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Nestle SA (NSTR)

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Friday 11 April, 2008

Nestle SA

Articles of Association 2008

Nestle SA
11 April 2008







Submission of Articles of Association of Nestle S.A.
April 11, 2008
Vevey, Switzerland


'Further to the amendment of Nestle S.A.'s regulations on shares with restricted
transferability, please find attached a copy of the inofficial translation into
English of the revised Articles of Association of Nestle S.A., as approved
yesterday by its Annual General Meeting of Shareholders'.





                                TRANSLATION (*)

                  ARTICLES  OF  ASSOCIATION  OF  NESTLE  S.A.

                                OF 10 APRIL 2008



I.   General


Article 1       Corporate name; Registered offices; Duration


1    Nestle S.A. (Nestle AG) (Nestle Ltd.) (hereinafter 'Nestle') is a company
     limited by shares incorporated and organised in accordance with the Swiss 
     Code of Obligations.

2    The registered offices of Nestle are in Cham and Vevey, Switzerland.

3    The duration of Nestle is unlimited.



Article 2       Purpose


1    The purpose of Nestle is to participate in industrial, service,
     commercial and financial enterprises in Switzerland and abroad, in 
     particular in the food, nutrition, health, wellness and related industries.

2    Nestle may itself establish such undertakings or participate in,
     finance and promote the development of undertakings already in existence.

3    Nestle may enter into any transaction which the business purpose may
     entail. Nestle shall, in pursuing its business purpose, aim for long-term,
     sustainable value creation.





II.  Share Capital


Article 3       Share capital

The share capital of Nestle is CHF 393 072 500 (three hundred ninety three
million and seventy two thousand five hundred Swiss francs) divided into 393 072
 500 fully paid up registered shares with a nominal value of CHF 1 each.



Article 3bis  Conditional share capital



1    The share capital of Nestle may be increased in an amount not to exceed CHF
10 000 000 (ten million Swiss francs) by issuing up to 10 000 000 registered
shares with a nominal value of CHF 1 each, which shall be fully paid up, through
the exercise of conversion rights and/or option rights granted in connection
with the issuance by Nestle or one of its subsidiaries of newly or already
issued convertible debentures, debentures with option rights or other financial
market instruments.

2    The shareholders have no preferential rights to subscribe for these new
shares. The current owners of conversion rights and/or option rights shall be
entitled to subscribe for the new shares.

3    The new shares shall be subject, as soon as they are issued following the
exercise of conversion and/or option rights, to the restrictions set forth in
art. 5.

4    The Board of Directors may limit or withdraw the right of the
shareholders to subscribe in priority to convertible debentures, debentures with
option rights or similar financial market instruments when they are issued, if:
     
a)   an issue by firm underwriting by a consortium with subsequent offering to
     the public without preferential subscription rights seems to be the most
     appropriate form of issue at the time, particularly in terms of the 
     conditions for issue; or

b)   the financial market instruments with conversion or option rights are 
     issued in connection with the financing or refinancing of the acquisition 
     of an enterprise or parts of an enterprise or participations or new 
     investments.


5    Any financial market instruments with conversion or option rights which the
Board of Directors decides not to offer directly or indirectly for prior
subscription to the shareholders shall be subject to the following conditions:
     
a)   Conversion rights may be exercised only for up to 15 years, and option
     rights only during 7 years from the date of issue of the relevant financial
     market instruments.

b)   The new shares shall be issued according to the applicable conversion or
     option conditions. The respective financial instruments must be issued at 
     the relevant market conditions.

c)   The issue of new shares upon exercise of option or conversion rights shall
     be made at conditions taking into account the market price of the shares 
     and/or comparable instruments with a market price at the time of issuance 
     of the relevant convertible debenture, debenture with option rights or 
     similar financial market instrument.



Article 4       Share certificates; Dematerialised shares


1    Nestle shall issue registered shares or certificates covering several
registered shares, which are issued in the name of the owner.

2    The certificates shall be signed by two members of the Board of Directors.
Both signatures may be affixed in facsimile.

3    Nestle may cease printing and supplying certificates. A shareholder shall
however have the right to demand at any time that a certificate for his shares
be printed and supplied at no cost.

