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Rules governing the Supervisory Board's principles and best practices Royal BAM Group nv

 

Article 1 Preliminary provisions

 

1.1 These rules were adopted by the Supervisory Board of Royal BAM Group N.V., hereinafter ‘the Company’, and are complementary to the rules and regulations applicable to the Supervisory Board under Dutch law or the company's articles of association. A company controlled directly or indirectly by the Company is called ‘group company’. The Company and the group companies are hereinafter collectively called ‘BAM Group’.

 
1.2 These rules have been prepared on the basis of the Dutch corporate governance code (the ’code’) of December 2008 to the extent that the code is relevant to the Company and has been adopted by the Company.

 
1.3 The following annexes are attached to, and form an integral part of, these rules:
Annex A: the rules governing the audit committee of the Supervisory Board.
Annex B: the rules governing the remuneration committee of the Supervisory Board.
Annex C: the rules governing the selection and appointment committee of the Supervisory Board.
1.4 These rules have been brought to the attention of the members of the Executive Board and the members of the central works council of the Company. These rules will be mentioned in the report of the Supervisory Board, which report will be part of the annual report of the Company. These rules will be published on the Company’s website.

 
1.5 Where these rules are inconsistent with Dutch law or the Company's articles of association, the latter shall prevail. Where these rules conform to the Company's articles of association but are inconsistent with Dutch law, the latter shall prevail. If one or more provisions of these rules are or become invalid, this shall not affect the validity of the remaining provisions.

 
1.6 These rules and its annexes have come into force as from 1 October 2004 and have been amended on 18 November 2009.

 

 

 

Article 2 Responsibilities of the Supervisory Board

 

2.1 The Supervisory Board shall be responsible for supervising the Company's Executive Board and the Company's general affairs and the business connected with it. Furthermore the Supervisory Board shall advise the Executive Board. In discharging its duties, the Supervisory Board shall be guided by the interests of the Company and its business; it shall take into account the relevant interests of all those involved in the Company, including the Company's shareholders. The Supervisory Board shall also have due regard for corporate social responsibility issues that are relevant to the enterprise. The Supervisory Board and each of its members individually is responsible for the quality of its own performance.

 
2.2 The responsibilities of the Supervisory Board shall include:
  1. supervising and monitoring, and whether preceding or not, controlling and advising the Executive Board on: (i) the realisation of the objectives of BAM Group, (ii) the Company's strategy and risks inherent to its business activities, (iii) the design and effectiviness of the internal risk management and control systems, (iv) the financial reporting process, (v) compliance with primary and secondary regulations (vi) the company-shareholder relationship and (vii) corporate social responsibility issues that are relevant to the enterprise;
  2. adopting the dividend policy and the profit distribution;
  3. supervising and monitoring, and whether preceding or not, controlling and advising the Executive Board on establishing and maintaining internal procedures amongst which procedures to ensure that all major financial information originating from the group companies is known to the management board, so that the timeliness, completeness and correctness of that information and the external financial reporting are assured.
  4. disclosing, complying with and enforcing the Company's corporate governance structure;
  5. supervising the preparation of the annual accounts, the quarterly and half yearly results, any intermediate management statement and other ad hoc financial information and approving the Company's annual operational plan, once every three years the Company’s strategy and the major capital expenditures of the Company;
  6. selecting and recommending the appointment of the Company's external auditor after having received the report on the functioning of the external auditor from the Executive Board and the audit committee and recommending to the Executive Board, based on a proposal of the audit committee, on the issue of whether or not to appoint an internal auditor;
  7. approving of the remuneration of the external auditor and of instructions to the external auditor to provide non-audit services, such on recommendation of the audit committee and after consultation with the Executive Board;
  8. selecting and appointing the members of the Executive Board, proposing the remuneration policy and major changes therein for the members of the Executive Board to be adopted by the general meeting of shareholders of the Company, fixing the remuneration in accordance with the said remuneration policy and contractual terms and conditions of employment of the members of the Executive Board and adopting yearly the remuneration report;
  9. selecting and recommending the appointment of the members of the Supervisory Board, and proposing the remuneration of its members for adoption by the general meeting of shareholders;
  10. evaluating and assessing the functioning of the Executive Board, the Supervisory Board, the separate committees of the Supervisory Board and their individual members including the evaluation of the Supervisory Board's profile and the introduction, education and training programme;
  11. handling, and deciding on, reported potential conflicts of interests within the meaning of article 11 between the Company on the one side and members of the Supervisory Board, members of the Executive Board, the external auditor and the major shareholder(s) on the other side;
  12. handling, and deciding on, reported alleged irregularities that relate to the functioning of members of the Executive Board within the meaning of the Company’s whistleblower arrangements.

