ARTICLES OF ASSOCIATION
of:
SGS-THOMSON Microelectronics N.V.
established in Amsterdam
dated December 11, 1995
NAME, SEAT AND DURATION.
Article 1.
1.1. The name of the company is: SGS-THOMSON
Microelectronics N.V.
1.2. The company is established at Amsterdam.
1.3. The company will continue for an indefinite period.
OBJECTS.
Article 2.
The objects of the company shall be to participate or take in any manner any
interests in other business enterprises, to manage such enterprises, to carry on
the business in semiconductors and electronic devices, to take and grant
licenses and other industrial property interests, assume commitments in the name
of any enterprises with which it may be associated within a group of companies,
to take financial interests in such enterprises and to take any other action
which in the broadest sense of the term, may be related or contribute to the
aforesaid objects.
SHARE CAPITAL.
Article 3.
3.1. The authorized capital of the company amounts to two billion seven
hundred and fifty million Dutch
2
guilders (NLG 2,750,000,000) and is divided into two hundred million
(200,000,000) shares of thirteenDutch guilders and seventy-five cents
(NLG 13.75) each.
3.2. The supervisory board shall have the power to issue shares and to
determine the terms and conditions of such issue if and in so far as
the supervisory board has been designated by the general meeting of
shareholders as the authorized body for this purpose. A designation
as referred to above shall only take place for a specific period of
no more than five years and may not be extended by more than five
years on each occasion.
3.3. If a designation as referred to in the second paragraph is not in
force, the general meeting of shareholders shall have the power, upon
the proposal of and on the terms and conditions set by the
supervisory board to resolve to issue shares.
3.4. In the event of a share issue, shareholders shall have a pre-emptive
right in proportion to the number of shares which they own,
notwithstanding the provisions of the law. In respect of the issue of
shares there shall be no pre-emptive right to shares issued against a
contribution other than in cash or issued to employees of the company
or of a group company. The supervisory board shall have the power to
limit or debar the preferential right accruing to shareholders, if
and in so far as the supervisory board has also been designated by
the general meeting of shareholders for this purpose as the
authorized body for the period of such designation. The provisions in
the second sentence of the second paragraph shall equally apply.
3.5. If a designation as referred to in the fourth paragraph is not in
force, the general meeting of shareholders shall have the power, upon
the proposal of the supervisory board to limit or debar the
preferential
3
right accruing to shareholders.
3.6. A resolution of the general meeting of shareholders in accordance
with the fourth or fifth paragraph of this article requires a
majority of at least two-thirds of the votes cast in a meeting of
shareholders in which at least fifty per cent (50 %) of the issued
capital is present or represented.
3.7. Without prejudice to what has been provided in section 80, paragraph
2, Civil Code:2, shares shall at no time be issued below par and be
fully paid up upon issue.
3.8. Payment must be made in cash to the extent that no other contribution
has been agreed upon. If the company so allows, payment in cash can
be made in a currency other than Dutch currency.
In the event of payment in a foreign currency the obligation to pay
is for the amount which can be freely exchanged into Dutch currency.
The decisive factor is the rate of exchange on the day of payment, or
as the case may be after application of the next sentence, on the day
mentioned therein.
The company can require payment at the rate of exchange on a certain
day within two months prior to the last day when payment shall have
to be made provided the shares or depositary receipts for shares
after having been issued - shall immediately be incorporated in the
price list of an exchange abroad.
3.9. This article shall equally apply to the granting of rights to take
shares, but shall not apply to the issue of shares to someone who
exercises a previously acquired right to take shares.
3.10 All notifications to shareholders will be made in accordance with the
provisions relating to giving of notice to convene a general meeting
as set out in article 26.2.
Article 4.
4
4.1. The company may acquire, for valuable consideration, shares in its
own share capital if and in so far as:
a. its equity less the purchase price of these shares is not less
than the aggregate amount of the paid up and called up capital
and the reserves which must be maintained pursuant to the law;
b. the par value of the shares in its capital which the company
acquires, holds or holds in pledge, or which are held by a
subsidiary company, amounts to no more than one-tenth of the
issued share capital; and
c. the general meeting of shareholders has authorized the managing
board to acquire such shares, which authorization may be given
for no more than eighteen months on each occasion,
notwithstanding the further statutory provisions.
4.2. Shares thus acquired may again be disposed of. The managing board
shall not acquire shares in the company's own share capital as
referred to above - if an authorization as referred to above is in
force - or dispose of such shares without the prior approval of the
supervisory board.
If depositary receipts for shares in the company have been issued,
such depositary receipts shall for the application of the provisions
of this paragraph and the preceding paragraph be treated as shares.
4.3. In the general meeting no votes may be cast in respect of (a)
share(s) held by the company or a subsidiary company; no votes may be
cast in respect of a share the depositary receipt for which is held
by the company or a subsidiary company. However, the holders of a
right of usufruct and the holders of a right of pledge on shares held
by the company and its subsidiary companies, are nonetheless not
excluded from the right to vote such shares, if the right of usufruct
or the right of pledge was granted prior to the time such
5
share was held by the company or a subsidiary company. Neither the
company nor a subsidiary company may cast votes in respect of a share
on which it holds a right of usufruct or a right of pledge.
