Preparing and organising the work of the Board of directors

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REPORT OF THE CHAIRMAN OF THE BOARD RELATED TO CORPORATE GOVERNANCE

1 Preparing and organising the work of the Board of directors

On 20 January 2004, in addition to the Company’s legal, regulatory and statutory provisions, the Board of Directors adopted a set of bylaws whose purpose is to specify the manner in which the Board is organised and operates, along with rules applicable to securities transactions involving company representatives and their families.

These bylaws were amended by the Board of Directors dated 6 March 2007 in order to comply with the new provisions set forth in the AMF general regulations related to securities transactions by company management.

In addition, the bylaws were enhanced in March 2008 by information speciﬁ cally referring to corporate governance.

Finally, given the adoption of the new Middlenext Reference Code by the Board of Directors, the Board’s bylaws were subject to certain changes at the 1 February 2010 meeting of the Board of Directors.

The Board of Directors’ bylaws complies with the sixth Recommendation of the Reference Code concerning content and publication of the bylaws.

It is available on the Company’s website (http://www.alten.fr/ﬁ nance/informations-reglementees-alten.htm).

1.1 Rules of operation and organisation 1.1.1 Composition of the Board of Directors

Article 15 of the Company’s bylaws provides that the Board of Directors is composed of no fewer than three (3) and no more than eighteen (18) members.

The Board of Directors is composed of:

Mr Simon Azoulay, who also serves as Chief Executive Ofﬁ cer;

Ms Catherine Behar (married name Azoulay);

Mr Gérald Attia, who also serves as Deputy Managing Director.

Mr Simon Azoulay, of French nationality, was born on 29 May 1956 in Rabat (Morocco). He is a graduate of SUPELEC. On 31 December 2010, he held 8.11% of the Company’s share capital (2,591,550 shares) in his own name, and 25.36% (8,105,961 shares) via SGTI, the company in which he has a 100% controlling stake.

Mr Gérald Attia, of French nationality, was born on 6 April 1962 in Livry Gargan (93) and holds an MBA from Hartford. As of 31 December 2010 he held 0.036% of the company’s capital (11,690 shares) in his own name.

Mrs Catherine Behar, married to Mr Simon Azoulay, of French nationality, was born on 18 November 1958 in Paris’ 14th arrondissement. As of 31 December 2010, Ms Catherine Azoulay held 0.005% of the company’s capital (1,500 shares) in her own name.

To the Company’s knowledge there is currently no conﬂ ict of interest between the duties of any member of the Board of Directors with regard to the Company and their private interests.

A motion will be tabled at the Combined General Meeting to be held in June 2011 to consider the appointment of two new directors:

Mr Bruno Benoliel, of French nationality, was born on 13 May 1964 in Paris’ 17th arrondissement and resides at 131, rue du Faubourg Saint Honoré, 75008 Paris.

Mr Benoliel joined ALTEN in September 1997, as the Chief Financial Ofﬁ cer. He is currently Deputy Managing Director in charge of ﬁ nance, information systems and legal services. His current duties are as follows:

Marital status and position Positions currently held within the Group Bruno BENOLIEL

born 13 May 1964 in Paris

Deputy Managing Director in charge of ﬁ nance, IT systems and legal

Director (Italy):

• ALTEN Italia – Vice Chairman (2008-2012)

• Onion (2009-2012)

Chairman of the Board (Poland):

• IMP Engineering Poland S.P. ZOO (2004-unlimited) Manager (Romania):

• ALTEN SI – Techno Romania SRL (2009-unlimited) Director (Great Britain):

SD Partners Ltd (2001-unspeciﬁ ed)

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REPORT OF THE CHAIRMAN OF THE BOARD RELATED TO CORPORATE GOVERNANCE

Ms Emily Luna, of French nationality, was born on 20 July 1948 in Rabat (Morocco) and resides at 9, rue Papillon, 75009 Paris.

Ms Luna was employed by ALTEN for several years as Director of sales administration. Thanks to her efﬁ cient organisation of customer administration, Ms Emily Luna was a key aid in terms of audits and implementation and analysis of processes. She left the company in September 2007.

1.1.2 Representation of men and women on the Board of Directors

The French law of 27 January 2011 introduced rules promoting professional equality between men and women, particularly in terms of achieving a gender balance on company Boards. The Board of Directors, which already has one female director (Ms Catherine Behar-Azoulay), decided at its meeting of 6 April 2011 to ask the General Meeting scheduled for June 2011 to approve the appointment of Ms Emilie Luna as a new director.

If the General Meeting approves the appointment of Ms Luna, the Board will have two women among its ﬁ ve members.

