TomTom 2012 Annual Report Download - page 23

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to 20% in case of a merger or acquisition) and to restrict or
exclude the pre-emption rights for existing shareholders for such
issue or grant of rights.
Separately, the Management Board has been authorised to grant
rights to subscribe for ordinary shares and to restrict or exclude
the pre-emption rights for existing shareholders for those rights,
up to 4,620,000 ordinary shares for the purpose of executing the
TomTom Employee Stock Option Plan and the Management Board
Stock Option Plan. The authorisation was subject to the prior
approval of the Supervisory Board. It was granted for a period
starting from the 2012 Annual General Meeting and ending with
the Annual General Meeting to be held in 2013.
In addition to the authorisations referred to above, the
Management Board has been granted authority to issue preferred
shares or to grant rights to subscribe for preferred shares and to
restrict or exclude existing shareholders’ pre-emption rights for
those rights. The authorisation was subject to the prior approval
of the Supervisory Board and applies until 26 October 2013.
For further information on this authority of the Management
Board, see the protection mechanism section below.
Repurchase by the company of its own shares
During the 2012 Annual General Meeting, the Management Board
was authorised to acquire shares in the capital of the company
up to 10% of the issued share capital. The authorisation was
granted for a period of 18 months, and will be in effect until
26 October 2013.
Protection mechanism
Foundation Continuity TomTom
A foundation, the Stichting Continuïteit TomTom (the Foundation)
was established on 26 May 2005 to act as an instrument that
protects the company against hostile takeovers and to protect the
company’s interests in a variety of other situations. The purpose of
the Foundation is to safeguard the company’s interests and those
of its subsidiaries, as well as the interests of all stakeholders of
the organisation. It does so by ensuring that the company is in a
position to resist infl uences which could affect its independence,
continuity and/or corporate identity in any manner that would
be in contravention of the interests of the company or its
stakeholders.
The company has granted the Foundation a call option
(the Call Option) entitling it to subscribe for preferred shares.
The authority is limited to 50% of the aggregate outstanding
share capital (excluding issued and outstanding preferred shares)
of the company at the time of issue. An issue of preferred shares
in the manner described would cause substantial dilution to the
voting power of any shareholder whose objective was to gain
control of the company.
We believe that such an issuance of preferred shares or the
granting of rights to subscribe for preferred shares to the
Foundation may help to prevent, discourage or otherwise delay
unsolicited attempts to obtain (de facto) control of the company.
We also believe that these measures will strengthen our position
in relation to potential bidders, and allow us to seek alternatives.
Currently there are no preferred shares outstanding.
The Management Board of the company and the Board of the
Foundation declare that the Foundation is independent vis à vis
the company.
Management Board authority to issue additional preferred shares
As mentioned above, during the Annual General Meeting held
in April 2012, a resolution was passed to extend the authority
of the Management Board to issue preferred shares, to grant
rights to subscribe for such shares and to restrict or exclude the
pre-emption rights for existing shareholders for those rights until
26 October 2013. The aforementioned authority is limited to 50%
of the aggregate outstanding share capital (excluding issued and
outstanding preferred shares) of the company at the time of issue.
The members of the Management Board believe that there may
be circumstances in which they and the Supervisory Board feel
that the interests of the company and its stakeholders require
the issue of additional preferred shares. They may believe, for
example, that the Foundation is not able to acquire a suffi cient
number of preferred shares to be effective in its function. Also
a situation could occur whereby the Foundation has already
exercised its Call Option and subsequently the preferred shares
have been cancelled. As with the instrument in place for the
Foundation, any possible issuances of preferred shares will be
temporary and subject to the company’s Articles of Association
and the legislation on takeovers.
Pursuant to the Articles of Association, a resolution of our
Management Board to issue preferred shares or to grant rights to
subscribe for preferred shares, as a result of which the aggregate
nominal value of the issued preferred shares will exceed 50% of
the issued capital of ordinary shares at the time of issue, will at all
times require the prior approval of the General Meeting.
Upon the issue of preferred shares, subscribers for preferred
shares
must pay at least 25% of the nominal value of the preferred
shares.
Each transfer of preferred shares requires the approval of
the Management Board and Supervisory Board. No resolution of
the General Meeting or the Management Board is required for an
issue of preferred shares pursuant to the exercise of a previously
granted right to subscribe for preferred shares (including the right
of the Foundation to acquire preferred shares pursuant to the Call
Option).