 
2.3 The Supervisory Board shall prepare and publish a report on the functioning and activities of the Supervisory Board and its committees during the preceding financial year, amongst which the broad outline of the remuneration report. The report shall be included in the annual report of the Company and shall at least include the information referred to in articles 3.1 (if applicable), 3.4, 3.5, 5.3, 7.4, 8.4, 17.1 and 17.2. The report will be published on the Company’s website.

 
2.4 In discharging its duties the Supervisory Board may ask the assistance of experts on account of the Company.

 
2.5 The Supervisory Board may appoint one or more members as "delegated" Supervisory Board members. Delegated Supervisory Board members are Supervisory Board members with a special task. The delegated authority may not exceed the duties of the Supervisory Board member him/herself and does therefore include managing the Company; it entails more intensive supervision and advice and more frequent consultation with the Executive Board. The delegation shall be of a temporary nature only. The delegation may not detract from the function and power of the Supervisory Board. Delegated Supervisory Board members remain members of the Supervisory Board.

 

 

Article 3 Composition, expertise and independence of the Supervisory Board

3.1 The Supervisory Board consists of at least five members and of eight members at the most, however of reasons of continuity this maximum may be exceeded temporarily with the approval of the general meeting of shareholders.
The Supervisory Board shall prepare a profile of its scope and composition, taking into account the nature of the business, its activities, and the desired expertise, experience and independence of its members. The profile shall deal with the aspects of diversity in the composition of the Supervisory Board that are relevant to the company and shall state what specific objective is pursued by the Board in relation to diversity. In so far as the existing situation differs from the intended situation, the Supervisory Board shall account for this in the report of the Supervisory Board and shall indicate how and within what period it expects to achieve this aim.
The Supervisory Board shall evaluate the profile annually. Adoption of and changes in the profile will be discussed with the general meeting of shareholders. The profile is available at the Company’s offices and will be published on the Company’s website.

 
3.2 The composition of the Supervisory Board shall be such that the members are able to function independently and critically towards each other, the members of the Executive Board and any other interest involved. Furthermore the composition shall be such that the combined experience, expertise, diversity and independence of its members meet the profile and enables the Supervisory Board to best carry out the variety of its responsibilities and duties to the Company and all others involved in the Company including its shareholders, consistent with applicable law and regulations. Furthermore the Supervisory Board shall aim for a diverse composition in terms of such factors as gender and age.

 
3.3 In composing the Supervisory Board, the following requirements must be observed:
  1. all of its members shall be capable of assessing the broad outlines of the overall policy of BAM Group;
  2. all of its members shall match the profile and, by way of their respective participation in the Supervisory Board, the Supervisory Board as a whole must be composed in accordance with article 3.2.;
  3. at least one of the members of the Supervisory Board shall have relevant expertise in financial administration and accounting for listed companies or other large companies;
  4. all of its members, with the exception of no more than one person, must be independent within the meaning of article 3.4;
  5. none of its members may be re-appointed after his/her third 4-year term, or his/her twelfth year in office;
  6. none of its members may maintain more than five memberships of Supervisory Boards in Dutch listed Companies, including the Company; in this connection, a chairmanship counts twice;
  7. none of its members may be a member of the managing board of the administrative trust that holds and administers the shares in the Company's capital by way of fiducia cum amico (ten titel van beheer);
  8. the chairman of the Supervisory Board may not be a former member of the Executive Board.

 
3.4 Members of the Supervisory Board will not be considered independent within the meaning of article 3.3 if he/she or his/her wife/husband, registered partner or other life companion, foster child or relative by blood or marriage up to the second degree:
  1. has been an employee or member of the Company's managing board, including associated companies as referred to in section 1 of the 1996 Disclosure of holdings in listed companies act (Wet melding zeggenschap in ter beurze genoteerde vennootschappen 1996) in the five years prior to his/her appointment;
  2. receives personal financial compensation from the Company other than the compensation received for the work performed as a Supervisory Board member, and in so far as this is not in keeping with the normal course of business;
  3. has had an important business relationship with the Company or a company associated with it in the year prior to his/her appointment. This will in any event include the situation where a Supervisory Board member, or the firm of which he/she is a shareholder, partner, associate or advisor, has acted as advisor to the Company (consultant, external auditor, civil notary and lawyer) and the situation where a Supervisory Board member is a managing board member or an employee of any bank with which the company has a lasting and significant relationship;
  4. is a member of the managing board of a company, of which a member of the Company's managing board (that he/she supervises) is a Supervisory Board member (cross-ties);
  5. holds at least ten percent of the shares in the Company (including the shares held by natural persons or legal entities that co-operate with him/her under a legal, tacit, oral or written agreement);
  6. is a member of the managing or Supervisory Board -or is a representative in some other way - of a legal entity that holds at least ten percent of the shares in the Company;
  7. has temporarily managed the Company during the preceding twelve months while members of the Executive Board were absent or unable to discharge their duties.

