AXWAY_REGISTRATION_DOCUMENT_2017

CONSOLIDATED FINANCIAL STATEMENTS AXWAY GROUP AND ITS BUSINESS ACTIVITIES Report of the Board of Directors on corporate governance and internal control CORPORATE GOVERNANCE CORPORATE RESPONSIBILITY

2017 ANNUAL FINANCIAL STATEMENTS

CAPITAL AND AXWAY SOFTWARE STOCK

INFORMATIONS ADMINISTRATIVES ETbJURIDIQUES

COMBINED GENERAL MEETING OFb6bJUNEb2018

Internal regulations of the Board of Directors The internal regulations cover the following topics: reminder of legal and statutory powers, meetings, information received by the Board of Directors, training of members, committees, conflicts of interest, directors’ fees, confidentiality and Works Council representatives. Board of Directors’ charter The charter addresses the following issues: proxies, duties and performance conditions, knowledge of rights and obligations, individually owned shares, ethical rules pertaining to stock market transactions, transparency, conflicts of interest, meeting attendance and confidentiality. The Articles of Association, the internal regulations and the charter of the Board of Directors are available upon request from the Company’s Corporate Secretary. Powers of the Chief Executive Officer The Chief Executive Officer exercises his or her powers within the limits of the corporate purpose and applicable laws, the Articles of Association and the internal regulations. The Chief Executive Officer has authority over the Group as a whole and directs its operating activities. He or she is vested with the broadest powers to act in all circumstances in the name of the Company and represents the Company in its relations with third parties. The Chief Executive Officer chairs the Group’s Executive Committee (ExCom). The Chief Executive Officer is moreover in charge of providing the Board of Directors and its committees with the information that they need and implementing the decisions made by the Board. The internal regulations of the Board of Directors specify the role of the Chief Executive Officer and the conditions for exercising the prerogatives of the office. The Chief Executive Officer thus closely coordinates his or her activity with the Chairman of the Board of Directors to ensure a continuous liaison between the members of the Board of Directors and Executive Management and keeps them informed of the Group’s situation and of any proposed decisions when such decisions could have a material impact on the course of business. The decisions defined hereinafter must receive the prior authorization of the Board of Directors, or of the Chairman in the event of emergencies or when delegated to the Chairman by the Board, and in that case the Chairman must report back to the Board on the authorizations that he or she gives in such circumstances. In all cases, these decisions must be prepared and discussed by the Chief Executive Officer with the Chairman. Decisions requiring the prior approval of the Board of Directors in the above-referenced conditions are those that have a major strategic effect or which are likely to have a material impact on the financial position or the commitments of the Company or of its subsidiaries and in particular those related to:

● adaptation of the business model,

● any decision to acquire or dispose of companies or business activities, with powers delegated to the Chairman by the Board for transactions less than €5Ǿmillion,

● the conclusion of strategic alliances;

● organizational matters:

● the appointment or dismissal of a member of the management team (members of the Executive Committee, functional heads and heads of support divisions) with powers delegated to the Chairman by the Board, ● any significant modification of internal organization or operations, with powers delegated to the Chairman by the Board; ● financial transactions that have or could have a future material impact on the parent company financial statements or the consolidated financial statements, ● any procedural commitment, treaty, settlement or compromise, in the case of litigation, for an amount exceeding €1,000,000, ● the capital increase or reduction of a subsidiary, ● any surety, security or guarantee granted by the Company. Role entrusted to the Chairman of the Board of Directors Pursuant to the provisions of ArticleǾL.Ǿ225-51 of the French Commercial Code and the stipulations of ArticleǾ 2 of the Company’s internal regulations, the role of the Chairman of the Board of Directors includes: ● organizing and directing the work of the Board of Directors; ● setting the dates and agenda of the Board of Directors’ meetings; ● ensuring the smooth running of the Company’s management bodies and the application of best governance practices; as well as; ● ensuring that directors are able to carry out their duties;Ǿand ● financial matters: It is hereby recalled that the Board of Directors, at its meeting of 24ǾOctober 2013, decided, based on the recommendations of the Selection, Ethics and Governance Committee, to appoint a Vice-Chairman to take over the Chairman’s duties in the event of the latter’s incapacity. Accordingly, it was decided to amend the internal regulations of the Board of Directors. The directors, whose terms of office were renewed by the Combined General Meeting of 22ǾJune 2015, decided to (i)Ǿmaintain the office of Vice-Chairman of the Board of Directors, and (ii)Ǿrenew Kathleen Clark Bracco in this capacity. ArticleǾ 2.6 of the Board of Directors’ internal regulations also provides that “Pursuant to ArticleǾ15 paragraph 4 of the ● ensuring that they have the required information. Role entrusted to the Vice-Chairman ofbthebBoard of Directors

● the implementation of the strategy:

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AXWAY - 2017 REGISTRATION DOCUMENT

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