DANONE RULES OF PROCEDURE OF THE BOARD OF DIRECTORS

Transcription

1 DANONE RULES OF PROCEDURE OF THE BOARD OF DIRECTORS 1/19

2 Article 1 Application scope of these Rules of Procedure These Rules of Procedure are intended to supplement the Company s by-laws. They lay down the operating principles of the Board of Directors, the ethical rules applying to its members, as well as the interactions with the Committees and the General Management. They serve for internal purposes only and are not effective against third parties. These Rules of Procedure apply to all members of the Board of Directors, including, if applicable, to the Honorary Chairman and the Honorary Vice-Chairmen, the Directors representing employees, and the Works Council Delegates on the Board of Directors. They shall be communicated to all candidates for the position of Director and to any permanent representative of a legal entity prior to that person assuming his/her duties. Article2 Meetings of the Board of Directors 2.1. Notice The Board of Directors meets as often as the Company s interests so require and at least five times per year. Notices are sent by all available means and in particular by letter, fax or . Notices may be verbal in urgent situations. Notices are sent out by the Chairman or on his/her behalf by any person he/she appoints, and in particular by the Secretary of the Board. They may also be issued by a majority of the sitting Directors or, if the Board has not convened for over two months, by one third of them. In both of these cases, notices shall indicate the meeting agenda. In all events, the Board of Directors may, over the course of each of its meetings, in the event of an emergency, and upon a proposal of the Chairman, discuss items brought to its attention that are not listed on the agenda. Meetings are held at any location specified in the notice Rules governing the quorum and majority A member of the Board of Directors may grant a proxy to another member of the Board of Directors to represent him/her at a Board of Directors meeting. No more than one proxy shall be granted, as stipulated above, to a member of the Board of Directors for a given session. The provisions of the two preceding paragraphs apply to the permanent representatives of legal entities. 2/19

3 The decisions of the Board of Directors are valid only if at least one half of its members are present. Decisions are made by a majority vote of the members present or represented. In the event of a tie, the vote of the Chairman of the session becomes the deciding vote Participation in a Board of Directors meeting through Telecommunications The members of the Board of Directors may, under the conditions permitted by law and applicable regulations, participate in the meetings of the Board of Directors by videoconference or telecommunications, including conference calls (the Telecommunications ). The Chairman ensures that these Telecommunications permit the identification of the Board member and guarantee his/her effective participation in the Board of Directors meeting, whose discussions must be retransmitted without interruption. The members of the Board of Directors participating in the Board of Directors meetings through Telecommunications are considered to be present for the purpose of calculating the quorum and majority, except as concerns: - the closing of the annual company and consolidated financial statements, and - the establishment of the Company s management report, including the management report of the Danone group ( the Group ) Discussions The Chairman ensures that the Board of Directors, during its meetings, allows sufficient time for discussion, enabling each Director to express himself/herself freely. The Chairman may authorize persons who are not Board members to attend Board of Directors meetings, including through Telecommunications. Article 3 Minutes, Attendance Register and Secretariat of the Board 3.1. Minutes of Board of Directors meetings Minutes of the proceedings of each meeting of the Board of Directors are drafted, in accordance with applicable legal provisions. The Chairman satisfies him/herself that the opinions expressed by the Directors are properly recorded in the Board of Directors minutes. 3/19

