DANONE - Registration document 2015

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Combined Shareholders' Meeting of April 28, 2016
8.3 Comments on the resolutions of the Shareholders' Meeting
DANONE REGISTRATION DOCUMENT 2015 342
Share buyback (16th resolution)
Description of the authorization
We ask you to renew the authorization granted to your Board to
purchase, hold or transfer Company shares within the scope of a
buyback program coming under the provisions of Articles L. 225-
209 et seq . of the French commercial code and European Regulation
2273/2003 of December 22, 2003 implementing European Directive
2003/6/EC of January 28, 2003.
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 is given in section 7.2 Treasury shares
and Danone call options held by the Company and its subsidiaries.
The buyback by Danone of its own shares may be implemented for
any of the following purposes:
• the allocation of shares with respect to the exercise of stock
purchase options by employees and/or corporate 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 Group per-
formance shares to employees and/or corporate officers of the
Company 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 company savings plans;
• the delivery of shares upon the exercise of rights attached to
securities 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 themaximum legal limit; and/or
• supporting the equity market for the DANONE shares pursuant
to a liquidity contract entered into with an investment service
provider in accordance with the Ethical Charter recognized by
the French Financial Markets Authority.
These transactions may not be carried out during periods of public
tender offers on the Company's shares.
Depending on the case, the sharesmay be acquired, sold, exchanged
or transferred, in whole or in part, on one or more occasions, by
any means or in any markets, including through multilateral trading
systems or a systematic internalizer, or over the counter, including
through purchases or sales of blocks of shares (without limiting
the portion of the share buyback program that may be completed
this way). These means include the use of any financial contract or
forward financial instrument (including in particular any forward
agreement or option), except the sale of put options, in the conditions
set out by applicable regulations.
The maximum number of shares that may be purchased would
represent 10% of the share capital, or 65,495,120 shares as of
December 31, 2015, at a maximum purchase price of €75 (net of
acquisition costs), resulting in amaximum theoretical total purchase
amount of €4,312,134,000. The latter figure is for information purposes
only, as it does not include shares already held by the Company.
This authorization would be given for an 18-month period and would
supersede with effect from its adoption the 19th resolution approved
by the 2015 Shareholders' Meeting.
Justification for the authorization request
It is important for Danone and its shareholders that your Board
continues to have the necessary powers to carry out transactions
involving the Company's shares.
These transactions enable the Board to make payments in Company
shares in the context of external growth transactions and to offer
shares to Danone's employees and corporate officers, notably as
part of allocations of shares subject to performance conditions.
In 2015, therefore, the share buyback program implemented resulted
in the acquisition of 1.2 million shares for the purpose of granting
shares to Danone's corporate officers and eligible employees and
in connection with a liquidity agreement.
It should be noted, insofar as it is necessary, that the Company
purchased call options on DANONE shares in 2011 to cover a portion
of the stock purchase option plans granted to certain employees
and corporate officers. These calls, which represented a total of
0.1% of the Company's share capital as of December 31, 2015, may
be exercised at any time to allow Danone to fulfill its obligations to
deliver shares to these beneficiaries.
In accordance with the regulations of the French Financial Markets
Authority, share buyback transactions are disclosed in detail each
week on the Company's website.
Allocations of Group Performance Shares (17thresolution)
Context of the authorization request
Your Board of Directors, upon recommendation of the Nomination
and Compensation Committee asks you to renew the authoriza-
tion granted to it at the 2015 Shareholders' Meeting for a period of
one year (until December 31, 2015), to allocate shares subject to
performance conditions (“Group performance shares” or “GPS”).
Identical structure and dilutive effect
The new resolution is based on a structure which is identical to that
adopted in 2015 and brings no change in terms of dilution (0.2% of
share capital).
The main characteristics of this new resolution are as follows:
• authorization to allocate Group performance shares is again
proposed for one year (until December 31, 2016). A vote will thus
enable shareholders to ensure in 2016 that, as in 2015, based
on a strict and precise definition of performance conditions, the
expected level of objectives would continue to be sufficiently
ambitious and motivating in line with the Group's performance;
• group performance shares could only be allocated to employees
and executive corporate officers, since the Chairman of the Board
is not eligible in 2016, as in 2015;
• maintenance of a single reference period of three years applicable
to all performance conditions;
• performance conditions that are demanding and adapted to
Danone's current environment, based in equal parts on (i) an
external performance criteria based on the average growth
in Danone's net sales (consolidated) relative to that of a Panel
of food and beverage industry companies, and (ii) an internal
performance criteria based on the improvement of Danone's