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EXHIBIT 3.1
HAVAS ADVERTISING
Corporation with capital of 60,755,824 euros
84 rue de Villiers (92300) Levallois-Perret
335 480 265 Nanterre Registry of Commerce and Companies
ARTICLES OF ASSOCIATION
Articles of association amended pursuant to decision of the Board of Directors
dated February 9, 2000
CERTIFIED TRUE COPY
[signature]
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TITLE I
PURPOSE - NAME - DURATION - HEAD OFFICE
Article 1: Formation of Company
--------------------------------
The company is formed as a corporation and is governed by the Law of July 24,
1966 on commercial companies and by these articles of association.
Article 2: Purpose
-------------------
The purpose of the company in France and in any country shall be:
- advertising and communication in all forms, on its own behalf or in
partnership, by management, trusteeship or brokerage, and by all current
and future processes and means and for all purposes;
- providing of services, whatever they may be, to any legal or non-legal
persons, including the conducting of technical, financial, commercial or
administrative studies on its own behalf and on behalf of other parties;
- any activities of production, sale, distribution, more particularly in
sectors that are developing rapidly or have great communication power;
- conducting of technical or administrative studies pertaining to the
acquisition, disposal, development or construction of real-estate
properties; management of real-estate operations for construction and
administration of any real-estate assets and rights; acquisition by
purchase, contribution, exchange or otherwise, for operation or sale, of
any real-estate assets or rights and any shares or interests in real-estate
companies; construction, development and improvement of real-estate
properties;
- acquisition of interests and direct or indirect equity stake by any means
in any companies or businesses formed or yet to be formed, formations of
companies, contributions, subscriptions of shares, bonds or other
securities, acquisitions of rights in general partnerships, limited
partnerships or other partnerships, merger, alliance and by any other means
and in any other forms used in France and abroad; management, sale,
exchange of such securities and any other partnership rights;
and more generally, any industrial, commercial or financial, real-estate or
securities transactions that may be directly or indirectly connected with the
company's purpose or facilitate the realization and development thereof.
Article 3: Name
----------------
The name of the company shall be: HAVAS ADVERTISING.
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Article 4: Duration
--------------------
The company's duration, which was set at thirty years, commencing on July 12,
1900, the date of the founding meeting of shareholders, has been extended, first
by fifty years, to end on July 12, 1980, then by seventy years, to end on July
12, 2050, barring cases of early dissolution or extension decided by the meeting
of shareholders.
Article 5: Head Office
-----------------------
The company's head office shall be at 84 rue de Villiers, Levallois-Perret
(92300).
It may be transferred to any other location in the same departement [French
administrative division] or in a bordering departement by decision of the Board
of Directors, subject to confirmation of such decision by the next regular
meeting of shareholders, and to any other location by decision of the
extraordinary meeting of shareholders.
TITLE II
CAPITAL STOCK - SHARES
Article 6: Capital Stock
-------------------------
The capital stock shall be 60,755,824 euros; it shall be divided into 7,594,478
shares of eight euros par value each, fully paid in, all of the same class.
Article 7: Changes in Capital
------------------------------
The capital stock may be increased by decision of the extraordinary meeting of
shareholders, either by subscription of new shares paid in cash or by offset
with liquid and due claims on the company, by contributions in kind, by
conversion of bonds, by incorporation of reserves, profits or issue premiums. In
this last case, the extraordinary meeting of shareholders shall deliberate under
the conditions of quorum and majority that are stipulated for the regular
meetings of shareholders and any increase in capital may then be made by
increasing the par value of the existing shares.
In the event of an increase by issuing shares payable in cash and barring
contrary decision of the extraordinary meeting of shareholders adopted in
accordance with laws then in effect, the owners of the shares previously created
that have made the assessed payments shall have, in proportion to the amount of
such shares, a preemptive right to subscribe to the new shares, which right
shall be exercised in the manner and within the time limits that the Board of
Directors will determine pursuant to the law and shall be tradable under the
same conditions as the shares, during the subscription period.
