SAAT, as well as all Depository Receipt Holders, was able to take note of the voting items on the agenda of the extraordinary general meeting of shareholders of Triodos Bank to be held on 23 October 2024 (EGM). During the Meeting of Holders of Depository Receipts on 9 October SAAT gave Depository Receipt Holders the opportunity to ask questions and submit comments on the voting items on the agenda of the EGM. SAAT used this input to finalise its voting statement at this meeting.
SAAT will only vote at the EGM on behalf of those Depository Receipt Holders who have explicitly given SAAT a proxy to vote for them. Depository Receipt Holders may give SAAT specific voting instructions for this purpose. If Depository Receipt Holders do not give voting instructions to SAAT but do instruct them to cast a vote at the EGM, SAAT votes on behalf of those Depository Receipt Holders. SAAT determines its position on voting items on the agenda of Triodos Bank's EGM based on the interest of Depository Receipt Holders, the interest of Triodos Bank and the interest of the mission.
To ensure that the vote of Depository Receipt Holders can actually influence the vote at the EGM, SAAT announced on 9 October to organize a Meeting of Depository Receipt Holders. Depository Receipt Holders also have the opportunity to decide whether they want to give SAAT a power of attorney or whether they want to speak and vote at the EGM themselves.
On the agenda of the EGM there are essentially two topics that will be put to a vote:
- Listing of Triodos Bank depository receipts on Euronext
- Reduction of the issued capital by means of lowering the nominal value per share in Triodos Bank.
Listing of Triodos Bank depository receipts on Euronext
The EGM is seeking approval for the listing of depository receipts for shares in the capital of Triodos Bank and admission to trading on Euronext. Following the review of the listing on MTF, which was also requested by SAAT, Triodos Bank announced that on the basis of this evaluation, it had been concluded that a listing on Euronext's trading platform could provide better accessibility for investors. And in doing so, a better alignment with the expectations of existing and new investors, while Triodos Bank's mission and values and ambition to be a forerunner in sustainable banking remain unchanged. In the explanatory notes to the agenda of the EGM, Triodos Bank announces that Jeroen Rijpkema will explain the intended positioning of Triodos Bank in the context of the listing on Euronext, the status in terms of preparation and further follow-up steps. With the listing on Euronext, Triodos Bank aims to remove the potential barriers to increasing the possibilities to invest in its depository receipts and further improve liquidity. SAAT has already explained that it is positive about its listing on Euronext for these reasons.
If the proposal to list the depository receipts on Euronext is approved at the EGM, Triodos Bank would also like to propose an amendment to Triodos Bank's articles of association for the purpose of that listing. As stated in the explanatory notes to Triodos Bank's agenda for the EGM, the changes are aimed at strengthening Triodos Bank's governance.
The proposed changes are as follows:
- Triodos Bank is a B-Corp and wishes to bring its articles of association further in line with the B-Corp certification standards. B-corp is a sustainability label for companies. In order to obtain the inspection work, the activities of the company are taken into account. In addition, the provisions below need to be amended to further align the Articles of Association with the B-corp certification standards. Triodos Bank therefore wants to enshrine in its articles of association that:
- one of Triodos Bank's goals is to have a significant positive impact on nature, the environment and society in general through its business operations and activities;
- the members of the Executive Board shall also take into account in their decision-making the social, economic, legal or other consequences of Triodos Bank's business operations in relation to (i) capital providers, (ii) employees, subsidiaries and suppliers, (iii) the interests of the customers of Triodos Bank and its subsidiaries, (iv) the communities and society in which Triodos Bank, (v) the local and global environment and (vi) Triodos Bank's short- and long-term interests.
SAAT supports the embedding of these standards in the articles of association.
- If the depository receipts for shares in the capital of Triodos Bank are admitted to Euronext, some additional provisions of the Dutch Civil Code will also apply to Triodos Bank. Triodos Bank therefore wants to embed the relevant requirements in its articles of association. Triodos Bank's explanation of these proposed changes is brief and, in SAAT's opinion, could have been more accessible. SAAT therefore believes that it is useful to explain the proposed changes in more detail in addition to Triodos' explanation:
- The proposed amendment to Section 6(3) relates to the anchoring of Section 2:135a of the Dutch Civil Code. This article will become applicable as a result of the listing on the stock exchange. This section of the law contains specific provisions on Triodos Bank's remuneration policy. It states, for example, that the remuneration policy is submitted to the shareholders' meeting every four years for adoption. This article also prescribes the topics that the remuneration policy must contain, for example an explanation of how the remuneration policy contributes to the company's strategy, long-term interests and sustainability.
- Articles 7(3) and 10(5) prohibit members of the Executive Board and the Supervisory Board from participating in deliberations and decision-making when they are involved in a transaction with a related party. Related party refers to a person or entity that has a close relationship with the relevant director or supervisory director. Of course, there is already a conflict of interest rule.
