Pre-Annual General Meeting Information • Aug 24, 2012
Pre-Annual General Meeting Information
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For the Extraordinary General Meeting of Shareholders to be held on 4 October 2012 at 10.00 hours CET in the Qurius Inspirience Center, Van Voordenpark 1a, Zaltbommel, the Netherlands concerning a proposed public-to-private transaction
Zaltbommel, 23 August 2012
| 1 | Introduction and important information | 3 | |||
|---|---|---|---|---|---|
| 1.1 Purpose of this Shareholder Circular |
3 | ||||
| 1.2 Information provided and authorization |
6 | ||||
| 1.3 Forward-looking statements |
6 | ||||
| 1.4 Defined terms |
7 | ||||
| 1.5 Presentation of financial and other information |
7 | ||||
| 2 | Letter to shareholders | 8 | |||
| 3 | Background to and rationale for the transaction | 10 | |||
| 3.1 Background to the transaction |
10 | ||||
| 3.2 Rationale for the Transaction |
13 | ||||
| 4 | Summary of the transaction | 14 | |||
| 4.1 Transaction structure |
14 | ||||
| 4.2 Conditions precedent |
14 | ||||
| 4.3 Approval debt providers |
15 | ||||
| 4.4 Alternative Offer |
15 | ||||
| 4.5 Other important terms and conditions |
16 | ||||
| 4.6 Tax considerations for Qurius |
16 | ||||
| 4.7 Tax consideration for Qurius shareholders |
16 | ||||
| 4.8 Timetable of principle events |
16 | ||||
| 5 | Recommendation and support | 18 | |||
| 5.1 Recommendation |
18 | ||||
| 5.2 Qurius' works council advice and point of view |
19 | ||||
| 6 | Disposal, dissolution, distribution and delisting | 20 | |||
| 6.1 Disposal and payment of the Purchase Price |
20 | ||||
| 6.2 Dissolution and Distribution |
21 | ||||
| 6.3 Delisting |
22 | ||||
| 7 | Prodware | 23 | |||
| 7.1 Introduction |
23 | ||||
| 7.2 General structure and business |
23 | ||||
| 7.3 Selected pro forma financial information |
23 | ||||
| 7.4 Shareholding structure |
24 | ||||
| 7.5 Corporate governance |
24 | ||||
| 7.6 Employees |
25 | ||||
| 7.7 Major shareholders |
25 | ||||
| 7.8 Listing and liquidity of the listed shares |
25 | ||||
| 7.9 2011 annual accounts |
27 | ||||
| Schedule 1 - Definitions |
29 | ||||
| Appendix 1 - Fairness Opinion |
31 | ||||
| Appendix 2 – Dutch tax considerations for Qurius shareholders |
32 | ||||
| Appendix 3 – Agenda Extraordinary General Meeting 35 |
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| Appendix 4 - Prodware 2011 accounts: |
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| Management report / Consolidated accounts |
39 |
This Shareholder Circular is provided by Qurius N.V. (Qurius) to its shareholders solely for the purpose of providing further information on the proposals on the agenda for the extraordinary general meeting of shareholders of Qurius (the Extraordinary General Meeting) to be held on 4 October 2012 at 10.00 hours CET in the Qurius Inspirience Center, Van Voordenpark 1a, Zaltbommel, the Netherlands. This Shareholder Circular – which is available in English only – is also available on Qurius' website (www.qurius.nl) and in hard copy at Qurius' offices and will be available at the Extraordinary General Meeting.
On 30 July 2012, Qurius and Prodware, S.A. (Prodware) entered into a term sheet (the Term Sheet). The combination of transactions that Qurius and Prodware agreed by means of the Term Sheet (the Transaction) effectively regards a public-to-private transaction. It consists of the following main elements:
Qurius UK, Qurius GE, Qurius NL, Qurius CZ and Qiptree are collectively referred to as the Companies.
The Disposal is executed in two steps. The first step of the Disposal (Step 1), which shall be completed on 24 August 2012 at the latest, consists of (i) the sale by Qurius International Holding B.V. (Qurius International Holding) of the entire outstanding share capital of Qurius Deutschland A.G. to Prodware, (ii) the sale by Qurius of the entire outstanding share capital of Qurius UK to Prodware, and (iii) the assignment of claims of Qurius vis-à-vis Qurius GE and Qurius UK to Prodware. The second step of the Disposal (Step 2) shall consist of (a) the sale by Qurius of the entire outstanding share capital of (i) Qurius NL, and (ii) Qurius CZ; (b) the assumption by Prodware of the Debt (as defined below); and (c) the assignment of intercompany receivables of Qurius vis-à-vis (i) Qurius NL, and (ii) Qurius CZ (to Prodware.
(b) upon completion of Step 1:
(2) payment of EUR 3,500,000 in listed ordinary shares in Prodware (the Prodware Shares) at a value per Prodware Share equal to the weighted average closing price of the Prodware Shares twenty trading days prior to 31 July 2012, which is the date on which the Transaction was announced (the Announcement Date) (the Announcement Date Share Price);
Prodware has agreed to ensure that upon completion of Step 2, Qurius shall have a positive balance (after deduction of its (contingent) liabilities (whether due and payable or not), whereby any and all liabilities of Qurius vis-à-vis Prodware in respect of any of the representations, warranties and indemnifications with respect to the Transaction shall not be taken into account) of at least EUR 7,000,000 in Prodware Shares and/or cash and EUR 1,000,000 in cash (the Pre-liquidation Balance)
(at a value per Prodware Share equal to (a) the Announcement Date Share Price, unless (b) if the Step 2 Share Price is 20% or more lower or, as the case may be, higher than the Announcement Date Share Price, in which case the Step 2 Share Price will apply, to be increased or decreased, as the case may be, with 15%). In the event the costs for the liquidation of Qurius exceed EUR 1,000,000, Prodware shall increase the cash portion of the Pre-liquidation Balance and accordingly decrease the share portion of the Pre-liquidation Balance.
Completion of the Transaction is conditional upon the satisfaction of certain conditions precedent.
For more information on the conditions precedents see paragraph 4.2 of Chapter 4 (summary of the Transaction).
If approved by the Extraordinary General Meeting and completed, the overall result of the Transaction will be that if you hold shares in Qurius on the Distribution Record Date, your investment will effectively be transformed from a shareholding in the listed company Qurius to (a) a holding of ordinary shares in the listed company Prodware and/or (b) a payment in cash.
The decision to pursue the Transaction requires the general meeting of shareholders of Qurius to resolve on a number of matters. Consequently, Qurius convenes the Extraordinary General Meeting. At the Extraordinary General Meeting, Qurius shareholders will be asked to vote on the following proposals (the Transaction Resolutions):
To confirm in view of a (potential) conflict of interest between Qurius and members of the Executive Board that the shareholders meeting shall not make an appointment as referred to in section 21 subsection 2 of Qurius' articles of association.
In relation to each of the Transaction Resolutions, the affirmative vote of a simple majority of votes cast at the Extraordinary Meeting is required. Prodware holds 21.579.571 shares in Qurius, representing approximately 15,89% of all shares in Qurius that are outstanding at the date of this Shareholders Circular.
This Shareholder Circular serves as written information as referred to in best practice provision IV.3.8 of the Dutch corporate governance code to provide information in respect of the Transaction that shareholders may find relevant when asked to vote at the Extraordinary General Meeting on the Transaction Resolutions. This Shareholder Circular is in addition to, and not in lieu of, the agenda and explanatory notes for the Extraordinary General Meeting that are included in this Shareholder Circular as Appendix 3.
With the exception of the information contained in Chapter 0 (Prodware), which has been provided by and at the responsibility of Prodware, the information in this Shareholder Circular has been solely provided by and at the responsibility of Qurius. No person is or has been authorized to give any information or to make any representation other than the information provided in this Shareholder Circular and, if given or made, such information or representations must not be relied upon as having been authorized by Qurius or Prodware.