4 The minutes make note of the use of Telecommunications and the name of each person who has participated in the Board of Directors meeting through these means. It also mentions any technical incidents involving Telecommunications if they have disrupted the smooth conduct of the meeting Attendance register An attendance register signed by the members of the Board of Directors participating in the meeting is kept at the company s registered office. The written proxies are appended to the attendance register. The attendance register mentions, where applicable, the participation of Directors through Telecommunications The Secretary of the Board The Board of Directors appoints, on the proposal of the Chairman, a Secretary of the Board who may be chosen from outside its ranks. The Secretary remains in office for the period determined by the Board of Directors. In the Secretary of the Board s absence, the Board of Directors appoints one of its members or a third party to replace him/her. The Secretary of the Board is notably responsible for the dispatch of working documents to Directors. He/she remains at their disposal for any request for information pertaining to their rights and duties, the operation of the Board or the life of the Company. He/she assists the Chairman of the Board of Directors in the performance of his/her duties. The Secretary of the Board is authorized to issue and certify copies of or excerpts from the minutes. Article 4 Exercise of the powers of the Board of Directors 4.1. General prerogatives The Board of Directors determines the orientations of the Company s activity and oversees their implementation. It rules on all decisions concerning the Company s major strategic, economic, social, financial or technological orientations Specific prerogatives At any time during the year, the Board of Directors performs the verifications and audits it deems advisable. 4/19

5 At each Board of Directors meeting, the Chairman reviews the status of the transactions completed since the previous meeting as well as the main pending projects that could be completed before the next Board of Directors meeting. The Board of Directors reviews each year the essential points of the management report and the resolutions presented to the Shareholders General Meeting Authorization of strategic operations The Board of Directors approves strategic investment projects and all operations, in particular acquisitions or disposals that could have a significant impact on the Group s results, the structure of its balance sheet or its risk profile. In particular, the Chief Executive Officer must obtain the prior authorization of the Board of Directors for the following operations: Type of operations Acquisitions or disposals of securities and/or assets, partnerships or joint-ventures (in cash or by asset contributions, carried out in one or several operations) Any off-balance sheet commitment made by the Group Other investments Internal reorganizations Thresholds based on the Group s consolidated sales Threshold of 250 million applicable: - to acquisitions, partnerships and joint ventures: by investment for the Group s share - for disposals: proceeds received for the Group s share Threshold of 100 million for the Group s share Any significant excess over the amount set in the framework of the annual budget Any reorganization representing an overall cost for the Group s share exceeding 50 million Article 5 Information, training and attendance of the Directors 5.1. Information Board of Directors meetings are preceded by the mailing, in a timely manner, of a file covering agenda items requiring particular analysis and prior thought so that each Director may act with full knowledge of the facts and in an informed manner regarding these items. 5/19

6 During each meeting of the Board of Directors, the Chairman informs its members of the principal facts and significant events concerning the life of the Group that have occurred since the date of the preceding Board of Directors meeting. Furthermore, the Board of Directors is informed by the General Management at least once every six months of the Company s financial situation, cash situation and commitments. Between Board of Directors meetings, the Directors also receive all useful information on significant events or operations for the Group. More generally, they may receive from the Chairman at any time all information and documents that they deem useful for the fulfillment of their duties. They receive the press releases circulated by the Company. Directors may ask to meet with the Company's principal executive managers, even outside the presence of corporate officers. The Secretary of the Board and the corporate officers should be given prior notice. Directors may visit a Group site in order to obtain the information required to perform their duties. In order to do so, Directors must submit a written request explaining the purpose of such a visit to the Chairman of the Board, via the Secretary of the Board. The Secretary of the Board organizes the conditions of such visits Training of Directors At the time of his/her appointment and throughout his/her term, each Director may receive the training necessary for the performance of his/her duties. In particular, such internal or external training will allow him/her to thoroughly understand the Group s activities, risks and organization, or to develop some specific skills. Directors representing employees shall be provided with training adapted to the performance of their duties. These trainings are organized by the Company at its sole expense. 5.3 Directors Attendance Directors ensure that they attend Board of Directors meetings and Shareholders General Meetings. Directors devote the time needed for the performance of their duties. Directors are careful to limit the number of board memberships and committee chairmanships at other companies so as to remain sufficiently available. Therefore: - Directors shall inform the Chairman of the Board of Directors and the Chairman of the Nomination and Compensation Committee promptly after having accepted a new board membership or having changed his/her professional responsibilities, 6/19

