2008 Registration Document - Rexel

10.8 STATEMENT RELATING TO CORPORATE GOVERNANCEFollowing the admission of its shares to trading on theEuronext Paris market, Rexel has initiated a general reviewin order to comply with corporate governance practicesas defined by the corporate governance code of theAssociation Française des Entreprises Privées (AFEP) andthe Mouvement des Entreprises de France (MEDEF) asamended by the guidelines of the AFEP and of the MEDEFdated October 2008.Further to the meeting of the Supervisory Board ofDecember 2, 2008, the Company issued, in accordancewith the request of the French financial markets authority(AMF), the following press release:“Rexel’s Supervisory Board, after reviewing the AFEP-MEDEF recommendations dated October 6, 2008concerning the compensation of executive directors of listedcompanies at its meeting on December 2, 2008, agreeswith the principles resulting from such recommendationsand shall ensure that they are implemented by the RexelGroup.The Board considers that these recommendations are inline with the corporate governance policy implemented bythe Group.Consequently, in accordance with the Act of July 3, 2008that implements the European Union directive 2006/46/ECof June 14, 2006, the AFEP-MEDEF corporate governancecode thus amended will be Rexel’s reference as of fiscalyear 2008 for the preparation of the report provided for inArticle L.225-37 of the French Commercial Code.”Rexel believes to be in compliance with the corporategovernance principles as set forth in the corporategovernance code of the AFEP and the MEDEF, to the extentthat such principles are compatible with the organization,size and means of the Rexel Group, subject to the followingitems:– taking into account the Company’s shareholdingstructure, the number of independent members is threeout of eleven for the Supervisory Board, two out of fivefor the Audit Committee, the Strategic Committee, andthe Compensation Committee, and one out of four forthe Appointments Committee. The term of office for amember of the Supervisory Board was fixed at 5 years;– the severance packages of the members of theManagement Board are not submitted to the followingcumulative conditions: (i) forced dismissal and (ii) changein control or strategy. The Company wished that theseverance packages (including legal or conventionalredundancy payment (indemnité de licenciement légaleou conventionnelle)) that benefit to the Members of theManagement Board would be paid in cases of terminationof the employment contract (which is suspended duringthe term of the corporate office) at the Company’sinitiative, except in cases of serious misconduct (fautegrave) or gross misconduct (faute lourde), which excludesany payment in the event of termination at the initiativeof the corporate officer or in case of a change in hisduties within the Group. Finally, the compensation in lieuof notice is not included in the calculation basis of theseverance package nor it is submitted to the cumulativeconditions referred to above (see paragraph 11.1.2 of thisDocument de Référence);– in case of retirement, in order to protect the interests ofRexel and the Rexel Group taken as a whole, the noncompeteprovisions may be applicable;– the additional defined-benefit retirement plan (article39) benefits to a limited number of beneficiaries and,among these beneficiaries, the number of corporateofficers exceeds the number of beneficiaries which arenot corporate officers. Full benefits under this retirementplan are vested over a maximum five-year periodpursuant to an annual vesting rate of 2.5% of the averageof the best three reference annual compensations(fixed compensation, bonus, benefits in kind excludingexceptional bonuses). As of July 1, 2009, this retirementplan will be replaced by a new defined-benefit retirementplan providing for amended entitlement and wage rulesin accordance with the AFEP and MEDEF guidelines (seeparagraph 11.2 of this Document de Référence); and– the share subscription options and free shares allocatedby the Company do not apply some of the AFEP andMEDEF guidelines. These allocations were carriedout prior to the publication of the AFEP and MEDEF’sguidelines and the amendment of the plans wouldraise major practical issues considering the number ofbeneficiaries.10.8.1 Rules of procedure of theSupervisory Board, Management Boardand Supervisory Board CommitteesThe Management Board and Supervisory Board eachadopted Rules of Procedure (see paragraphs 10.1.2 and10.2.2 of this Document de Référence). The SupervisoryBoard committees have also drawn up their own Rulesof Procedure, the main provisions of which are set out inparagraph 10.3.2 of this Document de Référence. Thepurpose of these Rules of Procedure are to specify theorganization and operations of the various bodies, theirpowers, responsibilities and duties, and the rights andobligations of their members.10.8.2 Supervisory Board CommitteesThe Supervisory Board has set up four specializedcommittees: an Audit Committee, a CompensationCommittee, an Appointments Committee and a StrategicCommittee (see paragraph 10.3 of this Document deRéférence). These committees are made up of at least oneindependent Supervisory Board member and their missionis to prepare Supervisory Board meetings and decisions.REXEL 2008 | PAGE 115