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EXHIBIT 1
ARTICLES OF ASSOCIATION
OF
KONINKLIJKE PHILIPS ELECTRONICS N.V.
(ROYAL PHILIPS ELECTRONICS)
AS LAST AMENDED
ON AUGUST 1, 2000, PURSUANT TO THE RESOLUTION OF THE GENERAL
MEETING OF SHAREHOLDERS HELD ON MAY 29, 2000.
TRANSLATION OF THE ORIGINAL AND AUTHENTIC DUTCH TEXT.
NAME AND SEAT
ARTICLE 1
1. The name of the Company is: Koninklijke Philips Electronics N.V.
2. The Company is authorized to act as "Royal Philips Electronics".
3. Its registered office is situated in Eindhoven.
OBJECTS
ARTICLE 2
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The objects of the Company are to establish, participate in, administer and
finance legal entities, companies and other legal forms for the purpose of the
manufacture and trading of electrical, electronic, mechanical or chemical
products, the development and exploitation of technical and other expertise,
including software, or for the purpose of other activities, and to do everything
pertaining thereto or connected therewith, all this in the widest sense, as may
also be conducive to the proper continuity of the collectivity of business
undertakings, in the Netherlands and abroad, which are carried on by the Company
and the companies in which it directly or indirectly participates.
SHARE CAPITAL, SHARES, SHAREHOLDERS, SHARE CERTIFICATES
AND SHARE REGISTER
ARTICLE 3
1. The share capital of the Company is one billion and three hundred
million euros (EUR 1,300,000,000), divided into ten priority shares of
five hundred euros (EUR 500) each, in these articles of association
henceforth referred to as "priority shares", three billion two hundred
fifty million common shares of twenty euro cents (EUR 0.20) each, in
these articles of association henceforth referred to as "common
shares", and three billion two hundred fourty-nine million nine hundred
seventy-five thousand preference shares of twenty euro cents (EUR 0.20)
each, in these articles of association henceforth referred to as
"preference shares."
2. Unless otherwise stated, the term "shares" in these articles shall
refer equally to priority, common and preference shares.
ARTICLE 4
1. The Board of Management shall have the power to issue common shares if
and insofar as the Board of Management has been designated by the
General Meeting of Shareholders as the authorized body for this
purpose. Such a designation 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. The Board of Management requires the approval
of the Supervisory Board and of the meeting of priority shareholders
for such an issue.
2. If a designation as referred to in clause 1 is not in force, the
General Meeting of Shareholders shall have the power, upon the proposal
of the Board of Management - which proposal must be approved by the
Supervisory Board and by the meeting of priority shareholders - to
resolve to issue common shares.
3. In the event of a common share issue in return for a cash
consideration, holders of common shares shall have a pre-emption right
in proportion to the number of common shares which they own. The Board
of Management shall have the power to restrict or exclude the
pre-emption right accruing to these shareholders, if and insofar as the
Board of Management 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 and third sentences of
clause 1 shall apply accordingly.
4. If a designation as referred to in clause 3 is not in force, the
General Meeting of Shareholders shall have the power, upon the proposal
of the Board of Management - which proposal must be approved by the
Supervisory Board and by the meeting of priority shareholders - to
restrict or exclude the pre-emption right accruing to shareholders.
5. A resolution of the General Meeting of Shareholders in accordance with
clauses 3 and 4 of this article requires a majority of at least
two-thirds of the votes cast if less than half of the issued share
capital is
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represented at the meeting.
6. Clauses 1 and 2 of this article apply mutatis mutandis to an issue of
preference shares. An option to take preference shares was granted on
19 June 1989 to the Stichting Preferente Aandelen Philips under the
power vested in the Board of Management at that time in the articles of
association.
7. In order for resolutions of the General Meeting of Shareholders to
issue shares or to designate the Board of Management, as referred to in
clauses 1, 2 and 6, to be valid, a prior or simultaneous resolution
granting approval is required from each group of holders of shares of
the same type whose rights are affected by the issue.
8. The preceding clauses of this article shall apply accordingly mutatis
mutandis 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. The Board of Management shall have the power to
issue such shares.
9. The issue price shall not be fixed below par, subject to deviations
which the law permits in this respect. The common and priority shares
shall be fully paid up when they are taken. At least a quarter of the
nominal amount shall be paid on preference shares when they are taken.
Further payment on the preference shares shall be made within one month
after the Board of Management, subject to the approval of the
Supervisory Board and the meeting of priority shareholders, has made a
corresponding request in writing to the shareholders concerned.
ARTICLE 5
1. Any acquisition by the Company of shares in its capital which are not
fully paid up shall be null and void.
2. The Company may acquire, for valuable consideration, common shares in
its own share capital if and insofar as:
a. its shareholders' equity less the purchase price of the common
shares is not less than is laid down in the relevant statutory
provisions;
b. the nominal amount of the shares in its capital which the
Company acquires, holds or holds as pledgee, or which are held
by a subsidiary, is not more than one-tenth of the issued
share capital; and c. the General Meeting of Shareholders has
authorized the Board of Management to acquire such shares,
which authorization may be given for no more than 18 months on
each occasion. Shares thus acquired may again be disposed of.
The Board of Management 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 approval of the Supervisory Board.
3. The Board of Management shall have the power, without the authorization
referred to in clause 2 but with the approval of the Supervisory Board,
to acquire on behalf of the Company shares in its own share capital as
referred to above in order to transfer the shares to employees of the
Company or of a group company, in pursuance of a rule applying to them.
