ARCADIS applies the principles and best practices of the Dutch Corporate Governance Code published in December 2003 and as amended in December 2009, except for the following and for the reasons set out below:
II.1.1: Executive Board members to be (re)appointed after the Code first became effective, will be appointed for a period of maximum four years. This is the case for the members (re)appointed to the Executive Board in 2009, 2010 and 2011. The maximum four-year term will not be observed for the one member of the Executive Board who was appointed in 1994 for an indefinite period. This is in line with the preambles to the Code when it was first introduced, which indicates that existing contracts may be respected.
II.2.8: For Executive Board members to be (re)appointed after the Code first became effective, in principle a maximum severance payment that is consistent with the Code is or will be included in their contracts. This applies to the members (re)appointed to the Executive Board in 2010 and 2011. The contract of the Executive Board member appointed prior to the introduction of the Code does not contain (maximum) severance pay provisions. Consequently, in the event of involuntary dismissal, the severance payment will be determined by taking into account the relevant factors such as applicable laws and regulations, the grounds for dismissal, the level of remuneration and the legal position of the individual as determined, inter alia, by length of service at the Company. The Executive Board member appointed in November 2009 is, in case of a “not-for-cause” termination of his contract, eligible to a severance payment of 18 months fixed (base) salary, which is in line with his employment contract at that time and justified by his longstanding tenure with ARCADIS.
III.5: ARCADIS does not have a separate remuneration committee and a separate selection and appointment committee but combines the two in the Selection and Remuneration Committee, consistent with the practice established in 1998. The current size of the Supervisory Board, the allocation of responsibilities among its members, and the fact that the current committee is functioning satisfactorily, justify this deviation. The Chairman of the Supervisory Board also chairs this committee, which we consider necessary given the selection and nomination tasks of this committee. Under the Code, the Chairman of the Supervisory Board can be chairman of the Selection and Appointment Committee but not of the Remuneration Committee. In this respect, ARCADIS deviates from best practice provision III.5.11.
IV.1.1: In 2003, the Articles of Association of the Company were amended to abandon the structure regime. At that time, provisions were included in the Articles of Association that prescribe that binding nominations for the appointment or dismissal of members of the Executive and Supervisory Board can only be overruled by the General Meeting by a qualified majority. This was done in view of the percentage of share ownership of the Lovinklaan Foundation. It was further stipulated that nominations to the Executive Board would normally be binding, whereas nominations to the Supervisory Board would, under normal circumstances, be non-binding. The General Meeting explicitly approved this practice in 2003 by adopting the resolution to make the related amendments to the Articles of Association.