7 - Directors shall inform the Chairman of the Board of Directors and the Chairman of the Nomination and Compensation Committee before accepting another board membership in a listed French or foreign company, - Corporate officers shall in addition seek the opinion of the Board of Directors before accepting another board membership in a listed French or foreign company. The Company s annual report contains data on Directors attendance at Board of Directors and Committee meetings. Article 6 Creation of special committees Common provisions 6.1. Creation of Committees The Board of Directors may decide to create one or more special Committees, whose composition and prerogatives it determines and which exercise their activity under its responsibility. These Committees cannot interfere with the Company s management or reduce or limit the powers of the Chief Executive Officer or, if applicable, of the Deputy General Managers, or those of the Board of Directors. Within its field of expertise, each Committee issues proposals, recommendations and opinions, depending on the case, and reports on its assignments at the next meeting of the Board of Directors List of Committees There are four permanent Committees: - the Audit Committee, - the Nomination and Compensation Committee, - the Strategic Committee, - the Social Responsibility Committee. Furthermore, the Board of Directors may create one or more permanent or temporary ad hoc Committees Composition of the Committees The Committees are composed solely of Directors. Their members are appointed by the Board of Directors, upon a proposal of the Nomination and Compensation Committee. Members are appointed in a personal capacity and cannot be represented. 7/19

8 6.4. Committee chairmanships A Director appointed by the Board of Directors, upon a proposal of the Nomination and Compensation Committee, serves as the Committee s Chairman for a maximum period corresponding to that of his/her term as Board member. The Chairman of the Committee determines the conditions under which he/she reports to the Board of Directors on the Committee s work Committee assignments The assignments of the Audit Committee, Nomination and Compensation Committee, Social Responsibility Committee and Strategic Committee are described in detail in specific Rules of Procedure, which are subject to the approval of the Board of Directors Referrals to the Committees and Committee agendas Each Committee deals with all matters within its area of expertise as stipulated by its Rules of Procedure. Moreover, the Chairman of the Board of Directors may refer to a Committee any matter that is included or is to be included on the Board of Directors agenda. Lastly, the Board of Directors and its Chairman may also refer to a Committee at any time matters that fall within the scope of its expertise. Each Committee Chairman prepares the agenda of each meeting and determines its annual schedule Committee meeting schedule After examining the schedule adopted by the Board of Directors, each Committee establishes the provisional annual schedule for its own meetings. Such meetings are held at the registered office or any other location specified by its Chairman Quorum and majority Committee members participate in their meetings in person, using Telecommunications if appropriate. Committee meetings may be held with binding effect only if at least one half of their members are present or participate via Telecommunications. Opinions and recommendations are made by a majority vote of the members participating in the meeting, with each member entitled to one vote. In the event of a tie, the vote of the Chairman of the Committee becomes the deciding vote. 8/19

9 6.9. Committee meetings Subject to the provisions specific to each Committee, its Chairman may decide, for each of its sessions, to invite members of the Board of Directors and, as needed, any person of his choosing, to attend. Only Committee members participate in its deliberations. Nevertheless, the Lead Independent Director may also participate in the meetings and has access to the work of the Committees Committee means In exercising their respective prerogatives, the Committees may be briefed by the Group s executive managers and request external technical research, at the Company s expense. They report on the information obtained and opinions gathered Committee Secretariat The Committees appoint a Secretary, who may be chosen from outside the Committees ranks. The Secretary remains in office for the period determined by the Committees. In the event of the Secretary s absence, the Committees appoint one of their members or a third party to replace him/her. Unless other arrangements are made, the minutes of each Committee meeting are prepared by the Committee s Secretary, under the authority of the Chairman of this Committee and are transmitted to its members. Article 7 Chairman of the Board of Directors In addition to the powers granted by applicable laws and by other provisions of these Rules of Procedure, the Chairman: - chairs and coordinates the Strategic Committee; - ensures compliance with the values and culture of Danone; - can, upon request of the Chief Executive Officer, represent the Company in its high-level relations, both national and international, notably with public authorities or the Company s strategic partners and stakeholders; and 9/19

