UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington, DC
20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13A - 16 OR 15D - 16 OF
THE SECURITIES EXCHANGE ACT OF 1934
15 January 2021
Commission
File No. 001-32846
____________________________
CRH
public limited company
(Translation of registrant's name into English)
____________________________
Belgard Castle, Clondalkin,
Dublin 22, Ireland.
(Address of principal executive offices)
____________________________
Indicate
by check mark whether the registrant files or will file annual
reports
under
cover of Form 20-F or Form 40-F:
Form
20-F X Form
40-F___
Indicate
by check mark if the registrant is submitting the Form 6-K in paper
as permitted by
Regulation
S-T Rule 101(b)(1):_________
Indicate
by check mark if the registrant is submitting the Form 6-K in paper
as permitted by
Regulation
S-T Rule 101(b)(7):________
Enclosure:
Circular re. EGM
THIS CIRCULAR AND THE ACCOMPANYING FORM OF PROXY ARE IMPORTANT AND
REQUIRE YOUR IMMEDIATE ATTENTION.
If you
are in any doubt about the contents of this Circular and what
action you should take, you are recommended to consult your
independent professional adviser, who is authorised or exempted
under the European Union (Markets in Financial Instruments)
Regulations 2017 (as amended) or the Investment Intermediaries Act
1995 (as amended), if you are resident in Ireland, or who is
authorised under the Financial Services and Markets Act, 2000 (as
amended), if you are resident in the United Kingdom, or from
another appropriately authorised independent financial adviser if
you are in a territory outside Ireland or the United
Kingdom.
Your attention is drawn to the special arrangements for the
Extraordinary General Meeting in response to the Coronavirus
(“COVID-19”) pandemic, which are set out in this
Circular.
If you
sell or otherwise transfer or have sold or otherwise transferred
all of your CRH plc shares (“Shares”), please forward this
Circular and the accompanying Form of Proxy to the purchaser or
transferee of such Shares or to the stockbroker, or other agent
through whom the sale or transfer is/was effected for onward
transmission to the purchaser or transferee.
CRH plc
NOTICE OF EXTRAORDINARY GENERAL MEETING
Replacement of CREST with Euroclear Bank for electronic settlement
of trading in CRH plc Shares
Simplification of CRH’s share capital by the surrender and
cancellation of the Income Shares
Amendment of the Articles of Association
Your
attention is drawn to the letter from the Chairman of the Company
which is set out on pages 1 to 22 of
this Circular, which contains the recommendation of the Board to
Shareholders to vote in favour of the Resolutions to be proposed at
the Extraordinary General Meeting referred to below. You should
read this Circular in its entirety and consider whether or not to
vote in favour of the Resolutions in light of the information
contained in this Circular.
Notice of the Extraordinary General Meeting of CRH plc to be held
at Stonemason’s Way, Dublin 16 Ireland on Tuesday 9 February
2021 at 11.00 a.m. is set out in this Circular.
A form
of proxy for use at the Extraordinary General Meeting is enclosed
(“Form of
Proxy”). If you wish to validly appoint a proxy, the
Form of Proxy should be completed and signed in accordance with the
instructions printed thereon, and returned by post to the
Company’s Registrar, Link Registrars Limited, PO Box 1110,
Maynooth, Co. Kildare, W23 F854, Ireland (the “Company's Registrar”) or by hand
to Link Registrars Limited, Block C, Maynooth Business Campus,
Maynooth, Co Kildare, W23 F854, Ireland as soon as possible but in
any event so as to be received by the Company’s Registrar no
later than 11.00 a.m. on Sunday, 7 February 2021.
Alternatively,
electronic proxy appointment is also available for the
Extraordinary General Meeting. This facility enables shareholders
to appoint a proxy by electronic means by logging on to
www.signalshares.com
and entering the Company name: CRH plc. You will need to register
for Signal Shares by clicking on “registration section”
(if you have not registered previously) and following the
instructions thereon.
For
those shareholders who hold Shares in CREST, a shareholder may
appoint a proxy by completing and transmitting a CREST Proxy
Instruction to the Company’s Registrar, (ID Number 7RA08). In
each case, the proxy appointment must be received electronically by
no later than 11.00 a.m. on Sunday, 7 February 2021.
Further
instructions on how to appoint a proxy are set out in the notes to
the notice of the Extraordinary General Meeting
(“EGM Notice”)
and on the Form of Proxy.
Holders
of American Depositary Shares (“ADS”) may instruct the ADS
Depositary as to the way in which the Shares represented by their
ADSs should be voted by completing and returning the voting card
provided to such holders by the ADS Depositary in accordance with
the accompanying instructions (including any applicable
deadlines).
Preference Shareholders
The
holders of 5% Cumulative Preference Shares and 7% “A”
Cumulative Preference Shares are entitled to vote on resolutions 1,
2 and 3 as described in this Circular and set out in the Notice of
the Extraordinary General Meeting on page 2 to
2. A
form of proxy for use by Preference shareholders is enclosed
(“Preference
Form of Proxy”). If
you wish to validly appoint a proxy, the Preference Form of Proxy
should be completed and signed in accordance with the instructions
printed thereon, and returned by post to the Company’s
Registrar, Link Registrars Limited, PO Box 1110, Maynooth, Co.
Kildare, Ireland or by hand to Link Registrars Limited, Block C,
Maynooth Business Campus, Maynooth, Co Kildare, W23 F854, Ireland
as soon as possible, but in any event so as to be received by the
Company’s Registrar no later than 11.00 a.m. on Sunday, 7
February 2021.
Class
general meetings (“Class
Meetings”) of the holders of 5% Cumulative Preference
Shares and 7% “A” Cumulative Preference Shares will
also be held on 9 February 2021. Details in relation to the Class
Meetings will be posted separately to the holders of the preference
shares.
Important Note
Information
in this Circular in relation to the process of the Migration and/or
the Market Migration is based on information contained in the
Euroclear Bank SA/NV (“Euroclear Bank”) Migration Guide
(Version 2, October 2020) (the “EB Migration Guide”), to which the
attention of all Shareholders holding Migrating Shares is
specifically drawn. The EB Migration Guide has been made available
for inspection, in the manner outlined in section 9 of Part 1 of this Circular.
In
addition, information in this Circular in relation to the service
offering available following the Migration from Euroclear Bank in
the case of participants (“EB
Participants”) in the central securities depositary
operated by Euroclear Bank (the “Euroclear System”) and from
Euroclear UK & Ireland Limited (“EUI”) in the case of CREST
Depository Interests (“CDI”) holders is based on
information contained in the EB Services Description, the EB Rights
of Participants Document and the CREST International Manual
respectively. All three documents have been made available for
inspection, in the manner outlined in section 9 of Part 1 of this Circular.
Shareholders intending to hold their interests in Migrating Shares
(as defined on page 14 herein) via the Euroclear System or CREST
should carefully review the EB Migration Guide, the EB Services
Description, the EB Rights of Participants Documents and the CREST
International Manual (including
any updated versions thereof to the extent they are published after
the date of this Circular), together with the additional
documentation made available for inspection as set out in section
9 of Part 1 of this Circular
and should consider those
documents and consult with their stockbroker, independent
professional adviser or other intermediary in making their
decisions with respect to their Migrating
Shares.
The Company is not making any recommendation with respect to the
manner in which Shareholders should hold their interests in the
Company prior to, on, or subsequent to, the Migration. No reliance
should be placed on the contents of this Circular for the purposes
of any decision in that regard.
COVID-19 Notice
The
well-being of Shareholders and our people is a primary concern for
the Board and we are closely monitoring the COVID-19 situation and
any advice by the Government of Ireland in relation to the
pandemic. We will take all recommendations and applicable law into
account in the arrangements for the holding of the Extraordinary
General Meeting. If the current (or similarly more extensive)
restrictions relating to COVID-19 are in force at the time of the
Extraordinary General Meeting, the Company will be required to hold
the Extraordinary General Meeting as a closed meeting (i.e. not
generally open to the public).
In the
likely event that the Extraordinary General Meeting will be a
closed meeting, Shareholders will be provided with a facility to
listen to the business of the meeting and ask questions. Details of
this facility are set out in the notes to the notice convening the
Extraordinary General Meeting. The Company continues to monitor the
impact of COVID-19 and any relevant updates regarding the
Extraordinary General Meeting, including any changes to the
arrangements outlined in this Circular, will be available on
www.crh.com/investors/shareholder-centre.
A
Shareholder may also submit a question in advance in writing, to be
received at least two business days before the meeting (i.e. 5
February 2021) by post to the Company Secretary, CRH plc, 42
Fitzwilliam Square, Dublin 2, Ireland or by email to [email protected].
All correspondence should include sufficient information to
identify a Shareholder on the Register of Members, for example, an
IVC number, which is an 11 digit unique identifier printed on the
proxy form.
TABLE OF CONTENTS
|
Page
|
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
|
1
|
Part 1:
|
LETTER
FROM THE CHAIRMAN
|
4
|
Part 2:
|
QUESTIONS
AND ANSWERS IN RELATION TO THE MIGRATION
|
23
|
Part 3:
|
FURTHER
INFORMATION PROVIDED FOR THE PURPOSE OF SECTION 6(1) OF THE
MIGRATION ACT
|
31
|
Part 4:
|
COMPARISON
OF EUROCLEAR BANK AND EUI SERVICE OFFERINGS
|
35
|
Part 5:
|
OVERVIEW
OF BELGIAN LAW RIGHTS
|
45
|
Part 6:
|
OVERVIEW
OF CREST DEPOSITORY INTERESTS
|
52
|
Part 7:
|
TAX
INFORMATION IN RESPECT OF THE MIGRATION
|
56
|
Part 8:
|
PROPOSED
AMENDMENTS TO THE ARTICLES OF ASSOCIATION
|
79
|
Part 9:
|
DEFINITIONS
|
84
|
Appendix 1
|
NOTICE
OF AN EXTRAORDINARY GENERAL MEETING
|
92
|
Appendix 2
|
RIGHTS
OF MEMBERS OF IRISH INCORPORATED COMPANIES UNDER THE COMPANIES ACT
THAT ARE NOT DIRECTLY EXERCISABLE UNDER THE EUROCLEAR BANK SERVICE
OFFERING
|
99
|
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
EGM Timetable
Publication
date of this Circular (which included the Notice of Extraordinary
General Meeting) and the Form of Proxy
|
15
January 2021
|
Latest
time and date for receipt of Forms of Proxy in respect of
Extraordinary General Meeting
|
11.00
a.m. on
7
February 2021
|
Voting
Record Time
|
7.00
p.m. on
7
February 2021
|
Deadline
for receipt of written questions in advance of the Extraordinary
General Meeting
|
9.00
a.m. on
5
February 2021
|
Time and date of Extraordinary General Meeting
|
11.00 a.m. on
9 February 2021
|
Indicative Timetable for Key Migration Steps
The further dates below, which relate to the Migration, are
indicative only, are subject to change, and will depend, amongst
other things, on the date to be appointed by Euronext Dublin as the
Live Date in accordance with the provisions of the Migration of
Participating Securities Act 2019 (the “Migration
Act”).
The Company will give notice of confirmed dates, when known, via
its website on www.crh.com/investors/shareholder-centre.
All times relating to the Migration in this timetable are subject
to subsequent clarification and announcement.
EUI and
Euroclear Bank to announce the Migration timetable.(1)
|
February/March
2021
|
Euronext
Dublin to announce Live Date.
It
should be noted that the Company has no control over the selection
of the Live Date and the timetable for the Migration consequent
upon it.
|
Prior
to Friday,
12 March
2021
|
Expected
latest time and date for Shareholders who hold their Shares in
uncertificated (i.e. dematerialised) form and who do not want their
Shares to be subject to the Migration to withdraw the relevant
Shares from the CREST System and hold them in certificated (i.e.
paper) form.
Shareholders
wishing to hold their Shares in certificated (i.e. paper) form
prior to the Migration taking effect should make arrangements with
their stockbroker or custodian in good time so as to allow their
stockbroker or custodian sufficient time to withdraw their Shares
from the CREST System prior to the closing date set out above for
such CREST withdrawals.
|
Unless
otherwise notified, by 12.00 p.m. on Thursday, 11 March 2021
at the latest (the “Latest
Withdrawal Date”)
|
Expected
latest time and date for Shareholders who hold their Shares in
certificated (i.e. paper) form to deposit the relevant Shares into
the CREST System and hold them in uncertificated (i.e.
dematerialised) form so as to ensure that such Shares are subject
to the Migration.(2)
Shareholders
wishing to hold their Shares in uncertificated (i.e.
dematerialised) form prior to Migration taking effect should make
arrangements with a stockbroker or other custodian in good time so
as to allow their stockbroker or custodian sufficient time to
deposit their Shares into the CREST System prior to the time and
date for such CREST deposits.
|
Expected
to be no less than two (2) business days prior to the Live
Date
|
Expected
latest time holders of Shares can transfer their Shares from their
account in EUI to an account in Euroclear Bank in which the Shares
will be held under Euroclear Bank’s investor central
securities depositary service until the Migration. The services
described in the EB Services Description will however only become
applicable as of the Live Date.
|
Any
time before and until close of business on Friday, 12 March
2021
|
Latest
date for allotments directly to CREST members.
|
Friday,
12 March 2021
|
The
date when EUI has said it will cease settlement of trades in Irish
Securities pursuant to the Irish CREST Regulations.
|
6.00
p.m. on Friday,
12
March 2021
|
Migration
Record Date.
|
7.00
p.m. on Friday,
12
March 2021
|
Live
Date.
|
Expected
to be Monday, 15 March 2021
|
All
trades conducted on the London Stock Exchange from, and including
this date, will settle in CDI form via CREST. (3) (4)
|
Live
Date - 2
|
All
trades conducted on Euronext Dublin from, and including this date,
will settle via Euroclear Bank.
|
Live
Date
|
CREST
members who wish to move all or part of a CDI holding to an EB
Participant can do so by way of a cross-border delivery free of
payment.
|
Following
the start of business on the Live Date
|
Migrating
Shares enabled as CDIs in CREST (please see below at Part 1,
section 2 and Part 4 of this
Circular for further information concerning CDIs). (3)
|
Commencement
of trading on the Live Date
|
Expiry
of EUI’s temporary equivalence pursuant to Implementing
Decision 2020/1766.(5)
|
30 June
2021
|
Notes:
(1)
The dates specified
in this table are the dates which the Company currently reasonably
anticipates will be the Live Date and the date Migrating Shares are
enabled as CDIs in the CREST System. The actual Live Date will be
specified by Euronext Dublin in accordance with the provisions of
the Migration Act and EUI/Euroclear Bank will confirm the timing of
consequent steps. Should the Live Date change or not be as
expected, the dates for other actions will change
accordingly.
(2)
The expected latest
time and date for Shareholders who hold their Shares in
certificated form to deposit the relevant Shares into the CREST
System and hold them in uncertificated form so as to ensure that
such Shares are subject to the Migration, is not yet available, but
is expected to be a number of days prior to the Live Date. As set
out in the EB Migration Guide, the process for stock deposits made
into the CREST System prior to the Migration will be dependent on
the outcome of the review of the CREST Courier and Sorting Service
(“CCSS”), as
EUI’s current arrangements with TNT (owned by FedEx) for the
CCSS was due to terminate in December 2020. EUI has indicated that
it will share further information on when the ultimate deadline
will be for a stock deposit into EUI prior to the
Migration.
(3)
In regard to trades
entered into on Thursday, 11 March 2021 and Friday, 12 March 2021, it
is expected that these will settle in CDI on Monday 15 March 2021
and Tuesday 16 March 2021 respectively. Please refer to section
3.5.9 of the EB Migration Guide in respect of unsettled trades as
at close of business on 12 March 2021.
(4)
On 2 December 2020,
EUI announced that it will not be able to continue to settle in
euro under the current TARGET2 arrangements from Monday, 29 March
2021. In the same announcement, EUI confirmed that it is
investigating alternative arrangements with the aim that euro can
continue as a settlement currency in the CREST system. Unless such
alternative arrangements can be secured, this means that the final
date for euro settlement (including the payment of dividends) in
EUI will be Friday, 26 March 2021, following which all trades carried
out on the London Stock Exchange will settle in pounds sterling or
US dollars only. This could therefore impact holders of CDIs who
wish to receive dividends in euro.
(5)
On 25 November 2020
the European Commission issued Implementing Decision 2020/1766,
which determined that the legal and supervisory arrangements
governing central securities depositaries established in the United
Kingdom shall be considered to be equivalent to the requirements
laid down in CSDR for a period of six months from 1 January 2021 to
30 June 2021. The European Securities and Markets Authority
announced on 11 December 2020 that it will recognise EUI as a third
country CSD at the end of the Brexit transition
period.
(6)
All references in
this table to times are to Dublin, Ireland times.
PART 1
CRH PLC
(Registered
in Ireland No. 12965)
DIRECTORS
Richie
Boucher (Non-Executive Director, Chairman)
Albert
Manifold (Executive Director, Chief Executive)
Senan
Murphy (Executive Director, Group Finance Director)
Gillian
L. Platt (Senior Independent Director)
Richard
Fearon (Non-Executive Director)
Johan
Karlström (Non-Executive Director)
Shaun
Kelly (Non-Executive Director)
Lamar
McKay (Non-Executive Director)
Heather
Ann McSharry (Non-Executive Director)
Mary K.
Rhinehart (Non-Executive Director)
Lucinda
J. Riches (Non-Executive Director)
Siobhán
Talbot (Non-Executive Director)
REGISTERED OFFICE
42 Fitzwilliam Square, Dublin, D02 R279, Ireland
Chairman’s letter to Shareholders
15
January 2021
To the Holders of Ordinary and Preference Shares
Dear
Shareholder,
Replacement of CREST with Euroclear Bank
for electronic settlement of trading in CRH plc Shares
Simplification of CRH’s share capital by the surrender and
cancellation of the Income Shares
Notice of an Extraordinary General Meeting of CRH plc
to be held at Stonemason’s Way, Dublin 16,
Ireland
on Tuesday, 9 February 2021 at 11.00 a.m.
(“EGM”)
The purpose of this Circular is to convene the EGM in order to approve certain
resolutions which are necessary to ensure the Company’s
Shares can continue
to be settled electronically when they are traded on
the London Stock Exchange and
Euronext Dublin and remain
eligible for continued admission to trading and listing on those
exchanges. If approved, these resolutions will have a direct
impact on those larger shareholdings which are held in
uncertificated (i.e. dematerialised/non-paper) form. There will be
no immediate impact on
those smaller shareholdings which are held in certificated (i.e.
paper) form.
In order for trading in shares to be settled electronically, the
shares must be in uncertificated (i.e. dematerialised/non-paper)
form. Approximately 95% of the Company’s issued share
capital is held in uncertificated form. These uncertificated shares
(“Participating
Securities” as
more fully defined in Part 9 of this Circular) are not represented
by any share certificates and nor do they need to be transferred by
the execution of a written stock transfer form. Instead, they are
currently transferred by operator instructions issued pursuant to
the Companies Act 1990 (Uncertificated Securities) Regulations 1996
(as amended) (“Irish CREST
Regulations”)
via the CREST System, which is the London-based securities
settlement system (the “CREST
System”)
operated by Euroclear UK & Ireland Limited
(“EUI”).
Approximately 5% of the issued share capital of the Company is held
by Shareholders who hold shares in certificated form. The Migration
will have no immediate impact on these Shareholders and they will
not need to take any action in respect of the Migration (other than
voting in respect of the Resolutions should a Shareholder wish to
do so) so long as they wish to continue holding their shares in
certificated form.
The regulation of central securities depositaries
(“CSDs”),
which operate securities settlement systems, is harmonised across
the EU under the EU Central Securities Depositories Regulation
(Regulation (EU) No. 909/2014) (“CSDR”).
As a result of the withdrawal of the United Kingdom from the EU
(“Brexit”),
and following the end of the Brexit transition period on 31
December 2020, EUI is no longer subject to EU law. On 25 November
2020 the European Commission issued Implementing Decision
2020/1766, which determined that the legal and supervisory
arrangements governing CSDs established in the United Kingdom shall
be considered to be equivalent to the requirements laid down in
CSDR for a period of six months from 1 January 2021 to 30 June
2021. The European Securities and Markets Authority
(“ESMA”)
announced on 11 December 2020 that it will recognise EUI as a third
country CSD at the end of the Brexit transition
period.
In
December 2018, Euronext Dublin announced that, based on the
analysis it had carried out of four possible CSD options for
settlement post-Brexit, it had selected the CSD operated by
Euroclear Bank SA/NV, an international CSD incorporated in Belgium
(“Euroclear
Bank”), to replace the CREST System as the long-term
CSD for Irish securities settlement (the “Market Migration”).
As it is essential for the Company that electronic settlement of
trading of its Shares can continue on the London Stock Exchange and
on Euronext Dublin, the purpose of the EGM is to consider, and if
thought fit, approve a number of resolutions (the
“Migration Resolutions”)
which are intended to facilitate the migration of the
Company’s Participating Securities from the CREST System to
the CSD system operated by Euroclear Bank (the
“Euroclear
System”) in
the manner described in this Circular (the
“Migration”)
and to make certain other changes to the Company’s Articles
of Association. It is intended that the Migration of the Company's
Shares will occur as part of the Market Migration, which is
expected to occur in mid-March 2021.
If the Migration Resolutions are not passed, and the Company does
not participate in the Migration, all Participating Securities in
the Company will be required to be re-materialised into
certificated (i.e. paper) form and Shareholders and other investors
will no longer be able to settle trades in the Shares
electronically. This could materially and adversely impact on
trading and liquidity in the Shares as it would result in
significant delays for Shareholders and investors wishing to sell
or acquire Shares. It would also put at risk the continued
admission to trading and listing of the Shares on the London Stock
Exchange and on Euronext Dublin as the absence of electronic
settlement of Shares would mean that the Company would cease to
meet the eligibility criteria for admission to trading on the
London Stock Exchange and Euronext Dublin. The Directors believe
that the failure to participate in the Migration would have a
material adverse impact on liquidity in, and could have a material
adverse impact on the market value of the Shares as well as the
relative attractiveness of the Shares for investors.
Neither the Migration, nor the proposed changes to the Articles of
Association of the Company referred to below, are expected to
impact on the on-going business operations of the Company. The
Company will remain headquartered, incorporated and resident for
tax purposes in Ireland. The nature and venue of the stock exchange
listings of the Company will not change in connection with the
Migration. The Company does not expect that the Migration will
result in any change in the eligibility of the Company for the
indices of which it is a constituent as of the date of this
Circular.
2.
Simplification of CRH’s
share capital by the surrender and cancellation of the Income
Shares
The
capital of the Company is divided into 5% Cumulative Preference
Shares, 7% “A” Cumulative Preference Shares, Ordinary
Shares and Income Shares. The Income Shares are unlisted shares
which do not carry voting votes and are issued with, and tied to,
Ordinary Shares. The Income Shares were created on 29 August 1988
for the express purpose of giving shareholders the choice of
receiving dividends on either their Ordinary Shares or on their
Income Shares (by notice of election to the Company). The Income
Shares carried a different tax credit to the Ordinary Shares. The
creation of the Income Shares was achieved by the allotment of
fully paid Income Shares to each shareholder equal to his/her
holding of Ordinary Shares but the shareholder is not entitled to
an Income Share certificate, as a certificate for Ordinary Shares
is deemed to include an equal number of Income Shares and a
shareholder may only sell, transfer or transmit Income Shares with
an equivalent number of Ordinary Shares.
Due to
changes in Irish tax legislation since the creation of the Income
Shares, dividends on the Company’s shares no longer carry a
tax credit and as a result on 8 May 2002 the Articles of
Association of the Company were amended to cancel elections for
Income Shares. The Income Shares therefore no longer provide any
benefit for Shareholders. In addition, the Income Shares represent
an unnecessary complexity for the Company when undertaking the
Migration. This is so because under the Articles of Association,
the Income Shares are stapled to the Ordinary Shares. This means
that whenever there is change in the register of members in respect
of a holding of Ordinary Shares, the Company must ensure that this
is mirrored by a corresponding change in the register for the
corresponding holdings of the Income Shares. This has also meant
that it has not been necessary to have the process settled via the
CREST System. As the Income Shares are not in the CREST System, the
ability to maintain this stapling both during and after the
Migration in respect of shareholdings in the CREST System is not
straightforward. For these reasons, the Board believes that it is
in the best interests of the Company and its Shareholders to
simplify the Company’s share capital by seeking shareholder
approval for the cancellation of the Income Shares. This is the
purpose of Resolution 4, 5 and 6 in the EGM Notice. The approval of
these resolutions is not conditional on the Migration. If these
resolutions are approved, the Income Shares will no longer form
part of the share capital of the Company with effect from close of
business on 9 February 2021.
3.
An
explanation of how the Migration will affect the rights of
registered shareholders (i.e. members) and the form through which
shareholdings in the Company are held
Currently,
anyone acquiring Participating Securities via the CREST System in
accordance with the Irish CREST Regulations can either have the
Participating Securities registered in its own name in the
Company’s Register of Members, if it is a CREST member, or,
if it is not a CREST Member, it can arrange for a custodian which
is a CREST Member to hold the Participating Securities on its
behalf, in which case the custodian will be registered as the
holder of the Participating Securities in the Company’s
Register of Members. In both cases, the owner of the Participating
Securities is able to exercise all rights attaching to the
Participating Securities either directly as the registered
shareholder or indirectly via instructions given to the relevant
custodian shareholder in accordance with the terms of the private
contract entered into with the custodian.
The
Euroclear System is structured as an ‘intermediated’ or
‘indirect’ system, which means that for so long as
securities remain in the Euroclear System, Euroclear Bank’s
nominee, Euroclear Nominees Limited (“Euroclear Nominees”) will be
recorded in the Company’s Register of Members as the holder
of the relevant Shares and trades in the securities will instead be
reflected by a change in Euroclear Bank’s book-entry system.
In addition, anyone acquiring an interest in the shares in the form
of Belgian Law Rights via the Euroclear System must either be a
participant in the Euroclear System (“EB Participant”) or arrange for an
EB Participant to act as custodian on its behalf for its holding to
be recorded in Euroclear Bank’s book-entry
system.
As the
Migration will require all of the uncertificated (i.e.
dematerialised) Shares to move from the CREST System to the
Euroclear System, this means that Euroclear Nominees will be
registered as the sole legal holder of all of these Shares. Since
neither Euroclear Bank nor Euroclear Nominees will be the ultimate
owner of these Shares, they will only exercise rights attaching to
such Shares in accordance with instructions given by the relevant
EB Participant in accordance with Euroclear Bank’s Terms and
Conditions governing use of Euroclear including the Operating
Procedures of the Euroclear System (“EB Operating
Procedures”).
The EB
Operating Procedures, the EB Service Description and the EB Rights
of Participants Documents set forth the services provided to all EB
Participants with respect to interests in the Shares and are
governed by Belgian law. The services available under the Euroclear
System in respect of the indirect exercise of shareholder rights
are set out in the EB Service Description, and the rights
indirectly exercisable by an ultimate owner of Shares through the
Euroclear System will not be as extensive as is currently the case
for a person holding Participating Securities in the CREST System
pursuant to the Irish CREST Regulations and exercising rights
directly.
It is
important to note that in addition to the limits placed on it by
its EB Operating Procedures, Euroclear can only act on the
instructions of an EB Participant since section 101 of the
Companies Act makes it an offence for anyone to do any of the
following without the approval of the owner of the relevant
Shares:
(a)
obtain any interest
in such Shares;
(b)
receive any money
due to the owners of such Shares; or
(c)
vote at any meeting
of the Company as if it were the true and lawful
owner.
In
addition, further limitations are placed on what can and cannot be
done with respect to securities in the Euroclear System by the
Belgian statutory provisions summarised in Part 5 of this
Circular.
In
order to both ensure an orderly transfer to the intermediated
Euroclear model and also facilitate trading of Shares on the London
Stock Exchange, Euroclear has arranged with EUI for CDIs to be
issued to all former holders of Participating Securities on the
Live Date (with the exception of the Shares represented by the
ADSs). These CDIs will represent the Participating Securities
deposited in the Euroclear System. In its book entry system,
Euroclear Bank will record all of the deposited Participating
Securities as being in the account of CIN (Belgium) Limited (the
“CREST
Nominee”). The CREST Nominee is an EB Participant and
is nominee of the CREST Depository for the purpose of the creation
of CDIs. The CREST Depository’s relationship with CREST
members is governed by the global deed poll made on 25 June 2001 by
the CREST Depository (the “CREST Deed Poll”). CDIs may also
be of assistance for holders of Participating Securities who do not
qualify as, or do not have a custody relationship with an entity
which is an EB Participant. A Former Holder may then, at its own
discretion, therefore continue to hold CDIs, or transfer its
holding to an account in Euroclear Bank on a free-of-payment basis.
Further information in relation to CDIs is set out in Part 6
of this Circular and a summary comparing the service offering of
EUI with respect to CDIs and Euroclear Bank to EB Participants via
the Euroclear System is set out at Part 4 of this
Circular.
Part 4
of this Circular contains a high-level comparison of certain
elements of the service offering which will be available following
the Migration in relation to common corporate actions. In general
terms there will be earlier deadlines for action (including
deadlines for the submission of proxy instructions and restrictions
on the withdrawal of proxy instructions by holders) than would
currently apply and different procedural requirements (in some
cases more onerous) than currently apply but the ability to vote
electronically, to receive dividends and to participate in share
issuances will be preserved in accordance with the terms of the
service offering. Shareholders are
strongly encouraged to consult the EB Migration Guide, the EB
Services Description and the EB Rights of Participants Documents
(including any updated versions thereof to the extent they are
published after the date of the Circular), together with the
additional documentation made available for inspection as set out
in paragraph 9 of Part 1 of this Circular and should consider those
documents in making their decisions with respect to their Migrating
Shares.
Summary of effect of the Migration for holders of certificated
shares (i.e. Shareholders with paper share
certificates)
The
legal effects of the Migration for holders of certificated shares
can be summarised as follows:
●
Shareholders
holding a direct interest in Shares in certificated (i.e. paper)
form will continue to do so after the Live Date, without any
further action being required.
●
The Migration will
not affect the manner in which they hold their Shares or exercise
their rights. No new share certificates will be issued in
connection with the Migration.
This
will also be the case for Shareholders that currently hold their
Shares in the CREST System but who withdraw their Shares from the
CREST System and hold them in certificated (i.e. paper) form prior
to the latest time for doing so prior to the
Migration.
Shareholders
who wish to deposit Shares currently held in certificated (i.e.
paper) form into the CREST System, in order for the Shares to be
subject to the Migration, should either become a CREST member
themselves or make arrangements with their stockbroker or CREST
nominee in good time so as to allow their stockbroker or CREST
nominee sufficient time to deposit their Shares into the CREST
System by the closing date for CREST deposits prior to the
Migration. Such Shareholders will then receive CDIs on Migration,
as further referred to below.
As is
the case currently, in the event that Shareholders holding
certificated shares wish to settle a transaction in their shares on
the London Stock Exchange or Euronext Dublin they will need to
arrange for such shares to be dematerialised (which can be done
through their broker) prior to settlement.
Approximately
5% of the issued share capital of the Company is held by
Shareholders who hold in certificated form. These Shareholders, who
are not directly impacted by the Migration, represent approximately
73% in number of the total registered Shareholders in the
Company.
Summary of effect of the Migration for holders of Participating
Securities (i.e. holders of uncertificated shares)
For
Holders of Participating Securities, the immediate legal effects of
the Migration can be summarised as follows:
●
Title to all
Participating Securities on the Migration Record Date will become
vested in Euroclear Nominees (which is incorporated in England and
Wales).
●
Euroclear Nominees
will be entered into the Register of Members as the holder of all
Participating Securities.
●
Holders of
Participating Securities will no longer be able to directly
exercise certain rights as members of the Company in respect of
such Participating Securities.
●
Furthermore, CREST
Depository Interests (“CDIs”) will be issued in respect
of all of the Shares held in electronic form to the CREST members
on the Migration Record Date. Please see below at paragraph
4 and in Part 4 of this Circular
for further information concerning CDIs and the arrangements which
will apply to Shares represented by ADS. Once the CDIs have been
issued, the relevant CREST members will then be able to either
continue to hold via CDI or, subject to being, becoming, or having
a custody relationship with, an EB Participant, will be able to
hold via the Euroclear System.
●
The services which
can be availed of via the Euroclear System are in respect of the
indirect exercise of shareholder rights, and the rights indirectly
exercisable by EB Participants in respect of these securities
through the Euroclear System will not be as extensive as is
currently the case for a person holding Participating Securities in
the CREST System pursuant to the Irish CREST Regulations and
exercising rights directly.
●
Euroclear Bank will
only be able to take action with respect to the services it is
providing where an instruction is received from the relevant EB
Participant, which is recorded as entitled to Participating
Securities in the book-entry records of Euroclear Bank. Only those
EB Participants can directly exercise the foregoing rights and
avail of the foregoing services in respect of the Participating
Securities, unless otherwise available in the circumstances
provided under Belgian law as further explained in Part 5 of this
Circular (although the contractual relationship between the owner
of an interest in Participating Securities and the relevant EB
Participant may provide for the exercise of such rights and
services). Unless a former Holder of Participating Securities at
the Migration Record Date (a “Former Holder”) is or has become
an EB Participant, the Former Holder will need to appoint an EB
Participant to act on its behalf.
●
The rights of EB
Participants (which will include CIN (Belgium) Limited which is the
EB Participant in respect of the shares underlying the CDIs) to
securities deposited in the Euroclear System, as well as the
services being provided by Euroclear, are governed by Belgian law
and by the Belgian Law governed contractual rights summarised in
Part 5 of this Circular. The services available to EB
Participants and to CDI holders will be governed by the EB Services
Description and, additionally in the case of CDIs, the CREST
International Manual. This is a significant change in both the form
and nature of shareholding in the Company, and the substance of,
and manner in which, rights can be exercised.
●
In the event of
bankruptcy proceedings or resolution measures affecting Euroclear
Bank, EB Participants have a right of recovery. This is a
proprietary right to receive back the relevant quantity of
securities in the event of bankruptcy proceedings or any other
procedure where the rule of equal treatment of creditors applies.
This recovery right must be brought collectively in respect of the
pool of securities of the same issue held by EB Participants with
Euroclear Bank. This is explained further in Part 5 of this
Circular.
●
Article 12 of the
Belgian Royal Decree No. 62 provides that where the pool of
securities is insufficient (i.e. if there is a securities loss) to
allow complete restitution of all due securities of a specific
issue held on account with Euroclear Bank by all EB Participants,
the pool must be allocated among the EB Participants/owners in
proportion to their rights. The EB Participants will rank in
priority to Euroclear Bank in circumstances where Euroclear Bank is
also an owner of some of the securities.
●
Euroclear Bank has
a statutory lien over financial instruments (including securities),
cash, currencies and other rights held in the books of Euroclear
Bank on behalf of the EB Participant’s underlying clients and
Euroclear Bank may exercise this lien to secure any claim it has
against the EB Participant in connection with the settlement of
securities subscriptions, transactions in securities or
currency-forward transactions, including claims resulting from
loans or advances, which are carried out on behalf of the EB
Participant’s underlying clients. Since the underlying
clients are only entitled to a co-ownership right on the
securities/shares deposited on the EB Participant’s client
account with Euroclear Bank, all securities/shares on said account
serve as collateral with respect to Euroclear Bank’s claim
(that relates to transactions carried out on behalf of underlying
clients), regardless of whether the particular underlying client
was connected to the transaction.
