Based on the Principles agreed on the Combination Agreement, the Governance is set out in the by-laws and the Board internal rules of EssilorLuxottica.
Principles relating to the composition of the Board of Directors of EssilorLuxottica
1. The EssilorLuxottica Executive Chairman will have equal powers with the EssilorLuxottica Executive Vice-Chairman in compliance with the by-laws of EssilorLuxottica as approved by Essilor’s general shareholders’ meeting on May 11, 2017. As referred to in the aforementioned by-laws, the Board rules of procedure reflect equal powers of the EssilorLuxottica Executive Chairman and the EssilorLuxottica Executive Vice-Chairman.
In addition, neither the EssilorLuxottica Executive Chairman nor the Chairman of any of the Committees referred to below will have a casting vote.
The EssilorLuxottica Executive Chairman of the Board, together with the EssilorLuxottica Executive Vice-Chairman of the Board, will organize and direct the work and meetings of the Board of Directors of EssilorLuxottica, on which they will report to the EssilorLuxottica shareholders’ general meeting. They will ensure the smooth functioning of the Board of Directors and, in particular, that the Directors are able to fulfil their missions.
As provided in the Board internal rules, except in the case where the EssilorLuxottica Executive Chairman and/or the EssilorLuxottica Executive Vice-Chairman would be absent of a meeting, the EssilorLuxottica Executive Chairman will associate the EssilorLuxottica Executive Vice-Chairman in each mission he is vested in pursuant to his function as Chairman of the Board pursuant to applicable laws, regulations and recommendations from the AFEP/ MEDEF Code, including in the missions relating to the Company’s shareholders’ meetings (which he shall organize and direct together with the EssilorLuxottica Vice-Chairman), and all corresponding decisions will be taken jointly with the EssilorLuxottica Executive Vice-Chairman.
2. The Board of Directors is composed of 16 members, of whom 8 members designated by Essilor (including the EssilorLuxottica Executive Vice-Chairman) and 8 members designated by Delfin (including the EssilorLuxottica Executive Chairman). They are all appointed for the initial term (i.e. [XXXX]).
Following the initial term, the Board members of EssilorLuxottica will have a term of office of three years; and any new member of the Board of Directors of EssilorLuxottica will be proposed for election at the EssilorLuxottica’s general shareholders’ meeting by the Board of Directors of EssilorLuxottica upon recommendation by the compensation and nomination committee of EssilorLuxottica or by any EssilorLuxottica’s shareholder in accordance with applicable law, without any regard to the provenance of the nominees from Luxottica or Essilor.
Beyond the initial term, Delfin and Essilor have confirmed with respect to the employee shareholding culture, that Valoptec Association, to the extent that it continues to represent exclusively (x) employees or former employees (or their successors) of EssilorLuxottica or of its subsidiaries or joint ventures in which it holds a significant interest and/or (y) asset management companies whose capital is entirely held by, and whose entire assets are managed exclusively in the interests of, the persons indicated in point (x) above, will be:
- the only structure federating the employees of the combined group (including Luxottica’s employees) who are also shareholders of the same in accordance with its current organizational rules and model and the balanced governance framework of the Combination Agreement and,
- the only one represented on the Board of Directors of EssilorLuxottica.
3. Four specialised committees - Nomination and Compensation Committee, Audit & Risk Committee, Corporate Social Responsibility (CRS) Committee and Strategy Committee - are set up and comprise four members (two from the current Board of Directors of Essilor and two designated by Delfin); they are chaired by a representative of Luxottica or by a Director who was a member of the Board of Directors of Essilor in office as of the date of the Combination Agreement and designated by Essilor, as defined by the Board internal rules. With respect to the strategy committee, unless otherwise determined by a joint decision of the EssilorLuxottica Executive Chairman and the EssilorLuxottica Executive Vice-Chairman, the Chairman of such committee shall invite all members of the EssilorLuxottica’s Board of Directors to attend (but not to vote at) the meetings of such strategy committee, except for meetings convened to discuss sensitive and significant acquisition projects.
The Chairman of the Nomination and Compensation Committee and of the Corporate Social Responsibility Committee is held by a Director who was a member of the Board of Directors of Essilor in office as of the date of the Combination Agreement designated by Essilor; the chair of the Audit & Risk Committee and of the Strategy Committee is held by a Director designated by Delfin. None of the committee chairpersons has a casting vote.
Principles relating to the management of EssilorLuxottica and the integration committee
The management of EssilorLuxottica (and its staff members) will be located in Paris, 1-6 rue Paul Cézanne, 75008 Paris.
An Integration Committee will be put in place, co-chaired by EssilorLuxottica Executive Chairman and EssilorLuxottica Executive Vice-Chairman, to provide a forum for them and define measures required to implement the Integration and the synergies.