Organizational Model pursuant to Legislative Decree 231/2001web.intercos.it/bond/files/org/Intercos Europe MOG_PARTE GENERAL… · over such risk and offenses, the information flows

Courtesy translation

This document has been translated into English solely for the convenience of the international reader. In case of discrepancies, the Italian language document is the sole authoritative and universally valid version.

1

Organizational Model

pursuant to Legislative Decree 231/2001

INTERCOS EUROPE S.p.A.

Approved at the meeting of the Board of Directors held on November 20, 2012

• update and revision approved at the meeting of the Board of Directors on March 31, 2014

• update and revision approved at the meeting of the Board of Directors on April 10, 2015

• update and revision approved at the meeting of the Board of Directors on September 12, 2016

Intercos Europe S.p.A.

Organizational Model pursuant to Legislative Decree 231/2001


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This document has been translated into English solely for the convenience of the international reader. In case of discrepancies, the

Italian language document is the sole authoritative and universally valid version. 2

Index

General Part

Definitions ...................................................................................................................................... 4

Structure of the document ............................................................................................................. 6

1. Legislative Decree 231 dated June 8, 2001 ........................................................ 8

1.1. Characteristics and nature of the entity’s liability ................................................. 7

1.2. Categories of offenses identified by the Decree (as subsequently modified) ...... 8

1.3. Conditions for the attribution of liability to the entity .......................................... 10

1.4. The Decree’s guidelines on the characteristics of the organizational Model....11

1.5. Offenses committed outside the Italian territory…………………… …………...12

1.6. Sanctions ........................................................................................................... 14

1.7. Changes to the entity’s corporate form or identity ............................................. 16

2. Intercos Europe S.p.A.: the Company ............................................................... 16

3. The purpose of the Model ................................................................................. 16

4. The Model and the Code of Conduct ................................................................. 16

5. Method of construction of the Intercos Europe Model ....................................... 18

6. Modifying and updating the Model ..................................................................... 19

7. The Model’s relationship to the Intercos S.p.A. Model. ..................................... 20

8. The offenses that are relevant for Intercos Europe ........................................... 19

9. Addressees of the Model ................................................................................... 22

10. The Supervisory Body........................................................................................21




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10.1. Purpose and duties ............................................................................................ 21

10.2. Requisites and composition ............................................................................... 23

10.3. Requisites for appointment ................................................................................ 25

10.4. Appointment, revocation, replacement, forfeiture and resignation .................... 24

10.5. Activities and powers ......................................................................................... 27

10.6. Information flows to and from the Supervisory Board ........................................ 26

11. Services provided by third parties ...................................................................... 29

12. Disciplinary system ............................................................................................ 29

12.1. General principles ............................................................................................. 29

12.2. Disciplinary measures ........................................................................................ 32

13. Communication to and education of Company personnel ................................. 34

Special part

Omitted




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Definitions

� The Company or Intercos Europe: Intercos Europe S.p.A., whose registered office is at Generale

Armando Diaz 1, Milan.

� Intercos S.p.A.: Intercos S.p.A., whose registered office is at Generale Armando Diaz 1, Milan.

� The Group: companies directly or indirectly controlled by Intercos S.p.A.

� Decree: Legislative Decree 231 dated June 8, 2001 as subsequently modified or integrated.

� Sensitive activities: the activities of the Company in which there is a risk, or potential risk, that

offenses identified in the Decree will be committed.

� PA: the Public Administration.

� Confindustria Guidelines: the document issued by Confindustria (approved on March 7, 2002 and

updated on March 31, 2014) which provides guidance on the construction of organizational Models for

the purposes of the Decree.

� The Model: the organizational Model adopted by the Company for the purposes of Legislative Decree

231/2001.

� The Code of Conduct: the Code of Conduct adopted by the Company.

� Supervisory Body: the body provided for in article 6 of the Decree, charged with the duty of overseeing

the functioning of and compliance with the Organizational Model and its updating.

� Key executives: persons appointed to represent, administer or direct the Company or one of its units

with functional and financial autonomy, and persons who, also only de facto, manage or control the

Company.

� Subordinates: persons in positions subject to the management and supervision of the above persons.

� Consultants: persons who, in virtue of their professional competence, provide intellectual services to

the Company on the basis of a mandate or other form of engagement for professional services.

� Employees: persons who are directly employed by labor contract with the Company or are in a similar

relationship with the Company including employment through an agency.

� Partners: the counterparties, both individuals and entities, in contracts with the Company by which the

Company undertakes any form of contractually regulated collaboration.

� CCNL: the national collective labor contract applicable to the Company which is currently in force.




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� “TUF” or Unified Finance Law: Legislative Decree 58 dated February 24, 1998 as subsequently

modified or integrated.

� Instruments for implementation of the Model: Company statute, organization chart, scheme of

powers and authorities, job descriptions, policies, procedures, organizational dispositions and all the

Company’s other regulations, deliberations and directives.




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Structure of the document

This document is composed of a General Part and a Special Part (omitted) composed of fourteen special

sections.

The purpose of the General Part is to describe the regulations contained in Legislative Decree 231/2001, to

indicate – to the extent they are relevant for the Decree – the specific laws applicable to the Company, to

describe the offenses that are relevant for the Company, to identify the Addressees of the Model, to

indicate the operating principles of the Supervisory Body, to define a disciplinary system directed at

violations of the Model and to indicate the obligations to communicate with and educate the Company’s

personnel.

The purpose of each Special Part is to list the offenses considered within each family of offense to which

each Special Part refers and to indicate the so-called “sensitive” activities – the activities which the

Company considers to be at risk for the commission of an offense on the basis of the risk assessments

performed – pursuant to the Decree, the general principles of conduct, the control protocols established

over such risk and offenses, the information flows to the Supervisory Body and an appendix of the laws

specifying the predicate offenses.

The Code of Conduct, which defines the Company’s principles and norms of conduct, is also an integral

part of the Model.

These deliberations and documents are available, in the form and manner prescribed for their divulgation,

within the Company and on the corporate intranet.




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General Part




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1. Legislative Decree 231 dated June 8, 2001

1.1. Characteristics and nature of the entity’s liability

In adopting the international anti-corruption regulations, Legislative Decree 231 (the “Decree”) dated June

8, 2001 introduces and legislates administrative liability for offenses committed by collective entities which,

until 2001, could only be expected to pay, on a joint basis, the fines, penalties and administrative sanctions

imposed on its legal representatives, directors and employees.

This new form of liability of entities is of a mixed nature and has the peculiarity that the liability is a

conjunction of aspects of the system of criminal law sanctions with those under administrative law. In fact

the Decree provides for an entity to be punished with an administrative sanction since it is responsible for

an administrative offense, but the system of sanctions is based on criminal proceedings: the competent

judicial authority for the offense is the Public Prosecutor and it is the criminal court judge who imposes the

sanction.

