ARTICLES OF ASSOCIATION
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of:
STMicroelectronics N.V.,
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established in Amsterdam
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dated May 5, 2000
NAME, SEAT AND DURATION.
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Article 1.
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1.1. The name of the company is: STMicroelectronics N.V.
1.2. The company is established at Amsterdam.
1.3. The company will continue for an indefinite period.
OBJECTS.
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Article 2.
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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 semi-conductors 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.
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Article 3.
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3.1. The authorised capital of the company amounts to one billion eight
hundred nine million six hundred thousand euro (EUR 1,809,600,000),
consisting of
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one billion two hundred million (1,200,000,000) ordinary shares and
five hundred forty million (540,000,000) preference shares of one
euro and four eurocents (EUR 1.04) each.
3.2. Where in these articles of association reference is made to shares
and shareholders this shall include the shares of each class as
well as the holders of shares of each class respectively, unless
explicitly provided otherwise.
ISSUE OF SHARES.
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Article 4.
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4.1. 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.
4.2. If a designation as referred to in the first 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.
4.3. In the event of an issue of ordinary shares, shareholders shall
have a pre-emptive right in proportion to the number of ordinary
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. In the
event of an issue of preference shares none of
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the shareholders shall have a pre-emptive right. The supervisory
board shall have the power to limit or debar the pre-emptive 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 first
paragraph shall equally apply.
4.4. If a designation as referred to in the third 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
pre-emptive right accruing to shareholders.
4.5. A resolution of the general meeting of shareholders to limit or
debar pre-emptive rights 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.
4.6. Without prejudice to what has been provided in section 80,
paragraph 2, Civil Code:2, shares shall at no time be issued below
par.
4.7. Ordinary shares shall be issued only against payment in full;
preference shares may be issued against partial payment, provided
that the proportion of the nominal amount that must be paid on each
preference share, irrespective of when it was issued, shall be the
same and that at least one quarter of the nominal amount is paid up
in full when the share is taken.
4.8. 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
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foreign 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.
4.9. 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.
4.10. The managing board shall determine, subject to approval by the
supervisory board, when and in what amount payment is to be made in
respect of partially paid preference shares. The managing board
shall notify the shareholders concerned thereof in writing at least
thirty days before the date on which the payment must finally be
made.
4.11. 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 27.2.
REPURCHASE OF SHARES.
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Article 5.
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5.1. The company may acquire, for valuable consideration, shares in its
own share capital if and in so far as:
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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.
5.2. The company may, without being authorized thereto by the general
meeting of shareholders and notwithstanding to what is provided in
paragraph 1 under a and b, acquire shares in its own share capital
in order to transfer those shares to the employees of the company
or a group company under a scheme applicable to such employees.
5.3. Shares thus acquired may again be disposed of. The company shall
not acquire shares in its own share capital as referred to in
paragraph 1 -if an authorization as referred to in such paragraph
is in force- or as referred to in paragraph 2 without the prior
approval of the supervisory board. The company shall also not
dispose of shares in its own share capital -with the exception of
shares in the company's own share capital acquired pursuant to
paragraph 2- without the prior approval of the supervisory board.
If depositary receipts for shares in the company
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have been issued, such depositary receipts shall for the
application of the provisions of this paragraph and the preceding
paragraph be treated as shares.
5.4. 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 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.
5.5. Upon the proposal of the supervisory board the general meeting of
shareholders shall have the power to decide (i) to cancel shares
acquired by the company from its own share capital, and (ii) to
cancel all preference shares against repayment of the amount paid
up on those shares, all subject however to the statutory provisions
concerned.
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SHARES, SHARE CERTIFICATES, SHARE REGISTER.
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Article 6.
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6.1. Shares shall be in registered form.
6.2. Ordinary 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.
Preference shares shall only be made available in the form of type
I shares.
6.3. 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.
6.4. Type II share certificates shall be available in such denominations
as the supervisory board shall determine.
6.5. 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.
6.6. All share certificates shall be identified by numbers and/or
letters.
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6.7. 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.
6.8. The expression "share certificate" as used in these articles shall
include a share certificate in respect of more than one share.
Article 7.
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7.1. 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.
7.2. 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 publication, always provided that the
original documents have not been produced to the managing board
before that time.
