CORPORATE GOVERNANCE of which they are a member is exercised by A Director who is appointed to replace another the members of the Supervisory Board of such Director shall remain in office only for the remainder mutual funds, the candidates are appointed by of his predecessor’s term. such board from among its members; and 6. No person may be appointed as Director unless b) Where the voting right attached to the shares he/she compl ies with the rules on combining held by the employees (or by the mutual funds of offices, conflicts of interests and disqualification or which they are a member) is directly exercised by prohibitions as provided by law. such employees, the candidates are appointed The number of directors who are linked to Rexel by at the time of the consultation provided under an employment agreement may not exceed one article L.225-106 of the French Commercial third of the directors in office. Code, either by the employee shareholders in a special meeting called for this specific purpose, 7.1 In accordance with Article L.225-27-1 of the or pursuant to a written consultation. Only those French Commercial Code, the Board of Directors candidacies presented by a group of shareholders includes one or two directors representing the representing at least 5% of the shares held by the employees of the Group, to be appointed as follows. employees who exercise their voting right in their When the number of directors,calculated in 3 personal capacity are admissible. accordance with the law, is below or equal to twelve, 4. The directors may be individuals or legal the Board of Directors shal l include a director entities. Any legal entities must, at the time of their representing the employees appointed by the trade appointment, appoint a Permanent Representative union having obtained the large number of votes in who is subject to the same conditions and the first round of the elections referred to in Articles obligations and who incurs the same liability as if L.2122-1 and L.2122-4 of the French labor code within he/she were a director in his/her own name, without Rexel and its subsidiaries, either direct or indirect, prejudice to the joint and several liability of the legal the registered office of which is established on the entity he/she represents. This office of Permanent French territory. Representative is concurrent with the term of office When the number of directors exceeds twelve, and of the legal entity that he/she represents. It must be subject to this criterion stil l being satisfied upon renewed each time the term of office of the legal the date of his/her appointment, a second director entity comes up for renewal. representing the employees shall be appointed by Should the legal entity dismiss its representative, it the European Works Council. This appointment shall must notify Rexel thereof without delay, by registered take place within a term of six months as from the mai l, and of the identity of its new Permanent crossing of the threshold of twelve directors. Representative. The same shal l also apply in the In case of vacancy, for any reason whatsoever, of event of the death, resignation or disability of the the office of a Director representing the employees, Permanent Representative. the vacant office shall be filled in in accordance with the provisions of Article L.225-34 of the French 5. Should one or more seats on the Board of Commercial Code. Directors become vacant between two shareholders’ meetings, as a result of the death or resignation of 7.2The term of office of the employee Directors members, the Board of Directors may co-opt one or shall be of four years. more persons to serve as interim members. The duties of the Director appointed pursuant to Any cooption of directors by the Board of Directors article L.225-27-1 of the French Commercial Code is subject to ratification by the shareholders at the shall expire at the end of the ordinary shareholders’ next ordinary shareholders’ meeting. meeting called to approve the financial statements of the previous financial year, held in the year during The resolutions adopted and actions carried out by which his or her term of office expires. the coopted directors shall be valid notwithstanding the absence of ratification. In addition, their term of office shall cease ipso jure when these employee representatives no longer Should the number of directors fall to less than three, meet the eligibility criteria provided for in Article the Board of Directors shall immediately convene an L.225-28 of the French Commercial Code, or in case ordinary shareholders’ meeting to bring the number of termination of their employment agreement in of directors up to the required minimum. accordance with Article L.225-32 of such code. REXEL 2017 – REGISTRATION DOCUMENT 125