Danone // 2020 Universal Registration Document

6 corporate governance 6.4 Detailed information on long-term compensation plans DANONE UNIVERSAL REGISTRATION DOCUMENT 2020 263 Regarding the external financial performance criterion, the compo- sition of the peer group panel that has been used to determine the performance conditions of GPS and the severance pay of corporate officers has been essentially the same since 2007. However, two adjustments were made in 2013 and 2015 due to the restructuring of The Kraft Heinz Company, a member of the panel. All performance conditions related to GPS are subject to a three- year reference period. Continuous employment condition The definitive grant of GPS is subject to a four-year continuous employment condition that applies to all beneficiaries. Therefore, a beneficiary of a share grant who leaves Danone before the end of the vesting period cannot retain his or her shares except in the cases allowed by law (including death and disability), and barring exceptions decided by the Board of Directors based on a reasoned opinion. However, in the specific case where an employee retires at the legal age (or prior to this as allowed by law), the GPS granted in the 12 months preceding the retirement date are cancelled with no exceptions. Regarding the executive corporate officers, the Board of Directors may, where applicable, decide on an exception to the continuous employment condition, only on a partial and prorata basis. Finally, as a reminder, the GPS plans allow beneficiaries to be exempt from the continuous employment and performance conditions in the event of a change of control of the Company, with the exception of executive corporate officers and Executive Committee members for whom, since 2019, the achievement of the continuous employment condition will be reviewed by the Board of Directors on a prorata basis, calculated between the date of the grant and the date of change of control, relative to the initial delivery date stipulated in the plan. In addition, regarding the fulfillment of the performance conditions, either the Board of Directors will have reached a decision regarding the level of fulfillment or no such decision will have been reached, in which case the Board, acting on the recommendation of the Governance Committee, will assess the degree of fulfillment for each performance condition on the basis of the available information. Definitive grant The grants of GPS become final and DANONE shares are delivered to their beneficiaries at the end of the vesting period set by the Board of Directors. Since 2013, the Board of Directors has only set up “4+0” plans (four-year vesting period and no holding period). Other applicable rules The rules that govern GPS plans prohibit beneficiaries fromhedging in any manner (i) their position with respect to their right to receive GPS or (ii) their position with respect to shares which they have already received and which are still subject to the holding period (applicable to executive corporate officers and Executive Committee members – see above). For the corporate officers, the prohibition of hedging extends to all DANONE shares or financial instruments related to DANONE shares which they own or may be in a position to own. In addition, each beneficiary of GPS has personally agreed not to use hedging instruments. Thus, Mr. Emmanuel FABER has made a formal commitment not to use hedging instruments to hedge his risk exposure, in particular regarding GPS that he has received or will receive until such time as he ceases to exercise his functions. To the Company’s knowledge, no hedging instrument has been established by the Chairman and Chief Executive Officer. In addition, an obligation to hold DANONE shares resulting from GPS applies to corporate officers and other Executive Committee members, who must hold (in registered form) a number of shares resulting fromGPS (and until termination of their duties) equivalent to 35% of the gain at exercise, net of tax and social security contri- butions, that they would be able to realize if they sold all the shares resulting from GPS granted to them under the respective plan. Given the significant level of the holding obligation applicable to corporate officers and other Executive Committee members, on the recommendation of the Governance Committee, the Board of Directors decided that it was not necessary to require them to purchase a minimum number of DANONE shares at the end of the holding period for their shares subject to performance conditions. In addition, following the proposal of the Governance Committee, the Board of Directors, at its meeting on February 14, 2012, decided to add to the scheme an overall holding ceiling for the requirement to hold shares resulting from the grant of performance shares or from exercises of stock options representing the equivalent in shares of four years of fixed compensation for corporate officers and two years of fixed compensation for other Executive Committee members. The Board of Directors confirmed this holding obligation when it renewed Mr. Emmanuel FABER’s term of office as Director on February 18, 2019 and when it approved the grant of GPS at its meeting on July 24, 2019.