10 - can, without prejudice to the prerogatives of the Board of Directors and its Committees, be regularly consulted by the Chief Executive Officer on any significant events concerning the Company s strategy in line with the Board of Directors guidelines, major external growth projects, major financial transactions, social initiatives or on the appointment of the key activities and functions of the Company. At the invitation of the Chief Executive Officer, the Chairman can participate to internal meetings with managers and teams of the Company so as to bring his/her opinion and experience on strategic issues. All these specific duties shall be performed by the Chairman in close coordination with the Chief Executive Officer, who is solely responsible for the direction and operational management of the Group. Article 8 Lead Independent Director 8.1. Appointment of the Lead Independent Director The Lead Independent Director is appointed by the Board of Directors, acting upon a recommendation of the Nomination and Compensation Committee, from among the Directors that it certifies as independent. The Lead Independent Director holds this position throughout his/her entire term as Director Role and duties of the Lead Independent Director The Lead Independent Director s primary function is to ensure the smooth operation of the Board of Directors and its Committees. In that context, he/she is in charge of the following maters: Board of Directors assessment The Lead Independent Director participates in the Board of Directors assessment process Management of conflicts of interest The Lead Independent Director prevents conflicts of interest from occuring, notably by taking preventive measures to raise awareness. He/she brings any conflicts of interest involving corporate officers and other Board members that he/she has identified to the attention of the Board of Directors. As part of the duty to report conflicts of interest as specified in Article 10.4 of these Rules of Procedure, any Director having a conflict of interest, even potential, notifies the Lead Independent Director Compliance with the Rules of Procedure The Lead Independent Director ensures that these Rules of Procedure are complied with. 10/19

11 As part of the consultation procedure with respect to market ethics as specified in Article 10.9 of these Rules of Procedure, the Lead Independent Director may be consulted by the Directors in the same capacity as the Chairman Relations with Shareholders The Lead Independent Director assists the Chairman and the Chief Executive Officer, upon their request, to answer questions from shareholders, and makes himself/herself available to meet with them and receive comments and suggestions from them, at the request of and with the approval of the Chairman and of the Chief Executive Officer Activity report The Lead Independent Director reports on the execution of his/her duties once a year to the Board of Directors. During the Shareholders General Meetings, he/she may be requested by the Chairman to report on his/her actions Prerogatives of the Lead Independent Director As part of his/her duties, the Lead Independent Director exercises the following prerogatives: Convening of the Board of Directors/ Agenda / Informing Directors The Lead Independent Director may request the Chairman to convene the Board of Directors for a given agenda. He/she may propose to the Chairman additional agenda items. He/she ensures that the Directors are capable of performing their duties under the best possible conditions, and notably that they are properly informed prior to the Board of Directors meetings Independent Directors Directors certified as independent by the Board of Directors hold a meeting at least once a year at the initiative of the Lead Independent Director. He/she may invite external non-independent Directors to participate in these meetings. The Lead Independent Director ensures the link between independent Directors and the other Board members and the General Management. 11/19

12 8.3.3.Board of Directors Committees The Lead Independent Director may be appointed by the Board of Directors to serve as Chairman or member of one or more Board of Directors Committees. Even if not appointed, the Lead Independent Director may attend the meetings and has access to the work of the other Committees. In particular, the Lead Independent Director is involved in the work of the Nomination and Compensation Committee concerning the annual performance assessment and recommendations regarding the compensation of corporate officers Meetings with managers The Company keeps the Lead Independent Director regularly informed of its activities, including through the organization of regular meetings with operational or functional managers, on his/her request and after having informed the Chairman and the Chief Executive Officer Means The Lead Independent Director has access to all documents and information that he/she deems necessary to fulfill his/her duties. Article 9 - Compensation of the Board of Directors It is the responsibility of the Shareholders General Meeting to determine the maximum total amount of attendance fees to be allocated by the Board of Directors among its members. Directors who are also members of the Executive Committee or employees or corporate officers within the Group do not receive attendance fees. In the event of a dissociation of the offices of Chairman and Chief Executive Officer, the Chairman does not receive attendance fees, his/her compensation being paid by the Company, upon authorization of the Board of Directors acting on the recommendation of the Nomination and Compensation Committee. The formula for allocating these attendance fees, based on the applicable authorization granted by the Shareholders General Meeting, includes a fixed portion and a variable portion in consideration of participation in Board of Directors and Committees meetings. Additional compensation may be decided for Directors residing outside of France to take account of their additional constraints created by the need to travel to board meetings. 12/19

