TARKETT. Company anonyme [Public limited company] with a Management Board and Supervisory Board with a share capital of 318,613,480

Transcription

1 TARKETT Company anonyme [Public limited company] with a Management Board and Supervisory Board with a share capital of 318,613,480 Registered office: 1, Terrasse Bellini Tour Initiale Paris La Défense (France) R.C.S. [Trading companies register], Nanterre ARTICLES OF ASSOCIATION Articles of Association updated on 27 April 2017

2 I GENERAL PROVISIONS Article 1 FORM The Company has the form of a public limited company with a Management Board and Supervisory Board. Article 2 NAME Its name is TARKETT. Article 3 OBJECT The Company has as its object, in France and in all other countries: - the study, creation, development, exploitation, direction and management of all commercial, industrial, property or financial businesses or companies linked to activities in the fields of coverings; - direct or indirect participation in all transactions or companies via creation of companies, establishments or groupings with a property, commercial, industrial or financial character, participation in their establishment or in capital increases of existing companies; - management of a portfolio of participations and securities and the associated transactions; - ownership and management of all properties; - and in general, the execution of any industrial, commercial, financial, securities or property transactions which may be associated directly or indirectly with the above objects. Article 4 REGISTERED OFFICE The registered office is 1, Terrasse Bellini Tour Initiale Paris La Défense (France). It may be transferred to any other location of Hauts-de-Seine or of an adjacent department by simple decision of the Supervisory Board subject to the ratification of this decision by the immediately following ordinary general meeting of shareholders and anywhere else, by virtue of a decision of the extraordinary general meeting of shareholders. Article 5 DURATION The Company shall have a duration of ninety nine years, starting from its registration in the Trade and Companies Register, unless dissolved in advance or extended for a duration which may not exceed 99 year. 2

3 Il SHARE CAPITAL AND SHARES Article 6 AMOUNT OF THE SHARE CAPITAL The share capital is set as the amount of three hundred and eighteen million six hundred and thirteen thousand four hundred and eighty (318,613,480) euros, divided into sixty three million seven hundred and twenty two thousand six hundred and ninety six (63,722,696) shares with a nominal value of five (5) euros each, of the same category and fully paid up. Article 7 TRANSFER OF SHARES The ordinary shares are freely negotiable. The transfer of ordinary shares shall be made by transfer from account to account. They are in registered or bearer form, at the choice of the shareholder, under the conditions provided by the regulations in effect. The Company is authorised to make use of the provisions of the regulations in effect on identification of the holders of securities granting voting rights, immediately or in the future, at its own shareholder meetings. When the person who has formed the object of a request for information has not forwarded the information within the deadlines established by the legal and regulatory provisions in effect or has forwarded incomplete or erroneous information regarding both its capacity and the owners of the securities, the shares or securities granting access immediately or in the future to the capital and for which this person was registered in the account shall be deprived of the voting rights for any general meeting of shareholders held until the date of regularisation of the identification, and the payment of the corresponding dividend shall be deferred until this date. Any legal or natural person, acting alone or concertedly, who comes to hold, or ceases to hold, whether directly or indirectly, a fraction equal to or greater than 1% of the share capital or voting rights of the Company, or any multiple of this percentage, including above the declaration shareholders provided by the legal and regulatory provisions, shall inform the Company of the total number of shares and voting rights that it holds, as well as securities providing access to the share capital and voting rights potentially attached to the same, via registered letter with a request for notice of receipt, addressed to the registered office, at the latest at the close of the fourth trading session following the day of crossing of the threshold. In order to determine the thresholds cited above, account shall also be taken of the shares or voting rights held indirectly and of the shares or of the voting rights regarded as the shares or voting rights possessed, as defined by the provisions of articles L et seq. of the Commercial Code. In the event of failure to observe the provisions provided above, the sanctions provided by law in the event of failure to observe the obligation of declaration of the crossing of the legal threshold shall only apply to the statutory thresholds on request, recorded in the minutes of the general meeting, by one or several shareholders holding at least 1% of the share capital or voting rights of the Company. Subject to the above stipulations, this statutory obligation shall be governed by the same provisions as those governing the legal obligation, with this including the cases of categorisation as held shares, provided by the legal and regulatory provisions. The Company shall bring to the attention of the public and shareholders, in its half-yearly financial report and in its annual report, the information which has been notified to it. It shall further reserve the 3