In accordance with the provisions of the law of 27 January 2011, to be applied with immediate effect, the Board of Directors will meet in 2011 to deﬁ ne the Company’s policy with regard to achieving professional parity among its workforce, including in terms of salary scales.

1.1.3 Duration and number of terms

The Board of Directors asked the 23 June 2009 General Meeting of shareholders to approve an amendment to the bylaws concerning the terms of the directors, reducing their terms to four (4) years rather than six (6) years. The term of ofﬁ ce for members of the Board of Directors is now set in the bylaws at four (4) years. This term complies with the suggestions in the tenth Recommendation of the Reference Code.

Note that the directors’ terms of ofﬁ ce are staggered (see the summary table of ofﬁ ces).

The list of ofﬁ ces held by members of the Board of Directors during the 2010 ﬁ scal year can be found in Chapter 14.1.3 of this document.

1.1.4 Convening meetings of the Board of Directors

In accordance with law and the bylaws, Directors are convened by simple letter or by e-mail. On average, 2010 Board meetings were convened ﬁ ve (5) days in advance.

Representatives to the Works Council (one management and one non-management representative) were called to all meetings of the Board of Directors by e-mail and by registered letter with acknowledgement of receipt.

In accordance with the provisions of Article L. 823-17 of the French Commercial Code, the Company’s statutory auditors are called to all meetings of the Board of Directors convened to review or approve the interim or the annual statements, as well as to the annual Ordinary General Meeting.

In an effort to improve transparency and ensure that the statutory auditors are in a position where they are best able to fulﬁ l their duties, the auditors were invited to attend all the meetings of the Board of Directors in 2010.

1.1.5 Director information

To enable members of the Board of Directors to effectively prepare for meetings, the Chairman gives the Directors all information within a reasonable and adequate period of time as required to make decisions and, more generally to carry out their duties in an independent manner. Each Director is able to obtain additional information necessary to perform his or her duties.

The Directors deemed that the information provided was clear and precise and gave them an opportunity to constructively discuss issues and help articulate the Company’s acquisition and growth strategy.

The representatives from the Works Committee received the same information within the same timeframe as the members of the Board of Directors.

Minutes of the Board Meetings are drafted following each meeting and are subject to approval of the Board of Directors at its next meeting.

1.1.6 Proxy representation of Directors

Directors may be represented by proxy at meetings of the Board of Directors by another Director. The proxy must be given in writing. Only one Director used this right during ﬁ scal year 2010.

1.1.7 Use of videoconferences and telecommunications

The Company’s articles of association and the bylaws of the Board of Directors allow the Directors to take part in the Board’s deliberations via videoconference or telecommunication. Directors who take part in Board deliberations using this method are deemed to be present when calculating the quorum and the majority, except when taking decisions where such methods are forbidden by law or regulation (currently ﬁ nancial statements and the management report).

These methods were not used in the course of ﬁ scal year 2010.

1.1.8 Chairmanship of meetings

Mr Simon Azoulay, the Chairman, presided over twelve (12) meetings of the Board of Directors in 2010.

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1.1.9 Guests invited to Board meetings

During the 2010 fi scal year, the Group’s Chief Financial Offi cer and the Head of the Legal Department regularly attended Board meetings. The role of Board secretary will be fulfi lled by the Head of the Group’s Legal department or by the CFO.

1.1.10 Board meetings taking the form of committees

Finally, in accordance with Articles L. 823-19 et seq of the French Commercial Code, the Board of Directors, in the presence of Mr Bruno Benoliel, Chief Operating Ofﬁ cer responsible for ﬁ nance, convened as an Audit committee on 6 April 2011, in order to monitor:

the process by which ﬁ nancial information is compiled;

the efﬁ ciency of internal control and risk management procedures;

the control required by law of the annual ﬁ nancial statements and the consolidated statements by the Statutory Auditors;

the independence of the Statutory Auditors.

Given the structure of the Board of Directors and the absence of at least one independent director, it was not deemed necessary to create an Audit Committee.

The Company has adopted some of the recommendations contained in the Poupart-Lafarge report of July 2010 relating to Board meetings in Committee form: it has followed the report’s recommendations concerning the duties of the committee and now keeps speciﬁ c minutes for Board meetings held in Committee form.

1.1.11 Evaluation of the Board

In accordance with the provisions of the ﬁ fteenth Recommendation of the Reference Code, the Board of Directors regularly discusses subjects such as the composition of the Board of Directors, its work, its delegations of powers and its decisions.

