Corporate governance

The Dutch Corporate Governance Code came into force on 1 January 2004. The Corporate Governance Code Monitoring Committee (Commissie Frijns) released an amendment to the Code (the ‘Amended Code’) in December 2008. The Amended Code came into force on 1 January 2009 and has been incorporated in Dutch law and will hereinafter be referred to as the Code. A report on compliance with the Code will be presented at the AGM of 2010. During the course of 2009, the Executive Board carried out an in-depth study of the changes and amendments set out in the Code and reported hereon to the Supervisory Board and the Remuneration Committee. In this report the Company’s compliance with the best practices of the Code are reviewed and commented upon. In compliance with the Code, this ‘Corporate governance’ chapter will be put for discussion on the agenda of the Annual General Meeting of Shareholders (AGM) to be held on 1 April 2010 under a separate agenda item.

The main points where the Company is not in compliance with the current Code are the following:

• Appointment of Executive Board members for a (renewable) maximum period of four years. The CEO and the CFO were appointed prior to the introduction of the Code and the Company is bound by employment contracts for an unlimited period. During the year under review, the Executive Vice-Presidents of the Company’s three divisions were appointed to the Executive Board at an EGM held on 30 June 2009. The terms of the employment of the three Executive Vice-Presidents as new members of the Executive Board are in full compliance with the best practices of the Code.
• Severance pay limited to one year’s fixed remuneration component. The CEO and the CFO were appointed prior to the introduction of the Code and the Company is bound by the terms of their employment contracts and the severance payment conditions provided therein. For the newly appointed members of the Executive Board, the severance pay has been limited to one year’s fixed remuneration in compliance with the requirements of the Code.

For easy reference, this corporate governance report follows, where practical, the sequence of the best practices as listed in the Code and sets out to what extent the Company applies the best practice provisions of the Code.

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