Statutory cooling-off period for Dutch listed companies

Pursuant to a recently approved bill, a new section – section 2:114a - is added to the Dutch Civil Code. Based on this provision, the management board of a Dutch public company (naamloze vennootschap or NV) that is listed on a regulated market or MTF in the EEA or a similar exchange outside of the EEA is entitled to invoke a cooling-off period if:

1. a shareholder or a group of shareholders holding at least 3% of the company's shares requests the consideration of a proposal for (i) the appointment, suspension or dismissal of one or more members of the management board or the supervisory board or (ii) amendment of one or more provisions of the articles of association that relate to the appointment, suspension or dismissal of members of the management board or the supervisory board, or
   
   
2. an unsolicited (hostile) public bid is announced or made for shares in the capital of the company,

and the management board considers the aforementioned request or the public bid, as applicable, to be substantially conflicting with the interests of the company and its business.

The decision of the management board to invoke the cooling-off period must be motivated and approved by the supervisory board. The cooling-off period can be invoked for a maximum of 250 days, calculated from the day following the last day on which a shareholders request for consideration by an upcoming shareholders meeting can be made or calculated from no later than the day following the day on which the public bid is made. The management board can shorten a cooling-off period that it has invoked. In the case of a public bid, the cooling-off period ends in any case the day after the public bid has completed.

The powers of the general meeting to appoint, suspend or dismiss management or supervisory directors or to amend provisions of the articles of association that relate thereto are suspended during the cooling-off period, except in relation to proposals to appoint, suspend or dismiss a management or supervisory director that the company has tabled itself. 

During the cooling-off period, the management board must gather all information needed for a considered policy determination. To this end, it must in any case consult with shareholders that hold at least 3% of the company's shares and the company's works council. If such shareholders or the works council present their position to the management board, the company will place the same on the company's website if the consulted party agrees to this. The management board must report on the policy pursued and the course of affairs from the time that the cooling-off period was invoked. The report will be posted on its website no later than one week after the last day of the cooling-off period and be included as an agenda item in the notice convening the next general meeting after the cooling-off period has elapsed.

A shareholder or a group of shareholders that holds at least 3% of the company's shares at the moment that the cooling-off period is invoked may request the Enterprise Chamber (Ondernemingskamer) of the Amsterdam Court of Appeals to terminate the cooling-off period. The Enterprise Chamber will do so if:

1. in light of the circumstances prevailing at the time when the cooling-off period was invoked, the management board could not have reasonably considered the shareholders request or public bid, as applicable, to be substantially conflicting with the interests of the company and its business, 
   
   
2. the management board is no longer able to reasonably be of the view that the continuation of the cooling-off period can contribute to a considered policy determination, or
   
   
3. during the cooling-off period one or more measures are active that correspond to the cooling-off period in terms of nature, purpose and scope and these measures are not terminated or suspended within a reasonable period after the petitioning shareholders have requested the same.

For questions about the statutory cooling-off period for Dutch listed companies, please contact Michiel Wurfbain.