This content is from: Local Insights

The Netherlands

Houthoff Buruma

Amsterdam

Eleven listed companies, the Amsterdam Stock Exchange and a number of Dutch securities institutions have set up a system by which publicly listed companies can communicate with their shareholders through an independent intermediary. Up to now publicly traded Dutch companies have, with certain exceptions, generally not known who their shareholders are and have therefore been unable to communicate with shareholders. In addition to improving communication between shareholders and companies, this new system may also open up the possibility for shareholders to participate more directly in decision-making through proxy solicitation.

Participation in the new shareholder communications system is purely voluntary. Under the system listed companies which choose to participate or shareholders holding at least 1% of the outstanding shares in such companies (or shares in such companies with a market value of at least _EUR250,000) will have access to (other) shareholders through a confidential database maintained by an AEX intermediary.

In connection with the introduction of the new shareholder communications system the law has been amended to allow public companies to set a record date for shareholder meetings.

Those who hold shares on the record date will have the right to vote at shareholders' meetings even if they have transferred their shares after the record date and prior to the meeting. The record date must not be earlier than seven days before the meeting. The legislation concerning the record date will be effective in time for shareholders' meetings to be held in the year 2000 and will also apply to companies that do not participate in the new shareholder communication system. Companies will not be required to set a record date for meetings and may elect to set record dates for some meetings and not others. The concept of a record date for dividends and other distributions is not included in the new legislation.

The new shareholders communications system is, especially in combination with the record date, a useful instrument for parties - friendly or unfriendly - engaging in proxy solicitation.

There are as yet no provisions in Dutch law regulating the content or manner of proxy solicitations.

Maarten Scholtens

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