4 right to bring to the attention of the public and shareholders the failure to observe the aforementioned obligation by the relevant person. Article 8 DOUBLE VOTING RIGHT A double voting right shall be established to the benefit of the fully paid up shares which have formed the object of continuous holding in registered form by the same holder for a minimum period of at least two (2) years. For the calculation of this holding period, account shall not be taken of the duration of holding of the shares of the Company preceding the date of admission of the shares of the Company to trading on the NYSE Euronext Paris regulated market. Pursuant to article L , para. 2 of the Commercial Code, in the event of a capital increase by incorporation of reserves, profits or issue premiums, the double voting right shall be granted on issuance of the new bonus shares to a shareholder by virtue of existing shares for which it already benefits from this right. This double voting right may be exercised on the occasion of any General Meeting. The double voting right shall cease ipso jure when the share is converted to bearer form or ownership is transferred. Article 9 RIGHTS AND OBLIGATIONS ATTACHED TO THE SHARES The ownership of the sharing entails ipso jure adhesion to these articles of association and to the decisions of the general meetings. Each share shall provide entitlement, in the ownership of the company s assets and liquidation premium, to a share equal to the stake in the share capital that it represents. Whenever it is necessary to possess several existing shares to exercise any right, or also in the event of exchange or attribution of shares providing entitlement to a new share against the submission of several existing shares, the isolated shares or shares of a number less than that required shall not provide any right to their holders against the Company, with the shareholders personally responsible for the grouping and possibly for the purchase or sale of the necessary number of securities. The shares shall be indivisible with regard to the Company. Article 10 PAYING UP OF SHARES IN CASH The amounts remaining to be paid on the shares to be paid up in cash shall be called up by the Management Board. The stakes called and the date on which the corresponding amounts must be paid shall be brought to the attention of the shareholders, either via an announcement made at least fifteen days in advance in a publication authorised to receive legal announcements in the department of the registered office, or by registered letter addressed to each of the shareholders within the same deadline. The shareholder who does not make the due payments on the shares on their maturity, of which it is the holder, shall, ipso jure, and without prior notice, be liable to the Company for late payment interest calculated daily starting from the due date, at the legal rate plus three percentage points. 4

5 The Company may also undertake the sale of the shares for which the due payments have not been made under the conditions set by law. The proceeds deriving from the sale, after deducting costs, shall be attributed pursuant to the law to the balance due to the Company from the expropriated shareholder, who shall remain liable for the difference but who shall benefit from the excess, if any exists. III MANAGEMENT BOARD Article 11 COMPOSITION OF THE MANAGEMENT BOARD A Management Board shall administer and direct the Company under the control of a Supervisory Board. It shall consist of at least two members and at most five members. If a position is vacant, the Supervisory Board shall fill the vacancy within two months. Failing this, any interested party may ask the chairman of the Commercial Court, ruling on an interlocutory basis, to make this appointment in a provisional capacity; the person so named may be replaced by the Supervisory Board at any time. The members of the Management Board shall mandatorily be natural persons. Appointed by the Supervisory Board, they may be dismissed, either by the ordinary general meeting of shareholders, or by the Supervisory Board. In the absence of just cause, their dismissal may give rise to damages. The dismissal of a member of the Management Board from his/her position shall not have the effect of terminating the employment agreement that the interested party has concluded with the Company. Article 12 DURATION OF THE DUTIES OF MEMBERS OF THE MANAGEMENT BOARD The members of the Management Board shall be appointed for a three-year period, except in the event of appointment as a replacement for a vacant position, in which case, the duties of the member designated by the Supervisory Board as a replacement shall expire on expiry of the remaining period until the renewal of the Management Board. The members of the Management Board shall always be re-electable. Any member of the Management Board shall be regarded as resigning from office at the end of the General Meeting ruling on the financial statements for the year during which he/she has reached the age of 65. The Supervisory Board shall set, in the appointment decision, the mode and amount of the remuneration of each of the members of the Management Board. Each member of the Management Board of the Company shall submit to the regulations in effect for limitation of accumulation of mandates. He/she may not hold a mandate of managing director, member of the Management Board or sole managing director or of a mandate of director or member of the supervisory board in listed companies external to the Tarkett Group (as this term is defined in article 16 hereinafter). Each member of the Management Board shall collect the opinion of the Supervisory Board before accepting a new company mandate within a listed company not controlled by the Company either directly or indirectly. Article 13 ORGANISATION AND FUNCTIONING OF THE MANAGEMENT BOARD 5