Shareholders who, due to the number of their shares, are unable to obtain a new
share or a whole number of new shares, shall have the option to join together to
exercise their right, but this shall not be regarded as a joint subscription.
The capital increase shall be subject to the provisions of articles 184 and 185
of the Law of July 24, 1966.
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The meeting of shareholders may also, by virtue of a resolution adopted as
stated above, decide to reduce the capital stock for any reason and in any way,
especially by way of redemption to shareholders, buyback or cancellation of the
company's shares, or an exchange of old stock certificates for new certificates,
in an equivalent or smaller number, whether or not they have the same par value
and, if applicable, with obligation to transfer or purchase old shares to enable
the exchange even when it is not due to losses.
In the event of a capital reduction not caused by losses, bond holders and
creditors may contest the reduction pursuant to the provisions of article 216 of
the Law of July 24, 1966.
The company shall be prohibited from subscribing for and purchasing its own
shares, either directly or through a person acting in his own name but on the
company's behalf. The company may purchase its own shares only in the case set
forth in article 217 of the Law of July 24, 1966, and in connection with the
provisions of articles 217-1 to 217-7.
In conformity with the provisions of article 217-8 of the Law of July 24, 1966,
the company shall be prohibited from taking its own shares in pledge, directly
or through a person acting in his own name but on the company's behalf.
The company may not advance funds, grant loans or grant a surety bond for
subscription or purchase of its own shares by another party.
These provisions shall not apply to transactions conducted for employees to
acquire shares of the company or one of its subsidiaries.
Article 8: Nonpayment of Shares
--------------------------------
In the event of a capital increase by issue of shares in cash and when the
payment for the new shares has not been made at time that was determined for
such payment, interest shall be owed for each day of delay in payment at the
rate of 7% per annum, with no need to file a legal claim action and without
prejudice to the voidance of the subscription.
At least one month after formal notice by registered letter with return receipt
requested, with no response, the Board of Directors may sell said shares without
any authorization from a court of law.
Such sale shall then be conducted pursuant to the methods indicated by current
regulations.
The net proceeds from the sale of such shares shall be allocated, pursuant to
law, to what is owed in principal and in interest to the company by the
expropriated shareholder, who shall continue to owe any negative difference or
be entitled to the surplus.
Thirty days after the aforementioned formal notice, the shares on which the
payments due have not been made shall cease to give the right to admission to
and voting at meetings of shareholders and shall be disregarded for calculating
the quorum; the right to dividends and the preemptive right of subscription for
capital increases attaching to such shares shall be suspended; after payment of
the amounts owed, in principal and interest, the shareholder may request the
payment of dividends that are not time-barred; he may not bring an action under
the preemptive right of subscription for a capital increase after the deadline
set for exercising that right has expired.
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The company may also bring a personal and ordinary action against the
shareholder and its guarantors, either before or after the sale of the shares,
or concurrently with such sale.
Article 9: Form of Shares
--------------------------
Regardless of their origin, shares shall be registered or in bearer form at the
shareholder's discretion, barring statutory or regulatory provisions that may
restrict the registered form.
Article 10: Condition for Validity of Shares
---------------------------------------------
Shares shall give rise to an account entry under the conditions and according to
the methods provided by laws and regulations.
Article 11: Transfer of Shares
-------------------------------
Shares shall change hands by transfer from account to account.
Any person who holds or becomes the holder of at least 2% of the stock, directly
or indirectly through companies that he controls pursuant to article 355-1 of
the Law of July 24, 1966, must, within two weeks of exceeding that threshold,
disclose to the company by registered letter with return receipt requested
addressed to the head office of the company, the total number of shares that he
owns.
Such disclosure must be repeated, under the aforementioned conditions, whenever
an additional 2% threshold is exceeded.
In the event of nonperformance of the disclosure obligation indicated in the
preceding two paragraphs, the shareholder shall, under the conditions and within
the limits defined by the law, be deprived of the voting right attaching to the
shares that exceed the threshold in question, upon request of one or more
shareholders holding at least 5% of the capital stock.
