French Commercial code
In forceThe Ordinary General Meeting may authorise the Board of Directors or the Management Board, as the case may be, to purchase the company's shares, in order to offer them or allocate them:
- in the year in which they are purchased, to the beneficiaries of a transaction mentioned in Article L. 225-208 of this code or intervening within the framework of articles L. 3332-1 et seq. of the French Labour Code;
- within two years of their repurchase, in payment for or in exchange for assets acquired by the company as part of an external growth transaction, merger, demerger or contribution;
- within five years of their repurchase, to shareholders who notify the company of their intention to acquire them during an auction procedure organised by the company itself within three months of each annual ordinary general meeting.
The number of shares acquired by the company may not exceed:
- 10% of the company's capital when the buyback is authorised with a view to a transaction provided for in the second or fourth paragraph of this article;
- 5% of the company's capital when the buyback is authorised with a view to a transaction provided for in the third paragraph.
The Ordinary General Meeting shall specify the purposes of the transaction. It shall define the maximum number of shares for which it authorises the acquisition, the price or the procedures for setting the price and the duration of the authorisation, which may not exceed twelve months. It may authorise the Board of Directors or the Management Board, as the case may be, within the time limits mentioned in the second to fourth paragraphs of this article, to use the shares repurchased for another of the purposes provided for in this article.
The price of the repurchased shares shall be paid by a deduction from the reserves available to the General Meeting pursuant to the second paragraph of Article L. 232-11 of this Code.
If they have not been used for one of the purposes and within the time periods mentioned in the second to fourth paragraphs of this article, the repurchased shares are cancelled ipso jure.
The Ordinary General Meeting shall decide on the basis of a report drawn up by an independent expert, under conditions defined by decree in the Conseil d'Etat, and on a special report by the company's statutory auditors or, if none has been appointed, by a statutory auditor appointed for this purpose in accordance with the procedures set out in Articles L. 225-228 or L. 22-10-66 making known their assessment of the conditions for setting the acquisition price.
The price of the shares may not, on pain of nullity, be higher than the highest value or lower than the lowest value appearing in the valuation report of the independent expert communicated to the General Meeting.
The Board of Directors may delegate to the Managing Director or, in agreement with the latter, to one or more Delegate Directors the powers necessary to carry out these transactions. The Management Board may delegate to its Chairman or, with his agreement, to one or more of its members the powers necessary to carry out such transactions. The persons appointed shall report to the Board of Directors or the Management Board on the use made of this power under the conditions laid down by the latter.
The Statutory Auditors, if any, shall present a special report to the Annual Ordinary General Meeting on the conditions under which the shares were repurchased and used during the last financial year ended.
Shares bought back may be cancelled up to a maximum of 10% of the company's capital per twenty-four month period. If the shares purchased are cancelled, the capital reduction is authorised or decided by the Extraordinary General Meeting, which may delegate to the Board of Directors or the Management Board, as the case may be, all powers to carry it out.
As an exception to the provisions of the tenth paragraph, shares purchased but not used may, by decision of the Ordinary General Meeting, be used for another of the purposes set out in this article.