13 This allocation is made as follows: 9.1. Fixed portion - each Director receives a semi-annual fixed amount of 5,000, - the Lead Independent Director receives a semi-annual fixed amount of 25,000. If a Director is appointed or his/her term ends during this semi-annual period, he/she is entitled to receive the full amount of the fixed compensation due for this current period Variable portion Participation at each Board of Directors or Committee meeting, either in person or via Telecommunications, entitles the Director to receive the following compensation: Board of Directors meetings - an amount of 3,000 per Board of Directors meeting, - for travel by Directors residing outside of France: - an additional amount of 2,000 per trip to attend a Board of Directors meeting for Directors residing elsewhere in Europe, - an additional amount of 4,000 per trip to attend a Board of Directors meeting for Directors residing outside of Europe. It should be noted that for meetings of independent Directors (as specified in Article of these Rules of Procedure), the rules included in this Article apply unless these meetings are held on the same day as a Board of Directors meeting Meetings of the Audit Committee, Nomination and Compensation Committee, Social Responsibility Committee and Strategy Committee - an amount of 4,000 per Committee meeting for the members of this Committee, - an amount of 8,000 per Committee meeting for the Chairman of this Committee, With respect to variable compensation owed for travel to Committee meetings, the same rules as those applicable to Directors also apply. However, Directors making a single trip that enables them to attend several Board of Directors, Committee or independent Directors meetings (as specified in Article of these Rules of Procedure), will receive compensation only once for their travel Payment Payment of the fixed and variable components is made at the end of each semi-annual period. 13/19

14 If the total amount to be paid to Directors pursuant to the allocation rules described above exceeds the maximum overall amount authorized by the Shareholders General Meeting, the total amount to be paid to Directors shall be reduced so as to comply with the authorization in effect. The amounts to be paid to each Director will then be reduced on a pro rata basis to the amounts each should have received. Lastly, Directors will be reimbursed by the Company for all reasonable expenses incurred in the performance of their duties (in particular as regards transportation, food and lodging in order to attend Board of Directors and Committee meetings), provided that they produce all necessary receipts. Article 10 Directors Code of Ethics Directors knowledge of rights and duties Upon taking office, each Director is required to be aware of the general and specific duties incumbent upon him/her. In particular, he/she must take note of (i) the legal and regulatory rules governing the operation of French limited liability companies (sociétés anonymes), (ii) the Company s by-laws, (iii) these Rules of Procedure and all supplements or amendments that may subsequently be made hereto Directors duty of confidentiality The members of the Board of Directors and its Committees, as well as all persons taking part in the work of the Board of Directors or the Committees, are bound by an absolute duty of confidentiality which exceeds the mere duty of discretion stipulated by law with respect to: (i) (ii) the content of discussions and deliberations of the Board of Directors and its Committees, and all information and documents presented therein, or communicated to them for the preparation of their work, or to which they may have had access in the framework of their duties. This duty of confidentiality applies implicitly, even if the Chairman has not explicitly stipulated the confidential nature of the information. Furthermore, the members of the Board of Directors and its Committees, as well as all persons taking part in the work of the Board of Directors or the Committees: (i) are bound by this duty of confidentiality with respect to both persons outside the Company and persons within the Company who, given their duties, have no reason to have knowledge of the information; 14/19

