Rules and regulations of the Board of Directors
The Board of Directors of the Company has adopted rules and regulations to govern its functioning and that of its committees. These rules and regulations have been updated on April 7, 2010, notably to account for the AFEP-MEDEF guidelines.
The rules and regulations of the Board of Directors notably include provisions on the following points:
Composition of the Board of Directors, in order to ensure and control its independence. At least half of Company’s Board members must be, to the extent possible, independent. The independence of Board members must be assessed each year by the Board based on criteria proposed by the Corporate Governance Committee.
Holding of Board meetings. Subject to the limits and exceptions provided for by law, are deemed to attend Board meetings, with respect to quorum and majority, Board members taking part in the meeting by means of Visio conference or telecommunication which enable their identification and effective participation. These means of participation are that allowed by applicable regulations and shall be used under the conditions permitted by law. Specifically, participation by means of Visio conference or telecommunication is not permitted for meetings on the review of the statutory and consolidated financial annual returns or for the approval of the management report.
Information of the Board members. Board members must be given regular information on the financial situation of the Company, its cash position and financial commitments. The Chairman must communicate to the Board members any significant piece of information regarding the Company, notably press articles and reports from financial analysts, including negative information released by external organizations. All Board members are entitled to receive any piece of information or any document that any member considers necessary for the performance of his duties. Board members are further entitled to meet any member the Company’s management, outside the presence of the Chairman.
Decisions for which the Chief Executive Officer must obtain preliminary authorization of the Board. The list of such decisions notably include: decisions to set up new offices abroad or to close down these offices; significant operations that could affect the Group’s strategy or alter its financial structure or its scope of activity; buying or selling of shares from other companies; any transactions concerning goods, titles or shares; buying or selling real estate; the granting of securities on assets of the Company of the obtaining of loans exceeding € 150,000.
Designation and functions of the committees. The Board may set up committees among its members to prepare the Board’s work. The Board fixes the functions of each committee; the committees work under the exclusive and collective responsibility of all Board members. The Committees help prepare the decisions to be made by the Board by making recommendations and giving advice. Committee members must personally attend the meetings and cannot be represented by another member. Committees can only meet when half of the committee members attend. The committees can choose to discuss any item within their field of competence. They may also be seized by the Board or its Chairman.
Attributions of the Audit Committee. The attributions of the Audit Committee include ensuring the quality of internal control and the reliability of information provided to shareholders and to the financial markets. The Audit Committee is notably in charge of following the process of preparation of the financial information, of monitoring the efficacy of internal control systems (evaluation of the internal control procedures, review of proposed internal audits and implementation of the recommendations prepared based on the outcome of internal audits, evaluation of risk assessment), of following the legal control of statutory and consolidated accounts by the Statutory Auditors (review of the assumptions used for the preparation of the accounts, review of the annual, half yearly and, as the case may be, quarterly statutory and consolidated accounts before their submission to the Board, review with the Statutory Auditors of the relevance and implementation of the accountancy principles utilized, review of major transactions for which a potential conflict of interest could arise), of ensuring the independence of the Statutory Auditors and following the procedure of their selection, their fees; and the recourse to the Statutory Auditors for any missions other than the audit of accounts.
Composition of the Audit Committee. The Audit Committee counts three to five members. It is composed of independent members, to the extent possible, for at least two thirds of its members and comprises at least one member with financial or accountancy competences. The Chairman&CEO is in principle not member of the Audit committee. The Audit Committee meets as often as it deems necessary and at least twice a year prior to the Board meetings called to review the yearly and half-yearly accounts. The Committee may request from the Chairman the communication of all documents or the audition of all persons. The Committee must receive a summary of the internal audit reports, and may have recourse to external experts.
Attributions of the Compensation Committee. The attributions of the Compensation Committee consist in making proposals on the general remuneration policy of the corporate officers (fixed and variable, benefits in kind, retirement, severance packages) and for the allocation of free shares, stock-options and warrants; in making recommendations regarding the remuneration package of each corporate officer (including benefits in kind); in making proposals regarding the global amount of the director fees and their allocation between Board members; in making proposals regarding the remuneration package (including stock-options and free shares) of the management team (Senior Directors, Vice-Presidents, Chief Financial Officer); in examining a proposed consolidated yearly salary raise; in reviewing the contemplated stock-option and free share attributions to employees and the criteria of attribution and conditions applicable to the attributions; in collecting information regarding the remuneration and benefits in kind paid to the corporate officers of the Company and of the controlled entities of the Goup.
Composition of the Compensation Committee. The Committee counts three to five members. It is composed, whenever possible, for at least half of its members, of Board members considered as independent. The Chairman & CEO is in principle not member of the Compensation Committee. The Committee meets as often as it deems necessary and at least once a year. The Committee may request from the Chairman the communication of all documents or the audition of all persons.
Attributions of the Corporate Governance Committee. The attributions of the Corporate Governance Committee consist in proposing criteria for the evaluation of the independence of Board members; evaluating the efficacy and adequacy of corporate governance procedures; submitting recommendations to improve good corporate governance within the Company; making proposals regarding the composition of the Committees and their attributions; examining candidacies of potential Board members and for the strategic managerial functions.
Composition of the Corporate Governance Committee. The Corporate Governance Committee counts three to five members. At least half of its members should, to the extent possible, be considered as independent. The Chairman & CEO is in principle not member of the Corporate Governance Committee but participates in the selection of proposed Board members and other corporate officers. The Committee may request from the Chairman the communication of all documents or the audition of all persons.
Principles for the allocation of director fees. The Board may notably take into account, for such allocation, attendance to Board meetings and participation in the Committees.
Reminder of confidentiality obligations.
Reminder of the legal obligation for shares held by Board members to be in registered form.
Procedure for the declaration of transactions made by Board members and their families on the Company’s shares providing that Board members, and General Managers (CEO) must declare in writing to the French ‘Autorité des Marchés Financiers’ (AMF), within five working days, all transactions on Company shares made by themselves or by one of their relatives.
Recommendations to prevent insider trading
The Board has adopted, aimed at its employees and corporate officers, recommendations to prevent insider trading. These recommendations include a list of precautions to safeguard the secrecy of sensitive information. They recommend to wait at least one business day after the release of a public announcement before buying or selling shares of the Company and to avoid buying and selling shares over a short period of time, save for the exercise of warrant rights or stock-options, in which case it is recommended to inform the Chief Financial Officer beforehand and in writing.