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Share capital and share ownership
7.2 Treasury shares and DANONE call options held by the Company and its subsidiaries
DANONE
REGISTRATION DOCUMENT 2015
307
7.2 TREASURY SHARES AND DANONE CALL OPTIONS HELD BY THE COMPANY
AND ITS SUBSIDIARIES
This section 7.2 is a description of the share buyback program set up in accordance with Articles 241-1 et seq. of the General Regulations of
the French Financial Markets Authority.
Authorization granted to the Company to buy back its own shares
Existing authorization
The Shareholders' Meeting of April 29, 2015 authorized the Board of
Directors, for an 18-month period, to buy back a number of shares
representing a maximum of 10% of the share capital of the Company
at a maximum purchase price of €70 per share. This authorization
cancelled and replaced the authorization previously granted by the
Shareholders' Meeting of April 29, 2014.
This authorization was used during fiscal year 2015 (see section
Transactions on Company shares in 2015 and situation as of December 31,
2015
hereafter).
Authorization subject to approval by the
Shareholders' Meeting
The Board of Directors will submit a new authorization, valid for
18months, to the Shareholders' Meeting to be held on April 28, 2016 to
buy back up to 10%of the total number of shares comprising the share
capital of theCompany (i.e. for informationpurposes, 65,495,120 shares
as of December 31, 2015, representing amaximumpotential purchase
amount (excluding transaction fees) of approximately €4.9 billion) at
a maximum purchase price of €75 per share.
Subject to approval of the authorization by the Shareholders' Meeting
of April 28, 2016, the buyback by the Company of its own shares may
be executed for the purpose of:
•
the allocation of shares with respect to the exercise of stock-op-
tions by employees and/or executive directors and officers of the
Company and of companies or economic interest groups related
to it pursuant to applicable legal and regulatory provisions;
•
the implementation of any plan for the allocation of shares subject
to performance conditions to employees and/or executive directors
and officers of theCompany and of companies or economic interest
groups related to it pursuant to applicable legal and regulatory
provisions;
•
the sale of shares to employees (either directly or through an
employee savings mutual fund) within the context of employee
shareholding plans or savings plans;
•
the delivery of shares upon the exercise of rights attached to se-
curities giving access to the Company's share capital;
•
the later delivery of shares as payment or for exchange in the
context of external growth transactions;
•
the cancellation of shares within the maximum legal limit; and
•
animating DANONE stock market pursuant to a liquidity contract
concluded with an investment service provider in accordance with
the Ethical Charter recognized by the French Financial Markets
Authority.
Share buybacksmay be carried out, in whole or in part, by acquisition,
sale, exchange or transfer, on one or more occasions, by any means
on any stock markets, including multilateral trading facilities (MTF),
through a systematic internalizer or over-the-counter, including by
acquisition or disposal of blocks of shares (without limiting the portion
of the share repurchase program that may be completed this way).
These means include the use of any financial contract or derivative
instrument (including in particular any future or any option), except
the sale of put options.
These transactions may be carried out during an 18-month period
beginning April 28, 2016 (with the exception of periods of public ten-
der offer on the Company's shares) within the limits allowed by the
applicable regulations.
Authorization to cancel shares and reduce the share capital following the buyback
by the Company of its own shares
The Shareholders' Meeting of April 29, 2015 granted an authorization to the Board of Directors for 24 months to cancel shares acquired in the
context of a share buyback program subject to a limit of 10% of the existing share capital as of the day of the Meeting.
This authorization was not used during fiscal year 2015.
DANONE call options held by the Company
Purchase of DANONE call options
by the Company in 2011
OnOctober 25, 2011, as part of its sharebuybackprogram, theCompany
acquired DANONE call options to hedge part of the stock-options
granted to some of its employees and corporate officers and still in
force, as a substitute for their existing hedge by treasury shares held.
Prior to this date, in order to satisfy its legal obligations, the Company
held treasury shares specifically allocated to hedge these stock-option
plans. These treasury shares were earmarked for gradual release
into circulation on the market as and when beneficiaries exercised
stock-options until the expiry of the plans still in force, i.e. until
October 2017. In order to limit the dilutive effect of the exercise of
these options, in 2011 the Company decided to hedge part of these
stock-options by the acquisitionof DANONEcall options, as a substitute
for the treasury shares held.
A total of 6.6million DANONE call options representing around 1.02%
of the share capital were thus acquired from a financial institution.
The Company's intention is to exercise these call options at any time
until the expiry of the last stock-option plans still in force (i.e. until
October 2017), in order to comply with its commitments to deliver
shares to stock-option holders.
The 6.6 million treasury shares held until then to hedge the stock-op-
tions concernedwere reallocatedwith a view to their cancellation and
were subsequently canceled on December 13, 2011.