In these deliberations, members of the Board review the organisation of the Board and its mode of operation. They examine in particular documents provided to the directors, to the representatives of the Works Committee and the Statutory Auditors. The Board members also verify that the most important questions have been suffi ciently prepared, in particular using the expertise of the CFO when the agenda contains a question relating to the activity of the Group, the company or consolidated fi nancial statements or the Company’s fi nancial communications.

A procedure aimed at allowing a full and structured assessment will be implemented once an independent director has been appointed to the Board of Directors.

1.2 Frequency of meetings and Directors’ average attendance rate

The Board of Directors met twelve (12) times during ﬁ scal year 2010, at the registered ofﬁ ce, with an average attendance rate of 66%.

1.3 Main missions

The Board of Directors’ primary duty is to determine the direction of the Company’s business, deﬁ ne its strategy and monitor its implementation.

It operates in areas which relate to its own areas of competence such as approval of fi nancial statements (annual and interim fi nancial statements), convocation of General Meetings of shareholders, regulated agreements (within the meaning of Article L. 225-38 of the French Commercial Code) and determining remuneration for offi cers and directors.

In addition, the following transactions are subject to prior approval by the Board of Directors: (i) acquisitions (ii) cessation of business, (iii) creation of jointly-held companies with third parties, (iv) issuance of bonds, guarantees and securities.

In the course of fi scal year 2010, the Board of Directors: approved two (2) projects to create companies controlled at 100%, one (1) acquisition of a minority stake, one (1) internal restructuring operation and one (1) project to create a joint venture, approved the 2009 annual statements and the provisional management documents, examined and approved the fi nancial communiqués, decided on compensation for company offi cers and delegated authority to the CEO to issue guarantees, bonds and sureties under certain conditions and limitations.

1.4 Mode of operation of General Management

On 28 June 2002, the Company’s Board of Directors combined the duties of Chairman of the Board of Directors and Chief Executive Offi cer. Since that time, Mr Simon Azoulay has been responsible for the general management of the Company. The Board of Directors has not imposed any specifi c restrictions on the powers of the Chief Executive Offi cer.

The Combined General Meeting of 23 June 2009, in its ﬁ fth resolution, renewed the director’s mandate of Mr Simon Azoulay for a period of four (4)

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In effect, the Company bylaws require that the following operations must receive prior approval by the Board: (i) external growth operations (acquisitions of companies or business assets), (ii) divestments (company securities or business assets), (ii) the setting up of jointly held companies with third parties, (iv) the issuing of bonds, guarantees and sureties.

Mr Gérald Attia serves as Deputy Managing Director. He was appointed by the Board of Directors on 28 June 2002 at the suggestion of the Chairman. No restrictions have been placed on his powers.

Mr Attia’s mandate as Deputy Managing Director was renewed by the Board of Directors that met after the Combined General Meeting of 23 June 2009, for the same term as the CEO, which will expire at the end of the General Meeting held to approve the 2013 ﬁ nancial statements. The Board of Directors did not place any restrictions on the powers of the Deputy Managing Director, with the exception of those already contained in the Company’s bylaws.

The Chief Executive Ofﬁ cer and the Deputy Managing Director are vested with the broadest possible powers to act on behalf of the Company in all circumstances. They exercise their powers within the scope of the Company’s purpose, subject to that which the law expressly assigns to the Shareholders’ Meeting and to the Board of Directors. They represent the Company in its relations with third parties and before the courts.

1.5 Delegations of authority relating to guarantees, bonds and securities - Art. L. 225-35 of the French Commercial Code At its meeting on 31 January 2011, the Board of Directors renewed its authorisation granted to the Chairman at the meeting of 18 January 2010, to issue, with the right to further delegate its authority, guarantees, bonds and sureties in the Company’s name up to a maximum of ﬁ ve (5) million euros. This delegation of authority, issued for a period of twelve (12) months, will expire on 31 January 2012.

This authorisation was only used once in the course of ﬁ scal year 2010.

1.6 Remuneration policy for company ofﬁ cers and directors

The Chief Executive Ofﬁ cer and the Deputy Managing Director receive remuneration for their positions. At the beginning of the year, the Board of Directors declares the amount to be allocated to them for the current ﬁ scal year, as set forth below.

1.6.1.1 Remuneration paid by ALTEN SA

Total ﬁ xed remuneration paid to Mr Simon Azoulay in compensation for his service as CEO in 2010 amounted to 109,080 euros. No variable remuneration was paid to Mr Simon Azoulay in 2010.

Mr Simon Azoulay was not awarded any stock options or free shares during the 2010 fi scal year. He did not receive any extraordinary remuneration or benefi ts in kind paid by the Company during the 2010 fi scal year.