6 The members of the Management Board may, with the authorisation of the Supervisory Board, allocate executive tasks among themselves. In this event, this allocation shall not release the Management Board from meeting and deciding on the most significant management issues of the Company, or be invoked as a ground for release from the obligation of monitoring of the general conduct of the Company s activities incumbent on each member of the Management Board and of the resulting liability of a joint and several character. The Management Board may assign one or several of its members or any person chosen from outside its numbers to special missions, permanent or temporary, which it determines and delegate to them the powers which it judges appropriate for one or several given objects, with or without the right of subdelegation. Article 14 CHAIRMAN OF THE MANAGEMENT BOARD AND MANAGING DIRECTORS The Supervisory Board shall grant one of the members of the Management Board the capacity of Chairman. The Chairman of the Management Board shall represent the Company in its relations with third parties. The Supervisory Board may attribute the same powers of representation to one or several members of the Management Board, who shall then hold the title of Managing Director. The Chairman of the Management Board or the Managing Directors may validly grant a power of attorney to a third party. The powers granted by this power of attorney shall nevertheless be limited and relate to one or several given objects. With regard to third parties, all actions committing the Company shall be validly performed by the Chairman of the Management Board or any member who has received the title of Managing Director from the Supervisory Board. Article 15 MEETINGS OF THE MANAGEMENT BOARD The Management Board shall meet as often as the interests of the Company demand, on notice of calling of the Chairman or one of its members made by any means, including verbally. The meetings of the Management Board may be held at the registered office or at any other location indicated in the notice of calling. A member of the Management Board may arrange to be represented at a meeting by another member of the Management Board who may not hold more than one mandate. In the event of absence of the Chairman, the Management Board shall designate its member who shall serve as chairman of the session. The Management Board may also designate a secretary, who need not be chosen from among its members. For the decisions of the Management Board to be valid, the presence, participation by any means of videoconference, teleconference, or the representation of the majority of the members in office shall be necessary and sufficient. Decisions shall be taken with a majority of the members present or participating by videoconference, conference call or who are represented. 6

7 In the event of a tied vote, the vote of the Chairman of the session shall not be decisive unless it belongs to the Chairman of the Management Board. The minutes of the decisions of the Management Board shall be drawn up in a special register kept at the registered office and signed by the Chairman and Sec or by another member of the Management Board. The copies or extracts from these minutes shall be validly certified by the Chairman or by a member of the Management Board or a Managing Director. Article 16 POWERS AND OBLIGATIONS OF THE MANAGEMENT BOARD The Management Board shall hold the broadest powers with regard to third parties to act in all circumstances in the name of the Company, within the limits of the company object and subject to those expressly attributed by law to the Supervisory Board and to the shareholder meetings and subject to the Important Decisions requiring the prior authorisation of the Supervisory Board, as specified below. In relations with third parties, the Company shall be committed even by the actions of the Management Board which do not fall under the company object, unless it demonstrates that the third party knew that the action exceeded this object or that it could not be unaware of the same in view of the circumstances. However, without prejudice to the cases in which the prior authorisation of the Supervisory Board is required by way of application of the law, the Management Board shall request the prior authorisation of the Supervisory Board for the execution of the following decisions (the Important Decisions ) within the Company and/or its subsidiaries pursuant to article L of the Commercial Code (together, the Tarkett Group ): (a) the granting of sureties, endorsements and guarantees by any company of the Tarkett Group beyond a cumulative annual amount set by the Supervisory Board; if the sureties, endorsements and guarantees were given for a total amount exceeding the limit set for the period under consideration, the overshoot shall not be enforceable against third parties who were not aware of the same; (b) the transactions resulting in a significant change in the industrial activities (floor coverings and sporting services) carried out in a principal capacity by the Tarkett Group companies; as necessary, the conduct of new activities in an accessory capacity by the entities of the Tarkett Group shall only require the prior authorisation of the Supervisory Board if it constitutes an Important Decision; (c) the acquisition or assignment (and more generally, any transfer of ownership or investment) or allocation by way of a surety of an element of the Tarkett Group s assets within a project, any contribution of assets, notably a partial contribution of assets submitted to the general meeting pursuant to the so-called demerger procedure, any merger or reorganisation (whether with a third party or within the Tarkett Group), relating to a total amount exceeding the threshold set by the Supervisory Board or failing this, the internal regulations of the Supervisory Board (whether globally, or by type of transaction); (d) the listing on the stock exchange of any company of the Tarkett Group (other than the Company); (e) the conclusion by a company of the Tarkett Group of any borrowing for a principal unit amount (i) exceeding the amount set by the Supervisory Board or failing this, the internal regulations of the Supervisory Board or (ii) entailing an increase in the global amount of principal of outstanding borrowings of the Tarkett Group beyond the globally committed amount (in principal) of borrowings authorised by the Supervisory Board for the period in question and any significant modification to the procedures for these borrowings; 7