4. No voting right attaches to own shares referred to above. These shares
shall not rank for the purpose of determining any majority or for
deciding whether a specific proportion of the issued share capital is
represented at a general meeting of shareholders.
5. Upon the proposal of the Board of Management - which proposal must have
the
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prior approval of the Supervisory Board and the meeting of priority
shareholders - the General Meeting of Shareholders shall have the power
to resolve, having regard to the provisions of Section 99 of Book 2 of
the Netherlands Civil Code, to reduce the issued share capital:
- by a cancellation of common shares acquired by the Company in
its own share capital;
- by a reduction of the nominal amount of the shares by
amendment of the articles of association, with partial
repayment on those shares;
- by a cancellation of preference shares, with repayment on the
said preference shares; or
- by a release from the obligation to make further payment on
the preference shares upon implementation of a resolution to
reduce the nominal amount of such shares.
It shall be indicated in this resolution whether and, if so, to what
extent this relates to common shares, to all or only to certain
preference shares or - insofar as this is permitted - to all shares,
and rules shall be drawn up for the implementation of the resolution. A
partial repayment or release from the obligation to make further
payment must be made proportionally to all shares concerned.
ARTICLE 6
1. Priority shares and preference shares shall be registered. Common
shares shall, at the option of the shareholder, be either in bearer or
registered form, as specified in the following clauses.
2. Where a share belongs to more than one person in any form of joint
ownership, or where limited rights in rem attach to any share, the
Company is entitled to require those concerned to designate in writing
one person to exercise the rights attached to the share.
3. The expression "shareholder", as used in these articles, shall, if the
ownership of a share is vested in more than one person, mean the joint
holders of such share, without prejudice, however, to the provisions of
clause 2 of this article. The expression "person", as used in these
articles, shall include a body corporate.
4. Share certificates for bearer shares consist of a main part with a
dividend sheet not consisting of separate dividend coupons. Such
dividend sheets shall be issued solely to "depositaries" who have been
admitted to the Centre for Securities Administration in Amsterdam and
who are bound by the regulations that apply to such depositaries. Share
certificates for bearer shares shall be available for such numbers,
which may be subject to change, as the Board of Management may
determine.
5. Registered 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 Board of Management 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
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dividend sheet; shares of this type and share certificates of this type
for common shares are referred to in these articles as Type II shares
and share certificates,
these being available for such numbers, which may be subject to change,
as the Board of Management may determine.
6. The form in which share certificates are issued shall be determined by
the Board of Management.
7. The forms of share specified in clauses 4 and 5 may, on conditions to
be determined by the Company, be converted into other forms referred to
in the respective clauses.
ARTICLE 7
1. In respect of registered shares a register shall be kept by or on
behalf of the Company, which register shall be regularly updated and,
in the form the Board of Management will decide, may, in whole or in
part, be maintained in more than one copy and at more than one place.
At least one copy will be maintained at the office of the Company.
2. Each shareholder's name and address, the number and type of shares
registered in his name, the date on which registered shares were
acquired, the date of acknowledgement and/or service upon the Company
of the instrument of transfer, the amounts paid thereon and such
further data as the Board of Management shall deem desirable, whether
at the request of a shareholder or not, shall be entered in the
register. The names and addresses of persons who have a right of
usufruct or pledge in respect of those shares, the date on which they
acquired such a right, the date of acknowledgement or service upon the
Company of the instrument of transfer, as well as the other data
required by law, shall also be entered in the register.
3. Upon request, a shareholder shall be given free of charge an extract
from the register in respect of the shares registered in his name.
ARTICLE 8
1. Upon a written request from a person entitled to such certificates,
missing or damaged common share certificates, or parts thereof, may be
replaced by new certificates, or by duplicates bearing the same numbers
and/or letters, provided that the applicant proves his title and, in so
far as applicable, his loss to the satisfaction of the Board of
Management, and further subject to such conditions as the Board of
Management may deem fit.
2. In appropriate cases, at its own discretion, the Board of Management
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 Board of
Management, announcing the application made; in such a case new
certificates or duplicates may not be issued until six months have
expired since the last publication, always provided that the original
documents have not been produced and shown to the Board of Management
before that time.
3. The issue of new certificates or duplicates shall render the original
document invalid.
4. The issue of new certificates or duplicates for shares may in
appropriate cases, at the discretion of the Board of Management, be
published in newspapers to be indicated by the Board of Management.
ARTICLE 9
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1. The transfer of a registered share, including:
- the allotment of registered shares in the event of a judicial
partition and division of any form of community of property or
interests;
- the transfer of a registered share as a consequence of a
judgement execution;
- the creation of limited rights in rem on a registered share
shall require an appropriate instrument of transfer that has
to meet the conditions stipulated by the Company and for which
a model will be available for shareholders at no costs, as
well as an acknowledgement. This acknowledgement may be made;
- in the instrument of transfer; or
- by a certificate with an officially recorded, or otherwise
fixed, date containing the acknowledgement on the instrument
of transfer or of a copy or extract thereof authenticated by a
civil law notary or by the transferor.
If a Type II share certificate has been issued, the share certificate
is also required to be handed over to the Company for the purpose of
the share transfer. In this case the acknowledgement may be made by
making an annotation on the share certificate or by replacing the
certificate with a new one in the name of the transferee.
