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DANONE
REGISTRATION DOCUMENT 2015
Corporate Governance
6.5 Statutory auditors' special report on related party agreements and commitments
298
(ii) Cases of payment of the Indemnity
The Indemnity will be payable to Mr. Emmanuel Faber only in case
of termination of his term of office as corporate officer related to
a change in control or strategy, on the initiative of the Board of
directors, regardless of the form of such termination, in particular
dismissal or non-renewal (except in cases of serious misconduct,
i.e. an extremely serious fault which precludes any continuation of
his term of office, or gross negligence, i.e. an extremely serious
fault committed with the intention of harming your company), and
subject to the performance conditions being met. It is specified
that “change of control” means any change in your company's legal
situation resulting, in particular, from a merger, restructuring, sale,
takeover bid or exchange offer, following which a shareholder that is
a legal entity or individual, either alone or acting in concert, comes
to hold, directly or indirectly, more than 50% of your company's
share capital or voting rights.
Moreover, in accordance with the recommendations of the AFEP-
MEDEFCode, no payment of the Indemnity will be due if Mr. Emmanuel
Faber is able to avail himself of his pension entitlements within a
short period of time under the terms and conditions defined by the
pension plans.
Given the automatic resumption of Mr. Emmanuel Faber's employ-
ment contract in the event of the termination of his term of office as
a corporate officer, the Indemnity will be due if Mr. Emmanuel Faber
ceases to carry out his duties under said employment contract or
resigns from his salaried position within the three months following
the date on which his term of office as a corporate officer came to
an end due to a change of control.
Where applicable, no Indemnity pursuant to the office will be due
if Mr. Emmanuel Faber resumes a salaried position and does not
request that such position be terminated within the aforementioned
three-month period.
(iii) Performance conditions governing payment of the Indemnity
Payment of the Indemnity will be based on:
a) the arithmetic average internal (“organic”) growth in the Danone
Group's net sales (the “Group's CA”) over the five completed fiscal
years preceding the date of termination of the term of the corporate
officer (the “Reference Period”); and
b) the arithmetic average internal (“organic”) growth in net sales
recorded by the Panel members (“CA of the Panel”) over the
Reference Period.
For the application of these conditions, it is noted that:
•
the Group's CA refers to the arithmetic average internal (“or-
ganic”) growth in Danone Group's net sales over the Reference
Period (on a consolidated basis and on a like-for-like basis, i.e.
excluding changes in consolidation scope and exchange rates);
•
the CA of each Panel member refers to the arithmetic average
internal (“organic”) growth in net sales recorded by said Panel
member over the Reference Period (on a consolidated basis and
on a like-for-like basis, i.e. excluding changes in consolidation
scope and exchange rates);
•
the Panel CAs refer to the CAs of all members of the Panel;
•
the Median CA of the Panel refers to the value of the CA of the
Panel member that divides the Panel CAs into two equal parts (so
that that there are as many Panel members with a CA exceeding
or equal to the Median as Panel members with a CA being less
than or equal to the Median), it being specified that if the Panel
members are an even number, the Median CA of the Panel will
be equal to the arithmetic average of the two central values of
the Panel CA;
•
the Panel consists of eight benchmark international groups in
the food and beverage sector, namely Kellogg Company, Unilever
N.V., Nestlé S.A., Kraft Heinz Company (Kraft Foods Group Inc.
until 2014), Mondelez International Inc., PepsiCo Inc., The Coca-
Cola Company and General Mills Inc.
The Board of directors must determine whether these performance
conditions are met within three months of the date of termination
of the term of office of the corporate officer, through an explicit
decision, duly justified and mentioned in the Board of directors'
report to the Shareholders' meeting, following a recommendation
by the Nomination and Compensation Committee, and based on a
report of a financial advisor.
To ensure the comparability of the CAs used, it is specified that:
•
restatementsmay bemade (such as corrections related to changes
in consolidation scope and exchange rates) to the strict extent
necessary in order to ensure that the method of calculating the
CAs of all Panel members and the Group's CA is consistent over
the entire Reference Period;
•
in the event that the audited accounting or financial results of one
of the Panel members are not published or are published late,
the Board of directors may, exceptionally, exclude this member
from the Panel through a duly justified decision;
•
in the event that the audited accounting or financial results of
two or more members of the Panel are not published or are
published late, the Board of directors will make a decision duly
justified at a later date, on the basis of the most recent audited
financial statements published by the members of the Panel and
by your company over the last five fiscal years for which financial
statements were published for all members of the Panel and
for your company;
•
the Board of directors may, through a duly justified decision
taken at a later date, change the Panel members in the event of
an acquisition, absorption, dissolution, spin-off, merger or change
of activity of one or more members of the Panel, provided that it
maintains the overall consistency of the peer group.
Over the Reference Period:
•
if the Group's CA exceeds or is equal to theMedian CA of the Panel,
100% of the Indemnity will be paid to Mr. Emmanuel Faber; and
•
if the Group's CA is lower than the Median CA of the Panel, no
Indemnity will be paid to Mr. Emmanuel Faber.
In accordance with the amendment to Mr. Emmanuel Faber's
employment contract (authorized by the Board of directors on
February 10, 2010), it should be noted that the same performance
conditions will apply to the portion of the Indemnity for Termination
of the Employment Contract corresponding to the length of service
acquired pursuant to the office and that the sum of the Indemnity
pursuant to the office and of the Indemnity for Termination of the
Employment Contract may not exceed twenty-four (24) months of
gross fixed and variable compensation.
At the time of each renewal of Mr. Emmanuel Faber's term of office,
these performance conditions and, where appropriate, the compo-
sition of the Panel will be reexamined by the Board of directors and,
where appropriate, modified to take into account changes affecting
your company and its business sectors.
(iv) Payment of the Indemnity
The amount of the Indemnity determined according to the above
rules will be paid within 30 days of the date of the Board of directors'
meeting which will decide whether the performance conditions
governing payment of the Indemnity have been met.