●
Euroclear Bank has
a statutory lien over financial instruments (including securities),
cash, currencies and other rights held in the books of Euroclear
Bank as an EB Participant’s own (i.e. proprietary) assets,
which secures any claim Euroclear Bank has against the EB
Participant in connection with the settlement of securities
subscriptions, transactions in securities or currency-forward
transactions, including claims resulting from loans or advances. In
this instance only the EB participant’s own assets can be
used as collateral (provided that Euroclear Bank’s claim does
not relate to transactions carried out on behalf of underlying
clients).
●
The existing CREST
arrangements applicable to Participating Securities under the Irish
CREST Regulations will cease to apply.
Shareholders
who wish to hold their Participating Securities in certificated
form so that they do not participate in the Migration can do so and
should liaise with their broker or custodian in relation to how
this can be done via the CREST System.
Shareholders
who wish to transfer their Participating Securities to an account
in Euroclear Bank prior to Migration can do so (in which event all
the characteristics of a holding via the Euroclear System will
apply to them prior to Migration but their ability to avail of the
services available under the EB Services Description will only
commence on Migration). In order to do this, the relevant
Shareholders must either be or become an EB Participant or appoint
an EB Participant to act on their behalf.
Information
concerning the process for withdrawing securities from the
Euroclear System post Migration is contained in the EB Services
Description and is set out in paragraph 18 in Part 2 of this Circular. It is
expected that entry of the transferee on the Register of Members of
the Company can be effected within one (1) business day from
receipt of a valid withdrawal, although it may take up to ten (10)
business days after entry for the transferee to receive a share
certificate, however entry on the Register of Members is
prima facie evidence of a
shareholding under Irish law.
Information
on how to become an EB Participant can be accessed on the Euroclear
website at https://www.euroclear.com/about/en/business/Becomingaclient/BecomingaclientEuroclearBank.html.
Holders of ADSs
The
ADSs representing Shares are registered and delivered by The Bank
of New York Mellon, as depositary (the “ADS Depositary”). The terms and
conditions of the ADSs are set forth in the amended and restated
deposit agreement dated as of 28 November 2006, entered into among
the Company, the ADS Depositary and all holders from time to time
of ADSs issued thereunder (the “ADS Deposit Agreement”).
Currently, the Shares represented by the ADSs are held directly on
the Register of Members via the CREST System in the name of a
nominee of the ADS Depositary (the “CREST ADS Nominee”).
Because
the Shares represented by the ADSs are Participating Securities,
such Shares will be subject to the Migration. It is currently
expected that, on the Live Date, the Shares represented by ADSs
will cease to be held directly by the CREST ADS Nominee on the
Register of Members in the CREST System, and Euroclear Nominees
will be entered into the Register of Members as the holder of such
Shares in place of the CREST ADS Nominee. Euroclear Bank will then
credit the rights and interests in such Shares to the Euroclear
Bank account of the CREST ADS Nominee and CDIs representing those
Shares will be credited to the CREST account of the CREST ADS
Nominee. The CREST ADS Nominee will on the same day direct CREST to
cancel those CDIs and deliver the interests in the underlying
Shares to the Euroclear Bank account of the ADS Depositary which is
an EB Participant, by using cross-border delivery. As a result, the
rights and interests of the ADS Depositary in such Shares
represented by ADSs will comprise the Belgian Law Rights summarised
in Part 5 of this Circular.
It is
envisaged that the Migration will not require any changes to the
terms of the ADSs or the Deposit Agreement. Following the
Migration, it is expected that outstanding ADSs will continue to
trade and settle on New York Stock Exchange in the same manner as
before the Migration.
If
holders of ADSs wish to exercise the rights of holders of Shares
listed in Appendix 2 following the Live Date, then they
should, prior to the Live Date, surrender their ADSs to the ADS
Depositary for cancellation and arrange to hold the Shares
represented by their ADSs in certificated (i.e. paper) form. Any
surrender of ADSs and withdrawal of the Shares represented by such
ADSs will result in the incurrence of (i) the charges specified in
the Deposit Agreement for the surrender of the Company ADSs and
(ii) any applicable taxes and/or governmental charges.
Following
the Migration, in the event a holder of ADSs surrenders their ADSs
to the ADS Depositary for cancellation, it is currently expected
that the ADS Depositary would arrange to credit the Euroclear Bank
account of such holder (or its designated EB Participant) with the
rights and interests of the ADS Depositary (as an EB Participant)
in the Shares represented by such ADSs.
Proposed amendments to the Articles of Association in order to
address many of the shareholder rights which are not accommodated
under the EB Services Description.
Appendix 2
of this Circular contains a list of rights of members that are not
directly exercisable under the EB Services Description. The rights
listed in Appendix 2 may be exercised directly by withdrawing
the Participating Securities from Euroclear Bank (see below),
resulting in a certificated (i.e. paper) holding, as described
below. Shareholders wishing to hold their Shares in certificated
form following the Migration are also advised that their ability to
do so following 1 January 2023 (in respect of new issues of Shares)
and 1 January 2025 (in respect of all issued Shares) will be
subject to the model of dematerialisation which has yet to be
devised by the Irish legislature in order to comply with the
requirements of Articles 3(1) and 76(2) of CSDR.
Appendix 2
also refers to three changes to company law sought by Euroclear
which have been implemented by the European Union (Consequential
Provisions) Act 2020 (the “Brexit Omnibus Act”).
It is
understood that the Company Law Review Group (the statutory body
charged with monitoring, reviewing and advising the Minister for
Business, Enterprise & Innovation in relation to company law in
Ireland) has conducted a review of certain Irish company law
provisions in light of the impending move to an intermediated
settlement system. It is hoped that these legislative amendments
will be advanced in the period prior to 1 January 2023 addressing
some or all of the potential deficiencies in the exercise of
shareholder rights.
In the
interim and in order to minimise the negative impact from the loss
of these rights, the Company is proposing that the Directors would
have the discretion to facilitate the exercise of certain of these
rights in certain circumstances and subject to certain
requirements, by making amendments to the Articles of Association
as part of the approval of Resolution 2. These amendments are also
detailed in Part 8 of this Circular.
Holders of Participating Securities are strongly urged to read
Appendix 2 as this appendix also indicates those rights which
cannot be accommodated by the proposed amendments to the
Company’s Articles of Association and would therefore need to
be remedied by changes in law.
Withdrawal of Participating Securities from Euroclear
System
Until
the EU-wide dematerialisation deadline of 1 January 2025 required
by Articles 3(1) and 76(2) of CSDR, it will be possible to withdraw
the Participating Securities from Euroclear Bank and hold them in
certificated (i.e. paper) form and/or by immobilisation in
accordance with CSDR. Information concerning the process for
withdrawing securities from Euroclear Bank is contained in the EB
Service Description. Generally this involves the sending of an
instruction by the EB Participant to Euroclear Bank, which will be
communicated to the Registrar, which will proceed to effect a
transfer of the relevant shareholding from Euroclear Nominees to
the EB Participant or other transferee, whose name will be entered
on the Register of Members. The time period for any such withdrawal
of securities from Euroclear Bank has not yet been finalised but is
expected to be longer than the equivalent period which would
currently apply in respect of a withdrawal from the CREST System.
After shares have been withdrawn from the Euroclear System to be
held so that they become represented in certificated (i.e. paper)
form, if the shareholder needs a stockbroker to sell the shares on
its behalf on the London Stock Exchange or Euronext Dublin, the
shares will need to be redeposited into the Euroclear
System.
As a
consequence of Section 1087C of the Companies Act it will not be
necessary to execute a written instrument of transfer in order to
withdraw shares from Euroclear (in favour of any holder of rights
or interests in those securities) or transfer those securities from
one authorised CSD to another.
Stock Lending
Persons
engaged in stock lending and borrowing transactions in Shares, as
currently facilitated as part of the EUI CREST service offering
under the Irish CREST Regulations, should note that such services
do not form part of the EB Services Description. Persons who wish
to lend and borrow shares in the Company after the Migration may
seek to register for Euroclear Bank’s automated Securities
Lending and Borrowing programme or use one of the other services of
Euroclear Bank that can achieve an equivalent effect. It is important for Shareholders to note that
the foregoing change in service offering will have an impact on any
stock lending and borrowing transactions in Shares that remain
outstanding as at the Live Date. The CREST stock lending and
borrowing service will remain available to CREST members holding
CDIs via the CREST System.
4.
Preference
Shareholder
Preference
Shares which are also Participating Securities on the Record Date
will become Migrating Shares in the same way as other Migrating
Shares described in this Circular. The holders of the Preference
Shares are being asked to vote on resolutions 1, 2 and 3 as these
resolutions relate to the Migration. As resolutions 4, 5 and 6 do
not affect the rights of the Preference Shareholders, the
Preference Shareholders are not entitled to vote on those
resolutions.
5.
Further
background relating to the Migration
Since
1996, the electronic settlement of share trading in Irish
incorporated companies has been carried out through the CREST
System as operated by EUI. EUI is incorporated in England and Wales
and is regulated in the UK by the Bank of England. Insofar as it
applies to Irish companies, the CREST System is also regulated in
Ireland by the Minister for Business, Enterprise and Innovation
under the Irish CREST Regulations.
Since
17 September 2014, both EUI and Euroclear Bank have been central
securities depositories operating in the EU for the purpose of the
EU Central Securities
Depositories Regulation. The aim of CSDR is to harmonise
certain aspects of the settlement cycle and settlement discipline
and to provide a set of common requirements for a CSD operating
securities settlement systems across the EU. CSDR plays a pivotal
role for post-trade harmonisation efforts in Europe, enhancing the
legal and operational conditions for cross-border settlement in the
EU.
EUI
became an authorised CSD for the purposes of CSDR on 8 December
2020. Prior to this, it had been able to provide CSD services in
Ireland on account of the ‘grandfathering provision’ in
Article 69(4) of CSDR and the fact that the CREST System is
regulated in Ireland by the Minister for Business, Enterprise and
Innovation under the Irish CREST Regulations. Since 31 December
2020 (“Brexit
Date”) EUI has ceased to be an authorised CSD for the
purposes of CSDR. Notwithstanding this, EUI will continue to be
able to provide its existing CSD services for shares in Irish
companies until 30 June 2021 on account of Implementing Decision
2020/1766 issued by the European Commission on 25 November 2020 and
ESMA’s announcement on 11 December 2020 that it will
recognise EUI as a third country CSD with effect from the Brexit
Date.
In
December 2018, Euronext Dublin announced that, based on the
analysis it had carried out of four possible CSD options for
settlement post-Brexit, it had selected Euroclear Bank with a
Belgian-based model to replace the CREST System as the long-term
CSD for Irish securities settlement.
In May
2019, Euroclear Bank issued a White Paper which set out its
proposal for Euroclear Bank to become the Issuer CSD for Irish
corporate securities from March 2021.
On 26
December 2019, the Migration of Participating Securities Act 2019
(the “Migration
Act”) was enacted with the intention that it would
provide a legislative mechanism to facilitate the migration of
Irish securities to an EU-based CSD. While the issue of CDIs to
Former Holders who are CREST members, as described in this
Circular, is a key part of the implementation of the Migration, it
is not provided for in the Migration Act. Instead, this aspect of
the Migration is to be covered by the taking of certain operational
steps by Euroclear Bank, the CREST Nominee and the CREST Depository
as set out in the EB Migration Guide and in accordance with the
terms of the CREST Deed Poll and the CREST International Manual and
the amendment of the Company’s Articles of Association,
including by the adoption of the proposed new Article 18 pursuant
to Resolution 2 and the approval of Resolution 3.
On 14
December 2020, the Company notified Euroclear Bank of its intention
to seek shareholder consent in order for Participating Securities
in the Company to be the subject of the Migration in accordance
with the Migration Act (“Notification to Euroclear”). In
the Notification to Euroclear, the Company confirmed that the
following matters have been or will be done or satisfied in time
for the Migration:
1)
the appointment of
an issuer agent which meets or will by the time of the Migration
meet Euroclear Bank’s requirements for being an issuer agent
in respect of the Irish Issuer CSD service;
2)
nothing in the
Company’s articles of association would prevent a shareholder
from voting in the manner permitted by section 190 of Companies Act
(i.e. on the basis of a poll);
3)
nothing in the
Company’s articles of association would prevent voting at
meetings from being conducted on the basis of a poll;
and
4)
electronic proxy
voting with respect to meetings of the Company may occur through
the use of a secured mechanism to exchange electronic messages (as
agreed with Euroclear Bank).
In the
same letter, the Company set out its understanding of certain key
aspects of the Migration mechanisms.
On 15
December 2020, the Company received a statement in writing from
Euroclear Bank (as required by section 5(6)(a) of the Migration
Act) to the effect that the provision of the services of the
Euroclear Bank System to the Company will, on and from the Live
Date, be in compliance with Article 23 of CSDR. In the same letter,
the Company also received the statement from Euroclear Bank (as
required by section 5(6)(b) of the Migration Act) to the effect
that following (i) such inquiries as have been made of the Company
by Euroclear Bank, and (ii) the provision of such information by or
on behalf of the Company, in writing, to Euroclear Bank as
specified by Euroclear Bank, Euroclear Bank is satisfied that the
relevant Participating Securities in the Company meet the criteria
stipulated by Euroclear Bank for the entry of the Participating
Securities into the settlement system operated by Euroclear Bank.
This confirmation from Euroclear Bank was stated as being subject
to the information which the Company has provided to Euroclear Bank
as mentioned in (ii) above being true and correct at the time of
the Migration. These communications were all required before the
Company could issue this Circular.
On 9
November 2020, the UK Chancellor and HM Treasury announced that the
UK will be granting a package of equivalence decisions to the
European Economic Area States (“EEA”), including the Member States
of the European Union. This includes the Central Securities
Depositories Regulation Equivalence Directions 2020 which will
determine that CSDs in each EEA State are equivalent to Article 25
of the CSDR which will form part of UK law at the end of the
Transition Period. With equivalence granted, the Bank of England
can then assess CSDs in the EEA for recognition (subject to
establishing co-operation arrangements with the relevant EU
authorities), allowing those CSDs, once recognised, to continue to
service UK securities and to exit the transitional regime contained
in Article 69 CSDR and Part 5 of the UK Central Securities
Depositories (Amendment) (EU Exit) Regulations 2018.
On 2
December 2020, EUI announced that it will not be able to continue
to settle in euro under the current TARGET2 arrangements as defined
in the CREST Manual from Monday, 29 March 2021. In the same
announcement, EUI confirmed that it is investigating alternative
arrangements with the aim that euro can continue as a settlement
currency in the CREST system. Unless such alternative arrangements
can be secured, this means that the final date for euro settlement
in EUI will be Friday, 26 March 2021, following which all trades
carried out on the London Stock Exchange will settle in pounds
sterling or US dollars only.
6.
Implementation
of the Migration
If the
Migration Resolutions are passed, and the Company satisfies the
other requirements applicable to the Migration becoming effective,
title to all the Participating Securities in the Company at the
Migration Record Date (“Migrating Shares”) will be vested
in Euroclear Nominees as nominee for Euroclear Bank on the Live
Date and Euroclear Nominees will be registered as the holder of all
Participating Securities on the basis that they will be holding the
Participating Securities on trust for Euroclear Bank on the Live
Date. The Live Date has not yet been confirmed and will be
specified by Euronext Dublin in accordance with the Migration Act.
For the same reason, the Migration Record Date has not yet been
confirmed and will be specified by the Company when the Live Date
is known. The Live Date is currently expected to be on or around 15
March 2021 with the Migration occurring over the weekend
immediately prior to the Live Date and then taking effect on the
Live Date. The Company will give notice of further confirmed dates
in connection with the Migration, when known, via its website on
www.crh.com/investors/shareholder-centre.
While
the issue of CDIs as described in this Circular is a key part of
the implementation of the Migration, this is not provided for in
the Migration Act. Instead, this aspect of the Migration is to be
covered by additional provisions set out in the Brexit Omnibus Act,
the amendment of the Company’s Articles of Association,
including by the adoption of the proposed new Article 18 pursuant
to Resolution 2, the approval of Resolution 3 and the measures and
steps to be effected in accordance with and as envisaged by the EB
Migration Guide.
Euroclear
Bank and EUI have identified the following sequence of steps to be
taken in order to implement the Migration:
●
At 2.55 p.m. on the
Friday preceding the Migration weekend (which is expected to be
Friday, 12 March 2021), EUI will stop the delivery versus payment
settlement of the Participating Securities. EUI will continue to
settle transfers until 6.00 p.m. on 12 March 2021 where the
transfer of the securities does not require a corresponding
transfer of funds.
●
There will then be
a final reconciliation between EUI and the Registrar which is
necessary so that the Participating Securities can be reclassified
as CDIs in the CREST System.
●
By the Live Date,
the Company will rely on the proposed new Article 18 pursuant to
Resolution 2 and the approval of Resolution 3 in order to instruct
its Company’s Registrar to enter the Euroclear Nominees into
the Register of Members as the holder of the Migrating Shares (i.e.
Participating Securities which are on the Register of Members at
the Migration Record Date).
●
Euroclear Bank will
credit its interest in such Shares (which it holds via Euroclear
Nominees) to the account of the CREST Nominee, CIN (Belgium)
Limited and the CREST Nominee will hold its interest in such Shares
(i.e. the Belgian Law Rights) as nominee and for the benefit of the
CREST Depository. The CREST Depository will, in turn, hold its
interest in such Shares (i.e. the Belgian Law Rights) on trust and
for the benefit of the holders of the CDIs.
●
With effect from
the Live Date, each holding of Participating Securities credited to
any stock account in the CREST System on the Migration Record Date
will be disabled and enabled in the CREST System as a holding via
CDIs which represent the Belgian Law Rights which
are granted to the CREST Nominee as an EB Participant pursuant to
Royal Decree No. 62 and represent the underlying Shares registered
in the name of Euroclear Nominees.
●
On the Live Date,
the CREST ADS Nominee will then direct CREST to cancel the CDIs
represented by ADSs at such time and deliver the interests in the
underlying Shares to the Euroclear Bank account of the ADS
Depositary, which is an EB Participant.
The
steps outlined above are only possible on account of the combined
effect of provisions set out in the Brexit Omnibus Act, the
amendment of the Company’s Articles of Association, including
by the adoption of the proposed new Article 18 pursuant to
Resolution 2, the approval of Resolution 3 and the measures and
steps to be effected in accordance with and as envisaged by the EB
Migration Guide. Under the proposed new Article 18 pursuant to
Resolution 2 any holder of a Participating Security on the
Migration Record Date shall be deemed to have consented to and
authorised the carrying out of these steps with respect to its
Participating Security. Any holder of Participating Securities who
does not wish to give such consent and authorisation must withdraw
the relevant Shares from the CREST System before the Latest
Withdrawal Date.
While
these steps are set out in the EB Migration Guide, neither
Euroclear Bank nor EUI are required to do any of these steps by the
Migration Act and nor has it been possible to put in place any
contractual commitment requiring them to do so. If there is a systems failure on the part of
Euroclear, EUI or the Company’s Registrar which prevents any
of these steps from taking place as described above, the amended
Article 18 pursuant to Resolution 2 makes it clear that a holder of Participating
Securities shall have no recourse against the Company, the
Directors or the Company’s Registrar. Under the
Migration Act, Euronext Dublin has the power to appoint the Live
Date and reserves the right to confirm the Live Date on the Live
Date.
As
indicated, upon completion of the foregoing steps, the Migrating
Shares (other than Migrating Shares represented by ADSs) will be
enabled as CDIs in the CREST System. If the Former Holder wishes to
exercise the rights relating to the underlying Migrating Shares via
the Belgian Law Rights in the Euroclear System, rather than
CDIs in the CREST System, the Former Holder must:
(a)
be an EB
Participant (or must appoint an EB Participant to hold the interest
in the Migrating Shares on its behalf); and
(b)
transfer the
Belgian Law Rights in respect of the Migrating Shares from the
CREST International Account in Euroclear Bank to the account of
another EB Participant by using cross-border delivery. The delivery
instruction will need to match with a receipt instruction and all
other settlement criteria required must be satisfied in order for
the transfer to settle.
It will
be for each Shareholder to decide whether, following the Migration,
it will hold the Belgian Law Rights as EB Participants or hold its
interest in the Participating Securities by way of CDIs
representing those Belgian Law Rights. The practical result of the
Migration taking effect will be that all Migrating Shareholders
(other than ADS holders) will receive one CDI for each Migrating
Share held at the Migration Record Date. Migrating Shareholders
will then be entitled to choose whether (1) to continue to hold via
CDI, or (2) to convert their holding via CDI into a holding of the
Belgian Law Rights as an EB Participant (subject to such Migrating
Shareholder being or becoming an EB Participant), or through a
custodian, broker or other nominee which is an EB Participant. ADS
holders will continue to hold their ADSs as before, but the ADS
Depositary will (following cancellation of the CDIs initially
received by it) hold the underlying Shares in its account with
Euroclear Bank instead of in CREST through CDIs.
Information
on how to become an EB Participant can be accessed on the Euroclear
website at https://www.euroclear.com/about/en/business/Becomingaclient/BecomingaclientEuroclearBank.html.
For the
avoidance of doubt, CDIs are separate and different from shares
currently transferable via the CREST System. Currently legal title
in shares entered in the Register of Members is transferred
electronically in the CREST System. CDIs, however, are a technical
means by which interests in Shares can be held in the CREST System
as an alternative to holding Belgian Law Rights directly as an EB
Participant. CDIs will allow a Shareholder to continue to hold
interests in the CREST System (albeit indirectly) and to settle
trades in the Shares conducted on the London Stock Exchange.
Further information on CDIs is set out at Part 6 of this
Circular.
Shareholders
should further note that the Belgian Law Rights are not securities
that can be traded. Instead, they are special co-ownership rights
created by operation of law in respect of the pool of the Company's
Shares of the same type (i.e. the same ISIN), which are held
through the Euroclear System. Belgian law grants such rights to the
relevant EB Participants, and, in certain specifically identified
cases, to the holders of the underlying Shares. Further information
on the Belgian Law Rights is set out in Part 5 of this
Circular.
The
European Central Bank has declined to permit settlement of trades
on the London Stock Exchange in euro beyond March 2021 and EUI has
advised that absent alternative arrangements it intends to cease
euro settlement (which would include dividend payments) on 26 March
2021. This may therefore impact holders of CDIs who wish to receive
dividends in euro. The settlement of Shares traded on the London
Stock Exchange will occur via CDI through the CREST System in GBP
and/or US dollar as of two (2) days following the Live Date and the
settlement of Shares traded on Euronext Dublin will occur via
Belgian Law Rights through the Euroclear System only as of two (2)
days following the Live Date in euro. This is due to the respective
requirements of, inter
alia, the London Stock Exchange Trading Rules and the
Euronext Dublin Trading Rules.
Where persons hold interests in Migrating Shares via a contractual
arrangement with another party, such as a broker or other
custodian, they should consult with that party as well as their
independent professional advisers to ascertain the effect of the
Migration on such interests.
7.
Resolutions
proposed for consideration at the EGM
The holders of 5% Cumulative Preference Shares and 7%
“A” Cumulative Preference Shares are being asked to
vote on resolutions 1, 2 and 3 as these resolutions relate to the
Migration. As resolutions 4, 5 and 6 do not affect the rights of
the Preference Shareholders, the Preference Shareholders are not
entitled to vote on those resolutions.
Resolution 1 –
Shareholders’ consent
to the Migration
Resolution
1 is being proposed in order to satisfy the requirement in sections
4, 5 and 8 of the Migration Act that the Shareholders of the
Company pass a resolution (called a Special Resolution in the
Migration Act) to approve of the Company giving its consent to the
Migration. Unlike a special resolution provided for in the
Companies Act, the Migration Act requires that this special
resolution be approved at a general meeting at which there is in
attendance at least three (3) persons holding or representing by
proxy at least one-third in nominal value of the issued Shares in
the Company. While the Migration Act is silent on the approval
threshold, Resolution 1 is being proposed by the Board on the basis
that it must be approved of by 75% or more of votes properly cast,
in person or by proxy at the EGM.
As the
Migration may be considered as affecting the rights or privileges
of the holders of the Preference Shares, the holders of the
Preference Shares will also be entitled to vote with the holders of
the Ordinary Shares.
If
Resolution 1 is approved, the consent of the Company to the
Migration will, subject to the market wide migration proceeding, be
given by a resolution of the Board (or a committee thereof) (the
“Board Migration
Resolution”), notice of which shall be published via
an announcement through a Regulatory Information Service prior to
the Live Date.
Resolution 2 – Approval and adoption of new Articles of
Association of the Company
Resolution
2 is being proposed as a Special Resolution for the purposes of the
Companies Act as it seeks to approve and adopt new Articles of
Association of the Company to facilitate the new arrangements
required as a result of the Migration and to take account of
changes introduced by the Migration Act. The adoption of Resolution
2 is subject to the approval of Resolution 1. Resolution 2 must be
approved of by 75% or more of votes properly cast, in person or by
proxy at the EGM.
As
these changes may be considered as affecting the rights or
privileges of the holders of the Preference Shares, the holders of
the Preference Shares will also be entitled to vote with the
holders of the Ordinary Shares in respect of Resolution
2.
An
explanation of the proposed changes to the Articles of Association
is contained in Part 8 of this Circular. These changes will
include an amendment to the Articles of Association of the Company
so as to allow the Directors to take all steps necessary to
implement the Migration Act including the processes and procedures
described in the EB Migration Guide and instructing the Registrar
of the Company to enter Euroclear Nominees into the Register of
Members as the holder of the Migration Shares. The Company is also
proposing that the Directors would have discretion to exercise
their powers under the Articles of Association to facilitate the
exercise of certain rights of registered shareholders (i.e.
members), in appropriate requirements which would otherwise become
un-exercisable directly by a holder of Participating Securities
following the Migration.
A copy
of the Articles of Association in the form amended by Resolution 2
(marked to highlight the proposed changes) is available (and will
be so available until the conclusion of the EGM) on the
Company’s website (www.crh.com/investors/shareholder-centre),
in London as detailed at paragraph 9 below and will also be
available at and for the duration of, the EGM.
If
approved by Shareholders, the Articles of Association in the form
amended by Resolution 2 will be effective on the date specified in
the Board Migration Resolution.
Resolution 3 - To authorise and instruct the Directors to take all
necessary steps to give effect to the Migration
Resolution
3 is being proposed as a special resolution for the purposes of the
Companies Act. As the Migration involves the taking of certain
procedural steps which are not specifically provided for in the
Migration Act, including the issue of CDIs as explained in further
detail at section 2 of Part 3, the Company is seeking
Shareholder approval and direction by way of a special resolution
to give flexibility to the Board to give effect to these
arrangements. It is expected that any such arrangements will be in
substantial conformity with measures taken by all Irish listed and
traded issuers which participate in the Market Migration.
Resolution 3 will authorise and instruct the Company to take any
and all actions which the Directors, in their absolute discretion,
consider necessary or desirable to implement the Migration and/or
the matters in connection with the Migration referred to in this
Circular (including the procedures and processes described in the
EB Migration Guide as amended from time to time), including
appointing any necessary parties to act as the agents of the
holders of Migrating Shares in order to implement the Migration
and/or matters in connection with the Migration referred to in the
Circular (including the procedures and processes described in the
EB Migration Guide as amended from time to time). The adoption of
Resolution 3 is subject to the approval of Resolutions 1 and 2.
Resolution 3 must be approved of by 75% or more of votes properly
cast, in person or by proxy at the EGM.
As the
issue of CDIs may be considered as affecting the rights or
privileges of the holders of the Preference Shares, the holders of
the Preference Shares will also be entitled to vote with the
holders of the Ordinary Shares.
As resolutions 4, 5 and 6 do not affect the rights of the
Preference Shareholders, the Preference Shareholders are not
entitled to vote on those resolutions.
Resolution 4 - To authorise and instruct the Directors in regard to
the cancellation of the Income Shares
In
Resolution 4, the Company is seeking Shareholder approval to adopt
a new Article 51(d) in the Articles of Association which would
authorise and instruct the Directors to take any and all actions to
effect the surrender and cancellation of the Income Shares.
Resolution 4 is not conditional on the Migration taking place. If
approved, the Income Shares would cease to exist with effect from
the close of business on 9 February 2021. Resolution 4 must be
approved of by 75% or more of votes properly cast, in person or by
proxy at the EGM.
Resolution 5 - Diminish the authorised share capital by
€25,000,000 from €426,297,940 to €401,297,940
divided into 150,000 5% Cumulative Preference Shares of €1.27
each, 872,000 7% "A" Cumulative Preference Shares of €1.27
each and 1,250,000,000 Ordinary Shares of €0.32
each
In
Resolution 5, the Company is seeking Shareholder approval to
diminish the authorised share capital by €25,000,000 from
€426,297,940 to €401,297,940 divided into 150,000 5%
Cumulative Preference Shares of €1.27 each, 872,000 7% "A"
Cumulative Preference Shares of €1.27 each and 1,250,000,000
Ordinary Shares of €0.32 each. This change is subject to the
approval of Resolution 4 and the completion of the surrender and
cancellation of the Income Shares. Resolution 5 must be approved of
by a simple majority or more of votes properly cast, in person or
by proxy at the EGM.
Resolution 6 – Deletion of reference to Income Shares in the
Articles of Association
In
Resolution 6, the Company is seeking Shareholder approval to amend
the Articles of Association by the deletion of all references to
the Income Shares. This amendment is subject to the approval of
Resolution 4 and the completion of the surrender and cancellation
of the Income Shares. Resolution 6 must be approved of by 75% or
more of votes properly cast, in person or by proxy at the
EGM.
A copy
of the Articles of Association in the form amended by Resolution 6
(marked to highlight the proposed changes) is available (and will
be so available until the conclusion of the EGM) on the
Company’s website (www.crh.com/investors/shareholder-centre),
in London as detailed at paragraph 9 below and will also be
available at and for the duration of, the EGM.
You
should read this Circular in its entirety. Part 1 of this
Circular summarises:
(a)
how the Migration
will affect the rights of registered Shareholders, and the form
through which shareholdings in the Company are held;
(b)
the range of rights
indirectly exercisable through and services available via the
Euroclear System;
(c)
how the rights
indirectly exercisable through and services accessible to
uncertificated shareholders following the Migration (provided via
the Euroclear System and via CREST in respect of CDIs) differ from
those currently provided;
(d)
further background
relating to the Migration;
(e)
the implementation
of the Migration;
(f)
certain regulatory
matters, including certain company law provisions relevant to the
Migration; and
(g)
where and how to
inspect display documentation relating to the
Migration.
Part 2
of this Circular contains a series of questions and answers that
will hopefully address any queries you may have about the
Migration. Part 3 provides further information for the purpose
of section 6(1) of the Migration Act. Part 4 sets out a
comparative summary of the Euroclear Bank service offering to EB
Participants and the EUI service offering to CDI holders, each for
Irish securities. Part 5 of this Circular contains further
information on Belgian Law Rights relevant to a holding in the
Euroclear System and Part 6 provides an overview of CDIs.
Part 7 of this Circular contains certain information in
relation to the tax impact of the Migration. Part 8 contains a
description of the proposed changes to the Articles of Association
of the Company to take account of the Migration, the cancellation
of Income Shares and otherwise as explained in Part 8. Defined
terms used in this Circular are explained in Part 9. The EGM
Notice is set out at the end of this Circular in Appendix 1.
Appendix 2 contains a list of those rights of members of Irish
incorporated PLCs under the Companies Act that are not directly
exercisable under the EB Services Description or CREST
International Manual.
Copies
of the following documents relevant to the Migration will be made
available for inspection during normal business hours on any
business day from the date of this Circular until the EGM in London
at Arthur Cox’s London office at 12 Gough Square, London,
EC4A 3DW, United Kingdom, and online at www.crh.com/investors/shareholder-center.
(a)
a copy of the
Articles of Association marked to show the changes proposed to be
made by Resolution 2;
(b)
a copy of the
Articles of Association marked to show the changes proposed to be
made by Resolution 6;
(c)
a copy of the
notification issued by the Company to Euroclear Bank as required by
section 5 of the Migration of Participating Securities Act
2019;
(d)
a copy of the
statements issued by Euroclear Bank as required by section 5 of the
Migration of Participating Securities Act 2019;
(e)
a copy of the
section 6(4) Notice published by the Company;
(f)
the Euroclear Terms
and Conditions (April 2019);
(g)
the EB Operating
Procedures (October 2020);
(h)
the EB Services
Description (October 2020);
(i)
the EB Rights of
Participants Document (July 2017);
(j)
the EB Migration
Guide (October 2020);
(k)
the CREST Manual
(December 2020);
(l)
the CREST
International Manual (provided within the CREST Manual) (December
2020);
(m)
the CREST Deed Poll
(provided within the CREST International Manual);
(n)
the CREST Terms and
Conditions (August 2020); and
(o)
the CREST Tariff
Brochure (August 2020).
In accordance with applicable regulations and public health
guidelines in force in the UK in connection with COVID-19, the
Company requests Shareholders not to attend these offices but
instead to inspect the documents on the Company’s
website.
10.
Public
Health Guidelines and the EGM
The
well-being of our Shareholders and our people is a primary concern
for the Directors. We are closely monitoring the COVID-19 situation
and any advice by the Government of Ireland in relation to the
pandemic. We will take all recommendations and applicable law into
account in the arrangements for the holding of the EGM. Under the
current COVID-19 regulations, Shareholders will not be able to
attend the EGM in person and we would therefore encourage
Shareholders to submit their Form of Proxy to ensure they can vote
and be represented at the EGM. By submitting a Form of Proxy in
favour of the chairman of the EGM you can ensure that your vote on
the Resolutions is cast in accordance with your wishes without
attending in person. If the current (or similarly more extensive)
restrictions relating to COVID-19 are in force at the time of the
EGM, the Company will be required to hold the EGM as a closed
meeting (i.e. not generally open to the public).
In the
likely event that the EGM will be a closed meeting, Shareholders
will be provided with a facility to listen to the EGM remotely and
follow the business of the meeting as outlined at section 11
below.
The
Company continues to monitor the impact of COVID-19 and any
relevant updates regarding the EGM, including any changes to the
arrangements outlined in this Circular will be available on
www.crh.com/investors/shareholder-centre.
In the
event that it is not possible to hold the EGM either in compliance
with public health guidelines or applicable law or where it is
otherwise considered that proceeding with the EGM as planned poses
an unacceptable health and safety risk, the EGM may be held as a
closed meeting, or adjourned or postponed or relocated to a
different time and/or venue, in which case notification of such
adjournment or postponement or relocation will be given in
accordance with applicable law and will be announced as explained
in the previous paragraph.
The
formal EGM Notice appears at Appendix 1 of this Circular and
sets out the items to be transacted at the EGM.
Under
the current COVID-19 regulations, Shareholders will not be able to
attend the EGM in person and I would therefore urge all
Shareholders, regardless of the number of Shares that you own, and
regardless of whether you hold or wish to continue to hold your
Shares in certificated form (i.e. paper) or electronically, to
complete, sign and return your Form of Proxy as soon as possible
but, in any event, so as to reach the Registrar by 11 a.m. on 7
February 2021. In the exceptional circumstances of the current
COVID-19 pandemic, the CRH Board strongly encourages members to
appoint the chairman of the meeting as their proxy, however, a
member may appoint another person, who need not be a member(s) of
the Company, as a proxy, by electronic means or in writing, to vote
some or all of their shares. If you appoint someone other than the
chairman of the meeting to be your proxy, that person is unlikely
to be able to attend the EGM if the prevailing COVID-19 measures
require the Company to conduct the EGM as a closed meeting.
Alternatively, Shareholders may register their proxy appointment
and voting instructions electronically via the internet, or, where
they hold their Shares in the CREST System, via the CREST
Electronic Proxy Appointment Service. Details of how to do this are
provided in the notes section on pages 2 to
2 of
this Circular.