The company shall be entitled any time to ask the securities clearance entity,
under the conditions defined in article 263-1 of the Law of July 24, 1966, for
the identity of the holders of shares conferring the voting right at its own
meetings of shareholders, the number of shares held by each of them and any
restrictions affecting the shares.
Article 12: Indivisibility of Shares
-------------------------------------
Each share shall be indivisible with respect to the company.
To participate at meetings of shareholders, co-owners of joint shares shall be
represented by one of them or by a single agent; in the event of disagreement,
the agent shall be appointed by a court of law at the request of the co-owner
who acts first.
If the shares are encumbered by usufruct, the voting right attaching to such
shares shall be exercised pursuant to article 25 below.
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Article 13: Rights of Shares
-----------------------------
Shareholders shall be liable only up to the value of the shares that they own.
The rights and obligations associated with each share shall follow the share
regardless of the owner thereof; possession of a share shall automatically
entail adherence to the company's articles of association and the resolutions
adopted by the meeting of shareholders.
A shareholder's heirs or creditors may not, under any pretext, cause seals to be
affixed to the company's property or assets nor interfere in any way in the acts
of its management; to exercise their rights, they must rely on the company
inventories and the decisions of the meeting of shareholders.
Article 14: Rights of Shareholders
-----------------------------------
In the event of liquidation or partition, each share shall give the right to a
proportional stake in the company's assets.
It shall also give a right, in the distribution of annual profits and the
liquidation surplus, as defined in articles 33, 34 and 37 below, to a
proportional stake in the percentage of the capital that it represents, taking
into account, if applicable, the extent to which it has been paid in or
redeemed.
Any taxes and assessments that are levied on stock redemptions made either
during the company's existence or at its liquidation shall be paid uniformly,
considering their par value, by all shares without distinction, regardless of
their source or issue date, existing at the time of such redemptions and
participating therein, so that each share having the same par value shall
receive the same net sum from the company.
TITLE III
MANAGEMENT OF COMPANY
Article 15: Board of Directors
-------------------------------
The company shall be administered by a Board of Directors composed of at least
three members, and at most twenty-four members, subject to the exception
provided by law in the event of any merger.
The Directors' term in office shall be six years, subject to provisions as to
age limit. They shall be eligible for reelection under the same reservation.
The Board shall be renewable by thirds, every other year, and the first outgoing
Directors shall be designated by drawing lots.
During his term in office, each Director must own at least one share, pursuant
to law.
Article 16: Deliberations of the Board of Directors
----------------------------------------------------
The Board of Directors shall meet as often as the company's interest so
requires, upon notice from its Chairman or Vice-Chairman.
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Directors representing at least one third of the Board may, indicating the
agenda, convene a Meeting of the Board if the Board has not met for more than
two months.
The meeting shall be held either at the head office or at any other location
indicated in the notice of meeting. Notices of a meeting shall be given by any
means and even orally.
Resolutions shall be adopted under the conditions of quorum and majority that
are provided by law; in the event of a tie vote, the vote of the Chairman of the
meeting shall be decisive.
Article 17: Powers of the Board
--------------------------------
The Board of Directors shall be vested with the broadest powers to act on the
company's behalf, it shall exercise those powers within the limit of the
company's purpose, and subject to the powers that are expressly vested by law in
the meetings of shareholders.
If it sees fit, the Board may, upon proposal from its Chairman, be joined for a
time period set at its discretion, by one or more non-voting advisory members,
whether they are legal or non-legal persons, who may or may not be shareholders,
and whose powers and compensation it shall set.
The non-voting advisory members may be called to all meetings of the Board.
They shall take part in the deliberations purely on a consulting basis.
Article 18: Compensation of Directors
--------------------------------------
Directors shall be granted a fixed annual compensation, the total amount of
which shall be determined by the ordinary meeting of shareholders.
Directors' fees shall be allocated by the Board among its members in the
proportions that it shall set.
The Board of Directors may also allocate exceptional compensation to Directors
under the conditions provided by law.