The information included in this Shareholder Circular is stated only as at the date of this Shareholder Circular and under no circumstances should the issue and/or distribution of this Shareholder Circular after the date of its publication be interpreted as implying that the information included therein will continue to be correct and complete at any later date.
This Shareholder Circular contains certain statements that are or may be forward-looking statements including, statements with respect to the expected timing of events, financial conditions or prospects. Words such as "expects", "plans", "anticipates", "estimates", "believes", "believe", "may", "could", "should", "would", "will", "intends", "continues", "projects", "goals", "targets", "strategy" and other words of similar meaning are intended to identify such forward-looking statements. Such forward-looking statements involve unknown risks, uncertainties and other factors which may cause the expected timing of events, financial conditions or prospects to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Undue reliance should not be placed on these statements because, by their nature, they are subject to known and unknown risks and can and may be affected by factors that are beyond the control of Qurius or Prodware.
Except as required by law, any intent or obligation to update any forward-looking statements in this Shareholder Circular is expressly disclaimed.
This Shareholders Circular does not contain, constitute or form part of, and should not be construed as, an offer or invitation to subscribe for or purchase any securities and neither this Shareholder Circular nor anything contained herein shall form the basis of, or be relied on in connection with, any offer or commitment whatsoever. It is specifically noted that the Distribution of the Prodware Shares to the Qurius shareholders shall be an allocation of such securities where there is no element of choice on the part of the recipient, including no right to repudiate the allocation. Consequently, the Distribution of the Prodware Shares is no "offer of securities to the public" in the meaning of Chapter 5.1 of the Financial Supervision Act (Wet op het financieel toezicht) and article 2.1 (d) of the Prospectus Directive (2003/71/EC - 2010/73/EU). The Distribution does therefore not require the publication of a prospectus, nor does any other element of the Transaction require such a publication of a prospectus. Neither Prodware Shares nor the shares in Qurius have been (nor will be) registered under the US Securities Act of 1933, as amended (the US Securities Act), or the securities laws of any state or other jurisdiction of the United States, and may not be offered, sold or allotted except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act.
No shares in Qurius or Prodware Shares will be offered or allotted directly or indirectly into, or by use of the mails of, or by any means or instrumentality of interstate or foreign commerce of, or any facilities of a national securities exchange of, the United States, unless an exemption from registration under the US Securities Act, is available. This includes, but is not limited to, facsimile transmission, electronic mail, telephone and the internet. Accordingly, copies of this Shareholders Circular and any related
offering documents will not and must not be mailed or otherwise transmitted, distributed or forwarded in or into the United States.
This Shareholders Circular has not been submitted to or reviewed by the US Securities and Exchange Commission (the SEC) or any state securities commission of any other jurisdiction, and neither the SEC nor any such state securities commission of any other jurisdiction has (a) approved or disapproved the allotment of the Prodware Shares, (b) passed upon the merits or fairness of the allotment, or (c) passed upon the adequacy or accuracy of the disclosure in this Shareholders Circular. Any representation to the contrary is a criminal offence in the United States.
The allotment of the Prodware Shares is being made by a Dutch company, the Prodware Shares allotted are shares in a French company, and this Shareholders Circular and other information in relation to the allotment of the Prodware Shares comply with Dutch disclosure requirements, which differ materially from US disclosure requirements, format and market practice. Neither the Prodware Shares nor the shares in Qurius have been (nor will be) registered under the US Securities Act, or the securities laws of any state or other jurisdiction of the United States, and may not be offered, sold or allotted except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act. There will be no public offer of Prodware Shares or shares in Qurius in the United States.
Certain terms used in this Shareholder Circular are defined in Schedule 1 (Definitions).
Certain figures contained in this Shareholder Circular have been subject to rounding adjustments. Accordingly, in certain instances the sum of the numbers in a column or a row in tables contained in this Shareholder Circular may not conform exactly to the total figure given for that column or row.
Dear shareholder,
It was announced on 31 July 2012 that Qurius and Prodware have reached an agreement on the heads of terms of a combination of transactions that allows Qurius' business to be continued by Prodware, a company whose shares are listed on the NYSE Euronext stock exchange on the Alternext index in Paris, following the earlier sale of Qurius' subsidiaries in Belgium and Spain to Prodware. For a further description of the Transaction's structure, please see paragraph 4.1 of Chapter 4 (Summary of the Transaction).
The Transaction is subject to shareholder approval at the Extraordinary General Meeting. This Shareholder Circular contains important information about the Transaction and you are urged to carefully review and consider the information in this Shareholder Circular before any decision is made by you on the Transaction.
Due to market circumstances and as previously communicated by Qurius, Qurius' financial position and financial outlook were rapidly deteriorating by the end of May and beginning of June. Accordingly, Qurius faced very substantial challenges in the immediate future to finance its operations, and if no major corporate restructuring was carried out (such as the Transaction), Qurius would have incurred substantial and severe cashflow problems for which no immediate solution was available.
Simultaneously, the NIBC as lending bank, indicated its wish to investigate discontinuing the relationship and terminate the existing financing facility with Qurius. NIBC also requested for a swift resolution to the situation that had arisen. The urgency thus created by the projected cash flow situation combined with the NIBC position was driving the short timelines available to find a final solution.
In view of Qurius' financial situation, Qurius conducted a review of the options available for securing the future of Qurius' business and value for all Qurius shareholders. All available options were explored, including the possibility of closing Qurius' operations, selling its assets and distributing cash back to shareholders, and the possibility of combining Qurius' business with those of other companies. Qurius has also investigated the options to sell a limited number of its subsidiaries in order to generate short term liquidity, and the options of a major participation of an outside investor (and hence a very substantial dilution of Qurius' current shareholders). These investigations have learned that these options did not provide meaningful benefit for Qurius and its stakeholders.
Qurius' shareholder Prodware - who already significantly invested in Qurius' business - has agreed to invest in Qurius' business by taking over the Qurius' subsidiaries as described in this Shareholders Circular. Despite intensively seeking alternative solutions Qurius could not identify a different solution that would provide equivalent certainty and stability for Qurius' stakeholders. Qurius therefore concluded that the transaction with Prodware offers the only significant funding that is available to Qurius.
In evaluating the Transaction on behalf of all of Qurius' stakeholders and considering the terms of the Transaction against the alternatives, Qurius has concluded that the Transaction is in the best interests of Qurius' shareholders and other stakeholders, which conclusion is supported by a fairness opinion dated 26 July 2012 2012 from Duff and Phelps in connection with the Transaction, stating that, in the opinion of Duff and Phelps, the Transaction is fair and reasonable from a financial point of view so far
as Qurius' shareholders are concerned (the Fairness Opinion), a copy of which is included in this Shareholders Circular as Appendix 1. Accordingly, on the basis that the proposed Transaction is in the best interests of Qurius and Qurius' shareholders, employees, customers and other stakeholders, the management board and supervisory board of Qurius support the proposed Transaction and recommend Qurius' shareholders exercising their voting rights at the Extraordinary General Meeting to vote in favour of the proposed Transaction and the other proposed resolutions described in this Shareholder Circular. For more information on Qurius' recommendation and its arguments and considerations supporting the recommendation, please see paragraph 5.1 of Chapter 5 (Recommendation and Support).
The agenda and explanatory notes of the Extraordinary General Meeting are included in this Shareholder Circular as Appendix 3. You can vote in person at the Extraordinary General Meeting or by submitting a proxy. For further information on the voting formalities, see the agenda and explanatory notes of the Extraordinary General Meeting.
