Philips 2013 Annual Report Download - page 123

10 Corporate governance 10.3 - 10.4
Annual Report 2013 123
amendments to the Articles of Association and resolutions for the
appointment of members of the Board of Management and Supervisory
Board shall be submitted separately to the General Meeting of
Shareholders, it being understood that amendments and other proposals
that are connected in the context of a proposed (part of the) governance
structure may be submitted as one proposal. 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 and the Dutch Corporate Governance Code, 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 official price list of
NYSE Euronext Amsterdam, representing a value of at least EUR 50
million. Written requests may be submitted electronically and shall
comply with the procedure stipulated by the Board of Management, which
procedure is posted on the Company’s website. Pursuant to new
legislation, eective July 1, 2013, shareholders requesting an item to be
included on the agenda, have an obligation to disclose their full economic
interest (i.e. long position and short position) to the Company. The
Company has the obligation to publish such disclosures on its website.
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
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 includes 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
significance 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 applies principle IV.1 of the Dutch
Corporate Governance Code 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 is 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 is 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 in refusing to provide information, 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.
A resolution to dissolve the Company or change its Articles of Association
can be adopted at the General Meeting of Shareholders by at least three-
fourths of the votes cast, at which meeting more than half of the issued
share capital is represented. If the requisite share capital is not
represented, a further meeting shall be convened, to be held within eight
weeks of the first meeting, to which no quorum requirement applies.
Furthermore, the resolution requires the approval of the Supervisory
Board. If the resolution is proposed by the Board of Management, the
adoption needs an absolute majority of votes and no quorum requirement
applies to the meeting.
Repurchase and issue of (rights to) own shares
The 2013 General Meeting of Shareholders has resolved to authorize the
Board of Management, subject to the approval of the Supervisory Board,
to acquire shares in the Company within the limits of the Articles of
Association and within a certain price range up to and including November
2, 2014. The maximum number of shares the company may hold, will not
exceed 10% of the issued share capital as of May 3, 2013, which number
may be increased by 10% of the issued capital as of that same date in
connection with the execution of share repurchase programs for capital
reduction programs.
In addition, the 2013 General Meeting of Shareholders resolved to
authorize the Board of Management, subject to the approval of the
Supervisory Board, to issue shares or grant rights to acquire shares in the
Company as well as to restrict or exclude the pre-emption right accruing to
shareholders up to and including November 2, 2014. This authorization is
limited to a maximum of 10% of the number of shares issued as of May 3,
2013 plus 10% of the issued capital in connection with or on the occasion of
mergers and acquisitions.
10.4 Logistics of the General Meeting of Shareholders and
provision of information
Introduction
Pursuant to Dutch law, the record date for the exercise of the voting rights
and the rights relating to General Meetings of Shareholders is set at the
28th day prior to the day of the meeting. 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.
Information which is required to be published or deposited pursuant to the
provisions of company law and securities law applicable to the Company
and which is relevant to the shareholders, 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 of facts and circumstances relevant
to proposed resolutions in explanatory notes to the agenda and, if
deemed appropriate, by means of a ‘shareholders circular’ published on
the Company’s website.
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 15 days after the meeting. A draft 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 respond to this summary for three months, after which a final summary
is adopted by the chairman of the meeting in question. Such final summary
shall be made available on the Company’s website.
Registration, attending meetings and proxy voting
Holders of common shares who wish to exercise the rights attached to
their shares in respect of a General Meeting of Shareholders, are required
to register for such meeting. Shareholders may attend a General Meeting
of Shareholders in person, or may grant a power of attorney to a third party
to attend the meeting and to vote on their behalf. The Company will also
distribute a voting instruction form for a General Meeting of Shareholders
(assuming the agenda for such meeting includes voting items). 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. Also other persons entitled to vote shall be given
the possibility to give voting proxies or instructions to an independent
third party prior to the meeting. Details on the registration for meetings,
attending and proxy voting will be included in the notice convening a
General Meeting of Shareholders. The Dutch Shareholders
Communication Channel decided to terminate its activities as per the end