NETHERLANDS Law and Practice Contributed by: Bastiaan Cornelisse, Bastiaan Kemp, Michel van Agt and Philippe Hezer, Loyens & Loeff
measures include the deployment of defence meas- ures, which are well developed in the Dutch market. Typically, these are part of the wider structuring of the company and implemented pre-IPO, so that they can be triggered in case of hostile shareholder activist. Examples of common defence measures include: • the issuance of protective shares to a protective foundation, allowing for a poison pill-like mecha- nism to neutralise hostile shareholder influence; • binding nomination mechanics and supermajority requirements for the appointment and involun- tary dismissal of directors which, combined with staggered boards, present a significant hurdle to interfering with board composition; • listing depositary receipts for shares, instead of the actual shares, so that voting rights can remain with a friendly protective foundation; and • the use of priority shares held by friendly founda- tions that have special control rights.
Further reference is made to the so-called “response time” and “cooling-off period”, which can be invoked to temporarily suspend certain shareholder rights. During such time, the company can engage in dia- logue with the activist and other shareholders, and explore alternatives. • Response time: the Dutch Corporate Governance Code provides for a response time of a reasonable period of up to 180 days, which can be invoked once the company becomes aware of a sharehold- er’s intention to submit agenda items that may lead to a change in the company’s strategy, including the dismissal of a director. • Cooling-off period: Dutch statutory law provides for a cooling-off period of up to 250 days, which may be invoked by the company when it is faced with either a shareholder proposal to appoint, suspend or dismiss members of the board (or amendment of provisions in the company’s articles of associa- tion related thereto) or an unsolicited public offer for its shares.
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