The urgent situation for Qurius that occurred by the end of May 2012 started a chain of inevitable developments that had to lead to a timely and viable outcome. The boards of Qurius deeply regret the fact that they had not been able to make the turnaround of Qurius as an independent business. The burden of loans, tough economic circumstances, the fundamental changes in the market created a challenging path for Qurius with no margins left for business setbacks. When confronted with unexpected and substantial disappointments, drastic steps were necessary where we had anticipated a more evolutionary approach to Prodware and the build-up of a strong alliance on a more equal basis. We fully realize that we now had to deal with the situation in a stage of restructuring the company where the company was valuated by the market at a low level. However there was no time left to build up value following our initial restructuring plan. The Transaction that we now propose to our shareholders is, given all circumstances, the best we could manage. We have experienced Prodware as a reliable partner over the last two and a half years and we share with them the vision that with Qurius integrated, it can build up a strong and successful group over the coming years.
Yours sincerely,
Supervisory Board Qurius N.V. / Executive Board Qurius N.V.
At the start of 2012 we were quite optimistic that we would achieve our internal goals in terms of sales, costs, EBIT and net results. During 2011 the monthly business reviews from each operating company showed improved EBITDA and improvement in the outlooks. The restructuring process, initiated mid-2010, was halfway and the first results were visible, as reported in the annual report 2011 and at the AGM on 24 May 2012. Our operation in the UK managed to produce a small positive EBIT in 2011 and was positioned to pick up growth of the business. In Germany the losses declined while in the last few months of 2011, a number of large deals were closed, lifting this operating company to a higher level. The operations in the Netherlands were improving and we expected in 2012 to reap the fruit of a lower cost level and a more focussed organisation. Also based on the financial analyses days, in which we are regularly updated by the members of the country management in person, we expected 2012 to become the first profitable year since 2007.
However, the 2011 trend did not continue to the full in the first quarter of 2012. Sales lagged somewhat behind, costs were less flexible than required and the amount of available working capital shrunk. At that time, we considered this to be a temporary break that we would catch up later in the year. This matched with our experience that quarterly results tend to show deviations from planning and expectations. Sometimes positive, sometimes negative. These respective fluctuations from quarter to quarter, level out over a longer period of time.
We had to await the figures over the second quarter that eventually became available on 16 July. In the meantime however, the German operation did not perform up to plan and management in Germany appeared not to be in control at the desired level, as we indicated on the AGM on 24 May by mentioning the need for tighter project management in Germany. We took immediate steps to achieve this and as we were going into more detail, we learned subsequently that Qurius Germany was confronted with a number of problems that it was no longer able to solve all by itself. The first was that Qurius Germany had provided an outlook that appeared not to be realistic in view of the local market circumstances. Secondly it appeared that it had lost a considerable number of fee earners for whom there was had plenty of work to do, while the remaining staff members were less chargeable as these are specialised in services for which was less demand. Thirdly it appeared that in a large fixed price project, Qurius Germany did not meet milestones timely in order to secure payments while the subcontractors that Qurius Germany hired, needed to be paid. At that point we started negotiations with the Managing Director of Qurius Germany to step down. In the meantime, we appointed a team of the best and most experienced managers to sort things out in Germany. We also felt that this was stock price sensitive information that we needed to disclose to our investors. To that aim we issued a press release dealing with the problems and our remedy on 11 June 2012. By then, the task force had already started.
On 11 June, also the monthly, internal latest estimate of the quarterly results became available. This indicated that we suffered over the month of May, a serious loss in Germany, that the market in the Netherlands further lagged behind and that Qurius UK had stopped its positive development and would probably report a slightly negative EBIT.
Already in 2010 and early 2011, the Supervisory Board, together with the Executive Board, investigated the options to merge with other, larger European parties. Various conversations have been held with numerous potential strategic partners. Some of them conducted due diligence and some conversations did not lead to a due diligence phase. The 2010 and 2011 process led the Executive Board and Supervisory Board to the conclusion that the potentials for a strategic alliance or merger were limited and that Prodware offered the best available case. From that orientation also followed the
establishment of the strategic alliance with Prodware that was initiated in February 2011 and intensified in July 2011.
In the first half of 2012, the Supervisory Board had eight formal, in-person meetings with the Executive Board and a dozen of meetings among each other, most of them by means of a conference call. This intensified supervision was triggered by the disappointing operational performance and the discontinuation of the 2011 trend. With a weak cash position, the Supervisory Board wished to closely monitor developments and keep in close contact with the Executive Board. As a consequence there was more contact with the Executive Board and among each other.
The aforementioned developments in Germany and the effect these developments have on the group, combined with the vulnerability for disappointing market circumstances in the Netherlands, made it clear to the Executive Board and the Supervisory Board of Qurius that the goals as set before internally, would not be achieved and that the expectations of the results of the restructuring process, had to be adjusted. In order to meet this new reality, a major corporate restructuring is necessary to avoid further severe liquidity difficulties in the near future. The time available to reach a solution was limited by the direction of NIBC indicating the wish for a swift resolution combined with the anticipated cash flow situation. Preliminary and exploring talks were initiated with a number of 5 potential investors, all of which not successful.
Both the Supervisory Board and the Executive Board concluded that the best option was to intensify the talks with its strategic partner Prodware with the option of a full merger and the immediate sale of Qurius UK and Qurius Germany to supply cash in the short term. The chairman of the Executive Board and the chairman of the Supervisory Board were designated to lead this process. The Executive Board and the Supervisory Board also realised that it would be in the interest of at least the shareholders, if other serious parties would be called upon to show their interest too – leading hopefully to a bid. To that aim Qurius announced its intensified talks with Prodware in the recent June press release. In this way, the press release would also serve as an invitation to then unknown other parties to consider a bid as well. This strategy worked out well and on 6 July 2012 Qurius issued a press release that talks were held with more parties than Prodware. The criteria to enter into discussions with other parties were as follows:
On the basis of these criteria, Qurius entered into serious talks with three other parties next to Prodware. One of these interested parties was a multinational IT company with its basis on the American continent, the other two were IT companies based in Europe. All three executed a due diligence on headlines. Non-disclosure agreements were concluded with these parties, hence Qurius is not able to fully disclose details about these talks. Nevertheless, the following can be mentioned.
Negotiations with the American party
The business case that the non-European party presented, matched Qurius' existing strategy poorly. One of the fundamentals of the Qurius strategy is to specialise in Microsoft software and not to offer similar products based on software from other suppliers. This candidate buyer applied a different strategy, involving all kinds of available software as long as it was focussed on a specific vertical industry. This with the aim to become a leading IT supplier in each of the
selected industries. For Qurius the required adoption of this new strategy would involve a considerable investment in acquiring expertise in non-Microsoft products.
The proposal it finally put on table, was difficult to compare with that of Prodware. This candidate would insert cash by buying newly issued shares. This would lead to a considerable dilution for the existing shareholders and Qurius had to conclude that this bid was not in the best interest of our shareholders.
Furthermore, the question was whether this injection would be sufficient to overcome the situation, also in view of the additional investments that were required. In addition to that, this party had little experience with Microsoft products, offering little opportunities for creating synergy. But perhaps the most important issue was that joining this party, this would mean that Qurius had to stop with serving a number of its existing customers as these would not be part of the industry focus from the new strategy. And that would be in conflict with putting the interests of our customers in the first place. After all, at the basis of everything we do, lies that Qurius is a reliable partner for all of its customers – in the short, medium and long term.
Negotiations with one of the European parties
The second interested party, had a business model that was merely based on operational efficiency. Although this was appealing to us as we felt that Qurius should indeed operate more efficiently, this approach does not primarily focus on integral solutions for our customers but more on distinct products for distinct processes. That does not match with the significance Qurius wants to have, and has, for its customers: a full fletched business partner that supplies strategic solutions and that focusses on the integral business of its customers instead of supplying solutions for parts of it. This party was primarily interested in the Dutch operation but withdrew its bid.