How to appoint a proxy electronically via signalshares.com and join
remote audio facility
Shareholders will
be provided with a facility to listen to the proceedings of the EGM
remotely. To access this remote audio facility Shareholders should
visit www.crh.com/investors/shareholder-centre
using a smartphone, tablet or computer with an internet connection
and click on the link which will be made available in advance of
the EGM. Shareholders will then be prompted to enter their unique
‘Login Code’ and ‘PIN’. The Login Code is
your IVC number, which is an 11 digit code is printed on the
enclosed Form of Proxy. The PIN is the last 4 digits of the IVC.
This will authenticate each Shareholder. Access to the audio
facility will be available from 30 minutes before start of event
although Shareholders will not be able to listen to the audio until
the meeting is declared open. If a Shareholder wishes to appoint a
proxy or to submit a Letter of Representation for a corporate
representative for them to access the virtual audio-cast of the
meeting on the Shareholders’ behalf, please contact the
Registrars by telephone on +353 1 5530050* at least 48 hours before
the time set for the meeting. If Shares are held within a Nominee
Account and Shareholders’ wish to access the live audio-cast
of the meeting, then Shareholders are required to contact their
Nominee in order for them to obtain their Login Code and PIN from
the Registrars for onward transmission to the Shareholder ahead of
the meeting. Joint holders should contact the Registrars by
telephone on +353 1 5530050* if more than one holder wishes to
access the virtual audio-cast of the meeting. *Lines are open from
9.00 a.m. to 5.00 p.m. Monday to Friday, excluding Irish bank
holidays.
Shareholders have a
right to ask questions related to items on the EGM agenda and to
have such questions answered by the Company subject to any
reasonable measures the Company may take to ensure the
identification of Shareholders. The
live-audio cast of the EGM will provide Shareholders with a
type-based facility to submit questions remotely during the EGM.
This facility can be accessed by clicking on the link which will be
available to left of the main screen once you enter the live-audio
cast of the meeting. In addition, Shareholders may also
submit a question in writing in advance of the meeting, to be
received at least two business days before the meeting (i.e. 5
February 2021) by post to the Company Secretary, CRH plc, 42
Fitzwilliam Square, Dublin 2, Ireland or by email to [email protected].
All correspondence should include sufficient information to
identify a Shareholder on the Register of Members, for example, an
IVC number, which is an 11 digit unique identifier printed on the
enclosed Form of Proxy. An answer is not required if (a) an answer
has already been given on the Company’s website in the form
of a “Q&A” or (b) it would interfere unduly with
preparation for the meeting or the confidentiality or business
interests of the Company or (c) it appears to the chairman of the
meeting that it is undesirable in the interests of good order of
the meeting that the question be answered.
12.
Matters which remain to be
clarified
The
steps to implement the Migration are set out at Part 1 of this
Circular. As the Migration Act provides only for an element of the
Migration (the transfer of title in Participating Securities to
Euroclear Nominees), it may be necessary for the Company or another
agent of the Shareholders to enter into other arrangements with EUI
and/or Euroclear Bank on behalf of Shareholders to give effect to
the remaining elements of the Migration (involving the creation of
CDIs and arrangements with EUI), which have not been clarified as
of the date of this Circular. Resolution 3 is proposed to give
flexibility to the Board to give effect to these arrangements to
the extent they are clarified prior to Migration. It is expected
that any such arrangements will be in substantial conformity with
measures taken by all Irish listed and traded issuers which
participate in the Market Migration.
The
Board is not making any recommendation with respect to the manner
in which Shareholders should hold their interests in the Company
prior to, on, or subsequent to, the Migration. Shareholders should
make their own investigation in relation to the manner in which
they may hold their interests in the Company at such times.
Shareholders intending to hold their interests in Migrating Shares
via the Euroclear System or as CDIs should carefully review the EB
Migration Guide, the EB Services Description, the CREST
International Manual and the EB Rights of Participants Documents
(including any updated versions thereof to the extent they are
published after the date of this Circular), together with the
additional documentation made available for inspection as set out
in paragraph 9 above and should consider those
documents in making their decisions with respect to their Migrating
Shares. Nothing in this Circular constitutes legal, tax or other
advice, and if you are in any doubt about the contents of this
Circular, you should consult your own professional
adviser(s).
The impact of the Migration on shareholder rights, trading flows,
liquidity, share custody costs, the nature, range and cost of
corporate services, and the ease and ability for underlying
Shareholders to exercise their economic rights, and the costs of so
doing are not expected to be an improvement from the CREST
System. Nevertheless in order to ensure that following March
2021 electronic trading of the Company’s Shares may continue
to be settled in compliance with EU law, and to ensure ongoing
compliance with the electronic share trading requirements for
listing on the London Stock Exchange and Euronext Dublin, the Board
of Directors believes that each of the Migration Resolutions are in
the best interests of the Company and its Shareholders as a whole.
In addition, the Income Shares represent an unnecessary complexity
for the Company when undertaking the Migration and considering that
the Income Shares no longer provide any benefit for Shareholders
the Board of Directors believes that each of Resolutions 4, 5, and
6 are in the best interests of the Company and its Shareholders as
a whole. The Board of Directors therefore unanimously recommends
that you vote in favour of each of these Resolutions, as they
intend to do so themselves in respect of all of the 97,213 Shares
(representing approximately 0.01 % of the issued ordinary share
capital of the Company on that date) held or beneficially owned by
them.
Yours
faithfully,
Richie
Boucher
Chairman
QUESTIONS AND ANSWERS IN RELATION TO THE MIGRATION
The questions and answers set out below are intended to address
briefly some commonly asked questions regarding the Migration.
These questions and answers only highlight some of the information
contained in this Circular and may not contain all the information
that is important to you. Accordingly, you should read carefully
the full contents of this Circular before deciding what action to
take. If you are in any doubt as to the action you should take, you
are recommended to consult your independent professional personal
adviser, who is authorised or exempted under the European Union
(Markets in Financial Instruments) Regulations 2017 (as amended) or
the Investment Intermediaries Act 1995 (as amended), if you are
resident in Ireland, or who is authorised under the Financial
Services and Markets Act 2000 (as amended), if you are resident in
the United Kingdom, or from another appropriate authorised
independent financial adviser if you are in a territory outside
Ireland or the United Kingdom. The contents of this Circular,
including this Part 2, should not be construed as legal,
business, accounting, tax, investment or other professional
advice.
1.
Why
is the Migration being proposed?
It is a
requirement of the continued admission of the Shares to trading and
listing on the London Stock Exchange and Euronext Dublin that
adequate procedures are available for the clearing and settlement
of trades in the Shares conducted on those venues, including that
the Shares are eligible for electronic settlement. At present,
trading in Shares is settled electronically via the CREST System,
which is the London-based securities settlement system operated by
EUI. Only Shares which are held in uncertificated (i.e.
dematerialised) form are eligible for admission to the CREST
System. Approximately 95% of the Company’s issued share
capital is currently held in uncertificated form.
As it
is essential for the Company that electronic settlement of trading
of its Shares can continue in order to ensure ongoing compliance
with the electronic share trading requirements for listing on the
London Stock Exchange and Euronext Dublin, the Directors believe
that it is appropriate to seek admission of the Company’s
Shares to an alternative securities settlement system that will
facilitate the electronic settlement of trades in the
Company’s Shares following Brexit.
In
December 2018, Euronext Dublin announced that, based on the
analysis it had carried out of four possible post-Brexit securities
settlement options, it had selected the CSD system operated by
Euroclear Bank SA/NV, an international CSD incorporated in Belgium
to replace the CREST System as the long-term securities settlement
system for Irish issuers. At the date of this Circular, no
alternative securities settlement system authorised to provide
settlement services in respect of Irish securities has been
actively engaging with Irish market participants to facilitate the
transition of Irish shares to its settlement system.
Accordingly,
the Migration of those Shares which are held in uncertificated form
on a designated Live Date from the CREST System to the Euroclear
System is being proposed in order to preserve the continued listing
and admission to trading of the Shares on Euronext Dublin and the
London Stock Exchange. Further consequences of the failure to
implement the Migration are discussed in the response to Question
2 below.
2.
What happens if the Migration is
not approved at the EGM?
If the Migration Resolutions are not passed and the Company is
therefore unable to participate in the Migration, all Shares in the
Company which are currently held in uncertificated (i.e.
dematerialised) form through the CREST System will be required to
be re-materialised into certificated (i.e. paper) form and
Shareholders and other investors will no longer be able to settle
trades in the Shares electronically.
This would materially and adversely impact on trading and liquidity
in the Shares as it would result in significant delays for
Shareholders and investors wishing to sell or acquire Shares. It
would also put at risk the continued admission to trading and
listing of the Shares on the London Stock Exchange and on Euronext
Dublin as the absence of electronic settlement of Shares would mean
that the Company would cease to meet the eligibility criteria for
admission to trading on the London Stock Exchange and on Euronext
Dublin. The Directors believe that the failure to participate in
the Migration would have a material adverse impact on liquidity in,
and could have a material adverse impact on the market value of the
Shares/ADSs as well as the relative attractiveness of the
Shares/ADSs for investors.
3.
What
do I need to do in relation to the Migration?
You are
encouraged to complete, sign and return the Form of Proxy to vote
on the Resolutions as explained on the front page of this Circular
and in the EGM Notice.
Any
further actions that you may take/wish to take will depend on
whether you hold and/or wish to continue to hold, your Shares in
certificated (i.e. paper) form or in uncertificated (i.e.
dematerialised) form. These possible actions are referred to
below.
4.
If
the Migration Resolutions are approved, when will the Migration
occur?
The
Migration is expected to occur in mid-March 2021, with the Live
Date to be specified by Euronext Dublin in accordance with the
provisions of the Migration Act. It is currently expected that the
Live Date will be 15 March, 2021, with the Migration occurring over
the weekend immediately prior to the Live Date and then taking
effect on the Live Date.
5.
Will
the Migration affect the business or operations of the
Company?
No.
Neither the Migration, nor the proposed changes to the Articles of
Association of the Company, will impact on the on-going business
operations of the Company. The Company will remain headquartered,
incorporated and resident for tax purposes in Ireland. The
Company’s stock exchange listings will not be changed by the
Migration. The Company does not expect that the Migration will
result in any change in the eligibility of the Company for the
indices of which it is a constituent as of the date of this
Circular. In addition, the ISIN relating to the Shares will be
unchanged.
6.
I
hold my Shares in certificated (i.e. paper) form and wish to
continue to do so. What action should I take and what is the latest
date for any such action?
Shares
which are held in certificated (i.e. paper) form on the Migration
Record Date will not be subject to the Migration and can continue
to be held in certificated (i.e. paper) form, at the option of the
Shareholder.
Accordingly,
Shareholders holding their Shares in certificated (i.e. paper) form
and wishing to continue to do so following the Migration are not
required to take any action in advance of the Migration (other than
voting in respect of the Resolutions should a Shareholder wish to
do so).
Shareholders
wishing to hold their Shares in certificated form following the
Migration are also advised that their ability to do so following 1
January 2023 (in respect of new issues of Shares) and 1 January
2025 (in respect of all issued Shares) will be subject to the model
of dematerialisation adopted in order to comply with the
requirements of Articles 3(1) and 76(2) of CSDR.
7.
I
hold my Shares in certificated (i.e. paper) form but I would like
to hold them in uncertificated form in CREST (via CDI) with effect
from the Migration. What action should I take and what is the
latest date for any such action?
Shareholders
currently holding their Shares in certificated (i.e. paper) form
and wishing to hold their interests in book-entry form via CDIs in
the CREST System following the Migration should become a CREST
member or engage the services of a broker or custodian who is a
CREST member in order to have their Shares admitted to the CREST
System so that they are held in uncertificated form within the
CREST System in advance of the Migration Record Date. If they wish
to have this completed before Migration so that the relevant Shares
participate in the Migration, they will need to have completed the
deposit of their Shares into the CREST System prior to the
Migration in accordance with the timelines to be confirmed by EUI.
This deposit will not be subject to Irish stamp duty as long as
there is no change in ownership.
8.
I hold my Shares in certificated
(i.e. paper) form but I would like to hold them via Belgian Law
Rights in the Euroclear System as soon as possible following the
Migration. What action should I take?
Shareholders
wishing to hold their interests in electronic form via Belgian Law
Rights directly in the Euroclear System following the
Migration must be or become EB Participants (or must appoint an EB
Participant to hold the Belgian Law Rights on their behalf) and
will need to make arrangements to have their certificated Shares
deposited into the Euroclear System following the Migration.
Belgian Law Rights differ from the rights attaching to certificated
shares. Please see Part 5 for an explanation of what it means
to hold Belgian Law Rights.
Where a
Shareholder is not an EB Participant and does not wish to become an
EB Participant, it should consult its broker or custodian in order
to arrange for the relevant Shares to be deposited into the
Euroclear System and held in electronic form via Belgian Law Rights
by an EB Participant on behalf of that Shareholder using
arrangements put in place by such broker or custodian. Information
on how to become an EB Participant can be accessed on the Euroclear
website at:
https://www.euroclear.com/about/en/business/Becomingaclient/BecomingaclientEuroclearBank.html.
These
arrangements can also be put in place prior to the Migration as
referred to in section 3.5.8 of the EB Migration Guide and will
enable a holding through the Euroclear System following the
Migration once the transfer out of the initial CDIs holding has
been completed, or at any time following the Migration. If such
arrangements are effected before the Migration, the Shares will be
transferred to an account in Euroclear Bank in which the Shares
will be held under Euroclear Bank’s investor CSD service
until the Migration. The services described in the EB Services
Description will however only become applicable as of the Live
Date.
Depositing
Shares in the Euroclear System will not be subject to Irish stamp
duty as long as there is no change in ownership.
9.
I
hold my Shares in uncertificated (i.e. dematerialised) form;
through the CREST System and intend to continue to hold my
interests through the CREST System (via CDI) with effect from the
Migration. What action should I take and what is the latest date
for any such action?
Shares
which are held in uncertificated (i.e. dematerialised) form through
the CREST System on the Migration Record Date will automatically be
subject to the Migration and will be held in book-entry form via
CDIs in the CREST System following the Migration, unless
Shareholders take the steps referred to in the response to Question
10 below (in which case their interests
will be held via Belgian Law Rights in the Euroclear
System).
Accordingly,
no action is required to be taken in advance of the Migration
(other than voting in respect of the Migration Resolutions should a
Shareholder wish to do so) by Shareholders wishing to hold their
interests in book-entry form via CDIs in the CREST System following
the Migration.
10.
I hold my Shares in
uncertificated (i.e. dematerialised) form; that is, through the
CREST System and wish to hold my interests via Belgian Law Rights
in the Euroclear System as soon as possible. What action should I
take and what is the latest date for any such action?
Shareholders
wishing to hold their interest in electronic form via Belgian Law
Rights in the Euroclear
System rather than via CDIs in the CREST System following
the Migration, must be or become an EB Participant (or must appoint
an EB Participant to hold the Belgian Law Rights on their behalf)
and must transfer such Belgian Law Rights from the CREST
International Account in Euroclear Bank to the account of another
EB Participant by way of cross-border delivery. Upon matching with
a pending receipt instruction from the EB Participant, the transfer
will settle if the applicable other settlement conditions are
satisfied. As referred to in the response to Question 8 above, these transfers can occur following
the Migration and can also occur ahead of the Migration as referred
to in section 3.5.8 of the EB Migration Guide.
11.
I
hold my Shares in uncertificated (i.e. dematerialised) form through
the CREST System but I do not wish for my Shares to be part of the
Migration. What action should I take and what is the latest date
for any such action?
If a
Shareholder does not wish their Shares to participate in the
Migration they will need to hold their interests in certificated
(i.e. paper) form before the Migration Record Date. To do this they
will need to withdraw the relevant Shares from the CREST System
prior to the Migration (by a time which will be confirmed closer to
the Migration). Based on the Expected Timetable of Principal Events
the deadline for this action will be 12.00 p.m. on Thursday, 11
March 2021 and any changes to these dates will be published on the
Company’s website.
Shareholders
wishing to hold their Shares in certificated (i.e. paper) form
prior to the Migration taking effect should make arrangements with
their broker or custodian in good time so as to allow their
stockbroker or custodian sufficient time to withdraw their Shares
from the CREST System prior to the closing date set out above for
CREST withdrawals.
12.
If
I continue to hold my Shares in certificated (i.e. paper) form
following the Migration, what impact will the Migration have in
relation to my shareholding?
Shares
which are held in certificated (i.e. paper) form on the Migration
Record Date will not be subject to the Migration and can continue
to be held in certificated (i.e. paper) form following the
Migration, at the option of the Shareholder.
While
it is not expected that the Migration will initially directly
impact Shareholders who continue to hold their Shares in
certificated (i.e. paper) form, such Shareholders should note that,
as is currently the case, in order to settle an on market trade in
their Shares following the Migration, they will need to effect a
deposit of their Shares by depositing them into the Euroclear
System, to be held via Belgian Law Rights or into the CREST System
to be held via CDIs, prior to such trades occurring. Any such
deposit of Shares will entail interaction with a broker and/or
custodian and may involve certain costs being incurred and/or, a
delay in execution of a share trade being experienced by the
Shareholder which may differ from the comparable process applicable
in respect of deposit of Shares into the CREST System.
Depositing
Shares in the Euroclear System will not be subject to Irish stamp
duty as long as there is no change in ownership.
13.
If
I hold my Shares as an EB Participant or through an EB Participant
following the Migration, what impact will the Migration have in
relation to my shareholding?
After
the Migration, Euroclear Nominees will hold title to all Shares
admitted to the Euroclear System. As a result, Euroclear Nominees
will be recorded in the Register of Members of the Company as the
holder of the relevant Shares. EB Participants’ rights with
respect to the Shares deposited in the Euroclear System will be
governed by Belgian law (through Belgian Law Rights) and the EB
Services Description.
Holding
Shares through the Euroclear System will entail share custody costs
and certain differences in the nature, range and cost of corporate
services, including with respect to the manner in which voting
rights can be exercised in person or by proxy, relative to a direct
holding of Shares through the CREST System.
Shareholders
who anticipate holding their Shares via the Euroclear System should
familiarise themselves with the EB Services Description in this
regard.
14.
What
is a CDI and why is it relevant in relation to the
Migration?
“CDI”
stands for CREST Depository Interest. CDIs are issued via the CREST
System and can be used as an alternative to holding Belgian Law
Rights as an EB Participant. Following the Migration, holders of
Irish Securities wishing to continue to hold and settle
transactions in Irish Securities in the CREST System, including in
respect of all trades executed on the London Stock Exchange, will
only be able to do so for their Shares held via CDIs.
It is
only possible to hold and transfer certain securities in the CREST
System, (this currently includes shares constituted under Irish law
(“Irish
Securities”)). Once it ceases to be possible to hold,
settle or transfer Irish Securities directly through the CREST
System, EUI can facilitate the issuance of CDIs representing such
Irish Securities, in order to provide an alternative settlement
mechanism involving CREST. A CDI is issued by the CREST Depository
to CREST members and represents an entitlement to identifiable
underlying securities.
Each
CDI issued on Migration will reflect the Belgian Law Rights related
to each underlying Migrating Share. On Migration each Migrating
Shareholder will receive one CDI for each Migrating Share held by
them at the Migration Record Date. Some Former Holders may not wish
to hold CDIs and may instead choose to hold their interests via
Belgian Law Rights through the Euroclear System. To do this the
Former Holder must be or become an EB Participant (or must appoint
an EB Participant to hold the Participating Securities on its
behalf) and must transfer such Participating Securities from the
CREST International Account in Euroclear Bank to the account of
another EB Participant by way of cross-border delivery instruction
in accordance with Euroclear Bank’s procedures. The delivery
instruction will need to match with a receipt instruction in order
for the transfer to settle. Please see the response to
Question 10 above as to what steps
should be undertaken to convert a holding via CDIs into a holding
via Belgian Law Rights.
15.
If
I hold my Shares through a CDI following the Migration, what is the
impact of this type of holding?
Following
the Migration, holders of CDIs will not be the registered holders
of Shares to which they are entitled. Rather, immediately following
the Migration, their interests in the Migrating Shares will be held
through an intermediated chain of holdings, whereby Euroclear
Nominees will hold the legal interest in the Shares transferred to
it, on trust for Euroclear Bank, and will be the registered holder
of such Shares entered on the Register of Members. Euroclear Bank
will credit its interest in such Shares to the account of the CREST
Nominee, and the CREST Nominee will hold its interest in such
Shares (i.e. the Belgian Law Rights) as nominee and for the benefit
of the CREST Depository. The CREST Depository will, in turn, hold
its interest in such Shares on trust and for the benefit of the
holders of the CDIs.
Holding
by way of a CDI will entail international custody costs and certain
differences in the nature, range and cost of corporate services,
including with respect to the manner in which voting rights can be
exercised in person or by proxy, relative to a direct holding in
the CREST System or relative to a position in Euroclear
Bank.
The
manner (if you do not now hold Shares through a custodian/nominee)
and time period within which any such voting rights may be
exercised by CDI holders may differ from arrangements that would
currently apply in respect of direct holdings in the CREST System
or in the Euroclear System.
16.
If
I hold ADSs, what is the impact of Migration on this type of
holding?
Because
the Shares represented by the ADSs are Participating Securities,
such Shares will be subject to the Migration. It is expected that,
on the Live Date, the Shares representing ADSs will cease to be
held directly by the CREST ADS Nominee on the Register of Members
in the CREST System, and the Euroclear Nominees will be entered
into the Register of Members as the holder of such Shares in place
of the CREST ADS Nominee. Following the Live Date, the interests in
the underlying Shares will be held by the ADS Depositary, which is
an EB Participant. As a result, the rights and interests of the ADS
Depositary in such Shares represented by ADSs will comprise the
Belgian Law Rights summarised in Part 5 of this
Circular.
The
Board does not currently expect that the Migration will require any
changes to the terms of the ADSs or the Deposit Agreement. The
Board currently expects that, following the Migration, outstanding
ADSs will continue to trade and settle on New York Stock Exchange
in the same manner as before the Migration.
17.
What
are the taxation implications of the Migration?
You
should refer to Part 7 of this Circular in relation to
taxation. Shareholders should consult their own tax advisers about
the tax consequences which may arise as a result of being Migrating
Shareholders and the acquisition, ownership and disposition of
Shares in the future. In general terms, as referred to therein
legislation is being enacted in Ireland which seeks to provide that
the Migration is a tax neutral event for Shareholders and that the
Irish taxation regime subsequently applying is not materially
different from that currently applying.
In
general terms, as referred to in Part 7 of this Circular, from
a UK tax perspective the Migration should be not give rise to a
chargeable gain or loss for UK Shareholders (as defined in Part 7
of this Circular) and the UK taxation regime subsequently applying
should not be materially different from that which currently
applies.
US
Holders (as defined in Part 7 of this Circular) are not
expected to recognise any gain or loss for US federal income tax
purposes as a consequence of the Migration.
It is
unclear whether the Migration would be viewed as a transfer of
ownership in the Migrating Shares triggering the taxation of
unrealized capital gains for Holders that are French tax residents.
Such Holders are invited to consult with their usual tax adviser as
to the tax treatment of the Migration in France.
In
general terms, as referred to in Part 7 of this Circular,
Shareholders, whether they be Belgian residents or not, are not
expected to be subject to Belgian income tax on capital gains as a
consequence of the Migration on the basis that the Migration should
normally not give rise (or should not be treated as giving rise) to
a definitive disposal of the Shares.
As tax laws may change, Shareholders should consult their own tax
advisers about the tax consequences which may arise as a result of
being Migrating Shareholders and the acquisition, ownership and
disposition of Shares in the future.
18.
How do I withdraw my Shares from
either the Euroclear System or the CREST System following the
Migration in order to become a registered (certificated)
holder?
The
procedures for withdrawing Shares will be different depending on
whether a holder of Participating Securities holds his interests
through the Euroclear System via Belgian Law Rights or through the
CREST System via CDIs.
Withdrawal of Participating Securities from the Euroclear System to
become a registered (certificated) holder
The
process involved in order to withdraw the Participating Securities
from Euroclear Bank and hold them in certificated (i.e. paper) form
is contained in the EB Services Description. This involves the
sending of an instruction by the EB Participant to Euroclear Bank,
which will be communicated to the Registrar, which will proceed to
effect a transfer of the relevant shareholding from Euroclear
Nominees to the transferee whose name will be entered on the
Register of Members. The time period for any such withdrawal of
securities from the Euroclear System, is expected to be within one
(1) business day such that the owner of the Participating
Securities will be entered on the Register of Members of the
Company within one business day. It may take up to ten (10)
business days for a transferee to receive the relevant share
certificate; however, entry on the Register of Members is
prima facie evidence of a
shareholding under Irish law.
Former
Holders whose interests in Shares are held through EB Participants
(or other nominees) on their behalf will need to engage with their
stockbroker or other custodian to procure that the steps outlined
above are taken on their behalf by the relevant EB Participant. For
a description as to what EB Participants need to do to withdraw
their Shares from Euroclear Nominees into a direct name on register
(mark-down), please refer to the EB Services Description section
“4.2.3 Mark-up and Mark-down”.
Withdrawal of Participating Securities from CREST to become a
registered (certificated) holder
The
process involved in order to withdraw the Participating Securities
from the CREST System (which are held via CDIs following the
Migration as described in Part 3 and Part 4 of this
Circular) is as provided in the CREST International Manual and
requires a cancellation of CDIs in the CREST System and the receipt
of the relevant Belgian Law Rights into a shareholding account with
a depository financial institution which is an EB Participant. This
involves the input of a cross-border delivery instruction in favour
of the relevant EB Participant, which should separately input a
matching cross-border receipt instruction to ensure receipt of the
Belgian Law Rights. After this, the process to withdraw the
Participating Securities from the Euroclear System is as described
above. It is expected that the time period to withdraw the CDIs and
receive the Belgian Law Rights into the Euroclear System will be
one (1) business day.
Shareholders
wishing to hold their Shares in certificated form following the
Migration are also advised that their ability to do so following 1
January 2023 (in respect of new issues of Shares) and 1 January
2025 (in respect of all issued Shares) will be subject to the model
of dematerialisation which has yet to be devised by the Irish
legislature in order to comply with the requirements of Articles
3(1) and 76(2) of CSDR.
19.
Can
I attend a general meeting of the Company following
Migration?
Shares
which are held in certificated (i.e. paper) form on the Migration
Record Date will not be subject to Migration and can continue to be
held in certificated (i.e. paper) form following Migration, at the
option of the Shareholder. Such Shareholders can attend, vote and
speak at a general meeting of the Company in person or by proxy in
the same way as before Migration.
EB
Participants holding Belgian Law Rights via the Euroclear System
can instruct Euroclear Bank to vote in favour, against or abstain,
in advance of the relevant Euroclear Bank voting deadline. EB
Participants can also, in advance of the Euroclear Bank voting
deadline, instruct Euroclear Bank to appoint a third party (other
than Euroclear Bank’s nominee or the chairman of the meeting)
identified by the EB Participant to attend and vote at a general
meeting for the number of Shares specified in the proxy voting
instruction. For example, such third party may be the EB
Participant or, where the EB Participant is a broker or custodian,
the client of that broker or custodian or a corporate
representative. If a corporate is appointed as a proxy, it may in
turn appoint its own corporate representative to represent itself
at the meeting.
CDI
holders are able to instruct Broadridge Proxy Voting Service
(“Broadridge”),
in advance of the relevant Broadridge voting deadline, to vote in
favour, against or abstain. CDI holders can also, in advance of the
Broadridge deadline, instruct Broadridge to appoint a third party
(other than Euroclear Bank’s nominee or the chairman of the
meeting) identified by the CDI holder to attend and vote at a
general meeting for the number of Shares specified in the proxy
voting instruction. The third party identified in the proxy
instruction, could be for example the CREST member, the client of a
CREST member or a corporate representative. The CREST Nominee (as
EB Participant) will then action that instruction to Euroclear Bank
as set out above.
If the
Directors deem that an indirect owner of Shares is eligible to
receive notice of a meeting under proposed new Article 12 (to be
adopted as part of the approval of Resolution 2), the same Article
will allow the Directors to deem that person (in their absolute
discretion) eligible to attend and speak at the meeting, provided
that such person remains an owner of a Share at the relevant record
date of the meeting. However, such persons will not be entitled to
vote or exercise any other right conferred by membership in
relation to meetings of the Company while in attendance. Instead,
EB Participants and CDI holders should issue voting instructions
(which may include a proxy appointment as set out above) through
the Euroclear System and/or the CREST System in accordance with the
relevant deadlines set by Euroclear Bank, EUI and/or
Broadridge.
20.
Who
do I contact if I have a query/require more
information?
If you
have any questions about the action you should take as a result of
the receipt of this Circular, you should contact your stockbroker,
bank or other appropriately authorised independent advisor in the
first instance.
Subject
to the preceding paragraph, if you have any questions about this
Circular, the proposed Migration detailed herein or the EGM, or are
in any doubt as to how to complete the Form of Proxy, please call
Link Registrars Limited on + 353 1 5530050. Lines
are open from 9:00 a.m. to 5:00 p.m. Monday to Friday, excluding
bank holidays in Ireland. Please note that calls may be monitored
or recorded and Link Registrars Limited cannot provide legal, tax
or financial advice or advice on the merits of the Migration or the
Resolutions.
Under
the current COVID-19 regulations, Shareholders will not be able to
attend the EGM in person. Shareholders are therefore encouraged to
use the above facility for any queries, shareholders can also
submit a question to be raised at the EGM in writing, to be
received at least two business days before the meeting (i.e. 5
February 2021) by post to the Company Secretary, CRH plc,
42 Fitzwilliam Square, Dublin 2, Ireland or by email to
[email protected]. All correspondence should include sufficient
information to identify a shareholder on the Register of Members,
for example, an IVC number, which is an 11-digit unique identifier
printed on the enclosed proxy form.
Shareholders intending to hold their interests in Migrating Shares
through the Euroclear System via Belgian Law Rights or the CREST
System via CDIs should carefully review the EB Migration Guide, the
EB Services Description and the EB Rights of Participants Documents
and, in the case of CDIs, the CREST Deed Poll and the CREST
International Manual (including any updated versions thereof to the
extent they are published after the date of this Circular),
together with the additional documentation made available for
inspection as set out in section 9 of Part 1.
FURTHER INFORMATION PROVIDED FOR THE PURPOSE OF SECTION 6(1) OF THE
MIGRATION ACT
1.
Impact
for Certificated Holders
Only
those Shares which are Participating Securities (i.e. Shares which
are held in uncertificated form through the CREST System) on the
Migration Record Date will be subject to the Migration.
Shareholders holding a direct interest in shares in certificated
(i.e. paper) form on the Migration Record Date will continue to do
so following the Migration, without any further action being
required. No new share certificates will be issued in connection
with the Migration. Such Shareholders should note however that in
order to settle trades in their Shares on a trading venue, such as
Euronext Dublin or the London Stock Exchange, following the
Migration, they will need to take steps to deposit their Shares in
the Euroclear System to be held via Belgian Law Rights, or (via
Euroclear’s link with the CREST System) to be held as CDIs
prior to settlement. This deposit will not be subject to Irish
stamp duty provided that there is no change in
ownership.
A CDI
is a security constituted under English law, which is issued by the
CREST Depository, and that represents an interest in other
securities (which may be securities constituted under the laws of
other countries). In the case of the Migration each CDI will
reflect the interests of the CREST member in each underlying
Migrating Share. Interests do not need to be held as CDIs in order
to be traded, but will need to be held as a CDI in order to settle
a transaction conducted on the London Stock Exchange. Any
conversion of a certificated holding into a CDI holding will entail
interaction with a broker and/or custodian and may involve certain
costs being incurred, and/or, a delay in execution of a share trade
being experienced by the Shareholder (as would be the case
currently, although these may differ following the Migration).
Further information on CDIs is set out in Part 6 of this
Circular.
Shareholders
who currently hold their Shares in certificated (i.e. paper) form
and who wish to deposit those Shares into the CREST System, in
order for the Shares to be subject to the Migration should either
become a CREST member themselves or engage the services of a broker
or custodian who is a CREST member.
A
Shareholder wishing to deposit some or all of its Shares into the
CREST System in advance of the Migration is recommended to ensure
that the procedures are implemented in advance of the Migration
Record Date. Shareholders wishing to hold indirect interests in
their Shares in uncertificated (i.e. dematerialised) form on and
immediately following the Migration should make arrangements with a
stockbroker or other CREST nominee in good time so as to allow
their stockbroker or CREST nominee sufficient time to deposit their
Shares into the CREST System in advance of the Migration Record
Date.
Shareholders
wishing to hold their Shares in certificated form following the
Migration are also advised that, as described in further detail in
section 3 of Part 1 of this Circular, their ability to do
so following 1 January 2023 (in respect of new issues of Shares)
and 1 January 2025 (in respect of all issued Shares) will be
subject to the model of dematerialisation which has yet to be
devised by the Irish legislature in order to comply with the
requirements of Articles 3(1) and 76(2) of CSDR.
2.
Impact for Uncertificated
Holders
All
Shares which are Participating Securities (i.e. Shares which are
held in uncertificated form through the CREST System) on the
Migration Record Date will be subject to the Migration. On
Migration, all such Participating Securities will be registered in
the Register of Members of the Company in the name of Euroclear
Nominees, which will hold the Shares in trust for Euroclear Bank.
Euroclear Bank will then credit the account of the CREST Nominee
with the Belgian Law Rights which represent the underlying Shares
and which are automatically granted to the CREST Nominee as an EB
Participant pursuant to Royal Decree No. 62. The Belgian Law Rights
will entitle the CREST Nominee to exercise certain rights in
respect of the Shares, in accordance with the EB Services
Description. With effect from the Live Date, each holding of
Participating Securities (other than those Participating Securities
belonging to ADS holders) credited to any stock account in the
CREST System on the Migration Record Date will be disabled and
reclassified in the CREST System as a holding via CDIs which in
turn represent the Belgian Law Rights which have been granted to
the CREST Nominee. The practical result of the Migration taking
effect will be that all Migrating Shareholders will initially
receive one CDI for each Migrating Share held on the Migration
Record Date, on the basis described at sub-paragraph 2(a) below.
Migrating Shareholders will then be entitled to choose whether
(1) to continue to hold via CDI or (2) to convert their
CDIs into and instead hold and exercise the Belgian Law Rights in
respect of the underlying Migrating Shares (subject to such
Migrating Shareholders being or becoming an EB Participant or
appointing an EB Participant to hold the Belgian Law Rights on its
behalf).
(a)
CREST members and CREST
Depository Interests (CDIs)
As
outlined above, on the Live Date, the CREST accounts of Migrating
Shareholders who held Participating Securities (other than ADS
holders) on the Migration Record Date will be credited with
CDIs.
Each
CDI will reflect the indirect Belgian Law Rights of a Migrating
Shareholder in the underlying Migrating Shares, title which vests
in Euroclear Nominees as nominee for Euroclear Bank as part of the
Migration. The terms on which CDIs are issued and held in the CREST
System on behalf of CREST members are set out in the CREST
International Manual (and, in particular, the CREST Deed Poll set
out in the CREST International Manual) and the CREST Terms and
Conditions issued by EUI.
On the
Migration, the Migrating Shares will be registered in the name of
Euroclear Nominees for the benefit of Euroclear Bank which will in
turn credit the Belgian Law Rights in respect of such Shares to the
Securities Clearance Account of the CREST Nominee.