Shares in respect of which voting rights may not be exercised by law
or by the articles of association shall not be taken into account,
when determining to what extent the shareholders cast votes, to what
extent they are present or represented or to what extent the share
capital is provided or represented.
4.4. Upon the proposal of the supervisory board the general meeting of
shareholders shall have the power to decide to cancel shares acquired
by the company from its own share capital, subject however to the
statutory provisions concerned.
SHARES, SHARE CERTIFICATES, SHARE REGISTER.
Article 5.
5.1. Shares shall be in registered form.
5.2. Shares shall be available:
- in the form of an entry in the share register without issue of a
share certificate; shares of this type are referred to in these
articles as type I shares;
- and - should the supervisory board so decide - in the form of an
entry in the share register with issue of a certificate, which
certificate shall consist of a main part without dividend
coupon; shares of this type and share certificates of this type
are referred to in these articles as type II shares.
5.3. The supervisory board can decide that the registration of type I
shares may only take place for one or more quantities of shares which
quantities are to be specified by the supervisory board - at the same
time.
5.4. Type II share certificates shall be available in such
6
denominations as the supervisory board shall determine.
5.5. All share certificates shall be signed by or on behalf of a managing
director; the signature may be effected by printed facsimile.
Furthermore type II share certificates shall, and all other share
certificates may, be countersigned by one or more persons designated
by the managing board for that purpose.
5.6. All share certificates shall be identified by numbers and/or letters.
5.7. The supervisory board can determine that for the purpose of effecting
trading or transfer of shares at foreign exchanges share certificates
shall be issued in such form as the supervisory board may determine,
complying with the requirements set by said foreign exchange(s) and
not provided with any dividend sheet.
5.8. The expression "share certificate" as used in these articles shall
include a share certificate in respect of more than one share.
Article 6.
6.1. Upon written request from a shareholder, missing or damaged share
certificates, or parts thereof, may be replaced by new certificates
or by duplicates bearing the same numbers and/or letters, provided
the applicant proves his title and, in so far as applicable, his loss
to the satisfaction of the supervisory board, and further subject to
such conditions as the managing board may deem fit.
6.2. In appropriate cases, at its own discretion, the managing board may
stipulate that the identifying numbers and/or letters of missing
documents be published three times, at intervals of at least one
month, in at least three newspapers to be indicated by the managing
board announcing the application made; in such a case new
certificates or duplicates may not be issued until six months have
expired since the last
7
publication, always provided that the original documents have not
been produced to the managing board before that time.
6.3. The issue of new certificates or duplicates shall render the original
document invalid.
Article 7.
7.1. Notwithstanding the statutory provisions in respect of registered
shares a register shall be kept by or on behalf of the company, which
register shall be regularly updated and, at the discretion of the
managing board, may, in whole or in part, be kept in more than one
copy and at more than one place. A part of the register may be kept
abroad in order to meet requirements set out by foreign statutory
provisions or provisions of the foreign exchange.
7.2. Each shareholder's name, his address and such further data as the
managing board deems desirable, whether at the request of a
shareholder or not, shall be entered in the register.
7.3. The form and the contents of the share register shall be determined
by the managing board with due regard to the provisions of paragraphs
1 and 2 of this article. The managing board may determine that the
records shall vary as to their form and contents according to whether
they relate to type I shares or to type II shares.
7.4. Upon request a shareholder shall be given free of charge a
declaration of what is stated in the register with regard to the
shares registered in his name, which declaration may be signed by one
of the specially authorized persons to be appointed by the managing
board for this purpose.
7.5. The provisions of the last four paragraphs shall equally apply to
those who hold a right of usufruct or of pledge on one or more
registered shares, with the proviso that the other data required by
law must be
8
entered in the register.
Article 8.
8.1. Subject to the provisions of article 5, the holder of an entry in the
share register for one or more type I shares may, upon his request
and at his option, have issued to him one or more type II share
certificates for the same nominal amount.
8.2. Subject to the provisions of article 5, the holder of a type II share
certificate registered in his name may, after lodging the share
certificate with the company, upon his request and at his option,
either have one or more type I shares entered in the share register
for the same nominal amount.
8.3. A request as mentioned in this article shall, if the supervisory
board so requires, be made on a form obtainable from the company free
of charge, which shall be signed by the applicant.
TRANSFER OF SHARES.
Article 9.
9.1. The transfer of a registered share shall be effected either by
service upon the company of the instrument of transfer or by written
acknowledgement of the transfer by the company, subject however to
the provisions of the following paragraphs of this article.
9.2. Where a transfer of a type II share is effected by service of an
instrument of transfer on the company, the company shall, at the
discretion of the managing board, either endorse the transfer on the
share certificate or cancel the share certificate and issue to the
transferee one or more new share certificates registered in his name
to the same nominal amount.