1.6.1.2 Remuneration paid by companies controlled by ALTEN SA (under the terms of Article L. 233-16 of the French Commercial Code).

Mr Simon Azoulay received no remuneration or beneﬁ ts in kind from any companies controlled by ALTEN SA (under the terms of the Article L. 233-16 of the French Commercial Code) in 2010, with the exception of director’s fees as mentioned in paragraph 1.6.3.

1.6.2 Remuneration paid to the Deputy Managing Director during 2010 1.6.2.1 Remuneration paid by ALTEN SA

During the 2010 ﬁ scal year, Mr Gérald Attia received total gross ﬁ xed remuneration of one hundred seventy-eight thousand two hundred and twenty-four euros (178,224 euros) for his position as Deputy Managing Director.

The Board of Directors, at its meeting of 9 November 2010, decided to allot Mr Gérald Attia, for the ﬁ scal year 2010 and in addition to his gross ﬁ xed salary of 178,224 euros, a variable performance-based remuneration of no more than 100,000 euros.

In order that the performance criteria take into account the challenges faced by the Group and the need to ensure its continuity, the Board of Directors decided that the remuneration of Mr Gérald Attia should be linked not only to the meeting of short-term objectives (by 31 December 2010) but also to success in mid-term projects (by 2015). The short and long-term targets each account for 50% of the overall assessment of his success.

The Board of Directors, at its meeting of 31 January 2011, having judged that Mr Attia had achieved the objectives, decided to attribute a variable remuneration of ﬁ fty thousand (50,000) euros.

Mr Gérald Attia was not allocated any stock options or free shares for ﬁ scal year 2010. Neither did he receive any exceptional remuneration, nor any beneﬁ ts in kind from ALTEN SA over the course of 2010.

1.6.2.2 Remunerations paid by companies controlled by ALTEN SA

Mr Gérald Attia received no remuneration or any beneﬁ ts in kind from any company controlled by ALTEN SA (under the terms of Article L. 233-16 of the French Commercial Code) during 2010, with the exception of director’s fees as described in paragraph 16.3.2 hereafter.

To date, the ofﬁ cers and directors have not received any deferred remuneration, beneﬁ ts to departing employees or pension obligations.

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1.6.3 Directors’ fees:

1.6.3.1 Directors’ fees paid by ALTEN SA

Company directors have not received directors’ fees from ALTEN SA for the 2010 ﬁ scal year.

1.6.3.2 Directors’ fees paid by companies controlled by ALTEN SA (under the terms of Article L. 233-16 of the French Commercial Code).

Mr Simon Azoulay received 150,000 euros in Director’s fees from the Spanish Private Limited company ALTEN SPAIN.

Mr Gérald Attia received Director’s fees of 84,000 euros from the Spanish Private Limited company ALTEN SPAIN.

1.7 Shares owned and securities transactions

The Board of Directors’ bylaws include certain provisions governing Company securities transactions that are carried out by members of the Board of Directors, including:

members of the Board of Directors will declare to the Autorité des Marchés Financiers (AMF) and the Company (according to procedures set forth by law, the market authority’s general regulations and stock market authorities and those currently set forth in the AMF instruction dated 3 February 2006) all transactions (transfer, purchase, share, pledge, etc.) concerning Company shares within the statutory period (currently a maximum of ﬁ ve (5) stock market trading days from the transaction date).

Note that it is recommended that securities held by the members of the Board of Directors must be registered (directly or administered). The Economic Modernisation Act (known as the LME Act) of 4 August 2008 eliminated the requirement that directors hold a Company share. The articles of association may elect to set forth a number of shares that each director must hold.

A resolution proposing to amend Article 15 of the Company’s articles of association will be submitted to a shareholders’ vote during the Combined General Meeting on 23 June 2009.

like any shareholder, members of the Board of Directors shall inform the AMF when it crosses any legal or regulatory threshold related to capital and/or voting rights, whether to the upside or the downside. These declarations must be submitted to the AMF within a maximum period of four (4) stock market trading days. Board members shall also provide the Company’s Legal Department with a copy of the declaration submitted to the AMF.

1.8 The Executive Committee and the Administrative Committee

The Board of Directors relies on the work of the Executive Committee and the Administrative Committee in order to be fully prepared before taking decisions.

1.8.1 The Executive Committee

The Executive Committee, which meets at least once (1) a month, comprises the Chief Executive Ofﬁ cer, the operations managers of the Group’s different divisions, the CFO and the Head of Human Resources. It is chaired by the Chief Executive Ofﬁ cer.

In document Engineering and Technology Consulting (Page 143-148)