In the Supervisory Board's report, the Supervisory Board shall declare that in its view article 3.3 d) has been fulfilled. It shall also indicate which Supervisory Board members it considers to be not independent (if any).

 
3.5 Of each member of the Supervisory Board the Supervisory Boards report shall comprise:
  1. gender;
  2. age;
  3. profession;
  4. principal position;
  5. nationality;
  6. other positions as far as relevant to the duties as a member of the Supervisory Board;
  7. date of initial appointment;
  8. current term in office.

The chairman shall procure that above information is acquired from the members of the Supervisory Board and that this information is published in the Supervisory Board's report.

 
3.6 Prior to acceptance, each member of the Supervisory Board shall inform the chairman of the Supervisory Board of any acceptance of other positions after the date of appointment as member of the Company’s Supervisory Board, as far as relevant to the duties as a member of the Supervisory Board. In this context also, any conflict of interest or apparent conflict of interest between the Company and Supervisory Board members shall be avoided.

 

 

Article 4 Chairman, vice-chairman and company secretary

4.1 The Supervisory Board shall appoint one of its members as chairman, taking into account the provision of article 3.3 sub h and one of its members as vice-chairman. The chairman determines the agenda, chairs the meetings of the Supervisory Board, monitors the proper functioning of the Supervisory Board and its committees, is on behalf of the Supervisory Board the main contact for the Executive Board and for shareholders regarding the functioning of the Supervisory Board and of the Executive Board, and as chairman ensures the orderly and efficient conduct of the general meeting of shareholders.

 
4.2 Notwithstanding the duties and responsibilities assigned by law, the articles of association, the rules of the Executive Board and these rules of the Supervisory Board, the chairman of the Supervisory Board is the main contact of the Executive Board, has frequent contact with the chairman of the Executive Board and discusses with the latter issues as the agenda, the order of the meetings and any other issues, which are entrusted by the Supervisory Board to its chairman.

 
4.3 The chairman of the Supervisory Board ensures:
  1. the participation of members of the Supervisory Board of their introduction, education and training programme;
  2. the adequate and timely submission of information to the members of the Supervisory Board as necessary for the proper performance of their duties;
  3. that there is ample time for consultation, consideration and decision-taking by the Supervisory Board;
  4. the steering, and procuring the adequate performance of the committees of the Supervisory Board;
  5. the annual evaluation and assessment of the functioning of the members of the Executive Board and the Supervisory Board;
  6. the appointment of a vice-chairman of the Supervisory Board;
  7. that the contact with the Executive Board and the central works council is productive and that the results thereof are timely and prudently communicated to the other members of the Supervisory Board
  8. receiving, and deciding on, reported potential conflicts of interests within the meaning of article 11;
  9. receiving, and deciding on, reported alleged irregularities relating to the functioning of the members of the Executive Board within the meaning of the Company’s whistleblower arrangements.

 
4.4 The vice-chairman of the Supervisory Board shall deputise the chairman and shall act as contact for individual members of the Supervisory Board and of the Executive Board concerning the functioning of the chairman.

 
4.5 The Supervisory Board shall be assisted by the Company secretary. The Company secretary will be appointed and dismissed - whether or not at the recommendation of the Supervisory Board- by the Executive Board subject to the prior approval of the Supervisory Board. The Company secretary shall be primarily responsible for:
  1. compliance of the functioning of the Supervisory Board's functioning with Dutch law, the company's articles of association and the rules and regulations issued pursuant thereto including the code and these rules;
  2. assisting the chairman of the Supervisory Board in the logistics of the Supervisory Board (information, agenda, evaluation, introduction, education and training programme.

 

 

Article 5 Supervisory Board committees 

5.1 The Supervisory Board shall have three standing committees, i.e., the audit committee, the remuneration committee and the selection and appointment committee. The Supervisory Board may appoint further committees. Committees are to be appointed by the Supervisory Board from its own members. The Supervisory Board is entitled to abolish a committee any time. The entire Supervisory Board remains responsible for its decisions even if they were prepared by one of the board's committees.

 
5.2 The Supervisory Board shall prepare rules governing the respective committee's practices and principles (responsibilities, composition, meetings, etc.). The present rules of the respective committees are attached as Annexes A, B and C.

 
5.3 The composition of the committees, the number of committee meetings and the main items to be discussed therein shall be recorded in the Supervisory Board's report.

The rules governing the respective committee's practices and principles and the composition of its respective members shall be placed on the Company's website.