Negotiations with the other European party
The third party with whom we entered into negotiations, was interested in Qurius Germany only. Although we preferred to keep the Qurius companies together, this candidate buyer offered a business case that was very viable and would be in the interest of all of our German customers. The negotiations resulted in a bid for Qurius Germany that was higher than that of Prodware for Qurius Germany. We confronted Prodware with this option and suggested that we would sell Qurius Germany to this party and the rest of the operating companies to Prodware. The result was that Prodware increased its bid on Qurius Germany. This was one aspect that made us choose for Prodware as the buyer of Qurius Germany. The other reason was that the party interested in Qurius Germany only, would spread its payments over two years. Apart from the uncertainty for our shareholders that this would introduce, it would also prevent us from liquidating Qurius N.V. in the short term leading to substantial additional costs with no other goal than waiting for the money in order to return it to our shareholders. We concluded that the bid from this candidate buyer neither was superior to that of Prodware and the conclusion was to finalise the negotiations with Prodware.
Simultaneously, talks were being held with Prodware that took almost entirely place in July, and were a team effort from the Executive Board and the Supervisory Board, notably the chairmen of the two where the chairman of the Supervisory Board was in the lead. These negotiations resulted to the proposed Transaction as contemplated in this Shareholder Circular.
In addition, the Company's interim financial report 2012 dd. 23 August 2012 as attached hereto also provides insight in the background to the Transaction.
The aforementioned developments resulted in a tight cash situation, as a consequence of which Qurius has an acute need to attract additional funding. Having been informed by its bankers that they are unable to assist to attract additional financing in the current circumstances, not having been able to identify a different transaction that offers Qurius' stakeholders a comparable or better benefit, Qurius believes that the Transaction offers the only significant funding opportunity that is available to it. Without the funding that the Transaction will generate, Qurius will likely incur substantial and severe cashflow problems for which no immediate alternative solution is available.
In addition, the Interim Executive Board's Report as included in the Company's interim financial report 2012 dd. 23 August 2012 as attached hereto also provides insight in the Rationale to the Transaction.
The Executive Board and the Supervisory Board of Qurius have explored the options available to Qurius for such restructuring and have concluded that the offer that Prodware makes, delivers the best option available to Qurius' stakeholders, including its shareholders, its customers and its employees. Both the Executive Board and the Supervisory Board have unanimously determined, after taking into account the interests of Qurius' shareholders, employees and other stakeholders, to support and to recommend the Transaction to Qurius' shareholders (the Recommendation).
The Recommendation is further set out in Chapter 5 (Recommendation and Support). The Recommendation is supported by the Fairness Opinion from Duff and Phelps in connection with the Transaction, stating that, in the opinion of Duff and Phelps, the Transaction is fair and reasonable so far as Qurius' shareholders are concerned. A copy of the Fairness Opinion is included in this Shareholders Circular as Appendix 1.
The Transaction that Qurius and Prodware agreed on pursuant to the Term Sheet effectively regards a public-to-private transaction combined with the Business being provided with additional funding. It consists of the following main elements.
For more detailed information on the Disposal, Dissolution, Distribution and Delisting, please see Chapter 6 (Disposal, Dissolution, Distribution and Delisting).
Completion of the Transaction is conditional upon the satisfaction of certain conditions precedent, amongst which the Extraordinary General Meeting having approved the Transaction and there not having been made an Alternative Offer (as defined herein).
Whilst Qurius shareholders that obtain Prodware Shares will remain to be invested in the same business, there are a number of crucial differences between an investment in the Business post Transaction by way of Prodware Shares as compared to an investment in the Business prior to the Transaction by way of Qurius shares, as further set out herein. As you should be fully aware of the main changes to your investment in the Business that the Transaction will bring about if approved by the Extraordinary General Meeting, you are urged to carefully read and consider the information set out herein before any decision is made by you as to how you intend to exercise your voting rights at the Extraordinary General Meeting.
The Transaction is subject to fulfilment of a number of conditions precedents including:
NIBC and Parcom, Qurius' debt providers, have given their approval to the Transaction, whereby NIBC's approval is conditional regarding Step 2: Step 2 requires prior credit approval from NIBC regarding the acceptance by NIBC of Prodware as borrower or guarantor under the applicable financing documentation.
An Alternative Offer is an unconditional written bona fide offer by any third party for the Step 2 Companies or a significant part thereof or for the shares in Qurius, which (a) (i) is EUR 1,500,000 higher than the Purchase Price relating to the Step 2 Companies that is agreed upon with Prodware or (ii) EUR 10.5 million for all outstanding shares of Qurius1, and (b) may be a realistic and credible alternative to the Transaction for the Seller's shareholders and other stakeholders.
If in the period starting on the date of this Shareholders Circular and ending on the 16th day before the date of Qurius' Extraordinary General Meeting of shareholders (such period the Alternative Offer Period) Qurius receives one or more Alternative Offer(s), Qurius will as soon as possible publicly announce that the Alternative Offer was made and the terms and conditions thereof (the Alternative Offer Announcement). Prodware may in its sole discretion amend its offer for Qurius' business in such a manner that it matches or is superior to the Alternative Offer (the Matching Offer Right) for a period of five days following the Alternative Offer Announcement.
Before the Extraordinary General Meeting, the Executive Board and the Supervisory Board shall indicate whether they intend, acting in good faith and taking into account the possible exercise of the Matching Offer Right by the Purchaser, to withdraw or materially modify their Recommendation.
1 In the event of a successful public offer for the shares of Qurius a bidder will by acquiring Qurius N.V. also indirectly acquire the debt owed by Qurius.
The objective of the Transaction is that at Completion the entire business of Qurius is transferred to Prodware, effectively transforming Qurius in a listed shell company with the Prodware Shares issued to it and the Cash Portion as its single assets and without any known financial liabilities and that the Prodware Shares shall be subsequently available for distribution to the Qurius shareholders by way of the Distribution. In view of this objective, Prodware shall inter alia ensure that upon completion of Step 2, Qurius shall have a positive balance (after deduction of its (contingent) liabilities (whether due and payable or not), whereby any and all liabilities of Qurius vis-à-vis Prodware in respect of any of the representations, warranties and indemnifications with respect to the Transaction shall not be taken into account) of at least EUR 7,000,000 in Prodware Shares and/or cash and EUR 1,000,000 in cash (the Pre-liquidation Balance) (at a value per Prodware Share equal to (a) the Announcement Date Share Price, unless (b) if the Step 2 Share Price is 20% or more lower or, as the case may be, higher than the Announcement Date Share Price, in which case the Step 2 Share Price will apply, to be increased or decreased, as the case may be, with 15%). In the event the costs for the liquidation of Qurius exceed EUR 1,000,000, Prodware shall increase the cash portion of the Pre-liquidation Balance and accordingly decrease the share portion of the Pre-liquidation Balance.
The representations and warranties that Qurius has provided to Prodware under the transaction documentation relating to Step 1 shall terminate upon completion of Step 2.
Qurius may realise a capital gain on the transfer of its business pursuant to the Transaction which will be subject to corporate income tax in respect of the year in which the Completion occurs. However, no corporate income tax would be payable by Qurius, if and to the extent that: (a) any capital gain realized in connection with the transfer of the business is exempt from corporate income tax under the participation exemption and (b) any capital gain realized in connection with the transfer of its business does not exceed the tax loss carry forwards available to Qurius. Qurius believes that no corporate income tax should be payable in connection with the transfer of the Business, either under the participation exemption or due to the set off of tax loss carry forwards available to Qurius at 31 December 2011.
Qurius believes that no corporate income tax will be payable by Qurius in respect of any income (including capital gains) (if any) from, or in connection with the acquisition, the holding or the disposal of, the Prodware Shares under the participation exemption.