9.3. The Company's written acknowledgement of a transfer of a type II
share shall, at the discretion of the managing board, be effected
either by endorsement of the transfer on the share certificates or by
the issue
9
to the transferee of one or more new share certificates registered in
his name to the same nominal amount.
9.4. The provisions of the foregoing paragraphs of this article shall
equally apply to the allotment of registered shares in the event of a
judicial partition of any community of property or interests, the
transfer of a registered share as a consequence of a judgement
execution and the creation of limited rights in rem on a registered
share.
If a share certificate has been issued, the acknowledgement can only
be effected either by putting an endorsement to that effect on this
document, signed by or on behalf of the company, or by replacing this
document by a new certificate in the name of the acquirer.
9.5. The submission of requests and the lodging of documents referred to
in articles 6 to 9 inclusive shall be made at a place to be indicated
by the managing board and in any case the places where the company is
admitted to a stock exchange.
Different places may be indicated for the different classes and types
of shares and share certificates.
9.6. The company is authorized to charge amounts to be determined by the
managing board not exceeding cost price to those persons who request
any services to be carried out by virtue of articles 6 up to and
including 9.
USUFRUCTUARIES, PLEDGEES, HOLDERS OF DEPOSITARY RECEIPTS.
Article 10.
10.1. The usufructuary, who in conformity with the provisions of section
88, Civil Code:2 has no right to vote, and the pledgee who in
conformity with the provisions of section 89, Civil Code:2 has no
right to vote, shall not be entitled to the rights which by law have
been conferred on holders of depositary receipts for shares
10
issued with the cooperation of the company.
10.2. Where in these articles of association persons are mentioned,
entitled to attend meetings of shareholders, this shall include to
holders of depositary receipts for shares issued with the cooperation
of the company, and persons who in pursuance of paragraph 4 in
section 88 or section 89, Civil Code:2 have the rights that by law
have been conferred on holders of depositary receipts for shares
issued with the cooperation of the company.
MANAGING BOARD.
Article 11.
11.1. The company shall be managed by a managing board consisting of one or
more managing directors under the supervision of the supervisory
board. The number of members of the managing board shall be resolved
upon by the general meeting of shareholders upon the proposal of the
supervisory board. The members of the managing board shall be
appointed for three years, a year being understood as meaning the
period between two Annual General Meetings of Shareholders adopting
the Accounts of the previous fiscal year or the meeting in which a
postponement of this is granted.
11.2. Managing directors shall be appointed by the general meeting of
shareholders upon the proposal of the supervisory board for each
vacancy to be filled.
11.3. Without prejudice to the provisions of article 27, paragraph 2, a
proposal to make one or more appointments to the managing board may
be placed on the agenda of a general meeting of shareholders by the
supervisory board.
11.4. The supervisory board shall determine the salary, the bonus, if any,
and the other terms and conditions of employment of the managing
directors.
11.5. The general meeting of shareholders shall decide in
11
accordance with the provisions of article 31,
paragraph 1.
Votes in respect of persons who have not been so nominated shall be
invalid.
Article 12.
12.1. The general meeting of shareholders shall be entitled to suspend or
dismiss one or more managing directors, provided that at least half
of the issued share capital is represented at the meeting. No such
quorum shall be required where the suspension or dismissal is
proposed by the supervisory board.
12.2. Where a quorum under paragraph 1 is required but is not present, a
further meeting shall be convened, to be held within four weeks after
the first meeting, which shall be entitled, irrespective of the share
capital represented, to pass a resolution in regard to the suspension
or dismissal.
12.3. The managing directors can be jointly or individually suspended by
the supervisory board. After suspension a general meeting of
shareholders shall be convened within three months, at which meeting
it shall be decided whether the suspension shall be cancelled or
maintained.
The person involved shall be given the opportunity to account for
his actions at that meeting.
REPRESENTATION.
Article 13.
13.1. The entire managing board as well as each managing director may
represent the company.
13.2. The managing board may grant powers of attorney to persons, whether
or not in the service of the company, to represent the company and
shall thereby determine the scope of such powers of attorney and the
titles of such persons.
13.3. The managing board shall have power to perform legal
12
acts as specified in section 2:94, paragraph 1, Civil Code in so far
as such power is not expressly excluded or limited by any provision
of these articles or by any resolution of the supervisory board.
Article 14.
14.1. The supervisory board shall appoint one of the managing directors as
chairman of the managing board. Appointment of the chairman shall be
resolved with the majority mentioned in article 21, paragraph 1.
14.2. Resolutions of the managing board shall be passed by simple majority
of votes. In the event of a tie of votes the chairman of the managing
board shall have a casting vote.
Article 15.