 
5.4 The Supervisory Board shall receive from each of the committees a report of its deliberations and findings.

 

 

Article 6 (Re-)appointment, term and resignation

6.1 The members of the Supervisory Board shall be appointed in the manner as provided in the Company's articles of association and within the scope of the profile of the Supervisory Board. Any (re-)appointment shall state the reasons for it. Any (re-)appointment will be evaluated prudently and will not be an automatism. On re-appointment, the manner in which the candidate fulfilled his/her duties as member of the Supervisory Board shall be taken into account.

 
6.2 Members of the Supervisory Board shall hold office for a maximum period of four years and shall thereafter be eligible for re-appointment, provided that no member shall hold office for more than three 4-year terms or twelve years, as the case may be.

A member of the Supervisory Board appointed to fill an interim vacancy shall take the place of his predecessor in respect of the time of resignation, unless the Supervisory Board decides otherwise.

 
6.3 Discussions about a re-appointment of a member of the Supervisory Board will take place without the presence of the member of the board in question and will be based upon an account of the chairman of the Supervisory Board of a discussion between the chairman and the member of the Supervisory Board in question. In case of re-appointing the chairman of the Supervisory Board the above applies mutatis mutandis, however, the role of the chairman of the Supervisory Board will be fulfilled by the vice-chairman of the Supervisory Board and in case of the latter’s absence by a member of the Supervisory Board appointed by the Supervisory Board.

 
6.4 The Supervisory Board shall prepare a resignation rota to prevent, to the greatest extent possible, (re-)appointments occurring simultaneously. Notwithstanding article 6.5 members of the Supervisory Board shall resign in accordance with the resignation rota. The resignation rota is available at the Company’s offices and will be published on the Company’s website.

 
6.5 Members of the Supervisory Board shall retire early in the event of inadequate performance, including frequent absence at meetings, structural incompatibility of interests, and other instances where retirement is deemed necessary at the discretion of the Supervisory Board.

 
6.6 Members of the Supervisory Board who take on the management of the Company temporarily, where the Executive Board members are absent or unable to discharge their duties, shall (temporarily) resign from the Supervisory Board in order to do so.

 

 

Article 7 Supervisory Board meetings

7.1 Meetings of the Supervisory Board will be chaired by the chairman of the Supervisory Board. In his absence the vice-chairman will chair the meeting. In absence of both the chairman and the vice-chairman the meeting will appoint a chairman.

 
7.2 The Supervisory Board shall hold at least four meetings per year and whenever one or more of its members have requested a meeting. The chairman of the Supervisory Board decides on the place of venue, after consultation with the chairman of the Executive Board. In addition, meetings may be held by telephone or video-conference provided that all participants can hear each other simultaneously.

 
7.3 Meetings will be convened by the chairman of the Supervisory Board, by any member of the Supervisory Board who requests a meeting, or on behalf of the chairman of the Supervisory Board by the Company secretary. Notices convening the meeting, the agenda of the items to be discussed and enclosures will be distributed among the members of the Supervisory Board and of the Executive Board as early as possible.

 
7.4 Members of the Supervisory Board who are frequently absent during meetings of the Supervisory Board shall be asked by the chairman to explain their absence. Frequent absences shall be reported in the annual report of the Company.

 
7.5 Unless the Supervisory Board decides otherwise, meetings of the Supervisory Board shall be attended by one or more members of the Executive Board, and by the secretary of the Supervisory Board, in case the secretary is not one of its members, save for meetings concerning subjects as mentioned in article 8.4 sub a,b and c and potential conflicts of interests of members of the Executive Board within the meaning of article 11, which subjects will be discussed and decided upon by the Supervisory Board without the attendance of members of the Executive Board and the secretary of the Supervisory Board in case the secretary is not one a Supervisory Board member.

The external auditor of the company shall attend each Supervisory Board meeting at which the examination and approval of the annual accounts are discussed and such supervisory meetings as the Supervisory Board seems fit. The external auditor shall receive the financial information underlying the approval of the quarterly or half yearly accounts and other interim financial reports and shall be given the opportunity to respond to all information.

 
7.6 Managing directors of group companies may be invited to attend meetings of the Supervisory Board, for instance in order to present their group company to the Supervisory Board.

 
7.7 The Supervisory Board may require that the officers and external advisors of BAM Group as mentioned in article 13.1 attend its meetings, if it considers such an attendance as appropriate.

 
7.8 At meetings of the Supervisory Board each member of the Supervisory Board may be represented by another member of the Supervisory Board only. The representation should be in writing.

 
7.9 Minutes of the meeting shall be prepared by the secretary of the meeting. They shall generally be adopted in the next meeting. If all members of the Supervisory Board agree on the contents of the minutes, they may be adopted earlier. The minutes shall be signed for adoption by the chairman. The Company secretary may issue and sign extracts of the adopted minutes.

