The EADS Board of Directors and the company’s core shareholders have agreed on a far-reaching change of the company’s shareholding structure and governance. This agreement aims at normalising and simplifying the governance of EADS while securing a shareholding structure that allows France, Germany and Spain to protect their legitimate strategic interests. Subject to customary regulatory conditions and to Germany (through Kreditanstalt für Wiederaufbau (KfW), the investment arm of the German State) acquiring an initial block of 5% of EADS, an Extraordinary General Meeting of shareholders will be held during the first half of 2013, to vote on the proposed changes to the company’s Articles of Association, on the proposed share buy-back and to elect new directors. Key elements of the agreement are:
France and Germany intend to build equal ownership positions, while the present core industrial shareholders, Daimler AG and Lagardère SCA, are provided with a path to partially divest and will eventually be free to trade their shares at their discretion.
Subject to the vote of the Extraordinary General Meeting of the shareholders of EADS, the present shareholder pact, called “Participation Agreement”, in place since the company’s foundation in 2000, will be terminated and replaced by a new, limited arrangement between the French, German and Spanish Governments.
France, Germany and Spain have agreed on a capped government shareholding (approximately 12 plus 12 plus 4%). The three states will have reciprocal pre-emption rights. The amended Articles of Association of EADS will contain an ownership and voting restriction from crossing the 15% threshold by shareholder individually or collectively.
The three States have agreed that, upon the request of any of them, they would vote against a future change to a limited number of the new governance provisions.
The future EADS Board will comprise 12 members, proposed by the Remuneration and Nomination Committee, including a Chairman, a Chief Executive Officer and at least 8 independent Non-Executive Directors. The majority of Directors as well as two thirds of the members of the Executive Committee will be EU nationals.
Certain specific French and German national security interests will be protected through the creation of “national defence companies” holding sensitive military assets, and including the rights of France and Germany to consent to three outside directors to the board of their respective “national defence companies”. Two of such directors of each “national defence company” shall be members of the EADS Board.
Under the new governance scheme, no veto right will be given to any group of Directors in the Board or to any shareholder at the Shareholders’ Meeting.
