TomTom 2006 Annual Report Download - page 34

Corporate Governance 32 TomTom Annual Report 2006
Corporate Governance
Continued
The notice convening a General Meeting of Shareholders
must include an agenda indicating the items for discussion,
as well as any proposals for the agenda. Shareholders
holding at least 1% of our issued and outstanding share
capital or shares representing a value of at least 50 million
according to the Daily Official List may submit proposals for
the agenda. Provided we receive such proposals no later
than the 60th day before the General Meeting of
Shareholders, we will have the proposals included in the
notice we publish in a national newspaper distributed daily
in the Netherlands and also in the Daily Official List at least
15 days before the meeting.
The Management Board may determine a record date to
establish which shareholders are entitled to attend and
vote at the General Meeting of Shareholders. There is no
attendance quorum.
Each of our ordinary shares and preference shares is
entitled to one vote. Shareholders may vote by proxy. The
voting rights attached to any of our shares held by us are
suspended as long as they are held in treasury.
Resolutions of the General Meeting of Shareholders are
adopted by a simple majority, except where Dutch law or
our Articles of Association provide for a special majority.
According to our Articles of Association the following
decisions of the General Meeting of Shareholders require a
majority of at least two-thirds of the votes cast,
representing more than 50% of our issued share capital:
— a resolution to cancel a binding nomination for the
appointment of members of our Management Board
and Supervisory Board;
— a resolution to appoint members of the Management
Board or Supervisory Board in contravention of the list
of nominees submitted by the Supervisory Board; and
— a resolution to dismiss or suspend members of the
Management Board or Supervisory Board.
In addition, our Articles of Association require a majority
of at least two-thirds of the issued capital if less than
50% of our issued share capital is represented for among
other matters:
— a resolution of the General Meeting of Shareholders
regarding restricting and excluding pre-emptive
rights or decisions to designate the Management
Board as the body authorised to exclude or restrict
pre-emptive rights;
— a resolution of the General Meeting of Shareholders
to reduce our outstanding share capital; and
— a resolution of the General Meeting of Shareholders
to have us merge or demerge.
Preference shares as an anti-takeover measure
General
The Articles of Association provide for the possibility
of issuing preference shares to the Stichting Continuïteit
TomTom (the “Foundation”), established on 26 May 2005,
as an anti-takeover measure. The purpose of the
Foundation is to safeguard our interests and those of
our subsidiaries in such a way that these interests as well
as the interests of all those involved in the organisation, are
safeguarded, and that influences, which in contravention
with those interests could affect our continuity and/or
corporate identity, are fended off. We believe that
the issue of preference shares may have the effect of
preventing, discouraging or delaying an unsolicited attempt
to obtain (de facto) control and may help us to determine
our position in relation to a bidder and its plans, and to
seek alternatives.
There are currently no preference shares outstanding.
Composition of the Continuity Foundation
The Management Board of the Foundation consists of one
‘A Board member’ and two ‘B Board members’. The A
Board member is appointed by the Management Board,
from among the members of the Supervisory Board,
subject to the approval of the Supervisory Board. The B
Board members are appointed by the Board of the
Foundation.
In 2006, the members of the Management Board of the
Foundation were:
G.J.M. Demuynck A Board member
M.W. den Boogert B Board member
R.L. de Bakker B Board member
The Management Board of the Company and the
Management Board of the Foundation declare that they
are jointly of the opinion that the Foundation is independent
of the Company as required by the Euronext Rule Book,
Book II of the stock market of Euronext Amsterdam.
Anti-takeover mechanism
We granted the Foundation a call option (the “Call Option”)
entitling it to acquire from us preference shares up to a
maximum of 50% of our total issued and outstanding
share capital (excluding issued and outstanding preference
shares). Under the terms of a separate agreement entered
into between us and the Foundation on 26 May 2005, we
have the right to require the Foundation to exercise the Call
Option if (i) we expect a hostile takeover may be attempted
or (ii) in the opinion of the Management Board, a single
shareholder (or group of shareholders) holds a ‘substantial
number’ of our ordinary shares.