In the case of preference shares which have not been paid up in full,
the acknowledgement may be made only if there is an instrument of
transfer with an officially recorded, or otherwise fixed, date. When
preference shares which have not been paid up in full are transferred,
the date of transfer shall be entered in the register.
2. The transfer of priority shares is subject to the provisions of article
10, as well as to those of the preceding clause.
PRIORITY SHARES
ARTICLE 10
1. Without prejudice to the provisions of article 9, the transfer of
priority shares is subject to the conditions stated in the following
clauses of this article.
2. A priority share may only be transferred to a nominee nominated by the
meeting of priority shareholders, and upon payment of the nominal value
of such share, with interest at the rate of four per cent per annum -
or such lower rate as the statutory interest rate will be at the
beginning of the relevant financial year - as from the beginning of the
current financial year until the date of the transfer.
3. A holder of a priority share wishing to transfer such share shall
notify the Board of Management of such intention by registered letter.
The Board of Management shall as soon as possible bring the contents of
such notification to the notice of the Chairman of the Supervisory
Board and of the holders of priority shares. In that event the Chairman
of the Supervisory Board shall convene a meeting of priority
shareholders, which shall be held within a month after receipt of the
notification referred to above and which shall propose a nominee.
4. However, the holder of a priority share who, by registered letter
addressed to the Board of Management, has requested the proposal of a
nominee in
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accordance with the provisions of the preceding clause shall be free to
transfer the share offered by him, if after a period of three months
after receipt of such notification the meeting of priority shareholders
has not proposed a nominee or no nominee has agreed to acquire the
share.
5. In the event of transfer of any priority share upon the death of the
holder thereof or for any other reason, those who acquire the share
shall, by registered letter addressed to the Board of Management, offer
such share for transfer to a nominee to be proposed by the meeting of
priority shareholders. In that event the provisions of clauses 3 and 4
of this article shall apply mutatis mutandis. In such a case the
Company shall be irrevocably authorized on behalf of the successor or
successors in title to effect the transfer to such nominee and to
receive the payments on his or their behalf. Until the transfer of the
priority share has taken place in the prescribed manner and is entered
in the priority share register, no vote may be cast in respect of such
priority share at the meeting of priority shareholders.
6. The provisions of clause 5 of this article shall apply mutatis mutandis
to a holder of priority shares who has been adjudicated bankrupt or
granted a moratorium of payments or placed in the care of a guardian,
or is unable for any other reason to dispose freely of his property.
7. The transfer of a priority share shall be entered in the priority share
register.
BOARD OF MANAGEMENT
ARTICLE 11
1. The Company shall be managed by a Board of Management, consisting of at
least three members, under the supervision of a Supervisory Board. The
Chairman of the Board of Management shall be President of the Company.
The other members shall be Executive Vice-Presidents[FN 1] of the
Company. With due observance of the minimum of three, the number of
members shall be decided by the meeting of priority shareholders in
consultation with the Supervisory Board.
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[FN 1] In the original Dutch version of these articles of associates
the term "Vice-President" is used.
2. Members of the Board of Management, as well as the Chairman of the
Board of Management and President of the Company, shall be appointed by
the General Meeting of Shareholders from a binding list of two nominees
for each vacancy to be filled, drawn up by the Supervisory Board in
agreement with the meeting of priority shareholders. Votes in respect
of persons who have not been so nominated shall be invalid. In the
event of an equality of votes, the nominee who is placed first on the
list shall be appointed.
3. The list of nominees shall be deposited for inspection by shareholders
at the office of the Company and at a bank at Amsterdam to be specified
in the notice convening the general meeting at which the appointments
are to be made, as from the date of serving the said notice until the
close of that meeting.
4. The list of nominees referred to in clause 2 of this article may be
deprived of its binding character by a resolution adopted at a general
meeting of shareholders by a majority of at least two-thirds of the
votes cast, representing more than one half of the issued share
capital. In that event a new binding list shall be submitted to a
subsequent general meeting of shareholders, with due observance of the
provisions of the preceding clauses of this article. Should such a
second list also be deprived of its binding character in the manner
provided for in the first sentence, the
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General Meeting of Shareholders shall be free to appoint.
5. Should the number of members of the Board of Management fall below
three, the powers of the Board of Management shall remain intact. In
such a case a general meeting of shareholders shall be held at the
earliest opportunity to fill the vacancies on the Board of Management.
6. Without prejudice to the provisions of clause 2 of this article, a
proposal to make appointments to the Board of Management may only be
placed on the agenda of the general meeting of shareholders by the
Board of Management and only in consultation with the meeting of
priority shareholders and the Supervisory Board.
ARTICLE 12
1. Members of the Board of Management may be suspended or removed by the
General Meeting of Shareholders. A resolution to suspend or remove a
member of the Board of Management, other than a resolution proposed by
the Board of Management, the Supervisory Board or the meeting of
priority shareholders, may only be adopted by a majority of at least
two-thirds of the votes cast, representing more than half of the issued
share capital. The provisions of Section 120 (3) of Book 2 of the Civil
Code shall not apply.
2. The members of the Board of Management may be suspended from office by
the Supervisory Board either collectively or individually. Within three
months of such suspension a general meeting of shareholders shall be
held to decide whether the suspension shall be cancelled or upheld. The
person so suspended shall be entitled to be heard at the meeting.