The administrative liability of the entity is distinct from and independent of the responsibility of the individual

person who commits the offense and it exists even if the perpetrator of the offense has not been identified

or if the offense has been extinguished other than by amnesty. The liability of the entity is always additional

to and may never replace the liability of the individual person who perpetrated the offense.

The Decree’s field of application is very broad and covers all entities having legal identity, companies,

associations including those without separate legal identity, public enterprises and private operators of a

public service. The legislation is not applicable to the State, territorial public bodies, public bodies not

conducting an enterprise and bodies which perform significant constitutional functions (for example,

political parties or trade unions).

The legislation does not make any reference to entities which are not resident in Italy. However, on this

matter an order of the Milan Court Preliminary Investigation Judge (order dated June 13, 2007; see also

Milan Preliminary Investigation Judge order dated April 27, 2004 and Milan Court order dated October 28,

2004) ratified the jurisdiction of the Italian judge over offenses committed in Italy by foreign entities,

applying the principle of territoriality.

1.2. Categories of offenses identified by the Decree (as subsequently modified)

The entity can be held liable only for those offenses – the so-called predicate offenses – which are

specified in the Decree or in legislation which came into effect prior to the commission of the acts

constituting the offense.




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At the date of approval of the present document, the predicate offenses belong to the following categories

of offenses:

� offenses involving relationships with the Public Administration (articles 24 and 25);

� information technology (IT) offenses and illegal use of data (article 24-bis);

� organized crime offenses (article 24-ter);

� offenses involving forgery of money, of public credit instruments, of revenue stamps and of

identification instruments or marks (article 25-bis);

� offenses against industry and trade (article 25-bis.1);

� corporate offenses (article 25-ter);

� offenses committed for the purposes of terrorism and subversion of the democratic order (article

25-quater);

� practices of mutilation of female genital organs (article 25-quater.1);

� offenses against individuals (article 25-quinquies);

� market abuse offenses (article 25-sexies);

� manslaughter and serious and very grave injury as a result of violation of workplace health and

safety regulations (article 25-septies);

� offenses involving handling of stolen goods, money laundering and utilization of funds, assets or

other resources deriving from unlawful activities as well as self-money laundering (article 25-

octies);

� violation of intellectual property rights (article 25-novies);

� offenses of inducing others not to make statements or to make false statements to the judicial

authorities (article 25-decies);

� environmental offenses (article 25-undecies);

� employment of citizens of foreign countries with residence irregularities (article 25-duodecies);




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Italian language document is the sole authoritative and universally valid version.

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� transnational offenses (article 10, Law 146 dated March 16, 2006)1.

The applicability and relevance of each offense to the Company are discussed in paragraph 7 of this

General Part.

1.3. Conditions for the attribution of liability to the entity

In addition to the commission of one of the predicate offenses, Decree 231 imposes other conditions for the

entity to be punishable. These further criteria for the attribution of liability to the entity can be divided into

‘objective’ and ‘subjective’ criteria.

The first objective criterion is that the offense is perpetrated by a person tied to the entity by a qualified

relationship. In this connection distinction is made between:

� ”key executives”, that is to say persons appointed to represent, administer or direct the entity, for

example as legal representative, member of the board of directors, general manager of an

1 The list of offenses originally contained in the Decree has since been extended. In fact there have been the following extensions:

Legislative Decree 350 dated September 25, 2001, which introduced article 25-bis « Forgery of money, of public credit instruments

and of revenue stamps», subsequently modified into « Forgery of money, of public credit instruments, of revenue stamps and of

identification instruments or marks» by Law 99 dated July 23, 2009; Legislative Decree 61 dated April 11, 2002, which introduced

article 25-ter «Corporate offenses»; Law 7 dated January 14, 2003 which introduced article 25-quater «Offenses committed for the

purposes of terrorism and subversion of the democratic order»; Law 228 dated August 11, 2003 which introduced article 25-quinquies

«Offenses against individuals»; Law 62 dated April 18, 2005 which introduced article 25-sexies «Market abuse offenses»; Law 7

dated January 9, 2006 which introduced article 25-quater.1 «Practices of mutilation of female genital organs»; Law 146 dated March

16, 2006 which established the liability of entities for transnational offenses; Law 123 dated August 3, 2007 which introduced article

25-septies «Manslaughter and serious and very grave injury as a result of violation of accident prevention and workplace hygiene and

health regulations», subsequently modified into «Manslaughter and serious and very grave injury as a result of violation of workplace

health and safety regulations» by Legislative Decree 81 dated April 9, 2008; Legislative Decree 231 dated November 21, 2007 which

introduced article 25-octies «Offenses involving handling of stolen goods, money laundering and utilization of funds, assets or other

resources deriving from unlawful activities», subsequently modified in «Offenses involving handling of stolen goods, money laundering

and utilization of funds, assets or other resources deriving from unlawful activities as well as self-money laundering» from Law 196

dated December 15, 2014; Law 48 dated March 18, 2008 which introduced article 24-bis «Information technology (IT) offenses and

illegal use of data»; Law 94 dated July 15, 2009 which introduced article 24-ter «Organized crime offenses»; Law 99 dated July 23,

2009 – already cited – which introduced article 25-bis.1 «Offenses against industry and trade» and article 25-novies «Violation of

intellectual property rights»; Law 116 dated August 3, 2009 which introduced article 25-novies (later renumbered article 25-decies by

Legislative Decree 121 dated July 7, 2011) «Offenses of inducing others not to make statements or to make false statements to the

judicial authorities»; Legislative Decree 121/ dated July 7, 2011 – already cited – which introduced article 25-undecies

«Environmental offenses»; Legislative Decree 209 dated July 16, 2012 which introduced art. 25-duodecies «Employment of citizens of

foreign countries with residence irregularities».




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autonomous division of the entity as well as persons who, also only de facto, manage the

Company. These are the persons who in effect have autonomous power to take decisions in the

name of and on behalf of the entity. Also to be considered part of this category of person are all

those to whom the directors have granted powers to manage and direct the entity and its branches;

� “subordinates”, being all those persons in positions which are subject to management and

supervision by the key executives. This category includes employees and collaborators and those

persons who while not being part of the Company’s personnel have duties which fall under the

direction and supervision of key executives. The third parties in this category, in addition to

collaborators, are sales promoters and consultants who act in the name of the entity under a

contract for services. Finally, those assignments or contractual relationships with parties who are

not part of the entity’s personnel are also included if such parties act in the name of and on behalf

of the entity.

A further objective condition is that the offense is perpetrated in the interest or to the advantage of the

entity; it is sufficient for one of these two conditions to be satisfied:

� “interest” is defined as present when the perpetrator of the offense acted with the intent to favor the

entity, without regard to whether or not such objective is actually achieved;

� “advantage” is defined as present when the entity has derived – or could have derived – a positive

outcome, in economic or other terms, from the commission of the offense.

According to the Cassation Court (criminal sentence no. 3615 dated December 20, 2005), the concepts of

interest and advantage are not to be considered as one and the same but dissociated since there is a clear

distinction between what might be considered a possible expected gain in consequence of the unlawful act

and an advantage clearly enjoyed thanks to the effects of the offense. In this direction the Milan Court has

also pronounced (order dated December 20, 2004) to the effect that the mere directing of criminal behavior

in the pursuit of a given utility is sufficient, regardless of the effective outcome of the behavior.

