APC 2004 Annual Report Download - page 138

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Issuance of shares to employees who
are members of an employee stock purchase
plan - fourteenth 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 2004, the Board of Directors used this authorization
to issue shares equivalent to 0.3% of the issued cap-
ital as part of a worldwide employee stock purchase
program. This authorization, which was granted for a
period of five years, was renewed by shareholders at
the Annual Meeting of May 6, 2004 for five more
years.
Under the "NRE" Act, if a company asks shareholders
for an authorization to issue shares, a separate reso-
lution must be tabled at the meeting covering the
issuance of shares to employees who are members of
an employee stock purchase plan. Since the eleventh,
twelfth, thirteenth and fifteenth resolutions seek
authorization to issue shares and share equivalents
with or without pre-emptive subscription rights, the
Board is asking for the early renewal of the authoriza-
tion given in May 2004, which it has not used.
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 the maximum discount at which the
shares could be offered is set at 15%.
The new authorization, sought for a period of five
years, cancels and replaces the authorization given in
May 2004.
Authorization to grant shares without
consideration to officers and employees of
the Company and its subsidiaries and
affiliates- fifteenth resolution -
In the fifteenth resolution, you are asked to authorize
the Board of Directors to grant shares without consid-
eration to officers and employees of Schneider
Electric SA and its subsidiaries and affiliates, as
defined in article L.225-197-2 of the Commercial
Code.
The Board of Directors is seeking this authorization
so that it can take advantage of a new method for
retaining and motivating officers and employees intro-
duced by France's 2005 Finance Act.
In accordance with the Commercial Code, the Board
of Directors will determine the recipients and the con-
ditions and criteria for making said grants.
The total number of shares granted without consider-
ation may not represent more than 2% of the
Company's capital. Furthermore, the total number of
shares that may be subscribed or purchased on the
exercise of options granted under the 19th resolution
approved by shareholders at the Annual Meeting of
May 6, 2004 and of shares that may be granted with-
out consideration under this resolution may not repre-
sent more than 3% of the Company's capital. In light
of the number of options granted in 2004, the aggre-
gate ceiling currently stands at 2% of the Company's
capital.
In accordance with the law, the rights to shares grant-
ed without consideration shall vest after a period of no
less than two years, to be followed by a lock-up peri-
od of at least two years from the vesting date. The
Board of Directors may extend the vesting period or
the lock-up period at its discretion.
The authorization is being sought for a period of 38
months.
Any new shares granted to employees and officers
without consideration will be paid up by capitalizing
retained earnings, income or additional paid-in capi-
tal; consequently, shareholders will automatically
waive their right to the portion of retained earnings,
income or additional paid-in capital that may be capi-
talized to pay up any new shares issued under this
resolution.
If the Board of Directors grants new shares, it will buy
back and cancel shares at the time of transfer to off-
set any dilution.