COMPENSATION AND BENEFITS 15 companies, through recommendations of the specialist external the functions of Chairman of the Board of Directors and those of consulting firm. Chief Executive Officer) for whatever reason. Annual variable remuneration As an exception to the above, this Termination Indemnity shall The annual variable remuneration is capped at a maximum of 50% not be due: of the fixed remuneration annual. (i)i n the event of dismissal of Mr. Bernard Gilly from his duties as Chief Executive Officer (or of Chairman and Chief Executive In view of the profile of the company, the criteria for determining Officer, in the event that the Board of Directors subsequently the annual variable remuneration are exclusively qualitative. The decides to combine the functions of Chairman of the Board qualitative criteria have been pre-established by the Board of of Directors and those of Chief Executive Officer) for serious Directors, at the proposal of the remuneration committee, but misconduct or gross negligence, as these notions are defined are not made public on grounds of confidentiality. They principally by the case law applicable to Labour law, or represent operational milestones linked to the development of (ii) i n the event of resignation by Mr. Bernard Gil ly from his research and development projects, the conduct of operations mandate as Chief Executive Officer (or of Chairman Chief and the development of the company in general. Executive Officer, in the event that the Board of Directors Attribution of Free Shares (AGA) subsequently decides to combine the functions of Chairman of The Chief Executive Officer is eligible for the attribution of free the Board of Directors and those of Chief Executive Officer), shares. The shares are subject to an acquisition period, conditional unless this resignation is due to illness or for family reasons, it on the presence and achievement of performance criteria, as well being specified that in these latter two cases, the Termination as of a mandatory holding period. Indemnity shall then be due to Mr. Bernard Gilly. The Termination Indemnity shall not be due if Mr. Bernard Gilly The amount of attributions of free shares is set on the basis of changes position within the Group or leaves the Company at his market practices observed in comparable companies, through own initiative in order to take up new positions. recommendations of the specialist external consulting firm. Benefits in kind The payment of the Termination Indemnity shall be contingent on meeting the fol lowing conditions: Achievement of at least The Chief Executive Officer shall benefit from a Company flat. 50% of the annual objectives for the past year. These objectives Exceptional remuneration are established annual ly by the Board of Directors, at the proposal of the remuneration committee, but are not made The Board of Directors may decide, at the proposal of the public for reasons of confidentiality. They principally represent remuneration committee, to grant exceptional remuneration to operational milestones linked to the development of research the Chief Executive Officer in view of very special circumstances. and development projects, the conduct of operations and the The payment of this type of remuneration must be justifiable by development of the Company in general. an event, such as the execution of a major transaction for the Company, or an operational outperformance measure. Non-competition commitment The monthly non-competition commitment to the benefit of The payment of the elements of variable remuneration and, as Mr. Bernard Gil ly, Chief Executive Officer, authorized by the appropriate, exceptional remuneration attributed for a financial Board Meeting of March 9, 2017 for a period of one (1) year year, is conditional on approval by the Ordinary General Meeting starting from his departure from the Company, equal to 40% of of the elements of remuneration of the Chief Executive Officer, his last net monthly remuneration, excluding any bonus (after paid or attributed by way of the said financial year (ex post vote). deduction of any other amount received in any capacity by 15.1.1.3 Commitments with regard to the Chief Executive way of a non-competition obligation) as consideration for the Officer on the basis of article L.225-42-1 of the Commercial commitment made by this latter party for the same duration of Code one year starting from his departure: • not to hold in Europe, Canada, the United States or any Departure indemnities country in which the Company exercises its activity, a position The amount of the sudden termination indemnity shall be equal of manager, director, employee or consultant in a company to twelve (12) months’ remuneration calculated on the basis of conducting the activity; or the last annual remuneration (fixed and variable) in the event of • not to hold shares in the share capital of a company carrying cessation by Mr. Bernard Gilly of his duties as Chief Executive out the activity, with the exception of a holding in any listed Officer (or of Chairman and Chief Executive Officer, in the event company representing at most 1% of the share capital held that the Board of Directors subsequently decides to combine exclusively for financial reasons. 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