AGM Information • Apr 9, 2021
AGM Information
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Fully paid-up share capital € 9,650,526.24 Tax code and Milan Company Register No. 12870770158 - ABI code No. 03158.3 Largo Augusto 1/A, angolo Via Verziere 13, 20122 Milan
__________________ www.bancasistema.it
ORDINARY SHAREHOLDERS' MEETING, HELD ON SINGLE CALL AT THE REGISTERED OFFICE AT LARGO AUGUSTO 1/A ANGOLO VIA VERZIERE 13, MILAN 30 APRIL 2021, 10.00 A.M.
BOARD OF DIRECTORS' REPORT ON ITEM 8 OF THE AGENDA
(prepared pursuant to Art. 125-ter of Legislative Decree No. 58 of 24 February 1998, as amended and supplemented)
ORDINARY MEETING "AUTHORISATION FOR THE PURCHASE AND DISPOSAL OF TREASURY SHARES, SUBJECT TO THE REVOCATION OF THE RESOLUTION ADOPTED BY THE SHAREHOLDERS' MEETING HELD ON 23 APRIL 2020. RELATING AND RESULTING RESOLUTIONS"
Dear Shareholders,
On 23 April 2020, the Ordinary Shareholders' Meeting had resolved to authorise the Board of Directors (i) to submit to the Bank of Italy the request for authorisation, pursuant to Article 29, paragraphs 1 and 4, Delegated Regulation (EU) No 241/2014, to repurchase treasury shares for a maximum of € 855,000 and (ii) to purchase the Company's ordinary fully paid-in treasury shares, each of a nominal value of € 0.12 (zero point twelve), for a maximum not exceeding the total nominal value, for a maximum of € 855,000 and in any case not exceeding one fifth of the share capital. This equivalent value will be covered by the undistributable reserve provided by law and called "Reserve for future purchase of treasury shares". The aforementioned authorisation provided for a duration no longer than 18 (eighteen) months of the date of the Shareholders' Meeting. The Shareholders' Meeting therefore authorised the Board of Directors to dispose of the treasury shares by allocating them as part of the variable remuneration to be paid to specific employees in accordance with the remuneration policies from time to time adopted in the Shareholders' Meeting.
For the reasons under point 1 below, it was decided not to proceed with the authorisation request to the Bank of Italy.
The Board of Directors also proposes to authorise - subject to full revocation of the authorisation adopted on 23 April 2020 - the purchase of ordinary shares of Banca Sistema S.p.A., pursuant to article 2357 of the Italian Civil Code and article 132 of Legislative Decree. no. 58 of 24 February 1998, as amended and supplemented (the "Consolidated Law on Finance"), and articles 77 and 78 of Regulation (EU) no. 575/2013 ("CRR") and article 29, paragraph 1 and 4 of Delegated Regulation (EU) no. 241/2014 as subsequently amended and supplemented ("Regulation 241/2014"), according to the terms and in the manner indicated below, in compliance with article 144-bis of the Regulation adopted by Consob with resolution no. 11971 of 14 May 1999, as amended and supplemented ("Issuers' Regulation").
The above purchase may be made only after obtaining the authorisation of the Bank of Italy in accordance with the above EU regulations.
It is finally proposed to submit a motion asking to authorise the Board of Directors to dispose of the shares of Banca Sistema by allocating the same to "key personnel", in implementation of the remuneration policies approved by the Shareholders' Meeting as variable component of the remuneration.
During the previous year, the Board of Directors examined in detail the possibility of identifying alternative mechanisms to meet the obligations to pay the treasury share portion of variable remuneration. In particular, the Bank assessed whether it would be appropriate not to establish a reserve of treasury shares or to redetermine their amount and to have a third-party financial intermediary purchase the shares at the same time as they are to be assigned to the beneficial owners.
The examination showed that it is preferable for Banca Sistema to use these alternative mechanisms only secondarily, since it is more appropriate to ordinarily and mainly continue with the establishment of a reserve of treasury shares for payment of the variable remuneration to entitled employees.
Consequently, in order to allow the Bank to purchase the number of shares necessary to meet its obligations to entitled employees, it is appropriate to revoke the previous authorisation granted to the Board of Directors for the purchase of up to 855,000 shares, which is still pending, and to consider a new authorisation for a greater number.