8 (f) decisions relating to the modifications of the articles of association of the Company or entailing such modifications and the modifications of the articles of association of any company of the Tarkett Group (i) the value of the assets of which exceeds an amount set by the internal regulations of the Supervisory Board or (ii) which has assets which are strategic for the Tarkett Group, insofar as these modifications affect the rights of the Tarkett Group company which controls this subsidiary; (g) the approval of these significant joint venture or cooperation agreements, i.e. those for which the assets contributed by any entity of the Tarkett Group (including in cash) exceed a threshold set by the internal regulations of the Supervisory Board; (h) any significant change in the accounting principles applied by the Company for the preparation of its (annual or half-yearly) accounts, other than on account of the modification of the IAS/IFRS standards; (i) the adoption of the annual budget of the Tarkett Group and any significant change made to this budget; (j) the adoption of a medium- or long-term Strategic Plan and the annual update of this plan (with the annual budget); (k) any proposal of resolutions to the general meeting and exercise of delegations granted by the general meeting, regarding the issuance of shares or securities granting access, whether immediately or in the future, to the Company s share capital, as well as any issue of shares or securities granting access, whether immediately or in the future, to the share capital of a company of the Tarkett Group to the benefit of a third party to the Tarkett Group; (l) any acquisition or assignment (and more generally, any transfer of ownership) of derivative products, contracts relating to currencies, swaps, options or other financial instruments of speculative type, other than (i) for the hedging requirements of the Tarkett Group or (ii) within the context of a share buyback programme of the Company; (m) the implementation of any insolvency procedure, dissolution, liquidation or dismantling, moratorium or suspension (or any similar procedure in each applicable jurisdiction) of a company of the Tarkett Group (i) with a number of employees exceeding a threshold set by the internal regulations of the Supervisory Board or (ii) having strategic assets for the Tarkett Group, insofar as these modifications affect the rights of the Tarkett Group company controlling this subsidiary; (n) any loan granted to a third party by the Tarkett Group, with the exception of advances to clients, employees and any loan concluded during the normal course of business; (o) (i) any recruitment or suspension (or dismissal) of the principal executives of the Tarkett Group, defined in the internal regulations of the Supervisory Board and (ii) any significant modification to their remuneration (including pension plans or special departure conditions); (p) the implementation or any amendment to the profit sharing plan of the executive team (including any profit-sharing in the form of shares or cash); (q) the creation or amendment of stock option plans or plans for the attribution of bonus shares of the Company or of any company of the Tarkett Group (or any other instrument falling under a similar logic) to the benefit of the directors and/or employees of the Group or of certain categories of them; (r) the conclusion or significant modification of any collective agreement, pension plan or of any dismissal plan concerning a number of persons set by the internal regulations of the Supervisory Board; 8