The entity is responsible not only when it has drawn immediate financial advantage from the commission of

the offense but also when, even in the absence of such advantage, the act is motivated by the interests of

the entity. The improvement of its market position and the concealment of a critical financial situation, for

example, are instances which involve the interests of the entity but which are without any immediate

economic advantage. It is also important to note that where the offense is committed by qualifying persons

of an entity belonging to a group, the concept of interest may be extended so as to implicate the parent

company. The Milan Court (order dated December 20, 2004) affirmed that the defining characteristic of




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group interest lies in the fact that the interest is not that of one member of the group exclusively but that

common to all the components of the group. For this reason it is considered that liability for an unlawful act

by a subsidiary company can be also attributed to the parent company, on condition that the individual

person who perpetrated the offense – alone or with others – belonged functionally to the subsidiary

company.

The subjective conditions for attribution of liability to an entity relate to the preventive measures which the

entity has put in place to avoid the commission in the course of its business operations of one of the

offenses identified by the Decree. The Decree in fact provides for the exoneration from liability of the entity

solely if it demonstrates:

� that the entity’s governing body has, prior to the commission of the offense, adopted and

implemented effectively an organizational Model suitable for the prevention of offenses of the type

which has been committed;

� the duty of overseeing the functioning of and the compliance with the Model and its update has

been entrusted to an internal body with autonomous powers of initiative and control;

� there was no omission or insufficiency of control on the part of the aforesaid body.

For the entity to be exonerated from liability, all the conditions set out above must be satisfied.

Although the Model serves as a ground for exoneration from liability both in the case of a predicate offense

committed by a key executive and of an offense committed by a subordinate, the Decree provides that the

mechanism concerning the burden of proof is much more severe for the entity in the case of an offense

committed by a key executive. In fact in this latter case the entity is required to demonstrate that the person

acted in such a way as to elude the Model with fraudulent intent; the Decree therefore requires a stronger

proof of extraneousness since the entity must also show that there has been fraudulent conduct by the key

executive.

Conversely, with regard to alleged offenses committed by subordinates, the entity may be held liable only

where it is established that the commission of the offense was made possible by the failure to observe the

duties of management or oversight, such failure being excluded if, prior to the commission of the offense,

the entity had equipped itself with an organizational Model suitable for the prevention of offenses of the

type committed. It is a matter, in this case, of genuine organizational reprehensibility: failure to direct the

activities and conduct of persons at risk of committing a predicate offense.




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1.4. The Decree’s guidelines on the characteristics of the organizational Model

The Decree limits itself to the definition of a number of general principles relating to the organizational

Model without providing details of its specific characteristics. The Model is effective as a basis for

exonerating the entity from liability only if:

� it is effective, in other words if it is reasonably suitable to prevent the offense or the offenses

committed;

� it is actually implemented, in other words if the contents of the Model are operative in the

Company’s procedures and system of internal control.

With regard to the effectiveness of the Model, the Decree sets the following minimum content:

� it must identify the areas of the entity’s activity in which offenses could be committed;

� it must provide for specific procedures (protocols) regulating the entity’s processes for making

decisions and for executing the actions decided in relation to the offenses which are to be

prevented;

� it must establish modes of handling financial resources which are suitable for the prevention of the

commission of offenses;

� it must introduce a disciplinary system which is suitable for the imposition of sanctions for failure to

comply with the measures indicated in the Model;

� it must provide for information flows to the Supervisory Body;

� with regard to the nature and dimension of the organization and to the type of activity of the entity,

it must establish measures to ensure that activities are conducted in observance of the law and

that situations of risk are eliminated promptly.

The Decree establishes that the Model must be the object of periodic verification and of update both in the

case of significant violations of its prescriptions and in the case of significant changes in the entity’s

organization or activities or in the regulatory environment, in particular when new predicate offenses are

introduced.

1.5. Offenses committed outside the Italian territory

In virtue of article 4 of the Decree the entity may be held liable in Italy for predicate offenses committed

outside the territory of the Italian State.




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The Decree, however, makes this possibility subject to meeting the following conditions which are

additional to those described earlier:

� meeting the general conditions set out in articles 7, 8, 9 and 10 of the Italian Criminal Code for an

offense committed outside the territory to be actionable in Italy;

� location of the entity’s principal offices in the territory of the Italian State;

� absence of action against the entity by the State in which the offense was committed.

1.6. Sanctions

The system of sanctions in the Decree 231 legislation includes four types of sanction which can be

imposed on the entity in the event that it is found liable under the Decree:

� pecuniary sanctions: these are always imposed where the judge finds that the entity is liable. It is

computed using a system based on quotas which are determined by the judge in number and

amount: the number of quotas, to be applied within a minimum and a maximum that varies with the

type of offense, depends on the gravity of the offense, on the degree of liability of the entity and on

the actions taken to prevent the offense or to attenuate its effects or to prevent the commission of

further offenses; the amount of the individual quota is established, in a range from Euro 258 to a

maximum of Euro 1,549 by reference to the economic conditions and assets of the entity.

� disqualifying sanctions: disqualifying sanctions are bans imposed in addition to the pecuniary

sanctions only if expressly prescribed for the offense for which the entity has been found liable and

only in instances where one of the following conditions is met:

� the entity has derived from the offense a significant profit and the offense was committed

by a key executive, or by a subordinate person where the commission of the offense was

made possible by the presence of serious organizational weaknesses:

� there has been repetition of the offenses.

The disqualifying sanctions are:

� disqualification from the exercise of the entity’s activity;

� suspension or revocation of authorizations, licenses or concessions functional to the

perpetration of the offense;

� ban on entering into contracts with the Public Administration, other than those for receiving

a public service;




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� exclusion from benefits, loans, funding and subsidies and the possible revocation of those

previously granted;

� ban on publicizing goods or services.

Unusual in being applicable with definitive effect, the disqualifying sanctions are temporary in

nature with a duration ranging from three months to two years and are directed at the specific

activity of the entity to which the offense relates. They can be imposed also as a precautionary

measure, prior to sentencing, at the request of the Public Prosecutor in the presence of strong

evidence of the liability of the entity and proven specific elements indicating a real danger of the

commission of further offenses of the same nature as that being tried by the court.

� confiscation: the sentence establishing liability is always accompanied by the confiscation of the

proceeds or profits from the offense or of assets or other utility of equivalent value; the profit from

the offense has been defined by the United Sessions of the Cassation Court (see sentence no.

26654 dated March 27, 2008) as the economic advantage directly and immediately caused by the

offense, and actually determined net of the effective utility enjoyed by the damaged party in any

contractual relationship with the entity; the United Sessions also specified that from such definition

must be excluded any form of business performance parameter with the consequence that the

profit cannot be identified with the net income realized by the entity (except in the case, provided

for in the legislation, of the entity being placed under the administration of an external

commissioner). For the Naples Court (order dated July 26, 2007) also the absence of a financial

loss arising from costs that would have been payable must be considered to fall within the concept.