15.1. Without prejudice to provisions made elsewhere in these articles, the
managing board shall require the prior express approval:
(i) From the supervisory board for decisions relating to:
1. all proposals to be submitted to a vote at the general
meeting of the shareholders;
2. the formation of all companies, acquisition or sale of any
participation, and conclusion of any cooperation and
participation agreement;
3. all pluriannual plans of the company and the budget for
the first coming year, covering the following matters:
- investment policy;
- policy regarding research and development, as well as
commercial policy and objectives;
- general financial policy;
- policy regarding personnel;
4. all acts, decisions or operations covered by the above list
and constituting a significant change with respect to
decisions already adopted
13
by the supervisory board or not provided for in the above
list and as specifically laid down by the supervisory board
by resolution passed by it to that effect.
(ii) From the general meeting of the shareholders for
decisions relating to:
- sale of all or of an important part of the
company's assets or concerns;
- all mergers, acquisitions, or joint ventures
which the company wishes to make.
The absence of the approval provided for above may not be raised by
or against third parties.
15.2. Without prejudice to provisions made elsewhere in these articles, the
managing board shall require the approval of the general meeting of
shareholders according to the law and the provisions of these
articles as well as such resolutions as are clearly defined by a
resolution of the general meeting of shareholders to that effect.
Article 16.
In the event of the absence or inability to act of one of more managing
directors the remaining managing directors or managing director shall
temporarily be responsible for the entire management. In the event of the
absence or inability to act of all managing directors, one or more persons
appointed by the supervisory board for this purpose at any time shall be
temporarily responsible for the management.
SUPERVISORY BOARD.
Article 17.
17.1. The supervisory board shall be responsible for supervising the policy
pursued by the managing board and the general course of affairs of
the company and the business enterprise which it operates. The
supervisory board shall assist the managing board with advice
relating to the general policy aspects connected with the activities
of the company. In fulfilling their
14
duties the supervisory directors shall serve the interests of the
company and the business enterprise which it operates.
17.2. The managing board shall provide the supervisory board in good time
with all relevant information as well as the information the
supervisory board requests, in connection with the exercise of its
duties.
Article 18.
18.1. The supervisory board shall consist of at least six members, to be
appointed by the general meeting of shareholders upon the proposal of
the supervisory board for each vacancy to be filled. The number of
supervisory directors shall without prejudice to the preceding
sentence be resolved upon by the general meeting of shareholders upon
the proposal of the supervisory board.
18.2. The general meeting of shareholders shall decide in accordance with
the provisions of article 31 paragraph 1.
18.3. Without prejudice to the provisions of article 27, paragraph 2, a
proposal to make one or more appointments to the supervisory board
may be placed on the agenda of the general meeting of shareholders by
the supervisory board.
18.4. The supervisory board shall appoint from their number a chairman and
a vice-chairman of the supervisory board with the majority mentioned
in article 21, paragraph 1.
18.5. Upon the appointment of the supervisory directors the particulars as
referred to in section 142, paragraph 3, Civil Code:2 shall be made
available for prior inspection.
Article 19.
19.1. The supervisory board may appoint one or more of its members as
delegate supervisory director in charge of supervising the managing
board on a regular basis. They
15
shall report their findings to the supervisory board. The offices of
chairman of the supervisory board and delegate supervisory director
are compatible.
19.2. With due observance of these articles of association, the supervisory
board may adopt rules regulating the division of its duties among its
various supervisory directors.
19.3. The supervisory board may decide that one or more of its members
shall have access to all premises of the company and shall be
authorized to examine all books, correspondence and other records and
to be fully informed of all actions which have taken place, or may
decide that one or more of its supervisory directors shall be
authorized to exercise a portion of such powers.
19.4. At the expense of the company, the supervisory board may obtain such
advice from experts as the supervisory board deems desirable for the
proper fulfilment of its duties.
19.5. If there is only one supervisory director in office, such supervisory
director shall have all rights and obligations granted to and imposed
on the supervisory board and the chairman of the supervisory board by
law and by these articles of association.
Article 20.
20.1. A supervisory director shall retire no later than at the ordinary
general meeting of shareholders held after a period of three years
following his appointment. A retired supervisory director may
immediately be re-elected.
20.2. A supervisory director shall retire at the annual general meeting of
the year in which he reaches the age prescribed by law for retirement
of a supervisory director.
20.3. The supervisory board may establish a rotation
16
scheme.
20.4. The supervisory directors may be suspended or dismissed by the
general meeting of shareholders. The supervisory board may make a
proposal to the general meeting of shareholders for the suspension or
dismissal of one or more of its supervisory directors.
Article 21.
21.1. The supervisory board may pass resolutions by at least three quarters
of the votes of the members in office. Each supervisory director has
the right to cast one vote. In case of absence a supervisory director
may issue a proxy, however, only to another supervisory director. The
proxy should explicitly indicate in which way the vote must be cast.
The supervisory board may pass resolutions in writing without holding
a meeting provided that the proposals for such resolutions have been
communicated in writing to all supervisory directors and no
supervisory director is opposed to this method of passing a
resolution.
