TomTom 2009 Annual Report Download - page 50

48 / SUPERVISORY BOARD REPORT (CONTINUED)
4. Pension plan contributions (continued)
In 2009 the pension arrangements and disability
insurance for Alain De Taeye were revised. In
view of Dutch pension legislation and the tax
situation of Alain De Taeye, it was decided to
replace his pension scheme by an annuity
arrangement with separate partner pension
insurance, which resulted in a decrease in
related costs for the company.
In addition to the above-mentioned
remuneration components the Management
Board members are entitled to remuneration
components such as medical insurance, death
and disability insurance and benefit from
directors’ and officers ’liability insurance
coverage. These benefits are in line with
market practice.
The company does not provide loans to
members of the Management Board.
OUTLOOK 2010
TomTom has the intention to continue to
consistently apply the Remuneration Policy for the
foreseeable future, as adopted by the Annual
General Meeting of Shareholders in 2009.
As the company’s financial position is more
balanced, the first steps will be taken to align base
salary levels for the CEO and CFO with median
market practices in the Netherlands.
The Supervisory Board has decided to add a top-line
performance-related target as a financial key
performance indicator for the Short-Term Incentive
Scheme in 2010, alongside the pre-existing targets
of EBIT and cash flow. This as a result of the
changing business model for the group which will
generate revenue streams from a wider range of
activities. The following financial key performance
indicators apply in 2010:
• Revenue (40%);
• EBIT (40%);
• Cash flow (20%).
With a view to creating consistency in long-term
incentives, the Supervisory Board has decided to
retain Market Capitalisation as the key performance
indicator for the Option Plan. The actual targets of
the key performance indicators will not be disclosed
as the company deems this to be commercially
sensitive information.
During 2010, the Remuneration Committee will
continue to assess TomTom's Management Board
remuneration policy and the application thereof in
light of any internal and/or external developments.
Based on these assessments, the Remuneration
Committee might advise the Supervisory Board to
amend or extend the KPIs applicable to the long
term and short term incentive schemes for 2011.
EMPLOYEE ARRANGEMENTS AND SEVERANCE AGREEMENTS
Members of the Management Board have an
employment contract with us. The contracts are
entered into for an indefinite period of time. However,
the term of office of members of the Management
Board is four years, after which the appointment
can be renewed for another period of not more than
four years at a time. For all members of the
Management Board, with the exception of Alain De
Taeye, a notice period of 12 months is applicable.
In the event that the employment of such a member
of the Management Board is terminated by or on
the initiative of us, he or she shall be entitled to a
fixed amount of 50% of one year’s base salary,
including holiday allowance, unless the employment
is terminated for causes within the meaning of the
articles 7:677, paragraph 1 and 7:678 of the Dutch
Civil Code, in which situation the Management
Board member is not entitled to any severance.
This amount will be due in addition to the salary we
have to pay to members of the Management Board
during the agreed notice period of 12 months.
A member of the Management Board will not be
entitled to the severance if the employment is
terminated by him or her or on his or her initiative.
The employment contract with Alain De Taeye is
entered into for an indefinite period of time. We
are entitled to request Alain De Taeye to resign on
19 September 2010 in which case the employment
agreement would be terminated with mutual consent
as of 30 September 2010. After 19 September 2010,
a notice period of 6 months is applicable. In the
case of an involuntary termination of his employment
agreement during the course of his employment,
Alain De Taeye is entitled to the annual fixed
remuneration (including holiday allowance, car
allowance insurance and pension premiums) plus
an amount equal to 100% of the annual bonus paid
to him over the year preceding the year in which his
employment agreed was terminated.
Members of the Supervisory Board are not entitled
to any benefits upon the termination of their
appointment.
AUDIT COMMITTEE REPORT
Six Audit Committee meetings were held during
the year, this included four meetings prior to
publication of financial results and two conference
calls. All meetings were well attended, with virtually
all members present at every meeting and the
Chairman present at all meetings.
Non-Audit Committee members of the Supervisory
Board may, at their own discretion, attend Audit
Committee meetings, and the Audit Committee
welcomed their presence several times at various
meetings held during the year. The Audit Committee
considers that there is sufficient breadth, depth,
industry relevant knowledge, experience and
expertise for them to appropriately discharge
their duties.