7.3. The issue of new certificates or duplicates shall render the
original document invalid.
Article 8.
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8.1. Notwithstanding the statutory provisions in respect
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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.
8.2. 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.
8.3. 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.
8.4. 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.
8.5. 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 entered in the register.
Article 9.
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9.1. Subject to the provisions of article 6, the holder of an entry in
the share register for one or more
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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.
9.2. Subject to the provisions of article 6, 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.
9.3. 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.
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Article 10.
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10.1. 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.
10.2. 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.
10.3. 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 to the transferee of one or more new share
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certificates registered in his name to the same nominal amount.
10.4. 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.
10.5. The submission of requests and the lodging of documents referred to
in articles 7 to 10 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.
10.6. 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 7 up
to and including 10.
USUFRUCTUARIES, PLEDGEES, HOLDERS OF DEPOSITARY RECEIPTS.
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Article 11.
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11.1. 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
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to vote, shall not be entitled to the rights which by law
have been conferred on holders of depositary receipts for shares
issued with the cooperation of the company.
11.2. 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.
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Article 12.
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12.1. 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.
12.2. Managing directors shall be appointed by the general meeting of
shareholders upon the proposal of the supervisory board for each
vacancy to be filled.
12.3. Without prejudice to the provisions of article 28, paragraph 2, a
proposal to make one or more
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appointments to the managing board may be placed on the agenda of a
general meeting of shareholders by the supervisory board.
12.4. The supervisory board shall determine the salary, the bonus, if
any, and the other terms and conditions of employment of the
managing directors.
12.5. The general meeting of shareholders shall decide in accordance with
the provisions of article 32, paragraph 1.
Votes in respect of persons who have not been so nominated shall be
invalid.
Article 13.
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13.1. 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.
13.2. 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.
13.3. 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.
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Article 14.
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14.1. The entire managing board as well as each managing director may
represent the company.
14.2. 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.
14.3. The managing board shall have power to perform legal 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 15.
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15.1. 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 22,
paragraph 1.
15.2. 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 16.
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16.1. 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
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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 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 shareholders for
decisions relating to:
- sale of all or of an important part of the company's
assets or business enterprise(s);
- entering into mergers, acquisitions or joint
ventures, which the supervisory board considers of
material significance,
the absence of the approval provided for above may not be raised by
or against third parties.
16.2. 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
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shareholders to that effect.
Article 17.
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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.
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Article 18.
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18.1. 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 duties the
supervisory directors shall serve the interests of the company and
the business enterprise which it operates.
18.2. 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 19.
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19.1. 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
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of the supervisory board.
19.2. The general meeting of shareholders shall decide in accordance with
the provisions of article 32 paragraph 1.
19.3. Without prejudice to the provisions of article 28, 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.
19.4. The supervisory board shall appoint from their number a chairman
and a vice-chairman of the supervisory board with the majority
mentioned in article 22, paragraph 1.
19.5. 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 20.
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20.1. 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 shall report their findings to the
supervisory board. The offices of chairman of the supervisory board
and delegate supervisory director are compatible.
20.2. 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.
20.3. 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
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place, or may decide that one or more of its supervisory directors
shall be authorised to exercise a portion of such powers.
20.4. 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.
Article 21.
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21.1. 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.
21.2. 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.
21.3. The supervisory board may establish a rotation scheme.
21.4. 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 22.
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22.1. 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
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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.
22.2. 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.
22.3. The managing directors shall attend meetings of the supervisory
board at the latter's request.
22.4. 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 entitled to convene the meeting.
22.5. 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 23.
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The general meeting of shareholders determines the compensation to the members
of the Supervisory Board or to one or more of its members. The meeting shall
have
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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.
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Article 24.
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24.1. 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)
judgements, 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 unlawful or out
of his mandate. The termination of any action, suit or proceeding
by a judgement, 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
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best interests of the company, and, with respect to any criminal
action or proceeding, had reasonable cause to believe that his
conduct was unlawful.
24.2. 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 judgement 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 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
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jurisdiction shall deem proper.
24.3. 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.
24.4. 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 22,
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.
24.5. 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 an undertaking by or on behalf of
<PAGE>
23
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.
24.6. 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.
24.7. 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.