ARTICLE 13
1. Two members of the Board of Management may jointly represent the
Company at law and otherwise.
a. The Board of Management may authorize each of its members
separately to represent the Company within the limits defined
in the authorization.
b. The authority of a member of the Board of Management to
represent the company does not cease to exist where there is a
conflict of interest with the company, unless a legal act
between the company and a director himself is involved, in
which case, without prejudice to the provisions of the last
sentence of Section 146 of Book 2 of the Civil Code, the other
members of the Board of Management shall have the authority to
represent the Company with regard to that legal act.
ARTICLE 14
1. The Board of Management shall have the power to enter into contracts as
specified in Section 94 (1) of Book 2 of the Civil Code.
2. The Board of Management may grant powers of attorney to persons,
whether or not in the service of the Company, to represent the Company
and may thereby determine the scope of such powers of attorney and the
titles of such persons.
ARTICLE 15
Subject to the approval of the Supervisory Board, the Board of Management shall
draw up Standing Orders, regulating, inter alia, the mode of convening its
meetings and the internal procedure at such meetings.
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ARTICLE 16
1. Without prejudice to the provisions made elsewhere in these articles,
resolutions of the Board of Management concerning the following matters
shall be subject to the approval of the Supervisory Board:
a. issue of shares in the Company, restricting or excluding the
pre-emption right in the event of an issue of shares,
acquisition of shares in the capital of the Company and the
disposal of shares thus acquired; issue of debentures
chargeable to the Company;
b. cooperation in the issue of certificates of shares in the
Company;
c. application for quotation or for withdrawal of the quotation
of the securities referred to under a. and b. in the price
list of any stock exchange;
d. long-term cooperation, directly or indirectly, with another
company or body corporate, and the discontinuation of such
cooperation, if the said cooperation or discontinuation
thereof is of fundamental significance;
e. taking a direct or indirect participation in the share capital
of another company, the value of which is at least equal to
the amount of one quarter of the issued share capital plus the
reserves of the Company, as shown by its balance sheet and
explanatory notes, and any fundamental change in the scale of
such participation;
f. any investment involving expenditure equal to at least one
quarter of the issued share capital plus the reserves of the
Company, as shown by its balance sheet and explanatory notes;
g. a proposal to amend the articles of association;
h. a proposal to dissolve the Company or for a legal merger of
the Company;
i. a petition for bankruptcy or for a moratorium of payments;
j. a proposal to reduce the issued share capital.
2. The Supervisory Board may grant the approvals required in accordance
with this article either for a specific legal act, or for a group of
such legal acts.
ARTICLE 17
Without prejudice to the statutory provisions, absence or inability to act of
members of the Board of Management is regulated in the Standing Orders of the
Board of Management.
ARTICLE 18
The remuneration and other terms of employment of the members of the Board of
Management shall be fixed by the Supervisory Board upon the proposal of the
President of the Company.
SUPERVISORY BOARD
ARTICLE 19
1. The Supervisory Board shall be responsible for supervising the policy
pursued by the Board of Management and the general course of affairs in
the group of companies within the Netherlands and abroad, of which the
Company forms part. The Supervisory Board shall assist the Board of
Management with advice relating to the general policy aspects connected
with the activities
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of the Company and of the group of companies associated with it.
2. The Board of Management shall provide the Supervisory Board in due time
with such information as the Supervisory Board needs for the
performance of its duties and shall regularly report on the course of
business of the Philips Group.
ARTICLE 20
1. The members of the Supervisory Board shall be appointed and may be
removed by the General Meeting of Shareholders. The Supervisory Board
shall consist of at least five members.
2. Members of the Supervisory Board shall be appointed by the General
Meeting of Shareholders from a binding list of two nominees for each
vacancy to be filled, drawn up by the Supervisory Board in agreement
with the meeting of priority shareholders. Votes in respect of persons
who have not been so nominated shall be invalid. In the event of an
equality of votes, the person who is placed first on the list shall be
appointed. A list of nominees shall be deposited for inspection by
shareholders at the office of the Company and at a bank in Amsterdam to
be specified in the notice convening the general meeting on whose
agenda the proposed appointment has been placed, as from the date on
which the said notice is served until the close of that meeting.
Without prejudice to the provisions of the first sentence and in
compliance with Section 142 (3) of Book 2 of the Civil Code, a proposal
to appoint a member of the Supervisory Board may only be placed on the
agenda of the general meeting by the Supervisory Board, though only in
consultation with the Board of Management and the meeting of priority
shareholders. Persons as referred to in Sections 142 (4) and 160 of
Book 2 of the Civil Code shall not be appointed.
3. The list of nominees referred to in clause 2 of this article may be
deprived of its binding character by a resolution adopted at a general
meeting of shareholders by a majority of at least two-thirds of the
votes cast, representing more than one half of the issued share
capital. In that event, a new binding list shall be submitted to a
subsequent general meeting of shareholders with due observance of the
provisions of the preceding clauses of this article. Should such a
second list also be deprived of its binding character in the manner
provided for in the first sentence, the General Meeting of Shareholders
shall then be free to appoint.
4. A member of the Supervisory Board shall retire at the end of the next
general meeting of shareholders held after a period of four years
following his appointment. Should a member of the Supervisory Board
reach the age of 72 in any financial year, he shall retire at the end
of the ordinary general meeting of shareholders held in that financial
year. After having held office for the first period of four years,
members of the Supervisory Board are eligible for reelection only twice
for a full period of four years. In specific cases the Supervisory
Board and the meeting of priority shareholders may resolve to deviate
from this provision. The Supervisory Board may establish a rotation
schedule.
