2008 Registration Document - Rexel

12.5 AGREEMENTS POTENTIALLY LEADING TO A CHANGE OF CONTROLCD&R, Eurazeo, MLGPE and Ray Investment, the Caissede Dépôt et Placement du Québec and Citygroup VentureCapital Equity Partners L.P. (either directly or throughtheir respective investment vehicles) entered into severalagreements in order to structure their relationship as directand indirect shareholders of Rexel. These agreements aredescribed below.12.5.1 Ray Investment Shareholders’AgreementOn April 4, 2007, Ray Investment, CD&R, Eurazeo, MLGPME,the Caisse de Dépôt et Placement du Québec and CitigroupVenture Capital Equity Partners L.P. amended the existingRay Investment shareholders agreement entered into onMarch 26, 2005 (the “Ray Investment Shareholders’Agreement”). The Ray Investment Shareholders’Agreement aims at structuring the relationships betweenthe shareholders of Ray Investment.The Ray Investment Shareholders’ Agreement notablyprovides that decisions to be taken by Ray Investmentas a shareholder of Rexel, as well as certain decisionswith respect to Ray Investment should be previouslyapproved by the members of the Consortium or of RayInvestment partners, in accordance with particular majorityrequirements.With the exception of transfers to affiliates, interests held inRay Investment are not transferable to third-parties withoutthe prior written consent of CD&R, Eurazeo, MLGPE andthe Caisse de Dépôt et Placement du Québec.However, the parties to the Ray Investment Shareholders’Agreement have the option to exchange their shares in RayInvestment against the corresponding proportion of Rexelshares held by Ray Investment, in accordance with certainconditions.The Ray Investment Shareholders’ Agreement enteredinto force upon the admission of Rexel’s shares to tradingon the Euronext Paris market and will remain in effect for10 years from the date of this admission. However, the RayInvestment Shareholders’ Agreement will cease to apply toa given party at such time as such party no longer holdsany interest in Ray Investment.12.5.2 Rexel Shareholders’ AgreementOn April 4, 2007, CD&R, Eurazeo and MLGPE entered intoa shareholders’ agreement (the “Rexel Shareholders’Agreement”) in order to organize the corporate governanceof Rexel.The Rexel Shareholders’ Agreement provides that Rexel’sSupervisory Board comprises three members appointedfrom a list proposed by CD&R, three members appointedfrom a list proposed by Eurazeo, two members appointedfrom a list proposed by MLGPE and three independentmembers, one of whom may be appointed from a listproposed by MLGPE, so long as such person meetsindependence criteria and MLGPE’s direct or indirectparticipation in Rexel’s capital remains equal to at least 5%.The number of Supervisory Board members that may benominated by CD&R, Eurazeo and MLGPE may be reducedif their direct or indirect ownership of Rexel is reduced belowcertain thresholds.CD&R has the right to nominate the first chairman of theSupervisory Board. Subsequently, if Eurazeo or MLGPE’sshareholdings are greater by 50% than CD&R’s, Eurazeo orMLGPE, as the case may be, will be entitled to nominate thechairman of the Supervisory Board.The Rexel Shareholders’ Agreement also provides that theSupervisory Board have the following four committees:an audit committee, a compensation committee, anappointments committee and a strategic committee.The Rexel Shareholders’ Agreement will remain in effectuntil the later of (i) the second anniversary of the initial publicoffering of Rexel and (ii) the date on which CD&R, Eurazeoand MLGPE cease to collectively hold, directly or indirectly,at least 40% of Rexel’s capital or if such shareholders ceaseto control Rexel within the meaning of article L.233-3 of theFrench Commercial Code. In any case, the provisions of theRexel Shareholders’ Agreement will cease to be applicableafter the fifth anniversary of the initial public offering ofRexel. Furthermore, the provision of the Rexel Shareholder’sAgreement will cease to apply to any party whose direct orindirect shareholding in Rexel becomes less than 5%.The Rexel Shareholder’s Agreement also provides that itwill automatically become void if any of the shareholders(acting alone or through one of its subsidiaries) launches atender offer to purchase all of Rexel’s existing shares.12.5.3 Liquidity AgreementOn April 4, 2007, Ray Investment, CD&R, Eurazeo, MLGPE,the Caisse de Dépôt et de Placement du Québec andCitigroup Venture Capital Equity Partners L.P. entered intoan agreement relating to the acquisition and disposal ofRexel’s shares (the “Liquidity Agreement”).Since the lock-up period has expired on January 1, 2008,CD&R, Eurazeo, MLGPE, the Caisse de Dépôt et dePlacement du Québec and Citigroup Venture Capital EquityPartners may, under certain conditions:− Sell, or have Ray Investment sell, Rexel shares into themarket subject to a maximum of €10 million per 30-dayperiod, subject to prior notice to the other shareholdersof Ray Investment; and− Initiate, or have Ray Investment initiate, (i) the sale ofRexel’s shares through a block trade with reasonablyestimated gross proceeds of at least €75 million, or (ii)an underwritten secondary public offering of Rexel’sshares with reasonably estimated gross proceeds of atREXEL 2008 | PAGE 145