capital structure and protective measure
At 31 December 2015 the authorised share capital of USG People stood at € 100,000,000, consisting of 200,000,000 shares with a nominal value of € 0.50 each. The shares are divided into 100,000,000 ordinary shares and 100,000,000 preference shares. The issued capital at that date was € 40,559,380.50, consisting of 81,118,761 ordinary shares. Each ordinary share represents one vote.
buyback of own shares
At the General Meeting of Shareholders on 7 May 2015 shareholders authorised the Executive Board – with the approval of the Supervisory Board – to buy back USG People shares for a period of 18 months as from 7 May 2015. Shares may be purchased under any agreement, including private transactions and transactions effected through the stock exchange. The buyback of own shares is subject to the following conditions:
- the buyback may not exceed 10% of the issued share capital on 7 May 2015; and
- the price must be between the nominal value and 110% of the stock market value.
issue of shares and preference rights
The Executive Board is designated as the body authorised to take decisions regarding the issue of shares – subject to the approval of the Supervisory Board and in accordance with the stipulations of the Articles of Association and legal provisions. This authority relates to a maximum of 10% of all shares of the issued capital of USG People as at the moment the Executive Board is designated as the authorised body. Every year the General Meeting of Shareholders is requested to extend this period for a period of 18 months from the date of General Meeting of Shareholders.
Every year the General Meeting of Shareholders is customarily requested to extend the period for which the Executive Board is designated as the body authorised to limit or exclude legal preferential rights. The extension applies to the same period for which the Executive Board is authorised to issue shares. The Executive Board will only exercise this authority if it is in the best interests of USG People to do so.
stichting preferente aandelen
The foundation ‘Stichting Preferente Aandelen USG People’ (hereinafter referred to as: ‘the Foundation’) was established in 2009. In accordance with its Articles of Association, the Foundation shall endeavour to serve the best interests of USG People, its associated business and all parties connected to it, warding off as much as possible any influences that could conflict with the continuity, independence and identity of the company. These influences may result from a (considerable) interest in USG People built up by a third party, the announcement of a public offer or other concentration of control, or any other form of unreasonable pressure exercised on the company to change the (strategic) policies of USG People.
The Articles of Association of USG People provide for the possibility of issuing preference shares as a temporary protective measure. USG People considers it undesirable for preference shares to remain outstanding for any longer than is strictly necessary. Accordingly, article 7.8 of the Articles of Association of USG People stipulates that in the event of the issue of preference shares a General Meeting of Shareholders shall be held no later than 18 months after the initial issuance of these shares. A decision concerning the buyback or cancellation of the preference shares outstanding must be put on the agenda for that meeting.
USG People has granted the Foundation a call option to take up preference shares. The call option is divided into two parts: the first call option entitles the Foundation to take 30% (minus one share) of the voting rights. The second call option grants the Foundation the right to take 100% (minus one share) of the total issued capital, i.e. shares other than preference shares, issued at that time. This second call option can only be exercised, in whole or in part, after the announcement of a public offer for all shares in USG People. The call option agreement means that the decision to issue preference shares lies with the Foundation and not with the Executive Board, nor the Supervisory Board of USG People.
In addition to the aforementioned call options, the Foundation also has the right of inquiry. The Foundation can make use of this right in situations where it may not wish to exercise its right to take preference shares but which, in the opinion of the Foundation, justify the need for legal intervention in view of the definition of its objects in the Articles of Association.
The Foundation will operate independently from USG People. In doing so, it is in compliance with the requirements stipulated in the Dutch Financial Supervision Act with respect to a foundation of this type. In 2015 the board of the Foundation consisted of Messrs R. Pieterse (chairman), J.F. van Duijne and Professor M.W. den Boogert. The board members have drawn up a retirement schedule aimed at ensuring the continuity, knowledge and expertise of the Foundation.
Under the Dutch Financial Supervision Act, shareholders are required to report holdings that exceed certain set percentages to the Netherlands Authority for the Financial Markets (AFM).
Under the Dutch Financial Supervision Act the following interests were declared on 31 December 2015:
A.D. Mulder 19.87%
J O Hambro Capital Management Limited 4.28%
Norges Bank 3.69% (2.33% direct actual holding / 1.36% direct potential holding)
Dimensional Fund Advisors, L.P. 3.61%
Members of the Executive Board and Supervisory Board must comply with the so-called Model Code. This regulation sets out how transactions involving securities of USG People should be conducted and prohibits trading during the so-called closed periods. Responsibility for Model Code compliance checks lies with the USG People Compliance Officer.