 

 

Article 8 Supervisory Board resolutions

8.1 The Supervisory Board can only validly adopt resolutions in a meeting at which at least the majority of its members is present or represented, with the proviso that members who have a conflict of interests as referred to in article 11 shall not be taken into account when calculating this quorum.
The Supervisory Board may also adopt resolutions outside a meeting, provided that the motion in question has been brought to the attention of all of its members, none of them has objected to this form of decision-taking and each of them participated in the voting, provided that members who have a conflict of interests as referred to in article 11 shall not participate in the voting. The chairman shall prepare and sign a report of the resolution adopted in this manner, enclosing any written replies received. The adoption of resolutions outside a meeting must be reported at the next meeting.

 
8.2 Subject to article 11, the Supervisory Board can only adopt resolutions validly in or outside a meeting if the majority of the Supervisory Board members has voted in favour of the resolution. An abstention will not be considered as a vote. If there is a tie, the chairman shall have the casting vote.

 
8.3 Notwithstanding the provisions of the rules of the Executive Board, the ongoing items to be considered and discussed at Supervisory Board meetings include:
  1. the minutes of previous meetings, in so far not yet approved;
  2. the general operational business based on the Company’s operational plan;
  3. the Company's financial results, amongst which the annual forecast based on the quarterly results, liquidities, guarantees and twice a year an overview over the major lawsuits;
  4. taking major decisions requiring Supervisory Board action based on the rules of the Executive Board amongst which (i) the operational and financial objectives of the company, (ii) the strategy designed to achieve the objectives, (iii) the parameters to be applied in relation to the strategy, for example in respect of the financial ratios and (iv) corporate social responsibility issues that are relevant to the enterprise;
  5. once a year the operational plan for the following year;
  6. once a year the annual accounts with the report and management letter of the external auditor;
  7. the broad outline of the Company’s corporate governance structure as included as a paragraph in the annual report;
  8. once a year a preparation and review of the general meeting of shareholders and the on the agenda listed items;
  9. the reports of the committees of the Supervisory Board.

 
8.4 At least once a year, the Supervisory Board shall discuss:
  1. the functioning of the Supervisory Board, the separate committees of the Supervisory Board, and of its individual members, and the conclusions to be drawn on the basis thereof;
  2. the desired profile, composition and competence of the Supervisory Board;
  3. the functioning of the Executive Board and its individual members and the conclusions to be drawn on the basis thereof;
  4. the corporate strategy, including the long term strategy, capital structures for the long term as well as any significant changes thereto;
  5. the risks of the business, and the result of the assessment by the Executive Board of the structure and operation of the internal risk management and control systems, as well as any significant changes and any major improvements planned thereto;
  6. the evaluation of the introduction, education and training programme as referred to in article 8;

The report of the Supervisory Board will refer to the fact that the meetings as mentioned in article 8.4 sub a,b,c,d and e were held. The report shall also state how the evaluation of the functioning of the Supervisory Board, the separate committees of the Supervisory Board, and of its individual members has been carried out.

 

 

 

Article 9 Remuneration

 

9.1 The Supervisory Board shall from time to time submit proposals to the general meeting of shareholders in respect of the remuneration to be paid to the chairman and other members of the Supervisory Board. The remuneration of a Supervisory Board member may not be made dependent on the Company's results. If the members of the Supervisory Board are required to charge VAT on their fees, the Company shall pay the amount of VAT.
An adequate remuneration will be proposed to the general meeting of shareholders in respect of a delegated Supervisory Board member as mentioned in article 2.5.

 
9.2 In fixing the remuneration of the Supervisory Board, the following requirements must be observed:
  1. none of its members may hold shares or options or similar rights to acquire shares in the Company's capital;
  2. none of its members may hold securities as meant sub a) other than for long-term investment;
  3. none of its members may hold other securities than as mentioned sub a) other than in accordance with the regulations as mentioned in article 12.2;
  4. none of its members may accept personal loans or guarantees from the Company, other than in the normal course of business and with the approval of the Supervisory Board. No remission of loans may be granted.

 
9.3 Members of the Supervisory Board shall be reimbursed for all reasonable costs incurred in connection with their attendance of meetings. Any other expenses shall only be reimbursed, either in whole or in part, if incurred with the prior consent of the chairman.

 
9.4 The remuneration, reimbursement of expenses and other agreed terms and conditions, including the date as of which such payments shall be made, shall be determined by the general meeting of shareholders and be agreed in writing. The notes to the annual accounts shall contain full and detailed information on the amount and structure of the remuneration of Supervisory Board members.