24.8. Whenever in this article reference is being made to the company,
this shall include, in addition to the
<PAGE>
24
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, 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 25.
-----------
25.1. The ordinary general meeting of shareholders shall be held each
year within six months after the close of the financial year.
25.2. 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 37;
c. filling vacancies on the managing board in accordance with
the provisions of article 12;
<PAGE>
25
d. filling vacancies on the supervisory board in accordance
with the provisions of article 19;
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 26.
-----------
26.1. 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.
26.2. 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 27.
-----------
27.1. 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.
27.2. The notice convening a general meeting of shareholders shall be
published by advertisement
<PAGE>
26
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.
27.3. 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.
Article 28.
-----------
28.1. 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.
28.2. 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.
28.3. 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
<PAGE>
27
open to inspection by the shareholders and other persons entitled
to attend the meetings of shareholders at the office of the
company.
Article 29.
-----------
29.1. 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.
29.2. 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 meeting.
29.3. 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 30.
-----------
30.1. 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.
30.2. 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
<PAGE>
28
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.
30.3. 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.
30.4. 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.
Article 31.
-----------
31.1. 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.
31.2. 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 32.
-----------
32.1. Unless otherwise stated in these articles, resolutions shall be
adopted by simple majority of
<PAGE>
29
votes of the shareholders having the right to vote in a meeting of
shareholders where at least one/third 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.
32.2. 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.
32.3. 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 33.
-----------
At the general meeting of shareholders each share shall confer the right to cast
one vote.
MEETINGS OF HOLDERS OF SHARES OF A PARTICULAR CLASS.
----------------------------------------------------
Article 34.
-----------
34.1. A meeting of holders of preference shares shall be held whenever
required by virtue of the provisions of these articles of
association and further whenever the managing board and/or the
supervisory board shall decide, and also whenever one or more
holders of preference shares so request the managing board and/or
the supervisory board in writing, stating the items of business to
be transacted.
If after receipt of a request as referred to in the preceding
sentence neither the managing board nor the supervisory board has
called a meeting in such
<PAGE>
30
a way that the meeting is held within four weeks of receipt, the
applicant(s) shall be authorised to call the meeting themselves,
with due observance of the relevant provisions of these articles of
association.
34.2. The managing directors and the supervisory directors shall have the
right to attend meetings of holders of preference shares; in that
capacity they shall have an advisory vote. Notice of a meeting of
holders of preference shares shall be given by letters sent to all
holders of preference shares. The notice shall state the items of
business to be transacted.
34.3. Article 27, paragraphs 1 and 3, article 28, article 29, article 30,
paragraph 1, article 31, article 32 and article 33 shall apply
mutatis mutandis to meetings of holders of preference shares.
34.4. At a meeting of holders of preference shares at which the entire
issued capital in shares of those class is represented, valid
resolutions may be adopted, provided that they are passed by
unanimous vote, even if the requirements in respect of the place of
the meeting, the manner of notice, the term of notice and the
stating in the notice of the items of business to be transacted,
have not been observed.
34.5. All resolutions which may be adopted by the holders of preference
shares at a meeting may also be adopted outside a meeting.
Resolutions may be adopted outside a meeting only if all holders of
preference shares and holders of a right of usufruct on preference
shares entitled to vote have declared themselves in favour of the
proposal by letter, by telegram, by telex
<PAGE>
31
communication or telecopier.
The resolution shall be recorded in the minute book of the meeting
of holders of preference shares by a managing director.
34.6. A meeting of holders of ordinary shares shall be held whenever
required by virtue of the provisions of these articles of
association. Articles 27 up to and including 33 shall apply mutatis
mutandis to meetings of holders of ordinary shares.
ANNUAL ACCOUNTS, REPORT OF THE BOARD OF MANAGEMENT AND DISTRIBUTIONS.
---------------------------------------------------------------------
Article 35.
-----------
35.1. The financial year shall run from the first day of January up to
and including the thirty-first day of December.
35.2. 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.
35.3. The managing board shall be bound to draw up the aforesaid annual
accounts in accordance with established principles of business
management.
35.4. 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.
35.5. Copies of the annual accounts which have been made
<PAGE>
32
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 thereof.
Article 36.