The Remuneration Policies of the Banca Sistema Group (the "Group"), submitted to the Shareholders' Meeting for approval, include the payment of a portion of the variable component of the remuneration,
as well as any fees paid in anticipation of or as a result of early termination of the employment relationship or early termination of the position, through the allocation of financial instruments.
In particular, the proposed purchase of treasury shares is aimed at allocating the shares of the Bank to "key personnel", in implementation of the above Remuneration policies.
At 8 April 2021, Banca Sistema holds 28.939 shares representing 0.04% of its share capital, as per the previous Plans for the repurchase of treasury shares approved by the Shareholders Meeting.
It was decided that this number of treasury shares held by Banca Sistema is not sufficient for the above future requirements of Banca Sistema.
A request for authorisation should be submitted to the Bank of Italy given the reduction of own funds following the purchase of treasury shares, in implementation of the provisions of article 77 of the CRR and article 29 of Regulation no. 241/2014.
Our proposal is to establish a maximum pre-set amount of shares that may be repurchased equal to € 2,810.000, that are considered to be sufficient for allocation to "key personnel", in implementation of the remuneration policies approved by the Shareholders' Meeting.
The proposed purchase of shares, even in tranches, refers to fully paid-in ordinary shares of the Bank, with a nominal amount of € 0.12 (zero point twelve) each.
An undistributable reserve equal to the amount of the treasury shares recognised under the assets in the financial statements should be established and kept until the shares are transferred or cancelled.
The limit for the purchase of treasury shares is that set by article 2357, paragraphs 1 and 3, of the Italian Civil Code according to which (i) Banca Sistema S.p.A. may only purchase treasury shares within the limits of distributable earnings and distributable reserves indicated by the last approved financial statements and (ii) the total nominal amount of the shares may not exceed one fifth of the share capital as a whole, including any shares held by subsidiaries.
In order to comply with the latter provision, the directors of Banca Sistema S.p.A. will ensure that subsidiaries do not carry out transactions involving shares of Banca Sistema.
Based on the proposal, shares may be purchased, even in tranches, up to a maximum number having a total equivalent value not exceeding € 2,810,000, taking into account the provisions of paragraph 5) below and, in any case, within the limit of one fifth of the share capital, within a period of 18 months from the date of approval of the resolution.
There is no time limit for the sale of the shares, which may again be made in tranches, even before the maximum number of shares have all been purchased.
Shares may be purchased at a price of no less than 15% - and no more than 15% - of the price determined on the last business day of each week as average of the official closing price of the quotations of Banca Sistema shares for the last two weeks in the TARGET calendar prior to the date of determination of the average price. This minimum and maximum price will be valid for a period starting as from the day after the date on which the average price is determined to the date on which the new weekly price is determined (inclusive).
In the case of approval by the Shareholders' Meeting, the "Reserve for the future purchase of treasury shares" will be used to establish, after each actual purchase, the "Reserve for treasury shares", undistributable and provided by article 2357-ter of the Italian Civil Code, equal to the amount of the treasury shares recognised under the assets in the financial statements that should be kept until the treasury shares are transferred or cancelled.
Ordinary shares may be purchased, pursuant to article 144-bis of the Issuers' Regulation, exclusively on the market regulated, organised and managed by Borsa Italiana S.p.A. where the shares of Banca Sistema are traded according to procedures that ensure compliance with equal treatment for all shareholders set forth by article 132 of the Consolidated Law on Finance, and in compliance with applicable market laws and practices accepted by Consob pursuant to article 13 of Regulation (UE) no. 596/2014.
Treasury shares will be allocated as part of the variable remuneration paid to specific employees in compliance with the policies approved from time to time by the Shareholders' Meeting.
* * *
Dear Shareholders,
With reference to the above, we invite you to approve the following resolution:
"Having heard and approved the report of the Board of Directors on item 8) of the agenda;
A) TO REVOKE the following resolution, adopted in the Ordinary Shareholders' Meeting held on 23 April 2020:
A) TO AUTHORISE the Board of Directors (i) to submit to the Bank of Italy the request for authorisation to repurchase treasury shares for an amount of no more than € 855,000 and (ii) to purchase fully paid-in ordinary treasury shares of the Bank, with a nominal amount of € 0.12 (zero point twelve) each, for a maximum number having a total nominal amount not exceeding € 855,000 and in any case in compliance with the limit of one fifth of the share capital. This equivalent value will be covered by the undistributable reserve provided by law called "Reserve for the future purchase of treasury shares".