5. A resolution to suspend or remove a member of the Supervisory Board,
other than a resolution proposed by the Supervisory Board or the
meeting of priority shareholders, may only be adopted by a majority of
at least two-thirds of the votes cast, representing more than half of
the issued share capital. The provisions of Section 120 (3) of Book 2
of the Civil Code shall not apply.
ARTICLE 21
1. The members of the Supervisory Board shall appoint from their number a
Chairman, a Vice-Chairman and a Secretary.
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2. The Supervisory Board may appoint one of its members to be a Delegate
Member and in so doing determine the period of such appointment.
Without prejudice to the duties and responsibilities of the Supervisory
Board and of its members, the Delegate Member shall, on behalf of the
Supervisory Board, maintain more frequent contact with the Board of
Management with regard to the general course of affairs within the
scope of article 20 of these articles of association. In so doing, the
Delegate Member of the Supervisory Board shall assist the Board of
Management with advice.
3. Without prejudice to the duty and responsibility of the Supervisory
Board as such, the latter body may resolve to have certain tasks
performed or prepared and certain powers exercised or prepared by a
commission from their number. Such a resolution shall specify the
chairman and the secretary thereof and in what manner and how
frequently such commission shall render account to the Supervisory
Board as such.
ARTICLE 22
1. The Supervisory Board may adopt resolutions by absolute majority of the
votes cast at a meeting attended by at least one-third of its members.
The Supervisory Board may adopt resolutions in writing outside a
meeting provided that the proposals for such resolutions have been sent
in writing to all members and no member is opposed to this method of
adopting a resolution, and provided that in such a case more than half
of the members declare themselves in favour of the proposals.
2. Minutes shall be kept of the proceedings of the Supervisory Board,
which in any case shall include the resolutions adopted by the meeting.
In the event that the resolutions are adopted outside a meeting, as
referred to in the second sentence of the preceding clause, the
resolutions so adopted shall be recorded in writing by the Secretary.
Such record shall be signed by the Chairman and the Secretary.
3. A certificate signed by two members to the effect that the Supervisory
Board has adopted a particular resolution shall constitute evidence of
such a resolution in dealings with third parties.
4. The members of the Board of Management shall, if so invited by the
Supervisory Board, attend the meetings of the Supervisory Board.
ARTICLE 23
1. The Supervisory Board shall draw up Standing Orders regulating the mode
of convening its meetings and the internal procedure at such meetings.
ARTICLE 24
1. Upon a proposal made by the Supervisory Board, the General Meeting of
Shareholders shall determine the remuneration of the members of the
Supervisory Board, which shall consist of a fixed yearly amount.
2. The Supervisory Board may grant an additional remuneration to be borne
by the Company to its Chairman, to a Delegate Member or to members who
pursuant to a resolution of the Supervisory Board have been designated
to perform certain functions or activities of the Supervisory Board.
GENERAL MEETINGS OF SHAREHOLDERS
ARTICLE 25
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1. The ordinary general meeting of shareholders shall be held each year
not later than 30 June and, at the Board of Management's option, at
Eindhoven, at Amsterdam, at The Hague or at Rotterdam; the notice
convening the meeting shall inform the shareholders accordingly.
Extraordinary general meetings of shareholders shall be held as often
as deemed necessary by the Supervisory Board or the Board of
Management, and must be held if the meeting of priority shareholders or
one or more shareholders jointly representing at least one-tenth of the
issued share capital make a written request to that effect to the
Supervisory Board and the Board of Management, specifying in detail the
business to be dealt with.
If the Board of Management fails to comply with a request as referred
to in the preceding clause in such a 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
District Court at `s - Hertogenbosch to convene the meeting themselves.
2. The general meeting of shareholders will in any case deal with and
deliberate on the following:
a. the Company's annual report, including at least:
- the Board of Management's report;
- the annual accounts with explanation and appendices;
- the Supervisory Board's report;
this being without prejudice to the possibility of a deferment granted
to the Board of Management, as provided in Section 101 of Book 2 of the
Civil Code.
b. proposals placed on the agenda by the Supervisory Board, the
meeting of priority shareholders, the Board of Management or
shareholders in accordance with the provisions of these
articles;
c. the filling of vacancies on the Board of Management and/or the
Supervisory Board in accordance with the provisions of these
articles.
ARTICLE 26
1. The notice convening a general meeting shall be published in the form
of an advertisement which in the Netherlands shall be inserted in at
least one national daily newspaper and, at the Board of Management's
option, in one or more foreign newspapers. In addition, holders of
registered shares shall be notified by letter that the meeting is being
convened.
2. The notice convening the meeting shall be issued by the Board of
Management. In the case envisaged in the third paragraph of clause 1 of
the preceding article, the notice shall be issued by the shareholders
therein specified, subject to the relevant provisions of Section 111 of
Book 2 of the Civil Code.
3. The notice convening the meeting shall be issued no later than on the
fifteenth day prior to the meeting.
4. Without prejudice to what is provided in this respect elsewhere in
these articles, the agenda shall contain such business as may be placed
thereon by the Board of Management, the Supervisory Board or the
meeting of priority shareholders. Furthermore the agenda shall contain
such business as one or more shareholders representing at least
one-hundredth of the issued share capital have requested the
Supervisory Board and the Board of
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Management to place on the agenda, at least 60 days before the date of
the meeting. The Supervisory Board and the Board of Management may
resolve not to place such business proposed by shareholders on the
agenda if they are of the opinion that such request would be
detrimental to the serious interests of the Company. The meeting shall
not adopt resolutions on matters other than those which have been
placed on the agenda.
