Pursuant to the Articles of Association of the Company, the Board of Directors is responsible for the management and the affairs 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. 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 Chairmen and the Chief Executive Officers. The Rules also specify the creation of two committees (the Audit and the Remuneration and Nomination 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 / 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 two additional independent Directors who are not officers, directors, employees or agents of or otherwise have no significant commercial or professional connection either with the DaimlerChrysler, Société de Gestion de Participations Aéronautiques (“SOGEPA”) or Lagardère Groups or the French State. Pursuant to the Participation Agreement, the Board of Directors comprises ten members of whom:

• four nominated by DaimlerChrysler;
• four nominated by Société de Gestion de l’Aéronautique, de la Défense et de l’Espace (“SOGEADE”); and
• two independent Directors, one nominated by DaimlerChrysler and one nominated by SOGEADE.

In addition, although from 8th July 2003, Sociedad Estatal de Participaciones Industriales (“SEPI”) no longer has a right to nominate a Director, based upon the proposal of DaimlerChrysler and SOGEADE, the shareholders’ meeting of EADS held on 11th May 2005 appointed an additional Spanish Director bringing the total number of Directors to eleven.

Pursuant to the Articles of Association, each member of the Board of Directors held office for a term expiring at the Annual General Meeting of the Company held on 11th May 2005. Such Annual General Meeting reconstituted the Board of Directors for a term of five years ending at the close of the Annual General Meeting which will be held in the year 2010. 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 two Chairmen, one chosen from the DaimlerChrysler-nominated Directors and one chosen from the SOGEADE-nominated Directors.

The Chairmen ensure the smooth functioning of the Board of Directors in particular with respect to its relations with the Chief Executive Officers whose efforts they support with regard to top level strategic discussions with outside partners.

The Board of Directors also appointed two Chief Executive Officers to be responsible for the day-to-day management of the Company, one chosen from the DaimlerChrysler-nominated Directors and one chosen from the SOGEADE-nominated Directors.

The Company is represented by the Board of Directors or by the Chief Executive Officers acting jointly. Furthermore, the Company has granted general powers to each of the Chief Executive Officers, authorizing them to each individually represent the Company.

In the event of a deadlock between the two Chief Executive Officers, the matter shall be referred to the two Chairmen.

The Chief Executive Officers 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:

• approving any change in the nature and scope of the activities of the Group;
• approving the overall strategy and the strategic plan of the Group;
• approving the business plan and the yearly budget of the Group;
• setting the major performance targets of the Group;
• appointing the members of the Executive Committee (see below) and the Corporate Secretary;
• approving proposals for appointments of members of Airbus Shareholders’ Committee and Executive Committee and chairmen of the Supervisory Board (or similar bodies) and the chief executive officers (or equivalent position) of important Group companies and BUs;
• approving material changes to the organisational structure of the Group;
• approving major investments, projects or product decisions or divestments of the Group contemplated in the business plan with a value exceeding €200 million;
• approving major strategic alliances and cooperations of the Group;
• approving any material decision affecting the ballistic missiles activity of the Group;
• approving matters of shareholder policy, major actions or major announcements to the capital markets; and
• approving other measures and business of fundamental significance for the Group or which involve an abnormal level of risk.

The Board of Directors met seven times during 2005 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 91%. Topics intensively discussed and operations authorised at these meetings included EADS’ strategy, reorganisation topics (such as the reshaping of EADS divisional structure and headquarter organisation), major business issues (such as the A350 industrial launch decision, Airbus future product policy, EADS strategy in defense including European industry consolidation and the acquisition of Atlas Elektronik together with ThyssenKrupp Technologies, the review of the EADS UAV programmes, the co-development of the EC 175 helicopter with China and the review of Sogerma future strategy), the approval of operational plans, budgets, remuneration (including a stock option plan and an employee share ownership plan) and the Group’s financial results and forecasts, as well as financial optimisations and the process of risk management and internal controls. The Board of Directors also dealt with topics regarding personnel and human resources, such as management qualification as well as attracting, retaining and developing high potentials in order to ensure the future quality of EADS’ management and the multinational leadership structure. In its meeting held on 11th May 2005, Manfred Bischoff and Arnaud Lagardère were re-elected Chairmen and the two Board Committees were reconstituted with the same members as previously. The Board of Directors has also appointed on 25th June 2005 the Chief Executives Officers, Thomas Enders and Noël Forgeard as the two Chief Executive Officers, the President and CEO of Airbus, the Head of the Division Defense and Security Systems, and the Head of Eurocopter as member of the Executive Committee, while confirming the other members of the Executive Committee.

Following the changes to EADS’ Corporate Governance decided in 2003 in light of the Corporate Governance best practices developed in the jurisdictions relevant to EADS, the Board of Directors supervised the implementation of such decisions during the year 2005. Among other matters, the induction package remitted to new Board members after their appointment through the annual General Meeting (“AGM”).

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.

Mandates of all the members of the Board of Directors expired at the general shareholders’ meeting of the Company held on 11th May 2005. Based upon the nominations of the main EADS shareholders DaimlerChrysler and SOGEADE (Lagardère and French State), the Board of Directors decided on 8th March 2005 to propose at such general shareholders’ meeting to reconstitute the Board of Directors by appointing Manfred Bischoff and Arnaud Lagardère (designated as Chairmen), Thomas Enders and Noël Forgeard (designated as Chief Executive Officers), Jean-Paul Gut and Hans Peter Ring as Executive Directors, Juan Manuel Eguiagaray Ucelay, Louis Gallois and Rüdiger Grube as Non-Executive Directors and Francois David and Michael Rogowski as Independent Directors, each of them for a term of five years ending at the close of the general shareholders’ meeting to be held in the year 2010.

Each Director shall have one vote, provided that if there is a vacancy on the Board of Directors’ in respect of a DaimlerChrysler-nominated Director or a SOGEADE-nominated Director, the DaimlerChrysler-nominated Directors being present or represented at the meeting can jointly exercise the same number of votes that the SOGEADE-nominated Directors who are present or represented at the meeting can exercise and vice versa. All decisions of the Board of Directors require a vote in favor by at least seven Directors voting in person or by proxy.

The quorum for the transaction of business at meetings of the Board of Directors requires the presence of at least one of the SOGEADE-nominated Directors and one of the DaimlerChrysler-nominated Directors.

In the event of a deadlock in the Board of Directors, other than a deadlock giving DaimlerChrysler the right to exercise the put option granted to it by SOGEADE (see “Part 2 / Relationships with Principal Shareholders — Put Option”), the matter shall be referred to Arnaud Lagardère (or such person as shall be nominated by Lagardère) as representative of SOGEADE and to the chief executive officer of DaimlerChrysler. In the event that the matter in question, including a deadlock giving DaimlerChrysler the right to exercise the put option (but in this case with the agreement of SOGEPA and DaimlerChrysler) is a matter within the competence of the General Meeting of EADS, a resolution on the issue shall be put to the General Meeting, with the voting rights of SOGEADE, DaimlerChrysler and SEPI being negated.

Pursuant to the Rules, the Board of Directors is empowered to form committees from its members. In addition to the Audit Committee and the Remuneration and Nomination 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. The quorum for the transaction of business at any meeting of a committee shall be at least one Director appointed by SOGEADE and at least one Director appointed by DaimlerChrysler. All decisions of a committee require the simple majority of the members.