Thomson implements the separation of the roles of Chairman and Chief Executive Officer
The Board of Directors of Thomson (Euronext 18453 ; NYSE ; TMS) met on 28 March 2008 at the Group’s headquarters in Paris under the chairmanship of Frank Dangeard in order to call the 22 May 2008 Annual General Meeting and finalize the resolutions for that meeting, and also to review current trading and other Group matters.
In 2004, the Thomson Board defined a strategy that led to the Group’s exit from its consumer electronics activities and to the creation of a technology company specialised in digital video solutions. This transformation has been successfully completed and the Group is now firmly positioned in the Internet and broadband equipment and services sector.
Taking into account the completion of the Group’s transformation which opens a new period for the Group, the Board has resolved, as announced on 14 February 2008, to implement right now a new governance structure that entails the separation of the roles of Chairman and Chief Executive, and brings to a close Frank Dangeard’s combined roles of Chairman & CEO.
The Board offered the role of Chairman to Frank Dangeard, a proposal he has decided to decline believing that the role of Chairman and future of the Group as envisaged by the Board would be better overseen by someone other than himself in that role. However, in the interests of the Group Frank Dangeard has agreed to be Chairman until 12 April 2008 at the latest, in order to assist with the transition period, and the Board has therefore appointed him to the position under these terms with immediate effect.
The Board warmly recognised Frank Dangeard’s achievements and leadership in the successful transformation of the Group in all of its aspects, thereby repositioning Thomson in new and attractive markets focused on “video solutions” in which the Groups today occupies world leading positions.
In consideration of the above, the Board resolved to grant Frank Dangeard a severance payment as envisaged under motions passed at the Annual General Meeting of 10 May 2005. The Board also accepted Frank Dangeard’s proposal to reduce the amount of this payment to the equivalent of 18 months of his 2007 remuneration, in line with the governance policy that the Group wants to apply in the future.
The Board also appointed Julian Waldron as interim CEO, at the proposal of the Group’s Nominations and Governance Committee, this appointment to last until the process for the selection of a permanent CEO has been completed. That process is proceeding according to the plan and schedule established by the Board. Julian Waldron will chair an unchanged Executive Committee and will combine his existing Chief Financial Officer role with that of Chief Executive Officer.
Taking full account of the crisis in the global financial and credit markets, the Board has been closely monitoring the Group’s liquidity position and funding situation. The Board confirms its position as set out in the 11 March 2008 press release which stated that the Group has “sufficient liquidity to refinance its short-term and long-term debt falling due in 2008 and 2009”. In the same release it added that “It has no plans for a capital increase”.
Thomson indicated in its press release of 14 February 2008 that the first months of the 2008 year would be challenging. The slowdown in the Access Products activities of the Systems Division has continued into the first quarter with reduced orders from broadband operator customers. In the Services Division, the Hollywood writers strike, while now over, has negatively affected the Film Services and Content Services businesses. As a consequence Group revenues for the first quarter are likely to show a sharp decrease on a constant currency basis compared to the first quarter of 2007. The Group will comment further upon the release its quarterly revenues.
Activity has been more stable in other areas of the Group’s business such as the Service Division’s DVD activity and the Systems Division’s Broadcast & Networks activity. In addition, the last weeks of March showed an improvement in activity in the Access Products business indicating renewed investment by the Group’s customers. On the basis of the current outlook, the Group would expect a more positive evolution of second quarter revenues, even if these will still be lower than those recorded in the same period last year on a constant currency basis.
The Board confirms the Group’s overall strategic orientation with its mission to build a world leader in “video solutions”. Thomson has unique assets in the broadband equipment and network services sector, and is also constantly optimizing the perimeter of all three of its divisions. The Group is already a major player in “video solutions” with number one or two positions worldwide in its chosen markets and an exceptional client list.
Certain statements in this press release, including any discussion of management expectations for future periods, constitute “forward-looking statements” within the meaning of the “safe harbor” of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on management’s current expectations and beliefs and are subject to a number of factors and uncertainties that could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements due to changes in global economic and business conditions, consumer electronics markets, and regulatory factors. More detailed information on the potential factors that could affect the financial results of Thomson is contained in Thomson’s filings with the U.S. Securities and Exchange Commission.
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