 

 

 

Article 10 Introduction programme and ongoing training and education

 

10.1 Once appointed, each member of the Supervisory Board shall follow an introduction programme, prepared and sponsored by the Company, addressing:
  1. general financial, social and legal affairs;
  2. financial reporting by the Company;
  3. specific aspects unique to the Company and its business activities;
  4. responsibilities of members of the Supervisory Board.

 
10.2 The Supervisory Board shall evaluate the introduction programme annually to identify any other specific aspects in respect of which further training and education is required.

 

 

 

Article 11 Conflict of interest

 

11.1 Each Supervisory Board member other than the chairman of the Supervisory Board shall immediately report any (potential) conflict of interest that he/she may have with the Company to the chairman of the Supervisory Board. In case the chairman of the Supervisory Board has a (potential) conflict of interest he/she shall immediately report such potential conflict to the vice-chairman of the Supervisory Board.

The Supervisory Board member with such (potential) conflict of interest must provide the chairman of the Supervisory Board, or the vice-chairman of the Supervisory Board in case the chairman has a conflict of interest, with all information relevant to the conflict of interest, including information relating to his/her wife/husband, registered partner or other life companion, foster child and relatives by blood or marriage up to the second degree.

 
11.2 Decisions to enter into transactions in which there are conflicts of interest between Supervisory Board members and the Company that are of material significance to the Company and/or to the relevant Supervisory Board members require the prior approval of the Supervisory Board.

The chairman of the Supervisory Board shall procure that transactions in respect of which Supervisory Board members have a conflict of interest with the Company, that are of material significance to the Company and/or to the relevant Supervisory Board members, will be referred to in the Company's annual report with reference to the conflict of interest and a declaration that articles 11.1, 11.2 first paragraph, 11.3 and 11.4 have been complied with.

 
11.3 In any event a member of the Supervisory Board shall have a conflict of interest of significant interest to the Company and/or the relevant member of the Supervisory Board with the Company if:
  1. he/she has personally an significant financial interest in a Company with which the company intends to enter into a transaction;
  2. he/she has a family law relationship (familierechtelijke verhouding) with a member of the managing board of a company with which the Company intends to enter into a transaction;
  3. he/she is a member of the managing or Supervisory Board of, or holds similar office with, a company with which the Company intends to enter into a transaction;
  4. under applicable law, including the rules of any exchange on which the Company's shares (or depositary receipts thereof) may be listed, such conflict of interests exists or is deemed to exist;
  5. the chairman, or the vice-chairman as the case may be, of the Supervisory Board has ruled at his sole discretion that such conflict of interest exists or is deemed to exist.

In the above mentioned circumstances a conflict of interest exits and the provisions of article 11.2 apply.

 
11.4 All transactions in which there is a conflict of interest between Supervisory Board members and the Company shall be agreed, if approved pursuant to article 10.2 to the extent that such an approval is required, on terms that are customary in the sector concerned.

A Supervisory Board member shall not participate in the discussions and/or decision-taking process on a subject or transaction in relation to which he/she has a conflict of interest with the Company.
These discussions and decisions will take place without the involved member of the Supervisory Board being present.

 
11.5 The above provisions apply mutatis mutandis to members of the Executive Board, to which end similar conflict of interest provisions have been included in the rules of the Executive Board as referred to in article 13.7. The chairman of the Supervisory Board shall procure that these transactions will be referred to in the Company’s annual report with reference to the conflict of interest and a declaration that the articles 11.1, 11.2 first paragraph, 11.3 and 11.4 have been complied with.

 
11.6 All transactions between the Company and legal or natural persons who hold at least ten percent of the shares in the company shall be agreed on terms that are customary in the sector concerned.
Decisions regarding these transactions that are of material significance to the Company and/or these persons require Supervisory Board approval.
The chairman of the Supervisory Board shall procure that these transactions will be referred to in the Company’s annual report with reference to the conflict of interest and a declaration that the provisions of this articles 11.6 have been complied with.

 
11.7 In any event the external auditor shall have a conflict of interest with the Company, if:
  1. the independence of the external auditor with respect to its supervision of the financial reporting is compromised by the non-audit activities for the Company;
  2. under applicable law, including the rules of any exchange on which the Company's shares (or depositary receipts thereof) may be listed, such conflict of interest exists or is deemed to exist;

The external auditor of the Company, as well as each member of the executive and Supervisory Board shall immediately report any potential conflict concerning the external auditor to the chairman of the Supervisory Board. The external auditor of the Company, as well as each member of the executive and Supervisory Board shall provide all information relevant to the conflict of interest to the chairman of the Supervisory Board. In all circumstances the Supervisory Board will determine whether a reported (potential) conflict of interest qualifies as a conflict of interest pursuant to which the appointment of the external auditor will have to be reconsidered or other measures shall be taken to resolve it. The chairman of the Supervisory Board shall procure that those measures will be mentioned in the Company’s annual report with reference to the conflict of interest and a declaration that article 11.7 has been complied with.

