APC 2003 Annual Report Download - page 136

Auditors' special report on
the proposed stock option plans
To the Shareholders,
In our capacity as Statutory Auditors of Schneider
Electric SA and pursuant to Article L.225-177 of the
Commercial Code, as well as to Article 174-19 of the
decree of March 23, 1967, we present below our
report on the proposal to grant stock options to the
management and employees of the Company and
related entities within the meaning of Article L.225-
180 of the Commercial Code, according to the list of
grantees drawn up by the Board.
The Board of Directors is responsible for reporting to
Shareholders on the aims and objectives of the pro-
posed stock option plans as well as on the method to
be used to set the option exercise price. Our respon-
sibility is to express an opinion on the proposed
method of setting the option exercise price.
We carried out our work in accordance with the pro-
fessional standards applied in France. Those stan-
dards require that we perform procedures to verify
that the proposed method of setting the option exer-
cise price is described in the report of the Board of
Directors, and that said method complies with the
provisions of the relevant texts, is transparent for
Shareholders and does not appear to be manifestly
inappropriate.
We have no matters to report concerning the pro-
posed method.
Assemblée générale mixte du 6 mai 2004
134
Paris and Neuilly-sur-Seine, February 19, 2004
The Statutory Auditors
PricewaterhouseCoopers Audit Barbier Frinault et Autres / Ernst & Young
Anne Monteil Christian Chochon / Pierre Jouanne
Auditors’ report on the proposed
employee share issue with
cancellation of shareholders’
pre-emptive subscription right
To the Shareholders of Schneider Electric SA,
In our capacity as Statutory Auditors of Schneider
Electric SA and pursuant to Article L 225-135 of the
Commercial Code, we present below our report on
the proposed issue of shares to the employees of the
Company and related companies within the meaning
of Article L 225-180 of the Commercial Code, as pre-
sented to shareholders for approval.
As provided for in Article L 225-129 VII of the
Commercial Code, the Board of Directors is seeking
a five-year authorization, on the basis described in
the Board's report, to set the terms and conditions of
the employee share issue in accordance with Article
L 443-5 of the Labor Code. Shareholders will be
asked to waive their pre-emptive right to subscribe
this issue.
The aggregate nominal amount by which the capital
may be increased under the authorization has been
set at 5% of the capital issued and outstanding when
the authorization is used. The shares may not be
offered for subscription at a discount of more than
15% to the benchmark share price.
We performed our work in accordance with the pro-
fessional standards applied in France. Those stan-
dards require that we perform procedures to check
the method used to determine the share issue price.
We have no matters to report concerning the method
for determining the issue price as described in the
Report of the Board of Directors, contingent upon our
final review of the terms of the proposed capital
increase.
Since the issue price has not yet been set, we can-
not formulate an opinion on the final conditions under
which the share issue will be carried out, and conse-
quently have no opinion on the proposal to cancel
shareholders' pre-emptive subscription right, the
principle of which is consistent with the proposed
operation.
Should this resolution be approved and as required
by article 155-2 of the Decree of March 23, 1967, we
will prepare an additional report at the time the capi-
tal increase is carried out by the Board of Directors.
Paris and Neuilly-sur-Seine, February 19, 2004
The Statutory Auditors
PricewaterhouseCoopers Audit Barbier Frinault et Autres / Ernst & Young
Anne Monteil Christian Chochon / Pierre Jouanne