First resolution

 

The General Meeting, ruling under the conditions of quorum and majority required for Extraordinary General Meetings, after having taken cognizance of the Board of Directors’ report, the Auditors' special report and the report from the Contribution Auditors and pursuant to the provisions of Articles L.228-11 et seq. of the French Commercial Code (Code de commerce), resolves, subject to the adoption of the following resolution and of the final completion of the capital increase specified therein,

 

- to create a new class of shares comprised of preference shares (known as B Shares);

- that the share capital of BNP Paribas will accordingly be split into two classes of shares, “A Shares” corresponding to all the existing shares of BNP Paribas, and “B Shares”;

- to adopt, in its entirety, the new text of the Articles of Association included in Appendix 1, which includes the description of the characteristics of B Shares;

 

and grants all powers to the Board of Directors with power of subdelegation under the conditions set by law, in particular to accomplish all acts and formalities required for implementing this resolution.

 

• Presentation of the resolution
  
  The first two resolutions concern:
  
  - the creation of a new share category consisting of preferred shares and the resulting modification to the Bank’s Articles of Association (first resolution);
  
  - following on from this, a capital increase through a preferred share issue (second resolution) reserved for the state-owned Société de Prise de Participation de l’Ëtat (SPPE).

These resolutions fall within the scope of the measures announced by the French Government on October 13, 2008 designed to strengthen the equity capital of banks so that they in turn may continue to finance the economy.

BNP Paribas meets the equity capital requirements imposed by the supervisor. Nevertheless, BNP Paribas intends to fulfill to the utmost extent its mission to finance the real economy in spite of difficult refinancing conditions. As a result, it has elected to be part of the initiative proposed by the government in the interests of its clients as well as of its shareholders.

Consequently, BNP Paribas has made a commitment to:
- 4% annual growth in its loan outstandings to the French economy in 2009. This includes loans to individual customers (housing and consumer credit) and corporate customers;
- respect the AFEP-MEDEF (the French business leaders association) recommendations of October 2008 regarding executive compensation. BNP Paribas announced as early as November 6, 2008 that these recommendations and those previously published on corporate governance were part of the Code to which it voluntarily adhered. BNP Paribas occupies the leading position in the corporate governance ratings published in February 2009 by Riskmetrics (specialist in risk assessment) and Capitalcom, an agency specializing in financial and extra-financial communication.

In view of the above, the Bank:
 - issued on December 11, 2008 €2.55 billion in perpetual super-subordinated notes, eligible for Tier 1 capital under the first phase of the French economic stimulus plan;
- announced on January 21, 2009 that it will participate in the second phase of an equity capital increase in a similar amount of €2.55 billion.  In addition to the super-subordinated debt, options include the issuance of non-voting preferred shares that constitute "Core Tier 1" but are less diluting than ordinary shares in an amount that could go as high as €5.1 billion for concomitant repayment of the super-subordinated notes subscribed during Phase One.


Subject to the adoption of the second resolution authorizing the preferred share issue in favour of SPPE and taking into account the report of the Board of Directors, the special report of the Statutory Auditors and the report of the appraisers, the first resolution requests your approval of the creation of a new share category consisting of preferred shares and the subsequent modification of the Articles of Association. The preferred shares as offered to you here would allow you to strengthen your company’s share capital with a limited dilution for existing shareholders. This applies to:
- control:
  * no voting rights;
  * no preferred subscription rights;
  * shares cannot be converted into ordinary shares;
- as well as to payments:
  * no discount on issue price;
  * preferred shares to receive a dividend only if a dividend is paid on ordinary shares;
  * any dividend paid on preferred shares must be authorized by the Ordinary General Meeting;
  * in contrast to the ordinary share dividend, the dividend payable on preferred shares is limited; its return may never exceed two times the fixed rate of the Super-Subordinated Notes issued by BNP Paribas on December 11, 2008, recalculated on the date of the decision to issue preferred shares(1). The return on the preferred share is therefore comparable to the return on an ordinary share within this context only, since outside this context the note is like a bond instrument;  
  * if the preferred dividend does not become due during a specific accounting period, it will not be accounted for in subsequent accounting periods and is therefore not cumulative;
  * a buy-back may occur at any time at the sole request of the issuer, at a price increasing over time but in any case capped at 160% of the issuance price per unit after July 1, 2022.

 

 

 (1) The return on the preferred shares may not be less than a floor equal to one time the rate of the super-subordinated notes plus 0.25% per annum from January 1, 2010, up to a maximum of 1.50% from January 1 2015.