 

 

 

Article 12 Complaints, whistle blowers

 

12.1 Based on the statutory regulations concerning abuse of inside information, as set out in the Securities Transactions Supervision Act, the Company has adopted Privileged Information Rules, which rules apply to the members of the Supervisory Board.

 
12.2 Furthermore the Supervisory Board has adopted a set of regulations containing rules governing ownership of and transactions in securities by members of the Supervisory Board, other than securities issued by their ‘own’ company. These regulations, which are an annex to the Privileged Information Rules as mentioned in article 12.1, shall be posted on the Company's website.
A member of the Supervisory Board shall provide the compliance officer periodically, but in any event at least within one month after the end of each quarter, with any changes in his holding of securities in Dutch listed companies that operate in the same area or related areas as BAM Group, including in any case companies that operate as subcontractor, advisor or supplier of the building, construction and mechanical and electrical industry. A member of the Supervisory Board who invests exclusively in listed investment funds or who has transferred the discretionary management of his securities portfolio to an independent third party by means of a written mandate agreement is exempted from compliance with this last provision.

 

 

Article 13 Information, relationship with the managing board

13.1 The Supervisory Board, and its individual members, have their own responsibility for obtaining all information from the Executive Board and the external auditor that the Supervisory Board requires for the due performance of its duties.

If the Supervisory Board deems necessary, it may obtain information from officers and external advisors of BAM Group, with notification thereof in advance to the chairman of the Executive Board. The Executive Board shall provide the necessary means for this purpose.

Each member of the Supervisory Board keeps the chairman of the Supervisory Board and the chairman of the Executive Board informed in advance of any contacts that member may have with members of the Executive Board, officers of BAM Group and external advisors of BAM Group in the proper performance of his/hers duties as Supervisory Board member.

 
13.2 The Executive Board shall timely provide the Supervisory Board with information on all facts and developments concerning BAM Group which the Supervisory Board may need to function as required and to properly carry out its duties. Members of the Executive Board are required to attend meetings of the Supervisory Board, if invited.

 
13.3 The Executive Board shall quarterly provide the Supervisory Board with a report in writing prepared in a format as agreed from time to time and setting out detailed information on the general business of BAM Group in that quarter, with special emphasize on financials and strategic developments in the relevant markets.

 
13.4 Without prejudice to the above, each year, the Executive Board shall provide the Supervisory Board with the operational plan for the following year, an up-to-date version of the main features of the strategic policy, an overview of the general and financial risks, an assessment of the structure and management of the internal risk management and control systems and of major changes therein and any major improvements planned and shall discuss these subjects with the Executive Board.

 
13.5 From time to time the Executive Board shall provide the Supervisory Board with copies of reports of analysts with respect to the Company and its relevant markets.

 
13.6 In the event that the Company is subject of a rating process, called or uncalled for, the Executive Board shall provide the Supervisory Board with the reports resulting thereof.

 
13.7 The Executive Board shall adopt a set of rules which comprises matters concerning the Executive Board, amongst which the relationship with the Supervisory Board.

 
13.8 The Supervisory Board ensures that the Executive Board shall implement an arrangement for whistleblowers will be introduced, which arrangement makes it possible for employees to report alleged irregularities of a general, operational and financial nature in the Company to the chairman of the Executive Board or to an official designated by him, without jeopardising their legal position.
Alleged irregularities concerning the functioning of members of the Executive Board shall be reported to the chairman of the Supervisory Board.

 

 

Article 14 Relationship with the shareholders

14.1 The members of the Supervisory Board shall attend the general meetings of shareholders, unless they are prevented from attending on serious grounds.

 
14.2 The Supervisory Board shall provide the general meeting of shareholders with any information it may require, unless important interests (zwaarwegende belangen) of the Company or any law, rules or regulations applicable to the Company prevent it from doing so. The Supervisory Board shall specify the reasons for invoking such important interests.

 
14.3 The Supervisory Board is, as part of the annual report, accountable for the corporate governance structure of the Company and compliance with this structure to the general meeting of shareholders. Each substantial change in the Company’s corporate governance structure and in the compliance of the Company with the code shall be submitted to the general meeting of shareholders for discussion under a separate agenda item.