� publication of the sentence establishing liability: this can be imposed when the entity receives a

disqualifying sanction; it consists in the publication of the sentence once, in extract or in its entirety,

in one or more of the daily newspapers indicated by the judge in the sentence and by exhibition at

the offices of the local authority in which the entity has its principal place of business; such

publication is at the expense of the entity.

The administrative sanctions imposed on the entity become statute barred on the completion of a five years

period from the date on which the offense was committed.

The definitive sentence establishing the entity’s liability is entered in the national register of administrative

sanctions inflicted for offenses.




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1.7. Changes to the entity’s corporate form or identity

The Decree regulates the attribution of liability of the entity in the case of transformations, mergers,

demergers and sales of business units.

In the case of the transformation of an entity the liability remains for the offenses committed prior to the

date when the transformation took effect. The new entity is therefore the recipient of the sanctions

applicable to the original entity in respect of acts which occurred prior to the transformation.

In the case of a merger the entity arising from the merger, including that from a merger of one company

into another, is liable for the offenses for which the entities which participated in the merger were liable. If

the merger occurred prior to the conclusion of the judgment determining the entity’s liability, the judge must

take into account the economic conditions of the original entity and not those of the entity which arises from

the merger.

In the case of a demerger, the demerged entity remains liable for the offenses committed prior to the date

when the demerger took effect and the entities which are recipients or arise from the demerger are jointly

and severally liable to pay the pecuniary sanctions inflicted on the demerged entity to a limit equal to the

value of the net assets transferred to each single entity, except in the case of the entity to which has been

transferred the business or part of the business in which the offense was committed; the disqualifying

sanctions apply to the entity (or entities) in which the business in which the offense was committed

remained or to which such business was transferred. If the demerger took place prior to the conclusion of

the judgment determining the entity’s liability, the judge must take into account the economic conditions of

the original entity and not those of the entity which arises from the demerger.

In the case of the sale or conferment of a business unit in which an offense has been committed, unless

the transferor entity settles the pecuniary sanctions in advance, the transferor and the recipient entities are

jointly and severally liable for the sanctions, up to the limit of the value of the business unit transferred and

up to the limit of the pecuniary sanctions which are recorded in the obligatory accounting records or are

due for offenses of which the recipient was anyhow aware.

2. Intercos Europe S.p.A.: the Company

The Company, which is part of the Intercos Group, one of the principal global operators in the creation,

development and production of make-up products (lipstick, eye shadow, mascara, foundation, powders,

eyeliner and lip pencils) for the main players in the international cosmetics industry, has as its corporate

object the study, design and manufacture, also for third parties, of cosmetics as well as the marketing and




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sale of the products manufactured. The Intercos Group operates through companies and factories located

in Italy, the USA, Malaysia and China and also through eight sales offices placed in the strategically more

important markets (USA, France, Italy, the UK, Malaysia and China). The Company’s system of corporate

governance is composed of the following:

� Shareholders: a meeting of shareholders, in ordinary or extraordinary session, has the power to

resolve on the matters which the law restricts to its competence;

� Board of Directors: the Board has all and every power for the ordinary and extraordinary

administration of the Company, excluding only those restricted by law to the meeting of

shareholders; for certain actions of the Board of Directors the Company’s statute requires prior

approval by the shareholders;

� Board of Statutory Auditors: the administration of the Company is overseen by a Board of Statutory

Auditors composed of three regular members and two alternate members.

� Legal control of accounting: the legal control of accounting of the Company is performed by an

audit firm registered with the Ministry of Justice.

3. The purpose of the Model

With the adoption of the Model the Company intends to be fully compliant with the Decree and to improve

and make as efficient as possible the existing systems of internal control and corporate governance.

The principal objective of the Model is to create an organic and structured system of control principles and

procedures designed to prevent, where possible and as far as is feasible in practice, the commission of the

offenses identified in the Decree. The Model will constitute the foundation of the Company’s system of

governance and will implement the process of diffusion of a corporate culture characterized by correctness,

transparency and legality.

The Model also sets itself the following aims:

� provide adequate information to employees and to those who act under a mandate from the

Company or who are bound to the Company in relationships which are relevant for the purposes of

the Decree, with reference to the activities which involve the risk of commission of offenses;




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18

� spread a corporate culture which is based on legality, since the Company condemns all conduct

which does not comply with the law or with internal norms and in particular with the norms

contained in its Model;

� spread a culture of control and of risk management;

� set up an effective and efficient organization of the Company’s activities, with particular emphasis

on decision-making and on the transparency and traceability of decisions, on the assignment of

responsibility to the persons engaged in the making of decisions and in their implementation, on

the imposition of controls, both before and after the decision, and on the management of

information, both internally and externally;

� put into effect all the measures necessary to reduce as far as possible and as soon as possible the

risk of commission of an offense, strengthening the controls in place to prevent unlawful conduct

relevant for the purposes of the Decree.

4. The Model and the Code of Conduct

Intercos Europe adopted the Intercos Code of Conduct – approved at the meeting of the Board of Directors

held on November 20, 2012, as subsequently updated and amended – which sets out and formalizes the

ethical and social principles and values which must underlie the conduct in general of the Company itself

and that of the Addressees of the Code of Conduct and which were in practice already being observed by

the Intercos Group prior to the introduction of Decree 231.

The Model presupposes compliance with the requirements of the Code of Conduct, constituting, with the

Code, a body of norms having the aim of promoting an ethical and transparent corporate culture.

The Company’s Code of Conduct, in all its future formulations, is considered to be integrally assimilated

herein and constitutes the essential foundation of the Model, whose provisions are integral with the

provisions of the Code.

5. Method of construction of the Intercos Europe Model

The Intercos Europe Model has been constructed by reference to the activities actually carried out by the

Company and to the nature and dimensions of its organization. It is understood that the Model will be

updated to reflect the future evolution of the Company and of the environment in which it operates.




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The Company made a preliminary analysis of its own business environment and, subsequently, an analysis

of the areas of activity which presented potential risks of commission of the offenses identified in the

Decree. A particular analysis was made of: the Company’s history, the corporate context, the business

sector in which it operates, the corporate organizational structure, the system of corporate governance

used, the system of powers and authorities, the existing legal relationships with third parties, the operating

situation, the practices and procedures formalized and disseminated within the Company for the

management of operations.

For the purposes of constructing this document, in accordance with the dispositions of the Decree, with the

Confindustria Guidelines and with the indications which can be derived from judgments of the courts, the

Company proceeded with the following:

� identification, by discussion with the various heads of functions, of the processes and sub-

processes or business activities in which the predicate offenses identified in the Decree could be

committed;

� assessment of the risk that offenses could be committed (risk assessment) and of the internal

controls suitable for the prevention of unlawful conduct;

� identification of the appropriate points of control, already present or to be implemented, in the

Company’s operating procedures and practices, suitable for the elimination or mitigation of the risk

of the commission of the offenses identified in the Decree;

� review of the Company’s systems of powers and authorities and attribution of responsibilities.

