TomTom 2007 Annual Report Download - page 42

36 CORPORATE GOVERNANCE (CONTINUED)
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-third of the votes cast, representing
more than 50% of our issued share capital:
•aresolution 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;
• 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 PROTECTION MEASURE
General
On 26 May 2005, the Stichting Continuïteit TomTom
(the “Foundation”) was established as an
instrument of protection against hostile takeovers
and to protect our interests in other situations. The
purpose of the Foundation is tosafeguardour
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 corporateidentity, are fended off.
The Articles of Association of the Company provide
for the possibility of issuing preference shares and
granting rights tosubscribe for preference shares.
We believe that the issue of preference shares or
the grant of rights to subscribe for preference
shares to the Foundation, may have the effect of
preventing, discouraging or delaying an unsolicited
attempt to obtain (de facto) control and may help
us todetermine our position in relation to a bidder
and its plans, and to seek alternatives.
Therearecurrentlyno preference shares
outstanding.
Composition of 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 2007, 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
Board of the Foundation declare that they are
jointly of the opinion that the Foundation is
independent of the Company.
Protection mechanism
We have granted the Foundation a call option (the
“Call Option”), entitling it tosubscribe for
preferenceshares, 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 the Company and the
Foundation on 26 May 2005, we have the right to
require the Foundation to exercise the Call Option
in whole or in part if, for example, a hostile takeover
has been announced or made. The foundation may
also itself determine toexercise the Call Option in
other situations. The issue of preference shares in
this manner would cause substantial dilution to the
voting power of any shareholder whose objective
was togain control of us.
Preference shares
During our Annual General Meeting of
Shareholdersheld in April 2006, a resolution was
passed which grants the Management Board the
irrevocable authority to issue preference shares,
or grant rights to subscribe for preference shares,
up to a maximum of 50% of the outstanding share
capital of ordinary shares, for a period of two years
starting on 13 May 2007 (i.e. expiration dateof
authority previously granted) and ending on 13 May
2009, subject to the approval of the Supervisory
Board.
The Management Board must provide a justification
for such issue or grant of rights to subscribe for
preferenceshares (but not for the issue of
preference shares as a result of the exercise of
rights) at the General Meeting of Shareholders,
held within four weeks after the date of issue or
grant, unless such a justification has been given
at an earlier General Meeting of Shareholders.