5CORPORATE GOVERNANCEAppendix: Board of Directors’ CharterIn this case, however, the director concerned shall not be deemed presentfor the purpose of calculating the quorum and majority.The Board of Directors may also permit persons other than the directors toattend its meetings, in a consultative capacity only.An attendance register is drawn up and signed by those directors attendinga Board meeting.Directors attending a meeting by videoconference or telecommunicationsare certified as present on the attendance register by the Chairman.Article 3 - Minutes of Board meetingsBoard resolutions are recorded in minutes signed by the Chairman of themeeting and at least one of the directors present. Minutes are approved at thenext Board meeting and a draft copy is sent to all directors in advance.The minutes shall indicate whether or not a videoconference ortelecommunications link was used, list those directors who participated bythose means, and mention any technical incidents which occurred duringthe meeting.Copies or extracts of the minutes may be validly certified by the Chairman ofthe Board, the Chief Executive Officer, a Chief Operating Officer, the directortemporarily acting as Chairman, or a duly empowered representative.Article 4 - Directors’ feesThe Board of Directors may receive annual directors’ fees, as voted by theshareholders at the Annual General Meeting pursuant to Article 22-I of theArticles of Association.The total fee voted by shareholders is allocated by the Board of Directors,on the proposal or recommendation of the Appointments and CompensationCommittee, on the following basis:■■a fixed sum allocated to each director;a variable sum based on attendance at Board meetings.Directors may also receive additional fixed fees for their specific experienceor for special tasks undertaken at the Board’s request.The Board of Directors fixes the amount of any other compensation payableto the Chairman and Vice Chairman or Chairmen. It may also allocateexceptional compensation for special assignments or mandates entrustedto its members.Each director, whether a natural person, legal entity or permanentrepresentative, undertakes to hold a number of shares in the Companyequivalent to the sum of at least one year’s directors’ fees. Shares held tomeet this requirement must be held in registered form.Pursuant to the provisions of Article L. 228-17 of the French CommercialCode (Code de commerce), directors or permanent representatives maynot hold preferred non-voting shares.2. AUTHORIT Y AND POWERS OF THE BOARD OF DIRECTORSArticle 5 - Role and powersof the Board of DirectorsUnder the provisions of Article L. 225-35 of the French Commercial Code(Code de commerce):“The Board of Directors is responsible for defining the Company’s broadstrategic objectives and for their implementation. Except for those powersexpressly vested in the shareholders in General Meeting, the Board ofDirectors considers and decides on all matters related to the Company’soperations, subject to compliance with the corporate purpose.”The Board of Directors also decides whether to combine or separate thepositions of Chairman of the Board and Chief Executive Officer. Where thepositions are separated, the Chief Executive Officer must be an individualbut is not required to be a director.The Board of Directors exercises the powers vested in it by law and theCompany’s Articles of Association. To exercise these powers, it has a rightof information and communication and may be assisted by Committeesof the Board.A - Powers vested in the Board of DirectorsThe Board of Directors reviews and approves the annual and interim financialstatements of the Company and the Group, as well as the managementreports on the operations and results of the Company and its subsidiaries.It also approves budgets and forecasts.It calls shareholders’ meetings and may carry out shareholder-approvedsecurities issues.B - Matters requiring the Board of Directors’ priorauthorisationIn addition to the issue of guarantees and security interests and related-partyagreements governed by Article L. 225-38 of the French Commercial Code(Code de commerce), which by law require the Board’s prior authorisation,the Board of Directors has decided, as an internal rule, that its priorauthorisation must be obtained for certain management transactions dueto their nature or if they exceed a unit value of €200 million, as specifiedin the paragraph below entitled “Senior Management”. Accordingly, theBoard’s authorisation is required for all transactions that are likely to affectthe strategy of the Company and its subsidiaries, their financial positionor scope of business, such as the signature or termination of commercialagreements likely to materially influence the Group’s future development.In this respect, the Board has also granted certain blanket delegations ofauthority, renewable each year, which are described in the paragraph belowentitled “Senior Management”.Article 6 - Right of information and communicationThe Board of Directors carries out all the verifications and controls it deemsnecessary and at the times it deems appropriate. The Chairman or ChiefExecutive Officer is responsible for providing all directors with the documentsand information they need to fulfil their role and duties.Prior to each Board meeting, directors receive all the information they requireto prepare for the agenda items, provided such information is available andsufficiently complete.The Chief Executive Officer reports to the Board of Directors on the followingat least once every quarter:■■■operations of the Company and its main subsidiaries including sales andearnings figures;debt and the credit lines available to the Company and its mainsubsidiaries;headcount data for the Company and its main subsidiaries.The Board of Directors also reviews the Group’s off-balance sheetcommitments at least once every six months.Article 7 - Chairman of the Board of DirectorsThe Chairman of the Board organises and leads meetings of the Boardand reports to shareholders on the Board’s work at the General Meeting.He is responsible for ensuring that the Company’s corporate governancestructures function correctly and, more particularly, that the directors arecapable of fulfilling their duties.The Chairman also prepares a report to shareholders, in addition to theManagement Report, on the Company’s corporate governance and internalcontrol/risk management systems, particularly regarding the financial reportingprocess. This report indicates any restrictions placed by the Board ofDirectors on the Chief Executive Officer’s powers. If the Company voluntarilyrefers to a corporate governance code drawn up by an accredited body or194 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CORPORATE GOVERNANCEAppendix: Board of Directors’ Charter5organisation, the report also indicates any provisions that are not appliedand the reasons why. It indicates where a copy of the code may be obtained.If the Company does not voluntarily refer to such a corporate governancecode, the report describes the Company’s corporate governance practicesover and above the legal requirements and explains