4    Uncertificated shares and the rights attached to such shares but not
represented by a certificate may only be transferred by written assignment. In
order to be valid, the assignment must be notified to Nestle.

5    Uncertificated shares and the rights attached thereto may be pledged only
by way of written agreement and only in favour of the bank administering the
shares for the shareholder.



Article 5       Share register


1    Nestle shall maintain a share register showing the name and address of the
holders or usufructuaries. Any change of address must be reported to Nestle.

2    Only persons entered in the share register as shareholders with voting
rights may exercise the voting rights or the other rights related thereto.

3    After the acquisition of shares, upon request of the shareholder to be
recognised as such, any acquiring party shall be considered as a shareholder
without voting rights, until it is recognised by Nestle as a shareholder with
voting rights. If Nestle does not refuse the request to recognise the acquiring
party within twenty days, the latter shall be deemed to be a shareholder with
voting rights.

4    An acquirer of shares shall be recorded in the share register as a
shareholder with voting rights provided he expressly declares to have acquired
the shares in his own name and for his own account.

5    No person or entity shall be registered with voting rights for more than 5%
of the share capital as recorded in the commercial register. This limitation on
registration also applies to persons who hold some or all of their shares
through nominees pursuant to this article. All of the foregoing does not apply
in the case of the acquisition of an enterprise, or parts of an enterprise or
participations through exchange of shares or in the cases provided in art. 685d
par. 3 of the Swiss Code of Obligations.

6    The Board of Directors shall promulgate regulations relating to the
registration of fiduciaries or nominees to ensure compliance with these Articles
of Association.

7    Legal entities that are linked to one another through capital, voting
rights, management or in any other manner, as well as all natural persons or
legal entities achieving an understanding or forming a syndicate or otherwise
acting in concert to circumvent the regulations concerning the limitation on
registration or the nominees, shall be counted as one person or nominee within
the meaning of paragraphs 4 and 5 of this article.
     
8    After hearing the registered shareholder or nominee, the Board of Directors
may cancel, with retroactive effect as of the date of registration, the
registration of such shareholder or nominee if the registration was effected
based on false information. The respective shareholder or nominee shall be
informed immediately of the cancellation of the registration.

9    The Board of Directors shall specify the details and promulgate the
necessary regulations concerning the application of this art. 5. Such
regulations shall specify the cases in which the Board or a corporate body
designated by the Board may allow exemptions from the limitation on registration
or the regulation concerning nominees.

10   The limitation on registration provided for in this article shall also
apply to shares acquired or subscribed by the exercise of subscription, option
or conversion rights.




III.  Organisation of Nestle



A.  General Meeting


Article 6       Powers of the General Meeting


1      The General Meeting of shareholders is the supreme authority of Nestle.


2      The following powers shall be vested in the General Meeting:

     
a)   to adopt and amend the Articles of Association;

b)   to elect and remove the members of the Board of Directors and the Auditors
     of Nestle;

c)   to approve the annual report and the consolidated financial statements;

d)   to approve the annual financial statements as well as the resolution on the
     use of the balance sheet profit, in particular, the declaration of 
     dividends;

e)   to grant release to the members of the Board of Directors and the persons
     entrusted with management; and

f)   to take all decisions which by law or under these Articles of Association
     are within the powers of the General Meeting.



Article 7       Annual General Meeting


The Annual General Meeting shall be held each year within six months of the
close of the financial year of Nestle. The meeting shall be convened by the
Board of Directors.


Article 8       Extraordinary General Meeting


1    Extraordinary General Meetings shall be convened by the Board of Directors
or, if necessary, by the Auditors, as well as in the other cases foreseen by
law.

2    The Board of Directors shall, if so requested by a General Meeting or at
the request in writing, specifying the items and proposals to appear on the
agenda, of one or more shareholders with voting rights whose combined holdings
represent at least one tenth of the share capital as recorded in the commercial
register, convene an Extraordinary General Meeting. The Extraordinary General
Meeting shall be held as promptly as practicable following such request.



Article 9       Notice of General Meetings; Agenda



1    Annual or Extraordinary General Meetings shall be convened by notice in the
'Swiss Official Gazette of Commerce' not less than twenty days before the date
fixed for the meeting. Shareholders may in addition be informed by ordinary
mail.

