2015-2016 share buyback program
Description of the share buyback program under Article 241-1 et seq. of the General Regulation of the French Financial Markets Authority (Autorité des marchés financiers – AMF)
Objectives of the share buyback program:
- reduce the Company’s capital through the cancellation of shares;
- honor the Company’s obligations related to securities convertible or exchangeable into Company shares;
- honor the Company’s obligations related to stock option programs or other share grants to the Company’s executive directors or to employees of the Company or a Group subsidiary;
- deliver shares (by exchange, payment or otherwise) in connection with external growth operations; and
- stimulate the secondary market or the liquidity of the TOTAL share under a liquidity agreement.
Implementation of this share buyback program, which is covered by Article L. 225-209 et seq. of the French Commercial Code, Article 241-1 et seq. of the General Regulation of the French Financial Markets Authority, and the provisions of EC Regulation 2273 / 2003 of December 22, 2003, is subject to approval by the TOTAL S.A. Shareholders’ Meeting of May 29, 2015 through the 5th resolution that reads as follows:
“Upon presentation of the report by the Board of Directors and information appearing in the description of the program prepared pursuant to Articles 241-1 and thereafter of the General Regulation (Règlement général) of the French Financial Markets Authority (Autorité des marchés financiers, or “AMF”), and voting under the conditions of quorum and majority required for Ordinary General Meetings, the shareholders hereby authorize the Board of Directors, with the possibility to sub-delegate such authority under the terms provided for by French law, pursuant to the provisions of Article L. 225-209 of the French Commercial Code, of Council Regulation n° 2273 / 2003 dated December 22, 2003 and of the General Regulation of the AMF, to buy or sell shares of the Company within the framework of a share buyback program.
The purchase, sale or transfer of such shares may be transacted by any means on regulated markets, multilateral trading facilities or over the counter, including the purchase or sale by block-trades, in accordance with the regulations of the relevant market authorities. Such transactions may include the use of any financial derivative instrument traded on regulated markets, multilateral trading facilities or over the counter, and implementing option strategies.
These transactions may be carried out at any time, in accordance with the applicable rules and regulations, except during any public offering periods applying to the Company’s share capital.
The maximum purchase price is set at €70 per share.
In the case of a capital increase by incorporation of reserves or share grants for no consideration and in the case of a stock-split or a reverse-stock-split, this maximum price shall be adjusted by applying the ratio of the number of shares outstanding before the transaction to the number of shares outstanding after the transaction.
Pursuant to the provisions of Article L. 225-209 of the French Commercial Code, the maximum number of shares that may be bought back under this authorization may not exceed 10% of the total number of shares outstanding as of the date on which this authorization is used. This limit of 10% is applicable to a capital of the Company which may be adjusted from time to time as a result of transactions after the date of the present Meeting. Purchases made by the Company may under no circumstances result in the Company holding more than 10% of the share capital, either directly or indirectly through indirect subsidiaries.
As of December 31, 2014, out of the 2,385,267,525 shares outstanding at this date, the Company held 9,030,145 shares directly and 100,331,268 shares indirectly through its subsidiaries, for a total of 109,361,413 shares. Under these circumstances, the maximum number of shares that the Company could buy back is 129,165,339 shares and the maximum amount that the Company may spend to acquire such shares is €9,041,573,730.
The purpose of this share buyback program is to reduce the number of shares outstanding or to allow the Company to fulfill its engagements in connection with:
- convertible or exchangeable securities that may give holders rights to receive shares of the Company upon conversion or exchange; or
- share purchase option plans, employee shareholding plans, Company savings plans or other share allocation programs for management or employees of the Company or Group companies.
The purpose of the buybacks may also be one of the market practices accepted by the AMF, i.e.:
- delivery of shares (by exchange, payment or otherwise) in cases of external growth transactions, mergers, spin-offs or contributions, not exceeding the limit set forth in Article L. 225-209, 6th paragraph of the French Commercial Code in cases of mergers, spin-offs or contributions; or
- support the secondary market or the liquidity of TOTAL shares by an investment services provider by means of a liquidity agreement compliant with the Code of ethics recognized by the AMF.
This program may also be used by the Company to trade in its own shares, either on or off the market, for any other purpose that is authorized or any permitted market practice, or any other purpose that may be authorized or any other market practice that may be permitted under the applicable law or regulation. In case of transactions other than the above-mentioned intended purposes, the Company will inform its shareholders in a press release.
According to the intended purposes, the treasury shares that are acquired by the Company through this program may, in particular, be:
- cancelled, up to the maximum legal limit of 10% of the total number of shares outstanding on the date of the operation, per each 24-month period;
- granted for no consideration to the employees of the Group and to the management of the Company or of other companies of the Group;
- delivered to the holders of Company’s shares purchase options having exercised such options;
- sold to employees, either directly or through the intermediary of Company savings funds;
- delivered to the holders of securities that grant such rights to receive such shares, either through redemption, conversion, exchange, presentation of a warrant or in any other manner; or
- used in any other way consistent with the purposes stated in this resolution.
While they are bought back and held by the Company, such shares will be deprived of voting rights and dividend rights.
This authorization is granted for a period of eighteen months from the date of this Meeting. It renders ineffective up to the unused portion, the previous authorization granted by the Combined Shareholders’ Meeting held on May 16, 2014.
The Board of Directors is hereby granted full authority, with the right to delegate such authority, to undertake all actions authorized by this resolution.”
Maximum share capital to be purchased and maximum funds allocated to the transaction
The maximum number of shares that may be purchased under the authorization proposed to the Shareholders’ Meeting of May 29, 2015 may not exceed 10% of the total number of shares outstanding, with this limit applying to an amount of the Company’s share capital that will be adjusted, if necessary, to include transactions affecting the share capital subsequent to this Meeting. Purchases made by the Company may under no circumstances result in the Company holding more than 10% of the share capital, either directly or indirectly through subsidiaries.
Before any share cancellation under the authorization given by the Shareholders’ Meeting of May 16, 2014, based on the number of shares outstanding as of December 31, 2014 (2,385,267,525 shares), and given the 109,258,853 shares held by the Group as of February 27, 2015, i.e., 4.58% of the share capital, the maximum number of shares that may be purchased would be 129,267,899, representing a theoretical maximum investment of €9,048,752,930 based on the maximum purchase price of €70.
Conditions for buybacks
Such shares may be bought back by any means on regulated markets, multilateral trading facilities or over the counter, including through the purchase or sale of blocks of shares, under the conditions authorized by the relevant market authorities. These means include the use of any financial derivative instrument traded on a regulated market or over the counter and the implementation of option strategies, with the Company taking measures, however, to avoid increasing the volatility of its stock. The portion of the program carried out through the purchase of blocks of shares will not be subject to quota allocation, up to the limit set by this resolution. These shares may be bought back at any time in accordance with current regulations, except during public offerings for the Company’s shares.
Duration and schedule of the share buyback program
In accordance with the 5th resolution, which will be subject to approval by the Shareholders’ Meeting of May 29, 2015, the share buyback program may be implemented over an 18-month period following the date of this Meeting, and therefore expires on November 29, 2016.
Transactions carried out under the previous program
Transactions carried out under the previous program are listed in the special report of the Board of Directors on share buybacks (see point "Board’s report on share buybacks and sales" of this Chapter).