Philips 2005 Annual Report Download - page 223

Philips Annual Report 2005 223
General Meeting of Shareholders
General
A General Meeting of Shareholders is held at least once a year to discuss
the Annual Report, including the report of the Board of Management,
theannualnancialstatementswithexplanationandappendices,and
the Report of the Supervisory Board, any proposal concerning dividends
or other distributions, the appointment of members of the Board of
Management and Supervisory Board (if any), important management
decisions as required by Dutch law, and any other matters proposed
by the Supervisory Board, the Board of Management or shareholders in
accordance with the provisions of the Company’s articles of association.
As a separate agenda item and in application of Dutch law, the General
Meeting of Shareholders discusses the discharge of the members of the
Board of Management and the Supervisory Board from responsibility
fortheperformanceoftheirrespectivedutiesintheprecedingnancial
year. However, this discharge only covers matters that are known to
the Company and the shareholders when the resolution is adopted.
The General Meeting of Shareholders is held in Eindhoven, Amsterdam,
Rotterdam or The Hague no later than six months after the end of
thenancialyear.
Meetings are convened by public notice and by letter, or, insofar as
permitted by law, by the use of electronic means of communication, to
registered shareholders. Extraordinary General Meetings of Shareholders
may be convened by the Supervisory Board or the Board of Management
if deemed necessary and must be held if shareholders jointly representing
at least 10% of the outstanding share capital make a written request to
that effect to the Supervisory Board and the Board of Management,
specifying in detail the business to be dealt with. The agenda of the
General Meeting of Shareholders shall contain such business as may
be placed thereon by the Board of Management or the Supervisory
Board, and agenda items will be explained where necessary in writing.
In accordance with the articles of association and Dutch law, requests
from shareholders for items to be included on the agenda will generally
be honored, subject to the Company’s rights to refuse to include the
requested agenda item under Dutch law, provided that such requests
are made in writing at least 60 days before a General Meeting of
Shareholders to the Board of Management and the Supervisory Board
by shareholders representing at least 1% of the Company’s outstanding
capitalor,accordingtotheofcial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nancial
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
exclude pre-emptive rights of shareholders and to repurchase or cancel
outstanding shares. Following common corporate practice in the
Netherlands, the Company each year requests limited authorization
to issue (rights to) shares, to restrict or exclude 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 (a) transfer the business of the Company, or almost
the entire business of the Company, to a third party (b) 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signicancetotheCompanyor(c)acquire
or dispose of a participating interest in the capital of a company to
the value of at least one third 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 one third 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 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.
Resolutions adopted at a General Meeting of Shareholders shall be
recorded by a civil law notary and co-signed by the chairman of the
meeting; such resolutions shall also be published on the Company’s
website within one day after the meeting. A summary of the discussions
during the General Meeting of Shareholders, in the language of the
meeting, is made available to shareholders, on request, no later than
three months after the meeting. Shareholders shall have the opportunity
to react to this summary in the following three months, after which a
nalsummaryisadoptedbythechairmanofthemeetinginquestion.
Such summary shall be made available on the Company’s website.
Proxy voting and the Shareholders Communication Channel
Philips was one of the key companies in the establishment of the
Shareholders Communication Channel, a project of Euronext Amsterdam,
banks in the Netherlands and several major Dutch companies to
simplify contacts between a participating company and shareholders
that hold their shares through a Dutch bank account with a participating
bank. The Company uses the Shareholders Communication Channel to
distribute a voting instruction form for the Annual General Meeting of
Shareholders. By returning this form, shareholders grant power to an
independent proxy holder who will vote according to the instructions
expressly given on the voting instruction form. The Shareholders
Communication Channel can also be used, under certain conditions,
by participating Philips shareholders to distribute – either by mail or by
placing it on the Company’s website – information directly related to