-----------
Adoption by the general meeting of shareholders of the annual accounts, referred
to in article 35, 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.
PROFIT AND LOSS.
----------------
Article 37.
-----------
37.1. Distribution of profits pursuant to this article shall be made
following approval of the annual accounts which show that the
distribution is permitted.
The company may only make distributions to shareholders and other
persons entitled to distributable profits to the extent that its
equity exceeds the total amount of its issued capital and the
reserves which must be maintained by law.
A deficit may only be offset against the reserves prescribed by law
in so far as permitted by law.
37.2. Upon proposal of the managing board, the supervisory board shall
determine what portion of the profit shall be retained by way of
reserve, having regard to the legal provisions relating to
<PAGE>
33
obligatory reserves.
37.3. The portion of the profit that remains after application of
paragraph 2, shall be at the disposal of the general meeting of
shareholders, with due observance of the provisions of article 38,
paragraph 2.
37.4. In case the general meeting of shareholders resolves upon
distribution of profits made in the latest financial year, first,
if possible, an amount equal to the percentage referred to below of
the paid up part of their par value shall be paid as dividend on
the preference shares. No further distributions shall be made on
the preference shares. The percentage referred to above is equal to
the average of the Euro Interbank Offered Rates applying to cash
loans with a term of one year - weighted on the basis of the number
of days for which these rates applied - during the financial year
in respect of which the distribution takes place. If the amount to
be paid on the preference shares has been reduced or, pursuant to a
resolution for further payment, has been increased in the financial
year in respect of which the distribution referred to above is
made, the distribution on these shares shall be reduced or, as the
case may be, increased if possible by an amount equal to the
percentage referred to above of the amount of the reduction or, as
the case may be, the increase, calculated from the time of the
reduction or, as the case may be, from the time at which further
payments become obligatory.
37.5. 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
<PAGE>
34
the profit in whole or in part.
Article 38.
-----------
38.1. 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.
38.2. 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 37, article 38, paragraph 1 and article 39 may be made in
full or 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 39.
-----------
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 40.
-----------
40.1. Distributions under articles 37, 38 or 39 shall be payable as from
a date to be determined by the
<PAGE>
35
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.
40.2. Distributions under articles 37, 38 or 39 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.
40.3. The supervisory board may determine the method of payment in
respect of cash distributions on type I shares.
40.4. Cash distributions under articles 37, 38 or 39 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
are listed on a stock exchange not being the Euro, converted at the
rate of exchange determined by the European 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
any governmental action or other exceptional circumstances beyond
its control, to make payment at the place designated outside the
Netherlands or in the relevant 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.
40.5. The person entitled to a distribution under
<PAGE>
36
articles 37, 38 or 39 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.
40.6. 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.
40.7. Distributions in cash under articles 37, 38 or 39 that have not
been collected within five years after they have become due and
payable shall revert to the Company.
40.8. In the case of a distribution under article 38, paragraph 2, any
shares in the company not claimed within a period to be determined
by the supervisory 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 6. 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.
40.9. In the case of a distribution in the form of shares
<PAGE>
37
in the company under article 38, 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.
40.10. 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 37, 38 or 39, 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 41.
-----------
41.1. A resolution to alter the articles of association or to wind up the
company shall be valid only provided that:
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.
41.2. A resolution to amend the articles of association
<PAGE>
38
by which the rights conferred on holders of shares of a specific
class as such are changed shall require the approval of the
relevant class meeting.
Article 42.
-----------
42.1. If the company is wound up, the liquidation shall be carried out by
any person designated for that purpose by the general meeting of
shareholders, under the supervision of the supervisory board.
42.2. 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.
42.3. 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.
42.4. After settling the liquidation, the liquidators shall render
account in accordance with the provisions of the law.
42.5. 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 43.
-----------
From what is left of the company's assets after all creditors have been
satisfied, first, if possible, all holders of preference shares shall have
returned to them the paid up part of the nominal amount of their preference
shares.
The residue shall be divided amongst the holders of ordinary shares pro rata to
their respective holdings of ordinary shares.
<PAGE>
39
Article 44.
-----------
Any amounts payable to shareholders or due to creditors which have not been
claimed within six months after the last distribution was made payable, shall be
deposited with the Public Administrator of Unclaimed Debts.