5. Without prejudice to the provisions of Sections 99 and 123 of Book 2 of
the Civil Code, the notice convening the meeting shall either mention
the business on the agenda or state that the agenda is open to
inspection by shareholders at the office of the Company and at a
specified bank at Amsterdam.
ARTICLE 27
1. All shareholders are entitled, without prejudice to the provisions of
article 6, clause 2, to attend the general meeting of shareholders, to
address the meeting and, subject to the provisions of Section 118 (7)
of Book 2 of the Civil Code, to vote.
2. In order to exercise the rights mentioned in clause 1 of this article,
the holders of bearer share certificates shall deposit their share
certificates prior to the meeting at the office of the Company or at
one of the banks or other establishments to be indicated in the notice,
at least one of which shall be a depositary as mentioned in article 6,
clause 4, situated at Amsterdam. The notice shall also mention the last
day on which this can be done. The deposit shall be made in return for
a card of admission to the meeting.
3. In order to exercise the rights mentioned in clause 1 of this article,
the holders of registered common 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 - insofar
as Type II common shares are concerned - stating the identifying number
of the common share certificate. They may only exercise the said rights
at the meeting for the common shares registered in their name both on
the day referred to above and on the day of the meeting.
4. In order to exercise the rights mentioned in clause 1 of this article,
the holders of preference shares shall notify the Company of their
intention to do so no later than on the day prior to the meeting. They
may exercise the said rights at the meeting only for the shares
registered in their name on the day of the meeting.
5. 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 provisions of the two preceding clauses.
6. Shareholders, usufructuaries and pledgees who are entitled to attend a
general meeting may be represented by proxies with written authority.
Without prejudice to the provisions of the preceding clauses of this
article, the written authorization must be deposited not later than at
the time and at the place indicated in this article.
ARTICLE 28
With regard to the exercise of the rights referred to in the preceding article,
the Company is entitled to regard as correct the statements regarding the
depositing of share certificates and/or the granting of authorizations by
shareholders, and regarding the quantities to which the deposits and/or
authorizations relate, which are made to it in due time by the institutions
designated for that purpose in the notice convening the meeting.
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ARTICLE 29
1. General meetings of shareholders shall be presided over by the Chairman
of the Supervisory Board or by any other person nominated by the
Supervisory Board. The Chairman may restrict the time for which
shareholders may speak, if he considers this to be desirable with a
view to the orderly conduct of the meeting.
2. The resolutions adopted at a general meeting of shareholders shall be
recorded by a civil law notary. Such record shall be co-signed by the
Chairman of the meeting. The latter shall ensure that a summary account
is made of the business transacted at the meeting.
ARTICLE 30
1. Unless otherwise stated in these articles, resolutions shall be adopted
by absolute majority of votes. Blank and invalid votes shall not be
counted. The Chairman shall decide on the method of voting, including
the possibility of voting by acclamation. In the event of voting by
acclamation, the votes against will be recorded if a request to this
effect is made.
2. Except as provided in article 11, clause 2 and article 20, clause 2, in
the event of an equality of votes the relevant proposal shall be deemed
to have been rejected.
ARTICLE 31
Each common share and each preference share shall entitle to one (1) vote. Each
priority share shall entitle to two thousand five hundred (2500) votes.
ARTICLE 32
1. Separate meetings of holders of preference shares shall be held as
often as a resolution of the meeting of holders of preference shares is
required by statutory provisions or these articles of association, and
further as often as the Board of Management, the Supervisory Board or
the meeting of priority shareholders deems this necessary, and must be
held if one or more holders of preference shares representing at least
one-tenth of the capital issued in the form of preference shares make a
written request to that effect to the Board of Management, specifying
in detail the business to be dealt with.
2. A meeting of holders of preference shares shall be convened no later
than on the fifteenth day prior to the meeting by a letter addressed to
the persons entitled to attend this meeting.
3. Meetings of holders of preference shares shall be held at Eindhoven, at
Amsterdam, at The Hague or at Rotterdam. The notice convening the
meeting shall inform the holders of preference shares in respect
thereof. Articles 27 to 31 inclusive shall apply accordingly to
meetings of holders of preference shares.
4. At a meeting of holders of preference shares at which the whole of the
capital issued in the form of preference shares is represented, valid
resolutions may be adopted, provided that the vote is unanimous, even
if the provisions governing the place of the meeting, the manner in
which it is convened, the period of notice and the specification in the
notice of the business to be dealt with have not been observed.
ARTICLE 33
Separate meetings of holders of common shares shall be held as often as a
resolution of the meeting of holders of common shares is required by statutory
provisions or these articles of association. The provisions of article 25,
15
clause 1 and articles 26 to 31 inclusive shall apply accordingly to such a
meeting.
MEETINGS OF PRIORITY SHAREHOLDERS
ARTICLE 34
1. Meetings of priority shareholders shall be held on the proposal of the
Board of Management. They shall be held at a place to be indicated by
the Chairman of the Board of Management.
2. Meetings of priority shareholders must be held if holders of priority
shares representing at least two-fifths of the issued priority share
capital make a written request to that effect to the Board of
Management, specifying in detail the business to be dealt with. If the
meeting is not convened within fourteen days after a request made by
priority shareholders, those shareholders shall be entitled to convene
the meeting themselves.
