ANNEXE TO THE 2012 ANNUAL CORPORATE GOVERNANCE REPORT
INCLUDING ASPECTS COVERED BY ARTICLE 61B OF ACT 24/1988, OF 28 OF JULY, ON THE SECURITIES MARKET
Act 2/2011, on a Sustainable Economy, has amended Act 24/1988, of 28 July, on the Securities Market (hereinafter, LMV), introducing a new chapter VI entitled
“
On the annual corporate governance report”. Chapter VI contains, among others, a new article 61a on the distribution and content of the Annual Corporate
Governance Report. The aforesaid article 61a repeals and revises the content of articles 116, on the Annual Corporate Governance Report, and 116a, which
established the obligation of including additional information in the Management Report. It also requires the Annual Corporate Governance Report to include
a description of the principal characteristics of the internal risk control and management systems in relation to the process of issuing financial information.
The 2012 Annual Corporate Governance Report has been based on the format provided on the CNMV website. The provisions of this Annexe have been
added this Report wherever they are lacking in the CNMV template, including detailed information on the text of new Article 61b of the LMV, which is broken
down under the following subheadings:
1.
Securities that are not traded in a regulated European Union market, indicating, where relevant, the various types of shares, and the rights and
obligations relating to each type of share.
NH Hoteles, S.A. is listed on the Spanish and New York stock markets at Level 1 ADR.
2.
Any restriction on the transmissibility of securities and any restriction on voting rights
There are no restrictions in the company bylaws on the transmissibility of the shares from share capital.
The restrictions on voting rights are the same as those for any other public limited company, with no specific restrictions on this right in the company
bylaws other than those stipulated by law.
3.
Regulations applicable to modification of the company bylaws.
The regulations applicable to modification of the company bylaws are those established in Articles 285 and subsequent of Royal Legislative Decree
1/2010,
of 2 July, approving the revised text of the Capital Companies Act (henceforward Capital Companies Act), which require the approval of the
General Shareholders’ Meeting by the majorities stipulated in Articles 194 and 201 of this Act. The Bylaws, which where adapted to the most recent
legislative developments in accordance with the resolutions passed by the General Meetings of 29 June 2011 and 29 June 2012, are in keeping with the
law in that regard.
4.
Significant agreements signed by the company and that come into force, are modified or are terminated in the case of a change in control of the
company resulting from a public acquisition offer and the effects thereof.
The NH Hoteles group has agreements signed with the partners of Residencial Marlín S.L. and Los Alcornoques de Sotogrande, S.L. that, given that the
personal characteristics of the partners are essential for smooth running of projects involving these companies, establish that any change in effective
control, either in the partners or in their respective parent companies, will result in a procedure enabling the other partner to leave the company with the
right to have his or her shareholdings refunded and be compensated for any damages caused.
The €715,855,325 syndicated loan signed by group company NH Finance, S.A., as borrower, and a syndicate of banks on 29 March 2012 contains a clause
establishing early maturity in any circumstances giving rise to a change in control of the company NH Hoteles, S.A.
In addition, the NH Hoteles Group has been granted loans and credits with a joint limit of €35 million containing a clause establishing their early maturity
in the event of circumstances that give rise to a change in control of the company NH Hoteles, S.A.
There are hotel management contracts signed by subsidiaries of the Group under which the company that owns (or leases) the hotels can exercise the
right to terminate the contracts in the event of a change of control at NH Hoteles, S.A., such a change being deemed to be that by which one or more
persons acting together can exercise at least 50.01% of the voting rights. Should that right be exercised, the company owning the hotels must pay the
managing company an amount that varies according to when the right is exercised, by way of compensation for the effects arising from the termination
of the contract. Accordingly, the management contracts signed between Hoteles Hesperia, S.A. (which is 99% owned by NH Hoteles España, S.L.) and
the respective owners of the hotels in question establishes, for example that, in the event of a change of control at NH Hoteles, S.A., the owner may opt
to terminate the management contract, but would have to pay Hoteles Hesperia, S.A., an amount related to the Average Annual Earnings, as defined
in the contracts.
Lastly, article 9 of the Bylaws of Coperama Servicios a la Hostelería, S.L., states that its shareholders will have the right of first refusal over its shares in the
event that control of the company through which the shares are held changes and the new shareholder is a competitor of the other shareholders. To that
effect, control shall be deemed to have changed when a different third party directly or indirectly owns more than 50% of the share capital and voting
rights in the company. The shareholder assuming control must notify the other shareholders of the fact and offer to acquire their shares at fair value.
5.
The agreements between the company and its directors and managers or employees relating to compensation if they resign or are unfairly dismissed,
or if the employment relationship between them comes to an end as the result of a public acquisition offer.
The Company has agreed to set compensation for five beneficiaries at an amount that could be greater than would correspond to them under the terms
of the Workers’ Statute or Royal Decree 1382/1985, of 1 August, which governs the special employment relationship for senior executives in cases of
unfair dismissal and changes of control.
6.
Description of the main features of the internal risk control and management systems relating to the financial reporting process.
1.
The company’s control environment
1.1
Bodies and/or functions responsible for: (i) the existence and maintenance of an adequate and effective internal financial information control system
(
SCIIF); (ii) its implementation; (iii) its supervision
The Finance Department is the department responsible for establishing the design, implementation and comprehensive monitoring of the Group
internal financial information control system. That involves taking responsibility for the maintenance of the necessary control structure and ensuring
that it functions effectively and continuously over time. The purpose of the internal control system is to provide the company with reasonable
guarantees that the financial information generated is reliable.
The entity’s Board of Directors is responsible for overseeing this control structure, in line with the provisions of Article 5 of the Regulation of the
Board of Directors.
In order to carry out this previously-described oversight function, the Board of Directors turns to the Audit and Control Committee, which is
obliged, through its internal auditing function, to implement measures and action plans to ensure that this oversight function is properly fulfilled,
as described in Article 25 of the Regulation of the Board of Directors.
58
ANNUAL CORPORATE
GOVERNANCE REPORT
