Corporate Governance Statement
The corporate governance statement (in accordance with Sec. 289a HGB [“Handelsgesetzbuch”: German Commercial Code]) contains the declaration of compliance, disclosures relating to corporate governance practices and a description of the way the Managing Board and Supervisory Board work. It was made available to the public on the website at group.hugoboss.com/Investor Relations/Corporate Governance. It is also included in the Corporate Governance section of this Annual Report.
Dependent company report
Pursuant to Sec. 312 AktG [“Aktiengesetz”: German Stock Corporation Act], the Managing Board of HUGO BOSS AG is obliged to prepare a dependent company report. The dependent company report presents the relationships with Permira Holdings Limited, Guernsey, until the final refutation of the presumption of dependence on May 12, 2015 and the companies of the HUGO BOSS Group. The Managing Board has prepared a dependent company report and made the following concluding statement: “… the Company has at all times received appropriate consideration for all transactions within the meaning of this report based on the circumstances prevailing at the time of each respective transaction and has not suffered any disadvantage in the period from January 1 until May 12, 2015 by reason of undertaking or refraining from undertaking measures at the instruction or in the interest of Permira Holdings Limited, Guernsey, and its affiliates.”
Disclosures under takeover law pursuant to sec. 289 (4), 315 (4) HGB
The disclosures required in accordance with Sec. 289 (4) and Sec. 315 (4) HGB are presented and explained in the following. As far as the Managing Board is concerned, there is no further need for explanations within the meaning of Sec. 175 (2) Sentence 1 and Sec. 176(1) Sentence 1 AktG.
The subscribed capital of HUGO BOSS AG is made up of 70,400,000 no-par value ordinary shares with an imputed share in share capital of EUR 1.00 each.
There are no restrictions on voting rights or the transfer of shares.
HUGO BOSS AG has not been notified of any direct or indirect capital investment that exceed 10% of the voting rights.
In fiscal year 2015, HUGO BOSS AG was notified of 34 voting rights announcements pursuant to Sec. 21 (1) and Sec. 22 of the German Securities Trading Act (WpHG). The respective voting rights announcements are published on the internet at group.hugoboss.com/en/investor-relations/financial-releases and are also disclosed in the annual financial statements of HUGO BOSS AG for the fiscal year 2015.
The Company has not received any other notifications from shareholders who hold 3 % or more of the voting rights in HUGO BOSS AG.
There are no shares in HUGO BOSS AG with special rights granting control authority. There are no special rules governing the exercise of shareholder rights by shareholders who are employees of HUGO BOSS AG.
The appointment and dismissal of members of the Managing Board of HUGO BOSS AG is in accordance with Sec. 84 and Sec. 85 AktG and Sec. 31 MitbestG [“Mitbestimmungsgesetz”: German Co-determination Act] in conjunction with Art. 6 of the Articles of Association. In accordance with Art. 6 (1) of the Articles of Association, the Managing Board comprises at least two members. The number of members of the Managing Board is determined by the Supervisory Board pursuant to Art. 6 (2) of the Articles of Association. The Supervisory Board can appoint a chairman and a deputy chairman of the Managing Board. The Supervisory Board can revoke a person’s appointment to the Managing Board and appointment to the position of chairman of the Managing Board for good cause. In accordance with Art. 6 (3) of the Articles of Association, members of the Managing Board may not generally be older than 60 years of age when they are appointed. Members of the Managing Board are appointed by the Supervisory Board for no more than five years.
Amendments to the Articles of Association are made by resolution of the Annual Shareholders’ Meeting. Unless prescribed otherwise by the German Stock Corporation Act, resolutions are passed pursuant to Art. 17 (2) of the Articles of Association by simple majority of the votes cast and – if a majority of the capital represented when passing a resolution is required – by simple majority of the share capital represented when the resolution is passed. Pursuant to Art. 20 of the Articles of Association, the Supervisory Board is authorized to make amendments to the Articles of Association that only affect the wording.
Authorization of the Managing Board to increase share capital with the option of excluding subscription rights
The Management Board of HUGO BOSS AG may with the Supervisory Board’s consent increase the share capital by up to EUR 35,200,000.00 on or before May 12, 2019 by issuing up to 35,200,000 new registered shares on a cash and/or non-cash basis once or repeatedly (Authorized Capital). In general, shareholders have a subscription right.
However, the Managing Board is authorized, subject to the approval of the Supervisory Board, to exclude the subscription rights of shareholders up to a maximum of 20 % of the share capital (a) to eliminate fractional rights (b) in the case of a capital increase in exchange for contributions in kind and (c) in the event that the issue price of the new shares in cash-based capital increases is not significantly below the quoted price of the existing quoted shares at the time the issue price is finally determined, which time should be as close as possible to the time at which the shares are placed; whereby in case (c) the shares issued, including any own shares sold under exclusion of subscription rights pursuant to Section 186 (3) Sentence 4 AktG may not exceed 10 % of the share capital either at the time this authorization becomes effective or at the time when it is exercised.
Authorization to acquire own shares and to use own shares, also while excluding put options and subscription rights, including authorization to redeem acquired own shares and reduce capital
Pursuant to the resolution of the Annual Shareholders’ Meeting of May 12, 2015, the Managing Board is authorized on or before May 11, 2020 to acquire own shares of the Company up to a share of no more than 10% of the share capital outstanding as of May 12, 2015 or, if this value is lower, the share capital outstanding at the time of exercising the authorization. The authorization can be exercised directly by HUGO BOSS AG or by a company dependent on HUGO BOSS AG or in which it holds a majority interest or by commissioned third parties and permits the acquisition of own shares fully or in partial amounts, once or several times. The acquisition can be made through the stock exchange or a public offer addressed to all shareholders to submit sale offers or through the granting of put options to the shareholders. The authorization also allows for a restriction of the principle of equal treatment of all shareholders and any rights of the shareholders to sell shares to the company in connection with the acquisition of the shares.
Own shares acquired under this authorization can be sold again through the stock exchange or through an offer addressed to all shareholders (also while excluding subscription rights of shareholders). They can alternatively be redeemed as compensation for the acquisition of a company and investments in companies, for sale at a price that does not fall materially short of the current quoted price and for the admission of the share to foreign stock exchanges. The Managing Board is also authorized subject to the consent of the Supervisory Board and without any compliance with a deadline to offer for acquisition own shares to persons with an employment relationship with HUGO BOSS AG (employee shares).
By resolution of the Annual General Meeting of May 12, 2015, the Managing Board is further authorized to acquire own shares using equity derivatives.
The syndicated loan taken out by HUGO BOSS AG and HUGOBOSS International B.V. and guaranteed by HUGO BOSS AG as well as the bilateral lines of credit contain customary conditions that grant the contracting parties additional termination rights in the event of a change of control – so-called “change-of-control clauses”.
The service agreements of the members of the Managing Board contain a clause under which, in the event of a “change of control” (acquisition of more than 30% of the voting rights in HUGO BOSS AG), the contracting partners are granted under certain circumstances an additional termination right and, if the service agreement is indeed terminated, the member of the Managing Board has to be compensated. The Company has not entered into any other compensation arrangements with the other members of the Managing Board or with employees in the event of a takeover bid.