9 (s) the initiative, halting or settlement of any dispute (including a fiscal dispute) or the waiver of any claim, in each of these cases, for an amount exceeding those set by the internal regulations of the Supervisory Board; (t) the appointment, renewal or dismissal of the statutory auditors; (u) any subsidy, sponsorship operation and more generally, any form of donation exceeding one hundred thousand (100,000) euros. At least once a quarter, the Management Board shall submit a report to the Supervisory Board. Within three months of the end of each financial year, it shall submit the annual financial statements to it, for the purposes of auditing and verification. IV SUPERVISORY BOARD Article 17 COMPOSITION OF THE SUPERVISORY BOARD The permanent control of the Company s management by the Management Board shall be exercised by a Supervisory Board consisting of at least three and at most eighteen members, subject to the waivers provided by law. In the event of resignation, death or incapacity of a member of the Supervisory Board, the Supervisory Board shall meet as soon as possible in order to elect a member to replace the resigning, deceased or incapable member. Until he/she holds 1,000 shares, each member of the Supervisory Board shall use half of the amount of his/her attendance fees to acquire shares in the Company. The Supervisory Board shall include a member representing the employees appointed by the Works Council of the Company. This number shall be raised to two when the Supervisory Board consists of more than 12 members. The mandate of the member(s) of the Supervisory Board representing the employees shall be four years and shall end at the end of the ordinary general meeting ruling on the financial statements for the past financial year and held in the year during which the mandate of the said member expires. In the event of failure to maintain the conditions of application to article L of the Commercial Code, at the end of a financial year, the mandates of the members of the Supervisory Board representing the employees shall end at the end of the General Meeting which approved the financial statements for the said financial year. Article 18 DURATION OF THE DUTIES OF MEMBERS OF THE SUPERVISORY BOARD The duration of the duties of members of the Board shall be four years, ending at the end of the ordinary general meeting which decided on the financial statements for the past financial year and held in the year during which the mandate of the said member expired. As an exception, the general meeting may provide, on designation of certain members of the Supervisory Board, that the duration of their mandate shall be less than four years, in order to permit a staggered renewal of the mandates of the members of the Supervisory Board. They shall always be eligible for election. They may be dismissed at any time by the ordinary general meeting. 9

10 Part of the members of the Supervisory Board shall be renewed each year, in order to ensure a staggered renewal of all of the Supervisory Board over a four-year period. The number of members of the Board who have exceeded the age of 75 may not exceed one third of the incumbent members of the Board. No member of the Supervisory Board may form part of the Management Board. If a member of the Supervisory Board is appointed to the Management Board, its mandate for the Board shall end as soon as he/she takes office. Article 19 PROVISIONAL APPOINTMENTS In the event of a vacancy due to death or resignation for one or several positions, the Supervisory Board may, between two general meetings, make appointments in a provisional capacity. If the number of Board members falls below three, the Management Board shall immediately call the ordinary general meeting with a view to making up the numbers of the Board. The provisional appointments made by the Supervisory Board shall be subject to ratification by the following ordinary general meeting; the member appointed as a replacement for another shall only remain in office for the remaining time of his/her predecessor s mandate. In the absence of ratification of the provisional appointments, the decisions taken and the actions previously carried out by the Supervisory Board shall nevertheless remain valid. Article 20 ORGANISATION OF THE SUPERVISORY BOARD The Supervisory Board shall elect a Chairman and Deputy Chairman from among its members, pursuant to the provisions of its internal regulations. The Supervisory Board shall meet on notice of calling of the Chairman. The Chairman shall nevertheless call the Board when at least one member of the Management Board or at least one third of the members of the Board submits a grounded written request in this sense, within fifteen days of the receipt of the request. If this request has remained without result, its authors may themselves issue the notice of calling, indicating the agenda for the session. The Board may appoint a secretary, who may be chosen from outside of its members. Article 21 MEETINGS OF THE SUPERVISORY BOARD The members of the Supervisory Board shall be called to the sessions of the Supervisory Board by any means, including via , with prior notice of at least five (5) business days. This deadline may be waived at the proposal of the Chairman of the Supervisory Board, if all the members of the Supervisory Board are present or represented the meeting of the Supervisory Board or if the absent or unrepresented members agree that the meeting of the Supervisory Board shall be held in their absence. The meetings shall take place at the registered office of the Company or at any other location indicated in the notice of calling. The notice of calling shall contain the agenda of the meeting. The Supervisory Board may only validly deliberate if at least half of its members are present. To the extent authorised by law, members shall be regarded as present for the calculation of the quorum and 10