The Company adopted the organizational Model for the first time by a resolution passed at the meeting of

the Board of Directors held on November 20, 2012. Modifications of the Model may be made only by the

Board of Directors.

6. Modifying and updating the Model

The Model must always be modified or integrated promptly, by means of a resolution of the Board of

Directors and also at the suggestion of the Supervisory Body, whenever:

� significant changes have occurred in the Company’s regulatory environment, in its organization or

its activities;




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20

� there have been violations or elusions of the precepts contained in the Model which demonstrate

the inefficacy of the Model as a means of preventing offenses.

For this purpose the Supervisory Body receives information and specific notification from the HR &

Organization Function on any modification of the Company’s organizational structure, of its procedures and

of its organizational or operational methods.

If modifications, such as clarifications or specifications in the text, become necessary which are of an

exclusively formal nature, the Chairman and Chief Executive Officer of the Company may, after hearing the

views of the Supervisory Body, proceed autonomously, referring the matter without delay to the Board of

Directors.

In any event circumstances which render necessary the modification or updating of the Model must be

notified by the Supervisory Body to the Board of Directors, in writing, so that the Board can pass the

appropriate resolutions within its competence.

The modifications to Company procedures necessary for the implementation of the Model are the

responsibility of the functions affected. Where necessary the Chairman and Chief Executive Officer

proceed to make the consequential updates to the Special Part of the Model; these modifications will be

submitted for ratification at the next available meeting of the Board of Directors. The Supervisory Body is

constantly informed about the update and about the implementation of the new operating procedures and

may express its opinion on the modifications made.

7. The Model’s relationship to the Intercos S.p.A. Model

As provided for in the Intercos S.p.A. Model, in defining its own Model the Company has followed the

principles and contents of the Intercos S.p.A. Model itself, integrating it where specific factors concerning

the nature, dimensions, type of activity or system of powers and authorities call for the implementation of

different organizational principles and rules.

The Company’s Model is communicated to the Supervisory Body of Intercos S.p.A. Each subsequent

modification of significance made to the Model is communicated by the Supervisory Body to the

Supervisory Body of Intercos S.p.A.




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21

8. The offenses that are relevant for Intercos Europe

Taking into account the structure and activities of the Company, the management team engaged in the

assessment identified the following predicate offenses as relevant:

� offenses involving relationships with the Public Administration (articles 24 and 25);

� information technology offenses and illegal use of data (article 24-bis);

� organized crime offenses (article 24-ter);

� offenses involving forgery of money, of public credit instruments, of revenue stamps and of

identification instruments or marks (article 25-bis);

� offenses against industry and trade (article 25-bis.1);

� corporate offenses (article 25-ter);

� market abuse offenses (article 25-sexies);

� manslaughter and serious and very grave injury as a result of violation of workplace health and

safety regulations (article 25-septies);

� offenses involving handling of stolen goods, money laundering and utilization of funds, assets or

other resources deriving from unlawful activities as well as self-money laundering (art. 25-octies);

� violation of intellectual property rights (article 25-novies);

� offenses of inducing others not to make statements or to make false statements to the judicial

authorities (article 25-decies);

� environmental offenses (article 25-undecies);

� employment of citizens of foreign countries with residence irregularities (article 25-duodecies);

� transnational offenses (article 10, Law 146/2006).

The following offenses were considered not to be relevant for the Company: offenses committed for the

purposes of terrorism and subversion of the democratic order (article 25-quater), practices of mutilation of

female genital organs (article 25-quater.1) and offenses against individuals (article 25-quinquies), since the

Company does not carry out activities in which such offenses can be committed nor is it possible to

configure an interest or advantage to the Company arising from their commission.

The present document identifies in the Special Part each special part associated with a family of offense

relevant for Intercos Europe, the activities of the Company identified as sensitive in virtue of the inherent




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22

risk of commission of offenses of the categories herein listed and for each of the sensitive activities sets out

the principles for prevention and the control measures.

The Company undertakes to assess on a continuous basis the relevance of the Model for any other

offenses, both those already contemplated by the Decree and those which may be included in the future.

9. Addressees of the Model

The Intercos Europe Model applies to:

� those who carry out, also de facto, the functions of management, administration, direction and

control in the Company or in one of its autonomous organizational units;

� employees of the Company, including those who are performing their duties outside Italy;

� consultants and all who while not being employees work under a mandate from the Company or on

behalf of the Company.

The Chairman and Chief Executive Officer and the directors/heads of functions responsible for

relationships with counterparties collaborate with the Supervisory Body to establish the identity of other

categories of Addressees of the Model by reference to the legal relationship and the activity which the

counterparties perform for the Company.

All Addressees of the Model are required to observe scrupulously the dispositions contained therein and in

the instruments for implementation of the Model.

10. The Supervisory Body

10.1. Purpose and duties

In compliance with the Decree, the Company has instituted a Supervisory Body which is autonomous,

independent and competent in matters of risk management in the specific activities undertaken by the

Company itself and in related legal matters.

The Supervisory Body has the duty to supervise on a continuous basis:

� observance of the Model by the Addressees, as identified in the preceding paragraph;




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23

� the efficacy of the Model in preventing the commission of the offenses contemplated by the

Decree;

� the implementation of the prescriptions of the Model in the context of the Company’s operations;

� the updating of the Model, in situations where there is a necessity to modify the same as a result of

changes in the enterprise’s structure and organization, in the activities performed by the Company

or in the reference legislative environment.

The Supervisory Body equips itself with its own Regulations governing its operations, approving the

contents and presenting them to the Board of Directors.

10.2. Requisites and composition

Each member of the Supervisory Body must be selected exclusively on the basis of the following

requisites:

� autonomy and independence: the autonomy and independence of the Supervisory Body, like those

of its members, are key elements for the efficacy of the control activity.

The concepts of autonomy and independence do not have a valid definition in absolute terms but

must be used and inserted in the operational context in which they are to be applied. Since the role

of the Supervisory Body is to check that in the Company’s operations the controls are being

applied, its position within the entity must be assured of autonomy with regard to any form of

interference and influence from any component of the entity and in particular from operational

management, above all considering that the function performed includes supervision of the

activities of the vigilance over the entity’s governing bodies. Consequently the Supervisory Body’s

place in the organizational structure of the entity is at the highest level of the hierarchy and in the

performance of its duties it is responsible only to the Board of Directors.

Also, to further safeguard the autonomy of the Supervisory Body, the Board of Directors places at

its disposal company resources in the quantity and with the competences suited to the tasks

assigned to them, and in its budgeting process approves an appropriate allocation of financial

resources, as proposed by the Supervisory Body, to be placed at the latter’s disposal for any

expenditure necessary for the correct performance of its duties (for example specialist

consultancies, travel, etc.).