Article 19: Chairmanship and General Management
------------------------------------------------
From amongst its members, the Board of Directors shall elect a Chairman, who
must be a non-legal person.
Subject to the powers that the law expressly vests in the meetings of
shareholders and the powers that it specially reserves for the Board of
Directors and within the limit of the company's purpose, the Chairman shall be
vested with the broadest powers to act in all circumstances on the company's
behalf.
The Board may also designate:
- one or two Vice-Chairmen;
- a Secretary who need not be a Director or a shareholder.
In the Chairman's absence, the meeting of the Board shall be chaired by the
eldest Vice-Chairman. Failing that, the Board shall designate the Chairman of
the meeting from amongst its members.
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Upon proposal from the Chairman, the Board of Directors may appoint one or more
General Managers under the conditions provided by law.
General Managers may be dismissed at any time by the Board of Directors, upon a
proposal from the Chairman; in the event of death, resignation or revocation of
the Chairman, barring contrary decision of the Board, they shall retain their
position and duties until the new Chairman is appointed.
In agreement with the Chairman, the Board of Directors shall determine the
extent and duration of the powers delegated to the General Managers.
With respect to third parties, the General Managers shall have the same powers
as the Chairman; any restriction of power shall not be enforceable against third
parties.
TITLE IV
INDEPENDENT AUDITORS - REGULATED AGREEMENTS
Article 20: Independent Auditors
---------------------------------
The meeting of shareholders shall appoint, for the term and under the conditions
set by current laws, at least two statutory auditors to perform the task that is
assigned to them by said laws.
The meeting of shareholders shall also appoint at least two alternate auditors,
who shall replace the statutory auditors if they die, are indisposed or have
declined.
Auditors may be reelected.
The auditors may act separately, but they shall draft a common report; if there
is disagreement between them, the report shall indicate the different opinions
expressed. The auditors shall conduct the audits, tests and other tasks provided
by applicable laws.
The auditors shall be called to the meeting of the Board of Directors that draws
up the financial statements for the fiscal year just ended, and to any meetings
of shareholders. They may also, if applicable, be called to any meeting of the
Board of Directors; notice of meeting shall be given to the auditors by
registered letter with return receipt requested.
The fees of the auditors shall be set pursuant to applicable regulations.
Article 21: Regulated Agreements
---------------------------------
Any agreement occurring between the company and one of the Directors shall be
subject to authorization, under the conditions provided by applicable
regulations.
The same shall hold true for the agreements in which a Director is indirectly
involved or in which he deals with the company through an intermediary.
Agreements between the company and another business shall also be subject to
prior authorization if one of the directors of the company is an owner, partner,
manager, general manager or director of the business.
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However, the above provisions shall not apply to agreements concerning routine
transactions that are concluded pursuant to arm's length negotiations.
The Director involved must inform the Board of Directors as soon as he has
knowledge of an agreement to which these provisions apply.
The Director involved may not vote at the Board of Directors or at the meeting
of shareholders that concern the said agreements.
Directors other than legal entities shall be prohibited from contracting loans
from the company in any form; they shall also be prohibited from setting up an
overdraft in a current account or any other account with the company's consent
and from obtaining the company's guarantee or its cosignature to any of their
undertakings with regard to third parties. The same prohibition shall apply to
the permanent representatives of Directors that are legal entities, to their
spouses, any ascendant and descendant relatives of the persons indicated above
and to any intermediaries.
TITLE V
MEETINGS OF SHAREHOLDERS
Article 22: Nature of meetings and Notices thereto
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I - The regular meeting of shareholders duly convened shall represent all
shares; its decisions shall be binding on all parties, even those who are
absent, dissenting or incompetent.
Shareholders shall assemble each year in a meeting of shareholders, within six
months following the close of the fiscal year (barring extension of that
deadline by decision of a court of law).
They may also assemble, either in a regular meeting of shareholders convened
extraordinarily or in an extraordinary meeting of shareholders.
Meetings shall take place on the date, at the time and at the place indicated in
the notice of such meetings.
