Shareholders' Letter

See report
page 216 and page 168
2.5 Profit-sharing certificates
Swisscom Ltd has not issued any profit-sharing certificates.
2.6 Limitations on transferability and nominee registrations
Swisscom shares are freely transferable, and the voting rights of the shares registered in the share
register in accordance with the Articles of Incorporation are not subject to any special restrictions.
Swisscom has issued special regulations governing the registration of trustees and nominees in
the share register. To facilitate tradability of the company’s shares on the stock exchange, the Articles
of Incorporation allow the Board of Directors, by means of regulations or agreements, to permit
the fiduciary entry of registered shares with voting rights which exceed the percentage restriction
of 5% by trustees, provided that the latter disclose their trustee capacity. In addition, trustees or
nominees must be subject to supervision by a banking or financial market supervisory authority
or otherwise provide the necessary assurances of proper business conduct, and must act for the
account of one or more unrelated parties. They must also be able to provide evidence of the names,
addresses and holdings of the beneficial owners of the shares. In accordance with this provision
in the Articles of Incorporation, which can be revised with an absolute majority of the voting shares
cast, the Board of Directors has issued regulations governing the entry of trustees and nominees
in the Swisscom share register. The entry of trustees and nominees as shareholders with voting
rights is subject to application and the conclusion of an agreement specifying the entry restrictions
and disclosure obligations of the trustee or nominee. In particular, each trustee or nominee undertakes,
within the percentage limit of 5%, not to request entry as a shareholder with voting rights
for the account of an individual beneficial owner for more than 0.5% of the registered share capital
of Swisscom Ltd entered in the commercial register.
No exceptions for the fiduciary entry of registered shares with voting rights above the aforementioned
percentage limit were granted in fiscal 2010.
2.7 Debenture bonds, convertible bonds and options
During 2007, Swisscom successfully placed debenture bonds on the Swiss domestic market for
the first time with a value of CHF 1,500 million. The first tranche, issued on 19 July 2007, included
CHF 550 million with a coupon of 3.50% and a term of six years, and CHF 350 million with a coupon
of 3.75% and a term of ten years. The second tranche, issued on 22 October 2007, comprised CHF
350 million with a coupon of 3.25% and a term of three years, and a CHF 250 million top-up of the
ten-year bond issued in July 2007 with a coupon of 3.75%. On 17 September 2008, Swisscom issued
a further debenture bond of CHF 500 million (basic tranche with top-up option) with a coupon of
4.00% and a term of seven years. During the course of 2009, Swisscom issued two further debenture
bonds worth a total of CHF 2,750 million. The first, worth CHF 1,250 million, was issued on
8 April 2009 with a coupon of 3.50% and a term of five years. The second, worth CHF 1,500 million
(basic tranche with top-up option), was issued on 14 September 2009 with a coupon of 3.25% and
a term of nine years. On 31 August 2010, Swisscom issued debenture bonds totalling CHF 750 million.
CHF 250 million were issued for two years with a coupon of 0.75% and CHF 500 million for
12 years with a coupon of 2.63%. The investors are entitled to sell the bonds back to Swisscom if
a shareholder other than the Swiss Confederation holds more than 50% of Swisscom’s shares and
at the same time Swisscom’s rating falls below the lowest investment-grade level given by a recognised
rating agency (BBB-/Baa3 or a comparable level). A debenture bond of CHF 350 million was
repaid on the due date in 2010.
The debenture bonds are listed in Note 5 of the Notes to the financial statements of Swisscom
Ltd. The Swisscom Ltd share option scheme is described in Note 11 to the consolidated financial
statements.