SECTION 778-2

The extraordinary general meeting of shareholders is the only competent body to decide on the issuance, repurchase and conversion of preferred shares in light of a report of the board of directors or the general director, as the case may be and of a special report of the auditors. It may delegate such authority under the conditions set forth in articles 564 to 568 above. Any decision taken in violation of this paragraph shall be null. Repurchase must be expressly stipulated in the articles of association of the company prior to the issuance of preferred shares. Otherwise, the decision to redeem shares shall be null. Terms of repurchase or conversion of preferred shares may also be set forth in the articles of association.