II - Regular and extraordinary meetings of shareholders shall be called by the
Board of Directors.
Absent that, they may also be called:
a) by the statutory auditors
b) by an agent appointed by a court of law at the request of any interested
party in cases of urgency or by one or more shareholders holding at least one
tenth of the capital stock, or an group of shareholders meeting the conditions
set by law.
After accomplishment of the formalities stipulated by applicable regulations,
notices of meetings of shareholders shall be given by a written announcement
containing the information required by said regulations; such announcement shall
be inserted in a newspaper authorized to receive legal announcements in the
departement where the head office is located and also in the French Legal
Mandatory Announcements Bulletin.
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The registered shareholders who have been entered in account for at least one
month at the date of insertion of such announcement shall also be notified by
ordinary letter, unless they have requested in timely fashion that they be
notified, at their expense, by registered letter.
That letter must also be sent under the same conditions to all the co-owners of
joint shares whose rights have been evidenced by an entry in registered account
for at least the one-month time period as indicated above and, when the shares
are encumbered by usufruct, to the holder of the voting right.
The time period between the date of the last of the aforementioned insertions
and the date of the meeting of shareholders shall be at least fifteen days for
the first conveneing and six days for any subsequent conveneings. Such notices
must give a summary of the purpose of the meeting.
III - When a meeting of shareholders has failed to deliberate properly due to
the absence of the required quorum, a second meeting shall be called in the
manner indicated above and the second notice of meeting must cite the date of
the first meeting. The same shall hold true for the notice of an extraordinary
meeting of shareholders that is extended on a second notice under the conditions
provided in article 28 below.
IV - The meeting of shareholders shall be composed of all the shareholders,
regardless of the number of their shares, provided that they have been paid in
as required. However, only registered shareholders who were entered in account
at least five days prior to the date of the meeting may participate in meetings
of shareholders.
Registered shareholders who have been entered in account more than five days
before the date of the meeting may attend the meeting of shareholders without
any prior formality.
To be entitled to attend meetings of shareholders, owners of bearer shares must
deposit at the location indicated by the notice of the meeting, at least five
days prior to the date of that meeting, a certification of the recording and the
non-transferability of their shares up to the date of the meeting of
shareholders, issued by the authorized intermediary where the shares have been
entered in account. However, the Board of Directors shall have the right to
accept deposits even after the deadline set above or to shorten that deadline.
V - Any shareholder who is entitled to participate in the meeting of
shareholders may be represented by his spouse or by another shareholder.
However, minors or incompetent adults shall be validly represented by their
legal representative. Public institutions and companies shall be validly
represented by their representative or by any agent specially authorized for
that purpose, with no need for the representative or agent to personally be a
shareholder.
The form of proxy shall be determined by the Board of Directors in conformity
with applicable regulations.
The proxy forms must be filed before the date of the meeting of shareholders
within a deadline that shall be set by the Board of Directors and which may not
exceed five days.
All the documents stipulated by applicable regulations must be enclosed with the
proxy form sent to shareholders by the company or by the agent designated
thereby to permit their representation at a meeting of shareholders.
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Any shareholder may vote by means of an absentee ballot under the conditions and
according to the methods provided by law.
VI - As of the notice of the meeting of shareholders, shareholders may ask the
company to send to them, at the address indicated by them, the various documents
and information set out by said regulations. They may also acquire knowledge at
the head office (or at the location of the administrative management) of the
documents indicated by those regulations.
For fifteen days preceding the meeting of shareholders, each shareholder shall
be entitled to obtain access to the list of shareholders that has been drawn up
by the company.
Moreover, at any time of the year, any shareholder may, by himself or through
his agent, exercise the right of access provided by applicable laws and
regulations.
Article 23: Agenda
-------------------
The agenda of the meeting of shareholders shall be drawn up pursuant to
applicable regulations. It shall be drawn up by the party giving the notice.
