Philips 2004 Annual Report Download - page 205

made at least 60 days before a General Meeting of Shareholders to
the Board of Management and the Supervisory Board in writing by
shareholders representing at least 1% of the Company’s
outstanding capital or, according to the official price list of
Euronext Amsterdam N.V., representing a value of at least 50
million euros.
Main powers of the General Meeting of
Shareholders
All outstanding shares carry voting rights. The main powers of the
General Meeting of Shareholders are to appoint, suspend and
dismiss members of the Board of Management and of the
Supervisory Board, to adopt the annual accounts, declare
dividends and to discharge the Board of Management and the
Supervisory Board from responsibility for the performance of their
respective duties for the previous financial year, to appoint the
external auditor as required by Dutch law, to adopt amendments
to the articles of association and proposals to dissolve or liquidate
the Company, to issue shares or rights to shares, to restrict or
pass pre-emptive rights of shareholders, to repurchase or cancel
outstanding shares, and to determine the registration date for a
General Meeting of Shareholders (until the Amended Articles of
Association enter into force). Following common corporate
practice in the Netherlands, the Company each year requests
limited authorization to issue (rights to) shares, to restrict or pass
pre-emptive rights and to repurchase shares. In compliance with
Dutch law, decisions of the Board of Management that are so
far-reaching that they would greatly change the identity or nature
of the Company or the business require the approval of the
General Meeting of Shareholders. This concerns resolutions to (i)
transfer the business of the Company, or almost the entire
business of the Company, to a third party (ii) enter into or
discontinue long-term cooperation by the Company or a
subsidiary with another legal entity or company or as a fully liable
partner in a limited partnership or ordinary partnership, if this
cooperation or its discontinuation is of material significance to the
Company or (iii) acquire or dispose of a participating interest in
the capital of a company to the value of at least 1/3 of the amount
of the assets according to the balance sheet and notes thereto or,
if the Company prepares a consolidated balance sheet, according
to the consolidated balance sheet and notes thereto as published
in the last adopted annual accounts of the Company, by the
Company or one of its subsidiaries. Thus the Company puts
principle IV.1 of the Dutch Corporate Governance Code into
practice within the framework of the articles of association and
Dutch law and in the manner as described in this corporate
governance report.
The Board of Management and Supervisory Board are also
accountable, at the Annual General Meeting of Shareholders, for
the policy on the additions to reserves and dividends (the level and
purpose of the additions to reserves, the amount of the dividend
and the type of dividend). This subject shall be dealt with and
explained as a separate agenda item at the General Meeting of
Shareholders. Philips aims for a sustainable and stable dividend
distribution to shareholders in the long term. A resolution to pay a
dividend shall be dealt with as a separate agenda item at the
General Meeting of Shareholders.
The Board of Management and the Supervisory Board are required
to provide the General Meeting of Shareholders with all requested
information, unless this would be prejudicial to an overriding
interest of the Company. If the Board of Management and the
Supervisory Board invoke an overriding interest, reasons must be
given. If a serious private bid is made for a business unit or a
participating interest and the value of the bid exceeds a certain
threshold (currently 1/3 of the amount of the assets according to
the balance sheet and notes thereto or, if the Company prepares a
consolidated balance sheet, according to the consolidated balance
sheet and notes thereto as published in the last adopted annual
accounts of the Company), and such bid is made public, the Board
of Management shall, at its earliest convenience, make public its
position on the bid and the reasons for this position.
Logistics of the General Meeting of
Shareholders and provision of information
General
The Company may set a registration date for the exercise of the
voting rights and the rights relating to General Meetings of
Shareholders. Shareholders registered at such date are entitled to
attend the meeting and to exercise the other shareholder rights
(in the meeting in question) notwithstanding subsequent sale of
their shares thereafter. This date will be published in advance of
every General Meeting of Shareholders. Shareholders who are
entitled to attend a General Meeting of Shareholders may be
represented by proxies.
Information distributed via the Shareholders Communication
Channel (see hereafter), and further information which is required
to be published or deposited pursuant to the provisions of
company law and securities law applicable to the Company, is
placed and updated on the Company’s website, or hyperlinks are
established. The Board of Management and Supervisory Board
shall ensure that the General Meeting of Shareholders is informed
by means of a ‘shareholders circular’, published on the Company’s
website, of facts and circumstances relevant to the proposed
resolutions.
204 Philips Annual Report 2004
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