The
CREST Nominee is an EB Participant and holds rights to securities
held in Euroclear Bank (i.e. the Belgian Law Rights representing
Migrating Shares) on behalf of the CREST Depository’s for the
account of CREST members. The CREST Depository’s is the
entity responsible for the issue of CDIs to CREST members. The
CREST Depository’s relationship with CREST members is
governed by the CREST Deed Poll entered into under and governed by
English law. The CREST Depository holds its rights to international
securities (such rights being held on its behalf by the CREST
Nominee) upon trust for the holders of the related
CDIs.
Upon
Migration of the Migrating Shares to the Euroclear System,
Euroclear Bank will instruct EUI, pursuant to the terms of the
CREST Deed Poll, to issue CDIs to, and credit the appropriate stock
account in the CREST System of, the Migrating Shareholders which
held the Migrating Shares on the Migration Record Date. The CDIs
will represent the Belgian Law Rights held by the CREST Nominee on
behalf of the CREST Depository. As the Belgian Law Rights in turn
represent the underlying Migrating Shares admitted to the Euroclear
System, each CDI will reflect an indirect interest in the
underlying Migrating Shares. The stock account credited will be the
same account of the relevant Migrating Shareholder in respect of
the relevant Migrating Shares.
CDIs
are designated as “international securities” within the
CREST System and have access to different services in terms of
voting and other custody services when compared to securities held
directly in the CREST System (see the summary in Part 6 in this
Circular). However, the manner (if the relevant holder does not now
hold Shares through a custodian/nominee) and time period within
which any such voting rights may be exercised by CDI holders will
differ from arrangements that would currently apply in respect of
direct holdings in the CREST System.
An
international custody fee and a transaction fee, as determined by
EUI from time to time, is charged for the CREST International
Settlement Links Service and in respect of transactions. The
anticipated fees which will apply in respect of Irish equities are
outlined in section 6.3 Irish
equities pricing from 15 March 2021 of the CREST Tariff
Brochure which is available for inspection as set out in paragraph
9 of Part 1 of this
Circular.
Following the
enablement of CDIs in the CREST System on the Live Date, CREST
members may choose to hold their interests via Belgian Law Rights
in the Euroclear
System rather than via CDIs in the CREST System. To hold
interests via Belgian Law Rights in the Euroclear System, a Former
Holder must be or become an EB Participant (or must appoint an EB
Participant to hold the Belgian Law Rights on its behalf) and must
transfer such Belgian Law Rights from the CREST International
Account in Euroclear Bank to the account of another EB Participant
by using cross-border delivery. Upon matching with a pending
receipt instruction and satisfaction of other relevant settlement
criteria from the Euroclear System, the transfer will
settle.
Information on how
to become an EB Participant can be accessed on the Euroclear
website at https://www.euroclear.com/about/en/business/Becomingaclient/BecomingaclientEuroclearBank.html
(c)
Custodian,
broker or nominee which is an EB Participant
Shareholders that
currently hold interests in Shares through a custodian, broker or
other nominee should consult that custodian, broker or nominee to
determine the manner in which they intend to hold those Shares
following Migration.
The
arrangements in relation to holdings of interests by Former Holders
through a custodian, broker or nominee that is an EB Participant
will be subject to the terms between that custodian, broker or
nominee and the Former Holder.
3.
Options
for Shareholders who do not wish their Shares to be subject to the
Migration
Shareholders
holding a direct interest in Shares in certificated (i.e. paper)
form on the Migration Record Date will not be subject to the
Migration. Accordingly, no action is required to be taken in
advance of the Migration (other than voting in respect of the
Migrations Resolutions should a Shareholder wish to do so) by a
Shareholder who holds Shares in certificated (i.e. paper) form and
wishes to continue to do so following the Migration.
If a
holder of Participating Securities does not wish their Shares to be
subject to the Migration, the relevant Participating Securities
must be converted into certificated (i.e. paper) form by
withdrawing them from the CREST System.
The
Latest Withdrawal Date (currently expected to be 12.00 p.m. on 11
March 2021) is the recommended latest time for receipt by EUI of a
properly authenticated dematerialised instruction requesting
withdrawal of Participating Securities from the CREST System in
order to ensure that the Participating Securities will not be
subject to the Migration. The Company will issue an announcement if
it is notified of any change to the Latest Withdrawal Date. You are
recommended to refer to the CREST Manual for details of the
procedures applicable in relation to withdrawal of shares from the
CREST System. Shareholders wishing to hold their Shares in
certificated (i.e. paper) form prior to the Migration should make
arrangements with their stockbroker or other CREST nominee in good
time so as to allow their stockbroker or other CREST nominee
sufficient time to withdraw their Shares from the CREST System by
the closing date for CREST withdrawals as outlined in the EB
Migration Guide.
Shareholders
should note that there are other CSDs authorised in the EU for the
purposes of CSDR and currently three of these CSDs are recorded by
ESMA as having designated Ireland as a host Member State for the
purposes of CSDR. While the Migration Act is not specific to
Euroclear Bank, it appears that Euroclear Bank is the only CSD that
has been actively engaging with Irish market participants to
facilitate the transition of Irish shares to its settlement
system.
COMPARISON OF EUROCLEAR BANK AND EUI SERVICE OFFERINGS
Following
the Migration, Migrating Shares which are held through the
Euroclear System via Belgian Law Rights will be subject to the
service offering set out in the EB Services Description. Interests
in Migrating Shares which are held through the CREST System in the
form of CDIs will be subject to the service offering expected to be
set out in the revised CREST International Manual. These service
offerings differ from each other in some respects as well as from
the current service offering available in respect of Participating
Securities which are currently admitted directly to the CREST
System. This Part 4 provides a summary of the key differences
between these service offerings.
Whilst
the timelines and mechanics of a CREST participant holding a
security constituted under Irish law taking part in certain
corporate actions may be affected by the change of model from a
direct ‘name on register’ legal holding to an
intermediated CDI holding (through Euroclear Bank), the effective
exercise of the rights of such CREST participant will be
substantially unaffected except as explained in Appendix 2. In
particular, Shareholders should be aware that the timeline for
exercising certain corporate actions on securities held as a CDI in
EUI will be different to the timelines to exercise equivalent
corporate actions in respect of securities held directly in
Euroclear Bank. This is because EUI, being an EB Participant
through the CREST Nominee will receive notifications later and will
have to set earlier deadlines for the receipt of instructions from
CDI holders in order to be able to communicate those instructions
to Euroclear Bank by the deadline set by Euroclear
Bank.
Shareholders
who expect to hold their interests in Migrating Shares through a
custodian, nominee or other intermediary should be aware that
earlier deadlines for some corporate actions may apply under the
arrangements between the Shareholder and that custodian, nominee or
other intermediary.
Shareholders intending to hold their interests in Migrating Shares
through the Euroclear System via Belgian Law Rights or the CREST
System via CDIs should carefully review the EB Migration Guide, the
EB Services Description and the EB Rights of Participants Documents
and, in the case of CDIs, the CREST Deed Poll and the CREST
International Manual (including
any updated versions thereof to the extent they are published after
the date of this Circular), together with the additional
documentation made available for inspection as set out in
section 9 of Part 1 of this
Circular and consult with their
stockbroker or other custodian in making any decisions with respect
to manner in which they hold any interests in Migrating Shares Shareholders should not rely
on the summary below, which is incomplete and may exclude
descriptions of differences which are material to the circumstances
of an individual Shareholder. While it is expected that a revised
CREST International Manual will be published prior to Migration,
that document is not yet available as at the date of this Circular.
This Part reflects the revisions expected to be made to the CREST
International Manual based on discussions with Euroclear
Bank.
The Company is not making any recommendation with respect to the
manner in which Shareholders should hold their interests in the
Company prior to, on, or subsequent to, the Migration. No reliance
should be placed on the contents of this Circular for the purposes
of any decision in that regard.
●
Section 5.3.2.7 of
the EB Operating Procedures describes the specific contractual
aspects of how the voting service is operated by Euroclear Bank.
This section is further supplemented by the ‘Online Market
Guides (“Online Market
Guides”) for market specific operational elements
(currently the EB Services Description) (the Online Market Guides
forming part of the contractual relationship between Euroclear Bank
and EB Participants).
●
Section 5.3.1.4 of
the EB Operating Procedures makes clear that Euroclear Bank has no
discretion in exercising any corporate action, including a voting
instruction, and will act only upon instruction of the EB
Participant (where an instruction is needed).
●
Chapter 4 of the
CREST International Manual outlines the broad principles
surrounding the management of corporate actions in the CREST system
for CDIs. EUI retains broad discretion regarding the procedures
followed in respect of corporate actions under the terms of the
CREST International Manual and so the below are illustrations,
rather than what is certain to happen in any
situation.
●
All material
information regarding the manner in which the voting rights are
exercised can be found in the EB Services Description (Version 4)
at section 6 - Custody- Meeting Services.
Item
|
Euroclear Bank Offering to EB Participants
|
EUI offering to CDI holders
|
Pre-Migration CREST System offering
|
Meeting
announcements
|
The
Registrar notifies Euroclear Bank of an event.
Euroclear
Bank automatically sends this event notification to all EB
Participants either (a) having or receiving a position in that
security up to Euroclear Bank’s voting deadline or, (b)
having a pending instruction, the settlement of which would result
in an EB Participant having such a position.
|
As an
EB Participant, the CREST Nominee (via a third party service
provider engaged by EUI, currently Broadridge) receives an event
notification from Euroclear Bank.
Upon
receipt of an event notification from Euroclear Bank, Broadridge
notifies that event to any CREST member who holds CDIs up to the
Broadridge voting deadline.
The
notification will be made available to all CREST members (those
either having or receiving a position in that CDI) within forty
eight (48) hours of receipt by Broadridge of complete
information.
|
The
CREST member can be notified through the CREST System directly by
the issuer or the issuer’s agent.
The
announcement is available once notice is entered correctly on the
CREST System.
|
Determination
of record date for voting
|
Record
date is determined by the issuer and is a market-wide applicable
date.
|
Record
date is determined by the issuer and is a market-wide applicable
date.
|
Record
date is determined by the issuer and is a market-wide applicable
date.
|
Submission
of proxy appointment instructions
|
From a
Euroclear Bank perspective, there are two distinct options, with
the same operational timelines. EB Participants can either
send:
1.
electronic voting instructions to instruct Euroclear Nominees (or
to appoint the chairman of the meeting as proxy to) :
✓ Vote in favour of
all or a specific resolution(s).
✓ Vote against all or
a specific resolution(s).
✓ Abstain from all or
a specific resolution(s).
✓ Give a
discretionary vote to the chairman in respect of one or more of the
resolutions being put to a shareholder vote,
or
2.
Proxy voting instruction to:
✓ appoint a third
party (other than Euroclear Nominees/the chairman of the meeting)
to attend the meeting and vote for the number of Shares specified
in the proxy voting instruction.
|
CREST
members can complete and submit proxy appointments (including
voting instructions) electronically through Broadridge. The same
voting options as in Euroclear Bank will be available (i.e.
electronic votes or appointing the chairman of the meeting or
appointing a third party proxy).
|
CREST
members can complete and submit proxy appointments (including
voting instructions) electronically through the CREST System to a
CREST member acting on behalf of the issuer.
|
Deadline
for submission of voting instructions
|
Euroclear
Bank will, wherever practical, aim to have a voting instruction
deadline of one (1) hour prior to the issuer’s proxy
appointment deadline.
|
Broadridge
will process and deliver proxy voting instructions received from
CREST members by the Broadridge voting deadline date to Euroclear
Bank, by their cut-off and to agreed market requirements.
Broadridge’s deadline will be earlier than Euroclear
Bank’s voting instruction deadline.
|
The
proxy appointment instruction may be submitted at any time from the
time of input of the meeting announcement instruction up to the
issuer’s proxy appointment deadline.
|
Amending,
withdrawing or cancelling submitted voting
instructions
|
Voting
instructions cannot be changed after Euroclear Bank’s proxy
appointment deadline.
|
Voting
instructions cannot be changed after Broadridge’s voting
deadline.
|
CREST
members can appoint a Corporate Representative to attend the
meeting in person and change their vote at the
meeting.
|
Attending
and voting at meetings
|
Upon
receipt of a third party proxy voting instruction from an EB
Participant before the voting instruction deadline, Euroclear Bank
will appoint a third party (who may be a corporate representative)
identified by the EB Participant (other than Euroclear Nominees or
the chairman of the issuer) to attend the meeting and vote for the
number of Shares specified in the proxy voting
instruction.
Euroclear’s
service does not currently include a facility whereby it will issue
a letter of representation appoint a corporate representative to
act in Euroclear’s name. However, if a corporate is appointed
as a proxy by Euroclear, it may in turn appoint its own corporate
representative to represent itself at the meeting.
|
A CREST
member will be able to send a third party proxy voting instruction
through Broadridge in order to appoint a third party (who may be a
corporate representative) to attend and vote at the meeting for the
number of Shares specified in the proxy instruction (subject to the
Broadridge voting deadline).
CREST’s
service does not currently include a facility whereby it will issue
a letter of representation in respect of/appoint a corporate
representative to act in Euroclear’s name. However, if a
corporate is appointed as a proxy through the CREST System, it may
in turn appoint its own corporate representative to represent
itself at the meeting.
|
CREST
members can, after the date of submission of proxy instructions to
the Registrar, and after the deadline for doing so, which is
usually at any time up to the meeting, appoint a corporate
representative to attend and vote at the meeting in any manner,
including contrary to that set out in the proxy
instructions.
|
Announcement
of results
|
In
practice an EB Participant is expected to access this information
when published by way of announcement on a Regulatory Information
Service and/or published on the website of the issuer.
|
In
practice a CDI holder is expected to access this information when
published by way of announcement on a Regulatory Information
Service and/or published on the website of the issuer.
|
CREST
functionality supports the announcement of meeting results through
the CREST System, if a registrar chooses to use this functionality.
However in practice these announcements are normally communicated
outside the CREST System by way of announcement on a Regulatory
Information Service and/or published on the website of the
issuer.
|
3.
Shareholder
Identification
Item
|
Euroclear Bank offering to EB Participants
|
EUI Offering to CDI holders
|
Pre-Migration CREST System offering
|
ID
Request
|
Issuers
will be able to investigate the underlying ownership or interests
in Shares by making a disclosure request either via the existing
“section 1062” process set out in the Companies Act or
via a disclosure request under the articles of association of the
company or by a process that will be facilitated by systems that
are to be put in place by Euroclear Bank in connection with the
implementation of SRD II.
If
Euroclear Bank (through Euroclear Nominees) receives a section 1062
or the articles of association of the company request from an
issuer, it will provide to the issuer or its agent the name,
account number and holding of any EB Participant having a holding
in the relevant security. As is the case today, the issuer or the
issuer’s agent will then contact EB Participants to
understand on whose behalf they are holding the
position.
If an
issuer or its agent submits a request to Euroclear Bank via ISO
20022 (STP) message (as opposed to a request in the format
habitually used for section 1062 requests), (i) Euroclear Bank will
provide to the requestor the EB Participant Legal Entity Identifier
(LEI), name, full address, email address (if available), position
split between an EB Participant’s own assets and assets held
by the EB Participant on behalf of (an) underlying client(s) and,
(ii) Euroclear Bank will request via ISO 20022 its EB Participants
having a holding to disclose the relevant data to the
issuer/registrar/issuer’s agent or relevant shareholder
identification provider.
|
CREST
members may be contacted by issuer agents as part of the
“section 1062” process set out in the Companies Act or
under the articles of association of the company.
Alternatively,
issuers and their agents may enter into an agreement to subscribe
to a CDI register which will, at pre-agreed intervals (for example
every last business day of the month) be sent in an agreed format
showing all CREST members and the holding they have in that
particular security.
The
Company may enter into a CDI register agreement.
|
Each
issuer is legally obliged to maintain a register of members. As
such, the register maintained by the issuer (or by its registrar)
records shareholder information.
For
dematerialised securities this is the CREST member recorded against
the issuance in the CREST system.
If an
issuer wants to identify the holders behind a nominee structure it
may issue a section 1062 request or a request under the articles of
association of the company to the nominee account holder in CREST
in accordance with the procedures specified in the Companies
Act.
|
4.
Dividends and Corporate
Actions
●
The general
framework for processing corporate actions within the Euroclear
System is described in section 5.3 of the EB Operating Procedures,
with further detail on certain corporate actions being set out in
section 5.3.2.
●
Section 5.3.1.4 of
the EB Operating Procedures indicates that where an instruction is
needed in respect of a corporate action, Euroclear Bank does not
have discretion in exercising any corporate action and confirms
that Euroclear Bank will act only upon instruction of an EB
Participant (where an instruction is needed). Certain corporate
actions may have a default action which will be taken by Euroclear
Bank if no instruction is received by the appropriate
deadline.
●
Section 5 of the
Euroclear Terms and Conditions governing use of the Euroclear
System provides that income/dividends received by Euroclear Bank
will be distributed pro-rata to the holders of the relevant
securities (i.e. the relevant EB Participants).
●
Further details on
the process of collection, distribution and payment of dividends
are provided for in section 5.3 of the EB Operating Procedures,
with reference to the Online Market Guides for market specific
operational elements (currently the EB Service
Description).
●
All material
information regarding the manner in which receipt of dividends and
participation in corporate actions is processed is described in
section 5 of the EB Services Description- (Version 4) –
Custody - Income and Corporate Actions.
Item
|
Euroclear Bank offering to EB Participants
|
EUI Offering to CDI holders
|
Pre-Migration CREST System offering
|
Payment
of dividends
|
The
entitlement of EB Participants to a dividend will be based on their
holdings of the relevant security in Euroclear Bank on the relevant
record date.
Upon
receipt of funds and successful reconciliation by Euroclear Bank,
EB Participants will get credited an amount based on their record
date holdings.
|
The
entitlement of CREST members holding a CDI to a dividend will be
based on their holdings in CREST on the relevant record
date.
Upon
receipt of funds from Euroclear Bank and successful reconciliation
by CREST, CREST members will be credited an amount based on their
record date holdings with timing dependent on. when the paying
agent of the issuer’s registrar credits Euroclear
Bank’s cash account.
|
This is
determined by the issuer and their receiving agent. EUI has in
place various instructions which facilitate the payment of
dividends to shareholders CREST members can receive dividends by
cheque or alternatively via SEPA or BACS or through the CREST
System, should the issuer offer these options.
|
Other
corporate actions (including dividends with options)
|
The
issuer’s registrars will advise Euroclear Bank of corporate
actions in a standardised way. Upon receipt of a notification,
Euroclear Bank will notify every EB Participant having a position
or a pending settlement instruction in the relevant security. The
notification will inform the EB Participant of the relevant
deadlines (Euroclear Bank deadline, record date, election date
etc.) as well as the actions the EB Participant needs to undertake
(i.e. is it a mandatory event, elective event, is there a default
action or not).
Upon
receipt of the instructions from EB Participants, an aggregated
instruction (consolidating the instructions received from those EB
Participants having a position in the relevant security) is sent by
Euroclear Bank to the issuer’s registrars.
Where
relevant to the corporate action, the registrars will credit the
relevant proceeds to Euroclear Bank, and Euroclear Bank will then
credit the entitled EB Participants based on either their elections
or their holdings on the relevant record date.
|
As an
EB Participant, EUI (through the CREST Nominee) will receive a
notification regarding the relevant corporate action from Euroclear
Bank.
Broadridge
on behalf of EUI, will notify CREST members of the event as soon as
possible after receipt of a complete notification of the corporate
action from Euroclear Bank (normally shortly after the announcement
by the issuer).
The
notification will inform the CREST member of the relevant deadlines
(EUI deadline, record date, election date etc.) as well as the
actions the CREST member needs to undertake (i.e. is it a mandatory
event, elective event, is there a default action or
not).
Upon
receipt by EUI of the corporate action instructions from the CDI
holders by the CREST deadline, EUI will send the instructions to
Euroclear Bank, who in turn will include these instructions in the
aggregated instructions Euroclear Bank sends to the
registrars.
Where
relevant to the corporate action, the registrar will credit the
relevant proceeds to Euroclear Bank and upon receipt of the
proceeds, Euroclear Bank will then credit the entitled EB
Participants (including EUI as an EB Participant) with their
respective entitlement.
Upon
receipt of the relevant proceeds, EUI will credit the CREST members
with their entitlement based on either their elections or their
holdings on the relevant record date.
|
Each
corporate action set up in the CREST System is ascribed its own
corporate action number which identifies the corporate actions data
held under the ISIN of the underlying security.
CREST
members can receive notifications of corporate actions via their
chosen CREST communication method or can obtain the information
directly from the CREST System via an enquiry
function.
|
Deadline
for corporate action instructions
|
The
deadline will be determined on a case-by-case basis as it is
dependent upon the market deadline (set by the issuer) and the type
of corporate action event.
|
The
deadline would be earlier than the Euroclear Bank deadline, as EUI
needs to ensure it sends its instructions to Euroclear Bank within
the Euroclear Bank deadline.
|
The
deadline is managed by the issuer, their agent in the CREST System
and the shareholder. EUI is not involved and does not supervise the
way in which corporate actions are offered. Deadlines are not
enforced by EUI.
|
Remedies
of holders
|
EB
Participants’ rights and remedies are set out in the Belgian
law governed contract entered into with Euroclear
Bank.
|
CREST
members’ remedies are set out in the English law governed
contract entered into with EUI (the CREST Deed Poll).
|
As
directly registered shareholders, all rights and remedies are
governed by the Companies Act and the Company’s articles of
association.
|
Treatment
of fractional entitlements.
|
Euroclear
Bank does not credit fractional entitlements. EB Participants with
the largest fractional entitlement will be rounded up until all
fractional entitlements are distributed.
|
As
Euroclear Bank will not credit fractions of securities proceeds,
CREST members will not be credited with fractional
entitlements.
|
Fractional
entitlements are managed by the issuer. Fractions are generally
sold for the benefit of the shareholder, save for de minimis
amounts.
|
5.
Exchange for Certificated
Interests
Appendix 2
of this Circular contains a list of shareholder rights under the
Companies Act that are not directly exercisable under the EB
Services Description or CREST International Manual. For this
reason, the Company is proposing to ensure that many of these
rights remain available for exercise by making certain amendments
to the Company’s Articles of Association as part of the
approval being sought in Resolution 2 in the EGM Notice. These
amendments are also detailed in Part 8 of this Circular.
Holders of Participating Securities
are strongly urged to read Appendix 2 as some of the rights listed in this appendix
cannot be accommodated by the proposed amendments to the
Company’s Articles of Association. These rights will
still be capable of being exercised following the Migration but, in
order to do so, the relevant intermediated holder will need to
arrange to have its interests in Shares withdrawn from the
Euroclear System (and the CREST System in the case of CDI holders)
and held in certificated (i.e. paper) form. The process for doing
so is set out below:
(a)
Actions
to be taken by EB Participants
EB
Participants can withdraw their Shares from Euroclear Nominees into
a direct name on register (mark-down). For a detailed description
as to what EB Participants would need to do, please refer to the
EB Services Description section 4.2.3 –Mark-up and
Mark-down.
(b)
Actions
to be taken by a holder of a CDI
A CDI
only exists in the CREST System as a settlement mechanic. It is not
possible to directly rematerialise a CDI. Please see Clause 6 of
the CREST Deed Poll set out in Chapter 8 of the CREST International
Manual. There are two distinct steps in this process:
1.
if a CREST member
no longer wishes to hold their interest in the underlying Irish
security by way of a CDI, they can choose to deliver the interest
out to an EB Participant. Once the delivery in Euroclear Bank is
settled, EUI will debit the CDI; and
2.
Euroclear Bank
enables EB Participants to withdraw their Shares from Euroclear
Nominees into a direct name on register. For a detailed description
as to what EB Participants need to do, please refer to
section 4.2.3 Mark up and Mark down of the EB Services
Description.
OVERVIEW OF BELGIAN LAW RIGHTS
A
description of the current Belgian Law Rights that, as a matter of
Belgian law, are granted to EB Participants in respect of the
Shares credited to them in the Euroclear System is set out
below.
Section
4(b) of the Terms and Conditions governing use of Euroclear
(“Euroclear
Terms and
Conditions”) lists the various
pieces of legislation which govern securities held in the Euroclear
System, namely:
(a)
the coordinated
Royal Decree No. 62 on the deposit of fungible financial
instruments and the settlement of transactions involving such
instruments (“Royal Decree
No. 62”), which applies to all
types of securities admitted in the Euroclear System which are, in
principle not governed by one of the specific pieces of legislation
listed in items 1(b) to (d)
below;
(b)
the Act of 2
January 1991 on the market in public debt securities and monetary
policy instruments, which applies to dematerialised debt
instruments issued by the Belgian Federal Government or other
public-sector entities;
(c)
the Act of 22 July
1991 on commercial paper and certificates of deposit, which applies
to certain short or medium-term dematerialised debt instruments
issued by Belgian issuers, or foreign issuers that have
specifically chosen to use one of these types of
securities;
(d)
the Belgian
Companies Code and Associations Code (section 5:30 et seq. and
section 7:35 et seq.), which apply to dematerialised securities
issued by certain Belgian companies, it being understood that,
notwithstanding the statement at sub-paragraph (a), certain provisions of the Royal Decree
No. 62 also apply to these types of securities;
or
(e)
other applicable
Belgian legislation providing for a regime of fungibility, as the
case may be, and as the same may be amended, supplemented or
superseded from time to time (note that there are currently no such
other pieces of applicable legislation).
The
asset protection rules set out in the pieces of legislation listed
at sub-paragraphs 1(b) to (d) (inclusive) above provide a protection
which is equivalent, in substance, to the protection afforded by
Royal Decree No. 62. In addition, some of the pieces of legislation
listed above do not apply to shares issued by an Irish issuer (for
example, due to the fact that they only apply to securities issued
by a Belgian issuer or by a Belgian public authority) and the
remainder of this summary, therefore, relates only to those rules
provided for by Royal Decree No. 62.
2.
Scope of Royal Decree
No. 62
Royal
Decree No. 62 applies to all securities (other than with a
limited number of exceptions those governed by one of the specific
pieces of legislation mentioned in sub-paragraphs 1(b) to (d) above
(inclusive)) deposited with Euroclear Bank by EB Participants,
irrespective of whether:
(a)
the securities have
been initially deposited with Euroclear Bank or have first been
deposited with another CSD before being transferred to a Securities
Clearance Account opened on the books of Euroclear
Bank;
(b)
Euroclear Bank
sub-deposits these securities with sub-custodians or CSDs in
Belgium or elsewhere; and
(c)
where relevant,
under the law governing the securities, it is the EB Participant,
Euroclear Bank itself or a nominee (e.g. Euroclear Nominees) that
has legal title to the securities.
Securities
held by Euroclear Bank on behalf of EB Participants are fungible
(Article 6 of Royal Decree No. 62). This means that once the
securities have been accepted by Euroclear Bank for deposit in the
Euroclear System, it is no longer possible to identify (whether on
the books of Euroclear Bank or in the books of the relevant
depository) a specific security (by means of a serial number or
otherwise) as belonging to a particular EB
Participant.
Owing
to this fungibility, securities held in the Euroclear System are
treated on a book-entry basis. Rights to such securities (i.e. the
co-ownership right on the pool of securities of the same issue held
in the Euroclear System as discussed below) are evidenced by
entries to the Securities Clearance Account of the relevant EB
Participant pursuant to Article 8 of Royal Decree
No. 62.
4.
Rights
attaching to the securities
The
rights that EB Participants have in respect of securities held in
the Euroclear System are twofold: an EB Participant has a right to
claim back the underlying securities initially deposited or
transferred to a Securities Clearance Account under the fungibility
regime but also, as long as the securities are held in the
Euroclear System, a co-ownership right on all securities of the
same issue held under the fungibility regime. The deposit of
securities in the Euroclear System amounts to the exchange by the
depositor of an ownership interest in specific securities for an
intangible co-ownership right over the pool of securities of the
same issue as such specific securities held in the Euroclear System
by all EB Participants. It is this co-ownership right that is the
subject of book-entry transfers between the EB Participants in the
Euroclear System. If an EB Participant wishes to take possession of
or recover an ownership interest in specific securities it may at
any time request the delivery of an amount of underlying securities
corresponding to the amount of such securities the co-ownership
right of which are recorded on the EB Participant’s
Securities Clearance Account. As from such delivery, the securities
will no longer be held in the Euroclear System. Such delivery would
satisfy the recovery claim the EB Participant has against Euroclear
Bank, as evidenced by the credit to the EB Participant’s
Securities Clearance Account.
5.
Nature
of the co-ownership right
Royal
Decree No. 62 offers enhanced protection to holders of
book-entry securities compared with mere contractual rights. Under
Royal Decree No. 62, EB Participants are granted an intangible
co-ownership right over the pool of book-entry securities of the
same issue held by Euroclear Bank on behalf of all EB Participants
that hold securities of that issue (Article 2 of Royal Decree
No. 62). Securities of the same issue are securities that have
been issued by the same issuer and have the same maturity and
rights (and are therefore fungible) (i.e. the same
ISIN).
The
existence of this co-ownership right affords EB Participants
specific rights with respect to the securities recorded on their
Securities Clearance Account, (in this case the Migrating Shares)
which would not otherwise arise under Belgian law in favour of
holders of pure contractual rights, namely:
(a)
a right to directly
exercise voting rights (subject to the laws applicable to the
underlying security, i.e. the Migrating Shares); and
(b)
a right of recovery
(terugvorderingsrecht/droit de
revendication), i.e. a proprietary right to receive back the
relevant quantity of securities in the event of the bankruptcy of
Euroclear Bank (or any other proceedings in which the rule of equal
treatment of creditors applies (geval van samenloop/situation de
concours)).
These
rights are regarded as the two essential attributes of ownership
under Belgian law.
As a
consequence of the fungibility of the securities deposited with
Euroclear Bank, Article 12 of Royal Decree No. 62 provides
that the right of recovery is a collective right, to be exercised
by all EB Participants collectively that have deposited the
relevant securities (rather than an individual right to be
exercised by each EB Participant). This right is as a matter of
principle to be exercised by the administrator of Euroclear
Bank’s bankruptcy or any other procedure where the rule of
equal treatment of creditors applies (geval van samenloop/situation de
concours), and it is the administrator that would, on behalf
of all EB Participants having deposited the securities concerned,
claim those securities back from the depositories. Where the
administrator would fail to take any action to effect the recovery
of the securities held on behalf of EB Participants, it is
considered in legal doctrine that each EB Participant may directly
make a claim with the depositories for the portion of securities
held by it in the Euroclear System, as evidenced by the entries in
the Securities Clearance Account(s) of the EB
Participant.
6.
Absence
of proprietary right of Euroclear Bank
Euroclear
Bank has, under Belgian law, no proprietary right in respect of
securities recorded in EB Participants’ Securities Clearance
Accounts. This is without prejudice to the other rights Euroclear
Bank may have with respect to securities held in the Euroclear
System, as described elsewhere in this Part 5 (see in
particular the statutory liens and other rights described further
below).
7.
Insolvency
of Euroclear Bank
Under
Belgian law, were bankruptcy proceedings (faillissement/faillite) to be opened in
respect of Euroclear Bank, the assets of Euroclear Bank would be
placed under judicial control to be conserved, administrated and
liquidated by one or more bankruptcy administrators (curator/curateur), in order to
reimburse the creditors of Euroclear Bank. The administrator would
also be responsible for returning to each EB Participant the number
of securities it held in the Euroclear System.
The
National Bank of Belgium may also commence resolution measures in
respect of Euroclear Bank in accordance with Title VIII of the Act
of 25 April 2014 on the status and supervision of credit
institutions and stock brokerage firms (the “Banking Act”) which has
implemented amongst others, Directive 2014/59/EU of 15 May 2014
establishing a framework for the recovery and resolution of credit
institutions and investment firms in Belgium. The impact of such
resolution measures on EB Participants would depend on the measures
taken. Section 288 of the Banking Act provides that the resolution
authority should ensure that the exercise of its resolution powers
does not affect the operation of and regulation of payment and
settlement covered by Directive 98/26/EC of 19 May 1998 on
settlement finality in payment and securities settlement
systems.
8.
Securities
held on behalf of EB Participants are not part of bankruptcy
estate
EB
Participants are granted an intangible co-ownership right over the
pool of book-entry securities of the same issue held by Euroclear
Bank on behalf of all EB Participants that hold securities of that
issue (Article 2 of Royal Decree No. 62). Such securities
would not form part of the assets of Euroclear Bank which would be
available for the satisfaction of the claims of Euroclear
Bank’s creditors where bankruptcy proceedings (faillissement/faillite) would be
commenced before the Belgian courts in respect of Euroclear Bank or
where resolution measures affecting Euroclear Bank would be
taken.
9.
Recovery
of securities
Securities
held with Euroclear Bank would be recoverable in kind by the EB
Participants in the event of bankruptcy proceedings (faillissement/faillite) or resolution
measures affecting Euroclear Bank. As noted above, EB Participants
have a right of recovery (terugvorderingsrecht/droit de
revendication), i.e. a proprietary right to receive back the
relevant quantity of securities in the event of bankruptcy
proceedings (faillissement/faillite) or any other
procedure where the rule of equal treatment of creditors applies
(geval van samenloop/situation de
concours). This recovery right must be brought collectively
in respect of the pool of securities of the same issue held by EB
Participants with Euroclear Bank.
Article
12 of Royal Decree No. 62 provides that where the pool of
securities is insufficient (i.e. if there is a securities loss) to
allow complete restitution of all due securities of a specific
issue held on account with Euroclear Bank by all EB Participants,
the pool must be allocated among the EB Participants/owners in
proportion to their rights (i.e. on a pro rata basis). If Euroclear
Bank itself is the owner of a number of securities of the same
issue, it will only be entitled to the number of securities
remaining after the total number of securities of the same issue
which it held for third parties has been returned.
In
order for an EB Participant to be entitled to the recovery of
securities held in the Euroclear System in the case of a bankruptcy
(faillissement/faillite) of
Euroclear Bank, the EB Participant must file a claim for recovery
with the clerk’s office of the Brussels business court before
the submission of the first report of verification of claims
(neerlegging van het eerste
proces-verbaal van verificatie/dépôt du premier
procès-verbal de vérification des créances)
(section XX.194 of the Belgian Code of Economic Law). The judgment
pursuant to which the bankruptcy has been declared would contain
the date by which the first report of verification of claims must
be submitted (generally between thirty (30) and forty five (45)
days after the bankruptcy declaration). Any claim for recovery
submitted after that date would be inadmissible. The administrator
of the bankruptcy would then allocate the securities of each issue
between those EB Participants having filed a claim for recovery in
accordance with the rules set out in this Part 5.
11.
Attachment
prohibited
Pursuant
to Article 11 of Royal Decree No. 62, attachments
(derden-beslag/saisie-arrêt)
of Securities Clearance Accounts opened with Euroclear Bank are
prohibited. The prohibition prevents Euroclear Bank, third parties
(such as creditors of the account holder), depositaries or service
providers from being able to attach (in beslag nemen/saisir) securities
recorded in a Securities Clearance Account. Article 11 of Royal
Decree No. 62 also stipulates that no attachment of securities
deposited by Euroclear Bank with depositaries is permissible.
Further, Article 14 of Royal Decree No. 62 provides that the
dividend, interest and principal amount cash payments relating to
fungible securities paid to Euroclear Bank by issuers of securities
held in the Euroclear System may not be attached by the creditors
of Euroclear Bank.
12.