why a reference codeis not used. The report also describes any special conditions regardingshareholder attendance at general meetings or refers to the provisions ofthe articles of association where such conditions can be found. The reportsets out the principles and rules set by the Board of Directors to determinethe compensation and benefits paid to executive officers and refers todisclosure of the information required by article L. 225-100-3 of the FrenchCommercial Code (Code de commerce).The report is approved by the Boardof Directors and published.The Chairman is elected for a period not exceeding his term of office asdirector. If the Chairman reaches the age of 70 while in office, he is requiredto stand down at the end of that term.In the event of the Chairman’s temporary unavailability or death, the Boardof Directors may appoint another director as acting Chairman. In the caseof temporary unavailability, the acting Chairman is appointed for a fixedperiod, which may be renewed. In the case of death, the acting Chairmanis appointed until such time as a new Chairman is elected.Article 8 - Senior ManagementBy virtue of article L. 225-56 of the French Commercial Code (Codede commerce), the Chief Executive Officer has full powers to act in allcircumstances in the name of the Company within the limits of its corporatepurpose, and except for those powers vested by law in the Board of Directorsor in the shareholders in a General Meeting. The Chief Executive Officerrepresents the Company in its dealings with third parties.However, the Board of Directors has decided, as an internal rule, that theChief Executive Officer must obtain the Board’s prior authorisation for thefollowing:■■transactions that are likely to affect the strategy of the Company and itssubsidiaries, their financial position or scope of business, such as thesignature or termination of industrial and commercial agreements likelyto materially influence the Group’s future development;transactions representing over two hundred million Euros (€200,000,000),including but not limited to:- investments in securities and immediate or deferred investments in anycompany or business venture,- sales of assets, rights or securities, in exchange for securities or acombination of securities and cash,- acquisitions of real property or real property rights,- purchases or sales of receivables, acquisitions or divestments of goodwillor other intangible assets,- issues of securities by directly or indirectly controlled companies,- granting or obtaining loans, borrowings, credit facilities or short-termadvances,- agreements to settle legal disputes,- disposals of real property or real property rights,- full or partial divestments of equity interests,- granting security interests.This €200 million ceiling does not, however, apply to finance lease transactionsrelating to buildings and/or equipment, for which the maximum aggregateauthorised amount is set at €300 million per year.These provisions apply to transactions carried out directly by the Companyand by all entities controlled directly or indirectly by the Company, exceptfor intragroup transactions.The Board of Directors may grant the Chief Executive Officer authority tocarry out the following transactions, up to a maximum aggregate limit seton an annual basis:■■■Guarantees and security interestsThe Chief Executive Officer may issue guarantees or other security intereststo third parties in the Company’s name, subject to a maximum annual limitof €600 million and a maximum limit per commitment of €300 million.Loans, confirmed credit lines, short-term credit facilities and all financingagreementsThe Chief Executive Officer may negotiate and/or renew or extend loans,confirmed credit lines, short-term credit facilities and all syndicated andnon-syndicated financing agreements subject to a maximum annual limitof €3 billion and a maximum limit per transaction of €500 million.Issuance of bonds and other debt securitiesThe Chief Executive Officer may issue bonds or any debt securities otherthan commercial paper, under the EMTN programme or otherwise, subjectto a ceiling of €3 billion, determine the terms and conditions of any suchissue and carry out all related market transactions. The Chief ExecutiveOfficer may issue commercial paper subject to a ceiling of €1 billion.The Chief Executive Officer may delegate all or some of these powers,except the power to issue bonds or other debt securities. He is requiredto report regularly to the Board of Directors on their utilisation.These provisions apply to transactions carried out directly by the Companyand by all entities controlled directly or indirectly by the Company.The Chief Executive Officer’s term of office is set by the Board of Directorsat its discretion, but may not exceed three years. If the Chief ExecutiveOfficer reaches the age of 70 while in office, he is required to stand downat the end of that term.In the event of the temporary unavailability of the Chief Executive Officer, theBoard of Directors shall appoint an acting Chief Executive Officer until suchtime as the Chief Executive Officer is able to resume his duties.At the proposal of the Chief Executive Officer, the Board of Directors mayappoint up to five individuals as Chief Operating Officers to assist the ChiefExecutive Officer in his duties.In agreement with the Chief Executive Officer, the Board of Directorsdetermines the scope and duration of the powers to be vested in the ChiefOperating Officers. However, they have the same powers as the ChiefExecutive Officer in dealings with third parties.The Chairman, if he is also Chief Executive Officer, the Chief Executive Officerand each of the Chief Operating Officers may delegate their powers to carryout one or several specific transactions or categories of transaction.3. COMMITTEESArticle 9 - Committees of the Board –General provisionsUnder Article 19-III of the Company’s by-laws, the Board of Directorsmay establish one or more specialised committees, appoint the membersthereof, and specify their role and responsibilities, under its oversight andauthority. The Board of Directors may not delegate to these Committeesany powers that are specifically vested in the Board of Directors either bylaw or under the Company’s by-laws. Each committee reports on its workat the next Board meeting.The Committees comprise at least three members, who must be directors,permanent representatives of corporate directors or non-voting directors,appointed by the Board. Members are appointed on a purely personal basisand may not be represented by proxy.Their term of office is set by the Board of Directors and may be renewed.The Board of Directors appoints a Chairman of each Committee, for a periodthat may not exceed that person’s term of office as a Committee member.Each Committee decides how often it will meet and may invite anyone itdeems appropriate to attend meetings.Minutes are prepared after each Committee meeting, unless specificallyprovided otherwise, under the authority of the Committee Chairman. Suchminutes are sent to all Committee members.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group195