Board of Directors - Role and Composition

On 16th July 2007, the EADS core shareholders have decided, together with the EADS management team, to implement a new management and leadership structure. The German Government has also been consulted. Guiding principles of the modification are efficiency, cohesiveness and simplification of EADS’ management and leadership structure, towards corporate governance best practices while maintaining a balance between the French and the German core shareholders.

Pursuant to the Articles of Association of the Company, the Board of Directors is responsible for the management of the Company.

The Board of Directors consists of a maximum of eleven members appointed and removed by the shareholders’ meeting. The Board of Directors adopted rules governing its internal affairs (the “Rules”) at a Board of Directors’ meeting held on 7th July 2000. The Rules were amended at a Board of Directors’ meeting held on 5th December 2003 to take into account recommendations for changes to corporate governance. These rules were amended at a Board of Directors' meeting held on 22nd October 2007, to take into account the corporate governance modifications approved during an Extraordinary General Shareholders Meeting held the same day, and initiated by the EADS core shareholders, together with the management team, on 16th July 2007. The Rules specify the composition, the role and the key responsibilities of the Board of Directors, and also determine the manner of appointment and the responsibilities of the Chairman and the Chief Executive Officer. The Rules also specify the creation of three committees (the Audit, the Remuneration and Nomination, as well as the Strategic Committees) and specify their composition, role and operating rules.

The Board of Directors has also adopted specific Insider Trading Rules, which restrict its members from trading in EADS shares in certain circumstances (for more information, please see “Part 2/3.1.3 Governing Law — Dutch Regulations”).

The parties to the Participation Agreement have agreed that the voting rights attached to the Indirect EADS Shares shall be exercised by EADS Participations B.V. to ensure that the Board of Directors of EADS comprises the Directors of EADS Participations B.V. and four additional independent Directors.

According to the Internal Rules of the Board of Directors the independent Director is defined as follows: "a Director who is not an officer, director, employee, agent or otherwise has any significant commercial or professional connection with either the Dasa Group, the Lagardère Group, the Sogepa Group, the Sepi Group, the French State, the German State, the Spanish State or the EADS Group."

Pursuant to the Participation Agreement, the Board of Directors comprises eleven members of whom:

Pursuant to the Articles of Association, each member of Board of Directors holds office for a term expiring at the Annual General Meeting of the Company held in 2012. Members of the Board of Directors will be elected at each fifth Annual General Meeting thereafter.

The shareholders’ meeting may at all times suspend or dismiss any member of the Board of Directors. There is no limitation on the number of terms that a Director may serve.

The Board of Directors appointed one Chairman. He ensures the smooth functioning of the Board of Directors in particular with respect to its relations with the Chief Executive Officer whose efforts he supports with regard to top level strategic discussions with outside partners.

The Board of Directors also appointed one Chief Executive Officer to be responsible for the day-to-day management of the Company.

The Company is represented by the Board of Directors or by the Chief Executive Officer.

The Chief Executive Officer shall not enter into transactions which form part of the key responsibilities of the Board of Directors unless these transactions have been approved by the Board of Directors.

The key responsibilities of the Board of Directors include amongst others:

Each Director can exercise one vote, provided that, if there are more SOGEADE nominated Directors than Daimler nominated Directors present or represented at the meeting, the Daimler nominated Director who is present at the meeting can exercise the same number of votes as the SOGEADE nominated Directors who are present or represented at the meeting, and vice versa. All decisions of the Board shall be taken by a simple majority of votes (six Directors, present or represented, voting in favour of the decision), except for the votes relating to Reserved Matters which can only be validly resolved upon a majority of votes including the unanimous vote of the two SOGEADE nominated and the two Daimler nominated Directors (the Qualified Majority).

The quorum for the transaction of business at meetings of the Board of Directors requires the presence of one SOGEADE nominated Director and one Daimler nominated Director, at the time when the relevant business is transacted.

A Director can authorise another Director to represent him or her at a Board meeting and to vote on his or her behalf. Such authorisation shall be in writing.

Pursuant to the Rules, the Board of Directors is empowered to form committees from its members. In addition to the Audit Committee, the Remuneration and Nomination Committee, and the Strategic Committee, the Board of Directors may form other committees to which it may transfer certain minor or ancillary decision-making functions although such assignment does not negate the joint responsibility of all Directors. All decisions of a committee require the simple majority of the members, unless otherwise set out in the Internal Rules of the Board of Directors.