However, one or more shareholders representing at least the percentage of stock
set by applicable regulations or a group of shareholders meeting the
requirements set by law shall have, observing the procedure stipulated for that
purpose, the right to demand to have draft resolutions placed on the agenda,
attaching to it, if applicable, a brief summary of the reasons; draft
resolutions shall be placed on the agenda of the meeting and put to a vote.
The meeting of shareholders may net deliberate on a matter not on the agenda.
The agenda may not be changed on second notice.
Article 24: Officers of the Meeting of Shareholders
----------------------------------------------------
The meeting of shareholders shall be chaired by the Chairman of the Board of
Directors or, in his absence, by one of the Vice-Chairmen, and in their absence,
by a member of said board appointed by the board.
Meetings of shareholders that are called by statutory auditors, a court-
appointed agent or a liquidator, shall be chaired by whichever of them has
called the meeting.
The inspectors at the meeting of shareholders will be the two members of said
meeting of shareholders who have the largest number of votes both in their
personal name and as agents and who accept that position.
The Chairman of the meeting and the two inspectors shall be the officers of the
meeting and shall appoint the secretary of the meeting, who need not be a
shareholder.
For each meeting of shareholders, an attendance sheet shall be kept, containing
the information required by applicable regulations.
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That attendance sheet, duly initialed by the shareholders present and the agents
of the represented shareholders, shall be certified true by the officers of the
meeting.
Article 25: Voting Right
-------------------------
At all ordinary and extraordinary meetings of shareholders, the quorum shall be
calculated on all shares composing the capital stock, minus shares subscribed
to, acquired by or taken in pledge by the company.
With no limitation other than the one set by law, the voting right shall be
proportional to the percentage of the capital stock that each share represents,
and each share shall confer the right to one vote.
The voting right attached to the share shall belong to the holder of the
usufruct interest at ordinary meetings of shareholders and to the bare owner at
extraordinary meetings of shareholders.
Co-owners of joint shares shall be represented at meetings of shareholders as
provided in article 12 above.
The voting right shall be exercised by the owner of pledged shares.
Article 26: Ordinary Meetings of Shareholders - Quorum
-------------------------------------------------------
The ordinary meeting of shareholders (annual or convened on an extraordinary
basis) shall be composed of all shareholders owning at least one share that has
been paid in as required.
The ordinary meeting of shareholders shall deliberate validly on first
conveneing only if the shares present or represented possess at least one
quarter of the shares with voting rights attached to them. On second notice, no
quorum shall be required.
The meeting shall be ruled by the majority of the votes cast by the shareholders
who are present or are represented at the meeting.
Article 27: Ordinary Meetings of Shareholders - Powers
-------------------------------------------------------
The ordinary meeting of shareholders shall deliberate and rule, pursuant to law,
on all matters concerning the financial statements of the previous fiscal year,
and on the use or allocation of annual profits; it shall set the dividends to be
distributed and it shall decide as to the creation or endowment of any reserve
funds or any retained earnings.
It shall choose the members of the Board of Directors and shall set the amount
of the Directors' fees allocated to the Board.
It shall authorize any borrowing through bond issuance (other than borrowing
indicated in article 28, final paragraph).
It shall deliberate over all proposals placed on the agenda that are not within
the powers of the extraordinary meeting of shareholders.
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Article 28: Extraordinary Meetings of Shareholders - Quorum and Powers
-----------------------------------------------------------------------
The extraordinary meeting of shareholders shall be composed of all shareholders
regardless of the number of their shares, provided that the shares have been
paid in as required.
The extraordinary meeting of shareholders shall deliberate validly only if the
shareholders present or represented possess at least, on first convening, one
third and, on second convening, one quarter of the shares with voting rights
attached to them. In the absence of the second quorum, the second meeting may
be set up and postponed to a subsequent date no more than two months later than
the date for which it had been called.
The meeting shall rule by a two-thirds majority of the votes cast by the
shareholders who are present or are represented at the meeting.
The extraordinary meeting of shareholders may amend any provisions of the
articles of association. However, it may not increase the liabilities of the
shareholders, without prejudice to the operations of a pooling of shares duly
performed, or change the nationality of the company unless such change is
provided by law.