For Dutch tax considerations for Qurius shareholders, see Appendix 2 (Dutch Tax Considerations for Qurius Shareholders).
| Lapse of Alternative Offer Period | 12 September 2012 |
|---|---|
| Extraordinary General Meeting | 4 October 2012 |
| Completion Date | expected on or around 18 October 2012 |
| Dissolution coming into effect | expected on or around 4 October 2012 |
|---|---|
| Ex Date | two business days prior to the Distribution Record Date |
| Distribution Record Date (after close of trading on NYSE Euronext in Amsterdam) |
ten business days after the Dissolution coming into effect |
| End of liquidation and Distribution | expected early 2013 |
| Delisting | expected early 2013 |
The Executive Board and the Supervisory Board have unanimously determined, after taking into account the interests of Qurius' shareholders, employees and other stakeholders, to support the proposed Transaction and recommend Qurius' shareholders exercising their voting rights at the Extraordinary General Meeting in favour of the proposed Transaction (the Recommendation), on the basis of the following arguments and considerations:
The Recommendation is supported by the Fairness Opinion from Duff and Phelps in connection with the Transaction, stating that, in the opinion of Duff and Phelps, the Transaction is fair and reasonable so far
as Qurius shareholders are concerned. A copy of the Fairness Opinion is included in this Shareholders Circular as Appendix 1.
In accordance with section 25 of the Works Council Act (Wet op de Ondernemingsraden) and section 2:107(a) of the Dutch Civil Code, the Qurius works council has been requested for its advice regarding the Transaction and been given the opportunity to determine its point of view thereon. The works council has at this point in time not yet provided its advice, the advice shall be made available to the shareholders on Qurius' website as soon as it is available.
Qurius is the holding company of several wholly-owned subsidiaries, i.e. (i) Qurius Deutschland A.G. and its interests in C-3 GmbH, CKL Software GmbH and Qurius Advanced Solutions A.G., (ii) Qurius UK Ltd., (iii) Qurius Nederland B.V. and its interests in Qiptree B.V.
The vast majority of the assets and liabilities that collectively comprise Qurius' business and operations are owned and held by these two subsidiaries, the main exception to this being the obligations under Qurius' debt to NIBC and Parcom with an aggregate par value of EUR 9,500,000.
The first element of the Transaction – the Disposal – shall be executed in two steps. The first step of the Disposal (Step 1) shall consist of (i) the sale by Qurius International Holding of the entire outstanding share capital of Qurius Deutschland A.G. to Prodware, (ii) the sale by Qurius of the entire outstanding share capital of Qurius UK to Prodware, and (iii) the assignment of claims of Qurius vis-à-vis Qurius GE and Qurius UK to Prodware.
The second step of the Disposal (Step 2) shall consist of (a) the sale by Qurius of the entire outstanding share capital of (i) Qurius Nederland B.V., (ii) Qiptree, and (iii) Qurius International Holding, which is the sole shareholder of Qurius CZ; (b) the assumption by Prodware of the Debt (as defined below); and (c) the assignment of claims of Qurius vis-à-vis (i) Qurius NL, (ii) Qurius CZ, and (iii) Qiptree to Prodware.
As consideration for the Disposal, Prodware shall pay to Qurius (or, in part, to Qurius International Holding, as the case may be) an aggregate amount of EUR 18,500,000 (the Purchase Price), which is the second element of the Transaction. The Purchase Price is payable as follows:
(2) assumption of Qurius' debt to NIBC Bank B.V. (NIBC) and Parcom Investment Fund 1 B.V. (Parcom) (the Debt), with an aggregate par value of EUR 9,500,000 (the Debt Assumption).
The Disposal and payment of the Purchase Price shall be followed by the third element of the Transaction, being the Dissolution, which shall result in the Distribution.
The Dissolution entails that Qurius is dissolved in accordance with section 34 of Qurius' articles of association with [Reggie de Jong] becoming the liquidators of the Qurius' assets and liabilities. The Dissolution shall come in effect immediately after completion of the Disposal, which is expected to be on or around 18 October 2012. In order to enable the Extraordinary General Meeting to appoint a liquidator, the articles of association must first be amended.
The liquidators shall liquidate the Qurius' assets and liabilities in accordance with Qurius' articles of association and section 2:23a et seq. of the Dutch Civil Code.
The liquidators will prepare liquidation accounts (rekening en verantwoording) and a plan of distribution (plan van verdeling) and make the same available at the Chamber of Commerce of Midden-Nederland (Kroonstraat 50, 3511 RC, Utrecht) and Qurius' office at Van Voordenpark 1 a, 5301KP Zaltbommel and announce the same in a nationwide newspaper. For a period of two months after that announcement the liquidation accounts and the plan of distribution may be inspected by anyone and during this period any creditor may object to the liquidation accounts and the plan of distribution by submitting a request thereto to the Arnhem District Court.
Any objections submitted, will be announced by the liquidators in a nationwide newspaper and in a press release. In the event the objections (if any) have led to an amendment of the liquidation accounts or plan of distribution, such amendment will be announced in a nationwide newspaper.
The liquidators will make a liquidation distribution to the Qurius shareholders of such liquidation surplus as soon as reasonably possible after the liquidation accounts and plan of distribution have become final (the Distribution).
The Distribution, to the extent it concerns the distribution of the Prodware Shares, to the Qurius shareholders shall be an allocation of such securities where there is no element of choice on the part of the recipient, including no right to repudiate the allocation. Consequently, the Distribution of the Prodware Shares is no "offer of securities to the public" in the meaning of Chapter 5.1 of the Financial Supervision Act (Wet op het financieel toezicht) and article 2.1 (d) of the Prospectus Directive (2003/71/EC - 2010/73/EU). The Distribution does therefore not require the publication of a prospectus, nor does any other element of the Transaction require such publication of a prospectus.
The Distribution of the Prodware Shares to the Qurius shareholders will be settled through the book entry system operated by Euroclear Netherlands, and will result in one Prodware Share being credited in the securities account of each Qurius shareholder for each Qurius share held on the Distribution Record Date. Consequently, to receive Prodware Shares, you must hold Qurius shares on the Distribution Record Date, which shall be the first business day following the date on which no objections can be filed against the liquidation accounts and any outstanding objections being settled. To hold Qurius shares on
the Distribution Record Date, you must have bought such shares before the Ex Date, which shall be the second business day prior to the Distribution Record Date. Conversely, if you do not want to receive Prodware Shares, you must sell your Qurius shares before the Ex Date. In the event you have any question or require additional information on this settlement though Euroclear Netherlands you are recommend to contact your bank or intermediary or other adviser.
For Dutch tax considerations for Qurius shareholders regarding the Distribution, see Appendix 2 (Dutch Tax Considerations for Qurius Shareholders).
When the liquidation ends Qurius shall cease to exist. This shall effectively also result in Qurius' delisting, to the extent the delisting cannot be achieved at an earlier date in consultation with Euronext Amsterdam and subject to such conditions as Euronext Amsterdam may propose.
The information contained in this Chapter 7 (Prodware) has been provided by Prodware.
In this Chapter, a description of the capital and corporate governance structure of Prodware is provided. The capital and corporate governance structure that may eventually be implemented may differ from what is set out herein. In the event that changes will be made to the capital and corporate governance structure which may be material to (future) holders of Prodware Shares, such shall be announcement by way of a press release before the Extraordinary General Meeting.
Founded in 1989, Prodware (www.prodware.fr) creates, integrates and hosts IT solutions for businesses. The group acts in a sector where success requires a combination of strong IT expertise and industry know-how.
Prodware serves more than 17,500 clients, and is the key actor and partner for the installation and management of global IT solutions and applications.
Prodware is now considered as the first partner of Microsoft Dynamics in EMEA (Europe, Middle East, Africa) with a presence in 14 countries, counting approximately 1,650 employees and a turnover of about €180 millions.
