Recticel, The passion for comfort. A confident belief in careful stabilization

Corporate Governance Charter

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Corporate Governance Charter —

This section contains more factual information on corporate governance in general and the application of the Code at Recticel during the past financial year in particular.

Since 1 January 2006, in accordance with the provisions of the Belgian Corporate Governance Code, Recticel has published its Corporate Governance Charter on its website (www.recticel.com). Interested parties are invited to download the Charter there or request a copy from the registered office of the company. The Charter contains a detailed description of the corporate governance structure and policy of the company. In 2009, the Corporate Governance Commission published an amended version of the Corporate Governance Code. The Recticel Corporate Governance Charter will soon be amended and adapted to this new code.

1. Composition of the Board of Directors

Recticel’s Board of Directors comprises today twelve members. There are four independent directors. The Managing Director represents both a reference shareholder and the management. Four other directors represent reference shareholders. Two directors are non-executive directors. One director, Olivier Chapelle SPRL, is executive director and will replace the current Managing Director, Vean NV, as of 1 April 2010. Vean NV will become executive director in charge of special assignments as of same date. The table below provides an overview of the members of Recticel’s Board of Directors during the financial year 2009 and up to the present.

Composition of the The board of directors

2. Changes since the previous annual report – statutory appointments – proposal of new directors

On 12 May 2009, the Shareholders’ General Meeting accepted the resignation as directors of Edouard Dupont and Robert Westdijk and of Emsee BVBA, represented by Marc Clockaerts, effective as of 31 December 2008.

On the proposal of the Board of Directors, after consultation of the Remuneration and Appointments Committee, the Annual General Meeting of 12 May 2009 renewed the mandates of Davignon, Paquot, Sioen and Vandepoel as well as of Louis Verbeke BVBA, represented by Louis Verbeke, for a three-year term of office, which will expire at the close of the Annual General Meeting of 2012.

At the same time, Wilfried Vandepoel and Louis Verbeke BVBA, represented by Louis Verbeke, were appointed as independent directors within the meaning of Article 524 §2 and 526bis §2 of the Companies Code. They both meet the criteria listed under Article 526ter of the Companies Code. They meet also the independence criteria of the 2009 Corporate Governance Code. Louis Verbeke BVBA, represented by Louis Verbeke, will remain independent director up to 5 November 2010, after which date it will become a non-executive director since it will have reached the maximum term of office of twelve years. Wilfried Vandepoel will remain independent director up to 18 May 2011, after which date he will also become a non-executive director for having reached the same maximum term of office.

Following the sudden decease on 20 November 2009 of Jean-Jacques Sioen, a Recticel director since 2 October 1998, the Board of Directors, in conformity with recommendation of the Remuneration and Appointments Committee and the articles of association, decided to co-opt as director of Recticel SA/NV, effective as of 1 December 2009, Olivier Chapelle SPRL, established at 1180 Brussels, Drève Pittoresque 83, represented by its permanent representative, Olivier Chapelle, in order to complete the mandate of Jean-Jacques Sioen, which will expire at the close of the Annual General Meeting of 2012.

The mandates of Pol Bamelis NV, represented by Pol Bamelis, Mercator Insurance NV, represented by Henk Janssen, en Tonny Van Doorslaer and Klaus Wendel expire at the close of the Annual General Meeting. The Board of Directors proposes to the General Meeting:

• to renew the mandate of Pol Bamelis NV, represented by Pol Bamelis, for a new term of one year, which will expire at the close of the Annual General Meeting of 2011.
• to renew the mandates of Tonny Van Doorslaer and Klaus Wendel, for a new term of three years, which will expire at the close of the Annual General Meeting of 2013.
• not to renew the mandate of Mercator Insurance NV, represented by Henk Janssen.
• to elect as director Jacqueline Zoete for a term of two years, which will expire at the close of the Annual General Meeting of 2012.

The Board of Directors also proposes to appoint Klaus Wendel and Pol Bamelis NV, represented by Pol Bamelis, as independent directors, within the meaning of Article 524 §2 and 526bis §2 of the Companies Code, for the duration of their mandate. They both meet the criteria listed under Article 526ter of the Companies Code. They meet also the independence criteria of the 2009 Corporate Governance Code.

3. Operation of the Board of Directors

The Board of Directors met eight times in 2009. One meeting focused on the 2009 budget, two meetings dealt mainly with approving the annual accounts at 31 December 2008 and the interim accounts at 30 June 2009, and one meeting covered the new edition of the Stock Option Plan.