11 majority who participated in the meeting by videoconference, conference call, or by any other legally recognised resource. The decisions of the Supervisory Board shall be taken with a simple majority of votes of the present or represented members of the Board. In the event of a tied vote, only that of the Chairman of the Supervisory Board shall be decisive, with the chairman of the session not having a deciding vote if he is not the Chairman of the Supervisory Board. The decisions of the Supervisory Board of the Company shall be recorded in minutes which shall be prepared within fifteen (15) days of the meeting of the said board, signed by the chairman of the session and a member of the Supervisory Board and transcribed in a special register kept at the registered office of the Company, or in the event of impediment of the chairman of the session, by at least two members. The copies or extracts of the decisions of the Supervisory Board shall be validly certified by the Chairman of the Supervisory Board, the Deputy Chairman of the Supervisory Board or any of the members of the Management Board. Article 22 MISSION OF THE SUPERVISORY BOARD The Supervisory Board shall exercise permanent control of the management of the Company by the Management Board. At any time during the year, it shall make the inspections and controls which it considers appropriate and may arrange for the notification of the documents that it considers useful for the performance of its mission. The Supervisory Board may, within the limits that it sets, authorise the Management Board, with the right of delegation, to assign real property, assign holdings as a whole or in part, establish sureties and guarantee deposits, endorsements and guarantees in the name of the Company. The Supervisory Board shall also give the Management Board the authorisations provided by article 16 of these articles of association under the conditions provided in this article. It shall present its observations to the annual general on the report by the Management Board, as well as on the annual financial statements. It may grant all special mandates to one or several of its members for one or several given objects. The Supervisory Board may establish internal regulations notably providing for the creation of one or several internal committees, the composition and attributions of which it shall set and as appropriate, the remuneration of each of its members. The observance of these internal regulations shall be imposed on the members of the Supervisory Board and of the Management Board, as well as on the observers. Article 23 REMUNERATION OF THE MEMBERS OF THE SUPERVISORY BOARD The general meeting may allocate to the members of the Supervisory Board, by way of remuneration for their duties, a fixed annual amount by way of attendance fees. The Supervisory Board shall allocate the allocated global amount among its members. Exceptional remuneration may furthermore be allocated by the Supervisory Board for specific missions or mandates granted to its members. In this event, this remuneration shall be paid in addition to the attendance fees and under the conditions provided by law. 11

12 V CONTROL OF THE COMPANY Article 24 STATUTORY AUDITORS The control of the Company shall be made by one or several statutory auditors, assisted by one or several substitute statutory auditors who are appointed and shall execute their mission under the conditions set by law. Article 25 GENERAL MEETINGS VI GENERAL MEETINGS General meetings shall be called and shall decide under the conditions set by law. The meetings shall take place at the registered office or in any other location specified in the notice of calling. If the Management Board so decides at the moment of the notice of calling of the General Meeting, the public rebroadcasting of the General Meeting by videoconference or by any means of telecommunications and remote transmission, including via Internet, shall be authorised. A shareholder may arrange to be represented by another shareholder or by any other natural or legal person of its choice. The mandate, as well as, as appropriate, its revocation, shall be written and notified to the Company under the conditions stipulated by the regulations in effect. Any shareholder may participate in the general meetings, in person or via a representative, on justification of its identity in the ownership of its securities, in the form of registration in an account of its securities under the conditions provided by law. The joint owners of undivided shares shall be represented at general meetings by one of their number or by a common representative of their choice. In the absence of an agreement between them on the choice of representative, it shall be appointed by order of the Chairman of the Commercial Court, ruling on an interlocutory basis at the request of the first joint owner to take action. Any shareholder may also, if the Management Board so permits at the time of the notice of calling of the General Meeting, take part in this General Meeting by videoconference or by telecommunications or remote transmission resources, including via Internet, under the conditions set by the laws and regulations. This shareholder shall then be regarded as present for the calculation of the quorum and majority. The general meetings shall be chaired by the Chairman of the Supervisory Board and in his absence, by the Deputy Chairman or, failing this, by a member of the Supervisory Board specially delegated for this purpose by the Board. Failing this, the general meeting shall itself elect its Chairman. The functions of scrutineers shall be carried out by the two members of the general meeting holding the largest number of votes and accepting this position. The bureau shall appoint the secretary, who need not be chosen from among the shareholders. An attendance sheet shall be kept under the conditions provided by law. 12