21.2. A certificate signed by two supervisory directors to the effect that
the supervisory board has passed a particular resolution shall
constitute evidence of such a resolution in dealings with third
parties.
21.3. The managing directors shall attend meetings of the supervisory board
at the latter's request.
21.4. The supervisory board shall meet whenever two or more of its members
or the managing board so requests. Meetings of the supervisory board
shall be convened by the chairman of the supervisory board, either on
request of two or more supervisory directors or on request of the
managing board, or by the supervisory directors requesting the
meeting to be held. If the chairman fails to convene a meeting to be
held within four weeks of the receipt of the request, the supervisory
board members making the request are
17
entitled to convene the meeting.
21.5. The supervisory board shall draw up standing orders regulating inter
alia the manner of convening board meetings and the internal
procedure at such meetings. These meetings may be held by telephone
as well as by video.
Article 22.
The General Meeting of the Shareholders determines the compensation
to the members of the Supervisory Board or to one or more of its
members. The meeting shall have authority to decide whether such
compensation will consist of a fixed amount and/or an amount that is
variable in proportion to profits or any other factor. The
Supervisory Board members shall be reimbursed for their expenses.
INDEMNIFICATION.
Article 23.
23.1. The company shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the
company) by reason of the fact that he is or was a supervisory
director, managing director, officer or agent of the company, or was
serving at the request of the company as a supervisory director,
managing director, officer or agent of another company, a
partnership, joint venture, trust or other enterprise, against all
expenses (including attorneys' fees) judgments, fines and amounts
paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not opposed
to the best interests of the company, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his
conduct was
18
unlawful or out of his mandate. The termination of any action, suit
or proceeding by a judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the person did not act in good faith and
not in a manner which he reasonably believed to be in or not opposed
to the best interests of the company, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that
his conduct was unlawful.
23.2. The company shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action or proceeding by or in the right of the company to procure a
judgment in its favor, by reason of the fact that he is or was a
supervisory director, managing director, officer or agent of the
company, or is or was serving at the request of the company as a
supervisory director, managing director, officer or agent of another
company, a partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of such
action or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of
the company and except that no indemnification shall be made in
respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable for gross negligence or wilful
misconduct in the performance of his duty to the company, unless and
only to the extent that the court in which such action or proceeding
was brought or any other court having appropriate jurisdiction shall
determine upon application that, despite the adjudication of
liability but in view of all the
19
circumstances of the case, such person is fairly and reasonably
entitled to indemnification against such expenses which the court in
which such action or proceeding was brought or such other court
having appropriate jurisdiction shall deem proper.
23.3. To the extent that a supervisory director, managing director, officer
or agent of the company has been successful on the merits or
otherwise in defense of any action, suit of proceeding, referred to
in paragraphs 1 and 2, or in defense of any claim, issue or matter
therein, he shall be indemnified against expenses (including
attorney's fees) actually and reasonable incurred by him in
connection therewith.
23.4. Any indemnification by the company referred to in paragraphs 1 and 2
shall (unless ordered by a court) only be made upon a determination
that indemnification of the supervisory director, managing director,
officer or agent is proper in the circumstances because he had met
the applicable standard of conduct set forth in paragraphs 1 and 2.
Such determination shall be made:
a. either by the supervisory board by a majority vote in a meeting
in which a quorum as mentioned in article 21, paragraph 1, and
consisting of supervisory directors who where not parties to
such action, suit or proceeding, is present;
b. or, if such a quorum is not obtainable or although such a quorum
is obtained if the majority passes a resolution to that effect,
by independent legal counsel in a written opinion;
c. or by the general meeting of shareholders.
23.5. Expenses incurred in defending a civil or criminal action, suit or
proceeding may be paid by the company in advance of the final
disposition of such action, suit or proceeding upon a resolution of
the supervisory board with respect to the specific case upon receipt
of
20
an undertaking by or on behalf of the supervisory director, managing
director, officer or agent to repay such amount unless it shall
ultimately be determined that he is entitled to be indemnified by the
company as authorized in this article.
23.6. The indemnification provided for by this article shall not be deemed
exclusive of any other right to which a person seeking
indemnification may be entitled under any by-laws, agreement,
resolution of the general meeting of shareholders or of the
disinterested supervisory directors or otherwise, both as to actions
in his official capacity and as to actions in another capacity while
holding such position, and shall continue as to a person who has
ceased to be a supervisory director, managing director, officer or
agent and shall also inure to the benefit of the heirs, executors and
administrators of such a person.
23.7. The company shall have the power to purchase and maintain insurance
on behalf of any person who is or was a supervisory director,
managing director, officer or agent of the company, or is or was
serving at the request of the company as a supervisory director,
managing director, officer, employee or agent of another company, a
partnership, joint venture, trust or other enterprise, against any
liability asserted against him and incurred by him in any such
capacity or arising out of his capacity as such, whether or not the
company would have the power to indemnify him against such liability
under the provisions of this article.