2    The notice of a meeting shall state the items on the agenda and the
proposals of the Board of Directors and of the shareholders who requested that a
General Meeting be convened (art. 8 par. 2) or that items be included in the
agenda (art. 9 par. 3).      


3    One or more shareholders with voting rights whose combined holdings
represent at least 0.15% of the share capital of Nestle as recorded in the
commercial register may request that an item be included in the agenda of a
General Meeting. Such a request must be made in writing to the Board of
Directors at the latest 45 days before the meeting and shall specify the agenda
items and the proposals made.


4    No resolution shall be passed at a General Meeting on matters which do not 
appear on the agenda except for:

a)   a resolution convening an Extraordinary General Meeting; or

b)   the setting up of a special audit.



Article 10     Presiding officer; Minutes

1    The Chairman or any member of the Board of Directors shall preside at
General Meetings and carry all procedural powers.

2    Minutes of General Meetings shall be kept by the Secretary of the Board
of Directors.



Article 11     Voting rights; Proxies


1    Each share recorded in the share register as share with voting rights
confers one vote on its holder.

2    At General Meetings no person may exercise, directly or indirectly, voting
rights, with respect to own shares or shares represented by proxy, in 
excess of 5% of the share capital as recorded in the commercial register. 
Legal entities that are linked to one another through capital, voting 
rights, management or in any other manner, as well as all natural persons 
or legal entities achieving an understanding or forming a syndicate or 
otherwise acting in concert to circumvent such a limit, shall be counted as 
one shareholder.

3    The foregoing limit does not apply to shares received and held by a
shareholder pursuant to an acquisition of an enterprise, or parts of an
enterprise or participations as referred in art. 5 par. 5.

4    In order to permit the exercise of voting rights in respect of shares
deposited with banks, the Board of Directors may by means of regulations or
agreements with banks depart from the limit foreseen in this article. It  may
also depart from such a limit within the framework of the regulations  referred
to in art. 5 par. 6 and par. 9. In addition, this limit shall not  apply to the
exercise of voting rights pursuant to the statutory rules on institutional
shareholder representatives.


Article 12     Quorum and decisions


1    General Meetings shall be duly constituted irrespective of the number of
shareholders present or of shares represented.

2    Unless provided otherwise by law or the Articles of Association,
shareholders' resolutions and elections shall be decided by an absolute 
majority of the shares represented.

3    Votes shall be taken either on a show of hands or by electronic voting
unless a vote by written ballot is ordered by the Presiding officer of the
meeting. The Presiding officer may at any time order to repeat an election  or
resolution, if he doubts the results of the vote. In this case, the  preceding
election or resolution is deemed not having taken place.

4    If the first ballot fails to result in an election and more than one
candidate is standing for election, the Presiding officer shall order a  second
ballot in which a relative majority shall be decisive.     


Article 13     Special quorum


The approval of at least two thirds of the shares represented and the absolute
majority of the nominal value represented at a General Meeting shall be required
for resolutions with respect to:

a)   a modification of the purpose of Nestle;

b)   the creation of shares with increased voting powers;

c)   restrictions on the transfer of registered shares and the change or removal
     of such restrictions;

d)   an authorized or conditional increase in share capital;

e)   an increase in share capital through the conversion of capital surplus,
     through a contribution in kind or for the purpose of an acquisition of 
     assets, or a grant of special benefits upon a capital increase;

f)   the restriction or withdrawal of the right to subscribe;

g)   a change of the registered offices of Nestle;

h)   the dissolution of Nestle;

i)   restrictions on the exercise of voting rights and the change or removal of
     such restrictions;

j)   the limitation on registration (art. 5 par. 4 to 7) and the limitation on
     voting rights (art. 11 par. 2, 3 and 4) and the change or removal of such
     limitations;

k)   the change of the corporate name of Nestle; and

l)   other matters as provided by statutory law.



B.  Board of Directors


Article 14     Number of Directors

The Board of Directors shall consist of at least seven members.


Article 15     Term of office


1    The members of the Board of Directors shall be elected for a term of 
office of three years by the General Meeting. Each year the Board shall be
renewed by rotation, to the extent possible in equal numbers and in such  manner
that, after a period of three years, all members will have been  subject to re-
election. Directors shall be elected individually.

