervision Act. See table 70.
Special control rights
The shares into which the company’s equity is divided are not subject to any special control rights.
Employee share plan or employee option plan
The company does not have any employee share or employee option plans. Since 2015 a long-term incentive plan based on performance shares has been introduced for the members of the Executive Board, which replaces the previous long-term incentive plan which was based on phantom shares. The new long-term incentive plan is cascaded down to a maximum number of fifteen senior executive positions below the Executive Board.
Each share in the company provides entitlement to the casting of one vote at shareholders’ meetings. There are no restrictions on the exercising of voting rights. The company’s Articles of Association contain the usual provisions in relation to intimation for the purpose of being acknowledged as a proxy at shareholders’ meetings. Where the company’s Articles of Association mention holders of depositary receipts or depositary receipt holders, whether named or bearer, this is understood to mean holders of depositary receipts issued with the company’s cooperation and also individuals who, under the terms of Articles 88 or 89, Book 2 of the Dutch Civil Code, have the rights accorded to holders of depositary receipts for shares issued with the company’s cooperation.
The company is not aware of any agreements involving one of the company’s shareholders and which might provide reasons for:
(i) Restricting the transfer of shares or of depositary receipts issued with the company’s cooperation, or
(ii) Restricting the voting rights.
Appointment and dismissal of members of the Supervisory Board and members of the Executive Board and amendment of the Articles of Association
The company is obliged by law to operate a mitigated two-tier structure. The General Meeting appoints the members of the Supervisory Board, based on a recommendation from the Supervisory Board. The General Meeting also appoints the members of the Executive Board, with the Supervisory Board having the right of recommendation. A more detailed explanation of the appointment and dismissal of members of the Supervisory Board and members of the Executive Board can be found in the Articles of Association of the Company. Resolutions to amend the Articles of Association or to dissolve the Company may only be adopted by the General Meeting pursuant to a proposal of the Executive Board and subject to the approval of the Supervisory Board.
Powers of the Executive Board
The company is managed by an Executive Board. The Executive Board’s powers are those arising from legislation and regulations. A more detailed description of the Executive Board’s duties can be found in the Executive Board rules. The Executive Board was authorised by the General Meeting held on 19 April 2017 to issue ordinary shares and Class F preference shares and/or to grant options to purchase these shares, subject to approval from the Supervisory Board. This authorisation is limited in duration to eighteen months. It is also limited in scope to 10 per cent of the issued capital, plus an additional 10 per cent, which additional 10 per cent may be used exclusively for mergers, acquisitions or strategic partnerships by the company or by operating companies. However, the General Meeting rejected the proposal to authorise the Executive Board to restrict or exclude pre-emptive rights in the event of an issue of or granting of rights to acquire ordinary shares.
The General Meeting held on 18 April 2018 granted authority to the Executive Board for a period of eighteen months to repurchase shares in the company, within the limitations imposed by the law and the Articles of Association and subject to the approval of the Supervisory Board. In principle, the General Meeting is asked to grant these authorisations every year. 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 Executive Board and approved by the Supervisory Board.
Change of control provisions in important agreements
BAM differentiates the following categories of agreements as referred to in the Decree on Article 10 of the EU Takeover Directive:
- The Group has entered into syndicate revolving credit facilities (RCF). See for further details note 18 of the financial statements. The RCF agreements stipulate that in the event of a change of control, the loans/amounts outstanding under these arrangements are immediately due.
- In June 2016, Royal BAM Group n.v. issued €125 million in subordinated unsecured convertible bonds (see note 18 of the financial statements). This agreement also contains a change of control which gives the holder of each bond the right to require BAM to redeem that bond.
- Royal BAM Group and its subsidiaries have entered into various important 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 itself not considered key agreements within the meaning of the Decree on Article 10 of the Takeover Directive, but jointly they are 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 vest the conditional Performance Shares accelerated on a prorated basis, both in terms of time and performance. The Supervisory Board is however also authorised to withdraw conditional and unconditional performance shares in exchange for a cash payment at market value.