The autonomy and independence of the individual members of the Supervisory Body are

determined by reference to the function performed and the duties attributed, identifying from whom




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24

and from what that individual member must be autonomous and independent in order to be able to

carry out such duties. Consequently each member must be without a decision-making, operational

or management role that compromises the autonomy and independence of the entire Supervisory

Body. In any case the requisites of autonomy and independence presuppose that the members

avoid situations of even potential personal conflict of interests with regard to the Company.

Further the members of the Supervisory Body must not:

� occupy an operational position within the organization of Intercos Europe or of other Group

companies;

� be the spouse of or be related within the fourth degree to the directors of Intercos Europe

or another Group company;

� be in any other situation of evident or potential conflict of interests.

� Professional competence: within its membership the Supervisory Body must have technical and

professional skills which are adequate for the duties which it is required to perform. Accordingly it is

necessary that the Supervisory Body includes subjects with appropriate professional skills in

financial, legal and risk management matters. In particular the Supervisory Body should possess

the specialist technical capacity to carry out both control and advisory activities.

To ensure that the Supervisory Body has the professional skills useful or necessary for its activities

and to guarantee its professional competence (in addition to its autonomy as already illustrated) it

is allocated a specific expenditure budget to enable it to purchase from outside the Company, when

it is necessary, the professional skills which integrate its own skills. In this way the Supervisory

Body, using external professionals, can equip itself with the resources competent, for example, in

legal matters, business organization, accounting, internal control, finance, workplace safety etc.

Continuity of action: the Supervisory Body performs in a continuous manner the activities

necessary to oversee the Model with adequate commitment and with the necessary powers to

investigate.

Continuity of action must not be interpreted as incessant activity, since such an interpretation would

necessarily impose on the Supervisory Body a composition exclusively of persons drawn from

within the entity, a circumstance which would lead to a diminution of the indispensable autonomy

which must characterize the Supervisory Body itself. Continuity of action means that the

Supervisory Body should not limit its activity to periodic meetings of its members but the activity




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25

should be organized in a plan for a constant monitoring and assessment of the entity’s preventive

control systems.

In conformity with the criteria set out above, the Supervisory Body is composed of three members in

collegial form, the majority being subjects who are not part of the Company’s personnel.

In any case the Chairman of the Supervisory Body must be a person outside the Company.

10.3. Requisites for appointment

Of each member of the Supervisory Body it is requested in advance that he/she is not in any of the

conditions of ineligibility and/or incompatibility set out below:

� to have been subjected to preventive measures under the provisions of Legislative Decree 159

dated September 6, 2011 (“Anti-mafia Code and preventive measures and new dispositions

concerning anti-mafia documentation according to articles 1 and 2 of Law 136 dated August 13,

2010”);

� to be under investigation or to have been sentenced, also by a sentence that is not definitive or by

a sentence issued under article 444 et seq. of the Code of Criminal Procedure, even with a

conditional suspension of the sentence, excepting the cases of rehabilitation:

� one or more of the unlawful acts which are specifically provided for in Decree 231;

� for any crime with malicious intent;

� to be prohibited, banned, bankrupt or have been sentenced, also by a sentence that is not

definitive, to a punishment which entails the ban, also on a temporary basis, from public office or

the impossibility of exercising directive duties;

� to have been subjected to accessory administrative sanctions under article 187-quater of

Legislative Decree 58 dated February 24, 1998.

The applicability of a single one of the above conditions entails ineligibility for membership in the

Supervisory Body.

10.4. Appointment, revocation, replacement, forfeiture and resignation

The Board of Directors appoints the Supervisory Body, stating the grounds for the choice of each member

after having verified the existence of the requisites set out in the preceding paragraphs, basing the decision

not only on their curricula but also on the formal specific declarations obtained from the candidates. In




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26

addition the Board of Directors receives from each candidate the attestation of the absence of the grounds

for ineligibility set out in the preceding paragraph.

After the formal acceptance on the part of the subjects appointed, the appointment is notified to all levels of

the Company by means of an internal communication.

The Supervisory Body remains in office for three financial years, the term ending on the date of the meeting

of shareholders convened to approve the financial statements of the third and last year. Members of the

Supervisory Body may be re-appointed.

Revocation of the appointment as a member of the Supervisory Body may be effected only with a

resolution of the Board of Directors and for one of the following reasons:

� loss of the requisites set out in the preceding paragraphs;

� non-compliance with the obligations inherent in the appointment given;

� absence of good faith and diligence in carrying out the duties of the appointment;

� failure to collaborate with the other members of the Supervisory Body;

� unjustified absence from more than two meetings of the Supervisory Body.

Each member of the Supervisory Body is under an obligation to notify the Board of Directors by means of

the Chairman of the Supervisory Body of the loss of the requisites set out in the preceding paragraphs.

The Board of Directors revokes the appointment of the member of the Supervisory Body who is no longer

fit for the office, giving adequate grounds, and proceeds immediately to appoint a replacement.

Good cause for the forfeiture of the appointment before the end of its term is constituted by incapacity or

impossibility to carry out the duties of the appointment for whatever reason, including the court’s imposition

of restrictive measures or a prison sentence.

Each member of the Supervisory Body may resign from the appointment at any time in the mode

established in the Supervisory Body’s Regulations.

In the event of forfeiture of the appointment or resignation on the part of one of the components of the

Supervisory Body, the Board of Directors proceeds promptly to replace the member who has become unfit

for office.




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27

10.5. Activities and powers

The Supervisory Body meets at least four times a year and at any time that a member makes a motivated

request to the Chairman for the convening of a meeting. Further, it can delegate specific functions to the

Chairman. Each meeting of the Supervisory Body is minuted.

For the performance of the duties assigned to it the Supervisory Body is vested with powers of initiative and

investigation over every activity of the Company and over personnel at all levels, reporting exclusively to

the Board of Directors by means of its own Chairman.

The duties and the attributes of the Supervisory Body and of its members cannot be qualified by any other

corporate body or function, subject to the power of the Board of Directors to verify that the activities actually

carried out by the Supervisory Body are coherent with the mandate given to it. Further, the Supervisory

Body, excepting any overriding dispositions of law, has unrestricted access – without the need for prior

consent – to all corporate functions and bodies for the purposes of obtaining any information or fact

considered necessary for the performance of its duties.

The Supervisory Body performs its duties in coordination with the other control bodies and functions

present in the Company. Further, the Supervisory Body works in coordination with the functions

responsible for sensitive activities with regard to all the aspects of operating procedures implementing the

Model and may utilize for the performance of its activities the aid and support of employees and external

consultants of the Company, in particular for problems which require the support of specialist skills.

The Supervisory Body organizes its activities according to an annual plan on the basis of which are

programmed the steps to be taken to assess the efficacy and effective operation of the Model and also the

timeliness of the updating of the Model. The plan is presented to the Board of Directors.

The Supervisory Body establishes its annual expenditure budget and submits it for approval to the Board of

Directors.

