Danone // 2020 Universal Registration Document

Share capital and ownership 7.6 Shareholders’ Meeting, voting rights DANONE UNIVERSAL REGISTRATION DOCUMENT 2020 300 • in respect of voting rights used by theChairmanof theShareholders’ Meeting, those attached to shares for which a proxy form has been returned to the Company without naming a proxy and which, individually, do not violate the applicable limitations, are not taken into account. This limitation of voting rights at Shareholders’ Meetings has been implemented by the Company in respect of the MFS group since 2013 (see section 7.8 Share ownership structure of the Company as of December 31, 2020 and significant changes over the past three years for more information on the interest held by MFS in the Company’s share capital). Exceptions to limitations on voting rights In accordance with Article 27.II of the Company’s by-laws, the afo- rementioned limitations shall become null and void if any individual or corporate entity, acting alone or in concert with one or more individuals or legal entities, were to come into possession of at least two-thirds of the total shares of the Company as a result of a public tender offer for all the Company’s shares. The Board of Directors shall formally acknowledge that the limitations have become null and void and shall complete the corresponding amendments to the by-laws. In addition, in accordance with the general regulations of the French Financial Markets Authority, the effects of the limitations provided for in the preceding sections shall be suspended at the first Shareholders’ Meeting following the close of a takeover bid if the bidder, acting alone or in concert, were to come into possession of more than two-thirds of the total shares or total voting rights of the company concerned. Lastly, following adoption of the 16 th resolution by the Shareholders’ Meeting of April 22, 2010, the limitations on voting rights shall be suspended for a Shareholders’ Meeting if the number of shares present or represented at such meeting reaches or exceeds 75% of the total number of shares carrying voting rights. In such event, the Chairman of the Board of Directors (or any other person who is presiding over themeeting in his absence) shall formally acknowledge the suspension of said limitation when the Shareholders’ Meeting is opened. Reasons for the limitation of voting rights for shareholders The Board of Directors has, on several occasions, reviewed this clause limiting voting rights at Shareholders’ Meetings and, notably following discussions with its shareholders, has concluded that this voting rights limitation is in the interest of all the Company’s shareholders. Thus: • considering the effective participation rate at Shareholders’ Meetings (which remains below the average participation rate for shareholders’ meetings of CAC 40 companies), this limitation prevents shareholders from influencing corporate decisions in a manner that would be disproportionate to the actual size of their shareholding, particularly in the event of a low quorum or when a simple majority is sufficient for the adoption of a corporate decision (with a quorum for Shareholders’ Meetings of 50%, 25% of the votes could be sufficient to adopt or reject a corporate decision); • considering Danone’s disperse shareholding, in the absence of such a limitation mechanism, a shareholder could take de facto control of the Company “by stealth”, i.e. without being obliged to launch a public tender offer and offer existing shareholders the possibility of selling their shares in the Company under satisfactory conditions. The clause limiting voting rights is therefore clearly aimed at requiring any shareholder wishing to take control of the Company, at any time, to launch a takeover bid for all of the Company’s shares, to offer a control premium, and, when required, to respect price conditions as set by the French Financial Markets Authority. In this regard, this provision provides protection for all the shareholders and guarantees them the best valuation for their shares; • this clause of the by-laws does not constitute an obstacle to a takeover bid on the Company, since the clause becomes auto- matically null and void for the first Shareholders’ Meeting held subsequent to a takeover bid resulting in one ormore shareholders acting in concert owning more than two-thirds of the Company’s share capital or voting rights; • the validity of clauses limiting voting rights has been recognized by the French Commercial Code, and their utility is illustrated by the fact that several other CAC 40 companies with a disperse shareholding have implemented a similar mechanism in their by-laws; • the limitation clause does not affect, in any way, the economic rights of the shareholders that would be concerned by the mea- sure insofar as such shareholders are eligible to receive the full dividend attached to the shares they own. Like other CAC 40 companies, in 2007 the Shareholders’ Meeting rejected a resolution aimed at removing this statutory clause limiting voting rights at a Meeting. In 2010, following discussions with its shareholders, the Board considered it would be appropriate to amend the terms of the voting rights limitation mechanism in order to introduce the automatic suspension of the limitation process for any Shareholders’ Meeting at which a sufficiently high quorum is achieved. Indeed, whereas this limitation appears appropriate and justified in the event of a low quorum, it appears superfluous in the event of a high quorum, since such a quorum would ensure all shareholders could express their opinion without the risk of distortion. For this reason, this limitation is suspended, in respect of any Meeting at which the number of shares whose shareholders are present or represented reaches or exceeds 75% of the total number of shares with voting rights. This suspension mechanism, based on the quorum, offers an additional guarantee to Danone’s shareholders as it ensures that the voting rights limitation would be objectively activated. In the event that a shareholder acquires a significant non-controlling interest in the Company’s share capital, the quorum should automa- tically increase and would facilitate suspension of the clause, while ensuring that said shareholder was not able to influence proceedings at the Shareholders’ Meeting in a manner disproportionate to his or her shareholding. The quorum achieved at the Shareholders’ Meeting of June 26, 2020 was 63.52%.