Blackberry 2007 Annual Report Download - page 26

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24
RESEARCH IN MOTION LIMITED
management’s discussion and analysis of financial
condition and results of operations continued
FOR THE THREE MONTHS AND FISCAL YEAR ENDED MARCH 3, 2007
• Mr. Cork and Dr. Wright, who were members of the
Company’s Compensation Committee, advised the Board
that they would not stand for re-election at the upcoming
annual general meeting of the Company and tendered
their resignations from all committees of the Board. They
have each been appointed to the honorary position of
Director Emeritus of the Board in recognition of their
substantial contributions to the Company over many years.
• The Board size was increased from seven to nine. Barbara
Stymiest (formerly the CEO of the TSX Group and currently
the COO of Royal Bank of Canada) and John Wetmore
(formerly the President and CEO of IBM Canada and
currently a Director of Loblaw Companies Limited) were
appointed to the Board as directors. Ms. Stymiest has
joined the Audit Committee, the Nominating Committee
and the Oversight Committee, and Mr. Wetmore
has joined those committees and the Compensation
Committee. A candidate selection process is underway to
identify two other new independent directors for election
to the Board to replace Mr. Cork and Dr. Wright. The
Audit Committee is being chaired by Ms. Stymiest, who
the Board has determined is an audit committee financial
expert, as defined under applicable securities laws.
• The Nominating Committee of the Board was
reconstituted to be comprised of Jim Estill, John
Richardson, Barbara Stymiest and John Wetmore.
The Nominating Committee will review the board slate
prior to its submission to shareholders for the next
annual meeting. The Board has mandated that the newly
constituted Nominating Committee consider the role of a
non-executive Chairman and make recommendations to
the Board at its first meeting following the Company’s next
annual meeting.
• Dennis Kavelman moved from his position as Chief
Financial Officer of the Company to become the
Company’s Chief Operating Officer - Administration and
Operations.
• Brian Bidulka was appointed as the Company’s Chief
Accounting Officer and is the Company’s senior financial
officer overseeing all financial reporting and compliance
activities. Mr. Bidulka, who was not previously involved
in the administration of the Company’s stock option
program, is also now responsible for administering the
Company’s stock option program on an interim basis.
• The Company is also enhancing its capabilities in U.S.
GAAP and in securities disclosure and compliance matters
issues by establishing two new permanent full-time
positions to be filled, respectively, by an employee with
expertise in U.S. GAAP and an employee with expertise in
securities disclosure and compliance. The latter employee
will be responsible for administering RIM’s stock option
granting program.
• Certain other changes in the roles and responsibilities
of less senior members of RIM’s finance group were also
made.
• The Company is in the process of establishing an internal
audit department, the head of which will report directly to
the Audit Committee.
Review Costs
Included in the Company’s selling, marketing and
administrative expenses in fiscal 2007 are legal, accounting
and other professional costs incurred by the Company
in fiscal 2007 as well as other costs incurred by the
Company under indemnity agreements in favor of certain
officers and directors of the Company, in each case in
connection with the Review, the Restatement and related
matters.
Mr. Balsillie and Mr. Lazaridis have voluntarily offered to
assist the Company in defraying costs incurred in connection
with the Review and the Restatement by contributing up to
CAD $10 million (up to CAD $5 million each) of those costs.
The Company has agreed to accept this voluntary payment,
which is expected to be recorded in fiscal 2008. The amounts
will be recorded when received as an increase to paid-in
capital.
Regulatory Matters and Litigation
The Company is continuing to cooperate with the SEC, the
OSC and the USAO and has reported to them on the results
of the Review. At this time, the Company cannot predict
what, if any, action may result.
On January 24, 2007, RIM was served with a Notice of
Application that was filed with the Ontario Superior Court of
Justice - Commercial List by a pension fund that alleges it was
a shareholder, seeking various orders against the Company
and named directors. On April 27, 2007, RIM was served with
a Fresh As Amended Notice of Application (the “Amended