In its activity of supervising the effective implementation of the Model the Supervisory Body is vested with

the following powers and obligations which it exercises in compliance with the law and with the individual

rights of workers and of the interested parties:

� perform or have performed under its direct supervision and responsibility periodic checking and

testing activities;

� accede to all the information concerning the sensitive activities of the Company;




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28

� request information or sight of documents relating to sensitive activities from all employees of the

Company and where necessary from directors, members of the Board of Statutory Auditors and

from subjects with duties defined under workplace health and safety regulations;

� request information or sight of documents relating to sensitive activities from consultants, partners

of the Company and in general from all Addressees of the Model identified in the manner set out in

paragraph 9;

� verify the Company’s principal corporate deliberations and contracts signed by the Company with

regard to sensitive activities and their conformity with the dispositions of the Model;

� propose to the body or function holding disciplinary powers the adoption of the necessary sanctions

as set out in paragraph 12 below;

� verify periodically the efficacy, the effectiveness and the timely updating of the Model and, where

necessary, propose changes or updates to the Board of Directors;

� define, in collaboration with the HR & Organization Function, the education and training programs

for personnel in the area of Decree 231/2001;

� prepare at half-yearly intervals a written report to the Board of Directors having the minimum

content set out in paragraph 10.6 below;

� in the event of the occurrence of a grave or urgent matter noted in the course of performing its

activities, inform the Board of Directors immediately;

� in coordination with the directors/heads of functions responsible for relations with counterparties

identify the types of Addressees of the Model having regard to legal relationships and the activity

performed for the Company.

10.6. Information flows to and from the Supervisory Body

The Supervisory Body has the duty to refer to the Board of Directors in two modes:

� on a continuous basis for specific matters, including those of an urgent nature;

� on a six-monthly basis by means of a written report which sets out the following specific

information:

� a summary of activity, of the checks carried out by the Supervisory Body in the period and

the findings of such checks;




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29

� details of any discrepancies between the instruments for implementation of the Model and

the Model itself;

� any new categories of offense covered by the Decree;

� reports received from external or internal subjects relating to any violations of the Model

together with the findings from investigation of such reports;

� disciplinary proceedings initiated on the basis of proposals made by the Supervisory Body

and any sanctions imposed;

� a general assessment of the Model and of its effective operation, with any proposals for

integration or improvement of its form and content;

� any modifications in the benchmark legislative environment;

� an account of any expenses incurred.

The Board of Directors and the Chairman and Chief Executive Officer have the right to convene a meeting

of the Supervisory Body at any time. Correspondingly, the Supervisory Body, for its part, has the right,

through the competent functions or persons, to request a meeting with the aforesaid corporate bodies for

urgent matters. Meetings with the bodies to which the Supervisory Body reports must be minuted and a

copy of the minutes must be kept by the Supervisory Body and by the corporate bodies from time to time

involved.

The Supervisory Body reports also to the Board of Statutory Auditors, at least once a year, on the

application of the Model, on its functioning, on its updating and on any significant circumstances or events

in the period. In particular the Supervisory Body:

� notifies to the Board of Statutory Auditors any weakness identified in the organizational structure

and in the efficacy and operation of the procedures;

� reports violations of the Model by directors or other Addressees of the Model.

The Supervisory Body, in conclusion, communicates annually to the Supervisory Body of Intercos S.p.A.

the activities carried out, any weaknesses or improvement requirements found which affect the Model, any

actions taken for the prevention of offenses etc. In addition the Supervisory Body informs the Supervisory

Body of Intercos S.p.A. promptly of any violation of the Model, of the instruments for implementation of the

Model and of the Code of Conduct, as well as of any circumstances or events which are considered

significant.




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30

All the Addressees of the Model are required to communicate directly with the Supervisory Body to report

any violations of the Model, using the internal mail or the dedicated electronic mail address:

[[email protected]]

or the ordinary mailing address:

Supervisory Board


Via Marconi 84

20864 – Agrate Brianza (MB)

Italy

Reports of violations, which may also be anonymous, must describe in detail the events and persons which

are the subject of the report.

Apart from the violation reports described above, the following must be transmitted to the Supervisory Body

using the abovementioned e-mail address or the ordinary postal service:

� the information expressly identified in the Special Part of this document;

� information on disciplinary proceedings and any sanctions imposed or on any decisions to dismiss

such proceedings together with the grounds for such decision.

The additional types of information which the function heads responsible for sensitive activities are required

to transmit, along with the frequency and method of transmission to the Supervisory Body, are established

by the Supervisory Body itself, also through the definition of a specific operational procedure and/or the

integration of an existing procedure.

The Supervisory Body undertakes to adopt suitable measures to ensure that the identity of the subject

making a report to the Supervisory Body remains confidential. However conduct which is directed

exclusively at obstructing the activity of the Supervisory Body must be appropriately reprimanded. The

Company is committed to safeguarding the subject who reports a violation from any form of reprisal,

discrimination or penalization and in any case guarantees the confidentiality of the identity of the reporting

subject within the limits set by legal obligations and the protection of the rights of the Company or of the

persons accused erroneously or in bad faith.




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31

The violation reports received and the documents handled by the Supervisory Body are kept by the

Supervisory Body itself in an appropriate archive, in paper or electronic form. Access to this archive is

restricted to subjects from time to time authorized by the Supervisory Body.

11. Services provided by third parties

The provision by third parties (for example other companies, including those within the Group, consultants,

partners etc.) of goods, labor or services which may involve sensitive activities must be regulated by written

contract.

Such contract must provide for the counterparty in the contract with the Company to be bound by:

� the obligation to attest the truthfulness and completeness of the documentation produced and

communicated to the Company under obligations imposed by the law;

� the commitment to observe, while the contract is in force, the underlying principles of the Model

and of the Code of Conduct, as well as the dispositions of Legislative Decree 231 and to conduct

operations in line with them;

� the obligation to satisfy any requests made by the Supervisory Body of the Company itself for

information, data or news.

The contract must also provide for the right of Intercos Europe to take protective measures (for example

resolution of the contract, application of penalties etc.) in cases where a violation of the foregoing points

has been identified.

12. Disciplinary system

12.1. General principles

The Company condemns any conduct which is contrary not only to the law but also to the Model, the

instruments for implementation of the Model and the Code of Conduct, including situations in which the

conduct was adopted in the interests of the Company itself or was adopted in order to obtain an advantage

for the Company.

Any violation of the Model or of the instruments for the implementation of the Model, whoever may commit

them, must be immediately notified to the Supervisory Body in writing, without prejudice to procedures and

actions which fall within the competence of the holder of disciplinary powers.




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32

All Addressees of the Model have a duty to notify/report a violation.

On receipt of such report the Supervisory Body must immediately undertake the appropriate enquiries,

meanwhile ensuring the maintenance of confidentiality with respect to the subject about which the enquiries

are in progress. Once the appropriate analyses and assessments have been made, the Supervisory Body

will inform the holder of disciplinary powers of its findings and the latter will commence the procedure

leading to the initiation of charges for infractions and if applicable to disciplinary measures, such measures

being adopted by the competent body of the Company by virtue of the powers granted under the Statute

and the internal regulations of the Company.