Statutory liens, other rights
and pledge
Pursuant
to section 31, §2 of the Act of 2 August 2002 on the
supervision of the financial sector and financial services (the
“Act of 2 August
2002”), Euroclear Bank has:
(a)
a statutory lien
over financial instruments (including securities), cash, currencies
and other rights held in the books of Euroclear Bank as an EB
Participant’s own (i.e. proprietary) assets, which secures
any claim Euroclear Bank has against the EB Participant in
connection with the settlement of securities subscriptions,
transactions in securities or currency-forward transactions,
including claims resulting from loans or advances; and
(b)
a statutory lien
over financial instruments (including securities), cash, currencies
and other rights held in the books of Euroclear Bank on behalf of
the EB Participant’s underlying clients, which may only be
used to secure any claim Euroclear Bank has against the EB
Participant in connection with the settlement of securities
subscriptions, transactions in securities or currency-forward
transactions, including claims resulting from loans or advances,
which are carried out on behalf of the EB Participant’s
underlying clients.
13.
Other
liens and rights
In
addition to the section 31 statutory lien referred to above,
Belgian law provides for:
(a)
a retention right
in favour of the depository (e.g. Euroclear Bank) to guarantee its
claim for the full payment of any amount owed to it in connection
with the deposit (section 1948 of the Belgian Civil
Code);
(b)
a statutory lien
which covers any expenses made for the preservation of an asset
(e.g. securities) (section 20, 4° of the Belgian mortgage act
of 16 December 1851 as amended from time to time (the
“Mortgage
Act”)); and
(c)
a statutory lien in
favour of the unpaid seller on the sold, movable assets (e.g.
securities) which exists as long as the buyer is in possession of
such assets (section 20, 5 of the Mortgage Act).
Section
14(e) (limbs (i) and (ii)) of the Euroclear Terms and Conditions
provides, therefore, for a contractual right of set-off and
retention in favour of Euroclear Bank pursuant to which Euroclear
Bank may (upon the effectiveness of any termination or resignation
of an EB Participant):
(a)
set off or retain
from the amounts to be returned by Euroclear Bank to the EB
Participant any amounts which are due to, or which may become due
to, Euroclear Bank from the EB Participant; and
(b)
retain securities
held in the Securities Clearance Account(s) opened in the name of
the EB Participant to provide for the payment in full of any
amounts which are due to, or which may become due to, Euroclear
Bank from the EB Participant.
Belgian
law provides that holders of interests through the Euroclear Bank
CSD have the right to exercise other “associative
rights” directly against the Company under Article 13 of the
Royal Decree No. 62. These associative rights would (to the
extent permitted by the law governing the underlying security)
include, for example, the right to attend and vote at a general meeting, the
right to subscribe in rights issues or the right to commence
derivative claims against the Directors. Holders would request
evidence of their shareholding from Euroclear Bank CSD in
connection with the exercise of such associative
rights.
Pursuant
to section 3.5.2 of the EB Operating Procedures in order to secure
any claim Euroclear Bank may have against an EB Participant in
connection with the use of the Euroclear System (in particular any
claim resulting from any extension of credit or conditional credit
made in connection with the clearance or settlement of transactions
or custody services), each EB Participant agrees to pledge to
Euroclear Bank:
(a)
all securities and
cash such EB Participant holds in the Euroclear
System;
(b)
all right, title
and interest in and to such securities and cash; and
(c)
all existing and
future contractual claims such EB Participant may have against
Euroclear Bank in connection with the use of the Euroclear System
and in particular any claim to receive from Euroclear Bank
securities from a local market as a result of either:
(i)
stock exchange
trade orders where such transactions are automatically fed by the
local stock exchange into the local clearance system;
or
(ii)
receipt
instructions that Euroclear Bank sends to the local market on such
EB Participant’s behalf.
Unless
otherwise agreed in writing, this general pledge concerns both the
EB Participant’s proprietary securities as well as those
securities the EB Participant holds on behalf of its clients. The
EB Participant represents and warrants having obtained the
necessary consent from its clients to that effect. This general
pledge is without prejudice to (i) any collateral arrangements that
Euroclear Bank may enter into with the EB Participant and (ii) the
section 31 statutory lien referred to in section 12 above.
Pursuant
to section 3.5.1(b) of the EB Operating Procedures, Euroclear Bank
waives the statutory lien provided by section 31, §2 of the
Act of 2 August 2002 with respect to all securities held by the EB
Participant on behalf of clients, provided such securities are
credited to a Securities Clearance Account separately and
specifically identified in writing by the EB Participant as an
account to which only client securities are credited.
Section
17 of the Euroclear Terms and Conditions contains a general
loss-sharing rule which is without prejudice to the rules contained
in section 12 of Royal Decree No. 62. The rules set out in
section 17 are also without prejudice to any liability that
Euroclear Bank may have to compensate EB Participants for
negligence or wilful misconduct on its part.
Where
all or a portion of the securities of a particular issue held in
the Euroclear System is lost or otherwise becomes unavailable for
delivery (such loss or unavailability being referred to as a
“Securities
Loss”), then the reduction in the amount of securities
of such issue (i.e. the same ISIN) held in the Euroclear System
arising therefrom will be borne by those EB Participants holding
securities of such issue in the Euroclear System at the opening of
the business day on which Euroclear Bank makes a determination that
a Securities Loss has occurred (or if such day is not a business
day, at the opening of business on the immediately preceding
business day).
The
loss sharing is to be pro
rata with the amount of securities of such issue so held by
each EB Participant at the time of such determination and is
effected by means of debits to the Securities Clearance Accounts on
which securities of such issue are credited. This is subject to
appropriate adjustment in the event that any portion of the
securities of such issue held in the Euroclear System is for any
reason not credited to Securities Clearance Accounts. Any reduction
in the amount of securities available for delivery which arises
from a Securities Loss with respect to securities held with any
depository or other CSD shall be shared at the time as of which
such reduction is attributed to Euroclear Bank.
In the
case of any Securities Loss with respect to any issue of securities
which arises under circumstances in which any depository, any EB
Participant, any other CSD, any sub-custodian, or any other person
is or may be legally liable (or if any other remedy may be
available for making good the Securities Loss), Euroclear Bank may
take such steps to recover the securities which are the subject of
such Securities Loss or damages (or to obtain the benefits of any
such other remedy) as Euroclear Bank reasonably deems appropriate
under all the circumstances (including without limitation the
bringing and settling of legal proceedings).
Unless
Euroclear Bank is liable for such Securities Loss due to its
negligence or wilful misconduct, Euroclear Bank will charge those
sharing the reduction in securities arising out of such Securities
Loss (proportionately in accordance with the amount of such
sharing) the amount of any cost or expense incurred in connection
with any action taken referred to in the preceding
paragraph.
Any
cash amounts or securities which Euroclear Bank recovers in respect
of a Securities Loss relating to a particular issue of securities
or for which Euroclear Bank is liable in connection with a
Securities Loss will be credited to the appropriate cash accounts
or Securities Clearance Accounts of those sharing the reduction in
the amount of securities of such issue arising from such Securities
Loss.
OVERVIEW OF CREST DEPOSITORY INTERESTS
1.
Effect
of the Migration and initial creation of CDIs
The
practical result of the Migration taking effect will be that all
Migrating Shareholders (other than ADS holders) will initially
receive one (1) CDI for each Migrating Share held at the Migration
Record Date. Migrating Shareholders may then choose whether (1) to
continue to hold via CDI, or (2) to cancel their CDIs and instead
to hold and exercise the Belgian Law Rights in such Migrating
Shares as an EB Participant (subject to such Migrating Shareholder
being or becoming an EB Participant), or appointing a custodian
(e.g. a broker or other nominee which is an EB Participant) to hold
the interest in the Migrating Shares on its behalf.
Following
the Migration, Migrating Shares will likely be represented by a
combination of book entries within the Euroclear System and CDIs in
the CREST System. It should be noted that transactions in the
Shares resulting from trades on Euronext Dublin will settle via the
Euroclear System and transactions in the Shares resulting from
trades on the London Stock Exchange will settle via CDIs in the
CREST System. Transactions in the Shares resulting from trades on
other trading venues which are not cleared through a central
counterparty can settle either in the Euroclear System or in the
CREST System as agreed by the counterparties.
With
respect to CDIs, the CREST Nominee (CIN (Belgium) Limited) will be
an EB Participant and will hold rights to the Shares held within
Euroclear Bank on behalf of the CREST Depository for the account of
CDI holding CREST members.
Following
the Migration, holders of CDIs will not be the registered holders
of Shares to which they are entitled. Rather, immediately following
the Migration, their interests in the Migrating Shares will be held
through an intermediated chain of holdings, whereby Euroclear
Nominees will hold the legal interest in the Shares transferred to
it, on trust for Euroclear Bank, and will be the registered holder
of such Shares entered on the Register of Members. Euroclear Bank
will credit its interest in such Shares to the account of the CREST
Nominee, and the CREST Nominee will hold its interest in such
Shares (i.e. the Belgian Law Rights) as nominee and for the benefit
of the CREST Depository. The CREST Depository will, in turn, hold
its interest in such Shares on trust and for the benefit of the
holders of the CDIs.
The
terms and conditions upon which CDIs are issued and held in CREST
are set out in the CREST Deed Poll and the CREST International
Manual.
An
international custody fee and a transaction fee, as determined by
EUI from time to time, is charged at user level for the use of CDIs
and or transactions. The anticipated fees which will apply in
respect of Irish equities are outlined in section 6.3 Irish equities pricing from 15 March
2021 of the CREST Tariff Brochure.
The
rights of prospective holders of CDIs in relation to EUI and its
subsidiaries in respect of CDIs held through CREST are set out in
the CREST Deed Poll.
3.
Rights
attaching to CDIs
The
holders of CDIs will have an indirect entitlement to the Shares but
will not be the registered holders thereof. Accordingly, the
holders of CDIs will be able to enforce and exercise the rights
relating to the Shares through and in accordance with the
arrangements described below. As a result of certain aspects of
Irish law which govern the Shares, the holders of CDIs will not be
able directly to enforce or exercise certain rights, including
voting and pre-emption rights but, instead, will be entitled to
enforce them indirectly via Euroclear Nominees as further explained
below. Holders of CDIs will, at their option, be able to effect the
cancellation of their CDIs in CREST and receive a transfer of the
underlying shares to which they are entitled in the manner set out
in section 5 of Part 4 of this
Circular by appointing an agent or custodian which is an EB
Participant to receive the relevant Belgian Law Rights and
arranging for that agent or custodian to take the necessary steps
to effect the transfer of the relevant Shares from the Nominee.
Such holders may also choose to receive the benefit of the Belgian
Law Rights either directly (if they are an EB Participant) or via a
shareholding account with a depository financial institution which
is an EB Participant.
The
CDIs will be created and issued pursuant to the terms of the CREST
Deed Poll and as described in the CREST International
Manual.
The
CDIs will have the same security code (ISIN) as the underlying
Shares and will not be separately listed on the official list or
separately traded on the London Stock Exchange.
CDIs
are capable of being credited to the same member account as all
other CREST securities of any particular investor. This means that,
from a practical point of view, CDIs representing Shares will be
held and transferred in the same way that Participating Securities
are held and transferred in CREST today.
Holders
of CDIs will only be able to exercise their rights attached to CDIs
by instructing the CREST Depository to exercise these rights on
their behalf, and, therefore, the process for exercising rights
(including the right to vote at general meetings and the right to
subscribe for new shares on a pre-emptive basis) will take longer
for holders of CDIs than for holders of Shares or Belgian Law Rights. Consequently,
it is expected that the CREST Depository shall set a deadline for
receiving instructions from all CDI holders regarding any corporate
event. The holders of CDIs may be granted shorter periods in which
to exercise the rights carried by the CDIs than the Shareholders
have in which to exercise rights carried by Shares or EB Participants have in which to
exercise rights carried by Belgian Law Rights. The CREST Depository
will not exercise voting rights in respect of CDIs for which it has
not received voting instructions within the established
term.
EUI has
an SRD II like solution in place in respect of Irish
Securities held as CDIs in the CREST System (which will include
CDIs arising consequent to the Migration). The manner (where the
holder does not hold Shares through a custodian/nominee) and time
period within which any such voting rights may be exercised by CDI
holders will differ from arrangements that would currently apply in
respect of direct holdings in the CREST System.
EUI has
arranged for voting instructions relating to Shares to be received
via a third party service provider, currently Broadridge. Any CREST
member who has a holding in the CDI up to the Broadridge voting
deadline will be notified through Broadridge upon
Broadridge’s receipt of such notification from Euroclear
Bank.
The
notification will be made available to all CREST members (those
either having or receiving a position in that CDI) within forty
eight (48) hours of receipt by Broadridge of complete
information.
The
relevant record date is determined by the issuer and is a
market-wide applicable date.
CREST
members can complete and submit proxy appointments (including
voting instructions) electronically through Broadridge. The same
voting options as in Euroclear Bank will be available (i.e.
electronic votes by means of chairman proxy appointments or
appointing a third party proxy).
The
voting service will process and deliver proxy voting instructions
received from CREST members on the Broadridge voting deadline date
to Euroclear Bank, by their cut-off and to agreed market
requirements. Voting instructions cannot be changed or cancelled
after Broadridge’s voting deadline.
There
is no facility to appoint a corporate representative.
Holders
of CDIs wishing to use the voting rights attached to the Shares
represented by their CDIs personally in their capacity as a
Shareholder (and not as proxy), by attending a shareholders’
meeting of the Company, will first have to effect the cancellation
of their CDIs by receiving the relevant Belgian Law Rights (via an
EB Participant if they are not an EB Participant) and then
effecting a transfer of their underlying Shares so that such Shares
are held in certificated form by such holder as described above in
time for the record date of the relevant Shareholders’
meeting. On so doing, they will, subject to and in accordance with
the Articles of Association, be able to attend and vote in person
or appoint a corporate representative at the relevant
Shareholders’ meeting.
Voting confirmations may not be provided by Euroclear Bank to EB
Participants or to underlying CDI holders.
The
entitlement of CREST members holding CDIs to a dividend will be
based on their holdings in the CREST System on the relevant record
date. Upon receipt of funds and successful reconciliation by CREST,
CREST members will be credited an amount based on their record date
holdings.
On 2
December 2020, EUI announced that it will not be able to continue
to settle in euro under the current TARGET2 arrangements from
Monday, 29 March 2021. In the same announcement, EUI confirmed that
it is investigating alternative arrangements with the aim that euro
can continue as a settlement currency in the CREST system. Unless
such alternative arrangements can be secured, this means that the
final date for euro settlement (including the payment of dividends)
in EUI will be Friday, 26 March 2021, following which all trades
carried out on the London Stock Exchange will settle in pounds
sterling or US dollars only. This could therefore impact holders of
CDIs who wish to receive dividends in euro.
(c)
Other
Corporate Actions
EUI
notifies CREST members of an event as soon as possible after
receipt of complete notification of the corporate action from
Euroclear Bank (normally shortly after the announcement by the
issuer).
The
notification will inform the CREST member of the relevant deadlines
(EUI deadline, record date, election date etc.) as well as the
actions the CREST member needs to undertake (i.e. is it a mandatory
event, elective event, is there a default action or
not).
Upon
receipt by CREST of the corporate action instructions from the CDI
holders by the CREST deadline, CREST will send the instructions to
Euroclear Bank who in turn will include these instructions in the
aggregated instructions Euroclear Bank sends to the
issuer/agents.
The
issuer/agents in turn credit the relevant proceeds to Euroclear
Bank and upon receipt of the proceeds, Euroclear Bank credits the
entitled EB Participants (including CREST as a Participant of
Euroclear Bank) with their respective entitlement.
The
relevant EUI deadline for elections will be earlier than the
Euroclear Bank deadline, as CREST needs to ensure it sends its
instructions to Euroclear Bank within the Euroclear Bank
deadline.
Upon
receipt of the relevant proceeds, CREST will credit the CREST
members with their entitlement based on either their elections or
the holdings they had on the relevant record date.
CREST
members’ remedies are set out in the English law contract
entered into with EUI.
Given
that Euroclear Bank will not credit a fraction of a Share, CREST
members will not be credited with fractional
entitlements.
4.
Cancellation of CDIs for
underlying Belgian Law Rights or for underlying Shares
Holders
of CDIs will, at their option, be able to effect the cancellation
of their CDIs in the CREST System and receive the Belgian Law
Rights to which they are entitled into a shareholding account with
a depository financial institution which is an EB Participant and
to be registered as holder of the underlying Shares by arranging
for that EB Participant to take the necessary steps to effect the
transfer of the relevant Shares from Euroclear Nominees. It is
envisaged that receipt of Belgian Law Rights on cancellation of
CDIs can be accomplished within the same business day, and that
entry on the Register of Members as holder of the underlying Shares
can be accomplished within one (1) business day. It may take up to
ten (10) business days for a transferee to receive the relevant
share certificate, however entry on the Register of Members is
prima facie evidence of a
shareholding under Irish law. Certain transfer fees will generally
be payable by a holder of CDIs who makes such a
transfer.
TAX INFORMATION IN RESPECT OF THE MIGRATION
THE TAX CONSIDERATIONS SUMMARISED BELOW ARE FOR GENERAL INFORMATION
ONLY AND ARE IN RESPECT OF TAX CONSIDERATIONS OF THE MIGRATION
ONLY. EACH SHAREHOLDER SHOULD CONSULT HIS OR HER OWN TAX ADVISER AS
TO THE PARTICULAR TAX CONSEQUENCES THAT MAY APPLY TO SUCH
SHAREHOLDER.
The
following is a general summary of the material Irish tax
considerations applicable to persons who are the ultimate owners of
Migrating Shares for Irish tax purposes and references to
“Shareholders” in this summary should be read
accordingly. The summary contained in this Part 7 is based on
existing Irish tax law and our understanding of the practices of
the Irish Revenue Commissioners (“Irish Revenue”) in and or around
the date of this Circular. It is based on the recently introduced
Finance Act 2020, parts of which have not been commenced into law.
Legislative, administrative or judicial changes may modify the tax
consequences described in this Part 7, possibly with
retroactive effect. Furthermore, we can provide no assurances that
the tax consequences contained in this summary will not be
challenged by the Irish Revenue or will be sustained by an Irish
court if they were to be challenged.
The
following summary does not constitute tax advice and is intended
only as a general guide. The following summary is not exhaustive
and Shareholders should consult their own tax advisers about the
Irish tax consequences (and the tax consequences under the laws of
other relevant jurisdictions), which may arise as a result of being
Migrating Shareholders and the acquisition, ownership and
disposition of Shares in the future. Furthermore, the following
summary applies only to Shareholders who currently hold their
Shares as capital assets and does not apply to all categories of
Shareholders, such as dealers in securities, trustees, insurance
companies, collective investment schemes, pension funds or
Shareholders who have, or who are deemed to have, acquired their
Shares by virtue of an office or employment and such persons may be
subject to special rules.
The Finance Act includes a number of amendments to the Irish tax
legislation that seek to ensure that the migration of securities in
Irish registered companies from the CREST system to the Euroclear
System is tax neutral and to maintain the status quo
post-migration. The Finance Act has been subject to a number of
stages in the legislative process before it was signed into law in
December 2020 and the relevant provisions will only come into force
when a ministerial commencement order is made. The Irish Revenue
have proposed addressing some matters by way of published practice
rather than by statute, but this has not been published yet. It is
possible that further changes in law may be introduced and/or that
the law or practice of the Irish Revenue could change, either
prospectively or retroactively, and such change could increase,
reduce or mitigate possible tax consequences for Shareholders.
Also, the assumed practices may not be issued by the Irish Revenue.
The position under current Irish law is uncertain and the Company
makes no assurances on the tax position for
Shareholders.
The following summary is drafted on the basis that the amendments
in the Finance Act 2020 dealing with the Migration are commenced by
way of ministerial order prior to any action or transaction being
undertaken in relation to the Migration.
(b)
Irish
Capital Gains Tax
Shareholders
should not be liable to Irish capital gains tax
(“CGT”) as a
result of the Migration on the basis that the Migration should not
be treated as giving rise to a disposal of shares for CGT
purposes.
Shareholders
who are not resident or ordinarily resident in Ireland for Irish
tax purposes should not be liable to CGT to the extent a gain is
realised on a disposal of shares (including CDIs and ADSs) (or an
interest in shares) unless such shares (or interest in shares) are
used, held or acquired for the purpose of a trade or business
carried on by such shareholder in Ireland through a branch or an
agency.
Following
the Migration, a disposal by an Irish resident or ordinarily
resident shareholder of its shares may, depending on the
circumstances (including the availability of exemptions and
reliefs), give rise to a chargeable gain or allowable loss for that
Shareholder. The rate of CGT is currently 33%.
(c)
Irish
Dividend Withholding Tax
Irish
dividend withholding tax (“DWT”) should not arise as a result
of the Migration.
Following
the Migration, unless exempted, a withholding at the standard rate
of income tax (currently 25%) will apply to dividends or other
relevant distributions paid by the Company. The withholding tax
requirement will not apply to distributions paid to certain
categories of Irish resident Shareholders or to distributions paid
to certain categories of non-Irish resident
Shareholders.
The
following Irish resident Shareholders, inter-alia, are exempt from
withholding if, on a timely basis in advance of the payment of any
relevant dividend they make an appropriate declaration of
entitlement to exemption to the Company:
●
Irish resident
companies;
●
pension schemes
approved by the Irish Revenue;
●
qualifying fund
managers or qualifying savings managers in relation to approved
retirement funds (“ARF”s) or approved minimum
retirement funds (“AMRF”s);
●
Personal Retirement
Savings Account (“PRSA”) administrators who receive
the relevant distribution as income arising in respect of PRSA
assets;
●
qualifying employee
share ownership trusts;
●
collective
investment undertakings;
●
designated brokers
receiving the distribution for special portfolio investment
accounts;
●
any person who is
entitled to exemption from income tax under Schedule F on dividends
in respect of an investment in whole or in part of payments
received in respect of a civil action or from the Personal Injuries
Assessment Board for damages in respect of mental or physical
infirmity;
●
certain qualifying
trusts established for the benefit of an incapacitated individual
and/or persons in receipt of income from such a qualifying
trust;
●
any person entitled
to exemption to income tax under Schedule F by virtue of section
192(2) of the Taxes Consolidation Act (“TCA”) 1997;
●
unit trusts to
which section 731(5)(a) of the TCA 1997 applies; and
●
certain Irish
Revenue-approved amateur and athletic sport bodies.
The
following non-resident stockholders are exempt from withholding if
they make to the Company, in advance of payment of any dividend, an
appropriate declaration of entitlement to exemption:
●
persons (other than
a company) who (i) are neither resident nor ordinarily resident in
Ireland and (ii) are resident for tax purposes in (a) a country
which has signed a Double Taxation Agreement with Ireland (a
“tax treaty
country”) or (b) an EU member state other than
Ireland;
●
companies not
resident in Ireland which are resident in an EU member state or a
tax treaty country and are not controlled, directly or indirectly,
by an Irish resident or Irish residents;
●
companies not
resident in Ireland which are directly or indirectly controlled by
a person or persons who are, by virtue of the law of a tax treaty
country or an EU member state, resident for tax purposes in a tax
treaty country or an EU member state other than Ireland and which
are not controlled directly or indirectly by persons who are not
resident for tax purposes in a tax treaty country or EU member
state;
●
companies not
resident in Ireland, the principal class of shares of which is
substantially and regularly traded on a recognised stock exchange
in a tax treaty country or an EU member state including Ireland or
on an approved stock exchange; or
●
companies not
resident in Ireland that are 75% subsidiaries of a single company,
or are wholly-owned by two (2) or more companies, in either case
the principal classes of shares of which is or are substantially
and regularly traded on a recognised stock exchange in a tax treaty
country or an EU member state including Ireland or on an approved
stock exchange.
In the
case of an individual non-Irish resident Shareholder resident in an
EU member state or tax treaty country, the declaration must be
accompanied by a current certificate of tax residence from the tax
authorities in the Shareholder’s country of residence. In the
case of both an individual and corporate non-Irish resident
Shareholder resident in an EU member state or tax treaty country,
the declaration must also contain an undertaking that he, she or it
will advise the Company accordingly if he, she or it ceases to meet
the conditions to be entitled to the DWT exemption. No declaration
is required if the Shareholder is a 5% parent company in another EU
member state in accordance with section 831 TCA 1997.
The DWT
position in respect of dividends or distributions in respect of
Shares represented by ADSs should not change as a result of the
Migration.
Investors
who hold their shares through a qualifying intermediary should make
the appropriate declaration of entitlement to exemption on a timely
basis to that intermediary.
(d)
Income
Tax on Dividends Paid
Irish
income tax may arise for certain Shareholders in respect of any
dividends received from the Company.
Non-Irish Resident Shareholders
Except
in certain circumstances, a person who is neither resident nor
ordinarily resident in Ireland and is entitled to receive dividends
without deductions is not liable for Irish tax on the dividends.
Where a person who is neither resident nor ordinarily resident in
Ireland is subject to withholding tax on the dividend received due
to not benefiting from any exemption from such withholding, the
amount of that withholding will generally satisfy such
person’s liability for Irish tax, however individual
Shareholders should confirm this with their own tax
adviser.
Irish Resident Shareholders
Companies
resident in Ireland other than those taxable on receipt of
dividends as trading income are exempt from corporation tax on
distributions received on the Shares. Shareholders that are
“close” companies for Irish taxation purposes may,
however, be subject to a 20% corporation tax surcharge on
undistributed investment income.
Individual
Shareholders who are resident or ordinarily resident in Ireland are
subject to income tax on the gross dividend at their marginal tax
rate, but are entitled to a credit for the tax withheld by the
Company. The dividend will also be subject to the universal social
charge. An individual Shareholder who is not liable or not fully
liable for income tax by reason of exemption or otherwise may be
entitled to receive an appropriate refund of tax withheld. A charge
to Irish social security taxes can also arise for such individuals
on the amount of any dividend received from the
Company.
(e)
Capital
Acquisitions Tax
Irish
capital acquisitions tax (“CAT”) should not arise simply by
virtue of the Migration. Following the Migration, a gift or
inheritance of Shares (including CDIs and ADSs) (or an interest in
Shares) should be within the charge to CAT notwithstanding that the
donor or the donee/successor in relation to such gift or
inheritance is domiciled and resident outside Ireland. CAT is
charged at a rate of 33% above a tax-free threshold. This tax-free
threshold is determined by the amount of the current benefit and of
previous benefits taken since 5 December 1991, as relevant, within
the charge to CAT and the relationship between the donor and the
donee/successor. Gifts and inheritances between spouses (and in
certain cases former spouses) are not subject to CAT.
In a
case where an inheritance or gift of Shares is subject to both
Irish CAT and foreign tax of a similar character, the foreign tax
paid may in certain circumstances be credited in whole or in part
against the Irish tax. Shareholders should consult their own tax
advisers as to whether CAT is creditable or deductible in computing
any domestic tax liabilities.
The
Finance Act contains a provision to the effect Stamp duty shall not
be chargeable on the migration of securities under the Migration of
Participating Securities Act 2019.
It is
understood that this provision is based on the understanding that
the mere act of migration itself does not give rise to a stamp duty
charge. Accordingly, where a shareholder also effects a change in
beneficial ownership or similar change, in addition to the effects
of the Migration, any such additional effect may bring the
transaction within the charge to stamp duty.
Following
the Migration transfers of equitable or beneficial interests in
Shares (or an interest in Shares), including a transfer of CDIs
within the CREST System, will be subject to stamp duty at a current
rate of 1% of the consideration or the market value of the Shares,
if greater. The person accountable for payment of stamp duty is the
transferee or, in the case of a transfer by way of a gift or for a
consideration less than the market value, all parties to the
transfer. The methods for
collection of stamp duty remain to be clarified by the Irish
Revenue.
(g)
Cancellation
of Income Shares
Shareholders
who are Irish resident or ordinarily resident and who have their
Income Shares redeemed for nil consideration may recognise a loss
to the extent that base cost is attributable to those Income
Shares; any such loss may be allowable depending on the
Shareholder’s circumstances. No Irish stamp duty will be
payable by a Shareholder on the cancellation of their Income Shares
for nil consideration.
2.
United Kingdom Tax
Considerations
The
following is a general summary of the material United Kingdom tax
considerations applicable to Shareholders who are resident (and, in
the case of individuals, domiciled) in the United Kingdom for
United Kingdom tax purposes and who are the beneficial owners of
Migrating Shares and who have neither lent nor borrowed their
shares (“UK
Shareholders”). The summary contained in this
Section 2 of Part 7 is based
on our understanding of existing United Kingdom tax law and the
published practice of Her Majesty’s Revenue and Customs
(“HMRC”) in and
or around the date of this Circular. Legislative, administrative or
judicial changes may modify the tax consequences described in this
Section 2 of Part 7, possibly
with retroactive effect. Furthermore, we can provide no assurances
that the tax consequences contained in this summary will not be
challenged by HMRC or will be sustained by a United Kingdom court
if they were to be challenged.
The
following summary does not constitute tax advice and is intended
only as a general guide. It relates only to certain limited aspects
of the United Kingdom taxation treatment of UK Shareholders. It may
not apply to certain UK Shareholders, such as traders,
broker-dealers, dealers in securities, intermediaries, insurance
companies and collective investment schemes, shareholders who have
(or are deemed to have) acquired their Migrating Shares by virtue
of an office or employment or who are officers or employees or
individual shareholders who own 10% or more of the issued share
capital of the Company (including in certain circumstances, shares
comprised in a settlement of which the shareholder is a settlor and
shares held by a connected person as well as shares transferred by
a shareholder pursuant to a repurchase or stock lending
arrangement). Such persons may be subject to special rules. The
following statements may not apply where the Company offers scrip
dividends in lieu of cash. Shareholders should consult their own
tax advisers about the United Kingdom tax consequences (and the tax
consequences under the laws of other relevant jurisdictions), which
may arise as a result of being Migrating Shareholders and the
acquisition, ownership and disposition of Shares in the
future.
(b)
Cancellation
of the Income Shares
A UK
Shareholder that has its Income Shares redeemed for nil
consideration may recognise a loss to the extent that base cost is
attributable to those Income Shares; any such loss may be
allowable. No United Kingdom stamp duty or stamp duty reserve tax
(“SDRT”) will be
due from UK Shareholders on the cancellation of their Income Shares
for nil consideration.
UK
Shareholders are not expected to be liable to United Kingdom
capital gains tax or corporation tax on chargeable gains as a
result of the Migration, either on the basis that the Migration
does not give rise (or should not be treated as giving rise) to a
disposal of Shares, or on the basis that under the securities
identification rules any disposal should be treated as being of the
interest in Shares acquired in the Migration (whether held as a CDI
or as Belgian Law Rights by an EB Participant or through a broker
or other nominee which is an EB Participant) and therefore at no
gain and no loss. There is therefore expected to be no effect on
the base cost available to be taken into account by UK Shareholders
in computing the gain on any subsequent disposals.
No
United Kingdom stamp duty or SDRT is expected to be required to be
paid in respect of the Migration.
(d)
Cancellation
of CDIs for underlying Belgian Law Rights or for underlying
Shares
Following
the Migration, if a UK Shareholder holding CDIs effects the
cancellation of those CDIs in the CREST System and receives Belgian
Law Rights as described in paragraph 4 of Part 6 of this Circular: (i) the UK
Shareholder is not expected to be liable to United Kingdom capital
gains tax or corporation tax on chargeable gains as a result of the
cancellation; (ii) the base cost in the Belgian Law Rights is
expected to be the same as the base cost in the CDIs; and (iii) no
United Kingdom stamp duty or SDRT is expected to be required to be
paid as a result of the cancellation. HMRC considers that there
will have been a disposal of the CDIs for the purposes of United
Kingdom capital gains tax or corporation tax on chargeable gains
and that the usual computational rules will apply; but as it is not
expected that any consideration (beyond the receipt of the Shares
themselves) would be received by a UK Shareholder for the disposal
of the CDIs, no chargeable gains should arise. If a UK Shareholder
holding Belgian Law Rights in respect of Shares subsequently takes
steps (whether immediately after the cancellation of that UK
Shareholder’s CDIs or at a later time) to become registered
directly as the holder of the Shares (again as described in
paragraph 4 of Part 6 of this
Circular), similarly: (i) the UK Shareholder is not expected to be
liable to United Kingdom capital gains tax or corporation tax on
chargeable gains as a result of that direct registration; (ii) the
base cost in the Shares is expected to be the same as the base cost
in the Belgian Law Rights; and (iii) no United Kingdom stamp duty
or SDRT is expected to be required to be paid as a result of that
direct registration.
Following
the Migration, a beneficial owner of CDIs in respect of Shares is
expected to be treated for UK tax purposes as the beneficial owner
of the corresponding number of Shares held through the Euroclear
System for the benefit of the CREST Depository. On that basis, if a
UK Shareholder receives a dividend on his or her Shares (including
Shares represented by CDIs) and Irish tax is withheld from the
payment of the dividend (see Irish tax considerations in
Section 1 of this Part 7 for
comments on the withholding tax position), credit for the Irish tax
may be available for set-off against any liability to UK
corporation tax or UK income tax on the dividend. The amount of the
credit will normally be equal to the lesser of: (i) the amount
withheld once appropriate double tax treaty claims have been made
by the UK Shareholder to mitigate Irish withholding tax suffered;
and (ii) the liability to UK tax on the dividend. The credit will
not normally be available for set-off against a UK
Shareholder’s liability to UK tax other than on the dividend
and, to the extent that the credit is not set off against UK tax on
the dividend, the credit will be lost.
Individuals
UK
Shareholders who are within the charge to UK income tax will pay no
tax on their cumulative dividend income in a tax year up to an
allowance (£2,000 for the 2020/21 tax year). The rates of
income tax on dividends received above the annual dividend
allowance are currently (i) 7.5% for basic rate taxpayers; (ii)
32.5% for higher rate taxpayers; and (iii) 38.1% for additional
rate taxpayers. Dividend income that is within the dividend
allowance counts towards an individual’s basic or higher rate
limits and will therefore affect the rate of tax that is due on any
dividend income in excess of the annual dividend allowance. In
calculating into which tax band any dividend income over the
£2,000 allowance falls, savings and dividend income are
treated as the highest part of an individual’s income. Where
an individual has both savings and dividend income, the dividend
income is treated as the top slice.
Corporate shareholders
UK
Shareholders who are within the charge to UK corporation tax will
be subject to UK corporation tax on any dividends on the Shares
unless certain conditions for exemption are satisfied. The
exemption is of wide application and such UK Shareholders will
therefore ordinarily not be subject to UK corporation tax on the
dividends received on the Shares.
Preference Shares
Special rules may apply to the receipt of dividends on Preference
Shares. UK Shareholders holding Preference Shares should
consult their own tax advisers about whether those rules may apply
to the receipt of dividends on their Shares.
(f)
Taxation
of chargeable gains
A
disposal or deemed disposal of Shares (including the CDIs and
Shares represented by them) by a UK Shareholder may, depending on
the UK Shareholder’s particular circumstances and subject to
any available exemption or relief, give rise to a chargeable gain
or allowable loss for the purposes of capital gains tax or
corporation tax on chargeable gains.
Individuals
who are temporarily non-resident in the UK may, in certain
circumstances, be subject to capital gains tax in respect of gains
realised on a disposal of Shares during their period of
non-residence.
(g)
United
Kingdom Stamp Duty and SDRT
No UK
stamp duty will be payable in respect of a paperless transfer of
Shares for which no written instrument of transfer is
used.
No UK
stamp duty will be payable on a written instrument of transfer of
Shares if that transfer instrument is executed and retained outside
the UK and does not relate to any property situated in the UK or to
any other matter or thing done or to be done in the UK (which may
include, without limitation, the involvement of UK bank accounts in
payment mechanics).
No UK
SDRT will arise in respect of an agreement to transfer Shares,
provided that the Shares are not registered in a register that is
kept in the UK.
