The Belgian Act of Dec. 20, 2010, regarding the exercise of certain shareholders' rights in listed companies (wet betreffende de uitoefening van bepaalde rechten van aandeelhouders in beursgenoteerde vennootschappen / Loi concernant l'exercice de certains droits des actionnaires de sociétés cotées ) was published in the Belgian Official Gazette on April 18, 2011 (the Act). The Act will enter into force on Jan. 1, 2012, as of which date the articles of association of the companies, where applicable, need to be amended in order to comply with the provisions of the Act.
The title of the Act is somewhat misleading though as some of the new rules do not only apply to publicly listed companies, but also to some companies that are not listed on a stock exchange. This memorandum contains an overview of the main changes introduced by the Act.
1. Changes that only apply to publicly listed companies.
Convocation of shareholders' meetings – The minimum notice period to convene a general shareholders' meeting is extended from 24 days to 30 days. The notice period to convene a second shareholders' meeting when the required attendance quorum is not met at the first meeting, remains at least 17 days.
In addition to the publication in the Belgian Official Gazette and, where applicable, a nationally distributed newspaper, the Act requires that shareholders' meetings are also convened through media that may reasonably be expected to contribute to an efficient distribution of information to the public in the entire European Economic Area (EEA) and that is quickly accessible on a non-discriminating basis. In this connection, the Financial Services and Markets Authority (FSMA) recommends that companies use a variety of distribution channels, such as press agencies, international newspapers, (electronic) information providers, etc. A publication in national newspapers in every country of the EER is not required. The Act specifically mentions that the companies may not charge any costs to the shareholders for this service.
Contents of the convocation of shareholders' meetings – The Act introduces a new Article 533bis in the Company Code, containing the minimum contents of notices convening shareholders' meetings. In addition to mentioning the place, date and hour of the meeting, the agenda and the proposed resolutions to be resolved upon by the meeting, the notice also needs to contain a clear and accurate description of the various possibilities to attend, participate to and vote at the meeting, and the related formalities to be complied with by the shareholders in that respect.
Information to be made available on the website of the company – All relevant information, including the notice, the total number of shares and voting rights, any documents to be submitted to the meeting, the agenda and proposed resolutions, proxies, etc., also needs to be made available on the company's website as from the publication of the notice (i.e., 30 days prior to the meeting) until five years after the meeting has been held.
Right to add items to the agenda – One or more shareholders owning at least 3% of the share capital are entitled to add items on the agenda of the shareholders' meeting and can submit proposed resolutions with respect to the items included or to be added to the agenda. Such requests can be submitted in writing up to 22 days prior to the meeting and the company must publish the amended agenda (including new proxies and voting forms) at least 15 days prior to the meeting.
Formalities to attend the shareholders' meeting / registration of shares – The registration system becomes mandatory: to be able to participate in and vote at the shareholders' meeting, shares must now be registered in the name of the shareholder on midnight on the 14th day prior to the shareholders' meeting (the registration date), regardless of the number of shares held at the date of the shareholders' meeting, provided that a shareholder desiring to attend or be represented at the meeting, notifies the company thereof at the latest on the 6th day prior to meeting.
Minutes of the meeting – For each resolution, the minutes must mention the number of shares that have validly voted, the part of the share capital such number represents, the total number of votes cast, the number of shares that have voted in favor and against a proposed resolution, and the number of abstentions. This information also needs to be made available on the company's website within a 15-day period following the meeting.
2. Changes applicable to listed and non-listed companies.
Remote participation and voting – The Act introduces the possibility for shareholders to participate in the meeting and vote at the meeting from a distance, if the articles of association of the company so allow. The companies are free to organize such remote participation and voting system, provided that (i) an electronic communication system is used allowing the shareholders to at least participate to the discussions and deliberations and to exercise their voting rights with respect to the items to be resolved upon by the meeting on a live, simultaneous and uninterrupted basis, and (ii) the company is able to verify the capacity and identity of the shareholder.
Remote electronic voting – The Act also allows the articles of association of most Belgian companies to organize a remote electronic voting system, again as long as the company is able to verify the capacity and identity of the shareholder. This possibility is however not provided for cooperative companies.
3. Conclusion
The Act has direct consequences for all listed companies with respect to the organization of shareholders' meetings as from Jan. 1, 2012. Where required, the articles of association of listed companies will need to be amended in order to comply with the provisions of the Act. Non-listed companies may also wish to modify their articles of association in order to allow for remote participation and (electronic) voting.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