In addition to the Rules, the work of the Board of Directors is governed by internal directors’ guidelines (the “Directors’ Guidelines”) adopted, in a meeting dated 10th December 2004, in light of Corporate Governance best practices. The Directors Guidelines are composed of a Directors’ charter (the “Directors’ Charter”) detailing the rights and duties of the members of the Board of Directors, an Audit Committee charter (the “Audit Committee Charter”) and a Remuneration and Nomination Committee charter (the “Remuneration and Nomination Charter”) each such charter setting forth the respective committees’ enhanced roles.

The Directors’ Charter sets out core principles, which bind each and every Director, such as acting in the best interest of the Company and its stakeholders, devoting necessary time and attention to the carrying out of their duties and avoiding any and all conflicts of interest.

The Board of Directors met ten times during 2006 and was regularly informed of developments through business reports from the Chief Executive Officers, including rolling forecasts as well as strategic and operational plans. The average attendance rate at such meetings was 95%. Following a detailed review of the A380 production and delivery program, Airbus informed the Board of Directors on 13th June that the A380 delivery schedule for the period 2006 to 2009 was revised. According to this, the Board of Directors decided immediately to release this new schedule and its financial impact, and subsequently on 3rd October 2006 (EADS statement and more detailed information about the ongoing regulatory and judicial proceedings can be found on “Note to the Financial Statements — Note 28: Litigation and claims”). On 2nd July 2006, the Board of Directors appointed a new Co- Chief Executive Officer, Louis Gallois, replacing Noël Forgeard in his functions, as well as Chrisitian Streiff as new President and Chief Executive Officer of Airbus, Members of the Executive Committee. After the resignation of the President and Chief Executive Officer of Airbus, Christian Streiff, three months later, the Board of Directors changed significantly the management structure of EADS by appointing on the 9th October 2006, EADS Co-Chief Executive Officer Louis Gallois additionally as Airbus President and Chief Executive Officer, the non-Airbus Divisions reporting to EADS Co-Chief Executive Officer Thomas Enders. Subsequently, on the 31st October 2006, the Board of Directors appointed EADS Chief Operating Officer Finance, Hans Peter Ring, additionally as Airbus Chief Financial Officer. The Board of Directors also appointed on that date a new Chief Operating Officer of Airbus, Fabrice Brégier, and a new head of Eurocopter Division, Lutz Bertling, as Members of the Executive Committee. Overall, in 2006, nine Board of Directors meetings covered Airbus related matters. On 5th April 2007, Manfred Bischoff presented his resignation as chairman of the EADS Board of Directors and the Board of Directors decided to designate Rüdiger Grube as his successor in this position. Manfred Bischoff also presented his resignation as member of the Board of Directors.

Topics intensively discussed, and operations authorised at the meetings included: EADS’ strategy (comprising, in M&A matters, European industry consolidation and the buy-back of BAE Systems’ stake in Airbus), major business issues such as the A380 recovery efforts and the Power8 program, the A350 industrial launch decision and Airbus future product strategy, the reviews of the EADS UAV programs and of the A400M program, the review of Sogerma future strategy, the approval or postponement of operational plans, reorganisation topics, budgets, the Group’s financial results and forecasts, as well as financial optimisations and the discussions regarding the implementation of an ethics alert system. The Board of Directors also dealt with topics regarding personnel and human resources, such as management qualification, remuneration (including a long-term incentive plan and an employee share ownership plan) as well as attracting, retaining and developing individuals with high potential in order to ensure the future quality of EADS’ management and the multinational leadership structure.

The Company has not appointed observers to the Board of Directors. Pursuant to applicable Dutch law, the employees are not entitled to elect a Director. There is no minimum number of shares that must be held by a Director.

European Aeronautic Defence and Space Company EADS N.V.
Le Carré · Beechavenue 130-132 · 1119 PR Schiphol Rijk · The Netherlands

EADS Deutschland GmbH · 81663 Munich · Germany
EADS France S.A.S. · 37, boulevard de Montmorency · 75781 Paris Cedex 16 · France
EADS CASA · Ava. de Aragón, 404, 28022 Madrid · Spain