No UK
stamp duty will arise on transfers of CDIs within the CREST System,
on the assumption that no written instrument of transfer is used to
effect such a transfer.
No UK
SDRT will arise on transfers of CDIs within the CREST System,
provided that (i) the Shares represented by the CDIs are of the
same class as shares in the Company that are listed on a
‘recognised stock exchange’ for UK tax purposes, (ii)
the Shares are not registered in a register that is kept in the UK,
and (iii) the Company (as a non-UK incorporated company) remains
centrally managed and controlled outside the UK. Shares that are
included in the UK Official List and admitted to trading on the
main market of the London Stock Exchange, and/or officially listed
in Ireland and admitted to trading on the main market of Euronext
Dublin, are regarded as listed on a recognised stock exchange for
UK tax purposes.
THE UNITED KINGDOM TAX CONSIDERATIONS SUMMARISED ABOVE ARE FOR
GENERAL INFORMATION ONLY. EACH SHAREHOLDER SHOULD CONSULT HIS OR
HER OWN TAX ADVISER AS TO THE PARTICULAR TAX CONSEQUENCES THAT MAY
APPLY TO SUCH SHAREHOLDER.
3.
United
States Federal Income Tax Considerations
The
following is a summary of certain US federal income tax
considerations relating to the purchase, ownership and disposition
of Migrating Shares or ADSs by a beneficial owner of the Migrating
Shares or ADSs who is a citizen or resident of the United States, a
US domestic corporation or otherwise subject to US federal income
tax on a net income basis in respect of the Migrating Shares or the
ADSs (“US
Holders”). This summary does not purport to be tax
advice or a comprehensive description of all of the tax
considerations that may be relevant to a decision to purchase the
Migrating Shares or the ADSs, including the alternative minimum tax
and Medicare tax on net investment income. In particular, the
summary deals only with US Holders that will hold Migrating Shares
or ADSs as capital assets and generally does not address the tax
treatment of US Holders that may be subject to special tax rules
such as banks, regulated investment companies, insurance companies,
tax-exempt organisations dealers in securities or currencies,
partnerships or partners therein, entities subject to the branch
profits tax, traders in securities electing to mark to market,
persons that own 10% or more of the stock of the Company (measured
by vote or value), US Holders whose “functional
currency” is not US dollars or persons that hold the
Migrating Shares or the ADSs as a synthetic security or as part of
an integrated investment (including a “straddle” or
hedge) consisting of the Migrating Shares or the ADSs and one or
more other positions.
This
summary is based on the Internal Revenue Code of 1986, as amended
(the “Code”),
its legislative history, existing and proposed regulations
promulgated thereunder, published rulings and court decisions, all
as currently in effect. These authorities are subject to change,
possibly on a retroactive basis. In addition, this summary assumes
the deposit agreement, and all other related agreements, will be
performed in accordance with their terms.
Holders
of the Migrating Shares or the ADSs should consult their own tax
advisors as to the US or other tax consequences of the purchase,
ownership, and disposition of the Migrating Shares or the ADSs in
light of their particular circumstances, including, in particular,
the effect of any foreign, state or local tax laws.
For US
federal income tax purposes, holders of the ADSs generally will be
treated as the beneficial owners of the Migrating Shares
represented by those ADSs. Exchanges of Migrating Shares for ADSs,
and ADSs for Migrating Shares, generally will not be subject to US
federal income tax.
(b)
Tax
Consequences of the Cancellation of the Income Shares and of the
Migration
US
Holders are not expected to recognise any gain or loss for US
federal income tax purposes as a consequence of the cancellation of
the Income Shares. US Holders are likewise not expected to
recognise any gain or loss for US federal income tax purposes as a
consequence of the Migration. After the Migration, US Holders of
ADSs will continue to be treated as holding the underlying
Migrating Shares for US federal income tax purposes.
(c)
Taxation
of Dividends
The
gross amount of any dividends (including any amount withheld in
respect of Irish taxes) paid with respect to the Migrating Shares,
including Migrating Shares represented by ADSs, will generally be
includible in the taxable income of a US Holder when the dividends
are received by the holder, in the case of Migrating Shares, or
when received by the Depositary, in the case of ADSs. Such
dividends will not be eligible for the “dividends
received” deduction allowed to US corporations in respect of
dividends from a domestic corporation. Dividends paid in euro
generally should be included in the income of a US Holder in a US
dollar amount calculated by reference to the exchange rate in
effect on the day they are received by the holder, in the case of
Migrating Shares, or the Depositary, in the case of ADSs. US
Holders generally should not be required to recognise any foreign
currency gain or loss to the extent such dividends paid in euro are
converted into US dollars immediately upon receipt.
Subject
to certain exceptions for short-term and hedged positions, the US
dollar amount of dividends received by an individual with respect
to the Migrating Shares or ADSs will be taxable at the preferential
rates for “qualified dividends” if (i) the Company is
eligible for the benefits of a comprehensive income tax treaty with
the United States that the Internal Revenue Service
(“IRS”) has
approved for the purposes of the qualified dividend rules; and (ii)
the Company was not, in the year prior to the year in which the
dividend is paid, and is not, in the year in which the dividend is
paid, a passive foreign investment company (a “PFIC”). The Convention between the
Government of the United States of America and the Government of
Ireland for the Avoidance of Double Taxation and the Prevention of
Fiscal Evasion with Respect to Taxes on Income and Capital Gains,
dated as of 28 July 1999 (the “US-Ireland Income Tax Treaty”) has
been approved for the purposes of the qualified dividend rules.
Based on the Company’s audited financial statements and
relevant market data, the Company believes that it was not treated
as a PFIC for U.S. federal income tax purposes with respect to its
fiscal 2019 taxable year. In addition, based on the Company’s
audited financial statements and its current expectations regarding
the value and nature of its assets, the sources and nature of its
income, and relevant market data, the Company does not anticipate
becoming a PFIC for its fiscal 2020 taxable year.
Dividends
received by US Holders generally will constitute foreign source and
“passive category” income for US foreign tax credit
purposes. Subject to limitations under US federal income tax law
concerning credits or deductions for foreign taxes, any Irish taxes
withheld at the appropriate rate from cash dividends on the
Migrating Shares or ADSs may be treated as a foreign income tax
eligible for credit against a US Holder’s US federal income
tax liability (or at a US Holder’s election, may be deducted
in computing taxable income if the US Holder has elected to deduct
all foreign income taxes for the taxable year). The rules with
respect to foreign tax credits are complex and US Holders should
consult their own tax advisors concerning the implications of these
rules in light of their particular circumstances.
Distributions
of Migrating Shares that are made as part of a pro rata distribution to all
stockholders generally should not be subject to US federal income
tax, unless the US Holder has the right to receive cash or
property, in which case the US Holder will be treated as if it
received cash equal to the fair market value of the
distribution.
(d)
Taxation
of Capital Gains
Upon a
sale or other disposition of the Migrating Shares or ADSs, US
Holders will recognise gain or loss for US federal income tax
purposes in an amount equal to the difference between the US dollar
value of the amount realised on the disposition and the US
Holder’s tax basis, determined in US dollars, in the
Migrating Shares or ADSs. Generally, such gains or losses will be
capital gains or losses, and will be long-term capital gains or
losses if the Migrating Shares or ADSs have been held for more than
one year. Short-term capital gains are subject to US federal income
taxation at ordinary income rates. Gains realised by a US Holder
generally should constitute income from sources within the United
States for foreign tax credit purposes and generally should
constitute “passive category” income for such purposes.
The deductibility of capital losses, in excess of capital gains, is
subject to limitations. Deposits and withdrawals of Migrating
Shares by US Holders in exchange for ADSs should not result in the
realisation of gain or loss for US federal income tax
purposes.
(e)
Foreign
Financial Asset Reporting
Certain
US Holders that own “specified foreign financial
assets” with an aggregate value in excess of US $50,000 on
the last day of the taxable year or US $75,000 at any time during
the taxable year are generally required to file an information
statement along with their tax returns, currently on IRS Form 8938,
with respect to such assets. “Specified foreign financial
assets” include any financial accounts held at a non-US
financial institution, as well as securities issued by a non-US
issuer that are not held in accounts maintained by financial
institutions. The understatement of income attributable to
“specified foreign financial assets” in excess of US
$5,000 extends the statute of limitations with respect to the tax
return to six (6) years after the return was filed. US Holders who
fail to report the required information could be subject to
substantial penalties. Prospective investors are encouraged to
consult with their own tax advisors regarding the possible
application of these rules, including the application of the rules
to their particular circumstances.
(f)
Information
Reporting and Backup Withholding
Dividends
paid on, and proceeds from, the sale or other disposition of the
Migrating Shares or ADSs that are made within the United States or
through certain US related financial intermediaries generally will
be subject to information reporting and may also be subject to
backup withholding unless the holder (i) provides a correct
taxpayer identification number and certifies that it is not subject
to backup withholding or (ii) otherwise establish an exemption from
backup withholding. Backup withholding is not an additional tax.
Any amounts withheld may be allowed as a refund or credit against a
US Holder’s US federal income tax liability, provided the
required information is timely furnished to the IRS.
4.
Belgian
Tax Considerations
The
following is a general summary of the material Belgian tax
considerations applicable to Shareholders who are the beneficial
owners of Migrating Shares, who have neither lent nor borrowed
their shares and who are (i) Belgian resident individuals or
companies (“Belgian Resident
Shareholders”) or (ii) Belgian non-resident
individuals or companies (“Belgian Non-Resident
Shareholders”). It has been assumed that Belgian
Non-Resident Shareholders are Shareholders that have no connection
with Belgium other than the mere fact that their Shares (including
Shares represented by CDIs) are held through the Euroclear System.
The summary is based on our understanding of existing Belgian tax
laws, treaties and regulatory interpretations by the Belgian Tax
Authorities in effect in Belgium on 6 January 2021. Legislative,
administrative or judicial changes may modify the tax consequences
described in the paragraphs below, possibly with retroactive
effect. Furthermore, we can provide no assurances that the tax
consequences contained in this summary will not be challenged by
the Belgian Tax Authorities or will be sustained by a Belgian court
if they were to be so challenged, unless a specific tax ruling were
to be obtained beforehand from the Belgian Ruling
Commission.
The
following summary applies to the Migration of Ordinary Shares only.
Special rules may apply to the Cancellation of Income Shares.
Belgian Resident Shareholders and Belgian Non-Resident Shareholders
holding Income Shares should consult their own tax
advisers.
The
following summary does not constitute tax advice and is intended
only as a general guide. The following summary is not exhaustive
and does not purport to address all tax consequences of the
acquisition, ownership and disposal of Ordinary Shares, nor does it
take into account (i) the specific circumstances of particular
Shareholders, some of which may be subject to special rules, or
(ii) the tax laws of any country other than Belgium. This summary
does not describe the tax treatment of Shareholders that may be
subject to special rules, such as banks, insurance companies,
pension funds, trustees, collective investment undertakings,
dealers in securities or currencies, persons that hold, or will
hold, Migrating Shares as a position in a straddle,
share-repurchase transaction, conversion transaction, synthetic
security or other integrated financial transactions. This summary
does not address the local taxes applicable to Belgian resident
individuals.
For
purposes of this summary, a Belgian resident individual is an
individual subject to Belgian personal income tax (i.e. an
individual domiciled in Belgium or having his seat of fortune in
Belgium or a person assimilated to a resident for purposes of
Belgian tax law). A Belgian resident company is a company subject
to the ordinary Belgian corporate income tax (i.e. a corporate
entity that has its main establishment, its administrative seat or
seat of management in Belgium and that is not excluded from the
scope of the Belgian corporate income tax). The fact that a company
has its statutory seat in Belgium leads to a rebuttable presumption
that its main establishment, its administrative seat or seat of
management is located in Belgium. A Belgian non-resident is an
individual or company that is not a Belgian resident. As mentioned
above, it has been assumed that Belgian Non-Resident Shareholders
are Shareholders that have no connection with Belgium other than
the mere fact that their Ordinary Shares (including Ordinary Shares
represented by CDIs) are held through the Euroclear
System.
In
addition to the assumptions mentioned above, it is also assumed in
this Circular that for purposes of the domestic Belgian tax
legislation, the beneficial owners of CDIs will be treated as the
beneficial owners of the Ordinary Shares represented by such CDIs.
However, the assumption has not been confirmed by or verified with
the Belgian Tax Authorities.
Shareholders
should consult their own tax advisors about the Belgian tax
consequences which may arise as a result of being Migrating
Shareholders and the acquisition, ownership and disposal of
Migrating Shares in the future (including the effect of any
regional or local laws).
Belgian Resident and Non-Resident Shareholders
are not expected to be subject to Belgian income tax on capital
gains as a consequence of the Migration on the basis that the
Migration should normally not give rise (or should not be treated
as giving rise) to a definitive disposal of the Ordinary
Shares.
For
Belgian income tax purposes, the gross amount of all benefits paid
on or attributed to Ordinary Shares (including Ordinary Shares
represented by CDIs) is expected to be treated as a dividend
distribution. By way of exception, the repayment of capital may not
be treated as a dividend distribution to the extent that such
repayment is imputed to the fiscal capital. Note that any reduction
of fiscal capital is deemed to be paid out on a pro rata basis of the fiscal capital
and reserves (provided that the Company has reserves). The part of
the capital reduction deemed to be paid out of the fiscal capital
may, subject to certain conditions, for Belgian income tax
purposes, be considered as a reimbursement of capital and not be
considered as a dividend distribution. The part imputed on the
reserves is treated as a dividend distribution subject to
applicable tax rules.
Non-Belgian
dividend withholding tax, if any, will neither be creditable
against any Belgian income tax due nor reimbursable to the extent
that it exceeds Belgian income tax due.
Belgian Resident Shareholders
Individuals
Dividends
distributed to Belgian Resident Shareholders holding the Ordinary
Shares (including Shares represented by CDIs) in the framework of
the normal management of their private estate, are in principle
expected to be subject to Belgian withholding tax of 30% if an
intermediary established in Belgium was in any way involved in the
processing of the payment of the dividends. The Belgian withholding
tax of 30% in principle fully discharges their personal income tax
liability.
The
intermediary established in Belgium, as referred to in the above
paragraph, will not qualify as the debtor of the Belgian
withholding tax and hence should not withhold the Belgian
withholding tax if (a) it is proven to him that another
intermediary has withheld the Belgian withholding tax, (b) he can
demonstrate that the dividends have been paid to an in Belgium
established credit institution, stock market company or recognised
clearing or settlement institution which has explicitly,
unequivocally and verifiably accepted to comply with the
obligations “as intermediary” in respect of the Belgian
withholding tax, or (c) the intermediary qualifies as an in Belgium
established credit institution, stock market company or recognised
clearing or settlement institution which has paid the dividends to
(i) credit institutions established abroad, (ii) financial
intermediaries, established abroad, as defined in Article 2,
9° of the Act of 2 August 2002, (iii) clearing institutions
and settlement institutions, established abroad, as defined in
Article 2, 16° and 17°, respectively, of the Act of 2
August 2002, and (iv) undertakings, established abroad, whose
principal activity is the management of assets, the provision of
advice in connection with the management of assets or the custody
and management of financial instruments as well as undertakings,
established abroad, which are authorised to carry on one of those
activities under the law to which they are subject to (together (i)
to (iv), the “Specific
Foreign Intermediaries”).
Belgian
individuals may nevertheless opt to report the dividends in their
personal income tax return or may even need to report them if (i)
an intermediary established in Belgium was involved in the
processing of the payment of the dividends but such intermediary
did not withhold the Belgian dividend withholding tax due, or (ii)
no intermediary established in Belgium was in any way involved in
the processing of the payment of the non-Belgian sourced
dividends.
Belgian
resident individuals who report the dividends in their personal
income tax return will normally be taxable at the lower of the
generally applicable 30% Belgian withholding tax rate on dividends
or at the progressive personal income tax rates applicable to their
overall declared income. In addition, if the dividends are
reported, the Belgian dividend withholding tax may be credited
against the personal income tax due and is reimbursable to the
extent that it exceeds the personal income tax due provided that
the dividend distribution does not result in a reduction in value
of or a capital loss on the Ordinary Shares (including Ordinary
Shares represented by CDIs) of the Company. The latter condition is
not applicable if the individual can demonstrate that he/she has
held the Shares (including Ordinary Shares represented by CDIs) in
full legal ownership for an uninterrupted period of twelve (12)
months prior to the payment or attribution of the
dividends.
Subject
to certain conditions and formalities, an exemption from personal
income tax could in principle be claimed by Belgian resident
individuals in their personal income tax return for a first tranche
of dividend income up to the amount of EUR 800, per year and
per taxpayer (for the income year 2021). All reported dividends (so
not only the dividends distributed on the Ordinary Shares (or on
Ordinary Shares represented by CDIs)) are taken into account to
assess whether said maximum amount is reached.
For
Belgian Resident Shareholders holding Ordinary Shares (including
Ordinary Shares represented by CDIs) for professional purposes, the
Belgian withholding tax will not fully discharge their Belgian
income tax liability. Dividends received should be reported by the
Shareholder and will, in such a case, be taxable as professional
income at the Shareholder’s progressive personal income tax
rate increased with local surcharges. Belgian withholding tax
levied could then be credited against the personal income tax due
and would be reimbursable to the extent that it exceeds the income
tax due, subject to two conditions: (i) the taxpayer must own the
Ordinary Shares (including Ordinary Shares represented by CDIs) in
full legal ownership on the day the beneficiary of the dividend is
identified and (ii) the dividend distribution may not result in a
reduction in value of or a capital loss on Ordinary Shares
(including Ordinary Shares represented by CDIs). The latter
condition is not applicable if the Shareholder can demonstrate that
he has held the full legal ownership of Ordinary Shares (including
Ordinary Shares represented by CDIs) for an uninterrupted period of
twelve (12) months immediately prior to the payment or attribution
of the dividends.
Companies
Dividends
distributed by the Company to Belgian Resident Shareholders are in
principle expected to be subject to Belgian withholding tax of 30%
if an intermediary established in Belgium was in any way involved
in the processing of the payment of the dividends.
The
intermediary established in Belgium, as referred to in the above
paragraph, will not qualify as the debtor of the Belgian
withholding tax and hence should not withhold the Belgian
withholding tax if (a) it is proven to him that another
intermediary has withheld the Belgian withholding tax, or (b) he
can demonstrate that the dividends have been paid to an in Belgium
established credit institution, stock market company or recognised
clearing or settlement institution which has explicitly,
unequivocally and verifiably accepted to comply with the
obligations “as intermediary” in respect of the Belgian
withholding tax; or (c) the intermediary qualifies as an in Belgium
established credit institution, stock market company or recognised
clearing or settlement institution which has paid the dividends to
Specific Foreign Intermediaries.
For
Belgian Resident Shareholders, the dividend income (after deduction
of any non-Belgian withholding tax but including any Belgian
withholding tax) must be declared in the corporate income tax
return and will be subject to the standard corporate income tax
rate of 25% (as of assessment year 2021 linked to a financial year
starting on or after 1 January 2020). Subject to certain
conditions, a reduced corporate income tax rate of 20% (as of
assessment year 2021 linked to a financial year starting on or
after 1 January 2020) applies for so-called small and medium sized
enterprises (as defined by Article 1:24, §1 to §6 of the
Belgian Code on Companies and Associations) on the first
EUR 100,000 of taxable profits. Belgian resident companies may
under certain conditions deduct 100% of the gross dividend received
from their taxable income (“Dividend Received Deduction”).
Such Shareholders should consult their own tax advisor in this
respect.
Belgian
dividend withholding tax levied at source could be credited against
the Belgian corporate income tax due and would be reimbursable to
the extent it exceeds such corporate income tax, subject to two
conditions: (i) the taxpayer must own the Ordinary Shares
(including Ordinary Shares represented by CDIs) in full legal
ownership on the day the beneficiary of the dividend is identified
and (ii) the dividend distribution does not result in a reduction
in value of or a capital loss on the Ordinary Shares (including
Ordinary Shares represented by CDIs). The latter condition is
expected not to be applicable: (i) if the taxpayer can demonstrate
that it has held the Ordinary Shares (including Ordinary Shares
represented by CDIs) in full legal ownership for an uninterrupted
period of twelve (12) months immediately prior to the payment or
attribution of the dividends or (ii) if, during that period, the
Ordinary Shares (including Ordinary Shares represented by CDIs)
never belonged in full legal ownership to a taxpayer other than a
Belgian resident company or a non-resident company that has, in an
uninterrupted manner, invested the Ordinary Shares (including
Ordinary Shares represented by CDIs) in a Belgian permanent
establishment.
Dividends
received by Belgian Resident Shareholders on the Ordinary Shares
(including Ordinary Shares represented by CDIs) are exempt from
Belgian withholding tax provided that the investor satisfies the
identification requirements in Article 117, §11 of the Royal
Decree implementing the Belgian Income Tax Code 1992.
Belgian Non-Resident Shareholders
Dividends
distributed by the Company to Belgian Non-Resident Shareholders are
in principle expected to be subject to Belgian withholding tax of
30% if an intermediary established in Belgium was in any way
involved in the processing of the payment of the
dividends.
The
intermediary established in Belgium, as referred to in the above
paragraph, will not qualify as the debtor of the Belgian
withholding tax and hence should not withhold the Belgian
withholding tax if (a) it is proven to him that another
intermediary has withheld the Belgian withholding tax; (b) he can
demonstrate that the dividends have been paid to an in Belgium
established credit institution, stock market company or recognised
clearing or settlement institution which has explicitly,
unequivocally and verifiably accepted to comply with the
obligations “as intermediary” in respect of the Belgian
withholding tax; or (c) the intermediary qualifies as an in Belgium
established credit institution, stock market company or recognised
clearing or settlement institution which has paid the dividends to
Specific Foreign Intermediaries.
Dividends
paid by the Company through a Belgian credit institution, stock
market company or recognised clearing or settlement institution to
Belgian Non-Resident Shareholders should be exempt from Belgian
dividend withholding tax with respect to dividends of which the
debtor (i.e. the Company) is subject to the Belgian non-resident
income tax and has not allocated said income to his Belgian
establishment provided that the Belgian Non-Resident Shareholders
deliver an affidavit confirming that (i) they are non-residents in
the meaning of Article 227 of the Belgian Income Tax Code 1992,
(ii) they have not allocated the Ordinary Shares (including
Ordinary Shares represented by CDIs) to business activities in
Belgium, and (iii) they are the full owners or usufructors of the
Ordinary Shares (including Ordinary Shares represented by
CDIs).
No
Belgian dividend withholding tax should be due with respect to
dividends, as referred to in the above paragraph, paid by an in
Belgium established credit institution, stock market company or
recognised clearing or settlement institution to intermediaries
other than Specific Foreign Intermediaries provided that such other
intermediaries deliver an affidavit confirming that the
beneficiaries of the dividends (i) are non-residents in the sense
of Article 227 of the Belgian Income Tax Code 1992, (ii) have not
allocated the Ordinary Shares (including Ordinary Shares
represented by CDIs) to business activities in Belgium, and (iii)
are the full owners or usufructors of the Ordinary Shares
(including Ordinary Shares represented by CDIs).
If
Ordinary Shares (including Ordinary Shares represented by CDIs) are
acquired and held by a Belgian Non-Resident Shareholder in
connection with a business in Belgium, the Shareholder must report
the dividends received and such dividends will then be taxable at
the applicable Belgian non-resident individual or corporate income
tax rate, as appropriate. Any Belgian withholding tax levied at
source may be credited against the Belgian non-resident individual
or corporate income tax and is reimbursable to the extent it
exceeds the income tax due, subject to two conditions: (i) the
taxpayer must own the Ordinary Shares (including Ordinary Shares
represented by CDIs) in full legal ownership on the day the
beneficiary of the dividends is identified and (ii) the dividend
distribution does not result in a reduction in value of or a
capital loss on the Ordinary Shares (including Ordinary Shares
represented by CDIs). The latter condition is not applicable if (i)
the non-resident Shareholder can demonstrate that the Ordinary
Shares (including Ordinary Shares represented by CDIs) were held in
full legal ownership for an uninterrupted period of twelve (12)
months immediately prior to the payment or attribution of the
dividends or (ii) with regard to non-resident companies only, if,
during the said period, the Ordinary Shares (including Ordinary
Shares represented by CDIs) have not belonged in full legal
ownership to a taxpayer other than a resident company or a
non-resident company which has, in an uninterrupted manner,
invested the Ordinary Shares (including Ordinary Shares represented
by CDIs) in a Belgian permanent establishment.
Dividends
paid or attributed to Belgian non-resident individuals who do not
use the Ordinary Shares (including Ordinary Shares represented by
CDIs) in the exercise of a professional activity, may, subject to
certain conditions and formalities, be exempt from Belgian
non-resident individual income tax up to the amount of
EUR 800, per year and per taxpayer (for the income year 2021).
Consequently, if Belgian withholding tax has been levied on
dividends paid or attributed to the Ordinary Shares (including
Ordinary Shares represented by CDIs), such Belgian non-resident
individual may request in his or her Belgian non-resident income
tax return that any Belgian withholding tax levied on dividends up
to the amount of EUR 800 (for the income year 2021) be
credited and, as the case may be, reimbursed. However, if no such
Belgian income tax return has to be filed by the Belgian
non-resident individual Shareholder, Belgian withholding tax levied
on such an amount could in principle be reclaimed by filing a
request thereto addressed to the tax official to be appointed in a
Royal Decree, subject to formalities.
Belgian
non-resident companies that have invested the Shares in a Belgian
establishment may, under certain conditions, apply the Dividend
Received Deduction (see above). Such Shareholders should consult
their own tax advisor in this respect.
Belgian Resident Shareholders
Individuals
Belgian
Resident Shareholders holding Ordinary Shares (including Ordinary
Shares represented by CDIs) in the Company would as a matter of
principle not be subject to Belgian income tax on capital gains
realised upon the disposal of the Ordinary Shares provided that
such capital gains are realised within the scope of normal
management of the individual’s private estate; capital losses
would in such case not be tax deductible. Capital gains realised by
a private individual may however be considered as miscellaneous
income taxable at 33% (plus local surcharges) if the capital gains
are realised outside the scope of normal management of the
individual’s private estate. Capital losses would in such
case not be tax deductible.
Belgian
Resident Shareholders holding Ordinary Shares (including Ordinary
Shares represented by CDIs) for professional purposes may be
taxable at the ordinary progressive personal income tax rates (plus
local surcharges) on capital gains realised upon the disposal of
the Ordinary Shares (including Ordinary Shares represented by CDIs)
or, except for Ordinary Shares held for more than five (5) years,
which may under certain circumstances be taxable at a separate rate
of 10% (in the framework of cessation of activities under certain
circumstances) or 16.5% (plus local surcharges). Capital losses on
the Ordinary Shares (including Ordinary Shares represented by CDIs)
incurred by Belgian resident individuals holding the Ordinary
Shares for professional purposes may be tax deductible. Capital
gains realised by Belgian resident individuals upon the redemption
of Ordinary Shares (including Ordinary Shares represented by CDIs)
of the Company or upon the liquidation of the Company would be
taxable as a dividend (see above).
Companies
Following
the Migration, a disposal by a Belgian Resident Shareholder of its
Ordinary Shares (including Ordinary Shares represented by CDIs) may
be exempt from Belgian corporate income tax provided that any
potential income distributed in respect of the Ordinary Shares (or
interest in Ordinary Shares) would be deductible pursuant to the
conditions for the application of the Dividend Received Deduction
regime. Application of the Dividend Received Deduction regime
depends, however, on a factual analysis to be made upon each
distribution and its availability should be verified upon each
distribution. Shareholders should consult their own tax advisor in
this respect.
If one
or more of these conditions for the application of the Dividend
Received Deduction regime are not met, then any capital gain
realised on Shares (including Shares represented by CDIs) will be
taxable at the standard corporate income tax rate of 25%, unless
the reduced corporate income tax rate of 20% applies (see above).
Capital losses on the Shares incurred by Belgian resident companies
are as a general rule not tax deductible.
Capital
gains realised by Belgian resident companies upon redemption of the
Ordinary Shares (including Ordinary Shares represented by CDIs) or
upon liquidation of the Company would in principle be subject to
the same taxation regime as dividends (see above).
Belgian Non-Resident Shareholders
Belgian
Non-Resident Shareholders should in principle not be subject to
Belgian income tax on capital gains realised on Ordinary Shares
(including Ordinary Shares represented by CDIs) unless the Ordinary
Shares (including Ordinary Shares represented by CDIs) are held as
part of a business in Belgium through a fixed base in Belgium or a
Belgian permanent establishment. In such case, the same principles
apply as described above with regard to Belgian Resident
Shareholders - Individuals (holding the Ordinary Shares for
professional purposes) or Belgian Resident Shareholders -
Companies.
Shareholders
who (i) are Belgian Non-Resident Shareholders - Individuals, (ii)
do not use the Ordinary Shares (including Shares represented by
CDIs) for professional purposes and (iii) have their fiscal
residence in a country with which Belgium has not concluded a tax
treaty or with which Belgium has concluded a tax treaty that
confers the authority to tax capital gains on the Ordinary Shares
to Belgium, could be subject to tax in Belgium if the capital gains
are obtained or received in Belgium and arise from transactions
that are considered as being outside the scope of normal management
of the individual’s private estate. Belgium has however
concluded tax treaties with more than ninety five (95) countries
which would generally provide for a full exemption from Belgian
capital gains taxation on such gains realised by residents of those
countries. Capital losses are generally not deductible in
Belgium.
(e)
Tax
on stock exchange transactions
The
purchase and the sale and any other acquisition or transfer for
consideration of existing Ordinary Shares (including Ordinary
Shares represented by CDIs) (secondary market transactions) in
Belgium through a professional intermediary is expected to be
subject to the tax on stock exchange transactions (taks op de
beursverrichtingen/taxe sur
les opérations de bourse) if it is (i) entered into or
carried out in Belgium through a professional intermediary, i.e.
credit institutions, stock market companies, trade platforms and
any other intermediary that habitually acts as an intermediary in
securities transactions, or (ii) deemed to be entered into or
carried out in Belgium, which is the case if the order is directly
or indirectly made to a professional intermediary established
outside of Belgium, either by private individuals with habitual
residence in Belgium, or legal entities for the account of their
seat of establishment in Belgium (both referred to as
“Belgian
Investor”). The tax on stock exchange transactions is
not due upon the issuance of Shares (primary market
transactions).
The tax
on stock exchange transactions is expected to be levied at a rate
of 0.35% of the purchase price, capped at EUR 1,600 per
transaction and per party.
Moreover,
a tax on repurchase transactions (taks op de reportverrichtingen/taxe sur les
reports) (tax on a sale combined with a forward purchase) at
the rate of 0.085% (subject to a maximum of EUR 1,600 per party and
per transaction) will be due from each party to any such
transaction entered into or settled in Belgium in which a
stockbroker acts for either party.
For
both the tax on stock exchange transactions and the tax on
repurchase transactions, a separate tax is due by each party to the
transaction, and both taxes are collected by the professional
intermediary. However, if the transaction is in scope of the tax
and the order is, directly or indirectly, made to a professional
intermediary established outside of Belgium, the tax is then in
principle due by the Belgian Investor, unless that Belgian Investor
could demonstrate that the tax has already been paid. In the latter
case, the foreign professional intermediary would also need to
provide each client (which gives such intermediary an order) with a
qualifying order statement (bordereau/borderel), at the latest on the
business day after the day the transaction concerned was realised.
Alternatively, professional intermediaries established outside of
Belgium could appoint a stock exchange tax representative in
Belgium, subject to certain conditions and formalities
(“Stock Exchange Tax
Representative”). Such Stock Exchange Tax
Representative will then be liable towards the Belgian Treasury in
respect of the transactions executed through the professional
intermediary and for complying with the reporting obligations and
the obligations relating to the order statement in that respect. If
such a Stock Exchange Tax Representative has paid the tax on stock
exchange transactions due, the Belgian Investor will, as per the
above, no longer be the debtor of the tax on stock exchange
transactions.
No tax
on stock exchange transactions or tax on repurchase transactions
should be due on transactions entered into by the following
parties, provided they are acting for their own account: (i)
professional intermediaries described in Article 2, 9° and
10° of the Act of 2 August 2002 on the supervision of the
financial sector and financial services; (ii) insurance companies
described in Article 2, § 1 of the Belgian Law of 9 July 1975
on the supervision of insurance companies; (iii) pension
institutions referred to in Article 2,1° of the Belgian Law of
27 October 2006 concerning the supervision of pension institutions;
(iv) collective investment institutions; (v) regulated real estate
companies; and (vi) Belgian non-resident Shareholders provided they
deliver a certificate to their financial intermediary in Belgium
confirming their non-resident status.
On 14
February 2013 the EU Commission adopted the Draft Directive on a
Financial Transaction Tax (“FTT”). The Draft Directive
currently stipulates that once the FTT enters into effect, the
participating Member States shall not maintain or introduce any
taxes on financial transactions other than the FTT (or VAT as
provided in the Council Directive 2006/112/EC of 28 November 2006
on the common system of value added tax). For Belgium, the tax on
stock exchange transactions and the tax on repurchase transactions
should thus be abolished once the FTT enters into effect. The Draft
Directive is still subject to negotiation between the participating
Member States and may, therefore, never be passed into law and may
be further amended at any time.
(f)
Tax
on securities accounts
On 4
November 2020, the Belgian tax authorities published a notice in
the Belgian State Gazette indicating that the Council of Ministers
has approved on 2 November 2020 a preliminary draft law
(“Draft Law”)
aimed at introducing (a renewed version of) an annual tax on
securities accounts (“Draft TSA”). The Draft Law has been
submitted to the Belgian Parliament on 5 January 2021.
The
Draft TSA would apply to securities accounts as such and would
therefore, in principle, cover all securities accounts held by (i)
individuals, including those subject to the Belgian non-resident
income tax, and (ii) legal persons subject to the Belgian corporate
income tax, the Belgian legal entity tax or Belgian non-resident
tax. It would entail an annual tax on the holding of a securities
account.
The
applicable tax base would be the average value of qualifying
financial instruments held on a securities account provided said
average value exceeds EUR 1,000,000. The applicable tax rate of the
Draft TSA is 0.15% and, where applicable, the amount of the tax
shall be limited to 10 % of the difference between the tax base and
EUR 1,000,000. The Draft Law also contains a general anti-abuse
provision, which would retroactively apply as from 30 October 2020
preventing, inter alia, (i) the splitting of a securities account
where securities are transferred to one or more accounts with the
same financial intermediary or to accounts with another financial
intermediary with the aim of avoiding that the total value of the
securities in one account exceeds EUR 1,000,000, (ii) the opening
of securities accounts where securities are spread between accounts
with the same financial intermediary or with another financial
intermediary with the aim of avoiding that the total value of the
securities on one account exceeds EUR 1,000,000, (iii) the
conversion of registered shares, bonds and other taxable financial
instruments so that they are no longer held in a securities
account, with the aim of escaping the tax, (iv) the placing of a
securities account subject to the tax in a foreign legal entity
that transfers the securities to a foreign securities account, with
the intention of avoiding the tax, and (v) placing a securities
account subject to the tax in a fund whose parts are placed in
registered form, with a view to avoiding the tax. In the above
situations, there is a rebuttable presumption of tax avoidance
whereby the taxpayer can provide proof to the
contrary.
Please
note that this tax is still subject to negotiation and the
aforementioned principles could still change. Hence, Shareholders
are strongly advised to seek their own professional advice in
relation to this potential new version of the tax on securities
accounts.
5.
