Annual Report 2016

Departures from the Corporate Governance Code

The company observes all the best practice provisions with the exception of those stated in this section. With respect to the best practices not or not fully observed by the company, an explanation is given for why this decision has been made. In other cases, an explanation is given of how some of the best practices are applied within the company.

Best practice II.2.3

The elements of this best practice are included in the company’s option program.

Best practice II.2.4

Allocation of options is at the discretion of the Supervisory Board. The options allocated since 2013 were in accordance with this best practice. Options allocated up to year-end 2012 were available for exercise within a period shorter than three years, subject to profit objectives being realised. Management Board members not eligible for reappointment after completing their first term may exercise their options up to three months after leaving employment. Options may in addition be exercised without special restrictions in the event of a bid to acquire all the shares in the company.

Best practice II.2.8

The employment contract with the Management Board members does not include the possibility of a one-time increase of the Board member’s salary by up to the amount of their annual salary in the event that the dismissal of the Board member is clearly unreasonable. Beter Bed Holding therefore applies a stricter standard than that set by the Corporate Governance Code.

Best practice II.2.10

The company applies this best practice as follows: a variable remuneration may be allocated to individual Management Board members on the basis of an assessment by and to some extent at the discretion of the Supervisory Board. For the Chief Executive Officer this was capped in 2016 at 60% of gross fixed annual salary; 50% of this is linked to quantitative objectives periodically set by the Supervisory Board, and the remaining 50% is based on the realisation of qualitative objectives. For the Finance Director, the variable remuneration in 2016 is capped at 50% of gross fixed annual salary; 40% is based on the realisation of quantitative objectives, and the remaining 60% is based on the realisation of qualitative objectives. The Supervisory Board may, at its discretion and only in the event of extraordinary circumstances, decide to adjust the variable remuneration.

Best practice III.4.3

The position of Company Secretary is held by an employee of the company, currently the Group Controller.

Best practice III.5.14

In view of the size of the company, the tasks of the Selection and Appointment Committee are performed by the Supervisory Board as a whole.

Best practice III.6.4

There were no transactions in 2016 between the company and natural or legal persons holding at least 10% of the shares in the company that were of material significance to the company and/or the persons concerned.

The best practice provisions of part III.8. ('one-tier board') and part IV.2. ('certification of shares') do not apply to the company.

Best practice IV.3.1

The company does not organise webcasts of analysts’ meetings etc. for reasons of cost. The data are published on the website in advance and the presentations are made available on the website prior to the meeting.

Best practice IV.3.11

The company has no operational or potentially usable protective measures against an acquisition of control of the company.

Best practice V.3.1 to V3.3

The best practice provisions of part V.3. ('internal audit function') do not apply to the company since the company does not have an internal audit function due to its size. The Audit Committee reviews annually whether there is a requirement for an internal auditor in accordance with best practice provision V.3.3.