23.8. Whenever in this article reference is being made to the company, this
shall include, in addition to the resulting or surviving company also
any constituent company (including any constituent company of a
constituent company) absorbed in a consolidation or merger which, if
its separate existence had continued,
21
would have had the power to indemnify its supervisory directors,
managing directors, officers and agents, so that any person who is or
was a supervisory director, managing director, officer or agent of
such constituent company, or is or was serving at the request of such
constituent company as a supervisory director, managing director,
officer or agent of another company, a partnership, joint venture,
trust or other enterprise, shall stand in the same position under the
provisions of this article with respect to the resulting or surviving
company as he would have with respect to such constituent company if
its separate existence had continued.
GENERAL MEETING OF SHAREHOLDERS.
Article 24.
24.1. The ordinary general meeting of shareholders shall be held each year
within six months after the close of the financial year.
24.2. At this general meeting shall be dealt with:
a. the written report of the managing board on the course of
business of the company and the conduct of its affairs during
the past financial year, and the report of the supervisory board
on the annual accounts;
b. adoption of the annual accounts and the declaration of dividend
in the manner laid down in article 35;
c. filling vacancies on the managing board in accordance with the
provisions of article 11;
d. filling vacancies on the supervisory board in accordance with
the provisions of article 18;
e. the proposals placed on the agenda by the managing board or by
the supervisory board, together with proposals made by
shareholders in accordance with the provisions of these
articles.
Article 25.
22
25.1. Extraordinary general meetings of shareholders shall be held as often
as deemed necessary by the supervisory board and shall be held if one
or more shareholders and other persons entitled to attend the
meetings of shareholders jointly representing at least one-tenth of
the issued share capital make a written request to that effect to the
managing board or supervisory board, specifying in detail the
business to be dealt with.
25.2. If the managing board or supervisory board fail to comply with a
request under paragraph 1 above in such manner that the general
meeting of shareholders can be held within six weeks after the
request, the persons making the request may be authorized by the
President of the Court within whose jurisdiction the company is
established to convene the meeting themselves.
Article 26.
26.1. General meetings of shareholders shall be held at Amsterdam,
Haarlemmermeer (Schiphol Airport), Rotterdam or The Hague; the notice
convening the meeting shall inform the shareholders and other persons
entitled to attend the meetings of shareholders accordingly.
26.2. The notice convening a general meeting of shareholders shall be
published by advertisement which shall at least be published in a
national daily newspaper and abroad in at least one daily newspaper
appearing in each of these countries other than the United States,
where, on the application of the company, the shares have been
admitted for official quotation. In addition, holders of registered
shares shall be notified by letter that the meeting is being
convened.
26.3. The notice convening the meeting shall be issued by the managing
board, by the supervisory board or by those who according to the law
or these articles are entitled thereto.
23
Article 27.
27.1. The notice convening the meeting referred to in the foregoing article
shall be issued no later than on the twenty-first day prior to the
meeting.
27.2. The agenda shall contain such business as may be placed thereon by
the person(s) entitled to convene the meeting, and furthermore such
business as one or more shareholders, representing at least one-tenth
of the issued share capital, have requested the managing board or
supervisory board to place on the agenda at least five days before
the date on which the meeting is convened. Nominations for
appointment to the managing board and the supervisory board cannot be
placed on the agenda by the managing board. No resolution shall be
passed at the meeting in respect of matters not on the agenda.
27.3. Without prejudice to the relevant provisions of law, dealing with
withdrawal of shares and amendments to articles of association, the
notice convening the meeting shall either mention the business on the
agenda or state that the agenda is open to inspection by the
shareholders and other persons entitled to attend the meetings of
shareholders at the office of the company.
Article 28.
28.1. General meetings of shareholders shall be presided over by the
chairman of the supervisory board or in his absence by the
vice-chairman of the supervisory board. In case of absence of the
chairman and the vice-chairman of the supervisory board the meeting
shall be presided by any other person nominated by the supervisory
board.
28.2. Minutes shall be kept of the business transacted at a general meeting
of shareholders, which minutes shall be drawn up and signed by the
chairman and by a person appointed by him immediately after the
opening of the
24
meeting.
28.3. Where the minutes are drawn up before a civil law notary, the
chairman's signature, together with that of the civil law notary,
shall be sufficient.
Article 29.
29.1. All shareholders and other persons entitled to vote at general
meetings of shareholders are entitled to attend the general meetings
of shareholders, to address the general meeting of shareholders and
to vote. The general meeting of shareholders may lay down rules
regulating, inter alia, the length of time for which shareholders may
speak. In so far as such rules are not applicable, the chairman may
regulate the time for which shareholders may speak if he considers
this to be desirable with a view to the orderly conduct of the
meeting.
29.2. In order to exercise the rights mentioned in paragraph 1, the holders
of registered shares shall notify the company in writing of their
intention to do so no later than on the day and at the place
mentioned in the notice convening the meeting, and also - in so far
as type II shares are concerned - stating the serial number of the
shares certificate.
