Report from the Remuneration and Appointment Committee The Supervisory Board has established a Remuneration and Appointment Committee, which reports its conclusions and recommendations to the full Supervisory Board, usually immediately following its Committee meeting. In 2005, the Committee comprised Mr Laan as Chairman and Ms Kaminsky and Mr Angenent as members. During the year under review, the Committee met twice in person and also had several meetings by telephone. At the beginning of the year under review, the Committee dedicated a great deal of time to the remuneration and employment conditions of the members of the Board of Management. Upon proposal of the Committee, the Supervisory Board approved the 2004 remuneration report in its meeting on 2 February 2005. Later in the year, the Remuneration and Appointment Committee particularly discussed the composition and performance of the Board of Management and its remuneration and employment conditions effective 1 January 2006. In January 2006, the Committee prepared the 2005 remuneration report, which can be found here. The report was approved by the Supervisory Board on 1 February 2006.
Annual General Meeting of shareholders At the Annual General Meeting, held on 29 April 2005, the Chief Executive and Chairman of the Board of Management, Mr Miles, gave a presentation on the general state of affairs at Vedior and its financial performance in 2004. This meeting adopted the 2004 financial statements and approved the payment to shareholders charged to the reserves. Shareholders were given the opportunity to raise questions about the 2004 annual report. The members of the Board of Management were granted discharge for their management of Vedior and the members of the Supervisory Board were granted discharge for their supervision thereof. The meeting discussed extensively the Company’s corporate governance. The meeting authorised the Board of Management to issue shares and to restrict or exclude the pre-emptive rights. It was proposed that the authority be limited up to a maximum of 10% of the issued ordinary share capital on the day of the meeting plus a further 15% of the issued ordinary share capital in case an issue takes place in relation to a merger or acquisition. Upon suggestion by the Board of the Foundation for ordinary Vedior shares, which believes that an additional 10% (rather than 15%) is more normal and sufficient if the issue takes place in the context of a merger or acquisition, the Chairman of the Supervisory Board stated that the Company will not in fact avail itself of the margin between 10% and 15% in such context. The authorisation was granted for a period of 18 months as from 29 April 2005. The meeting authorised the Board of Management to acquire the Company’s own (depositary receipts of) shares through purchase on the stock market or otherwise for a period of 18 months from 29 April 2005. The maximum number of shares or depositary receipts of shares to be acquired is equal to the statutory allowed maximum of one-tenth of the total issued capital. The meeting also approved the proposal to adjust the remuneration of the Supervisory Board to reflect the increase in corporate governance responsibilities and bring the remuneration into line with the remuneration of Supervisory Boards in comparable Dutch companies. As stated above, Mr Sinninghe Damsté was reappointed as a member of the Supervisory Board. The meeting approved the proposal to cancel all issued preference A and B shares as a separate class of shares. The redemption of the preference A shares took effect as from 5 July 2005. The preference B shares will be redeemed as per 1 July 2007. The Board of Management, acting with the approval of the Supervisory Board, had decided to propose such cancellations in order to simplify the Company’s capital structure and reduce its finance costs. Shareholders also approved the proposal to amend Vedior N.V.’s articles of association in order to align them with the approved redemption of the preference A shares. The meeting was simultaneously transmitted by audio web cast via the corporate website. All documents for the meeting have been placed on the corporate website. Three months after the meeting, the draft minutes of the meeting have been made available for comments during a period of another three months and were subsequently adopted. The final minutes of the meeting are available at the Company’s offices and are also published on Vedior’s corporate website. The Supervisory Board was pleased that the Annual General Meeting again included a very open and constructive discussion with shareholders. Every holder of depositary receipts present at the Annual General Meeting automatically obtained a proxy to vote without having to file a specific request with the Foundation for ordinary Vedior shares. Holders of depositary receipts had also been given the opportunity to issue a binding voting instruction to the Foundation for ordinary Vedior shares. The voting form was available for downloading on the corporate website. In this respect, the Supervisory Board would like to highlight that an increasing number of holders of depositary receipts attends or is represented at the Annual General Meeting. The Supervisory Board sincerely hopes that this trend will continue. During the Annual General Meeting, the Chairman of the Supervisory Board stated that the depositary receipt structure will be maintained for the time being, as it prevents a chance majority of votes present at a meeting of shareholders exercising undue influence on the meeting. As had already been stated during the previous Annual General Meeting held in 2004, once the turnout of holders of depositary receipts of ordinary shares at meetings of shareholders rises substantially (more than 35% of total issued ordinary share capital) over a number of years, or if proxy solicitation becomes more practicable in the Netherlands, it will be proposed to abolish the depositary receipt structure. The Annual General Meeting held on 29 April 2005 achieved a turnout of more than 32% which will be deemed as the first meeting where this minimum turnout has been achieved. In this respect the Supervisory Board would also like to refer to the meeting of holders of depositary receipts with the Board of the Foundation for ordinary Vedior shares, which was held the same day following the Annual General Meeting to comply with the relevant provisions of the Dutch corporate governance code (see this page).
2005 financial statements The 2005 financial statements, enclosed with this report, were prepared by the Board of Management and audited and provided with an unqualified opinion by Deloitte Accountants B.V.. Their opinion can be found here. At its meeting on 1 February 2006, the Supervisory Board discussed the 2005 financial statements in detail and subsequently approved them. The Supervisory Board recommends that the 2005 financial statements be adopted by shareholders at the Annual General Meeting to be held on 28 April 2006. The Supervisory Board endorses the decision taken by the Board of Management to propose to the Annual General Meeting of shareholders that a dividend of €0.2 million will be paid to the holders of (depositary receipts of) preference B shares and of €42 million to the holders of (depositary receipts of) ordinary shares. The payment per (depositary receipt of an) ordinary share is €0.25. We refer to this page for further information. Historically, Vedior distributed 25-35% of annual net earnings per share before amortisation of goodwill and extraordinary results. Vedior intends paying a slightly increased dividend each year. The pay-out ratio may vary between 25-50% of annual net earnings per share. This year’s proposed dividend payment equals 30% of annual net earnings per share. The Supervisory Board also proposes that, pursuant to article 30, paragraph 6 of the articles of association of the Company, the Annual General Meeting of shareholders grant discharge to the members of the Board of Management for their management and grant discharge to the members of the Supervisory Board for their supervision of the Company’s affairs. The Supervisory Board would like to thank the Board of Management and all employees of the Vedior Group for their contribution and dedication to the Company over this past year. Amsterdam, 1 February 2006
The Supervisory Board W.C.J. Angenent, Chairman
R.J. Laan, Vice-chairman
P. Kaminsky
D. Sinninghe Damsté
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