It may specifically decide on or authorize the increase of the capital stock and
also decide on the reduction thereof in the manner and under the conditions that
it will determine, and the total or partial redemption thereof, the extension or
early dissolution of the company; its merger with other companies already formed
or yet to be formed; the transfer or sale to any third parties or contribution
to any company of all or part of the assets, rights and obligations of the
company.
In the event of a capital increase, the extraordinary meeting of shareholders
shall approve the valuation of the contributions in kind and the granting of
special benefits by deliberating under the conditions provided by applicable
laws and regulations.
Pursuant to law, it shall decide on or authorize the issuance of bonds that are
convertible into shares, or exchangeable against shares, or that have stock
subscription warrants.
Article 29: Meeting of Shareholders -- Minutes
-----------------------------------------------
The deliberations of meetings of shareholders shall be recorded in minutes,
which shall contain the information stipulated by applicable regulations and
shall be signed by the officers of the meeting.
Such minutes shall be either recorded in a special register, numbered and
initialed, to be kept at the head office, or written on loose leafs to be
numbered consecutively, initialed and bound together, all pursuant to applicable
regulations.
Copies or extracts of minutes to be produced in a court of law or elsewhere
shall be signed by the Chairman of the Board of Directors, by a Director acting
as the General Manager or by the secretary of the meeting of shareholders.
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TITLE VI
ANNUAL FINANCIAL STATEMENTS - RESERVE FUNDS -
DISTRIBUTION OF PROFITS
Article 30: Fiscal Year
------------------------
The company fiscal year shall commence on January 1 and end on December 31.
Article 31: Inventory - Financial Statements and Balance Sheet
---------------------------------------------------------------
At the close of each fiscal year, the Board of Directors shall draw up the
inventory of the various company assets and liabilities existing as of that
date.
The Board of Directors shall also draw up, in accordance with the rules
applicable to the matter, for submission to the meeting of shareholders, the
balance sheet, the income statement, the notes to the financial statements and
the other documents provided by law.
Even when there are no profits, the Board of Directors must book the necessary
depreciation and provisions so that the balance sheet will be accurate.
The Board of Directors shall also prepare a written management report on the
condition of the company and its activity during the fiscal year just ended,
containing all the information and data required by law.
The aforementioned documents shall be made available to the statutory auditors
within the time limits stipulated by applicable regulations. The Board of
Directors and the auditors shall submit their reports to the meeting of
shareholders under the conditions provided by law.
The company must file the documents provided by applicable regulations with the
clerk of the commercial court, to be appended to the commercial register, within
one month after the financial statements are approved by the meeting of
shareholders.
Article 32: Shareholder Right of Access
----------------------------------------
Any shareholder shall be entitled to exercise, under the conditions determined
by applicable law, the right to access that is reserved for him.
Article 33: Determination of Net Profit
----------------------------------------
The net proceeds of the fiscal year, minus overhead expenses and other charges
of the company, including any depreciation and provisions, shall constitute the
net profits.
Article 34: Distribution of Profits
------------------------------------
From the net profits, minus any previous losses, at least 5% shall be deducted
to form the legal reserve fund stipulated by law; such withdrawal shall cease to
be mandatory when that fund reaches an amount equal to one, tenth of the capital
stock; it shall become mandatory again when, for any, reason, said reserve drops
below such one tenth.
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The distributable profit shall be composed of the net profits of the fiscal
year, minus previous losses, and amounts to be placed in reserve pursuant to law
or the articles of association, plus the retained earnings.
The sum necessary to pay the shareholders shall be withdrawn from this
distributable profit as a first dividend which sum shall be equal to 5% of the
value of their shares that has been paid in response to calls for funds and
which have not been redeemed. However, if the profits of one year do not permit
such payment, the shareholders may not claim it from the profits of subsequent
years.
