APC 2003 Annual Report Download - page 133

Resolutions to be voted on in
Extraordinary Shareholders’ Meeting
Change in the bylaws to allow for
the appointment of a non-voting Director
– seventeenth resolution –
In France, société anonyme joint-stock companies
may appoint non-voting Directors to benefit from the
advice and expertise of individuals who do not wish
to serve as Directors. Since Schneider Electric SA’s
bylaws do not explicitly authorize this function, the
Board of Directors recommends that the bylaws be
modified to allow for the appointment of a maximum
of two non-voting Directors.
In the resolution tabled at the Extraordinary
Shareholders’ Meeting of May 6, 2004, non-voting
Directors would be appointed for four-year terms, to
be renewed by the Board of Directors on the recom-
mendation of its Chairman. They would participate in
Board Meetings in an advisory capacity and could
serve on special Board committees. Their compen-
sation would be determined by the Board of
Directors.
If the shareholders approve this resolution, the Board
of Directors will appoint Claude Bébéar as a non-vot-
ing Director. Mr. Bébéar is Chairman of the
Supervisory Board of Axa and a member of the
Boards of Directors of BNP Paribas and Vivendi
Universal.
Issuance of shares to employees who are
members of an employee stock purchase plan
– eighteenth resolution –
At the Extraordinary Shareholders’ Meeting of May
16, 2003, the Board of Directors was authorized to
issue shares to employees who are members of an
employee stock purchase plan, up to the equivalent
of 5% of Schneider Electric's issued capital.
In 2003, the Board of Directors used this authoriza-
tion to issue shares equivalent to 0.46% of the
issued capital as part of a worldwide employee stock
purchase program. This authorization, which as
granted for a period of five years, expires on May 16,
2008.
Under the new "NRE" Act, if a company asks share-
holders for an authorization to issue shares, a sepa-
rate resolution must be tabled at the meeting cover-
ing the issuance of shares to employees who are
members of an employee stock purchase plan. Since
the nineteenth resolution seeks authorization to
grant options to purchase new or existing shares, the
Board is asking for the early renewal of the autho-
rization given in 2003.
The Board of Directors would have full powers to
carry out employee share issues up to the equivalent
of 5% of the Company's issued capital.
Under the new authorization, sought for a period of
five years, the maximum discount at which the
shares could be offered is set at 15%.
The Board of Directors has decided in principle to
carry out an employee share issue in 2004, corre-
sponding to a maximum of 1% of the current issued
capital. The shares would be offered at a maximum
discount of 15%.
Stock options
– nineteenth resolution –
In May 1999, the Board of Directors was authorized
to grant options to purchase new or existing shares
to the management and key employees of Schneider
Electric SA and its subsidiaries and affiliates, as
defined in article L.225-180 of the Commercial Code.
The total number of options outstanding at any given
time would not be exercisable for shares represent-
ing more than 5% of the capital.
This authorization expires on May 6, 2004.
The Board of Directors used this authorization to
grant 6.7 million options, representing 2.9% of the
capital. Since most of these options were subject to
achievement of financial targets concerning sales,
operating income, and other indicators, some of
them will not be exercisable. Fifty percent of the
options granted under plan 18, for example, have
been cancelled.
Because options play such an important role in
incentive plans and in rewarding employee loyalty,
the Board of Directors proposes that the authoriza-
tion be renewed for a further 38 months. Under the
terms of the new authorization, the total number of
options outstanding at any given time would not be
exercisable for shares representing more than 3% of
the capital. In addition, the option exercise price
would not represent less than the average of the
opening prices quoted for the Company’s shares
over the twenty trading days preceding the date of
grant.
By definition, this authorization entails the waiver by
shareholders of their pre-emptive right to subscribe
the shares to be issued on exercise of the options.
Authorization to cancel treasury stock
– twentieth resolution –
You are asked to give full powers to the Board of
Directors to cancel shares representing up to 10% of
the Company's capital over a period of 24 months, in
order to reduce the dilutive impact of the most recent
share issues.
In 2003, the Board of Directors used the authoriza-
tion granted by shareholders at the Extraordinary
Shareholders’ Meeting of May 27, 2002 to cancel 12
million shares.
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