Philips 2014 Annual Report Download - page 98

Corporate governance 11.3
98 Annual Report 2014
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
financial year. However, this discharge only covers
matters that are known to the Company and the
General Meeting of Shareholders when the resolution
is adopted. The General Meeting of Shareholders is
held in Eindhoven, Amsterdam, Rotterdam, The Hague,
Utrecht or Haarlemmermeer (Schiphol Airport) no later
than six months after the end of the financial year.
Meetings are convened by public notice, via the
Company’s website or other electronic means of
communication and to registered shareholders by letter
or by the use of electronic means of communication, at
least 42 days prior to the (Extraordinary) General
Meeting of 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 eect to the
Supervisory Board and the Board of Management,
specifying in detail the business to be dealt with. The
agenda of a 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. The agenda shall list which items are for
discussion and which items are to be voted upon.
Material 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, 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 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 Dutch legislation, 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 Annual General Meeting of
Shareholders. 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