Changes of control and defence measures

SRL’s Articles of Association contain neither an “opting up” nor an “opting out” provision.

Duty to make an offer

SRL has not put in place any specific measures to defend against potential unfriendly takeover attempts. The Board of Directors believes that the company’s best protection is a fair valuation of its shares and that the efficiency of a free market is preferable to artificial obstacles, which can have a negative impact on the share price in the long term.

In accordance with the Financial Markets Infrastructure Act (FMIA), any party who acquires SRL shares which, added to those already owned, exceed the threshold of 33⅓% of SRL shares, either directly, indirectly or in concert with third parties, and regardless of whether these voting rights of such SRL shares are exercisable or not, triggers a mandatory takeover offer for the outstanding SRL shares owned by all other shareholders.

The FMIA allows companies to include an “opting up” provision in their articles of association, which raises the mandatory takeover offer threshold up to 49%, or an “opting out” provision, which waives the mandatory offer. SRL’s Articles of Association contain neither of these provisions.

Change of control clauses

The mandates and employment contracts of the members of the Board of Directors, Group EC and further Executive Management members do not contain any provisions such as severance payments, notice periods of more than 12 months, additional pension fund contributions or the treatment of deferred compensation that would benefit them in a change of control situation.

Unvested deferred compensation may vest and employee participation plan rules may be amended upon a change of control (if the Board of Directors so decides; see below). In such an event, the rights of members of the Board of Directors and the Group EC, as well as of further Executive Management members are identical to those of all other employees.

The Articles of Association provide that the Board of Directors (or to the extent delegated to it, the Compensation Committee) may decide on the continuation, acceleration, amendment or removal of any vesting, blocking or exercise conditions for the payment or grant of deferred compensation. The Board of Directors may also decide to replace the award with shares of the entity assuming control. For more information on the quantitative impact of vested shares, please refer to section Capital structure in this Corporate Governance Report under the paragraph entitled “Shares”.