- The term in Article 12(3) of the Articles of Association is increased from six to eight weeks. This article deals with the period within which a shareholders' meeting must be held when a shareholder or a depository receipt holder so requests. The law does not allow for a period of six weeks. A listing on Euronext therefore means that the period within which such a shareholders' meeting must be held will be eight weeks.
- Article 12(4) changes the notice period for shareholders' meetings. Currently, the notice period for shareholders' meetings is formally at least fifteen days. In practice, Triodos Bank aims to publish the notice well in advance of that deadline. After listing on Euronext, a notice period of 42 days will legally apply. With this amendment, that period will be included in the articles of association. It is also proposed to extend the period in Article 18(3) for any necessary second shareholders' meeting. The convocation shall be issued by means of a notice published by electronic means which is directly and permanently accessible until the general meeting. We assume that this will remain the same as it is now. Advertisements will no longer be placed in the newspaper.
- Article 12(9) stipulates that the record date is the 28th day before the day of the shareholders' meeting. In practice, Triodos Bank already uses that day as the registration date. The registration date is the day on which it is determined who is entitled to vote or hold meetings.
SAAT has carefully reviewed all the proposed changes. The relevant legal provisions to be included in the articles of association shall also apply without an amendment to the articles of association. That is why SAAT supports this proposal.
- Terms of appointment of members of the Supervisory Board in accordance with the Dutch Corporate Governance Code.
Again, SAAT supports bringing the articles of association in line with the Corporate Governance Code. The current articles of association still state that a supervisory board member can serve three times for four years. However, the Dutch Corporate Governance Code stipulates that this is a maximum of two four-year periods. The articles of association will be brought in line with this. The Code allows a member of the Supervisory Board to be reappointed after these eight years for a maximum period of two more years. This is explicitly intended as an exception. This is not clear from the explanatory notes and SAAT would like to emphasise to Triodos Bank for the sake of completeness. - Inclusion of a seven-day notice period, setting the deadline for shareholders and depository receipt holders to notify Triodos Bank of their intention to attend a shareholders' meeting. In practice, Triodos already uses a notification period of seven days. With the inclusion of this provision, the articles of association are brought into line with this practice.
SAAT supports that this practice is enshrined in the articles of association. - Finally, a number of textual changes to Article 8(1)(c) and (m) are proposed. In subsection (c), the term 'regulated market or a multilateral trading facility' is changed to the term 'trading venue' so that subsection (c) is in line with the text in the Dutch Civil Code that also uses that term. And in sub m the name of SAAT was not written correctly. It said 'Stichting Administratiekantoor Triodos Bank', but of course it should be 'Stichting Administratiekantoor Aandelen Triodos Bank'.
The meeting documents for the EGM include a so-called triptych in which each amendment explains why this amendment is proposed. After careful consideration, SAAT has concluded that the proposed amendments are technical in nature and necessary to bring the articles of association in line with applicable laws and regulations. This confirmation has also been given by our notary Van Doorne. As explained earlier, SAAT supports the proposal to list the depository receipts on Euronext. In doing so, SAAT also supports this proposed amendment to the articles of association. The proposed resolution to amend Triodos Bank's Articles of Association includes the proposal to authorise the members of the Board of Directors and any civil-law notary, candidate civil-law notary, notarial assistant and lawyer employed by NautaDutilh N.V. to execute the deed amending Triodos Bank's Articles of Association. Now that SAAT supports the amendment of the articles of association, it is also logical to agree to the proposal to grant the requested authorization to execute the deed.
Reduction of the issued capital by means of lowering the nominal value per share in Triodos Bank.
Triodos Bank proposes to reduce the issued capital by means of lowering the nominal value per share in Triodos Bank to EUR 1 (currently EUR 49). The par value per share is slightly different from the market value at which shares or depository receipts are traded. The nominal value is an accounting value at which, at the same time as the proposed lowering of the nominal value from the current EUR 49 to EUR 1 per share, an amount of EUR 48 per share will be added to Triodos Bank's share premium reserve, thereby keeping Triodos Bank's equity unchanged.
But why is this being proposed? As stated in the explanatory notes to the EGM, this reduction in the nominal value will allow Triodos Bank to issue new shares in the future, for example to raise new capital or to pay stock dividends. This can also be done with variable trade prices of certificates, and thus even when the trade price is lower than the current face value. It therefore offers extra flexibility for the future. Does the proposed EUR 1 per share make sense? It's not strange; For the same reasons as mentioned above, a low nominal value also occurs in other listed companies. ING shares, for example, have a nominal accounting value of only EUR 0.01 per share, which is also much lower than the current share price. Because of the extra flexibility for the future, SAAT therefore supports this proposal.
For the purpose of the proposed reduction of the nominal value, an amendment to the articles of association is proposed and authorization is requested to execute the deed of amendment of the articles of association. Because SAAT supports the proposal to reduce the nominal value per share, SAAT intends to support this amendment to the articles of association together with the requested authorization during the EGM.