As a good corporate citizen, Prodware assists its clients in their approach to sustainable development with its service offer GreenITude (www.greenitude.fr). The company is part of the Gaia Index.
Prodware is a public company listed on NYSE Euronext-Paris.
| IFRS (in million euros) | 2011 | 2010 |
|---|---|---|
| Revenue | 106.9 | 83.5 |
| EBITDA | 21.9 | 16.3 |
| as % of Revenue | 20.5% | 19.6% |
| EBIT | 17.0 | 10.1 |
| as % of Revenue | 15.9% | 12.1% |
| Operating Profit | 16.1 | 9.8 |
| as % of Revenue | 15.1% | 11.7% |
| Net Income | 12.2 | 8.2 |
| as % of Revenue | 11.5% | 9.8% |
| IFRS (in million euros) | H1 2012 | H1 2011 |
| Revenue | 67.7 | 47.3 |
|---|---|---|
| EBITDA | 18.2 | 12.7 |
| as % of Revenue | 26.9% | 26.9% |
| EBIT | 13.7 | 8.9 |
| as % of Revenue | 20.2% | 18.9% |
| Operating Profit | 10.7 | 8.6 |
| as % of Revenue | 15,8% | 18.1% |
| Net Income | 8.3 | 10.6 |
| as % of Revenue | 12.2% | 22.3% |
On December 31st, 2011, the share capital consisted of 5,202,226 shares of €0.65 each.
In accordance with the Company's Memorandum and Articles of Association, double voting rights are attached to the shares which have been in the register maintained by the Company ("actions au nominatif") for at least 2 years. These shares are held mainly by the Company's management and some private investors
Taking into account these double voting rights, on December 31st, 2011, the total voting rights was 7,356,233.
The split of the capital and voting rights are then as follows:
| Management | 38,4% | 50,3% |
|---|---|---|
| Public investors | 1,0% | 1,4% |
| Private investors | 6,0% | 8,3% |
| Employees | 4,2% | 4,3% |
| Free float | 50,2% | 35,4% |
| TOTAL | 100% | 100% |
| % of capital | % of voting rights | ||
|---|---|---|---|
| Management Public investors Private investors Employees Free float |
38,4% 1,0% 6,0% 4,2% 50,2% |
50,3% 1,4% 8,3% 4,3% 35,4% |
|
| TOTAL | 100% | 100% | |
| shares. 7.5 members. |
Please note that by the end of August 2012, the share capital of Prodware consists of 5,793,563 Corporate governance |
Prodware SA ("Société Anonyme") is a French public company, managed by a Board of Directors of 7 | |
| Members | Position held at Prodware SA | Term of office ends |
|
| Philippe Bouaziz | President of the Board of Directors | 2014 General Meeting | |
| Alain Conrard | General Director (CEO) and administrator | 2013 General Meeting | |
| Stéphane Conrard | Managing Director (CFO) and administrator | 2013 General Meeting | |
| Jean-Gérard Bouaziz | Administrator | 2014 General Meeting | |
| Viviane Neiter | Administrator | ||
| Klara Foucher | 2013 General Meeting | ||
| Administrator | 2013 General Meeting |
Employees of the group on December 31st 2011 were 1,147. By the end of August 2012, total employees are around 1,650.
Major shareholder is the founder of the company and current President of the Board of the Directors, Mr Philippe Bouaziz.
Mr François Richard, co-founder, is the second private main shareholder.
Direct and indirect stakes of the founders and managers of the Company are, per the register maintained by the Company, the following:
| Shares | % of total | Voting rights | % of total | |
|---|---|---|---|---|
| Philippe Bouaziz | 1 296 294 | 24,92% | 2 560 588 | 34,73% |
| François Richard | 422 150 | 8,11% | 840 800 | 11,41% |
| PHAST Invest* | 200 000 | 3,84% | 200 000 | 2,71% |
| Alain Conrard | 51 900 | 1,00% | 81 150 | 1,10% |
| Stéphane Conrard | 22 650 | 0,44% | 22 650 | 0,31% |
| Jean-Gérard Bouaziz | 4 450 | 0,09% | 8 900 | 0,12% |
| TOTAL | 1 997 444 | 38,40% | 3 714 088 | 50,38% |
* company held by Mr Philippe Bouaziz, Mr Alain Conrard and Mr Stéphane Conrard The major public and historical investor in Prodware is Entrepreneur Venture, which by the way of various funds, held 301,546 shares (equivalent to 5.8% of the capital on December 31st, 2011) in bearer or registered form.
Prodware shares are listed on Alternext by NYSE Euronext Paris under the code FR0010313486 ALPRO
The share closed out at 7.07 euros on the end of June 2011.
From July 1st, 2011 to June 30th, 2012, the average volume of transactions was 8,166 shares traded per day.
| Year ended 31 December | 2011 | 2010 | |
|---|---|---|---|
| Revenue | Note 6 | 106 936 | 83 468 |
| Other income from operations | Note 7 | 9 448 | 6 240 |
| Purchases consumed | -34 140 | -25 982 | |
| External purchases | -24 311 | -17 220 | |
| Taxes (other than corporation tax) | -2 370 | -1 868 | |
| Employee benefit expense | Note 8 | -52 280 | -39 644 |
| Amortisation and depreciation | Note 14 | -4 593 | -3 599 |
| Provisions reversed (set aside) | 2 253 | -716 | |
| Other operating income and charges on ordinary activities | Note 9 | 16 059 | 9 459 |
| Operating profit on ordinary activities | 17 002 | 10 139 | |
| Restructuring costs | -357 | -362 | |
| Profit on disposals and liquidations | - | 16 | |
| Goodwill impairment | Note 13 | -524 | |
| Other operating income and charges | - | ||
| Operating profit | 16 121 | 9 794 | |
| Finance costs | Note 10 | -5 403 | -2 374 |
| Other financial income and charges | Note 10 | 53 | 27 |
| Profit before tax | 10 772 | 7 447 | |
| Income tax expense | Note 11 | 1 594 | 2 028 |
| Profit for the year from continuing operations | 12 365 | 9 475 | |
| Discontinued operations | - | -1 305 | |
| Profit for the year | 12 365 | 8 170 | |
| Non-controlling interests | -115 | 47 | |
| Profit for the year attributable to the owners | 12 250 | 8 217 |
| Profit for the year from continuing operations attributable to the owners |
2011 | 2010 | |
|---|---|---|---|
| Basic earnings per share (€) | 2 533 | 2 276 | |
| Diluted earnings per share (€) | 2 127 | 1 605 |
| Year ended 31 December | 2011 | 2010 | |
|---|---|---|---|
| Assets | |||
| Goodwill | Note 13 | 20 794 | 17 828 |
| Intangible assets | Note 14 | 40 535 | 32 547 |
| Property, plant and equipment | Note 14 | 4 251 | 2 785 |
| Non-current financial assets | Note 15 | 4 745 | 955 |
| Deferred tax assets | Note 11 | 8 817 | 6 692 |
| Total non-current assets | 79 142 | 60 807 | |
| Inventories | Note 16 | 3 147 | 3 508 |
| Trade receivables and other receivables | Note 17 | 49 354 | 40 175 |
| Other current assets | Note 17 | 23 488 | 17 913 |
| Cash and cash equivalents | Note 18 | 6 171 | 1 397 |
| Total current assets | 82 161 | 62 992 | |
| Total assets | 161 303 | 123 799 | |
| Equity and Liabilities | |||
| Share capital | Note 19 | 3 371 | 2 767 |
| Share premium | 28 138 | 23 363 | |
| Reserves | 22 633 | 14 435 | |
| Translation differences | -46 | -64 | |
| Profit for the year attributable to the owners | 12 250 | 8 217 | |
| Equity attributable to the owners of the company | 66 347 | 48 718 | |
| Reserves attributable to non-controlling interests | -71 | -24 | |
| Profit attributable to non-controlling interests | 115 | -47 | |
| Non-controlling interests | 44 | -71 | |
| Deferred tax liabilities | Note 11 | 435 | 398 |
| Non-current provisions | Note 20 | 3 085 | 2 163 |
| Convertible bonds | Note 21 | 13 738 | 9 282 |
| Other non-current financial liabilities | Note 21 | 12 269 | 13 774 |
| Total non-current liabilities | 29 527 | 25 616 | |
| Current financial liabilities | Note 21 | 14 989 | 14 203 |
| Trade payables | Note 22 | 22 923 | 15 101 |
| Tax and social security | Note 22 | 24 445 | 18 533 |
| Other short-term liabilities | Note 22 | 3 028 | 1 699 |
| Total short-term liabilities | 65 386 | 49 536 | |
| Total equity and liabilities | 161 303 | 123 799 |
The 2012 H1 Prodware accounts are as yet not available and shall be made available as soon as possible on Qurius' website. The Prodware Consolidated Accounts 2011 and the Management report Prodware 2011 are attached hereto as Appendix 4.