15 (ii) must in particular, if the Board of Directors or its Committees have received specific, confidential information that could, at the time of its disclosure, affect the price of the Company s shares, refrain from disclosing this information to a third party as long as it has not been made public Independence of Directors The independence of Directors is assessed in compliance in the context of the provisions of the AFEP-MEDEF Code. The Board of Directors is responsible, upon proposal of the Nomination and Compensation Committee, for the assessment of its members independence according to those criteria and for the information of the Shareholders on the conclusions of this assessment in the Registration Document Management of conflicts of interest Each Director is mandated by all the Shareholders. In exercising the assignment entrusted to him/her, each Director must make his/her decisions independently of any interests other than Danone s company interests. Each Director must ensure at all times that his/her personal situation does not give rise to a conflict of interest with the Group. Duty to report conflicts of interest Any Director having a conflict of interest, even potential, in particular due to the duties he/she performs at another company, must notify the Chairman of the Board of Directors and the Lead Independent Director so that the Board of Directors can vote on this matter and ask him/her, if necessary, to resolve the conflict of interest. If necessary, the Chairman of the Board of Directors or the Lead Independent Director may solicit the opinion of the Nomination and Compensation Committee. In particular, each Director is required to prepare a sworn statement concerning the existence of a conflict of interest, or even a potential one: (i) (ii) (iii) (iv) upon assuming his/her duties, each year in response to a request made by the Company as it drafts its Registration Document, at any time if the Chairman of the Board of Directors so requests of him/her, and within 10 business days following the occurrence of any event making the previous sworn statement issued by a Director totally or partially inaccurate. 15/19

16 Each Director is also required, on the one hand in response to a request made annually by the Company, to report the list of board appointments and duties exercised at all companies within the past five years, and, on the other, to answer the questionnaire stipulated by European Regulation 809/2004 concerning in particular the existence of any conflict of interest. Duty to abstain A Director with a conflict of interest, even a potential one, must abstain from taking part in discussions and in the corresponding vote Ownership of Company shares The Directors undertake to hold on a continuous basis, in registered form, the number of Company shares required in the Company s by-laws. They must be able to provide proof of ownership of said shares at all times. This provision does not apply to Honorary Directors or to Directors representing employees Trading of Company shares As a general rule, the members of the Board of Directors must observe a duty of caution and vigilance and pay particular attention to all personal transactions involving Company shares or any financial instruments linked to these shares. In particular, the Directors are required to refrain from acquiring (therefore purchasing, exchanging or subscribing), selling (including conveyances free of charge) or making donations in any form or attempting to acquire or sell, for their own account or for that of others, either directly or indirectly, Company shares or any other financial instruments linked to these Company shares: (i) (ii) between the actual date when the holder became aware of privileged information (as defined by French stock exchange regulations governing insider trading) and the date (inclusive) on which this same information is disclosed to the public, and during the so-called blackout or negative window periods defined as follows: - between the 30 th day inclusive preceding the publication date of the Company s annual and interim financial statements and the publication date (inclusive) of the release accompanying these financial statements, - between the 15 th day inclusive preceding the publication date of the Company s quarterly sales figures and the publication date (inclusive) of the release accompanying these sales figures. 16/19