By way of example, the following conduct would constitute disciplinable infractions:

� violation, also by omission or in possible complicity with others, of the principles of the Model or of

the instruments through which the Model is implemented;

� creation, also with accomplices, of false documents;

� facilitating, also by omission, the creation by others of false documents;

� the misappropriation, destruction or alteration of documents for the purposes of eluding the system

of controls imposed by the Model;

� obstruction of the activities of the Supervisory Body;

� the denial of access to information and documents requested by the subjects responsible for

checks on procedures and decisions;

� unjustified absence from education and training sessions regarding Decree 231/2001 or Legislative

Decree 81//2008;

� any other conduct aimed at eluding the control system established by the Model.

12.2. Disciplinary measures

The Model is a body of rules with which personnel must comply, covering norms for conduct and sanctions;

any violation, therefore, entails the application of disciplinary procedures and the imposition of the related

sanctions. Each employee, of whatever grade or level (blue-collar, white-collar, supervisory and managerial

staff), bound to the Company by whatever employment contract applies (full time or part time), with or

without subordination within the Company’s organizational hierarchy, is required to comply with the

dispositions contained in the Model.




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33

Vis-à-vis employees of the Company the disciplinary system is applied in conformity with article 7 of Law

300 dated May 20, 1970 (the so-called Workers’ Statute) and the category’s national collective labor

contract (CCNL) for the chemical, chemical-pharmaceutical, chemical fibers industry and the abrasive,

lubricant and NLG sectors approved on May 10, 2006 and renewed on October 15, 2015. If the conduct in

question also constitutes a violation of the law or of the employment contract such as to exclude the

continuation of the employment relationship even on a provisional basis, dismissal without notice may be

applicable as defined in article 2119 of the Italian Civil Code, subject to proper observance of the

established disciplinary process. Within the discretionary limits of the holder of the disciplinary powers, the

following, for the purposes of exemplification, are applicable:

� for a minor violation of the principles of the Code of Conduct and of the Model, the sanction is a

verbal admonition;

� for a violation, also by omission or in possible complicity with others, of the principles of the Code

of Conduct and of the Model, the sanction is an admonition in writing;

� for the creation, also with accomplices, of false documents and the facilitation, by acts of omission,

of the creation of false documents by others, the sanction is a fine2;

� for the misappropriation, destruction or alteration of documents in order to circumvent the control

system imposed by the Model, the obstruction of the Supervisory Body’s activities, the prevention

of access to information and documents requested by the subjects responsible for checks on

procedures and decisions and any other conduct aimed at eluding the control system established

by the Model, the sanction is suspension3.

In the case of repetition of the violation or of violations which are particularly grave or which have exposed

the Company to the danger of harmful consequences, a sanction is imposed which is more severe than

that provided for the single violation, or in more serious cases, the sanction is dismissal.

If the violation involves senior managers, the Supervisory Body must notify the holder of the disciplinary

powers and the Board of Directors in the person of the Chairman and Chief Executive Officer by means of

a written report. The recipients of the report begin the processes for which they are responsible in order to

initiate the charges for violations and if applicable to inflict the sanctions prescribed by law and by the

2 Pursuant to article 51 of the applicable CCNL the fine may not exceed the equivalent of three hours of remuneration.

3 Pursuant to article 51 of the applicable CCNL the suspension may not be imposed for a period of more than three days and is

applied for more serious violations.




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34

applicable national collective labor contract together, if applicable, with the revocation of powers and

authorities.

If the violation involves a director of the Company, the Supervisory Body must immediately notify the Board

of Directors and the Board of Statutory Auditors by means of a written report. In this case the Board of

Directors may apply any measure allowed by law, the measure to be determined by the gravity of the

violation, by the degree of responsibility for the violation and by the harm resulting for the Company.

In the most serious cases and when the violation is detrimental to the relation of trust with the Company,

the Board of Directors proposes to the shareholders the revocation of the appointment.

In the case of a violation committed by a member of the Board of Statutory Auditors, if the violations are

such that they give good cause for revocation of the appointment, the Board of Directors submits to a

meeting of shareholders a proposal for the appropriate measures and takes care of any other formalities

required by law.

For the sanctions against members of the Supervisory Body reference should be made to the rules for

revocation established for them (see paragraph 10.4).

Notwithstanding the matters set out in the preceding paragraphs, the Supervisory Body may propose the

precautionary suspension of the person, either senior executive or direct subordinate, in circumstances in

which that person’s conduct constitutes the commission of one of the offenses identified in articles 24 et

seq. of the Decree for which the dispositions of the Decree regarding administrative liability of entities are

applicable.

Relationships with third parties are regulated by appropriate contracts which must include clauses ensuring

the observance by the third parties of the fundamental principles of the Model and of the Code of Conduct.

In particular, failure to observe these principles must entail the resolution of the contracts with good cause,

without prejudice to any claim for damages if real damages to the Company are caused by the violation.

13. Communication to and education of Company personnel

The communication of the Model and its underlying principles to parties outside the Company is handled by

the VP Global Marketing Function of Intercos S.p.A. which ensures through the use of the media which it

considers most suitable (for example the Company website, appropriate brochures etc.) its diffusion to the

Addressees outside the Company identified in paragraph 9 and their knowledge of it, as well as to the

community in general.




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35

Operational responsibility for education and training of Company personnel on the Model is entrusted to the

HR & Organization Function which, in coordination with the Company’s Supervisory Body and using the

media which it considers most suitable, ensures its diffusion to the Addressees inside the Company

identified in paragraph 9 and their effective knowledge of it.

It is the duty of the Company to prepare specific formal education and training plans aimed at ensuring the

effective knowledge of the Decree, the Code of Conduct and the Model on the part of all the departments

and functions of the Company. The training provided must be differentiated according to whether it is

addressed to employees in general, to employees working in specific risk areas, to the Supervisory Body,

to the directors etc. on the basis of an analysis of the competences and training and education needs

established by the Supervisory Body with the support of the HR & Organization Function.

Education and training of personnel for the purposes of implementing the Model is obligatory for all

Addressees and is administered by the HR & Organization Function, in close collaboration with the

Supervisory Body which ensures that the education and training programs are carried out in an efficacious

manner.

The Company predisposes the means and modes of ensuring that the training and education initiatives are

always traceable, that attendance by participants is formally recorded, that the level of learning attained by

the participants and their assessments of the quality of course are formalized in order to develop new

education and training initiatives and improve those in progress, also through comments and suggestions

on the course content, material, instructors etc.

The education and training, which may also be delivered using remote-learning techniques or using the

information system, and the content of which must be reviewed by the Supervisory Body, is performed by

experts in the disciplines specified by the Decree.




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36

Special Part

Omitted

Documents

Organizational Model pursuant to Legislative Decree 231/2001web.intercos.it/bond/files/org/Intercos Europe MOG_PARTE GENERAL… · over such risk and offenses, the information flows