Unless explicitly stated otherwise, the following terms shall have the following meaning (and grammatical variations of such terms shall have corresponding meanings):
AFM means the Netherlands Authority of the Financial Markets (Autoriteit Financiële Markten);
Alternative Offer means an unconditional written bona fide offer by any third party for the Business or a significant part thereof or for the shares in Qurius, which may be a realistic and credible alternative to the Transaction for the Seller's shareholders and other stakeholders;
Alternative Offer Period means the period starting on the date of this Shareholders Circular and ending on the 16th day before the date of Qurius' Extraordinary General Meeting of shareholders;
Qurius means Qurius N.V.;
Completion means the consummation of the transactions as contemplated by the Term Sheet, thus effectuating the transfer of the Qurius' business to Prodware;
Completion Date means the date on which Completion shall take place, which is currently expected to be on or around 18 October 2012;
Delisting means Qurius delisting from NYSE Euronext in Amsterdam and ceasing to exist;
Disposal means the disposal by Qurius of the Qurius' business to Prodware,
Dissolution means the dissolution and liquidation of Qurius;
Distribution Record Date means the date that is the tenth business day following the date on which the Dissolution shall come in effect;
Executive Board means the management board (raad van bestuur) of Qurius;
Ex Date means the date that is two business days prior to the Distribution Record Date;
Extraordinary General Meeting means the extraordinary general meeting of shareholders of Qurius to be held on 4 October 2012;
Fairness Opinion means the fairness opinion dated 26 July 2012 from Duff and Phelps in connection with the Transaction, stating that, in the opinion of Duff and Phelps, the Transaction is fair and reasonable so far as Qurius shareholders are concerned, a copy of which is included in this Shareholders Circular as Appendix 1
Distribution the liquidation distribution to the Qurius shareholders of any liquidation;
Matching Offer Right means the right of Prodware to amend its offer for the Qurius' business in such a manner that it matches or is superior to an Alternative Offer;
Recommendation means the recommendation of the Executive Board and the Supervisory Board to the shareholders for the approval of the proposed Transaction at the Extraordinary General Meeting;
SEC means the US Securities and Exchange Commission;
Supervisory Board means the supervisory board (raad van commissarissen) of Qurius;
Transaction means the proposed transaction pursuant to the Term Sheet that effectively regards a public-to-private transaction, consisting of five main elements as further set out in paragraph 4.1 of Chapter 4 (Summary of the Transaction);
Transaction Resolutions means the resolutions Qurius shareholders will be asked to vote at the Extraordinary General Meeting, as further set out in paragraph 1.1 of Chapter 1 (Introduction and Important Information) and the agenda and explanatory notes of the Extraordinary General Meeting included in this Shareholder Circular as Appendix 3; and
Prodware means Prodware S.A.;
Prodware Share means an ordinary share in the capital of Prodware and listed at NYSE Euronext Paris, as further set out Chapter 0 (Prodware); and
US Securities Act means the US Securities Act of 1933, as amended.
Appendix 1 to Shareholder circular, Fairness Opinion
This summary solely addresses certain Dutch tax consequences in respect of the Distribution made by Qurius. It does not consider every aspect of taxation that may be relevant to a particular holder (each a Shareholder and together the Shareholders) of Qurius shares (each a Share and together the Shares) under special circumstances or who is subject to special treatment under applicable law. It is limited to Dutch tax law as applied by the Dutch courts and published and in effect on the date of this Shareholders Circular and it is subject to any change in law, possibly with retroactive effect.
As this is a general summary, we recommend the Shareholders to consult their own tax advisers as to the Dutch or other tax consequences of the Distribution made by Qurius.
This summary does not address the tax consequences arising in any jurisdiction other than the Netherlands in connection with the Distribution made by Qurius to the Shareholders. And this summary is not intended for any Shareholder, who is:
In general, a Shareholder holds a substantial interest in Qurius, if such Shareholder, alone or together with his partner (as defined in Income Tax Act 2001) (Wet op de inkomstenbelasting 2001)) or certain other related persons, directly or indirectly, holds (i) the ownership of, or certain rights over, shares representing 5% or more of the total issued and outstanding capital (or the issued and outstanding capital of any class of shares) of Qurius, (ii) rights to acquire shares that represent 5% or more of the total issued and outstanding capital (or the issued and outstanding capital of any class of shares) of Qurius or (iii) the ownership of certain profit participating certificates that relate to 5% or more of the annual profit of Qurius or to 5% or more of the liquidation proceeds of Qurius. A deemed substantial interest may arise, if (part of) a substantial interest has been disposed of, or is deemed to have been disposed of, on a non-recognition basis as a result of applying a tax (rollover) facility.
Dividend distributions made by Qurius generally are subject to a withholding tax in the Netherlands at a rate of 15% (rate for 2012). However, certain exceptions may apply, including that no dividend withholding tax will have to be deducted from the Distribution made by Qurius to the Shareholders, if and to the extent that the amount of the Distribution does not exceed the amount of the average paid-in capital on the Shares (as recognised for dividend withholding tax purposes) in the amount of €0,12 per Share.
Qurius does believe that no dividend withholding tax should have to be deducted from the Advance Distribution or the Final Distribution (if any). In the event that any dividend withholding tax would have to be deducted from the Distribution, Qurius would withhold the tax when making the distribution to Shareholders.
An individual Shareholder who is a resident or deemed to be a resident of the Netherlands, or who opts to be taxed as a resident of the Netherlands, for the purposes of Dutch taxation will be subject to personal income tax in respect of any income (including capital gains) from the Shares at progressive rates (with a maximum of 52%; rate for 2012), if:
(i) the Shares are attributable to an enterprise (onderneming) of such holder or a co-entitlement to the net value of an enterprise (other than as an entrepreneur or a shareholder); or
(ii) such holder is an individual, such income (including capital gains) from the Shares qualifies as benefits from 'miscellaneous activities' (resultaat uit overige werkzaamheden) (as defined in the Income Tax Act 2001), which include activities with respect to the Shares that exceed 'regular active portfolio management' (normal actief vermogensbeheer) or benefits which are derived from the holding, directly or indirectly, of (a combination of) shares, debt claims or other rights which form a 'lucrative interest' (lucratief belang) (as defined in the Income Tax Act 2001).
If neither situation (i) nor situation (ii) does apply to the Shareholder, the income (including capital gains) from the Shares will be subject to personal income tax on the basis of a deemed return on income from savings and investments (sparen en beleggen), rather than on the basis of income actually received or capital gains actually realized. At present, this deemed return on income from savings and investments has been fixed at 4% of the individual's net capital (rendementsgrondslag) at the beginning of the calendar year, insofar as the individual's net capital exceeds a certain threshold (heffingvrij vermogen). The individual's net capital is determined as the fair market value of certain qualifying assets held by the Shareholder less the fair market value of certain qualifying liabilities at the beginning of the calendar year. The deemed return on income from savings and investments of 4% will be taxed at a rate of 30% (rate for 2012).
