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DANONE
REGISTRATION DOCUMENT 2015
Corporate Governance
6.5 Statutory auditors' special report on related party agreements and commitments
299
Meanwhile, it is recalled that in accordance with Mr. Emmanuel
Faber's employment contract, amended by authorization of the
Board of directors on February 10, 2010, the performance condi-
tions applicable to the portion of the Indemnity for Termination of
the Employment Contract corresponding to seniority acquired as
part of his term of office will be adjusted automatically through the
approval of this commitment.
Motives to justify the interest of this engagement for the Company
Your board of directors justified this engagement as follows:
The company put in place this system of indemnity in the event of
termination of a corporate officer's term of office in order to attract
and retain talents in an increasingly competitive environment while
ensuring that the structure of executive corporate officers' total
compensation, its components and amounts consider the compa-
ny's general interest, the market practices and the expected level
of performance. It is furthermore specified that the payment of this
severance is limited to those provided by the AFEP-MEDEF Code
and submitted to the fulfillment of performance conditions.
1.2.2. Amendment to the undertaking concerning
the defined benefit pension plan of Mr. Emmanuel
FABER, Chief Executive Officer
Person concerned
Mr. Emmanuel FABER, Chief Executive Officer
Nature, purpose and conditions
On February 13, 2008 and with Mr. Emmanuel Faber abstaining,
the Board of directors unanimously confirmed your company's
commitment on behalf of Mr. Emmanuel Faber, corporate officer,
relative to the payment of a pension under a defined benefit pension
plan in the form of an annuity (with a reversion option), calculated
on the basis of the following elements:
•
the basis of calculation for the annuity corresponds to the average
of annual compensations and bonuses for the three full years of
activity within the Group preceding the retirement, the seniority
taken into consideration including the period corresponding to
the term as corporate officer (the “Base”);
•
for each corporate officer, in the event of retirement without
satisfying the conditions necessary for obtaining the Social se-
curity pension, a reduction of 1.25% per quarter between the age
at which the person retired and the age at which he would have
profited of his full rate Social security pension will be applied
to this annuity; and;
•
the amount of the life annuity that would be attributed to Mr.
Emmanuel Faber would correspond to: (i) 1.5%per year of seniority
(including the period corresponding to the term as corporate
officer) of this Base, for the portion of the Base falling between
three and eight times the French social security ceiling, and (ii)
3% per year of seniority (including the period corresponding to
the term as corporate officer) of this Base, for the portion that is
higher than eight times the ceiling (this amount will, however, be
capped on the basis of a maximum seniority of 20 years), less the
full amount of the retirement rights acquired by Mr. Emmanuel
Faber resulting from the implementation of your company's
non-contributory supplementary retirement plan.
Mr. Emmanuel Faber is eligible to benefit from this pension plan only if
he is performing his duties within the Group at the time of retirement
(it being specified that, in the event that the person leaves the Group
before reaching the age of 55 years old, all acquired rights will be
lost, and that in the event such officer is terminated after the age of
55 years old, the benefit derived from this plan will be preserved,
on condition that the person does not take up a salaried position).
At its February 22, 2016 meeting and in connection with the renewal
of Mr. Emmanuel Faber's termof office as Chief Executive Officer, the
Board of directors, acting on the recommendation of the Nomination
and Compensation Committee, voted unanimously (Mr. Emmanuel
Faber abstaining) to:
•
recognize that Mr. Emmanuel Faber cumulates 18 years seniority
at Danone and took note of your company's existing pension
obligations toward Mr. Emmanuel Faber and approved by the
Shareholders Meeting of April 29, 2008;
•
decide, in accordance with articles L. 225-22-1 and L.225-42-1 of
the French commercial code (as amended by law No. 2015-990
of August 6, 2015 known as the Macron law), (i) to subordinate
the annual increase of his conditional rights that may be granted
starting from the renewal of his term of office as Chief Executive
Officer to the performance condition described below, and (ii)
to submit the increase of these conditional future rights to re-
tirement benefit to the approval of the Shareholders' meeting
of April 28, 2016.
(i) Performance condition related to the increase in conditional
pension rights
As of the Shareholders' meeting of April 28, 2016, the increase in Mr.
Emmanuel Faber's pension rights for each fiscal year will depend on:
a) the arithmetic average internal (“organic”) growth in the Danone
Group's net sales (the “Group's CA”) during the fiscal year and five
prior fiscal years (the “Reference Period”); and
b) the arithmetic average internal (“organic”) growth in net sales by
members of the Panel (the “CA of the Panel”) during Reference Period.
it being noted that the terms “CA of the Group”, “CA of each member
of the Panel”, “CA of the Panel”, “Median CA of the Panel” and “Panel”
are defined as indicated above in section 1(iii) for the performance
conditions of the indemnity for termination of Mr. Emmanuel Faber's
corporate officer term of office, and that the Board of directors
may apply the principles described in that paragraph to ensure the
comparability of sales (CA) used.
During the Reference Period (namely at the end of each fiscal year):
•
if the Group's CA is equal to or greater than the Median CA of the
Panel, the increase in Mr. Emmanuel Faber's conditional future
rights to retirement benefit for the fiscal year will be acquired
(subject to the fulfillment of other conditions laid down by the plan);
•
if the Group's CA is less than the Median CA of the Panel, Mr.
Emmanuel Faber will not qualify to receive an increase of con-
ditional future rights to pension benefits for that fiscal year
(expressed as a percentage of the Base);
it being noted that in all cases, the amount of the annuity that would
be paid to Mr. Emmanuel Faber will remain capped on the basis of
20 years' maximum seniority, minus the sum of pension benefits
acquired by Mr. Emmanuel Faber due to the implementation of the
supplementary pension plan fully funded by your company.
(ii) Determination as to whether the performance condition has been
satisfied and whether to increase pension benefits
Each year, prior to the Shareholders' meeting held to approve the
previous financial statements, the Board of directors shall issue a
statement as to whether this performance condition has been sat-
isfied, based on the report of a financial advisor, and will determine
the increase of Mr. Emmanuel Faber's pension benefits for the said
financial year, through duly justified decisions taken after recom-
mendations from the Nomination and Compensation Committee.