French Commercial code
In forceThe Extraordinary General Meeting of a société par actions, or in companies which do not have one, the body which takes its place, may decide, on the basis of the report of the Board of Directors or the Management Board, as the case may be, and that of the statutory auditors, to create, in a proportion which may not exceed one quarter of the share capital, of investment certificates representing pecuniary rights and voting right certificates representing the other rights attached to the shares issued on the occasion of a capital increase or a split of existing shares.
In the event of a capital increase, holders of shares and, if any, holders of investment certificates, have a preferential subscription right to the investment certificates issued and the procedure followed is that for capital increases. Holders of investment certificates waive their preferential subscription rights at a special meeting called and held in accordance with the rules applicable to extraordinary general meetings of shareholders. The voting right certificates are divided between the holders of shares and the holders of voting right certificates, if any, in proportion to their rights.
In the event of a split, the offer to create the investment certificates is made at the same time and in a proportion equal to their share of the capital to all the holders of shares. At the end of a period set by the Extraordinary General Meeting, the balance of the unallocated creation possibilities is distributed among the holders of shares who have requested to benefit from this additional distribution in a proportion equal to their share of the capital and, in any event, up to the limit of their requests. After this distribution, any balance is distributed by the Board of Directors or the Management Board, as the case may be.
The certificate of voting rights must be in registered form.
The investment certificate is negotiable. Its nominal value is equal to that of the shares. Where the shares are divided, the investment certificates are also divided.
The voting right certificate may only be transferred together with an investment certificate. However, it may also be transferred to the holder of the investment certificate. In both cases, the share is automatically reconstituted. The share is also automatically reconstituted in the hands of the holder of an investment certificate and a certificate of voting rights. The latter must declare this to the company within fifteen days. If this declaration is not made, the share is deprived of voting rights until the situation is regularised and for a period of one month thereafter.
No certificate representing less than one voting right may be allocated. The General Meeting shall determine the terms and conditions for the allocation of certificates for fractional rights.
In the event of a merger or demerger, the investment certificates and voting right certificates of a company that is disappearing may be exchanged for shares in companies benefiting from the transfer of assets.