They may only exercise the said rights at the meeting for the shares
registered in their name both on the day referred to above and on the
day of the meeting.
29.3. The company shall send a card of admission to the meeting to holders
of registered shares who have notified the company of their intention
in accordance with the provision in the foregoing paragraph.
29.4. The provisions laid down in paragraphs 2 up to and including 4 are
mutatis mutandis applicable to shares from which usufructuaries and
pledgees who do not have the voting right attached to those shares
derive their rights.
25
Article 30.
30.1. Shareholders and other persons entitled to attend meetings of
shareholders may be represented by proxies with written authority to
be shown for admittance to a meeting.
30.2. All matters regarding the admittance to the general meeting, the
exercise of voting rights and the result of votings, as well as any
other matters regarding the affairs at the general meeting shall be
decided upon by the chairman of that meeting, with due observance of
the provisions of section 13, Civil Code:2.
Article 31.
31.1. Unless otherwise stated in these articles, resolutions shall be
adopted by simple majority of votes of the shareholders having the
right to vote in a meeting of shareholders where at least fifty
percent (50%) of the issued capital is present or represented. Blank
and invalid votes shall not be counted. The chairman shall decide on
the method of voting and on the possibility of voting by acclamation.
31.2. Where the voting concerns appointments, further polls shall, if
necessary, be taken until one of the nominees has obtained a simple
majority, such with due observance of the provision of paragraph 1 of
this article. The further poll or polls may, at the chairman's
discretion, be taken at a subsequent meeting.
31.3. Except as provided in paragraph 2, in case of an equality of the
votes cast the relevant proposal shall be deemed to have been
rejected.
Article 32.
At the general meeting of shareholders each share shall confer the right to cast
one vote.
ANNUAL ACCOUNTS, REPORT OF THE BOARD OF MANAGEMENT AND DISTRIBUTIONS.
26
Article 33.
33.1. The financial year shall run from the first day of January up to and
including the thirty-first day of December.
33.2. Each year the managing board shall cause annual accounts to be drawn
up, consisting of a balance sheet as at the thirty-first day of
December, of the preceding year and a profit and loss account in
respect of the preceding financial year with the explanatory notes
thereto.
33.3. The managing board shall be bound to draw up the aforesaid annual
accounts in accordance with established principles of business
management.
33.4. Upon proposal of the managing board, the supervisory board shall
determine what portion of the profit - the positive balance of the
profit and loss account - shall be retained by way of reserve, having
regard to the legal provisions relating to obligatory reserves.
33.5. The supervisory board shall cause the annual accounts to be examined
by one or more registered accountant(s) designated for the purposes
by the general meeting of shareholders or other experts designated
for the purpose in accordance with section 393, Civil Code:2, and
shall report to the general meeting of shareholders on the annual
accounts, notwithstanding the provisions of the law.
33.6. Copies of the annual accounts which have been made up, of the report
of the supervisory board, of the report of the managing board and of
the information to be added pursuant to the law shall be deposited
for inspection by shareholders and other persons entitled to attend
meetings of shareholders, at the office of the company as from the
date of serving the notice convening the general meeting of
shareholders at which meeting those items shall be discussed, until
the close
27
thereof.
Article 34.
Adoption by the general meeting of shareholders of the annual accounts, referred
to in article 33, shall fully discharge the managing board and the supervisory
board from liability in respect of the exercise of their duties during the
financial year concerned, unless a proviso is made by the general meeting of
shareholders, and without prejudice to the provisions of sections 138 and 149,
Civil Code:2.
Article 35.
35.1. The portion of the profit that remains after application of article
33, paragraph 4, shall be at the disposal of the general meeting of
shareholders, with due observance of the provisions of article 36,
paragraph 2.
35.2. The general meeting of shareholders is empowered either to distribute
the profits in cash or in kind or to withhold distribution of the
said portion of the profit in whole or in part.
35.3. The company only makes distributions in so far as its own equity
exceeds the amount of paid up and called portion of the share
capital, plus the reserves that must be maintained pursuant to the
law.
Article 36.
36.1. Upon the proposal of the supervisory board, the general meeting of
shareholders shall be entitled to resolve to make distributions
charged to the share premium reserve or charged to the other reserves
shown in the annual accounts not prescribed by the law, with due
observance of the provisions of paragraph 2.
36.2. The supervisory board shall be entitled to resolve that
distributions, the amount of which distributions has been resolved
upon by the general meeting of shareholders, to shareholders under
article 35, article 36, paragraph 1, and article 37 may be made in
full or
28
partially in the form of the issue of shares in the share capital of
the company.
The distribution to a shareholder according to the preceding sentence
shall be made to a shareholder in cash or in the form of shares in
the share capital of the company, or partially in cash and partially
in the form of shares in the share capital of the company, such, if
the supervisory board so resolves, at the option of the shareholders.
Article 37.