In addition to the Model Code, members of the Executive Board and Supervisory Board are bound to the Tracking Compliance Programme, which sets out the rules for monitoring transactions involving the securities of direct competitors, the so-called Peer Group. Any transactions involving securities in these companies must be reported in advance to the USG People Compliance Officer. Transactions involving securities of companies outside the Peer Group do not require prior permission; nor are they subject to a regular reporting obligation.
conflicts of interest
Any transactions involving a potential conflict of interest for members of the Executive Board or Supervisory Board and are of material significance to the company and/or the relevant person (the person involved/concerned) must be published in the annual report. Under the Code, any such transactions are subject to agreement under the conditions customary for the sector. During 2015 no transactions of material significance took place which could be qualified as involving a conflict of interest. Provisions aimed at preventing conflicts of interest with respect to such transactions are included in the Regulations of the Executive Board and the Regulations of the Supervisory Board. The other transactions with the large shareholder are expanded on in the financial statements, see note 25.
disclosures pursuant to article 10 of the takeover directive decree
Pursuant to Article 10 of the Takeover Directive Decree companies whose shares are admitted to trading on a regulated market must disclose information in their annual report on matters including the capital structure of the company and the existence of any shareholders with special rights. In accordance with these requirements USG People hereby makes the following disclosures:
- For information on the capital structure of the company and the existence of different types of shares, please refer to the notes to the consolidated financial statements in this annual report. For information on the rights attached to these shares, please refer to the company’s Articles of Association which can be found on the company’s website.
- The company has imposed no restrictions on the transfer of shares other than the restrictions that apply based on the Model code.
- For information on equity stakes in the company to which a notification requirement applies (pursuant to Articles 5:34, 5:35 and 5:43 of the Dutch Financial Supervision Act), please refer to the information included in the ‘Large shareholders’ section of this annual report. A list of shareholders who are known to the company to have holdings of 3% or more at the stated date can be found here.
- There are no special control rights or other rights associated with shares in the company.
- USG People operates a share bonus scheme for the Executive Board and senior management. Please refer to the remuneration report for further information.
- No restrictions apply to voting rights associated with the company's shares, nor do any deadlines exist for exercising voting rights.
- No agreements with shareholders are known to the company to exist which may result in restrictions on the transfer or limitation of voting rights.
- The rules governing the appointment and dismissal of members of the Executive Board and the Supervisory Board and amendment of the Articles of Association are stated in the company’s Articles of Association. To summarise, the Dutch large company regime is applicable to the company. Members of the Executive Board are appointed and dismissed by the Supervisory Board, with the proviso that the General Meeting of Shareholders must be consulted prior to the dismissal of a member of the Board of Management. Supervisory Board members are nominated by the Supervisory Board and appointed by the General Meeting of Shareholders. The Works Council has an enhanced right of recommendation for one-third of the number of Supervisory Board members. The General Meeting of Shareholders can declare a vote of no confidence in the Supervisory Board by an absolute majority of votes cast, representing at least one-third of issued capital. Such a vote of no confidence shall result in immediate dismissal. An amendment of the company’s Articles of Association requires a decision by the General Meeting of Shareholders in response to a proposal made by the Executive Board with the approval of the Supervisory Board.
- The powers of the Executive Board are set out in the Articles of Association. The powers of the Executive Board in respect of the issuance of shares in the company are set out in article 7 of the company’s Articles of Association. To summarise, the General Meeting of Shareholders – or the Executive Board if authorised by the General Meeting of Shareholders – takes the decision, subject to prior approval by the Supervisory Board, to issue shares, whereby the issue price and other conditions relating to the issue are determined by the General Meeting of Shareholders – or the Executive Board if authorised. In the event the Executive Board is designated as the body authorised to take decisions with respect to the issue of shares, the number of shares that may be issued as well as the term of the designation is determined at the time of such designation. The procedures governing the acquisition and disposal by the company of shares in its own capital are set out in article 10 of the Articles of Association of the company. To summarise, the Executive Board may decide, subject to authorisation by the General Meeting of Shareholders and to prior approval by the Supervisory Board, that the company may buy back fully paid-up shares of its issued capital. Decisions regarding the disposal of shares acquired by the company are taken by the Executive Board, subject to prior approval by the Supervisory Board.
- With the exception of the option agreement with Stichting Preferente Aandelen USG People concerning the placement of preference shares with the Foundation, the company is not a party to any significant agreements which take effect or are altered or terminated upon a change of control of the company as a result of a public offer within the meaning of Article 5:70 of the Dutch Financial Supervision Act. The General Meeting of Shareholders of 23 December 2008 decided to grant Stichting Preferente Aandelen USG People the right to acquire preference shares.
- The company has entered into agreements with members of the Executive Board which provide for a pay-out on termination of their employment as a result of a public offer within the meaning of Article 5:70 of the Dutch Financial Supervision Act.