3. Meetings shall be convened by notice to every holder of a priority
share. A meeting shall not be deemed to be invalid by reason of a
notice not having been received or not received in due time, unless it
cannot be shown that the notice was indeed dispatched. The notices
shall be issued by the Chairman of the Board of Management or, in the
case provided in clause 2, by the priority shareholders referred to
therein. Notices shall be served at least eight days prior to the
meeting.
4. A meeting at which three-fifths of the priority share capital is
represented shall be exempted from all periods of notice and
formalities concerning the convening of the meeting.
5. The meeting of priority shareholders may adopt resolutions in writing
provided that the proposals for such resolutions have been sent in
writing to all holders of priority shares and no holder is opposed to
this method of adopting a resolution.
6. A certificate signed by the holder(s) of at least half of the priority
shares to the effect that the meeting of priority shareholders has
adopted a particular resolution shall constitute evidence of such a
resolution in dealings with third parties.
7. The consent of the meeting is required if a priority shareholder wishes
to be represented at the meeting by a proxy.
REPORT OF THE BOARD OF MANAGEMENT,
ANNUAL ACCOUNTS AND DISTRIBUTIONS
ARTICLE 35
1. The financial year shall be identical with the calendar year.
2. Without prejudice to the provisions of article 25, clause 2, the Board
of Management shall, within four months after the close of each
financial year, submit to the Supervisory Board annual accounts
consisting of a balance sheet as at 31 December of the preceding year
and a profit and loss account in respect of the financial year then
ended, with the explanatory notes thereto.
3. With the approval of the Supervisory Board and the meeting of priority
shareholders, the Board of Management shall have the power to determine
what portion of the profit - the positive balance of the profit and
loss account - shall be retained by way of reserve. Not available for
retention
16
in this way are amounts needed for (a) the formation of legally
required reserves and/or (b) distributions as referred to in clauses 1
to 3 of article 37.
4. The Supervisory Board shall cause the annual accounts to be examined by
a registered accountant designated for that purpose by the Company in
compliance with the provisions of Section 393 of Book 2 of the Civil
Code and shall report to the General Meeting of Shareholders on the
annual accounts. If the General Meeting of Shareholders does not
designate such a registered accountant, the Supervisory Board, and in
default thereof, the Board of Management, shall have the power to do
so. Such a designation may be made for an indefinite period.
5. The Board of Management shall then have the annual report drawn up, as
provided in article 25. Sufficient copies of the annual report shall be
made available to the shareholders from the day on which the annual
general meeting of shareholders is convened until the close of that
meeting.
ARTICLE 36
Adoption by the General Meeting of Shareholders of the annual accounts, as
referred to in article 39 and without any express reservation made by the
General Meeting of Shareholders, shall have the effect of fully discharging the
Board of Management and the Supervisory Board from liability for the performance
of their respective duties in the financial year concerned.
ARTICLE 37
1. From the profit shown in the annual accounts adopted by the General
Meeting of Shareholders, the percentage mentioned below of the amount
required to be paid from time to time in the course of the financial
year concerned on the preference shares shall, as far as possible and
in compliance with the provisions of Section 105 (2) of Book 2 of the
Civil Code, first be distributed on those shares. The dividend on the
preference shares shall only be distributed for the number of days that
such shares were actually outstanding in the financial year concerned.
2. The percentage referred to in clause 1 shall be equal to the Average
Main Refinancing Rates during the financial year for which the
distribution is made, plus two percent (2%). Average Main Refinancing
Rate shall be understood to mean the average value on each individual
day during the financial year for which the distribution is made of the
Main Refinancing Rates prevailing on such day. Main Refinancing Rate
shall be understood to mean the rate of the Main Refinancing Operation
as determined and published from time to time by the European Central
Bank.
3. If the profit for a financial year is declared and one or more
preference shares have been withdrawn or preference shares have been
fully repaid in that financial year, those persons who according to the
register referred to in article 7 were holders of preference shares at
the time of the said withdrawal or repayment shall have an inalienable
right to a distribution of profit as described below. The profit which,
if possible, shall be distributed to the said persons shall be equal to
the amount of the distribution to which they would have been entitled
under the provisions of clause 1 if they had still been holders of the
aforementioned preference shares at the time when the profit was
declared, this being calculated on the basis of the period for which
they were holders of preference shares in the said financial year, a
part of a month being counted as a full month. With regard to an
alteration to the provisions of this clause, the proviso referred to in
Section 122 of Book 2 of the Civil Code is made.
4. From the profit that remains after the application of clause 3 of
article 35 and clauses 1 to 3 inclusive of this article, an amount of
20 euros (euros 20) shall first be distributed on every priority share.
The profit
17
that remains thereafter shall be at the disposal of the General Meeting
of Shareholders, which is empowered to withhold distribution in whole
or in part or to make a distribution in whole or in part to holders of
common shares in proportion to their holdings of common shares.
ARTICLE 38
1. Upon the proposal of the Board of Management, which proposal shall have
received the prior approval of the Supervisory Board and of the meeting
of priority shareholders, the General Meeting of Shareholders shall be
entitled to resolve to make distributions charged to the "other
reserves" shown in the annual accounts or charged to "share premium
account".
2. Upon the proposal of the Board of Management, which proposal shall have
received the prior approval of the Supervisory Board and of the meeting
of priority shareholders, the General Meeting of Shareholders shall be
entitled to make distributions to shareholders under article 37,
article 38, clause 1 and article 39 in the form of the issue of common
shares.