From the surplus, the ordinary meeting of shareholders, based upon proposal from
the Board of Directors, shall have the night to decide to withdraw sums that it
sees fit to set, either to be carried forward to the next fiscal year, or for
additional redemptions, or to be paid to any general or special reserve funds.
The balance of the net profits, if any exists, shall be distributed among all
the shares indiscriminately.
The meeting of shareholders may decide to distribute sums withdrawn from the
reserves over which it has control, expressly indicating the reserve item(s)
from which the withdrawals are to be made.
All dividends not claimed within five years after becoming claimable shall be
time-barred pursuant to applicable law.
The ordinary meeting of shareholders shall have the power to grant each
shareholder, for all or part of the dividends or interim dividends that are
distributed, an option between payment in cash or in stock.
Article 35: Payment of Dividends
---------------------------------
The methods of payment of the dividends that are voted by the meeting of
shareholders shall be set by it or, failing that, by the Board of Directors.
However, the payment must be made within the maximum time limit of nine months
after the close of the fiscal year, unless that time limit is extended by
decision of a court of law ruling at the request of the Board of Directors.
TITLE VII
DISSOLUTION - LIQUIDATION
Article 36: Equity Less Than Half of Capital
---------------------------------------------
If, due to losses recorded in the accounting documents, the company's equity
becomes less than one half of the capital stock, the Board of Directors must,
within four months following the approval of the financial statements showing
such loss, convene the extraordinary meeting of shareholders to decide whether
there are grounds for early dissolution of the company.
If the dissolution is not pronounced, the company must, by the close of the
second fiscal year following the fiscal year during which the losses were
acknowledged and subject to law, reduce its capital by an amount at least equal
to the amount of the losses that could not be offset against the reserves, if,
within that time limit, the equity has not been restored to a value equal to at
least one half of the capital stock.
In both cases, the decision of the meeting of shareholders shall be published
according to the methods set by applicable regulations.
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To be able to deliberate, the meeting of shareholders must meet the requirements
set by article 28 above. If a meeting of shareholders is not convened, and if
such a meeting of has failed to deliberate validly on a second notice, any
interested party may petition a court of law in order to dissolve the company.
The same shall hold true if the provisions of paragraph 2 above have not been
applied.
In all cases, the court may grant the company a maximum time limit of six months
in which the company must rectify the situation; it may not pronounce any
dissolution if, on the date when it rules on the merits, such rectification has
been made.
Article 37: Liquidation of Company
-----------------------------------
At the expiration of the company or in the event of early dissolution, the
meeting of shareholders shall determine the method of liquidation and shall
appoint one or more liquidators, whose powers it shall determine.
By virtue of a resolution of the extraordinary meeting of shareholders, the
liquidators may transfer or contribute the rights, causes of action and
obligations of the dissolved company to another company or to any other party.
During the liquidation, the meeting of shareholders, duly convened, shall retain
the same powers as during the life of the company.
A meeting of the shareholders shall be convened at the end of the liquidation to
rule on the final account; to approve the liquidator's actions and to discharge
his mandate and also to rule on the close of the liquidation; where such a
meeting fails to take place, any shareholders may petition a court of law to
appoint an agent to convene the meeting.
The notice of close of the liquidation shall be published according to the
methods set by applicable regulations. The final accounts of the liquidator
shall be filed with the clerk of the commercial court and appended to the
commercial register. The decision of the shareholders ruling on the accounts
shall be attached thereto.
After the settlement of the company's liabilities and expenses, the net proceeds
from the liquidation shall be used first to completely redeem the capital stock,
if that redemption has not yet occurred. Any surplus shall be distributed
indiscriminately, in cash or in stock, among all the shares.
TITLE VIII
DISPUTES
Article 38
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In the event of a dispute, all shareholders must elect to reside in Levallois-
Perret and any notices and summonses shall be validly given at the residence
elected thereby, irrespective of the actual residences of the shareholders.
If no residence is elected, such election shall occur automatically, for the
purposes of legal notices, at the Office of the Clerk of the commercial court of
Nanterre.
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The elected residence shall entail attribution of jurisdiction to the courts
where the head office is located.