2    In the event of an increase or a decrease in the number of Directors, the
Board of Directors shall establish a new order of rotation. It follows that  the
term of office of some members may be less than three years.

3    Members of the Board of Directors whose term of office has expired shall be
immediately eligible for re-election.

4    A year shall mean the period running between one Annual General Meeting and
the next.


Article 16      Organisation of the Board; Remuneration

1    The Board of Directors shall elect its Chairman and one or two  Vice-
Chairmen. It shall appoint a Secretary and his substitutes, neither of  whom
need be members of the Board of Directors.

2    The Board of Directors shall define in the Board regulations pursuant to
art. 19 par. 2 its organisation and the assignment of responsibilities.

3    The members of the Board of Directors are entitled to a directors' fee for
their activities the amount of which is fixed by the Board of Directors.


Article 17     Powers of the Board in general

The Board of Directors shall conduct all the business of Nestle to the extent
that it is not within the powers of the General Meeting or not delegated
pursuant to the Board regulations as set forth in art. 19 par. 2.




Article 18     Specific powers of the Board

The Board of Directors has the following non-transferable and inalienable
duties:

a)   the ultimate direction of the business of Nestle, in particular the      
     conduct, management and supervision of the business of Nestle, and the 
     provision of necessary directions;

b)   the determination of the organisation in the Board regulations pursuant to
     art. 19 par. 2;

c)   the determination of accounting and financial control principles;

d)   the appointment and removal of the persons entrusted with the management 
     and the granting of signatory powers to persons representing Nestle;

e)   the ultimate supervision of the persons entrusted with the management of
     Nestle, ensuring in particular their compliance with the law, the Articles 
     of Association, regulations and instructions given;

f)   the preparation of the business report in accordance with the provisions of
     the law;

g)   the preparation of General Meetings and the carrying out of its resolutions;
     
h)   the determination of the manner in which the dividend shall be paid;

i)   the opening and closing of branch offices; and

j)   the notification of the court in case of overindebtedness.



Article 19     Delegation of powers

1    The Board of Directors may appoint from amongst its members standing or ad
hoc committees entrusted with the preparation and execution of its  decisions or
the supervision of specific parts of the business. The Board  of Directors shall
ensure that it is kept properly informed.

2    Unless otherwise provided by law, the Board of Directors may in accordance 
with the Board regulations delegate all or part of the management to one or more 
of its members, to one or more board committees, or to third parties.



C.  Auditors


Article 20     Number of Auditors; Term of office


The General Meeting shall appoint, for a term of one year, one or more Auditors
of the annual financial statements of Nestle and the consolidated financial
statements of the Group, which shall be independent from Nestle and meet the
special professional standards required by law. The Auditors of Nestle may be
re-elected.



Article 21     Rights and duties of Auditors



The Auditors shall verify the annual financial statements of Nestle and the
consolidated financial statements of the Group. The Auditors shall submit their
reports to the General Meeting. Their rights and duties shall be as set out in
the Swiss Code of Obligations.





IV.  Business report and appropriation of profit resulting from the balance
     sheet



Article 22     Financial year

The financial year shall commence on 1 January and shall end on 31 December.



Article 23     Business report

For every financial year the Board of Directors shall prepare a business report
consisting of the annual financial statements of Nestle, of the annual report
and the consolidated financial statements.


Article 24     Appropriation of profit resulting from the balance sheet

The profit shall be allocated by the General Meeting within the limits set by
applicable law. The Board of Directors shall submit its proposals to the General
Meeting.





V.  Announcements, Communications


Article 25     Notices


All notices and communications to be made by Nestle shall be considered duly
made if published in the 'Swiss Official Gazette of Commerce', unless the law
provides otherwise.


Articles of Association approved by the Annual General Meeting of 10 April 2008


For further information:

Nestle S.A.
Avenue Nestle 55, CH-1800 Vevey ( Switzerland)
tel. +41 (0)21 924 21 11

www.nestle.com


--------------------------


(*)        This is an unofficial translation. In case of doubt or differences of
interpretation, the official French and German versions of the Articles of
Association shall prevail over the English text.


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