German Tax
Considerations
The
following is a general summary of the material German tax
considerations applicable to Shareholders who are resident (and, in
the case of individuals, have their usual domicile) in Germany for
German tax purposes and who are the beneficial owners of Migrating
Shares (“German
Shareholders”). The summary contained in this
Section 5 of Part 7 is based
on existing German tax law and our understanding of the practice of
the German tax authorities on and or around the date of this
Circular. Legislative, administrative or judicial changes may
modify the tax consequences described in this Section 5 of Part 7 possibly with retroactive
effect. Furthermore, we can provide no assurances that the tax
consequences contained in this summary will not be challenged by
the German tax authorities or will be sustained by a German tax
court if they were to be challenged.
The
following summary applies to the Migration of Ordinary Shares only.
Special rules may apply to the Cancellation of Income Shares.
German Shareholders holding Income Shares should consult their own
tax advisers.
The
following summary does not constitute tax advice and is intended
only as a general guide. The following summary relates only to
certain limited aspects of the German taxation treatment of German
Shareholders. Shareholders should consult their own tax advisers
about the German tax consequences (and the tax consequences under
the laws of other relevant jurisdictions), which may arise as a
result of being a Migrating Shareholder and the acquisition,
ownership and disposition of Ordinary Shares in the
future.
German
Shareholders should not be liable to German income tax
(Einkommensteuer), German
corporate income tax (Körperschaftsteuer), German trade
tax (Gewerbesteuer),
solidarity surcharge (Solidaritätszuschlag) or German
church tax (Kirchensteuer),
if applicable (together “German Income Taxes”), on
chargeable gains as a result of the Migration on the basis that the
Migration should not give rise to a disposal of Shares from a
German tax perspective. There is therefore expected to be no effect
on the acquisition cost available to be taken into account by
German Shareholders in computing the gain on any subsequent
disposals.
No
German stamp duty will be required to be paid in respect of the
Migration.
Similarly,
if a German Shareholder holding CDIs effects the cancellation of
those CDIs in CREST and receives the underlying Ordinary Shares:
(i) the German Shareholder should not be liable to German Income
Taxes on chargeable gains as a result of the cancellation; (ii) the
acquisition cost in the Ordinary Shares should be the same as the
acquisition cost in the CDIs. No German stamp duty will be required
to be paid in respect of the cancellation.
Following
the Migration, a beneficial owner of CDIs in respect of Ordinary
Shares should be treated for German tax purposes as the beneficial
owner of the corresponding number of Ordinary Shares held for the
benefit of the CREST Depositary. Dividend payments made by CRH plc
and received by the German Shareholders should therefore also
qualify as dividend payments for German tax purposes, also in case
the German Shareholder holds the Shares by way of
CDIs.
German withholding taxes
On that
basis, dividends received by a non-business German Shareholder
should be subject to German withholding tax if the Ordinary Shares
(including Ordinary Shares represented by CDIs) are kept or
administered in a custodial account with a German branch of a
German or non-German bank or financial services institution, a
German securities trading company or a German securities trading
bank (each, a German Disbursing
Agent, auszahlende
Stelle). The tax rate is 25% (plus solidarity surcharge at a
rate of 5.5% thereon, the total withholding being 26.375%). For
individual German Shareholders who are subject to church tax an
electronic information system for church withholding tax purposes
should apply in relation to dividend payments, with the effect that
church tax will be collected by the German Disbursing Agent by way
of withholding unless the German Shareholder has filed a blocking
notice (Sperrvermerk) with
the German Federal Central Tax Office (Bundeszentralamt für Steuern) in
which case that German Shareholder will be assessed to church tax.
Subject to certain requirements and restrictions being met, the
German Disbursing Agent may credit any Irish withholding taxes
levied on the dividend payments if the German Shareholder is an
individual not holding the Ordinary Shares (including Ordinary
Shares represented by CDIs) for business purposes.
Individual
German Shareholders not holding their Ordinary Shares (including
Ordinary Shares represented by CDIs) for business purposes
(Non-business German
Shareholders) are entitled to an annual allowance
(Sparer-Pauschbetrag) of
EUR 801 (EUR 1,602 for couples and registered partners filing
jointly) for all investment income received in a given year. Upon
the Non-business German Shareholder filing an exemption certificate
(Freistellungsauftrag) with
the German Disbursing Agent, the German Disbursing Agent will take
the allowance into account when computing the amount of tax to be
withheld. No withholding tax will be deducted if the German
Shareholder has submitted to the German Disbursing Agent a
certificate of non-assessment (Nichtveranlagungs-Bescheinigung) issued
by the competent local tax office.
German
withholding tax should also apply to dividend payments received by
corporate German Shareholders (irrespective of any deductions of
foreign tax and capital losses incurred). The same may apply where
the Ordinary Shares form part of a trade or business of an
individual German Shareholder, subject to further requirements
being met.
Taxation of current income
The
personal German income tax liability of a Non-business German
Shareholder deriving dividends from the Ordinary Shares is, in
principle, settled by the German tax withheld. To the extent German
withholding tax has not been levied, such as in the case of
Ordinary Shares (including Ordinary Shares represented by CDIs)
kept in custody abroad or if no German Disbursing Agent is involved
in the payment process, the Non-business German Shareholder must
report his or her dividend income derived from the Shares on his or
her tax return and then will also be taxed at a rate of 25% (plus
solidarity surcharge and church tax thereon, where applicable).
Further, a Non-business German Shareholder may request that all
investment income of a given year is taxed at his or her lower
individual tax rate based upon an assessment to tax with any
amounts over withheld being refunded. In each case, the deduction
of expenses on an itemized basis is not permitted.
Where
Ordinary Shares form part of a trade or business the withholding
tax, if any, will not settle the German personal or corporate
income tax liability. Non-business German Shareholders who (a) hold
25% or more of the share capital in CRH plc or (b) hold 1% or more
of the share capital in CRH plc and may exert significant influence
on CRH plc due to their professional relationship with CRH plc, may
opt to subject the dividend income to their regular German income
taxation. In all these cases, the respective German Shareholder
will have to report income and related (business) expenses on the
tax return and the balance will be taxed at the German
Shareholder's applicable tax rate. Withholding tax levied, if any,
will be credited against the German personal or corporate income
tax of the German Shareholder. Where Shares form part of a German
trade or business the dividends may also be subject to German trade
tax.
(e)
Taxation
of chargeable gains
German withholding taxes
Taxes
to be withheld as described under paragraph (d) (Dividends)
(German withholding taxes)
also apply to chargeable gains (i.e. the difference between the
proceeds from the disposal, redemption, repayment or assignment
after deduction of expenses directly related to the disposal,
redemption, repayment or assignment and the cost of acquisition) if
derived by a Non-business German Shareholder provided the Shares
have been kept or administered in a custodial account with the same
German Disbursing Agent since the time of their acquisition. If the
same Ordinary Shares kept or administered in the same custodial
account were acquired at different points in time, the Ordinary
Shares first acquired should be deemed to have been sold first for
the purposes of determining the chargeable gains. Where Ordinary
Shares are acquired and/or sold or redeemed in a currency other
than euro, the sales/redemption price and the acquisition costs
have to be converted into euro on the basis of the foreign exchange
rates prevailing on the sale or redemption date and the acquisition
date respectively with the result that any currency gains or losses
are part of the chargeable gains.
To the
extent the Ordinary Shares have not been kept or administered in a
custodial account with the same German Disbursing Agent since the
time of their acquisition, upon the disposal, redemption, repayment
or assignment, withholding tax applies at a rate of 26.375%
(including solidarity surcharge, plus church tax, if applicable) on
30% of the disposal proceeds, unless the current German Disbursing
Agent has been notified of the actual acquisition costs of the
Ordinary Shares by the previous German Disbursing Agent or by a
statement of a bank or financial services institution from another
Member State of the European Union or the European Economic Area or
from certain other countries (e.g. Switzerland or
Andorra).
In
computing any German tax to be withheld from chargeable gains
realized upon the disposal of Ordinary Shares, the German
Disbursing Agent generally deducts from the basis of the
withholding tax negative investment income realised by a
Non-business German Shareholder via the same German Disbursing
Agent subject to certain limitations, e.g. losses from the sale of
other securities, including other shares or stocks. In addition,
subject to certain requirements and restrictions the German
Disbursing Agent may credit any Irish withholding taxes levied on
chargeable gains realised by the disposal, redemption, repayment or
assignment of the Ordinary Shares in a given year held by a
Non-business German Shareholder in the custodial account with the
same German Disbursing Agent.
German
withholding tax should not apply to gains from the disposal,
redemption, repayment or assignment of Shares held by a
corporation. The same should apply where the Ordinary Shares held
by an individual German Shareholder form part of a trade or
business, subject to further requirements being met.
Taxation of current income
The
description of the income taxation under paragraph (d) (Dividends)
(Taxation of current
income) above generally applies to the income taxation of
chargeable gains as well.
If the
German withholding tax on a disposal, redemption, repayment or
assignment has been calculated from 30% of the disposal proceeds
(rather than from the actual gain), a Non-business German
Shareholder may and in case the actual gain is higher than 30% of
the disposal proceeds must also apply for an assessment on the
basis of his or her actual acquisition costs.
Losses
realised upon the disposal, redemption, repayment or assignment of
the Ordinary Shares can only be offset against any gain realised
deriving from the disposal of shares in a stock corporation and
only in the same or the following years but not
retroactively.
No
German stamp duty will be payable in respect of any transfer of
Ordinary Shares.
6.
French
Tax Considerations
The
following description is a general summary of the material French
tax considerations applicable to Migrating Shareholders who are tax
residents in France and are the beneficial owners of Migrating
Shares.
There
is no relevant administrative regulations or available case law
providing guidelines in respect of the French tax treatment
applicable to Migrating Shareholders in respect of the contemplated
Migration, the issue, holding and disposal of a CDI, or the income
received by Migrating Shareholders in connection thereto.
Similarly, there is no established practice as to how the Migration
or a CDI should be qualified under French tax law. Hence, there is
room for a significant uncertainty as to the French tax treatment
of the Migration and of any income received by Migrating
Shareholders following the Migration and we can provide no
assurance that the tax consequences outlined in this summary will
not be challenged by the French tax authorities or will be
confirmed by a French court should such tax consequences be
challenged by the French tax authorities.
Shareholders
should consult with their own tax advisers about the French tax
consequences (and the tax consequences under the laws of any other
relevant jurisdiction) which may arise as a result of being a
Migrating Shareholder and the acquisition, ownership and
disposition of Shares or CDIs in the future.
This
summary is based on French laws and regulations as currently in
force. The considerations below may be modified as a result of
subsequent amendments brought to the applicable French tax rules
(potentially with retroactive effect) and their interpretation by
the French tax authorities.
This
summary does not constitute tax advice and is only given as a
general guideline. The following summary relates only to certain
limited aspects of the tax treatment in France of French tax
residents and is not intended to constitute a comprehensive
analysis of all the tax consequences which may apply to a Migrating
Shareholder.
The
following summary applies to the Migration of Ordinary Shares only.
Special rules may apply to the Migration of Preference Shares or
the cancellation of Income Shares. French Shareholders holding
Preference Shares or Income Shares should consult their own tax
advisers.
Furthermore,
the following summary applies only to Migrating Shareholders who
hold their Ordinary Shares as capital assets and does not apply to
all categories of Shareholders, such as dealers in securities,
trustees, insurance companies, collective investment schemes,
pension funds or shareholders who have, or who are deemed to have,
acquired their Ordinary Shares by virtue of an office or
employment.
Absent
any direct authority under French law in respect of the tax
treatment of the Migration or the issue of CDIs, it is unclear
whether such transactions would be viewed as a transfer of
ownership in the Migrating Shares triggering the taxation of
unrealized capital gains for Migrating Shareholders that are French
tax residents.
In
accordance with a first interpretation of French tax law, the
Migration would be viewed as an exchange by the Migrating
Shareholders of Ordinary Shares against (i) another security (the
CDI), (ii) a contractual right embedded in the CDI or (iii) a
co-ownership right in the Ordinary Shares (such alternatives being
not exhaustive). This interpretation may be based, in particular,
on the transfer of the legal title in the Migrating Shares to the
Euroclear Nominees. As a result of such transfer, the Migrating
Shareholders may be viewed as having participated into an exchange
of direct ownership rights in their Migrating Shares with indirect
co-ownership rights in the Ordinary Shares, as provided under
Belgian law. Under this interpretation, such exchange may
constitute a taxable event in respect of the Migrating
Shares.
In
accordance with a second interpretation of French tax law,
intermediaries interposed between the Migrating Shareholders and
the Company (including CREST Participants, EB Participants,
Euroclear Nominees and other nominees, trustees and brokers) may be
considered as mere custodians or agents of the Migrating
Shareholders. Even though the legal title in the Ordinary Shares
would be held by Euroclear Nominees, the rights that will be
exercised by the Migrating Shareholders in respect of the Ordinary
Shares after the Migration may be viewed as similar in substance to
the rights the Migrating Shareholders would have had, had they hold
the Ordinary Shares directly. Under this second interpretation, the
Migrating Shareholders would continue to be treated as direct
Shareholders of the Company and the Migration would not constitute
a taxable event for them.
It is
not possible to determine at this stage which of these
interpretations would be upheld by the French tax authorities or
the French tax courts, as there would be serious arguments to
support both interpretations.
Shareholders
are invited to consult with their usual tax adviser as to the tax
treatment of the Migration in France.
The
Migration and the issuance of the CDIs should not be subject to the
tax on financial transactions referred to in Article 235 ter ZD of
the French Tax Code (the “FTC”), nor French registration tax
provided that no agreement with respect to the Migration or the
issue of the CDIs is entered into in France.
Similarly,
if a French tax resident holding CDIs effects the cancellation of
those CDIs in CREST and receives a direct right in respect of the
Ordinary Shares, the cancellation may be viewed as an exchange of
CDIs against (i) another security (the underlying Ordinary Shares)
or (ii) a co-ownership right in the Shares (this list is not
exhaustive). Under this interpretation, the cancellation may be
viewed as a taxable event under French tax law.
On the
other hand, under the second interpretation described above, the
Migrating Shareholders would be viewed as being direct holders of
the Ordinary Shares and the cancellation should not affect their
being viewed as direct Shareholders of the Company. Under such
interpretation, the cancellation should not be viewed as a taxable
event under French tax law.
It is
not possible to determine at this stage which of these
interpretations would be upheld by the French tax authorities or
the French tax courts, as there would be serious arguments to
support both interpretations.
The
cancellation of the CDIs should not be subject to the tax on
financial transactions referred to in Article 235 ter ZD of the
FTC, nor French registration tax provided that no agreement with
respect to the cancellation of the CDIs is entered into in
France.
As
described above regarding the Migration, it is not clear under
French tax law whether holders of CDIs would be viewed as direct
Shareholders of the Company, or holders of (i) another security
(the CDI), (ii) a contractual right embedded in the CDI or (iii) a
co-ownership right in the Ordinary Shares (this list is not
exhaustive). If holders of CDIs are not viewed as direct
Shareholders of the Company, income received in respect of the CDIs
(corresponding to dividends paid by the Company) may not qualify as
dividend payments for French tax purposes. This may affect the tax
treatment of French tax resident Shareholders, as described
below.
In
respect of Shareholders having opted for the cancellation of their
CDIs, it is expected that the dividend qualification of the income
received in respect of the Ordinary Shares would be respected.
However, one cannot exclude that the French tax authorities and
French tax courts may take another position.
Therefore,
subject to diverging views from the French tax authorities or
French courts, the tax treatment of French tax resident would be as
follows:
i)
Individual who are French tax residents acting in connection with
the management of their private assets outside the framework of a
share savings plan (“plan d’épargne en
actions”) and who do not perform stock exchange transactions
on a regular basis
If the
dividend qualification is respected, and subject to the specific
regimes provided for by law, dividends are, in principle, taxable
at a flat rate of income tax of 12.8%. Taxpayers may also elect for
such dividends to be taxed at the progressive rate of income tax
(the “Tax
Election”). If the Tax Election is made, dividends
may, under certain conditions, benefit from a tax allowance of 40%
according to the provisions of Article 158, 3-2° of the
FTC.
We draw
your attention on the fact that the Tax Election is irrevocable and
global according to the provisions of Article 200 A-2 of the
FTC.
Subject
to a limited number of exceptions, the gross amounts of the
distributed income are subject to a withholding tax of 12.8% by
application of Article 117 quarter of the FTC that is creditable
against the final income tax liability of the year during which the
dividend was received, the excess, if any, being refunded to the
taxpayer.
Such
tax is (i) withheld at source when the paying agent is located in a
State which is a member of the European Union or which is a party
to the agreement on the European Economic Area and has concluded a
treaty on administrative assistance to prevent fraud or tax
evasion, in the latter case, subject to the taxpayer’s
relevant instructions to the paying establishment or (ii) paid by
the taxpayer.
In
addition, dividends paid to individuals that are French tax
residents may be subject to social contributions at a rate of 17.2%
that must be withheld in the same manner as the withholding tax of
12.8% referred to above.
French
tax residents may be in a position to benefit from a tax credit in
France in respect of Irish withholding taxes (if any) levied by the
Company on the dividends paid in respect of the Ordinary
Shares.
If the
dividend qualification is not respected, income received by the
French tax resident individual shareholders may be taxable at
income tax marginal rates and the tax credit in respect of Irish
withholding tax may not be available.
ii)
Legal entities which are French tax residents and subject to
corporate income tax holding less than 5% of the share capital of
the Company
Irrespective
of the qualification as dividends, any income received in respect
of the Ordinary Shares should, in principle, be taxable at the
ordinary rate of corporate income tax in France as an ordinary
income and should not benefit from the parent subsidiary regime
implemented under Articles 145 and 216 of the FTC. As mentioned
above in respect of individual Shareholders, it is unclear whether
Shareholders would be in a position benefit from a tax credit in
France in respect of Irish withholding taxes (if any) levied by the
Company on the dividends paid in respect of the Ordinary
Shares.
A
disposal or deemed disposal of the Ordinary Shares or CDIs by a
French tax resident would, subject to the French tax
resident’s particular circumstances and subject to any
available exemption or relief, give rise to a taxable gain or loss.
Shareholders are invited to consult their usual tax adviser in this
respect.
Such
disposal should not be subject to the tax on financial transactions
referred to in Article 235 ter ZD of the FTC, nor French
registration tax provided that no agreement with respect to the
disposal is entered into in France.
PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION
Set out
below is an explanation for the amendments to the Articles of
Association of the Company proposed to be made pursuant to
Resolution 2 set out in the EGM Notice. The proposed changes will
take effect on and with effect from the date specified in the Board
Migration Resolution. Please note that unless otherwise stated,
references to particular articles included in the table below are
to the relevant article in the copy of the Articles of Association
of the Company (entitled the “Resolution 2 Version”), which
are available for inspection on the Company’s website except
if indicated otherwise.
These
changes are proposed with four objectives. The majority of the
proposed changes are necessary to enable the Company to satisfy the
eligibility requirements for Euroclear Bank and must be in effect
on and with effect from Migration.
While
the issue of CDIs as described in this Circular is a key part of
the implementation of the Migration, this is not provided for in
the Migration Act. Instead, this aspect of the Migration is to be
covered by the adoption of the proposed new Article 18 which is
intended to operate in conjunction with the Brexit Omnibus Act, the
approval of Resolution 3 and the measures and steps to be effected
in accordance with and as envisaged by the EB Migration
Guide.
In
addition a number of additional changes to the Articles of
Association are being proposed in relation to Article 12 so as to
allow the Directors to exercise their discretion so that the
ultimate owners of the Shares held by Euroclear Nominees can, in
certain circumstances, have the benefit of legal owners of certain
rights under the Companies Act which are expressed as
member’s rights. In the absence of such rights being
enshrined in the Articles of Association, continued exercise of
these rights would require that holders within the Euroclear system
or CDI holders withdraw the underlying shares and hold them in
certificated (i.e. paper) form at the relevant time. These changes
are not required in order to give effect to the
Migration.
Finally,
an additional number of changes to the Articles of Association are
being proposed to remove references to Income Shares upon the
adoption of Resolution 4 and Resolution 6.
Shareholders
are encouraged to review the proposed amendments to the Articles of
Association in their entirety which are available for inspection as
set out in section 9 of Part 1 of
this Circular.
Article
|
Explanation for the amendments to the Articles of
Association
|
2
|
New
definitions have been inserted in Article 2 for the reason that
these expressions are used elsewhere in the amended Articles of
Association.
|
4,
8A, 16,
31, 32(b), 74(b), 135, 137
|
The
articles referred to in this row are to the relevant article in the
copy of the Articles of Association of the Company (entitled the
“Resolution 6
Version”):
Amended
Article 4 to state the capital of the Company following the
cancellation of the Income Shares.
Corresponding
amendments to the Articles to remove references to Income
Shares.
|
12
|
A new
Article 12 (b) has been inserted which provides that where the
owner of shares which are recorded in book-entry form in a central
securities depository has notified the Company in writing that it
is the owner of such shares and the notification is accompanied by
such other evidence as the Directors may reasonably require to
confirm such ownership, the Directors may in their absolute
discretion exercise their powers in a way that would confer on such
owner the benefit of all of the rights conferred on a member with
respect to those shares by Articles 60(b), 61, 62(b), 69(b) and 87
and 110 and sections 37(1), 105(8), 112(2), 146(6), 178(2), 178(3),
180(1), 185(1), 1101 and 1104 of the Companies Act.
A new
Article 12(c) has been inserted in order to provide that the
references to a member, a holder of a share or a shareholder in
Articles 8, 11(a), 61(b), 65, 145, 149 and 150, and
Sections 89(1), 111(2), 180, 228(3), 228(4), 251(2), 252(2),
339, 374(3), 459, 460(4), 1137(4), 1147 and 1159(4) of the
Companies Act may be deemed by the Directors to include a reference
to an owner of a share who has satisfied the requirements in
Article 12(b) above with respect to that share.
A new
Article 12 (d) has been inserted in order to provide that all
persons who the Directors deem to be eligible to receive notice of
a meeting by virtue of Article 12(b) above at the date the notice
was given, served or delivered, may also be deemed eligible by the
Directors to attend at the meeting in respect of which the notice
has been given and to speak at such meeting provided that such
person remains an owner of a Share at the relevant record date for
such meeting.
The new
Article 12 (e) provides that neither Article 12(c) above nor the
reference to Article 87 in Article 12, shall entitle the person to
vote at a meeting of the Company or exercise any other right
conferred by membership in relation to meetings of the
Company.
The new
Article 12(f) provides that where two or more persons are the owner
of a Share, the rights conferred by this Article shall not be
exercisable unless all such persons have satisfied the requirements
in Article 12 with respect to that Share.
The new
Article 12(g) provides that any notice or other information to be
given, served or delivered by the Company pursuant to Article 12
shall be in writing (whether in electronic form or otherwise) and
served or delivered in any manner determined by the Directors (in
their absolute discretion) in accordance with the provisions of
Article 149. The Company shall not be obliged to give, serve or
deliver any notice or other information to any person pursuant to
Articles 12 where the Company is not in possession of the
information necessary for such information to be given, served or
delivered in the manner determined by the Directors in accordance
with the preceding sentence.
|
13(b)
|
A new
Article 13(b) has been inserted in order to take account of the
fact that all the Participating Securities will be registered in
the name of Euroclear Nominees which is acting as the nominee for
Euroclear Bank. This new provision recognises the fact that
Euroclear Nominees Limited shall have no beneficial interest in
such shares and all rights attaching to such shares may be
exercised on the instructions of Euroclear Bank and the Company
shall have no liability to Euroclear Nominees Limited where it acts
in response to such instruction.
|
14(b),
(d) (e), and (f)
|
Article
14 allows the Company to make enquiries of persons in order to
determine if a person has an interest in the Company’s
shares. This is in addition to the similar provision in section
1110b or 1062 of the Companies Act. Articles 14(b), 14(e) and 14(f)
have been amended and new Article 14(d) has been inserted in order
to make it clear what are the obligations of Euroclear Bank when
enquiries are made of it by the Company in accordance with Article
14.
|
16
|
This
Article has been amended to take account of Article 3(1) of CSDR.
Article 3(1) requires the Company to arrange for all of its shares
which are admitted to trading or traded on trading venues to be
represented in book-entry form as immobilisation or subsequent to a
direct issuance in dematerialised form. Article 3(1) shall apply to
new shares issued after 1 January 2023 and from 1 January 2025, it
will apply to all shares in the Company which are admitted to
trading or traded on trading venues.
|
18
|
Article
18 is an entirely new Article which is intended to facilitate the
transfer of Participating Securities to Euroclear Bank in
accordance with the Migration. Pursuant to this Article, holders of
the Migrating Shares will be deemed to have consented and agreed
to, inter
alia:
? the Company
appointing attorneys or agents of such holders to do everything
necessary to complete the transfer of the Migrating Shares to
Euroclear Nominees (or such other nominee(s) of Euroclear Bank as
it may notify the Company in writing) and do all such other things
and execute and deliver all such documents and electronic
communications as may be required by Euroclear Bank or as may, in
the opinion of such attorney or agent, be necessary or desirable to
vest the Migrating Shares in Euroclear Nominees (or such other
nominee(s) of Euroclear Bank as it may notify the Company in
writing) and, pending such vesting, to exercise all such rights
attaching to the Migrating Shares as Euroclear Bank and/or
Euroclear Nominees may direct;
? the Company’s
Registrar and/or the Company’s secretary completing the
registration of the transfer of the Migrating Shares by registering
such Migrating Shares in the name of Euroclear Nominees (or such
other nominee(s) of Euroclear Bank as it may notify to the Company
in writing) without having to furnish the Former Holder with any
evidence of transfer or receipt;
? Euroclear Bank and
Euroclear Nominees being authorised to take any action necessary or
desirable to enable the issuance of CDIs by the CREST Depository to
the relevant Holders of the Migrating Shares, including any action
necessary or desirable in order to authorise Euroclear Bank,
Euroclear Nominees, the CREST Nominee and/or any other relevant
entity to instruct the CREST Depository and/or EUI to issue the
CDIs to the relevant Holders of the Migrating Shares pursuant to
the terms of the CREST Deed Poll or otherwise;
? the attorney or
agent appointed pursuant to Article 18 being empowered to procure
the issue by the Company’s Registrar of such instructions in
the Euroclear System or otherwise as are necessary or desirable to
give effect to the Migration and the related admission of the
Migrating Shares to the Euroclear System, withdraw any
Participating Securities from the CREST System, execute and deliver
(i) any forms, instruments or instructions of transfer on behalf of
the Holders of the Migrating Shares in favour of Euroclear Nominees
(or such other nominee(s) of Euroclear Bank as it may notify the
Company in writing), and (ii) such agreements or other
documentation, electronic communications or instructions as may be
required in connection with the admission of the Migrating Shares
and any interest in them to the Euroclear System; and
? the Company’s
Registrar, the Company’s Secretary and/or EUI releasing such
personal data of the Holder of the Migrating Shares to the extent
required by Euroclear Bank, the CREST Depository and/or EUI to
effect the Migration and the issue of the CDIs.
Pursuant
to Article 18(d) the Holders of the Migrating Shares agree that
none of the Company, Directors, the Company’s Registrar or
the Company’s Secretary will be liable in any way in
connection with any of the actions taken in respect of the
Migrating Shares in connection with the Migration and/or any
failures/errors in the systems, processes or procedures of the
Registrar, Euroclear Bank and/or EUI which adversely impacts the
implementation of the Migration.
|
21 and
44
|
Articles
21 and 44 have been updated to clarify that Directors may authorise
some person to do all that is necessary under the Regulations
Governing Uncertificated Shares to change uncertificated shares
which are to be sold into certificated form prior to their
sale.
|
30(b)
|
The new
Article 30(b) provides that in the case of the death of an owner of
a Share, the survivor or survivors where the deceased was a joint
owner of the Share, and the personal representatives of the
deceased where he or she was a sole holder, shall be the only
persons recognised by the Company as the persons entitled to
benefit from the exercise of the Directors’ discretion as
provided for in the new Article 12 in respect of that share
provided that they or the deceased owner have satisfied the
requirements in Article 12 above with respect to that
share.
|
31
|
As
Article 31 deals with the requirement for a written instrument of
transfer in order to transfer an interest in the shares in the
company. Article 31 is being amended to further facilitate the
transfers of shares as part of the Migration and also for any
subsequent transfers in or out of the CSD. An additional sentence
has been added to make it clear that the Company can allow shares
to be transferred without a written instrument as permitted by the
Companies Act.
|
32, 33
and 35
|
Articles
32, 33 and 35 have been amended to provide that the Directors may
decline to register any renunciation of a renounceable letter of
allotment as the Directors may need this where there is an
attempted renunciation which is not in accordance with Euroclear
Bank’s procedures. In addition, that directors may decline to
register any transfer of shares in uncertificated form only in such
circumstances as may be permitted or required by the Regulations
governing Uncertificated Shares.
|
35(c)
|
As the
payment mechanism for Irish stamp duty has yet to be fully
clarified, this is the reason for the amendment to Article 35(c)
since it would allow the Company to make other arrangements to
ensure that stamp duty can be paid.
|
51(d)
|
New
Article 51 (d) to allow for the surrender and cancellation with
effect from close of business on 9 February 2021.
|
63 and
67
|
Amended
to make it clear that members present include members in person or
by proxy.
|
65
|
In
Article 65 if at an adjourned meeting such a quorum is not present
within half an hour from the time appointed for the meeting, the
meeting, if convened otherwise than by resolution of the Directors,
shall be dissolved, but if the meeting shall have been convened by
resolution of the Directors, a proxy appointed by a CSD entitled to
be counted in a quorum present at the meeting shall be a
quorum.
|
83(ii)(c)
|
The
reference to the 48 hour deadline for the submission of proxies in
the Articles of Association has been deleted or amended to the
latest time which may be specified by the Directors subject to the
requirements of the Acts.
|
83(c)
and 83B
|
Additional
provisions are being included in Articles 89(c) and 89B in order to
make it clear that proxies can be appointed using Euroclear
Bank’s and/or CREST’s system for electronic
communications.
|
87
|
As
Euroclear Bank is a body corporate, its ability to appoint
representatives at meetings of the Company is being further
facilitated by the amendment in Article 87 which allows for the
appointment of multiple corporate representatives. This should be
of use for the exercise of voting rights by different EB
Participants and their clients.
A new
Article 87(b) has been inserted so that any body corporate, which
is an owner of a share may by resolution of its directors or other
governing body authorise such person or persons as it thinks fit to
act as its representative or representatives at any meeting of the
Company or of any class of members of the Company and the person so
authorised shall be entitled to exercise the same powers on behalf
of the body corporate which such person represents as that body
corporate could exercise in accordance with the Articles of
Association.
|
139
|
Article
139 is being amended in order to make it clear that dividends and
all monies can be paid in accordance with such arrangements as the
Company may agree with Euroclear Bank.
|
149
|
Article
149 is being amended in order to allow for the serving of notices
on Euroclear Bank via its messaging system.
