APPENDIX 4 Presentation of the agenda for the Combined Shareholders - PDF document

.................................... .................................... .................................... ........... .. ........... .. ............. ............. ............. APPENDIX ............. ............. APPENDIX 4 APPENDIX 4 Presentation of the agenda for the Combined Shareholders’ Meeting of May 27, 2020 Board of Directors’ report This report outlines the issues and key points arising from Appropriation of income and determination of the the proposed resolutions to be submitted by the Board of dividend (third resolution) Directors for your approval at the Shareholders’ Meeting on In the third resolution, you are asked to vote on the proposed May 27, 2020. It is not intended to be exhaustive, and you appropriation of the Company’s net profit in the year ended should therefore read the proposed resolutions carefully December 31, 2019 and on the proposed dividend. before voting at the Meeting. Based on the fact that the Company’s net profit for the year Please note that no new agreements falling within the scope ended December 31, 2019 amounted to € 431,363,346.32 of article L. 225-38 of the French Commercial Code were and that there are no retained earnings, the amount available entered into during the year ended December 31, 2019. Two for distribution stands at the same amount of related-party commitments concerning Mr. Benoît Coquart € 431,363,346.32. On that basis, you are asked to approve a falling within the scope of article L. 225-42-1 of the French dividend of € 1.34 per share, making a total payout of Commercial Code were authorized by the Board of Directors € 357,730,047.48, based on the number of shares making up and then approved at the Shareholders’ Meeting of the share capital at December 31, 2019, less the treasury May 30, 2018. They subsequently remained in force. Since shares held by the Company at that date, with the remainder the order enacting the Pacte Law no. 2019-1234 of of income available for distribution being transferred to November 27, 2019 removed the obligation for such retained earnings. commitments given to senior executives and corporate officers to undergo the procedure for related-party Treasury shares held by the Company and shares canceled agreements, they are no longer disclosed as such in the prior the payment date do not carry entitlement to a dividend. Board of Directors’ report. Nonetheless, these commitments In the event of a change in the number of shares entitled to should be in conformity with the compensation policy receive a dividend before the dividend payment date, the established by the Board of Directors and approved by the total dividend payout will be adjusted accordingly. Shareholders’ Meeting. If this resolution is adopted, the ex-dividend date will be The Board of Directors has convened the Combined June 1, 2020 and the dividend payment date will be Shareholders’ Meeting on May 27, 2020 to consider the June 3, 2020. following agenda: In addition, following movements in the share capital during the course of 2019, the statutory reserve now shows a I. ORDINARY AGENDA surplus of € 87,608.40, and you are asked to approve the transfer of this amount to “Other reserves”. Approval of the financial statements for 2019 (first and second resolutions) You are also asked to approve the reduction in the non- In the first two resolutions, you are asked to vote on the distributable reserve for treasury shares by € 16,222,963.78 Company’s statutory and consolidated financial statements to € 3,456,250.11, with the corresponding amount being for the year ended December 31, 2019 and on the transferred to “Other reserves”. transactions reflected therein or summarized in the reports Lastly, note that the € 1.34 dividend payment per share will of the Board of Directors and Statutory Auditors, which will constitute taxable investment income for French tax be submitted for your consideration. residents and is subject to either (i) flat-rate income tax at At December 31, 2019: 12.8%, or (ii) progressive income tax, upon irrevocable election made in the taxpayer’s tax return no later than the  The Company’s statutory financial statements showed filing deadline date, in which case it is eligible for the 40% a net profit of € 431,363,346.32; and tax relief provided for in 2° of article 158-3 of the French Tax Code for French tax residents. In principle, this dividend is The Company’s consolidated financial statements  also subject to a flat-rate withholding tax of 12.8% (excluding showed a net profit of € 834.8 million. social security contributions) on the gross amount, and the Lastly, in the first resolution you are also asked to vote withholding will then be set off against income tax due on specifically on the total amount of costs and expenses income received in 2020. However, under article 117 quater referred to in 4° of article 39 of the French Tax Code, i.e., of the French Tax Code, “ individuals belonging to a tax costs and expenses not deductible for tax purposes. household whose reference taxable income for the last but one year, as defined in 1° of article 1417-IV, is less than € 50,000 for single, divorced or widowed taxpayers or less 2019 UNIVERSAL REGISTRATION DOCUMENT 364 LEGRAND

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . APPENDIX . . . . . . . . . . . . . . . . APPENDIX 4 . . . . . . . . In the fourth resolution you are asked to approve the than € 75,000 for taxpayers taxed jointly, may apply for tax .” Applications for following compensation paid in 2019 or awarded in respect exemption from this withholding exemption should be made by the taxpayer on the terms and of the same year to the corporate officers. The relevant conditions set out in article 242 quater of the French Tax details are provided in sections 6.2.2 “Total compensation Code. In addition, this dividend is subject to a social security and benefits paid in 2019 or awarded in respect of the same levy of 17.2% and, for taxpayers whose reference taxable year to the company officers” and 6.2.5 “Compensation income exceeds certain thresholds, to an exceptional levy policy applicable in respect of 2020 and compensation on high incomes at a rate of either 3% or 4% as applicable, components paid in 2019 or awarded in respect of the same pursuant to article 223 sexies of the French Tax Code. year to company officers requiring shareholders’ approval” of the Company’s Universal Registration Document. The tax-related information presented is that applicable when the report was drafted. Shareholders should consult Approval of the compensation and benefits of any kind their usual advisors for information about the tax rules paid in 2019 or awarded in respect of 2019 to Mr. Gilles applicable to them. Schnepp, Chairman of the Board of Directors (fifth resolution) Approval of the disclosures referred to in article L. 225- Pursuant to articles L. 225-37-2 and L. 225-100 of the 37-3 I of the French Commercial Code, in accordance French Commercial Code, the compensation paid during with article L. 225-100 II of the French Commercial Code 2019 or awarded in respect of the same year specifically to - relating to compensation and benefits of any kind paid Mr. Gilles Schnepp, Chairman of the Board of Directors, also in 2019 or awarded in respect of the same year to any of requires your approval. This compensation was paid or the corporate officers (fourth resolution) awarded in accordance with the compensation policy Order no. 2019-1234 of November 27, 2019 on the approved by the Shareholders’ Meeting on May 29, 2019. compensation of listed companies’ corporate officers amended article L. 225-100 of the French Commercial In the fifth resolution you are asked to approve the following Code, which now requires a draft resolution to be submitted compensation paid in 2019 or awarded in respect of 2019 to for shareholders’ approval presenting the disclosures Mr. Gilles Schnepp, Chairman of the Board of Directors. referred to in article L. 225-37-3 I, including total compensation and benefits of any kind paid in the financial year then ended or awarded in respect of the same year to any of the corporate officers. A 2019 UNIVERSAL REGISTRATION DOCUMENT LEGRAND 365