The above authorisation is intended as granted for a period of no more than 18 (eighteen) months from today's date. Shares may be purchased, even in tranches, at a price of no less than 15% - and no more than 15% - of the price determined on the last business day of each week as average of the official closing price of the quotations of Banca Sistema shares for the last two weeks in the TARGET calendar prior to the date of determination of the average price. This minimum and maximum price will be valid for a period starting as from the day after the date on which the average price is determined to the date on which the new weekly price is determined (inclusive).
B) TO AUTHORISE the Board of Directors to dispose of the treasury shares of Banca Sistema S.p.A. by allocating such treasury shares as part of the variable remuneration paid to specific
employees in compliance with the remuneration policies approved from time to time by the Shareholders' Meeting;
C) TO ESTABLISH that purchases may be made exclusively by trading ordinary Banca Sistema S.p.A. shares on the Stock Exchange, according to procedures that ensure equal treatment for all shareholders as set forth by article 132 of Legislative Decree no. 58/1998, and in compliance with applicable market laws and practices accepted by Consob pursuant to article 13 of Regulation (UE) no. 596/2014.
D) TO AUTHORISE AND INSTRUCT the CEO, with the authority to sub-delegate such powers, to submit to the Bank of Italy the request for authorisation to purchase treasury shares and carry out any transactions that may be necessary, including financial transactions, pertaining to or resulting from the implementation of the above resolutions, in compliance with the procedures set forth by applicable laws and regulations, ensuring through management and control of the subsidiaries, that the latter do not carry out any transaction involving the shares of Banca Sistema S.p.A. so as to ensure full compliance with the maximum limit of one fifth of the share capital. The CEO may use the services of third parties to execute the above, signing contracts and appointing agents or attorneys for single acts or categories of acts."
B) TO AUTHORISE the Board of Directors (i) to submit to the Bank of Italy the request for authorisation to repurchase treasury shares for an amount of no more than € 2,810,000 and (ii) to purchase fully paidin ordinary treasury shares of the Bank, with a nominal value of € 0.12 (zero point twelve) each, for a maximum amount not exceeding € 2,810,000 and in any case in compliance with the limit of one fifth of the share capital. This equivalent value will be covered by the undistributable reserve provided by law called "Reserve for the future purchase of treasury shares"
The above authorisation is intended as granted for a period of no more than 18 (eighteen) months from today's date. Shares may be purchased, even in tranches, at a price of no less than 15% - and no more than 15% - of the price determined on the last business day of each week as average of the official closing price of the quotations of Banca Sistema shares for the last two weeks in the TARGET calendar prior to the date of determination of the average price. This minimum and maximum price will be valid for a period starting as from the day after the date on which the average price is determined to the date on which the new weekly price is determined (inclusive).
C) TO AUTHORISE the Board of Directors to dispose of the treasury shares of Banca Sistema S.p.A. by allocating such treasury shares as part of the variable remuneration paid to specific employees in compliance with the remuneration policies approved from time to time by the Shareholders' Meeting;
D) TO ESTABLISH that purchases may be made exclusively by trading ordinary Banca Sistema S.p.A. shares on the Stock Exchange, according to procedures that ensure equal treatment for all shareholders as set forth by article 132 of Legislative Decree no. 58/1998, and in compliance with applicable market laws and practices accepted by Consob pursuant to article 13 of Regulation (UE) no. 596/2014".
E) TO AUTHORISE AND INSTRUCT the CEO, with the authority to sub-delegate such powers, to submit to the Bank of Italy the request for authorisation to purchase treasury shares and carry out any transactions that may be necessary, including financial transactions, pertaining to or resulting from the implementation of the above resolutions, in compliance with the procedures set forth by applicable laws and regulations, ensuring through management and control of the subsidiaries, that the latter do not carry out any transaction involving the shares of Banca Sistema S.p.A. so as to ensure full compliance with the maximum limit of one fifth of the share capital. The CEO may use the services of third parties to execute the above, signing contracts and appointing agents or attorneys for single acts or categories of acts."
Milan, 09 April 2021
On behalf of the Board of Directors Ms. Luitgard Spögler Chairperson of the Board of Directors
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