|
DEFINITIONS
The
following definitions apply in this Circular unless the context
otherwise clearly requires:
|
|
ADS
|
American
Depositary Share, each representing one Share issued pursuant to
the terms and conditions set out in the ADS Deposit
Agreement;
|
ADS
Deposit Agreement
|
amended
and restated deposit agreement, dated 28 November 2006, entered
into among the Company, the ADS Depositary and all holders from
time to time of ADSs issued thereunder;
|
ADS
Depositary
|
Bank of
New York Mellon; as depositary;
|
Articles
of Association or
Articles
|
the
articles of association of the Company as filed with the Registrar
of Companies;
|
Belgian
Law Rights
|
the
fungible co-ownership rights governed by Belgian law over a pool of
book-entry interests in securities of the same issue (i.e. ISIN)
which the EB Participants will receive upon the Migration, further
summary details of which are set out in Part 5 of this
Circular;
|
Belgium
|
the
Kingdom of Belgium and the word ‘Belgian’ shall be
construed accordingly;
|
Board
Migration Resolution
|
The
board resolution referred to in Resolutions 1 and 2 in the EGM
Notice;
|
Broadridge
|
Broadridge
Proxy Voting Service;
|
Brexit
Omnibus Act
|
the
Withdrawal of the United Kingdom from the European Union
(Consequential Provisions) Act 2020;
|
business
day
|
means a
day, other than a Saturday, Sunday or public holiday in Dublin and
London;
|
CCSS
|
CREST
Courier and Sorting Service;
|
CDI
|
CREST
Depository Interest;
|
certificated
form or in certificated
form
|
a share
being the subject of a certificate as referred to in section 99(1)
of the Companies Act;
|
CGT
|
Irish
capital gains tax;
|
Circular
|
this
Circular dated 15 January 2021;
|
Companies
Act
|
the
Companies Act 2014 (No. 38 of 2014), as amended;
|
Company
Law Review Group
|
the
statutory body charged with monitoring, reviewing and advising the
Minister for Business, Enterprise & Innovation in relation to
company law in Ireland as specified in Section 958 of the Companies
Act;
|
Company
or CRH
|
CRH
plc;
|
Company
Registrar
|
the
registrar to the Company, being Link Registrars
Limited;
|
Constitution
|
the
constitution of the Company as in effect from time to time,
consisting of the Memorandum of Association and the Articles of
Association;
|
CREST
or CREST
System
|
the
relevant settlement system operated by EUI and constituting a
relevant system for the purposes of the Irish CREST Regulation and,
in respect of CDIs, a relevant system for the purposes of the UK
CREST Regulations;
|
CREST ADS Nominee
|
BNY
(Nominees) Limited as the nominee of the ADS Depositary; for the
CREST System;
|
CREST
Deed Poll
|
the
global deed poll made on 25 June 2001 by CREST Depository, a copy
of which is set out in the CREST International Manual;
|
CREST
Depository
|
CREST
Depository Limited, a subsidiary of EUI;
|
CREST
Depository Interest or CDI
|
an
English law security issued by the CREST Depository that represents
a CREST member’s interest in the underlying
share;
|
CREST
International Manual
|
the
CREST manual for the Investor CSD service offered by EUI entitled
‘CREST International Manual’ dated December 2020, as
may be amended, varied, replaced or superseded from time to
time;
|
CREST
Manual
|
the
documents issued by Euroclear Bank governing the operation of
CREST, consisting of the CREST Reference Manual, CREST
International Manual, CREST Central Counterparty Service Manual,
CREST Rules, CREST CCSS Operations Manual, CREST Application
Procedure and CREST Glossary of Terms (all as defined in the CREST
Glossary of Terms);
|
CREST
members
|
has the
meaning given to it in the CREST Manual;
|
CREST
Nominee
|
CIN
(Belgium) Limited, a subsidiary of CREST Depository, or any other
body appointed to act as a nominee on behalf of the CREST
Depository, including the CREST Depository itself;
|
CREST
Proxy Instruction
|
the
appropriate CREST message to be completed with respect to the proxy
appointment or instruction, as outlined in the CREST
Manual;
|
CREST
Tariff Brochure
|
the
document issued by EUI entitled ‘Euroclear UK & Ireland
tariff’ dated August 2020, as may be amended, varied,
replaced or superseded from time to time;
|
CREST
Terms and Conditions
|
the
document issued by Euroclear Bank entitled ‘CREST Terms and
Conditions’ dated August 2020, as may be amended, varied,
replaced or superseded from time to time;
|
CSD
|
a
central securities depository, including EUI and Euroclear
Bank;
|
CSDR
|
Regulation
(EU) No. 909/2014 of the European Parliament and of the Council of
23 July 2014 on improving securities settlement in the European
Union and on central securities depositories and amending
Directives 98/26/EC and 2014/65/EU and Regulation (EU) No
236/2012;
|
Directors
or Board
|
the
board of directors of the Company, details of which are set out at
the top of Part 1 of this Circular;
|
EB
Migration Guide
|
the
document issued by Euroclear Bank entitled ‘Euroclear Bank as
Issuer CSD for Irish corporate securities; Migration Guide’
dated October 2020 as may be amended from time to
time;
|
EB
Operating Procedures
|
the
document issued by Euroclear Bank entitled “the Operating
Procedures of the Euroclear System” as amended from time to
time;
|
EB
Participants
|
participants
in Euroclear Bank, each of which has entered into an agreement to
participate in the Euroclear System subject to the Euroclear Terms
and Conditions;
|
EB
Rights of Participants Document
|
the
document issued by Euroclear Bank entitled ‘Rights of
Participants to Securities deposited in the Euroclear System’
dated July 2017;
|
EB
Services Description
|
the
document issued by Euroclear Bank entitled ‘Euroclear Bank as
Issuer CSD for Irish corporate securities’ Services
Description dated October 2020 as amended from time to
time;
|
EGM
Notice
|
the
notice of Extraordinary General Meeting which is contained at
Appendix 1 of this Circular;
|
ESMA
|
the
European Securities and Markets Authority;
|
EU
|
the
European Union;
|
EUI
|
Euroclear
UK & Ireland Limited, the operator of the CREST
System;
|
euro
or EUR or €
|
euro,
the lawful currency of Ireland;
|
Euroclear ADS Nominee
|
a
nominee of the CREST ADS Depositary;
|
Euroclear
Bank or EB
|
Euroclear
Bank SA/NV, an international CSD based in Belgium and part of the
Euroclear Group;
|
Euroclear
Bank Participants or EB
Participants
|
participants
in Euroclear Bank, each of which has entered into an agreement to
participate in the Euroclear System subject to the Euroclear Terms
and Conditions;
|
Euroclear
Bank Trust Deed
|
the
Euroclear Bank Trust Deed, referred to in Euroclear Bank’s
White Paper of May 2019 pursuant to which Euroclear Nominees will
act as trustee for Euroclear Bank in respect of the
Migration;
|
Euroclear
Group
|
the
group of Euroclear companies, including Euroclear Bank and
EUI;
|
Euroclear
Nominees
|
Euroclear
Nominees Limited, a wholly owned subsidiary of Euroclear Bank,
established under the laws of England and Wales with registration
number 02369969;
|
Euroclear
System
|
the
securities settlement system operated by Euroclear Bank and
governed by Belgian law;
|
Euroclear
Terms and Conditions
|
the
document issued by Euroclear Bank entitled ‘Terms and
Conditions governing use of Euroclear dated April 2019, as may be
amended, varied, replaced or superseded from time to
time;
|
Euronext
Dublin
|
The
Irish Stock Exchange plc, trading as Euronext Dublin;
|
Euronext
Dublin Listing Rules
|
the
Euronext Dublin Listing Rules for companies published by Euronext
Dublin;
|
Euronext
Dublin Trading Rules
|
the
Euronext Dublin Trading Rules for companies published by Euronext
Dublin;
|
Extraordinary
General Meeting or
EGM
|
the
extraordinary general meeting of the Company convened to be held at
11 a.m. on 9 February
2021 at Stonemason’s Way, Dublin 16, Ireland;
|
FCA
|
the
Financial Conduct Authority of the United Kingdom;
|
Finance
Act
|
the
Finance Act 2020;
|
Form of
Proxy
|
the
form of proxy in respect of voting at the EGM;
|
Former
Holders
|
the
former registered holders of Participating Securities at the
Migration Record Date who, following the Migration, hold, either
directly or indirectly, Belgian Law Rights in such Participating
Securities as EB Participants;
|
GBP
or £ or sterling
|
pounds
sterling, the lawful currency of the United Kingdom;
|
Holders
of Participating Securities
|
registered
holders of Participating Securities and/or (as the context
requires) persons holding their interests in Shares through such
registered holders;
|
Income
Holders
|
holders
of Income Shares;
|
Income
Shares
|
the
Income Shares in the capital of the Company of €0.02
each;
|
Interest
|
any
interest whatsoever in Shares (of any size) which would be taken
into account in deciding whether a notification to the Company
would be required under Chapter 4 of Part 17 of the Companies Act
and “interested” shall be construed
accordingly;
|
Investor
CSD
|
has the
meaning given to it in Article 1(f) of Commission Delegated
Regulation (EU) 2017/392 of 11 November 2016 supplementing
CSDR;
|
Ireland
|
the
island of Ireland, excluding Northern Ireland and the word
‘Irish’ shall be construed accordingly;
|
Irish
CREST Regulations
|
the
Companies Act 1990 (Uncertificated Securities) Regulations 1996 (as
amended);
|
Issuer
CSD
|
has the
meaning given to it in Article 1(e) of Commission Delegated
Regulation (EU) 2017/392 of 11 November 2016 supplementing
CSDR;
|
Latest
Withdrawal Date
|
Unless
otherwise notified by 12.00 p.m. on Thursday, 11 March 2021 at the
latest
|
Listing
Rules
|
the
Euronext Dublin Listing Rules and/or the UK Listing Rules, as
applicable;
|
Live
Date
|
the
date appointed by Euronext Dublin pursuant to the Migration Act to
be the effective date in respect of Market Migration, which has not
yet been confirmed but which is expected to be 15 March
2021;
|
London
Stock Exchange
|
London
Stock Exchange plc;
|
London
Stock Exchange Trading Rules
|
the
trading rules of the London Stock Exchange as set out in the Rules
of the London Stock Exchange Effective Date 1 July
2019;
|
Market
Migration
|
the
migration to Euroclear Bank of the Participating Securities of all
Relevant Issuers;
|
Memorandum
of Association
|
the
memorandum of association of the Company as filed with the
Registrar of Companies;
|
Migrating
Shareholders
|
the
registered holders of Migrating Shares as at the Migration Record
Date;
|
Migrating
Shares
|
if the
Migration Resolutions are passed, and the Company satisfies the
other requirements applicable to the Migration becoming effective,
the Participating Securities in the Company on the Migration Record
Date;
|
Migration
or Migrate
|
the
transfer of title to uncertificated securities of the Company,
which are at the Live Date Participating Securities, to Euroclear
Nominees holding on trust for Euroclear Bank with effect from the
Live Date as described in this Circular and including, where the
context requires, migration as described in and as envisaged by the
EB Migration Guide;
|
Migration
Resolutions
|
resolutions
1 to 3 proposed for consideration at the EGM as set out in the EGM
Notice;
|
Migration
Act
|
the
Migration of Participating Securities Act 2019;
|
Migration
Record Date
|
7.00
p.m. on Friday, 12 March 2021 or such other date and time as may be
announced by EUI and / or Euroclear Bank to determine the holders
of Participating Securities to be subject to the
Migration;
|
Notification
to Euroclear
|
a
letter from the Company to Euroclear Bank dated 6 March 2020,
notifying Euroclear Bank of the Company’s intention to seek
shareholder consent in order for Participating Securities in the
Company to be the subject of the Migration in accordance with the
Migration Act;
|
Ordinary
Shares
|
Ordinary
Shares of €0.32 each in the capital of the
Company;
|
Online
Market Guide(s)
|
a
Euroclear Bank web based resource providing specific legal and
operational information for individual domestic
markets;
|
Participating
Issuer(s)
|
has the
meaning given in the Migration Act;
|
Participating
Securities
|
has the
meaning given in the Migration Act;
|
Preference
Shares
|
5%
Cumulative Preference Shares of €1.27 each, and 7% "A"
Cumulative Preference Shares of €1.27 each in the capital of
the Company;
|
Register
or Register of
Members
|
the
register of members of the Company, maintained pursuant to section
169 of the Companies Act;
|
Relevant
Issuers
|
Participating
Issuers that have complied with the necessary formalities for the
Migration to occur under the Migration Act;
|
Resolutions
|
resolutions
1 to 6 proposed for consideration at the EGM as set out in the EGM
Notice;
|
Royal
Decree No. 62
|
Belgian
Royal Decree No. 62 of 10 November 1967, on the deposit
of fungible financial instruments and the settlement of
transactions involving such instruments;
|
Section
6(4) Notice
|
the
notice published by the Company in accordance with
section 6(4) of the Migration Act;
|
Securities
Clearance Account
|
an
account in the name of an EB Participant with the Euroclear
System;
|
Shares
|
the
Ordinary Shares and the Preference Shares;
|
Shareholder(s)
|
holders
of Shares;
|
SRD II
|
Directive
(EU) 2017/828 of the European Parliament and of the Council of 17
May 2017 amending Directive 2007/36/EC as regards the encouragement
of long-term shareholder engagement;
|
TCA
|
the
Taxes Consolidation Act 1997 (as amended);
|
UK
CREST Regulations
|
the
Uncertificated Securities Regulations 2001 of the United
Kingdom;
|
UK
Listing Rules
|
the
Listing Rules made by the FCA under Part VI of the UK Financial
Services and Markets Act 2000 (as amended);
|
uncertificated
or in uncertificated
form
|
a share
recorded on the relevant register of the share or security
concerned as being held in uncertificated form in a relevant system
(within the meaning of the Irish CREST Regulations) or a CSD, and
title to which may be transferred by means of a relevant system or
a securities settlement system (as defined in the CSDR) operated by
a CSD;
|
United
Kingdom or UK
|
the
United Kingdom of Great Britain and Northern Ireland;
and
|
United
States or US
|
the
United States of America, its territories and possessions, any
state of the United States of America and the District of Columbia
and all other areas subject to its jurisdiction.
|
Any reference to any provision of any legislation shall include any
amendment, modification, re-enactment or extension thereof. Any
reference to any legislation is to Irish legislation unless
specified otherwise.
Words importing the singular shall include the plural and vice
versa and words importing the masculine gender shall include the
feminine or neutral gender.
Unless otherwise stated, all reference to time in this Circular are
to Irish time.
NOTICE OF
AN EXTRAORDINARY GENERAL MEETING
OF
CRH PLC (THE “COMPANY”)
NOTICE is hereby given that an Extraordinary General Meeting
(“EGM”) of the
Company will be held at Stonemason’s Way, Dublin 16 Ireland,
on 9 February 2021 at 11.00 a.m. for the following
purposes:
For the holders of the Ordinary Shares and the Preference Shares to
consider and, if thought fit, to pass the resolutions 1 to 3
below:
1.
Special
resolution within the meaning of sections 4, 5 and 8 of the
Migration of Participating Securities Act 2019
“WHEREAS:-
(a)
the Company has
notified Euroclear Bank SA/NV (“Euroclear Bank”) by a letter dated
14 December 2020 of the proposal that the relevant Participating
Securities in the Company are to be the subject of the Migration,
in accordance with the Migration of Participating Securities Act
2019 (the “Migration
Act”);
(b)
the Company has
received a statement in writing from Euroclear Bank dated 15
December 2020 (as required by section 5(6)(a) of the Migration Act)
to the effect that the provision of the services of Euroclear
Bank’s settlement system to the Company will, on and from the
Live Date, be in compliance with Article 23 of Regulation (EU) No
909/2014 of the European Parliament and of the Council of 23 July
2014 (“CSDR”);
and
(c)
the Company has
received the statement from Euroclear Bank dated 15 December 2020
(as required by section 5(6)(b) of the Migration Act) to the effect
that following:
(i)
such inquiries as
have been made of the Company by Euroclear Bank; and
(ii)
the provision of
such information by or on behalf of the Company, in writing, to
Euroclear Bank as specified by Euroclear Bank,
Euroclear Bank is
satisfied that the relevant Participating Securities in the Company
meet the criteria stipulated by Euroclear Bank for the entry of the
Participating Securities into the settlement system operated by
Euroclear Bank.
IT IS HEREBY RESOLVED that this meeting
approves of the Company giving its consent to the Migration of the
Migrating Shares to Euroclear Bank’s central securities
depository (which is authorised in Belgium for the purposes of
CSDR) on the basis that the implementation of the Migration shall
be determined by and take effect subject to a resolution of the
board of directors of the Company (or a committee thereof) at its
discretion and provided that as part of the Migration the title to
the Migrating Shares will become and be vested in Euroclear
Nominees Limited, being a company
incorporated under the laws of England and Wales with registration
number 02369969, acting in its capacity as the trustee for and/or
nominee of Euroclear Bank pursuant to the Euroclear Bank Trust Deed
for the purpose of the Migrating Shares being admitted to the
Euroclear System. It being understood that:-
“Circular” means the circular
issued by the Company to its shareholders dated 15 January
2021;
“Euroclear System” has the same
meaning as defined in the Circular;
“Euroclear Bank Trust Deed” means
has the same meaning as defined in the Circular;
“Live Date” has the same meaning as
defined in the Circular;
“Migration” has the same meaning as
defined in the Circular;
“Migrating Shares” has the same
meaning as defined in the Circular;
“Participating Securities” has the
same meaning as defined in the Circular; and
“relevant Participating Securities”
means all Participating Securities recorded in the register of
members of the Company on the Live Date.”
2.
Special
resolution for the purposes of the Companies Act 2014
“That,
subject to the adoption of Resolution 1 in the notice of this
meeting and subject to the board of directors of the Company (or a
committee thereof) adopting a resolution to implement the Migration
(as described in Resolution 1 in the notice of this meeting), the
copy of the Articles of Association of the Company (entitled the
“Resolution 2
Version”) which have been signed at this meeting by
the Chairman of this meeting for identification purposes and which
have been available for inspection on the Company’s website
as set out in section 9 of Part 1 of the Circular referred to in
such Resolution 1, be approved and adopted as the new Articles of
Association of the Company on and with effect from date specified
by the directors (or a committee thereof) for the commencement of
the implementation of the Migration.”
3.
Special
resolution for the purposes of the Companies Act 2014
“That,
subject to the adoption of Resolutions 1 and 2 in the notice of
this meeting, the Company be and is hereby authorised and
instructed to:
(a)
take any and all
actions which the directors of the Company (or a committee
thereof), in their absolute discretion, consider necessary or
desirable to implement the Migration and/or the matters in
connection with the Migration referred to in the Circular
(including the procedures and processes described in the EB
Migration Guide (as amended from time to time)); and
(b)
appoint any persons
as attorney or agent for the holders of the Migrating Shares to do
any and all things, including the execution and delivery of all
such documents and/or instructions as may, in the opinion of the
attorney or agent, be necessary or desirable to implement the
Migration and/or the matters in connection with the Migration
referred to in the Circular (including the procedures and processes
described in the EB Migration Guide (as amended from time to time))
including:
(i)
instructing
Euroclear Bank and/or Euroclear Nominees to credit the interests of
the holders of the Migrating Shares in the Migrating Shares (i.e.
the Belgian Law Rights representing the Migrating Shares to which
such holder was entitled) to the account of the CREST Nominee (CIN
(Belgium) Limited) in the Euroclear System, as nominee and for the
benefit of the CREST Depository (or the account of such other
nominee(s) of the CREST Depository as it may
determine);
(ii)
any action
necessary or desirable to enable the CREST Depository to hold the
interests in the Migrating Shares referred to in sub-paragraph (i)
above on trust pursuant to the terms of the CREST Deed Poll or
otherwise and for the benefit of the holders of the CREST
Depository Interests (“CDIs”) (being the relevant holders
of the Migrating Shares);
(iii)
any action
necessary or desirable to enable the issuance of CDIs by the CREST
Depository to the relevant holders of the Migrating Shares,
including any action deemed necessary or desirable in order to
authorise Euroclear Bank, the CREST Nominee and/or any other
relevant entity to instruct the CREST Depository and/or EUI to
issue the CDIs to the relevant holders of the Migrating Shares
pursuant to the terms of the CREST Deed Poll or otherwise;
and
(iv)
the release by the
Company’s Registrar, the Secretary of the Company and/or EUI
of such personal data of a holder of Migrating Shares to the extent
required by Euroclear Bank, the CREST Depository and/or EUI to
effect the Migration and the issue of the CDIs.
It
being understood that capitalised terms used in this Resolution
shall have the meaning given to them in the Circular (as defined in
Resolution 1 in the notice of this meeting).”
For the holders of the Ordinary Shares to consider and, if thought
fit, to pass resolutions 4 to 6 below:
4.
Special
Resolution for the purposes of the Companies Act 2014
“That, a new
Article 51 (d) be and is hereby inserted in the Articles of
Association of the Company as follows:
51
(d)
The Income Shares
in the issued share capital of the Company are deemed to have been
surrendered to the Company for nil consideration with effect from
the close of business on 9 February 2021 and the Directors be and
are hereby authorised and instructed to take any and all actions on
behalf of both the Company and the holders of the Income Shares to
effect such surrender and the cancellation of the Income
Shares.”
5.
Ordinary
Resolution for the purposes of the Companies Act 2014
“That,
subject to the approval of Resolution 4 in the notice of this
meeting and immediately following the cancellation of the Income
Shares, the authorised share capital of the Company be and is
hereby diminished by €25,000,000 from €426,297,940 to
€401,297,940 divided into 150,000 5% Cumulative Preference
Shares of €1.27 each, 872,000 7% "A" Cumulative Preference
Shares of €1.27 each, and 1,250,000,000 Ordinary Shares of
€0.32 each.”
6.
Special
Resolution for the purposes of the Companies Act 2014
“That:
(i)
subject to the
approval of Resolution 4 in the notice of this meeting and
immediately following the cancellation of the Income Shares, the
Articles of Association of the Company be and are hereby amended by
the deletion of all references to the Income Shares as shown by the
deletion indicated in the copy of the Articles of Association of
the Company (entitled the “Resolution 6 Version”) which have
been signed at this meeting by the Chairman of this meeting for
identification purposes and which have been available for
inspection on the Company’s website as set out in section 9
of Part 1 of the Circular referred to in Resolution 1;
and
(ii)
subject to the
approval of Resolution 2 and Resolution 4 in the notice of this
meeting, all such deletions of the references to the Income Shares
are also to be effective as if they formed part of the amendments
made by Resolution 2 so that such deletions (including any
consequential renumbering of Articles and cross reference to
Articles) are hereby included in the Articles of Association of the
Company as amended by such Resolution 2 on and with effect
from the date specified by the directors (or a committee thereof)
for the commencement of the implementation of the Migration (as
defined in Resolution 1 in the notice of this
meeting).”
By
order of the Board
Neil
Colgan
Company Secretary
Registered
Office:
42
Fitzwilliam Square,
Dublin,
D02
R279,
Ireland
15
January 2021
NOTES
1.
The holders of 5%
Cumulative Preference Shares and 7% “A” Cumulative
Preference Shares are being asked to vote on resolutions 1, 2 and 3
as these resolutions relate to the Migration. As resolutions 4, 5
and 6 do not affect the rights of the preference shareholders, the
preference shareholders are not entitled to vote on those
resolutions.
2.
In light of the
ongoing impact of the Coronavirus (“COVID-19”) pandemic and related
public health guidance, we encourage shareholders to submit their
Forms of Proxy to ensure they can vote and be represented at the
EGM without the need to attend in person.
1.
We are closely
monitoring the situation and the measures advised by the Government
of Ireland in relation to the ongoing COVID-19 pandemic and will
endeavour to take all recommended actions into account in the
conduct of the EGM. Under the current COVID-19 regulations,
shareholders will not be able to attend the EGM in person. If you
appoint someone other than the chairman of the meeting to be your
proxy, that person is unlikely to be able to attend if the
prevailing COVID-19 measures require the Company to conduct the EGM
as a closed meeting.
2.
In the likely event
that it is not possible to hold the EGM either in compliance with
public health guidelines or applicable law or where it is otherwise
considered that proceeding with the EGM as planned poses an
unacceptable risk to health and safety, the EGM may be a closed
meeting, adjourned or postponed to a different time and/or venue,
in which case notification of such adjournment or postponement will
be given in accordance with the Company’s Articles of
Association. Shareholders are advised to monitor the
Company’s website, www.crh.com/investors/shareholder-centre
for any update announcements regarding the meeting in the context
of the evolving COVID 19 pandemic.
3.
Shareholders will
be provided with a facility to listen to the proceedings of the EGM
remotely. To access this remote audio facility Shareholders should
visit www.crh.com/investors/shareholder-centre
using a smartphone, tablet or computer with an internet connection
and click on the link which will be made available in advance of
the EGM. Shareholders will then be prompted to enter their unique
‘Login Code’ and ‘PIN’. The Login Code is
your IVC number, which is an 11 digit code is printed on the
enclosed Form of Proxy. The PIN is the last 4 digits of the IVC.
This will authenticate each Shareholder. Access to the audio
facility will be available from 30 minutes before start of event
although Shareholders will not be able to listen to the audio until
the meeting is declared open. If a Shareholder wishes to appoint a
proxy or to submit a Letter of Representation for a corporate
representative and for them to access the virtual audio-cast of the
meeting on the Shareholders’ behalf, please contact Link
Registrars Limited (the “Registrars”) by telephone on +353
1 5530050*. If Shares are held within a Nominee Account and
Shareholders’ wish to access the live audio-cast of the
meeting, then Shareholders are required to contact their Nominee in
order for them to obtain their Login Code and PIN from the
Registrars for onward transmission to the Shareholder ahead of the
meeting. Joint holders should contact the Registrars by telephone
on +353 1 5530050* if more than one holder wishes to access the
virtual audio-cast of the meeting. *Lines are open from 9.00 a.m.
to 5.00 p.m. Monday to Friday, excluding Irish bank
holidays.
4.
Only those members
registered in the register of members of the Company at 7.00 p.m.
on 7 February 2021 or if the EGM is adjourned, at 7.00 p.m. on the
day that falls 48 hours before the time appointed for the adjourned
meeting shall be entitled to access the live audio-cast of the
meeting or to attend, speak, ask questions and in respect of the
number of shares registered in their name, vote at the meeting, or
if relevant, any adjournment thereof. Changes in the register after
that time and date will be disregarded in determining the right of
any person to attend and/or vote at the meeting or any adjournment
thereof.
5.
Any member entitled
to attend, speak, ask questions and vote at this meeting may
exercise his or her right to vote by appointing one or more
proxies. In the exceptional circumstances of the current COVID-19
pandemic, the CRH Board strongly encourages members to appoint the
chairman of the meeting as their proxy, however, a member may
appoint another person, who need not be a member(s) of the Company,
as a proxy, by electronic means or in writing, to vote some or all
of their shares that person may not be able to attend if the
prevailing COVID-19 measures require the Company to conduct the EGM
as a closed meeting. A Proxy Form is enclosed. Appointment of a
proxy does not preclude members from attending, speaking and asking
questions at the meeting should they subsequently wish to do so.
Please note that proxies may be required to provide identification
to attend the meeting.
6.
To be valid, Proxy
Forms must be delivered in writing, together with any power of
attorney or other authority under which it is signed or a certified
copy thereof, to the Company’s Registrar, Link Registrars
Limited, (the “Registrars”), to P.O. Box 1110,
Maynooth, Co. Kildare, Ireland (if delivered by post) or to Link
Registrars Limited, Block C, Maynooth Business Campus, Maynooth, Co
Kildare, W23 F854, Ireland (if delivered by hand), so as to be
received not later than 11 a.m. on 7 February 2021. Shareholders
who wish to submit proxies by electronic means may do so up to the
same deadline by accessing the Registrars’ website,
www.signalshares.com
and entering CRH plc in the company name field. You will need to
register for Signal Shares by clicking on “registration
section” (if you have not registered previously) and
following the instructions thereon. Shareholders who do not receive a
Proxy Form by post, or who wish to be sent paper copies of
documents relating to the meeting, should contact the Registrars
(Tel. +353 1 553 0050).
7.
CREST members may
appoint one or more proxies through the CREST electronic proxy
appointment service in accordance with the procedures described in
the CREST Manual. CREST Personal Members or other CREST sponsored
members who have appointed a voting service provider(s) should
refer to their CREST sponsor or voting service provider(s), who
will be able to take the appropriate action on their behalf.
Further information on CREST procedures and requirements is
contained in the CREST Manual. The message appointing a proxy(ies)
must be received by the Registrar (ID 7RA08) not later than 11 a.m. on 7
February 2021. For this purpose, the time of receipt will be taken
to be the time (as determined by the timestamp generated by the
CREST system) from which the Registrar is able to retrieve the
message by enquiry to CREST in the manner prescribed by CREST. The
Company may treat as invalid a proxy instruction in the
circumstances set out in Regulation 35(5)(a) of the Companies Act,
1990 (Uncertificated Securities) Regulations, 1996.
8.
ADR holders wishing
to attend the meeting must obtain a Proxy Form from The Bank of New
York Mellon (BNY), which will enable them to attend and vote on the
business to be transacted. ADR holders may instruct BNY as to the
way in which the shares represented by their ADSs should be voted
by completing and returning the voting card provided by BNY in
accordance with the instructions given.
9.
Pursuant to Section
1105(2) of the Companies Act 2014 and Regulation 14 of the
Companies Act, 1990 (Uncertificated Securities) Regulations, 1996,
the Company hereby specifies that only those Shareholders
registered in the Register of Members of the Company as at 7.00
p.m. on 7 February 2021 shall be entitled to access the live
audio-cast of the EGM or to attend, speak, ask questions and vote
at the EGM in respect of the number of shares registered in their
name at that time.
10.
Pursuant to the
Company’s Articles of Association and subject to any contrary
provision in company law, Shareholders holding at least 3% of the
Company’s issued share capital, representing at least 3% of
the voting rights of all the members who have a right to vote at
the meeting, have the right to put an item on the agenda, or table
a draft resolution for an item on the agenda, of an EGM provided
that notice of the item or a draft of the resolution shall have
been submitted as required by Article 61 of the Company’s
Articles of Association and in time for the Company to comply with
the applicable notice requirements in sections 181, 191, 1098 and
1103 of the Companies Act 2014. Further information in relation to
Shareholders’ rights can be obtained from the CRH website,
www.crh.com.
11.
Pursuant to Section
1107 of the Companies Act 2014, shareholders have a right to ask
questions related to items on the EGM agenda and to have such
questions answered by the Company subject to any reasonable
measures the Company may take to ensure the identification of
Shareholders. The live-audio cast of
the EGM will provide Shareholders with a type-based facility to
submit questions remotely during the EGM. This facility can be
accessed by clicking on the link which will be available to left of
the main screen one you enter the live-audio cast of the
meeting. In addition, Shareholders may also submit a
question in writing in advance of the meeting, to be received at
least two business days before the meeting (i.e. 5 February 2021)
by post to the Company Secretary, CRH plc, 42 Fitzwilliam Square,
Dublin 2, Ireland or by email to [email protected]. All correspondence
should include sufficient information to identify a Shareholder on
the Register of Members, for example, an IVC number, which is an 11
digit unique identifier printed on the enclosed Form of Proxy. An
answer is not required if (a) an answer has already been given on
the Company’s website in the form of a “Q&A”
or (b) it would interfere unduly with preparation for the meeting
or the confidentiality or business interests of the Company or (c)
it appears to the chairman of the meeting that it is undesirable in
the interests of good order of the meeting that the question be
answered.
12.
Pursuant to Section
190(b) of the Companies Act 2014, where a poll is taken at the
meeting, a Shareholder, present in person or by proxy, holding more
than one share need not cast all his/her votes in the same
way.
13.
During the EGM,
should Shareholders (or their duly appointed proxies) attend in
person despite the advice not to do so in the context of the
ongoing COVID-19 pandemic, they may not use cameras, smart phones
or other audio, video or electronic recording devices, unless
expressly authorised by the chairman of the meeting.
RIGHTS OF MEMBERS OF IRISH-INCORPORATED COMPANIES UNDER THE
COMPANIES ACT THAT ARE NOT DIRECTLY EXERCISABLE UNDER THE EUROCLEAR
BANK SERVICE OFFERING
In
order to exercise the rights listed in Appendix 2, a Former
Holder must withdraw Participating Securities from Euroclear Bank,
resulting in a certificated (i.e. paper) holding, in order to
exercise them directly. The process for such a withdrawal (whether
as an EB Participant or as a CDI holder) is set out in section 3 of
Part 1 of this Circular. Please note that references to
particular articles included in the table below are to the relevant
article in the copy of the Articles of Association of the Company
(entitled the “Resolution 2 Version”), which
are available for inspection on the Company’s
website.
No.
|
Irish legal right
|
Section of the Companies Act 2014
|
Person(s) entitled to exercise
|
New Article, if any, to be inserted in Articles of
Association
|
1.
|
To have
a copy of the constitution sent to the member
|
37(1)
|
“any
member”
|
12(b)
|
2.
|
To
object to the conversion of his shares
|
83(4)
|
“the
holder”
|
No
change to the Articles of Association.
Owners
will get notice of the conversion via the Euroclear
system.
If an
owner does not want its share converted, it should withdraw the
share from the CSD.
|
3.
|
To
apply to Court to have a variation of share rights
cancelled
|
89(1)
|
“not
less than 10 per cent of the issued shares of that class, being
members who did not consent to or vote in favour of the resolution
for the variation”
|
No
change to the Articles of Association.
|
4.
|
To
apply to Court to have overdue share certificates
issued
|
99(4)
|
“the
person entitled to have the certificates”
|
No
change to the Articles of Association.
|
5.
|
To
apply to Court to have an invalid creation, allotment, acquisition
or cancellation of shares received
|
100(2)
|
“any
member or former member”
|
No
change to the Articles of Association.
|
6.
|
To
inspect a contract of purchase of the company’s own
shares
|
105(8);
112(2)
|
“the
members”
|
12(b)
|
7.
|
To be
sent copies of representations from directors the subject of a
resolution to be removed
|
146(6)
|
“every
member of the company to whom notice of the meeting is
sent”
|
12(b)
|
8.
|
To
apply to Court to rectify the register of members
|
173(1)
|
“any
member”
|
No
change to the Articles of Association.
|
9.
|
To
object to the holding of a general meeting outside the
State
|
176(2)
|
“unless
all of the members entitled to attend and vote at such meeting
consent in writing”
|
No
change to the Articles of Association.
|
10.
|
To
convene an EGM
|
178(2)
|
“not
less than 50 per cent (or such other percentage as may be specified
in the constitution) of the paid up share capital of the company
as, at that time, carries the right of voting at general meetings
of the company”
|
12(b)
|
11.
|
To
require the directors to convene an EGM
|
178(3)
(as modified by 1101 in the case of a regulated market
PLC)
|
“not
less than 5 per cent of the paid up share capital of the company,
as at the date of the deposit, of the requisition, carries the
right of voting at general meetings of the
company”
|
12(b)
|
12.
|
To
apply to court for an order requiring a general meeting to be
called
|
179(1)
|
“a
member of the company who would be entitled to vote at a general
meeting of it”
|
No
change to the Articles of Association.
|
13.
|
To
receive notice of every general meeting(1)
|
180(1)
|
“every
member”
|
12(b)
|
14.
|
To
object to the holding of a meeting on short notice
|
181(2)
|
“if
it is so agreed by ... all the members entitled to attend and vote
at the meeting”
|
No
change to the Articles of Association.
|
15.
|
Ability
of a body corporate to appoint a corporate representative to
represent it at shareholder meetings
|
185(1)
|
“if
it is a member…”
|
12(b)
|
16.
|
To vote
at general meetings(1)
|
188(2)
|
“every
member”
|
While
section 188(2) has been disapplied by the Articles of Association,
the subject matter of section 188(2) is dealt with by Article 75.
The rights under the Articles of Association in relation to voting,
and including proxy appointment instructions, must be received via
the Euroclear System or may be exercised directly following
re-materialisation.
It is
noted that the EB Participant or CDI holder may also appoint itself
or another person as a third party proxy in accordance with the EB
Services Description.
|
17.
|
To
demand a poll at a general meeting
|
189(2)
|
“(c)
any member or members present in person or by proxy and
representing not less than 10 per cent of the total voting rights
of all the members of the company concerned having the right to
vote at the meeting; or
a
member or members holding shares in the company concerned
conferring the right to vote at the meeting, being shares on which
an aggregate sum has been paid up equal to not less than 10 per
cent of the total sum paid up on all the shares conferring that
right”
|
No
change as all resolutions will be conducted by way of a
poll.
|
18.
|
To
apply to court for a declaration that a director is personally
responsible for the company’s liabilities where a solvency
declaration is given without reasonable grounds
|
210(1)
|
“a
... member”
|
No
change to the Articles of Association.
|
19.
|
To
apply to court to cancel certain special resolutions
|
211(3)
|
“one
or more members who held, or together held, not less than 10 per
cent in nominal value of the company’s issued share capital,
or any class thereof, at the date of the passing of the special
resolution and hold, or together hold, not less than that
percentage in nominal value of the foregoing on the date of the
making of the application”
|
No
change to the Articles of Association.
|
20.
|
To
apply to the court for an order where there is an instance of
minority oppression
|
212(1)
|
“any
member”
|
No
change to the Articles of Association.
|
21.
|
Requirement
that a scheme of arrangement be approved by a majority in number is
disapplied and instead the quorum for any meeting to consider a
resolution to approve a scheme of arrangement shall be at least two
persons holding or representing by proxy at least one-third in
nominal value of the issued shares, or class of issued shares, as
the case may be, of the issuer. This quorum applies only so long as
there are some of shares held outside an authorised
CSD.
|
Section
449(1) as amended by Section 1087D
|
A
majority in number of members
|
No
change to the Articles of Association.
|
22.
|
An
offeror for the Company which already held beneficial ownership of
more than 20% of the Company’s Shares will no longer be
required to satisfy the additional requirement in section 458(3) of
the Companies Act that the assenting shareholders in respect of the
relevant scheme, contract or offer are not less than 50% in number
of the holders of the relevant shares, in order for the offeror to
be entitled to compulsorily acquire the Shares of any dissenting
shareholders.
|
Section
458(3) as amended by Section 1087E
|
|
No
change to the Articles of Association.
|
23.
|
To
apply to the court for an order permitting a dissenting shareholder
to retain his or her shares or varying the terms of the scheme,
contract or offer as they apply to that shareholder, or in a case
where the offeror is bound to acquire his or her shares by virtue
of section 457(7)(a) , apply to the court for an order varying the
terms of the scheme, contract or offer as they apply to that
dissenting shareholder
|
459 (5)
to (8)
|
|
No
change to the Articles of Association.
|
24.
|
To
apply to the court for the appointment of one or more competent
inspectors to investigate the affairs of a company in order to
enquire into matters specified by the court and to report on those
matters in such manner as the court directs
|
747(2)
|
“not
less than 10 members of the company or a member or members holding
one-tenth or more of the paid up share capital of the
company
|
No
change to the Articles of Association.
|
25.
|
To
apply to the court for an order that the company or officer in
default to remedy the default within such time as the court
specifies.
|
797(3)(a)
|
“any
member”
|
No
change to the Articles of Association.
|
26.
|
The
company may select a record date for voting at shareholder meeting
provided that it is not more than 72 hours before the general
meeting to which it relates. Previously, the record date may not be
more than 48 hours before the meeting.
|
1105(1)
as amended by Section 1087G
|
|
No
change to the Articles of Association.
|
27.
|
Right
to put items on the agenda of the general meeting and to table
draft resolutions
|
1104
|
“one
or more members”
|
12(b)
|
28.
|
Ability
to request the company to acquire his shareholding for
cash
|
1140(1)
|
A
“shareholder”
|
If an
owner is opposed to the merger and wants its share acquired, it
should withdraw the share from the CSD.
|
Note:
(1)
Rights in respect
of general meetings may be exercised via the Euroclear System,
subject to the terms and restrictions set out in the EB Services
Description.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
|
CRH public limited company
|
|
(Registrant)
|
|
|
Date 15
January 2021
|
|
|
By:___/s/Neil
Colgan___
|
|
N.Colgan
|
|
Company Secretary
|