A corporate Shareholder which is resident or is deemed to be resident of the Netherlands, will in general be subject to corporate income tax in respect of any income (including capital gains) from the Shares at a rate of 20% for the first €200,000 of taxable income and 25% for any taxable income exceeding €200,000 (rate for 2012).
A non-resident individual Shareholder will be subject to personal income tax in the Netherlands in respect of any income (including capital gains) from the Shares, if:
(i) such holder derives profits from an enterprise, whether as an entrepreneur (ondernemer) or pursuant to a co-entitlement to the net value of such enterprise (other than as an entrepreneur or a shareholder), such enterprise either being managed in the Netherlands or carried on, in whole or in part, through a permanent establishment or a permanent representative in the Netherlands and the Shares are attributable to such enterprise; or
(ii) such holder is an individual, such holder derives benefits or is deemed to derive benefits from the Shares that are taxable as benefits from "miscellaneous activities" in the Netherlands, which include activities with respect to the Shares that exceed 'regular active portfolio management' or benefits which are derived from the holding, directly of indirectly, of (a combination of) shares, debt claims or other rights which form a carried interest (lucratief belang).
A non-resident corporate Shareholder will be subject to corporate income tax in the Netherlands in respect of any income (including capital gains) from the Shares, if such holder derives profits from an enterprise, whether as an entrepreneur (ondernemer) or pursuant to the co-entitlement to the net value of such enterprise (other than as an entrepreneur or a shareholder), such enterprise either being managed in the Netherlands or carried on, in whole or in part, through a permanent establishment or a permanent representative in the Netherlands, and the Shares are attributable to such enterprise.
If such a non-resident corporate Shareholder will be subject to corporate income tax in the Netherlands, any income (including capital gains) from the Shares is taxable in the Netherlands at a rate of 20% over the first €200,000 of taxable income and 25% over any taxable income exceeding €200,000 (rate for 2012).
| 1 | Opening and announcements |
|---|---|
| 2 | Explanation of the transaction with Prodware S.A. (the "Transaction") |
| 3 | Approval of the Transaction* |
| 4 | No instruction with respect to a possible conflict of interest* |
| 5 | Amendment to the articles of association of the Company* |
| 6 | Dissolution of the Company under the conditions precedent that (i) the articles of association of |
| the Company have been amended; and (ii) the Transaction has been completed (the | |
| "Dissolution")* | |
| 7 | To appoint Mr. L.P.W. Zevenbergen, Mr. M. Wolfswinkel and Ms. R.C. de Jong as liquidators of |
| the Company under the condition precedent and as per the date of the Dissolution* | |
| 8 | Closing and roundtable |
| *= voting item(s) |
Explanatory notes to the agenda of the Meeting
On 30 July 2012, the Company issued a press release in which it was announced that a term sheet has been entered into by the Company and Prodware S.A.("Prodware"), pursuant to which the business conducted by the Company shall be transferred to and continued by Prodware (the "Transaction").
The proposed Transaction consists of two steps. The first step provides for the transfer of the subsidiaries of the Company in Germany and the United Kingdom to Prodware for an amount of EUR 6 million. The second step provides for the transfer of Qurius Netherlands, Qurius Czech Republic and the operating company QIPtree to Prodware for an amount of EUR 12.5 million. The purchase price shall be partially paid in cash, partly in listed shares in Prodware and partly by assuming outstanding debts of Qurius by Prodware. After completion of the Transaction, Qurius will be liquidated and the remaining net assets, in the form of listed Prodware shares, shall be distributed to the shareholders.
Simultaneously with the convocation of the general meeting, the Company published a Shareholders Circular ("Circular") on its website in which the Transaction and subsequent steps are described in more detail. During the General Meeting additional information will be given on the Transaction.
We strongly recommend that you form your own opinion on the Transaction and the consequences thereof for you personally on the information provided e.g. in the Circular and, if so desired, independent advice.
It is proposed that the General Meeting resolves to approve the Transaction as described above and as further specified in the Circular.
It is proposed to the General Meeting to resolve, if and as far as a conflict of interest exists in relation to the Transaction between one or more members of the Management Board on the one hand and the Company on the other hand, not to use its authority to issue instructions and therefore the representative authority as included in the articles of association of the Company shall remain in effect.
Under the current articles of association the General Meeting is not authorized to appoint a liquidator. In view of the proposed appointment of a person as liquidator who is not a member of the Management Board of the Company, as described under agenda item 7 below, it is proposed to the General Meeting to resolve (i) to amend article 35 paragraph 1 of the articles of association of the Company and (ii) to authorise each member of the Management Board of the Company, as well as each civil-law notary, prospective civil-law notary and notarial paralegal, of Stibbe in Amsterdam, to sign the deed of amendment of the articles of association.
In view of the Transaction as described in the explanatory notes to agenda item 2 hereinabove and in the Circular, it is proposed to the General Meeting to resolve to dissolve the Company under the conditions
precedent that (i) the articles of association have been amended as set out above and (ii) the Transaction is completed.
In view of the proposed Transaction and the subsequent dissolution of the Company it is proposed to appoint Mr. L.P.W. Zevenbergen, Mr. M. Wolfswinkel and Ms. R.C. de Jong as liquidators of the Company such under the condition precedent of and per the date of the Dissolution.
In connection with the possible transition of Mr. L.P.W. Zevenbergen to Prodware during the liquidation of the Company and given the fact that the employment agreement of Mr. M. Wolfswinkel shall terminate at the end of April 2013, it is proposed to the General Meeting to -apart from the current members of the Management Board- also appoint Ms. R.C. de Jong as liquidator of the Company in order to ensure that during the liquidation of the Company at least one liquidator is in function. Prior to the fulfillment of the conditions for her appointment as a liquidator, Ms. R.C. de Jong shall step down as a member of the Supervisory Board.
| Name | : Leendert Pieter Willem Zevenbergen |
|---|---|
| Age | : 54 |
| Current Position | : member of the Management Board |
| Resume | : besides being a member of the Management Board, Mr. L.P.W. Zevenbergen has extensive management experience and has held several positions within and outside the IT industry. |
| Name | : Michiel Wolfswinkel |
|---|---|
| Age | : 49 |
| Current Position | : member of the Management Board |
| Resume | : besides being a member of the Management Board, Mr. M. Wolfswinkel has |
| extensive financial and management experience and has held several positions | |
| within and outside the IT industry. |
Resume Ms. R.C. de Jong
| Name | : Regina Constance de Jong |
|---|---|
| Age | : 48 |
| Current Position | : member of the Supervisory Board |
| Resume | : besides being a member of the Supervisory Board, Ms. R.C. de Jong is recognized an expert in the field of financial and operational management with companies within or outside the IT industry. Currently she is director of the Restructuring Company. |
Considering the relevant expertise and experience of the persons listed above and their involvement with the business of the Company the abovementioned persons will be able to contribute to the liquidation of the Company in a decent manner.
Ms. R. C. de Jong will be granted a remuneration of € 200 per hour, excluding (travelling) expenses, for her activities as liquidator. The terms of remuneration agreed upon with Mr. L.P.W. Zevenbergen and Mr. M. Wolfswinkel will not be amended as a consequence of their appointment as liquidators of the Company.
All members of the Supervisory Board will step down as per the Dissolution or the formal liquidation, as the case may be. On this occasion, appropriate arrangements will be made with them in relation therewith.
Appendix 4 to Shareholder circular, Prodware 2011 accounts: Management report / Consolidated accounts
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