The Company may acquire its own shares, subject to certain provisions of the law of The Netherlands and the Articles of Association, if (i) the shareholders' equity less the payment required to make the acquisition does not fall below the sum of paid-up and called portion of the share capital and any reserves required by the law of The Netherlands and (ii) the Company and its subsidiaries would not thereafter hold or hold in pledge shares with an aggregate nominal value exceeding one-tenth of the Company's issued share capital. Share acquisitions may be effected by the Board of Directors only if the shareholders in general meeting have authorized the Board of Directors to effect such repurchases. Such authorisation may apply for a maximum period of 18 months.
Shares held by the Company do not carry voting rights. Usufructuaries and pledgees of shares that are held by the Company are, however, not excluded from their voting rights in such cases where the right of usufruct or pledge was vested before the share was held by the Company.
The annual shareholders' meeting of EADS held on 6th May 2004 authorized the Board of Directors, in a resolution that renewed the previous authorisation given by the annual shareholders' meeting of EADS held on 6th May 2003, for a period of 18 months from the date of such meeting, to repurchase shares of the Company within the limit of 5% of the Company's issued share capital, on the stock exchange or otherwise in return for payment, at a price between the nominal value of the shares (€1.0) and an amount equal to 110% of the price at which the relevant shares were quoted on any stock exchange at close of business on the trading day before the day of the purchase by the Company.
As of July 2004, the Company had purchased in aggregate 11,927,934 of its own shares, 5,686,682 of which were cancelled on 20th July 2004.
The Board of Directors, considering its previous resolution dated 5th December 2002, resolved on 10th October 2003 and requested the Chief Executive Officers to implement, in the context of the employee share ownership plans for 2000, 2001 and 2002 (see "Employee Share Offering"), a share purchase programme for the Company to repurchase up to a maximum of 20,092,075 of its own shares (depending on the number of shares actually subscribed for by the relevant employees), which on 30th June 2004, represented 2.49% of the issued share capital of the Company. The objectives and characteristics of this share purchase programme are set out in the note d'information approved by the AMF on 30th July 2004 under number 04-708. The implementation of this share purchase programme has resulted in the acquisition by the Company of 153,562 of its own shares.
As of the date of this document, the Company had purchased in aggregate 6,394,814 of its own shares.
A resolution will be submitted to the annual shareholders' meeting of EADS called for 11th May 2005 in order to supersede and replace the authorisation given by the annual shareholders' meeting held on 6th May 2004 and authorize the Board of Directors, for a new period of 18 months as from the date of such meeting, to repurchase shares of the Company, by any means, including derivative products, on any stock exchange or otherwise, as long as, upon such repurchase, the Company shall not hold more than 5% of the Company's issued share capital and at a price not less than the nominal value and not more than the higher of the price of the last independent trade and the highest current independent bid on the trading venues where the purchase is carried out.
After making purchases of its own shares, the Company is required to immediately file a report with the AFM that contains specified information about such purchases, unless an exemption applies. The AFM makes this information publicly available.
As a result of its listing for trading on a regulated market in France, the Company is subject to the regulations summarized below.
Pursuant to Articles 241-1 to 241-7 of the AMF General Regulations, the purchase by a company of its own shares will, in principle, require the filing of a note d'information that has received the prior approval (or "visa ") of the AMF.
Under Articles 631-1 to 631-4 of the AMF General Regulations, a company may not trade in its own shares for the purpose of manipulating the market. Articles 631-5 and 631-6 of the AMF General Regulations also define the conditions for a company's trading in its own shares to be valid.
After purchasing its own shares, the Company is required to disclose, within at least seven trading days, specified information regarding such purchases by way of a release which is available to the public on the websites of the Company and the AMF. Additionally, the Company must notably report to the AMF, on at least a monthly basis, information concerning the cancellation of such repurchased shares.
As a foreign issuer, the Company is not subject to German rules on trading in its own shares, which only apply to German issuers.
As a foreign issuer, the Company does not have to comply with the Spanish rules on trading in its own shares, which only apply to Spanish issuers.
However, according to the Conduct Rules under the Spanish Securities Act 24/1988 of 28th July 1988, the Company may not trade in its own shares for the purpose of manipulating the market.