Each meeting also deals with the corporate strategy, a business review per division and the most important current acquisitions and/or disposals. Other matters (human resources, external communication, litigation and legal issues, delegations of authority, etc.) are discussed as and when necessary.

The written decision-making procedure was used two times in 2009, a first time within the framework of the sale of the participation in the joint venture Cofel and then further to the sudden decease of Jean-Jacques Sioen on 20 November 2009 and his replacement as director by cooptation of Olivier Chapelle SPRL, represented by Olivier Chapelle.

During 2009, no conflicts of interests arose between a director and the company as referred to in Articles 523 and 524 of the Companies Code, except in the context of the Stock Option Plan, when Luc Vansteenkiste had a conflict of interests. The above-mentioned articles were applied. Reference is made here to the annual report, which contains an extract from the minutes of 22 December 2009.

Philippe Jous, General Secretary & Corporate General Counsel, acts as secretary to the Board of Directors, assisted in this by Dirk Verbruggen, Company Secretary.

The individual percentage attendance of the directors at the meetings in 2009 was as follows:

4. Committees set up by the board of directors

a) The Audit Committee

The Audit Committee is composed of five members. All members are non-executive directors and two of them, including the Chairman, are independent directors.

The composition of the Audit Committee does comply with the provisions of the articles of association of Recticel as well as with the provisions of the Companies Code in that respect but does not comply with principle 5.2./4 of the 2009 Belgian Corporate Governance Code, which provides that at least the majority of the members of the Committee must be independent. However, Recticel considers that it complies with the spirit of these provisions since it still considers Etienne Davignon as an independent director. Etienne Davignon meets all criteria in this respect, except the twelve-year maximum term.

Pursuant to Article 526 bis of the Companies Code, Recticel SA/NV declares that the Chairman of the Audit Committee, Klaus Wendel, meets the independency requirements as well as he has the necessary skills with respect to accounting and audit.

The table below lists the members of the Audit Committee during the 2008 financial year and to the present.

The Audit Committee met six times in 2009. Two meetings were devoted primarily to examining the annual accounts at 31 December 2008 and the interim accounts at 30 June 2009. During all meetings, special attention was also brought to the internal audit programme, risk management, taxation and accounting issues relating to IFRS.

b) The Remuneration and Appointments Committee

The Remuneration and Appointments Committee consists of three members, all non-executive directors including two independent directors. Its composition is as follows:

The Remuneration and Appointments Committee met six times in 2009.

One meeting dealt with the remuneration and bonuses of the executive management and one meeting related to the new edition of the Stock Option Plan. The other meetings dealt mainly with the hiring of the new CEO.

5. Executive management

The Board of Directors has assigned the executive management of the company to the public limited liability company Vean, registered office Stationsstraat 172, 9260 Wichelen (Schellebelle), represented by its Managing Director and permanent representative, Luc Vansteenkiste. As of 1 Aril 2010, the private limited liability company Olivier Chapelle, established at 1180 Brussels, Drève Pittoresque 83, represented by its Director and permanent representative, Olivier Chapelle, has taken over the executive management from Vean.

The Management Committee has an advisory function for the benefit of the Board of Directors in its entirety and is not an executive committee within the meaning of the Companies Code.

6. Transactions and other contractual relationships between the company and affiliated companies and the directors and members of the Management Committee

Chapter VII.1 of the Recticel Corporate Governance Charter explains the policy of Recticel NV/SA concerning such transactions, which do not come under the conflict of interests rules.

There are commercial transactions between the Sioen Group and the Recticel Group, mainly as a consequence of joint product development. There were no transactions in 2009 exceeding the threshold amount of EUR 1 million.

No other applications have arisen in this connection.

7. Insider trading and market manipulation

The company policy on the prevention of insider trading and market manipulation is set out in chapter VII.2 of the Recticel Corporate Governance Charter.

These measures include the introduction of restrictions on the performance of transactions (“closed periods”), which are in application since 2006.

Dirk Verbruggen has been appointed Compliance Officer and is responsible for monitoring compliance with these rules. Accordingly, transactions performed will be disclosed at the appropriate time.

8. Relations with the reference shareholders

together by a shareholders’ agreement dated August 22, 2007. This shareholders’ agreement has a three-year term and can be renewed.

The participating shareholders are:

The shareholders’ agreement provides that the shareholders will jointly support Recticel’s strategy and that they will adopt a common position at General Meetings. Provision is also made for a first refusal right and resale right in one another’s favour. These shareholders, associated by a shareholders’ agreement, also act in consultation with Rec-Man & Co SCA, a company of Recticel managers, which holds 295,836 Recticel shares (1.02%), and other Recticel managers.