At its own discretion and subject to section 105, paragraph 4, Civil Code:2, the
supervisory board may resolve to distribute one or more interim dividends on the
shares before the annual accounts for any financial year have been approved and
adopted at a general meeting of shareholders.
Article 38.
38.1. Distributions under articles 35, 36 or 37 shall be payable as from a
date to be determined by the supervisory board. The date of payment
set in respect of shares for which certificates are outstanding or in
respect of type I shares may differ from the date of payment set in
respect of shares for which type II share certificates are
outstanding.
38.2. Distributions under articles 35, 36 or 37 shall be made payable at a
place or places, to be determined by the supervisory board; at least
one place shall be designated thereto in The Netherlands.
38.3. The supervisory board may determine the method of payment in respect
of cash distributions on type I shares.
38.4. Cash distributions under articles 35, 36 or 37 in respect of shares
for which a type II share certificate is outstanding shall, if such
distributions are made payable only outside the Netherlands, be paid
in the currency of a country where the shares of the company
29
are listed on a stock exchange, converted at the rate of exchange
determined by the Dutch Central Bank at the close of business on a
day to be fixed for that purpose by the supervisory board. If and in
so far as on the first day on which a distribution is payable, the
company is unable, in consequence of governmental action or other
exceptional circumstances beyond its control, to make payment at the
place designated outside the Netherlands or in the relevant foreign
currency, the supervisory board may in that event designate one or
more places in the Netherlands instead. In such event the provisions
of the first sentence of this paragraph shall no longer apply.
38.5. The person entitled to a distribution under articles 35, 36 or 37 on
registered shares shall be the person in whose name the share is
registered at the date to be fixed for that purpose by the
supervisory board in respect of each distribution for the different
types of shares.
38.6. Notice of distributions and of the dates and places referred to in
the preceding paragraphs of this article shall at least be published
in a national daily newspaper and abroad in at least one daily
newspaper appearing in each of those countries other than the United
States, where the shares, on the application of the company, have
been admitted for official quotation, and further in such manner as
the supervisory board may deem desirable.
38.7. Distributions in cash under articles 35, 36 or 37 that have not been
collected within five years after they have become due and payable
shall revert to the Company.
38.8. In the case of a distribution under article 36, paragraph 2, any
shares in the company not claimed within a period to be determined by
the supervisory
30
board shall be sold for the account of the persons entitled to the
distribution who failed to claim the shares. The period and manner of
sale to be determined by the supervisory board, as mentioned in the
preceding sentence, shall be notified according to paragraph 9. The
net proceeds of such sale shall thereafter be held at the disposal of
the above persons in proportion to their entitlement; distributions
that have not been collected within five years after the initial
distributions in shares have become due and payable shall revert to
the Company.
38.9. In the case of a distribution in the form of shares in the company
under article 36, paragraph 2, on registered shares, those shares
shall be added to the share register. A type II share certificate for
a nominal amount equal to the number of shares added to the register
shall be issued to holders of type II shares.
38.10. The provisions of paragraph 5 shall apply equally in respect of
distributions - including pre-emptive subscription rights in the
event of a share issue made otherwise than under articles 35, 36 or
37, provided that in addition thereto in the "Staatscourant" (Dutch
Official Gazette) shall be announced the issue of shares with a
pre-emptive subscription right and the period of time within which
such can be exercised.
Such pre-emptive subscription right can be executed during at least
two weeks after the day of notice in the "Staatscourant" (Dutch
Official Gazette).
ALTERATIONS TO ARTICLES OF ASSOCIATION, WINDING UP,
LIQUIDATION.
Article 39.
A resolution to alter the articles of association or to wind up the company
shall be valid only provided that:
31
a. the proposal to such a resolution has been proposed to the
general meeting of shareholders by the supervisory board;
b. the full proposals have been deposited for inspection by
shareholders and other persons entitled to attend meetings of
shareholders, at the office of the company as from the day on
which the notice is served until the close of that meeting.
Article 40.
40.1. If the company is wound up, the liquidation shall be carried out by
any person designated for the purpose by the general meeting of
shareholders, under the supervision of the supervisory board.
40.2. In passing a resolution to wind up the company, the general meeting
of shareholders shall upon the proposal of the supervisory board fix
the remuneration payable to the liquidators and to those responsible
for supervising the liquidation.
40.3. The liquidation shall take place with due observance of the
provisions of the law. During the liquidation period these articles
of association shall, to the extent possible, remain in full force
and effect.
40.4. After settling the liquidation, the liquidators shall render account
in accordance with the provisions of the law.
40.5. After the liquidation has ended, the books and records of the company
shall remain in the custody of the person designated for that purpose
by the liquidators during a ten-year period.
Article 41.
After all liabilities have been settled, including those incident to the
liquidation, the balance shall then be distributed among the shareholders in
proportion to the par value of their ownership of shares.
Article 42.
32
Any amounts payable to shareholders or due to creditors are not claimed within
six months after the last distribution was made payable, shall be deposited with
the Public Administrator of Unclaimed Debts.