13 The copies or extracts of the minutes of the general meeting shall be validly certified by the Chairman of the Supervisory Board, by the Deputy Chairman, by a member of the Management Board exercising the duties of Managing Director or by the secretary of the general meeting. The ordinary and extraordinary general meetings ruling under the conditions for a quorum and majority provided by the respective provisions governing the same, shall exercise the powers attributed to them by law. Article 26 OBSERVERS VII PANEL OF OBSERVERS The general meeting and the Supervisory Board may each appoint observers (natural or legal persons), the total number of which may not exceed two (2). The observers shall be appointed for a four-year period, it being specified that the body which appointed the may dismiss them at any time and that they are eligible for re-election. The observers shall be called on to assist as observers at the meetings of the Supervisory Board and may be consulted by it; they may, for the proposals submitted to them, and if they consider it appropriate, submit observations to the general meetings. They shall be called to each meeting of the Supervisory Board under the same conditions and with the same procedures as the members of the Supervisory Board. The Supervisory Board may entrust specific missions to the observers. The Supervisory Board may authorise the reimbursement of the expenses incurred by the observers in the interests of the Company. VIII COMPANY ACCOUNTS AND ALLOCATION OF RESULTS Article 27 FINANCIAL YEAR Each financial year shall have a duration of one year, starting on 1 January and ending on 31 December. Article 28 ALLOCATION OF PROFITS The result of each financial year shall be determined pursuant to the legal and regulatory provisions in effect. For the net profit for the financial year, reduced as appropriate by previous losses, an initial deduction of at least 5% shall be made to form the reserve fund provided by law. This deduction shall cease to be mandatory when the reserve fund reaches one tenth of the share capital. The general meeting may freely dispose of the surplus and, at the proposal of the Management Board and in view of the report by the Supervisory Board, either carry it forward as a whole or in part, or allocate it as a whole or in part to the establishment of a pension fund or extraordinary or special reserves under any name. It may also decide to distribute it as a whole or in part. The general meeting shall have the right to grant to the shareholders, for all or part of the dividend submitted for distribution, or for interim dividends, a choice between payment in cash and payment in shares under the conditions set by the regulations in effect. Furthermore, the general meeting may decide, for all or part of the dividend, on interim dividends, reserves or premiums allocated for distribution, or on any capital reduction, that this distribution of dividends, reserves or premiums or this 13

14 capital reduction shall be made in kind by the distribution of securities in the portfolio or assets of the Company. The share of each shareholder in the profits and its contribution to losses shall be proportional to its stake in the share capital. IX WORKS COUNCIL Article 29 POWERS OF THE WORKS COUNCIL The delegates of the Works Council shall exercise the rights attributed to them by law. The delegates of the Works Council may attend the General Meetings, without a consultative or deliberative vote. The Works Council may furthermore, under the conditions provided by law, request the entering of draft decisions on the agenda of the General Meetings. Article 30 LIQUIDATION X DISSOLUTION On expiry of the Company or in event of advanced dissolution, the general meeting shall settle the mode of liquidation and appoint one or several liquidators, whose powers it shall determine and who shall exercise their duties pursuant to the law. The appointment of the liquidator(s) shall end the mandates of the members of the Management Board and unless otherwise decided by the general meeting, those of the statutory auditors. Article 31 CHALLENGES XI CHALLENGES All contestations which may be raised during the life of the Company or its liquidation, whether between the shareholders, or between the Company and the shareholders concerning the interpretation or execution of these articles of association or in general, regarding the affairs of the company, shall be subject to the jurisdiction of the competent courts of the location of the registered office. For this purpose, in the event of a challenge, every shareholder shall choose domicile within the jurisdiction of the competent court of the location of the registered office and all writs of summons and notifications shall be regularly served at this domicile. In the event of failure to choose domicile, the writs of summons and notifications shall be validly made to the Public Prosecutor s Office at the Regional Court of the location of the registered office