ARTICLE 39
At its own discretion and having regard to the statutory provisions relating
thereto, the Board of Management, with the prior approval of the Supervisory
Board and of the meeting of priority shareholders, may distribute from the
profits for the current financial year 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.
ARTICLE 40
1. The Board of Management determines for various types of shares on what
dates and in what form distributions will be payable.
Notices relating to such distributions shall in the Netherlands be
given in at least one national daily newspaper, and abroad in at least
one daily newspaper appearing in each of those countries where, on the
application of the Company, the Company's shares have been admitted for
official quotation, and further in such manner as the Board of
Management may deem desirable.
The provisions of this article shall apply accordingly in the event of
a share issue with pre-emption subscription rights.
2. Cash distributions in respect of shares for which Type II share
certificates are outstanding shall, if such distributions are made
payable only outside the Netherlands, be paid in the currency of the
country concerned, converted at the rate of exchange on the Amsterdam
Stock Exchange at the close of business on a date to be fixed and
announced by the Board of Management.
This date may not be set earlier than the day before the date on which
the distribution is declared and not later than the date which has been
fixed for the shares concerned in accordance with the provisions of
clause 3.
3. With regard to the provisions of article 6, clause 2 and of article 7,
the person entitled to any distribution on registered shares shall be
the person in whose name the share is registered - or, in the case of
limited rights in rem, the person whose right appears well-founded - at
the date to be determined for that purpose by the Board of Management
in respect of the distribution for each of the different types of
shares.
4. A person entitled to a distribution on a bearer share for which a share
certificate is outstanding shall, in order to exercise his right to
such distribution, arrange for the dividend sheet
18
appertaining to that share to be in the safekeeping of a depositary as
mentioned in article 6, clause 4, at such a time as shall be specified
by the Board of Management. In respect of distributions referred to
herein, the Company shall have discharged its liability to the persons
entitled thereto by making these distributions available to the
depositary referred to in article 6, clause 4 or to one or more third
parties designated by the latter and the Company, in favour of the
persons in whose name the dividend sheets were held by the depositaries
at the aforementioned time.
5. Rights of payment of distributions in cash shall lapse if such
distributions are not claimed within five years following the day after
the date on which they were made available.
6. In the case of a distribution in shares, any shares not claimed within
a period to be determined by the Board of Management shall be sold for
the account of the persons entitled to the distribution who failed to
claim the shares. These persons are entitled only to the net proceeds
in cash of such a sale. This entitlement will be forfeited if the
proceeds are not claimed within five years following the day after the
date on which the distribution in shares was made payable.
7. In the case of a distribution in the form of shares 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,
without prejudice to the provisions of article 6, clause 4.
8. The Board of Management may, for reasons which it considers sufficient,
and subject to such conditions as it may consider necessary, rule that
the provisions of clause 1, second paragraph and clause 4 of this
article shall not apply.
AMENDMENT OF ARTICLES OF ASSOCIATION AND DISSOLUTION
ARTICLE 41
1. A resolution to amend the articles of association or to dissolve the
Company shall be valid only provided that:
a. the consent of the Supervisory Board and of the meeting of
priority shareholders has been or will be obtained;
b. the consent of the meeting of priority shareholders is given
at a meeting at which more than half the issued priority share
capital is represented and by at least three-fourth of the
votes cast; if this requirement is not complied with, a
further meeting shall be held within four weeks thereof, at
which, irrespective of the priority share capital represented,
the resolution can be adopted by at least three-fourth of the
votes cast;
c. the full proposals have been deposited for inspection by
shareholders at the office of the Company and at a bank at
Amsterdam specified in the notice convening the general
meeting of shareholders, as from the day on which the said
notice is served until the close of that meeting;
d. the resolution is adopted at a general meeting of shareholders
at which more than half of the issued share capital is
represented and by at least three-fourth of the votes cast; if
the requisite share capital is not represented at a meeting
called for that purpose, a
19
further meeting shall be convened, to be held within four
weeks of the first meeting, at which, irrespective of the
share capital represented, the resolution can be adopted by at
least three-fourth of the votes cast.
2. Where a resolution as referred to in the preceding clause of this
article is submitted by the Board of Management, the General Meeting of
Shareholders may, notwithstanding the provisions of clause 1 d.,
resolve by absolute majority of votes to amend the articles of
association or to dissolve the Company, without more than half of the
issued capital having to be represented.
ARTICLE 42
Should the Company be dissolved, the liquidation and apportionment shall be
effected by the Board of Management in compliance with the relevant provisions
of Book 2 of the Civil Code and, insofar as they are not inconsistent with the
latter, the articles of association. In adopting a resolution to dissolve the
Company, the General Meeting of Shareholders may approve the payment of a
remuneration to the liquidators.
ARTICLE 43
From the balance of the liquidation, a distribution shall first be made on every
preference share to the amount paid thereon, then on every priority share to the
nominal amount thereof, and the residue thereafter shall be distributed on the
common shares.
TRANSITIONAL PROVISIONS
ARTICLE 44
Rights attached to common shares outstanding upon this amendment of the articles
of association (August 1, 2000) may not be exercised so long as these common
shares have not been converted into common shares with a nominal value of twenty
euro cents (EUR 0.20) in accordance with this notarial deed, and, as far as
applicable, in compliance with the amendments of the articles of association of
May 6, 1994, May 29, 1999 and April 17, 2000. Upon conversion the shareholder is
entitled to the payment of dividends insofar as this right has not lapsed under
the provisions of article 40, clause 5 of these articles of association.