TomTom 2006 Annual Report Download - page 32

Corporate Governance 30 TomTom Annual Report 2006
Corporate Governance
Continued
Conflict of interest
Members of the Management Board must report and
provide all relevant information regarding any conflict of
interest or potential conflict of interest to the Chairman of
the Supervisory Board. The Supervisory Board shall decide,
without the relevant member of the Management Board
being present, whether there is a conflict of interest.
During the year 2006, the following potential
conflicts of interest were notified to the Chairman
of the Supervisory Board by the relevant members
of the Management Board:
— the intended sale and transfer of 3,000,000 shares in
the capital of the Company by Tradewind Investment
N.V., the holding company held for the benefit of
Mr. Goddijn and his family, as part of a secondary
offering by our founding shareholders and our
Chief Operating Officer; and
— the intended sale and transfer of 2,000,026 shares
in the capital of the Company upon exercise of an
equal number of share options by Mr. Ribbink, our
Chief Operating Officer, as part of the
aforementioned transaction.
Under the shareholders’ agreement between our founding
shareholders, the persons controlling the shareholdings of
such founding shareholders and the Company, the four
founding shareholders and the Company are required to
consult with each other and discuss in good faith the
intended transfer of shares for a period of three months.
Because two of the Management Board members
(mentioned above) intended to sell and transfer the shares
prior to expiration of such a three-month period, consent by
the Company to such shortening was required. Since this
constituted a formal conflict of interest, the decision to
grant consent under the shareholders’ agreement was
subject to the approval of the Supervisory Board.
After diligent consideration and after having taken external
expert legal and financial advice, the Supervisory Board
resolved, without the two aforementioned Management
Board members being present, to grant its approval as to
the timing of the intended transactions and concluded that
the timing of the transactions was not contrary to the best
interests of the Company and its stakeholders.
Taking into account the procedure followed in these
conflict of interest matters, we believe that we have
complied with relevant best practice provisions of Dutch
Corporate Governance.
Supervisory Board
General
The Supervisory Board is responsible for supervising
the conduct of the Management Board and the general
course of our business, as well as for providing advice
to the Management Board. In performing its duties,
the Supervisory Board is required to act in the interests
of the business as a whole. The Articles of Association
require certain decisions of the Management Board to
be approved by the Supervisory Board. These decisions
include the issue of shares or the granting of rights to
subscribe for shares and the exclusion of pre-emptive
rights to the extent that these rights are vested in the
Management Board, proposals to amend the Articles of
Association, proposals to merge or demerge, proposals to
dissolve the Company and proposals for capital reductions.
Composition and appointment
The Articles of Association provide that the number of
members of the Supervisory Board will be at least three.
Each member of the Supervisory Board is appointed for a
maximum of four years. This appointment can be renewed
for two additional periods of not more than four years at a
time. The members of the Supervisory Board retire
periodically in accordance with a rotation schedule.
The Supervisory Board appoints a Chairman and a Deputy
Chairman from amongst its members. A resolution of the
General Meeting of Shareholders to suspend or dismiss
members of the Supervisory Board requires a majority
of at least two-thirds of the votes cast representing more
than 50% of our issued share capital.
The General Meeting of Shareholders appoints the
members of the Supervisory Board, subject to the right of
the Supervisory Board to make a binding nomination. The
General Meeting of Shareholders may at all times, by a
resolution passed with a majority of at least two-thirds of
the votes cast representing more than 50% of our issued
share capital, resolve that the nomination submitted by the
Supervisory Board is not binding. In such case, the General
Meeting of Shareholders may appoint a member of the
Supervisory Board in contravention of the Supervisory
Board’s nomination by a resolution passed with a majority
of at least two-thirds of the votes cast representing more
than 50% of our issued share capital.
Members of the Supervisory Board
Andrew Browne
Chairman
Doug Dunn
Deputy Chairman
Guy Demuynck
Further details about the members of the Supervisory
Board and their biographies can be found in the
Management Board and Supervisory Board section.