17 10.7. Duty to report to the French Financial Markets Authority (Autorité des marchés financiers - AMF) the trading of DANONE shares Under applicable regulations, Directors are required to personally report to the AMF any transactions they make involving Company shares within five trading days (corresponding to five market trading days) after this transaction has been carried out. For information purposes, they submit a copy of this report to the Secretary of the Board. This duty to report also applies to related parties, i.e. persons with close personal ties to these executives. They include the spouse, child and parent living in the Director s residence as well as any legal entity managed or controlled by the executive (or for which the Director or a related party enjoys the majority of the economic benefits). Transactions that must be reported include any acquisition, disposal or subscription (for example as part of a capital increase or when Company stock purchase options are exercised) Ban on the use of certain transactions Each Director (as well as related parties as defined by Article 10.7 of these Rules of Procedure) shall refrain from: - carrying out short-term purchase/resale transactions, in other words back-and-forth transactions within the trading month or the following month, involving Company shares, - short-selling these shares, directly or indirectly, - using any hedging instruments for DANONE shares or any other financial instruments linked to DANONE shares, and in particular for (i) DANONE stock purchase or subscription options, (ii) rights to DANONE shares subject to performance conditions, (iii) DANONE shares created through options or shares subject to performance conditions, (iv) DANONE shares subject to a safekeeping obligation by the Board of Directors or under applicable law, and lastly (v) all the other DANONE shares held by this Director, and - carrying out transactions on shares (and any related financial instruments) of companies for which, as a result of his/her duties as Director of Danone, he/she has inside information Consultation procedure Any Director who has questions concerning a transaction involving Company shares (or concerning related financial instruments) which he/she is planning to carry out, or regarding the type of information that he/she may disclose, in particular when communicating with third parties, must submit such questions to the Chairman of the Board of Directors or the Lead Independent Director. 17/19

18 Article 11 Assessment of the performance of the Board of Directors The performance of the Board of Directors shall be assessed every two years, either in the form of a self-assessment or an assessment by the Nomination and Compensation Committee, or by any third-party organization. In addition, once a year, the Board of Directors dedicates one of the items on its agenda to a discussion concerning its operation. The Lead Independent Director participates in the assessment of the Board of Directors. The Board of Directors ensures the quality of the Board of Directors collective work as well as the Directors availability and commitment. Article 12 Vice-Chairman Honorary Chairman and Honorary Vice-Chairman Temporary replacement of the Chairman Vice-Chairman The Board of Directors elects, at its discretion, a Vice-Chairman (or several Vice-Chairmen) from among its members. The Vice-Chairman or Vice-Chairmen hold(s) this position for the period determined by the Board of Directors, with this period not to exceed that of the respective terms as Director(s). The position of Vice-Chairman carries no particular prerogatives other than the Chairmanship, on the one hand, of Shareholders General Meetings (as specified in Article 25 of the by-laws) and on the other hand, of meetings of the Board of Directors (as specified in Article 12.3 of these Rules of Procedure) Honorary Chairman Honorary Vice-Chairman The Board of Directors may appoint: - as Honorary Chairman, a Director sitting as Chairman of the Board of Directors on the expiration date of his/her term as Director; and - as Honorary Vice-Chairman, a maximum of two Directors sitting as Vice-Chairman on the expiration date of his/her term as Director. This appointment will be made by taking into account both this Director s position and his/her contribution to the Group s development. The Honorary Chairman and the Honorary Vice-Chairmen attend Board of Directors meetings and are entitled to receive the same information as the Company s Directors. 18/19

19 The Honorary Chairman and the Honorary Vice-Chairmen participate in the Board of Directors meetings in an advisory capacity. They do not receive attendance fees or any other compensation for their duties in the Company Chairmanship of the Board of Directors in the Chairman s absence In the event of the Chairman s absence and, where applicable, that of the Director assigned to perform the Chairman s duties in accordance with law, the Vice-Chairman or one of the Vice- Chairmen chairs the Board of Directors meetings. In the event of the absence of the Vice-Chairman (or Vice-Chairmen), the Board of Directors designates, for each meeting, one of its members present to chair the meeting Temporary Replacement of the Chairman in the event of his incapacity or death In the event of the Chairman s incapacity or death, the Board of Directors may assign a Director to act as Chairman under the conditions stipulated by law. Article 13 Approval and amendments of these Rules of Procedure These Rules of Procedure were approved by the Board of Directors, in a special decision of September 2, These Rules of Procedure may be amended at any time by a simple decision of the Board of Directors and upon a proposal of its Chairman. * * * 19/19