NEOPOST - 2018 Registration document

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Corporate governance report

Board of directors

Corporate governance code Neopost has long pursued an active corporate governance policy. The Company has referred to the Afep-Medef code to draft this report. Following the publication of the Afep-Medef code, which was revised in June 2018, the Board examined recommendations from the revised code at a meeting held on 25 March 2019. Implementing the “comply or explain” principle of the Afep-Medef code Under the “comply or explain” rule in article L. 225-37 of the French commercial code and article 25-1 of the Afep-Medef code, Neopost considers that its practices comply with the code’s recommendations. However, one recommendation have not been implemented during the 2018 fiscal period for the reasons provided in the following table:

This access is subject to the composition of the committees; for example, any given committee’s documents will only be accessible to the directors sitting on that committee. At the initiative of the lead director, “executive sessions” involving independent directors, without the presence of the Chairman and of the Chief Executive Officer may be held. An executive sessions was held before each Board meeting during the 2018 financial year. According to the Company’s by-laws, the Chairman's obligation to disclose information goes hand-in-hand with each director’s duty to be diligent in remaining informed, to request any information they may require to aid understanding of the points on the agenda in good time from the Chairman, to make themselves available, and to give the time and attention needed to perform their duties.

Afep-Medef recommendation not applied Termination of employment contract in case of appointment as executive director (article 22 of the code) “[…] When an employee is appointed as executive director, it is recommended to terminate his or her employment contract with the Company or with a company affiliated to the Group.”

Neopost position and explanation

In the Board of directors’ opinion, the decision to retain Denis Thiery’s employment contract, initially agreed on 1 October 1998, is justified by 18 years of service in the Group (and 10 years under this employment contract until it was suspended between 2007 and 2018 when he was appointed Chief Executive Officer). The decision allows the Company to have an internal promotion policy that allows the appointment to corporate officer positions of experienced senior executives with deep knowledge of Neopost’s businesses and markets. The loss of entitlements linked to their employment contracts and length of service (such as severance payments) would represent a constraint. The employment contract of the current Chairman was reactivated on 1 February 2018 following the end of Denis Thiery’s mandate as Chief Executive Officer and was terminated on 30 June 2018. The new Chief Executive Officer has no employment contract.

By-laws for the Board and committees

the regulations of the audit committee; • the definition of the role of an independent director, as • provided by the remuneration and appointments committee;

The by-laws of the Board and committees were drafted on 30 March 2004. It was deeply reshaped by the Board of directors on 24 September 2018 in order to create the strategy and corporate responsability committee. The late remuneration and appointments committees merged into one committee. The audit committee remains unchanged. The aim of the by-laws is to set out the role and operating procedures of the Board of directors, together with the rights, obligations and recruitment practices of its members, within the scope of their authority, in order to ensure the Company’s long-term future, its smooth running and the sustained creation of value for shareholders, employees and the Company’s other stakeholders. Finally, the by-laws establish and define the mission and competences of the lead director. The by-laws can only be approved and amended upon decision of the Board of directors. the regulations of the remuneration and appointments • committee; the regulations of the strategy and corporate responsability • committee; The following are attached to the by-laws:

the manager-shareholder’s charter. •

In addition to the tasks attributed to it by law and by the articles of association, the Board approves strategic decisions, budgets, significant acquisitions and divestments, and restructuring plans. It also ensures the quality and reliability of financial and non-financial information and of shareholder communication. approving this governance report, organizing and preparing • the Board’s work and managing internal control procedures; defining the role of an independent director; • defining the remuneration policy for the Group’s • executives; making necessary changes to the regulations governing the • various committees. The specialized committees make proposals to the Board relating to their field of expertise. In particular, the Board of directors' tasks include:

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REGISTRATION DOCUMENT 2018 / NEOPOST