 
14.4 The Supervisory Board shall ensure that:
  1. the general meetings of shareholders will be convened in due time;
  2. the shareholders are informed by means of a shareholders’ circular of all facts and circumstances relevant to relevant to the approval, delegation or authorisation to be granted as required by law or the articles of association of the Company;
  3. the agenda of the general meeting shall list which items are for discussion and which items are to be voted upon;
  4. material amendments to the articles of association and resolutions for the appointment of members of the Executive Board and members of the Supervisory Board shall be submitted separately at the general meeting;
  5. the company shall give shareholders and other persons entitled to vote the possibility of issuing voting proxies or voting instructions, respectively, to an independent third party prior to the general meeting;
  6. the company shall formulate an outline policy on bilateral contacts with the shareholders and that the company shall publish this policy on its website.

 
14.5 On request, the report of the general meeting of shareholders shall be made available to shareholders no later than three months after the end of the meeting, after which the shareholders shall have the opportunity to react to the report in the following three months. The report shall then be adopted in the manner provided for in the articles of association.

 
14.6 The Supervisory Board ensures that if a serious private bid is made for a group company, business unit or a participating interest and the value of the group company, business unit or a participating interest exceeds the threshold referred to in the applicable article of the Civil Code, and such bid is made public, the Executive Board of the Company shall, at its earliest convenience, make public its position on the bid and the reasons for this position.

 
14.7 The Supervisory Board ensures that, in case the Executive Board invokes the response time within the meaning of the best practice clauses II.1.9 and IV.4.4 of the code, the Executive Board shall use the response time for further deliberation and constructive consultation, in any case with the shareholder(s) involved, and shall ensure that the Executive Board explores the alternatives.

 
14.8 The Supervisory Board ensures that, in case of a takeover bid is being prepared for the company’s shares, the Executive Board will involve the Supervisory Board closely and timely in the takeover process and that a request from a competing bidder to inspect the company’s records will be discussed by the Executive Board with the Supervisory Board without delay.

 
14.9 The Supervisory Board ensures that the Executive Board shall require the approval of the general meeting of shareholders of resolutions regarding a significant change of the identity or character of BAM Group as mentioned in article 2:107a of the Dutch Code Civil.

 
14.10 The chairman of the general meeting shall ensure the orderly and efficient conduct of the general meeting.

 

 

Article 15 Relationship with the works council

15.1 A delegation out of the Supervisory Board shall annually attend two meetings (overlegvergaderingen) with the central works council and the Executive Board member acting as ‘bestuurder’ in the sense of section 24, paragraph 1 of the works councils act (Wet op de ondernemingsraden). In addition once each year an informal meeting will take place which will be attended by the Supervisory Board, the Executive Board and the central works council. The Supervisory Board shall annually draw up a list of members of the Supervisory Board who are available to attend meetings of the central works council.

 
15.2 The chairman of the Supervisory Board is primarily responsible for maintaining and co-ordinating contacts with the central works council. The chairman of the Supervisory Board acts as the primarily contact for the central works council. Of such contacts the chairman of the Executive Board will be informed by the chairman of the Supervisory Board. If a member of the Supervisory Board is invited to attend a meeting of the central works council, he shall accept the invitation only after prior consultation with the chairman of the Supervisory Board.

 

 

Article 16 Confidentiality

16.1 Discussions of the Supervisory Board are confidential. Members of the Supervisory Board shall treat all information and documentation acquired within the framework of their position as member of the Supervisory Board with the necessary discretion and with the appropriate secrecy.

 
16.2 Announcements referring to discussions of the Supervisory Board will be made exclusively by or in consultation with the chairman of the Supervisory Board.

 
16.3 After their resignation from the Supervisory Board, members of the Supervisory Board shall keep available to the chairman of the Supervisory Board all documentation regarding the discussions of the Supervisory Board.

 

 

Article 17 Non-compliance, amendment

17.1 Without prejudice to the provisions of articles 1.5 and 14.3, the Supervisory Board may occasionally decide at its sole discretion not to comply with and adhere to these rules pursuant to a Supervisory Board resolution to that effect. Such resolutions shall be referred to in the Supervisory Board’s report.

 
17.2 Without prejudice to the provisions of articles 1.5 and 14.3, these rules may be amended by a resolution of the Supervisory Board to that effect. Such resolutions shall be referred to in the Supervisory Board’s report.

 

 

Article 18 Governing law, jurisdiction and language

18.1 These rules shall be governed by and construed in accordance with the law of the Netherlands.

 
18.2 The courts of Utrecht, the Netherlands, shall have exclusive jurisdiction to settle any dispute arising from or in connection with these rules (including any dispute regarding the existence, validity or termination of these rules).

 
18.3 These rules are a translation of a Dutch version. In case of discrepancies the Dutch version of these rules prevails.

 

 

Adopted by the Supervisory Board in its meeting of 18 November 2009.

 

W.K. Wiechers (Chairman)